HomeMy WebLinkAbout2023 ACFR12800 Ravine Parkway S
Cottage Grove, MN 55016
651-458-2800
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Annual Comprehensive Financial Report
City of Cottage Grove, MN Year Ended December 31, 2023
ANNUAL COMPREHENSIVE FINANCIAL REPORT
OF THE
CITY OF COTTAGE GROVE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2023
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 Funds 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 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
Schedule of Changes in the Net Pension Liability and Related Ratios -
Cottage Grove Department Relief Association Statement 17 94
Schedule of Contributions -Cottage Grove Fire Department Relief Association Statement 18 96
Notes to RSI 97
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 19 108
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental Funds Statement 20 109
Subcombining Balance Sheet - Nonmajor Special Revenue Funds Statement 21 112
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Special Revenue Funds Statement 22 114
Subcombining Balance Sheet - Nonmajor Debt Service Funds Statement 23 118
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Debt Service Funds Statement 24 120
Subcombining Balance Sheet - Nonmajor Capital Project Funds Statement 25 124
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Capital Project Funds Statement 26 126
Special Revenue Funds:
Schedule of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Recycling Statement 27 128
Storm Water Maintenance Statement 28 129
Forfeiture/Seizure Statement 29 130
Golf Course Statement 30 131
Capital Project Funds:
Schedule of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Equipment Replacement Statement 31 132
Street Sealcoating Statement 32 133
Combining Statement of Net Position - Internal Service Fund Statement 33 136
Combining Statement of Revenues, Expenditures, and
Changes in Net Position - Internal Service Funds Statement 34 137
Combining Statement of Cash Flows - Internal Service Fund Statement 35 138
Combining Balance Sheet - Economic Development Authority
Component Unit Statement 36 139
Combining Statement of Revenues, Expenditures, and Changes in Fund
Balances - Economic Development Authority Component Unit Statement 37 140
CITY OF COTTAGE GROVE, MINNESOTA
TABLE OF CONTENTS
Page
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 7 169
Property Tax Levies and Collections Table 8 170
Debt Capacity:
Ratios of Outstanding Debt by Type Table 9 172
Ratios of General Bonded Debt Outstanding Table 10 174
Direct and Overlapping Governmental Activities Debt Table 11 175
Legal Debt Margin Information Table 12 176
Demographic and Economic:
Demographic and Economic Statistics Table 13 178
Principal Employers Table 14 179
Operating Information:
Full-Time Equivalent City Government Employees by Function Table 15 180
Operating Indicators by Function/Program Table 16 182
Capital Asset Statistics by Function/Program Table 17 184
III. STATISTICAL SECTION (Unaudited)
I. INTRODUCTORY SECTION
1
2
3
4
5
6
7
8
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, 2022
Executive Director/CEO
9
10
CITY OF COTTAGE GROVE, MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATION
December 31, 2023
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
Brena Malinowski Finance Director
Tammy Anderson City Clerk
Emily Schmitz Community Development Director
Ryan Burfeind Public Works Director
Peter Koerner Director of Public Safety
Zac Dockter Parks and Recreation Director
Gretchen Larson Economic Development Director
11
12
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
13
14
II. FINANCIAL SECTION
15
16
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 aggregate discretely presented component units each major fund, and
the aggregate remaining fund information of City of Cottage Grove, Minnesota, as of and for the
year ended December 31, 2023, 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
aggregate discretely presented component unit, each major fund, and the aggregate remaining
fund information of City of Cottage Grove, Minnesota, as of December 31, 2023, 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.
Prior Year Summarized Comparative Information
The predecessor auditor previously audited the City’s 2022 financial statements, and they
expressed unmodified audit opinions on the respective financial statements of the governmental
activities, the business-type activities, the aggregate discretely presented component unit, each
400 Robert Street North, Suite 1600, St. Paul, MN, 55101 651.426.7000 www.redpathcpas.com 17
major fund, and the aggregate remaining fund information in their report dated June 6, 2023. In
our opinion, the partial comparative information presented herein as of and for the year ended
December 31, 2022 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.
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.
18
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.
Change in Accounting Principle
As described in Note 18 to the financial statements, City of Cottage Grove, Minnesota adopted
new accounting guidance for the year ended December 31, 2023, Governmental Accounting
Standards Board Statement No. 96, Subscription-Based Information Technology Arrangements.
Our opinion is not modified with respect to this matter.
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 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 America. In our opinion, the combining and individual nonmajor fund financial
statements and schedules are fairly stated, in all material respects, in relation to the basic
financial statements as a whole.
19
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
24, 2024 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 24, 2024
20
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, 2023. We encourage readers to consider the information presented here in
conjunction with additional information that we have furnished in our letter of transmittal, which can be
found on pages 3 through 6 of this report.
Financial Highlights
The assets and deferred outflows of resources of the City of Cottage Grove and the EDA
Component Unit exceeded its liabilities and deferred inflows of resources at the close of the most
recent fiscal year by $432,158,906 (net position). Of this amount, $36,306,301 (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 $44,809,070 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 $41,851,561 an increase of $1,096,686 compared to
the previous year. Approximately 75% or $31,312,631 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
$12,581,127 (50%) 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 $44,732,787, an increase of $4,989,339 compared to the previous year due to the issuance of
debt during the current fiscal year for the building of the Glacial Valley Park building and
reconstruction of streets in the city.
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.
2121
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 31 of this report.
Fund financial statements: A fund is a grouping of related accounts that is used to maintain control
over resources that have been segregated for specific activities or objectives. The City of Cottage
Grove, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance-related legal requirements. All of the funds of the City of Cottage Grove can
be divided into two categories: governmental funds and proprietary funds.
Governmental funds: Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike the
government-wide financial statements, governmental fund financial statements focus on near-term
inflows and outflows of spendable resources, as well as on balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating a government’s near-term
financial requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statement. By doing
so, readers may better understand the long-term impact of the City's near term financial decisions. Both
the governmental fund balance sheet and governmental fund statement of revenues, expenditures, and
change in fund balance provide a reconciliation to facilitate this comparison between governmental
funds and governmental activities.
2222
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 seven 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
Data from the other governmental funds are combined into a single, aggregated presentation. Individual
fund data for each of these non-major governmental funds is provided in the form of combining
statements elsewhere in the report.
The City of Cottage Grove adopts an annual appropriated budget for its general and special revenue
funds. A budgetary comparison statement has been provided for those funds to demonstrate compliance
with this budget.
The basic governmental fund financial statements start on page 34 of this report.
Proprietary funds: The City of Cottage Grove maintains four enterprise funds and three internal
service funds as a part of its proprietary fund type. Enterprise funds are used to report the same
functions presented as business-type activities in the governmental-wide financial statements. The City
of Cottage Grove uses enterprise funds to account for street light operations, ambulance service, water
operations, and sewer operations. Internal service funds are an accounting device used to accumulate
and allocate costs internally among the City of Cottage Grove’s various functions. The City of Cottage
Grove uses internal service funds to account for self-insurance, fleet maintenance, and information
technology services activity. Because these services predominantly benefit governmental rather than
business-type functions, they have been included within governmental activities in the government-wide
financial statements.
Proprietary funds provide the same type of information as the government-wide financial statements,
only in more detail. The proprietary fund financial statements provide separate information for street
light operations, ambulance service, water operations, and sewer operations, all of which are major
funds of the City of Cottage Grove. Conversely, the internal service funds are combined into a single,
aggregated presentation in the proprietary fund financial statements. Individual fund data for the
internal service funds is provided in the form of combining statements elsewhere in this report.
The basic proprietary fund financial statements start on page 41 of this report.
Notes to the financial statements: The notes provide additional information that is essential to a full
understanding of the data provided in the government–wide and fund financial statements. The notes to
the financial statements start on page 45 of this report.
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 99 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 $432,158,906 at the
close of the most recent fiscal year.
The largest portion of the City of Cottage Grove’s net position ($381,795,249 or 88.3%) 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
2023 2022 2023 2022 2023 2022
Current and other assets $80,970,000 $71,455,167
$16,686,865 $16,703,246
$97,656,865 $88,158,413
Capital assets
301,111,452 268,696,454
124,845,135 104,180,227
425,956,587 372,876,681
Total assets
382,081,452 340,151,621
141,532,000 120,883,473
523,613,452 461,035,094
Deferred outflows of resources 13,934,629 16,727,066
2,211,203 2,514,596
16,145,832 19,241,662
Long-term liabilities outstanding 40,779,174 32,051,064
149,045 67,752
40,928,219 32,118,816
Pension liability 13,051,868 26,392,110 1,965,027 4,018,567 15,016,895 30,410,677
Other liabilities 28,965,202 20,555,962 678,410 541,879 29,643,612 21,097,841
Total liabilities 82,796,244 78,999,136 2,792,482 4,628,198 85,588,726 83,627,334
Deferred inflows of resources 19,966,694 9,253,764 2,044,958 45,822 22,011,652 9,299,586
Net position:
Net investment in capital assets
256,950,114 230,431,271
124,845,135 104,180,227
381,795,249 334,611,498
Restricted 14,057,356 6,398,608 - - 14,057,356 6,398,608
Unrestricted 22,245,673 31,795,908
14,060,628 14,543,822
36,306,301 46,339,730
Total net position $293,253,143 $268,625,787
$138,905,763 $118,724,049
$432,158,906 $387,349,836
24
City of Cottage Grove
Management's Discussion and Analysis
Government-wide Financial Analysis (Continued)
An additional portion of the City’s net position $14,057,356 or 3.3% represents resources that are
subject to external restrictions on how they may be used. The remaining portion of net position,
$36,306,301 or 8.4%, 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 $44,809,070.
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
2023 2022 2023 2022 2023 2022
Revenues:
Program revenues:
Charges for services $12,080,329 $ 13,601,266 $10,997,998 $9,704,695 $23,078,327 $23,305,961
Operating grants and contributions 3,680,506 2,278,343 67,605 41,788 3,748,111 2,320,131
Capital grants and contributions 44,115,417 37,949,025 7,446,103 12,272,831 51,561,520 50,221,856
General revenues: Property taxes 20,590,413 18,804,948 - - 20,590,413 18,804,948
Other taxes 2,655,191 2,426,427 - - 2,655,191 2,426,427
Grants and contributions not restricted to specific programs 72,738 229,638 - - 72,738 229,638
Unrestricted investment earnings
(loss) 2,567,079 (2,043,372) 636,750 (484,598) 3,203,829 (2,527,970)
Gain(loss) on sale of capital assets 9,025 29,658 - - 9,025 29,658
$85,770,698 73,275,933 19,148,456 21,534,716 104,919,154 94,810,649
Expenses:
General government 3,300,129 3,500,705 - - 3,300,129 3,500,705
Community development 2,526,101 2,676,975 - - 2,526,101 2,676,975
Economic development 742,227 864,161 - - 742,227 864,161
Public safety 16,938,793 13,853,217 - - 16,938,793 13,853,217
Public works 12,979,642 10,788,045 12,979,642 10,788,045
Culture and recreation 8,927,799 9,447,768 - - 8,927,799 9,447,768
Interest on long-term debt 1,077,579 931,466 - - 1,077,579 931,466
Street lights - - 1,157,388 1,099,054 1,157,388 1,099,054
Cottage Grove EMS - - 2,425,138 2,302,408 2,425,138 2,302,408
Water operating - - 5,692,361 4,053,526 5,692,361 4,053,526
Sewer operating - - 4,342,927 4,159,063 4,342,927 4,159,063
Total expenses 46,492,270 42,062,337 13,617,814 11,614,051 60,110,084 53,676,388
Increase (decrease) in net position before
transfers and special items 39,278,428 31,213,596 5,530,642 9,920,665 44,809,070 41,134,261
Transfers (14,651,072) (6,069,068) 14,651,072 6,069,068 - -
Increase (decrease) in net position 24,627,356 25,144,528 20,181,714 15,989,733 44,809,070 41,134,261
Net position - January 1 268,625,787 243,481,259 118,724,049 102,734,316 387,349,836 346,215,575
Net position - December 31 $293,253,143 $268,625,787 $138,905,763 $118,724,049 $432,158,906 $387,349,836
Net position from governmental activities increased by $24,627,356 to the contribution of capital assets
including streets and storm water from development activities.
25
City of Cottage Grove
Management's Discussion and Analysis
Government-wide Financial Analysis (Continued)
Overall, revenues from governmental activities increased by $12,494,765 or 17.1%. Capital grants and
contributions increased by $6,166,392, due to the receipt of Municipal State Aid for street construction
and settlement funding received from the MPCA/3M settlement for water treatment. Infrastructure
related to water treatment was constructed with the use of these settlement funds. In addition, there was
a large increase in the unrestricted investment earnings due to the unprecedented interest rate increases
that occurred in the previous year that caused a large mark to market adjustment for financial statement
presentation purposes.
Governmental activities expenses increased overall by only 4.29% due to higher operating costs and the
recognition of expense due to the dissolution of the fire relief pension plan detailed in Note 8.
Net position in business-type activities increased $20,181,714 primarily due to the transfers from the
governmental activities for capital assets related to water treatment. In addition, capital contributions
increased from the prior year due infrastructure contributions from developers related to water and sewer
infrastructure 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 captial grant revenue was received in the current year in public works, due to the receipt of
funds received from the State regarding the 3M settlement and Municipal State Aid received for the
reconstruction of streets.
$-
$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
$50,000,000
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 $20,181,714. The large increase is due to the
contribution of capital assets from developers and water infrastructure for water treatment. Below are
graphs showing the business-type activities revenue and expense comparisons.
In business type activities, changes in net position were positive for all four business-type activity funds
with the exception of Cottage Grove EMS. 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.
Charges for
Services
58%
Operating
Grants and
Contributions
0%
Capital Grants
and
Contributions
39%
Unrestricted
Investment
Earnings
3%
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
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 $41,851,561, an increase of $1,096,686. The largest portion of this increase is
due to one-time public safety aid received from the state in the amount of $1,733,090. Committed,
assigned and unassigned fund balance which is available for spending at the government’s discretion
has a balance of $31,312,631 at year end. This is approximately 75% of the ending fund balance. The
remainder of the fund balance is non-spendable or restricted to indicate it is not available for new
spending because it has already been obligated.
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 $12,581,127 while total fund balance was
$15,416,570. 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 50%
of total subsequent year General fund expenditures, while total fund balance represents 61% of the same
amount.
The General fund balance increased by $2,102,467. The increase primarily occurred is due to the
receipt of one-time public safety aid received from the state in the amount of $1,733,090. These funds
will be utilized in future years to fund new public safety positions including two police officers and
three firefighter/paramedics. In addition, investment earnings were strong in the current fiscal period.
Other Major Governmental Funds
The Closed Debt Fund decreased by $47,726 due to the use of funds to pay debt service in accordance
with the financial management plan.
The Ice Arena Fund increased by $59,140 due to strong operations and lower operating costs.
The Future Economic Development Fund increased by $1,030,161 due to land sales brokered by the city
for future development in the business park.
The MSA Construction Fund decreased by $1,102,278. A two-year street project at East Point Douglas
and Jamaica Avenue began in 2024. This project will be funded by future bonds and Municipal State
Aid.
28
City of Cottage Grove
Management's Discussion and Analysis
Financial Analysis of the Government's Funds (Continued)
The Future Projects Fund decreased slightly by $21,560 due to escrow funds being released to
developers for amounts remaining in the escrows after completion of developments.
The 3M Settlement MPCA Fund decreased slightly by $547,242 due to timing differences between
revenues received from the MPCA/3M settlement and use of those revenues for water treatment
activities.
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 $20,184,744 in 2023 due to increased utility
rates in accordance with a utility rate study that is completed every five years for each utility fund, and
capital contributions from completed infrastructure projects in new developments.
Budgetary Highlights
General Fund.
The General Fund actual results were different than the final budget amounts due to the following:
Revenues were $811,633 more than the final budget due to investment earnings and building
permit revenues that were higher than anticipated during the current year.
Public safety expenditures were $222,624 more than budgeted amounts due to part-time salaries
that were higher than the budgeted amounts and contractual services that were higher than
budgeted amounts due to repairs of equipment.
Public works expenditures were $229,605 higher than budgeted due to a severe winter at the
beginning of the current fiscal year and contractual services that were higher than budgeted
amounts due to repairs of equipment.
2929
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, 2023, amounts to $425,956,587 (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
2023 2022 2023 2022 2023 2022
Land and land improvements $19,889,402 $18,060,944 $2,898,495 $2,899,289 $22,787,897 $18,611,609
Easements 1,157,202 1,157,202 - - 1,157,202 1,157,202
Construction in progress 18,379,670 15,555,260 1,024,372 - 19,404,042 15,555,260
Buildings and improvements 47,831,410 45,132,955 7,486,918 3,885,930 55,318,328 49,018,885
Equipment and furniture 223,972 233,782 - - 223,972 233,782
Machinery and equipment 6,031,651 6,047,850 2,255,801 881,617 8,287,452 6,929,467
Other improvements 14,613,201 9,266,786 8,039,444 7,215,068 22,652,645 16,481,854
Infrastructure:
Streets 137,116,228 127,307,817 - - 137,116,228 127,307,817
Storm sewers 49,007,035 39,912,949 - - 49,007,035 39,912,949
Sidewalks/trails 6,567,160 5,994,568 - - 6,567,160 5,994,568
Right-to-use subscription-
based IT arrangements 280,270 - - - 280,270 -
Leased equipment 14,251 26,341 - - 14,251 26,341
Water and sewer lines - - 103,140,105 89,298,323 103,140,105 89,298,323
Ending balance $301,111,452 $268,696,454 $124,845,135 $104,180,227 $425,956,587 $370,528,057
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.
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
$44,732,787 an increase of $4,989,339. $4,695,195 of the debt outstanding is due within one year.
$7,815,000 in new debt was issued in the current fiscal year for the construction of the Glacial Valley
Park building and the reconstruction of city streets.
$19,340,000 of the outstanding bonds payable is for pavement management debt being repaid by a
combination of special assessments and property tax levies.
The City of Cottage Grove currently holds a general obligation debt rating of AAA/Stable from
Standard and Poor’s and Aa1 from Moody’s. According to S&P, Cottage Grove received an upgrade
due to “improving economic metrics and its relative growth prospects withing the Twin Cities
metropolitan statistical area demonstrated by the availability of developable land, coupled with a history
of strong financial performance and a favorable debt profile.”
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 $159,215,979.
