HomeMy WebLinkAbout06-04-2018 Council Work Session PacketCITY COUNCIL WORK SESSION AGENDA
CITY OF LINO LAKES
Monday, June 4, 2018
Community Room
6:00 P.M.
1. Community Solar Gardens, Katie Larsen and Kendra Lindahl, Landform
2. Comprehensive Plan Update, Michael Grochala
3. Review 2017 Annual Audit, Redpath & Company, Ltd.
4. Watermark Update, Michael Grochala
5. City Website Redesign, Jeff Karlson
6. Council Direction on Park Board Opening
7. Council Updates on Boards/Commissions, City Council
8. Monthly Progress Report, Jeff Karlson
9. Review Regular Agenda
10. Adjourn
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WORK SESSION STAFF REPORT
Work Session Item No. 1
STAFF ORIGINATOR: Kendra Lindahl, Landform
MEETING DATE: June 4, 2018
TOPIC: Lino Lakes Solar LLC Community Solar Garden Text Amendment
INTRODUCTION
The applicant Lino Lakes Solar LLC has submitted a text amendment application to allow
Community Solar Gardens in the City. The City currently allows individual property to install
solar panels on their houses or buildings via a building permit. There have also been a limited
number of requests from property owners to install one or two ground-mounted solar panels as
accessory uses.
The applicant is requesting that the City amend the Zoning Ordinance to allow Community Solar
Gardens. Typically, this type of development requires a minimum of five acres of land for
installation of solar panels and the associated infrastructure.
BACKGROUND
The Planning & Zoning staff report dated May 9, 2018 details the project (attached).
The Board was supportive of exploring community solar, but raised a number of concerns. Board
members did not want to see panels outside of the urban reserve areas, and were concerned about
installing panels on developable land. If an ordinance were to be drafted, they would like
minimum lot sizes instead of maximum lot sizes, details about screening and landscaping, and
decommissioning standards.
Following the meeting, staff researched the following items to address questions raised by the
Board:
• The number of homes that can be powered by 1 MW of energy. The applicant suggests
that 300 homes can be powered by 1 MW of energy. Based on staff’s research this seems
to be a conservative estimate. The Idaho Public Utility Commission estimates 1 MW
could support 650 homes. Staff also found examples stating that 1 MW could support
1,000 homes. Staff notes that panel efficiency varies by region, type of panel, and
changes in technology. Panels are becoming more and more efficient every year and that
increases in technology will continue to increase the power harvested by the solar cells.
• Staff also prepared an exhibit showing Xcel Service Territory over the 2040 Land Use
Plan.
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RECOMMENDATION
The Planning & Zoning Board held a public hearing on May 9, 2018. Harold Galvin,
representative of ReneSola Power (applicant), spoke about community solar gardens. There were
no other public comments. The Board voted unanimously to seek Council input as to whether
staff should draft an ordinance regarding community solar gardens.
ATTACHMENTS
1. May 9, 2018 Planning & Zoning Board Staff Report which includes:
a. Chisago County Solar Ordinance
b. Information Brief from the Research Department at the Minnesota House of
Representatives on the Xcel Legislation
2. Xcel Service Areas in Lino Lakes
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PLANNING & ZONING BOARD
AGENDA ITEM 6C
STAFF ORIGINATOR: Kendra Lindahl, Landform
P & Z MEETING DATE: May 9, 2018
REQUEST: PUBLIC HEARING: Zoning Ordinance Text Amendment
Regarding Community Solar Gardens
CASE NUMBER: TA2018-001
APPLICANTS: Lino Lakes Solar LLC
Attention: Brett Smith and Cindy Larson O’Neil
39510 Paseo Padre Parkway
Suite 330
Fremont, CA 94538
OWNERS: N/A
REVIEW SCHEDULE:
Complete Application Date: April 2, 2018
60-Day Review Deadline: June 1, 2018
120-Day Review Deadline: July 31, 2018
Environmental Board Meeting: N/A
Park Board Meeting: N/A
Planning & Zoning Board
Meeting: May 9, 2018
Tentative City Council Work
Session: June 4, 2018
Tentative City Council Meeting: June 11, 2018
BACKGROUND
The applicant, Lino Lakes Solar LLC, has submitted a zoning ordinance text amendment
application to allow Community Solar Gardens in the City. The City currently allows individual
property owners to install solar panels on their houses or buildings via a building permit. There
have also been a limited number of requests from property owners to install one or two ground-
mounted solar panels as accessory uses.
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The applicant is requesting that the City amend the Zoning Ordinance to allow Community Solar
Gardens. Typically, this type of development requires a minimum of five acres of land for
installation of solar panels and the associated infrastructure.
ANALYSIS
Solar Legislation
In 2007, the State of Minnesota adopted legislation that created a Renewable Portfolio Standard
(RPS) for investor-owned utilities and public/cooperative utilities, which mandates that a certain
percentage of each utility’s generation portfolio be derived from renewable sources by a certain
year. In particular, Xcel Energy is required to obtain 31.5% of their generation from renewable
sources by 2020, and Minnesota’s 2013 legislation further requires that an additional 1.5% of the
utility’s retail electricity sales be derived from solar power by the year 2020.
The State Legislature established the Community Solar Garden program in order to facilitate the
production of solar energy in the State. The community solar garden model allows individuals,
businesses, schools, and civic entities – known as “subscribers” – that have limited options to
install their own on-site solar panels to purchase or “subscribe” to a portion or a “share” of the
output from a given solar garden. This allows subscribers to purchase clean, renewable energy at
a savings compared to their current utility bill, without making costly upfront investments in a
solar system.
The Community Solar Garden legislation is specific to Xcel, which requires them to provide
energy to consumers from solar at reduced cost. Other utilities may have a community solar
garden model; however, it is staff’s understanding they are not subject to the state law provisions
for Xcel’s Community Solar Garden program.
The following table summarizes selected provisions of the current legislation related to Xcel’s
Community Solar Garden program:
Program
Feature
Public Utilities Commission Decision
Statewide Program Capacity Unlimited
Rate at which Solar Garden
Generated Electricity Is Purchased
by Xcel and Credited to Subscribers
Value-of-solar rate: $0.1033 in 2017; $0.1006 in
2018
Capacity Limits 1 MW
(1 MW requires approximately 5-8 acres of land)
Contract Length 25 years
Staff has included an Information Brief from the Research Department at the Minnesota House
of Representatives on the Xcel Legislation as an attachment to this document.
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Key Issues
The Lino Lakes zoning ordinance does not specifically allow solar as a principal or accessory
use. However, there are provisions within the code that allow flexibility in height for solar panels
attached to buildings and flexibility for landscaping standards in cases where the landscaping
may cause shading of the panels.
Resident demand for solar panels has been limited to individual houses or one or two ground-
mounted panels. Solar panels have been treated by City staff as accessory structures, and
residents have been required to obtain a building permit. The applicant is requesting solar panels
on a much larger scale. Typically, a one MW solar garden requires a minimum of five-acres of
land for installation of solar panels and the associated infrastructure.
Cities are not required to allow community solar gardens. However, we have reviewed a number
of other ordinances and model ordinances (a small sample is attached to this report) to provide
information about things that should be considered if the City wishes to allow them.
