HomeMy WebLinkAbout2024 ACFR12800 Ravine Parkway S
Cottage Grove, MN 55016
651-458-2800
CottageGroveMN.gov
Annual Comprehensive Financial Report
City of Cottage Grove, MN Year Ended December 31, 2024
ANNUAL COMPREHENSIVE FINANCIAL REPORT
OF THE
CITY OF COTTAGE GROVE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2024
Prepared By:
Finance Department
City of Cottage Grove
12800 Ravine Parkway South
Cottage Grove, MN 55016
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
I. INTRODUCTORY SECTION
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting 9
Elected Officials and Administration 11
Organizational Chart 13
Independent Auditor's Report 17
Management's Discussion and Analysis 21
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position Statement 1 35
Statement of Activities Statement 2 36
Fund Financial Statements:
Balance Sheet - Governmental Funds Statement 3 38
Reconciliation of the Balance Sheet to the Statement of Net Position - Governmental Activities Statement 4 41
Statement of Revenues, Expenditures and Changes in Fund Balance -
Governmental Funds Statement 5 42
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities Statement 6 44
Statement of Net Position - Proprietary Funds Statement 7 45
Statement of Revenues, Expenses and Changes in Fund Net Position -
Proprietary Funds Statement 8 46
Statement of Cash Flows - Proprietary Funds Statement 9 47
Notes to Financial Statements 49
Required Supplementary Information:
Budgetary Comparison Schedule - General Fund Statement 10 86
Budgetary Comparison Schedule - Ice Arena Fund Statement 11 88
Schedule of Changes in the Total OPEB Liability and Related Ratios Statement 12 89
Schedule of Proportionate Share of Net Pension Liability - General Employees Statement 13 90
Retirement Fund
Schedule of Pension Contributions - General Employees Retirement Fund Statement 14 91
Schedule of Proportionate Share of Net Pension Liability - Public Employees Police Statement 15 92
and Fire Fund
Schedule of Pension Contributions - Public Employees Police and Fire Fund Statement 16 93
Notes to RSI 95
II. FINANCIAL SECTION
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
Combining and Individual Nonmajor Fund Financial Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds Statement 17 106
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental Funds Statement 18 107
Subcombining Balance Sheet - Nonmajor Special Revenue Funds Statement 19 110
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Special Revenue Funds Statement 20 112
Subcombining Balance Sheet - Nonmajor Debt Service Funds Statement 21 116
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Debt Service Funds Statement 22 118
Subcombining Balance Sheet - Nonmajor Capital Project Funds Statement 23 122
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Capital Project Funds Statement 24 124
Special Revenue Funds:
Schedule of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Recycling Statement 25 126
Storm Water Maintenance Statement 26 127
Forfeiture/Seizure Statement 27 128
Golf Course Statement 28 129
Convention and Visitors Bureau Statement 29 130
Capital Project Funds:
Schedule of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Equipment Replacement Statement 30 131
Roadway and Trailway Maintenance Statement 31 132
Combining Statement of Net Position - Internal Service Fund Statement 32 134
Combining Statement of Revenues, Expenditures, and
Changes in Net Position - Internal Service Funds Statement 33 135
Combining Statement of Cash Flows - Internal Service Fund Statement 34 136
Combining Balance Sheet - Economic Development Authority
Component Unit Statement 35 137
Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances - Economic Development Authority Component Unit Statement 36 138
Economic Development Authority Component Unit -
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget to Actual Statement 37 139
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
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Reference No.
Supplementary Financial Information:
Combining Schedule of Bonded Indebtedness Schedule 1 143
Debt Service Payment to Maturity Schedule 2 144
Deferred Tax Levies Schedule 3 146
Subcombining Balance Sheet - Pavement Management Debt
Service Schedule Schedule 4 147
Schedule of Revenues, Expenditures and Change in Fund Balances -
Pavement Management Debt Service Schedule Schedule 5 148
Subcombining Balance Sheet - Tax Increment Construction
Revolving Schedule Schedule 6 149
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Tax Increment Construction Revolving Schedule Schedule 7 150
Subcombining Balance Sheet - TIF Debt Service Revolving Schedule Schedule 8 151
Schedule of Revenues, Expenditures and Changes in Fund Balances - Schedule 9 152
TIF Debt Service Revolving Schedule
Financial Trends:
Net Position by Component Table 1 156
Changes in Net Position Table 2 158
Fund Balances - Governmental Funds Table 3 162
Changes in Fund Balances - Governmental Funds Table 4 164
Revenue Capacity:
Tax Capacity Value and Estimated Market Value of Taxable Property Table 5 166
Direct and Overlapping Property Tax Rates Table 6 167
Principal Property Taxpayers Table 7 168
Property Tax Levies and Collections Table 8 169
Debt Capacity:
Ratios of Outstanding Debt by Type Table 9 170
Ratios of General Bonded Debt Outstanding Table 10 172
Direct and Overlapping Governmental Activities Debt Table 11 173
Legal Debt Margin Information Table 12 174
Demographic and Economic:
Demographic and Economic Statistics Table 13 176
Principal Employers Table 14 177
Operating Information:
Full-Time Equivalent City Government Employees by Function Table 15 178
Operating Indicators by Function/Program Table 16 180
Capital Asset Statistics by Function/Program Table 17 182
III. STATISTICAL SECTION (Unaudited)
I. INTRODUCTORY SECTION
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CITY OF COTTAGE GROVE 12800 Ravine Parkway Cottage Grove, Minnesota 55016
www.CottageGroveMN.gov 651-458-2800 Fax 651-458-2897 Equal Opportunity Employer
May 22, 2025
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 Annual Comprehensive
Financial Report of the City of Cottage Grove for the year ended December 31, 2024.
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.
Redpath and Company, 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, 2024. 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. It 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 2020 Census established the city population at 39,605: recent data estimates the
2024 population at 43,631.
Cottage Grove operates as a Statutory Plan A City under Minnesota law. Policy making and
legislative authority are vested in a City Council, consisting of the mayor and four other members,
elected at large and on a non-partisan basis. Terms of office are staggered four-year terms, with
elections held in each even-numbered year. The City Council is responsible for passing ordinances,
adopting the budget and appointing members of the various citizens’ advisory boards. In addition,
the mayor and council appoint a full-time city administrator, who is responsible for overall
supervision of city operations.
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Letter of Transmittal
May 22, 2025
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 councilmembers, and the five others are
appointed from the community. The EDA is included in this financial report as a discretely
presented component unit, due to the EDA’s relationship of financial benefit or burden to the city.
The annual budget serves as the foundation for the City of Cottage Grove’s financial planning and
control. Governmental funds with adopted budgets are: General, Ice Arena, Recycling, Storm
Water maintenance, Forfeiture/Seizure, Golf Course, Convention and Visitors Bureau, Equipment
Replacement, and Roadway & trailway maintenance. Additionally, the EDA Component unit has an
annually adopted budget.
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. The legal level of budgetary control is at
the department level.
Local Economy
Cottage Grove benefits from a significant amount of developable land and a location within the
economically prosperous Minneapolis/St. Paul seven county metropolitan area. The City’s tax base
is 80% residential and 20% commercial/industrial property. Total taxable market value in 2024 was
$6.1 billion. This was an increase of 16.64% over 2023, due to new construction and increases in
property values of existing building stock.
The city business park is home to many major employers including Renewal by Andersen, Van
Meter, NorthPoint, Up North Plastics, Leafline Labs and more. At build out of the business park, it is
estimated that we will add more than 3,000 new jobs, in addition to the 2,800 employees already
there. Other major employers include 3M, School District 833, Hy-Vee, Walmart, and American
Manufacturing & Distribution. Together these companies employ thousands of employees.
The City utilizes tax increment financing (TIF) for projects that but for city assistance, would not
have occurred to advance long-term economic development and housing initiatives in the City.
Long-term economic development benefits include job creation and retention, increased property
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Letter of Transmittal
May 22, 2025
tax base, and economic diversification. Long-term housing benefits include affordable housing,
life-cycle housing, and improved quality of life. These TIF agreements are considered tax
abatement under GASB Statement No. 77, and there are currently three agreements.
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. In
addition, a ten-year Financial Management Plan was developed in 2022 and finalized in 2023 to
determine the impacts of future operating costs, staffing needs, future growth, capital projects and
the impact on the property tax levies. The plan was incorporated into the 2024 budget.
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 full pavement replacement projects or full reconstruction projects.
Project funding for pavement management is covered by a 45%/55% cost split following the city’s
Infrastructure Maintenance Task Force Special Assessment Policy: special assessments against
benefiting properties (45%) with the balance of the costs covered by general obligation debt to be
repaid by annual tax levies.
Relevant Financial Policies
The City has financial policies and plans which establish the principles that guide staff and
councilmembers 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
• Long-term Financial Management 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 providing adequate working capital for current
operations without short term borrowing. The City’s fund balance policy as of the end of 2024,
identified the unassigned fund balance in the general fund shall be 45% to 55% of the annual
budgeted expenditures for the subsequent year.
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Letter of Transmittal
May 22, 2025
Major Strategic Initiatives
The strategic plan for 2024 focused on three pillars: Enhancing Quality of Life for Residents,
Fostering a Thriving Business and Tourism Environment, and Ensuring Cottage Grove Remains an
Employer of Choice. These pillars have been central to the work and success of the City.
Enhancing Quality of Life for Residents
As the City continues to grow and evolve, it is crucial to invest in the services, infrastructure, and
amenities that make Cottage Grove a desirable place to live, work, and raise a family. In 2024, the
city hosted numerous events such as the Eric Dowdle puzzle unveiling, Food Truck Festival, and
Hometown Holiday. Each of these events was an opportunity to build memories and community.
In 2024, a key achievement was the completion of a city-wide Housing Market Study, which
provided critical insights into the amounts and types of housing that should be developed to meet
the current and future needs of our community. This study, conducted in partnership with Maxfield
Research and Consulting, highlighted the need for additional senior housing, both service enriched
and active adult, as well as middle housing. Based on these findings, the city is now able to make
strategic and informed decisions that will guide housing development efforts in the years ahead.
Another significant project that aligns with the goal of improving quality of life is the completion of
the Small Area Study for the area around Innovation Road and Highway 61, named Innovation
Village. This is an area poised for significant growth, and Cottage Grove is already seeing interest
from developers eager to build there. With the anticipated extension of 100th Street, this study
helps to shape the future of this district, positioning it for business, housing, and recreational
opportunities.
The Parks and Recreation Department plays a crucial role in enhancing the physical environment of
Cottage Grove. In 2024, grant funding from the Minnesota Department of Natural Resources was
awarded for the restoration of over 22 acres within the Cottage Grove Trailway Corridor. This
project not only improves the natural beauty of the community but also enhances its ecological
and environmental value, transforming the corridor into a vibrant, native landscape that supports
both wildlife and recreational activities for residents. Beyond that, in total, the Parks and
Recreation team has been awarded grant funding to further support the City’s Parks mission.
Additionally, Cottage Grove continued to invest in existing parks and recreational facilities, ensuring
they remain safe, accessible, and enjoyable. The replacement of the aging playgrounds at West
Draw, Nina’s, and Granada Parks, as well as the upgrading of sports lighting at Woodridge Park,
were essential steps in maintaining the quality of recreational offerings. These improvements were
made with the safety and comfort of residents in mind.
The addition of solar panels to the Ice Arena’s roof started in 2024 and will be completed in 2025.
These panels are expected to generate more than 300,000 kilowatt-hours of clean energy, saving
the City of Cottage Grove between $25,000 and $30,000 annually in utility costs. This investment,
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Letter of Transmittal
May 22, 2025
coupled with the lighting upgrades at Woodridge Park, supports the broader sustainability goals,
reducing the City’s carbon footprint and helping achieve environmental targets.
The Police Department and Fire Department each created their own independent 5-year Strategic
Plans. One of the key initiatives within these plans was the addition of a co-responder social
worker to Police, and a community paramedic to the Fire Department. This approach allows the
City to serve residents more effectively, ensuring that those who need assistance receive the right
help, in a timely manner.
Cottage Grove Public Works worked tirelessly to deliver quality drinking water to the community. A
new permanent PFAS treatment facility started construction in 2024 that has been entirely paid for
through the 3M settlement. In addition, two additional temporary water treatment plants were
added to ensure that the city has safe, quality drinking water today and for years to come.
Fostering a Thriving Business and Tourism Environment
A thriving local economy is essential to the success and sustainability of the community. One of the
most significant business developments in 2024 was an agreement for the development of a 144-
unit affordable and senior living housing project. This project is expected to create dozens of
construction jobs, provide much-needed housing options, and stimulate further investment in the
area surrounding the site. The project will begin in 2025.
In addition, Bluestem Apartments is a new 52-unit affordable senior housing development. These
affordable housing units will help our community bridge the gap in the senior housing market.
The city also saw many new businesses open their doors in 2024. ChiroWay, O2B Kids, Bill’s Liquor,
Omni Nails, Salon Fusion, Chase Bank, Dunkin Donuts/Baskin Robbins, Cottage Grove Pediatric
Dentistry, and Discount Tire all opened for business here in Cottage Grove in 2024. In the business
park, the City welcomed many new businesses, including:
•Hohenstein’s: a wholesale beverage distribution company
•RJ Schinner: a wholesale distributor for the food services, lodging, grocery, janitorial, and
office supplies industry
•Lumbermen’s: a manufacturer and distributor of building materials
The Economic Development Authority approved funding for a comprehensive strategic plan for the
City’s Visitors Bureau, ensuring that the City is well-positioned to capture the growing interest in
Cottage Grove as a destination for visitors. This plan is helping to develop and promote the City’s
unique features, from the parks and recreational facilities to the growing arts and cultural scene. It
will also aid in economic development, as businesses look to develop in Cottage Grove to serve
residents and visitors alike.
A Business Retention and Expansion Survey was completed in 2024, providing invaluable data on
the needs and concerns of the local businesses. The survey identified areas that need targeted
support to improve the business environment, ensuring that Cottage Grove remains a place where
entrepreneurs and established companies can thrive.
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Cottage Grove
Minnesota
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
December 31, 2023
Executive Director/CEO
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CITY OF COTTAGE GROVE, MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATION
December 31, 2024
Elected Officials Position Term Expires
Myron Bailey Mayor December 31, 2024
Tony Khambata Council Member December 31, 2024
Justin Olsen Council Member December 31, 2024
Monique Garza Council Member December 31, 2024
Dave Thiede Council Member December 31, 2026
Appointed Personnel Position
Jennifer Levitt City Administrator
Brenda Malinowski Finance Director
Emily Schmitz Community Development Director
Ryan Burfeind Public Works Director
Peter Koerner Public Safety Director
Zac Dockter Parks and Recreation Director
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Cottage Grove Citizens
City Council
City
Administrator
City
Attorney
Administration
Communications
Economic
Development
City Clerk/
Elections
Human
Resources
Finance
IT
Community
Development
Building/Code
Enforcement
Planning
Parks and
Recreation
River Oaks
Recreation
Parks
Public Safety
Emergency
Management
Patrol
Investigations
Fire
HERO Center
Public Works
Utilties
Streets
Engineering
Fleet and
Facilities
Advisory
Commissions
Organizational
Chart
Emergency Medical Services
Ice Arena
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II. FINANCIAL SECTION
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400 Robert Street North, Suite 1600, St. Paul, MN, 55101 651.426.7000 www.redpathcpas.com
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Cottage Grove, Minnesota
Report on the Audit of the Financial Statements
Opinions
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 City of Cottage Grove, Minnesota, as of and for the
year ended December 31, 2024, and the related notes to the financial statements, which
collectively comprise City of Cottage Grove, Minnesota's basic financial statements as listed in
the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, the
discretely presented component unit, each major fund, and the aggregate remaining fund
information of City of Cottage Grove, Minnesota, as of December 31, 2024, 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.
Basis for Opinions
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. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. We are required to be independent of City of Cottage
Grove, Minnesota and to meet our other ethical responsibilities, in accordance with the relevant
ethical requirements relating to our audit. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our audit opinions.
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Report on Summarized Comparative Information
We have previously audited the City of Cottage Grove, Minnesota’s 2023 financial statements,
and we expressed unmodified audit 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 report dated May 24,
2024. In our opinion, the partial comparative information presented herein as of and for the year
ended December 31, 2023 is consistent, in all material respects, with the audited financial
statements from which it has been derived.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with accounting principles generally accepted in the United States of America, and
for 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.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about City of
Cottage Grove, Minnesota’s ability to continue as a going concern for twelve months beyond the
financial statement date, including any currently known information that may raise substantial
doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but
is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance
with generally accepted auditing standards and Government Auditing Standards will always
detect a material misstatement when it exists. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in
the aggregate, they would influence the judgment made by a reasonable user based on the
financial statements.
In performing an audit in accordance with generally accepted auditing standards and
Governmental Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the
audit.
Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements.
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Obtain an understanding of internal control relevant to the audit 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 City of Cottage Grove, Minnesota's internal
control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about City of Cottage Grove, Minnesota's ability to
continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain internal
control related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, the budgetary comparison schedules, and the schedules
of OPEB and pension information, as listed in the table of contents, be presented to supplement
the basic financial statements. Such information is the responsibility of management and,
although not a part of the basic financial statements, is required by the Governmental Accounting
Standards Board who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We
have applied certain limited procedures to the required supplementary information in accordance
with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the
information for consistency with 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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise City of Cottage Grove, Minnesota's basic financial statements. The
accompanying combining and individual nonmajor fund financial statements and schedules and
supplementary information as listed in the table of contents, are presented for purposes of
additional analysis and are not a required part of the basic financial statements. Such
information is the responsibility of management and was derived from and relates directly to the
underlying accounting and other records used to prepare the basic financial statements. The
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
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America. In our opinion, the combining and individual nonmajor fund financial statements and
schedules and supplementary information as listed in the table of contents are fairly stated, in all
material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other
information comprises the introductory and statistical sections but does not include the basic
financial statements and our auditor's report thereon. Our opinions on the basic financial
statements do not cover the other information, and we do not express an opinion or any form of
assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the
other information and consider whether a material inconsistency exists between the other
information and the basic financial statements, or the other information otherwise appears to be
materially misstated. If, based on the work performed, we conclude that an uncorrected material
misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
May 22, 2025 on our consideration of City of Cottage Grove, Minnesota’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 City of Cottage
Grove, Minnesota's 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 City of Cottage Grove, Minnesota’s internal control over financial reporting and
compliance.
REDPATH AND COMPANY, LLC
St. Paul, Minnesota
May 22, 2025
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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, 2024. 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 8 of this report.
Financial Highlights
The assets and deferred outflows of resources of the City of Cottage Grove primary government
exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal
year by $469,063,509 (net position). Of this amount, $38,810,438 (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 $36,904,603 as a result of current year operations.
As of the close of the current fiscal year, the City of Cottage Grove’s governmental funds
reported combined ending fund balances of $41,720,535, a very slight decrease of $131,026
compared to the previous year. Approximately 68.9% or $28,781,608 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
$13,719,569 (48.2%) 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 $59,571,251, an increase of $14,833,464 compared to the previous year due to the issuance of
debt during the current fiscal year for the reconstruction of streets in the city and the construction
of a new utilities building.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Cottage Grove’s basic
financial statements. The City’s basic financial statements comprise three components: 1) government-
wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This
report also contains other supplementary information in addition to the basic financial statements
themselves.
Government-wide financial statements: The government-wide financial statements are designed to
provide readers with a broad overview of the City of Cottage Grove’s finances, in a manner similar to a
private-sector business.
The statement of net position presents information on all of the City of Cottage Grove’s assets and
deferred outflows of resources and liabilities and deferred inflows of resources, with the difference
between the two reported as net position. Over time, increases or decreases in net position may serve as
a useful indicator of whether the financial position of the City of Cottage Grove is improving or
deteriorating.
21
City of Cottage Grove
Management's Discussion and Analysis
Overview of the Financial Statements (Continued)
The statement of activities presents information on how the City’s net position changed during the most
recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to
the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are
reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g.
uncollected taxes and earned but unused personal leave time).
Both of the government-wide financial statements distinguish functions of the City of Cottage Grove
that are principally supported by taxes and intergovernmental revenues (governmental activities) from
other functions that are intended to recover all or a significant portion of their costs through user fees
and charges (business-type activities). The governmental activities of the City of Cottage Grove include
general government, community development, economic development, public safety, public works, and
culture and recreation. The business-type activities of the City of Cottage Grove include street lighting,
water and sewer, and an ambulance service.
The government-wide financial statements include not only the City of Cottage Grove itself (known as
the primary government), but also a legally separate EDA component unit for which the City of Cottage
Grove is financially accountable. Financial information for this component unit is reported separately
from the financial information presented for the primary government itself.
The government-wide financial statements start on page 35 of this report.
Fund financial statements: A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The City of Cottage
Grove, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. All of the funds of the City of Cottage Grove can
be divided into two categories: governmental funds and proprietary funds.
Governmental funds: Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a 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.
22
City of Cottage Grove
Management's Discussion and Analysis
Overview of the Financial Statements (Continued)
Governmental funds: 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
Closed Debt Fund – Debt service fund
Ice Arena Fund – Special revenue fund
Future Economic Development Fund – Capital project fund
MSA Construction Capital Project Fund – Capital project fund
Future Projects Fund – Capital project fund
3M Settlement-MPCA Fund – Capital project fund
Park Capital Improvement Fund – Capital project fund
Data from the other governmental funds are combined into a single, aggregated presentation. Individual
fund data for each of these non-major governmental funds is provided in the form of combining
statements elsewhere in the report.
The City of Cottage Grove adopts an annual appropriated budget for its general and certain 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 35 of this report.
Proprietary funds: The City of Cottage Grove maintains four enterprise funds and four 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, information technology services,
and governmental funds compensated absences 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 45 of this report.
Notes to the financial statements: The notes provide additional information that is essential to a full
understanding of the data provided in the government–wide and fund financial statements. The notes to
the financial statements start on page 49 of this report.
23
City of Cottage Grove
Management's Discussion and Analysis
Overview of the Financial Statements (Continued)
Other information: The combining statements referred to earlier in connection with non-major
governmental funds and internal service funds are presented immediately following the required
supplementary information. Combining and individual fund statements and schedules start on page 106
of this report.
Government-Wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. In the case of the City of Cottage Grove, assets exceeded liabilities by $469,063,509 at the
close of the most recent fiscal year.
The largest portion of the City of Cottage Grove’s net position ($414,738,843 or 88.4%) 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
2024 2023 2024 2023 2024 2024
Current and other assets $87,248,750 $80,970,000 $20,554,367 $16,686,865 $107,803,117 $97,656,865
Capital assets 329,766,815 301,111,452 145,192,830 124,845,135 474,959,645 425,956,587
Total assets 417,015,565 382,081,452 165,747,197 141,532,000 582,762,762 523,613,452
Deferred outflows of resources 11,180,329 13,934,629 1,712,318 2,211,203 12,892,647 16,145,832
Long-term liabilities outstanding 43,633,337 40,779,174 11,724,508 149,045 55,357,845 40,928,219
Pension liability 9,362,621 13,051,868 1,378,232 1,965,027 10,740,853 15,016,895
Other liabilities 32,421,587 28,965,202 3,678,769 678,410 36,100,356 29,643,612
Total liabilities 85,417,545 82,796,244 16,781,509 2,792,482 102,199,054 85,588,726
Deferred inflows of resources 22,281,961 19,966,694 2,110,885 2,044,958 24,392,846 22,011,652
Net position:
Net investment in capital assets 281,427,503 256,950,114 133,311,340 124,845,135 414,738,843 381,795,249
Restricted 15,514,228 14,057,356 - - 15,514,228 14,057,356
Unrestricted 23,554,657 22,245,673 15,255,781 14,060,628 38,810,438 36,306,301
Total net position $320,496,388 $293,253,143 $148,567,121 $138,905,763 $469,063,509 $432,158,906
24
City of Cottage Grove
Management's Discussion and Analysis
Government-Wide Financial Analysis (Continued)
An additional portion of the City’s net position $15,514,228 or 3.3% represents resources that are
subject to external restrictions on how they may be used. The remaining portion of net position,
$38,810,438 or 8.3%, 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. Total net position
increased by $36,904,603.
The following is a summary of the City’s change in net position:
City of Cottage Grove's Changes in Net Position
Governmental Activities Business-Type Activities Total Primary Government
2024 2023 2024 2023 2024 2023
Revenues:
Program revenues:
Charges for services $12,464,666 $12,080,329 $11,038,351 $10,997,998 $23,503,017 $23,078,327
Operating grants and contributions 2,557,079 3,680,506 150,129 67,605 2,707,208 3,748,111
Capital grants and contributions 40,346,364 44,115,417 6,416,724 7,446,103 46,763,088 51,561,520
General revenues:
Property taxes 22,847,387 20,590,413 - - 22,847,387 20,590,413
Other taxes 4,329,068 2,655,191 - - 4,329,068 2,655,191
Grants and contributions not
restricted to specific programs 58,049 72,738 - - 58,049 72,738
Unrestricted investment earnings
(loss) 2,871,413 2,567,079 968,712 636,750 3,840,125 3,203,829
Gain(loss) on sale of capital assets - 9,025 - - - 9,025
$85,474,026 85,770,698 18,573,916 19,148,456 104,047,942 104,919,154
Expenses:
General government 4,011,989 3,300,129 - - 4,179,534 3,300,129
Community development 2,750,104 2,526,101 - - 2,750,104 2,526,101
Economic development 865,491 742,227 - - 697,946 742,227
Public safety 14,572,186 16,938,793 - - 14,572,186 16,938,793
Public works 17,498,237 12,979,642 17,498,237 12,979,642
Culture and recreation 9,798,551 8,927,799 - - 9,798,551 8,927,799
Interest on long-term debt 1,313,433 1,077,579 - - 1,313,433 1,077,579
Street lights - - 1,461,728 1,157,388 1,461,728 1,157,388
Cottage Grove EMS - - 2,254,375 2,425,138 2,254,375 2,425,138
Water operating - - 7,767,044 5,692,361 7,767,044 5,692,361
Sewer operating - - 4,850,201 4,342,927 4,850,201 4,342,927
Total expenses 50,809,991 46,492,270 16,333,348 13,617,814 67,143,339 60,110,084
Increase (decrease) in net position before
transfers and special items 34,664,035 39,278,428 2,240,568 5,530,642 36,904,603 44,809,070
Transfers (7,420,790) (14,651,072) 7,420,790 14,651,072 - -
Increase (decrease) in net position 27,243,245 24,627,356 9,661,358 20,181,714 36,904,603 44,809,070
Net position - January 1 293,253,143 268,625,787 138,905,763 118,724,049 432,158,906 387,349,836
Net position - December 31 $320,496,388 $293,253,143 $148,567,121 $138,905,763 $469,063,509 $432,158,906
Net position from governmental activities increased by $27,243,245 primarily due to the contribution of
capital assets including streets and storm water from development activities and favorable operations.
25
City of Cottage Grove
Management's Discussion and Analysis
Government-Wide Financial Analysis (Continued)
Overall, revenues from governmental activities decreased slightly from the prior year by $296,672
(-.35%) despite the prior year containing a significant capital grants and contribution ($3,769,053) that
the City received for a street reconstruction project that occurred in the prior year. In the current year,
other taxes increased by $1,673,877 (63.04%) in the current year due to new 20-year franchise fee
agreements with Xcel Energy and CenterPoint Energy. The prior 20-year agreements had expired during
the prior year. These franchise fee agreements allow the two utility companies to use the city’s rights-of-
way for their energy infrastructure for a fee. The prior agreement was set at $1.65 per month per
property for both gas and electric service. The new agreement is set at 3.75% of gross revenues.
Franchise fees in the City fund roadway and trailway maintenance projects.
Governmental activities expenses increased overall by $4,317,721 (9.29%) due to temporary water
treatment operating costs to provide quality drinking water to the community until construction is
completed on permanent water treatment facilities. These costs are currently fully funded by
reimbursements from the MPCA/3M settlement funds.
Net position in business-type activities increased $9,661,358 primarily due to infrastructure
contributions from developers related to water and sewer in new developments throughout the city.
Governmental Activities
The following chart illustrates the City’s expenses and corresponding program revenues for its
governmental activities.
Significant revenues were received in the current year for public works, due to the receipt of funds
received from the State regarding the MPCA/3M settlement funds that were used to provide quality
drinking water to the community, and infrastructure contributions from developers related to street and
storm water in new developments throughout the city.
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
General
Government
Community
Development
Economic
Development
Public Safety Public Works Culture and
Recreation
Interest on
Debt
Revenue Expense
26
City of Cottage Grove
Management's Discussion and Analysis
Government-Wide Financial Analysis (Continued)
Business-Type Activities
Net position in business-type activities increased by $9,661,358. The large increase is due to the
contribution of capital assets from developers. Below are graphs showing the business-type activities
revenue and expense comparisons.
In business-type activities, changes in net position were positive for the business-type activity funds
except for Cottage Grove EMS and the Water Fund. The Cottage Grove EMS fund experienced a loss
in the fund due to the reimbursement levels mandated for ambulance services. Opportunities to fund the
service into the future are being explored. Due to significant increases in capital assets related to water
treatment in the Water Fund, the depreciation of those assets has also increased and is causing a loss in
the fund. A rate study to determine how to recover those costs will need to occur in the near future.
Charges for
Services
59%
Operating
Grants and
Contributions
1%
Capital Grants
and
Contributions
35%
Unrestricted
Investment
Earnings
5%
Revenues - Business-Type Activities
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
Street Lights Cottage Grove EMS Water Operating Sewer Operating
Revenues Expenses
27
City of Cottage Grove
Management's Discussion and Analysis
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. 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 $41,720,535, a very slight decrease of $131,026.
Committed, assigned and unassigned fund balance, which is available for spending at the government’s
discretion, has a balance of $28,781,608 at year end. This is approximately 68.9% of the ending fund
balance. The remainder of the fund balance is non-spendable or restricted to indicate that is not
available for new spending because it has already been obligated.
General Fund
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 $13,719,569, while total fund balance was
$15,567,502. 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
48.20% of total subsequent year General fund expenditures, while total fund balance represents 55% of
the same amount. Per the City’s Fund Balance Policy, the unassigned fund balance shall be between
45% to 55% of the subsequent year operating expenditures, so the current year unassigned fund balance
fell within this range.
The General fund balance increased by $150,932. Favorable revenue results due to permits, investment
earnings, and charges for services were 5.74% higher than the original adopted budget. In addition,
expenditures were lower the original budget by -.23% due to operational savings throughout all
departments, including snow and ice removal due to a mild winter. Due to the positive results in both
revenues and expenditures, a one-time transfer in the amount of $1,370,900 was completed in the
current year to establish a Compensated Absences Internal Service Fund. The new fund was established
to provide better transparency in the funding of compensated absences for governmental activities. In
the past, the compensated absences were simply assigned as part of the year-end fund balance in the
General Fund.
Other Major Governmental Funds
The Closed Debt Fund increased by $54,224 due to favorable investment earnings in the fund.
The Ice Arena Fund increased by $63,226 due to strong operations and lower operating costs.
The Future Economic Development Fund decreased by $2,365,673 due to the construction of the South
District Street Phase 2 Project that provided improvements to 105th Street, 103rd Street, 100th Street and
Hadley Avenue. These improvements were necessary to facilitate economic development and
residential growth in this area of the City. Prior year revenues collected in the fund were used to fund
this project.
28
City of Cottage Grove
Management's Discussion and Analysis
Financial Analysis of the Government's Funds (Continued)
The MSA Construction Fund increased by $955,684. A two-year street project at East Point Douglas
and Jamaica Avenue began in 2023 and was completed in 2024. The increase is due to timing of the
revenues received to fund this two-year project.
The Future Projects Fund decreased $135,894 due to escrow funds being released to developers for
amounts remaining in the escrows after completion of developments.
The 3M Settlement MPCA Fund decreased by $787,523 due to timing differences between revenues
received from the MPCA/3M settlement and use of those revenues for water treatment activities. All
activities in this Fund are reimbursed by the MPCA/3M settlement.