Of that limit, $12,770,000 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
2023 2022
Governmental activities:
Bonds payable, net $42,883,069 $38,238,518
Lease liability 14,714 26,665
SBITA liability 265,055 -
Compensated absences 1,370,847 1,289,416
Total governmental activities 44,533,685 39,554,599
Business-type activities:
Compensated absences 199,102 188,849
Total business-type activities 199,102 188,849
Total primary government $44,732,787 $39,743,448
31
32
BASIC FINANCIAL STATEMENTS
33
34
CITY OF COTTAGE GROVE
STATEMENT OF NET POSITION Statement 1
December 31, 2023
With Comparative Totals For December 31, 2022
Component
Unit
Economic
Governmental Business-Type Total Primary Development
Activities Activities Government Authority 2023 2022
Assets:
Cash and investments (including cash equivalents) $57,296,400 $10,977,842 $68,274,242 $ -$68,274,242 $60,206,452
Interest receivable 410,067 -410,067 -410,067 460,039
Due from other governments 7,921,148 73,030 7,994,178 -7,994,178 3,765,363
Accounts receivable 1,344,465 2,925,570 4,270,035 2,219 4,272,254 4,544,287
Lease receivable 7,319,479 -7,319,479 -7,319,479 8,537,307
Prepaid items 413,959 241,280 655,239 -655,239 830,568
Property tax receivable 118,657 -118,657 800 119,457 113,240
Loan receivable - - - - -14,758
Special assessments receivable 7,491,622 -7,491,622 -7,491,622 7,959,561
Inventories 302,686 -302,686 -302,686 278,068
Internal balances (2,469,143) 2,469,143 - - - -
Due from discretely presented component unit 607,260 -607,260 -607,260 -
Property held for resale 213,400 -213,400 129,300 342,700 342,700
Fire relief pension asset - - - - 1,279,095
Capital assets not being depreciated
Land 19,889,402 2,874,997 22,764,399 -22,764,399 20,935,941
Easements 1,157,202 -1,157,202 -1,157,202 1,157,202
Construction in progress 18,379,670 1,024,372 19,404,042 -19,404,042 15,555,260
Capital assets net of accumulated depreciation/amortization - -
Land improvements -23,498 23,498 -23,498 24,292
Buildings and improvements 47,831,410 7,486,918 55,318,328 -55,318,328 49,018,885
Equipment and furniture 223,972 -223,972 -223,972 233,782
Leased equipment 14,251 -14,251 -14,251 26,341
Subscription-based IT arrangements 280,270 -280,270 -280,270 -
Machinery and equipment 6,031,651 2,255,799 8,287,450 -8,287,450 6,927,762
Other improvements 14,613,201 8,039,443 22,652,644 -22,652,644 16,481,854
Infrastructure 192,690,423 103,140,108 295,830,531 -295,830,531 262,515,362
Total assets 382,081,452 141,532,000 523,613,452 132,319 523,745,771 461,208,119
Deferred outflows of resources:
Deferred outflows of resources related to OPEB 538,170 80,072 618,242 6,737 624,979 237,261
Deferred outflows of resources related to pensions 13,396,459 2,131,131 15,527,590 33,601 15,561,191 19,071,841
Total deferred outflows of resources 13,934,629 2,211,203 16,145,832 40,338 16,186,170 19,309,102
Total assets and deferred outflows of resources $396,016,081 $143,743,203 $539,759,284 $172,657 $539,931,941 $480,517,221
Liabilities:
Accounts payable $5,266,714 $239,719 $5,506,433 $39,892 $5,546,325 $4,728,352
Salaries and benefits payable 655,672 118,681 774,353 9,883 784,236 728,037
Contracts payable 1,288,500 -1,288,500 -1,288,500 712,295
Due to primary government - - - 607,260 607,260 -
Due to other governments 57,939 147,938 205,877 75,159 281,036 291,043
Deposits payable 5,082,062 -5,082,062 -5,082,062 6,672,963
Unearned revenue 11,485,696 -11,485,696 -11,485,696 68,111
Interest payable 554,034 -554,034 -554,034 412,396
Bonds payable, net of unamortized premium - -
Due within one year 3,375,000 -3,375,000 -3,375,000 6,825,000
Due in more than one year 39,508,069 -39,508,069 -39,508,069 31,413,518
Leases Payable - -
Due within one year 5,807 -5,807 -5,807 11,828
Due in more than one year 8,907 -8,907 -8,907 14,837
Subscription-based IT arrangements - -
Due within one year 63,678 -63,678 -63,678 -
Due in more than one year 201,377 -201,377 -201,377 -
Compensated absences payable - -
Due within one year 1,078,634 172,072 1,250,706 13,396 1,264,102 1,284,945
Due in more than one year 292,213 27,030 319,243 6,689 325,932 211,968
Net pension liability: - -
Due in more than one year 13,051,868 1,965,027 15,016,895 107,991 15,124,886 30,589,127
Total OPEB liability - -
Due within one year 51,466 -51,466 -51,466 -
Due in more than one year 768,608 122,015 890,623 10,266 900,889 484,409
Total liabilities 82,796,244 2,792,482 85,588,726 870,536 86,459,262 84,448,829
Deferred inflows of resources:
Deferred inflows of resources related to pensions 12,795,721 2,031,334 14,827,055 34,954 14,862,009 743,770
Deferred inflows of resources related to lease receivable 7,079,410 -7,079,410 -7,079,410 8,436,870
Deferred inflows of resources related to OPEB 91,563 13,624 105,187 1,146 106,333 122,805
Total deferred inflows of resources 19,966,694 2,044,958 22,011,652 36,100 22,047,752 9,303,445
Net position:
Net investments in capital assets 256,950,114 124,845,135 381,795,249 -381,795,249 334,611,498
Restricted for:
Forfeiture and seizure 6,470 -6,470 -6,470 71,032
Public safety 1,891,847 -1,891,847 -1,891,847 -
Debt retirement 9,014,551 -9,014,551 -9,014,551 3,673,413
Fire pension - - - - -1,279,095
Tax increment purposes 3,080,093 -3,080,093 -3,080,093 2,654,163
Ice arena capital projects 64,395 -64,395 -64,395 -
Unrestricted 22,245,673 14,060,628 36,306,301 (733,979) 35,572,322 44,475,746
Total net position 293,253,143 138,905,763 432,158,906 (733,979) 431,424,927 386,764,947
Total liabilities, deferred inflows of resources, and net position $396,016,081 $143,743,203 $539,759,284 $172,657 $539,931,941 $480,517,221
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, 2023
With Comparative Totals For December 31, 2022
Program Revenues
Charges For
Functions/Programs Expenses Services
Primary government:
Governmental activities:
General government $3,300,129 $179,473
Community development 2,526,101 2,579,463
Public safety 16,938,793 1,214,663
Economic development 742,227 630,563
Public works 12,979,642 2,132,108
Culture and recreation 8,927,799 5,344,059
Interest and fiscal charges on long-term debt 1,077,579 -
Total governmental activities 46,492,270 12,080,329
Business-type activities:
Street lights 1,157,388 1,058,036
Cottage Grove EMS 2,425,138 2,191,586
Water operating 5,692,361 4,174,060
Sewer operating 4,342,927 3,574,316
Total business-type activities 13,617,814 10,997,998
Total primary government $60,110,084 $23,078,327
Component unit:
Economic Development Authority $598,647 $12,024
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 2023 2022 Authority
$74,212 $ - ($3,046,444) $ - ($3,046,444) ($3,286,253) $ -
- - 53,362 - 53,362 1,639,467 -
3,107,416 - (12,616,714) - (12,616,714) (11,839,336) -
205,144 - 93,480 - 93,480 980,881 -
271,318 42,257,543 31,681,327 - 31,681,327 28,563,155 -
22,416 1,857,874 (1,703,450) - (1,703,450) (3,360,151) -
- - (1,077,579) - (1,077,579) (931,466) -
3,680,506 44,115,417 13,383,982 - 13,383,982 11,766,297 -
898,433 - 799,081 799,081 576,546 -
551 - - (233,001) (233,001) (917,004) -
67,054 3,399,576 - 1,948,329 1,948,329 5,586,880 -
3,148,094 - 2,379,483 2,379,483 5,158,841 -
67,605 7,446,103 - 4,893,892 4,893,892 10,405,263 -
$3,748,111 $51,561,520 13,383,982 4,893,892 18,277,874 22,171,560 -
$312,500 $ - - - - (274,123)
General revenues:
Property taxes 20,590,413 - 20,590,413 18,804,948 124,955
Franchise taxes 860,203 - 860,203 642,584 -
Aggregate taxes 38,775 - 38,775 33,044 -
Lodging taxes 71,647 - 71,647 - -
Tax increment collections 1,684,566 - 1,684,566 1,750,799 -
Grants and contributions not
restricted to specific programs 72,738 - 72,738 229,638 -
Unrestricted investment earnings 2,567,079 636,750 3,203,829 (2,527,970) 78
Gain on sale of capital assets 9,025 - 9,025 29,658 -
Transfers (14,651,072) 14,651,072 - - -
Total general revenues and transfers 11,243,374 15,287,822 26,531,196 18,962,701 125,033
Change in net position 24,627,356 20,181,714 44,809,070 41,134,261 (149,090)
Net position - beginning 268,625,787 118,724,049 387,349,836 346,215,575 (584,889)
Net position - ending $293,253,143 $138,905,763 $432,158,906 $387,349,836 ($733,979)
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, 2023
With Comparative Totals For December 31, 2022
Debt Service Special Revenue Capital Projects
General Fund
(100)
Closed Debt
Fund (300) Ice Arena (250)
Future
Economic
Development
(286)
Assets
Cash and investments $15,704,399 $2,270,409 $7,580 $3,570,669
Interest receivable 273,424 - 30,951 -
Due from other funds - - - 770,884
Interfund loan receivable - - - 2,058,045
Due from discretely presented component unit - - - 607,260
Due from other governments 260,569 - 33,413 -
Accounts receivable 36,528 - 208,476 -
Lease receivable - - 2,464,128 -
Prepaid items 7,816 - 2,086 -
Inventories - - - -
Taxes receivable - delinquent 102,574 533 - -
Special assessments receivable
Deferred 828 52,469 - -
Delinquent 258 2,082 - -
Special deferred - 6,138 - 3,051,546
Property held for resale - - - 213,400
Total assets $16,386,396 $2,331,631 $2,746,634 $10,271,804
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $253,794 $ - $65,905 $284,636
Salaries and benefits payable 526,033 - 25,774 -
Due to other funds - - 770,884 -
Contracts payable - - - 47,218
Due to other governments 24,589 - 7,778 -
Deposits payable 500 - - -
Unearned revenue 61,250 - - -
Interfund loan payable - - - -
Total liabilities 866,166 - 870,341 331,854
Deferred inflows of resources:
Related to leases - - 2,407,105 -
Unavailable revenue - property taxes 102,574 533 - -
Unavailable revenue - special assessments 1,086 60,689 - 3,051,546
Unavailable revenue - intergovernmental - - - -
Total deferred inflows of resources 103,660 61,222 2,407,105 3,051,546
Fund balances:
Nonspendable 7,816 - 2,086 -
Restricted 1,733,127 - - -
Committed - - - -
Assigned 1,094,500 2,270,409 - 6,888,404
Unassigned 12,581,127 - (532,898) -
Total fund balances 15,416,570 2,270,409 (530,812) 6,888,404
Total liabilities, deferred inflows of
resources, and fund balances $16,386,396 $2,331,631 $2,746,634 $10,271,804
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)
Nonmajor
Governmental
Funds 2023 2022
$ - $6,200,323 $5,225,163 $24,009,971 $56,988,514 $49,401,487
- - - 105,692 410,067 460,039
- - - 433,767 1,204,651 1,656,704
- - - - 2,058,045 756,435
- - - - 607,260 -
311,242 - 7,141,468 122,226 7,868,918 3,696,494
- 9,557 - 1,082,679 1,337,240 1,344,062
- - - 4,855,351 7,319,479 8,537,307
- - - 12,884 22,786 31,996
- - - 83,758 83,758 105,873
- - - 15,550 118,657 112,396
23,280 364,972 - 2,852,257 3,293,806 2,383,466
- - - 4,104 6,444 7,529
30,000 346,161 - 757,527 4,191,372 5,568,566
- - - - 213,400 213,400
$364,522 $6,921,013 $12,366,631 $34,335,766 $85,724,397 $74,275,754
$318,846 $326,833 $1,494,759 $2,106,969 $4,851,742 $4,218,979
- - - 65,024 616,831 565,681
99,239 - - 334,528 1,204,651 1,656,704
250,024 - 434,866 556,392 1,288,500 712,295
2,740 1,578 1,175 16,517 54,377 126,530
- 4,775,030 - 306,532 5,082,062 6,154,373
- - 11,104,446 320,000 11,485,696 68,111
- - - 4,288,045 4,288,045 3,196,435
670,849 5,103,441 13,035,246 7,994,007 28,871,904 16,699,108
- - - 4,672,305 7,079,410 8,436,870
- - - 15,550 118,657 651,958
53,280 711,133 - 3,613,889 7,491,623 7,421,701
311,242 - - - 311,242 311,242
364,522 711,133 - 8,301,744 15,000,932 16,821,771
- - - 96,642 106,544 134,636
- - - 8,699,259 10,432,386 6,811,004
- - - 2,722,525 2,722,525 2,155,025
- 1,106,439 - 10,453,605 21,813,357 22,174,244
(670,849) - (668,615)(3,932,016)6,776,749 9,479,966
(670,849)1,106,439 (668,615)18,040,015 41,851,561 40,754,875
$364,522 $6,921,013 $12,366,631 $34,335,766 $85,724,397 $74,275,754
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 FUNDS
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2023
With Comparative Amounts For The Year Ended December 31, 2022
2023 2022
Total Fund Balances - Governmental Funds $41,851,561 $40,754,875
Amounts reported for governmental activities in the
Statement of Activities (Statement 2) 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 397,366,035 355,906,965
Less accumulated depreciation and amortization (97,100,905) (88,095,154)
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 (41,720,000) (37,190,000)
Unamortized bond premium (1,163,069) (1,048,518)
Net pension liability (12,416,629) (25,438,777)
Lease liability (14,714) (26,665)
Subscription-based IT arrangement liability (265,055) -
Compensated absences payable (1,278,474) (1,198,412)
Total OPEB liability (761,483) (408,310)
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 118,657 651,958
Special assessments 7,491,623 7,421,701
Deferred intergovernmental grants receivable 311,242 311,242
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 fire relief pensions - (500,456)
Deferred inflows of resources related to city pensions (12,590,111) (197,937)
Deferred outflows of resources related to fire relief pensions - 693,509
Deferred inflows of resources related to OPEB (85,021) (98,007)
Deferred outflows of resources related to city pensions 13,198,806 15,484,153
Deferred outflows of resources related to OPEB 499,720 189,354
The Fire Relief Association net pension asset created through contributions
to a defined benefit pension plan which is not recognized in the - 1,279,095
governmental funds.
Governmental funds do not report a liability for accrued interest due
and payable (554,034) (412,396)
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 364,994 547,567
Total net position - governmental activities $293,253,143 $268,625,787
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, 2023
With Comparative Totals For December 31, 2022
Debt Service Special Revenue Capital Projects
General Fund
(100)
Closed Debt
Fund (300) Ice Arena (250)
Future
Economic
Development
(286)
Revenue:
General property taxes $17,546,687 $684 $ - $ -
Franchise taxes - - - -
Aggregate taxes - - - -
Lodging tax - - - -
Tax increment collections - - - -
Special assessments 2,583 86,844 - 981,536
Licenses and permits 2,698,807 - - -
Direct charges to developers - - - -
Intergovernmental 3,094,543 - - -
Charges for services 1,038,595 -1,549,570 -
Rent - - -105
Lease related interest income - - 87,293 -
Fines and forfeitures 148,770 - - -
Investment earnings 572,123 119,866 - 262,338
Interest on interfund loan - - - 20,454
Connection charges - - - -
Park dedication fees - - - -
Refunds and reimbursements - - - -
Donations 85,149 - - 150,000
Miscellaneous 149,888 -20,359 617,313
Total revenues 25,337,145 207,394 1,657,222 2,031,746
Expenditures:
Current:
General government 2,871,443 15,725 - -
Community development 2,444,734 - - -
Public safety 11,488,879 - - -
Public works 3,002,297 - - -
Culture and recreation 2,951,793 -1,323,696 -
Economic development - - - 318,821
Capital outlay:
General government - - - -
Public safety 616,373 - - -
Public works - - - 682,764
Culture and recreation - - 74,386 -
Debt service:
Principal 32,679 - - -
Interest and other charges 527 - - -
Total expenditures 23,408,725 15,725 1,398,082 1,001,585
Excess of revenues over (under) expenditures 1,928,420 191,669 259,140 1,030,161
Other financing sources (uses):
Proceeds from sale of capital assets - - - -
Subscription-based IT arrangements issued 97,377 - - -
Bond issuance - - - -
Bond premium - - - -
Leases issued - - - -
Payments to refunded bond escrow agent - - - -
Transfers in 627,386 10,605 - -
Transfers out (550,716)(250,000)(200,000) -
Total other financing sources (uses)174,047 (239,395)(200,000) -
Net change in fund balances 2,102,467 (47,726)59,140 1,030,161
Fund Balances:
Beginning of year 13,314,103 2,318,135 (589,952)5,858,243
End of year $15,416,570 $2,270,409 ($530,812)$6,888,404
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)
Nonmajor
Governmental
Funds 2023 2022
$ - $ - $ - $3,036,781 $20,584,152 $18,257,259
- - - 860,203 860,203 642,584
- - - 38,775 38,775 33,044
- - - 71,647 71,647 -
- - - 1,684,566 1,684,566 1,750,799
6,103 39,992 - 1,085,319 2,202,377 864,104
- - - - 2,698,807 4,386,820
- 134,083 - 34,624 168,707 26,081
7,172,750 8,382 16,779,871 1,393,937 28,449,483 14,947,235
- - - 4,909,934 7,498,099 7,326,861
- - - 542,532 542,637 711,091
- - - 185,184 272,477 -
- - - 184,480 333,250 178,449
46,560 72,696 1,349 1,199,216 2,274,148 (2,010,736)
- - - - 20,454 16,533
- - - 1,784,257 1,784,257 4,110,942
- - - 767,094 767,094 1,144,364
- - - 104 104 806
- - - 131,924 367,073 196,893
- - - 9,635 797,195 1,858,357
7,225,413 255,153 16,781,220 17,920,212 71,415,505 54,441,486
- - - 17,185 2,904,353 3,033,636
- - - - 2,444,734 2,581,927
- - - 957,130 12,446,009 10,928,197
61,376 18,218 1,248,000 1,565,313 5,895,204 6,503,285
- 41,903 - 2,964,879 7,282,271 6,909,315
- - - 423,406 742,227 864,371
- - - 120,173 120,173 38,240
- - - 238,406 854,779 504,600
8,266,315 216,592 16,080,462 8,473,518 33,719,651 18,519,859
- - - 9,439,065 9,513,451 3,519,560
- - - 3,335,000 3,367,679 2,961,575
- - - 1,141,250 1,141,777 1,121,359
8,327,691 276,713 17,328,462 28,675,325 80,432,308 57,485,924
(1,102,278) (21,560) (547,242) (10,755,113) (9,016,803) (3,044,438)
- - - 9,025 9,025 9,687
- - - 238,406 335,783 -
- - - 7,815,000 7,815,000 -
- - - 320,387 320,387 -
- - - - - 38,240
- - - - - (3,875,000)
- - - 2,502,928 3,140,919 3,840,551
- - - (506,909) (1,507,625) (2,639,290)
- - - 10,378,837 10,113,489 (2,625,812)
(1,102,278) (21,560) (547,242) (376,276) 1,096,686 (5,670,250)
431,429 1,127,999 (121,373) 18,416,291 40,754,875 46,425,125
($670,849) $1,106,439 ($668,615) $18,040,015 $41,851,561 $40,754,875
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
For The Year Ended December 31, 2023
With Comparative Amounts For The Year Ended December 31, 2022
2023 2022
Total net change in fund balances - governmental funds (Statement 5) $1,096,686 ($5,670,250)
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 42,892,284 22,263,860
Developer contributed assets 14,787,928 15,704,910
Depreciation and amortization expense (8,491,528) (7,596,917)
Loss on disposal of capital assets (449,232)
Assets contributed to business-type activities (16,286,133) (7,270,329)
Compensated absences are recognized as paid in the governmental funds but (80,062) (148,521)
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). (29,821) (31,019)
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 3,367,679 6,836,575
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 (141,638) 69,668
Amortization of bond discounts and premiums 205,836 120,712
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 (8,150,783) (38,240)
(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 (320,387) -
Governmental funds recognized pension contributions as expenditures at the time
of payment whereas the Statement of Activities (Statement 2) factors in items related (3,127,521) (1,191,816)
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 6,261 547,689
Special assessments (469,640) 3,032,108
Loans and grants receivable - (745,175)
Internal service funds are used by management to charge the cost of insurance to
individual funds. This amount is net revenue (loss) attributable to governmental funds. (182,573) (738,727)
Change in net position of governmental activities (Statement 2) $24,627,356 $25,144,528
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, 2023
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 $373,381 $ - $7,608,243 $2,996,218 $10,977,842 $307,886
Accounts receivable 208,064 1,581,279 618,973 517,254 2,925,570 7,225
Due from other funds - - 824,376 - 824,376 -
Due from other governments - - 51,834 21,196 73,030 52,230
Inventories - - - - - 218,928
Prepaid items - 9,254 2,645 229,381 241,280 391,173
Total current assets 581,445 1,590,533 9,106,071 3,764,049 15,042,098 977,442
Noncurrent assets:
Interfund loan receivable - - - 2,230,000 2,230,000 -
Capital assets:
Land and land improvements - - 2,760,015 154,785 2,914,800 424,665
Buildings and improvements - - 12,447,537 - 12,447,537 928,870
Equipment and furniture - - - - - 70,127
Machinery and equipment 109,567 992,265 2,882,415 372,008 4,356,255 489,092
Other improvements 11,893,246 - - - 11,893,246 -
Construction in progress - - 1,024,372 - 1,024,372
Water and sewer lines - - 79,619,100 53,634,925 133,254,025 -
Total capital assets 12,002,813 992,265 98,733,439 54,161,718 165,890,235 1,912,754
Accumulated depreciation (3,979,966) (586,988) (24,708,356) (11,769,790) (41,045,100) (1,066,432)
Net capital assets 8,022,847 405,277 74,025,083 42,391,928 124,845,135 846,322
Total noncurrent assets 8,022,847 405,277 74,025,083 44,621,928 127,075,135 846,322
Total assets 8,604,292 1,995,810 83,131,154 48,385,977 142,117,233 1,823,764
Deferred outflows of resources:
Deferred outflows of resources related to pensions 23,719 1,901,853 164,052 41,507 2,131,131 197,653
Deferred outflows of resources related to OPEB 4,794 37,834 29,434 8,010 80,072 38,450
Total deferred outflows of resources 28,513 1,939,687 193,486 49,517 2,211,203 236,103
Total assets and deferred outflows of resources $8,632,805 $3,935,497 $83,324,640 $48,435,494 $144,328,436 $2,059,867
Liabilities
Current liabilities:
Accounts payable 94,818 12,183 113,912 18,806 239,719 414,972
Salaries payable 6,015 66,112 37,447 9,107 118,681 38,841
Due to other funds - 188,852 - - 188,852 635,524
Due to other governments (370) 9,671 82,029 56,608 147,938 3,562
Compensated absences payable 9,808 77,225 75,112 9,927 172,072 67,483
Total current liabilities 110,271 354,043 308,500 94,448 867,262 1,160,382
Noncurrent liabilities:
Compensated absences payable 488 8,431 16,864 1,247 27,030 24,890
Net pension liability 76,229 1,228,150 527,248 133,400 1,965,027 635,239
OPEB liability 7,305 57,652 44,852 12,206 122,015 58,591
Total noncurrent liabilities 84,022 1,294,233 588,964 146,853 2,114,072 718,720
Total liabilities 194,293 1,648,276 897,464 241,301 2,981,334 1,879,102
Deferred inflows of resources:
Deferred inflows of resources related to pensions 24,673 1,792,827 170,656 43,178 2,031,334 205,610
Deferred inflows of resources related to OPEB 816 6,437 5,008 1,363 13,624 6,542
Total deferred inflows of resources 25,489 1,799,264 175,664 44,541 2,044,958 212,152
Net position:
Net investment in capital assets 8,022,847 405,277 74,025,083 42,391,928 124,845,135 846,322
Unrestricted 390,176 82,680 8,226,429 5,757,724 14,457,009 (877,709)
Total net position $8,413,023 $487,957 $82,251,512 $48,149,652 $139,302,144 ($31,387)
Total liabilities, deferred inflows
of resources, and net position $8,632,805 $3,935,497 $83,324,640 $48,435,494 $144,328,436 $2,059,867
Net position reported above $139,302,144
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.(396,381)
Net position of business-type activities (Statement 1)$138,905,763
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, 2023
Governmental
Cottage Grove Activities -
Street Light EMS Fund Water Sewer Internal
Fund (630) (660) Operating (610) Operating (620)Total Service Funds
Operating revenue:
Charges for services - user fees $972,404 $2,184,282 $3,973,360 $3,600,456 $10,730,502 $6,615,391
Water meter/street light material sales 67,600 - 139,133 - $206,733 -
Special assessments - - - 2,953 2,953 -
Insurance refunds and reimbursements - - - - - 112,014
Total operating revenues 1,040,004 2,184,282 4,112,493 3,603,409 10,940,188 6,727,405
Operating expenses:
Personal services 163,382 1,899,148 1,201,799 253,328 3,517,657 4,128,692
Commodities 100,745 80,965 170,696 13,164 365,570 860,241
Commodities - items for sale 115,505 - - - 115,505 -
Contractual services 549,792 373,068 1,480,587 473,289 2,876,736 1,957,797
Disposal - contractual services - MCES - - - 2,647,617 2,647,617 -
Claims - - - - - 208,094
Depreciation 219,295 83,168 2,843,232 946,004 4,091,699 38,322
Total operating expenses 1,148,719 2,436,349 5,696,314 4,333,402 13,614,784 7,193,146
Operating income (loss) (108,715) (252,067) (1,583,821) (729,993) (2,674,596) (465,741)
Nonoperating revenues (expenses):
Investment earnings 20,782 - 440,954 151,664 613,400 22,293
Interest on interfund debt - - - 23,350 23,350 52,230
Intergovernmental grants - 551 67,054 - 67,605 -
Rent - - 2,700 - 2,700 -
Miscellaneous 18,032 7,304 58,867 (29,093) 55,110 203,848
Total nonoperating revenues (expenses) 38,814 7,855 569,575 145,921 762,165 278,371
Income (loss) before capital
contributions and transfers (69,901) (244,212) (1,014,246) (584,072) (1,912,431) (187,370)
Capital contributions 1,036,781 - 17,027,621 5,667,834 23,732,236 -
Transfers in - - - - - 1,767
Transfers out (134,027) (100,800) (953,493) (446,741) (1,635,061) -
Change in net position 832,853 (345,012) 15,059,882 4,637,021 20,184,744 (185,603)
Net position
Beginning of year 7,580,170 832,969 67,191,630 43,512,631 119,117,400 154,216
End of year $8,413,023 $487,957 $82,251,512 $48,149,652 $139,302,144 ($31,387)
Change in net position reported above $20,184,744
Adjustment to reflect the consolidation of internal service fund activity
related to enterprise funds.(3,030)
Change in net position of business-type activities (Statement 2)$20,181,714
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, 2023
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 $1,016,329 $2,520,424 $4,005,770 $3,633,632 $11,176,155 $6,573,422
Receipts from insurance refunds and reimbursements - - - - - 112,014
Payments to suppliers (716,451) (462,094) (1,615,146) (3,104,215) (5,897,906) (2,797,553)
Payments to employees (157,749) (1,696,605) (1,050,487) (270,705) (3,175,546) (4,098,021)
Miscellaneous revenue 18,032 7,304 61,567 (29,093) $57,810 203,848
Net cash flows - operating activities 160,161 369,029 1,401,704 229,619 2,160,513 (6,290)
Cash flows - noncapital financing activities:
Advances to/from other Funds - (268,780) 482,054 210,000 423,274 (213,274)
Intergovernmental revenue - 551 67,054 - 67,605 52,230
Transfer from other Funds - - - - - 1,767
Transfer to other Funds (134,027) (100,800) (953,493) (446,741) (1,635,061) -
Net cash flows - noncapital financing activities (134,027) (369,029) (404,385) (236,741) (1,144,182) (159,277)
Cash flows - capital related financing activities:
Acquisition of capital assets - - (1,024,372) - (1,024,372) -
Net cash flows - capital related financing activities - - (1,024,372) - (1,024,372) -
Cash flows - investing activities:
Interest and dividends received 20,782 - 440,954 151,664 613,400 22,293
Interest on interfund loan - - - 23,350 23,350 -
Net cash flows - investing activities 20,782 - 440,954 175,014 636,750 22,293
Net change in cash and cash equivalents 46,916 0 413,901 167,892 628,709 (143,274)
Cash and cash equivalents
January 1 326,465 - 7,194,342 2,828,326 10,349,133 451,160
December 31 $373,381 $ - $7,608,243 $2,996,218 $10,977,842 $307,886
Reconciliation of operating income (loss) to net cash
flows - operating activities:
Operating income (loss) ($108,715) ($252,067) ($1,583,821) ($729,993) ($2,674,596) ($465,741)
Adjustments to reconcile operating income (loss)
to income (loss) to net cash net cash flows - operating activities
Depreciation expense 219,295 83,168 2,843,232 946,004 4,091,699 38,322
Miscellaneous revenue 18,032 7,304 61,567 (29,093) 57,810 203,848
Pension expense (340) 198,363 109,745 (6,690) 301,078 22,066
OPEB expense 1,272 10,728 9,990 1,521 23,511 10,268
Changes in assets and liabilities:
Decrease (increase) in accounts receivables (23,675) 336,142 (96,022) 32,456 248,901 1,488
Decrease (increase) in due from other governments - - (10,701) (2,233) (12,934) (43,457)
Decrease (increase) in inventories - - - - - (46,733)
Decrease (increase) in prepaid items - (8,344) (90) (8,746) (17,180) 176,889
Increase (decrease) in accounts payable 49,591 (242) 16,541 (10,602) 55,288 96,774
Increase (decrease) in salaries payable 1,364 (6,535) 11,305 1,135 7,269 (3,033)
Increase (decrease) in due to other governments - 525 19,686 49,203 69,414 1,649
Increase (decrease) in compensated absences payable 3,337 (13) 20,272 (13,343) 10,253 1,370
Total adjustments 268,876 621,096 2,985,525 959,612 4,835,109 459,451
Net cash flows - operating activities $160,161 $369,029 $1,401,704 $229,619 $2,160,513 ($6,290)
Noncash investing, capital and financing activities:
Financing activities:
Capital asset contributions from governmental activities $138,348 $ - $13,628,045 $2,519,740 $16,286,133 $ -
Capital asset contributions from developers 898,433 3,399,576 3,148,094 7,446,103 -
Total noncash activities $1,036,781 $ - $17,027,621 $5,667,834 $23,732,236 $ -
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, 2023
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Cottage Grove was incorporated in 1974 and operates under the State of Minnesota Statutory Plan A
form of government. The governing body consist of a five-member City Council elected by voters of the City.