Types of Solar/Definitions
As we move through the ordinance development, we will use a number terms to describe
different components and styles of solar. For the purpose of discussion, we are starting with the
following terms and definitions. These will likely be revised, but it is starting point for the
discussion. These terms are taken from several different sources:
Building-integrated Solar Energy Systems - An active solar energy system that is an
integral part of a principal or accessory building, rather than a separate mechanical
device, replacing or substituting for an architectural or structural component of the
building. Building-integrated systems include but are not limited to photovoltaic or hot
water solar energy systems that are contained within roofing materials, windows,
skylights, and awnings.
Community Solar Garden- A solar-electric (photovoltaic) array that provides retail
electric power (or a financial proxy for retail power) to multiple community members
or businesses residing or located off-site from the location of the solar energy system,
consistent with Minn. Statutes 216B.1641 or successor statute. A community solar
system may be either an accessory or a principal use.
Ground Mounted Solar Energy System – a solar energy system that is structurally
mounted to the ground, generally upon a pole or rack mount. A ground mounted system
may be a fixed or tracking system.
Roof Mounted Solar Energy System – a solar energy system that is structurally
mounted to the roof of a structure. These systems are generally affixed with a racking
system and may be flush or angled.
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Solar Energy System - A device or structural design feature, a substantial purpose of
which is to provide for the collection, storage and distribution of sunlight for space
heating or cooling, generation of electricity, water heating, or providing daylight for
interior lighting.
Solar Farm - A commercial facility that converts sunlight into electricity, whether by
photovoltaics (PV), concentrating solar thermal devices (CST) or other conversion
technology, for the primary purpose of wholesale sales of generated electricity. A solar
farm is the principal land use for the parcel on which it is located.
Solar Mounting Devices - Racking, frames or other devices that allow the mounting of
a solar collector onto a roof surface or the ground.
*Staff notes that the primary difference between a Community Solar Garden and a Solar
Farm is that, while they both convert sunlight into energy for sale of the generated
energy, the Community Solar Garden has specific legislation that regulates development
and sales of power.
Generally solar systems can be broken down in a couple of ways:
1. Roof mounted or ground mounted
2. Accessory use or principal use
The community solar garden that the applicant is proposing would be considered a principal use.
Size/Scale of Solar
When we think about solar as a principal use like we would see with a community solar garden,
we need to think about size and scale. The applicant would only be allowed to develop a one
Megawatt facility which would require a minimum of five to eight-acres of land. The statute
does not allow more than one MW facility to be co-located, however, the statute does not spell
out how gardens constructed by a single developer and located adjacent to one another are
treated. Council could limit the total acreage of a solar farm on a site to 8 acres of panel coverage
(which would allow a 1 MW facility).
However, the city is not required to allow them to be this big. If the City is concerned about size,
they could limit the size to something smaller or they could provide a minimum site area.
However, most community solar garden developers will not install a solar garden that is less than
1 MW.
Should the City have a minimum lot size? If so, what would be appropriate? Should it be
different in different districts?
Location
1. Should community solar gardens or solar farms be allowed in Lino Lakes? If so where?
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This is the more challenging discussion. While solar gardens provide significant community
benefits by reducing our reliance on fossil fuels and helping to reduce energy costs, they do
change the landscape. While some advocates will argue that solar gardens are simply “growing
energy” on cropland instead of traditional crops, others express concern about the appearance of
the Community Solar Gardens. The nature of the use is similar to other types of uses allowed in
the Rural districts, such as green houses and commercial farming operations.
Community Solar Gardens in rural areas are generally accepted in most communities (albeit with
some adjacent neighbor opposition). Locating Community Solar Gardens in these areas generally
provides a small tax benefit to the city through a higher tax rate. However, locating them in
Commercial/Industrial areas in the MUSA takes away the opportunity for significant tax base
when those properties development in a traditional manner. Community Solar Gardens in those
districts would provide the same tax benefit as it would on rural residential land. Therefore, there
is an opportunity cost to locating land in the MUSA.
Staff has concerns about allowing Community Solar Gardens in the MUSA due to the lost
opportunities for development. However, if the Council is supportive of Community Solar
Gardens in the MUSA, they should further discuss which zoning districts it should be allowed in
(we may wish to look at the underlying land use as well) and which sewer staging area it should
be allowed in?
Questions:
1. Does the Council want to
allow Community Solar
Garden in the Rural area
(outside of the MUSA)?
2. Does the Council want to
allow Community Solar
Garden in the MUSA?
a. Should it be allowed
only in certain zoning
districts?
b. Should it be allowed
only in certain land
use categories?
c. Should it be allowed
only certain sanitary sewer staging areas?
3. Does the Council wish to continue to prohibit CSG in the City?
Performance standards
If the City Council wishes to proceed with allowing Community Solar Gardens as regulated by
Minnesota Statues, we will work to develop performance standards to address the most common
issues, including: height, screening/buffering, setbacks and glare. There is good industry
guidance on most of these issues, but the screening/buffering issue has been a challenge in some
communities. Community Solar Gardens have 6-10 foot high panels, inverter boxes and utility
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poles, so it is not possible to fully screen all of these elements. Some communities require a solid
row of plantings to fully screen the panels, whereas, others require landscaping to buffer the use.
The primary difference is that the screening is intended to ensure that the panels are not visible
from the adjacent properties and the buffering uses landscaping to soften the impact but does not
require a solid planting row and can result in a more natural landscape.
If the Planning & Zoning Board supports Community Solar Gardens in the City, they
should provide direction on screening/buffering goals.
Decommissioning
The City could consider establishing standards for decommissioning a community solar garden
when it ceases to operate. Because this is a new technology, communities don’t fully understand
the end-of-operations strategy, communities are requiring financial guarantees to ensure
decommissioning of the facilities.
The key question for the City is whether to require a financial guarantee to remain in place
throughout the life of the solar garden. If the City chooses to allow community solar gardens, this
should be an item to consider and review. If you choose to proceed, staff will bring back options
for financial guarantees through decommissioning.
Permitting
There are different processes for city review of solar and it may differ depending on the type of
solar and the zoning district in which it is located. It could be as simple as a building permit for
construction or it could be required to obtain a Conditional Use Permit or Interim Use Permit to
allow the development.
The Zoning Ordinance defines allowed uses in each zoning district as:
1. Principal - One which determines the predominant use as contrasted to accessory
building, structure or use.
2. Accessory – use or structure on the same lot with, and of a nature customarily incidental
and subordinate to, the principal use or structure.
3. Conditional Use - A use classified as conditional generally may be appropriate or
desirable in a specific zone, but requires special approval because if not carefully located
or designed it may create special problems such as excessive height or bulk, abnormal
traffic congestion or environmental disruption.
4. Interim Use – Similar to a condition use, but an interim use has a “sunset clause” where
the use will cease to be allowed (usually a certain date or some definable action).
If the Council supports Community Solar Gardens and Farms, staff recommends that they be
processed via an Interim Use Permit in any district that the Council finds them to be desirable.
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RECOMMENDATION
Provide a recommendation to City Council on whether or not staff should prepare a draft
Community Solar Garden Zoning Text amendment for review.