The Park Capital Improvement Fund increased by $40,199 due to investment earnings and antenna
revenue that were higher than the park improvement projects completed in the current year.
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 $9,602,530 in 2024 due to capital
contributions from completed infrastructure projects in new developments and increased utility rates in
accordance with utility rate studies that are completed every five years for each utility fund.
Budgetary Highlights
General Fund.
The General Fund original budget was revised to reflect the following significant changes.
•Permits and charges for services were increased by $406,000 to account for building and
construction revenues that were higher than anticipated. General government and Community
development expenditures were increased by the same amounts to account for higher costs needed
to service those building and construction activities.
•Intergovernmental revenue was increased by $246,000 to account for various public safety grants
that were received in the current year that were not included in the original budget. Expenditures
in public safety were increased by the same amount to account for expenditures related to these
grants.
•$200,000 was moved from the General Government Contingency expenditures to Public Safety
Emergency Management expenditures to account for costs related to a summer windstorm during
the current year.
The General Fund actual results were different than the final budget amounts due to the following:
Revenues were $584,095 more than the final budget due to investment earnings and building
permit revenues that were higher than anticipated during the current year.
Public works expenditures were $429,230 lower than budgeted due to a favorable winter. Fire
protection expenditures were $100,872 lower than budgeted due to vacancies in the beginning of
the year as the department transitioned to a more sustainable, reliable staffing model.
29
City of Cottage Grove
Management's Discussion and Analysis
Capital Assets
The City of Cottage Grove’s investment in capital assets for its governmental and business-type
activities as of December 31, 2024, amounts to $474,959,645 (net of accumulated depreciation).
This investment in capital assets includes land, buildings, infrastructure, machinery, and equipment.
City of Cottage Grove's Capital Assets
(Net of Depreciation)
Governmental Activities Business-type Activities Total Primary Government
2024 2023 2024 2023 2024 2023
Land and land improvements $19,889,402 $19,889,402 $2,897,700 $2,898,495 $22,787,102 $22,787,897
Easements 2,959,052 1,157,202 - - 2,959,052 1,157,202
Construction in progress 33,592,523 18,379,670 11,962,414 1,024,372 45,554,937 19,404,042
Buildings and improvements 46,099,177 47,831,410 7,917,541 7,486,918 54,016,718 55,318,328
Equipment and furniture 363,018 223,972 - - 363,018 223,972
Machinery and equipment 7,109,414 6,031,651 3,409,517 2,255,801 10,518,931 8,287,452
Other improvements 14,437,136 14,613,201 11,366,196 8,039,444 25,803,332 22,652,645
Infrastructure:
Streets 146,416,701 137,116,228 - - 146,416,701 137,116,228
Storm sewers 52,219,578 49,007,035 - - 52,219,578 49,007,035
Sidewalks/trails 6,420,753 6,567,160 - - 6,420,753 6,567,160
Right-to-use subscription-
based IT arrangements 210,202 280,270 - - 210,202 280,270
Lease equipment 49,859 14,251 - - 49,859 14,251
Water and sewer lines - - 107,639,462 103,140,105 107,639,462 103,140,105
Ending balance $329,766,815 $301,111,452 $145,192,830 $124,845,135 $474,959,645 $425,956,587
Infrastructure capital assets in new developments and water treatment assets related to the MPCA/3M
settlement were the largest additions to capital assets during the current year. In addition, there were
additions to Construction in progress due to construction of the Low Zone Water Treatment Plant and the
Utilities Building. Both facilities will be completed in 2025. The treatment plant is funded with settlement
funds from the MPCA/3M settlement. The City issued bonds in the current year for the Utilities Building.
Additional information on the City of Cottage Grove’s capital assets can be found in Note 3.
30
City of Cottage Grove
Management's Discussion and Analysis
Long-term debt
At the end of the current fiscal year, the City of Cottage Grove had total long-term debt outstanding of
$59,571,251 an increase of $14,838,464. $4,851,728 of the debt outstanding is due within one year.
The City issued $16,025,000 in general obligation bonds in the current year to fund pavement
management, street improvements, equipment, and the construction of the Utilities Building.
S&P Global Ratings assigned its ‘AAA” stable rating to the Cottage Grove 2025 debt issuance while
affirming its ‘AAA’ rating on the City’s existing GO debt. According to S&P, “The stable outlook
reflects our expectation that Cottage Grove will maintain its steadily robust reserves while continuing to
experience economic growth, benefiting from its location within a large, broad, and diverse MSA.”
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 $174,368,874.
Of that limit, $16,680,000 of the City's outstanding debt is counted within the statutory limitation
because all other debt is either wholly or partially repaid by revenues other than general property tax
levies.
Additional information on the City of Cottage Grove’s long-term debt can be found in Note 6.
Requests for information: This financial report is designed to provide a general overview of the City
of Cottage Grove’s finances for all those with an interest in the government’s finances. Questions
concerning any of the information provided in this report or requests for additional financial information
should be addressed to Finance Director, 12800 Ravine Parkway St, Cottage Grove, Minnesota 55016.
City of Cottage Grove's Outstanding Debt
2024 2023
Governmental activities:
Bonds payable, net $45,922,140 $42,883,069
Lease liability 50,397 14,714
Subscription liability 201,377 265,055
Compensated absences 1,546,044 1,370,847
Total governmental activities 47,719,858 44,533,685
Business-type activities:
Bonds payable, net 11,453,583 -
Compensated absences 212,596 199,102
Loans payable 185,114 -
Total business-type activities 11,851,293 199,102
Total primary government $59,571,251 $44,732,787
31
32
BASIC FINANCIAL STATEMENTS
33
34
CITY OF COTTAGE GROVE
STATEMENT OF NET POSITION Statement 1
December 31, 2024
With Comparative Totals For December 31, 2023
Component
Unit
Economic
Governmental Business-Type Total Primary Development
Activities Activities Government Authority 2024 2023
Assets:
Cash and investments (including cash equivalents) $61,269,470 $14,894,755 $76,164,225 $ - $76,164,225 $68,274,242
Interest receivable 344,507 -344,507 -344,507 410,067
Due from other governments 8,602,663 67,783 8,670,446 -8,670,446 7,994,178
Accounts receivable 2,255,687 3,017,477 5,273,164 2,277 5,275,441 4,272,254
Lease receivable 9,055,159 -9,055,159 -9,055,159 7,319,479
Prepaid items 191,020 256,108 447,128 2,400 449,528 655,239
Property tax receivable 148,365 -148,365 1,216 149,581 119,457
Special assessments receivable 6,538,230 -6,538,230 -6,538,230 7,491,622
Inventories 266,170 -266,170 -266,170 302,686
Internal balances (2,318,244) 2,318,244 - - - -
Due from discretely presented component unit 682,323 -682,323 -682,323 607,260
Property held for resale 213,400 -213,400 129,300 342,700 342,700
Capital assets not being depreciated:
Land 19,889,402 2,874,997 22,764,399 -22,764,399 22,764,399
Easements 2,959,052 -2,959,052 -2,959,052 1,157,202
Construction in progress 33,592,523 11,962,414 45,554,937 -45,554,937 19,404,042
Capital assets net of accumulated depreciation/amortization: - - -
Land improvements -22,703 22,703 -22,703 23,498
Buildings and improvements 46,099,177 7,917,541 54,016,718 -54,016,718 55,318,328
Equipment and furniture 363,018 -363,018 -363,018 223,972
Lease equipment 49,859 -49,859 -49,859 14,251
Subscription-based IT arrangements 210,202 -210,202 -210,202 280,270
Machinery and equipment 7,109,414 3,409,517 10,518,931 -10,518,931 8,287,450
Other improvements 14,437,136 11,366,196 25,803,332 -25,803,332 22,652,644
Infrastructure 205,057,032 107,639,462 312,696,494 -312,696,494 295,830,531
Total assets 417,015,565 165,747,197 582,762,762 135,193 582,897,955 523,745,771
Deferred outflows of resources:
Deferred outflows of resources related to OPEB 480,557 68,962 549,519 6,235 555,754 624,979
Deferred outflows of resources related to pensions 10,699,772 1,643,356 12,343,128 27,940 12,371,068 15,561,191
11,180,329 1,712,318 12,892,647 34,175 12,926,822 16,186,170Total deferred outflows of resources
Total assets and deferred outflows of resources $428,195,894 $167,459,515 $595,655,409 $169,368 $595,824,777 $539,931,941
Liabilities:
Accounts payable $7,283,568 $2,261,874 $9,545,442 $50,441 $9,595,883 $5,546,325
Salaries and benefits payable 841,819 145,573 987,392 9,144 996,536 784,236
Contracts payable 2,165,398 497,805 2,663,203 -2,663,203 1,288,500
Due to primary government - - - 682,323 682,323 607,260
Due to other governments 594,969 149,231 744,200 366 744,566 281,036
Deposits payable 4,203,560 -4,203,560 -4,203,560 5,082,062
Unearned revenue 11,787,498 -11,787,498 -11,787,498 11,485,696
Interest payable 683,039 386,268 1,069,307 -1,069,307 554,034
Loan payable:
Due within one year -45,898 45,898 -45,898 -
Due in more than one year -139,216 139,216 -139,216 -
Bonds payable, net of unamortized premium:
Due within one year 3,490,000 -3,490,000 -3,490,000 3,375,000
Due in more than one year 42,432,140 11,453,583 53,885,723 -53,885,723 39,508,069
Leases payable:
Due within one year 12,235 -12,235 -12,235 5,807
Due in more than one year 38,162 -38,162 -38,162 8,907
Subscription-based IT arrangements:
Due within one year 65,371 -65,371 -65,371 63,678
Due in more than one year 136,006 -136,006 -136,006 201,377
Compensated absences payable:
Due within one year 1,238,224 192,120 1,430,344 16,184 1,446,528 1,264,102
Due in more than one year 307,820 20,476 328,296 222 328,518 325,932
Net pension liability:
Due in more than one year 9,362,621 1,378,232 10,740,853 82,634 10,823,487 15,124,886
Total OPEB liability:
Due within one year 55,906 -55,906 -55,906 51,466
Due in more than one year 719,209 111,233 830,442 10,056 840,498 900,889
Total liabilities 85,417,545 16,781,509 102,199,054 851,370 103,050,424 86,459,262
Deferred inflows of resources:
Deferred inflows of resources related to pensions 13,528,631 2,091,574 15,620,205 52,314 15,672,519 14,862,009
Deferred inflows of resources related to lease receivable 8,618,772 -8,618,772 -8,618,772 7,079,410
Deferred inflows of resources related to OPEB 134,558 19,311 153,869 1,746 155,615 106,333
Total deferred inflows of resources 22,281,961 2,110,885 24,392,846 54,060 24,446,906 22,047,752
Net position:
Net investments in capital assets 281,427,503 133,311,340 414,738,843 -414,738,843 381,795,249
Restricted for:
Forfeiture and seizure 8,515 - 8,515 - 8,515 6,470
Public safety 1,399,697 -1,399,697 -1,399,697 1,891,847
Debt retirement 10,073,838 -10,073,838 -10,073,838 9,014,551
Infrastructure 333,542 -333,542 -333,542 -
Tax increment purposes 3,734,636 -3,734,636 -3,734,636 3,080,093
Ice arena capital projects - - - - -64,395
Unrestricted 23,518,657 15,255,781 38,774,438 (736,062) 38,038,376 35,572,322
Total net position 320,496,388 148,567,121 469,063,509 (736,062) 468,327,447 431,424,927
Total liabilities, deferred inflows of resources, and net position $428,195,894 $167,459,515 $595,655,409 $169,368 $595,824,777 $539,931,941
Reporting Entity
Primary Government Totals
The accompanying notes are an integral part of these financial statements. 35
CITY OF COTTAGE GROVE
STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
Program Revenues
Charges For
Functions/Programs Expenses Services
Primary government:
Governmental activities:
General government $4,011,989 $244,397
Community development 2,750,104 2,949,357
Public safety 14,572,186 1,273,818
Economic development 865,491 22,560
Public works 17,498,237 2,440,627
Culture and recreation 9,798,551 5,533,907
Interest on long-term debt 1,313,433 -
Total governmental activities 50,809,991 12,464,666
Business-type activities:
Street lights 1,461,728 1,360,721
Cottage Grove EMS 2,254,375 2,142,026
Water operating 7,767,044 3,544,820
Sewer operating 4,850,201 3,990,784
Total business-type activities 16,333,348 11,038,351
Total primary government $67,143,339 $23,503,017
Component unit:
Economic Development Authority $640,090 $52,647
The accompanying notes are an integral part of these financial statements.
36
Statement 2
Component
Unit
Operating Capital Grants Economic
Grants and and Governmental Business-Type Development
Contributions Contributions Activities Activities 2024 2023 Authority
$270,543 $ -($3,497,049) $ -($3,497,049) ($3,046,444) $ -
255 -199,508 -199,508 53,362 -
1,748,161 -(11,550,207)-(11,550,207) (12,616,714) -
294,062 -(548,869)-(548,869)93,480 -
163,372 39,502,422 24,608,184 -24,608,184 31,681,327 -
80,686 843,941 (3,340,017)-(3,340,017) (1,703,450) -
- -(1,313,433)-(1,313,433) (1,077,579) -
2,557,079 40,346,363 4,558,117 -4,558,117 13,383,982 -
- 231,983 -130,976 130,976 799,081 -
25,419 - - (86,930)(86,930)(233,001) -
124,710 3,029,337 -(1,068,177) (1,068,177) 1,948,329 -
- 3,155,404 -2,295,987 2,295,987 2,379,483 -
150,129 6,416,724 -1,271,856 1,271,856 4,893,892 -
$2,707,208 $46,763,087 4,558,117 1,271,856 5,829,973 18,277,874 -
$75,159 $ - - - - - (512,284)
General revenues:
22,847,388 -22,847,388 20,590,413 273,825
2,071,626 -2,071,626 860,203 -
20,314 -20,314 38,775 -
70,168 -70,168 71,647 -
2,166,960 -2,166,960 1,684,566 -
- - - - 236,376
58,049 -58,049 72,738 -
Property taxes
Franchise taxes
Aggregate taxes
Lodging taxes
Tax increment collections
Excess tax increment collections
Grants and contributions not
restricted to specific programs
Unrestricted investment earnings 2,871,413 968,712 3,840,125 3,203,829 -
Gain on sale of capital assets - - - 9,025 -
Transfers (7,420,790) 7,420,790 - - -
Total general revenues and transfers 22,685,128 8,389,502 31,074,630 26,531,196 510,201
Change in net position 27,243,245 9,661,358 36,904,603 44,809,070 (2,083)
Net position - beginning 293,253,143 138,905,763 432,158,906 387,349,836 (733,979)
Net position - ending $320,496,388 $148,567,121 $469,063,509 $432,158,906 ($736,062)
Program Revenues
Primary Government
Net (Expense) Revenues and Changes in Net Position
The accompanying notes are an integral part of these financial statements.
37
CITY OF COTTAGE GROVE
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2024
With Comparative Totals For December 31, 2023
Debt Service Special Revenue Capital Projects
General Fund
(100)
Closed Debt
Fund (300) Ice Arena (250)
Future
Economic
Development
(286)
Assets:
Cash and investments $16,121,849 $2,324,633 $6,304 $1,666,060
Interest receivable 197,591 - 22,626 -
Due from other funds - - - 838,869
Interfund loan receivable - - - 1,679,787
Due from discretely presented component unit - - - 682,323
Due from other governments 221,504 - 28,891 -
Accounts receivable 45,568 - 312,390 -
Lease receivable - - 2,043,197 -
Prepaid items 13,556 - 2,189 -
Inventories - - - -
Taxes receivable - delinquent 124,689 472 - -
Special assessments receivable:
Deferred 1,914 30,125 - -
Delinquent 207 1,572 - -
Special deferred - - - 2,465,019
Property held for resale - - - 213,400
Total assets $16,726,878 $2,356,802 $2,415,597 $7,545,458
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $175,064 $ - $44,259 $434,910
Salaries and benefits payable 674,747 - 29,175 -
Due to other funds - - 838,869 -
Contracts payable - - - 122,798
Due to other governments 146,255 - 5,618 -
Deposits payable 500 - - -
Unearned revenue 36,000 - 3,584 -
Interfund loan payable - - - -
Total liabilities 1,032,566 - 921,505 557,708
Deferred inflows of resources:
Related to leases - - 1,961,678 -
Unavailable revenue - property taxes 124,689 472 - -
Unavailable revenue - special assessments 2,121 31,697 - 2,465,019
Unavailable revenue - intergovernmental - - - -
Total deferred inflows of resources 126,810 32,169 1,961,678 2,465,019
Fund balances:
Nonspendable 13,556 - 2,189 -
Restricted 1,052,777 - - -
Committed - - - -
Assigned 781,600 2,324,633 - 4,522,731
Unassigned 13,719,569 - (469,775) -
Total fund balances 15,567,502 2,324,633 (467,586) 4,522,731
Total liabilities, deferred inflows of
resources, and fund balances $16,726,878 $2,356,802 $2,415,597 $7,545,458
The accompanying notes are an integral part of these financial statements.
38
Statement 3
MSA
Construction
(520)
Future Projects
(510, 810)
3M Settlement -
MPCA (455)
Park Capital
Improvement
Fund
(515)
Nonmajor
Governmental
Funds 2024 2023
$664,848 $4,751,371 $9,758,482 $919,771 $22,963,118 $59,176,436 $56,988,514
- - - 94,524 29,766 344,507 410,067
- - - - 202,454 1,041,323 1,204,651
- - - - -1,679,787 2,058,045
- - - - -682,323 607,260
8,407 36,831 7,761,095 -545,935 8,602,663 7,868,918
-358,427 - - 1,190,341 1,906,726 1,337,240
- - - 6,092,067 919,895 9,055,159 7,319,479
- - - - 5,342 21,087 22,786
- - - - 82,085 82,085 83,758
- - - - 23,204 148,365 118,657
18,707 332,137 - - 2,777,715 3,160,598 3,293,806
- 593 - - 3,153 5,525 6,444
30,000 346,161 - - 530,927 3,372,107 4,191,372
- - - - -213,400 213,400
$721,962 $5,825,520 $17,519,577 $7,106,362 $29,273,935 $89,492,091 $85,724,397
$193,247 $200,866 $5,138,892 $4,801 $667,286 $6,859,325 $4,851,742
- - - - 81,195 785,117 616,831
- - - - 202,454 1,041,323 1,204,651
195,173 -1,493,596 -353,831 2,165,398 1,288,500
- 7,597 252 -407,640 567,362 54,377
-3,967,621 -171,444 63,995 4,203,560 5,082,062
- - 10,986,156 -761,758 11,787,498 11,485,696
- - - - 3,699,787 3,699,787 4,288,045
388,420 4,176,084 17,618,896 176,245 6,237,946 31,109,370 28,871,904
- - - 5,794,232 862,862 8,618,772 7,079,410
- - - - 23,204 148,365 118,657
48,707 678,891 - - 3,311,795 6,538,230 7,491,623
- - 1,356,819 - - 1,356,819 311,242
48,707 678,891 1,356,819 5,794,232 4,197,861 16,662,186 15,000,932
- - - - 87,427 103,172 106,544
284,835 - - - 11,498,143 12,835,755 10,432,386
- - - - 2,116,926 2,116,926 2,722,525
-970,545 -1,135,885 9,031,328 18,766,722 21,813,357
- - (1,456,138)-(3,895,696)7,897,960 6,776,749
284,835 970,545 (1,456,138)1,135,885 18,838,128 41,720,535 41,851,561
$721,962 $5,825,520 $17,519,577 $7,106,362 $29,273,935 $89,492,091 $85,724,397
TotalsCapital Projects
The accompanying notes are an integral part of these financial statements.
39
40
CITY OF COTTAGE GROVE
RECONCILIATION OF THE BALANCE SHEET TO THE Statement 4
STATEMENT OF NET POSITION - GOVERNMENTAL ACTIVITIES
For The Year Ended December 31, 2024
With Comparative Amounts For The Year Ended December 31, 2023
2024 2023
Total Fund Balances - Governmental Funds $41,720,535 $41,851,561
Amounts reported for governmental activities in the
Statement of Net Position (Statement 1) 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 435,386,321 397,366,035
Less accumulated depreciation and amortization (106,636,604) (97,100,905)
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 (44,025,000) (41,720,000)
Unamortized bond premium (1,897,140) (1,163,069)
Net pension liability (8,879,525) (12,416,629)
Lease liability (50,397) (14,714)
Subscription-based IT arrangement liability - (265,055)
Compensated absences payable - (1,278,474)
Total OPEB liability (717,339) (761,483)
Revenues in the statement of activities (Statement 2) that do not provide current
financial resources are not reported as revenues in the funds.
Property taxes 148,365 118,657
Special assessments 6,538,230 7,491,623
Deferred intergovernmental grants receivable 1,356,819 311,242
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 city pensions (13,218,859) (12,590,111)
Deferred inflows of resources related to OPEB (124,528) (85,021)
Deferred outflows of resources related to city pensions 10,536,087 13,198,806
Deferred outflows of resources related to OPEB 444,738 499,720
Governmental funds do not report a liability for accrued interest due
and payable.(683,039) (554,034)
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. 597,724 364,994
Total net position - governmental activities $320,496,388 $293,253,143
The accompanying notes are an integral part of these financial statements.
41
CITY OF COTTAGE GROVE
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
Debt Service Special Revenue Capital Projects
General Fund
(100)
Closed Debt
Fund (300) Ice Arena (250)
Future
Economic
Development
(286)
Revenues:
General property taxes $18,558,145 $58 $ - $ -
Franchise taxes - - - -
Aggregate taxes - - - -
Lodging tax - - - -
Tax increment collections - - - -
Special assessments 1,482 33,005 - 244,347
Licenses and permits 3,061,587 - - -
Direct charges to developers - - - -
Intergovernmental 1,567,597 - 57,500 -
Charges for services 1,593,509 - 1,511,609 -
Rent 250 - - 210
Lease related interest income - - 74,994 -
Fines and forfeitures 150,448 - - -
Investment earnings 770,531 121,367 - 203,041
Interest on interfund loan - - - 44,847
Connection charges - - - -
Park dedication fees - - - -
Refunds and reimbursements - - - -
Donations 60,700 - 8,750 150,002
Miscellaneous 145,261 - 29,772 -
Total revenues 25,909,510 154,430 1,682,625 642,447
Expenditures:
Current:
General government 3,281,371 206 - -
Community development 2,774,134 - - -
Public safety 12,240,750 - - -
Public works 3,194,569 - - -
Culture and recreation 3,337,718 - 1,373,923 -
Economic development - - - 686
Capital outlay:
General government - - - -
Public safety 195,051 - - -
Public works 44,339 - - 3,633,454
Culture and recreation 17,829 - 45,476 -
Debt service:
Principal 8,656 - - -
Interest and other charges 755 - - -
Total expenditures 25,095,172 206 1,419,399 3,634,140
Excess of revenues over (under) expenditures 814,338 154,224 263,226 (2,991,693)
Other financing sources (uses):
Proceeds from sale of capital assets - - - -
Subscription-based IT arrangements issued - - - -
Bond issuance - - - -
Bond premium - - - -
Leases issued 44,339 - - -
Transfers in 663,155 - - 626,020
Transfers out (1,370,900) (100,000) (200,000) -
Total other financing sources (uses) (663,406) (100,000) (200,000) 626,020
Net change in fund balances 150,932 54,224 63,226 (2,365,673)
Fund balances:
Beginning of year, as previously presented 15,416,570 2,270,409 (530,812) 6,888,404
Change within financial reporting entity (nonmajor to major fund) - - - -
Beginning of year, as adjusted 15,416,570 2,270,409 (530,812) 6,888,404
End of year $15,567,502 $2,324,633 ($467,586) $4,522,731
The accompanying notes are an integral part of these financial statements. 42
Statement 5
MSA
Construction
(520)
Future Projects
(510, 810)
3M Settlement -
MPCA (455)
Park Capital
Improvement
Fund
(515)
Nonmajor
Governmental
Funds 2024 2023
$ - $ - $ - $ - $4,259,477 $22,817,680 $20,584,152
- - - - 2,071,626 2,071,626 860,203
- - - - 20,314 20,314 38,775
- - - - 70,168 70,168 71,647
- - - - 2,166,960 2,166,960 1,684,566
5,824 43,233 - - 926,633 1,254,524 2,202,377
- - - - - 3,061,587 2,698,807
- 5,000 - - 1,720 6,720 168,707
1,322,386 36,831 29,717,773 - 761,109 33,463,196 28,449,483
- - - - 5,244,340 8,349,458 7,498,099
- - - 368,568 104,053 473,081 542,637
- - - 238,802 32,376 346,172 272,477
- - - - 187,397 337,845 333,250
131,314 82,263 - 64,275 1,107,603 2,480,394 2,274,148
- - - - - 44,847 20,454
- - - - 1,680,447 1,680,447 1,784,257
- - - - 763,941 763,941 767,094
- - - - 591 591 104
- - - - 88,584 308,036 367,073
6,223 - - - 32,738 213,994 797,195
1,465,747 167,327 29,717,773 671,645 19,520,077 79,931,581 71,415,505
- - - - 184,985 3,466,562 2,904,353
- - - - - 2,774,134 2,444,734
- - - - 1,019,875 13,260,625 12,446,009
71,535 4,255 1,248,000 - 1,553,519 6,071,878 5,895,204
- 185,181 - 20,005 3,015,829 7,932,656 7,282,271
- - - - 864,805 865,491 742,227
- - - - - - 120,173
- - - - 410,929 605,980 854,779
6,778,553 113,785 29,257,296 - 4,349,849 44,177,276 33,719,651
- - - 611,441 1,792,732 2,467,478 9,513,451
- - - - 3,375,000 3,383,656 3,367,679
43,693 - - - 1,303,561 1,348,009 1,141,777
6,893,781 303,221 30,505,296 631,446 17,871,084 86,353,745 80,432,308
(5,428,034) (135,894) (787,523) 40,199 1,648,993 (6,422,164) (9,016,803)
- - - - 22,632 22,632 9,025
- - - - - - 335,783
4,104,708 - - - 1,575,292 5,680,000 7,815,000
683,985 - - - 213,667 897,652 320,387
- - - - - 44,339 -
1,595,025 - - - 935,402 3,819,602 3,140,919
- - - - (2,502,187) (4,173,087) (1,507,625)
6,383,718 - - - 244,806 6,291,138 10,113,489
955,684 (135,894) (787,523) 40,199 1,893,799 (131,026) 1,096,686
(670,849) 1,106,439 (668,615) - 18,040,015 41,851,561 40,754,875
- - - 1,095,686 (1,095,686) - -
(670,849) 1,106,439 (668,615) 1,095,686 16,944,329 41,851,561 40,754,875
$284,835 $970,545 ($1,456,138) $1,135,885 $18,838,128 $41,720,535 $41,851,561
Capital Projects Totals
The accompanying notes are an integral part of these financial statements. 43
CITY OF COTTAGE GROVE
RECONCILIATION OF THE STATEMENT OF REVENUES,Statement 6
EXPENDITURES AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2024
With Comparative Amounts For The Year Ended December 31, 2023
2024 2023
Total net change in fund balances - governmental funds (Statement 5)($131,026) $1,096,686
Amounts reported for governmental activities in the
Statement of Activities (Statement 2) are different because:
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 41,650,344 42,892,284
Developer contributed assets 5,075,072 14,787,928
Depreciation and amortization expense (9,252,614) (8,491,528)
Loss on disposal of capital assets (269,740) (449,232)
Assets contributed to business-type activities (8,438,205) (16,286,133)
Compensated absences are recognized as paid in the governmental funds but -(80,062)
recognized as the expense is incurred in the Statement of Activities (Statement 2).
OPEB expenses are recognized as paid in the governmental funds but recognized
as the expense is incurred in the Statement of Activities (Statement 2).(50,345) (29,821)
Principal payments on long-term debt are recognized as expenditures in the
governmental funds but as a reduction to the debt liability on the Statement of 3,383,656 3,367,679
Activities (Statement 2).
Some expenses reported in the Statement of Activities (Statement 2) do not require
the use of current financial resources and, therefore, are not reported as expenditures
in governmental funds.
Accrued interest payable (129,005) (141,638)
Amortization of bond discounts and premiums 163,581 205,836
Proceeds from long-term debt are recognized as an other financing source in the
governmental funds but as a decrease in net position in the Statement of Activities (5,724,339) (8,150,783)
(Statement 2).
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 (Statement 2).
Bond discounts and premiums (897,652) (320,387)
Governmental funds recognize pension contributions as expenditures at the time
of payment whereas the Statement of Activities (Statement 2) factors in items related 245,637 (3,127,521)
to pensions on a full accrual perspective.
Revenues in the Statement of Activities (Statement 2) that do not provide current
financial resources are not reported as revenues in the funds.
Property taxes 29,708 6,261
Special assessments (953,393) (469,640)
Loans and grants receivable 1,045,577 -
Internal service funds are used by management to charge the cost of insurance,
compensated absences, and other expenses to individual funds. This amount is
net revenue (loss) attributable to governmental funds.1,495,989 (182,573)
Change in net position of governmental activities (Statement 2)$27,243,245 $24,627,356
The accompanying notes are an integral part of these financial statements.
44
CITY OF COTTAGE GROVE
STATEMENT OF NET POSITION Statement 7
PROPRIETARY FUNDS
December 31, 2024
Governmental
Cottage Grove Activities -
Street Light EMS Fund Water Sewer Internal
Fund (630) (660) Operating (610) Operating (620)Total Service Funds
Assets:
Current assets:
Cash and investments $464,255 $ - $10,760,798 $3,669,702 $14,894,755 $2,093,034
Accounts receivable 248,067 1,638,735 491,676 638,999 3,017,477 348,961
Due from other funds - - 1,028,463 -1,028,463 -
Due from other governments -3,440 48,003 16,340 67,783 -
Inventories - - - - -184,085
Prepaid items -12,164 3,134 240,810 256,108 169,933
Total current assets 712,322 1,654,339 12,332,074 4,565,851 19,264,586 2,796,013
Noncurrent assets:
Interfund loan receivable - - - 2,020,000 2,020,000 -
Capital assets:
Land and land improvements - - 2,760,015 154,785 2,914,800 424,665
Buildings and improvements - - 15,498,523 -15,498,523 928,870
Equipment and furniture - - - - -70,127
Machinery and equipment 109,567 968,378 4,271,598 372,008 5,721,551 489,092
Other improvements 15,466,702 - - - 15,466,702 -
Construction in progress - - 9,314,633 2,647,781 11,962,414 -
Water and sewer lines - - 83,290,430 57,044,331 140,334,761 -
Subscription-based IT arrangements - - - - -350,338
Total capital assets 15,576,269 968,378 115,135,199 60,218,905 191,898,751 2,263,092
Less: Accumulated depreciation and amortization (4,210,073) (457,117) (29,237,762) (12,800,969) (46,705,921) (1,245,994)
Net capital assets 11,366,196 511,261 85,897,437 47,417,936 145,192,830 1,017,098
Total noncurrent assets 11,366,196 511,261 85,897,437 49,437,936 147,212,830 1,017,098
Total assets 12,078,518 2,165,600 98,229,511 54,003,787 166,477,416 3,813,111
Deferred outflows of resources:
Deferred outflows of resources related to pensions 20,080 1,456,134 133,723 33,419 1,643,356 163,685
Deferred outflows of resources related to OPEB 3,778 28,534 28,248 8,402 68,962 35,819
Total deferred outflows of resources 23,858 1,484,668 161,971 41,821 1,712,318 199,504
Total assets and deferred outflows of resources $12,102,376 $3,650,268 $98,391,482 $54,045,608 $168,189,734 $4,012,615
Liabilities
Current liabilities:
Accounts payable $80,308 $12,596 $2,128,870 $40,100 $2,261,874 $424,243
Salaries payable 7,093 74,133 47,989 16,358 145,573 56,702
Contracts payable - - 373,354 124,451 497,805 -
Due to other funds -392,666 - - 392,666 635,797
Due to other governments 2,646 11,212 68,949 66,424 149,231 27,607
Interest payable - - 289,701 96,567 386,268 -
Compensated absences payable 11,854 83,609 83,658 12,999 192,120 1,238,224
Loans payable -45,898 - - 45,898 -
Subscription-based IT arrangements - - - - -65,371
Total current liabilities 101,901 620,114 2,992,521 356,899 4,071,435 2,447,944
Noncurrent liabilities:
Compensated absences payable -6,566 12,145 1,765 20,476 307,820
Loans payable -139,216 - - 139,216 -
Bonds payable - - 8,590,187 2,863,396 11,453,583 -
Subscription-based IT arrangements - - - - -136,006
Net pension liability 59,928 829,722 391,406 97,176 1,378,232 483,096
OPEB liability 6,094 46,024 45,563 13,552 111,233 57,776
Total noncurrent liabilities 66,022 1,021,528 9,039,301 2,975,889 13,102,740 984,698
Total liabilities 167,923 1,641,642 12,031,822 3,332,788 17,174,175 3,432,642
Deferred inflows of resources:
Deferred inflows of resources related to pensions 35,833 1,724,105 263,658 67,978 2,091,574 309,772
Deferred inflows of resources related to OPEB 1,058 7,990 7,910 2,353 19,311 10,030
Total deferred inflows of resources 36,891 1,732,095 271,568 70,331 2,110,885 319,802
Net position:
Net investment in capital assets 11,366,196 326,147 76,933,896 44,685,101 133,311,340 815,721
Unrestricted 531,366 (49,616) 9,154,196 5,957,388 15,593,334 (555,550)
Total net position 11,897,562 276,531 86,088,092 50,642,489 148,904,674 260,171
Total liabilities, deferred inflows
of resources, and net position $12,102,376 $3,650,268 $98,391,482 $54,045,608 $168,189,734 $4,012,615
$148,904,674
(337,553)
Net position reported above
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.