The financial statements of the City of Cottage Grove have been prepared in conformity with generally accepted
accounting principles in the United States of America, as applied to governmental units by the Governmental
Accounting Standards Board (GASB). The following is a summary of the significant accounting policies.
A. FINANCIAL REPORTING ENTITY
As required by generally accepted accounting principles, the financial statements of the reporting entity
include those of the City of Cottage Grove (the primary government) and its component unit. The
component unit discussed below is included in the City's reporting entity because of the significance of its
operational and financial relationship with the City.
Component Unit
The Economic Development Authority (EDA) is considered a component unit of the City because
the Council appoints the members of the governing authority and because the EDA is in a
relationship of financial benefits or burden to the City. It is governed by a board which is made up
of two City council members and five other members. The EDA provides services to the City and
to potential future business owners within the City. The financial position and results of operations
of the EDA component unit is discretely presented in the primary government's basic financial
statements. The EDA is reported in a separate column to emphasize that it is legally separate from
the City. The component unit activity is reported on the modified accrual basis of accounting.
Separate financial statements 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 Gove. 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 $110,670 for
the year ended December 31, 2023. 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
49
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
identifiable with a specific function or business-type activity. Program revenues include: 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, service or privileges provided
by a given function or business-type activity and 2) grants and contributions that are restricted to meeting
the operational or capital requirements of a particular function or business-type activity. Taxes and other
items not included in program revenues are reported instead as general revenues. Separate financial
statements are provided for governmental funds and proprietary funds. Major individual governmental
funds and major individual enterprise funds are reported as separate columns in the fund financial
statements.
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.
Future Economic Development Capital Project Fund – This fund accounts for the receipt and use
of monies for economic development purposes.
50
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
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.
3M Settlement – MPCA Capital Projects Fund – This fund accounts for funds and expenditures
related to this agreement.
The government reports the following major proprietary funds:
Street Light Fund – This fund accounts for customer street light and service charges which are
used to finance street light operating expenses.
Cottage Grove EMS Fund – This fund accounts for the operation of the Cottage Grove ambulance
service that serves the cities of Cottage Grove, Newport, Saint Paul Park, and Grey Cloud Island.
Water Operating Fund – This fund accounts for customer water service charges which are used to
finance water operating expenses.
Sewer Operating Fund – This fund accounts for customer sewer service charges which are used to
finance sewer operating expenses.
Additionally, the government reports the following fund type:
Internal service funds account for the City's self-insurance, fleet maintenance, and information
services provided to other departments of the government on a cost reimbursement basis.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial
statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures,
or expenses if they involved external organizations, such as buying goods and services or payments in lieu
of taxes, are similarity treated when they involve other funds of the City of Cottage Grove. Elimination of
these charges would distort the direct costs and program revenues reported for the various functions
concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods services, or
privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including
special assessments. Internally dedicated resources are reported as general revenues rather than as program
revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operations. The principal operating revenue of the
water, sewer, ambulance, and street light enterprise funds are charges to customers for sales and services.
The ambulance fund operating revenues are net of write offs mandated by various government agencies
(including Medicare and Medicaid). Operating expenses for enterprise funds include the cost of sales and
services, administrative expenses, and depreciation on capital assets. All revenues and expenses not
meeting this definition are reported as nonoperating revenues and expenses.
51
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted
resources first, and then unrestricted resources as needed.
D. BUDGETS
Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles. Budgeted
amounts are reported as originally adopted, and as amended by the City Council. Individual amendments
were not material in relation to the original appropriations which were adjusted. Budgeted expenditure
appropriations can be carried forward to the next budget year subject to City Council approval.
E. LEGAL COMPLIANCE – BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
1. The City Administrator submits to the City Council a proposed operating budget for the fiscal year
commencing the following January 1. The operating budget includes proposed expenditures and
the means of financing them.
2. The City Council reviews the proposed budget and makes appropriate changes. Per statute, public
meetings are held to receive taxpayer comments.
3. The budget is legally enacted through passage of a resolution on a departmental basis and can be
expended by each department based upon detailed budget estimates for individual expenditure
accounts.
4. The City Administrator is authorized to transfer appropriations within any department budget up
to $2,500. Additional interdepartmental or interfund appropriations and deletions are authorized
by the City Council with expenditure reductions, fund (contingency) reserves or additional
revenues. The City Council may authorize transfers of budgeted amounts between City funds.
5. Formal budgetary integration is employed as a management control device during the year for the
General Fund, 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 expenditure category level (i.e., personal services,
commodities, contractual services, and capital outlay) within each activity. All amounts over
budget have been approved by the City Council through the disbursement approval process.
52
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
The following is a listing of expenditure categories that exceed budget appropriations for major and
nonmajor funds:
Final Amount Over
Budget Actual Budget
Major Funds:
General Fund $23,069,775 $23,408,725 $338,950
Ice Arena 1,115,830 1,398,082 282,252
Nonmajor Funds:
Recycling $57,040 $61,927 4,887
Forfeitures/seizures 30,980 82,419 51,439
Golf course 2,603,220 5,036,125 2,432,905
Street sealcoating 644,720 744,426 99,706
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, 2023, are planned to be eliminated in 2024. 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."
53
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Property taxes, special assessments, and ambulance receivables have been reported net of estimated
uncollectible accounts (see Note 1 H, I and L). Because utility bills are considered liens on property, no
estimated uncollectible amounts are established. Uncollectible amounts are not material for other
receivables and have not been reported.
H. PROPERTY TAX REVENUE RECOGNITION
The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment
date) of each year for collection in the following year. The County is responsible for billing and collecting
all property taxes for itself, the City, the local school district, and other taxing authorities. Such taxes
become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are
payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are
payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and
remitted to the City on or before July 7 and December 2 of the same year. Delinquent collections for
November and December are received the following January. The City has no ability to enforce payment of
property taxes by property owners; the County possesses this authority.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible
property taxes are not material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
The City recognizes property tax revenue when it becomes both measurable and available to finance
expenditures of the current period. In practice, current and delinquent taxes received by the City in July,
December and January are recognized as revenue for the current year. Taxes collected by the County by
December 31 (remitted to the City 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.
54
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
GOVERNMENTAL FUND FINANCIAL STATEMENTS
Revenue from special assessments is recognized by the City when it becomes measurable and available to
finance expenditures of the current fiscal period. In practice, current and delinquent special assessments
received by the City are recognized as revenue for the current year. Special assessments that are collected
by the County by December 31 (remitted to the City the following January) are also recognized as revenue
for the current year. All remaining delinquent, deferred, and special deferred assessments receivable in
governmental funds are completely offset by deferred inflows of resources.
J. INVENTORIES
Inventories are stated at cost, which approximates market, using the first-in, first-out (FIFO) method and
consist of items for resale, expendable supplies, and vehicle repair parts. The cost of such inventories is
recorded as expenditures/expenses when consumed rather than when purchased in both government-wide
and fund financial statements.
K. PREPAID ITEMS
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as
prepaid items in both government-wide and fund financial statements. The cost of prepaid items are
recorded as expenditures/expenses when consumed rather than when purchased.
L. ALLOWANCE FOR UNCOLLECTIBLE
The City directly bills for individuals for ambulance services. The City reserves an amount as uncollectible
based on historical collection rates. The amounts of the estimated uncollectible ambulance billings to
individuals as of December 31, 2023, were $572,000.
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.
55
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Capital assets not being depreciated include land, easements, and construction in progress. Property, plant,
and equipment of the primary government, as well as the component units, is depreciated using the straight-
line method over the following estimated useful lives:
Assets Years
Buildings and improvements 20 - 50
Equipment and furniture 3 - 10
Machinery and equipment 5 - 20
Other improvements 5 - 20
Streets 50
Storm sewers 50
Sidewalks 50
Trails 20
Street lights 50
Water and sewer lines 50
Capital assets of the water and sewer utility operations include the water distribution system and sewage
collection system. These systems have been wholly (or substantially) financed by non-operating funds
(special assessments, general taxes, federal and state grants, and other sources) and contributed to the sewer
and water operating funds. City policy is to finance these assets by the sources indicated rather than by user
charges. Accordingly, the water and sewer user rates are not established at levels sufficient to cover
depreciation on these assets.
O. DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
In addition to liabilities, the statement of financial position and Fund Financial statements will sometimes
report a separate section for deferred inflows of resources. This separate financial statement element
represents an acquisition of net 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. Annual Leave accruals vary from 18 to 26 days per
year.
56
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
As benefits accrue to employees, the accumulated leave amounts are reported as an expense and liability in
the proprietary fund financial statements. A liability for these amounts is reported in governmental funds
only if they have matured, for example, as a result of employee resignations and retirements. In accordance
with the provisions of GASB 16, Accounting for Compensated Absences, no liability is recorded for non-
vesting accumulating rights to receive accumulated leave benefits. However, a liability is recognized for
that portion of accumulating leave benefits that is vested as severance pay.
Q. LONG-TERM OBLIGATIONS
In the government-wide financial statements and proprietary fund types in the fund financial statements,
long-term debt, and other long-term obligations are reported as liabilities in the applicable governmental
activities, business-type activities, or proprietary fund type Statement of Net Position. Bond premiums are
deferred and amortized over the life of the bonds.
R. PENSIONS
For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension
expense, information about the fiduciary net position of the Public Employees Retirement Association
(PERA), and additions to/deductions from PERA's fiduciary net position have been determined on the same
basis as they are reported by PERA except that PERA's fiscal year end is June 30. For this purpose, plan
contributions are recognized as of employer payroll paid dates and benefit payments and refunds are
recognized when due and payable in accordance with the benefit terms. Investments are reported at fair
value.
S. FUND BALANCE
In the fund financial statements, governmental funds report fund balances in classifications that disclose
constraints for which amounts in those funds can be spent. These classifications are as follows:
Nonspendable – Amounts that cannot be spent because they are not in spendable form, such as
prepaid items and inventory.
Restricted – Amounts related to externally imposed constraints established by creditors, grantors,
or contributors; or constraints imposed by state statutory provisions.
Committed – Amounts constrained for specific purposes that are internal imposed by formal action
(resolution) of the City Council. Committed amounts cannot be used for any other purpose unless
the Council modifies or rescinds the commitment by resolution.
Assigned – Amounts constrained for specific purposes that are internally imposed. The Council
has adopted a fund balance policy which delegates the authority to assign fund balances to the City
Administrator and/or Finance Director.
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.
57
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
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.
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, 2023, all of the deposits were
insured or collateralized by securities held by the City or its agent in the City's name.
58
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
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.
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 City will not invest in:
Reverse purchase agreements
Future contracts
Options
Derivatives
59
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
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 $9,580,372 $4,278,562 $5,301,810 $ -
Freddie Mac - FHLMC AA+/Aaa 2,929,621 - 2,929,621 -
Federal Farm Credit Bank - FFCB AA+/Aaa 1,225,204 - 1,225,204 -
Federal National Mortgage Association - FNMA AA+/Aaa 1,464,180 996,720 467,460 -
U.S. Treasuries AA+/Aaa 4,146,434 3,201,979 944,455 -
Municipal Obligations NR 15,605,458 4,583,128 11,022,330 -
Money Market Mutual Funds NR 4,194,755 4,194,755 - -
External investment pool - 4M Fund NR 19,564,822 19,564,822 - -
Negotiable CD's NR 9,541,316 4,734,163 4,807,153 -
Total pooled investments $68,252,162 $41,554,129 $26,698,033 $0
Petty cash and change 22,080
Total cash and investments $68,274,242
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 $9,580,372 14%
The City has the following recurring fair value measurements as of December 31, 2023:
$4,146,434 of US Treasuries are valued using quoted market prices (Level 1 inputs).
$40,346,151 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, 2023
Note 3 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2023, was as follows:
Beginning Ending
Balance Increases Decreases Reclassification Balance
Primary Government
Governmental activities:
Capital assets, not being depreciated:
Land $18,060,944 $1,828,458 $ - $ - $19,889,402
Permanent easements 1,157,202 - - - 1,157,202
Construction in progress 15,555,260 16,549,302 (13,724,892) - 18,379,670
Total capital assets, not being depreciated 34,773,406 18,377,760 (13,724,892) - 39,426,274
Capital assets, being depreciated:
Buildings and improvements 63,997,926 4,481,397 - - 68,479,323
Equipment and furniture 1,860,591 - - - 1,860,591
Machinery and equipment 15,161,316 1,078,498 (241,938) - 15,997,876
Other improvements 14,711,585 6,102,748 (33,760) - 20,780,573
Infrastructure:
Streets 166,979,503 13,680,384 (712,855) - 179,947,032
Storm sewers 52,272,788 10,240,662 - - 62,513,450
Sidewalks/trails 8,049,798 768,863 - - 8,818,661
Right-to-use subscription based IT arrangements - 350,338 - - 350,338
Leased equipment 38,239 - - - 38,239
Total capital assets, being depreciated 323,071,746 36,702,890 (988,553)0 358,786,083
Less accumulated depreciation for:
Buildings and improvements 18,864,971 1,782,942 - - 20,647,913
Equipment and furniture 1,626,809 9,810 - - 1,636,619
Machinery and equipment 9,113,466 1,094,697 (241,938) - 9,966,225
Other improvements 5,444,799 756,333 (33,760) - 6,167,372
Infrastructure:
Streets 39,671,686 3,422,741 (263,623) - 42,830,804
Storm sewers 12,359,839 1,146,576 - - 13,506,415
Sidewalks/trails 2,055,230 196,271 - - 2,251,501
Less accumulated amortization for:
Right-to-use subscription based IT arrangements - 70,068 - - 70,068
Leased equipment 11,898 12,090 - - 23,988
Total accumulated depreciation and
amortization 89,148,698 8,491,528 (539,321) - 97,100,905
Total other capital assets being
depreciated, net 233,923,048 28,211,362 (449,232) - 261,685,178
Governmental activities capital assets, net $268,696,454 $46,589,122 ($14,174,124)$0 $301,111,452
61
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
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 - 1,024,372
Total capital assets, not being depreciated 2,874,997 1,024,372 - 3,899,369
Capital assets, being depreciated:
Land improvements 39,803 - - 39,803
Buildings and improvements 7,616,850 4,830,687 - 12,447,537
Machinery and equipment 2,696,357 1,659,898 - 4,356,255
Other improvements 10,856,466 1,036,780 - 11,893,246
Water and sewer lines 117,049,155 16,204,870 - 133,254,025
Total capital assets being depreciated 138,258,631 23,732,235 - 161,990,866
Less accumulated depreciation for:
Land improvements 15,511 794 - 16,305
Buildings and improvements 3,730,920 1,229,699 - 4,960,619
Machinery and equipment 1,814,740 285,716 - 2,100,456
Other improvements 3,641,398 212,405 - 3,853,803
Water and sewer lines 27,750,832 2,363,085 - 30,113,917
Total accumulated depreciation 36,953,401 4,091,699 - 41,045,100
Total capital assets being depreciated - net 101,305,230 19,640,536 - 120,945,766
Business-type activities capital assets - net $104,180,227 $20,664,908 -$ $124,845,135
During the year ended December 31, 2023, the City entered into a right-to-use subscription based IT arrangement.
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.
62
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Depreciation and amortization expense was charged to functions/programs of the City as follows:
Governmental activities:
General government $230,929
Public safety 1,597,567
Public works 5,144,459
Culture and recreation 1,518,573
Total depreciation and amortization expense - governmental activities $8,491,528
Business-type activities:
Street lights $219,295
Cottage Grove EMS 83,168
Water operating 2,843,232
Sewer operating 946,004
Total depreciation expense - business-type activities $4,091,699
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 $487,200 for the year ended December 31, 2023.
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,
2023, 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 $609,263 for the
year ended December 31, 2023.
The net present value of future lease payments has been recorded as a lease receivable and a deferred inflow of
resources, discounted at a 3.58% discount rate. Lease receivable at December 31, 2023, was $7,319,479 and
deferred inflow was $7,079,410. The revenue will be recognized in future years.
63
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Note 5 RECEIVABLES
Significant receivable balances not expected to be collected within one year of are as follows:
Special Lease
Assessments Receivable Total
Major funds:
Ice Arena $ - $2,043,198 $2,043,198
MSA Construction 48,700 - 48,700
Future projects 683,000 - 683,000
Closed Debt Fund 37,700 - 37,700
Future Economic Development 3,051,500 - 3,051,500
Non-major:
Debt Service 2,623,000 - 2,623,000
Capital projects 1,400 4,601,260 4,602,660
Total $6,445,300 $6,644,458 $13,089,758
64
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Note 6 LONG-TERM DEBT
A. GENERAL OBLIGATION DEBT
The City issues general obligation bonds to provide funds for the acquisition and construction of major
capital improvements. The City issues special assessment bonds to finance various improvements and will
be repaid primarily from special assessments levied on the properties benefiting from the improvements.
The reporting entity's long-term debt is segregated between the amounts to be repaid from governmental
activities and amounts to be repaid from business-type activities.
As of December 31, 2023, the governmental long-term debt of the financial reporting entity consisted of
the following:
Interest Issue Maturity Original Principal
Primary Government Rates Date Date Issue Outstanding
Governmental Activities:
General Obligation Tax Increment Bonds:
G.O. Tax Increment Bonds of 2004A 3.00 - 4.65 7/1/2004 2/1/2024 $1,405,000 $290,000
General Obligation Capital Improvement Bonds:
G.O. CIP Bonds of 2017A 2.50 - 3.25 5/11/2017 2/1/2038 9,155,000 7,325,000
G.O. CIP Bonds of 2019A 3.00 - 4.00 2/14/2019 2/1/2040 4,090,000 3,640,000
Total General Obligation Capital Improvement Bonds 13,245,000 10,965,000
G.O. Refunding Bonds of 2016A 2.00 - 3.00 1/28/2016 2/1/2027 4,660,000 1,505,000
Equipment Certificate 2019B 3.00 2/14/2019 2/1/2029 2,845,000 1,805,000
Special Assessment Bonds with Government Commitment:
G.O. Improvement Bonds of 2015A 2.50 - 3.00 5/27/2015 2/1/2031 5,700,000 3,190,000
G.O. Improvement Bonds of 2016B 2.00 - 2.10 11/16/2016 2/1/2033 4,275,000 2,740,000
G.O. Improvement Bonds of 2018A 3.00 6/26/2018 2/1/2035 7,620,000 6,355,000
G.O. Improvement Bonds of 2021A 1.65 - 2.00 6/10/2021 2/1/2037 3,955,000 3,725,000
G.O. Improvement Refunding Bonds of 2021B 1.10 - 2.00 12/9/2021 2/1/2029 3,840,000 3,330,000
Total Special Assessment Bonds 25,390,000 19,340,000
General Obligation Tax Abatement Bonds:
G.O. Tax Abatement Bonds of 2023A 3.60 - 4.00 5/9/2023 2/1/2044 7,815,000 7,815,000
Bond premium - 1,163,069
Total Governmental Activities Bonds 55,360,000 42,883,069
Lease Liability 14,714
Subscription Liability 265,055
Compensated absences payable 1,370,847
Total - governmental activities $55,360,000 44,533,685
Business-Type Activities:
Compensated absences payable 199,102
Total - primary government 44,732,787
Component Unit - EDA
Compensated absences payable 20,085
Total indebtedness - component unit $20,085
65
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
B. MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for general obligation bonds are as follows:
Year Ending
December 31, Principal Interest Principal Interest Principal Interest
2024 290,000 6,743 1,880,000 430,243 365,000 28,275
2025 - - 1,915,000 383,893 375,000 19,050
2026 - - 1,955,000 337,568 380,000 11,500
2027 - - 1,990,000 291,293 385,000 3,850
2028 - - 2,025,000 246,356 - -
2029 - 2033 - - 7,205,000 645,957 - -
2034 - 2038 - - 2,370,000 74,341 - -
Total $290,000 $6,743 $19,340,000 $2,409,651 $1,505,000 $62,675
Year Ending
December 31, Principal Interest Principal Interest Principal Interest
2024 560,000 322,059 280,000 49,950 5,807 404
2025 580,000 303,309 285,000 41,475 3,870 256
2026 600,000 283,884 295,000 32,775 4,011 115
2027 615,000 264,971 305,000 23,775 1,026 6
2028 640,000 247,459 315,000 14,475
2029 - 2033 3,450,000 961,039 325,000 4,875 - -
2034 - 2038 3,980,000 410,715 - - - -
2039 - 2043 540,000 18,294 - - - -
2044 - 2048 - - - - - -
Total $10,965,000 $2,811,730 $1,805,000 $167,325 $14,714 $781
G.O. Tax Increment Bonds
Governmental Activities
Special Assessment Bonds
Governmental Activities
Governmental Activities Governmental Activities Governmental Activities
Governmental Activities
G.O. Refunding Bonds
G.O. CIP Bonds Equipment Certificates Lease Liability
Year Ending
December 31, Principal Interest Principal Interest
2024 - 379,340 63,678 7,050
2025 335,000 302,265 65,371 5,357
2026 345,000 288,665 67,110 3,618
2027 355,000 274,665 68,896 1,833
2028 365,000 260,265
2029 - 2033 1,995,000 1,070,325 - -
2034 - 2038 2,325,000 642,263 - -
2039 - 2043 1,750,000 230,800 - -
2044 - 2048 345,000 6,900 - -
Total $7,815,000 $3,455,488 $265,055 $17,858
SBITA Liability
Governmental Activities
G.O. Improvement & Abatement
Governmental Activities
66
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. CHANGES IN LONG-TERM LIABILITIES
Beginning Ending Due Within
Primary Government Balance Additions Retirements Balance One Year
Governmental Activities:
Bonds payable:
General obligation bonds $13,935,000 $7,815,000 $1,175,000 $20,575,000 $1,215,000
Equipment certificate 2,075,000 - 270,000 1,805,000 280,000
Special assessment bonds 21,180,000 - 1,840,000 19,340,000 1,880,000
Bond premiums 1,048,518 320,387 205,836 1,163,069 -
Total bonds payable 38,238,518 8,135,387 3,490,836 42,883,069 3,375,000
Lease liability 26,665 - 11,951 14,714 5,807
Subscription liability - 335,783 70,728 265,055 63,678
Compensated absences payable 1,289,415 1,297,258 1,215,826 1,370,847 1,078,634
Total governmental activities 39,554,598 9,768,428 4,789,341 44,533,685 4,523,119
Business Type Activities:
Compensated absences payable 188,849 259,423 249,170 199,102 172,072
Total primary government $39,743,447 $10,027,851 $5,038,511 $44,732,787 $4,695,191
Component Units:
Economic Development Authority:
Compensated absences payable $18,649 $17,413 $15,977 $20,085 $13,396
For the governmental activities, compensated absences are generally liquidated by the General Fund.