ATTACHMENTS
1. Chisago County Solar Ordinance
2. Information Brief from the Research Department at the Minnesota House of
Representatives on the Xcel Legislation
AMENDMENT TO CHISAGO COUNTY ZONING ORDINANCE NO. 08-03
AMENDING THE CHISAGO COUNTY ZONING ORDINANCE BY ADDING STANDARDS AND
DEFINITIONS FOR SOLAR ENERGY SYSTEMS, SOLAR ENERGY FARMS AND FOR THEIR
INSTALATION AND USE IN CHISAGO COUNTY
THE CHISAGO COUNTY BOARD OF COMMISSIONER ORDAINS:
The following language is hereby added to the Chisago County Zoning Ordinance:
7.31 SOLAR ENERGY SYSTEMS
A. GENERAL PROVISIONS.
1. Purpose and Intent
Chisago County finds that it is in the public interest to encourage the use and development of renewable energy
systems that enhance energy conservation efforts, but result in limited adverse impact on nearby properties. As such,
the County supports the use of solar energy collection systems and the development of solar energy farms. Chisago
County also finds that the development of solar energy farms should be balanced with the protection of the public
health, safety and welfare. The County resolves that the following standards shall be adopted to ensure that solar
energy systems and solar energy farms can be constructed within Chisago County while also protecting public safety
and the natural resources of the County. Consistent with the Chisago County Comprehensive Plan, it is the intent of
the County with this Section to create standards for the reasonable capture and use, by households, businesses and
property owners, of their solar energy resource, and to encourage the development and use of solar energy.
2. Severability
The provisions of this Section shall be severable and the invalidity of any paragraph, subparagraph or subdivision
thereof shall not make void any other paragraph, subparagraph or subdivision of this section.
3. Applicability
These regulations shall apply to all solar energy systems and solar energy farms on properties and structures under the
jurisdiction of the Chisago County Zoning. Those systems shall be defined as solar farms generating less than 50
megawatts of power. Chisago County shall refer any application for a large electric power generating plant (LEPGP)
to the Minnesota Public Utilities Commission (MN PUC) for approval. An LEPGP shall be defined as any solar
energy system capable of producing more than 50 megawatts of power.
B. DEFINITIONS. The following words, terms and phrases, when used in this Section, shall have the meaning provided
herein, except where the context clearly indicates otherwise:
Building or Other Architecturally-Integrated Solar Energy System: An active solar energy system that is an
integral part of a principal or accessory building, rather than a separate mechanical device, replacing or substituting for
an architectural or structural component of the building. Building-integrated systems include, but are not limited to,
photovoltaic or thermal solar systems that are contained within roofing materials, windows, skylights and awnings.
CSES: Community solar energy system.
Community Solar Energy System (also called a “Solar Garden”): A solar-electric (photovoltaic) array that
provides retail electric power (or a financial proxy for retail power) to multiple community members or businesses
residing or located off-site from the location of the solar energy system.
Ground Mounted Panels: Freestanding solar panels mounted to the ground by use of stabilizers or similar
apparatus.
Large Energy Power Generating Plant (LEPGP): Any Solar Energy System capable of producing 50 megawatts
or more of power.
MN PUC: The Minnesota Public Utilities Commission.
Photovoltaic System: An active solar energy system that converts solar energy directly into electricity.
Roof or Building Mounted Solar Energy System: A solar energy system that is mounted to the roof or building
using brackets, stands or other apparatus.
SES: Solar Energy System
Solar Access: A view of the sun, from any point on the collector surface that is not obscured by any vegetation,
building, or object located on parcels of land other than the parcel upon which the solar collector is located, between
the hours of 9:00 AM and 3:00 PM Standard time on any day of the year.
Solar Collector: A device, structure or a part of a device or structure that the principal purpose is to transform solar
radiant energy into thermal, mechanical, chemical or electrical energy.
Solar Energy: Radiant energy received from the sun that can be collected in the form of heat or light by a solar
collector.
Solar Energy System: An active solar energy system that collects or stores solar energy and transforms solar energy
into another form of energy or transfers heat from a collector to another medium using mechanical, electrical, thermal
or chemical means.
Solar Farm: A commercial facility that converts sunlight into electricity, whether by photovoltaics (PV),
concentrating solar thermal devices (CST), or other conversion technology, for the principal purpose of wholesale
sales of generated electricity
Solar Garden: A community solar energy system.
Solar Hot Water System: A system that includes a solar collector and a heat exchanger that heats or preheats water
for building heating systems or other hot water needs.
Solar Site Permit: A land use permit required by the County for the installation of certain solar energy systems
regulated by this Ordinance.
C. TYPES OF SOLAR ENERGY SYSTEMS: This Ordinance identifies and regulates the following four types of solar
energy systems:
1. Rooftop or other Architecturally-Integrated Solar Energy Systems
2. Ground Mount Solar Energy Systems
3. Community Solar Energy Systems (Solar Gardens/CSES)
4. Solar Farms
These systems shall be defined and regulated as follows:
1. Rooftop or other Architecturally-Integrated Solar Energy Systems: Systems which are accessory to the
principal land use, designed to supply energy for the principal use. Rooftop or other architecturally-integrated systems
shall be regulated as follows:
a) Rooftop or other architecturally-integrated systems are permitted accessory uses in all
districts in which buildings and structures are permitted.
b) No Solar Site permit is required, but the owner or contractor shall obtain a building permit
before installing a rooftop or other architecturally-integrated solar energy system.
d) Commercial rooftop or other architecturally-integrated systems shall be placed on the roof
to limit visibility from the public right-of-way or to blend into the roof design, provided
that minimizing visibility but which still allows the property owner to reasonably capture
solar energy.
2. Ground-mount solar energy systems: Systems which are accessory to the principal use and designed to supply
energy for the principal use. Ground-mount systems shall be regulated as follows:
a) Ground-mount systems are permitted accessory uses in all districts in which
buildings and structures are permitted.
b) Ground-mount systems require a Solar Site Permit and a Building Permit.
c) Ground-mount systems shall be subject to the accessory use standards for the district
in which they are located, including dimensional standards, such as yard setbacks.
c) The height of ground-mounted components shall not exceed 10 feet.
e) No ground-mounted solar energy system shall cover or encompass more than 10 percent
of the total property area or lot size.
3. Community Solar Energy Systems (Solar Gardens/CSES): Roof or ground-mount CSES’s designed to
supply energy for off-site users on the distribution grid (but not for export to the wholesale market or connection to
the electric transmission grid) shall be allowed as a principal or accessory permitted use, in all districts unless otherwise
regulated or prohibited in this section:
a) Community Solar Energy Systems shall be located on parcels of land no less than five acres
in size.
b) Ground Mount CSES’s which are sited upon a contiguous or aggregate site area footprint
larger than 20 acres in size (whether commonly owned/controlled or not-so owned or operated) shall
require a Conditional Use Permit, in accordance with Section E. Conditional Use Permit Requirements.