Net position of business-type activities (Statement 1)$148,567,121
Business-Type Activities Enterprise Funds
The accompanying notes are an integral part of these financial statements.45
CITY OF COTTAGE GROVE
STATEMENT OF REVENUES, EXPENSES AND Statement 8
CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
For The Year Ended December 31, 2024
Governmental
Cottage Grove Activities -
Street Light EMS Fund Water Sewer Internal
Fund (630) (660) Operating (610) Operating (620)Total Service Funds
Operating revenues:
Charges for services - user fees $1,083,525 $2,132,406 $3,360,540 $3,977,841 $10,554,312 $7,478,935
Water meter/street light material sales 201,177 -149,310 -350,487 -
Special assessments - - - 2,158 2,158 -
Insurance refunds and reimbursements - - - - -696,382
Total operating revenues 1,284,702 2,132,406 3,509,850 3,979,999 10,906,957 8,175,317
Operating expenses:
Personal services 152,882 1,639,713 1,248,297 343,775 3,384,667 4,569,622
Commodities 83,860 96,192 229,934 22,685 432,671 915,261
Commodities - items for sale 194,845 - - - 194,845 -
Contractual services 761,638 415,637 1,446,178 607,387 3,230,840 1,927,558
Disposal - contractual services - MCES - - - 2,752,567 2,752,567 -
Claims - - - - -541,384
Depreciation and amorization 261,960 108,859 4,529,406 1,031,179 5,931,404 109,493
Total operating expenses 1,455,185 2,260,401 7,453,815 4,757,593 15,926,994 8,063,318
Operating income (loss)(170,483) (127,995) (3,943,965)(777,594) (5,020,037) 111,999
Nonoperating revenues (expenses):
Investment earnings 26,694 -756,885 163,883 947,462 31,629
Interest on interfund debt - - - 21,250 21,250 -
Interest expense - - (247,935)(82,645) (330,580) (7,050)
Intergovernmental grants -25,419 124,710 -150,129 76,577
Rent - - 1,200 -1,200 -
Bond issuance costs - - (80,071)(26,690) (106,761) -
Loss on disposal of capital assets - - - - -(51,262)
Miscellaneous 76,019 9,620 33,770 10,785 130,194 22,024
Total nonoperating revenues (expenses)102,713 35,039 588,559 86,583 812,894 71,918
Income (loss) before capital
contributions and transfers (67,770) (92,956) (3,355,406)(691,011) (4,207,143) 183,917
Capital contributions 3,618,505 -7,827,018 3,409,406 14,854,929 -
Loss on disposal of assets (13,196) (14,645) - - (27,841) -
Transfers in - - - - - 1,370,900
Transfers out (53,000) (103,825) (635,032)(225,558) (1,017,415) -
Change in net position 3,484,539 (211,426) 3,836,580 2,492,837 9,602,530 1,554,817
Net position - January 1, as previously presented 8,413,023 487,957 82,251,512 48,149,652 139,302,144 (31,387)
Change within financial reporting entity - - - - - (1,263,259)
Net position - Janaury 1, as adjusted 8,413,023 487,957 82,251,512 48,149,652 139,302,144 (1,294,646)
Net position - December 31 $11,897,562 $276,531 $86,088,092 $50,642,489 $148,904,674 $260,171
Change in net position reported above $9,602,530
Adjustment to reflect the consolidation of internal service fund activity
related to enterprise funds.58,828
Change in net position of business-type activities (Statement 2)$9,661,358
Business-Type Activities - Enterprise Funds
The accompanying notes are an integral part of these financial statements.
46
CITY OF COTTAGE GROVE
STATEMENT OF CASH FLOWS Statement 9
PROPRIETARY FUNDS
For The Year Ended December 31, 2024
Governmental
Cottage Grove Activities -
Street Light EMS Fund Water Sewer Internal
Fund (630) (660) Operating (610) Operating (620) Total Service Funds
Cash flows - operating activities:
Receipts from customers and users $1,244,699 $2,071,510 $3,640,978 $3,863,110 $10,820,297 $7,189,430
Receipts from insurance refunds and reimbursements - - - - - 696,382
Payments to suppliers (1,051,837) (512,786) (1,629,513) (3,362,958) (6,557,094) (3,094,804)
Payments to employees (151,701) (1,649,379) (1,241,640) (334,326) (3,377,046) (4,385,273)
Miscellaneous revenue 76,019 9,620 34,970 10,785 131,394 22,024
Net cash flows - operating activities 117,180 (81,035) 804,795 176,611 1,017,551 427,759
Cash flows - noncapital financing activities:
Advances to/from other Funds - 203,814 (204,087) 210,000 209,727 273
Intergovernmental revenue - 25,419 124,710 - 150,129 76,577
Transfer from other Funds - - - - - 1,370,900
Transfer to other Funds (53,000) (103,825) (635,032) (225,558) (1,017,415) -
Net cash flows - noncapital financing activities (53,000) 125,408 (714,409) (15,558) (657,559) 1,447,750
Cash flows - capital related financing activities:
Acquisition of capital assets - - (6,246,598) (2,523,330) (8,769,928) (51,262)
Proceeds from general obligation bonds - - 8,551,882 2,850,628 11,402,510 -
Principal paid on debt - (44,373) - - (44,373) (63,678)
Interest paid on debt - - - - - (7,050)
Net cash flows - capital related financing activities - (44,373) 2,305,284 327,298 2,588,209 (121,990)
Cash flows - investing activities:
Interest and dividends received 26,694 - 756,885 163,883 947,462 31,629
Interest on interfund loan - - - 21,250 21,250 -
Net cash flows - investing activities 26,694 - 756,885 185,133 968,712 31,629
Net change in cash and cash equivalents 90,874 - 3,152,555 673,484 3,916,913 1,785,148
Cash and cash equivalents
January 1 373,381 - 7,608,243 2,996,218 10,977,842 307,886
December 31 $464,255 $ - $10,760,798 $3,669,702 $14,894,755 $2,093,034
Reconciliation of operating income (loss) to net cash
flows - operating activities:
Operating income (loss) ($170,483) ($127,995) ($3,943,965) ($777,594) ($5,020,037) $111,999
Adjustments to reconcile operating income (loss)
to income (loss) to net cash net cash flows - operating activities:
Depreciation expense 261,960 108,859 4,529,406 1,031,179 5,931,404 109,493
Miscellaneous revenue 76,019 9,620 34,970 10,785 131,394 22,024
Pension expense (1,502) (21,431) (12,511) (3,336) (38,780) (14,013)
OPEB expense 47 (775) 4,799 1,944 6,015 5,304
Changes in assets and liabilities:
Decrease (increase) in accounts receivables (40,003) (57,456) 127,297 (121,745) (91,907) (341,735)
Decrease (increase) in due from other governments - (3,441) 3,831 4,856 5,246 52,230
Decrease (increase) in inventories - - - - - 34,843
Decrease (increase) in prepaid items - (2,910) (489) (11,429) (14,828) 221,240
Increase (decrease) in accounts payable (14,510) 413 60,168 21,294 67,365 9,271
Increase (decrease) in salaries payable 1,078 8,021 10,542 7,251 26,892 17,861
Increase (decrease) in due to other governments 3,016 1,541 (13,080) 9,816 1,293 24,045
Increase (decrease) in compensated absences payable 1,558 4,519 3,827 3,590 13,494 175,197
Total adjustments 287,663 46,960 4,748,760 954,205 6,037,588 315,760
Net cash flows - operating activities $117,180 ($81,035) $804,795 $176,611 $1,017,551 $427,759
Noncash investing, capital and financing activities:
Financing activities:
Capital asset aqusition from loan issuance $ - $254,265 $ - $ - $254,265 $ -
Capital asset contributions from governmental activites 3,386,522 - 4,797,681 254,002 8,438,205 -
Capital asset contributions from developers 231,983 - 3,029,337 3,155,404 6,416,724 -
Total noncash activities $3,618,505 $254,265 $7,827,018 $3,409,406 $15,109,194 $ -
Business-Type Activities Enterprise Funds
The accompanying notes are an integral part of these financial statements.47
48
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Cottage Grove (the City) 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 were not prepared for the EDA.
Joint Ventures
The City of Cottage Grove, Minnesota and the City of Woodbury, Minnesota, participate in a joint
venture to provide for the operation of the Health and Emergency Response Occupations Center
(HERO Center). The HERO Center is used as a regional public safety training center. The HERO
Center was created pursuant to an agreement dated April 28, 2016. The terms of the agreement
provide for the joint use, responsibility, and ownership of the HERO Center. The HERO Center is
owned by the City of Cottage Grove. The HERO Center is jointly and equally maintained,
operated, and managed by Cottage Grove and Woodbury. The share of the operating costs is
determined by dividing the authorized number of full-time sworn peace officers in each
community. Contributions from the City of Cottage Grove to the HERO center were $87,935 for
the year ended December 31, 2024. Separate financial statements were not prepared for the joint
venture.
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
49
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
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.
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.
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.
Ice Arena Special Revenue Fund – This fund accounts for the operations of the City's ice arena.
The primary revenue source is charges for services from users of the facility.
Future Economic Development Capital Project Fund – This fund accounts for the receipt and use
of monies for economic development purposes.
MSA Construction Capital Project Fund – This fund accounts for projects related to Municipal
State Aids.
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.
50
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
3M Settlement – MPCA Capital Projects Fund – This fund accounts for funds and expenditures
related to this agreement.
Park Capital Improvements Fund – to account for capital projects in existing municipal
parks.
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, information
services, and compensated absences 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. 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.
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.
51
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
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. The
governmental funds with adopted budgets are: General, Ice Arena, Recycling, Storm Water Maintenance,
Forfeiture/Seizure, Golf Course, Convention and Visitors Bureau, Equipment Replacement and Roadway
and Trailway Maintenance. Additionally, the EDA Component Unit has an annually adopted budget.
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, certain Special Revenue Funds, certain Capital Project Funds, Enterprise Funds,
and the Internal Service Fund. The General Fund and budgeted Special Revenue Funds are the
only funds with legally adopted annual budgets.
6. Legal debt obligation indentures determine the appropriation level and debt service tax levies for
the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to
determine and calculate user charges. These are not reflected in the financial statements.
7. A capital improvement program is reviewed annually by the City Council for the Capital Project
Funds. However, appropriations for major projects are not adopted until the actual bid award of
the improvement. The appropriations are not reflected in the financial statements.
8. Expenditures may not legally exceed budgeted appropriations at the total fund level. The legal
level of budgetary control is at the department level (i.e., administration, finance, police, etc.)
within each activity. All amounts over budget have been approved by the City Council through the
disbursement approval process.
52
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
The following is a listing of expenditure categories that exceed budget appropriations for major and
nonmajor funds:
F. DEPOSITS AND INVESTMENTS
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 2. 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, 2024, are planned to be eliminated in 2025. 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."
Ambulance receivables have been reported net of estimated uncollectible accounts (see Note 1 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.
53
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
H. PROPERTY TAX REVENUE RECOGNITION
The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment
date) of each year for collection in the following year. The County is responsible for billing and collecting
all property taxes for itself, the City, the local school district, and other taxing authorities. Such taxes
become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are
payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are
payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and
remitted to the City on or before July 7 and December 2 of the same year. Delinquent collections for
November and December are received the following January. The City has no ability to enforce payment of
property taxes by property owners; the County possesses this authority.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible
property taxes are not material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
The City recognizes property tax revenue when it becomes both measurable and available to finance
expenditures of the current period. In practice, current and delinquent taxes received by the City in July,
December and January are recognized as revenue for the current year. Taxes collected by the County by
December 31 (remitted to the City 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.
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.
54
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
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, 2024, were $1,325,000.
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.
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:
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
55
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
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 assets 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. Deferred inflows
of resources related to lease receivable is reported in both the government-wide Statement of Net Position
and Governmental Funds Balance Sheet.
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
assets 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 and OPEB.
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 and/or previous work experience. Annual Leave
accruals vary from 20 to 32 days per year.
As benefits accrue to employees, the accumulated leave amounts are reported as an expense and liability in
the statements of net position. All leave that is attributable to services already rendered, accumulates, and
is more likely than not to be used for time off or otherwise paid has been accrued. 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.
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. DEFINED BENEFIT PENSION PLANS
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.
56
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
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.
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 45% - 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.
57
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
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."
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, 2024, 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
The City's investment policy authorizes the City to invest in the following, which are all allowable
investments under Minnesota state statutes:
U.S. Treasury obligations which carry the full faith and credit of the United States government
U.S. government agency securities including mortgages, (but excluding high-risk mortgage
backed securities) and other securities which are direct obligations or are guaranteed or insured
issues of the United States, its agencies, instrumentalities or organizations created by an act of
Congress.
Certificates of Deposit (CDs) which are negotiable or non-negotiable instruments issued by
commercial banks and insured up to $250,000 each by the Federal Deposit Insurance Corporation
(FDIC).
Commercial paper, rated in the highest tier (AI, PI) by a nationally recognized rating agency and
maturing in 270 days or less.
58
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Any security which is a General Obligation of any state or local government with taxing powers
which is rated “A” or better by a national bond rating service.
Any security which is a revenue obligation of any state or local government which is rated “AA”
or better by a national bond rating service.
Bankers’ acceptances:
With prior approval, guaranteed investment contracts that are allowable under Minnesota
Statute 118A.05, which includes those issued or guaranteed by U.S. commercial banks,
domestic ranches of foreign banks, U.S. insurance companies, or their Canadian subsidiaries or
the domestic affiliates of any of the foregoing. The issuer must be rated in one of the two
highest categories by a nationally recognized rating agency. Should the issuer’s or guarantor’s
credit quality be downgraded below “A”, there must be withdrawal rights on our behalf.
Repurchase agreements consisting of collateral allowable in Minnesota Statute, section 118A.04.
Money market mutual funds which invest in authorized instruments according to Minnesota
Statutes 118A.05.
Local government investment pools developed through joint powers statutes or other
intergovernmental agreement legislation
The 4M fund is an external investment pool which is regulated by Minnesota Statues and the Board of
Directors of the League of Minnesota Cities. For the 4M Multi Class Fund (which includes the Liquid
Asset Class and the PLUS Class) the fair value of the position in the pool is the same as the value of pool
shares. The pool is managed to maintain a portfolio weighted average maturity of no greater than 60 days
and seeks to maintain a constant net asset value (NAV) of $1 per share. Investments are measured at
amortized cost in accordance with GASB Statement No. 79. The 4M PLUS (4MP) Class requires funds to
be deposited for a minimum of 14 calendar days. Withdrawals prior to the 14-day restriction period are
subject to penalty equal to 7 days interest on the amount withdrawn.
The City will not invest in:
Reverse purchase agreements
Future contracts
Options
Derivatives
59
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Interest Rate Risk – The 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.
Fair Less
Investment Type Rating Value Than 1 1-5 6-10
U.S. Agencies:
Federal Home Loan Bank - FHLB AA+/Aaa $4,462,304 $1,976,058 $2,486,246 $ -
Freddie Mac - FHLMC AA+/Aaa 3,583,439 997,090 2,586,349 -
Federal Farm Credit Bank - FFCB AA+/Aaa 1,276,078 997,300 278,778 -
Federal National Mortgage Association - FNMA AA+/Aaa 487,480 487,480 - -
U.S. Treasuries AA+/Aaa 25,538,333 14,623,028 10,915,305 -
External investment pool - 4M Liquid Asset Class AAAm 7,956,781 7,956,781 - -
External investment pool - 4MP AAAm 5,250,634 5,250,634 - -
Municipal Obligations NR 11,324,469 5,466,344 5,858,125 -
Money Market Mutual Funds NR 5,281,602 5,281,602 - -
Negotiable CD's NR 5,007,590 3,591,999 1,415,591 -
Commercial Paper NR 5,974,090 5,974,090 - -
Total pooled investments $76,142,800 $52,602,406 $23,540,394 $0
Petty cash and change 21,425
Total cash and investments $76,164,225
NR - Not Rated
Investment Maturities (in Years)
Custodial Credit Risk – 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:
Fair
Type Value Percent
Federal Home Loan Bank - FHLB $4,462,304 5%
U.S. Treasuries 25,538,333 34%
The City has the following recurring fair value measurements as of December 31, 2024:
$25,538,333 of US Treasuries are valued using quoted market prices (Level 1 inputs).
$26,141,359 of FNMA, FFCB, FHLB, FHLMC, municipal obligations
and negotiable CDs are valued using a matrix pricing model (Level 2 inputs).
60
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Note 3 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2024, was as follows:
Beginning Ending
Balance Increases Decreases Balance
rimary Government
overnmental activities:
Capital assets, not being depreciated:
Land $19,889,402 $ - $ - $19,889,402
Permanent easements 1,157,202 1,801,850 - 2,959,052
Construction in progress 18,379,670 25,445,673 (10,232,820) 33,592,523
Total capital assets, not being depreciated 39,426,274 27,247,523 (10,232,820) 56,440,977
Capital assets, being depreciated and amortized:
Buildings and improvements 68,479,323 133,777 - 68,613,100
Equipment and furniture 1,860,591 161,297 - 2,021,888
Machinery and equipment 15,997,876 2,328,878 (587,424) 17,739,330
Other improvements 20,780,573 750,524 - 21,531,097
Infrastructure:
Streets 179,947,032 13,236,429 (595,477) 192,587,984
Storm sewers 62,513,450 4,546,265 (140,784) 66,918,931
Sidewalks/trails 8,818,661 71,000 - 8,889,661
Right-to-use subscription based IT arrangements 350,338 - - 350,338
Lease equipment 38,239 44,339 (18,459) 64,119
Total capital assets, being depreciated
and amortized 358,786,083 21,272,509 (1,342,144) 378,716,448
Less accumulated depreciation for:
Buildings and improvements 20,647,913 1,866,010 - 22,513,923
Equipment and furniture 1,636,619 22,251 - 1,658,870
Machinery and equipment 9,966,225 1,209,198 (545,507) 10,629,916
Other improvements 6,167,372 926,589 - 7,093,961
Infrastructure:
Streets 42,830,804 3,744,732 (404,253) 46,171,283
Storm sewers 13,506,415 1,294,955 (102,017) 14,699,353
Sidewalks/trails 2,251,501 217,407 - 2,468,908
Less accumulated amortization for:
Right-to-use subscription based IT arrangements 70,068 70,068 - 140,136
Lease equipment 23,988 8,731 (18,459) 14,260
Total accumulated depreciation and
amortization 97,100,905 9,359,941 (1,070,236) 105,390,610
Total other capital assets being
depreciated and amortized, net 261,685,178 11,912,568 (271,908) 273,325,838
Governmental activities capital assets, net $301,111,452 $39,160,091 ($10,504,728) $329,766,815
61
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Depreciation and amortization expense was charged to functions/programs of the City as follows:
Beginning Ending
Balance Increases Decreases Balance
Primary Government
Business-type activities:
Capital assets, not being depreciated:
Land $2,874,997 $ - $ - $2,874,997
Construction in progress 1,024,372 10,938,042 - 11,962,414
Total capital assets, not being depreciated 3,899,369 10,938,042 - 14,837,411
Capital assets, being depreciated:
Land improvements 39,803 - - 39,803
Buildings and improvements 12,447,537 3,050,986 - 15,498,523
Machinery and equipment 4,356,255 1,643,672 (278,376) 5,721,551
Other improvements 11,893,246 3,618,505 (45,049) 15,466,702
Water and sewer lines 133,254,025 7,080,736 - 140,334,761
Total capital assets being depreciated 161,990,866 15,393,899 (323,425) 177,061,340
Less accumulated depreciation for:
Land improvements 16,305 795 - 17,100
Buildings and improvements 4,960,619 2,620,363 - 7,580,982
Machinery and equipment 2,100,456 450,308 (238,730) 2,312,034
Other improvements 3,853,803 278,556 (31,853) 4,100,506
Water and sewer lines 30,113,917 2,581,382 - 32,695,299
Total accumulated depreciation 41,045,100 5,931,404 (270,583) 46,705,921
Total capital assets being depreciated - net 120,945,766 9,462,495 (52,842) 130,355,419
Business-type activities capital assets - net $124,845,135 $20,400,537 ($52,842) $145,192,830
Governmental activities:
General government $531,370
Public safety 1,334,996
Public works 5,686,935
Culture and recreation 1,806,640
Total depreciation and amortization expense - governmental activities $9,359,941
Business-type activities:
Street lights $261,960
Cottage Grove EMS 108,859
Water operating 4,529,406
Sewer operating 1,031,179
Total depreciation expense - business-type activities $5,931,404
62
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Note 4 LEASE RECEIVABLE
The City has a lease agreement with the Cottage Grove Athletic Association and Independent School District No.
833 relating to the Cottage Gove Ice Arena that is owned by the City. Both leases expire in 2029. The City pays all
operating costs for the Arena, including maintenance and glass replacement costs. Total rental and interest income
earned from these leases was $520,422 for the year ended December 31, 2024.
The City has multiple leasing agreements relating to space on and around the Cities Water Towers. Lessors include
AT&T, Verizon Wireless, Zayo, T-Mobile, and Sprint and all leases expire sporadically between December 31,
2024, and December 31, 2048. Expiration dates noted include automatic 5-year renewals of leases that are only
terminatable by the Lessee. Total rental and interest income earned from Water Tower leases was $770,830 for the
year ended December 31, 2024.
The net present value of future lease payments has been recorded as a lease receivable and a deferred inflow of
resources, discounted at rates ranging from 3.28% to 3.58% discount rate. Lease receivable at December 31, 2024,
was $9,055,159 and deferred inflow was $8,618,772. The revenue will be recognized in future years.
Note 5 RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31, 2024 are as follows:
Special Lease
Assessments Receivable Total
Major funds:
Ice Arena $ - $1,606,948 $1,606,948
MSA Construction 44,133 - 44,133
Future Projects 650,839 - 650,839
Closed Debt Fund 9,402 - 9,402
Future Economic Development 2,465,019 - 2,465,019
Park Capital Improvement - 5,889,995 5,889,995
Non-major:
Debt Service Funds 2,793,867 - 2,793,867
Capital Projects Funds - 889,927 889,927
Total $5,963,260 $8,386,870 $14,350,130
63
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Note 6 LONG-TERM LIABILITIES
A. LONG-TERM 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, 2024, the governmental long-term liabilities of the financial reporting entity consisted
of the following:
Primary Government Rates Date Date Issue Outstanding
Governmental Activities:
General Obligation Capital Improvement Bonds:
G.O. CIP Bonds of 2017A 2.50 - 3.25 05/11/17 02/01/38 $9,155,000 $6,925,000
G.O. CIP Bonds of 2019A 3.00 - 4.00 02/14/19 02/01/40 4,090,000 3,480,000
Total General Obligation Capital Improvement Bonds 13,245,000 10,405,000
G.O. Refunding Bonds of 2016A 2.00 - 3.00 01/28/16 02/01/27 4,660,000 1,140,000
Equipment Certificate 2019B 3.00 02/14/19 02/01/29 2,845,000 1,525,000
Special Assessment Bonds with Government Commitment:
G.O. Improvement Bonds of 2015A 2.50 - 3.00 05/27/15 02/01/31 5,700,000 2,810,000
G.O. Improvement Bonds of 2016B 2.00 - 2.10 11/16/16 02/01/33 4,275,000 2,455,000
G.O. Improvement Bonds of 2018A 3.00 06/26/18 02/01/35 7,620,000 5,905,000
G.O. Improvement Bonds of 2021A 1.65 - 2.00 06/10/21 02/01/37 3,955,000 3,490,000
G.O. Improvement Refunding Bonds of 2021B 1.10 - 2.00 12/09/21 02/01/29 3,840,000 2,800,000
Total Special Assessment Bonds 25,390,000 17,460,000
General Obligation Tax Abatement Bonds:
G.O. Tax Abatement Bonds of 2023A 3.60 - 4.00 05/09/23 02/01/44 7,815,000 7,815,000
General Obligation Improvement Bonds:
G.O. Improvement Bonds of 2024A 5.00 03/12/24 02/01/40 5,680,000 5,680,000
Bond premium - 1,897,140
Total governmental activities bonds 59,635,000 45,922,140
Lease liability 50,397
Subscription liability 201,377
Compensated absences payable 1,546,044
Total - governmental activities $59,635,000 47,719,958
Business-Type Activities:
General Obligation Improvement Bonds:
G.O. Improvement Bonds of 2024A 4.00 - 5.00 03/12/24 02/01/45 10,345,000 10,345,000
Bond premium 1,108,583
Total - business-type activities bonds 11,453,583
Loans payable 185,114
Compensated absences payable 212,596
Total - business-type activities 11,851,293
Total - primary government $59,571,251
Component Unit - EDA
Compensated absences payable 16,406
Total indebtedness - component unit $16,406
64
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
B. MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for long-term debt are as follows:
It is not practicable to determine the specific year for payment of compensated absences.
Year Ending
December 31, Principal Interest Principal Interest Principal Interest
2025 $1,915,000 $383,893 $375,000 $19,050 $ - $393,656
2026 1,955,000 337,568 380,000 11,500 285,000 276,875
2027 1,990,000 291,293 385,000 3,850 300,000 262,250
2028 2,025,000 246,356 - - 315,000 246,875
2029 2,065,000 202,574 - - 325,000 230,875
2030 - 2034 6,020,000 486,943 - - 1,880,000 887,750
2035 - 2039 1,490,000 30,784 - - 2,105,000 384,375
2040 - 2044 - - - - 470,000 11,750
Total $17,460,000 $1,979,411 $1,140,000 $34,400 $5,680,000 $2,694,406
Year Ending
December 31, Principal Interest Principal Interest Principal Interest
2025 $580,000 $303,309 $335,000 $302,265 $285,000 $41,475
2026 600,000 283,884 345,000 288,665 295,000 32,775
2027 615,000 264,971 355,000 274,665 305,000 23,775
2028 640,000 247,459 365,000 260,265 315,000 14,475
2029 655,000 230,309 375,000 245,465 325,000 4,875
2030 - 2034 3,545,000 860,919 2,060,000 989,225 - -
2035 - 2039 3,495,000 294,210 2,390,000 551,598 - -
2040 - 2044 275,000 4,641 1,590,000 164,000 - -
Total $10,405,000 $2,489,702 $7,815,000 $3,076,148 $1,525,000 $117,375
Year Ending
December 31, Principal Interest Principal Interest
2025 $65,371 $5,357 $12,235 $1,491
2026 67,110 3,618 12,655 1,071
2027 68,896 1,833 9,956 675
2028 - - 9,228 372
2029 - - 6,323 78
Total $201,377 $10,808 $50,397 $3,687
Year Ending
December 31,
Principal Interest Principal Interest
2025 $ - $667,828 $45,898 $ -
2026 315,000 473,925 45,898 -
2027 330,000 457,800 45,898 -
2028 345,000 440,925 47,420 -
2029 365,000 423,175 - -
2030 - 2034 2,115,000 1,816,125 - -
2035 - 2039 2,705,000 1,216,375 - -
2040 - 2044 3,405,000 507,625 - -
2045 - 2049 765,000 15,300 - -
Total $10,345,000 $6,019,078 $185,114 $0
Lease Liability
Governmental Activities
G.O. Improvement & Abatement
Governmental Activities
G.O. Refunding Bonds
G.O. CIP Bonds Equipment Certificates
G.O Improvement Bonds
Governmental Activities
Special Assessment Bonds
G.O Improvement Bonds Loans Payable
Business-Type Activities Governmental Activities
Governmental Activities
Governmental Activities Governmental ActivitiesGovernmental Activities
Governmental Activities
Subscription Liability
65
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
C. CHANGES IN LONG-TERM LIABILITIES
The change in compensated absences is presented as net of change.
All long-term bonded indebtedness outstanding at December 31, 2024, is backed by the full faith and credit
of the City, including special assessment and revenue bond issues. Delinquent assessments receivable at
December 31, 2024, totaled $5,525.
D. LEASE AND SUBSCRIPTION LIABILITIES
The City leases two pieces of equipment under non-cancellable agreements for a period of 5 years with no
renewal options. The agreements call for monthly payments ranging from $344 - $800. The lease liability
is measured at the present value of the future minimum lease payments at discount rates ranging from
3.28% to 3.58%, which is based on the City’s borrowing rate over the same time period. There were no
variable payments associated with the agreements.
The City has one right-to-use subscription based IT arrangement (SBITA). The agreement for public safety
related software expires in August of 2027 and is reported at the present value of future minimum
payments, discounted at a 2.66% rate, which is the City’s estimated borrowing rate over the same time
period, plus capitalizable implementation costs. There were no variable payments associated with the
agreement.
Beginning Ending Due Within
Primary Government Balance Additions Retirements Balance One Year
Governmental Activities:
Bonds payable:
General obligation bonds $20,575,000 $5,680,000 $1,215,000 $25,040,000 $1,290,000
Equipment certificate 1,805,000 - 280,000 1,525,000 285,000
Special assessment bonds 19,340,000 - 1,880,000 17,460,000 1,915,000
Bond premiums 1,163,069 897,651 163,580 1,897,140 -
Total bonds payable 42,883,069 6,577,651 3,538,580 45,922,140 3,490,000
Lease liability 14,714 44,339 8,656 50,397 12,235
Subscription liability 265,055 - 63,678 201,377 65,371
Compensated absences payable 1,370,847 175,197 - 1,546,044 1,238,224
Total governmental activities 44,533,685 6,797,187 3,610,914 47,719,958 4,805,830
Business Type Activities:
Bonds payable:
General obligation bonds $ - $10,345,000 $ - $10,345,000 $ -
Bond premiums - 1,164,270 55,687 1,108,583 -
Total bonds payable - 11,509,270 55,687 11,453,583 -
Compensated absences payable 199,102 13,494 - 212,596 192,120
Loans payable - 185,114 - 185,114 45,898
Total business-type activities 199,102 11,707,878 55,687 11,851,293 238,018
Total primary government $44,732,787 $18,505,065 $3,666,601 $59,571,251 $5,043,848
Component Units:
Economic Development Authority:
Compensated absences payable $20,085 $0 $3,679 $16,406 $16,184
66
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
E. REVENUE PLEDGED
Future revenue pledged for the payment of long-term liabilities is as follows:
Note 7 DEFINED BENEFIT PENSION PLANS – PERA
A. PLAN DESCRIPTION
The City participates in the following cost-sharing multiple-employer defined benefit pension plans
administered by the Public Employees Retirement Association of Minnesota (PERA). Plan provisions are
established and administered according to Minnesota Statutes, Chapters 353, 353D, 353E, 353G and 356.