All long-term bonded indebtedness outstanding at December 31, 2023, is backed by the full faith and credit
of the City, including special assessment and revenue bond issues. Delinquent assessments receivable at
December 31, 2023, totaled $6,444.
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). PERA's defined
benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters
353 and 356. PERA's defined benefit pension plans are tax qualified plans under Section 401(a) of the
Internal Revenue Code.
1. General Employees Retirement Fund (GERF)
All full-time (with the exception of employees covered by PEPFF) and certain part-time
employees of the City are covered by the General Employees Retirement Fund (GERF). GERF
members belong to the Coordinated Plan. Coordinated Plan members are covered by Social
Security.
67
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
2. Public Employees Police and Fire Fund (PEPFF)
The PEPFF, originally established for police officers and firefighters not covered by a local relief
association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999,
the Police and Fire Plan also covers police officers and firefighters belonging to a local relief
association that elected to merge with and transfer assets and administration to PERA.
B. BENEFITS PROVIDED
PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute
and can only be modified by the state Legislature. Vested, terminated employees who are entitled to
benefits but are not receiving them yet, are bound by the provisions in effect at the time they last terminated
their public service.
1. GERF Benefits
Benefits are based on a member's highest average salary for any five successive years of allowable
service, age, and years of credit at termination of service. Two methods are used to compute
benefits for PERA's Coordinated Plan members. Members hired prior to July 1, 1989, receive the
higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June
30, 1989. Under Method 1, the accrual rate for a Coordinated members is 1.2% for each of the first
10 years of service and 1.7% for each additional year. Under Method 2, the accrual rate for
Coordinated members is 1.7% for all years of service. For members hired prior to July 1, 1989, a
full annuity is available when age plus years of service equal 90 and normal retirement age is 65.
For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social
Security benefits capped at 66.
Benefit increases are provided to benefit recipients each January. Beginning in 2019, 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%. 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 reduced prorated increase. In 2023, legislation repealed the statute delaying increases for
members retiring before full retirement age.
2. PEPFF Benefits
Benefits for PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a
prorated basis from 50% after five years up to 100% after 10 years of credited service. Benefits for
PEPFF members first hired after June 30, 2014, vest on a prorated basis from 50% after ten years
up to 100% after twenty years of credited service. The annuity accrual rate is 3% of average salary
for each year of service. For PEPFF members who were first hired prior to July 1, 1989, a full
annuity is available when age plus years of service equal at least 90.
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 reduced prorated increase.
68
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
C. CONTRIBUTIONS
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates
can only be modified by the state Legislature.
1. GERF Contributions
Coordinated Plan members were required to contribute 6.50% of their annual covered salary in
fiscal year 2023 and the City was required to contribute 7.50% for Coordinated Plan members.
The City's contributions to the GERF for the year ended December 31, 2023, were $735,778. The
City's contributions were equal to the required contributions as set by state statute.
2. PEPFF Contributions
Police and Fire Plan members were required to contribute 11.80% of their annual covered salary in
fiscal year 2023 and the City was required to contribute 17.70% for Police and Fire Plan members.
The City's contributions to the PEPFF for the year ended December 31, 2023, were $1,187,615.
The City's contributions were equal to the required contributions as set by state statute.
D. PENSION COSTS
1. GERF Pension Costs
At December 31, 2023, the City reported a liability of $6,352,385 for its proportionate share of
GERF’s 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 $175,066.
The net pension liability was measured as of June 30, 2023, 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, 2022, through
June 30, 2023, relative to the total employer contributions received from all of PERA's
participating employers. The City's proportionate share was 0.1136% at the end of the
measurement period and 0.1148% for the beginning of the period.
City’s proportionate share of the net pension liability $6,352,385
State of Minnesota’s proportionate share of the net
pension liability associated with the City 175,066
Total $6,527,451
For the year ended December 31, 2023, the City recognized pension expense of $1,243,846 for its
proportionate share of the GERF’s pension expense. In addition, the City recognized an additional
$787 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota's
contribution of $16 million to the GERF.
69
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
At December 31, 2023, the City reported its proportionate share of the GERF’s 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 $208,615 $43,529
Changes in actuarial assumptions 1,023,147 1,741,135
Difference between projected and
actual investment earnings - 227,025
Changes in proportion 360,043 44,413
Contributions paid to PERA
subsequent to the measurement date 384,728 -
Total $1,976,533 $2,056,102
The $384,728 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, 2023. Other amounts reported as deferred
outflows and deferred inflows of resources related to pensions will be recognized in pension
expense as follows:
Year Ending Pension
December 31, Expense
2024 $382,561
2025 (842,562)
2026 133,509
2027 (137,805)
2028 -
Thereafter -
2. PEPFF Pension Costs
At December 31, 2023, the City reported a liability of $8,772,500 for its proportionate share of the
PEPFF’s net pension liability. The net pension liability was measured as of June 30, 2023, 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, 2022, through June 30, 2023, relative to the total employer contributions
received from all of PERA's participating employers. The City's proportionate share was 0.5080%
at the end of the measurement period and 0.4940% for the beginning of the period.
The State of Minnesota also contributed $18 million to PEPFF during the plan fiscal year ended
June 30, 2023. The contribution consisted of $9 million in direct state aid that does meet the
definition of a special funding situation and $9 million in supplemental state aid that does not meet
the definition of a special funding situation. The $9 million direct state aid was paid on October 1,
2022. Thereafter, by October 1 of each year, the State will pay $9 million to the PEPFF 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
70
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Minnesota State 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
$353,388.
City’s proportionate share of the net pension liability $8,772,500
State of Minnesota’s proportionate share of the net
pension liability associated with the City 353,388
Total $9,125,888
The State of Minnesota is included as a non-employer contributing entity in PEPFF Schedule of
Employer Allocations and Schedule of Pension Amounts by Employer (pension allocation
schedules), for the $4.5 million in direct state aid. PEPFF employers need to recognize their
proportionate share of the State of Minnesota's pension expense (and grant revenue) under GASB
68 special funding situation accounting and financial reporting requirements. For the year ended
December 31, 2023, the City recognized pension expense of $2,710,799 for its proportionate share
of the Police and Fire Plan's pension expense. The City recognized an additional ($21,284) as
pension expense (and grant revenue) for its proportionate share of the State of Minnesota's
contribution of $9 million to the PEPFF.
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 $9 million in supplemental state aid. The
City recognized $45,720 for the year ended December 31, 2023, as revenue and an offsetting
reduction of the net pension liability for its proportionate share of the State of Minnesota's on-
behalf contributions to the Police and Fire Fund.
At December 31, 2023, the City reported its proportionate share of the PEPFF’s deferred outflows
of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual economic experience $2,422,403 $ -
Changes in actuarial assumptions 10,203,598 12,335,578
Difference between projected and
actual investment earnings - 452,121
Changes in proportion 339,832 18,209
Contributions paid to PERA
subsequent to the measurement date 618,825 -
Total $13,584,658 $12,805,908
71
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
The $618,825 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, 2024. Other amounts reported as deferred
outflows and inflows of resources related to pensions from the following sources:
Year Ending Pension
December 31, Expense
2024 $492,337
2025 161,740
2026 2,207,863
2027 (558,057)
2028 (2,143,958)
Thereafter -
The net pension liability will be liquidated by the General, Water Operating, Sewer Operating, Street
Light, Cottage Grove EMS, and Internal Service Funds.
E. ACTUARIAL ASSUMPTIONS
The total pension liability in the June 30, 2023, actuarial valuation was determined using an individual
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 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
deemed to be reasonable by the actuary. An investment return of 7.00% was deemed to be within that range
of reasonableness for financial reporting purposes.
Benefit increases after retirement are assumed to be 1.25% for the GERF and 1.00% for the PEPFF.
Salary growth assumptions in the GERF range in annual increments from 10.25% after one year of service
to 3.0% after 27 years of service. In the PEPFF, salary growth assumptions range from 11.75% after one
year of service to 3.0% after 24 years of service.
Mortality rates for GERF are based on the Pub-2010 General Employee Mortality Table. Mortality rates for
PEPFF are based on the Pub-2010 Public Safety Employee Mortality tables. The tables are adjusted slightly
to fit PERA's experience.
Actuarial assumptions for the GERF are reviewed every four years. The most recent four-year experience
study for GERF was completed in 2022. The assumption changes were adopted by the Board and became
effective with the July 1, 2023 actuarial valuation. The most recent four-year experience study for PEPFF
was completed in 2020 and was adopted by the Board and became effective with the July 1, 2021 actuarial
valuation.
72
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
The following changes in actuarial assumptions and plan provisions occurred in 2023:
General Employees Fund
Changes in Actuarial Assumptions:
The investment return assumption and single discount rate were changed from 6.50% to
7.00%.
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.
Police and Fire Fund
Changes in Actuarial Assumptions:
The investment return assumption was changed from 6.50% to 7.00%.
The single discount rate was changed from 5.40% to 7.00%.
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.
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:
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, 2023
F. DISCOUNT RATE
The discount rate used to measure the total pension liability in 2023 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 GERF and PEPFF 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
GERF net pension liability $11,237,879 $6,352,385 $2,333,880
Proportionate share of the
PEPFF net pension liability $17,405,685 $8,772,500 $1,674,866
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 on the Internet at www.mnpera.org.
I. PENSION EXPENSE
Pension expense recognized by the City for the year ended December 31, 2023 is as follows:
GERF $1,244,633
PEPFF 2,689,515
Total $3,934,148
Note 8 DEFINED PENSION PLANS – FIRE RELIEF
A. PLAN DESCRIPTION
The City of Cottage Grove previously participated in the Statewide Volunteer Firefighter Retirement Plan
(Volunteer Firefighter Plan accounted for in the Volunteer Firefighter Fund), an agent multiple-employer
lump-sum defined benefit pension plan administered by the Public Employees Retirement Association of
Minnesota (PERA). The Volunteer Firefighter Plan covered volunteer firefighters of municipal fire
departments that have elected to join the plan. As of December 31, 2023, the City disbanded the plan. All
74
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
remaining resources within the plan were remitted to PERA for distribution to plan participants.
Elimination of the plan resulted in an expense of $1,472,148 reported on the City’s Statement of Activities,
including $297,214 that was recognized as an on-behalf payment made by the State of Minnesota to the
Fire Relief prior to disbanding.
Note 9 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, 2023,
were:
Fund Total
Nonmajor Governmental Funds owed to Sewer Fund $2,230,000
Nonmajor Governmental Funds owed to Future Economic Development Fund 2,058,045
Total $4,288,045
Interfund receivable and payable balances are used for temporary cash deficits. Interfund receivable and payable
balances at December 31, 2023, are as follows:
Fund Total
Ice Arena owed to Future Economic Development Fund $770,884
MSA Construction Fund owed to Completed Construction (Nonmajor) 99,239
Sewer Connection and Area owed to Water Connection and Area (Nonmajor) 334,528
Internal Service Funds owed to Water Operating Fund 635,524
Cottage Grove EMS Fund owed to Water Operating Fund 188,852
Total $2,029,027
Interfund transfers during the year ended December 31, 2023, were as follows:
Closed Nonmajor Internal
General Debt Governmental Service
Fund (100) Fund (300) Funds Funds Total
Transfers out:
General Fund (100) $ - $10,605 $538,344 $1,767 $550,716
Closed Debt Fund (300) - - 250,000 - 250,000
Ice Arena (250) - - 200,000 - 200,000
MSA Construction (520) - - - - -
Nonmajor Governmental Funds 79,486 427,423 - 506,909
Street Light (630) 51,500 82,527 - 134,027
Cottage Grove EMS (660) 100,800 - - 100,800
Water Operating (610) 197,800 755,693 - 953,493
Sewer Operating (620) 197,800 248,941 - 446,741
Total $627,386 $10,605 $2,502,928 $1,767 $3,142,686
Transfers In
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NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Interfund transfers allow the City to allocate financial resources to the funds that receive benefit from services
provided by another fund. All transfers in 2023 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 10 TAX INCREMENT FINANCING
The City has entered into three 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 this agreement comes from
Minnesota Statute 469. The City entered into this agreement for economic development.
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, 2023, the City generated $1,684,566 in tax increment revenue and made
$411,801 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, 2023, the district generated $781,196 of tax increment and $258,170 in payments on the pay
as you go note were made. The balance due on the note at year end was $193,602.
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, 2023, the district generated
$183,824 of tax increment and $132,599 in payments on the pay as you go note were made. The balance
due on the note at year-end was $1,326,025.
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, 2023, the district generated
$26,278 of tax increment and $21,032 in payments on the pay as you go note were made. The balance due
on the note at year-end was $77,670.
Note 11 DEFICIT FUND BALANCES
The City has deficit fund balances at December 31, 2023, as follows:
Amount The deficit fund balances will be resolved through
Major Governmental Funds:
3M Settlement - MPCA (455)$668,615 Future Settlement Proceeds
Ice Arena (250)530,812 Future excess revenues and transfers from other City resources
MSA Construction (520)670,849 Future intergovernmental and special assessment collections
NonMajor Governmental Funds:
Golf Course Fund (255)1,413,802 Future excess revenues and transfers from other City resources
Future Storm Sewer Improvements (585) 169,724 Future excess revenues
Municipal Building Fund (525)2,083,363 Future tax levies
Fund
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CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Note 12 CONTINGENCIES
A. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets,
errors, and omissions and natural disasters for which the City carries commercial insurance policies. The
City retains risk for the deductible portions of the insurance policies. The amount of these deductibles is
considered immaterial to the financial statements.
There were no significant reductions in insurance from the previous year or settlements more than
insurance coverage for any of the past three fiscal years.
Workers compensation coverage is provided through a pooled self-insurance program through the League
of Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is
subject to supplemental assessments as deemed necessary by the LMCIT. The LMCIT reinsures through
Worker's Compensation Reinsurance Association (WCRA) as required by law. For workers compensation,
the City is subject to a $25,000 medical expense deductible. The City's premiums are determined after loss
experience is known. The amount of premium adjustment, if any, is considered immaterial and not
recorded until received or paid.
Property and casualty insurance coverage is provided through a pooled self-insurance program through
LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments
as deemed necessary by the LMCIT.
The City established the Self Insurance Fund in 1986 to account for and finance its uninsured risks of loss
related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees;
and natural disasters. Under this program, the Self Insurance Fund provides coverage for losses up to
$50,000 for each claim (annual aggregate is $100,000). The City purchases commercial insurance for
claims more than coverage provided by the Fund and for any risk of loss not covered. Settled claims have
not exceeded the commercial coverage in any of the past three fiscal years.
This fund is presented as an internal service fund type. All funds of the City participate in the program and
make payments to the Self Insurance Fund based on historical cost information. The claims liability of
$254,229 reported in the Fund at December 31, 2023, 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
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
77
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
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, 2023.
D.TAX INCREMENTS
The City's tax increment districts are subject to review by the State of Minnesota Office of the State
Auditor (OSA). Any disallowed claims or misuse of tax increments could become a liability of the
applicable fund.
Note 13 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 $180 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).
78
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Note 14 FUND BALANCES
At December 31, 2023, the City had various fund balances through legal restriction and City Council authorization.
Fund balance appropriations at December 31, 2023, are shown on the various balance sheets as segregations of the
fund balance. The fund balance classifications for governmental funds are as follows:
Future 3M
General Closed Debt Ice Economic MSA Future Settlement Nonmajor
Fund Fund Arena Development Construction Projects MPCS Governmental
(100)(300)(250)(286)(520) (510, 810) (455) Funds Total
Fund Balances:
Nonspendable:
Prepaid items $7,816 $ - $2,086 $ - $ - $ - $ - $12,884 $22,786
Inventory - - - - - - - 83,758 83,758
Restricted:
Public safety 1,733,127 - - - - - - 158,720 1,891,847
Debt retirement - - - - - - - 5,389,581 5,389,581
Forfeiture and seizure - - - - - - - 6,470 6,470
Tax increment purposes - - - - - - - 3,080,093 3,080,093
Ice arena projects - - - - - - - 64,395 64,395
Committed:
Recycling program - - - - - - - 98,74498,744
Storm water activities - - - - - - - 2,512,423 2,512,423
Convention & visitors bureau - - - - - - - 111,358 111,358
Assigned:
Compensated absences 894,900 - - - - - - - 894,900
Future budgets 194,000 - - - - - - - 194,000
School bus safety 5,600 - - - - - - - 5,600
Debt retirement - 2,270,409 - - - - - - 2,270,409
Future pavement management - - - - - 422,406 - - 422,406
Tree mitigation - - - - - 684,033 - - 684,033
Equipment replacement - - - - - - - 1,622,561 1,622,561
Street sealcoating - - - - - - - 483,944 483,944
Economic development - - - 6,888,404 - - - - 6,888,404
Capital improvements - - - - - - - 8,347,100 8,347,100
Unassigned 12,581,127 - (532,898) - (670,849) - (668,615) (3,932,016) 6,776,749
Total fund balances $15,416,570 $2,270,409 ($530,812) $6,888,404 ($670,849) $1,106,439 ($668,615) $18,040,015 $41,851,561
Major Funds
Note 15 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.
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 2023, the City contributed $59,768 to the plan.
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CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
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, using the
following actuarial assumptions, applied to all periods included in the measurement, unless otherwise
specified:
Discount rate 3.26%
Inflation 2.25%
Healthcare cost trend increases 9.00% initially decreasing to an
ultimate rate of 4.14% by 2040
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 3.26% based on the Bond Buyer 20-Bond
Obligation Index.
F. TOTAL OPEB LIABILITY
The City's total OPEB liability of $952,355 was measured as of December 31, 2023, and was determined
by an actuarial valuation as of January 1, 2023.
80
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Changes in the total OPEB liability are as follows:
Total
OPEB
Liability
Balance at January 1, 2023 $484,409
Changes for the year:
Service cost 20,099
Interest 34,945
Change in assumption 94,700
Difference between expected
and actual experience 377,970
Benefit payments (59,768)
Net Changes 467,946
Balance at December 31, 2023 $952,355
Changes of assumptions and other inputs reflect a change in the discount rate from 3.72% in 2022 to 3.26%
in 2023 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 3.26% as well as
the liability measured using 1% lower and 1% higher than the current discount rate.
1% decrease Current 1% increase
(2.26%) (3.26%) (4.26%)
$1,056,651 $952,355 $863,014
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
(2.26%) (3.26%) (4.26%)
$857,729 $952,355 $1,063,802
Total OPEB Liability
81
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
H. OPEB EXPENSE, DEFERRED OUTFLOWS OF RESOURCES, AND DEFERRED INFLOWS OF
RESOURCES RELATED TO OPEB
For the year ended December 31, 2023, the City recognized OPEB expense of $123,527. At December 31,
2023, 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 $490,942 $55,253
Changes of assumptions and other inputs 134,038 51,079
Total $624,980 $106,332
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
2024 $68,483
2025 68,483
2026 68,861
2027 70,153
2028 67,736
Thereafter 174,932
Note 16 COMMITTED CONTRACTS
At December 31, 2023, the City had commitments of $42,054,262 for uncompleted construction contracts.
82
CITY OF COTTAGE GROVE
NOTES TO FINANCIAL STATEMENTS
December 31, 2023
Note 17 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, 2023, a series of
Industrial Revenue Bonds were outstanding.
Issue Original 12/31/2023 Maturity
Date Issue Balance Date
Commercial Development Revenue Note - ESR, Inc.11/22/2005 $76,500 $7,364 11/22/2025
Commercial Development Revenue Note - ESR, Inc.5/19/2005 853,000 67,702 12/19/2025
Multifamily Housing Note - Legends of Cottage Grove 10/7/2016 18,422,000 17,240,726 5/1/2034
Multifamily Housing Note - Legends of Cottage Grove 10/7/2016 6,328,000 5,963,324 5/1/2034
Total $25,679,500 $23,279,116
Note 18 CHANGE IN ACCOUNTING PRINCIPLE
The City implemented GASB Statement No. 96 – Subscription-Based Information Technology Arrangements,
which resulted in the recording of right-to-use subscription assets and a subscription liability. Because the City
entered into these subscription agreements during 2023, the implementation of this standard had no impact on
beginning balances.
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. 99 Omnibus 2022. The provisions of this Statement contain multiple effective dates, the next
implementation date being for fiscal years beginning after June 15, 2023.
Statement No. 100 Accounting Changes and Error Corrections – an amendment of GASB Statement No. 62.
The provisions of this Statement are effective for fiscal years beginning after June 15, 2023.
Statement No. 101 Compensated Absences. The provisions of this Statement are effective for fiscal years
beginning after June 15, 2023.
Statement No. 102 Certain Risk Disclosures. The provisions of this Statement are effective for fiscal years
beginning after June 15, 2024.