The site area footprint size shall be computed by a determination of the Zoning Administrator.
c) Prohibited Districts: The County prohibits CSES’s within the following districts:
1) Shoreland Districts as designated by the Department of Natural Resources (DNR)
and the Chisago County Shoreland Management Ordinance;
2) Within Six Hundred (600) feet of areas designated or formally protected from
development by Federal, State or County agencies as wildlife habitat, wildlife
management areas or designated as National Wild and Scenic land or corridor;
3) Wetlands, to the extent prohibited by the Minnesota Wetland Conservation Act;
4) The Floodplain District.
d) All CSES’s and CSES components must meet the setback, height and coverage limitations
for the district in which the system is located.
e) CSES’s shall require a Solar Site Permit and a building permit, and are subject to the accessory use
standards for the district in which they are located.
f) Power and communication lines. All on-site power and communication lines running between
banks of solar panels and buildings shall be buried underground on premise. The Zoning
Administrator may grant exemptions to this requirement in instances where shallow
bedrock, water courses or other elements of the natural landscape interfere with the ability
to bury lines.
g) Decommissioning Plan: The owner/operator shall submit a decommissioning plan for
ground-mounted CSES’s to ensure that the owner or operator properly removes the equipment and
facilities upon the end of project life or after their useful life. The owner or operator shall
decommission the solar panels in the event they are not in use for twelve (12) consecutive months. The
plan shall include provisions for the removal of all structures and foundations, the removal of all
electrical transmission components, the restoration of soil and vegetation and a soundly-based plan
ensuring financial resources will be available to fully decommission the site. The disposal of structures
and/or foundations shall meet the requirements of the Chisago County Solid Waste Ordinance. The
owner/operator shall provide a current-day decommissioning cost estimate, and shall post a bond, letter
of credit or establish an escrow account, including an inflationary escalator, in an amount determined by
the County Board, to ensure proper decommissioning.
4) Solar farms: Ground-mount solar energy arrays which are the principal use on the property,
that are designed for providing energy to off-site users or export to the wholesale market shall be a permitted use in
the Agricultural district, except as otherwise regulated or prohibited in this section. Solar Farms shall be subject to
the following:
a) Solar Farms which have a generating capacity of 50 megawatts of power or more
shall fall under the jurisdiction of the Minnesota Public Utilities Commission.
b) Solar Farms shall be located on parcels of land no less than five acres in size.
c) Solar Farms which are sited upon a contiguous or aggregate site area footprint
larger than 20 acres in size (commonly owned/controlled or not so) shall require a
Conditional Use Permit, in accordance with Section E. Conditional Use Permit
Requirements. The site area footprint size shall be computed by a determination of the Zoning
Administrator.
d) Prohibitions: The County prohibits community solar farms within:
1) Shoreland Districts as designated by the Department of Natural Resources (DNR)
and the Chisago County Shoreland Management Ordinance
2) Six Hundred (600) feet of areas formally designated or protected from
development by Federal, State or County agencies as wildlife habitat, wildlife
management areas or designated as National Wild and Scenic land or corridor
3) Wetlands to the extent prohibited by the Minnesota Wetland Conservation Act,
4) The Floodplain District.
e) All Solar Farm components must meet the setback, height and coverage limitations for the
district in which the system is located.
f) Power and communication lines. All on-site power and communication lines running between
banks of solar panels and buildings shall be buried underground on premise. The Zoning
Administrator may grant exemptions to this requirement in instances where shallow
bedrock, water courses or other elements of the natural landscape interfere with the ability
to bury lines.
g) Decommissioning Plan: The owner/operator shall submit a decommissioning plan for ground-mounted
CSES’s to ensure that the owner or operator properly removes the equipment and facilities upon the end of
project life or after their useful life. The owner or operator shall decommission the solar panels in the event
they are not in use for twelve (12) consecutive months. The plan shall include provisions for the removal of
all structures and foundations, the removal of all electrical transmission components, the restoration of soil
and vegetation and a soundly-based plan ensuring financial resources will be available to fully decommission
the site. The disposal of structures and/or foundations shall meet the requirements of the Chisago County
Solid Waste Ordinance. The owner/operator shall provide a current-day decommissioning cost estimate, and
shall post a bond, letter of credit or establish an escrow account, including an inflationary escalator, in an
amount determined by the County Board, to ensure proper decommissioning.
D. ADDITIONAL STANDARDS: In addition to the standards required above, the following standards shall apply to all
Solar Energy Systems.
1. Compliance with Building Code. All SES’s shall require a building permit, shall be subject to the approval of
the County Building Official, and shall be consistent with the State of Minnesota Building Code.
2. Compliance with State Electric Code. All photovoltaic systems shall comply with the Minnesota State Electric
Code.
3. Compliance with State Plumbing Code. Solar thermal systems shall comply with applicable Minnesota State
Plumbing Code requirements.
4. Compliance with MN Energy Code. All SES’s shall comply with HVAC-related requirements of the Energy
Code.
5. Utility Notification. No grid-intertied photovoltaic system shall be installed until the owner has submitted
notification to the utility company of the customer’s intent to install an interconnected customer-owned
generator. Off-grid systems are exempt from this requirement.
6. Security and equipment buildings. Security and equipment buildings on the site of solar farms shall be
permitted uses accessory to the solar farm.
7. Controlled Access. The owner or operator shall contain all unenclosed electrical conductors located above
ground within structures that control access .
E. SOLAR SITE PLAN REQIREMENTS
1. A Solar Site Plan application shall be filed for all Ground Mount Solar Energy Systems sited on parcels 20 acres or
less in size, contiguous or aggregate. The site area footprint size shall be computed by a determination of the Zoning
Administrator.
2. Solar Site Plans shall require approval by the Zoning Administrator. Such approval shall be issued
following an Administrative determination that the design requirements of this Ordinance have been met.
F. CONDITIONAL USE PERMIT (CUP) REQUIREMENTS
1. A Conditional Use Permit (CUP) shall be required for a Community Solar Energy System or a Solar Farm which is
situated, (or which is staged to be eventually situated) on a contiguous or aggregate site area footprint larger than 20
acres in size, whether commonly owned/controlled or otherwise. Solar Farms and CSES’s located on a site area 20
acres or less (contiguous or aggregate) in size shall be permitted uses. The site area footprint size shall be computed
by a determination of the Zoning Administrator.
2. A CSES or Solar Farm which has the capacity to generate 50 megawatts or more shall fall under the jurisdiction of
the Minnesota Public Utilities Commission and shall not be subject to County review.
3. Landscaping:
Buffer Screening from routine view of the public right-of-way and immediately adjacent residences shall be required in
an attempt to minimize the visual impact of above grade site improvements and any extensive or imposing perimeter
security fencing that is proposed. Low lying screening, shrubbery, or other native vegetation shall be required around
site perimeters or perimeter security fencing.
4. Corridor Preservation:
Natural wildlife, wetland, woodland or other lineal corridors shall remain open to travel by native fauna, reptilia and
avialae. Perimeter fencing and security measures must accommodate unimpeded wildlife migration through large
solar array development sites and areas. Plan approval may require corridor replacement, relocation, removal, and/or
protection as determined by the Zoning Administrator.
5. Conditional Use Permit (CUP) Submittal Requirements.
CUP applications for solar energy systems shall be accompanied by horizontal and vertical elevation drawings, drawn
to scale. The drawings shall show the location of the system components on the property, as well as other elements,
including but not limited to the following:
Existing features
Proposed features
Property boundaries
Property zoning designation(s) including district property line and roadway setbacks
Solar arrays, connecting lines, and all affiliated installations and structures
Access points, drive aisles, security features, and fencing
Topography & surface water drainage patterns and treatment systems
Wetlands, Woodlands, Grasslands, Prairielands
Existing and proposed/preserved/protected wildlife corridors (wetland/woodland/topography connectivity)
Landscape Plan, including required screening of site perimeter and/or perimeter security fencing
Floodplains
Soils
Historical features
Archeological features
Wildlife and ecological habitat
Environmental mitigation measures
Description of Project Staging (if applicable)
G. ZONING ORDINANCE AMENDMENTS.
The Chisago County Zoning Ordinance (08-3) shall be amended to reflect the above language upon its adoption, in all
its relevant sections.