Minnesota Statutes Chapter 356 defines each plan’s financial reporting requirements. PERA’s defined
benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code. City
employees are partially allocated to the EDA Component Unit, and accordingly, a portion of the net
pension liability and related balances is allocated to the EDA.
1. General Employees Retirement Plan (General Plan)
Membership in the General Plan includes employees of counties, cities, townships, schools in non-
certified positions, and other governmental entities whose revenues are derived from taxation, fees, or
assessments. Plan membership is required for any employee who is expected to earn more than $425
in a month, unless the employee meets exclusion criteria.
2. Public Employees Police and Fire Retirement Plan (Police and Fire Plan)
Membership in the Police and Fire Plan includes full-time, licensed police officers and firefighters who
meet the membership criteria defined in Minnesota Statutes section 353.64 and who are not earning
service credit in any other PERA retirement plan or local relief association for the same service.
Employers can provide Police and Fire Plan coverage for part-time positions and certain other public
safety positions by submitting a resolution adopted by the entity’s governing body. The resolution
must state that the position meets plan requirements.
Percent of Remaining Principal Pledged
Use of total Term of Principal and Interest Revenue
Bond Issue Proceeds Type debt service Pledge and Interest paid received
G.O. Improvement Bonds of 2015A Infrastructure improvements Special Assessments 100% 2014- $3,077,885 $461,935 $96,121
2031
G.O. Improvement Bonds of 2016B Infrastructure Improvements Special Assessments 100% 2014- 2,667,420 337,370 100,227
2032
G.O. Improvement Bonds of 2018A Infrastructure Improvements Special Assessments 100% 2019- 6,931,375 633,900 227,390
2035
G.O. Improvement Bonds of 2021A Infrastructure Improvements Special Assessments 100% 2022- 3,863,171 296,373 56,861
2037
G.O. Improvement Bonds of 2021B Infrastructure Improvements Special Assessments 100% 2018- 2,899,558 580,665 103,091
2029
G.O. Tax Abatement Bonds of 2023A Infrastructure Improvements Special Assessments 100% 2025- 10,891,148 379,340 157,582
Tax Abatement 2044
G.O. Improvement Bonds of 2024A Infrastructure Improvements Special Assessments 100% 2026- 8,374,406 - 183,854
2040
G.O. Improvement Bonds of 2024A - Utility Infrastructure Improvements User Fees 100% 2025- 16,364,078 - -
2045
Current YearRevenue Pledged
67
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
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. When a member is “vested,” they have earned enough service credit to receive a
lifetime monthly benefit after leaving public service and reaching an eligible retirement age. Members who
retire at or over their Social Security full retirement age with at least one year of service qualify for a
retirement benefit.
1. General Employees Plan Benefits
The General Employees Plan requires three years of service to vest. Benefits are based on a member’s
highest average salary for any five successive years of allowable service, age, and years of credit at
termination of service. Two methods are used to compute benefits for General Plan members.
Members hired prior to July 1, 1989 receive the higher of the Step or Level formulas. Only the Level
formula is used for members hired after June 30, 1989. Under the Step formula, General Plan
members receive 1.2% of the highest average salary for each of the first ten years of service and 1.7%
for each additional year. Under the Level formula, General Plan members receive 1.7% of the highest
average salary for all years of service. For members hired prior to July 1, 1989, a full retirement
benefit is available when age plus years of service equal 90 and normal retirement age is 65. Members
can receive a reduced requirement benefit as early as age 55 if they have three or more years of
service. Early retirement benefits are reduced by 0.25% for each month under age 65. Members with
30 or more years of service can retire at any age with a reduction of 0.25% for each month the member
is younger than age 62. The Level formula allows General Plan members to receive a full retirement
benefit at age 65 if they were first hired before July 1, 1989 or at age 66 if they were hired on or after
July 1, 1989. Early retirement begins at age 55 with an actuarial reduction applied to the benefit.
Benefit increases are provided to benefit recipients each January. The postretirement increase is 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%. The 2024 annual increase was 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. 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
prorated increase.
2. Police and Fire Plan Benefits
Benefits for Police and Fire Plan members hired before July 1, 2010, are vested after three years of
service. Members hired on or after July 1, 2012, are 50% vested after five years and 100% vested after
ten years. After five years, vesting increased by 10% each full year of service until members are at
100% vested after ten years. Police and Fire Plan members receive a full retirement benefit when they
are age 55 and vested, or when their age plus their years of service equals 90 or greater if they were
first hired before July 1, 1989. Early retirement starts at age 50, and early retirement benefits are
reduced by 0.417% each month members are younger than age 55.
Benefit increases are provided to benefit recipients each January. The postretirement increase is 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. 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 prorated increase.
68
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
C. CONTRIBUTIONS
Minnesota Statutes Chapters 353, 353E, 353G, and 356 set the rates for employer and employee
contributions. Contribution rates can only be modified by the state legislature.
1. General Employees Fund Contributions
General Plan members were required to contribute 6.50% of their annual covered salary in fiscal year
2024 and the City was required to contribute 7.50% for General Plan members. The City’s
contributions to the General Employees Fund for the year ended December 31, 2024 were $778,178.
The City’s contributions were equal to the required contributions as set by state statute.
2. Police and Fire Fund Contributions
Police and Fire Plan members were required to contribute 11.80% of their annual covered salary in
fiscal year 2024 and the City was required to contribute 17.70% for Police and Fire Plan members.
The City’s contributions to the Police and Fire Fund for the year ended December 31, 2024 were
$1,177,797. The City’s contributions were equal to the required contributions as set by state statute.
D. PENSION COSTS
1. General Employees Fund Pension Costs
At December 31, 2024, the City reported a liability of $4,541,164 for its proportionate share of the
General Employee’s Fund net pension liability. The City’s net pension liability reflected a reduction
due to the State of Minnesota’s contribution of $16 million. 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 $117,425.
The net pension liability was measured as of June 30, 2024, and the total pension liability used to
calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s
proportion of the net pension liability was based on the City’s contributions received by PERA during
the measurement period for employer payroll paid dates from July 1, 2023 through June 30, 2024,
relative to the total employer contributions received from all of PERA’s participating employers. The
City’s proportionate share was 0.1228% at the end of the measurement period and 0.1136% for the
beginning of the period.
For the year ended December 31, 2024, the City recognized pension expense of $820,243 for its
proportionate share of the General Plan’s pension expense. In addition, the City recognized an
additional $3,148 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.
During the plan year ended June 30, 2024, the State of Minnesota contributed $170.1 million to the
General Employees Fund. The State of Minnesota is not included as a non-employer contributing
entity in the General Employees Plan pension allocation schedules for the $170.1 million in direct state
aid because this contribution was not considered to meet the definition of a special funding situation.
The City recognized $208,883 for the year ended December 31, 2024 as revenue and an offsetting
City’s proportionate share of the net pension liability $4,541,164
State of Minnesota’s proportionate share of the net
pension liability associated with the City 117,425
Total $4,658,589
69
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
reduction of net pension liability for its proportionate share of the State of Minnesota’s on-behalf
contributions to the General Employees Fund.
At December 31, 2024, the City reported General Employees Fund deferred outflows of resources and
deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual economic experience $428,020 $ -
Changes in actuarial assumptions 23,006 1,718,810
Net difference between projected and actual
earnings on pension plan investments - 1,363,810
Changes in proportion 709,253 213,503
Employer contributions
subsequent to the measurement date 411,872 -
Total $1,572,151 $3,296,123
The $411,872 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, 2025. Other amounts reported as deferred outflows and
inflows of resources related to pensions will be recognized in pension expense as follows:
2. Police and Fire Fund Pension Costs
At December 31, 2024, the City reported a liability of $6,282,322 for its proportionate share of the
Police and Fire Fund’s net pension liability. The net pension liability was measured as of June 30,
2024 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, 2023 through June 30, 2024, relative to the total employer contributions
received from all of PERA’s participating employers. The City’s proportionate share was 0.4775% at
the end of the measurement period and 0.5080% for the beginning of the period.
The State of Minnesota contributed $37.4 million to the Police and Fire Fund during the plan fiscal
year ended June 30, 2024. The contribution consisted of $9 million in direct state aid that meets the
definition of a special funding situation, additional one-time direct state aid contribution of $19.4
million, and $9 million in supplemental state aid that does not meet the definition of a special funding
situation. Additionally, $9 million supplemental state aid was paid on October 1, 2024. Thereafter, by
October 1 of each year, the state will pay $9 million to the Police and Fire Fund until full funding is
reached or July 1, 2048, whichever is earlier. The $9 million in supplemental state aid will continue
until the fund is 90% funded, or until the State Patrol Plan (administered by the Minnesota State
Year Ending Pension
December 31, Expense
2025 ($1,244,786)
2026 (159,147)
2027 (383,847)
2028 (348,064)
2029 -
Thereafter -
70
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Retirement System) is 90% funded, whichever occurs later. The State of Minnesota’s proportionate
share of the net pension liability associated with the City totaled $239,480.
City’s proportionate share of the net pension liability $6,282,322
State of Minnesota’s proportionate share of the net
pension liability associated with the City 239,480
Total $6,521,802
For the year ended December 31, 2024, the City recognized pension expense of $1,179,465 for its
proportionate share of the Police and Fire Plan’s pension expense. The City recognized an additional
$23,255 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota’s
contribution of $9 million to the Police and Fire Fund special funding situation.
The State of Minnesota is not included as a non-employer contributing entity in the Police and Fire
Pension Plan pension allocation schedules for the $28.4 million in supplemental state aid, because this
contribution was not considered to meet the definition of a special funding situation. The City
recognized $135,616 for the year ended December 31, 2024 as revenue and an offsetting reduction of
net pension liability for its proportionate share of the State of Minnesota’s on-behalf contributions to
the Police and Fire Fund.
At December 31, 2024, the City reported Police and Fire Fund deferred outflows of resources and
deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual economic experience $2,431,844 $ -
Changes in actuarial assumptions 6,753,522 9,248,871
Net difference between projected and actual
earnings on pension plan investments - 1,997,066
Changes in proportion 987,330 1,130,460
Employer contributions subsequent
to the measurement date 626,221 -
Total $10,798,917 $12,376,397
The $626,221 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, 2025. Other amounts reported as deferred outflows and
inflows of resources related to pensions will be recognized in pension expense as follows:
The net pension liability will be liquidated by the general, fleet, IT, EDA, water, sewer and street light
funds.
Year Ending Pension
December 31, Expense
2025 ($255,111)
2026 1,547,294
2027 (999,537)
2028 (2,434,471)
2029 (61,876)
Thereafter -
71
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
E. ACTUARIAL ASSUMPTIONS
The total pension liability in the June 30, 2024 actuarial valuation was determined using the entry-age
normal actuarial cost method and the following actuarial assumptions:
Inflation 2.25% per year
Investment Rate of Return 7.00%
The long-term investment rate of return is based on a review of inflation and investment return assumptions
from a number of national investment consulting firms. The review provided a range of investment return
rates considered reasonable by the actuary. An investment return of 7.00% is within that range.
Benefit increases after retirement are assumed to be 1.25% for the General Plan and 1.00% for the Police
and Fire Plan.
Salary growth assumptions in the General Plan range in annual increments from 10.25% after one year of
service to 3.0% after 27 years of service. In the Police and Fire Plan, salary growth assumptions range in
annual increments from 11.75% after one year of service to 3.0% after 24 years of service.
Mortality rates for General Plan were based on the Pub-2010 General Employee Mortality Table. Mortality
rates for Police and Fire Plan were based on the Pub-2010 Public Safety Employee Mortality tables. The
tables are adjusted slightly to fit PERA’s experience.
Actuarial assumptions for General Plan are reviewed every four years. The General Plan was last reviewed
in 2022. The assumption changes were adopted by the board and became effective with the July 1, 2023
actuarial valuation. The Police and Fire Plan was reviewed in 2024. PERA anticipates the experience
study will be approved by the Legislative Commission on Pensions and Retirement and become effective
with the July 1, 2025 actuarial valuation.
The following changes in actuarial assumptions and plan provisions occurred in 2024:
General Employees Fund
Changes in Actuarial Assumptions:
Rates of merit and seniority were adjusted, resulting in slightly higher rates.
Assumed rates of retirement were adjusted as follows: increase the rate of assumed unreduced
retirements, slight adjustments to Rule of 90 retirement rates, and slight adjustments to early retirement
rates for Tier 1 and Tier 2 members.
Minor increase in assumed withdrawals for males and females.
Lower rates of disability.
Continued use of Pub-2010 general mortality table with slight rate adjustments as recommended in the
most recent experience study.
Minor changes to form of payment assumptions for male and female retirees.
Minor changes to assumptions made with respect to missing participant data.
Changes in Plan Provisions:
The workers’ compensation offset for disability benefits was eliminated. The actuarial equivalent
factors updated to reflect the changes in assumptions.
72
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Police and Fire Fund
Changes in Plan Provisions:
The State contribution of $9.0 million per year will continue until the earlier of 1) both the Police &
Fire Plan and the State Patrol Retirement Fund attain 90 percent funded status for three consecutive
years (on an actuarial value of assets basis) or 2) July 1, 2048. The contribution was previously due to
expire after attaining a 90 percent funded status for one year.
The additional $9.0 million contribution will continue until the Police & Fire Plan is fully funded for a
minimum of three consecutive years on an actuarial value of assets basis, or July 1, 2048, whichever is
earlier. This contribution was previously due to expire upon attainment of fully funded status on an
actuarial value of assets basis for one year (or July 1, 2048 if earlier).
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 following table:
F. DISCOUNT RATE
The discount rate used to measure the total pension liability in 2024 was 7.00%. 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 position of
the General Plan and Police and Fire Plan 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, 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 one percentage point lower (6.00%) or
one percentage point higher (8.00%) than the current discount rate:
1% Decrease in 1% Increase in
Discount Rate Discount Rate Discount Rate
Proportionate share of the
General Plan net pension liability $9,918,634 $4,541,164 $117,705
Proportionate share of the Police and
Fire Plan net pension liability $14,846,354 $6,282,322 ($750,540)
Target Long-Term Expected
Asset Class Allocation Real Rate of Return
Domestic equity 33.5% 5.10%
International equity 16.5% 5.30%
Fixed income 25% 0.75%
Private markets 25% 5.90%
Total 100%
73
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
H. PENSION PLAN FIDUCIARY NET POSITION
Detailed information about each pension plan’s fiduciary net position is available in a separately-issued
PERA financial report that includes financial statements and required supplementary information. That
report may be obtained at www.mnpera.org.
I. PENSION EXPENSE
Pension expense recognized by the City for the year ended December 31, 2024 is as follows:
General Plan $823,391
Police and Fire Plan 1,202,720
Total $2,026,111
Note 8 INTERFUND LOANS AND TRANSFERS
The City uses interfund 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, 2024,
were:
Fund Total
Nonmajor Governmental Funds owed to Sewer Fund $2,020,000
Nonmajor Governmental Funds owed to Future Economic Development Fund 1,679,787
Total $3,699,787
Interfund receivable and payable balances are used for temporary cash deficits. Interfund receivable and payable
balances at December 31, 2024, are as follows:
Fund Total
Ice Arena owed to Future Economic Development Fund $838,869
HERO Center Operations owed to Opioid Settlement (Nonmajor)49,183
Forfeiture/Seizure owed to Opioid Settlement (Nonmajor)14,697
Sewer Connection and Area owed to Water Connection and Area (Nonmajor)138,574
Internal Service Funds owed to Water Operating Fund 635,797
Cottage Grove EMS Fund owed to Water Operating Fund 392,666
Total $2,069,786
74
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Interfund transfers during the year ended December 31, 2024, were as follows:
Future Nonmajor Internal
General MSA Economic Governmental Service
Fund (100) Construction (520) Development (286) Funds Funds Total
Transfers out:
General Fund (100) $ - $ - $ - $ - $1,370,900 $1,370,900
Closed Debt Fund (300) - - - 100,000 - 100,000
Ice Arena (250) - - - 200,000 - 200,000
Nonmajor Governmental Funds 98,850 1,167,041 626,020 610,276 - 2,502,187
Street Light (630) 53,000 - - - - 53,000
Cottage Grove EMS (660) 103,825 - - - - 103,825
Water Operating (610) 203,740 422,090 - 9,202 - 635,032
Sewer Operating (620) 203,740 5,894 - 15,924 - 225,558
Total $663,155 $1,595,025 $626,020 $935,402 $1,370,900 $5,190,502
Transfers In
Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services
provided by another fund. All transfers in 2024 were considered to be routine in nature as they were related to
services provided to another fund, fund balance policy transfers and funding construction projects.
Note 9 TAX INCREMENT FINANCING
The City has entered into five Tax Increment Financing agreements which meets the criteria for disclosure under
GASB Statement No. 77 – Tax Abatement Disclosures. The City's authority to enter into these agreements comes
from Minnesota Statute 469. The City entered into these agreements for economic development and housing
initiatives.
Under the agreements, 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, 2024, the City generated $2,166,960 in tax increment revenue and made
$845,014 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, 2024, the district generated $654,138 of tax increment and $200,221 in payments on the pay
as you go note were made. The note was paid in full in 2024.
TIF District 1-17 was established in 2016 for the establishment of senior housing. An agreement with
Cottage Grove Leased Housing I, LLLP called for up to $1.7 million to be reimbursed through tax
increment over a fifteen-year period. During the year ended December 31, 2024, the district generated
$176,472 of tax increment and $162,133 in payments on the pay as you go note were made. The balance
due on the note at year-end was $1,223,688.
TIF District 1-18 was established in 2018 for expansion of an existing manufacturing and warehousing
facility. An agreement with 9800 Hemmingway LLC called for up to $117,000 to be reimbursed through
tax increment over a nine-year period. During the year ending December 31, 2024, the district generated
$20,268 of tax increment and no payments on the pay as you go note were made on the note in 2024 due to
the developer not complying with the terms of the agreement. The balance due on the note at year-end was
zero.
75
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
TIF District 1-19 was established in 2019 for expansion of an existing manufacturing and warehousing
facility. An agreement with Up North Plastics, Inc. called for up to $892,000 to be reimbursed through tax
increment over a nine-year period. During the year ending December 31, 2024, the district generated
$365,169 of tax increment and $164,326 in payments on the pay as you go note were made. The balance
due on the note at year-end was $741,550.
TIF District 1-20 was established in 2021 for expansion of an existing manufacturing and warehousing
facility. An agreement with NP BGO Cottage Grove Logistics Park, LLC called for up to $7,166,00 to be
reimbursed through tax increment over a nine-year period. During the year ending December 31, 2024, the
district generated $707,409 of tax increment and $318,334 in payments on the pay as you go note were
made. The balance due on the note at year-end was $6,862,297.
Note 10 DEFICIT FUND BALANCES
The City has deficit fund balances at December 31, 2024, as follows:
Note 11 CONTINGENCIES
A. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets,
errors, and omissions and natural disasters for which the City carries commercial insurance policies. The
City retains risk for the deductible portions of the insurance policies. The amount of these deductibles is
considered immaterial to the financial statements.
There were no significant reductions in insurance from the previous year or settlements 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.
Amount The deficit fund balances will be resolved through
Major Governmental Funds:
3M Settlement - MPCA (455)$1,456,138 Future settlement proceeds
Ice Arena (250)467,586 Future excess revenues and transfers from other City resources
NonMajor Governmental Funds:
Golf Course Fund (255)1,413,798 Future excess revenues and transfers from other City resources
Future Storm Sewer Improvements (585) 305,015 Future excess revenues
Municipal Building Fund (525)1,667,741 Future tax levies
Ice Arena Capital Project (526)357,260 Future donation revenue
Fund
76
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
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
$241,951 reported in the Fund at December 31, 2024, 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:
Claims and
Beginning of Changes in Claim End of
Year Year Liability Estimates Payments Year Liability
2024 $254,229 $189,891 ($202,169) $241,951
2023 232,045 205,576 (183,392) 254,229
2022 222,469 430,468 (420,892) 232,045
2021 325,646 145,777 (248,954) 222,469
2020 201,608 346,696 (222,658) 325,646
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, 2024.
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.
77
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Note 12 SETTLEMENTS
In February 2018, the State of Minnesota settled its lawsuit against the 3M Company involving drinking water
contamination in the East Metro that has resulted from PFAS chemicals. The settlement included funding for
infrastructure projects for 14 East Metro communities, including the City of Cottage Grove to mitigate the PFAS
contamination in the City’s water supply wells. It is estimated the City will receive over $200 million through the
settlement agreement that will fund a long-term water supply and treatment plan. The resulting solution includes two
new water treatment plants, a new public well, new water mains, and connections for homes currently served by
private wells. These projects are recorded in the 3M Settlement-MPCA Fund (455).
Note 13 FUND BALANCES
At December 31, 2024, the City had various fund balances through legal restriction and City Council authorization.
Fund balance appropriations at December 31, 2024, are shown on the various balance sheets as segregations of the
fund balance. The fund balance classifications for governmental funds are as follows:
Note 14 POST EMPLOYMENT HEALTH CARE PLAN
A. PLAN DESCRIPTION
The City provides health benefits for retirees as required by Minnesota Statute §471.61 subdivision 2b
through a single-employer defined benefit OPEB plan. Pursuant to the provisions of the plan, retirees are
required to pay the total premium cost. No assets are accumulated in a trust. City employees are partially
allocated to the EDA Component Unit, and accordingly, a portion of the OPEB liability and related
balances is allocated to the EDA.
Future 3M Park
General Closed Debt Ice Economic MSA Future Settlement Capital Nonmajor
Fund Fund Arena Development Construction Projects MPCS Improvement Governmental
(100) (300) (250) (286) (520) (510, 810) (455) (515) Funds Total
Fund balances:
Nonspendable:
Prepaid items $13,556 $ - $2,189 $ - $ - $ - $ - $ - $5,342 $21,087
Inventory - - - - - - - - 82,085 82,085
Restricted:
Public safety 1,052,777 - - - - - - - 346,920 1,399,697
Debt retirement - - - - - - - - 6,742,858 6,742,858
Forfeiture and seizure - - - - - - - - 8,515 8,515
Affordable housing - - - - - - - - 126,792 126,792
Infrastructure - - - - 284,835 - - - - 284,835
Tax increment purposes - - - - - - - - 4,273,058 4,273,058
Committed:
Recycling program - - - - - - - - 109,049 109,049
Storm water activities - - - - - - - - 1,938,593 1,938,593
Convention & visitors bureau - - - - - - - - 69,284 69,284
Assigned:
Compensated absences - - - - - - - - - -
Future budgets 776,000 - - - - - - - - 776,000
School bus safety 5,600 - - - - - - - - 5,600
Debt retirement - 2,324,633 - - - - - - - 2,324,633
Future pavement management - - - - - - - - - -
Tree mitigation - - - - - 534,821 - - - 534,821
Equipment replacement - - - - - - - - 759,943 759,943
Roadway and trailway maintenance - - - - - - - - 842,697 842,697
Economic development - - - 4,522,731 - - - - - 4,522,731
Capital improvements - - - - - 435,724 - 1,135,885 7,428,688 9,000,297
Unassigned 13,719,569 - (469,775) - - - (1,456,138) - (3,895,696) 7,897,960
Total fund balances $15,567,502 $2,324,633 ($467,586) $4,522,731 $284,835 $970,545 ($1,456,138) $1,135,885 $18,838,128 $41,720,535
Major Funds
78
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
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 2024, the City contributed $51,466 to the plan.
D. MEMBERS
As of January 1, 2023, the following were covered by the benefit terms:
Inactive employees or beneficiaries currently receiving benefits 11
Active employees 156
Total 167
E. ACTUARIAL ASSUMPTIONS
The total OPEB liability was determined by an actuarial valuation as of January 1, 2023, measured as of
December 31, 2024, using the following actuarial assumptions, applied to all periods included in the
measurement, unless otherwise specified:
Discount rate 4.08%
Inflation 2.25%
Healthcare cost trend increases initially 9.00% decreasing to an
ultimate rate of 4.14% by 2042
Mortality assumption Pub-2010 Mortality Table adjusted
for mortality improvements using
projection scale MP-2021 by employee
in Valuation of Total OPEB Liability
Key Methods and Assumptions Used
The actuarial assumptions used in the January 1, 2023, valuation was based on the results of an actuarial
experience study dated June 27, 2019, for PERA's General Employees Retirement Plan and dated July 14,
2020, for PERA's PEPFF Plan.
The discount rate used to measure the total OPEB liability was 4.08% based on the Bond Buyer 20-Bond
Obligation Index.
F. TOTAL OPEB LIABILITY
The City's total OPEB liability of $896,404 was measured as of December 31, 2024, and was determined
by an actuarial valuation as of January 1, 2023.
79
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Changes in the total OPEB liability are as follows:
Changes of assumptions and other inputs reflect a change in the discount rate from 3.26% in 2023 to 4.08%
in 2024 to reflect recent rate changes in the Bond Buyer 20-Bond General Obligation Index.
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 4.08% as well as
the liability measured using 1% lower and 1% higher than the current discount rate.
1% decrease Current 1% increase
(3.08%) (4.08%) (5.08%)
$987,531 $896,404 $817,607
Total OPEB Liability
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 Current 1% increase
$812,097 $896,404 $995,165
Total OPEB Liability
Total
OPEB
Liability
Balance at January 1, 2024 $952,355
Changes for the year:
Service cost 20,756
Interest 30,892
Change in assumption (73,781)
Difference between expected
and actual experience 17,648
Benefit payments (51,466)
Net Changes (55,951)
Balance at December 31, 2024 $896,404
80
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
H. OPEB EXPENSE, DEFERRED OUTFLOWS OF RESOURCES, AND DEFERRED INFLOWS OF
RESOURCES RELATED TO OPEB
For the year ended December 31, 2024, the City recognized OPEB expense of $114,022. At December 31,
2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB
from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual economic experience $441,457 $46,975
Changes of assumptions and other inputs 114,297 108,640
Total $555,754 $155,615
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will
be recognized in OPEB expense as follows:
OPEB
Year Ended Expense
December 31, Amount
2025 $62,376
2026 62,754
2027 64,046
2028 61,629
2029 59,692
Thereafter 89,642
Note 15 COMMITTED CONTRACTS
At December 31, 2024, the City had commitments of $19,665,486 for uncompleted construction contracts.
81
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Note 16 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, 2024, a series of
Industrial Revenue Bonds were outstanding.
Note 17 CHANGE WITHIN THE FINANCIAL REPORTING ENTITY
For the year ended December 31, 2024, the City reported the following changes within the financial reporting entity:
The Park Capital Improvement Fund was determined to be a major fund. This fund had previously been
presented as a nonmajor fund.
The City created the Compensated Absences internal service fund. This fund will allow the City to better
account for and allocate the costs associated with providing compensated absences and related benefits to
City employees. The associated compensated absence liability was previously only reported in
governmental activities on the government wide statement of net position.
The City reallocated certain IT assets to the Information Services internal service fund. This reallocation
resulted in SBITA arrangements reported within the internal service fund which were previously only
reported on the government-wide statement of net position.
The impact of the changes within the internal service funds resulted in a restatement of beginning equity
reported on Statement 8 as follows:
Note 18 SUBSEQUENT EVENTS
On March 25, 2025, the City issued $10,000,000 General Obligation Bonds Series 2025A. The proceeds of the sale
will be used to finance various capital equipment purchases and City improvement projects.
Issue Original 12/31/2024 Maturity
Date Issue Balance Date
Commercial Development Revenue Note - ESR, Inc. 11/22/2005 $76,500 $2,567 11/22/2025
Commercial Development Revenue Note - ESR, Inc. 5/19/2005 853,000 9,655 12/19/2025
Multifamily Housing Note - Legends of Cottage Grove 10/7/2016 18,422,000 16,955,706 5/1/2034
Total $19,351,500 $16,967,928
Creation of the Compensated Absences internal service fund ($1,278,474)
Reallocation of certain IT assets 15,215
Total change within the financial reporting entity ($1,263,259)
82
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2024
Note 19 RECENTLY ISSUED ACCOUNTING STANDARDS
The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were
not implemented for these financial statements:
Statement No. 102 Certain Risk Disclosures. The provisions of this Statement are effective for fiscal years
beginning after June 15, 2024.
Statement No. 103 Financial Reporting Model Improvements. The provisions of this Statement are effective
for reporting periods beginning after June 15, 2025.
Statement No. 104 Disclosure of Certain Capital Assets. The provisions of this Statement are effective for
Reporting periods beginning after June 15, 2025.
The effect these standards may have on future financial statements is not determinable at this time.
83
84
REQUIRED SUPPLEMENTARY INFORMATION
85
CITY OF COTTAGE GROVE
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 1 of 2
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2023
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
General property taxes $18,567,010 $18,567,010 $18,558,145 ($8,865) $17,546,687
Special assessments 3,060 3,060 1,482 (1,578)2,583
Licenses and permits:
General government 69,870 69,870 105,967 36,097 80,963
Community development 2,269,600 2,621,600 2,929,559 307,959 2,560,881
Engineering 17,000 17,000 13,191 (3,809) 42,163
Public safety 15,200 15,200 12,870 (2,330) 14,800
Total licenses and permits 2,371,670 2,723,670 3,061,587 337,917 2,698,807
Intergovernmental revenues:
Federal grants and aid 30,000 30,000 129,417 99,417 75,894
State grants and aid:
Market value homestead credit - - 3,986 3,986 4,148
LGA 54,060 54,060 54,063 3 -
MSA maintenance - public works 50,000 50,000 49,500 (500) 49,500
Fire relief aid - public safety 547,750 547,750 309,614 (238,136) 297,214
Police relief aid - public safety 803,600 903,600 546,513 (357,087) 2,210,447
Other - general government 60,000 60,000 26,312 (33,688) -
Other - public safety 77,800 81,100 129,276 48,176 298,535
Local:
SRO program - public safety 100,980 100,980 107,342 6,362 104,564
Other - public safety 12,000 154,700 184,784 30,084 51,187
Other - public works 2,600 2,600 4,930 2,330 3,054
Other - community development - - 255 255 -
Other - culture and recreation - - 21,605 21,605 -
Total intergovernmental 1,738,790 1,984,790 1,567,597 (417,193) 3,094,543
Charges for services:
Investment charge - general government 1,000 1,000 -(1,000) -
Other - general government 100 100 10 (90)4,511
Other - community development 40,780 40,780 19,798 (20,982) 18,582
Other - engineering 978,000 1,002,000 1,093,308 91,308 655,343
Other - public safety 56,750 56,750 50,743 (6,007) 57,736
Other - public works 22,500 22,500 14,288 (8,212) 27,648
Other - culture and recreation 371,300 401,300 415,362 14,062 274,775
1,470,430 1,524,430 1,593,509 69,079 1,038,595
- - 250 250 -
150,000 150,000 150,448 448 148,770
126,250 271,350 770,531 499,181 572,123
- - - - -
Total charges for services
Rent
Fines and forfeitures - public safety
Investment earnings
Refunds and reimbursements
Donations:
General government -25,000 32,200 7,200 37,700
Public safety - - 15,000 15,000 38,460
Culture and recreation - - 13,500 13,500 8,989
Total donations -25,000 60,700 35,700 85,149
Miscellaneous:
General government 66,605 66,605 34,119 (32,486) 36,993
Public safety 9,500 9,500 72,088 62,588 85,269
Public works - - 27,634 27,634 22,095
Culture and recreation - - 11,420 11,420 5,531
Total miscellaneous 76,105 76,105 145,261 69,156 149,888
Total revenues 24,503,315 25,325,415 25,909,510 584,095 25,337,145
2024
Budgeted Amounts
See accompanying notes to the required supplementary information.
