HomeMy WebLinkAboutCity Council Packet_5-09-18CITY OF FALCON HEIGHTS
Regular Meeting of the City Council
City Hall
2077 West Larpenteur Avenue
AGENDA
May 9, 2018 at 7:00 P.M.
A.CALL TO ORDER:
B. ROLL CALL: LINDSTROM ___ LEEHY____ BROWN THUNDER ___
MIAZGA ___ GUSTAFSON___
STAFF PRESENT: THONGVANH____
C.PRESENTATIONS:
1.2017 Year End Audit Presentation
D. APPROVAL OF MINUTES:
1.April 25, 2018 City Council Meeting Minutes
E.PUBLIC HEARINGS:
1.Tobacco Ordinance Amendment
F. CONSENT AGENDA:
1. General Disbursements through: 5/01/18 $58,963.56
Payroll through: 4/30/18 $18,515.31
2.City Hall Summer Hours
G: POLICY ITEMS:
H.INFORMATION/ANNOUNCEMENTS
I. COMMUNITY FORUM:
J.ADJOURNMENT:
BLANK PAGE
REQUEST FOR COUNCIL ACTION
Families, Fields and Fair __________________________
The City That Soars!
Item Year End 2017 Annual Audit Report
Description Matt Meyer of KDV will present the Comprehensive Annual Financial Report
for the Year Ended December 31, 2017. The Financial Report is a complex
document that includes evaluation and analysis of the financial stability of the
City as it relates to General Fund, Capital Funds, Proprietary Funds, and Debt
Service Funds.
Mr. Meyer will provide a high-level overview of the financial stability of the
City for year-end 2017.
Budget Impact N/A
Attachment(s) ·Communication Letter
·Compliance Report
·Comprehensive Annual Financial Report (CAFR) 2017
Action(s) Requested Motion to accept and approve the Year End 2017 Annual Audit Report
Meeting Date May 9, 2018
Agenda Item Presentations C1
Attachment CAFR Documents
Submitted By Sack Thongvanh, City Administrator
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City of Falcon Heights
Ramsey County, Minnesota
Independent Auditor's Report
on Legal Compliance
December 31, 2017
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BerganKDV, Ltd. bergankdv.com
Report on Legal Compliance
Independent Auditor's Report
Honorable Mayor and Members
of the City Council
City of Falcon Heights
Falcon Heights, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United
States of America, the financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the City of
Falcon Heights, Minnesota as of and for the year ended December 31, 2017, and the related
notes to financial statements, and have issued our report thereon dated April 30, 2018.
The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor
pursuant to Minnesota Statutes § 6.65, contains seven categories of compliance to be tested:
contracting and bidding, deposits and investments, conflicts of interest, public indebtedness,
claims and disbursements, miscellaneous provisions, and tax increment financing. Our audit
considered all of the listed categories.
In connection with our audit, nothing came to our attention that caused us to believe that the
City of Falcon Heights failed to comply with the provisions of the Minnesota Legal
Compliance Audit Guide for Cities. However, our audit was not directed primarily toward
obtaining knowledge of such noncompliance. Accordingly, had we performed additional
procedures, other matters may have come to our attention regarding the City's
noncompliance with the above referenced provisions.
This report is intended solely for the information and use of those charged with governance
and management of the City and the State Auditor and is not intended to be, and should not
be, used by anyone other than these specified parties.
Minneapolis, Minnesota
April 30, 2018
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City of Falcon Heights Ramsey County, Minnesota Communications Letter
December 31, 2017
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City of Falcon Heights Table of Contents
Report on Matters Identified as a Result of the Audit of the Financial Statements 1
Material Weakness 3
Required Communication 5 Financial Analysis 8
Emerging Issues 17
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Bergan, Ltd. bergankdv.com
Report on Matters Identified as a Result of the Audit of the Financial Statements
Honorable Mayor, Members
of the City Council and Management Sack Thongvanh, City Administrator Roland Olson, Finance Director City of Falcon Heights
Falcon Heights, Minnesota
In planning and performing our audit of the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Falcon Heights, Minnesota, as of and for the year ended
December 31, 2017, in accordance with auditing standards generally accepted in the United States of America, we considered the City's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do
not express an opinion on the effectiveness of the City's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and, therefore, material weaknesses or
significant deficiencies may exist that were not identified. In addition, because of inherent limitations in internal control, including the possibility of management override of controls, misstatements due to error, or fraud may occur and not be detected by such controls. However, as discussed below, we identified a certain deficiency in internal control that we consider to be a material weakness.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies in internal control, such that there
is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or detected and corrected, on a timely basis. The material weakness identified is stated within this letter. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
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The accompanying memorandum also includes financial analysis provided as a basis for discussion. The matters discussed herein were considered by us during our audit and they do
not modify the opinion expressed in our Independent Auditor's Report dated April 30, 2018,
on such statements. This communication is intended solely for the information and use of management, the City Council, and others within the City and state oversight agencies and is not intended to be,
and should not be, used by anyone other than these specified parties.
Minneapolis, Minnesota April 30, 2018
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City of Falcon Heights Material Weakness
LACK OF SEGREGATION OF ACCOUNTING DUTIES The City continued to evaluate and improve the segregation of accounting duties among City staff
during 2017. Because of a limited number of office personnel, some areas of internal control still remain
without proper segregation of accounting duties; however, we can report on the following processes. The lack of adequate segregation of accounting duties could adversely affect the City's ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements.
Revenue Cycle The four areas of segregation in the revenue cycle include mailroom custody, treasurer custody, accounts receivable, and accounting. We noted some overlap in the mailroom and treasurer custody, with one employee having job
responsibilities in both areas. We also noted overlapping duties between accounts receivable and accounting, in that the person responsible for accounts receivable also is responsible for bank reconciliations. Purchasing Cycle The five areas of segregation in the purchasing cycle include purchasing authorization, receiving authorization, accounts payable, treasurer responsibilities, and accounting. We noted proper segregation between the responsibility of purchasing goods and services, the
individual responsible for preparing the purchase order and the person responsible for approving the purchase order. However, we noted overlapping duties with the approval of purchase orders, input of invoices, and preparing of disbursements being performed by one individual. Payroll Cycle
The five areas of segregation in the payroll cycle include human resources authorization, immediate supervisor authorization, payroll recording, paymaster custody, and accounting. In addition to having responsibilities in payroll recording, paymaster custody, and accounting cycles noted above, the Finance Director has full general ledger access and the ability to write and post
journal entries. While we believe this access is necessary to efficiently perform the financial duties required, this access has the ability to override many of the controls and segregation listed above.
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City of Falcon Heights Material Weakness
LACK OF SEGREGATION OF ACCOUNTING DUTIES (CONTINUED) Journal Entries
The three areas of segregation in journal entries include an employee to write the journal entry,
another to post the entry, and finally another employee to review the entry. We noted some journal entries were not approved by someone other than the person writing the entry.
We recommend a second review/approval to ensure accuracy. Bank Reconciliation Process The two areas of segregation include an employee to prepare the cash reconciliation and another employee to review the reconciliation; ideally, the individual preparing the reconciliation has limited
involvement in the revenue and purchasing cycles. We noted the bank reconciliations were not approved or reviewed by another person. We recommend each reconciliation be reviewed to help ensure accuracy.
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City of Falcon Heights Required Communication
We have audited the financial statements of the governmental activities, business-type activities, each major fund and the aggregate remaining fund information of the City as of and for the year ended December 31, 2017. Professional standards require that we provide you with the following information
related to our audit.
OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA
As stated in our engagement letter, our responsibility, as described by professional standards, is to
express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your responsibilities.
As part of our audit, we considered the internal control of the City. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. As part of obtaining reasonable assurance about whether the financial statements are free of material
misstatement, we performed tests of the City's compliance with certain provisions of laws, regulations, contracts, and grants. However, the objective of our tests was not to provide an opinion on compliance with such provisions. Generally accepted accounting principles provide for certain required supplementary information (RSI) to supplement the basic financial statements. Our responsibility with respect to the RSI, which supplement(s) the basic audit financial statements, is to apply certain limited procedures in accordance with generally accepted auditing standards. However, the RSI was not audited and, because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance, we do not express an opinion or provide any assurance on the RSI. PLANNED SCOPE AND TIMING OF THE AUDIT An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit involved judgment about the number of transactions to be
examined and the areas to be tested. Our audit included obtaining an understanding of the City and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing and extent of further audit procedures. Material misstatements may result from
(1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the City or to acts by management or employees acting on behalf of the City.
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City of Falcon Heights Required Communication
QUALITATIVE ASPECTS OF ACCOUNTING PRACTICES Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in the notes to financial statements. No new
accounting policies were adopted and the application of existing policies was not changed during the year ended December 31, 2017. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ
significantly from those expected. The most sensitive estimates affecting the financial statements were:
Depreciation – The City is currently depreciating its capital assets over their estimated useful lives, as determined by management, using the straight-line method. Expense Allocation – Certain expenses are allocated to programs based on an estimate of the benefit to that particular program. Examples are salaries, benefits, and supplies. Net Pension Liability, Deferred Outflows of Resources Related to Pensions, and Deferred Inflows of
Resources Related to Pensions – These balances are based on an allocation by the pension plans
using estimates based on contributions. We evaluated the key factors and assumptions used to develop the accounting estimates in determining that they are reasonable in relation to the financial statements taken as a whole.
The financial statement disclosures are neutral, consistent, and clear. DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT
We encountered no significant difficulties in dealing with management in performing and completing
our audit. CORRECTED AND UNCORRECTED MISSTATEMENTS
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. One of the misstatements detected as a result of audit procedures and corrected by management was
material, both individually and in the aggregate, to the financial statements taken as a whole.
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City of Falcon Heights Required Communication
DISAGREEMENTS WITH MANAGEMENT For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. MANAGEMENT REPRESENTATIONS
We requested certain representations from management that are included in the management representation letter. MANAGEMENT CONSULTATIONS WITH OTHER ACCOUNTANTS
In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our
knowledge, there were no such consultations with other accountants. OTHER AUDIT FINDINGS OR ISSUES
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
OTHER MATTERS
We applied certain limited procedures to the RSI that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
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City of Falcon Heights Financial Analysis The following pages provide graphic representation of select data pertaining to the financial position and operations of the City for the past five years. Our analysis of each graph is presented to provide a basis of discussion of past performance and how implementing certain changes may enhance future
performance. GENERAL FUND BALANCE At December 31, 2017, the General Fund balance was $1,865,356 which is an increase of $117,597
from 2016. Based on current expenditure levels, the fund balance represents over 11 months of expenditures.
$70,602 $89,222 $85,535 $71,138 $37,201
$1,326,645 $1,334,716 $1,504,383 $1,676,621 $1,828,155
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
2013 2014 2015 2016 2017
General Fund Balance
Nonspendable Unassigned
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City of Falcon Heights Financial Analysis GENERAL FUND
$1,662,381 $1,761,406 $1,911,906 $1,965,247 $2,053,181
$1,666,184 $1,752,715 $1,723,926 $1,785,406 $1,893,584
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
$2,200,000
2013 2014 2015 2016 2017
General Fund
Total Revenues Total Expenditures General Fund revenues increased by $87,934, or 4.5%, in 2017. Expenditures in the General Fund
increased by $108,178, or 6.1%, and resulted in total revenues exceeding expenditures by $159,597.
Further detailed explanations regarding variances will follow in subsequent charts.
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City of Falcon Heights Financial Analysis GENERAL FUND REVENUES
2013 2014 2015 2016 2017
Miscellaneous $27,085 $27,019 $30,672 $42,613 $40,063
Fines and Forfeitures 68,208 67,638 80,415 73,901 45,806
Charges for Services 61,779 64,584 66,092 58,240 73,723
Intergovernmental Revenue 427,082 621,411 650,798 660,178 654,024
Licenses and Permits 75,077 68,253 80,864 73,339 93,344
General Property Taxes 1,003,150 912,501 1,003,065 1,056,976 1,146,221
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
$2,200,000
General Fund Revenues
$1,662,381 $2,053,181$1,965,247$1,911,906$1,761,406
Property taxes increased $89,245, or 8.4%, from 2016 due to an increase in the total amount levied in the fund in 2017. Licenses and permits increased $20,005 from 2017 due to an increase in building permit revenues from the prior year. These increases were partially offset with a decrease in fines and forfeitures, which decreased $28,095 from 2016. Fines and forfeitures can fluctuate from year to year and decreased in 2017 due to less court fines collected.
The other remaining General Fund revenues in 2017 stayed relatively consistent with the prior year.
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City of Falcon Heights Financial Analysis GENERAL FUND REVENUES (CONTINUED) The following charts depict the components of the General Fund revenues by percentages.
General Property Taxes 56%
Licenses and Permits4%
Intergovernmental
Revenue32%
Charges for Services4%
Fines and Forfeitures2%Miscellaneous2%
General Fund Revenues 2017
`
General Property Taxes 54%
Licenses and Permits4%
Intergovernmental Revenue33%
Charges for Services3%
Fines and Forfeitures4%
Miscellaneous2%
General Fund Revenues 2016
General Fund sources of revenue remained consistent in 2017 compared to 2016.
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City of Falcon Heights Financial Analysis GENERAL FUND EXPENDITURES
2013 2014 2015 2016 2017
Parks and Recreation $90,761 $93,672 $65,571 $73,223 $88,231
Public Works 193,914 200,086 195,610 182,515 188,602
Public Safety 801,979 867,140 885,319 938,318 956,548
General Government 579,530 591,817 577,426 591,350 660,203
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
General Fund Expenditures
$1,893,584$1,785,406$1,723,926$1,752,715$1,666,184
In 2017, expenditures increased $108,178, or 6.1%, from 2016. General government accounted for $68,853 of the total increase. This increase was due to increase in building inspection costs, an increase in the cost of healthcare premiums and an increase in wages. Public safety increased $18,230, or 1.9% from the prior year due to an increase in police service costs and dispatch fees. Other expenditures stayed relatively consistent with the prior year.
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City of Falcon Heights Financial Analysis GENERAL FUND EXPENDITURES (CONTINUED)
General Government35%
Public Safety50%
Public Works10%
Parks and Recreation5%
General Fund Expenditures 2017
General Government33%
Public Safety53%
Public Works10%
Parks and Recreation4%
General Fund Expenditures 2016
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City of Falcon Heights Financial Analysis GENERAL FUND BUDGET
Actual
Amounts
Revenues
Taxes 1,152,646$ 1,146,221$ (6,425)$
Licenses and permits 59,950 93,344 33,394
Intergovernmental 668,524 654,024 (14,500)
Charges for services 52,935 73,723 20,788
Fines and forfeitures 73,000 45,806 (27,194)
Miscellaneous 15,500 40,063 24,563
Total revenues 2,022,555 2,053,181 30,626
Expenditures
General government 678,150 660,203 (17,947)
Public safety 972,966 956,548 (16,418)
Public works 236,649 188,602 (48,047)
Parks and recreation 92,790 88,231 (4,559)
Total expenditures 1,980,555 1,893,584 (86,971)
Excess of receipts over
disbursements 5,000 388,125 383,125
Other Financing Uses
Transfers out (42,000) (42,000) -
Net change in fund balance -$ 117,597$ 117,597$
Original and
Final Budget
Variance With
Final Budget -
Over (under)
Overall, General Fund revenues were over budget by 1.5%, or $30,626. This is primarily due to conservative budget estimates in licenses and permits, charges for services and miscellaneous revenues. These categories were a combined $78,745 over budget in 2017. This was offset by fines and forfeitures, which were under budget by $27,194, which was budgeted based on revenues received in the 2016. Expenditures were under budget by $86,971, or 4.4%. The largest variance was in public works which was $48,047 under budget, mostly due to budgeting for more snow removal costs in 2017. Other expenditures were closer to budgeted amounts.
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City of Falcon Heights Financial Analysis SANITARY SEWER FUND The graphs below and on the next page illustrate the current operations of the Sanitary Sewer and the
Storm Drainage Funds.
2013 2014 2015 2016 2017
Sewer Charges $807,031 $780,844 $756,539 $829,339 $879,391
Total Operating Expenses 704,897 629,452 613,868 760,415 723,236
Depreciation 7,619 8,084 10,296 11,958 12,013
Operating Income with Depreciation 102,134 151,392 142,671 68,924 156,155
Operating Income without Depreciation 109,753 159,476 152,967 80,882 168,168
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
Sanitary Sewer Fund
The Sanitary Sewer Fund realized operating income of $156,155 during 2017. Sewer charges in 2017 increased by $50,052 from 2016 due to an increase in sewer rates and additional charges received from
the University of Minnesota. Expenses in the fund decreased, going from $760,415 in 2016, to $723,236 in 2017. This decrease was due to a large televising project in 2016 as well as more repairs needed in 2016. With an operating income of $156,155, $17,988 in nonoperating revenue, and $400,000 in net transfers
out of the fund, the change in the Sanitary Sewer Fund net position was a decrease of $225,857. Total net position fell to $2,289,052 in 2017.
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City of Falcon Heights Financial Analysis STORM DRAINAGE FUND
2013 2014 2015 2016 2017
Storm Drainage Charges $156,632 $155,116 $154,984 $157,067 $169,957
Total Operating Expenses 136,662 116,201 136,551 122,303 142,494
Depreciation 38,206 37,245 33,334 35,229 46,866
Operating Income with Depreciation 19,970 38,915 18,433 34,764 27,463
Operating Income without Depreciation 58,176 76,160 51,767 69,993 74,329
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
Storm Drainage Fund
Storm sewer charges for services increased $12,890 from the prior year. Operating expenses also increased in 2017, going from $122,303 in 2016 to $142,494 in 2017. This increase of $20,191 was due to an increase in depreciation expense, additional repairs during the year, and an increase in wages. The Storm Drainage Fund had operating income of $27,463 in 2017.
With $1,330 in investment income, the Storm Drainage Fund had a total increase in net position of $28,793. Ending net position at December 31, 2017 was $1,525,970.
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City of Falcon Heights Emerging Issues Executive Summary The following is an executive summary of financial and business related updates to assist you in staying current on emerging issues in accounting and finance. This summary will give you a preview of the new standards that have been recently issued and what is on the horizon for the near future. The most recent and significant updates include:
• Accounting Standard Update – GASB Statement No. 75 – Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions – GASB has issued GASB Statement No. 75 relating to accounting and financial reporting for postemployment benefits other than pensions. This new statement requires governments in all types of OPEB plans to present more extensive note disclosures and required supplementary information (RSI) about
their OPEB liabilities.
• Accounting Standard Update – GASB Statement No. 84 – Fiduciary Activities – GASB has issued GASB Statement No. 84 relating to accounting and financial reporting for fiduciary activities. This new statement establishes clarity to determines when a government has fiduciary
responsibility for a certain activity.
• Accounting Standard Update – GASB Statement No. 87 – Leases – GASB has issued GASB Statement No. 87 relating to accounting and financial reporting for leases. This new statement establishes a single model for lease accounting based on the principle that leases are financing of the right to use an underlying asset. The following are extensive summaries of the current updates. As your continued business partner, we are committed to keeping you informed of new and emerging issues. We are happy to discuss these issues with you further and their applicability to your City. ACCOUNTING STANDARD UPDATE – GASB STATEMENT NO. 75 – ACCOUNTING AND
FINANCIAL REPORTING FOR POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS The primary objective of this Statement is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions (other postemployment benefits or OPEB). It also improves information provided by state and local governmental employers about financial support for OPEB that is provided by other entities. This Statement results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for all postemployment benefits (pensions and OPEB) with regard to providing decision-useful information, supporting assessments of accountability and interperiod equity, and creating additional transparency. This Statement replaces the requirements of Statements No. 45, Accounting and Financial Reporting by
Employers for Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPEB
Measurements by Agent Employers and Agent Multiple-Employer Plans, for OPEB. Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, establishes new accounting and financial reporting requirements for OPEB plans.
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City of Falcon Heights Emerging Issues ACCOUNTING STANDARD UPDATE – GASB STATEMENT NO. 75 – ACCOUNTING AND FINANCIAL REPORTING FOR POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED) GASB Statement No. 75 requires governments to report a liability on the face of the financial statements for the OPEB that they provide:
• Governments that are responsible only for OPEB liabilities related to their own employees and that provide OPEB through a defined benefit OPEB plan administered through a trust that meets specified criteria will report a net OPEB liability—the difference between the total OPEB
liability and assets accumulated in the trust and restricted to making benefit payments.
• Governments that participate in a cost-sharing OPEB plan that is administered through a trust
that meets the specified criteria will report a liability equal to their proportionate share of the
collective OPEB liability for all entities participating in the cost-sharing plan.
• Governments that do not provide OPEB through a trust that meets specified criteria will report
the total OPEB liability related to their employees. GASB Statement No. 75 carries forward from Statement No. 45 the option to use a specified alternative measurement method in place of an actuarial valuation for purposes of determining the total OPEB liability for benefits provided through OPEB plans in which there are fewer than 100 plan members (active and inactive). This option was retained in order to reduce costs for smaller governments. GASB Statement No. 75 requires governments in all types of OPEB plans to present more extensive note disclosures and required supplementary information (RSI) about their OPEB liabilities. Among the new note disclosures is a description of the effect on the reported OPEB liability of using a discount rate and a healthcare cost trend rate that are one percentage point higher and one percentage point lower than assumed by the government. The new RSI includes a schedule showing the causes of increases and decreases in the OPEB liability and a schedule comparing a government's actual OPEB contributions to its contribution requirements. Information provided above was obtained from www.gasb.org. ACCOUNTING STANDARD UPDATE – GASB STATEMENT NO. 84 – FIDUCIARY
ACTIVITIES The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported.
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City of Falcon Heights Emerging Issues ACCOUNTING STANDARD UPDATE – GASB STATEMENT NO. 84 – FIDUCIARY
ACTIVITIES (CONTINUED) This statement establishes criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria generally is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identify fiduciary component units and postemployment benefit arrangements that are fiduciary activities. An activity meeting the criteria should be reported in a fiduciary fund in the basic financial statements. Governments with activities meeting the criteria should present a statement of fiduciary net position and a statement of changes in fiduciary net position. An exception to that requirement is provided for a business-type activity that normally expects to hold custodial assets for three months or less. GASB Statement No. 84 describes four fiduciary funds that should be reported, if applicable: (1) pension (and other employee benefit) trust funds, (2) investment trust funds, (3) private-purpose trust funds, and (4) custodial funds. Custodial funds generally should report fiduciary activities that are not held in a trust or equivalent arrangement that meets specific criteria. This statement also provides for recognition of a liability to the beneficiaries in a fiduciary fund when an event has occurred that compels the government to disburse fiduciary resources. Events that compel a government to disburse fiduciary resources occur when a demand for the resources has been made or when no further action, approval, or condition is required to be taken or met by the beneficiary to release the assets. GASB Statement No. 84 is effective for reporting periods beginning after December 15, 2018. Earlier application is encouraged. Information provided above was obtained from www.gasb.org. ACCOUNTING STANDARD UPDATE – GASB STATEMENT NO. 87 – LEASES The objective of this statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments' financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments' leasing activities.
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City of Falcon Heights Emerging Issues ACCOUNTING STANDARD UPDATE – GASB STATEMENT NO. 87 – LEASES
(CONTINUED) A lease is defined as a contract that conveys control of the right to use another entity's nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. Any contract that meets this definition should be accounted for under the leases guidance, unless specifically excluded in this Statement. A short-term lease is defined as a lease that, at the commencement of the lease term, has a maximum possible term under the lease contract of 12 months (or less), including any options to extend, regardless of their probability of being exercised. Lessees and lessors should recognize short-term lease payments as outflows of resources or inflows of resources, respectively, based on the payment provisions of the lease contract. A lessee should recognize a lease liability and a lease asset at the commencement of the lease term, unless the lease is a short-term lease or it transfers ownership of the underlying asset. The lease liability should be measured at the present value of payments expected to be made during the lease term (less any lease incentives). The lease asset should be measured at the amount of the initial measurement of the lease liability, plus any payments made to the lessor at or before the commencement of the lease term and certain direct costs. A lessee should reduce the lease liability as payments are made and recognize an outflow of resources (for example, expense) for interest on the liability. The lessee should amortize the lease asset in a systematic and rational manner over the shorter of the lease term or the useful life of the underlying asset. The notes to financial statements should include a description of leasing arrangements, the amount of lease assets recognized, and a schedule of future lease payments to be made. A lessor should recognize a lease receivable and a deferred inflow of resources at the commencement of the lease term, with certain exceptions for leases of assets held as investments, certain regulated leases, short-term leases, and leases that transfer ownership of the underlying asset. A lessor should not derecognize the asset underlying the lease. The lease receivable should be measured at the present value of lease payments expected to be received during the lease term. The deferred inflow of resources should be measured at the value of the lease receivable plus any payments received at or before the commencement of the lease term that relate to future periods. A lessor should recognize interest revenue on the lease receivable and an inflow of resources (for example, revenue) from the deferred inflows of resources in a systematic and rational manner over the term of the lease. The notes to financial statements should include a description of leasing arrangements and the total amount of inflows of resources recognized from leases. GASB Statement No. 87 is effective for reporting periods beginning after December 15, 2019. Earlier application is encouraged. Information provided above was obtained from www.gasb.org.