Copies of this publication may be obtained by calling 651-296-6753. This document can be made available in
alternative formats for people with disabilities by calling 651-296-6753 or the Minnesota State Relay Service at
711 or 1-800-627-3529 (TTY). Many House Research Department publications are also available on the
Internet at: www.house.mn/hrd/.
INFORMATION BRIEF
Research Department
Minnesota House of Representatives
600 State Office Building
St. Paul, MN 55155
Bob Eleff, Legislative Analyst
651-296-8961 Updated: October 2017
Xcel Energy’s Community Solar Garden Program
High capital costs dissuade many small energy customers from installing a solar
energy system. Alternatively, a developer can build a system and sell “shares” of
the electricity generated to neighborhood residents and businesses. The 2013
Minnesota Legislature required Xcel Energy to develop a pilot project based on
the latter model, called a community solar garden. The statute contained some
program guidelines, but directed the Minnesota Public Utilities Commission to
determine the details of the program’s operation, which occurred in a series of
orders issued over the past four years. This information brief describes the salient
features of Xcel’s community solar garden program by examining selected
provisions of those orders.
Introduction
In 2013 the Minnesota Legislature enacted a provision requiring the state’s largest electric utility,
Xcel Energy, to submit a plan to the Public Utilities Commission under which the utility would
provide customers the option to purchase electricity under a community solar garden program.
A community solar garden is a neighborhood-scale solar energy system from which nearby
residential and other small electricity customers can purchase a subscription that reserves to them
a fixed monthly share of the electricity generated by the project. This arrangement removes the
significant barrier of large initial capital costs that often inhibits such customers from installing a
solar energy system. To date, solar gardens have been most often constructed and owned by a
third-party developer, rather than an electric utility.
House Research Department Updated: October 2017
Xcel Energy’s Community Solar Garden Program Page 2
The legislation specified various parameters of Xcel’s community solar garden program,
including:
•a garden’s capacity—the maximum amount of electricity it can generate—cannot exceed
1 megawatt (MW);1
•a garden must have at least five subscribers, none of which may consume more than 40
percent of the garden’s output;
•an individual customer’s subscription can be no greater than 120 percent of the
customer’s average annual electricity usage; and
•the utility to which the garden is interconnected must purchase all the electricity
generated by the garden and must credit each customer based on the size of the
customer’s subscription.2
The legislation required Xcel to develop a program that met these and other requirements. The
commission was granted authority to modify Xcel’s plan, provided that any plan it approves
must be consistent with the public interest.
Several issues regarding operation of the solar garden program were not spelled out in the
statute, including the following questions:
•Should a limit on the overall size of the program be established?
•At what rate should a utility purchase electricity generated by a solar garden?
•How should co-located gardens—aggregations of 1 megawatt projects constructed by a
single developer and located adjacent to one another—be treated?
•What should be the purchase rate for electricity generated by a solar garden that is not
subscribed by a customer?
•How are credits on a customer’s bill resulting from monthly generation exceeding
monthly electricity use treated at year-end?
In a series of orders issued between April 2014 and October 2015—and after receiving
comments on Xcel’s proposed plan from governmental agencies, nonprofit organizations that
work on energy issues, solar providers and the state’s solar industry association, and almost 200
members of the public―the commission established the details of the program. The commission
has continued to modify the program more recently. The table below summarizes the regulations
on several key issues under which solar gardens currently operate. The remainder of this
information brief provides background information regarding those decisions.
1 The Solar Energy Industries Association estimates that a solar system with a capacity of 1 megawatt can meet the energy needs of approximately 125 homes in Minnesota, taking into account available sunshine, average
household electricity consumption, and average temperature and wind speed. “What’s In a Megawatt?”
www.seia.org/policy/solar-technology/photovoltaic-solar-electric/whats-megawatt.
2 Minn. Stat. § 216B.1641.
House Research Department Updated: October 2017
Xcel Energy’s Community Solar Garden Program Page 3
Xcel’s Community Solar Garden Program: Selected Provisions
Program Feature Commission Decision
Statewide Program Capacity Unlimited
Rate at which Solar Garden
Generated Electricity Is Purchased
by Xcel and Credited to Subscribers
Value-of-solar rate: $0.1033 in 2017; $0.1006 in 2018
Capacity Limits for Co-located Solar
Gardens
1 MW
Project Completion Deadline 24 months after Xcel determines that the application is
complete
End-of-Year Treatment of Bill
Credits
Bill credits are carried forward for at least 12 months; Xcel
purchases all outstanding credits as of last day of February
Payment to Solar Garden Operators
for Unsubscribed Energy
> 40 kW gardens: Xcel’s avoided cost rate,3 plus 1 cent per
kWh for RECs 4
< 40 kW gardens: Xcel’s average retail rate, plus 1 cent per
kWh for RECs
Contract Length 25 years
Provisions of Xcel’s Community Solar Garden Program
Statewide Program Capacity Is Unlimited
Although Xcel originally proposed limiting the size of the program to 20 MW during its initial
two years, the commission decided not to place a limit on the aggregate capacity of solar
gardens, in part to maximize the opportunity for developers to take advantage of the existing 30
percent federal tax credit for solar systems, which was scheduled to decline to 10 percent
beginning in 2017.5 Interest in participating in the program vastly exceeded even the most
optimistic expectations, as discussed below.
3 Under Minnesota’s net metering statute, Minnesota Statutes, section 216B.164, subdivision 3, electric utilities are required to purchase electricity produced by a generator with a capacity below 40kW at the utility’s “avoided
cost.” The statute utilizes the federal definition of that term: the incremental cost to the utility of generating or
purchasing the same amount of energy from a source other than the net metering generator. See Code of Federal
Regulations, title 18, section 292.101, paragraph (b), clause (6), and section 292.304.
4 A Renewable Energy Certificate (REC) is a tradable, contractual instrument representing the property rights
to the environmental, social, and other nonpower qualities of 1 MWh of renewable electric generation. RECs can be
sold separately from the underlying physical electricity generated from renewable sources. Purchased RECs can be
used to satisfy part or all of a utility’s obligation under Minnesota’s Renewable Energy Standard (Minn. Stat. §
216B.1691) to generate a specific proportion of its retail electricity sales from renewable energy at specific times,
for example, 25 percent by 2025. Under Xcel’s solar garden program, no REC values will be paid if the solar
garden receives financial incentives under Xcel’s Solar*Rewards or the state’s Made in Minnesota program, since
these programs require RECs to be transferred to Xcel without compensation.
5 Minnesota Public Utilities Commission, In the Matter of the Petition of Northern States Power Company, dba
Xcel Energy, for Approval of Its Proposed Community Solar Garden Program, Docket No. E-002/M-13-867, Order
House Research Department Updated: October 2017
Xcel Energy’s Community Solar Garden Program Page 4
In 2017, Xcel Began to Credit Electricity Generated by Solar Gardens at Its
Value-of-Solar Rate
The statute contained three directives regarding the price at which Xcel is to purchase energy
generated by a solar garden and issue credit back to solar garden subscribers. This price was set
at the utility’s value-of-solar rate. 6 Until that rate, calculated according to a methodology
developed by the Department of Commerce, was approved by the commission, the applicable
retail rate was to be used. The statute also requires that any plan approved by the commission
must “reasonably allow for the . . . financing” of community solar gardens.