86
CITY OF COTTAGE GROVE
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 2 of 2
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2023
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Expenditures:
General government:
Mayor and city council 116,370 116,370 94,030 22,340 105,718
Administrative 919,620 987,420 956,334 31,086 843,576
Finance 676,130 706,230 705,163 1,067 595,774
Assessing services 248,500 248,500 242,440 6,060 235,847
City clerk/elections 236,785 297,985 266,358 31,627 129,349
Legal 244,100 324,100 293,145 30,955 276,723
Community and employee programs 181,335 215,335 192,934 22,401 142,386
Government buildings 574,260 574,260 530,967 43,293 542,070
Contingencies 200,000 - - - -
Total general government 3,397,100 3,470,200 3,281,371 188,829 2,871,443
Community development:
Planning and zoning 590,600 596,300 553,050 43,250 504,754
Building inspections 1,372,805 1,566,005 1,564,512 1,493 1,392,133
Engineering 628,570 657,870 656,572 1,298 547,847
Total community development 2,591,975 2,820,175 2,774,134 46,041 2,444,734
Public safety:
Police protection 9,893,825 10,128,825 10,128,059 766 9,414,432
Fire protection 1,931,190 1,935,590 1,834,718 100,872 1,752,124
Emergency preparedness 114,560 327,560 296,736 30,824 294,644
Animal control 30,710 30,710 25,576 5,134 27,679
Total public safety 11,970,285 12,422,685 12,285,089 137,596 11,488,879
Public works:
Public works administration 485,530 490,230 468,614 21,616 523,376
Streets 2,048,280 2,049,780 1,978,173 71,607 1,965,428
Snow and ice control 1,019,000 1,019,000 732,000 287,000 912,863
Street signs/striping 259,840 259,840 210,833 49,007 217,003
Total public works 3,812,650 3,818,850 3,389,620 429,230 3,618,670
Culture and recreation:
Forestry 416,340 441,340 405,140 36,200 318,024
Recreation programs 658,990 692,890 681,277 11,613 537,915
Parks maintenance 2,305,300 2,308,600 2,269,130 39,470 2,095,854
Total culture and recreation 3,380,630 3,442,830 3,355,547 87,283 2,951,793
Debt service:
Principal - - 8,656 (8,656) 32,679
Interest and other charges - - 755 (755)527
Total debt service - - 9,411 (9,411) 33,206
Total expenditures 25,152,640 25,974,740 25,095,172 879,568 23,408,725
Excess of revenues over
(under) expenditures (649,325) (649,325) 814,338 1,463,663 1,928,420
Other financing sources (uses):
Lease issued - - 44,339 44,339 -
Subscription-based IT arrangement issued - - - - 97,377
Transfers in 649,325 649,325 663,155 13,830 627,386
Transfers out - (1,370,900) (1,370,900) - (550,716)
Total other financing sources (uses)649,325 (721,575) (663,406) 58,169 174,047
Net change in fund balances $ - ($1,370,900) 150,932 $1,521,832 2,102,467
Fund balances:
Beginning of year 15,416,570 13,314,103
End of year $15,567,502 $15,416,570
Budgeted Amounts
2024
See accompanying notes to the required supplementary information.
87
CITY OF COTTAGE GROVE
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
BUDGETARY COMPARISON SCHEDULE - ICE ARENA SPECIAL REVENUE FUND
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2023
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Intergovernmental $57,000 $57,000 $57,500 $500 $ -
Charges for services 1,515,000 1,515,000 1,511,609 (3,391) 1,549,570
Lease related interest income - - 74,994 74,994 87,293
Contributions and donations - - 8,750 8,750 -
Miscellaneous - - 29,772 29,772 20,359
Total revenues 1,572,000 1,572,000 1,682,625 110,625 1,657,222
Expenditures:
Current:
Culture and recreation 1,269,920 1,269,920 1,373,923 (104,003) 1,323,696
Capital outlay:
Culture and recreation - - 45,476 (45,476) 74,386
Total expenditures 1,269,920 1,269,920 1,419,399 (149,479) 1,398,082
Excess of revenues over
(under) expenditures 302,080 302,080 263,226 260,104 259,140
Other financing uses:
Transfer out (200,000) (200,000) (200,000) - (200,000)
Net change in fund balances $102,080 $102,080 63,226 $260,104 59,140
Fund balance:
Beginning of year (530,812)(589,952)
End of year ($467,586)($530,812)
Budgeted Amounts
2024
See accompanying notes to the required supplementary information.
88
CITY OF COTTAGE GROVE
REQUIRED SUPPLEMENTARY INFORMATION Statement 12
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS
For The Last Ten Years
2024 2023 2022 2021 2020 2019 2018
Total OPEB liability:
Service cost $20,754 $20,099 $23,980 $25,083 $17,939 $16,325 $14,560
Interest 30,892 34,945 12,677 13,939 10,179 15,807 11,794
Differences between expected and actual experience 17,648 377,970 (61,716) 227,397 (6,031) (7,934) -
Changes of assumptions (73,781) 94,702 (59,493) 33,310 13,860 41,447 (14,652)
Benefit payments (51,466) (59,768) (44,681) (60,592) (29,882) (27,782) (18,651)
Net change in total OPEB liability (55,953) 467,948 (129,233) 239,137 6,065 37,863 (6,949)
Beginning of year 952,357 484,409 613,642 374,505 368,440 330,577 337,526
End of year $896,404 $952,357 $484,409 $613,642 $374,505 $368,440 $330,577
Covered-employee payroll $13,653,737 $13,959,400 $11,482,890 $11,729,994 $10,340,116 $10,569,669 $9,103,225
Total OPEB liability as a percentage of covered-employee payroll 6.6% 6.8% 4.2% 5.2% 3.6% 3.5% 3.6%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2018 and is intended to
show a ten year trend. Additional years will be added as they become available.
See accompanying notes to the required supplementary information.89
CITY OF COTTAGE GROVE
REQUIRED SUPPLEMENTARY INFORMATION Statement 13
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY -
GENERAL EMPLOYEES RETIREMENT FUND
For The Last Ten Years
City's
Proportionate
State's Share of the Plan
Proportionate Net Pension Fiduciary
City's City's Share (Amount) Liability Net Position
Proportionate Proportionate of the Net as a as a
Share Share (Amount) Pension Percentage Percentage
Measurement Fiscal Year (Percentage) of of the Net Liability of its covered of the Total
Date Ending the Net Pension Pension Associated with City's Covered Payroll Pension
June 30 December 31 Liability Liability (a) the City (b) Total (a+b) Payroll (c) ((a+b)/c) Liability
2015 2015 0.0919% $4,762,735 $ - $4,762,735 $5,401,220 88.2% 78.2%
2016 2016 0.0878% 7,128,925 43,058 7,171,983 5,447,306 131.7% 68.9%
2017 2017 0.0890% 5,681,701 71,469 5,753,170 5,887,025 97.7% 75.9%
2018 2018 0.0937% 5,198,092 170,553 5,368,645 6,298,520 85.2% 79.5%
2019 2019 0.0926% 5,119,647 159,160 5,278,807 6,555,453 80.5% 80.2%
2020 2020 0.0967% 5,797,607 178,810 5,976,417 6,898,173 86.6% 79.1%
2021 2021 0.1061% 4,530,946 138,442 4,669,388 7,640,187 61.1% 87.0%
2022 2022 0.1148% 9,092,198 266,634 9,358,832 8,601,787 108.8% 76.7%
2023 2023 0.1136% 6,352,385 175,066 6,527,451 9,031,468 72.3% 83.1%
2024 2024 0.1228% 4,541,164 117,425 4,658,589 10,013,781 46.5% 89.1%
See accompanying notes to the required supplementary information.
90
CITY OF COTTAGE GROVE
REQUIRED SUPPLEMENTARY INFORMATION Statement 14
SCHEDULE OF PENSION CONTRIBUTIONS - GENERAL EMPLOYEES RETIREMENT FUND
For The Last Ten Years
Statutorily Contributions in Contribution Contributions as a
Fiscal Year Required Relation to the Deficiency Covered Percentage of
Ending Contribution Statutorily Required (Excess)Payroll Covered
December 31 (a)Contribution (b) (a-b)(c)Payroll (b/c)
2015 $403,964 $403,964 $ - $5,386,187 7.50%
2016 424,202 424,202 - 5,656,027 7.50%
2017 458,971 458,971 - 6,119,613 7.50%
2018 482,521 482,521 - 6,433,613 7.50%
2019 508,963 508,963 - 6,786,173 7.50%
2020 539,417 539,417 - 7,192,227 7.50%
2021 595,200 595,200 - 7,936,000 7.50%
2022 644,786 644,786 - 8,597,147 7.50%
2023 735,778 735,778 - 9,810,375 7.50%
2024 778,178 778,178 - 10,375,546 7.50%
See accompanying notes to the required supplementary information.
91
CITY OF COTTAGE GROVE
REQUIRED SUPPLEMENTARY INFORMATION Statement 15
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY -
PUBLIC EMPLOYEES POLICE AND FIRE FUND
For The Last Ten Years
City's
Proportionate
State's Share of the Plan
Proportionate Net Pension Fiduciary
City's City's Share (Amount) Liability Net Position
Proportionate Proportionate of the Net as a as a
Share Share (Amount) Pension Percentage Percentage
Measurement Fiscal Year (Percentage) of of the Net Liability of its covered of the Total
Date Ending the Net Pension Pension Associated with City's Covered Payroll Pension
June 30 December 31 Liability Liability (a) the City (b) Total (a+b) Payroll (c) ((a+b)/c) Liability
2015 2015 0.4340% $4,931,256 $ - $4,931,256 $3,665,120 134.5% 86.6%
2016 2016 0.4450% 17,818,574 - 17,818,574 3,867,466 460.7% 63.9%
2017 2017 0.4380% 5,913,521 - 5,913,521 4,495,914 131.5% 85.4%
2018 2018 0.4582% 4,842,702 - 4,842,702 4,829,432 100.3% 88.8%
2019 2019 0.4716% 4,956,992 - 4,956,992 4,864,909 101.9% 89.2%
2020 2020 0.4772% 6,247,059 148,169 6,395,228 5,385,172 118.8% 87.2%
2021 2021 0.5018% 3,828,202 174,149 4,002,351 6,059,377 66.1% 93.7%
2022 2022 0.4940% 21,496,929 938,958 22,435,887 6,000,446 373.9% 70.5%
2023 2023 0.5080% 8,772,500 353,388 9,125,888 6,325,161 144.3% 86.5%
2024 2024 0.4775% 6,282,322 239,480 6,521,802 6,612,434 98.6% 90.2%
See accompanying notes to the required supplementary information.
92
CITY OF COTTAGE GROVE
REQUIRED SUPPLEMENTARY INFORMATION Statement 16
SCHEDULE OF PENSION CONTRIBUTIONS - PUBLIC EMPLOYEES POLICE AND FIRE FUND
For The Last Ten Years
Statutorily Contributions in Contribution Contributions as a
Fiscal Year Required Relation to the Deficiency Covered Percentage of
Ending Contribution Statutorily Required (Excess)Payroll Covered
December 31 (a)Contribution (b) (a-b)(c)Payroll (b/c)
2015 $664,300 $664,300 $ - $4,100,617 16.20%
2016 718,936 718,936 - 4,437,877 16.20%
2017 778,070 778,070 - 4,802,901 16.20%
2018 803,145 803,145 - 4,957,685 16.20%
2019 976,911 976,911 - 5,763,487 16.95%
2020 998,722 998,722 - 5,642,497 17.70%
2021 1,050,974 1,050,974 - 5,937,706 17.70%
2022 1,073,653 1,073,653 - 6,065,836 17.70%
2023 1,187,615 1,187,615 - 6,709,688 17.70%
2024 1,177,797 1,177,797 - 6,654,223 17.70%
See accompanying notes to the required supplementary information.
93
94
COTTAGE GROVE, CITY OF
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2024
Note A LEGAL COMPLIANCE – BUDGETS
The General and Ice Arena Special Revenue fund budgets are legally adopted on a basis consistent with accounting
principles generally accepted in the United States of America. The legal level of budgetary control is at the
department level for the General Fund and at the fund level for the Ice Arena Special Revenue Fund.
Note B PENSION INFORMATION
PERA – General Employees Retirement Fund
2024 Changes in Actuarial Assumptions:
The following changes in assumptions are effective with the July 1, 2024 valuation, as recommended in the
most recent experience study (dated June 29, 2023):
Rates of merit and seniority were adjusted, resulting in slightly higher rates.
Assumed rates of retirement were adjusted as follows: increase the rate of assumed unreduced
retirements, slight adjustments to Rule of 90 retirement rates, and slight adjustments to early retirement
rates for Tier 1 and Tier 2 members.
Minor increase in assumed withdrawals for males and females.
Lower rates of disability.
Continued use of Pub-2010 general mortality table with slight rate adjustments as recommended in the
most recent experience study.
Minor changes to form of payment assumptions for male and female retirees.
Minor changes to assumptions made with respect to missing participant data.
2024 Changes in Plan Provisions:
The workers’ compensation offset for disability benefits was eliminated. The actuarial equivalent
factors updated to reflect the changes in assumptions.
2023 Changes in Actuarial Assumptions:
The investment return assumption and single discount rate were changed from 6.50% to 7.00%.
2023 Changes in Plan Provisions:
An additional one-time direct state aid contribution of $170.1 million was contributed to the Plan on
October 1, 2023.
The vesting period of those hired after June 30, 2010, was changed from five years of allowable
service to three years of allowable service.
The benefit increase delay for early retirements on or after January 1, 2024, was eliminated.
A one-time, non-compounding benefit increase of 2.50% minus the actual 2024 adjustment will be
payable in a lump sum for calendar year 2024 by March 31, 2024.
2022 Changes in Actuarial Assumptions:
The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021.
2021 Changes in Actuarial Assumptions:
The investment return and single discount rates were changed from 7.50% to 6.50% for financial
reporting purposes.
The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020.
95
COTTAGE GROVE, CITY OF
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2024
2020 Changes in Actuarial Assumptions:
The price inflation assumption was decreased from 2.50% to 2.25%.
The payroll growth assumption was decreased from 3.25% to 3.00%.
Assumed salary increase rates were decreased 0.25% and assumed rates of retirement were changed
resulting in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements.
Assumed rates of termination and disability were also changed.
Base mortality tables were changed from RP-2014 tables to Pub-2010 tables, with adjustments.
The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019.
The spouse age difference was changed from two years older for females to one year older.
The assumed number of married male new retirees electing the 100% Joint & Survivor option changed
from 35% to 45%. The assumed number of married female new retirees electing the 100% Joint &
Survivor option changed from 15% to 30%. The corresponding number of married new retirees
electing the Life annuity option was adjusted accordingly.
2020 Changes in Plan Provisions:
Augmentation for current privatized members was reduced to 2.0% for the period July 1, 2020 through
December 31, 2023 and 0.0% after. Augmentation was eliminated for privatizations occurring after
June 30, 2020.
2019 Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018.
2019 Changes in the 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 in Actuarial Assumptions:
The mortality projection scale was changed from MP-2015 to MP-2017.
The assumed benefit increase was changed from 1.00% per year through 2044 and 2.50% per year
thereafter to 1.25% per year.
2017 Changes in Actuarial Assumptions:
The Combined Service Annuity (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, 15.0% for vested deferred member liability and 3.0% 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.
2016 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, and inflation were decreased by 0.25% to 3.25% for payroll
growth and 2.50% for inflation.
96
COTTAGE GROVE, CITY OF
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2024
PERA – Public Employees Police and Fire Fund
2024 Changes in Plan Provisions:
The State contribution of $9.0 million per year will continue until the earlier of 1) both the Police &
Fire Plan and the State Patrol Retirement Fund attain 90 percent funded status for three consecutive
years (on an actuarial value of assets basis) or 2) July 1, 2048. The contribution was previously due to
expire after attaining a 90 percent funded status for one year.
The additional $9.0 million contribution will continue until the Police & Fire Plan is fully funded for a
minimum of three consecutive years on an actuarial value of assets basis, or July 1, 2048, whichever is
earlier. This contribution was previously due to expire upon attainment of fully funded status on an
actuarial value of assets basis for one year (or July 1, 2048 if earlier).
2023 Changes in Actuarial Assumptions:
The investment return assumption was changed from 6.50% to 7.00%.
The single discount rate changed from 5.40% to 7.00%
2023 Changes in Plan Provisions:
An additional one-time direct state aid contribution of $19.4 million was contributed to the Plan on
October 1, 2023.
Vesting requirement for new hires after June 30, 2014, was changed from a graded 20-year vesting
schedule to a graded 10-year vesting schedule, with 50% vesting after five years, increasing
incrementally to 100% after 10 years.
A one-time, non-compounding benefit increase of 3.00% will be payable in a lump sum for calendar
year 2024 by March 31, 2024.
Psychological treatment is required effective July 1, 2023, prior to approval for a duty disability
benefit for a psychological condition relating to the member’s occupation.
The total and permanent duty disability benefit was increased, effective July 1, 2023.
2022 Changes in Actuarial Assumptions:
The single discount rate changed from 6.50% to 5.4%.
The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021.
2021 Changes in Actuarial Assumptions:
The investment return and single discount rates were changed from 7.50% to 6.50% for financial
reporting purposes.
The inflation assumption was changed from 2.50% to 2.25%.
The payroll growth assumption was changed from 3.25% to 3.00%.
The base mortality tables for healthy annuitants, disabled annuitants and employees were changed
from RP-2014 tables to Pub-2010 Public Safety Mortality tables. The mortality improvement scale
was changed from MP-2019 to MN-2020.
Assumed salary increase and retirement rates were modified as recommended in the July 14, 2020
experience study. The changes result in a decrease in gross salary increase rates, slightly more
unreduced retirements and fewer assumed early retirements.
Assumed rates of withdrawal were changed from select and ultimate rates to service-based rates. The
changes result in more assumed terminations.
Assumed rates of disability were increased for ages 25-44 and decreased for ages over 49. Overall,
proposed rates result in more projected disabilities.
Assumed percent married for active female members was changed from 60% to 70%.
2020 Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2018 to MP-2019.
97
COTTAGE GROVE, CITY OF
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2024
2019 Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018.
2018 Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2016 to MP-2017.
2017 Changes in Actuarial Assumptions:
The single discount rate was changed from 5.6% to 7.5%.
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 Combined Service Annuity (CSA) load was 30% for vested and non-vested deferred members.
The CSA was 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.
The assumed percentage of female members electing Joint and Survivor annuities was increased.
The assumed post-retirement benefit increase rate was changed from 1.00% for all years to 1.00% per
year through 2064 and 2.50% thereafter.
2016 Changes in Actuarial Assumptions:
The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2037 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 changed
from 7.9% to 5.6%.
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.
98
COTTAGE GROVE, CITY OF
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2024
Post Employment Health Care Plan
2023 Changes in Actuarial Assumptions:
The discount rate decreased from 3.72% in 2022 to 3.26% in 2023.
The valuation's first fiscal year 2023 retiree per capita claims costs and blended premiums are based on
plans and premiums as of January 1, 2023 and census data as of January 1, 2023. Second fiscal year
2024 amounts are 5.00% higher based on increased premiums effective January 1, 2024.
Decrement assumptions (i.e. withdrawal, retirement and mortality rates) and salary increase rates are
the same assumptions used in the July 1, 2023 GERP and July 1, 2023 PEP&FP actuarial valuations.
Medical trend assumption is developed based on the recent published SOA-Getzen trend rate model
update for 2023.
2020 Changes in Plan Provisions:
Medical plans and premiums have been updated effective as of January 1, 2023 and January 1, 2024.
2022 Changes in Actuarial Assumptions:
The discount rate increased from 2.06% in 2021 to 3.72% in 2022.
2021 Changes in Actuarial Assumptions:
The discount rate decreased from 2.12% in 2020 to 2.06% in 2021.
The general inflation rate was changed to the 2.25% rate used in the June 30, 2021, GERP and June 30,
2021, PEPFF, material valuations (from 2.50%).
2020 Changes in Actuarial Assumptions:
The discount rate decreased from 2.74% in 2019 to 2.12% in 2020.
Per capita claims and costs were reset to reflect updated experience, plans, and premiums as of January
2021.
The mortality improvement projection scale was updated.
The general inflation rate was changed to the 2.50% rate used in the June 30, 2019, GERP and June 30,
2019, PEPFF, material valuations (from 2.75%).
25.0% of GERP employees are assumed to elect coverage at retirement (changed from 20.0% based on
recent experience).
2020 Changes in Plan Provisions:
Medical plans and premiums have been updated effective as of January 1, 2021.
2019 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 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.
99
100
COMBINING AND INDIVIDUAL FUND STATEMENTS AND
SCHEDULES
101
102
NONMAJOR GOVERNMENTAL FUNDS
103
104
SPECIAL REVENUE FUNDS
The Special Revenue Funds are 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 long-term debt.
CAPITAL PROJECT FUNDS
The Capital Project Funds account for financial resources to be used for the
acquisition or construction of major capital facilities (other than those financed by
Proprietary Funds).
105
CITY OF COTTAGE GROVE
COMBINING BALANCE SHEET Statement 17
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2024
With Comparative Totals For December 31, 2023
Special
Revenue Debt Service Capital Projects 2024 2023
Assets:
Cash and investments $2,379,621 $6,746,736 $13,836,761 $22,963,118 $24,009,971
Interest receivable - - 29,766 29,766 105,692
Due from other funds 63,880 -138,574 202,454 433,767
Due from other governments 534,344 -11,591 545,935 122,226
Accounts receivable 250,804 -939,537 1,190,341 1,082,679
Lease receivable - - 919,895 919,895 4,855,351
Prepaid items 5,342 - - 5,342 12,884
Inventories 82,085 - - 82,085 83,758
Taxes receivable - delinquent -20,567 2,637 23,204 15,550
Special assessments receivable:
Deferred - 2,776,333 1,382 2,777,715 2,852,257
Delinquent -3,153 -3,153 4,104
Special deferred -530,927 -530,927 757,527
Total assets $3,316,076 $10,077,716 $15,880,143 $29,273,935 $34,335,766
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $219,663 $3,878 $443,745 $667,286 $2,106,969
Salaries and benefits payable 81,195 - - 81,195 65,024
Due to other funds 63,880 -138,574 202,454 334,528
Contracts payable - - 353,831 353,831 556,392
Due to other governments 15,440 -392,200 407,640 16,517
Deposits payable 14,785 -49,210 63,995 306,532
Unearned revenue 121,758 -640,000 761,758 320,000
Interfund loan payable 1,614,000 -2,085,787 3,699,787 4,288,045
Total liabilities 2,130,721 3,878 4,103,347 6,237,946 7,994,007
Deferred inflows of resources:
Related to leases - - 862,862 862,862 4,672,305
Unavailable revenue - property taxes -20,567 2,637 23,204 15,550
Unavailable revenue - special assessments - 3,310,413 1,382 3,311,795 3,613,889
Total deferred inflows of resources - 3,330,980 866,881 4,197,861 8,301,744
Fund balances:
Nonspendable 87,427 - - 87,427 96,642
Restricted 482,227 6,742,858 4,273,058 11,498,143 8,699,259
Committed 2,116,926 - - 2,116,926 2,722,525
Assigned - - 9,031,328 9,031,328 10,453,605
Unassigned (1,501,225)-(2,394,471) (3,895,696) (3,932,016)
Total fund balances 1,185,355 6,742,858 10,909,915 18,838,128 18,040,015
Total liabilities, deferred
inflows of resources, and
fund balances $3,316,076 $10,077,716 $15,880,143 $29,273,935 $34,335,766
Total
Nonmajor Governmental Funds
106
CITY OF COTTAGE GROVE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 18
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
Special
Revenue Debt Service Capital Projects 2024 2023
Revenues:
General property taxes $ - $3,643,949 $615,528 $4,259,477 $3,036,781
Franchise taxes - - 2,071,626 2,071,626 860,203
Aggregate taxes - - 20,314 20,314 38,775
Lodging tax 70,168 - - 70,168 71,647
Tax increment collections - 365,169 1,801,791 2,166,960 1,684,566
Special assessments - 925,126 1,507 926,633 1,085,319
Direct charges to developers - - 1,720 1,720 34,624
Intergovernmental 721,109 - 40,000 761,109 1,393,937
Charges for services 5,199,040 - 45,300 5,244,340 4,909,934
Rent - - 104,053 104,053 542,532
Lease related interest income - - 32,376 32,376 185,184
Fines and forfeitures 187,397 - - 187,397 184,480
Investment earnings 169,959 205,810 731,834 1,107,603 1,199,216
Connection charges - - 1,680,447 1,680,447 1,784,257
Park dedication fees - - 763,941 763,941 767,094
Refunds and reimbursements 591 - - 591 104
Donations 8,584 - 80,000 88,584 131,924
Miscellaneous 32,386 - 352 32,738 9,635
Total revenues 6,389,234 5,140,054 7,990,789 19,520,077 17,920,212
Expenditures:
Current:
General government 157,795 20,535 6,655 184,985 17,185
Economic development - 167,545 697,260 864,805 423,406
Public safety 971,985 - 47,890 1,019,875 957,130
Public works 887,925 - 665,594 1,553,519 1,565,313
Culture and recreation 2,898,034 - 117,795 3,015,829 2,964,879
Capital outlay:
General government - - - - 120,173
Public safety - - 410,929 410,929 238,406
Public works 464,758 - 3,885,091 4,349,849 8,473,518
Culture and recreation 228,468 - 1,564,264 1,792,732 9,439,065
Debt service:
Principal - 3,375,000 - 3,375,000 3,335,000
Interest and other charges 34,640 1,225,702 43,219 1,303,561 1,141,250
Total expenditures 5,643,605 4,788,782 7,438,697 17,871,084 28,675,325
Excess of revenues over
(under) expenditures 745,629 351,272 552,092 1,648,993 (10,755,113)
Other financing sources (uses):
Proceeds from sale of capital assets - - 22,632 22,632 9,025
Subscription-based IT arrangements issued - - - - 238,406
Bond issuance - 251,656 1,323,636 1,575,292 7,815,000
Bond premium - - 213,667 213,667 320,387
Transfers in - 792,800 142,602 935,402 2,502,928
Transfers out (1,034,187) (42,451) (1,425,549) (2,502,187) (506,909)
Total other financing sources (uses)(1,034,187) 1,002,005 276,988 244,806 10,378,837
Net change in fund balances (288,558) 1,353,277 829,080 1,893,799 (376,276)
Fund balances:
Beginning of year, as previously presented 1,473,913 5,389,581 11,176,521 18,040,015 18,416,291
Change within financial reporting entity (nonmajor to major fund) - - (1,095,686) (1,095,686) -
Beginning of year, as adjusted 1,473,913 5,389,581 10,080,835 16,944,329 18,416,291
End of year $1,185,355 $6,742,858 $10,909,915 $18,838,128 $18,040,015
Total
Nonmajor Governmental Funds
107
108
NONMAJOR SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for the proceeds of specific
revenues sources that are legally to restricted to expenditures for specified
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.
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.
Opioid Settlement – Established to account for opioid settlement receipts.
Convention and Visitors Bureau – Established to account for lodging tax to be
utilized for marketing and promotion of the community.
Local Affordable Housing Aid – Established to account for Local Affordable
Housing Aid revenue.
109
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2024
With Comparative Totals For December 31, 2023
Recycling
(215)
Storm Water
Maintenance
(230)
Forfeiture/
Seizure
(240)
Golf Course
Fund
(255)
Assets:
Cash and investments $125,070 $1,568,817 $ - $207,262
Due from other funds - - - -
Due from other governments - 345,891 23,355 -
Accounts receivable - 215,023 - 22,631
Prepaid items - - - 5,342
Inventories - - - 40,791
Total assets $125,070 $2,129,731 $23,355 $276,026
Liabilities and Fund Balances
Liabilities:
Accounts payable $14,867 $175,192 $143 $12,713
Salaries and benefits payable 1,154 15,230 - 42,907
Due to other funds - - 14,697 -
Contracts payable - - - -
Due to other governments - 716 - 5,419
Deposits payable - - - 14,785
Unearned revenue - - - -
Interfund loan payable - - - 1,614,000
Total liabilities 16,021 191,138 14,840 1,689,824
Fund balances:
Nonspendable - - - 46,133
Restricted - - 8,515 -
Committed 109,049 1,938,593 - -
Unassigned - - - (1,459,931)
Total fund balances 109,049 1,938,593 8,515 (1,413,798)
Total liabilities and fund balances $125,070 $2,129,731 $23,355 $276,026
110
Statement 19
HERO Center
Operations
(290)
Opioid
Settlement
(245)
Convention and
Visitors Bureau
(265)
Local Affordable
Housing Aid
(283)2024 2023
$200 $291,628 $59,852 $126,792 $2,379,621 $3,160,127
- 63,880 - - 63,880 -
165,098 - - - 534,344 96,762
- - 13,150 - 250,804 212,687
- - - - 5,342 12,884
41,294 - - - 82,085 83,758
$206,592 $355,508 $73,002 $126,792 $3,316,076 $3,566,218
$16,267 $ - $481 $ - $219,663 $154,476
18,667 - 3,237 - 81,195 65,024
49,183 - - - 63,880 -
- - - - - 12,561
717 8,588 - - 15,440 15,340
- - - - 14,785 112,904
121,758 - - - 121,758 -
- - - - 1,614,000 1,732,000
206,592 8,588 3,718 - 2,130,721 2,092,305
41,294 - - - 87,427 96,642
- 346,920 - 126,792 482,227 165,190
- - 69,284 - 2,116,926 2,722,525
(41,294) - - - (1,501,225) (1,510,444)
- 346,920 69,284 126,792 1,185,355 1,473,913
$206,592 $355,508 $73,002 $126,792 $3,316,076 $3,566,218
Nonmajor Special Revenue Funds
Totals
111
CITY OF COTTAGE GROVE
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
Recycling
(215)
Storm Water
Maintenance
(230)
Forfeiture/
Seizure
(240)
Golf Course
Fund
(255)
Revenues:
Intergovernmental $57,930 $360,976 $23,355 $ -
Lodging tax - - - -
Charges for services - 1,214,681 - 3,144,279
Fines and forfeitures - - 2,987 -
Investment income 6,991 126,867 420 10,970
Refunds and reimbursements - - - -
Donations - - - -
Miscellaneous 3,500 - - 5,897
Total revenues 68,421 1,702,524 26,762 3,161,146
Expenditures:
Current:
General government - - - -
Public safety - - 24,717 -
Public works 58,116 829,809 - -
Culture and recreation - - - 2,898,034
Capital outlay:
Public safety - - - -
Public works - 464,758 - -
Culture and recreation - - - 228,468
Debt service:
Principal - - - -
Interest and other charges - - - 34,640
Total expenditures 58,116 1,294,567 24,717 3,161,142
Excess of revenues over
(under) expenditures 10,305 407,957 2,045 4
Other financing sources (uses):
Subscription-based IT arrangements issued - - - -
Transfers in - - - -
Transfers out - (981,787) - -
Total other financing sources (uses) - (981,787) - -
Net change in fund balances 10,305 (573,830)2,045 4
Fund balances:
Beginning of year 98,744 2,512,423 6,470 (1,413,802)
End of year $109,049 $1,938,593 $8,515 ($1,413,798)
112
Statement 20
HERO Center
Operations
(290)
Opioid
Settlement
(245)
Convention and
Visitors Bureau
(265)
Local Affordable
Housing Aid
(283)2024 2023
$143,372 $ - $10,000 $125,476 $721,109 $393,937
- - 70,168 - 70,168 71,647
817,730 - 22,350 - 5,199,040 4,855,813
- 184,410 - - 187,397 184,480
6,399 12,377 4,619 1,316 169,959 138,805
591 - - - 591 104
- - 8,584 - 8,584 41,144
22,989 - - - 32,386 6,938
991,081 196,787 115,721 126,792 6,389,234 5,692,868
- - 157,795 - 157,795 -
938,681 8,587 - - 971,985 844,029
- - - - 887,925 1,028,102
- - - - 2,898,034 2,765,647
-
- - - - - 238,406
- - - - 464,758 -
- - - - 228,468 2,264,998
-
- - - - - 50,000
- - - - 34,640 5,480
938,681 8,587 157,795 - 5,643,605 7,196,662
52,400 188,200 (42,074) 126,792 745,629 (1,503,794)
- - - - - 238,406
- - - - - 827,151
(52,400) - - - (1,034,187) (202,519)
(52,400) - - - (1,034,187) 863,038
- 188,200 (42,074) 126,792 (288,558) (640,756)
- 158,720 111,358 - 1,473,913 2,114,669
$ - $346,920 $69,284 $126,792 $1,185,355 $1,473,913
Totals
Nonmajor Special Revenue Funds
113
114
NONMAJOR DEBT SERVICE FUNDS
The City's Debt Service Funds are used to account for the accumulation of
resources for, and payment of, interest, principal and related costs of long-term
debt other than proprietary fund debt.