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COMPREHENSIVE
ANNUAL FINANCIAL REPORT
OF THE
CITY OF FALCON HEIGHTS,
MINNESOTA
For the Year Ended December 31, 2017
Prepared by THE DEPARTMENT OF FINANCE
AND ADMINISTRATION
Sack Thongvanh, City Administrator
Roland Olson, Finance Director
CITY OF FALCON HEIGHTS
2077 W. Larpenteur Avenue
Falcon Heights, Minnesota 55113
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City of Falcon Heights
Table of Contents
Page
Introductory Section Elected Officials and Administration 1 Organization Chart 2
City Map 3
Letter of Transmittal 5
Certificate of Achievement for Excellence in Financial Reporting 10
Financial Section Independent Auditor's Report 11
Management's Discussion and Analysis 15
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 30 Statement of Activities 31 Fund Financial Statements
Balance Sheet – Governmental Funds 32
Reconciliation of the Balance Sheet to the Statement of Net Position –
Governmental Funds 35
Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds 36 Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances to the Statement of Activities – Governmental Funds 38
Statement of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual – General Fund 39
Statement of Net Position – Proprietary Funds 40
Statement of Revenues, Expenses, and Changes in Fund Net Position – Proprietary Funds 41 Statement of Cash Flows – Proprietary Funds 42
Notes to Financial Statements 43
Required Supplementary Information
Schedule of City's Proportionate Share of Net Pension Liability General
Employees Retirement Fund 68 Schedule of City Contributions General Employees Retirement Fund 68 Required Supplementary Information and Notes to Required
Supplementary Information 69
Notes to Required Supplementary Information 70
Combining and Individual Fund Statements and Schedules
Combining Balance Sheet – Nonmajor Governmental Funds 72 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances – Nonmajor Governmental Funds 76
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City of Falcon Heights
Table of Contents
Table Page
Financial Section (Continued) Combining and Individual Fund Statements and Schedules (Continued) Schedules of Revenues, Expenditures, and Changes in Fund Balance –
Budget and Actual
General Fund – Detailed 80
Park Programs Fund – Special Revenue Fund 83
Water Fund – Special Revenue Fund 84 Solid Waste Fund – Special Revenue Fund 85 Community Development Fund – Special Revenue Fund 86
Street Lighting Fund – Special Revenue Fund 87
Community Garden Fund – Special Revenue Fund 88
Emerald Ash Borer Grant Fund – Special Revenue Fund 89
G.O. Improvement Bonds, Series 2017A – Debt Service Fund 90 G.O. Improvement Bonds, Series 2013A – Debt Service Fund 91 G.O. Equipment Certificates, Series 2013B – Debt Service Fund 92
Future Improvements – Capital Projects Fund 93
Grove Street Improvement Project – Capital Projects Fund 94
General Capital Improvements – Capital Projects Fund 95
Parks/PW and Facilities Capital Improvements – Capital Projects Fund 96
Tax Increment No. 1 Construction – Capital Projects Fund 97 Tax Increment No. 1-3 – Capital Projects Fund 98 Public Safety Capital Improvements – Capital Projects Fund 99
Statistical Section
Net Position by Component 1 103
Changes in Net Position 2 105
Governmental Activities Tax Revenues by Source 3 106
Fund Balances of Governmental Funds 4 107 Changes in Fund Balances of Governmental Funds 5 108 General Governmental Tax Revenues by Source 6 110
Assessed Value and Estimated Actual Value of Taxable Property 7 111
Property Tax Rates – Direct and Overlapping Governments 8 112
Principal Property Taxpayers 9 113
Property Tax Levies and Collections 10 114
Ratios of Outstanding Debt by Type 11 115 Ratios of General Bonded Debt Outstanding 12 117
Direct and Overlapping Governmental Activities Debt 13 118
Legal Debt Margin Information 14 120
Pledged-Revenue Coverage 15 121
Demographic and Economic Statistics 16 122
Principal Employers 17 123 Full-Time Equivalent City Government Employees by Function 18 124 Operating Indicators by Function 19 125
Capital Asset Statistics by Function 20 126
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City of Falcon Heights
Elected Officials and Administration
December 31, 2017
Elected Officials Position Term Expires
Peter Lindstrom Mayor December 31, 2019
Joseph Brown Thunder Council Member December 31, 2019
Pamela Harris Council Member December 31, 2017
Randy Gustafson Council Member December 31, 2019
Tony Fischer Council Member December 31, 2017
Administration
Sack Thongvanh City Administrator
Roland Olson Finance Director
Tim Pittman Park and Public Works Director
Rich Hinrichs Fire Chief
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City of Falcon Heights
Organization Chart
December 31, 2017
TECHNICIAN
CABLE
DEPUTY CLERK
RECREATION SUPERVISOR
COMMUNITY DEVELOPMENT
COORDINATOR
FORESTRY
INSPECTOR
PLANNING CONSULTANTFISCAL CONSULTANT
DIRECTOR OF PARKS &
PUBLIC WORKS
PARKS/PW &
RECREATION STAFF
PARKS & RECREATION
COMMISSION
HUMAN RIGHTS
COMMISSION
MAYOR &
COUNCIL
PLANNING
COMMISSION
CITY
ADMINISTRATOR
ATTORNEYENGINEER
FIRE
INSPECTOR
NEIGHBORHOOD
COMMISSION
FIRE
CHIEF
MECHANICAL
INSPECTOR
PLUMBING
INSPECTOR
BUILDING
INSPECTOR
FINANCE
DIRECTOR
CLERICAL
STAFF
FIRE
FIGHTERS
ELECTIONS
COORDINATOR
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City of Falcon Heights
City Map
December 31, 2017
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Profile of the Government (Continued) Falcon Heights is a completely developed community. It has operated under the council/city
administrator form of government since 1974. Policy-making and legislative authority are vested
in a city council consisting of the mayor and four council members, all elected on a nonpartisan basis. The council appoints the city administrator, who in turn appoints the heads of the various departments. The council is responsible for passing ordinances, adopting the budget, appointing committees, and hiring the city administrator. The city administrator is responsible for carrying
out the policies and ordinances of the council and for overseeing the day-to-day operations of the
city government. Council members serve four-year staggered terms, with two council members elected every two years. The mayor is elected to serve a four-year term. The mayor and all four council members are elected at large.
The City of Falcon Heights provides a full range of services, including police and fire protection;
construction and maintenance of highways, streets, and other infrastructure, sewer services; and recreational and cultural activities. St. Paul Regional Water Services provides the water services for the City. The City of Falcon Heights' volunteer fire service also provides fire protection services for the City of Lauderdale, a neighboring community.
The Council is required to adopt a final budget by no later than the close of the fiscal year. This annual budget serves as the foundation for the City of Falcon Heights' financial planning and control. All departments of the City of Falcon Heights are required to submit requests for appropriation to the city administrator during or before the second week in June each year. The city administrator uses these requests as the starting point for developing a proposed budget. By
September of each year, the city staff submits to the city council a proposed operating budget for the fiscal year commencing the following January 1. The council is required to hold public hearings on the proposed budget and to adopt a final budget by no later than December 31, the close of the City of Falcon Heights' fiscal year.
The appropriated budget is prepared by fund, function (e.g., public safety), and department (e.g., police). Transfers of appropriations between funds require the special approval of the city council. Budget-to-actual comparisons are provided in the report for each individual governmental fund for which an appropriated annual budget has been adopted. For the general fund, this comparison is presented on page 36 as part of the basic financial statements for the
governmental funds. For the Special Revenue funds, Debt Service funds, and Capital Project funds, this comparison is presented on pages 71-91. Local Economy The information presented in the financial statements is perhaps best understood when it is
considered from the broader perspective of the specific environment within which the City of Falcon Heights operates.
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Local Economy (Continued) The City of Falcon Heights is primarily a bedroom, residential, inner ring suburban community
situated near the center of the Minneapolis and St. Paul metropolitan area. The economy of the
City consists of retail, commerce, agricultural-related businesses, and institutional landowners, such as the St. Paul campus of the University of Minnesota and the Minnesota State Fair. The St. Paul campus of the University of Minnesota has 2,700 employees and a student population of approximately 6,300 students enrolled in the specific colleges located on the St. Paul Campus.
The Minnesota State Fair, held over a 12-day period, is one of the nation's largest and best-
attended entertainment events with approximately 1.94 million visitors each year. Also, additional "non-fair" events have attendance estimated at 100,000 visitors. One of these "non-fair" events is the Minnesota Street Rod Convention, which
attracts over 65,000 visitors.
Because of its location in a region with a varied economic base, unemployment is relatively stable and tends to be less than the State of Minnesota and national rates. During the past ten years, the unemployment rate for Ramsey County, within which the City is located, was at a high of 9.1% in July 2011, and in 2017, the unemployment rate was 3.2%. In 2017, the State of
Minnesota's ending unemployment rate was 3.1% and the national ending unemployment rate was 4.1%. The average 2017 state of Minnesota's unemployment rate was 3.4% and the average 2017 national unemployment rate was 4.4%. The City is at or near full development, with a 2% increase in the median market value of
property during 2017. The City's economic conditions have remained relatively stable with the University of Minnesota agricultural campus, Spire Federal Credit Union, and the Minnesota State Fairgrounds providing a diversified economic employment base. The City continues an aggressive plan of reconstruction and improvement of its streets. Ongoing
maintenance activities will continue with yearly sealcoating, curb/gutter repairs, and sidewalk replacement as needed throughout the City. MSA street funds and assessments will be utilized for all street maintenance activities. Long-Term Financial Planning
During 2009, the City of Falcon Heights completed updating its Comprehensive Plan and obtained approval of the plan by the Metropolitan Council. As part of the plan, the City continues to look at alternative ways to increase the tax base of the City such as evaluating any re-development opportunities in our business district and increasing housing densities when appropriate.
The City continues to complete a ten-year capital improvement plan as part of its annual budget and uses a financial planning company to assist with any plans and bonding requirements.
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Relevant Financial Policies The Mayor and council members continue to evaluate the level of reserves of the city with their
desire to minimize property tax increases on the citizens while still maintaining service levels.
With tax revenues scheduled for receipt in the months of July and December, the City needs to maintain sufficient working capital to mitigate cash flow timing concerns. One important reason for maintaining a high fund balance in the general fund is that it leads to increased investment income allocated to the General Fund since the investment income is allocated based upon levels
of fund balance among all the funds. This helps to minimize any levy increases needed to
support the general operating expenses of the city. Major Initiatives In 2008, the City of Falcon Heights participated in a grant application of $1,078,000 with the
University of Minnesota and the neighboring city of Roseville to complete a three-mile
pedestrian trail. This grant was awarded with construction to have phase I completed in 2011 and phase II completed in 2012. The Northeast Connector Trail project has now been completed. This development project was a collaborative effort between the City of Roseville, the City of Falcon Heights and the University of Minnesota to allow for residents of both cities and the university to enjoy walking or biking through Falcon Heights.
In 2010, the City finished preliminary improvements on the Larpenteur Avenue streetscape project, which included modifications to the street medians to allow for plants and flowers. Warranty work for this project was completed in 2012. Larpenteur Avenue is one of the two main street corridors for the City of Falcon Heights.
In 2013, the City completed two storm water underground storage and infiltration systems in our storm water system in an area of the city that had no storm water sewer system. In 2014 and 2015, the City completed the relining of sanitary sewer lines in a residential section
of the city. Also in 2015, approximately one mile of city streets was improved with mill and overlay resurfacing. In 2015, an underground storage and infiltration system was completed in our Curtiss Field Park to prevent flooding whenever a large rainfall occurred.
In 2017, approximately one mile of city streets was improved with a reclaim and resurface project. New water lines were also installed with improvements in storm water catch basins and sanitary sewer basins. Awards and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Falcon Heights for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended December 31, 2017. This was the twenty-seventh consecutive year that the City has received this prestigious award. In order to be
awarded a Certificate of Achievement, the City published an easily readable and efficiently organized CAFR. This report satisfied both GAAP and applicable legal requirements.
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BerganKDV, Ltd. bergankdv.com
Independent Auditor's Report
Honorable Mayor and Members of the City Council
City of Falcon Heights
Falcon Heights, Minnesota
Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of
the City of Falcon Heights, Minnesota, as of and for the year ended December 31, 2017, and
the related notes to financial statements, which collectively comprise the City's basic
financial statements as listed in the Table of Contents.
Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States
of America; this includes the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error. Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
City's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinions.
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Opinions In our opinion, the financial statements referred to in the first paragraph present fairly, in all
material respects, the respective financial position of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the City of
Falcon Heights, Minnesota, as of December 31, 2017, and the respective changes in financial
position and, where applicable, cash flows thereof and the budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, which follows this report letter, and the Required
Supplementary Information as listed in the Table of Contents be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board (GASB), who
considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the Required Supplementary Information in accordance with auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the basic financial
statements and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Falcon Heights' basic financial statements. The introductory section, combining and individual nonmajor fund financial statements and
statistical section, are presented for purposes of additional analysis, and are not a required
part of the basic financial statements.
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Other Matters (Continued)
Other Information (Continued)
The combining and individual fund financial statements and schedules are the responsibility
of management and were derived from and relate directly to the underlying accounting and
other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly
to the underlying accounting and other records used to prepare the basic financial statements
or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In
our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The introductory section and statistical section have not been subjected to the auditing
procedures applied in the audit of the basic financial statements, and accordingly, we do not
express an opinion or provide any assurance on them.
Minneapolis, Minnesota
April 30, 2018
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City of Falcon Heights Management's Discussion and Analysis
15
As management of the City of Falcon Heights (the "City"), we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2017. 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 5-9 of this report. All amounts, unless otherwise indicated, are expressed in dollars. FINANCIAL HIGHLIGHTS
• The assets & deferred inflows of resources of the City exceeded its liabilities & deferred inflows of resources at the close of the most recent fiscal year by $14,035,741 (net position). Of this amount, $4,673,610 (unrestricted net position) may be used to meet the City's ongoing obligations to citizens and creditors.
• The City's total net position decreased by $22,274. Unrestricted net position decreased by $272,364.
• As of the close of the current fiscal year, the City's governmental funds reported
combined ending fund balances of $4,327,175 an increase of $1,133,545 in comparison
with the prior year. Debt principal payments of $150,000 and interest payments of $15,593 occurred in 2017. A positive change in fund balance in the general fund of $117,597, along with increases of $1,015,948 in the fund balances of other governmental funds resulted in a net increase of $1,133,545 in total fund balance.
• Fund balance definitions must conform to the Government Accounting Standards Board (GASB) Statement No. 54 for the most current year-ended. GASB 54 requires governments to allocate fund balances pursuant to a new hierarchy; fund balances are defined as "Non-spendable," "Restricted," "Committed," "Assigned," and "Unassigned."
The new hierarchy defines how a fund discloses its fund balance. Only the general fund
maintains an unassigned residual fund balance. The fund balances maintained by all of the other funds are designated for a specific purpose. Restricted, committed, and assigned balances represent differing forms of legal constraint. The reservation of restricted fund balances is stipulated by a city charter, constitution, or grant contract. Committed fund
balances have been reserved by the highest law-making body of the government. An
assigned fund balance is reserved for the purpose of the fund; for example, the fund balance in the Future Improvements Fund is assigned for future improvements. The General Fund's unassigned fund balance of $1,828,155 is approximately 45% of the total fund balance of all governmental funds.
• At the end of the current fiscal year, the unassigned fund balance for the General Fund was $1,828,155, or 96.5%, of total General Fund expenditures at 2017 levels.
• For 2017, there was an 8.9% increase in the property tax levy. For 2016, there was an 8.3% increase. In 2015 and 2014, there was no increase in the property tax levy. For 2013, there was a 6.5% increase in the property tax levy. For 2012, there was a 1.96%
decrease in the property tax levy. For 2011, there was a 1.5% increase in the property tax levy.
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City of Falcon Heights Management's Discussion and Analysis
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FINANCIAL HIGHLIGHTS (CONTINUED)
• The City's total debt increased by $695,000 during the current fiscal year. This represents scheduled payments of $150,000 of the City's debt and the addition of the 2017 GO Improvement Bond of $845,000. The principal of general obligation debt outstanding as
of December 31, 2017 is $1,625,000.
OVERVIEW OF THE FINANCIAL STATEMENTS
This management's discussion and analysis (MD&A) is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements are comprised of 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's finances in a manner similar to a private-sector business.
The Statement of Net Position presents information on all of the City's assets and liabilities, 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 is improving or deteriorating.
The Statement of Activities presents information showing how the government'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 vacation leave).
Both of the government-wide financial statements distinguish functions of the City 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 include
general government, public safety, public works, parks and recreation, and community development. The business-type activities of the City include sanitary sewer and storm drainage.
The government-wide financial statements include only the City itself (known as the primary government). The City has no component units.
The government-wide financial statements can be found on pages 30-31 of this report.
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City of Falcon Heights Management's Discussion and Analysis
17
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, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All funds of the City 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 financing 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 statements.
By doing so, readers may better understand the long-term impact of the City's near-term financing decisions. Both the governmental fund Balance Sheet and the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
Any fund experiencing financial change during the year is considered active. The City maintained 18 individual governmental funds during 2017. Of these funds, five are major funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General, Future Improvements, G.O. Improvement Series 2017A Debt Service Fund, G.O
Improvement Series 2013A Debt Service Fund, and the Grove Street Improvement capital fund. – the five major funds of the City. Data from the other 13 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 this report. In addition, individual fund schedules are presented on pages 83-99 for all Special Revenue, Debt Service
and Capital Projects Funds. The City adopts an annual appropriated budget for its General Fund, Special Revenue Funds Debt Service Funds and Capital Project Funds. A budgetary comparison statement has been provided for these funds to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 32-39 of this report.
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City of Falcon Heights Management's Discussion and Analysis
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FUND FINANCIAL STATEMENTS (CONTINUED) Proprietary Funds
The City maintains one type of proprietary fund. Enterprise funds are used to report the same
functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its sanitary sewer and storm drainage activities. Proprietary funds provide the same type of information as the government-wide financial
statements, only in greater detail. The proprietary fund financial statements provide separate
information for sanitary sewer and storm drainage, both of which are considered to be major funds of the City. The basic proprietary fund financial statements can be found on pages 40-42 of this report. NOTES TO THE FINANCIAL STATEMENTS The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The Notes to the Financial Statements can be found on pages 43-65 of this report.
OTHER INFORMATION The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the Notes to the Financial Statements, along with statistical
tables for the City. Combining and individual fund statements and schedules can be found on pages 72-99. Statistical tables can be found on pages 103-126 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a city's financial position. In the case of the City, assets & deferred outflows of resources exceeded liabilities & deferred inflows of resources by $14,035,741 at the close of the most recent fiscal year. Thirty three percent ($4,673,610) of the City's net position is unrestricted and may be used to
meet the City's ongoing obligations to citizens and creditors. About 4% ($613,084) of the net position is restricted and represents resources that are subject to external restrictions on how they may be used. The remaining 63% ($8,749,047) reflects the City's investment in capital assets (e.g., land, buildings, machinery, and equipment) offset by any related debt used to acquire those assets that are still outstanding.
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City of Falcon Heights Management's Discussion and Analysis
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GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED) City of Falcon Heights' Net Position
2017 2016 2017 2016 2017 2016
Assets
Current and other assets 4,645,762$ 3,416,385$ 2,319,781$ 2,689,272$ 6,965,543$ 6,105,657$
Capital assets 7,902,797 8,069,185 1,675,687 1,487,989 9,578,484 9,557,174
Total assets 12,548,559 11,485,570 3,995,468 4,177,261 16,544,027 15,662,831
Deferred outflows of
resources - pensions 114,286 210,172 39,589 74,223 153,875 284,395
Total assets and deferred
outflows of resources 12,662,845$ 11,695,742$ 4,035,057$ 4,251,484$ 16,697,902$ 15,947,226$
Liabilities
Long-term liabilities
Outstanding 1,999,014$ 1,330,190$ 168,938$ 198,485$ 2,167,952$ 1,528,675$
Other liabilities 357,379 245,376 21,400 14,692 378,779 260,068
Total liabilities 2,356,393 1,575,566 190,338 213,177 2,546,731 1,788,743
Deferred inflows of
resources - pensions 85,733 74,247 29,697 26,221 115,430 100,468
Net Position
Net investment in capital assets 7,073,360 7,139,185 1,675,687 1,487,989 8,749,047 8,627,174
Restricted 613,084 484,867 - - 613,084 484,867
Unrestricted 2,534,275 2,421,877 2,139,335 2,524,097 4,673,610 4,945,974
Total net position 10,220,719 10,045,929 3,815,022 4,012,086 14,035,741 14,058,015
Total liabilities, deferred
inflows of resources, and net position $ 12,662,845 $ 11,695,742 $ 4,035,057 $ 4,251,484 16,697,902$ 15,947,226$
Governmental Activities Business-Type Activities Total
The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although, the City'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 extinguish these liabilities. At the end of the current fiscal year, the City was able to report positive balances in all three categories of net position, both for the City as a whole, as well as for its separate governmental
and business-type activities. The same situation holds true for the prior fiscal year.
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GOVERNMENT-WIDE FINANCIAL ANALYSIS (CONTINUED) City of Falcon Heights' Changes in Net Position
2017 2016 2017 2016 2017 2016Revenues
Program revenues
Charges for services $ 436,820 $ 461,389 $ 1,049,348 $ 986,406 $ 1,486,168 $ 1,447,795
Operating grants and contributions 154,211 151,536 - 701 154,211 152,237
Capital grants and contributions 953,653 11,490 - - 953,653 11,490
General revenues
Property taxes 1,271,602 1,181,336 - - 1,271,602 1,181,336
Other 736,979 793,796 - - 736,979 793,796
Investment earnings 29,149 22,163 19,318 13,844 48,467 36,007
Gain of sale of assets 225 61 - - 225 61
Total revenues 3,582,639 2,621,771 1,068,666 1,000,951 4,651,305 3,622,722
Expenses
General government 752,640 696,194 - - 752,640 696,194
Public safety 1,072,905 1,073,268 - - 1,072,905 1,073,268
Public works 1,775,574 648,892 - - 1,775,574 648,892
Park and recreation 174,392 162,958 - - 174,392 162,958
Community development 3,726 1,789 - - 3,726 1,789
Interest on long-term debt 28,612 18,363 - - 28,612 18,363
Sanitary sewer - - 723,236 760,415 723,236 760,415
Storm drainage - - 142,494 122,303 142,494 122,303
Total expenses 3,807,849 2,601,464 865,730 882,718 4,673,579 3,484,182
Increase in net position before transfers (225,210) 20,307 202,936 118,233 (22,274) 138,540
Transfer 400,000 40,000 (400,000) (40,000) - -
Changes in net position 174,790 60,307 (197,064) 78,233 (22,274) 138,540
Net position – January 1 10,045,929 9,985,622 4,012,086 3,933,853 14,058,015 13,919,475
Net position - December 31 10,220,719$ 10,045,929$ 3,815,022$ 4,012,086$ 14,035,741$ 14,058,015$
Governmental Activities Business-type Activities Total
GOVERNMENTAL ACTIVITIES
Governmental activities increased the City's net position by $174,790. In 2017, the City Council increased the tax levy by 8.9% resulting in increased tax revenues by 8.4%. In 2016, the City Council increased the tax levy by 8.4%. In 2015, the property tax revenues increased by 3.63%. In 2014 there was a 3.4% decrease in property tax revenue due to a tax petition court case lowering the property taxes of one of the city's biggest taxpayers. The
2017 delinquencies in property tax collections were consistent with the delinquency payments in 2016, 2015 and 2014. The City's tax base continues to be very stable resulting in a low delinquency rate. In the governmental activities section, overall, charges for services decreased $24,569 from the
2016 level. Comparing to 2016 levels, roofing permits decreased $10,844, plan check fees increased $10,570, and the city's insurance refund decreased $22,154. Capital grants increased $942,163 primarily due to the 2017 Grove street project with capital
grant support of $468,786 from St Paul Water Utility, $79,083 from the University of Minnesota, $190,000 from Minnesota Department of Transportation, and property street assessments of $163,930.
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GOVERNMENTAL ACTIVITIES (CONTINUED)
Operating grants and contributions remain consistent with the 2016 level. In 2017, they were $154,211 compared to $151,536 in 2016. Local Government Aid (LGA) to the City from the State of Minnesota increased $4,200 in 2017. The amount of LGA support from the State of Minnesota typically varies annually. In addition, governmental activities unrestricted investment revenues increased $6,986 as compared to 2016. On the following pages are specific graphs, which provide comparisons of the governmental activities' revenues and expenses. Expenses and Program Revenue – Governmental Activities
Revenues by Source – Governmental Activities
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
$2,000,000
GeneralGovernment Public Safety Public Works Parks andRecreation CommunityDevelopment Interest onLong-TermDebt
Expenses
Program Revenues
Property Taxes36%
Other General Revenues21%
Charges for Services12%
Capital Grants and Contributions26%
Operating Grants and Contributions4%
Unrestricted
Investment Earnings1%
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BUSINESS-TYPE ACTIVITIES Business-type activities decreased the City's net position by $197,064. In 2017, there was a 4.7%
increase in the sanitary sewer fees and a 6.8% increase in storm drainage fees. In the business-
type activities section, there was an increase in charges for services totaling $62,942. In 2017, there was a 4.7% increase in sanitary sewer fees and a 6.8% increase in storm drainage fees. In 2016, there was a 10.4% increase in sanitary sewer fees and no increase in storm
drainage fees. In 2015 and 2014, there was no price increase for either sanitary sewer or storm
drainage fees. In 2013, the sanitary sewer fees raised 8.5% and an 11.4% increase of storm sewer fees. No price increases in 2012. In 2011, the City changed the method of billing the sanitary sewer fees. The City instituted a base fee plus a variable fee determined by water consumption, instead of the previous method of using a flat fee for residential property owners. This resulted in property owners having an incentive to use less water consumption to help lower their sanitary
sewer charges. The commercial properties were raised the same percentage increase as the residential properties. With the environmental importance of clean storm water drainage flows being discharged into our neighboring lakes and ponds, the City will continue to be required to make future capital improvements to our storm water drainage system. Expenses and Operating Revenues – Business-Type Activities
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
Sanitary Sewer Storm Drainage
Expenses
Operating Revenues
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BUSINESS-TYPE ACTIVITIES (CONTINUED) Revenues by Source – Business-Type Activities
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds
The focus of the City'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's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a city's net resources available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $4,327,175, an increase of $,1,133,545 in comparison with the prior year. Approximately 42% ($1,828,155) of this total amount constitutes unassigned fund balance, which is available for spending at the City's discretion. Approximately one percent ($37,201) of the remainder of fund balance is non-spendable, which indicates that it is not available for new
spending because it has already been disbursed for various prepaid expenditures in the General
Fund. Twelve percent ($498,308) is restricted fund balance constrained to a specific purpose by outside legislation, external parties, or constitutional provisions. Seven percent ($321,089) is committed fund balance constrained by the City Council for specific purposes. Thirty eight percent ($1,642,422) is assigned fund balance intended for specific purposes by management as
delegated authority by the City Council.