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, 2023
With Comparative Totals For December 31, 2022
2022
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
General property taxes $17,545,270 $17,545,270 $17,546,687 $1,417 $15,210,645
Special assessments 3,000 3,000 2,583 (417)5,621
Licenses and permits:
General government 68,400 68,400 80,963 12,563 69,917
Community development 2,354,500 2,354,500 2,560,881 206,381 4,202,034
Engineering 40,000 40,000 42,163 2,163 100,336
Public safety 20,000 20,000 14,800 (5,200) 14,533
Total licenses and permits 2,482,900 2,482,900 2,698,807 215,907 4,386,820
Intergovernmental revenues:
Federal grants and aids 73,400 73,400 75,894 2,494 43,226
State grants and aids:
Market value homestead credit - - 4,148 4,148 4,440
MSA maintenance - public works 45,000 45,000 49,500 4,500 49,470
Fire relief aid - public safety 206,000 297,000 297,214 214 258,668
Police relief aid - public safety 380,000 2,384,482 2,210,447 (174,035) 432,376
Other - public safety 50,200 50,200 298,535 248,335 83,509
Local:
SRO program - public safety 99,000 99,000 104,564 5,564 98,880
Other - public safety 13,000 13,000 51,187 38,187 14,749
Other - public works 2,500 2,500 3,054 554 2,629
Total intergovernmental 869,100 2,964,582 3,094,543 129,961 987,947
Charges for services:
Investment charge - general government 1,000 1,000 - (1,000) -
Other - general government 19,200 19,200 4,511 (14,689)4,107
Other - community development 21,000 21,000 18,582 (2,418) 95,171
Other - engineering 825,000 825,000 655,343 (169,657) 1,136,057
Other - public safety 51,600 51,600 57,736 6,136 61,974
Other - public works 12,500 12,500 27,648 15,148 20,338
Other - culture and recreation 238,000 238,000 274,775 36,775 248,452
Total charges for services 1,168,300 1,168,300 1,038,595 (129,705) 1,566,099
Fines and forfeitures - public safety 150,000 150,000 148,770 (1,230) 142,770
Investment earnings 125,000 125,000 572,123 447,123 (486,954)
Donations:
General government - - 37,700 37,700 32,600
Public safety - - 38,460 38,460 500
Culture and recreation - - 8,989 8,989 13,793
Total donations - - 85,149 85,149 46,893
Miscellaneous:
General government 32,000 32,000 36,993 4,993 16,312
Public safety 11,000 44,460 85,269 40,809 26,913
Public works 10,000 10,000 22,095 12,095 22,240
Culture and recreation - - 5,531 5,531 265
Total miscellaneous 53,000 86,460 149,888 63,428 65,730
Total revenues 22,396,570 24,525,512 25,337,145 811,633 21,925,571
2023
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, 2023
With Comparative Totals For December 31, 2022
2022
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Expenditures:
General government:
Mayor and city council 106,590 106,590 105,718 872 104,208
Administrative 950,500 847,860 843,576 4,284 880,390
Finance 649,030 649,030 595,774 53,256 602,514
Assessing services 221,800 221,800 235,847 (14,047) 218,239
City clerk/elections 110,600 213,240 129,349 83,891 244,433
Legal 237,000 237,000 276,723 (39,723) 245,633
Community and employee programs 153,300 153,300 142,386 10,914 137,913
Government buildings 473,100 473,100 542,070 (68,970) 578,242
Total general government 2,901,920 2,901,920 2,871,443 30,477 3,011,572
Community development:
Planning and zoning 592,025 592,025 504,754 87,271 669,344
Building inspections 1,362,460 1,362,460 1,392,133 (29,673) 1,435,965
Engineering 587,610 587,610 547,847 39,763 476,618
Total community development 2,542,095 2,542,095 2,444,734 97,361 2,581,927
Public Safety:
Police protection 9,073,300 9,203,760 9,414,432 (210,672) 8,600,414
Fire protection 1,669,220 1,760,220 1,752,124 8,096 1,719,685
Emergency preparedness 98,580 272,935 294,644 (21,709) 115,659
Animal control 29,340 29,340 27,679 1,661 25,790
Total public safety 10,870,440 11,266,255 11,488,879 (222,624) 10,461,548
Public works:
Public works administration 477,110 477,110 523,376 (46,266) 469,022
Streets 1,800,745 1,800,745 1,965,428 (164,683) 1,609,405
Snow and ice control 869,500 869,500 912,863 (43,363) 892,649
Street signs/striping 241,710 241,710 217,003 24,707 212,587
Total public works 3,389,065 3,389,065 3,618,670 (229,605) 3,183,663
Culture and recreation:
Forestry 394,670 394,670 318,024 76,646 341,445
Recreation programs 527,550 527,550 537,915 (10,365) 507,944
Parks maintenance 2,048,220 2,048,220 2,095,854 (47,634) 1,841,218
Total culture and recreation 2,970,440 2,970,440 2,951,793 18,647 2,690,607
Debt service:
Principal - - 32,679 (32,679) -
Interest and other charges - - 527 (527) -
Total debt service - - 33,206 (33,206) -
Total expenditures 22,673,960 23,069,775 23,408,725 (338,950) 21,929,317
Excess of revenues over
(under) expenditures (277,390) 1,455,737 1,928,420 472,683 (3,746)
Other financing sources (uses):
Leases issued - - - - 38,240
Subscription-based IT arrangements issued - - 97,377 97,377 -
Transfers in 687,390 687,390 627,386 (60,004) 575,230
Transfers out (410,000) (410,000) (550,716) (140,716) (400,000)
Total other financing sources (uses)277,390 277,390 174,047 (103,343) 213,470
Net change in fund balances $ - $1,733,127 2,102,467 $369,340 209,724
Fund balances:
Beginning of year 13,314,103 13,104,379
End of year $15,416,570 $13,314,103
Budgeted Amounts
2023
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, 2023
With Comparative Totals For December 31, 2022
2022
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Intergovernmental $57,000 $57,000 $ - ($57,000) $57,000
Charges for services 1,369,500 1,369,500 1,549,570 180,070 1,323,938
Lease related interest income - - 87,293 87,293 -
Contributions and donations - - - - 1,281
Miscellaneous - - 20,359 20,359 22,047
Total revenues 1,426,500 1,426,500 1,657,222 230,722 1,404,266
Expenditures:
Current:
Culture and recreation 1,048,830 1,048,830 1,323,696 (274,866) 1,216,926
Capital outlay:
Culture and recreation 67,000 67,000 74,386 (7,386) -
Total expenditures 1,115,830 1,115,830 1,398,082 (282,252) 1,216,926
Excess of revenues over
(under) expenditures 310,670 310,670 259,140 512,974 187,340
Other financing uses:
Transfer out (200,000) (200,000) (200,000) - (200,000)
Net change in fund balances $110,670 $110,670 59,140 $512,974 (12,660)
Fund balance
Beginning of year (589,952)(577,292)
End of year ($530,812)($589,952)
Budgeted Amounts
2023
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
2023 2022 2021 2020 2019 2018
Total OPEB liability:
Service cost $20,099 $23,980 $25,083 $17,939 $16,325 $14,560
Interest 34,945 12,677 13,939 10,179 15,807 11,794
Differences between expected and actual experience 377,970 (61,716) 227,397 (6,031) (7,934) -
Changes of assumptions 94,702 (59,493) 33,310 13,860 41,447 (14,652)
Benefit payments (59,768) (44,681) (60,592) (29,882) (27,782) (18,651)
Net change in total OPEB liability 467,948 (129,233) 239,137 6,065 37,863 (6,949)
Beginning of year 484,409 613,642 374,505 368,440 330,577 337,526
End of year $952,357 $484,409 $613,642 $374,505 $368,440 $330,577
Covered-employee payroll $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 6.8% 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%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
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%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
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%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
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%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
See accompanying notes to the required supplementary information.
93
CITY OF COTTAGE GROVE
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS -
FIRE RELIEF ASSOCIATION
For The Last Ten Years
**
Fiscal Year Ending and Measurement date December 31, 2023 December 31, 2022 December 31, 2021 December 31, 2020
Total pension liability:
Service cost $ - $110,582 $118,397 $108,515
Interest 241,592 144,923 103,853 111,351
Differences between expected and actual experience - (220,940) 30,166 (160,794)
Changes of assumptions - - - -
Changes in benefit terms - 86,900 580,945 -
Benefit payments (2,748,659) (68,260) (213,833) (174,000)
Net change in total pension liability (2,507,067) 53,205 619,528 (114,928)
Beginning of year 2,507,067 2,453,862 1,834,334 1,988,607
End of year $ - $2,507,067 $2,453,862 $1,873,679
Plan fiduciary net position:
Contributions - employer $ - $ - $ - $ -
State contributions 297,214 260,668 234,524 225,637
Net investment income 241,592 (599,450) 352,396 452,477
Benefit payments (3,706,265) (68,260) (213,833) (174,000)
Administrative expense (1,680) (1,929) (2,126) (2,018)
Other - - - -
Net change in plan fiduciary net position (3,169,139) (408,971) 370,961 502,096
Beginning of year 3,169,139 3,578,110 3,207,149 2,811,575
End of year $ - $3,169,139 $3,578,110 $3,313,671
Net pension liability (asset) - ending (a) - (b) $ - ($662,072) ($1,124,248) ($1,439,992)
Plan fiduciary net position as a percentage of the
total pension liability 0.0% 126.4% 145.8% 176.9%
Covered-employee payroll* NA NA NA NA
Net pension liability as a percentage of covered
employee payroll* NA NA NA NA
Pension benefit per year of service $15,000 $3,800 $3,800 $3,800
Number of plan participants 56 34 31 33
*The Relief Association is comprised of volunteers, therefore there are no payroll expenditures.
** See Footnote 8
GASB 68 was implemented in 2015. Information prior to 2015 is not available.
See accompanying notes to the required supplementary information.
94
Statement 17
December 31, 2019 December 31, 2018 December 31, 2017 December 31, 2016 December 31, 2015 December 31, 2014
$97,985 $102,569 $118,915 $109,062 $79,827 $77,691
115,532 117,070 100,267 85,750 88,550 85,148
(45,681) (12,862) 329,484 - - -
- - - (130,240) 77,611 -
- - - - 139,930 -
(322,109) (133,560)-(295,760)(140,973)(84,321)
(154,273)73,217 548,666 (231,188)244,945 78,518
1,988,607 1,915,390 1,366,724 1,597,912 1,352,967 1,274,449
$1,834,334 $1,988,607 $1,915,390 $1,366,724 $1,597,912 $1,352,967
$ - $ - $2,081 $5,265 $5,329 $5,155
209,430 198,977 192,139 195,271 191,183 177,804
510,329 (113,085)316,265 146,660 (117,497)98,130
(322,109)(133,560)-(295,760)(140,973)(84,321)
(2,155)(3,709)(12,334)(12,139)(15,165)(11,193)
79 - (2,319)210 - (23,403)
395,574 (51,377)495,832 39,507 (77,123)162,172
2,811,575 2,862,952 2,367,120 2,327,613 2,404,736 2,242,564
$3,207,149 $2,811,575 $2,862,952 $2,367,120 $2,327,613 $2,404,736
($1,372,815)($822,968)($947,562) ($1,000,396)($729,701)($1,051,769)
174.8%141.4%149.5%173.2%145.7%177.7%
NA NA NA NA NA NA
NA NA NA NA NA NA
$3,800 $3,500 $3,300 $3,300 $3,300 $3,300
30 33 35 32 32 32
See accompanying notes to the required supplementary information.
95
CITY OF COTTAGE GROVE
REQUIRED SUPPLEMENTARY INFORMATION Statement 18
SCHEDULE OF CONTRIBUTIONS - FIRE DEPARTMENT RELIEF ASSOCIATION
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)
2014 $ - $5,155 ($5,155)$ - NA
2015 - 5,329 (5,329) - NA
2016 - 5,265 (5,265) - NA
2017 - 2,081 (2,081) - NA
2018 - - - - NA
2019 - - - - NA
2020 - - - - NA
2021 - - - - NA
2022 - - - - NA
2023 - - - - NA
GASB 68 was implemented in 2015. Information prior to 2015 is not available.
*The Relief Association is comprised of volunteers, therefore there are no payroll expenditures.
See accompanying notes to the required supplementary information.
96
COTTAGE GROVE, CITY OF
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2023
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
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.
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.
97
COTTAGE GROVE, CITY OF
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2023
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.
PERA – Public Employees Police and Fire Fund
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.
98
COTTAGE GROVE, CITY OF
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 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.
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.
99
COTTAGE GROVE, CITY OF
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2023
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.
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.
100
COTTAGE GROVE, CITY OF
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2023
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.
101
102
COMBINING AND INDIVIDUAL FUND STATEMENTS AND
SCHEDULES
103
104
NONMAJOR GOVERNMENTAL FUNDS
105
106
SPECIAL REVENUE FUNDS
A Special Revenue Fund is used to account for the proceeds of specific revenues sources that
are legally to 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).
107
CITY OF COTTAGE GROVE
COMBINING BALANCE SHEET Statement 19
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2023
With Comparative Totals For December 31, 2022
Special
Revenue Debt Service Capital Projects 2023 2022
Assets:
Cash and investments $3,160,127 $5,407,945 $15,441,899 $24,009,971 $21,898,461
Interest receivable - - 105,692 105,692 105,692
Due from other funds - - 433,767 433,767 1,401,237
Due from other governments 96,762 -25,464 122,226 226,372
Accounts receivable 212,687 -869,992 1,082,679 937,189
Lease receivable - - 4,855,351 4,855,351 5,667,030
Prepaid items 12,884 - - 12,884 2,857
Inventories 83,758 - - 83,758 105,873
Taxes receivable - delinquent 13,845 1,705 15,550 14,372
Special assessments receivable: -
Deferred - 2,849,493 2,764 2,852,257 2,225,297
Delinquent -4,104 -4,104 3,989
Special deferred -757,527 -757,527 760,316
Total assets $3,566,218 $9,032,914 $21,736,634 $34,335,766 $33,348,685
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $154,476 $331 $1,952,162 $2,106,969 $2,015,994
Salaries and benefits payable 65,024 - - 65,024 37,670
Due to other funds - - 334,528 334,528 -
Contracts payable 12,561 -543,831 556,392 551,415
Due to other governments 15,340 -1,177 16,517 8,510
Deposits payable 112,904 -193,628 306,532 512,197
Unearned revenue - - 320,000 320,000 20,160
Interfund loan payable 1,732,000 18,032 2,538,013 4,288,045 3,196,435
Total liabilities 2,092,305 18,363 5,883,339 7,994,007 6,342,381
Deferred inflows of resources:
Related to leases - - 4,672,305 4,672,305 5,584,338
Unavailable revenue - property taxes -13,845 1,705 15,550 14,372
Unavailable revenue - special assessments - 3,611,125 2,764 3,613,889 2,991,303
Total deferred inflows
of resources - 3,624,970 4,676,774 8,301,744 8,590,013
Fund balances:
Nonspendable 96,642 - - 96,642 108,730
Restricted 165,190 5,389,581 3,144,488 8,699,259 6,811,004
Committed 2,722,525 - - 2,722,525 2,155,025
Assigned - - 10,453,605 10,453,605 11,846,419
Unassigned (1,510,444)-(2,421,572) (3,932,016) (2,504,887)
Total fund balances 1,473,913 5,389,581 11,176,521 18,040,015 18,416,291
Total liabilities, deferred
inflows of resources, and
fund balances $3,566,218 $9,032,914 $21,736,634 $34,335,766 $33,348,685
Total
Nonmajor Governmental Funds
108
CITY OF COTTAGE GROVE
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 20
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
Special
Revenue Debt Service Capital Projects 2023 2022
Revenues:
General property taxes $ - $2,786,647 $250,134 $3,036,781 $2,823,175
Franchise taxes - - 860,203 860,203 642,584
Aggregate taxes - - 38,775 38,775 33,044
Lodging tax 71,647 - - 71,647 -
Tax increment collections - 514,895 1,169,671 1,684,566 1,750,799
Special assessments - 783,589 301,730 1,085,319 571,660
Direct charges to developers - - 34,624 34,624 26,081
Intergovernmental 393,937 - 1,000,000 1,393,937 2,717,089
Charges for services 4,855,813 - 54,121 4,909,934 4,436,824
Rent - - 542,532 542,532 710,881
Lease related interest income - - 185,184 185,184 -
Fines and forfeitures 184,480 - - 184,480 35,679
Investment earnings 138,805 176,766 883,645 1,199,216 (1,193,572)
Connection charges - - 1,784,257 1,784,257 4,110,942
Park dedication fees - - 767,094 767,094 1,144,364
Refunds and reimbursements 104 - - 104 806
Donations 41,144 - 90,780 131,924 -
Miscellaneous 6,938 - 2,697 9,635 80,855
Total revenues 5,692,868 4,261,897 7,965,447 17,920,212 17,891,211
Expenditures:
Current:
General government - 14,686 2,499 17,185 29,798
Economic development - - 423,406 423,406 358,273
Public safety 844,029 - 113,101 957,130 774,087
Public works 1,028,102 - 537,211 1,565,313 1,968,946
Culture and recreation 2,765,647 - 199,232 2,964,879 2,912,279
Capital outlay:
General government - - 120,173 120,173 -
Public safety 238,406 - - 238,406 197,162
Public works - - 8,473,518 8,473,518 9,307,476
Culture and recreation 2,264,998 - 7,174,067 9,439,065 3,515,458
Debt service:
Principal 50,000 3,285,000 - 3,335,000 2,950,000
Interest and other charges 5,480 938,372 197,398 1,141,250 1,120,468
Total expenditures 7,196,662 4,238,058 17,240,605 28,675,325 23,133,947
Excess of revenues over
(under) expenditures (1,503,794) 23,839 (9,275,158) (10,755,113) (5,242,736)
Other financing sources (uses):
Proceeds from sale of capital assets - - 9,025 9,025 9,687
Subscription-based IT arrangements issued 238,406 - - 238,406 -
Bond issuance - 224,858 7,590,142 7,815,000 -
Bond premium - - 320,387 320,387 -
Payments to refunded bond escrow agent - - - - (3,875,000)
Transfers in 827,151 450,000 1,225,777 2,502,928 1,427,979
Transfers out (202,519) - (304,390) (506,909) (1,211,311)
Total other financing sources (uses)863,038 674,858 8,840,941 10,378,837 (3,648,645)
Net change in fund balances (640,756) 698,697 (434,217) (376,276) (8,891,381)
Fund balances:
Beginning of year 2,114,669 4,690,884 11,610,738 18,416,291 27,307,672
End of year $1,473,913 $5,389,581 $11,176,521 $18,040,015 $18,416,291
Total
Nonmajor Governmental Funds
109
110
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.
111
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2023
With Comparative Totals For December 31, 2022
Recycling
(215)
Storm Water
Maintenance
(230)
Forfeiture/
Seizure
(240)
Golf Course
Fund
(255)
Assets:
Cash and investments $95,751 $2,343,690 $6,470 $436,756
Due from other governments 380 - - -
Accounts receivable 3,500 199,466 - 991
Prepaid items - - - 12,564
Inventories - - - 40,755
Total assets $99,631 $2,543,156 $6,470 $491,066
Liabilities and Fund Balances
Liabilities:
Accounts payable $ - $8,558 $ - $126,647
Salaries and benefits payable 887 17,220 - 29,746
Interfund loan payable - - - 1,732,000
Contracts payable - 2,444 - 10,117
Due to other governments - 2,511 - 6,358
Deposits payable - - - -
Unearned revenue - - - -
Total liabilities 887 30,733 - 1,904,868
Fund balances:
Nonspendable - - - 53,319
Restricted - - 6,470 -
Committed 98,744 2,512,423 - -
Unassigned - - - (1,467,121)
Total fund balances 98,744 2,512,423 6,470 (1,413,802)
Total liabilities and fund balances $99,631 $2,543,156 $6,470 $491,066
112
Statement 21
HERO Center
Operations
(290)
Opioid
Settlement
(245)
Convention and
Visitors Bureau
(265)2023 2022
$11,892 $158,720 $106,848 $3,160,127 $2,090,197
96,382 - - 96,762 206,092
- - 8,730 212,687 226,053
320 - - 12,884 2,857
43,003 - - 83,758 105,873
$151,597 $158,720 $115,578 $3,566,218 $2,631,072
$18,671 $ - $600 $154,476 $63,766
13,551 - 3,620 65,024 37,670
- - - 1,732,000 274,000
- - - 12,561 2,444
6,471 - - 15,340 8,249
112,904 - - 112,904 110,114
- - - - 20,160
151,597 - 4,220 2,092,305 516,403
43,323 - - 96,642 108,730
- 158,720 - 165,190 71,032
- - 111,358 2,722,525 2,155,025
(43,323) - - (1,510,444) (220,118)
- 158,720 111,358 1,473,913 2,114,669
$151,597 $158,720 $115,578 $3,566,218 $2,631,072
Nonmajor Special Revenue Funds
Totals
113
CITY OF COTTAGE GROVE
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
Recycling
(215)
Storm Water
Maintenance
(230)
Forfeiture/
Seizure
(240)
Golf Course
Fund
(255)
Revenues:
Intergovernmental $56,734 $165,084 $ - $4,519
Lodging tax - - - -
Charges for services - 1,132,552 - 3,006,438
Fines and forfeitures - 17,414 14,714 -
Investment income 5,131 107,709 3,039 14,112
Refunds and reimbursements - - 104 -
Donations - - - -
Miscellaneous 3,880 - - 3,039
Total revenues 65,745 1,422,759 17,857 3,028,108
Expenditures:
Current:
Public safety - - 32,419 -
Public works 61,927 802,455 - -
Culture and recreation - - - 2,765,647
Capital Outlay:
Public safety - - 238,406 -
Public works - - - -
Culture and recreation - - - 2,264,998
Debt service:
Principal - - 50,000 -
Interest and other charges - - - 5,480
Total expenditures 61,927 802,455 320,825 5,036,125
Excess of revenues over
(under) expenditures 3,818 620,304 (302,968) (2,008,017)
Other financing sources (uses):
Subscription-based IT arrangements issued - - 238,406 -
Transfers in - - - 650,000
Transfers out - (168,129) - -
Total other financing sources (uses) - (168,129) 238,406 650,000
Net change in fund balances 3,818 452,175 (64,562) (1,358,017)
Fund balances:
Beginning of year 94,926 2,060,248 71,032 (55,785)
End of year $98,744 $2,512,423 $6,470 ($1,413,802)
114
Statement 22
HERO Center
Operations
(290)
Opioid
Settlement
(245)
Convention and
Visitors Bureau
(265)2023 2022
$85,010 $ -$82,590 $393,937 $269,054
- - 71,647 71,647 -
703,678 -13,145 4,855,813 4,408,995
-152,352 -184,480 35,679
2,451 6,292 71 138,805 (117,239)
- - - 104 806
- - 41,144 41,144 -
19 - - 6,938 28,172
791,158 158,644 208,597 5,692,868 4,625,467
811,610 - - 844,029 772,570
- - 163,720 1,028,102 874,217
- - - 2,765,647 2,417,261
- - - 238,406 31,906
- - - - 244,426
- - - 2,264,998 377,568
- - - 50,000 -
- - - 5,480 -
811,610 -163,720 7,196,662 4,717,948
(20,452) 158,644 44,877 (1,503,794) (92,481)
- - - 238,406 -
110,670 -66,481 827,151 -
(34,390)- - (202,519) (394,046)
76,280 -66,481 863,038 (394,046)
55,828 158,644 111,358 (640,756) (486,527)
(55,828)76 -2,114,669 2,601,196
$ - $158,720 $111,358 $1,473,913 $2,114,669
Totals
Nonmajor Special Revenue Funds
115
116
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 three types of bonded indebtedness:
Improvement Bonds
Refunding Bonds
Tax Increment Bonds
117
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2023
With Comparative Totals For December 31, 2022
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 $186,111 $33,145 $1,691,209 $519,511
Taxes receivable - delinquent 1,379 1,892 - 3,674
Special assessments receivable
Deferred - - 8,572 -
Delinquent - - 1,840 -
Special deferred - - 738,462 -
Total assets $187,490 $35,037 $2,440,083 $523,185
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $ - $ - $ - $ -
Interfund loan payable - - - -
Total liabilities - - - -
Deferred inflows of resources:
Unavailable revenue - property taxes 1,379 1,892 - 3,674
Unavailable revenue - special assessments - - 748,874 -
Total deferred inflows of resources 1,379 1,892 748,874 3,674
Fund balances:
Restricted 186,111 33,145 1,691,209 519,511
Total fund balances 186,111 33,145 1,691,209 519,511
Total liabilities, deferred inflows
of resources, and fund balances $187,490 $35,037 $2,440,083 $523,185
118
Statement 23
2016A G.O.
Refunding
Bonds
(369)
2021A G.O.
Improvement
Bonds
(330)
2023A G.O.
Improvement
Bonds
(494)
Pavement
Management
Debt Service
(340, 492, 493)
Tax Increment
Funds 2023 2022
$78,647 $626,967 $613,672 $796,757 $861,926 $5,407,945 $4,712,915
1,426 1,066 - 4,408 - 13,845 12,442
-
- 481,169 947,063 1,412,689 - 2,849,493 2,221,151
- 837 - 1,427 - 4,104 3,989
- - 4,278 14,787 - 757,527 760,316
$80,073 $1,110,039 $1,565,013 $2,230,068 $861,926 $9,032,914 $7,710,813
$ - $ - $ - $ - $331 $331 $ -
- - - - 18,032 18,032 22,032
- - - - 18,363 18,363 22,032
1,426 1,066 - 4,408 - 13,845 12,442
- 482,006 951,341 1,428,904 - 3,611,125 2,985,455
1,426 483,072 951,341 1,433,312 - 3,624,970 2,997,897
78,647 626,967 613,672 796,756 843,563 5,389,581 4,690,884
78,647 626,967 613,672 796,756 843,563 5,389,581 4,690,884
$80,073 $1,110,039 $1,565,013 $2,230,068 $861,926 $9,032,914 $7,710,813
Totals
Nonmajor Debt Service Funds
119
CITY OF COTTAGE GROVE
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2023
With Comparative Totals For December 31, 2022
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 $249,715 $349,551 $349,485 $609,704
Tax increment collections - - - -
Special assessments - - 1,272 -
Investment income 4,745 398 78,098 13,606
Total revenues 254,460 349,949 428,855 623,310
Expenditures:
Current:
General government 425 425 5,452 425
Principal retirement 155,000 270,000 435,000 390,000
Interest and other charges 123,959 58,674 197,650 217,200
Total expenditures 279,384 329,099 638,102 607,625
Excess of revenues over
(under) expenditures (24,924) 20,850 (209,247) 15,685
Other financing sources:
Bond issuance - - - -
Payments to refunded bond escrow agent - - - -
Transfers in - - - -
Transfers out - - - -
Total other financing sources - - - -
Net change in fund balances (24,924) 20,850 (209,247) 15,685
Fund balances:
Beginning of year 211,035 12,295 1,900,456 503,826
End of year $186,111 $33,145 $1,691,209 $519,511
120
Statement 24
2016A G.O.
Refunding
Bonds
(369)
2021A G.O.
Improvement
Bonds
(330)
2023A G.O.