The City’s debt service funds account for four types of bonded indebtedness:
Improvement Bonds
Refunding Bonds
Tax Increment Bonds
Equipment Certificates
115
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2024
With Comparative Totals For December 31, 2023
2019A G.O.
CIP Bonds
(315)
2019B
Equipment
Certificate
(305)
2018A G.O.
Improvement
Bonds
(310)
2017A G.O.
Capital
Improvement
Bonds
(371)
Assets:
Cash and investments $153,284 $45,543 $1,712,116 $528,350
Taxes receivable - delinquent 1,677 2,313 2,086 4,366
Special assessments receivable
Deferred - - 7,715 -
Delinquent - - 276 -
Special deferred - - 512,029 -
Total assets $154,961 $47,856 $2,234,222 $532,716
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $475 $475 $475 $475
Interfund loan payable - - - -
Total liabilities 475 475 475 475
Deferred inflows of resources:
Unavailable revenue - property taxes 1,677 2,313 2,086 4,366
Unavailable revenue - special assessments - - 520,020 -
Total deferred inflows of resources 1,677 2,313 522,106 4,366
Fund balances:
Restricted 152,809 45,068 1,711,641 527,875
Total fund balances 152,809 45,068 1,711,641 527,875
Total liabilities, deferred inflows
of resources, and fund balances $154,961 $47,856 $2,234,222 $532,716
116
Statement 21
2016A G.O.
Refunding
Bonds
(369)
2021A G.O.
Improvement
Bonds
(330)
2023A G.O.
Improvement
Bonds
(494)
2024A G.O.
Improvement
Bonds
(495)
Pavement
Management
Debt Service
(340, 492, 493)
Tax Increment
Funds 2024 2023
$103,688 $638,335 $1,453,730 $629,739 $747,749 $734,202 $6,746,736 $5,407,945
1,665 1,363 983 331 5,783 - 20,567 13,845
- 442,766 841,016 318,832 1,166,004 - 2,776,333 2,849,493
- 330 1,075 - 1,472 - 3,153 4,104
- - 4,490 - 14,408 - 530,927 757,527
$105,353 $1,082,794 $2,301,294 $948,902 $1,935,416 $734,202 $10,077,716 $9,032,914
$ - $475 $475 $475 $475 $78 $3,878 $331
- - - - - - - 18,032
- 475 475 475 475 78 3,878 18,363
1,665 1,363 983 331 5,783 - 20,567 13,845
- 443,096 846,581 318,832 1,181,884 - 3,310,413 3,611,125
1,665 444,459 847,564 319,163 1,187,667 - 3,330,980 3,624,970
103,688 637,860 1,453,255 629,264 747,274 734,124 6,742,858 5,389,581
103,688 637,860 1,453,255 629,264 747,274 734,124 6,742,858 5,389,581
$105,353 $1,082,794 $2,301,294 $948,902 $1,935,416 $734,202 $10,077,716 $9,032,914
Totals
Nonmajor Debt Service Funds
117
CITY OF COTTAGE GROVE
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2019A G.O.
CIP Bonds
(315)
2019B
Equipment
Certificate
(305)
2018A G.O.
Improvement
Bonds
(310)
2017A G.O.
Capital
Improvement
Bonds
(371)
Revenues:
General property taxes $248,632 $348,081 $248,682 $606,696
Tax increment collections - - - -
Special assessments - - 227,390 -
Investment income 1,625 167 79,660 7,918
Total revenues 250,257 348,248 555,732 614,614
Expenditures:
Current:
General government 5,425 5,425 451 425
Economic Development - - - -
Debt service:
Principal retirement 160,000 280,000 450,000 400,000
Interest and other charges 118,134 50,900 184,849 205,825
Total expenditures 283,559 336,325 635,300 606,250
Excess of revenues over
(under) expenditures (33,302) 11,923 (79,568)8,364
Other financing sources:
Bond issuance - - - -
Transfers in - - 100,000 -
Transfers out - - - -
Total other financing sources - - 100,000 -
Net change in fund balances (33,302) 11,923 20,432 8,364
Fund balances:
Beginning of year 186,111 33,145 1,691,209 519,511
End of year $152,809 $45,068 $1,711,641 $527,875
118
Statement 22
2016A G.O.
Refunding
Bonds
(369)
2021A G.O.
Improvement
Bonds
(330)
2023A G.O.
Improvement
Bonds
(494)
2024A G.O.
Improvement
Bonds
(495)
Pavement
Management
Debt Service
(340,492,
493)
Tax Increment
Funds 2024 2023
$218,819 $228,720 $537,666 $181,193 $1,025,460 $ - $3,643,949 $2,786,647
- - - - - $365,169 365,169 514,895
- 56,861 157,582 183,854 299,439 - 925,126 783,589
397 23,560 32,250 13,036 14,526 32,671 205,810 176,766
219,216 309,141 727,498 378,083 1,339,425 397,840 5,140,054 4,261,897
425 924 424 - 7,036 - 20,535 12,706
- - - - - 167,545 167,545 1,980
365,000 235,000 - - 1,195,000 290,000 3,375,000 3,285,000
28,750 62,324 380,291 475 186,871 7,283 1,225,702 938,372
394,175 298,248 380,715 475 1,388,907 464,828 4,788,782 4,238,058
(174,959) 10,893 346,783 377,608 (49,482) (66,988) 351,272 23,839
- - - 251,656 - - 251,656 224,858
200,000 - 492,800 - - - 792,800 450,000
- - - - - (42,451) (42,451) -
200,000 - 492,800 251,656 - (42,451) 1,002,005 674,858
25,041 10,893 839,583 629,264 (49,482) (109,439) 1,353,277 698,697
78,647 626,967 613,672 - 796,756 843,563 5,389,581 4,690,884
$103,688 $637,860 $1,453,255 $629,264 $747,274 $734,124 $6,742,858 $5,389,581
Nonmajor Debt Service Funds
Totals
119
120
NONMAJOR CAPITAL PROJECT FUNDS
Capital Project Funds account for financial resources to be used for the
acquisition or construction of major capital facilities (other than those financed by
Proprietary Funds).
Equipment Replacement Fund – Established to accumulate monies for the
replacement of capital equipment.
Roadway and Trailway Maintenance Fund – Established to account for the
receipt of franchise fees to be used for sealcoating activities.
Water Connection and Area – This fund accounts for the projects that are partially
paid for with connection charges.
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.
Developer Petitioned Projects – This fund accounts for costs of infrastructure
projects petitioned by developers and special assessment revenue which repay the
costs.
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.
Municipal Building Fund – This fund accounts for the accumulation of resources
and construction or remodeling costs of municipal buildings and facilities.
Ice Arena Capital Project – This fund accounts for the accumulation of resources
and capital expenditures related to the ice arena.
121
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2024
With Comparative Totals For December 31, 2023
Equipment
Replacement
(210)
Roadway and
Trailway
Maintenance
(235)
Water
Connection and
Area (575)
Completed
Construction
(500) Park Trust (570)
Developer
Petitioned
Projects (568)
Assets:
Cash and investments $759,943 $461,839 $4,105,673 $185,445 $170,739 $369,749
Interest receivable - - - - - -
Due from other funds - - 138,574 - - -
Due from other governments - 11,591 - - - -
Accounts receivable - 439,537 - - - -
Taxes receivable - delinquent 580 - - - - -
Lease receivable - - - - - -
Special assessment receivable - deferred - - - - - 1,382
Total assets $760,523 $912,967 $4,244,247 $185,445 $170,739 $371,131
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $ - $30,886 $4,970 $ - $20,068 $3,181
Due to other governments - - - - - -
Contracts payable - 13,740 - - 111,836 36,293
Due to other funds - - - - - -
Deposits payable - 25,644 - - - 23,566
Unearned revenue - - - - - -
Interfund loan payable - - - - - -
Total liabilities - 70,270 4,970 - 131,904 63,040
Deferred inflows of resources:
Related to leases - - - - - -
Unavailable revenue - property taxes 580 - - - - -
Unavailable revenue - special assessments - - - - - 1,382
Total deferred inflows of resources 580 - - - - 1,382
Fund balances:
Restricted - - - - - -
Assigned 759,943 842,697 4,239,277 185,445 38,835 306,709
Unassigned - - - - - -
Total fund balances 759,943 842,697 4,239,277 185,445 38,835 306,709
Total liabilities, deferred inflows
of resources, and fund balances $760,523 $912,967 $4,244,247 $185,445 $170,739 $371,131
122
Statement 23
Future Storm
Sewer
Improvements
(585)
Sewer
Connection and
Area (580)
Pavement
Management
Capital Project
(560)
Tax Increment
Construction
Revolving Fund
Municipal
Building Fund
(525)
Ice Arena Capital
Project
(526)2024 2023
$92,012 $ - $2,470,068 $4,666,746 $271,807 $282,740 $13,836,761 $15,441,899
- - - - 29,766 - 29,766 105,692
- - - - - - 138,574 433,767
- - - - - - 11,591 25,464
- 500,000 - - - - 939,537 869,992
- - - - 2,057 - 2,637 1,705
- - - - 919,895 - 919,895 4,855,351
- - - - - - 1,382 2,764
$92,012 $500,000 $2,470,068 $4,666,746 $1,223,525 $282,740 $15,880,143 $21,736,634
$327,494 $ - $50,643 $156 $6,347 $ - $443,745 $1,952,162
- - - 392,200 - - 392,200 1,177
69,533 - 122,429 - - - 353,831 543,831
- 138,574 - - - - 138,574 334,528
- - - - - - 49,210 193,628
- - - - - 640,000 640,000 320,000
- - - 65,787 2,020,000 - 2,085,787 2,538,013
397,027 138,574 173,072 458,143 2,026,347 640,000 4,103,347 5,883,339
- - - - 862,862 - 862,862 4,672,305
- - - - 2,057 - 2,637 1,705
- - - - - - 1,382 2,764
- - - - 864,919 - 866,881 4,676,774
- - - 4,273,058 - - 4,273,058 3,144,488
- 361,426 2,296,996 - - - 9,031,328 10,453,605
(305,015) - - (64,455) (1,667,741) (357,260) (2,394,471) (2,421,572)
(305,015) 361,426 2,296,996 4,208,603 (1,667,741) (357,260) 10,909,915 11,176,521
$92,012 $500,000 $2,470,068 $4,666,746 $1,223,525 $282,740 $15,880,143 $21,736,634
Nonmajor Capital Projects Funds
Totals
123
CITY OF COTTAGE GROVE
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
Equipment
Replacement
(210)
Roadway and
Trailway
Maintenance
(235)
Water
Connection and
Area
(575)
Completed
Construction
(500)
Park Trust
(570)
Park Capital
Improvement
Fund
(515)
Revenues:
Taxes $317,163 $ - $ - $ - $ -
Franchise taxes - 2,071,626 - - -
Aggregate taxes - 20,314 - - -
Tax increment collections - - - - -
Special assessments - - - - -
Direct charges to developers - 1,720 - - -
Intergovernmental - - 40,000 - -
Charges for services - 45,300 - - -
Rent - - - - -
Lease related interest income - - - - -
Investment income 52,026 32,435 215,885 9,595 30,139
Connection charges - - 500,388 - -
Park dedication fees - - - - 763,941
Donations - - - - -
Miscellaneous 352 - - - -
Total revenues 369,541 2,171,395 756,273 9,595 794,080 -
Expenditures:
Current:
General government - - - 31 -
Economic development - - - - -
Public safety 47,890 - - - -
Public works - 468,410 5,911 - -
Culture and recreation - - - - 117,795
Capital outlay:
General government - - - - -
Public safety 410,929 - - - -
Public works 706,491 1,037,504 55,249 - -
Culture and recreation 642,381 - - - 399,197
Interest and other charges 2,782 - - - -
Total expenditures 1,810,473 1,505,914 61,160 31 516,992 -
Excess of revenues over
(under) expenditures (1,440,932) 665,481 695,113 9,564 277,088
Other financing sources (uses):
Proceeds from sale of capital assets 22,632 - - - -
Bond issuance 434,840 - - - -
Bond premium 67,942 - - - -
Transfers in 52,900 - - - -
Transfers out - (306,728) (118,540) - (492,801)
Total other financing sources (uses) 578,314 (306,728) (118,540) - (492,801) -
Net change in fund balances (862,618) 358,753 576,573 9,564 (215,713)
Fund balances:
Beginning of year, as previously presented 1,622,561 483,944 3,662,704 175,881 254,548 1,095,686
Change within financial reporting entity (nonmajor to major fund) - - - - - (1,095,686)
Beginning of year, as adjusted 1,622,561 483,944 3,662,704 175,881 254,548 -
End of year $759,943 $842,697 $4,239,277 $185,445 $38,835 $ -
124
Statement 24
Developer
Petitioned
Projects
(568)
Future Storm
Sewer
Improvements
(585)
Sewer
Connection and
Area
(580)
Pavement
Management
Capital Project
(560)
Tax Increment
Construction
Revolving Fund
Municipal
Building Fund
(525)
Ice Arena
Capital Project
(526)2024 2023
$ - $ - $ - $ - $ - $298,365 $ - $615,528 $250,134
- - - - - - - 2,071,626 860,203
- - - - - - - 20,314 38,775
- - - - 1,801,791 - - 1,801,791 1,169,671
1,465 - - 42 - - - 1,507 301,730
- - - - - - - 1,720 34,624
- - - - - - - 40,000 1,000,000
- - - - - - - 45,300 54,121
- - - - - 104,053 - 104,053 542,532
- - - - - 32,376 - 32,376 185,184
32,464 13,908 - 155,970 159,679 8,702 21,031 731,834 883,645
- 656,326 523,733 - - - - 1,680,447 1,784,257
- - - - - - - 763,941 767,094
- - - - - - 80,000 80,000 90,780
- - - - - - - 352 2,697
33,929 670,234 523,733 156,012 1,961,470 443,496 101,031 7,990,789 7,965,447
- - - - - 6,624 - 6,655 2,499
- - - - 697,260 - - 697,260 423,406
- - - - - - - 47,890 113,101
410 156,472 34,209 182 - - - 665,594 537,211
- - - - - - - 117,795 199,232
- - - - - - - - 120,173
- - - - - - - 410,929 -
266,227 334,109 - 1,485,511 - - - 3,885,091 8,473,518
- - - - - - 522,686 1,564,264 7,174,067
- - - 9,521 9,666 21,250 - 43,219 197,398
266,637 490,581 34,209 1,495,214 706,926 27,874 522,686 7,438,697 17,240,605
(232,708) 179,653 489,524 (1,339,202) 1,254,544 415,622 (421,655) 552,092 (9,275,158)
- - - - - - - 22,632 9,025
- - - 888,796 - - - 1,323,636 7,590,142
- - - 145,725 - - - 213,667 320,387
- - - 47,251 42,451 - - 142,602 1,225,777
- (314,944) (192,536) - - - - (1,425,549) (304,390)
- (314,944) (192,536) 1,081,772 42,451 - - 276,988 8,840,941
(232,708) (135,291) 296,988 (257,430) 1,296,995 415,622 (421,655) 829,080 (434,217)
539,417 (169,724) 64,438 2,554,426 2,911,608 (2,083,363) 64,395 11,176,521 11,610,738
- - - - - - - (1,095,686) -
539,417 (169,724) 64,438 2,554,426 2,911,608 (2,083,363) 64,395 10,080,835 11,610,738
$306,709 ($305,015) $361,426 $2,296,996 $4,208,603 ($1,667,741) ($357,260) $10,909,915 $11,176,521
Nonmajor Capital Projects Funds
Totals
125
CITY OF COTTAGE GROVE
SPECIAL REVENUE FUND - RECYCLING Statement 25
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2023
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Intergovernmental $57,000 $57,000 $57,930 $930 $56,734
Investment income 500 500 6,991 6,491 5,131
Miscellaneous - - 3,500 3,500 3,880
Total revenues 57,500 57,500 68,421 10,921 65,745
Expenditures:
Current:
Public works 62,720 62,720 58,116 4,604 61,927
Total expenditures 62,720 62,720 58,116 4,604 61,927
Excess of revenues over
(under) expenditures ($5,220) ($5,220) 10,305 $15,525 3,818
Fund balances:
Beginning of year 98,744 94,926
End of year $109,049 $98,744
Budgeted Amounts
2024
126
CITY OF COTTAGE GROVE
SPECIAL REVENUE FUND - STORM WATER MAINTENANCE Statement 26
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2023
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Intergovernmental $ - $ - $360,976 $360,976 $165,084
Charges for services 1,198,360 1,198,360 1,214,681 16,321 1,132,552
Fines and forfeitures - - - - 17,414
Investment income 10,000 10,000 126,867 116,867 107,709
Total revenues 1,208,360 1,208,360 1,702,524 494,164 1,422,759
Expenditures:
Current:
Public works 973,915 973,915 829,809 144,106 802,455
Capital outlay:
Public works - - 464,758 (464,758) -
Total expenditures 973,915 973,915 1,294,567 (320,652) 802,455
Excess of revenues over
(under) expenditures 234,445 234,445 407,957 173,512 620,304
Other financing uses:
Transfers out (46,450) (46,450) (981,787) 935,337 (168,129)
Total other financing uses (46,450) (46,450) (981,787) 935,337 (168,129)
Net change in fund balance $187,995 $187,995 (573,830) ($761,825) 452,175
Fund balances:
Beginning of year 2,512,423 2,060,248
End of year $1,938,593 $2,512,423
Budgeted Amounts
2024
127
CITY OF COTTAGE GROVE
SPECIAL REVENUE FUND - FORFEITURE/SEIZURE Statement 27
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2023
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Intergovernmental $ - $ - $23,355 $23,355 $ -
Fines and forfeitures 24,000 24,000 2,987 (21,013) 14,714
Investment income - - 420 420 3,039
Refunds and reimbursements - - - - 104
Total revenues 24,000 24,000 26,762 2,762 17,857
Expenditures:
Current:
Public safety 26,870 26,870 24,717 2,153 32,419
Capital outlay:
Public safety 5,030 5,030 - 5,030 238,406
Debt service:
Principal - - - - 50,000
Total expenditures 31,900 31,900 24,717 7,183 320,825
Excess of revenues over
(under) expenditures (7,900) (7,900)2,045 9,945 (302,968)
Other financing sources:
Subscription-based IT arrangements issued - - - - 238,406
Total other financing sources - - - - 238,406
Net change in fund balance ($7,900) ($7,900)2,045 $9,945 (64,562)
Fund balances:
Beginning of year 6,470 71,032
End of year $8,515 $6,470
Budgeted Amounts
2024
128
CITY OF COTTAGE GROVE
SPECIAL REVENUE FUND - GOLF COURSE Statement 28
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2023
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Intergovernmental $ - $ - $ - $ - $4,519
Charges for services 2,999,180 2,999,180 3,144,279 145,099 3,006,438
Investment income - - 10,970 10,970 14,112
Miscellaneous - - 5,897 5,897 3,039
Total revenues 2,999,180 2,999,180 3,161,146 161,966 3,028,108
Expenditures:
Current:
Culture and recreation 2,490,091 2,490,091 2,898,034 (407,943) 2,765,647
Capital outlay:
Culture and recreation 220,609 220,609 228,468 (7,859) 2,264,998
Debt service:
Interest and other charges 183,000 183,000 34,640 148,360 5,480
Total expenditures 2,893,700 2,893,700 3,161,142 (267,442) 5,036,125
Excess of revenues over
(under) expenditures 105,480 105,480 4 (105,476) (2,008,017)
Other financing sources:
Transfers in - - - - 650,000
Total other financing sources - - - - 650,000
Net change in fund balance $105,480 $105,480 4 ($105,476) (1,358,017)
Fund balances:
Beginning of year (1,413,802) (55,785)
End of year ($1,413,798) ($1,413,802)
Budgeted Amounts
2024
129
CITY OF COTTAGE GROVE
SPECIAL REVENUE FUND - CONVENTION & VISITORS BUREAU Statement 29
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2023
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Intergovernmental $64,695 $64,695 $10,000 ($54,695) $82,590
Lodging tax 72,275 72,275 70,168 (2,107) 71,647
Charges for services 13,845 13,845 22,350 8,505 13,145
Investment income - - 4,619 4,619 71
Donations 2,750 2,750 8,584 5,834 41,144
Total revenues 153,565 153,565 115,721 (37,844) 208,597
Expenditures:
Current:
General government 148,460 148,460 157,795 (9,335) 163,720
Total expenditures 148,460 148,460 157,795 (9,335) 163,720
Excess of revenues over
(under) expenditures 5,105 5,105 (42,074) (47,179) 44,877
Other financing sources:
Transfers in - - - - 66,481
Total other financing sources - - - - 66,481
Net change in fund balance $5,105 $5,105 (42,074) ($47,179) 111,358
Fund balances:
Beginning of year 111,358 -
End of year $69,284 $111,358
Budgeted Amounts
2024
130
CITY OF COTTAGE GROVE
CAPITAL PROJECT FUND - EQUIPMENT REPLACEMENT Statement 30
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2023
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Taxes $319,100 $319,100 $317,163 ($1,937) $ -
Investment income 7,990 7,990 52,026 44,036 81,801
Miscellaneous - - 352 352 -
Total revenues 327,090 327,090 369,541 42,451 81,801
Expenditures:
Current:
Public safety - - 47,890 (47,890) -
Public works - - - - 9,307
Capital outlay:
Public safety 602,890 602,890 410,929 191,961 -
Public works 108,000 108,000 706,491 (598,491) 513,662
Culture and recreation 273,000 273,000 642,381 (369,381) -
Debt service:
Interest and other charges 16,800 16,800 2,782 14,018 -
Total expenditures 1,000,690 1,000,690 1,810,473 (809,783) 522,969
Excess of revenues over
(under) expenditures (673,600) (673,600) (1,440,932) (767,332) (441,168)
Other financing sources (uses):
Proceeds from sale of capital assets - - 22,632 22,632 9,025
Bond issuance 240,000 240,000 434,840 194,840 -
Bond premium - - 67,942 67,942 -
Transfers in - - 52,900 52,900 418,837
Total other financing uses 240,000 240,000 578,314 338,314 427,862
Net change in fund balance ($433,600) ($433,600) (862,618) ($429,018) (13,306)
Fund balances:
Beginning of year 1,622,561 1,635,867
End of year $759,943 $1,622,561
Budgeted Amounts
2024
131
CITY OF COTTAGE GROVE
CAPITAL PROJECT FUND - ROADWAY AND TRAILWAY MAINTENANCE FUND Statement 31
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2023
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Franchise taxes $1,905,000 $1,905,000 $2,071,626 $166,626 $860,203
Aggregate taxes 22,000 22,000 20,314 (1,686) 38,775
Direct charges to developers - - 1,720 1,720 34,624
Charges for services - - 45,300 45,300 54,121
Investment income 10,000 10,000 32,435 22,435 9,928
Total revenues 1,937,000 1,937,000 2,171,395 234,395 997,651
Expenditures:
Current:
Public works 390,640 390,640 468,410 (77,770) 247,745
Capital Outlay
Public works 1,404,000 1,404,000 1,037,504 366,496 496,681
Total expenditures 1,794,640 1,794,640 1,505,914 288,726 744,426
Excess of revenues over
(under) expenditures 142,360 142,360 665,481 807,841 253,225
Other financing sources (uses):
Transfers out - - (306,728) (306,728) -
Total other financing uses - - (306,728) (306,728) -
Net change in fund balance $142,360 $142,360 $358,753 $501,113 $253,225
Fund balances:
Beginning of year 483,944 230,719
End of year $842,697 $483,944
Budgeted Amounts
2024
132
INTERNAL SERVICE FUNDS
Internal service funds account for the financing of goods or services provided by
one department or agency to other departments or agencies of the government and
to other government 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.
Compensated Absences Fund – Established to provide better transparency in the
funding of compensated absences.
133
COTTAGE GROVE, CITY OF
COMBINING STATEMENT OF NET POSITION Statement 32
INTERNAL SERVICE FUNDS
December 31, 2024
With Comparative Totals For December 31, 2023
Fleet Information Compensated
Self Insurance Maintenance Services Absences
(700)(710)(720)(730)2024 2023
Assets:
Current assets:
Cash and investments
(including cash equivalents)$405,662 $ - $316,472 $1,370,900 $2,093,034 $307,886
Accounts receivable 348,372 470 119 - 348,961 7,225
Due from other governments - - - - - 52,230
Inventories - 184,085 - - 184,085 218,928
Prepaid items - - 169,933 - 169,933 391,173
Total current assets 754,034 184,555 486,524 1,370,900 2,796,013 977,442
Noncurrent assets:
Capital assets:
Land - 424,665 - - 424,665 424,665
Buildings and improvements - 928,870 - - 928,870 928,870
Equipment and furniture - - 70,127 - 70,127 70,127
Machinery and equipment - 489,092 - - 489,092 489,092
Subscription-based IT arrangements - - 350,338 - 350,338 -
Total capital assets - 1,842,627 420,465 - 2,263,092 1,912,754
Accumulated depreciation and amortization - (1,038,902) (207,092) - (1,245,994) (1,066,432)
Total noncurrent assets - 803,725 213,373 - 1,017,098 846,322
Total assets 754,034 988,280 699,897 1,370,900 3,813,111 1,823,764
Deferred outflows of resources:
Deferred outflows of resources related to pensions - 116,116 47,569 - 163,685 197,653
Deferred outflows of resources related to OPEB - 23,173 12,646 - 35,819 38,450
Total deferred outflows of resources - 139,289 60,215 - 199,504 236,103
Total assets and deferred outflows of resources $754,034 $1,127,569 $760,112 $1,370,900 $4,012,615 $2,059,867
Liabilities:
Current liabilities:
Accounts payable $347,842 $32,240 $44,161 $ - $424,243 $414,972
Salaries payable - 35,591 21,111 - 56,702 38,841
Due to other funds - 635,797 - - 635,797 635,524
Due to other governments 26,677 930 - - 27,607 3,562
Subscription-based IT arrangements - - 65,371 - 65,371 -
Compensated absences payable - 59,135 34,312 1,144,777 1,238,224 67,483
Total current liabilities 374,519 763,693 164,955 1,144,777 2,447,944 1,160,382
Noncurrent liabilities:
Subscription-based IT arrangements - - 136,006 - 136,006 -
Compensated absences payable - 4,620 11,724 291,476 307,820 24,890
Net pension liability - 345,049 138,047 - 483,096 635,239
OPEB liability - 37,378 20,398 - 57,776 58,591
Total noncurrent liabilities - 387,047 306,175 291,476 984,698 718,720
Total liabilities 374,519 1,150,740 471,130 1,436,253 3,432,642 1,879,102
Deferred inflows of resources:
Deferred inflows of resources related to pensions - 212,128 97,644 - 309,772 205,610
Deferred inflows of resources related to OPEB - 6,489 3,541 - 10,030 6,542
Total deferred inflows of resources - 218,617 101,185 - 319,802 212,152
Net position:
Net investment in capital assets - 803,725 11,996 - 815,721 846,322
Unrestricted 379,515 (1,045,513) 175,801 (65,353) (555,550) (877,709)
Total net position 379,515 (241,788) 187,797 (65,353) 260,171 (31,387)
Total liabilities, deferred
inflows of resources, and
net position $754,034 $1,127,569 $760,112 $1,370,900 $4,012,615 $2,059,867
Totals
134
COTTAGE GROVE, CITY OF
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 33
CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
Self Fleet Information Compensated
Insurance Maintenance Services Absences
(700) (710) (720) (730) 2024 2023
Operating revenues:
Charges for services:
User fees $ - $2,096,015 $1,853,430 $ - $3,949,445 $3,723,466
Employee benefits 3,529,490 - - - 3,529,490 2,891,925
Insurance refunds and reimbursements 696,382 - - - 696,382 112,014
Total operating revenues 4,225,872 2,096,015 1,853,430 - 8,175,317 6,727,405
Operating expenses:
Operating and maintenance:
Personal services - 912,595 463,748 157,779 1,534,122 1,280,137
Contractual services - 498,963 937,539 - 1,436,502 1,522,671
Commodities - 735,167 180,094 - 915,261 860,241
Administrative and general:
Personal insurance benefits 3,035,500 - - - 3,035,500 2,848,555
Contractual services 491,056 - - - 491,056 435,126
Claims 541,384 - - - 541,384 208,094
Depreciation and amortization - 38,198 71,295 - 109,493 38,322
Total operating expenses 4,067,940 2,184,923 1,652,676 157,779 8,063,318 7,193,146
Excess of revenues over
(under) expenses 157,932 (88,908) 200,754 (157,779) 111,999 (465,741)
Nonoperating revenues (expenses):
Investment earnings 13,975 - 17,654 - 31,629 22,293
Interest expense - - (7,050) - (7,050) -
Intergovernmental grants 76,577 - - - 76,577 52,230
Loss on disposal of capital assets (51,262) - - - (51,262) -
Miscellaneous (1,863) 23,887 - - 22,024 203,848
Total nonoperating revenues 37,427 23,887 10,604 - 71,918 278,371
Income (loss) before capital
contributions and transfers 195,359 (65,021) 211,358 (157,779) 183,917 (187,370)
Transfers in - - - 1,370,900 1,370,900 1,767
Change in net position 195,359 (65,021) 211,358 1,213,121 1,554,817 (185,603)
Net position - January 1, as previously presented 184,156 (176,767) (38,776) - (31,387) 154,216
Change within financial reporting entity - - 15,215 (1,278,474) (1,263,259) -
Net position - Janaury 1, as adjusted 184,156 (176,767) (23,561) (1,278,474) (1,294,646) 154,216
Net position - December 31 $379,515 ($241,788) $187,797 ($65,353) $260,171 ($31,387)
Total
135
COTTAGE GROVE, CITY OF
COMBINING STATEMENT OF CASH FLOWS Statement 34
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
Self Fleet Information Compensated
Insurance Maintenance Services Absences
(700) (710) (720) (730) 2024 2023
Cash flows - operating activities:
Receipts from interfund services provided $3,239,017 $2,097,102 $1,853,311 $ - $7,189,430 $6,573,422
Receipts from insurance refunds and reimbursements 696,382 - - - 696,382 112,014
Payments to suppliers (733,137) (1,221,444) (1,140,223) - (3,094,804) (2,797,553)
Payments to employees (3,035,500) (899,818) (449,955) - (4,385,273) (4,098,021)
Miscellaneous revenue (1,863) 23,887 - - 22,024 203,848
Net cash flows - operating activities 164,899 (273) 263,133 - 427,759 (6,290)
Cash flows - noncapital financing activities:
Advances to/from other funds - 273 - - 273 (213,274)
Intergovernmental revenue 76,577 - - - 76,577 52,230
Transfers from other funds - - - 1,370,900 1,370,900 1,767
Net cash flows - noncapital financing activities 76,577 273 - 1,370,900 1,447,750 (159,277)
Cash flows - capital and related financing activities:
Acquisition of capital assets (51,262) - - - (51,262) -
Principal paid on debt - - (63,678) - (63,678) -
Interest paid on debt - - (7,050) - (7,050) -
Net cash flows - capital and related financing activities (51,262) - (70,728) - (121,990) -
Cash flows - investing activities:
Interest and dividends received 13,975 - 17,654 - 31,629 22,293
Net change in cash and cash equivalents 204,189 - 210,059 1,370,900 1,785,148 (143,274)
Cash and cash equivalents
January 1 201,473 - 106,413 - 307,886 451,160
December 31 $405,662 $ - $316,472 $1,370,900 $2,093,034 $307,886
Reconciliation of operating income (loss) to net cash
flows - operating activities:
Operating income (loss) $157,932 ($88,908) $200,754 ($157,779) $111,999 ($465,741)
Adjustments to reconcile operating income (loss)
to income (loss) to net cash
net cash flows - operating activities
Depreciation expense - 38,198 71,295 - 109,493 38,322
Miscellaneous (1,863) 23,887 - - 22,024 203,848
Pension expense - (9,176) (4,837) - (14,013) 22,066
OPEB expense - 2,402 2,902 - 5,304 10,268
Changes in assets and liabilities:
Decrease (increase) in accounts receivables (342,703) 1,087 (119) - (341,735) 1,488
Decrease (increase) in due from other governments 52,230 - - - 52,230 (43,457)
Decrease (increase) in inventories - 34,843 - - 34,843 (46,733)
Decrease (increase) in prepaid items 242,005 - (20,765) - 221,240 176,889
Increase (decrease) in accounts payable 33,475 (22,379) (1,825) - 9,271 96,774
Increase (decrease) in salaries payable - 9,666 8,195 - 17,861 (3,033)
Increase (decrease) in due to other governments 23,823 222 - - 24,045 1,649
Increase (decrease) in compensated absences payable - 9,885 7,533 157,779 175,197 1,370
Total adjustments 6,967 88,635 62,379 157,779 315,760 459,451
Net cash flows - operating activities $164,899 ($273) $263,133 $ - $427,759 ($6,290)
Totals
136
CITY OF COTTAGE GROVE
COMBINING BALANCE SHEET Statement 35
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
December 31, 2024
With Comparative Totals For December 31, 2023
2024 2023
Assets:
Accounts receivable $2,277 $2,219
Prepaid items 2,400 -
Taxes receivable - delinquent 1,216 800
Property held for resale 129,300 129,300
Total assets $135,193 $132,319
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $50,441 $39,892
Salaries and benefits payable 9,144 9,883
Due to other governments 366 75,159
Due to primary government 682,323 607,260
Total liabilities 742,274 732,194
Deferred inflows of resources:
Unavailable revenue - property taxes 1,216 800
Total deferred inflows of resources 1,216 800
Fund balances:
Nonspendable - -
Unassigned (608,297) (600,675)
Total fund balances (608,297) (600,675)
Total liabilities, deferred inflows of
resources, and fund balances $135,193 $132,319
Fund balance reported above ($608,297)
Other long-term assets, including property taxes receivable, are
not available to pay for current-period expenditures, and therefore,
are deferred in the governmental funds. 1,216
Deferred outflows of resources and deferred inflows of resources
are created as a result of various differences related to pensions
that are not recognized in the governmental funds.