Charges for Services98%
Unrestricted
Investment Earnings2%
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FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS (CONTINUED) Governmental Funds (Continued)
The General Fund is the principal operating fund of the City. At the end of the current fiscal
year, unassigned fund balance of the General Fund was $1,828,155 , while total fund balance reached $1,865,356. 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 96.5% of total General Fund expenditures, while total fund balance represents
98.5% of that same amount.
In 2017, the fund balance of the City's General Fund increased by $117,597. Revenues were $30,626 over budget. Expenditures were $86,971 under budget. During 2017, the City emphasized operating within the budget. Key factors for this increased fund balance are:
Revenue Variances
• Property Tax revenue had a variance under budget of $6,425 due to delinquencies.
• Revenues from fees associated with licenses and permits was $33,394 over budget
primarily due to building permits from three new homes being built and the elementary
school being re-roofed.
• Intergovernmental revenue had a variance under budget of $14,500 primarily due to less revenue from a neighboring city fire contract due to decreased fire calls.
• Fines and forfeits revenue had a variance of $27,194 under budget primarily due to changes in police procedures. Ramsey County's court system collects the fines and forfeits for the City.
• Plan check fees were over budget by $11,231. Once again due to increased building
permits.
• Investment income was $8,519 over budget due to improving yields on investments.
• Other revenues was over budget by $14,539 due to a refund of the city's insurance policy, reimbursements from City of Anthony police expenses and fire training reimbursements
from State of Minnesota. Expenditure Variances
• The administrative section recognized a $13,836 expenditure variance under budget.
$5,707 of this variance was due to a reduction in conference and education expenses.
• The Finance section recognized a $7,713 expenditure variance under budget. This is due to lower salary and compensation expenses than budgeted.
• There was a $6,210 expenditure variance under budget in Legal due to less use of legal
representation.
• A $6,039 expenditure variance over the budgeted amount in police expenditures was recognized by the City.
• Expenditures for firefighting for the City were $5,694 under budget for the current year.
• The fire relief aid had a $14,418 expenditure variance under budget.
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FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS (CONTINUED)
Governmental Funds (Continued)
• Public works expenditures had a variance under budget of $48,047. Savings in snow plowing costs of $25,985 were achieved by a mild winter and performing snowplowing in house instead of hiring an outside vendor. Additional savings in motor fuel, lubricants,
and supplies resulted in an additional $4,845 variance under budget.
• A $17,947 expenditure variance over budget in planning and inspection expenditures primarily due to the large permits that were granted in 2017.
• A $4,559 expenditure variance under budget in total park and recreation expenditures
was due to less overall park maintenance.
• A transfer of $22,000 continued to be made from the General Fund to the Parks Program Special Revenue Fund to help support summer recreational sports programming activities. In additions, there was transfer of $20,000 from the General Fund to the
General Capital for future capital needs in city hall.
The Future Improvements Fund, a major fund, is the fund the City uses to record the infrastructure capital improvements of the City that would not be associated with any of the
City's tax increment financing districts. The City received $57,005 in street aid from the state of Minnesota and an additional grant of $4,031 from the University of Minnesota for bike repair stations in the City. This Future Improvement Fund holds $701,074 in assigned fund balance for future construction projects. Proprietary Funds The City's proprietary funds provide the same type of information found in the government-wide financial statements, but in greater detail.
Unrestricted net position of the Sanitary Sewer Fund at the end of the year amounted to $1,976,704 while unrestricted net position for the Storm Drainage Fund amounted to $162,631. GENERAL FUND BUDGETARY HIGHLIGHTS During the year, General Fund expenditures were $86,971 less than the budgetary estimates. Revenues were $30,626 more than the budgetary estimates. Also, $22,000 was transferred from the General Fund to the Parks Program Special Revenue Fund to help support summer recreational activities in the City and $20,000 was transferred from the General Fund to the
General Capital Fund for future capital projects in our council chambers. In 2017, the net change
in fund balance for the General Fund was $117,597
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets The City's investment in capital assets for its governmental and business-type activities as of December 31, 2017 amounts to $9,578,484 (net of accumulated depreciation). This investment in
capital assets includes land, buildings and system, improvements other than buildings, machinery and equipment and infrastructure.
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CAPITAL ASSET AND DEBT ADMINISTRATION (CONTINUED)
Capital Assets (Continued)
The City has elected to use the "modified approach," as defined by GASB Statement No. 34, for infrastructure reporting of its streets and alleys.
The City implemented a pavement management program in 2001 to assist in maintaining and
monitoring the performance of the paved street network. This is one of the City's largest investments and would have a significant dollar value if it were to be replaced today. The software program, MicroPAVER, developed by the Army Corps of Engineers, was used by the City in 2001 and 2004. For 2007, 2010, 2013, and 2016 the City used the software program
ICON, which was developed and supported by Goodpointe Technology as a tool for pavement
management. While the software is different, the methodology is the same. Both systems use field surveys to identify distresses and rate the current condition of the streets. Both systems use the segment and distress information to determine the current Pavement Condition Index (PCI) for each segment. However, ICON provides the City with the ability to determine future needs
based on current and past maintenance strategies and prioritize the appropriate rehabilitation at
optimum times. Also, ICON has a geographic information system interface to enable easy development of maps showing the results of the analysis.
ICON used the information gathered in the field to calculate a PCI rating for each pavement segment. A PCI rating of 100 would be indicative of a newly constructed street with no distress, while a rating of 0 would show a completely failed street. Segments then can be grouped into like categories of PCI ratings to help determine a schedule of maintenance, rehabilitation and
reconstruction. The PCI groups set up for the City are as follows: 100 to 66 – Adequate;
65 to 36 – Marginal; and 35 to 0 – Poor. The City's minimum desired PCI rating is 70. For the year 2007, the City's PCI rating was 87. For the year 2010, the City's PCI rating was 76. For 2013, the City's PCI rating was 74. For 2016, the City's PCI rating was 77.
In 2017, the City conducted mill and overlay resurfacing in one of the neighborhoods. During 2015, two major capital asset events occurred. The City relined a portion of the sanitary sewer line in one of the sections of the city at a cost of $166,190. The other major capital asset event was mill and overlay resurfacing on two of the city's streets including repair of storm drainage catch basins.
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CAPITAL ASSET AND DEBT ADMINISTRATION (CONTINUED) City of Falcon Heights' Capital Assets (Net of Depreciation)
2017 2016 2017 2016 2017 2016
Land $ 419,707 $ 419,707 $ - $ - $ 419,707 $ 419,707
Construction in progress - -
Building and system 302,391 344,911 1,619,929 1,479,585 1,922,320 1,824,496
Improvements other
Than buildings 529,625 534,672 - - 529,625 534,672
Machinery and equipment 901,291 1,020,112 55,758 8,404 957,049 1,028,516
Infrastructure 5,749,783 5,749,783 - - 5,749,783 5,749,783
Total $ 7,902,797 $ 8,069,185 $ 1,675,687 $ 1,487,989 $ 9,578,484 $ 9,557,174
Governmental Activities Business-Type Activities Total
Additional information on the City's capital assets can be found in Note 3 on pages 54-55 of this
report.
Long-Term Debt
At the end of the current fiscal year, the City had total bonded debt outstanding of $1,625,000.
During 2017 debt of $845,000 was issued. The debt service payment in 2017 was $150,000.
City of Falcon Heights' Outstanding Debt General Obligation (G.O.) and Revenue Bonds
2017 2016 2017 2016 2017 2016
G.O. Bonds $ 1,625,000 $ 930,000 $ - $ - $ 1,625,000 $ 930,000
TotalGovernmental Activities Business-Type Activities
The City earned a "AAA" rating from Standard and Poor's Rating Service on the latest debt issuance of 2017. State statutes limit the amount of G.O. debt a governmental entity may issue to a percentage of its total assessed valuation. The current debt limitation for the City is $8,068,774, which is in excess of the City's outstanding G.O. debt. Additional information on the City's long-term debt can be found in Note 5 on pages 56-58 of this report. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The December 2017 unemployment rate for Ramsey County, in which the City resides, is
currently 3.2%, which is a decrease from a rate of 3.5% a year ago. This local unemployment rate compares unfavorably to the state's December 2017 unemployment rate of 3.1% and favorably to the national December 2017 rate of 4.1%.
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ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES (CONTINUED) Inflationary trends in the region compare favorably to national indices. For a basket of goods
indexed at $100 in 1984, a resident of the Midwest Region will pay approximately $236. This
compares favorably to the average US citizen who pays approximately $245 for that same basket. The sources for this data are the Federal Reserve Bank of Minneapolis and the Federal Bureau of Labor and Statistics.
All of these factors were considered in preparing the City's budget for the 2017 fiscal year.
During the current fiscal year, the fund balance in the General Fund increased by $117,597 to a total of $1,865,356. The City has designated $1,828,155 of this balance as unassigned fund balance available for spending at the City's discretion. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Office of
the Finance Director, 2077 W. Larpenteur Ave., City of Falcon Heights, Minnesota 55113.
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29
BASIC FINANCIAL STATEMENTS
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Governmental
Activities
Business-Type
Activities TotalAssets
Cash and investments (including cash eqivalents)4,349,489$ 2,063,766$ 6,413,255$
ReceivablesTaxes receivable 10,727 - 10,727
Special assessments 151,284 - 151,284
Accounts receivable 44,758 207,020 251,778 Interest receivable 7,663 6,149 13,812
Due from other governments 44,640 - 44,640
Prepaid items 37,201 42,846 80,047 Capital assets (net of accumulated depreciation)Land 419,707 - 419,707
Infrastructure 5,749,783 - 5,749,783 Buildings and system 302,391 1,619,929 1,922,320 Improvements other than buildings 529,625 - 529,625
Machinery and equipment 901,291 55,758 957,049
Total assets 12,548,559 3,995,468 16,544,027
Deferred Outflows of ResourcesDeferred outflows of resources related to pensions 114,286 39,589 153,875
Total assets and deferred outflows of resources 12,662,845$ 4,035,057$ 16,697,902$
LiabilitiesAccounts payable 64,395$ 5,883$ 70,278$ Contracts payable 69,461 - 69,461
Due to other governments 660 - 660 Salaries and benefits payable 1,227 1,777 3,004 Interest payable 17,371 - 17,371
Unearned revenue 20,833 - 20,833 Bond principal payablePayable within one year 65,000 - 65,000 Payable after one year 1,089,437 - 1,089,437 Equipment certificate payable
Payable within one year 85,000 - 85,000
Payable after one year 435,000 - 435,000 Compensated absences payable
Payable within one year 33,432 13,740 47,172
Payable after one year 57,326 24,403 81,729
417,251 144,535 561,786 Total liabilities 2,356,393 190,338 2,546,731
Deferred Inflows of ResourcesDeferred inflows of resources related to pensions 85,733 29,697 115,430
Net PositionNet investment in capital assets 7,073,360 1,675,687 8,749,047 Restricted for
Debt service 519,530 - 519,530
Tax increment 58,964 - 58,964
Park dedication 34,590 - 34,590 Unrestricted 2,534,275 2,139,335 4,673,610 Total net position 10,220,719 3,815,022 14,035,741
Total liabilities, deferred inflows of resources, and net position 12,662,845$ 4,035,057$ 16,697,902$
See notes to financial statements.30
City of Falcon HeightsStatement of Net Position
December 31, 2017
Net pension liability
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Program Revenues
Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital Grants
and
Contributions
Governmental
Activities
Business-Type
Activities Total
Governmental activities
General government 752,640$ 145,060$ -$ -$ (607,580)$ -$ (607,580)$
Public safety 1,072,905 127,160 82,397 - (863,348) - (863,348) Public works 1,775,574 151,229 70,734 951,517 (602,094) - (602,094) Park and recreation 174,392 11,476 1,080 - (161,836) - (161,836) Community development 3,726 1,895 - 2,136 305 - 305
Interest on long-term debt 28,612 - - - (28,612) - (28,612)
Total governmental activities 3,807,849 436,820 154,211 953,653 (2,263,165) - (2,263,165)
Business-type activitiesSanitary sewer 723,236 879,391 - - - 156,155 156,155 Storm sewer 142,494 169,957 - - - 27,463 27,463
Total business-type activities 865,730 1,049,348 - - - 183,618 183,618
Total governmental and business-type activities 4,673,579$ 1,486,168$ 154,211$ 953,653$ (2,263,165) 183,618 (2,079,547)
General revenues
Property taxes levied for general purposes 1,146,562 - 1,146,562
Property taxes levied for debt service 125,040 - 125,040
Tax increments 172,018 - 172,018
Unrestricted state aid 546,524 - 546,524 Other general revenue 18,437 - 18,437 Unrestricted investment earnings 29,149 19,318 48,467
Gain of sale of assets 225 - 225
Transfers 400,000 (400,000) -
Total general revenues and transfers 2,437,955 (380,682) 2,057,273
Change in net position 174,790 (197,064) (22,274) Net position - beginning 10,045,929 4,012,086 14,058,015
Net position - ending 10,220,719$ 3,815,022$ 14,035,741$
3
1
See notes to financial statements.
Net (Expense) Revenue
and Changes in Net Position
Functions/Programs
City of Falcon Heights
Year Ended December 31, 2017Statement of Activities
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General
G.O.
Improvement
Series 2017A
G.O.
Improvement
Series 2013A
Assets
Cash and investments 1,828,979$ 138,635$ 135,872$
Taxes receivable - delinquent 9,793 - -
Special assessment receivables -
deferred - 38,485 93,662 Accounts receivable 3,069 - - Interest receivable 5,208 - -
Due from other governments 42,255 - 2,250
Prepaid items 37,201 - -
Total assets 1,926,505$ 177,120$ 231,784$
Liabilities
Accounts payable 49,469$ -$ -$
Contracts payable - - -
Due to other governments 660 - -
Salaries and benefits payable 1,227 - - Unearned revenue - - - Total liabilities 51,356 - -
Deferred Inflows of Resources
Unavailable revenue - property tax 9,793 - -
Unavailable revenue - special assessments - 38,485 93,662
Total deferred inflows of resources 9,793 38,485 93,662
Fund BalancesNonspendable 37,201 - -
Restricted - 138,635 138,122
Committed - - - Assigned - - - Unassigned 1,828,155 - -
Total fund balances 1,865,356 138,635 138,122
Total liabilities, deferred inflows of
resources, and fund balances 1,926,505$ 177,120$ 231,784$
See notes to financial statements.32
Debt Service Funds
City of Falcon Heights
Balance Sheet - Governmental Funds
December 31, 2017
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Future
Improvements
Grove Street
Improvement
Project
Other
Governmental
Funds
Total
Governmental
Funds
704,858$ 599,319$ 941,826$ 4,349,489$
934 - - 10,727
19,137 - - 151,284 - 18,943 22,746 44,758 1,816 - 639 7,663
- - 135 44,640
- - - 37,201
726,745$ 618,262$ 965,346$ 4,645,762$
5,600$ 560$ 8,766$ 64,395$
- 64,461 5,000 69,461
- - - 660
- - - 1,227 - - 20,833 20,833 5,600 65,021 34,599 156,576
934 - - 10,727
19,137 - - 151,284
20,071 - - 162,011
- - - 37,201
- - 221,551 498,308
- - 321,089 321,089 701,074 553,241 388,107 1,642,422 - - - 1,828,155
701,074 553,241 930,747 4,327,175
726,745$ 618,262$ 965,346$ 4,645,762$
33
Capital Projects Fund
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34
(THIS PAGE LEFT BLANK INTENTIONALLY)
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City of Falcon Heights
Reconciliation of the Balance Sheet to
the Statement of Net Position - Governmental Funds
December 31, 2017
Total fund balances - governmental funds 4,327,175$
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 10,388,820
Less accumulated depreciation (2,486,023)
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 (1,105,000)
Bond premium (49,437)
Equipment certificates payable (520,000)
Compensated absences payable (90,758)
Net pension liability (417,251)
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 (85,733)
Deferred outflows of resources related to pensions 114,286
Delinquent receivables will be collected in subsequent years, but are not
available soon enough to pay for the current period's expenditures and,
therefore, are deferred in the funds.
Property taxes 10,727
Revenues in the Statement of Activities that do not provide current
financial resources are not reported as revenues in the funds.
Deferred special assessments 151,284
Governmental funds do not report a liability for accrued interest on long-term
debt until due and payable.(17,371)
10,220,719$
See notes to financial statements.35
Amounts reported for governmental activities in the Statement of Net Position
Total net position - governmental activities
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General
G.O.
Improvement
Series 2017A
G.O.
Improvement
Series 2013A
RevenuesProperty taxes 1,146,221$ -$ 26,228$
Tax increments - - -
Special assessments - - 39,328
Licenses and permits 93,344 - -
Intergovernmental 654,024 - - Charges for services 73,723 - - Fines and forfeitures 45,806 - -
Miscellaneous
Investment income 15,519 185 527
Contributions and donations - - -
Refunds and reimbursements 6,505 - - Other 18,039 - - Total revenues 2,053,181 185 66,083
Expenditures
Current
General government 660,203 - 781
Public safety 956,548 - - Public works 188,602 - - Park and recreation 88,231 - - Community development - - -
Debt service
Principal - - 65,000
Interest and other charges - - 10,544 Capital outlayGeneral government - - - Public safety - - -
Public works - - -
Park and recreation - - -
Total expenditures 1,893,584 - 76,325
Excess of revenues over
(under) expenditures 159,597 185 (10,242)
Other Financing Sources (Uses)
Proceeds from sale of capital assets - - -
Bond issuance - 13,450 -
Bond premium - - - Transfers in - 125,000 25,000 Transfers out (42,000) - - Total other financing sources (uses)(42,000) 138,450 25,000
Net change in fund balances 117,597 138,635 14,758
Fund Balances
Beginning of year 1,747,759 - 123,364
End of year 1,865,356$ 138,635$ 138,122$
See notes to financial statements.36
Debt Service Funds
City of Falcon Heights
Statement of Revenues, Expenditures, andChanges in Fund Balances - Governmental FundsYear Ended December 31, 2017
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Future
Improvements
Grove Street
Improvement
Project
Other
Governmental
Funds
Total
Governmental
Funds
-$ -$ 99,356$ 1,271,805$
- - 172,018 172,018
7,697 163,931 - 210,956
- - - 93,344
61,402 737,869 25,699 1,478,994 184 - 162,021 235,928 - - - 45,806
5,731 2,154 5,033 29,149
- - 1,080 1,080
- - - 6,505 - 91 20,332 38,462 75,014 904,045 485,539 3,584,047
- - 1,560 662,544
- - 781 957,329 10,641 176 152,051 351,470 - - 36,165 124,396 - - 3,726 3,726
- - 85,000 150,000
- - 10,436 20,980
- - 30,303 30,303 - - 20,777 20,777
5,555 1,234,523 167,850 1,407,928
- - 18,619 18,619
16,196 1,234,699 527,268 3,748,072
58,818 (330,654) (41,729) (164,025)
- - 225 225
- 831,550 - 845,000
- 52,345 - 52,345 - - 292,000 442,000 - - - (42,000) - 883,895 292,225 1,297,570
58,818 553,241 250,496 1,133,545
642,256 - 680,251 3,193,630
701,074$ 553,241$ 930,747$ 4,327,175$
37
Capital Projects Funds
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City of Falcon Heights
Reconciliation of the Statement of Revenues,
Expenditures, and Changes in Fund Balances to
the Statement of Activities - Governmental Funds
Year Ended December 31, 2017
1,133,545$
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 49,070 Depreciation expense (215,458)
Compensated absences are recognized as paid in the governmental funds but
recognized as the expense is incurred in the Statement of Activities.(15,170)
Governmental funds recognized pension contributions as expenditures at the time of payment
whereas the Statement of Activities factors in items related to pensions on a full accrualperspective.(20,587)
Principal payments on long-term debt are recognized as expenditures in the
governmental funds but have no effect on net assets in the Statement of Activities.150,000
Interest on long-term debt in the Statement of Activities differs from the amount
reported in the governmental funds because interest is recognized as an expenditurein the funds when it is due and thus requires use of current financial resources. In
the Statement of Activities, however, interest expense is recognized as the interest
accrues, regardless of when it is due.(10,540)
Proceeds from long-term debt are recognized as another financing source in the
Governmental funds but as a decrease in net assets in the statement of activities.(845,000)
The governmental funds report the effect of bond premiums, discounts, and other similar items
when debt is first issued, whereas these amounts are deferred and amortized in the
Statement of Activities.
Premium on new bond issuances (52,345) Amortization of bond premiums 2,908
Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds.Special assessments (1,430)
Delinquent property taxes receivable will be collected in subsequent years,but are not available soon enough to pay for the current period's expenditures
and, therefore, are deferred in the funds.(203)
174,790$
See notes to financial statements.38
Change in net position - governmental activities
Net change in fund balances - governmental funds
Amounts reported for governmental activities in the Statement of Activities
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Original and
Final Budget
Actual
Amounts
RevenuesProperty taxes 1,152,646$ 1,146,221$ (6,425)$
Licenses and permits 59,950 93,344 33,394
Intergovernmental 668,524 654,024 (14,500)
Charges for services 52,935 73,723 20,788
Fines and forfeitures 73,000 45,806 (27,194)
Miscellaneous revenues
Investment income 7,000 15,519 8,519
Refunds and reimbursements 5,000 6,505 1,505
Other 3,500 18,039 14,539
Total revenues 2,022,555 2,053,181 30,626
ExpendituresCurrent
General government 678,150 660,203 (17,947)
Public safety 972,966 956,548 (16,418)
Public works 236,649 188,602 (48,047)
Park and recreation 92,790 88,231 (4,559)
Total expenditures 1,980,555 1,893,584 (86,971)
Excess of revenues
over expenditures 42,000 159,597 117,597
Other Financing UsesTransfers out (42,000) (42,000) -
Net change in fund balance -$ 117,597 117,597$
Fund Balance
Beginning of year 1,747,759
End of year 1,865,356$
See notes to financial statements.39
Variance
with Final
Budget -
City of Falcon HeightsStatement of Revenues, Expenditures, and
Changes in Fund Balance -
Budget and Actual - General Fund
Year Ended December 31, 2017
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Sanitary
Sewer
Storm
Drainage Total
Assets
Current assets
Cash and investments 1,864,469$ 199,297$ 2,063,766$
Accounts receivable 179,636 27,384 207,020
Interest receivable 6,149 - 6,149
Prepaid items 41,846 1,000 42,846
Total current assets 2,092,100 227,681 2,319,781
Noncurrent assets
Capital assets
Sewer system 1,277,781 - 1,277,781
Storm drain - 1,918,672 1,918,672
Machinery and equipment 53,104 122,570 175,674
Total capital assets 1,330,885 2,041,242 3,372,127
Less accumulated depreciation (1,018,537) (677,903) (1,696,440)
Net capital assets 312,348 1,363,339 1,675,687
Total assets 2,404,448 1,591,020 3,995,468
Deferred Outflows of Resouces
Deferred outflows of resources related to pensions 26,242 13,347 39,589
Total assets and deferred outflows of resources 2,430,690$ 1,604,367$ 4,035,057$
Liabilities
Current liabilities
Accounts payable 166$ 5,717$ 5,883$
Salaries and benefits payable 1,351 426 1,777
Amount due within one year 8,788 4,952 13,740
Total current liabilities 10,305 11,095 21,400
Noncurrent liabilities
Compensated absences 24,629 13,514 38,143
Net pension liability 95,807 48,728 144,535
Less amount due within one year (8,788) (4,952) (13,740)
Total noncurrent liabilities 111,648 57,290 168,938
Total liabilities 121,953 68,385 190,338
Deferred Inflows of Resouces
Deferred inflows of resources related to pensions 19,685 10,012 29,697
Net Position
Net investment in capital assets 312,348 1,363,339 1,675,687
Unrestricted 1,976,704 162,631 2,139,335
Total net position 2,289,052 1,525,970 3,815,022
Total liabilities, deferred inflows of resources,
and net position 2,430,690$ 1,604,367$ 4,035,057$
See notes to financial statements.40
City of Falcon Heights
Statement of Net Position - Proprietary Funds
December 31, 2017
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Sanitary
Sewer
Storm
Drainage Total
Operating revenues
Charges for services 879,391$ 169,957$ 1,049,348$
Operating expenses
Wages, salaries, and compensation 145,626 72,451 218,077
Materials and supplies - 1,245 1,245
Professional services 2,746 1,004 3,750
Electric 172 - 172
Maintenance 16,831 7,790 24,621
Repairs - 3,278 3,278
Depreciation 12,013 46,866 58,879
Travel - 34 34
Metro sewer charges 509,390 - 509,390
Sac charges 8,930 - 8,930
Billing fees 16,676 701 17,377
Insurance and bonds 6,656 2,238 8,894
Miscellaneous 4,196 6,887 11,083
Total operating expenses 723,236 142,494 865,730
Operating income 156,155 27,463 183,618
Nonoperating revenues
Investment income 17,988 1,330 19,318
Income before transfers
and capital contributions 174,143 28,793 202,936
Transfers out (400,000) - (400,000)
Change in net position (225,857) 28,793 (197,064)
Net position
Beginning of year 2,514,909 1,497,177 4,012,086
End of year 2,289,052$ 1,525,970$ 3,815,022$
See notes to financial statements.41
City of Falcon Heights
Statement of Revenues, Expenses, and Changes
in Fund Net Position - Proprietary Funds
Year Ended December 31, 2017
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City of Falcon Heights
Statement of Cash Flows - Proprietary FundsYear Ended December 31, 2017
Sanitary
Sewer
Storm
Drainage Total
Cash Flows - Operating ActivitiesReceipts from customers and users 816,366$ 168,550$ 984,916$
Payments to suppliers (565,037) (21,063) (586,100)
Payments to employees (135,421) (70,456) (205,877)
Net cash flows - operating activities 115,908 77,031 192,939
Cash Flows - Noncapital Financing Activities
Advance to other funds 300,000 - 300,000
Transfer to other funds (400,000) - (400,000) Net cash flows - noncapital
financing activities (100,000) - (100,000)
Cash Flows - Capital and Related Financing Activities
Acquisition of capital assets (33,089) (213,488) (246,577)
Cash Flows - Investing ActivitiesInterest and dividends received 14,869 1,872 16,741
Net change in cash and cash equivalents (2,312) (134,585) (136,897)
Cash and Cash Equivalents
Beginning of year 1,866,781 333,882 2,200,663
End of year 1,864,469$ 199,297$ 2,063,766$
Reconciliation of Operating Income (Loss) to Net Cash
Flows - Operating ActivitiesOperating income 156,155$ 27,463$ 183,618$
Adjustments to reconcile operating
income (loss) to net cash
flows - operating activities
Depreciation expense 12,013 46,866 58,879
Accounts receivable (63,025) (1,407) (64,432)
Prepaid items 603 (1,000) (397)
Pension expense 4,638 5 4,643
Accounts payable (43) 3,114 3,071 Salaries payable 1,351 426 1,777
Compensated absences payable 4,216 1,564 5,780 Total adjustments (40,247) 49,568 9,321
Net cash flows - operating activities 115,908$ 77,031$ 192,939$
See notes to financial statements.42
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43
City of Falcon Heights Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The City of Falcon Heights is a statutory city governed by an elected mayor and four council members.