In its April 2014 order, the commission defined the applicable retail rate to include the energy
charge, demand charge, customer charge, and applicable riders for the appropriate class,
approximately $0.12 per kWh. That rate was deemed “too low to reasonably allow for the
creation and financing of community solar gardens. Rather, developers’ uncontroverted
statements indicate that a rate of approximately $0.15 per kWh is the conservative minimum
needed to secure financing and make solar gardens attractive to subscribers.”7
Accordingly, the commission allowed solar garden developers to transfer the solar Renewable
Energy Certificate (RECs) associated with the garden’s generation to Xcel at a rate of $0.03 per
kWh for gardens with a capacity of 250 kW or less and $0.02 for larger gardens, resulting in a
2014 applicable retail rate plus REC payments for residential customers of $0.14033 and
$0.15033 per kWh, respectively.8
In its September 2016 order, the commission directed Xcel to pay solar garden operators the
value-of-solar rate for electricity the utility purchases from gardens whose applications are filed
in 2017 and thereafter. The value-of-solar rate in place at the time an application is completed
will remain in effect for the term of the solar garden’s operation, adjusted annually for inflation.
Updated value-of-solar calculations will be made each year for new project applications.9
Rejecting Xcel’s Solar-Garden Tariff Filing and Requiring the Company to File a Revised Solar-Garden Plan, April
7, 2014, p. 7. In December 2015, Congress extended the 30 percent credit through 2019, after which it declines to
26 percent in 2020, 22 percent in 2021, and 10 percent in 2022 and beyond, at which point it is available only for
commercial, not residential, applications.
6 A utility’s value-of-solar rate reflects the cost savings realized by a utility when a customer uses solar
electricity generated at or near the customer’s location rather than electricity generated by fossil fuels at a
centralized location and transported to the customer. Among the costs that a utility no longer must pay when
customers use small-scale solar energy are fuel costs, costs of pollution control equipment, costs to transmit (long-
distance) and distribute (short-distance) the electricity from the generation site to the customer. These savings
accrue to all utility customers.
7 April 7, 2014 Order, p.15.
8 Letter from Amy A. Lieberkowski, Manager, Rates and Regulatory Affairs, Xcel Energy, to Daniel P. Wolf,
Executive Secretary, Minnesota Public Utilities Commission, Docket No. E-002/M-13-867, Re: ARR calculation,
Community solar garden program, March 2, 2015, Attachment A.
9 Minnesota Public Utilities Commission, In the Matter of the Petition of Northern States Power Company, dba
Xcel Energy, for Approval of Its Proposed Community Solar Garden Program, Docket No. E-002/M-13-867, Order
Approving Value-of-Solar Rate for Xcel’s Solar Gardens Program, Clarifying Program Parameters, and Requiring
Further Filings, September 6, 2016, p. 14.
House Research Department Updated: October 2017
Xcel Energy’s Community Solar Garden Program Page 5
Xcel’s value-of-solar rate for calendar year 2017 was $0.1033 per kWh, and for calendar year
2018 is $0.1006.10
Capacity of Co-located Solar Gardens Will Remain Limited to 1 MW
Xcel’s original plan defined a community garden site as the parcel of real property on which the
solar system was constructed. However, at the suggestion of SunEdison, a global solar energy
company, the commission ordered Xcel to amend that definition to allow a garden site to instead
be based on a point of interconnection (“point of common coupling” is the term eventually
agreed upon) with a utility’s grid, allowing multiple facilities to be installed in close proximity to
one another. As the commission stated, “[T]he operator should be able to install solar panels on
multiple parcels, connect them to grid through a single interconnection point, and take advantage
of the resulting economies of scale.”11
The commission’s decisions regarding co-location and pricing contributed both to the amount
and the nature of the projects proposed by solar garden developers. Xcel began accepting
applications on December 12, 2014, and within a month received applications for 75 projects
totaling 431 MW. Fewer than one-third of these, representing only 4 percent of the total capacity
of all applications, proposed projects at the statutory limit of 1 MW or less. Sixteen proposed
projects, representing 58 percent of the total capacity of those applications, had capacities of 10
MW or greater; the largest project sited 40 MW of gardens adjacent to one another.12
In comments to the commission, Xcel cited four concerns with what the company called these
“utility-scale” projects. First, it stated that larger projects will require improvements to the
company’s distribution system in order to be interconnected to the grid, which could lengthen
interconnection schedules, especially if projects are so large as to require referral to the
interconnection process managed by the Midcontinent Independent System Operator (MISO),
the organization that dispatches electricity to Minnesota and 14 other states and a Canadian
province in the Midwest.13
10 Letter from Lisa R. Peterson, Manager, Regulatory Analysis, Xcel Energy, to Daniel P. Wolf, Executive
Secretary, Minnesota Public Utilities Commission, Docket No. E-002/M-13-867, Re: VOS Calculation and
Proposed 2018 VOS Vintage Year Bill Credit Tariff Sheets, Community Solar Garden Program, October 2, 2017, p.
2.In its September 17, 2014 Order, the commission found that Xcel’s value-of-solar rate at that time, $0.1075, was
“significantly below the level needed to support the financing and development of solar gardens as required by the
applicable statute.” Minnesota Public Utilities Commission, In the Matter of the Petition of Northern States Power
Company, dba Xcel Energy, for Approval of Its Proposed Community Solar Garden Program, Docket No. E-002/M-
13-867, Order Approving Solar-Garden Plan With Modifications, September 17, 2014, p. 9. The rapid decline in
the price of solar panels in the intervening two years now allows projects to be financed at an even lower value-of-
solar rate.
11 April 7, 2014 Order, p. 12.
12 Letter from Aakash Chandarana, Regional Vice President, Rates and Regulatory Affairs, Xcel Energy, to
Daniel P. Wolf, Executive Secretary, Minnesota Public Utilities Commission, Docket No. E-002/M-13-867, Re:
Supplemental Comments, January 13, 2015, Table 1, p. 4.
13 Letter from Aakash Chandarana, Regional Vice President, Rates and Regulatory Affairs, Xcel Energy, to
Daniel P. Wolf, Executive Secretary, Minnesota Public Utilities Commission, Docket No. E-002/M-13-867, Re:
Comments, February 10, 2015, p. 2.
House Research Department Updated: October 2017
Xcel Energy’s Community Solar Garden Program Page 6
Second, Xcel said that these larger projects are not consistent with the legislature’s intent in
creating the community solar garden program, which it characterized as expanding “access to the
benefits of solar to customers who are traditionally unsuited to rooftop solar . . . , [including]
customers who lack access to an appropriate roof location, are unable to afford the upfront costs
of an installation, or are discouraged by system maintenance or other considerations.”14
Third, the company expressed concern that large solar gardens would focus on selling to large
customers, creating “the potential for entire service classes [i.e., residential and small business]
to be largely excluded from participation….”15
Fourth, Xcel noted that the bill credit rate under the community solar garden program was
significantly higher than the price paid at the time by Xcel for solar electricity produced by
utility-scale projects acquired under a power purchase agreement resulting from the company’s
most recent resource bidding process ($0.0732 per kWh).16
As these issues were being raised in the first half of 2015, community solar garden applications
continued to accumulate, rising to a total capacity of more than 500 MW by April 2, 646 MW by
May 18, and 912 MW by June 23.17 On June 22, 2015, Xcel reached agreement with several
stakeholders on the co-location issue.
The agreement, approved by the commission with some modifications, contained the following
provisions:18
•Projects exceeding 5 MW for which applications had been received by Xcel as of the date
of the agreement would be scaled back to 5 MW.