Improvement
and Tax
Abatement
Bonds
Pavement
Management
Debt Service
(340,492,
493)
Tax Increment
Funds 2023 2022
$220,023 $244,354 $ - $763,815 $ - $2,786,647 $2,573,329
- - - - $514,895 514,895 704,259
- 75,956 379,512 326,849 - 783,589 480,815
985 24,055 9,302 24,058 21,519 176,766 (125,110)
221,008 344,365 388,814 1,114,722 536,414 4,261,897 3,633,293
425 943 - 4,611 1,980 14,686 17,996
355,000 230,000 - 1,175,000 275,000 3,285,000 2,950,000
39,550 66,973 - 213,420 20,946 938,372 1,079,266
394,975 297,916 - 1,393,031 297,926 4,238,058 4,047,262
(173,967) 46,449 388,814 (278,309) 238,488 23,839 (413,969)
- - 224,858 - - 224,858 -
- - - - - - (3,875,000)
200,000 - - 250,000 - 450,000 1,027,979
- - - - - - (156,058)
200,000 - 224,858 250,000 - 674,858 (3,003,079)
26,033 46,449 613,672 (28,309) 238,488 698,697 (3,417,048)
52,614 580,518 - 825,065 605,075 4,690,884 8,107,932
$78,647 $626,967 $613,672 $796,756 $843,563 $5,389,581 $4,690,884
Nonmajor Debt Service Funds
Totals
121
122
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.
Street Sealcoating – 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.
Park Capital Improvements – to account for capital projects in existing 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.
123
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2023
With Comparative Totals For December 31, 2022
Equipment
Replacement
(210)
Street
Sealcoating (235)
Water
Connection and
Area (575)
Completed
Construction
(500) Park Trust (570)
Park Capital
Improvement
Fund (515)
Assets:
Cash and investments $1,622,561 $115,666 $3,432,056 $76,642 $1,843,260 $1,012,389
Interest receivable - - - - -74,131
Due from other funds - - 334,528 99,239 - -
Due from other governments -25,464 - - - -
Accounts receivable -368,935 - - - -
Taxes receivable - delinquent - - - - - -
Lease receivable - - - - -3,955,119
Special assessment receivable - deferred - - - - - -
Total assets $1,622,561 $510,065 $3,766,584 $175,881 $1,843,260 $5,041,639
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $ - $477 $103,880 $ - $1,259,889 $47,845
Due to other governments - - - - - -
Contracts payable - - - - 328,823 -
Due to other funds - - - - - -
Deposits payable -25,644 - - - 144,418
Unearned revenue - - - - - -
Interfund loan payable - - - - - -
Total liabilities -26,121 103,880 -1,588,712 192,263
Deferred inflows of resources:
Related to leases - - - - -3,753,690
Unavailable revenue - property taxes - - - - - -
Unavailable revenue - special assessments - - - - - -
Total deferred inflows of resources - - - - -3,753,690
Fund balances:
Restricted - - - - - -
Assigned 1,622,561 483,944 3,662,704 175,881 254,548 1,095,686
Unassigned - - - - - -
Total fund balances 1,622,561 483,944 3,662,704 175,881 254,548 1,095,686
Total liabilities, deferred inflows
of resources, and fund balances $1,622,561 $510,065 $3,766,584 $175,881 $1,843,260 $5,041,639
124
Statement 25
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)2023 2022
$728,511 $118,322 $ - $2,754,215 $3,220,423 $133,459 $384,395 $15,441,899 $15,095,349
- - - - -31,561 -105,692 105,692
- - - - - - - 433,767 1,401,237
- - - - - - - 25,464 20,280
- - 500,000 1,057 - - - 869,992 711,136
- - - - -1,705 -1,705 1,930
- - - - -900,232 -4,855,351 5,667,030
2,764 - - - - - - 2,764 4,146
$731,275 $118,322 $500,000 $2,755,272 $3,220,423 $1,066,957 $384,395 $21,736,634 $23,006,800
$139,823 $205,023 $101,034 $93,389 $802 $ - $ - $1,952,162 $1,952,228
379 - - 798 - - - 1,177 -
25,326 83,023 -106,659 - - - 543,831 548,971
- - 334,528 - - - - 334,528 261
23,566 - - - - - - 193,628 402,083
- - - - - - 320,000 320,000 -
- - - - 308,013 2,230,000 -2,538,013 2,900,403
189,094 288,046 435,562 200,846 308,815 2,230,000 320,000 5,883,339 5,803,946
- - - - -918,615 -4,672,305 5,584,338
- - - - -1,705 -1,705 1,930
2,764 - - - - - - 2,764 5,848
2,764 - - - - 920,320 -4,676,774 5,592,116
- - - - 3,080,093 -64,395 3,144,488 2,049,088
539,417 -64,438 2,554,426 - - - 10,453,605 11,846,419
-(169,724)- - (168,485) (2,083,363)-(2,421,572) (2,284,769)
539,417 (169,724) 64,438 2,554,426 2,911,608 (2,083,363) 64,395 11,176,521 11,610,738
$731,275 $118,322 $500,000 $2,755,272 $3,220,423 $1,066,957 $384,395 $21,736,634 $23,006,800
Nonmajor Capital Projects Funds
Totals
125
CITY OF COTTAGE GROVE
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
Equipment
Replacement
(210)
Street
Sealcoating
(235)
Water
Connection and
Area
(575)
Completed
Construction
(500)
Park Trust
(570)
Park Capital
Improvement
Fund
(515)
Revenues:
Taxes $ - $ - $ - $ - $ - $ -
Franchise taxes - 860,203 - - - -
Aggregate taxes - 38,775 - - - -
Tax increment collections - - - - - -
Special assessments - - - - - -
Direct charges to developers - 34,624 - - - -
Intergovernmental - - - - 1,000,000 -
Charges for services - 54,121 - - - -
Rent - - - - - 486,781
Lease related interest income - - - - - 150,014
Investment income 81,801 9,928 199,567 9,554 122,895 61,286
Connection charges - - 677,066 - - -
Park dedication fees - - - - 767,094 -
Donations - - - - - 10,780
Miscellaneous - - - - 2,697 -
Total revenues 81,801 997,651 876,633 9,554 1,892,686 708,861
Expenditures:
Current:
General government - - - - - -
Economic development - - - - - -
Public safety - - 107,261 - - -
Public works 9,307 247,745 - - - -
Culture and recreation - - - - 103,204 96,028
Capital outlay:
General government - - - - - -
Public works 513,662 496,681 874,474 - - -
Culture and recreation - - - - 6,498,654 675,413
Interest and other charges - - - - 99,745 -
Total expenditures 522,969 744,426 981,735 - 6,701,603 771,441
Excess of revenues over
(under) expenditures (441,168) 253,225 (105,102) 9,554 (4,808,917) (62,580)
Other financing sources (uses):
Proceeds from sale of capital assets 9,025 - - - - -
Bond issuance - - - - 4,739,397 -
Bond premium - - - - 176,410 -
Transfers in 418,837 - - - - -
Transfers out - - (237,909) - - -
Total other financing sources (uses) 427,862 - (237,909) - 4,915,807 -
Net change in fund balances (13,306) 253,225 (343,011) 9,554 106,890 (62,580)
Fund balances:
Beginning of year 1,635,867 230,719 4,005,715 166,327 147,658 1,158,266
End of year $1,622,561 $483,944 $3,662,704 $175,881 $254,548 $1,095,686
126
Statement 26
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)2023 2022
$ - $ - $ - $ - $ - $250,134 $ - $250,134 $249,846
- - - - - - - 860,203 642,584
- - - - - - - 38,775 33,044
- - - - 1,169,671 - - 1,169,671 1,046,540
293,955 7,754 - 21 - - - 301,730 90,845
- - - - - - - 34,624 26,081
- - - - - - - 1,000,000 2,448,035
- - - - - - - 54,121 27,829
- - - - -55,751 -542,532 710,881
- - - - -35,170 -185,184 -
31,019 48,849 5,017 158,869 130,568 9,610 14,682 883,645 (951,223)
-555,074 552,117 - - - - 1,784,257 4,110,942
- - - - - - - 767,094 1,144,364
- - - - - - 80,000 90,780 -
- - - - - - - 2,697 52,683
324,974 611,677 557,134 158,890 1,300,239 350,665 94,682 7,965,447 9,632,451
- - - - -2,499 -2,499 13,319
- - - - 423,406 - - 423,406 358,273
- - - - - - 5,840 113,101 165,256
2,683 173,235 103,353 888 - - - 537,211 1,094,729
- - - - - - - 199,232 495,018
- - - - -120,173 -120,173 -
543,049 1,607,447 919,042 3,486,177 -8,539 24,447 8,473,518 9,063,050
- - - - - - - 7,174,067 3,137,890
- - - 59,990 14,313 23,350 -197,398 41,202
545,732 1,780,682 1,022,395 3,547,055 437,719 154,561 30,287 17,240,605 14,368,737
(220,758) (1,169,005) (465,261) (3,388,165) 862,520 196,104 64,395 (9,275,158) (4,736,286)
- - - - - - - 9,025 9,687
- - - 2,850,745 - - - 7,590,142 -
- - - 143,977 - - - 320,387 -
237,909 - - 563,729 -5,302 -1,225,777 400,000
- - (66,481) - - - - (304,390) (661,207)
237,909 -(66,481) 3,558,451 -5,302 -8,840,941 (251,520)
17,151 (1,169,005) (531,742) 170,286 862,520 201,406 64,395 (434,217) (4,987,806)
522,266 999,281 596,180 2,384,140 2,049,088 (2,284,769)- 11,610,738 16,598,544
$539,417 ($169,724) $64,438 $2,554,426 $2,911,608 ($2,083,363) $64,395 $11,176,521 $11,610,738
Nonmajor Capital Projects Funds
Totals
127
CITY OF COTTAGE GROVE
SPECIAL REVENUE FUND - RECYCLING Statement 27
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
2022
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Intergovernmental $56,040 $56,040 $56,734 $694 $56,210
Investment income 1,000 1,000 5,131 4,131 (2,244)
Miscellaneous - - 3,880 3,880 21,000
Total revenues 57,040 57,040 65,745 8,705 74,966
Expenditures:
Current:
Public works 57,040 57,040 61,927 (4,887) 53,264
Total expenditures 57,040 57,040 61,927 (4,887) 53,264
Excess of revenues over
(under) expenditures $ - $ - 3,818 $3,818 21,702
Fund balances:
Beginning of year 94,926 73,224
End of year $98,744 $94,926
2023
Budgeted Amounts
128
CITY OF COTTAGE GROVE
SPECIAL REVENUE FUND - STORM WATER MAINTENANCE Statement 28
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
2022
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Charges for services $1,146,550 $1,146,550 $1,132,552 ($13,998) $1,083,689
Fines and forfeitures - - $17,414 $17,414 -
Investment income 10,000 10,000 107,709 97,709 (98,612)
Intergovernmental - - 165,084 165,084 186,844
Total revenues 1,156,550 1,156,550 1,422,759 266,209 1,171,921
Expenditures:
Current:
Public works 867,270 867,270 802,455 64,815 820,953
Capital outlay:
Public works 55,000 55,000 - 55,000 244,426
Total expenditures 922,270 922,270 802,455 119,815 1,065,379
Excess of revenues over
(under) expenditures 234,280 234,280 620,304 386,024 106,542
Other financing uses:
Transfers out (153,100) (153,100) (168,129) 15,029 (394,046)
Total other financing uses (153,100) (153,100) (168,129) 15,029 (394,046)
Net change in fund balance $81,180 $81,180 452,175 $370,995 (287,504)
Fund balances:
Beginning of year 2,060,248 2,347,752
End of year $2,512,423 $2,060,248
2023
Budgeted Amounts
129
CITY OF COTTAGE GROVE
SPECIAL REVENUE FUND - FORFEITURE/SEIZURE Statement 29
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
2022
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Fines and forfeitures $30,000 $30,000 $14,714 ($15,286) $35,679
Intergovernmental - - - - 26,000
Investment income 1,000 1,000 3,039 2,039 (3,241)
Refunds and reimbursements - - 104 104 806
Total revenues 31,000 31,000 17,857 (13,143) 59,244
Expenditures:
Current:
Public safety 20,270 20,270 32,419 (12,149) 29,018
Capital outlay:
Public safety 10,710 10,710 238,406 (227,696) 31,906
Debt Service:
Principal - - 50,000 (50,000) -
Total expenditures 30,980 30,980 320,825 (289,845) 60,924
Excess of revenues over
(under) expenditures $20 $20 (302,968) ($302,988) (1,680)
Other financing sources:
Subscription-based IT arrangements issued - - 238,406 238,406 -
Total other financing sources - - 238,406 238,406 -
Net change in fund balance $20 $20 (64,562) ($64,582) (1,680)
Fund balances:
Beginning of year 71,032 72,712
End of year $6,470 $71,032
2023
Budgeted Amounts
130
CITY OF COTTAGE GROVE
SPECIAL REVENUE FUND - GOLF COURSE Statement 30
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
2022
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Charges for services $2,659,800 $2,659,800 $3,006,438 $346,638 $2,600,448
Intergovernmental - - 4,519 4,519 -
Investment income - - 14,112 14,112 (4,277)
Miscellaneous - - 3,039 3,039 6,736
Total revenues 2,659,800 2,659,800 3,028,108 368,308 2,602,907
Expenditures:
Current:
Culture and recreation 2,476,870 2,476,870 2,765,647 (288,777) 2,417,261
Capital outlay:
Culture and recreation 126,350 126,350 2,264,998 (2,138,648) 377,568
Debt Service:
Interest and other charges - - 5,480 (5,480) -
Total expenditures 2,603,220 2,603,220 5,036,125 (2,432,905) 2,794,829
Excess of revenues over
(under) expenditures $56,580 $56,580 (2,008,017) ($2,064,597) (191,922)
Other financing sources:
Transfers in - - 650,000 650,000 -
Total other financing sources - - 650,000 650,000 -
Net change in fund balance $56,580 $56,580 (1,358,017) ($1,414,597) (191,922)
Fund balances:
Beginning of year (55,785)136,137
End of year ($1,413,802)($55,785)
2023
Budgeted Amounts
131
CITY OF COTTAGE GROVE
CAPITAL PROJECT FUND - EQUIPMENT REPLACEMENT Statement 31
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
2022
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Investment income $ - $ - $81,801 $81,801 ($60,787)
Total revenues - - 81,801 81,801 (60,787)
Expenditures:
Current:
Public works - - 9,307 (9,307)1,548
Capital outlay:
Public works 621,550 621,550 513,662 107,888 55,027
Total expenditures 621,550 621,550 522,969 98,581 56,575
Excess of revenues over
(under) expenditures (621,550) (621,550) (441,168) $180,382 (117,362)
Other financing uses:
Proceeds from sale of capital assets - - 9,025 9,025 9,687
Transfers in 410,000 410,000 418,837 8,837 400,000
Total other financing uses 410,000 410,000 427,862 17,862 409,687
Net change in fund balance ($211,550) ($211,550) (13,306) $198,244 292,325
Fund balances:
Beginning of year 1,635,867 1,343,542
End of year $1,622,561 $1,635,867
2023
Budgeted Amounts
132
CITY OF COTTAGE GROVE
CAPITAL PROJECT FUND - STREET SEALCOATING Statement 32
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
2022
Variance with
Actual Final Budget -
Original Final Amounts Over (Under) Actual
Revenues:
Franchise taxes $633,500 $633,500 $860,203 $226,703 $642,584
Aggregate taxes 22,000 22,000 38,775 16,775 33,044
Charges for services - - 88,745 88,745 53,910
Investment income 10,000 10,000 9,928 (72) (31,816)
Total revenues 665,500 665,500 997,651 332,151 697,722
Expenditures:
Current:
Public works 271,120 271,120 247,745 23,375 304,354
Capital Outlay
Public works 373,600 373,600 496,681 (123,081) 1,159,043
Total expenditures 644,720 644,720 744,426 (99,706) 1,463,397
Excess of revenues over
(under) expenditures $20,780 $20,780 253,225 $274,005 (765,675)
Fund balances:
Beginning of year 230,719 996,394
End of year $483,944 $230,719
2023
Budgeted Amounts
133
134
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.
135
COTTAGE GROVE, CITY OF
COMBINING STATEMENT OF NET POSITION Statement 33
INTERNAL SERVICE FUNDS
December 31, 2023
With Comparative Totals For December 31, 2022
Fleet Information
Self Insurance Maintenance Services
(700) (710) (720) 2023 2022
Assets:
Current assets:
Cash and investments
(including cash equivalents) $201,473 $ - $106,413 $307,886 $451,160
Accounts receivable 5,669 1,556 - 7,225 8,713
Due from other governments 52,230 - - 52,230 8,773
Inventories - 218,928 - 218,928 172,195
Prepaid items 242,005 - 149,168 391,173 568,062
Total current assets 501,377 220,484 255,581 977,442 1,208,903
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 - 489,092 514,525
Total capital assets - 1,842,627 70,127 1,912,754 1,938,187
Accumulated depreciation - (1,000,703) (65,729) (1,066,432) (1,053,544)
Total noncurrent assets - 841,924 4,398 846,322 884,643
Total assets 501,377 1,062,408 259,979 1,823,764 2,093,546
Deferred outflows of resources:
Deferred outflows of resources related to pensions - 138,357 59,296 197,653 344,807
Deferred outflows of resources related to OPEB - 26,358 12,092 38,450 15,243
Total deferred outflows of resources - 164,715 71,388 236,103 360,050
Total assets and deferred outflows of resources $501,377 $1,227,123 $331,367 $2,059,867 $2,453,596
Liabilities:
Current liabilities:
Accounts payable $314,367 $54,619 $45,986 $414,972 $318,198
Salaries payable - 25,925 12,916 38,841 41,874
Due to other funds - 635,524 - 635,524 848,797
Due to other governments 2,854 708 - 3,562 1,913
Compensated absences payable - 39,657 27,826 67,483 73,075
Total current liabilities 317,221 756,433 86,728 1,160,382 1,283,857
Noncurrent liabilities:
Compensated absences payable - 14,213 10,677 24,890 17,928
Net pension liability - 444,667 190,572 635,239 953,333
OPEB liability - 40,165 18,426 58,591 23,768
Total noncurrent liabilities - 499,045 219,675 718,720 995,029
Total liabilities 317,221 1,255,478 306,403 1,879,102 2,278,886
Deferred inflows of resources:
Deferred inflows of resources related to pensions - 143,927 61,683 205,610 12,604
Deferred inflows of resources related to OPEB - 4,485 2,057 6,542 7,890
Total deferred inflows of resources - 148,412 63,740 212,152 20,494
Net position:
Net investment in capital assets - 841,924 4,398 846,322 884,643
Unrestricted 184,156 (1,018,691) (43,174) (877,709) (730,427)
Total net position 184,156 (176,767) (38,776) (31,387) 154,216
Total liabilities, deferred
inflows of resources, and
net position $501,377 $1,227,123 $331,367 $2,059,867 $2,453,596
Totals
136
COTTAGE GROVE, CITY OF
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 34
CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
Self Fleet Information
Insurance Maintenance Services
(700) (710) (720) 2023 2022
Operating revenues:
Charges for services:
User fees $ - $2,243,130 $1,480,336 $3,723,466 $2,869,669
Employee benefits 2,891,925 - - 2,891,925 2,520,820
Insurance refunds and reimbursements 112,014 - - 112,014 106,021
Total operating revenues 3,003,939 2,243,130 1,480,336 6,727,405 5,496,510
Operating expenses:
Operating and maintenance:
Personal services - 895,272 384,865 1,280,137 1,247,844
Contractual services - 636,382 886,289 1,522,671 1,171,323
Commodities - 750,183 110,058 860,241 934,950
Administrative and general:
Personal insurance benefits 2,848,555 - - 2,848,555 2,593,070
Contractual services 435,126 - - 435,126 412,042
Claims 208,094 - - 208,094 186,169
Depreciation - 37,095 1,227 38,322 41,167
Total operating expenses 3,491,775 2,318,932 1,382,439 7,193,146 6,586,565
Excess of revenues over
(under) expenses (487,836) (75,802) 97,897 (465,741) (1,090,055)
Nonoperating revenues:
Investment income 19,508 - 2,785 22,293 (49,169)
Intergovernmental grants 52,230 - - 52,230 8,773
Miscellaneous - 1,991 201,857 203,848 200,664
Total nonoperating revenues 71,738 1,991 204,642 278,371 160,268
Income (loss) before capital
contributions and transfers (416,098) (73,811) 302,539 (187,370) (929,787)
Transfers in 1,767 - - 1,767 -
Change in net position (414,331) (73,811) 302,539 (185,603) (929,787)
Net position:
Beginning of year 598,487 (102,956) (341,315) 154,216 1,084,003
End of year $184,156 ($176,767) ($38,776) ($31,387) $154,216
Total
137
COTTAGE GROVE, CITY OF
COMBINING STATEMENT OF CASH FLOWS Statement 35
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
Self Fleet Information
Insurance Maintenance Services
(700) (710) (720) 2023 2022
Cash flows - operating activities:
Receipts from interfund services provided $2,851,512 $2,241,574 $1,480,336 $6,573,422 $5,478,133
Receipts from insurance refunds and reimbursements 112,014 - - 112,014 106,021
Payments to suppliers (438,163) (1,396,777) (962,613) (2,797,553) (3,096,923)
Payments to employees (2,848,555) (878,575) (370,891) (4,098,021) (3,754,764)
Miscellaneous revenue - 1,991 201,857 203,848 209,437
Net cash flows - operating activities (323,192) (31,787) 348,689 (6,290) (1,058,096)
Cash flows - noncapital financing activities:
Advances to/from other funds - 31,787 (245,061) (213,274) 848,797
Intergovernmental revenue 52,230 - - 52,230 -
Transfers from other funds 1,767 - - 1,767 -
Net Cash flows - noncapital financing activities:53,997 31,787 (245,061) (159,277) 848,797
Cash flows - capital and related financing activities:
Acquisition of capital assets - - - - (10,296)
Net cash flows - capital and related financing activities - - - - (10,296)
Cash flows - investing activities:
Interest and dividends received 19,508 - 2,785 22,293 (49,169)
Net change in cash and cash equivalents (249,687) - 106,413 (143,274) (268,764)
Cash and cash equivalents
January 1 451,160 - - 451,160 719,924
December 31 $201,473 $ - $106,413 $307,886 $451,160
Reconciliation of operating income (loss) to net cash
flows - operating activities:
Operating income (loss) ($487,836) ($75,802) $97,897 ($465,741) ($1,090,055)
Adjustments to reconcile operating income (loss)
to income (loss) to net cash
net cash flows - operating activities
Depreciation expense - 37,095 1,227 38,322 41,167
Miscellaneous - 1,991 201,857 203,848 210,550
Pension expense - 18,945 3,121 22,066 75,924
OPEB expense - 6,950 3,318 10,268 (7,202)
Changes in assets and liabilities:
Decrease (increase) in accounts receivables 3,044 (1,556) - 1,488 95,304
Decrease (increase) in due from other governments (43,457) - - (43,457) (8,773)
Decrease (increase) in inventories - (46,733) - (46,733) (25,614)
Decrease (increase) in prepaid items 183,761 383 (7,255) 176,889 (294,959)
Increase (decrease) in accounts payable 18,748 37,037 40,989 96,774 4,744
Increase (decrease) in salaries payable - (3,787)754 (3,033) 1,276
Increase (decrease) in due to other governments 2,548 (899) - 1,649 (66,459)
Increase (decrease) in compensated absences payable - (5,411) 6,781 1,370 6,001
Total adjustments 164,644 44,015 250,792 459,451 31,959
Net cash flows - operating activities ($323,192) ($31,787) $348,689 ($6,290) ($1,058,096)
Noncash investing, capital and financing activities:
Financing activities:
Capital asset contributions $ - $ - $ - $ - $ -
Totals
138
CITY OF COTTAGE GROVE
COMBINING BALANCE SHEET Statement 36
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
December 31, 2023
With Comparative Totals For December 31, 2022
Economic
Development
Authority
(285) 2023 2022
Assets:
Cash and investments $ - $ - $4,672
Accounts receivable 2,219 2,219 17,041
Prepaid items - - 6,410
Taxes receivable - delinquent 800 800 844
Loan receivable - - 14,758
Property held for resale 129,300 129,300 129,300
Total assets $132,319 $132,319 $173,025