The accompanying financial statements present the government entities for which the government is
considered to be financially accountable.
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 City. Governmental activities, which
normally are supported by taxes and intergovernmental revenues, are reported separately from the
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 segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or
segment and 2) grants and contributions that are restricted to meeting the operational or capital
requirements of a particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues. Internally dedicated revenues are reported as
general revenues rather than program 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 financial statements. Revenues are
recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants
and similar items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met. Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City
considers revenues to be available if they are collected within 60 days of the end of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and
judgments, are recorded only when payment is due.
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City of Falcon Heights Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Property taxes, franchise fees, licenses, and interest associated with the current period are all considered
to be susceptible to accrual and so have been recognized as revenues of the current period. Only the
portion of special assessments receivable due within the current 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. Description of Funds:
Major Governmental Funds:
General Fund – This fund is the City's primary operating fund. It accounts for all financial resources of the general City, except those required to be accounted for in another fund.
G.O. Improvement Series 2017A – This fund accounts for the resources accumulated and payments
made for principal and interest on this bond issuance.
G.O. Improvement Series 2013A – This fund accounts for the resources accumulated and payments
made for principal and interest on this bond issuance. Future Improvements Capital Projects Fund – This fund accounts for costs associated with
replacement of the City's utility and road systems.
Grove Street Improvements Capital Projects Fund – This fund accounts for costs associated with the
Grove Street improvement project. Major Proprietary Funds:
Sanitary Sewer Enterprise Fund – This fund accounts for the operations of the City's sanitary sewer
utility.
Storm Drainage Enterprise Fund – This fund accounts for the activities of the City's storm drainage operations.
As a general rule, the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are charges between the City's utility functions and
various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned.
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City of Falcon Heights Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund's principal ongoing operations. The principal operating revenues of
the Sanitary Sewer and the Storm Drainage Enterprise Funds are charges to customers for sales and
services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use
restricted resources first, then unrestricted resources as they are needed. Further, the City applies
unrestricted funds in this order if various levels of unrestricted fund balances exist: committed, assigned, and unassigned.
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
1. Deposits and Investments Cash and investments include balances from all funds that are combined and invested to the extent
available in various securities as authorized by state law. Earnings from the pooled investments are allocated to the individual funds based on the average of month-end cash and investment balances.
The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-
term investments with original maturities of three months or less from the date of acquisition.
Minnesota Statutes authorizes the City to invest in obligations of the U.S. Treasury, agencies and instrumentalities, shares of investment companies whose only investments are in the aforementioned securities, obligations of the State of Minnesota or its municipalities, bankers' acceptances, future
contracts, repurchase and reverse repurchase agreements, and commercial paper of the highest
quality with a maturity of no longer than 270 days and in the Minnesota Municipal Investment Pool.
Certain investments for the City are reported at fair value as disclosed in Note 3. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The Hierarchy is based on the valuation inputs used to measure the
fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2
inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.
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City of Falcon Heights Notes to Financial Statements NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
(Continued)
1. Deposits and Investments (Continued) In accordance with GASB Statement No. 79, the Minnesota Municipal Investment Pool securities are valued at amortized cost, which approximates fair value. Investments in the 4M Plus must be
deposited for a minimum of 14 calendar days. Withdrawals prior to the 14-day restriction period will
be subject to a penalty equal to seven days interest on the amount withdrawn. Seven days' notice of
redemption is required for withdrawals of investments in the 4M Term Series withdrawn prior to the
maturity date of that series. A penalty could be assessed as necessary to recoup the Series for any charges, losses, and other costs attributable to the early redemption.
2. Receivables and Payables
All trade and property tax receivables are shown at a gross amount since both are assessable to the
property taxes and are collectible upon the sale of the property.
The City levies its property tax for the subsequent year during the month of December. December 28 is the last day the City can certify a tax levy to the County Auditor for collection the following year.
Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. The
property tax is recorded as revenue when it becomes measurable and available. Ramsey County is the
collecting agency for the levy and remits the collections to the City three times a year. The tax levy
notice is mailed in March with the first half of the payment due on May 15 and the second half due on October 15. Taxes not collected as of December 31 each year are shown as delinquent taxes receivable.
The County Auditor prepares the tax list for all taxable property in the City, applying the applicable
tax rate to the tax capacity of individual properties, to arrive at the actual tax for each property. The
County Auditor also collects all special assessments, except for certain prepayments paid directly to the City.
The County Auditor submits the list of taxes and special assessments to be collected on each parcel
of property to the County Treasurer in January of each year.
Unpaid taxes at December 31 become liens on the respective property and are classified in the financial statements as delinquent tax receivable.
3. Prepaid Items and Inventory
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. Prepaid items are reported
using the consumption method and recorded as expenditures/expenses at the time of consumption.
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City of Falcon Heights Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued)
3. Prepaid Items and Inventory (Continued)
Inventory is valued at cost using the first-in, first-out (FIFO) method. Inventories of governmental
funds are recorded as expenditures when consumed rather than when purchased. 4. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads,
sidewalks, and similar items), are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. Capital assets are defined by the City as assets
with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. 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 repairs that do not add to the value of the asset or materially
extend assets lives are not capitalized.
Property, plant, and equipment of the City are depreciated using the straight-line method over the following estimated useful lives:
Assets Years
Buildings 40
Park buildings 30
Building improvements 15
Furniture and equipment 5
Light vehicles 5
Machinery and equipment 5-7
Fire trucks 20
Utility distribution system 50
The City uses the modified approach in accounting for its street and alley infrastructure assets. Under
this method, depreciation expense is not recognized. A pavement condition policy has been established
and all costs of maintaining the assets at this level are expensed.
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City of Falcon Heights Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued)
5. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element represents a consumption of net position that applies to a 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 deferred outflows of resources related to pensions for various
estimate differences that will be amortized and recognized over future years.
In addition to liabilities, the statement of financial position and fund financial statements will sometimes report a separate section for deferred inflows of resources. This separate financial statement element represents an acquisition of net position that applies to a future period(s) and so
will not be recognized as an inflow of resources (revenue) until that time. The City has two items
that qualify for reporting in this category. The City presents deferred inflows of resources on the
Governmental Fund Balance Sheet as unavailable revenue. The governmental funds report
unavailable revenues from two sources: property taxes and special assessments. These amounts are
deferred and recognized as an inflow of resources in the period that the amounts become available. The City presents deferred inflows of resources on the Statements of Net Position for deferred inflows of resources related to pensions for various estimate differences that will be amortized and
recognized over future years.
6. Compensated Absences City employees earn vacation time based on years of City service with a maximum at twice their annual vacation leave. At least one week of vacation must be used per calendar year. Upon termination, employees will receive compensation for unused vacation time. Sick leave is
accumulated for all regular full-time employees at the rate of one day per calendar month to a
maximum of 120 days. The City compensates employees who leave municipal service at the rate of
50% of unused sick leave. Vacation and sick leave benefits are recorded as expenditures in
governmental funds when paid. Compensated absences payable are reported in governmental funds only if they have matured as a result of employee resignations and retirements. Vacation and sick benefits are recorded as expenses in proprietary funds when earned.
7. 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 and discounts are deferred and amortized over the life of the bonds using the
straight-line method.
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City of Falcon Heights Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued) 7. Long-Term Obligations (Continued) In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported
as other financing sources. Premiums received on debt issuances are reported as other financing
sources while discounts on debt issuances are reported as other financing uses. Issuance costs,
whether or not withheld from the actual debt proceeds received, are reported as debt service
expenditures. 8. 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.
9. Fund Equity a. Classification In the fund financial statements, governmental funds report fund classifications that comprise a
hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purpose for which amounts in those funds can be spent.
• Nonspendable Fund Balance – These are amounts that cannot be spent because they are not in spendable form.
• Restricted Fund Balance – These are amounts that are restricted to specific purposes either by
a) constraints placed on the use of resources by creditors, grantors, contributors, or laws or regulations of other governments, or b) imposed by law through enabling legislation.
• Committed Fund Balance – These are amounts that can only be used for specific purposes
pursuant to constraints imposed by the City Council (highest level of decision making authority) through resolution.
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City of Falcon Heights Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (Continued)
9. Fund Equity (Continued) a. Classification (Continued)
• Assigned Fund Balance – These are amounts that are constrained by the City's intent to be
used for specific purposes but are neither restricted nor committed. Based on authorization provided by the City's fund balance policy, assignments are made by the City Administrator
based on the City Council's direction.
• Unassigned Fund Balance – These are residual amounts in the General Fund not reported in any other classification. The General Fund is the only fund that can report a positive
unassigned fund balance. Other funds would report a negative unassigned fund balance
should the total of nonspendable, restricted, and committed fund balances exceed the total
net resources of that fund.
b. Minimum Fund Balance The City will strive to maintain a minimum unassigned fund balance in the General Fund of 45% of the subsequent year's budgeted expenditures.
10. Net Position
Net position represents the difference between assets, deferred outflows of resources, 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 their use through external restrictions imposed by creditors, grantors, or laws or regulations of other governments.
E. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and
expenditures/expense during the reporting period. Actual results could differ from those estimates.
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City of Falcon Heights Notes to Financial Statements
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Budgetary Information 1. In August of each year, City staff submits to the City Council, a proposed operating budget for
the year commencing the following January 1. The operating budget includes proposed
expenditures and the means of financing them for the upcoming year.
2. Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through passage of a resolution after obtaining taxpayer comments. 4. Budgets for the General, Special Revenue, Capital Projects, Debt Service, and Enterprise Funds are adopted on a basis consistent with accounting principles generally accepted in the United
States of America.
5. Expenditures may not legally exceed budgeted appropriations at the department level. No fund's
budget can be increased without City Council approval. The City Council may authorize transfer
of budgeted amounts between departments within any fund. Management may amend budgets within a department level, so long as the total department budget is not changed. 6. Annual appropriated budgets are adopted during the year for the General, Special Revenue,
Capital Projects, Debt Service, and Enterprise Funds.
7. Budgeted amounts are as originally adopted or as amended by the City Council. Individual
amendments were not material in relation to the original amounts budgeted. Budgeted
expenditure appropriations lapse at year-end.
NOTE 2 – DEPOSITS AND INVESTMENTS
Cash balances of the City's funds are combined (pooled) and invested to the extent available in various
investments authorized by Minnesota Statutes. Each fund's portion of this pool (or pools) is displayed in
the financial statements as "cash and cash equivalents" or "investments". For purposes of identifying risk
of investing public funds, the balances and related restrictions are summarized as follows. A. Deposits
Custodial Credit Risk – Deposits: This is the risk that in the event of a bank failure, the City's deposits
may not be returned to it. The City has a policy that requires the District's deposits be collateralized as
required by Minnesota Statutes for an amount exceeding FDIC, SAIF, BIF, or FCUA coverage. As of
December 31, 2017, the City's bank balance of $0 was not exposed to custodial credit risk because it was fully insured through the FDIC.
The book balance as of December 31, 2017, was $0 for deposits.
As of December 31, 2017, the City had petty cash as follows:
Petty cash 250$
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City of Falcon Heights Notes to Financial Statements NOTE 2 – DEPOSITS AND INVESTMENTS (CONTINUED) B. Investments
Investment Type Fair Value
Less than 1
Year 1 to 3 Years 3 - 5 Years Over 5 Years Rating
Brokered Certificates of Deposit 4,573,207$ 3,774,348$ 798,859$ -$ -$ NRU.S. Agencies 299,754 - - 299,338 416 AAA
4M Fund 726,441 726,441 N/A N/A N/A NR4M Fund Plus 555,447 555,447 N/A N/A N/A NRBrokered Money Markets 258,156 258,156 N/A N/A N/A NR
Total Investments 6,413,005$
Investment Maturity
Maximum
Maturity Investment
0 - 5 years 80%
6 - 10 years 20%
Concentration of Credit Risk: This is the risk of loss attributed to the magnitude of an investment in a
single issuer. The City's investment policy states the City shall set the goal that no one issuer represents
5% or more of total investments with the exception of U.S. Treasuries and U.S. government agencies that are either implicitly or explicitly guaranteed by the federal government.
Interest Rate Risk: This is the risk that market values of securities in a portfolio would decrease due to
changes in market interest rates. The City's investment policy states the City will invest in approximately 10% to 25% of its available funds in liquid instruments, such as commercial paper and money market accounts. This is to ensure the City's funds could be available should unexpected large bills be presented
for payment. The policy goes on to state once the liquidity needs have been met, the remaining
investments shall be placed with institutions offering the highest rate of return consistent with the
maturities determined by the City.
Credit Risk: This is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. State law limits investments in commercial paper and corporate bonds to be in the top two
ratings issued by nationally recognized statistical rating obligations. The policy lists the authorized
investments to comply with the requirements of Minnesota Statutes 118A.04, 118A.05, and 118A.06, examples include commercial paper rated as A-1, P-1 and F-1 with maturities of 270 days or less, U.S. government obligations, obligations of the State of Minnesota, irrevocable letter of credit and interest
bearing deposits.
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City of Falcon Heights Notes to Financial Statements
NOTE 2 – DEPOSITS AND INVESTMENTS (CONTINUED)
B. Investments (Continued) Custodial Credit Risk – Investments: For an investment, this is the risk that in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities
that are in the possession of an outside party. The City's investment policy states investments are to be
fully insured or collateralized and/or registered in the name of the City with safekeeping for the security
provided by the City's broker/financial institution or trust department. The financial institution is also
required to be a member of the Securities Investor Protection Corporation (SIPC) to protect the securities in the City's account. All certificates of deposit up to $250,000 principal and interest will be protected by the FDIC. In the event the City purchases a certificate of deposit from a broker/financial institution that
does not provide safekeeping, the City may provide safekeeping in a secured location at the City.
The City has the following recurring fair value measurements as of December 31, 2017:
• $4,872,961 of investments are significant other observable inputs (Level 2 inputs)
Summary of cash deposits and investments as of December 31, 2017, were as follows:
Petty Cash 250$
Investments (Note 3.B.)6,413,005
Total deposits and investments 6,413,255$
C. Cash and Investments
Deposits and investments are presented in the December 31, 2017, basic financial statements as follows:
Statement of Net Position
Cash and investments - governmental activities 4,049,489$
Cash and investments - business-type activities 2,363,766
Total 6,413,255$
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City of Falcon Heights Notes to Financial Statements NOTE 3 – CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2017, was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental activitiesCapital assets not being depreciated
Land 419,707$ -$ -$ 419,707$
Infrastructure 5,749,783 - - 5,749,783
Total capital assets not being depreciated 6,169,490 - - 6,169,490
Capital assets being depreciated
Buildings 1,360,310 - - 1,360,310
Improvements other than buildings 800,976 30,050 - 831,026
Machinery and equipment 2,015,563 19,020 6,589 2,027,994
Total capital assets being depreciated 4,176,849 49,070 6,589 4,219,330
Less accumulated depreciation for
Buildings 1,015,399 42,520 - 1,057,919 Improvements other than buildings 266,304 35,097 - 301,401
Machinery and equipment 995,451 137,841 6,589 1,126,703
Total accumulated
depreciation 2,277,154 215,458 6,589 2,486,023
Total capital assets being
depreciated, net 1,899,695 (166,388) - 1,733,307
Governmental activities capital
assets, net 8,069,185$ (166,388)$ -$ 7,902,797$
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City of Falcon Heights Notes to Financial Statements
NOTE 3 – CAPITAL ASSETS (CONTINUED)
Beginning EndingBalanceIncreasesDecreasesBalance
Business-type activities
Capital assets being depreciated
Buildings and system 3,011,977$ 184,476$ -$ 3,196,453$
Machinery and equipment 113,573 62,101 - 175,674 Total capital assets
being depreciated 3,125,550 246,577 - 3,372,127
Less accumulated depreciation for
Buildings and system 1,532,392 44,132 - 1,576,524
Machinery and equipment 105,169 14,747 - 119,916
Total accumulated
depreciation 1,637,561 58,879 - 1,696,440
Total capital assets being
depreciated, net 1,487,989 187,698 - 1,675,687
Business-type activities capital
assets, net 1,487,989$ 187,698$ -$ 1,675,687$
Depreciation expense was charged to functions/programs of the City as follows:
Governmental activities
General government 60,741$
Public safety 99,939
Public works 28,546
Culture and recreation 26,232
Total depreciation expense - governmental activities 215,458$
Business-type activities
Sanitary sewer 12,013$
Storm drainage 46,866
Total depreciation expense - business-type activities 58,879$
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City of Falcon Heights Notes to Financial Statements
NOTE 4 – INTERFUND TRANSFERS
Transfers during the year ended December 31, 2017, were as follows:
Sanitary
General Fund Sewer Total
Transfers in
G.O. Improvement Series 2013A -$ 25,000$ 25,000$
G.O. Improvement Series 2017A - 125,000 125,000
Other Governmental Funds 42,000 250,000 292,000
Total 42,000$ 400,000$ 442,000$
Transfers Out
The transfer from the General Fund to Other Governmental Funds was to assist with park programs and capital improvements. The transfer from Sanitary Sewer Fund to Other Governmental Funds was to assist with capital improvements. The transfers from the Sanitary Sewer Fund to the G.O. Improvement
Series 2013A Fund and the G.O. Improvement Series 2017A Fund were to assist with debt service
payments.
NOTE 5 – LONG-TERM DEBT
A. G.O. Debt
The City issues G.O. bonds and equipment certificates to provide for financing tax increment projects,
street improvement, and capital purchases. Debt service is funded, respectively, by tax increment and
special assessments against benefited properties with any shortfalls being paid from general taxes.
G.O. bonds are direct obligations and pledge the full faith and credit of the City.
Original Interest Principal
Issue Rates Outstanding
Long-term liabilities
Governmental activities
G.O. Equipment Certificates, Series 2013B 715,000$ 0.60%-2.40%520,000$
G.O. Improvement Bonds, Series 2013A 445,000 0.75%-2.40%260,000
G.O. Improvement Bonds, Series 2017A 845,000 3.00%845,000
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City of Falcon Heights Notes to Financial Statements
NOTE 5 – LONG-TERM DEBT (CONTINUED)
A. G.O. Debt (Continued)
Annual debt service requirements to maturity for G.O. bonds are as follows:
Year Ending
December 31, Principal Interest Principal Interest
2018 85,000$ 9,136 $ 65,000$ 30,772 $
2019 85,000 8,031 180,000 27,151
2020 85,000 6,671 180,000 22,418
2021 85,000 5,057 180,000 17,505
2022 90,000 3,173 120,000 13,200
2023-2025 90,000 1,080 380,000 17,250
Total 520,000$ 33,148 $ 1,105,000$ 128,296 $
G.O. Improvement BondsG.O. Equipment Certificates
B. Changes in Long-Term Liabilities
Long-term liability activity for the year ended December 31, 2017, was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One YearGovernmental activitiesBonds payable
G.O. Equipment Certificates 605,000$ -$ 85,000$ 520,000$ 85,000$ G.O. Improvement Bonds 325,000 845,000 65,000 1,105,000 65,000
Compensated absences 75,588 49,656 34,486 90,758 33,432
Total governmental
activities 1,005,588 894,656 184,486 1,715,758 183,432
Business-type activities
Compensated absences 32,363 14,080 8,300 38,143 13,740
Total long-termliabilities 1,037,951$ 908,736$ 192,786$ 1,753,901$ 197,172$
The General Fund typically liquidates the liability related to compensated absences.
C. Conduit Debt Conduit debt is certain limited-obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party. The City has issued revenue
bonds to provide funding to private-sector entities for projects deemed to be in the public interest.
Although these bonds bear the name of the City, the City has no obligation for such debt beyond the
resources provided by related leases or loans. Accordingly, the bonds are not reported as liabilities in the
financial statements of the City.
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City of Falcon Heights Notes to Financial Statements
NOTE 5 – LONG-TERM DEBT (CONTINUED)
C. Conduit Debt (Continued)
As of December 31, 2017, the following issues were outstanding:
Original Balance
Amount Outstanding
Name Date of Issue of Issue as of 12/31/17
Coventry Apartments 2008A 12,000,000$ 10,819,731$
Pines of Hutchinson, LLC 2013 4,400,000 3,788,203
Mounds Park Academy 2014 7,707,444 7,529,998
DeLasalle High School 2015 2,380,000 2,056,436
St Paul Academy & Summit School Project Series 2017 7,375,000 7,375,000
Total 33,862,444$ 31,569,368$
NOTE 6 – FUND BALANCE DETAIL
At December 31, 2017, fund balance was comprised of the following components:
Grove
G.O. G.O.Streetscape Other
Improvement Improvement Future Improvement Governmental
General Series 2017A Series 2013A Improvements Project Fund Total
Nonspendable
Prepaid items 37,201$ -$ -$ -$ -$ -$ 37,201$
Restricted
Tax increment capital
projects - - - - - 58,964 58,964
Debt service - 138,635 138,122 - - 127,997 404,754
Capital equipment - - - - - - -
Committed
Recreation costs - - - - - 15,904 15,904
Hydrant and fire truck costs - - - - - 125,996 125,996
Recycling and environmental
activities - - - - - 99,952 99,952
Activities promoting
economic development - - - - - 54,390 54,390
Lighting costs - - - - - 20,942 20,942
Garden costs - - - - - 3,701 3,701
Ash borer prevention - - - - - 204 204
Assigned
Capital projects - - - 701,074 553,241 388,107 1,642,422
Unassigned 1,828,155 - - - - - 1,828,155
Total 1,865,356$ 138,635$ 138,122$ 701,074$ 553,241$ 930,747$ 4,327,175$
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City of Falcon Heights Notes to Financial Statements
NOTE 7 – RISK MANAGEMENT
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) with other cities in the state which is a public entity risk pool currently operating as a common risk management and insurance program. The City pays an annual premium to the LMCIT for its
insurance coverage. The LMCIT is self-sustaining through commercial companies for excess claims. The
City is covered through the pool for any claims incurred but unreported, however, retains risk for the
deductible portion of its insurance policies. The amount of these deductibles is considered immaterial to
the financial statements. There were no significant reductions in insurance from the previous year or settlements in excess of
insurance coverage for any of the past three years.
The City's workers' compensation insurance policy is retrospectively rated. With this type of policy, final
premiums are determined after loss experience is known. The amount of premium adjustment for 2017 was estimated to be immaterial based on workers' compensation rates and salaries for the year.
At December 31, 2017, there were no other claims liabilities reported in the fund based on the
requirements of GASB Statement No. 10, which requires a liability for claims be reported if information
prior to the issuance of the financial statements indicates it is probable a liability has been incurred at the
date of the financial statements and the amount of the loss can be reasonably estimated. NOTE 8 – PENSION PLANS
The City participates in various pension plans and total pension expense for the year ended
December 31, 2017 was $69,370. The components of pension expense are noted in the following plan
summaries.
Public Employees' Retirement Association
A. Plan Description
The City participates in the following cost-sharing multiple-employer defined benefit pension plans
administered by PERA. PERA's defined benefit pension plans are established and administered in
accordance with Minnesota Statutes, Chapters 353 and 356. PERA's defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code.
General Employees Retirement Plan (General Employees Plan (accounted for in the General Employees
Fund))
All full-time and certain part-time employees of the City are covered by the General Employees Plan. General Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security.
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City of Falcon Heights Notes to Financial Statements
NOTE 8 – PENSION PLANS (CONTINUED) Public Employees' Retirement Association (Continued) 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.
Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. Members in plans that are at least 90% funded for two consecutive years are given 2.5% increases. Members in plans that have not exceeded 90% funded, or have fallen below 80%, are
given 1% increases.
The benefit provisions stated in the following paragraphs of this section are current provisions and apply
to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service.
General Employees Plan Benefits
General Employees Plan 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 members. The retiring member receives the higher of a step-
rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the
annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first ten
years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 1.7% for
Coordinated Plan members for each year of service. For members hired prior to July 1, 1989, a full
annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66.
C. Contributions
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution
rates can only be modified by the state legislature. General Employees Fund Contributions
Coordinated Plan members were required to contribute 6.50%, of their annual covered salary in calendar
year 2017. The City was required to contribute 7.50% for Coordinated Plan members in calendar year
2017. The City's contributions to the General Employees Fund for the year ended December 31, 2017, were $43,937. The City's contributions were equal to the required contributions as set by state statute.
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City of Falcon Heights Notes to Financial Statements
NOTE 8 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued) D. Pension Costs
General Employees Fund Pension Costs
At December 31, 2017, the City reported a liability of $561,786 for its proportionate share of the General Employee Fund's net pension liability. The City's net pension liability reflected a reduction due to the State of Minnesota's contribution of $6 million to the fund in 2017. 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 $7,039. The net pension liability was measured as of June 30, 2017, 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, 2016, through June
30, 2017, relative to the total employer contributions received from all of PERA's participating
employers. At June 30, 2017, the City's proportion share was 0.0088%, which was an increase of
0.0004% from its proportion measured as of June 30, 2016.