•Applications received after the date of the agreement but before September 25, 2015,
would be limited to 5 MW.
•Applications received between September 25, 2015, and September 15, 2016, would be
limited to 1 MW.
•The commission will determine whether and what co-location limits will apply to solar
garden applications submitted after September 15, 2016.
14 Ibid., p. 4.
15 Ibid. The Office of the Attorney General noted that such a strategy greatly reduces the marketing costs of
solar garden developers, who would avoid dealing with a large number of small customers. In the Matter of the
Petition of Northern States Power Company for Approval of its Proposed Community Solar Gardens Program,
Minnesota Public Utilities Commission Docket No. E002/M-867, Comments of the Office of the Attorney General –
Residential Utilities and Antitrust Division, March 4, 2015, pp. 3-4. The same principle would hold true for a
developer’s administrative costs.
16 Letter from Aakash Chandarana, Regional Vice President, Rates and Regulatory Affairs, Xcel Energy, to
Daniel P. Wolf, Executive Secretary, Minnesota Public Utilities Commission, Docket No. E-002/M-13-867, Re:
Reply Comments, March 4, 2015, p. 10.
17 Minnesota Public Utilities Commission, In the Matter of the Petition of Northern States Power Company,
dba Xcel Energy, for Approval of Its Proposed Solar Garden Program, Docket No. E-002/M-13-867, Order
Adopting Partial Settlement as Modified, August 6, 2015, pp. 3, 5.
18 Ibid., p. 5.
House Research Department Updated: October 2017
Xcel Energy’s Community Solar Garden Program Page 7
•The commissioner of commerce is authorized to settle disputes regarding the aggregate
size of co-located solar gardens.
•Xcel is not required to upgrade its distribution system to accommodate the
interconnection of co-located solar gardens.19
In its September 2016 order, the commission reaffirmed the 1 MW co-location cap. “Allowing
co-location beyond 1 MW,” it stated, “would render the statutory limit superfluous, undermine
the legislative intent to foster small, widely distributed solar gardens, and create a risk of
significant rate increases to nonparticipating ratepayers.”20
Project Completion Deadline Is Set at 24 Months
To ensure that unworkable projects do not tie up valuable solar garden sites or absorb undue
amounts of program resources, solar developers have a deadline by which a project must be
financed and constructed. Xcel’s plan set a deadline of 18 months after an application was
determined to be complete; the commission extended it to 24 months.21
End-of-Year Bill Credits Are Purchased by Xcel
Solar garden subscribers are compensated via monthly credits on their bills for all solar energy
generated, based on their “share” of the total project. Since the size of a subscription can be as
large as 120 percent of a customer’s average electricity consumption (calculated on the most
recent two years’ usage), credits may exceed a customer’s total bill in a given month, in which
case the remaining credits roll over to the next month.
Xcel proposed that any credits remaining at the end of February be forfeited, and that subscribers
begin March with a zero balance. However, the commission determined that such a provision
would violate the statute’s requirement that Xcel purchase all energy generated by the solar
garden and that the possibility of forfeiting credits might discourage conservation efforts. It
required Xcel to carry all bill credits forward for at least a 12-month period, to purchase all
outstanding credits remaining in the billing cycle that includes the last day of February, and to
restart the bill-credit system with a zero balance in the following billing period.22
Unsubscribed Energy Is Purchased by Xcel at Different Rates Depending on
Project Size
While the statute requires Xcel to purchase all energy generated by a solar garden, it is silent as
to the rate of payment for energy that is not subscribed by customers. Xcel proposed that it
receive this unsubscribed energy at no charge, as an incentive to solar garden managers to make
19 Ibid., pp. 12-13.
20 September 6, 2016 Order, p. 21.
21 September 17, 2014 Order, pp. 12-13.
22 April 7, 2014 Order, p. 16.
House Research Department Updated: October 2017
Xcel Energy’s Community Solar Garden Program Page 8
efforts to fully subscribe their gardens, and pass on the cost savings to all ratepayers via a
reduction in the fuel clause rider.
The commission found that not requiring Xcel to pay for unsubscribed energy would increase
investor uncertainty, making solar gardens more difficult to finance. It determined that for solar
gardens above 40 kW capacity, Xcel is required to pay for unsubscribed energy at the company’s
avoided cost rate, and at the company’s average retail energy rate for smaller solar gardens.23
The commission also ordered Xcel to purchase solar garden RECs associated with unsubscribed
energy at $0.01 per kWh.24
These provisions also apply to solar gardens receiving the value-of-solar rate for subscribed
energy.
Contract Length Is Set at 25 Years
Xcel proposed a 20-year term for solar garden contracts. The commission, concurring with
several commentators, ordered that a 25-year term be used in order to be consistent with the
Department of Commerce’s value-of-solar methodology, which assumes that a solar photovoltaic
system will last for 25 years.25
For more information about energy, visit the utility regulation area of our website,
www.house.mn/hrd/.
23 April 7, 2014 Order, p. 17. See fn. 3 for a definition of “avoided cost.”
24 August 6, 2015 Order, p. 25.
25 April 7, 2014 Order, p. 22; Minnesota Department of Commerce, Division of Energy Resources, Minnesota
Value of Solar: Methodology, April 1, 2014, p. 6, https://mn.gov/commerce/energy/images/MN-VOS-Methodology-
FINAL.pdf.
Baldw in Lake
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BaldEagleLake
Wilkins onLake
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AmeliaLake
Reshanau Lak eRice Lake
CentervilleLake
Marsh an Lake
Geo rg eWatchLake
Pelt ier Lake
Cedar Lake
L i l a c S t
20
th Ave
S
456721
456749
456754
456721
456749
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th Ave
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M ai n S t
Main St
M ai n S t
Cedar St
Hodgson
Rd
Lake Dr
E lm S t
Birch St
Birc h St
Lake Dr
Sunset Ave
Rondeau
Lake Dr E
As h S t
Oak Ln
Apollo Dr
62nd St N
As h St
Rondeau
Lake Rd W
Ce
nte
rvi
lle
Rd
Holl
y
Dr
4th Ave
Holly Dr E
Birch St
80th St E
64th St
City of
Blai
ne
City of Col umbus
City of
Hugo
City of North Oaks White Bear Township ´
2040 Future Lan d Use
Legend
City of Centerville
Xcel Service A rea
Permanent Rural
Urb an Rese rve
Low Den sity Reside ntia l
Me dium De nsity Resid ential
High Den sity Reside ntial
Commercia l
Mixed Use
Business Campus
Ind ustrial
Civic a nd Institutional
Parks an d O pen Space
Private Airfield
Open Water
Right-of-Way
Mu nicipal Bou ndary
Parcels
Stre ams
3,500 0 3,5001,750 Feet Date: 5/30/2018
Xcel S er vic e Areas in Li no La kes
DRA FT
Solar Ordinance
Amendment
May 9, 2018
Planning & Zoning Board
Introduction
•Request from Lino Lakes Solar, LLC for a
text amendment to allow Community Solar
Gardens.
•Planning & Zoning Board held a public
hearing on May 9th and recommended that
the Council consider the request
–Should the ordinance be amended to allow
community solar? If so where?