Deferred inflows of resources related to pensions (52,314)
Deferred outflows of resources related to pensions 27,940
Deferred inflows of resources related to OPEB (1,746)
Deferred outflows of resources related to OPEB 6,235
Long-term liabilities, including bonds payable, compensated absences,
net pension liability, and other post employment benefits, are not due
and payable in the current period and therefore are not reported in the funds. (109,096)
Net position of component unit ($736,062)
137
CITY OF COTTAGE GROVE
COMBINING STATEMENT OF REVENUES,Statement 36
EXPENDITURES AND CHANGES IN FUND BALANCES
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2024 2023
Revenues:
$273,409 $124,999
236,376 -
75,159 312,500
- 35
- 43
General property taxes
Excess tax increment collections
Intergovernmental
Investment income
Interest on loan to primary government
Miscellaneous 52,647 12,024
Total revenues 637,591 449,601
Expenditures:
Current:
General government:
Personal services 229,652 205,511
Commodities 1,820 3,728
Contractual services 413,741 394,738
Total expenditures 645,213 603,977
Excess of revenues over
(under) expenditures (7,622)(154,376)
Fund balances:
Beginning of year (600,675)(446,299)
End of year ($608,297)($600,675)
Net increase (decrease) in fund balance reported above ($7,622)
Revenues in the statement of activities (statement 2)
that do not report current financial resources are
not reported as revenues in the funds
General property taxes unavailable revenue:
At December 31, 2023 (800)
At December 31, 2024 1,216
Governmental funds recognize pension contributions
as expenditures at the time of payment whereas the
statement of activities (statement 2) factors in items
related to pensions on a full accrual perspective. 2,336
Governmental funds recognize OPEB activity as
expenditures at the time of payment whereas the
statement of activities (statement 2) factors in items
related to pensions on a full accrual perspective. (892)
Some expenses reported in the statement of activities
(statement 2) do not require the use of current
financial resources and therefore are not reported
as expenditures in governmental funds:
Compensated absences:
At December 31, 2023 20,085
At December 31, 2024 (16,406)
Change in net position of component unit ($2,083)
138
CITY OF COTTAGE GROVE
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT Statement 37
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2023
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
General property taxes $275,000 $275,000 $273,409 ($1,591) $124,999
Excess tax increment collections - - 236,376 236,376 -
Intergovernmental - - 75,159 75,159 312,500
Investment income - - - - 35
Interest on loan to primary government - - - - 43
Miscellaneous - - 52,647 52,647 12,024
Total revenues 275,000 275,000 637,591 309,944 449,601
Expenditures:
Current:
General government:
Personal services 212,875 212,875 229,652 (16,777) 205,511
Commodities 1,510 1,510 1,820 (310) 3,728
Contractual services 351,940 351,940 413,741 (61,801) 394,738
Total expenditures 566,325 566,325 645,213 (78,888) 603,977
Excess of revenues over
(under) expenditures ($291,325) ($291,325) (7,622) $388,832 (154,376)
Fund balances:
Beginning of year (600,675)(446,299)
End of year ($608,297)($600,675)
Budgeted Amounts
2024
139
140
SUPPLEMENTARY FINANCIAL INFORMATION
141
142
CITY OF COTTAGE GROVE
COMBINING SCHEDULE OF BONDED INDEBTEDNESS Schedule 1
For The Year Ended December 31, 2024
Interest Rate Dated Final Payment
Authorized
and Issued Retired Outstanding
Principal due
in 2025
Interest due
in 2025
Governmental Activities
General Obligation Bonds
$4,660,000 G.O. Refunding Bonds of 2016A 2.00%-3.00% 1/28/2016 2/1/2027 $4,660,000 $3,520,000 $1,140,000 $375,000 $19,050
$9,155,000 G.O. CIP Bonds of 2017A 2.5%-3.25% 5/11/2017 2/1/2038 9,155,000 2,230,000 6,925,000 410,000 192,725
$4,090,000 G.O. CIP Bonds of 2019A 3.00%-4.00% 2/14/2019 2/1/2040 4,090,000 610,000 3,480,000 170,000 110,584
Total General Obligation Bonds 17,905,000 6,360,000 11,545,000 955,000 322,359
Equipment Certificate
$2,845,000 Equipment Cerificate of 2019B 3.00% 2/14/2019 2/1/2029 2,845,000 1,320,000 1,525,000 285,000 41,475
Special Assessment Debt
Improvement Bonds of 2015A 2.50%-3.00% 5/27/2015 2/1/2031 5,700,000 2,890,000 2,810,000 390,000 70,385
Improvement Bonds of 2016B 2.00%-210% 11/16/2016 2/1/2033 4,275,000 1,820,000 2,455,000 285,000 46,670
Improvement Bonds of 2018A 3.00% 6/26/2018 2/1/2035 7,620,000 1,715,000 5,905,000 460,000 170,250
Improvement Bonds of 2021A 1.20%-2.00% 6/10/2021 2/1/2037 3,955,000 465,000 3,490,000 240,000 56,623
Improvement Refunding Bond of 2021B 1.05%-2.00% 12/9/2021 2/1/2029 3,840,000 1,040,000 2,800,000 540,000 39,965
Total Special Assessment Debt with
Governmental Commitment 25,390,000 7,930,000 17,460,000 1,915,000 383,893
Tax Abatement Bonds
G.O. Tax Abatement Bonds of 2023A 4.00% 5/9/2023 2/1/2044 7,815,000 - 7,815,000 335,000 302,265
General Obligation Improvement Bonds:
G.O. Improvement Bonds of 2024A 5.00% 3/12/2024 2/1/2040 5,680,000 - 5,680,000 - 393,656
Total Bonded Indebtedness - Govermental Activities 59,635,000 15,610,000 44,025,000 3,490,000 1,443,648
Business-Type Activities
General Obligation Bonds
G.O. Improvement Bonds of 2024A 5.00% 3/12/2024 2/1/2045 10,345,000 - 10,345,000 - 667,828
Total Bonded Indebtedness - Primary Government $69,980,000 $15,610,000 $54,370,000 $3,490,000 $2,111,476
143
CITY OF COTTAGE GROVE
DEBT SERVICE PAYMENTS TO MATURITY
For The Year Ended December 31, 2024
$4,660,000
G.O.
Refunding
Bonds of
2016A
$9,155,000
G.O. CIP
Bonds of
2017A
$4,090,000
G.O. CIP
Bonds of
2017A
$2,845,000
Equipment
Certificate of
2019B
$5,700,000
Improvement
Bonds of
2015A
Bonds payable $1,140,000 $6,925,000 $3,480,000 $1,525,000 $2,810,000
Future interest payable 34,400 1,519,198 970,502 117,375 267,885
Totals $1,174,400 $8,444,198 $4,450,502 $1,642,375 $3,077,885
Payments to maturity
2025 $394,050 $602,725 $280,584 $326,475 $460,385
2026 391,500 605,200 278,684 327,775 459,535
2027 388,850 603,387 276,584 328,775 449,535
2028 - 607,325 280,134 329,475 443,966
2029 - 605,950 279,359 329,875 442,691
2030 - 603,738 278,434 - 431,383
2031 - 605,607 277,359 - 390,390
2032 - 602,130 276,133 - -
2033 - 602,675 279,684 - -
2034 - 602,151 278,009 - -
2035 - 601,175 276,040 - -
2036 - 599,750 278,486 - -
2037 - 602,798 275,484 - -
2038 - 599,587 277,234 - -
2039 - - 278,653 - -
2040 - - 279,641 - -
2041 - - - - -
2042 - - - - -
2043 - - - - -
2044 - - - - -
2045 - - - - -
Totals $1,174,400 $8,444,198 $4,450,502 $1,642,375 $3,077,885
Primary Government
General Obligation Bonds
144
Schedule 2
$4,275,000
Improvement
Bonds of
2016B
$7,620,000
Improvement
Bonds of
2018A
$3,955,000
Improvement
Bonds of
2021A
$3,840,000
Improvement
Refunding
Bonds of
2021B
$7,815,000
Improvement &
Tax Abatement
Bonds of 2023A
$5,680,000
Improvement
Bonds of 2024A -
Governmental
Activities
$10,345,000
Improvement
Bonds of 2024A -
Business-Type
Activities
Total General
Obligation
Bonds
$2,455,000 $5,905,000 $3,490,000 $2,800,000 $7,815,000 $5,680,000 $10,345,000 $54,370,000
212,420 1,026,375 373,171 99,557 3,076,147 2,694,406 6,019,078 16,410,514
$2,667,420 $6,931,375 $3,863,171 $2,899,557 $10,891,147 $8,374,406 $16,364,078 $70,780,514
$331,670 $630,250 $296,622 $579,965 $637,265 $393,656 $667,828 $5,601,475
325,970 631,225 296,772 579,065 633,665 561,875 788,925 5,880,191
325,220 631,750 296,822 577,965 629,665 562,250 787,800 5,858,603
319,420 631,825 296,773 579,372 625,265 561,875 785,925 5,461,355
313,620 631,450 296,622 583,190 620,465 555,875 788,175 5,447,272
312,770 630,625 296,373 - 615,265 554,250 789,425 4,512,263
311,820 629,350 297,102 - 614,565 556,750 784,800 4,467,743
305,670 627,625 298,695 - 608,365 553,375 784,300 4,056,293
121,260 630,375 299,948 - 606,665 549,250 787,675 3,877,532
- 627,600 295,958 - 604,365 554,125 784,925 3,747,133
- 629,300 296,790 - 596,565 548,000 786,050 3,733,920
- - 297,260 - 593,265 487,500 785,925 3,042,186
- - 297,434 - 590,325 487,500 784,550 3,038,091
- - - - 582,742 481,625 781,925 2,723,113
- - - - 578,700 484,750 782,925 2,125,028
- - - - 352,700 481,750 782,425 1,896,516
- - - - 350,700 - 783,700 1,134,400
- - - - 348,300 - 782,000 1,130,300
- - - - 350,400 - 784,200 1,134,600
- - - - 351,900 - 780,300 1,132,200
- - - - - - 780,300 780,300
$2,667,420 $6,931,375 $3,863,171 $2,899,557 $10,891,147 $8,374,406 $16,364,078 $70,780,514
Primary Government
General Obligation Bonds
145
CITY OF COTTAGE GROVE
DEFERRED TAX LEVIES - TAX ABATEMENT AND SPECIAL ASSESSMENT BONDS Schedule 3
For The Year Ended December 31, 2024
Tax Abatement
Year of Tax
Levy/Collection
$7,815,000
Bonds of 2023A
$1,865,000
Bonds of
2012A
$3,840,000
Refunding
Bonds of
2021B
$5,700,000
Bonds of
2015A
$4,275,000
Bonds of
2016B
$7,620,000
Bonds of
2018A
$3,955,000
Bonds of
2021A
Total Special
Assessment
Bonds
2024/25 $375,949 $87,489 $515,400 $323,712 $194,545 $383,231 $252,067 1,756,444
2025/26 371,198 42,424 514,350 318,269 197,604 384,019 252,172 1,708,838
2026/27 361,027 - 513,090 318,076 195,308 384,334 252,171 1,662,979
2027/28 355,435 - 517,305 321,939 193,013 384,176 252,066 1,668,499
2028/29 349,424 - - 315,014 195,967 383,546 251,857 1,146,384
2029/30 337,993 - - 328,911 198,816 382,444 251,542 1,161,713
2030/31 331,391 - - - 196,310 380,868 253,390 830,568
2031/32 323,910 - - - 70,082 384,071 254,886 709,039
2032/33 316,259 - - - - 381,393 250,770 632,163
2033/34 307,978 - - - - 383,493 251,757 635,250
2034/35 293,816 - - - - - 252,518 252,518
2035/36 284,485 - - - - - 252,744 252,744
2036/37 274,524 - - - - - - -
2037/38 265,699 - - - - - - -
2038/39 256,488 - - - - - - -
2039/40 81,530 - - - - - - -
2040/41 69,640 - - - - - - -
2041/42 57,330 - - - - - - -
2042/43 44,850 - - - - - - -
2043/44 31,740 - - - - - - -
$5,090,666 $129,913 $2,060,145 $1,925,921 $1,441,645 $3,831,575 $3,027,940 $12,417,139
Special Assessment Bonds
146
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET Schedule 4
PAVEMENT MANAGEMENT DEBT SERVICE SCHEDULE
December 31, 2024
With Comparative Totals For December 31, 2023
G.O.
Improvement
Bonds 2015A
(492)
G.O.
Improvement
Bonds 2016B
(493)
2021B G.O.
Improvement
Refunding
Bond (340)2024 2023
Assets:
Cash and investments $503,005 $144,203 $100,541 $747,749 $796,757
Taxes receivable - delinquent 1,939 1,350 2,494 5,783 4,408
Special assessments receivable
Deferred 373,470 484,203 308,331 1,166,004 1,412,689
Delinquent 559 114 799 1,472 1,427
Special deferred 6,498 7,910 -14,408 14,787
Total assets $885,471 $637,780 $412,165 $1,935,416 $2,230,068
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable $475 $ - $ - $475 $ -
Total liabilities 475 - - 475 -
Deferred inflows of resources:
Unavailable revenue - property taxes $1,939 $1,350 $2,494 $5,783 $4,408
Unavailable revenue - special assessments 380,527 492,227 309,130 1,181,884 1,428,904
Total deferred inflows of resources 382,466 493,577 311,624 1,187,667 1,433,312
Fund balances:
Restricted 502,530 144,203 100,541 747,274 796,756
Total fund balances 502,530 144,203 100,541 747,274 796,756
Total liabilities, deferred inflows
of resources and fund balances $885,471 $637,780 $412,165 $1,935,416 $2,230,068
Totals
Pavement Management Debt
Service Schedule
147
CITY OF COTTAGE GROVE
SCHEDULE OF REVENUES,Schedule 5
EXPENDITURES AND CHANGES IN FUND BALANCES
PAVEMENT MANAGEMENT DEBT SERVICE SCHEDULE
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
G.O.
Improvement
Bonds 2015A
(492)
G.O.
Improvement
Bonds 2016B
(493)
2021B G.O.
Improvement
Refunding
Bond
(340)2024 2023
Revenues:
General property taxes $298,350 $198,907 $528,203 $1,025,460 $763,815
Special assessments 96,121 100,227 103,091 299,439 326,849
Investment income 13,290 963 273 14,526 24,058
Total revenues 407,761 300,097 631,567 1,339,425 1,114,722
Expenditures:
Current:
General government 1,669 1,425 3,942 7,036 4,611
Debt service:
Principal 380,000 285,000 530,000 1,195,000 1,175,000
Interest and other charges 82,886 52,845 51,140 186,871 213,420
Total expenditures 464,555 339,270 585,082 1,388,907 1,393,031
Excess of revenues over
(under) expenditures (56,794) (39,173) 46,485 (49,482) (278,309)
Other financing sources:
Transfers in - - - - 250,000
Net change in fund balances (56,794) (39,173) 46,485 (49,482) (28,309)
Fund balances:
Beginning of year 559,324 183,376 54,056 796,756 825,065
End of year $502,530 $144,203 $100,541 $747,274 $796,756
Totals
Pavement Management Debt
Service Schedule
148
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET Schedule 6
TAX INCREMENT CONSTRUCTION REVOLVING SCHEDULE
December 31, 2024
With Comparative Totals For December 31, 2023
TIF 1-8 (533)
TIF 1-12
(532, 534) TIF 1-15 (529) TIF 1-16 (528)
TIF 1-17
Dominium
(540) TIF 1-18 (542)
TIF 1-20
Northpoint
(535)2024 2023
Assets:
Cash and investments $385,214 $3,569,994 $163,142 $1,332 $159,060 $20,671 $367,333 $4,666,746 $3,220,423
Liabilities and Fund Balances
Liabilities:
Accounts payable - - - - 78 - 78 156 802
Due to other governments - 379,554 - - - 12,646 - 392,200 -
Interfund loan payable - - - 65,787 - - - 65,787 308,013
Total liabilities - 379,554 - 65,787 78 12,646 78 458,143 308,815
Fund balances:
Restricted 385,214 3,190,440 163,142 - 158,982 8,025 367,255 4,273,058 3,080,093
Unassigned - - - (64,455) - - - (64,455) (168,485)
Total fund balances 385,214 3,190,440 163,142 (64,455) 158,982 8,025 367,255 4,208,603 2,911,608
Total liabilities and fund balances $385,214 $3,569,994 $163,142 $1,332 $159,060 $20,671 $367,333 $4,666,746 $3,220,423
Totals
Tax Increment Construction
Revolving Fund
149
CITY OF COTTAGE GROVE
SCHEDULE OF REVENUES,Schedule 7
EXPENDITURES AND CHANGES IN FUND BALANCES
TAX INCREMENT CONSTRUCTION REVOLVING SCHEDULE
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
TIF 1-8
(533)
TIF 1-12
(532,534)
TIF 1-15
(529)
TIF 1-16
(528)
TIF 1-17
Dominium
(540)
TIF 1-18
(542)
TIF 1-20
Northpoint
(535)2024 2023
Revenues:
Tax increment collections $ - $654,138 $195,022 $48,482 $176,472 $20,268 $707,409 $1,801,791 $1,169,671
Miscellaneous:
Investment income - 144,821 8,042 582 3,838 414 1,982 159,679 130,568
Total revenues - 798,959 203,064 49,064 180,310 20,682 709,391 1,961,470 1,300,239
Expenditures:
Current:
Economic development 878 202,759 1,328 1,353 163,540 4,608 322,794 697,260 423,406
Debt service:
Interest and other charges - - 4,343 3,324 - 299 1,700 9,666 14,313
Total expenditures 878 202,759 5,671 4,677 163,540 4,907 324,494 706,926 437,719
Net change in fund balances (878) 596,200 197,393 44,387 16,770 15,775 384,897 1,254,544 862,520
Other financing sources (uses):
Transfers in - 42,451 - - - - - 42,451 -
Total other financing sources (uses) - 42,451 - - - - - 42,451 -
Net change in fund balances (878) 638,651 197,393 44,387 16,770 15,775 384,897 1,296,995 862,520
Fund balances:
Beginning of year 386,092 2,551,789 (34,251) (108,842) 142,212 (7,750) (17,642) 2,911,608 2,049,088
End of year $385,214 $3,190,440 $163,142 ($64,455) $158,982 $8,025 $367,255 $4,208,603 $2,911,608
Totals
Tax Increment Construction
Revolving Fund
150
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET Schedule 8
TIF DEBT SERVICE REVOLVING SCHEDULE
December 31, 2024
With Comparative Totals For December 31, 2023
2004A Taxable
Tax Increment
Refunding
Bonds
TIF 1-19
(320)
2014A Exempt
Increment
Bonds
TIF 1-12
(338)
2014A Taxable
Tax Increment
Refunding
Bonds
TIF 1-12
(341)2024 2023
Assets:
Cash and investments $734,202 $ - $ - $734,202 $861,926
Liabilities and Fund Balances
Liabilities:
Accounts payable $78 $ - $ - $78 $331
Interfund loan payable - - - - 18,032
Total liabilities 78 - - 78 18,363
Fund balances:
Restricted 734,124 - - 734,124 843,563
Total fund balances 734,124 - - 734,124 843,563
Total liabilities and fund balances $734,202 $ - $ - $734,202 $861,926
Totals
TIF Debt Service
Revolving Schedule
151
CITY OF COTTAGE GROVE
SCHEDULE OF REVENUES,Schedule 9
EXPENDITURES AND CHANGES IN FUND BALANCES
TIF DEBT SERVICE REVOLVING SCHEDULE
For The Year Ended December 31, 2024
With Comparative Totals For The Year Ended December 31, 2023
2004A Taxable
Tax Increment
Refunding
Bonds
TIF 1-19
(320)
2014A Exempt
Increment
Bonds
TIF 1-12
(338)
2014A Taxable
Tax Increment
Refunding
Bonds
TIF 1-12
(341)2024 2023
Revenues:
Tax increment collections $365,169 $ - $ - $365,169 $514,895
Miscellaneous:
Investment income 28,982 1,622 2,067 32,671 21,519
Total revenues 394,151 1,622 2,067 397,840 536,414
Expenditures:
Current:
Economic development 167,545 - - 167,545 1,980
Debt service:
Principal retirement - 290,000 - 290,000 275,000
Interest and other charges 541 6,742 - 7,283 20,946
Total expenditures 168,086 296,742 - 464,828 297,926
Excess of revenues over
(under) expenditures 226,065 (295,120)2,067 (66,988) 238,488
Other financing sources (uses):
Transfers out - (2,500) (39,951) (42,451) -
Net change in fund balances 226,065 (297,620) (37,884) (109,439) 238,488
Fund balances:
Beginning of year 508,059 297,620 37,884 843,563 605,075
End of year $734,124 $ - $ - $734,124 $843,563
Totals
TIF Debt Service Revolving
Schedule
152
III. STATISTICAL SECTION (UNAUDITED)
153
154
STATISTICAL SECTION
(Unaudited)
This part of the City's annual comprehensive 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.
Contents Tables
Financial Trends
These schedules contain trend information to help the reader
understand how the City's financial performance
and well-being have changed over time. 1 - 4
Revenue Capacity
These schedules contain information to help the reader
assess the City's most significant local revenue source,
the property tax. 5 - 8
Debt Capacity
These schedules present information to help the reader
assess the affordability of the City's current levels of outstanding
debt and the City's ability to issue additional debt in the future. 9 - 12
Demographic and Economic Information
These schedules offer demographic and economic indicators
to help the reader understand the environment within which
the City's financial activities take place. 13 - 14
Operating Information
These schedules present information to help the reader
understand how the information in the City 's financial report
relates to the services the City provides and the activities it performs. 15 - 17
Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive
financial reports for the relevant year.
155
CITY OF COTTAGE GROVE
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2015 2016 2017 2018
Governmental activities:
Net investment in capital assets $125,562,970 $132,834,867 $140,298,832 $152,256,234
Restricted 8,766,706 7,609,138 2,855,507 6,177,599
Unrestricted 24,285,174 19,091,443 24,845,782 21,252,792
Total governmental
activities net position $158,614,850 $159,535,448 $168,000,121 $179,686,625
Business-type activities:
Net investment in capital assets $54,202,710 $54,063,470 $56,060,163 $63,822,257
Restricted - - - -
Unrestricted 13,980,970 13,628,016 11,528,841 11,707,720
Total business-type
activities net position $68,183,680 $67,691,486 $67,589,004 $75,529,977
Primary government:
Net invested in capital assets $179,765,680 $186,898,337 $196,358,995 $216,078,491
Restricted for: 8,766,706 7,609,138 2,855,507 6,177,599
Unrestricted 38,266,144 32,719,459 36,374,623 32,960,512
Total primary government
net position $226,798,530 $227,226,934 $235,589,125 $255,216,602
Fiscal Year
156
Table 1
2019 2020 2021 2022 2023 2024
$173,846,256 $198,383,059 $204,395,412 $230,431,271 $256,950,114 $281,427,503
5,199,682 7,959,917 8,691,283 6,398,608 14,057,356 15,514,228
24,697,514 25,127,751 30,394,564 31,795,908 22,245,673 23,554,657
$203,743,452 $231,470,727 $243,481,259 $268,625,787 $293,253,143 $320,496,388
$70,373,534 $75,408,885 $87,203,382 $104,180,227 $124,845,135 $133,311,340
- - - - - -
12,742,735 13,696,597 15,530,934 14,543,822 14,060,628 15,255,781
$83,116,269 $89,105,482 $102,734,316 $118,724,049 $138,905,763 $148,567,121
$244,219,790 $273,791,944 $291,598,794 $334,611,498 $381,795,249 $414,738,843
5,199,682 7,959,917 8,691,283 6,398,608 14,057,356 15,514,228
37,440,249 38,824,348 45,925,498 46,339,730 36,306,301 38,810,438
$286,859,721 $320,576,209 $346,215,575 $387,349,836 $432,158,906 $469,063,509
Fiscal Year
157
CITY OF COTTAGE GROVE
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2015 2016 2017 2018
Expenses
Governmental activities:
General government $2,346,805 $3,450,479 $2,398,669 $2,573,693
Community development 1,086,197 1,173,071 1,527,549 1,626,960
Economic development 1,460,114 2,257,548 740,668 275,927
Public safety 7,662,393 10,153,726 9,308,430 9,353,309
Public works 7,426,045 9,623,335 8,413,073 8,559,929
Culture and recreation 5,153,844 5,340,558 5,137,951 5,035,903
Interest on long-term debt 1,029,228 875,642 962,772 1,037,986
Total governmental
activities expenses 26,164,626 32,874,359 28,489,112 28,463,707
Business-type activities:
Street lights 746,794 746,005 882,660 991,041
Cottage Grove EMS 1,507,766 1,688,041 1,571,044 1,605,779
Water operating 2,438,166 2,370,466 2,789,792 2,980,080
Sewer operating 2,448,283 2,727,188 2,879,119 2,881,446
Total business-type
activities expenses 7,141,009 7,531,700 8,122,615 8,458,346
Total primary
government expenses $33,305,635 $40,406,059 $36,611,727 $36,922,053
Program revenues
Governmental activities:
Charges for services:
General government $117,636 $665,193 $108,808 $319,999
Community development 1,527,836 1,660,365 2,240,628 1,758,096
Economic development 3,467 5,210 210 210
Public safety 394,574 431,862 363,782 360,609
Public works 971,599 975,532 1,099,690 3,932,082
Culture and recreation 3,091,072 2,725,288 2,682,090 3,376,799
Operating grants and contributions 1,237,805 1,676,805 1,408,099 3,710,686
Capital grants and contributions 5,861,631 10,284,047 13,805,696 13,899,381
Total governmental
activities program revenues 13,205,620 18,424,302 21,709,003 27,357,862
Business-type activities:
Charges for services:
Street lights 549,005 530,905 685,560 821,512
Cottage Grove EMS 1,431,007 1,766,236 1,510,101 2,006,555
Water operating 1,840,088 1,817,862 1,664,292 2,144,652
Sewer operating 2,310,624 2,291,038 2,294,714 2,685,608
Operating grants and contributions - - - 2,350
Capital grants and contributions 361,762 196,671 441,738 4,488,437
Total business-type
activities program revenues 6,492,486 6,602,712 6,596,405 12,149,114
Total primary government
program revenues $19,698,106 $25,027,014 $28,305,408 $39,506,976
Fiscal Year
158
Table 2
Page 1 of 2
2019 2020 2021 2022 2023 2024
$2,704,159 $5,621,197 $2,936,133 $3,500,705 $3,300,129 $4,011,989
1,524,566 1,750,768 2,305,822 2,676,975 2,526,101 2,750,104
492,107 583,767 823,036 864,161 16,938,793 865,491
9,272,317 6,947,733 11,098,534 13,853,217 742,227 14,572,186
10,062,896 13,650,476 15,567,240 10,788,045 12,979,642 17,498,237
5,566,175 5,638,642 6,365,540 9,447,768 8,927,799 9,798,551
1,286,632 1,141,147 1,236,037 931,466 1,077,579 1,313,433
30,908,852 35,333,730 40,332,342 42,062,337 46,492,270 50,809,991
1,073,480 1,152,326 1,262,557 1,099,054 1,157,388 1,461,728
1,750,771 1,843,840 2,091,317 2,302,408 2,425,138 2,254,375
2,904,174 3,039,639 3,428,669 4,053,526 5,692,361 7,767,044
3,139,150 3,463,493 3,532,908 4,159,063 4,342,927 4,850,201
8,867,575 9,499,298 10,315,451 11,614,051 13,617,814 16,333,348
$39,776,427 $44,833,028 $50,647,793 $53,676,388 $60,110,084 $67,143,339
$196,283 $193,964 $54,220 $89,818 $179,473 $244,397
2,424,030 2,648,715 3,439,162 4,316,442 2,579,463 2,949,357
572,983 400,210 210 1,694,792 1,214,663 22,560
409,463 764,732 1,689,365 1,391,825 630,563 1,273,818
3,106,452 1,095,238 2,304,418 1,854,776 2,132,108 2,440,627
3,094,394 2,578,312 3,798,744 4,253,613 5,344,059 5,533,907
2,231,407 17,726,027 4,648,424 2,278,343 3,680,506 2,557,079
29,783,591 20,144,097 23,828,108 37,949,025 44,115,417 40,346,363
41,818,603 45,551,295 39,762,651 53,828,634 59,876,252 55,368,108
825,587 962,958 1,115,511 1,038,210 1,058,036 1,360,721
2,066,733 1,772,704 2,524,990 1,378,154 2,191,586 2,142,026
2,537,654 3,002,920 3,648,447 3,624,478 4,174,060 3,544,820
3,064,703 3,190,196 3,352,994 3,663,853 3,574,316 3,990,784
23,409 101,196 147,694 41,788 67,605 150,129
2,700,615 3,842,839 6,359,047 12,272,831 7,446,103 6,416,724
11,218,701 12,872,813 17,148,683 22,019,314 18,511,706 17,605,204
$53,037,304 $58,424,108 $56,911,334 $75,847,948 $78,387,958 $72,973,312
Fiscal Year
159
CITY OF COTTAGE GROVE
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2015 2016 2017 2018
Net (expense) revenue:
Governmental activities ($12,959,006) ($14,450,057) ($6,780,109) ($1,105,845)
Business-type activities (648,523) (928,988) (1,526,210) 3,690,768
Total primary government
net (expense) revenue (13,607,529) (15,379,045) (8,306,319) 2,584,923
General revenues and other changes in net position:
Governmental activities:
Taxes:
Property taxes $13,394,585 $13,956,582 $14,483,061 $15,171,020
Franchise taxes 526,643 516,931 560,492 567,875
Aggregate taxes 37,133 39,748 28,442 20,791
Lodging taxes - - - -
Tax increment collections 710,541 776,061 1,002,046 769,475
Grants and contributions not restricted
to specific programs 99,137 126,058 126,670 -
Unrestricted investment earnings (loss) 357,170 285,494 330,903 519,675
Gain on sale of capital assets (15,157) - - 71,631
Transfers 613,878 (330,219) (1,286,832) (4,126,962)
Total governmental activities 15,723,930 15,370,655 15,244,782 12,993,505
Business-type activities:
Grants and contributions not restricted
to specific programs - 7,736 17,161 -
Unrestricted investment earnings (loss) 137,896 96,851 119,735 152,466
Gain on sale of capital assets - 1,988 - -
Transfers (613,878) 330,219 1,286,832 4,126,962
Total business-type activities (475,982) 436,794 1,423,728 4,279,428
Total primary government $15,247,948 $15,807,449 $16,668,510 $17,272,933
Change in net position:
Governmental activities $2,764,924 $920,598 $8,464,673 $11,887,660
Business-type activities (1,124,505) (492,194) (102,482) 7,970,196
Total primary government $1,640,419 $428,404 $8,362,191 $19,857,856
(1) Community development is in General.