For the year ended December 31, 2017, the City recognized pension expense of $69,370 for its proportionate share of General Employees Plan's pension expense. Included in the amount, the City
recognized $203 as pension expense (and grant revenue) for its proportionate share of the State of
Minnesota's contribution of $6 million to the General Employees Fund.
At December 31, 2017, the City reported its proportionate share of General Employee Plan's deferred
outflows of resources and deferred inflows of resources, related to pensions from the following sources:
Differences between expected and actual economic experience 18,516$ 34,759$
Changes in actuarial assumptions 89,030 56,319
Difference between projected and actual investment earnings - 137
Changes in proportion 24,360 24,215
Contributions paid to PERA subsequent
to the measurement date 21,969 -
153,875$ 115,430$
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
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City of Falcon Heights Notes to Financial Statements
NOTE 8 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued) D. Pension Costs (Continued)
$21,969 reported as deferred outflows of resources related to pensions resulting from City contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the
year ended December 31, 2018. Other amounts reported as deferred outflows and deferred inflows of
resources related to pensions will be recognized in pension expense as follows:
Year Ending Pension Expense
December 31,Amount
2018 9,998$
2019 34,017
2020 (3,692)
2021 (23,847)
Total 16,476$
E. Actuarial Assumptions
The total pension liability in the June 30, 2017, actuarial valuation was determined using the entry age normal actuarial cost method and the following actuarial assumptions:
Inflation 2.50 % Per year
Active member payroll growth 3.25 % Per year
Investment rate of return 7.50 %
Salary increases were based on a service-related table. Mortality rates for active members, retirees,
survivors, and disabilitants were based on RP-2014 tables for all plans for males or females, as
appropriate, with slight adjustments to fit PERA's experience. Cost of living benefit increases for retirees
are assumed to be 1% per year for the General Employees plan through 2044 and then 2.5% thereafter.
Actuarial assumptions used in the June 30, 2017, valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the General Employees Plan was
completed in 2015.
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City of Falcon Heights Notes to Financial Statements
NOTE 8 – PENSION PLANS (CONTINUED)
Public Employees' Retirement Association (Continued)
E. Actuarial Assumptions (Continued)
The following changes in actuarial assumptions occurred in 2017:
General Employees Fund
• 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% for vested deferred member liability, and 3% for non-vested
deferred member liability.
• The assumed post-retirement benefit increase rate was changed from 1% per year for all years to
1% per year through 2044 and 2.5% per year thereafter.
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the
reasonableness of the long-term expected rate of return on a regular basis using a building-block method
in which best-estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates
of geometric real rates of return for each major asset class are summarized in the following table:
Domestic stocks 39 %5.10 %
International stocks 19 5.30
Bonds 20 0.75
Alternative assets 20 5.90
Cash 2 0.00
Total 100 %
Asset Class
Long-Term
Expected Real Rate
of ReturnTarget Allocation
F. Discount Rate The discount rate used to measure the total pension liability in 2017 was 7.5%. The projection of cash flows used to determine the discount rate assumed that contributions from Plan members and employers
will be made at rates set in Minnesota Statutes. Based on those assumptions, the fiduciary net position of
the General Employees Fund was projected to be available to make all projected future benefit payments
of current Plan members. Therefore, the long-term expected rate of return on pension plan investments
was applied to all periods of projected benefit payments to determine the total pension liability.
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City of Falcon Heights Notes to Financial Statements
NOTE 8 – PENSION PLANS (CONTINUED) Public Employees' Retirement Association (Continued) G. Pension Liability Sensitivity
The following table presents the City's proportionate share of the net pension liability for all plans it
participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what
the City's proportionate share of the net pension liability would be if it were calculated using a discount
rate 1 percentage point lower or 1 percentage point higher than the current discount rate:
1% Decrease in 1% Increase in
City's proportionate share of
the General Employees Fund
net pension liability 871,372$ 561,786$ 308,334$
Discount Rate
(6.5%)
Discount Rate
(7.5%)
Discount Rate
(8.5%)
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. Defined Contribution Pension Plan – Volunteer Fire Fighter's Relief Association The Falcon Heights Firefighter's Relief Association is the administrator of a single employer defined contribution pension plan established to provide benefits for members of the Falcon Heights Fire
Department per Minnesota State Statutes.
The Association issues a publicly available financial report that includes financial statements and
required supplementary information. That report may be obtained by writing to Falcon Heights Firefighter's Relief Association, 2077 Larpenteur Ave. W, St. Paul, MN 55113 or by calling (651) 792-7635.
Members are not vested in their accounts until they attain five years of active service, at which time they
become 40% vested. Thereafter, the vested portion of their accounts increases by 4% annually until they
achieve 100% vesting after having served for 20 years. Plan provisions were established and may only be amended by amendments to the Association bylaws
which require a majority vote by the Board of Trustees.
During 2017, the City made no contributions to the plan and passed through to the association $55,582
in state aid.
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City of Falcon Heights Notes to Financial Statements
NOTE 9 – COMMITMENTS
The City had the following construction commitments at December 31, 2017: Expended
Project Through Remaining
Authorization 12/13/2017 Commitment
2017 Street Improvement Project 1,490,162$ 1,289,211$ 200,951$
NOTE 10 – NEW STANDARDS ISSUED BUT NOT YET IMPLEMENTED
GASB Statement No. 87, Leases establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments' leasing activities. This statement will be effective for the year ending December 31, 2020.
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REQUIRED SUPPLEMENTARY INFORMATION
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City's Covered Payroll
2015 0.0087%450,879$ -$ 450,879$ 502,440$ 89.74%78.2%
2016 0.0084%682,038 9,002 691,040 524,187 130.11%68.9%2017 0.0088%561,786 7,039 568,825 564,907 99.45%75.9%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
2015 36,927$ 36,927$ -$ 492,360$ 7.50%
2016 40,580 40,580 - 541,067 7.50%
2017 43,937 43,937 - 585,827 7.50%
Note: Schedule is intended to show ten year trend. Additional years will be reported as they become available.
68
Schedule of City Contributions
City's
Proportionate
Share of the Net
Pension Liability
(Asset) as a Percentage of its Covered Payroll
Plan Fiduciary
Net Position as a
Percentage of the Total Pension Liability
Last Ten Years
Last Ten Years
City's Proportionate Share of the Net
Pension Liablility
and the State's
Proportionate
Share of the Net
Pension Liablility Associated with the City
Contribution
Deficiency
(Excess)
Contributions as a
Percentage of
Covered Payroll
Statutorily
Required
Contribution
Contributions in Relation to the Statutorily
Required
Contributions
Fiscal Year
Ending
December 31,
For Fiscal Year Ended June 30,
State's
Proportionate
Share (Amount)
of the Net
Pension Liability Associated with the City
General Employees Retirement Fund
City's Covered
Payroll
City of Falcon Heights
City of Falcon Heights
Schedule of City's Proportionate Share
of Net Pension Liability
General Employees Retirement Fund
City's
Proportionate
Share
(Percentage) of the Net Pension Liability (Asset)
City's
Proportionate
Share (Amount)
of the Net Pension Liability (Asset)
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City of Falcon Heights Required Supplementary Information and Notes to Required Supplementary Information
69
INFRASTRUCTURE ASSETS REPORTED USING THE MODIFIED APPROACH
2013 2014 2015 2016 2017Streets and alleys
Estimated 1,174,456$ -$ 921,000$ 40,000$ 1,211,500$
Actual 796,336 10,842 499,929 39,599 1,234,522
Difference 378,120$ (10,842)$ 421,071$ 401$ (23,022)$
CONDITION RATING OF THE CITY'S STREET SYSTEMS 2010 2013 2016
Streets and alleys 76 74 77
The City implemented a pavement management program in 2001 to assist in maintaining and monitoring
the performance of the paved street network. This is one of the City's largest investments and would
have a significant dollar value if it were to be replaced today. The software program MircoPAVER,
developed by the Army Corps of Engineers, was used by the City in 2001 and 2004. For 2007, 2010,
2013, and 2016, the City used the software program ICON, which was developed and supported by
Goodpointe Technology, as a tool for pavement management. While the software is different, the methodology is the same. Both systems use field surveys to identify distresses and rate the current condition of the streets. Both systems use the segment and distress information to determine the current
Pavement Condition Index (PCI) for each segment. However, ICON provides the City with the ability to
determine future needs based on current and past maintenance strategies and prioritize the appropriate
rehabilitation at optimum times. Also, ICON has a geographic information system interface to enable
easy development of maps showing the results of the analysis. ICON used the information gathered in the field to calculate a PCI rating for each pavement segment. A
PCI rating of 100 would be indicative of a newly constructed street with no distress, while a rating of 0
would show a completely failed street. Segments then can be grouped into like categories of PCI ratings
to help determine a schedule of maintenance, rehabilitation, and reconstruction. The PCI groups set up
for the City are as follows: 100 to 66 – Adequate; 65 to 36 – Marginal; 35 to 0 – Poor. The City's minimum desired PCI rating is 70. For the year 2016, the City's PCI rating was 77. This was the sixth analysis of the City's streets and alleys. The next rating will be completed in 2019.
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City of Falcon Heights Notes to Required Supplementary Information
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GENERAL EMPLOYEES FUND
2017 Changes
Changes in Actuarial Assumptions
• The CSA loads were changed from 0.8% for active members and 60% for vested and non-
vested deferred members. The revised CSA loads are now 0.0% for active member liability,
15% for vested deferred member liability and 3% for non-vested deferred member liability.
• The assumed post-retirement benefit increase rate was changed from 1.0% per year for all
years to 1.0% per year through 2044 and 2.5% per year thereafter.
2016 Changes Changes in Actuarial Assumptions
• The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2035 and 2.5% per year thereafter to 1.0% per year for all future years.
• The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was
changed from 7.9% to 7.5%.
• Other assumptions were changed pursuant to the experience study dated June 30, 2015. The
assumed future salary increases, payroll growth, the inflation were decreased by 0.25% to 3.25%
for payroll growth and 2.50% for inflation.
2015 Changes Changes in Plan Provisions
• On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General Employees Fund, which increased the total pension liability by $1.1 billion and increased the fiduciary plan net position by $892 million. Upon consolidation, state and employer
contributions were revised.
Changes in Actuarial Assumptions
• The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2030
and 2.5% per year thereafter to 1.0% per year through 2035 and 2.5% per year thereafter.
100 of 204
71
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
101 of 204
Park Programs Water Solid Waste
Community
Development
AssetsCash and investments 15,769$ 120,932$ 93,410$ 74,677$
Accounts receivable - 5,064 12,311 -
Interest receivable - - - - Due from other governments 135 - - -
Total assets 15,904$ 125,996$ 105,721$ 74,677$
Liabilities
Accounts payable -$ -$ 5,769$ 287$
Contracts payable - - - -
Unearned revenue - - - 20,000
Total liabilities - - 5,769 20,287
Fund Balances
Restricted - - - -
Committed 15,904 125,996 99,952 54,390
Assigned - - - -
Total fund balances 15,904 125,996 99,952 54,390
Total liabilities
and fund balances 15,904$ 125,996$ 105,721$ 74,677$
72
Special Revenue
City of Falcon Heights
Combining Balance Sheet -
Nonmajor Governmental FundsDecember 31, 2017
102 of 204
Debt Service
Street
Lighting
Community
Garden
Emerald Ash
Borer Grant Total
G.O.
Equipment
Certificates,
Series 2013B
15,726$ 3,701$ 204$ 324,419$ 127,997$
5,371 - - 22,746 -
- - - - - - - - 135 -
21,097$ 3,701$ 204$ 347,300$ 127,997$
155$ -$ -$ 6,211$ -$
- - - - -
- - - 20,000 -
155 - - 26,211 -
- - - - 127,997
20,942 3,701 204 321,089 -
- - - - -
20,942 3,701 204 321,089 127,997
21,097$ 3,701$ 204$ 347,300$ 127,997$
73
Special Revenue
103 of 204
General Capital
Improvements
Parks/PW and
Facilities
Capital
Improvements
Tax Increment
No. 1
Construction
AssetsCash and investments 224,365$ 156,727$ 5,089$
Accounts receivable - - -
Interest receivable 639 - - Due from other governments - - -
Total assets 225,004$ 156,727$ 5,089$
Liabilities
Accounts payable -$ 1,969$ -$
Contracts payable - - 5,000
Unearned revenue - 833 -
Total liabilities - 2,802 5,000
Fund Balances
Restricted - 34,590 89
Committed - - -
Assigned 225,004 119,335 -
Total fund balances 225,004 153,925 89
Total liabilities
and fund balances 225,004$ 156,727$ 5,089$
74
Capital Projects
City of Falcon Heights
Combining Balance Sheet -
Nonmajor Governmental FundsDecember 31, 2017
104 of 204
Tax Increment
No. 1-3
Public Safety
Capital
Improvements Total
Total Other
Governmental
Funds
59,461$ 43,768$ 489,410$ 941,826$
- - - 22,746
- - 639 639 - - - 135
59,461$ 43,768$ 490,049$ 965,346$
586$ -$ 2,555$ 8,766$
- - 5,000 5,000
- - 833 20,833
586 - 8,388 34,599
58,875 - 93,554 221,551
- - - 321,089
- 43,768 388,107 388,107
58,875 43,768 481,661 930,747
59,461$ 43,768$ 490,049$ 965,346$
75
Capital Projects
105 of 204
Park Programs Water Solid Waste
Community
Development
RevenuesProperty taxes -$ -$ -$ -$ Tax increments - - - -
Intergovernmental - - 13,363 -
Charges for services 10,771 34,326 74,446 -
Miscellaneous
Investment income 160 785 634 391
Contributions and donations 1,080 - - -
Other - - - 1,895
Total revenues 12,011 35,111 88,443 2,286
Expenditures
Current
General government - - - -
Public safety - - - -
Public works - 10,818 85,810 -
Park and recreation 35,312 - - -
Community development - - - 3,726
Debt service
Principal - - - -
Interest and other charges - - - -
Capital outlay
General government - - - -
Public safety - - - -
Public works - - - -
Park and recreation - - - -
Total expenditures 35,312 10,818 85,810 3,726
Excess of revenues over
(under) expenditures (23,301) 24,293 2,633 (1,440)
Other Financing Sources
Proceeds from sale of capital assets - - - -
Transfers in 22,000 - - -
Total other financing sources 22,000 - - -
Net change in fund balances (1,301) 24,293 2,633 (1,440)
Fund Balances
Beginning of year 17,205 101,703 97,319 55,830
End of year 15,904$ 125,996$ 99,952$ 54,390$
76
Special Revenue
City of Falcon Heights
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances - Nonmajor Governmental Funds
Year Ended December 31, 2017
106 of 204
Debt Service
Street
Lighting
Community
Garden
Emerald Ash
Borer Grant Total
G.O.
Equipment
Certificates,
Series 2013B
-$ -$ -$ -$ 99,356$ - - - - -
- - - 13,363 -
41,773 705 - 162,021 -
-
199 27 1 2,197 407
- - - 1,080 -
- - - 1,895 -
41,972 732 1 180,556 99,763
- - - - 780
- - - - -
54,643 - - 151,271 -
- 73 - 35,385 -
- - - 3,726 -
-
- - - - 85,000
- - - - 10,436
-
- - - - -
- - - - -
- - - - -
- - - - -
54,643 73 - 190,382 96,216
(12,671) 659 1 (9,826) 3,547
- - - - -
- - - 22,000 -
- - - 22,000 -
(12,671) 659 1 12,174 3,547
33,613 3,042 203 308,915 124,450
20,942$ 3,701$ 204$ 321,089$ 127,997$
77
Special Revenue
107 of 204
General Capital
Improvements
Parks/PW and
Facilities
Capital
Improvements
Tax Increment
No. 1
Construction
RevenuesProperty taxes -$ -$ -$ Tax increments - - -
Intergovernmental - 2,136 -
Charges for services - - -
Miscellaneous
Investment income 1,237 341 40
Contributions and donations - - -
Other 18,437 - -
Total revenues 19,674 2,477 40
Expenditures
Current
General government 780 - -
Public safety - - -
Public works - - -
Park and recreation - 780 -
Community development - - -
Debt service
Principal - - -
Interest and other charges - - -
Capital outlay
General government 30,303 - -
Public safety - - -
Public works - - -
Park and recreation - 18,619 -
Total expenditures 31,083 19,399 -
Excess of revenues over
(under) expenditures (11,409) (16,922) 40
Other Financing Sources
Proceeds from sale of capital assets - 225 -
Transfers in 170,000 100,000 -
Total other financing sources 170,000 100,225 -
Net change in fund balances 158,591 83,303 40
Fund Balances
Beginning of year 66,413 70,622 49
End of year 225,004$ 153,925$ 89$
78
City of Falcon Heights
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances - Nonmajor Governmental Funds
Year Ended December 31, 2017
Capital Projects
108 of 204
Tax Increment
No. 1-3
Public Safety
Capital
Improvements Total
Total
Other
Governmental
Funds
-$ -$ -$ 99,356$ 172,018 - 172,018 172,018
- 10,200 12,336 25,699
- - - 162,021
434 377 2,429 5,033
- - - 1,080
- - 18,437 20,332
172,452 10,577 205,220 485,539
- - 780 1,560
- 781 781 781
780 - 780 152,051
- - 780 36,165
- - - 3,726
- - - 85,000
- - - 10,436
- - 30,303 30,303
- 20,777 20,777 20,777
167,850 - 167,850 167,850
- - 18,619 18,619
168,630 21,558 240,670 527,268
3,822 (10,981) (35,450) (41,729)
- - 225 225
- - 270,000 292,000
- - 270,225 292,225
3,822 (10,981) 234,775 250,496
55,053 54,749 246,886 680,251
58,875$ 43,768$ 481,661$ 930,747$
79
Capital Projects
109 of 204
Original and
Final Budget
Actual
Amounts
RevenuesProperty taxes 1,152,646$ 1,146,221$ (6,425)$
Licenses and permits 59,950 93,344 33,394
Intergovernmental revenue
Local government aid 544,817 544,817 - Cable television franchise fees 52,000 51,918 (82)
Fire aid 70,000 55,582 (14,418)
Other grants and aids 1,707 1,707 -
Total intergovernmental revenue 668,524 654,024 (14,500)
Charges for services
Fire contract 29,000 34,192 5,192
Plan check fees 2,000 13,231 11,231 Other 21,935 25,800 3,865
Snow removal - 500 500
Total charges for services 52,935 73,723 20,788
Fines and forfeitures 73,000 45,806 (27,194)
Miscellaneous revenue
Investment income 7,000 15,519 8,519
Refunds and reimbursements 5,000 6,505 1,505
Other 3,500 18,039 14,539
Total miscellaneous revenue 15,500 40,063 24,563 Total revenues 2,022,555 2,053,181 30,626
ExpendituresGeneral government
Legislative
Wages, salaries, and compensation 21,315 21,675 360
Materials and supplies 1,575 1,833 258
Other 20,018 18,428 (1,590)
Administration
Wages, salaries, and compensation 202,921 204,076 1,155
Materials and supplies 8,000 8,195 195 Other 33,900 18,714 (15,186)
80
Variance with
Final Budget -
Over (Under)
City of Falcon Heights
Schedule of Revenues, Expenditures, and Changes in Fund Balance -
Budget and Actual - General Fund - DetailedYear Ended December 31, 2017
110 of 204
Original and
Final Budget
Actual
Amounts
Expenditures (Continued)General government (continued)
Finance
Wages, salaries, and compensation 125,040$ 116,639$ (8,401)$ Materials and supplies 300 1,303 1,003
Other 19,970 19,655 (315)
Legal 16,500 10,290 (6,210) Elections
Materials and supplies 1,000 303 (697)
Other 19,363 19,516 153
Communications
Wages, salaries, and compensation 24,845 23,464 (1,381) Materials and supplies 4,300 2,856 (1,444)
Other 59,438 51,913 (7,525)
Planning and inspectionsWages, salaries, and compensation 70,250 76,115 5,865
Materials and supplies 50 - (50)
Other 49,365 65,228 15,863 Total general government 678,150 660,203 (17,947)
Public safety
Emergency preparedness
Wages, salaries, and compensation 6,658 4,452 (2,206)
Materials and supplies - 1,603 1,603
Other 1,210 356 (854)
Police services 710,128 716,167 6,039 Legal 31,000 30,112 (888)
Fire fighting
Wages, salaries, and compensation 82,660 78,885 (3,775) Fire relief pension 70,000 55,582 (14,418)
Materials and supplies 11,520 8,986 (2,534)
Other 59,790 60,405 615
Total public safety 972,966 956,548 (16,418)
Public works
Buildings and grounds
Wages, salaries, and compensation 25,694 21,674 (4,020) Materials and supplies 9,000 11,059 2,059
Other 35,550 36,723 1,173
81
Schedule of Revenues, Expenditures, and
Year Ended December 31, 2017
Variance with
Final Budget -
Over (Under)
Changes in Fund Balance -
Budget and Actual - General Fund - Detailed
City of Falcon Heights
111 of 204
Original and
Final Budget
Actual
Amounts
Expenditures (Continued)Public works (Continued)
Streets
Wages, salaries, and compensation 71,130$ 73,450$ 2,320$ Materials and supplies 18,400 13,706 (4,694)
Other 54,825 25,295 (29,530)
Engineering 15,000 4,147 (10,853) Tree program
Materials and supplies 50 25 (25)
Tree maintenance 7,000 2,523 (4,477)
Total public works 236,649 188,602 (48,047)
Park and recreation
Park maintenance
Wages, salaries, and compensation 57,795 51,407 (6,388) Materials and supplies 6,300 7,033 733
Other 28,695 29,791 1,096
Total parks and recreation 92,790 88,231 (4,559) Total expenditures 1,980,555 1,893,584 (86,971)
Excess of revenues over expenditures 42,000 159,597 117,597
Other Financing Uses
Transfers out (42,000) (42,000) -
Net change in fund balance -$ 117,597 117,597$
Fund BalanceBeginning of year 1,747,759
End of year 1,865,356$
82
Budget and Actual - General Fund - Detailed
Changes in Fund Balance - Schedule of Revenues, Expenditures, and
Variance with
Final Budget -
Over (Under)
Year Ended December 31, 2017
City of Falcon Heights
112 of 204
Variance with
Actual
Amounts
Final Budget -
Over (Under)
RevenuesCharges for services 27,000$ 10,771$ (16,229)$
Miscellaneous revenues
Investment income 100 160 60
Contributions and donations 1,000 1,080 80
Total miscellaneous revenues 1,100 1,240 140 Total revenues 28,100 12,011 (16,089)
Expenditures
Park and recreation
CurrentWages, salaries, and compensation 35,382 27,287 (8,095)
Materials and supplies 2,500 1,037 (1,463)
Other 12,200 6,988 (5,212)
Total expenditures 50,082 35,312 (14,770)
Excess of revenues
under expenditures (21,982) (23,301) (1,319)
Other Financing SourcesTransfers in 22,000 22,000 -
Net change in fund balance 18$ (1,301) (1,319)$
Fund BalanceBeginning of year 17,205
End of year 15,904$
83
Original and
Final Budget
City of Falcon HeightsSchedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
Park Programs Fund - Special Revenue Fund
Year Ended December 31, 2017
113 of 204
Original and
Final Budget
Actual
Amounts
Variance with
Final Budget-
Over (Under)
Revenues
Charges for services 29,000$ 34,326$ 5,326$
Miscellaneous revenues
Investment income 350 785 435
Total revenues 29,350 35,111 5,761
Expenditures
Public works
Wages, salaries, and compensation 9,257 9,084 (173)
Other 3,690 1,734 (1,956)
Total expenditures 12,947 10,818 (2,129)
16,403$ 24,293 7,890$
Fund BalanceBeginning of year 101,703
End of year 125,996$
84
Excess of revenues
over expenditures
City of Falcon Heights
Schedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
Water Fund - Special Revenue Fund
Year Ended December 31, 2017
114 of 204
Variance with
Original and
Final Budget
Actual
Amounts
Final Budget
Over (Under)
Revenues
Recycling grant 13,109$ 13,363$ 254$
Charges for services 73,000 74,446 1,446
Miscellaneous revenues
Investment income 350 634 284
Total revenues 86,459 88,443 1,984
Expenditures
Public works
Wages, salaries, and compensation 13,350 14,624 1,274
Materials and supplies 825 215 (610)
Recycling contract 70,000 69,228 (772)
Other 4,485 1,743 (2,742)
Total expenditures 88,660 85,810 (2,850)
Excess of revenues over
(under) expenditures (2,201)$ 2,633 4,834$
Fund Balance
Beginning of year 97,319
End of year 99,952$
85
City of Falcon Heights
Schedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
Solid Waste Fund - Special Revenue Fund
Year Ended December 31, 2017
115 of 204
Variance with Actual
Amounts
Final Budget -
Over (Under)
Revenues
Miscellaneous revenues
Investment income 150 391 241
Other 1,716 1,895 179
Total revenues 1,866 2,286 420
Expenditures
Community Development
Other 35,850 3,726 (32,124)
Excess of revenues
under expenditures (33,984)$ (1,440) 32,544$
Fund BalanceBeginning of year 55,830
End of year 54,390$
86
Original and
Final Budget
City of Falcon Heights
Schedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
Community Development Fund - Special Revenue Fund
Year Ended December 31, 2017
116 of 204
Variance with
Original Final
Actual
Amounts
Final Budget-
Over (Under)
Revenues