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $39,892 $39,892 $6,744
Salaries and benefits payable 9,883 9,883 9,070
Due to other governments 75,159 75,159 84,076
Deposits payable - - 518,590
Due to primary government 607,260 607,260 -
Total liabilities 732,194 732,194 618,480
Deferred inflows of resources:
Unavailable revenue - property taxes 800 800 844
Total deferred inflows of resources 800 800 844
Fund balances:
Nonspendable - - 6,410
Unassigned (600,675) (600,675) (452,709)
Total fund balances (600,675) (600,675) (446,299)
Total liabilities, deferred inflows of
resources, and fund balances $132,319 $132,319 $173,025
Fund balance reported above ($600,675)
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. 800
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 (34,954)
Deferred outflows of resources related to pensions 33,601
Deferred inflows of resources related to OPEB (1,146)
Deferred outflows of resources related to OPEB 6,737
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. (138,342)
Net position of component unit ($733,979)
Totals
Economic Development Authority
Component Unit
139
CITY OF COTTAGE GROVE
COMBINING STATEMENT OF REVENUES,Statement 37
EXPENDITURES AND CHANGES IN FUND BALANCES
ECONOMIC DEVELOPMENT AUTHORITY COMPONENT UNIT
For The Year Ended December 31, 2023
With Comparative Totals For The Year Ended December 31, 2022
Economic
Development
Authority
(285)2023 2022
Revenues:
General property taxes $124,999 $124,999 $124,823
Intergovernmental 312,500 312,500 178,590
Charges for services - - 6,290
Investment income 35 35 -
Interest on loan to primary government 43 43 307
Miscellaneous 12,024 12,024 101,931
Total revenues 449,601 449,601 411,941
Expenditures:
Current:
General government:
Personal services 205,511 205,511 215,886
Commodities 3,728 3,728 4,457
Contractual services 394,738 394,738 274,186
Total expenditures 603,977 603,977 494,529
Excess of revenues over
(under) expenditures (154,376)(154,376)(82,588)
Fund balances:
Beginning of year (446,299)(446,299)(363,711)
End of year ($600,675)($600,675)($446,299)
Net increase (decrease) in fund balance reported above ($154,376)
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, 2022 (844)
At December 31, 2023 800
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. 6,922
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. (156)
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, 2022 18,649
At December 31, 2023 (20,085)
Change in net position of component unit ($149,090)
Totals
140
SUPPLEMENTARY FINANCIAL INFORMATION
141
142
CITY OF COTTAGE GROVE
COMBINING SCHEDULE OF BONDED INDEBTEDNESS Schedule 1
For The Year Ended December 31, 2023
Interest Rate Dated Final Payment
Authorized
and Issued Retired Outstanding
Principal due
in 2024
Interest due
in 2024
Primary Government
General Obligation Bonds
$1,405,000 Tax Increment Bonds of 2004A 3.00%-4.65% 7/1/2004 2/1/2024 $1,405,000 $1,115,000 $290,000 $290,000 $6,743
$4,660,000 G.O. Refunding Bonds of 2016A 2.00%-3.00% 1/28/2016 2/1/2027 4,660,000 3,155,000 1,505,000 365,000 28,275
$9,155,000 G.O. CIP Bonds of 2017A 2.5%-3.25% 5/11/2049 2/1/2038 9,155,000 1,830,000 7,325,000 400,000 204,875
$4,090,000 G.O. CIP Bonds of 2019A 3.00%-4.00% 2/14/2019 2/1/2040 4,090,000 450,000 3,640,000 160,000 117,184
Total General Obligation Bonds 19,310,000 6,550,000 12,760,000 1,215,000 357,077
Equipment Certificate
$2,845,000 Equipment Cerificate of 2019B 3.00% 2/14/2019 2/1/2029 2,845,000 1,040,000 1,805,000 280,000 49,950
Special Assessment Debt
Improvement Bonds of 2015A 2.50%-3.00% 5/27/2015 2/1/2031 5,700,000 2,510,000 3,190,000 380,000 81,935
Improvement Bonds of 2016B 2.00%-210% 11/16/2016 2/1/2033 4,275,000 1,535,000 2,740,000 285,000 52,370
Improvement Bonds of 2018A 3.00% 6/26/2018 2/1/2035 7,620,000 1,265,000 6,355,000 450,000 183,900
Improvement Bonds of 2021A 1.20%-2.00% 6/10/2021 2/1/2037 3,955,000 230,000 3,725,000 235,000 61,373
Improvement Refunding Bond of 2021B 1.05%-2.00% 12/9/2021 2/1/2029 3,840,000 510,000 3,330,000 530,000 50,665
Total Special Assessment Debt with
Governmental Commitment 25,390,000 6,050,000 19,340,000 1,880,000 430,243
Tax Abatement Bonds
G.O. Tax Abatement Bonds of 2023A 4.00% 5/9/2023 2/1/20244 7,815,000 - 7,815,000 - 379,340
Total Bonded Indebtedness - Primary Government 55,360,000 13,640,000 41,720,000 3,375,000 1,216,610
Total Bonded Indebtedness - Reporting Entity $55,360,000 $13,640,000 $41,720,000 $3,375,000 $1,216,610
143
CITY OF COTTAGE GROVE
DEBT SERVICE PAYMENTS TO MATURITY
For The Year Ended December 31, 2023
$1,405,000
Tax Increment
Bonds of
2004A
$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
Bonds payable $290,000 $1,505,000 $7,325,000 $3,640,000 $1,805,000
Future interest payable 6,743 62,675 1,724,073 1,087,686 167,325
Totals $296,743 $1,567,675 $9,049,073 $4,727,686 $1,972,325
Payments to maturity
2024 $296,743 $393,275 $604,875 $277,184 $329,950
2025 - 394,050 602,725 280,584 326,475
2026 - 391,500 605,200 278,684 327,775
2027 - 388,850 603,387 276,584 328,775
2028 - - 607,325 280,134 329,475
2029 - - 605,950 279,359 329,875
2030 - - 603,738 278,434 -
2031 - - 605,607 277,359 -
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 - - - - -
Totals $296,743 $1,567,675 $9,049,073 $4,727,686 $1,972,325
144
Schedule 2
$5,700,000
Improvement
Bonds of
2015A
$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
Total General
Obligation
Bonds
$3,190,000 $2,740,000 $6,355,000 $3,725,000 $3,330,000 $7,815,000 $41,720,000
349,821 264,790 1,210,275 434,543 150,222 3,455,488 8,913,641
$3,539,821 $3,004,790 $7,565,275 $4,159,543 $3,480,222 $11,270,488 $50,633,641
$461,936 $337,370 $633,900 $296,372 $580,665 $224,858 $4,437,128
460,385 331,670 630,250 296,622 579,965 643,965 4,546,691
459,535 325,970 631,225 296,772 579,065 640,565 4,536,291
449,535 325,220 631,750 296,822 577,965 636,765 4,515,653
443,966 319,420 631,825 296,773 579,372 632,565 4,120,855
442,691 313,620 631,450 296,622 583,190 627,965 4,110,722
431,383 312,770 630,625 296,373 - 622,965 3,176,288
390,390 311,820 629,350 297,102 - 622,565 3,134,193
- 305,670 627,625 298,695 - 616,565 2,726,818
- 121,260 630,375 299,948 - 615,165 2,549,107
- - 627,600 295,958 - 613,165 2,416,883
- - 629,300 296,790 - 605,565 2,408,870
- - - 297,260 - 602,565 1,778,061
- - - 297,434 - 598,965 1,774,681
- - - - - 591,685 1,468,506
- - - - - 588,800 867,453
- - - - - 358,600 638,241
- - - - - 356,800 356,800
- - - - - 354,600 354,600
- - - - - 357,000 357,000
- - - - - 358,800 358,800
$3,539,821 $3,004,790 $7,565,275 $4,159,543 $3,480,222 $11,270,488 $50,633,641
General Obligation Bonds
Primary Government
145
CITY OF COTTAGE GROVE
DEFERRED TAX LEVIES Schedule 3
For The Year Ended December 31, 2023
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
2023/24 $ - $85,326 $516,240 $320,440 $196,736 $381,971 $251,857 1,752,570
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 $215,239 $2,576,385 $2,246,361 $1,638,381 $4,213,546 $3,279,797 $14,169,709
Special Assessment Bonds
146
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET Schedule 4
PAVEMENT MANAGEMENT DEBT SERVICE SCHEDULE
December 31, 2023
With Comparative Totals For December 31, 2022
G.O.
Improvement
Bonds 2015A
(492)
G.O.
Improvement
Bonds 2016B
(493)
2021B G.O.
Improvement
Refunding
Bond (340)2023 2022
Assets:
Cash and investments $559,324 $183,376 $54,057 $796,757 $825,065
Taxes receivable - delinquent 1,571 1,113 1,724 4,408 4,059
Special assessments receivable
Deferred 452,712 566,273 393,704 1,412,689 1,671,120
Delinquent 637 237 553 1,427 1,647
Special deferred 6,315 7,709 763 14,787 21,854
Total assets $1,020,559 $758,708 $450,801 $2,230,068 $2,523,745
Deferred Inflows of Resources and Fund Balances
Deferred inflows of resources:
Unavailable revenue - property taxes 1,571 1,113 1,724 4,408 4,059
Unavailable revenue - special assessments 459,664 574,219 395,021 1,428,904 1,694,621
Total deferred inflows of resources 461,235 575,332 396,745 1,433,312 1,698,680
Fund balances:
Restricted 559,324 183,376 54,056 796,756 825,065
Total fund balances 559,324 183,376 54,056 796,756 825,065
Total deferred inflows
of resources and fund balances $1,020,559 $758,708 $450,801 $2,230,068 $2,523,745
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, 2023
With Comparative Totals For The Year Ended December 31, 2022
G.O.
Improvement
Bonds 2015A
(492)
G.O.
Improvement
Bonds 2016B
(493)
2021B G.O.
Improvement
Refunding
Bond
(340)2023 2022
Revenues:
General property taxes $299,551 $199,784 $264,480 $763,815 $648,800
Special assessments 107,699 114,368 104,782 326,849 387,958
Investment income 19,776 4,134 148 24,058 (46,331)
Total revenues 427,026 318,286 369,410 1,114,722 990,427
Expenditures:
Current:
General government 1,688 1,456 1,467 4,611 7,544
Debt service:
Principal 380,000 285,000 510,000 1,175,000 1,135,000
Interest and other charges 93,810 58,545 61,065 213,420 281,628
Total expenditures 475,498 345,001 572,532 1,393,031 1,424,172
Excess of revenues over
(under) expenditures (48,472) (26,715) (203,122) (278,309) (433,745)
Other financing sources:
Payments to refunded bond
escrow agent - - - - (3,875,000)
Transfers in - - 250,000 250,000 82,363
Total other financing sources - - 250,000 250,000 (3,792,637)
Net change in fund balances (48,472) (26,715) 46,878 (28,309) (4,226,382)
Fund balances:
Beginning of year 607,796 210,091 7,178 825,065 5,051,447
End of year $559,324 $183,376 $54,056 $796,756 $825,065
Totals
Pavement Management Debt
Service Schedule
148
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET Schedule 6
TAX INCREMENT CONSTRUCTION REVOLVING SCHEDULE
December 31, 2023
With Comparative Totals For December 31, 2022
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)2023 2022
Assets:
Cash and investments $386,092 $2,551,789 $110,499 $1,945 $142,212 $3,028 $24,858 $3,220,423 $2,509,491
Liabilities and Fund Balances
Liabilities:
Accounts payable - - - - - 802 - 802 -
Interfund loan payable - - 144,750 110,787 - 9,976 42,500 308,013 460,403
Total liabilities - - 144,750 110,787 - 10,778 42,500 308,815 460,403
Fund balances:
Restricted 386,092 2,551,789 - - 142,212 - - 3,080,093 2,049,088
Unassigned - - (34,251) (108,842) - (7,750) (17,642) (168,485) -
Total fund balances 386,092 2,551,789 (34,251) (108,842) 142,212 (7,750) (17,642) 2,911,608 2,049,088
Total liabilities and fund balances $386,092 $2,551,789 $110,499 $1,945 $142,212 $3,028 $24,858 $3,220,423 $2,509,491
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, 2023
With Comparative Totals For The Year Ended December 31, 2022
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)2023 2022
Revenues:
Tax increment collections $ - $781,196 $129,706 $39,942 $183,824 $26,278 $8,725 $1,169,671 $1,046,540
Miscellaneous:
Investment income 5,894 111,475 5,890 886 4,888 82 1,453 130,568 (88,218)
Total revenues 5,894 892,671 135,596 40,828 188,712 26,360 10,178 1,300,239 958,322
Expenditures:
Current:
Economic development 1,079 260,469 1,248 1,199 134,278 23,353 1,780 423,406 358,273
Debt service:
Interest and other charges - - 6,743 4,374 807 389 2,000 14,313 15,752
Total expenditures 1,079 260,469 7,991 5,573 135,085 23,742 3,780 437,719 374,025
Net change in fund balances 4,815 632,202 127,605 35,255 53,627 2,618 6,398 862,520 584,297
Fund balances:
Beginning of year 381,277 1,919,587 (161,856) (144,097) 88,585 (10,368) (24,040) 2,049,088 1,464,791
End of year $386,092 $2,551,789 ($34,251) ($108,842) $142,212 ($7,750) ($17,642) $2,911,608 $2,049,088
Totals
Tax Increment Construction
Revolving Fund
150
CITY OF COTTAGE GROVE
SUBCOMBINING BALANCE SHEET Schedule 8
TIF DEBT SERVICE REVOLVING SCHEDULE
December 31, 2023
With Comparative Totals For December 31, 2022
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)2023 2022
Assets:
Cash and investments $526,422 $297,620 $37,884 $861,926 $627,107
Liabilities and Fund Balances
Liabilities:
Accounts payable $331 $ - $ - $331 $ -
Interfund loan payable 18,032 - - 18,032 22,032
Total liabilities 18,363 0 0 18,363 22,032
Fund balances:
Restricted 508,059 297,620 37,884 843,563 605,075
Total fund balances 508,059 297,620 37,884 843,563 605,075
Total liabilities and fund balances $526,422 $297,620 $37,884 $861,926 $627,107
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, 2023
With Comparative Totals For The Year Ended December 31, 2022
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)2023 2022
Revenues:
Tax increment collections $226,895 $288,000 $ - $514,895 $704,259
Miscellaneous:
Investment income 16,936 2,742 1,841 21,519 (6,432)
Total revenues 243,831 290,742 1,841 536,414 697,827
Expenditures:
Current:
Economic development 1,555 425 - 1,980 1,957
Debt service:
Principal retirement - 275,000 - 275,000 255,000
Interest and other charges 661 20,285 - 20,946 33,128
Total expenditures 2,216 295,710 - 297,926 290,085
Net change in fund balances 241,615 (4,968)1,841 238,488 407,742
Fund balances:
Beginning of year 266,444 302,588 36,043 605,075 197,333
End of year $508,059 $297,620 $37,884 $843,563 $605,075
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 comprehensive annual
financial reports for the relevant year.
155
CITY OF COTTAGE GROVE
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2014 2015 2016 2017
Governmental activities:
Net investment in capital assets $127,260,042 $125,562,970 $132,834,867 $140,298,832
Restricted 6,971,432 8,766,706 7,609,138 2,855,507
Unrestricted 28,277,397 24,285,174 19,091,443 24,845,782
Total governmental
activities net position $162,508,871 $158,614,850 $159,535,448 $168,000,121
Business-type activities:
Net investment in capital assets $54,432,059 $54,202,710 $54,063,470 $56,060,163
Restricted - - - -
Unrestricted 15,896,363 13,980,970 13,628,016 11,528,841
Total business-type
activities net position $70,328,422 $68,183,680 $67,691,486 $67,589,004
Primary government:
Net invested in capital assets $181,692,101 $179,765,680 $186,898,337 $196,358,995
Restricted for: 6,971,432 8,766,706 7,609,138 2,855,507
Unrestricted 44,173,760 38,266,144 32,719,459 36,374,623
Total primary government
net position $232,837,293 $226,798,530 $227,226,934 $235,589,125
Note: GASB 65 was implemented in 2013. Net position was restated for 2012 to reflect the expensing of bond issuance
costs in the year of issuance.
Net position for years prior to 2012 was not restated.
Note: GASB 68 was implemented in 2015. Net position was restated for 2014 to reflect the reporting of net pension liability
and pension related deferred outflows of resources. Net position for years prior to 2014 was not restated.
Note: The City closed the Stormwater Improvement Capital Project Fund during 2015 and transferred the majority
of the net position to the Stormwater Utility Fund.
Fiscal Year
156
Table 1
2018 2019 2020 2021 2022 2023
$152,256,234 $173,846,256 $198,383,059 $204,395,412 $230,431,271 $256,950,114
6,177,599 5,199,682 7,959,917 8,691,283 6,398,608 14,057,356
21,252,792 24,697,514 25,127,751 30,394,564 31,795,908 22,245,673
$179,686,625 $203,743,452 $231,470,727 $243,481,259 $268,625,787 $293,253,143
$63,822,257 $70,373,534 $75,408,885 $87,203,382 $104,180,227 $124,845,135
- - - - - -
11,707,720 12,742,735 13,696,597 15,530,934 14,543,822 14,060,628
$75,529,977 $83,116,269 $89,105,482 $102,734,316 $118,724,049 $138,905,763
$216,078,491 $244,219,790 $273,791,944 $291,598,794 $334,611,498 $381,795,249
6,177,599 5,199,682 7,959,917 8,691,283 6,398,608 14,057,356
32,960,512 37,440,249 38,824,348 45,925,498 46,339,730 36,306,301
$255,216,602 $286,859,721 $320,576,209 $346,215,575 $387,349,836 $432,158,906
Fiscal Year
157
CITY OF COTTAGE GROVE
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2014 2015 2016 2017
Expenses
Governmental activities:
General government $2,229,518 $2,346,805 $3,450,479 $2,398,669
Community development 946,001 1,086,197 1,173,071 1,527,549
Economic development 545,646 1,460,114 2,257,548 740,668
Public safety 7,212,998 7,662,393 10,153,726 9,308,430
Public works 7,599,182 7,426,045 9,623,335 8,413,073
Culture and recreation 5,119,093 5,153,844 5,340,558 5,137,951
Interest on long-term debt 808,642 1,029,228 875,642 962,772
Total governmental
activities expenses 24,461,080 26,164,626 32,874,359 28,489,112
Business-type activities:
Street lights 867,690 746,794 746,005 882,660
Cottage Grove EMS 1,412,855 1,507,766 1,688,041 1,571,044
Water operating 2,216,819 2,438,166 2,370,466 2,789,792
Sewer operating 2,428,944 2,448,283 2,727,188 2,879,119
Total business-type
activities expenses 6,926,308 7,141,009 7,531,700 8,122,615
Total primary
government expenses $31,387,388 $33,305,635 $40,406,059 $36,611,727
Program revenues
Governmental activities:
Charges for services:
General government $138,768 $117,636 $665,193 $108,808
Community development 989,140 1,527,836 1,660,365 2,240,628
Economic development 1,771 3,467 5,210 210
Public safety 325,368 394,574 431,862 363,782
Public works 1,010,695 971,599 975,532 1,099,690
Culture and recreation 2,448,968 3,091,072 2,725,288 2,682,090
Operating grants and contributions 1,545,268 1,237,805 1,676,805 1,408,099
Capital grants and contributions 9,401,775 5,861,631 10,284,047 13,805,696
Total governmental
activities program revenues 15,861,753 13,205,620 18,424,302 21,709,003
Business-type activities:
Charges for services:
Street lights 658,810 549,005 530,905 685,560
Cottage Grove EMS 1,626,320 1,431,007 1,766,236 1,510,101
Water operating 1,868,942 1,840,088 1,817,862 1,664,292
Sewer operating 2,151,756 2,310,624 2,291,038 2,294,714
Operating grants and contributions - - - -
Capital grants and contributions 1,783,762 361,762 196,671 441,738
Total business-type
activities program revenues 8,089,590 6,492,486 6,602,712 6,596,405
Total primary government
program revenues $23,951,343 $19,698,106 $25,027,014 $28,305,408
Fiscal Year
158
Table 2
Page 1 of 2
2018 2019 2020 2021 2022 2023
$2,573,693 $2,704,159 $5,621,197 $2,936,133 $3,500,705 $3,300,129
1,626,960 1,524,566 1,750,768 2,305,822 2,676,975 2,526,101
275,927 492,107 583,767 823,036 864,161 16,938,793
9,353,309 9,272,317 6,947,733 11,098,534 13,853,217 742,227
8,559,929 10,062,896 13,650,476 15,567,240 10,788,045 12,979,642
5,035,903 5,566,175 5,638,642 6,365,540 9,447,768 8,927,799
1,037,986 1,286,632 1,141,147 1,236,037 931,466 1,077,579
28,463,707 30,908,852 35,333,730 40,332,342 42,062,337 46,492,270
991,041 1,073,480 1,152,326 1,262,557 1,099,054 1,157,388
1,605,779 1,750,771 1,843,840 2,091,317 2,302,408 2,425,138
2,980,080 2,904,174 3,039,639 3,428,669 4,053,526 5,692,361
2,881,446 3,139,150 3,463,493 3,532,908 4,159,063 4,342,927
8,458,346 8,867,575 9,499,298 10,315,451 11,614,051 13,617,814
$36,922,053 $39,776,427 $44,833,028 $50,647,793 $53,676,388 $60,110,084
$319,999 $196,283 $193,964 $54,220 $89,818 $179,473
1,758,096 2,424,030 2,648,715 3,439,162 4,316,442 2,579,463
210 572,983 400,210 210 1,694,792 1,214,663
360,609 409,463 764,732 1,689,365 1,391,825 630,563
3,932,082 3,106,452 1,095,238 2,304,418 1,854,776 2,132,108
3,376,799 3,094,394 2,578,312 3,798,744 4,253,613 5,344,059
3,710,686 2,231,407 17,726,027 4,648,424 2,278,343 3,680,506
13,899,381 29,783,591 20,144,097 23,828,108 37,949,025 44,115,417
27,357,862 41,818,603 45,551,295 39,762,651 53,828,634 59,876,252
821,512 825,587 962,958 1,115,511 1,038,210 1,058,036
2,006,555 2,066,733 1,772,704 2,524,990 1,378,154 2,191,586
2,144,652 2,537,654 3,002,920 3,648,447 3,624,478 4,174,060
2,685,608 3,064,703 3,190,196 3,352,994 3,663,853 3,574,316
2,350 23,409 101,196 147,694 41,788 67,605
4,488,437 2,700,615 3,842,839 6,359,047 12,272,831 7,446,103
12,149,114 11,218,701 12,872,813 17,148,683 22,019,314 18,511,706
$39,506,976 $53,037,304 $58,424,108 $56,911,334 $75,847,948 $78,387,958
Fiscal Year
159
CITY OF COTTAGE GROVE
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2014 2015 2016 2017
Net (expense) revenue:
Governmental activities ($8,599,327) ($12,959,006) ($14,450,057) ($6,780,109)
Business-type activities 1,163,282 (648,523) (928,988) (1,526,210)
Total primary government
net (expense) revenue (7,436,045) (13,607,529) (15,379,045) (8,306,319)
General revenues and other changes in net position:
Governmental activities:
Taxes:
Property taxes $12,616,267 $13,394,585 $13,956,582 $14,483,061
Franchise taxes 542,689 526,643 516,931 560,492
Aggregate taxes 26,236 37,133 39,748 28,442
Lodging taxes - - - -
Tax increment collections 711,628 710,541 776,061 1,002,046
Grants and contributions not restricted
to specific programs 83,682 99,137 126,058 126,670
Unrestricted investment earnings (loss) 551,910 357,170 285,494 330,903
Gain on sale of capital assets 43,904 (15,157) - -
Transfers (720,742) 613,878 (330,219) (1,286,832)
Total governmental activities 13,855,574 15,723,930 15,370,655 15,244,782
Business-type activities:
Grants and contributions not restricted
to specific programs - - 7,736 17,161
Unrestricted investment earnings (loss) 199,179 137,896 96,851 119,735
Gain on sale of capital assets - - 1,988 -
Transfers 720,742 (613,878) 330,219 1,286,832
Total business-type activities 919,921 (475,982) 436,794 1,423,728
Total primary government $14,775,495 $15,247,948 $15,807,449 $16,668,510
Change in net position:
Governmental activities $5,256,247 $2,764,924 $920,598 $8,464,673
Business-type activities 2,083,203 (1,124,505) (492,194) (102,482)
Total primary government $7,339,450 $1,640,419 $428,404 $8,362,191
(1) Community development is in General.