Fiscal Year
160
Table 2
Page 2 of 2
2019 2020 2021 2022 2023 2024
$10,909,751 $10,217,565 ($569,691) $11,766,297 $13,383,982 $4,558,117
2,351,126 3,373,515 6,833,232 10,405,263 4,893,892 1,271,856
13,260,877 13,591,080 6,263,541 22,171,560 18,277,874 5,829,973
$15,608,602 $16,881,359 $17,494,963 $18,804,948 $20,590,413 $22,847,387
583,715 596,537 615,326 642,584 860,203 2,071,626
22,250 22,699 23,467 33,044 38,775 20,314
- - - - 71,647 70,168
1,085,358 1,321,659 1,427,233 1,750,799 1,684,566 2,166,960
113,435 181,316 83,568 229,638 72,738 58,049
982,812 582,781 (258,924) (2,043,372) 2,567,079 2,871,413
49,186 34,579 31,111 29,658 9,025 -
(4,973,641) (2,435,861) (6,836,521) (6,069,068) (14,651,072) (7,420,790)
13,471,717 17,185,069 12,580,223 13,378,231 11,243,374 22,685,127
- - - - - -
261,525 179,837 (40,919) (484,598) 636,750 968,712
- - - - - -
4,973,641 2,435,861 6,836,521 6,069,068 14,651,072 7,420,790
5,235,166 2,615,698 6,795,602 5,584,470 15,287,822 8,389,502
$18,706,883 $19,800,767 $19,375,825 $18,962,701 $26,531,196 $31,074,629
$24,381,468 $27,402,634 $12,010,532 $25,144,528 $24,627,356 $27,243,244
7,586,292 5,989,213 13,628,834 15,989,733 20,181,714 9,661,358
$31,967,760 $33,391,847 $25,639,366 $41,134,261 $44,809,070 $36,904,602
Fiscal Year
161
CITY OF COTTAGE GROVE
FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2015 2016 2017 2018
General Fund:
Nonspendable:
Prepaid items $15,383 $11,222 $8,750 $47,532
Restricted - - - -
Assigned 1,408,357 1,393,200 1,589,169 1,383,065
Unassigned 8,829,697 9,036,425 9,233,073 9,814,949
Total general fund $10,253,437 $10,440,847 $10,830,992 $11,245,546
All other governmental funds:
Nonspendable:
Prepaid items $7,343 $5,723 $2,827 $10,889
Inventory 20,696 28,750 30,625 30,297
Restricted 4,857,365 3,200,692 3,306,203 3,515,300
Committed 394,204 731,090 947,486 1,383,402
Assigned 26,322,717 23,020,349 21,301,562 19,445,494
Unassigned (9,122,473) (10,240,496)(5,511,868)(5,804,056)
Total all other
governmental funds $22,479,852 $16,746,108 $20,076,835 $18,581,326
Total all funds $32,733,289 $27,186,955 $30,907,827 $29,826,872
Fiscal Year
162
Table 3
2019 2020 2021 2022 2023 2024
$33,719 $27,042 $43,228 $25,906 $7,816 $13,556
- - - - 1,733,127 1,016,777
1,432,671 1,768,606 1,676,895 592,019 1,094,500 900,500
10,224,988 10,479,728 11,384,256 12,696,178 12,581,127 13,636,669
$11,691,378 $12,275,376 $13,104,379 $13,314,103 $15,416,570 $15,567,502
$14,933 $33,818 $7,743 $6,090 $14,970 $7,531
25,601 28,265 84,153 105,873 83,758 82,085
3,876,020 4,969,881 9,649,776 6,811,004 8,699,259 11,782,978
1,736,590 2,136,969 2,531,015 2,155,025 2,722,525 2,116,926
19,583,736 21,455,576 25,923,365 21,582,225 20,718,857 17,985,122
(7,464,138) (9,643,235) (4,875,306) (3,219,445) (5,804,378) (5,821,609)
$17,772,742 $18,981,274 $33,320,746 $27,440,772 $26,434,991 $26,153,033
$29,464,120 $31,256,650 $46,425,125 $40,754,875 $41,851,561 $41,720,535
Fiscal Year
163
CITY OF COTTAGE GROVE
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2015 2016 2017 2018
Revenues:
General property taxes $13,465,987 $13,957,128 $14,649,224 $15,166,368
Other taxes 1,274,317 1,332,740 1,402,475 1,358,141
Special assessments 1,499,796 2,004,196 2,715,466 2,482,866
Licenses and permits 1,305,442 1,323,680 1,922,934 1,773,543
Direct charges to developers 307,971 277,860 273,200 132,385
Intergovernmental 2,415,754 5,642,451 8,077,051 5,283,405
Charges for services 3,808,618 4,061,301 4,140,390 4,903,311
Rent 450,428 464,078 435,688 486,270
Lease related interest income - - - -
Fines and forfeits 228,642 236,260 184,942 208,744
Investment earnings (loss) 262,799 219,963 310,579 460,856
Interest on interfund loan 74,340 52,040 52,206 26,474
Connection charges 318,092 649,489 2,050,958 2,776,937
Park dedication fees 9,010 212,865 526,936 853,659
Miscellaneous 1,138,274 1,864,861 1,982,338 2,024,992
Total revenues 26,559,470 32,298,912 38,724,387 37,937,951
Expenditures:
Current:
General government 2,155,327 3,143,136 2,200,031 2,453,986
Community development 1,058,537 1,117,760 1,304,601 1,594,534
Economic development 1,456,306 2,236,464 695,356 230,615
Public safety 6,751,804 7,447,058 7,798,262 8,660,273
Public works 4,344,837 4,133,659 3,900,347 4,066,609
Culture and recreation 4,154,992 4,438,628 4,303,051 4,627,375
Capital outlay 7,036,802 17,201,219 22,426,545 20,919,610
Debt service:
Principal retirement 1,320,000 6,570,000 1,915,000 3,595,000
Capital lease payment 316,235 327,432 - -
Interest and fiscal charges 912,107 1,023,721 900,240 1,123,547
Total expenditures 29,506,947 47,639,077 45,443,433 47,271,549
Excess revenues over (under) expenditures (2,947,477) (15,340,165) (6,719,046) (9,333,598)
Other financing sources (uses):
Transfers in 3,049,657 1,648,258 7,111,644 5,149,453
Transfers out (2,362,952) (1,162,564) (6,135,532) (4,649,003)
Bonds issued 5,700,000 8,935,000 9,155,000 7,620,000
Proceeds from leases - - - -
Payment to refunded bond escrow agent - - - -
Premium on debt issued 254,245 357,684 289,321 111,630
Discount on debt issued - - - -
Proceeds from sale of capital assets 53,267 15,453 19,485 20,563
Subscription-based IT arrangements issued - - - -
Total other financing
sources(uses) 6,694,217 9,793,831 10,439,918 8,252,643
Net change in fund balances $3,746,740 ($5,546,334) $3,720,872 ($1,080,955)
Debt service as a percentage of
noncapital expenditures 11.3% 26.0% 12.2% 17.9%
Fiscal Year
164
Table 4
2019 2020 2021 2022 2023 2024
$15,631,133 $16,887,233 $17,514,744 $18,257,259 $20,584,152 $22,817,680
1,691,323 1,940,895 2,066,026 2,426,427 2,655,191 4,329,068
4,282,185 6,085,906 8,420,102 864,104 2,202,377 1,254,524
2,277,642 2,480,933 3,181,740 4,386,820 2,698,807 3,061,587
299,683 444,907 627,540 26,081 168,707 6,720
17,716,725 20,635,136 10,662,269 14,947,235 28,449,483 33,463,196
4,988,080 5,062,505 6,969,681 7,326,861 7,498,099 8,349,458
474,994 492,206 494,880 711,091 542,637 473,081
- - - - 272,477 346,172
220,024 141,380 192,036 178,449 333,250 337,845
924,396 527,309 (269,070) (2,010,736) 2,274,148 2,480,394
23,903 21,895 19,395 16,533 20,454 44,847
1,932,844 2,563,422 5,293,099 4,110,942 1,784,257 1,680,447
472,500 1,110,209 2,014,802 1,144,364 767,094 763,941
1,870,544 1,151,221 1,024,348 2,056,056 1,164,372 522,621
52,805,976 59,545,157 58,211,592 54,441,486 71,415,505 79,931,581
2,488,722 5,122,412 2,504,935 3,033,149 2,904,353 3,634,107
1,486,081 1,753,836 2,329,259 2,581,927 2,444,734 2,774,134
447,061 539,092 823,036 864,161 742,227 697,946
8,535,996 8,186,255 10,257,201 10,928,197 12,446,009 13,260,625
4,769,732 6,257,352 6,910,688 6,503,285 5,895,204 6,071,878
5,013,805 4,646,429 5,968,879 6,909,315 7,282,271 7,932,656
34,786,137 28,300,835 17,786,563 22,582,259 44,208,054 47,250,734
2,420,000 2,435,000 3,785,000 2,961,575 3,367,679 3,383,656
- - - - - -
1,253,185 1,352,629 1,344,234 1,121,846 1,141,777 1,348,009
61,200,719 58,593,840 51,709,795 57,485,714 80,432,308 86,353,745
(8,394,743) 951,317 6,501,797 (3,044,228) (9,016,803) (6,422,164)
5,308,513 5,094,561 2,897,844 3,840,551 3,140,919 3,819,602
(4,486,763) (4,267,119) (2,265,181) (2,639,290) (1,507,625) (4,173,087)
6,935,000 - 7,795,000 - 7,815,000 5,680,000
- - - 38,240 - 44,339
- - - (3,875,000) - -
239,309 - 235,748 - 320,387 897,652
- - - - - -
35,932 13,771 3,267 9,687 9,025 22,632
- - - - 335,783 -
8,031,991 841,213 8,666,678 (2,625,812) 10,113,489 6,291,138
($362,752) $1,792,530 $15,168,475 ($5,670,040) $1,096,686 ($131,026)
13.9% 11.9% 13.7% 11.6% 12.0% 13.8%
Fiscal Year
165
CITY OF COTTAGE GROVE
TAX CAPACITY VALUE AND ESTIMATED MARKET VALUE OF TAXABLE PROPERTY Table 5
Last Ten Fiscal Years
Taxable
Total Taxable Assessed Estimated
Residential Real and Fiscal Disparity Total Adjusted Value as a Actual Taxable
Payable Residential Commercial Agricultural Non-homestead Personal Personal Contribution (Net) Taxable Percentage of Market Total Direct
Year Property Property Property Property Property Property and TIF Value Taxable Value Value Tax Rate
2015 20,730,170 5,093,035 776,575 2,609,305 633,787 29,842,872 3,544,899 33,387,771 1.23% 2,705,975,400 41.591
2016 21,377,754 5,203,657 767,424 2,749,793 678,862 30,777,490 3,557,397 34,334,887 1.23% 2,790,852,600 43.14
2017 22,141,063 5,623,028 785,628 2,740,566 716,347 32,006,632 3,967,785 35,974,417 1.25% 2,889,152,300 43.01
2018 23,982,857 6,113,919 747,876 3,020,198 789,240 34,654,090 4,094,931 38,749,021 1.24% 3,125,587,600 40.58
2019 26,295,544 6,402,547 764,841 3,320,374 775,659 37,558,965 4,619,334 42,178,299 1.24% 3,407,440,600 38.959
2020 28,432,495 6,692,191 744,506 3,955,352 758,254 40,582,798 2,746,520 43,329,318 1.17% 3,691,869,400 39.182
2021 30,539,286 7,416,715 777,431 4,462,625 826,222 44,022,279 2,852,598 46,874,877 1.17% 3,991,958,100 37.351
2022 31,985,984 8,416,020 794,197 4,980,953 621,001 46,798,155 2,544,552 49,342,707 1.17% 4,226,273,500 37.251
2023 40,625,940 8,962,526 824,188 7,003,974 654,114 58,070,742 2,247,211 60,317,953 1.14% 5,307,199,300 33.899
2024 46,903,381 12,212,864 893,654 8,214,292 680,259 68,904,450 1,251,317 70,155,767 1.13% 6,193,083,500 32.909
Source: Washington County
* Taxable property values include both urban and rural properties.
(1) The tax capacity (assessed taxable value) of the property is calculated by applying a statutory formula to the
estimated maket value of the property.
166
CITY OF COTTAGE GROVE
DIRECT AND OVERLAPPING PROPERTY TAX RATES Table 6
Last Ten Fiscal Years
Fiscal Total City Washington School Total
Year General Debt Service Direct Rate County District (2) Other (4) Overlapping Total
2015 38.886 2.705 41.591 30.186 35.675 4.182 70.043 111.634
2016 40.422 2.717 43.139 30.564 36.812 4.568 71.944 115.083
2017 40.156 2.856 43.012 30.448 34.309 4.345 69.102 112.114
2018 36.509 4.075 40.584 29.983 33.303 4.175 67.461 108.045
2019 35.025 3.933 38.958 29.682 34.926 3.994 68.602 107.56
2020 33.645 5.537 39.182 28.944 33.904 2.382 65.23 104.412
2021 31.895 5.456 37.351 27.435 34.181 2.304 63.92 101.271
2022 31.571 5.68 37.251 27.532 33.739 2.196 63.467 100.718
2023 29.331 4.568 33.899 23.625 31.296 1.88 56.801 90.700
2024 27.704 5.205 32.909 21.908 32.613 2.833 57.354 79.262
Source: Official Statements for the City of Cottage Grove (Washington County)
*Overlapping rates are those of local and county governments that apply to property owners within the City. Not all
overlapping rates apply to all City property owners; for example, although the county property tax rates apply to all
City property owners, other District rates apply only to the approximately one-third of City property owners whose
property is located within that District's geographic boundaries.
City's property tax revenue base includes both urban and rural properties. Rural rate is 70% of urban rate plus debt.
(2) Independent School District 833
(4) Includes Metropolitan Transit Commission, Metropolitan Council, Washington County CDA, and Regional Rail Authority.
Overlapping Rates*City Direct Rate (1)
167
CITY OF COTTAGE GROVE
PRINCIPAL PROPERTY TAXPAYERS Table 7
Current Year and Ten Years Ago
Taxpayer
Net Tax
Capacity
Value Rank
Percentage
of Total
City
Tax
Capacity
Value
Net Tax
Capacity
Value Rank
Percentage
of Total
City
Tax
Capacity
Value
NP BGO Cottage Grove Logistics Park LLC $1,127,607 1 1.64% - - -
3M Company 1,035,928 2 1.50% 625,241 1 2.10%
Mars II Inc.799,888 3 1.16% 169,544 4 0.57%
Xcel Energy 648,830 4 0.94% 604,390 2 2.03%
ORP Hinton, LLC 617,916 5 0.90% - - -
Renewal by Andersen, LLC 560,770 6 0.81% - - -
PHS/Cottage Grove Inc 536,163 7 0.78% - - -
Renewal by Andersen Corp 401,950 8 0.58% 144,534 7 0.48%
North Star Sheets, LLC 367,350 9 0.53% -
80th & Hemmingway LLC 359,943 10 0.52%0.51%
Menard Inc - 178,806 3 0.60%
Dayton-Hudson Corporation - 154,230 5 0.52%
Wal-Mart Real Estate - 149,612 6 0.50%
Grove Rainbow LP - 135,516 8 0.45%
WER Dis LLC - 131,250 9 0.44%
MN Pipeline Co 130,690 10 0.44%
Total $6,456,345 9.37% $2,423,813 8.63%
Total All Property $68,904,450 $29,842,872
Source: Official Statements for the City of Cottage Grove
20152024
168
CITY OF COTTAGE GROVE
PROPERTY TAX LEVIES AND COLLECTIONS Table 8
Last Ten Fiscal Years
Percentage Collections Percentage
Fiscal Net Operating Debt MVHC/ Total Net of in Subsequent of
Year Tax Levy (1) Tax Levy Ag Credit (1) Tax Levy Amount Levy Abatements Years Amount Levy
2015 $12,526,600 $875,500 ($8,722) 13,393,378 $13,326,911 99.50% $ - $66,026 13,392,937 100.00%
2016 13,174,084 890,000 (9,707) 14,054,377 13,991,560 99.55% (6,717) 54,896 14,046,456 99.94%
2017 13,798,587 985,000 (8,890) 14,774,697 14,694,114 99.45% - 79,309 14,773,423 99.99%
2018 13,700,988 1,535,000 (7,072) 15,228,916 15,156,690 99.53% 988 72,552 15,229,242 100.00%
2019 14,100,682 1,590,000 (7,213) 15,683,469 15,631,548 99.67% (4,732) 46,073 15,677,621 99.96%
2020 14,557,824 2,397,500 (6,788) 16,948,536 16,890,861 99.66% (41,455) 13,435 16,904,296 99.74%
2021 15,033,501 2,576,500 (6,226) 17,603,775 17,548,413 99.69% (29,002) 21,093 17,569,506 99.81%
2022 15,526,411 2,804,000 (5,826) 18,324,585 18,256,754 99.63% (28,281) 31,777 18,288,531 99.80%
2023 17,860,270 2,789,440 (4,704) 20,645,006 20,571,262 99.64% (37,143) 24,779 20,596,041 99.76%
2024 19,461,110 3,664,490 (6,129) 23,119,471 22,985,189 99.42% (17,070) - 22,985,189 99.42%
Notes:
(1) This reflects the Final Levy Certification after all adjustments have been made
Fiscal Year of Levy Total Collections to Date
Collected within the
Taxes Levied for the Fiscal Year
169
CITY OF COTTAGE GROVE
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
General General Obligation
Obligation General Special
Fiscal Tax Increment Obligation Assessments Subscription
Year Bonds (1) Bonds (1) Bonds (1)Leases Liability
2015 $2,309,130 $ - $17,964,105 $4,842,432 $ -
2016 2,096,395 4,660,000 20,679,730 - -
2017 1,868,660 13,736,030 19,281,013 - -
2018 1,625,926 13,103,649 24,189,529 - -
2019 1,363,191 16,323,536 22,941,943 - -
2020 1,085,456 15,595,093 21,674,357 - -
2021 820,000 14,701,649 27,242,322 - -
2022 565,000 11,825,549 23,703,909 26,665 -
2023 290,000 24,290,368 16,439,716 14,714 265,055
2024 - 26,512,448 17,837,784 50,397 201,377
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Presented net of original issuance discounts and premiums.
(2) See the Demographic and Economic statistics schedule for personal income and population data.
Governmental Activities
170
Table 9
Other Other Total Percentage
Long-Term Revenue Capital Long-Term Primary of Personal Per
Debt Bonds (1) Lease Debt Government Income (2) Capita (2)
$ - $609,856 $ - $ - $25,725,523 1.28%718
- - - - 27,436,125 1.30%761
- - - - 34,885,703 1.58%956
- - - - 38,919,104 1.67%1,042
2,947,657 - - - 43,576,327 1.74%1,141
2,686,458 - - - 41,041,364 1.55%1,064
2,420,259 - - - 45,184,230 1.58%1,141
2,144,060 - - - 38,265,183 1.23%933
1,862,985 - - - 43,162,838 1.27%1,012
1,571,909 11,453,582 - 185,114 57,812,611 1.58%1,325
Business-Type Activities
171
CITY OF COTTAGE GROVE
RATIOS OF GENERAL BONDED DEBT OUTSTANDING Table 10
Last Ten Fiscal Years
General Obligation Percentage of
General General Special Less: Amounts Estimated
Fiscal Obligation Tax Obligation Assessments Available in Debt Actual Taxable Per
Year Increment Bonds (1) Bonds (1) Bonds (1) Service Funds Total Market Value (2) Capita (3)
2015 $2,309,130 $ - $17,964,105 $3,773,605 $16,499,630 0.61% 461
2016 2,096,395 4,660,000 20,679,730 4,098,850 23,337,275 0.84% 647
2017 1,868,660 13,736,030 19,281,013 3,281,981 31,603,722 1.09% 866
2018 1,625,926 13,103,649 24,189,529 3,370,032 35,549,072 1.14% 952
2019 1,363,191 16,323,536 22,941,943 3,224,138 37,404,532 1.10% 980
2020 1,085,456 15,595,093 21,674,357 4,128,227 34,226,679 0.93% 888
2021 820,000 14,701,649 27,242,322 8,133,965 34,630,006 0.87% 874
2022 565,000 11,825,549 23,703,909 4,712,195 31,382,263 0.74% 765
2023 290,000 24,290,368 16,439,716 5,374,800 35,645,284 0.67% 851
2024 - 26,512,448 17,837,784 6,746,735 37,603,497 0.61% 862
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Presented net of original issuance discounts and premiums.
(2) See the Assessed and Estimated Actual Value of Taxable Property for estimated actual taxable market value.
(3) See the Demographic and Economic statistics schedule for population data.
172
CITY OF COTTAGE GROVE
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT Table 11
As of December 31, 2024
City of Cottage Grove
Percent of Debt Share of
Net Debt Applicable Overlapping
Outstanding to City Debt
Overlapping:
Washington County 112,695,000$ 13.5988%15,325,168$
School Districts:
ISD No. 200 (Hastings)42,586,288 1.5516%660,769$
ISD No. 833 (South Wash. County)376,230,000 32.5601%122,500,864$
Metro Council 159,410,000 1.1111%1,771,205$
Total Overlapping 140,258,005
City of Cottage Grove Direct Debt 57,812,611 100.00%57,812,611
Total Direct and Overlapping Debt:748,733,899$ 198,070,616$
Source: City of Cottage Grove Municipal Disclosure Reporting
Notes: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule
estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City.
This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by
the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident,
and therefore responsible for repaying the debt, of each overlapping government.
173
CITY OF COTTAGE GROVE
LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
Market value
Debt limit (3% of market value)
Debt applicable to limit:
General obligation bonds
Less: Amount set aside for repayment
of general obligation debt
Total net debt applicable to limit
Legal debt margin
2015 2016 2017 2018
Debt limit $81,179,262 $83,725,578 $86,674,569 $93,767,628
Total net debt applicable to limit 4,805,000 4,660,000 13,240,000 12,645,000
Legal debt margin $76,374,262 $79,065,578 $73,434,569 $81,122,628
Total net debt applicable to the limit as a
percentage of debt limit 5.92% 5.57% 15.28% 13.49%
Legal Debt Margin Calculation for Fiscal Year 2024
174
Table 12
$6,368,295,800
191,048,874
16,680,000
-
16,680,000
$174,368,874
2019 2020 2021 2022 2023 2024
$102,223,218 $110,756,082 $119,758,743 $126,788,205 $159,215,979 $191,048,874
15,745,000 15,140,000 14,375,000 13,585,000 13,508,767 16,680,000
$86,478,218 $95,616,082 $105,383,743 $113,203,205 $145,707,212 $174,368,874
15.40% 13.67% 12.00% 10.71% 8.48% 8.73%
Legal Debt Margin Calculation for Fiscal Year 2024
175
CITY OF COTTAGE GROVE
DEMOGRAPHIC AND ECONOMIC STATISTICS Table 13
Last Ten Fiscal Years
Per
Capita
Fiscal Personal Personal School Unemployment
Year Population (1)Income (2)Income(2)Enrollment(3)Rate(4)
2015 35,814 2,012,741,903 56,200 17,893 3.3%
2016 36,062 2,105,690,772 58,392 17,794 3.4%
2017 36,492 2,213,900,353 60,669 18,165 3.2%
2018 37,341 2,329,396,164 63,035 18,519 2.6%
2019 38,175 2,500,210,040 65,493 18,554 2.8%
2020 38,555 2,641,981,375 68,525 18,753 5.7%
2021 39,605 2,862,372,165 72,273 18,502 3.2%
2022 41,027 3,148,124,791 76,733 18,558 2.1%
2023 42,648 3,403,907,472 79,814 18,770 2.4%
2024 43,631 3,665,789,358 84,018 19,008 2.7%
Sources:
(1) Census 2020. Metropolitan Council 2013-2019 and 2021-2022. City Community Development Department 2023.
(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.
176
CITY OF COTTAGE GROVE
PRINCIPAL EMPLOYERS Table 14
Current Year and Ten Years Ago
Percentage Percentage
of Total of Total
Taxpayer Employees Rank Employment Employees Rank Employment
School District 833 (1) 3,028 1 32% 2,232 1 33%
Renewal by Andersen 1,680 2 18% 450 3 7%
Hy-Vee 725 3 8%
Up-North Plastics 710 4 7% 300 4 4%
3M Company 657 5 7% 775 2 11%
Walmart 283 6 3% 230 5 3%
City of Cottage Grove 230 7 2% 176 7 3%
Van Meter 218 8 2% 170 8 2%
American Manufacturing & Distribution 200 9 2%
Cub Foods 200 10 2% 200 6 3%
Menards 150 9 2%
Target 130 10 2%
Total 7,931 83% 4,813 70%
Notes:
(1) Includes employees for entire district, including those outside the City limits.
(2) Previously listed as Werner Electric.
Source: Official Statements for the City of Cottage Grove
2024 2015
177
CITY OF COTTAGE GROVE
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
Last Ten Fiscal Years
Function 2015 2016 2017 2018
General government:
Total general government 23.25 25.70 27.60 28.20
Public safety:
Police/Cottage Grove EMS:
Officers 40.00 43.56 46.84 46.84
Civilians 7.56 7.56 7.56 7.56
Fire/Emergency managaement 9.00 11.75 15.10 15.10
Total public safety 56.56 62.87 69.50 69.50
Public works 27.62 25.66 27.23 26.99
Parks & Recreation 11.20 11.10 10.30 10.30
Ice arena - - - -
Golf Course
Water/Sewer/Street lights 9.34 10.34 11.31 11.31
Fleet maintenance 4.04 4.04 4.00 4.00
Total 132.01 139.71 149.94 150.30
Prior to 2023, Parks & Recreation listed under Public Works.
Source: City of Cottage Grove Finance Office
Full-Time Equivalent Employees as of December 31
178
Table 15
2019 2020 2021 2022 2023 2024
29.00 26.00 26.50 27.50 32.63 33.63
46.84 46.64 47.94 47.94 44.00 46.00
7.56 7.56 7.56 7.56 12.77 13.97
15.10 18.00 18.00 18.50 16.00 19.00
69.50 72.20 73.50 74.00 72.77 78.97
27.59 33.20 42.00 42.00 24.69 24.69
10.30 9.80 7.50 7.50 22.00 24.50
- - - - 6.00 6.50
23.00 23.00
11.31 11.50 9.00 9.00 16.54 16.54
4.00 4.00 2.00 2.00 8.00 8.00
151.70 156.70 160.50 162.00 205.63 215.83
Full-Time Equivalent Employees as of December 31
179
CITY OF COTTAGE GROVE
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2015 2016 2017 2018
General government:
Elections 2 4
Registered voters as of 7am election day 21,594 22,076
Number of votes cast 19,799 17,369
Voter participation (registered)84.50%75.00%
Community development:
Inspections:
Building permints (new dwelling units)65 99 255 185
Property maintenance inspections 1,013 841 1,018 1,119
Public safety:
Police:
Crimes - Part I 719 673 767 619
Crimes - Part II 1,419 1,424 1,471 1,358
Total calls for service 20,576 21,331 20,879 22,647
Fire:
Total calls for service (1)2,464 2,681 2,790 2,914
Avg response time (minutes) medical 6:13 6:21 6:25 6:25
Avg response time (minutes) fire 7:06 6:54 7:05 7:13
Avg response time (minutes) both 6:16 6:24 6:28 6:54
Public works:
Sq. yards of streets sealcoated 118,159 193,249 71,152 0
Miles of streets new construction 0.56 1.11 1.02 4.82
Miles of watermain added 1.06 1.20 3.64 4.30
Source: Various City of Cottage Grove departments
Note:
Fiscal Year
180
Table 16
2019 2020 2021 2022 2023 2024
1312 1
22,689 24,444 25,006 25,621 27,176
2,559 22,932 8,352 17,602 24,552
11.28%93.81%33.40%68.70%90.40%
284 382 574 350 290 338
803 666 771 597 489 1,174
619 616 459 409 317 299
948 961 738 517 487 526
20,375 32,288 28,933 28,077 43,021 41,160
2,950 2,995 3,747 3,502 4,603 4,930
7:17 6:18 7:30 6:50 6:06 6:22
6:08 9:38 9:24 9:43 6:59 6:37
7:03 8:18 8:27 7:29 N/A N/A
0 250,766 0000
2.80 2.87 4.94 2.99 1.39 2.35
4.52 9.16 6.94 9.50 4.31 3.04
Fiscal Year
181
CITY OF COTTAGE GROVE
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2015 2016 2017 2018
Public works:
City-owned lights 2,495 2,592 2,682 2,797
Xcel owned lights 301 301 301 301
Streets (miles)160.91 162.02 163.04 167.87
Sidewalks/trails (miles)59.56 61.98 64.87 70.06
Parks (acreage):
Community parks 400 400 400 400
Neighborhood parks 275 275 275 275
Recreation facilities 15 15 15 15
County parks 569 569 569 569
State scientific and nature area 238 238 238 238
Golf course 219 219 219 219
Other open space 961 961 961 961
Water:
Number of connections 10,706 10,789 10,983 11,256
Miles of water mains and laterals 149.98 151.18 154.82 159.12
Sanitary sewer:
Number of connections 10,670 10,667 10,891 11,160
Miles of sanitary sewer mains and laterals 131.45 132.81 135.42 139.51
Storm sewer:
Miles of storm sewers 89.52 93.94 98.75 106.39
Source: Various City departments
Fiscal Year
182
Table 17
2019 2020 2021 2022 2023 2024
2,898 2,968 3,071 3,153 3,234 3,317
301 301 301 301 301 301
170.67 175.53 178.47 181.46 182.85 185.19
75.55 81.28 85.97 91.24 96.00 100.61
400 400 400 408 421 421
275 275 280 285 285 285
15 15 15 15 14 14
569 569 569 569 569 569
238 238 238 238 238 250
219 219 219 219 219 219
969.8 969.8 980 995 995 1,000
11,521 11,714 12,280 13,170 13,190 13,739
164.24 175.40 182.34 191.84 196.14 199.18
11,212 11,513 12,081 12,969 12,989 13,734
142.42 146.87 153.29 157.69 160.50 163.25
111.18 116.96 122.53 128.06 132.49 136.19
Fiscal Year
183
184