Charges for services 41,000$ 41,000$ 41,773$ 773$
Miscellaneous revenues
Investment income 70 70 199 129
Total revenues 41,070 41,070 41,972 902
Expenditures
Public works
Other 36,600 57,700 54,643 (3,057)
Excess of revenues
over (under) expenditures 4,470$ (16,630)$ (12,671) 3,959$
Fund Balance
Beginning of year 33,613
End of year 20,942$
87
City of Falcon HeightsSchedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
Street Lighting Fund - Special Revenue Fund
Year Ended December 31, 2017
Budgeted Amounts
117 of 204
City of Falcon HeightsSchedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
Community Garden Fund - Special Revenue Fund
Year Ended December 31, 2017
Variance withOriginal and
Final Budget
Actual
Amounts
Final Budget -
Over (Under)
Revenues
Charges for services
Park and recreation 700$ 705$ 5$
Miscellaneous revenues
Investment income 15 27 12
Total revenues 715 732 17
ExpendituresPark and recreation
Other 1,000 73 (927)
Excess of revenues over
(under) expenditures (285)$ 659 944$
Fund Balance
Beginning of year 3,042
End of year 3,701$
88
118 of 204
City of Falcon HeightsStatement of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
Emerald Ash Borer Grant Fund - Special Revenue Fund
Year Ended December 31, 2017
Variance with Actual
Amounts
Final Budget -
Over (Under)
Revenues
Miscellaneous revenues
Investment income -$ 1$ 1$
Expenditures
Parks and recreation
Wages, salaries, and compensation 750 - (750)
Excess of revenues over
(under) expenditures (750)$ 1 751$
Fund BalanceBeginning of year 203
End of year 204$
89
Original and
Final Budget
119 of 204
City of Falcon Heights
Schedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
G.O. Improvement Bonds, Series 2017A - Debt Service Fund
Year Ended December 31, 2017
Variance with
Original Final
Actual
Amounts
Final Budget -
Over (Under)
Revenues
Special assessments -$ 40,000$ -$ (40,000)$ Miscellaneous revenuesInvestment income - 100 185 85 Total revenues - 40,100 185 (39,915)
ExpendituresPublic works
Wages, salaries and compensation - 800 - (800)
Debt service
Interest and other charges - 21,000 - (21,000)
Total expenditures - 21,800 - (21,800)
Excess of revenues
over expenditures - 18,300 185 (18,115)
Other Financing Sources
Bond Issuance - 20,000 13,450 (6,550)
Transfers in - 125,000 125,000 -
Total other financing
sources - 145,000 138,450 (6,550)
Net change in fund balance -$ 163,300$ 138,635 (24,665)$
Fund Balance
Beginning of year -
End of year 138,635$
90
Budgeted Amounts
120 of 204
City of Falcon HeightsSchedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
G.O. Improvement Bonds, Series 2013A - Debt Service Fund
Year Ended December 31, 2017
Variance with Original and
Final Budget
Actual
Amounts
Final Budget -
Over (Under)
Revenues
Property Taxes 26,228$ 26,228$ -$
Special assessments 47,448 39,328 (8,120)
Miscellaneous revenues
Investment income 200 527 327
Total revenues 73,876 66,083 (7,793)
ExpendituresGeneral government
Other 750 781 31
Debt service
Principal 65,000 65,000 -
Interest and other charges 12,606 10,544 (2,062)
Total expenditures 78,356 76,325 (2,031)
Excess of revenues under
expenditures (4,480) (10,242) (5,762)
Other Financing Sources
Transfers in 25,000 25,000 -
Net change in fund balance 20,520$ 14,758 (5,762)$
Fund Balance
Beginning of year 123,364
End of year 138,122$
91
121 of 204
City of Falcon HeightsSchedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual -
G.O. Equipment Certificates, Series 2013B - Debt Service Fund
Year Ended December 31, 2017
Variance with Original and
Final Budget
Actual
Amounts
Final Budget -
Over (Under)
Revenues
Property taxes 99,356$ 99,356$ -$
Miscellaneous revenues
Investment income 200 407 207
Total revenues 99,556 99,763 207
Expenditures
General government
Wages, salaries, and compensation 750 780 30
Debt service
Principal 85,000 85,000 -
Interest and other charges 13,986 10,436 (3,550)
Total expenditures 99,736 96,216 (3,520)
Excess of revenues over
(under) expenditures (180)$ 3,547 3,727$
Fund Balance
Beginning of year 124,450
End of year 127,997$
92
122 of 204
City of Falcon HeightsSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - Future Improvements - Capital Projects FundYear Ended December 31, 2017
Budgeted Amount Variance with
Original Final
Actual
Amounts
Final Budget -
Over (Under)
Revenues
Special assessments 81,000$ 6,000$ 7,697$ 1,697$
Intergovernmental
Other grants and aids 653,000 60,000 61,402 1,402
Charges for services
Public works - - 184 184 Miscellaneous revenuesInvestment income 4,500 4,500 5,731 1,231
Total revenues 738,500 70,500 75,014 4,514
Expenditures
Public works
Current
Other 25,750 25,750 10,641 (15,109)
Capital outlay 1,183,500 7,000 5,555 (1,445)
Debt service
Interest and other charges 15,000 - - -
Total expenditures 1,224,250 32,750 16,196 (16,554)
Excess of revenues over
(under) expenditures (485,750) 37,750 58,818 21,068
Other Financing Sources
Bond issuance 800,000 - - -
Net change in fund balance 314,250$ 37,750$ 58,818 21,068$
Fund BalanceBeginning of year 642,256
End of year 701,074$
93
123 of 204
City of Falcon HeightsSchedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual -
Grove Street Improvement Project - Capital Projects Fund
Year Ended December 31, 2017
Budgeted Amount Variance with
Original Final
Actual
Amounts
Final Budget -
Over (Under)
RevenuesSpecial assessments -$ 40,000$ 163,931$ 123,931$ Intergovernmental revenue
Municipal state aid - 200,000 190,000 (10,000)
Other grants and aids - 662,000 547,869 (114,131)
Total intergovernmental revenue - 862,000 737,869 (124,131)
Miscellaneous revenuesInvestment income - 100 2,154 2,054
Other - - 91 91
Total miscellaneous - 100 2,245 2,145
Total revenues - 902,100 904,045 1,945
Expenditures
Public works
Current
Other - 16,800 176 (16,624)
Capital outlay - 1,211,500 1,234,523 23,023 Total expenditures - 1,228,300 1,234,699 6,399
Excess of revenues
under expenditures - (326,200) (330,654) (4,454)
Other Financing Sources (Uses)
Bond issuance - 850,000 831,550 (18,450)
Bond premium - - 52,345 52,345
Transfers out - (300,000) - 300,000
Total other financing sources (uses)- 550,000 883,895 333,895
Net change in fund balance -$ 223,800$ 553,241 329,441$
Fund BalanceBeginning of year -
End of year 553,241$
94
124 of 204
City of Falcon HeightsSchedule of Revenues, Expenditures, andChanges in Fund Balance - Budget and Actual -
General Capital Improvements - Capital Projects Fund
Year Ended December 31, 2017
Variance with
Original Final
Actual
Amounts
Final Budget -
Over (Under)
RevenuesMiscellaneous revenuesInvestment income 400$ 400$ 1,237$ 837$
Other - - 18,437 18,437
Total revenues 400 400 19,674 19,274
ExpendituresGeneral government
Current
Other 750 750 780 30
Capital outlay 27,800 177,800 30,303 (147,497)
Total expenditures 28,550 178,550 31,083 (147,467)
Excess of revenues
under expenditures (28,150) (178,150) (11,409) 166,741
Other Financing Sources Transfers in 20,000 170,000 170,000 -
Net change in fund balance (8,150)$ (8,150)$ 158,591 166,741$
Fund BalanceBeginning of year 66,413
End of year 225,004$
95
Budgeted Amounts
125 of 204
City of Falcon HeightsSchedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual - Parks/PW
and Facilities Capital Improvements - Capital Projects FundYear Ended December 31, 2017
Variance with
Original Final
Actual
Amounts
Final Budget -
Over (Under)
Revenues
Intergovernmental
Other grants and aids -$ -$ 2,136$ 2,136$
Miscellaneous revenuesInvestment income 200 200 341 141
Total Revenues 200 200 2,477 2,277
ExpendituresParks and recreation
Current
Other 750 750 780 30
Capital outlay 7,500 23,000 18,619 (4,381) Total expenditures 8,250 23,750 19,399 (4,351)
Excess of revenues
under expenditures (8,050) (23,550) (16,922) 6,628
Other Financing Sources
Proceeds from sale of capital assets - - 225 225
Transfers in - 100,000 100,000 -
Total other financing sources - 100,000 100,225 225
Net change in fund balance (8,050)$ 76,450$ 83,303 6,853$
Fund BalanceBeginning of year 70,622
End of year 153,925$
96
Budgeted Amounts
126 of 204
City of Falcon Heights
Schedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and ActualTax Increment No. 1 Construction - Capital Projects Fund
Year Ended December 31, 2017
Variance with
Original Final
Actual
Amounts
Final Budget -
Over (Under)
RevenuesMiscellaneous revenuesInvestment income -$ -$ 40$ 40$
Excess of revenues
over expenditures -$ -$ 40 40$
Fund Balance
Beginning of year 49
End of year 89$
97
Budgeted Amounts
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City of Falcon Heights
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual -
Tax Increment No. 1-3 - Capital Projects Fund
Year Ended December 31, 2017
Variance with Original and
Final Budget
Actual
Amounts
Final Budget -
Over (Under)
RevenuesTax increments 240,000$ 172,018$ (67,982)$
Miscellaneous revenueInvestment income 200 434 234
Total revenues 240,200 172,452 (67,748)
ExpendituresPublic works
CurrentOther 750 780 30
Capital outlay 248,000 167,850 (80,150)
Total expenditures 248,750 168,630 (80,120)
Excess of revenues over
(under) expenditures (8,550)$ 3,822 12,372$
Fund BalanceBeginning of year 55,053
End of year 58,875$
98
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City of Falcon Heights
Schedule of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual - Public Safety Capital Improvements - Capital Projects Fund
Year Ended December 31, 2017
Variance with Original and
Final Budget
Actual
Amounts
Final Budget -
Over (Under)
Revenues
Intergovernmental Revenue
Federal grants -$ 10,200$ 10,200$
Miscellaneous revenues
Investment income 200 377 177
Total revenues 200 10,577 10,377
ExpendituresPublic safety
Current
Other 750 781 31
Capital outlay 43,500 20,777 (22,723)
Total expenditures 44,250 21,558 (22,692)
Excess of revenues
under expenditures (44,050)$ (10,981) 33,069$
Fund BalanceBeginning of year 54,749
End of year 43,768$
99
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101
City of Falcon Heights
Statistical Section
This part of the City's comprehensive annual financial report presents detailed information as a context
for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.
CONTENTS
Financial Trends
The tables contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Tables 1-5
Revenue Capacity
These tables contain information to help the reader assess the
City's most significant local revenue source, the property tax. Tables 6-10 Debt Capacity
These tables 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. Tables 11-15
Demographic and Economic Information These tables offer demographic and economic indicators to
help the reader understand the environment within which the
City's financial activities take place. Tables 16-17
Operating Information
These tables contain service and infrastructure data 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. Tables 18-20
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Table 1
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Governmental Activities
Net investment in capital assets 5,726,545$ 6,137,726$ 7,033,744$ 7,620,526$ 7,695,346$ 7,637,289$ 7,257,327$ 7,205,699$ 7,139,185$ 7,073,360$ Restricted 415,459 356,592 96,994 74,940 254,441 474,487 610,535 477,094 484,867 613,084
Unrestricted 3,254,771 3,403,646 2,783,025 2,706,267 2,501,081 2,493,059 2,545,364 2,302,829 2,421,877 2,534,275 Total governmental activities 9,396,775$ 9,897,964$ 9,913,763$ 10,401,733$ 10,450,868$ 10,604,835$ 10,413,226$ 9,985,622$ 10,045,929$ 10,220,719$
Business-Type ActivitiesNet investment in capital assets 925,065$ 980,706$ 968,304$ 920,202$ 874,377$ 828,552$ 1,223,115$ 1,535,176$ 1,487,989$ 1,675,687$ Unrestricted 2,212,799 2,216,182 2,250,456 2,343,470 2,580,201 2,670,746 2,656,683 2,398,677 2,524,097 2,139,335 Total business-type activities 3,137,864$ 3,196,888$ 3,218,760$ 3,263,672$ 3,454,578$ 3,499,298$ 3,879,798$ 3,933,853$ 4,012,086$ 3,815,022$
Primary GovernmentNet investment in capital assets 6,651,610$ 7,118,432$ 8,002,048$ 8,540,728$ 8,569,723$ 8,465,841$ 8,480,442$ 8,740,875$ 8,627,174$ 8,749,047$ Restricted 415,459 356,592 96,994 74,940 254,441 474,487 610,535 477,094 484,867 613,084 Unrestricted 5,467,570 5,619,828 5,033,481 5,049,737 5,081,282 5,163,805 5,202,047 4,701,506 4,945,974 4,673,610 Total primary government net position 12,534,639$ 13,094,852$ 13,132,523$ 13,665,405$ 13,905,446$ 14,104,133$ 14,293,024$ 13,919,475$ 14,058,015$ 14,035,741$
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Source: City of Falcon Heights financial records
City of Falcon HeightsNet Position by ComponentLast Ten Fiscal Years
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Table 2
2008 2009 2010 2011 2012 2013 2014 2015*2016 2017ExpensesGovernmental activitiesGeneral government 597,928$ 523,873$ 568,952$ 491,470$ 590,809$ 649,412$ 665,388$ 634,328$ 696,194$ 752,640 Public safety 772,506 799,212 830,881 852,153 882,722 870,860 956,694 1,009,561 1,073,268 1,072,905 Public works 508,822 752,624 659,202 698,625 607,628 1,473,421 643,323 1,068,292 648,892 1,775,574 Park and recreation 212,820 178,193 192,293 200,583 215,570 215,654 253,333 300,800 162,958 174,392 Community development 5,563 773 2,350 535 615 7,551 2,187 10,967 1,789 3,726 Interest on long-term debt 49,367 37,578 30,432 10,574 3,101 55,352 19,695 18,363 28,612
Total governmental activities expenses 2,147,006 2,292,253 2,284,110 2,253,940 2,300,445 3,272,250 2,520,925 3,043,643 2,601,464 3,807,849 Business-type activitiesSanitary sewer 587,105 583,548 707,466 635,832 565,107 704,897 629,452 613,868 760,415 723,236 Storm sewer 104,870 109,282 114,869 210,185 139,766 136,662 116,201 136,551 122,303 142,494 Total business-type activities expenses 691,975 692,830 822,335 846,017 704,873 841,559 745,653 750,419 882,718 865,730 Total primary government expenses 2,838,981$ 2,985,083$ 3,106,445$ 3,099,957$ 3,005,318$ 4,113,809$ 3,266,578$ 3,794,062$ 3,484,182$ 4,673,579$
Program RevenuesGovernmental activitiesCharges for servicesGeneral government 105,605$ 120,531$ 141,883$ 144,682$ 150,366$ 155,006$ 132,811$ 158,077$ 167,214$ 145,060 Public safety 191,648 129,344 113,489 137,447 147,127 129,220 137,377 145,952 125,161 127,160 Public works 47,066 56,585 92,406 121,887 135,552 149,158 147,014 149,152 152,128 151,229 Park and recreation 22,570 27,287 28,399 34,664 36,368 184,510 43,209 25,232 15,170 11,476 Community development 1,155 1,155 1,255 1,155 1,716 1,717 1,716 1,716 1,716 1,895 Operating grants and contributions 101,372 336,215 118,735 212,806 119,267 218,919 193,236 473,143 151,536 154,211 Capital grants and contributions 8,513 155,736 5,141 338,228 1,567 664,846 13,967 196,337 11,490 953,653 Total governmental activities program revenues 477,929 826,853 501,308 990,869 591,963 1,503,376 669,330 1,149,609 624,415 1,544,684
Business-type activitiesCharges for servicesSanitary sewer 674,211 704,759 748,376 760,972 788,551 807,031 780,844 756,539 829,339 879,391 Storm sewer 118,005 122,034 120,665 125,339 141,630 156,632 155,116 154,984 157,067 169,957 Operating grants and contributions - - - - - - - - 701 - Capital grants and contributions - - - - - - - - - - Total business-type activities program revenues 792,216 826,793 869,041 886,311 930,181 963,663 935,960 911,523 987,107 1,049,348
Total primary government program revenues 1,270,145$ 1,653,646$ 1,370,349$ 1,877,180$ 1,522,144$ 2,467,039$ 1,605,290$ 2,061,132$ 1,611,522$ 2,594,032$
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Table 2 continued next page
City of Falcon HeightsChanges in Net Position
Last Ten Fiscal Years
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Table 2 (Cont)
2008 2009 2010 2011 2012 2013 2014 2015*2016 2017Net (expense)/revenue
Governmental activities (1,669,077)$ (1,465,400)$ (1,782,802)$ (1,263,071)$ (1,708,482)$ (1,768,874)$ (1,851,595)$ (1,894,034)$ (1,977,049)$ (2,263,165)$ Business-type activities 100,241 133,963 46,706 40,294 225,308 122,104 190,307 161,104 104,389 183,618 Total primary government net (expense)/revenue (1,568,836)$ (1,331,437)$ (1,736,096)$ (1,222,777)$ (1,483,174)$ (1,646,770)$ (1,661,288)$ (1,732,930)$ (1,872,660)$ (2,079,547)$
General revenues and other changes in net positionGovernmental activitiesTaxes
Property taxes 924,922$ 942,881$ 992,568$ 1,003,977$ 1,011,688$ 1,080,588$ 1,043,863$ 1,081,384$ 1,181,336$ 1,271,602 Tax increments 309,127 328,757 366,948 345,716 349,752 374,385 202,372 156,606 251,476 172,018 Unrestricted state aids 309,520 441,005 330,012 341,137 311,928 312,593 505,414 533,015 542,320 546,524 Other general revenue - - - - - 66,520 38,602 15,000 - 18,437 Unrestricted investment income 138,626 111,946 50,571 24,080 28,174 118 26,324 14,783 22,163 29,149 Gain on sale of assets - - - 13,131 - 8,637 34,060 270 61 225 Transfers 65,000 142,000 58,502 23,000 56,075 80,000 (167,106) - 40,000 400,000
Total governmental activities 1,747,195 1,966,589 1,798,601 1,751,041 1,757,617 1,922,841 1,683,529 1,801,058 2,037,356 2,437,955 Business-type activitiesOther general revenue - - 6,900 - - - Unrestricted investment income 82,734 67,061 26,768 16,348 21,673 2,616 23,087 13,091 13,844 19,318 Proceeds sale of assets - - - 11,270 - - - - - Transfers (65,000) (142,000) (58,502) (23,000) (56,075) (80,000) 167,106 - (40,000) (400,000) Total business-type activities 17,734 (74,939) (24,834) 4,618 (34,402) (77,384) 190,193 13,091 (26,156) (380,682)
Total primary government 1,764,929$ 1,891,650$ 1,773,767$ 1,755,659$ 1,723,215$ 1,845,457$ 1,873,722$ 1,814,149$ 2,011,200$ 2,057,273
Changes in net positionGovernmental activities 78,118$ 501,189$ 15,799$ 487,970$ 49,135$ 153,967$ (168,066)$ (92,976)$ 60,307$ 174,790$
Business-type activities 117,975 59,024 21,872 44,912 190,906 44,720 380,500 174,195 78,233 (197,064) Total primary government 196,093$ 560,213$ 37,671$ 532,882$ 240,041$ 198,687$ 212,434$ 138,540$ (22,274)$
Change in net position 81,219$ Net position - beginning 14,293,024 Change in accounting principle (Note 10)(454,768) Net position - beginning, as restaed 13,838,256
Net position - ending 13,919,475
*Governmental Accounting Standards Board Statement NO. 68 required implementation for fiscal year 2015.
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Source: City of Falcon Heights financial records
City of Falcon HeightsChanges in Net Position
Last Ten Fiscal Years
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Table 3
Fiscal Property Tax Franchise
Year Tax Increment Tax Total
2008 924,922$ 309,127$ -$ 1,234,049$
2009 942,881 328,757 - 1,271,638
2010 992,568 366,948 - 1,359,516
2011 1,003,977 345,716 - 1,349,693
2012 1,011,688 349,752 - 1,361,440
2013 1,080,588 374,385 - 1,454,973
2014 1,043,863 202,372 - 1,246,235
2015 1,081,384 156,606 - 1,237,990
2016 1,181,336 251,476 - 1,432,812
2017 1,271,602 172,018 - 1,443,620
Source: City of Falcon Heights financial records 106
City of Falcon Heights
Governmental Activities Tax Revenues by Source
Last Ten Fiscal Years
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Table 4
2008 2009 2010
General FundReserved 62,924$ 64,092$ 71,531$
Unreserved 1,157,135 1,229,994 1,225,784
Total general fund 1,220,059$ 1,294,086$ 1,297,315$
All Other Governmental FundsReserved -$ 750$ -$
Unreserved, reported in
Special revenue funds 113,415 137,267 171,744 Debt service funds 49,905 56,985 9,758
Capital projects funds 2,314,663 2,301,744 1,735,450
Total all other governmental funds 2,477,983$ 2,496,746$ 1,916,952$
2011*2012 2013 2014 2015 2016 2017
65,289$ 67,068$ 70,602$ 89,222$ 85,535$ 71,138$ 37,201$ - - - - - - -
- - - - - - - - - - - - - -
1,236,211 1,275,982 1,326,645 1,334,716 1,504,383 1,676,621 1,828,155
1,301,500$ 1,343,050$ 1,397,247$ 1,423,938$ 1,589,918$ 1,747,759$ 1,865,356$
-$ -$ -$ -$ - -$ -$ 258,902 333,945 951,032 411,590 318,141 337,506 498,308
182,259 189,414 285,035 251,368 263,384 308,915 321,089
1,225,142 997,693 851,073 919,832 803,442 799,450 1,642,422 Unassigned - - - - (43,120) - -
governmental funds 1,666,303$ 1,521,052$ 2,087,140$ 1,582,790$ 1,341,847$ 1,445,871$ 2,461,819$
*Governmental Accounting Standards Board Statement NO. 54 required implementation for fiscal year 2011.
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Source: City of Falcon Heights financial records
City of Falcon Heights
Last 10 Fiscal Years
Fund Balances of Governmental Funds
Fiscal Year
General Fund
Committed
Assigned
Fiscal Year
Nonspendable
Restricted
Assigned
UnassignedTotal general fund
Total all other
All Other Governmental Funds
Nonspendable
RestrictedCommitted
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Table 5
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017RevenuesTaxes1,232,705$ 1,267,192$ 1,356,491$ 1,346,281$ 1,371,399$ 1,453,211$ 1,254,073$ 1,229,405$ 1,435,717$ 1,443,823$ Special assessments 58,749 96,239 23,478 8,011 5,918 130,256 62,977 76,673 54,579 210,956
Licenses and permits 52,725 52,082 69,270 73,100 75,629 75,077 68,253 80,864 73,339 93,344
Intergovernmental 450,726 893,875 496,416 625,363 486,354 761,796 755,281 1,142,257 792,070 1,478,994 Charges for services 118,880 135,438 177,017 221,007 243,946 393,542 253,357 238,876 225,347 235,928 Fines and forfeitures 77,479 78,486 61,792 72,246 64,121 68,208 67,638 80,415 73,901 45,806 Investment income 138,626 111,946 50,571 24,080 28,174 118 26,324 14,783 22,163 29,149 Miscellaneous 79,126 30,953 21,684 22,262 32,274 204,418 54,850 50,185 35,435 46,047
Total revenues 2,209,016 2,666,211 2,256,719 2,392,350 2,307,815 3,086,626 2,542,753 2,913,458 2,712,551 3,584,047
ExpendituresGeneral government 553,869$ 486,226$ 530,960$ 523,355$ 536,809$ 580,783$ 593,735$ 580,026$ 593,485$ 662,544$ Public safety 711,068 743,437 769,924 778,565 822,563 807,412 867,779 885,969 939,029 957,329 Public works 290,052 278,839 272,874 339,843 378,776 408,555 363,027 351,541 322,322 351,470
Park and recreation 157,153 123,934 155,463 159,460 136,054 179,299 180,126 218,807 110,393 124,396
Community development 5,563 773 2,350 535 615 7,551 2,187 10,967 1,789 3,726
Miscellaneous 1,150 9,448 1,834 1,070 - - - - - - Capital outlay 247,829 684,640 1,055,955 593,850 553,842 1,614,042 1,097,652 796,133 364,916 1,477,627 Debt service:Principal 330,000 345,000 365,000 265,000 65,000 65,000 70,000 125,000 140,000 150,000 Interest and other charges 55,753 44,403 37,426 13,603 3,466 52,336 19,966 20,248 18,813 20,980
Total expenditures 2,352,437 2,716,700 3,191,786 2,675,281 2,497,125 3,714,978 3,194,472 2,988,691 2,490,747 3,748,072
Excess of revenues under expenditures (143,421) (50,489) (935,067) (282,931) (189,310) (628,352) (651,719) (75,233) 221,804 (164,025)
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Table 5 continued next page
City of Falcon Heights
Changes in Fund Balances of Governmental FundsLast 10 Fiscal Years
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Table 5 (Cont.)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Other Financing Sources (uses)Transfers in 455,600$ 446,800$ 807,329$ 274,366$ 246,775$ 170,418$ 241,685$ 24,716$ 62,000$ 442,000$
Transfers out (390,600) (304,800) (748,827) (251,366) (190,700) (90,418) (101,685) (24,716) (22,000) (42,000)
Proceeds sale of capital assets - 1,279 - 13,467 29,534 8,637 34,060 270 61 225 Bonds issued - - 300,000 - - 1,160,000 - - - 845,000 Bond premium - - - - - - - - - 52,345 Total other financing sources (uses)65,000 143,279 358,502 36,467 85,609 1,248,637 174,060 270 40,061 1,297,570
Net change in fund balances (78,421)$ 92,790$ (576,565)$ (246,464)$ (103,701)$ 620,285$ (477,659)$ (74,963)$ 261,865$ 1,133,545$
Debt service as a percentage of noncapital expenditures 16.44%15.41%15.88%11.42%3.11%3.72%3.74%5.02%6.44%4.62%
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Source: City of Falcon Heights financial records
City of Falcon Heights
Changes in Fund Balances of Governmental FundsLast 10 Fiscal Years
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Table 6
Fiscal Property Tax Franchise
Year Tax Increment Tax Total
2008 923,578$ 309,127$ -$ 1,232,705$
2009 938,435 328,757 - 1,267,192
2010 988,609 367,882 - 1,356,491
2011 998,999 347,282 - 1,346,281
2012 1,021,683 349,716 - 1,371,399
2013 1,078,855 374,356 - 1,453,211
2014 1,051,636 202,437 - 1,254,073
2015 1,072,799 156,606 - 1,229,405
2016 1,184,241 251,476 - 1,435,717
2017 1,271,805 172,018 - 1,443,823
Source: City of Falcon Heights financial records 110
City of Falcon Heights
General Governmental Tax Revenues by Source
Last 10 Fiscal Years
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Table 7
Assesed
Estimated (Tax Capacity)
Year Real Property (1)Personal Property (1)Less Total Taxable Actual Value(1) as a
Ended Residential Commercial Motor Tax Exempt Assessed Taxable Percentage of
December 31,Property Property Vehicles Other Real Property (1)Value (1)Market Value Taxable Market Value
2008 4,695,436$ NA NA 49,950$ NA 4,745,386$ 18.554 %437,709,000$ 1.08%
2009 4,572,505 NA NA 48,842 NA 4,621,347 19.216 %427,019,600 1.08%
2010 4,453,957 NA NA 48,814 NA 4,502,771 20.654 %415,592,900 1.08%
2011 4,255,866 NA NA 52,800 NA 4,308,666 21.521 %397,758,400 1.08%
2012 4,021,671 NA NA 55,328 NA 4,076,999 23.515 %374,125,500 1.09%
2013 3,697,530 NA NA 59,508 NA 3,757,038 27.884 %362,697,600 1.04%
2014 3,776,860 NA NA 59,934 NA 3,836,794 24.819 %369,585,000 1.04%
2015 4,111,429 NA NA 61,664 NA 4,173,093 23.470 %385,888,200 1.08%
2016 4,100,084 NA NA 64,788 NA 4,164,872 25.855 %384,679,900 1.08%
2017 4,327,797 NA NA 68,082 NA 4,395,879 26.342 %403,438,700 1.09%
(1) Assessed values replaced by Gross Tax Capacity (GTC) by state statutes.