(2) In 2013, Golf Course was reclassified to a special revenue fund
Note: GASB 65 was implemented in 2013. Governmental activity expenses were restated for 2012
to reflect the expensing of bond issuance costs in the year of issuance. Expenses for years prior to 2012 were not restated.
Note: GASB 68 was implemented for 2015. Expenses for years prior to 2015 were not restated.
Fiscal Year
160
Table 2
Page 2 of 2
2018 2019 2020 2021 2022 2023
($1,105,845) $10,909,751 $10,217,565 ($569,691) $11,766,297 $13,383,982
3,690,768 2,351,126 3,373,515 6,833,232 10,405,263 4,893,892
2,584,923 13,260,877 13,591,080 6,263,541 22,171,560 18,277,874
$15,171,020 $15,608,602 $16,881,359 $17,494,963 $18,804,948 $20,590,413
567,875 583,715 596,537 615,326 642,584 860,203
20,791 22,250 22,699 23,467 33,044 38,775
- - - - - 71,647
769,475 1,085,358 1,321,659 1,427,233 1,750,799 1,684,566
- 113,435 181,316 83,568 229,638 72,738
519,675 982,812 582,781 (258,924) (2,043,372) 2,567,079
71,631 49,186 34,579 31,111 29,658 9,025
(4,126,962) (4,973,641) (2,435,861) (6,836,521) (6,069,068) (14,651,072)
12,993,505 13,471,717 17,185,069 12,580,223 13,378,231 11,243,374
- - - - - -
152,466 261,525 179,837 (40,919) (484,598) 636,750
- - - - - -
4,126,962 4,973,641 2,435,861 6,836,521 6,069,068 14,651,072
4,279,428 5,235,166 2,615,698 6,795,602 5,584,470 15,287,822
$17,272,933 $18,706,883 $19,800,767 $19,375,825 $18,962,701 $26,531,196
$11,887,660 $24,381,468 $27,402,634 $12,010,532 $25,144,528 $24,627,356
7,970,196 7,586,292 5,989,213 13,628,834 15,989,733 20,181,714
$19,857,856 $31,967,760 $33,391,847 $25,639,366 $41,134,261 $44,809,070
Fiscal Year
161
CITY OF COTTAGE GROVE
FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2014 2015 2016 2017
General Fund:
Nonspendable:
Prepaid items $18,019 $15,383 $11,222 $8,750
Restricted - - - -
Assigned 1,380,698 1,408,357 1,393,200 1,589,169
Unassigned 8,113,424 8,829,697 9,036,425 9,233,073
Total general fund $9,512,141 $10,253,437 $10,440,847 $10,830,992
All other governmental funds:
Nonspendable:
Prepaid items $8,529 $7,343 $5,723 $2,827
Inventory 24,434 20,696 28,750 30,625
Restricted 4,478,812 4,857,365 3,200,692 3,306,203
Committed 329,841 394,204 731,090 947,486
Assigned 25,591,181 26,322,717 23,020,349 21,301,562
Unassigned (10,958,389)(9,122,473) (10,240,496)(5,511,868)
Total all other
governmental funds $19,474,408 $22,479,852 $16,746,108 $20,076,835
Total all funds $28,986,549 $32,733,289 $27,186,955 $30,907,827
Fiscal Year
162
Table 3
2018 2019 2020 2021 2022 2023
$47,532 $33,719 $27,042 $43,228 $25,906 $7,816
- - - - - 1,733,127
1,383,065 1,432,671 1,768,606 1,676,895 592,019 1,094,500
9,814,949 10,224,988 10,479,728 11,384,256 12,696,178 12,581,127
$11,245,546 $11,691,378 $12,275,376 $13,104,379 $13,314,103 $15,416,570
$10,889 $14,933 $33,818 $7,743 $6,090 $14,970
30,297 25,601 28,265 84,153 105,873 83,758
3,515,300 3,876,020 4,969,881 9,649,776 6,811,004 8,699,259
1,383,402 1,736,590 2,136,969 2,531,015 2,155,025 2,722,525
19,445,494 19,583,736 21,455,576 25,923,365 21,582,225 20,718,857
(5,804,056) (7,464,138) (9,643,235) (4,875,306) (3,219,445) (5,804,378)
$18,581,326 $17,772,742 $18,981,274 $33,320,746 $27,440,772 $26,434,991
$29,826,872 $29,464,120 $31,256,650 $46,425,125 $40,754,875 $41,851,561
Fiscal Year
163
CITY OF COTTAGE GROVE
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2014 2015 2016 2017
Revenues:
General property taxes $12,687,917 $13,465,987 $13,957,128 $14,649,224
Other taxes 1,292,229 1,274,317 1,332,740 1,402,475
Special assessments 1,326,017 1,499,796 2,004,196 2,715,466
Licenses and permits 904,400 1,305,442 1,323,680 1,922,934
Direct charges to developers 661,861 307,971 277,860 273,200
Intergovernmental 3,932,021 2,415,754 5,642,451 8,077,051
Charges for services 3,572,351 3,808,618 4,061,301 4,140,390
Rent 435,975 450,428 464,078 435,688
Lease related interest income - - - -
Fines and forfeits 171,317 228,642 236,260 184,942
Investment earnings (loss) 452,293 262,799 219,963 310,579
Interest on interfund loan 59,066 74,340 52,040 52,206
Connection charges 841,434 318,092 649,489 2,050,958
Park dedication fees 63,595 9,010 212,865 526,936
Miscellaneous 1,005,867 1,138,274 1,864,861 1,982,338
Total revenues 27,406,343 26,559,470 32,298,912 38,724,387
Expenditures:
Current:
General government 2,025,709 2,155,327 3,143,136 2,200,031
Community development 919,126 1,058,537 1,117,760 1,304,601
Economic development 541,838 1,456,306 2,236,464 695,356
Public safety 6,484,552 6,751,804 7,447,058 7,798,262
Public works 4,306,068 4,344,837 4,133,659 3,900,347
Culture and recreation 4,169,469 4,154,992 4,438,628 4,303,051
Capital outlay 5,028,422 7,036,802 17,201,219 22,426,545
Debt service:
Principal retirement 2,470,000 1,320,000 6,570,000 1,915,000
Capital lease payment 305,076 316,235 327,432 -
Interest and fiscal charges 882,508 912,107 1,023,721 900,240
Total expenditures 27,132,768 29,506,947 47,639,077 45,443,433
Excess revenues over (under) expenditures 273,575 (2,947,477) (15,340,165) (6,719,046)
Other financing sources (uses):
Transfers in 1,840,995 3,049,657 1,648,258 7,111,644
Transfers out (1,213,059) (2,362,952) (1,162,564) (6,135,532)
Bonds issued 1,405,000 5,700,000 8,935,000 9,155,000
Proceeds from leases - - - -
Payment to refunded bond escrow agent - - - -
Premium on debt issued 18,461 254,245 357,684 289,321
Discount on debt issued - - - -
Proceeds from sale of capital assets 67,120 53,267 15,453 19,485
Subscription-based IT arrangements issued - - - -
Total other financing
sources(uses) 2,118,517 6,694,217 9,793,831 10,439,918
Net change in fund balances $2,392,092 $3,746,740 ($5,546,334) $3,720,872
Debt service as a percentage of
noncapital expenditures 16.5% 11.3% 26.0% 12.2%
Fiscal Year
164
Table 4
2018 2019 2020 2021 2022 2023
$15,166,368 $15,631,133 $16,887,233 $17,514,744 $18,257,259 $20,584,152
1,358,141 1,691,323 1,940,895 2,066,026 2,426,427 2,655,191
2,482,866 4,282,185 6,085,906 8,420,102 864,104 2,202,377
1,773,543 2,277,642 2,480,933 3,181,740 4,386,820 2,698,807
132,385 299,683 444,907 627,540 26,081 168,707
5,283,405 17,716,725 20,635,136 10,662,269 14,947,235 28,449,483
4,903,311 4,988,080 5,062,505 6,969,681 7,326,861 7,498,099
486,270 474,994 492,206 494,880 711,091 542,637
- - - - - 272,477
208,744 220,024 141,380 192,036 178,449 333,250
460,856 924,396 527,309 (269,070) (2,010,736) 2,274,148
26,474 23,903 21,895 19,395 16,533 20,454
2,776,937 1,932,844 2,563,422 5,293,099 4,110,942 1,784,257
853,659 472,500 1,110,209 2,014,802 1,144,364 767,094
2,024,992 1,870,544 1,151,221 1,024,348 2,056,056 1,164,372
37,937,951 52,805,976 59,545,157 58,211,592 54,441,486 71,415,505
2,453,986 2,488,722 5,122,412 2,504,935 3,033,149 2,904,353
1,594,534 1,486,081 1,753,836 2,329,259 2,581,927 2,444,734
230,615 447,061 539,092 823,036 864,161 742,227
8,660,273 8,535,996 8,186,255 10,257,201 10,928,197 12,446,009
4,066,609 4,769,732 6,257,352 6,910,688 6,503,285 5,895,204
4,627,375 5,013,805 4,646,429 5,968,879 6,909,315 7,282,271
20,919,610 34,786,137 28,300,835 17,786,563 22,582,259 44,208,054
3,595,000 2,420,000 2,435,000 3,785,000 2,961,575 3,367,679
- - - - - -
1,123,547 1,253,185 1,352,629 1,344,234 1,121,846 1,141,777
47,271,549 61,200,719 58,593,840 51,709,795 57,485,714 80,432,308
(9,333,598)(8,394,743)951,317 6,501,797 (3,044,228)(9,016,803)
5,149,453 5,308,513 5,094,561 2,897,844 3,840,551 3,140,919
(4,649,003)(4,486,763)(4,267,119)(2,265,181)(2,639,290)(1,507,625)
7,620,000 6,935,000 -7,795,000 -7,815,000
- - - - 38,240 -
- - - - (3,875,000) -
111,630 239,309 - 235,748 - 320,387
- - - - - -
20,563 35,932 13,771 3,267 9,687 9,025
- - - - - 335,783
8,252,643 8,031,991 841,213 8,666,678 (2,625,812)10,113,489
($1,080,955)($362,752)$1,792,530 $15,168,475 ($5,670,040)$1,096,686
17.9%13.9%11.9%13.7%11.6%12.0%
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
2014 18,114,214 5,001,690 761,279 2,207,013 622,578 26,706,774 2,264,989 28,971,763 1.21% 2,396,493,700 43.812
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
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
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
2014 40.976 2.836 43.812 32.811 39.169 5.401 77.381 121.193
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 90.70
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, and Regional Rail Authority.
Overlapping Rates*City Direct Rate (1)
167
168
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
3M Company $790,732 1 1.36% 618,873 1 2.32%
ORP Hinton, LLC 641,761 2 1.11% - - -
Xcel Energy 623,376 3 1.07% 579,616 2 2.17%
Mars II Inc. 619,366 4 1.07% 169,544 5 0.63%
PHS/Cottage Grove Inc 493,582 5 0.85% - - -
Renewal by Andersen, LLC 394,471 6 0.68% 144,536 7 0.54%
Renewal by Andersen Corp 315,232 7 0.54% - - -
Wal-Mart 294,224 8 0.51% - - -
Northstar Sheets 290,316 9 0.50% -
Grove-Rainbow LP 284,524 10 0.49% 135,516 9 0.51%
Menard Inc - 193,170 3 0.72%
PHM/Cottage Grove Inc - 176,591 4 0.66%
Dayton-Hudson Corporation - 160,496 6 0.60%
MN Pipeline Company - 136,418 8 0.51%
Wer Dis LLC 131,250 10 0.49%
Total $4,747,584 8.18% $2,446,010 9.15%
Total All Property $58,070,742 $26,706,774
Source: Official Statements for the City of Cottage Grove
20142023
169
CITY OF COTTAGE GROVE
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Percentage
Fiscal Net Operating Debt MVHC/ Total Net of
Year Tax Levy (1) Tax Levy Ag Credit (1) Tax Levy Amount Levy
2014 $11,873,130 $826,000 ($5,947) $12,693,183 $12,610,243 99.35%
2015 12,526,600 875,500 (8,722) 13,393,378 13,326,911 99.50%
2016 13,174,084 890,000 (9,707) 14,054,377 13,991,560 99.55%
2017 13,798,587 985,000 (8,890) 14,774,697 14,694,114 99.45%
2018 13,700,988 1,535,000 (7,072) 15,228,916 15,156,690 99.53%
2019 14,100,682 1,590,000 (7,213) 15,683,469 15,631,548 99.67%
2020 14,557,824 2,397,500 (6,788) 16,948,536 16,890,861 99.66%
2021 15,033,501 2,576,500 (6,226) 17,603,775 17,548,413 99.69%
2022 15,526,411 2,804,000 (5,826) 18,324,585 18,256,754 99.63%
2023 17,860,270 2,789,440 (4,704) 20,645,006 20,571,262 99.64%
Notes:
(1) This reflects the Final Levy Certification after all adjustments have been made
Fiscal Year of Levy
Collected within the
Taxes Levied for the Fiscal Year
170
Table 8
Collections Percentage
in Subsequent of
Abatements Years Amount Levy
$0 $81,432 $12,691,675 99.94%
- 65,274 13,392,185 99.50%
(6,717) 54,318 14,045,878 99.55%
- 78,509 14,772,623 99.45%
988 71,880 15,228,570 99.53%
(4,732) 45,426 15,676,974 99.67%
(41,455) 11,334 16,902,195 99.66%
(21,465) 23,857 17,572,270 99.69%
(1,390) 49,059 18,305,813 99.63%
5,588 - 20,571,262 99.64%
Total Collections to Date
171
CITY OF COTTAGE GROVE
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
General General Obligation
Obligation General Special Other
Fiscal Tax Increment Obligation Assessments Long-Term
Year Bonds (1) Bonds (1) Bonds (1)Leases Debt
2014 $2,516,865 $ - $13,140,768 $5,158,667 $ -
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 - 2,947,657
2020 1,085,456 15,595,093 21,674,357 - 2,686,458
2021 820,000 14,701,649 27,242,322 - 2,420,259
2022 565,000 11,825,549 23,703,909 26,665 2,144,060
2023 290,000 24,290,368 16,439,716 14,714 1,862,985
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
172
Table 9
Other Total Percentage
Revenue Capital Long-Term Primary of Personal Per
Bonds (1)Lease Debt Government Income (2) Capita (2)
$717,221 $ - $ - $21,533,521 1.12%605
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
- - - 43,576,327 1.74%1,141
- - - 41,041,364 1.55%1,064
- - - 45,184,230 1.58%1,141
- - - 38,265,183 1.23%942
- - 265,055 43,162,838 1.29%1,031
Business-Type Activities
173
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)
2014 $2,516,865 $ - $13,140,768 $2,833,208 $12,824,425 0.54% 360
2015 2,309,130 - 17,964,105 3,773,605 16,499,630 0.61% 461
2016 2,096,395 4,660,000 20,679,730 4,098,850 23,337,275 0.84% 647
2017 1,868,660 13,736,030 19,281,013 3,281,981 31,603,722 1.09% 866
2018 1,625,926 13,103,649 24,189,529 3,370,032 35,549,072 1.14% 952
2019 1,363,191 16,323,536 22,941,943 3,224,138 37,404,532 1.10% 980
2020 1,085,456 15,595,093 21,674,357 4,128,227 34,226,679 0.93% 888
2021 820,000 14,701,649 27,242,322 8,133,965 34,630,006 0.87% 874
2022 565,000 11,825,549 23,703,909 4,712,195 31,382,263 0.74% 765
2023 290,000 24,290,368 16,439,716 5,374,800 35,645,284 0.67% 851
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Presented net of original issuance discounts and premiums.
(2) See the Assessed and Estimated Actual Value of Taxable Property for estimated actual taxable market value.
(3) See the Demographic and Economic statistics schedule for population data.
174
CITY OF COTTAGE GROVE
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT Table 11
As of December 31, 2023
City of Cottage Grove
Percent of Debt Share of
Net Debt Applicable Overlapping
Outstanding to City Debt
Overlapping:
Washington County 98,060,000$ 6.5868% 6,459,016$
School Districts:
ISD No. 200 (Hastings) 65,377,571 12.0208% 7,858,907
ISD No. 833 (South Wash. County) 283,615,000 31.7406% 90,021,103
Metro Council 191,435,000 1.1606% 2,221,795
Total Overlapping 106,560,820
City of Cottage Grove Direct Debt 42,883,069 100.00% 42,883,069
Total Direct and Overlapping Debt: 681,370,640$ 149,443,889$
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.
175
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
2014 2015 2016 2017
Debt limit 71,894,811$ 81,179,262$ 83,725,578$ 86,674,569$
Total net debt applicable to limit 5,085,000 4,805,000 4,660,000 13,240,000
Legal debt margin $66,809,811 $76,374,262 $79,065,578 $73,434,569
Total net debt applicable to the limit as a
percentage of debt limit 7.07% 5.92% 5.57% 15.28%
Legal Debt Margin Calculation for Fiscal Year 2023
176
Table 12
$5,307,199,300
159,215,979
12,770,000
738,767
13,508,767
$145,707,212
2018 2019 2020 2021 2022 2023
93,767,628$ 102,223,218$ 110,756,082$ 119,758,743$ $126,788,205 159,215,979$
12,645,000 15,745,000 15,140,000 14,375,000 13,585,000 13,508,767
$81,122,628 $86,478,218 $95,616,082 $105,383,743 $113,203,205 145,707,212$
13.49% 15.40% 13.67% 12.00% 10.71% 8.48%
Legal Debt Margin Calculation for Fiscal Year 2023
177
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)
2014 35,619 1,926,643,820 54,090 17,685 3.8%
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 3.3%
2022 41,027 3,148,124,791 76,733 18,558 2.2%
2023 41,875 3,342,211,250 79,814 18,770 2.5%
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.
178
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) 2,983 1 30% 1591 1 24%
Renewal by Andersen 1,610 2 16% 454 3 7%
Up-North Plastics 710 3 7% 245 4 4%
3M Cottage Grove 653 4 7% 760 2 11%
Hy-Vee 650 5 7%
Wal-Mart 318 6 3% 140 8 2%
City of Cottage Grove 229 7 2% 186 6 3%
Van Meter (2) 208 8 2% 213 5 3%
American Manufacturing & Distribution 163 9 2%
Menards 149 10 1%
AGCO 163 7 2%
Target 135 9 2%
Allina 110 10 2%
Total 7,673 77% 3,997 60%
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
2023 2014
179
CITY OF COTTAGE GROVE
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
Last Ten Fiscal Years
Function 2014 2015 2016 2017
General government:
Total general government 23.40 23.25 25.70 27.60
Public safety:
Police/Cottage Grove EMS:
Officers 40.00 40.00 43.56 46.84
Civilians 8.26 7.56 7.56 7.56
Fire/Emergency managaement 7.00 9.00 11.75 15.10
Total public safety 55.26 56.56 62.87 69.50
Public works 23.68 27.62 25.66 27.23
Parks & Recreation 11.20 11.20 11.10 10.30
Ice arena 3.65 - - -
Water/Sewer/Street lights 9.24 9.34 10.34 11.31
Fleet maintenance 4.04 4.04 4.04 4.00
Total 130.47 132.01 139.71 149.94
Source: City of Cottage Grove Finance Office
Full-Time Equivalent Employees as of December 31
180
Table 15
2018 2019 2020 2021 2022 2023
28.20 29.00 26.00 26.50 27.50 32.13
46.84 46.84 46.64 47.94 47.94 44.00
7.56 7.56 7.56 7.56 7.56 9.72
15.10 15.10 18.00 18.00 18.50 16.00
69.50 69.50 72.20 73.50 74.00 69.72
26.99 27.59 33.20 42.00 42.00 19.46
10.30 10.30 9.80 7.50 7.50 22.50
- - - - - -
11.31 11.31 11.50 9.00 9.00 16.54
4.00 4.00 4.00 2.00 2.00 8.00
150.30 151.70 156.70 160.50 162.00 168.35
Full-Time Equivalent Employees as of December 31
181
CITY OF COTTAGE GROVE
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2014 2015 2016 2017
General government:
Elections 2 2
Registered voters as of 7am election day 20,780 21,594
Number of votes cast 11,166 19,799
Voter participation (registered)53.73%84.50%
Community development:
Inspections:
Building permints (new dwelling units)77 65 99 255
Code enforcement inspections 1,482 1,013 841 1,018
Public safety:
Police:
Crimes - Part I 774 719 673 767
Crimes - Part II 1,434 1,419 1,424 1,471
Total calls for service 18,448 20,576 21,331 20,879
Fire:
Medical 2,562 2,464 2,681 2,790
Avg response time (minutes) medical 6:19 6:13 6:21 6:25
Avg response time (minutes) fire 7:34 7:06 6:54 7:05
Avg response time (minutes) both 6:27 6:16 6:24 6:28
Entire service area
Public works:
Sq. yards of streets sealcoated 199,725 118,159 193,249 71,152
Miles of streets new construction 1.99 0.56 1.11 1.02
Miles of watermain added 1.84 1.06 1.20 3.64
Source: Various City of Cottage Grove departments
Fiscal Year
182
Table 16
2018 2019 2020 2021 2022 2023
41312
22,076 22,689 24,444 25,006 25,621
17,369 2,559 22,932 8,352 17,602
75.00%11.28%93.81%33.40%68.70%
185 284 382 574 350 290
1,119 803 666 771 597 489
619 619 616 459 409 317
1,358 948 961 738 517 487
22,647 20,375 32,288 28,933 28,077 43,021
2,914 2,950 2,995 3,747 3,502 4,603
6:25 7:17 6:18 7:30 6:50 3,364
7:13 6:08 9:38 9:24 9:43 6:06
6:54 7:03 8:18 8:27 7:29 6:59
0 0 250,766 0 0 0
4.82 2.80 2.87 4.94 2.99 1.39
4.30 4.52 9.16 6.94 9.50 4.31
Fiscal Year
183
CITY OF COTTAGE GROVE
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2014 2015 2016 2017
Public works:
City-owned lights 2,481 2,495 2,592 2,682
Xcel owned lights 301 301 301 301
Streets (miles) 160.35 160.91 162.02 163.04
Sidewalks/trails (miles) 57.83 59.56 61.98 64.87
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 10,706 10,789 10,891
Miles of water mains and laterals 149.98 149.98 151.18 154.82
Sanitary sewer:
Number of connections 10,670 10,670 10,667 10,983
Miles of sanitary sewer mains and laterals 131.45 131.45 132.81 135.42
Storm sewer:
Miles of storm sewers 89.52 89.52 93.94 98.75
Source: Various City departments
Fiscal Year
184
Table 17
2018 2019 2020 2021 2022 2023
2,797 2,898 2,968 3,071 3,153 3,234
301 301 301 301 301 301
167.87 170.67 175.53 178.47 181.46 182.85
70.06 75.55 81.28 85.97 91.24 96.00
400 400 400 400 408 421
275 275 275 280 285 285
15 15 15 15 15 14
569 569 569 569 569 569
238 238 238 238 238 238
219 219 219 219 219 219
961 969.8 969.8 980 995 995
11,160 11,212 11,513 12,081 12,969 13,190
159.12 164.24 175.40 182.34 191.84 196.14
11,256 11,521 11,714 12,280 13,170 12,989
139.51 142.42 146.87 153.29 157.69 160.50
106.39 111.18 116.96 122.53 128.06 132.49
Fiscal Year
185
186