Assessed values of commercial property, motor vehicles and tax exempt properties are not
provided by Ramsey County.
1
1
1
Source: Ramsey County Property Tax and Records
City of Falcon Heights
Assessed Value and Estimated Actual Value of Taxable Property
Last 10 Fiscal Years
Rate
Tax
Direct
Total
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Table 8
City of Falcon Heights Overlapping RatesSchool Total
Debt Total Technical Ramsey District Special Direct andFiscalOperatingService City College County No. 623 Districts Overlapping
Year Rate (3)Rate Rate Rate Rate Rate Rate Rates
2008 18.554 0.000 18.554 0.000 44.023 10.175 6.687 79.439
2009 19.216 0.000 19.216 0.000 46.546 10.624 6.806 83.192201020.654 0.000 20.654 0.000 50.248 13.065 7.233 91.200
2011 21.521 0.000 21.521 0.000 54.678 14.566 7.889 98.654201223.515 0.000 23.515 0.000 61.316 17.065 8.871 110.767
2013 27.884 0.000 27.884 0.000 65.240 15.464 9.305 117.893201424.819 0.000 24.819 0.000 63.735 16.251 9.037 113.842
2015 23.470 0.000 23.470 0.000 58.922 17.18 8.647 108.219
2016 25.855 0.000 25.855 0.000 58.885 20.958 9.052 114.750201726.342 0.000 26.342 0.000 55.850 18.894 8.669 109.755
(1) overlapping rates are those of local and county governments that apply to property owners within the city of falcon heights. Not all
overlapping rates apply to all city of falcon heights property owners (e.g. , the rates for special districts apply only to the proportion of
the government's property owners whose property is located within the geographic boundaries of the special district).
(2) tax capacity rates are used by state statute instead of millage rates.
(3) does not include tax increments.
Source: Ramsey County Property Tax And Records 112
Net Tax Capacity Rates (2)
City of Falcon HeightsProperty Tax RatesDirect and Overlapping(1) GovernmentsLast 10 Fiscal Years
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City of Falcon Heights
Principal Property Taxpayers
Table 9
2017 2008
Percentage of Percentage of
Taxable Total Taxable Taxable Total Taxable
Assessed Assessed Assessed Assessed
Value (1)Rank Value Value Rank Value
Falcon Heights Town Square Apartments, LP 151,375$ 1 3.44 %136,413$ 2 3.02 %
Spire Federal Credit Union 137,052 2 3.12 174,910 1 3.88
Sidal Realty Co. Limited Partnership 125,870 3 2.86 99,000 3 2.20
Town Square Senior Apartments, LLC 76,250 4 1.73 54,079 4 1.20
Northern States Power 68,082 5 1.63 49,950 5 1.11
Falcon Crossing, LLC 52,718 6 1.20 47,250 6 1.05
Anna Spiegler 46,446 7 1.06 39,398 8 0.87
Carl and Eloise Pohlad Foundation 43,220 8 0.98 - - -
Warner Properties of MN, LLP 41,674 9 0.95 43,250 7 0.96
1800 Larpenteur LLC & CO John Stiehm 33,263 10 0.76 - - -
JAK Rental Properties LLC 30,814 11 0.76 - - -
Cox Building LLC 28,698 12 0.70 - - -
Total 835,462$ 19.20 %644,250$ 14.28 %
(1) Assessed values replaced by Gross Tax Capacities (GTC) by state statute.
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3
Source: Ramsey County Property Tax and Records
Taxpayer
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Table 10
Total Tax
Levy for Collections in
Fiscal Year Amount Percentage of Levy Subsequent Years Amount Percentage of Levy
922,476$ 920,967$ 99.8%1,509$ 922,476$ 100.00%
943,828 937,551 99.3%6,277 943,828 100.00%
1,022,944 982,578 96.1%16,549 999,127 97.67%
1,038,290 989,035 95.3%5,222 994,257 95.76%
1,017,944 1,011,688 99.4%6,256 1,017,944 100.00%
1,084,007 1,078,855 99.5%4,411 1,083,266 99.93%
1,083,850 1,044,751 96.4%1,785 1,046,536 96.56%
1,083,850 1,072,033 98.9%10,178 1,082,211 99.85%
1,173,447 1,171,208 99.8%2,239 1,173,447 100.00%
1,278,231 1,271,805 99.5%1,271,805 99.50%
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4
Source: City of Falcon Heights Financial Records
2017
2012
2013
2014
2015
2016
Fiscal Year
2008
2009
2010
2011
Fiscal Year of the Levy Total Collections to Date
Collected within the
City of Falcon Heights
Property Tax Levies and Collections (1)
Last 10 Fiscal Years
144 of 204
Table 11
Total Percentage
Fiscal G.O.Primary of Personal Per
Year Bonds Government Income(1)Capita(1)
2008 910,000$ 910,000$ 0.34%158$
2009 565,000 565,000 0.35%98
2010 500,000 500,000 0.32%94
2011 235,000 235,000 0.14%44
2012 170,000 170,000 0.10%31
2013 1,265,000 1,265,000 0.78%236
2014 1,195,000 1,195,000 0.72%218
2015 1,070,000 1,070,000 0.65%196
2016 930,000 930,000 0.54%170
2017 1,625,000 1,625,000 0.95%298
Source: City of Falcon Heights Financial Records 115
(1) See the Schedule of Demographic and Economic Statistics (Table 16) for personal income and
population data.
City of Falcon Heights
Ratios of Outstanding Debt by Type
Last 10 Fiscal Years
Governmental Activities
Note: Details regarding the City's outstanding debt can be found in the Notes to Financial Statements.
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116
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Table 12
Percentage of
EstimatedLess Amounts Actual Taxable
Fiscal G.O.Available in Debt Value(1) of Per
Year Bonds Service Fund Total Property Capita(2)
2008 910,000$ 49,905$ 860,095$ 0.20%149$
2009 565,000 56,985 508,015 0.12%88
2010 500,000 9,758 490,242 0.12%92
2011 235,000 402 234,598 0.06%44
2012 170,000 2,427 167,573 0.04%31 2013 1,265,000 44,007 1,220,993 0.34%227
2014 1,195,000 260,990 934,010 0.25%170
2015 1,070,000 234,341 835,659 0.22%153
2016 930,000 247,198 682,802 0.18%125
2017 1,625,000 404,754 1,220,246 0.30%224
Note: Details regarding the City's outstanding debt can be found in the Notes to the Financial
Statements.
(1) See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property
(Table 7) for property value data.
(2) Population data can be found in the Schedule of Demographic and Economic Statistics
(Table 16)
Source: City of Falcon Heights Financial Records 117
City of Falcon Heights
Ratios of General Bonded Debt Outstanding
Last 10 Fiscal Years
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Table 13
Estimated
Estimated Share of
Debt Percentage Overlapping
Outstanding Applicable(1)Debt
Debt repaid with property taxes: county 1,810,501,202$ 0.4%7,771,621$
Subtotal, overlapping debt 7,771,621
City of Falcon Heights direct debt 1,625,000
Total direct and overlapping debt 9,396,621$
Note: Overlapping governments are those that coincide, at least in part, with the geographic
boundaries of the City. This schedule estimates the portion of outstanding debt of those
overlapping governments that is borne by the residents and businesses of the City.
This process recognizes that, when considering the government's ability to issueand 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.
(1) The percentage of overlapping debt applicable is estimated using taxable assessedproperty values. Applicable percentages were estimated by determining the portion of thecounty's total taxable assessed value.
Sources: Assessed value data used to estimate applicable percentages provided by the County
Board of Equalization and Assessment. Debt outstanding data provided by the County.
1
1
8
City of Falcon Heights
Direct and Overlapping Governmental Activities DebtDecember 31, 2017
Governmental Unit
148 of 204
Ramsey County, Minnesota
Computation of Direct and Overlapping Bonded DebtDecember 31, 2017 Table 13 (Cont.)
City's Share
Gross Debt (1)Sinking Funds Net Debt Percent Amount
DirectCity of Falcon Heights 1,625,000$ 404,754$ 1,220,246$ 100.00 %1,220,246$
OverlappingSchool DistrictsISD No. 623 46,605,000 2,159,235 44,445,765 7.36 3,272,231
ISD No. 916 79,875,000 2,987,403 76,887,597 1.81 1,388,969
Ramsey County
Ramsey County 162,252,000 65,357,666 96,894,334 0.90 870,773
County Library 31,350,000 2,278,319 29,071,681 1.78 516,917 Metro Watershed 4,755,770 - 4,755,770 - -
Metropolitan AgenciesMetro Council 1,484,038,432 176,014,035 1,308,024,397 0.13 1,722,731 Metro Airports - - - - -
Commission - - - - -
Total
OverlappingDebt 1,808,876,202 248,796,658 1,560,079,544 7,771,621
Total direct and overlapping debt 1,810,501,202$ 249,201,412$ 1,561,299,790$ 8,991,867$
(1) Gross debt totals include bonds which are financed by ad valorem tax levy, G.O. Revenue financing and
special assessments.
Metro Council has G.O. Revenue debt of $ 1,295,417,818 and Revenue debt of $ 0. Metro AirportsCommission has G.O. Revenue debt of $ 0 and Revenue debt of $ 1,458,170,000.
The City's share is based on Net Tax Capacity of each political subdivision
1
1
9
Source: Department of Property Records and Revenue - Ramsey County
Governmental Unit
City of Falcon Heights
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Table 14
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Debt limit 8,754,180$ 8,540,392$ 8,311,858$ 7,955,168$ 7,482,510$ 6,838,406$ 6,991,052$ 7,717,764$ 7,693,598$ 8,068,774$
Total net debt applicable to limit - - - - - - - - - -
Legal debt margin 8,754,180$ 8,540,392$ 8,311,858$ 7,955,168$ 7,482,510$ 6,838,406$ 6,991,052$ 7,717,764$ 7,693,598$ 8,068,774$
Total net debt applicable to the limit as a percentage of debt limit 0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
Legal Debt
MarginCalculation forFiscal Year 2017
Assessed value 403,438,700$ Add back exempt real property - Total assessed value 403,438,700
Debt limit (2% of total assessed value)8,068,774 Debt applicable to limitG.O. Bonds - Less amount set aside for repayment of G.O. Debt -
Total net debt applicable to limit - Legal debt margin 8,068,774$
Note: Under state finance law, the City's G.O. debt should not exceed 2% of total assessed tax capacity. By law, the
G.O. debt subject to the limitation may be offset by amounts set aside for repaying G.O. bonds.
1
2
0
City of Falcon HeightsLegal Debt Margin InformationLast 10 Fiscal Years
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Table 15
Special Assessment Bonds
Special
Fiscal Assessment Debt Service
Year Collections Principal Interest Coverage
2008 28,189$ 160,000$ 18,698$ 15.8%
2009 17,951 165,000 16,917 9.9%
2010 2,857 175,000 5,273 1.6%
2011 - 200,000 5,200 0.0%
2012 - - - 0.0%
2013 31,483 - - 0.0%
2014 58,007 - 6,701 865.6%
2015 50,145 60,000 6,870 75.0%
2016 45,371 60,000 6,345 68.4%
2017 39,328 65,000 5,606 55.7%
Note: Details regarding the City's outstanding debt can be found in the Notes
to the Financial Statements.
Source: City of Falcon Heights Financial Records 121
City of Falcon Heights
Pledged-Revenue Coverage
Last Ten Fiscal Years
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City of Falcon Heights
Demographic and Economic StatisticsLast 10 Fiscal Years
Table 16
Education
Per Level in
Total Capita Years of
Fiscal Personal Personal Median Formal School
Year Population(1)Income Income(2)Age(3)Schooling(3)Enrollment(4)
2008 5,775 263,784,678$ 30,293$ NA 14.5 6,450 5.3 %
2009 5,775 161,676,900 27,996 NA 14.5 6,450 7.6
2010 5,321 154,074,876 28,956 NA 14.8 6,561 6.4
2011 5,350 164,009,600 30,656 NA 14.8 6,747 5.520125,426 165,113,180 30,430 NA 14.8 6,793 5.4
2013 5,370 161,631,630 30,099 NA 14.8 7,471 4.3
2014 5,490 165,117,240 30,076 NA 14.8 7,436 3.2
2015 5,450 165,314,850 30,333 NA 14.8 7,507 3.1
2016 5,460 170,657,760 31,256 NA 14.8 7,590 4.1
2017 5,450 170,345,200 31,256 NA 14.8 7,592 3.2
Data sources
(1) Bureau of the Census/Metropolitan Council
(2) State of Minnesota Demography Department - Ramsey County data and US Census data 2010 (2017 is estimated on 2016 data)
(3) Census Data for 2000 and 2010
(4) School District
(5) State Department of Labor
* Revenue Information for Ramsey County not available
Note: Population, median age and education level information are based on surveys conducted during the last quarter ofthe calendar year. Personal income information is a total for the year. Unemployment rate information is an adjusted yearly
average. School enrollment is based on the census at the start of the school year.
1
2
2
Rate(5)
Unemployment
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City of Falcon Heights
Principal Employers
Current Year and Nine Years Ago
Table 17
Percentage of Percentage of
Total City Total City
Employees Rank Employment Employees Rank Employment
University of Minnesota (1)2,700 1 75.00 %2,683 1 72.51 %
Twin Cities Laboratories 118 3 3.28 %- - - %
TIES 77 2 2.14 %104 2 2.81 %
Spire Federal Credit Union 240 4 6.67 %86 3 2.32 %
Minnesota State Fair (2)75 5 2.08 %80 4 2.16 %
Estimated Total City Employees All Businesses:3,600 89.17 %3,700 79.80 %
(1) The University of Minnesota Saint Paul Campus employs an additional 2100 part time people during the year.
(2) During the Minnesota State Fair held each fall, there are an additional 2,700 people contingently employed.
1
2
3
Source: City of Falcon Heights Administrative office.
2017 2008
Taxpayer
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Table 18
General Government 5.17 3.85 4.29 4.16 4.16 4.16 4.51 4.26 4.26 4.61Public Safety
Police (1)Officers NA NA NA NA NA NA NA NA NA NAFireFirefighters and officers 2.27 2.27 2.27 2.27 2.27 2.27 3.02 3.02 3.02 2.77Highways and Streets
Engineering (2) Maintenance 1.25 1.38 1.32 1.13 1.13 1.13 1.13 1.13 1.13 1.10Park and Recreation 2.74 2.00 2.49 2.49 2.49 2.49 2.49 2.49 2.49 2.44Sewer1.88 2.41 2.29 2.19 2.19 2.19 2.19 2.19 2.19 2.32Total13.31 11.91 12.66 12.24 12.24 12.24 13.34 13.09 13.09 13.24
(1) The City contracts with a neighboring city for police services.(2) The City contracts with outside entities for engineering services.
1
2
4
Source: City of Falcon Heights administrative office.
2017Function
City of Falcon HeightsFull-Time Equivalent City Government Employees by FunctionLast 10 Fiscal Years
2008 2009 2010 2011 2012 2013 2014 2015 2016
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Table 19
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
PolicePhysical arrests 701 613 547 638 605 649 620 700 539 311
Parking violations 533 426 391 243 215 336 427 313 303 155
Traffic violations 2,180 1,370 1,315 1,647 1,486 1,608 1,496 1,987 1,344 1,653
FireNumber of calls answered 102 88 108 101 149 94 117 108 120 119
Inspections 114 30 29 60 68 61 86 67 77 105
Highways and StreetsStreets resurfacing (miles)- 0.6 - - - 1 - - - -
Potholes repaired 26 14 20 30 60 70 185 80 70 68
SanitationRefuse collected (tons/day) (1)NA NA NA NA NA NA NA NA NA NA
Recyclables collected (tons/day) (2)25.2 17.2 21.5 9.9 9.3 9.3 9.6 8.9 9.0 8.9
Park and RecreationAthletic field permits issued 73 68 59 6 3 3 3 3 3 83
Community centers admissions (3)NA NA NA NA NA NA NA NA NA NA
WaterNew connections - - - - - - - - - 3
Water mains breaks 2 1 3 - - 6 1 - - 1
Average daily consumption
(thousands of gallons)890 741 715 868 903 1054 707 728 716 723
WastewaterAverage daily sewage treatment 694 708 626 604 688 553 562 561 574 538
(thousands of gallons per day)
Note: Indicators are not available for the general government function.
(1) Individual property owners contract privately with refuse collectors to provide this service.
(2) The City of Falcon Heights contracts with a recycling collector to collect recyclables. Starting 2011, recyclables were picked up every week during the year instead of twice
a month.
(3) The City of Falcon Heights has no community center, but does have park buildings to use when parks are rented.
1
2
5
Sources: Various government departments
Function
City of Falcon Heights
Operating Indicators by Function
Last 10 Fiscal Years
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Table 20
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Public Safety
Police (1)
Stations - - - - - - - - - - Patrol units - - - - - - - - - - Fire stations 1 1 1 1 1 1 1 1 1 1
Highways and StreetsStreets (miles)24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 24.3 Streetlights 210 210 210 210 210 210 210 210 210 210
Traffic signals 9 9 9 9 9 9 9 9 9 9
Park and RecreationParks acreage 18.07 18.07 18.07 18.07 18.07 18.07 18.07 18.07 18.07 18.07 Parks 3 3 3 3 3 3 3 3 3 3
Tennis courts 2 2 2 2 2 2 2 2 2 2
WaterWater mains (miles)14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5 14.5
Fire hydrants 146 146 146 146 146 146 146 146 146 146
Maximum daily capacity 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 (thousands of gallons)Sewer
Sanitary sewers (miles)14.7 14.7 14.7 14.7 14.7 14.7 14.7 14.7 14.7 14.7
Storm sewers (miles)4 4 4 4 4 4 4 4 4 4 Maximum daily treatment capacity (2)339,000 339,000 339,000 339,000 339,000 339,000 339,000 339,000 339,000 339,000
(thousands of gallons)
Note: No capital asset indicators are available for the general government function.
(1) Falcon Heights contracts with the City of St. Anthony for 24 hour police coverage
(2) Falcon Heights is part of the Metropolitan Council Environmental Services metro area wide treatment facility. This number represents total system daily plant capacity authorized by permit for the area including the City.
1
2
6
Sources: Various city departments, St Paul Water Utility, Metropolitan Council Environmental Services.
Function
City of Falcon Heights
Capital Asset Statistics by FunctionLast 10 Fiscal Years
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CITY OF FALCON HEIGHTS
Regular Meeting of the City Council
City Hall
2077 West Larpenteur Avenue
MINUTES
April 25, 2018 at 7:00 P.M.
A. CALL TO ORDER: 7:00 pm
B. ROLL CALL: LINDSTROM ___ LEEHY__X__ BROWN THUNDER __X__
MIAZGA _X__ GUSTAFSON_X_
STAFF PRESENT: THONGVANH__X__
1. Mayor Pro-tem Gustafson made a Motion that the agenda be amended adding a 5th item
to the Consent Agenda.
Approved 4-0
C. PRESENTATIONS: None
D. APPROVAL OF MINUTES:
1. April 11, 2018 City Council Meeting Minutes
Corrections to be made are:
Pg. 1, line 4, change ‘too’ to ‘to’.
Council Member Leehy had a question regarding Pg. 3, 3rd paragraph from the bottom, “The
new law allows LGUs to impose rent of up to $150 annually plus $25 for maintenance for each
site.” She wanted to know if that was “annually or is part of that monthly”?
City Administrator Thongvanh, said he would have to check and get back to her.
Approved 4-0
E. PUBLIC HEARINGS: None
F. CONSENT AGENDA:
1. General Disbursements through: 4/18/18 $141,893.01
Payroll through: 4/15/18 $19,511.37
2. Approval of City Licenses – Municipal business license for “Banana Buy Back”.
They buy cell phones, repair them, and sell them back.
3. 2019 Volunteer Fire Assistance Grants
4. Proclamation to Recognize National Police Week 2018
5. Appointment of Amanda Lor to the position of Administrative Coordinator with the
City of Falcon Heights
Mayor Pro-Tem Gustafson Moved, Approved 4-0
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Page | 2
G: POLICY ITEMS:
1. Approve the Replacement of Pedestrian Signal on Garden Ave and Hamline
City Administrator Thongvanh
The City of Roseville and the City of Falcon Heights jointly own ‘flashers’ for the
crosswalk at Hamline and Garden. The existing pedestrian ‘flashers’ were installed
in 2008 at an approximate cost of $6,000 split between the cities. The City has
received a number of complaints from residents that the flashers sometimes works
or does not work and sometimes they are not consistent with each other. Part of that
is the age of the flashers, but the other part of it, is the solar array panels that
generate the power to the flashers and the panel that is attached to it, is just not large
enough to last all day long.
The City of Roseville has trimmed the trees, so that it does not affect the solar panels,
but ultimately the equipment has come to the age that it needs to be replaced. There
are now three issues with the ‘flashers’ 1) the battery, 2) the two flashers are not
communicating, and 3) the circuit board needs to be replaced for the system. The
cost of replacing the circuit board is half the cost of the system; and the system has
performed marginally at best, so it is definitely time to replace the ‘flashers’.
The cost would be split with the City of Roseville. The City has received a quote of
approximately $11,600, using an RRFB signal instead of using the traditional flashing
beacon, which is currently being used. Research has shown that this type of
pedestrian flasher is much more effective at getting vehicles to stop for pedestrians,
compared to the traditional flashing beacon. If approved, the City of Roseville
would procure the equipment and split the cost with the City of Falcon Heights.
Installation of the equipment will be installed by each city, so Falcon Heights will
save a few thousand dollars. The cost of the signal replacement for the City of
Falcon Heights would be $5,822.64. The funding for the equipment will be from the
lighting MSA fund, so there will not be an impact on our budget or any levee.
Action is requested for a motion replacing the pedestrian signal at Garden and
Hamline with an RRFB in the amount of $5,822.64, and authorizing the City
Administrator to execute all necessary documents.
Council Member Brown Thunder Moved, Approved 4-0
2. 2017 PMP Supplemental Agreement
City Administrator Thongvanh
Approval is requested for 2017 PMP Supplemental Agreement. During the 2017
pavement advent project construction, various conditions changed, so the City has to do
a supplemental agreement to generate a summary of the work.
Supplemental Agreement #1: Due to utility conflicts, catch basin modifications and
clearing and grubbing were needed to the storm sewer work along trail connecting Hoyt
Ave to Folwell. Cost of the changes is $5,170 which would be funded using storm sewer
funds.
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Page | 3
Supplemental Agreement #2: Based on residents request, installation of shredded
hardwood mulch in lieu of sod for residents. Installation of B624 curb that needed to be
replaced on Roselawn Avenue adjacent to the trail. The contract did not have a bid item
for either of these two items. The cost of the change order is $12,089.00.
There has been no increase in the cost, otherwise it would have been brought to the
Council, since the choice for mulch and or sod was pretty cost neutral, so the residents
were able to choose. One of the things done, which has not been done in the past, is
requiring the residents to sign an Agreement with the City, saying they are responsible
for any upkeep of the mulch, or add more mulch later. Say a homeowner sells their
property five years from now, and the new homeowner does not want mulch, it is up to
the seller to re-sod, and not the City’s responsibility.
Staff would recommend approving Supplemental Agreement, Amendment 1 & 2 for the
2017 Pavement Management Project, and authorize the City Administrator to execute all
the necessary documents.
Council Member Leehy Moved, Approved 4-0
H. INFORMATION/ANNOUNCEMENTS
Council Member Miazga
· This Saturday, April 28, is the Sustainable Action Fair at Community Park.
Council Member Miazga said he would be there first thing at 8:30 to help set up
and he hoped to see everyone there.
· Council Member Miazga reported that the Planning Commission meeting went
well. He said it was an extensive meeting with the consultants, and they went
over a lot of language, and tried to bring all the community input to the meeting.
On Tuesday, May 22, at 7:00 pm there will be a public hearing on the
comprehensive plan.
Council Member Leehy
· The Parks and Recreation Commission will be joining the Community
Engagement Commission in the “Spring Together” event. Highlighted will be
signage in place for the history of Curtiss Field. Roger Bergenson, a local author,
will be donating ten of his books that have that history and will be given away
during the event. Council Member Leehy said she was excited about the
upcoming event, which is on Saturday, May 12 from 11:00 AM – 2:00 PM.
· Having a piano at Community Park is progressing. The title will be “Play Your
Part”, and will be coming in early June. One of the local art teachers from Falcon
Heights Elementary will be helping with the decorations on the piano. People
can come and play with their friends and family or plan events around that.
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Page | 4
· Sign up for all the Summer Programs is progressing. Volunteers and part-time
staff positions are being filled. Contact City Hall, Time Sanvik, to register for a
program or to work as a volunteer or a part-time worker.
· Citizen of the Year Award. Any nominee would need three letters of
recommendation to be eligible for the award. The end of May is the cut-off for
these nominations.
Council Member Brown Thunder
· The NYFS ‘Leadership Luncheon’ will be Wednesday, May 2, from 11:30 AM –
1:00 PM at the Midland Hills Country Club. The NYFS Senior Chore Program is
always looking for volunteers for spring cleanup projects for the seniors in our
community. Information on this program is located at NYFS.org. You need to be
a senior to get the services. NYFS is always looking for seniors to help.
Mayor Pro-tem Gustafson
· The Community Engagement Commission’s next meeting will be June 18.
‘Spring Together” has been the main focus of the group, and that will be
happening Saturday, May 12 from 11:00 AM – 2:00 PM. Many of members of the
Engagement Commission have been out knocking on doors at business’ and
homes, and passing out flyers to promote the event.
· ‘Bike and Walk to School Day’ is Wednesday, May 9 at Falcon Heights
Elementary. He encouraged all the citizens to be careful while driving past the
school, since there will be more walkers and bikers. They will be gathering at
Roseville Lutheran and then traveling from there to Falcon Heights Elementary.
· ‘National Police Week’, which is May 13-19, the Sheriff’s Office will be
participating in the Minnesota Memorial at the Capitol Grounds. They will hold
a vigil and stand guard in twenty-minute shifts from 7:00 pm on the May 14
through 7:00 pm on May 15. The Sheriff’s Office first event is at 12:30 pm to lay
the wreath for one of the fallen. There are four fallen members from the Sheriff’s
Office. Then the Sheriff’s Office will stand guard at 1:00 pm until 3:00 pm.
Thursday, May 17 at 11:00 AM, is the Suburban Ramsey County event. It will
take place at St. Mary’s of the Lake in the White Bear Lake Catholic Church on
Bald Eagle Avenue.
City Administrator Thongvanh
· Restating the dates and times for the “Falcon Heights Sustainable Action Fair” for
April 28th at 11am and “Spring Together” from 11am to 2pm.
· Reported that the 2017 PMP project has a number of things to be completed this
year. He wanted to thank the community, the residents of the Grove Association,
and the University Grove, as they did an excellent job this year. Initially, there were
a few cars that were parked illegally, but mostly the Public Works Dept. had no
problem plowing that area. There was a hiccup with the County, but no damage
was done, so the City was able to complete the snow removal without much trouble.
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Page | 5
In other areas of the community, there were many cars parked in the street, which
will be addressed down the line.
The residents of the Grove will be receiving a letter soon with information about the
2017 PMP starting up. The residents in that area can expect a letter from the
engineering firm, the City of Roseville in the next week. The engineering firm wants
to start quickly.
· The Ramsey County Sheriff’s Dept. will be able to use and administer citations after
May 1. Keep an eye on the e-newsletter here will be more information.
· Council Member Gustafson, Council Member Leehy and I will be attending the
Kettering Foundation’s ‘Shared Learning Experience’ - May 20-23.
· The new Administrative Coordinator, Amanda Lor, will be attending the ‘Spring
Together’ event. She will be the staff liaison for the Community Engagement
Commission. Our Deputy Clerk will still be involved until she is acclimated to the
position.
I. COMMUNITY FORUM: None
J. ADJOURNMENT: 7:26 P.M.
______________________________
Randy Gustafson, Mayor Pro-Tem
Dated this 25th day of April, 2018
________________________________
Sack Thongvanh, City Administrator
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BLANK PAGE
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REQUEST FOR COUNCIL ACTION
Families, Fields and Fair __________________________
The City That Soars!
Item Tobacco Ordinance Amendment
Description
During the February 7th City Council Workshop, Katie Engman Program Director
for the Association for Nonsmokers-MN made a presentation about the effects of
tobacco and how that affects underage children.
Nationally, more than 260 communities in 18 states have adopted a Tobacco 21
policy. The states of California, Hawaii, Maine, New Jersey, and Oregon have also
raised their minimum tobacco sale age to 21. Edina was the first Minnesota local
jurisdiction to raise its tobacco sale age to 21, effective July 1, 2017. St. Louis Park
will be the second with its ordinance going into effect on October 1, 2017.
The proposal includes raising the age to purchase tobacco products to the age of 21.
The ordinance presented will also include the regulation of flavored tobacco.
Budget Impact
N/A
Attachment(s) · Ordinance 18-03 Amending Chapter 14, Article IX Pertaining to Tobacco
Regulations
· Official Summary 18-03 A Summary of Ordinance 18-03 Mending Chapter
14, Article IX
Action(s)
Requested
Staff would recommend approval ordinance and summary for publication.
Meeting Date May 9, 2018
Agenda Item Public Hearing E1
Attachment Ordinance and Summary Publication
Submitted By Sack Thongvanh, City Administrator
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BLANK PAGE
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CITY OF FALCON HEIGHTS, RAMSEY COUNTY, MINNESOTA
ORDINANCE NO. 18-03
AN ORDINANCE AMENDING CHAPTER 14, ARTICLE IX PERTAINING TO TOBACCO
THE CITY COUNCIL OF THE CITY OF FALCON HEIGHTS ORDAINS: SECTION 1: Chapter 14, Article IX of the Falcon Heights City Code is amended by adding the
underlined language and deleting the strikethrough language as follows:
SECTION 2: Section 14-292 of the Falcon Heights City Code is amended to provide:
Because marketing and public health research and tobacco industry documents reveal that tobacco companies have used fruit, candy, and alcohol flavors as a way to target youth and young adults and that the presence of flavors such as menthol in tobacco products can make it more difficult for youth, young adult, and adult tobacco users to quit; and
The City further recognizes that young people are particularly susceptible to the addictive properties of tobacco products, and are particularly likely to become lifelong users. National data show that about 95 percent of adult smokers begin smoking before they turn 21. The ages
of 18 to 21 are a critical period when many smokers move from experimental smoking to regular, daily use. Because smoking has been shown to be the cause of several serious health problems which subsequently place a financial burden on all levels of government;
This article shall be intended to regulate the sale of tobacco, tobacco-related devices, electronic
cigarettes, and nicotine or lobelia delivery products for the purpose of enforcing and furthering existing laws, to protect youth and young adults against the serious effects associated with the illegal use of tobacco, tobacco products, tobacco-related devices, and electronic delivery devices, and to further the official public policy of the state in regard to preventing young people from starting to smoke as stated in Minn. Stats. § 144.391, as it may be amended from time to time.
SECTION 3: Section 14-293 of the Falcon Heights City Code is amended by amending the
definition of “Compliance checks”, “Electronic Delivery Device”, “Smoking” and “Tobacco-related devices” and adding the definitions of “Cigar”, “Child-Resistant Packaging”, “Fflavored tobaccoTobacco”, and “Pperson” and removing the definitions of “Minor”:
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Cigar. Any roll of tobacco that is wrapped in tobacco leaf or in any other substance containing tobacco, with or without a tip or mouthpiece, which is not a cigarette as defined in Minn. Stat. §
297F.01, subd. 3, as may be amended from time to time. Child-Resistant Packaging. Packaging that meets the definition set forth in Code of Federal Regulations, title 16, section 1700.15(b), as in effect on January 1, 2015, and was tested in accordance with the method described in Code of Federal Regulations, title 16, section 1700.20, as in effect on January 1, 2015. Except as may otherwise be provided or clearly implied by context, all terms shall be given their commonly accepted definitions. For the purpose of this article, the following definitions shall apply unless the context clearly indicates or requires a different meaning:
Compliance checks means the system the city uses to investigate and ensure that those
authorized to sell tobacco, tobacco products, tobacco-related devices, and electronic delivery devices are following and complying with the requirements of this article. Compliance checks shall involve the use of minors persons under the age of 21 as authorized by this article.
Compliance checks shall also mean the use of minors persons under the age of 21 who attempt to purchase tobacco, tobacco products, tobacco-related devices, or electronic delivery devices for educational, research and training purposes as authorized by state and federal laws.
Compliance checks may also be conducted by other units of government for the purpose of enforcing appropriate federal, state or local laws and regulations relating to tobacco, tobacco products, tobacco-related devices, and electronic delivery devices.
Electronic delivery devices means any product containing or delivering nicotine, lobelia, or any other substance intended for human consumption that can be used by a person to simulate
smoking in the delivery of nicotine or any other substance through inhalation of vapor from the product. Electronic delivery device shall include any component part of such a product, whether or not sold separately. Electronic delivery device shall not include any product that has been
approved or otherwise certified by the United States Food and Drug Administration for legal sales for use in tobacco cessation treatment or other medical purposes and is being marketed and sold solely for that approved purpose.
Electronic delivery device means any product containing or delivering nicotine, lobelia, or any other substance intended for human consumption through the inhalation of aerosol or vapor from the product. Electronic delivery device includes, but is not limited to, devices manufactured, marketed, or sold as e-cigarettes, e-cigars, e-pipes, vape pens, mods, tank systems, or under any other product name or descriptor. Electronic delivery device includes any component part of a product, whether or not marketed or sold separately. Electronic delivery device does not include any product that has been approved or certified by the United States Food and Drug Administration for sale as a tobacco-cessation product, as a tobacco-
dependence product, or for other medical purposes, and is marketed and sold for such an approved purpose.
Flavored tobacco product means any tobacco, tobacco products, tobacco-related device, or
electronic delivery device that contains a taste or smell, other than the taste or smell of tobacco, that is distinguishable by an ordinary consumer either prior to or during the consumption of the product, including, but not limited to, any taste or smell relating to menthol, mint, wintergreen,
chocolate, cocoa, vanilla, honey, fruit, or any candy, dessert, alcoholic beverage, herb, or spice. A public statement or claim, whether express or implied, made or disseminated by a manufacturer of tobacco or tobacco related devices, or by any person authorized or permitted by the manufacturer to make or disseminate public statements concerning such products, that a
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product has or produces a taste or smell other than tobacco will constitute presumptive evidence that the product is a flavored product.
Minor means any natural person who has not yet reached the age of 18 years. -
Person means any natural person, partnership, firm, joint stock company, corporation, or other legal entity, including an employee of a legal entity.
Smoking means inhaling or exhaling smoke from any lighted or heated cigar, cigarette, pipe, or any other lighted or heated tobacco or plant product. Smoking also includes carrying a lighted or heated cigar, cigarette, pipe, or any other lighted or heated tobacco or plant product intended for inhalation. “Smoking” also includes the use of an electronic delivery device.
Tobacco-related devices include any tobacco product as well as a pipe, rolling papers, ashtray, or other device intentionally designed or intended to be used in a manner which enables the chewing, sniffing or smoking of tobacco or tobacco products. Tobacco-related devices include
components of tobacco-related devices which may be marketed or sold separately.
Sec. 14-294. - License.
(l) Sale by person under the age of 18. It shall be unlawful for any business licensed under this article to allow any person under the age of 18 years to sell, offer for sale, or attempt to sell
tobacco, tobacco products, tobacco-related devices, or electronic delivery devices.
(m) Age verification. Licensees must verify by means of government-issued photographic identification that the purchaser is at least 21 years of age. Verification is not required for a person over the age of 30. That the person appeared to be 30 years of age or older does not constitute a defense to a violation of this subsection.
(n) Signage. Notice of the legal sales age and age verification requirement must be posted at each location where licensed products are offered for sale. The required signage, which will be provided to the licensee by the city, must be posted in a manner that is clearly visible to anyone who is or is considering making a purchase.
Sec. 14-295. - License restrictions.
A. It shall be a violation of this article for any person to sell or offer to sell any tobacco, tobacco product, tobacco-related device, or electronic delivery device:
(1) To any person under the age of 18 21 years.
(6) In the form of liquid, whether or not such liquid contains nicotine, which is intended for human consumption and use in an electronic delivery device, in packaging that is not child-resistant. Upon request, a licensee must provide a copy of the certificate of compliance or full laboratory testing report for the packaging used.
(7) By any other means, to any other person, on in any other manner or form prohibited by federal, state or other local law, ordinance provision, or other regulation.
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(8) It shall be a violation of this article for any person to sell or offer to sell any
flavored tobacco product. This prohibition on the sale of flavored tobacco products does not apply to retail establishments that:
a. Prohibit persons under 18 21 years of age from entering at all times; and
b. Derive at least 90 percent of their revenues from the sale of any tobacco,
tobacco products, tobacco-related devices, or electronic delivery devices.
c. Any retail establishment that sells flavored tobacco products must provide
upon request financial records that document annual sales.
State Law reference— Sale of tobacco to minors, Minn. Stats. § 609.685.
Sec. 14-296. - Compliance checks.
(b) Annual compliance checks. From time to time, but at least twice per year, the City shall conduct compliance checks. One check will be conducted by engaging, with the written consent of their parents or guardians, a person over the age of 15 years but less than 17 years of age, to enter the licensed premise to attempt to purchase tobacco, tobacco products, tobacco-related devices, or electronic cigarettes. A second check will be conducted by engaging a person over the age of 18 but less than 21 years of age, to enter the licensed premise to attempt to purchase tobacco, tobacco products, tobacco-related devices, or electronic cigarettes.
(c) Persons under the age of 21 used for the purpose of compliance checks shall be supervised by City designated law enforcement officers or other designated City personnel. No person under the age of 21 used in compliance checks shall attempt to use a false identification misrepresenting the person’s age, and all persons under the age of 21 lawfully engaged in a compliance check shall answer all questions about their person’s age asked by the licensee or his or her employee and shall produce any identification, if any exists, for
which he or she is asked. Nothing in this Section shall prohibit compliance checks authorized by state or federal laws for educational, research, or training purposes, or required for the enforcement of a particular state or federal law.
(Code 1993, § 5-1.03(D)(6); Ord. No. 99-01, § 1, 1-3-1999)
State Law reference— Compliance checks, Minn. Stats. § 461.128, subd. 5.
Sec. 14-297. - Violations and penalties.
(d) Administrative civil penalties; individuals: An individual who sells tobacco to a person under the age of 18 21 years shall pay an administrative penalty of $50.00.
(Code 1993, § 5-1.03(D)(7); Ord. No. 99-01, § 1, 1-3-1999; Ord. No. 10-02, § 1, 1-27-2010)
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Sec. 14-298. - Affirmative defense.
SECTION 5. Effective Date: This ordinance shall take effect 60 days from and after its
passage and a summary published in the official newspaper. ADOPTED this 9th day of May, 2018, by the City Council of Falcon Heights,
Minnesota.
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Moved by: Approved by: ________________________
Peter Lindstrom
Mayor
LINDSTROM ___ In Favor Attested by: ________________________
GUSTAFSON Sack Thongvanh
BROWN THUNDER ___ Against City Administrator
MELANIE LEEHY
MARK MIAZGA
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OFFICIAL SUMMARY NO. 18-03
CITY OF FALCON HEIGHTS RAMSEY COUNTY, MINNESOTA A SUMMARY OF AN ORDINANCE AMENDING CHAPTER 14, ARTICLE
IX OF THE FALCON HEIGHTS CITY CODE
CONCERNING TOBACCO
The following is the official summary of Ordinance 18-03 approved by the City Council of
Falcon Heights on May 9, 2018. This ordinance amends Chapter 14 of the Falcon Heights City Code concerning tobacco. This ordinance amends Chapter 14 Article IX – Tobacco of the Falcon Heights City Code that governs
the regulation of tobacco and tobacco related products.
The proposed changes to the City Code would include, but not limited to: 1. Updates and addition to several definitions.
2. Increase the age for purchase of tobacco products from 18 years old to 21 years old.
3. Prohibits the sale of flavored tobacco with a few exceptions.
A printed copy of the entire ordinance is available for inspection by any person during the City
Administrator/Clerk’s regular office hours at City Hall at 2077 Larpenteur Ave West, Falcon
Heights, Minnesota 55113. APPROVED for publication by the City Council of the City of Falcon Heights, Minnesota this 9th
day of May, 2018 to be effective 60 days after publication.
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Moved by: Approved by: ________________________
Peter Lindstrom
Mayor
LINDSTROM ___ In Favor Attested by: ________________________
GUSTAFSON Sack Thongvanh
BROWN THUNDER ___ Against City Administrator
MELANIE LEEHY
MARK MIAZGA
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May 1, 2018 Falcon Heights City Council 2077 Larpenteur Avenue West Falcon Heights, MN 55423 Dear Mayor Lindstrom and Members of the Falcon Heights City Council,
I am writing on behalf of Aurora St. Anthony Neighborhood Development Corporation
(ASANDC) to express our support for the proposed ordinance that would restrict the sale of
flavored tobacco products, including menthol, to adult-only tobacco shops. ASANDC is a
community development agency that has worked to ensure affordable housing, economic
development and youth and resident leadership in Saint Paul’s Rondo and Frogtown
neighborhoods since 1981.
Our organization was one of the leaders advocating for Saint Paul to restrict the sale of menthol
in 2017. We are pleased to see Falcon Heights, our neighbor, step up to do the right thing and
protect our young people and our community from the predatory practices of the tobacco
industry.
Since the 1960s the tobacco industry has targeted our African American community with
menthol tobacco products. They bombarded us with messages and images in the magazines
that we read and the stores where we shopped. They tried to make it look cool and fashionable
to smoke menthol tobacco. They still do. Their unrelenting efforts to push this product on our
community have worked. Now, 88% of African-Americans who use tobacco choose menthol
products.
We are glad to see Falcon Heights recognize the need to restrict where these lethal products
are sold. Please do the right thing and show us that you value the lives of communities of color
and young people over a dollar by voting to support this ordinance.
Thank you for your courage.
Sincerely,
Nieeta Presley
Executive Director
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WWW.TOBACCOFREEKIDS.ORG
April 25, 2018
Mayor Lindstrom and Falcon Heights City Councilmembers,
My name is Jodi Radke. I am the Regional Director with the Campaign for Tobacco-Free Kids. Our organization works
within the United States and around the world to advocate for public policies proven to prevent kids from using tobacco,
help tobacco users quit and protect everyone from secondhand smoke. For more information about our policy
priorities, please visit www.tobaccofreekids.org.
It is public health heroes, such as yourselves, who help achieve the outcomes we seek. Thank you for leading the way in
protecting Minnesota’s kids by considering raising the age of sale on tobacco and restricting access to flavored tobacco
that includes menthol, products that demonstrate incentivized use and initiation amongst kids, in Falcon Heights from
18 to 21.
About 95 percent of adult smokers began smoking before they turned 21. Policies, such as the one you are considering,
are a critical part of reducing the number of kids who start smoking, and will help to eliminate a critical point of access
that kids have to tobacco. This policy will improve public health and will save lives.
The tobacco industry continues to target Minnesota kids with its deceptive marketing practices. We must be vigilant in
protecting Minnesota’s kids from the tobacco industry’s outreach and efforts to addict them.
Thus far, five states and more than 300 localities (and counting) across the United States have raised their tobacco age
to 21, including multiple cities within Minnesota. Let’s keep the momentum going.
Thank you again for your leadership and partnership to protect Falcon Height’s kids.
If you have any questions I can assist with, please feel free to contact me directly.
Respectfully,
Jodi L. Radke
Jodi L. Radke
Regional Director
Campaign for Tobacco-Free Kids
970-214-4808
jradke@tobaccofreekids.org
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HealthPartners
8170 33rd Avenue South
Bloomington, MN 55425
healthpartners.com
Mailing Address:
PO Box 1309
Minneapolis, MN 55440-1309
April 9, 2018
The Honorable Mayor Lindstrom & Members of the Falcon Heights City Council
Falcon Heights City Hall
2077 W. Larpenteur Avenue
Falcon Heights, MN 55113
Dear Mayor Lindstrom and Members of the City Council:
On behalf of the 25,000 employees at HealthPartners, many of whom live or work in this city, we want to express
our strong support for the proposed ordinance to raise the age for tobacco sales to 21 and restrict the sale of
flavored products. As you may know, it is HealthPartners’ mission to improve health and well-being in partnership
with our members, patients and the community.
Approximately 95 percent of adult smokers started before they were 21. For years tobacco use has been the
number one preventable cause of death in our country and our state. Smoking costs the state more than $3 billion
annually in excess health care costs and each year more than 6,000 Minnesotans die from tobacco-related
diseases.
18-21 is a critical time when young people move from intermittent smoking to daily use. In addition to the
countless long-term negative health effects of tobacco, nicotine itself is known to be particularly harmful to the
development of the adolescent brain. Research suggests that nicotine interferes with brain maturation and can
have long term effects on development and mental health. A recent report from the Institute of Medicine found
that increasing the tobacco sales age to 21 would also mean that smoking initiation among 15-17-year-olds would
be reduced by 25 percent.
In addition to increasing the tobacco sales age, please also consider restricting youth access to flavored tobacco
products – a significant way in which the tobacco industry appeals to kids. Chocolate cigars and cherry e-cigarettes
should not be available in stores where kids shop in Falcon Heights. By restricting the sale of flavored tobacco to
adult-only stores like tobacco product shops, we can limit youth access to these products, which look kid-friendly
but can lead to a lifetime of addiction. The combination of increasing the tobacco sales age and restricting youth
access to flavored tobacco products will have a tremendous impact on the future health of our youth and our city.
Thank you for you for being a leader in our state and taking a positive step towards keeping tobacco out of the
hands of our children.
Sincerely,
Dr. Thomas Kottke, M.D.
HealthPartners Medical Director, Well-being
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An equal opportunity employer.
P rotecting, Maintaining and Improving the Health of All Minnesotans
May 4, 2018
Mr. Peter Lindstrom, Mayor
City of Falcon Heights
2077 West Larpenteur Ave
Falcon Heights, MN 55113-5594
Dear Mayor Lindstrom and Councilmembers:
As Commissioner of Health, I strongly support Falcon Height’s proposal to increase the minimum tobacco sales
age to 21 and limit the sale of menthol and other flavored tobacco products. These measures are powerful
deterrents of youth initiation, will reduce youth tobacco use, and protect youth from a lifetime of addiction.
I am very concerned about the dramatic increases in youth use of e-cigarettes and other tobacco products. As
shown by the Minnesota Youth Tobacco Survey, tobacco use among high-school students spiked to 26% in
2017; the first increase in 17 years. This is dramatic increase is driven in part by a surge in e-cigarette use.
Among high school students, e-cigarette use increased by 50% since 2014, nearly 1 in 5 high school students
reporting use. This is likely the result of and wide availability and proliferation of e-cigarette and flavored
tobacco products that are designed to attract and addict youth.
Young smokers report choosing flavored tobacco products because they taste better and seem to be safer. This
is quite alarming as nearly all e-cigarettes contain nicotine, which we know is highly addictive. Research shows
youth who use e-cigarettes are two times more likely to start smoking combustible cigarettes.
In 2015, the Minnesota Department of Health issued a health advisory detailing the harms of nicotine. No
amount is safe for youth as there are negative implications for learning, memory, attention, and future
addiction. Teens are especially susceptible to nicotine addiction and the harmful effects it has on the brain as
teens grow. Raising the minimum tobacco sales age to 21 would limit youth access to tobacco until the portion
of the brain responsible for rational decision-making is more fully developed.
I applaud Falcon Heights for considering these bold actions to protect youth from a lifetime of addiction.
For more information, contact Laura Oliven the Tobacco Program Manager at 651-201-5442.
Sincerely,
Jan K. Malcolm
Commissioner
P.O. Box 64975
St. Paul, MN 55164-0975
www.health.state.mn.us
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REQUEST FOR COUNCIL ACTION
Families, Fields and Fair __________________________
The City That Soars!
Item General Disbursements and Payroll
Description
General Disbursements through: 5/01/18 $58,963.56
Payroll through: 4/30/18 $18,515.31
Budget Impact The general disbursements and payroll are consistent with the budget.
Attachment(s) · General Disbursements and Payroll
Action(s)
Requested
Staff recommends that the Falcon Heights City Council approve general
disbursements and payroll.
Meeting Date May 9, 2018
Agenda Item Consent F1
Attachment General Disbursements and Payroll
Submitted By Roland Olson, Finance Director
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REQUEST FOR COUNCIL ACTION
Families, Fields and Fair __________________________
The City That Soars!
Item City Hall Summer Hours
Description
For the past several years, the City has implemented a modified schedule during summer
months.
During the summer months, especially on Fridays, the amount of walk-in and phone call
requests for service drops off dramatically. Many cities use this as an opportunity to
employ alternative hours of operation, commonly known as “summer hours”.
Currently, normal hours of operation are Monday – Friday, 8:00 a.m. – 4:30 p.m. Staff is
proposing that the City of Falcon Heights use the following schedule between Memorial
Day and Labor Day:
Monday – Thursday 7:30 am – 5:00 pm
Friday 7:30 am - noon
This would allow for City Hall to still be open the same number of hours per week (42.5)
and for employees to still work the same number of total hours (40, with one ½ hour break
each day). It would also allow City Hall customers the ability to come in a ½ hour earlier
and later in the day to conduct business.
We will publicize this through our normal methods (email, website, flyers, newsletters,
newspapers, and social media). We would also insert a notice on all permit applications so
that contractors and/or residents do not come to city hall on Friday afternoon hoping to
pick up permits for their weekend projects. Notice will also be given to those who rent
facilities that building keys will need to be picked up before noon on Friday.
Budget Impact N/A
Attachment(s) None
Meeting Date May 9, 2018
Agenda Item Consent F2
Attachment N/A
Submitted By Sack Thongvanh
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Action(s)
Requested
Staff recommends that the Falcon Heights City Council adopt the summer hours schedule
explained above from Memorial Day to Labor Day.
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