Solar Legislation
•State of Minnesota Initiative
–The community solar garden model allows
individuals, businesses, schools, and civic
entities –known as “subscribers” –that
have limited options to install their own on-
site solar panels to purchase or “subscribe”
to a portion or a “share” of the output from a
given solar garden
Solar Legislation
Solar Legislation
•Community Solar Garden legislation
specific to Xcel
–Other utilities may provide community solar
garden options, but they are not subject to
the state requirements
–Limited to 1 MW, typically requires 5-8
acres of land and serves more than 300
homes
Solar Legislation
•Solar facility itself is exempt from
taxation
–Land is taxed at the utility rate of 2%, rather
than the agricultural rate of 1%.
–Plus the solar developer must pay a
production tax rate of $1.20 per megawatt
hour
–Revenue is split 80/20 between the County
and City.
Key Issues
•The application specifically requests that
the ordinance be amended to allow
community solar gardens in the City, but
does not request a specific location
•Considerations:
–Size/Scale
–Locations
–Permitting process
Size / Scale
•Community Solar
Garden (CSG)
–max. size of 1 MW
= max. size of 5-8
acres
•Should the city
establish a
minimum lot size
for CSG?
Location
•Should
community
solar gardens
or solar farms
be allowed in
Lino Lakes? If
so where?
Location
•Does the Council want to allow Community Solar Garden
in the Rural area (Urban Reserve or Permanent Rural?
Location
•Does the Council want to allow Community Solar Garden in
the MUSA ?
–Should it be allowed only in certain zoning districts?
–Should it be allowed only in certain land use categories?
–Should it be allowed only certain sanitary sewer staging
areas?
Performance Standards
Community Solar Gardens have 6-10 foot
high panels, inverter boxes and utility
poles
•Not possible to fully screen all of these
elements.
•Solid row of plantings to fully screen the
panels or
•Landscaping to buffer the use?
Permitting
•The Zoning Ordinance defines allowed
uses in each zoning district as:
•Principal
•Accessory
•Conditional Use
•Interim Use
•If the City supports CSGs, staff recommends IUP
Recommendation
Discuss whether or not there is Council
support for the proposed use and direction
on whether or not staff should prepare a
draft Community Solar Garden Zoning Text
amendment for review.
Next Steps:
Council Meeting: June 11, 2018
WS – Item 2
WORK SESSION STAFF REPORT
Work Session Item No. 2
Date: June 4, 2018
To: City Council
From: Michael Grochala, Community Development Director
Re: Comprehensive Plan Update
Background
Open House
The City held an Open House on Tuesday, April 3, 2018 to present the draft 2040
Comprehensive Plan to the public. There were 12 people that signed-in. Members of the City
Council and Advisory Boards also attended. Open House Feedback Forms were provided to
people to make comments and suggestions regarding the plan. Overall, general feedback from
those who attended was positive.
Staff did receive one formal written request from the Lundgren family to change the proposed
utility staging area. They own 4 parcels totaling approximately 110 acres along CR J (Ash
Street). The 2040 Comprehensive Plan proposes their property be in the Stage 2B (2035-2040)
utility staging area. The Lundgrens are requesting their property be in the Stage 1A (2018-2025)
utility staging area.
Staff also received a verbal request from the Noren family. They own 3 parcels totaling
approximately 80 acres along Holly Drive and CR J (Ash Street). The 2040 Comprehensive Plan
proposes their property also be in the Stage 2B (2035-2040) utility staging area. The Norens are
requesting their property be in the Stage 1A (2018-2025) utility staging area as well.
Staff will review their requests and make a recommendation to the Planning & Zoning Board
meeting at a future meeting.
Schedule
The City Council approved the request for extension on May 14, 2018. The Metropolitan
Council approved the request on May 23, 2018. The approval also included extension of the
planning grant expiration to July 15, 2020. Accordingly the planning process schedule is as
follows:
Process Step Target Date
Public Hearing Date (Planning & Zoning Board) October 12, 2018
Council Authorizes Distribution December 10, 2018
Initiation of 6 month review/comment period by adjacent jurisdictions December 12, 2018
6 month review period ends June 12, 2019
City Council approval for Metropolitan Council submittal July 8, 2019
Date of Plan submission to the Metropolitan Council July 15, 2019
Completion of fiscal devises and official controls review/amendment August 2020
Any outstanding City Council items can be addressed over the next 3 months prior to the
Planning and Zoning Board public hearing.
Requested Council Direction
None required. Discussion Only.
Attachments
None.
WS – Item 3
WORK SESSION STAFF REPORT
Work Session Item No. 3
Date: June 4, 2018
To: City Council
From: Sarah Cotton, Finance Director
Re: 2017 Annual Audit Report
Background
Andy Hering of Redpath and Company will be in attendance at the meeting to provide an
overview of the City’s 2017 Annual Financial Report, present the auditor’s management
analysis and answer any questions you may have with regard to the financial condition of
the City.
The 2017 annual audit was undertaken earlier this year, with field work being completed
in May. The auditors review all financial transactions and the financial reports of the
City over the previous year for their fairness in presentation and for full disclosure of all
material aspects of the City’s financial condition. This review is conducted in accordance
with generally accepted auditing standards and the standards applicable to financial
audits contained in U.S. Government Auditing Standards, issued by the Comptroller
General of the United States. The auditors concluded that the City’s financial statements
for 2017 presented fairly, in all material respects, the financial position of the City as of
December 31, 2017. The auditors also issue their reports on the City’s legal compliance
with certain laws, regulations, contracts, etc., our internal control structure, and
management issues.
It should be noted that the City has received the Certificate of Achievement for
Excellence in Financial Reporting from the Government Finance Officers Association of
the United States and Canada for its 2016 Comprehensive Annual Financial Report. The
city has received this award each year since 1995. We believe that the report issued for
2017 continues to uphold the high standards of reporting excellence that this prestigious
award represents.
The presentation at the work session will be comprehensive and is intended to provide the
opportunity for council members to ask any questions or make comments about the audit
report and the state of city finances. Mr. Hering will also give an abbreviated
presentation at the June 11, 2018, regular City Council meeting.
Requested Council Direction
None
Attachments
2017 Comprehensive Annual Financial Report
2017 Other Audit Reports
COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
CITY OF LINO LAKES, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2017
Prepared By: Finance Department
Sarah Cotton, Director of Finance
Paula Schloer, Accountant
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CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
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Reference No.
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting 9
Organization Chart 10
Principal City Officials 11
Independent Auditor's Report 15
Management's Discussion and Analysis 19
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position Statement 1 33
Statement of Activities Statement 2 34
Fund Financial Statements:
Balance Sheet - Governmental Funds Statement 3 36
Reconciliation of the Balance Sheet of Governmental Funds
To the Statement of Net Position Statement 4 37
Statement of Revenues, Expenditures and Changes in Fund Balance -
Governmental Funds Statement 5 38
Reconciliation of the Statement of Revenues, Expenditures and Changes
In Fund Balance of Governmental Funds to the Statement of Activities Statement 6 40
Statement of Net Position - Proprietary Funds Statement 7 41
Statement of Revenues, Expenses and Changes in Fund Net Position -
Proprietary Funds Statement 8 42
Statement of Cash Flows - Proprietary Funds Statement 9 43
Statement of Net Position - Fiduciary Funds Statement 10 44
Notes to Financial Statements 45
Required Supplementary Information:
Budgetary Comparison Schedule - General Fund Statement 11 86
Schedule of Changes in the Total OPEB Liability and Related Ratios Statement 12 92
Schedule of Proportionate Share of Net Pension Liability -
General Employees Retirement Fund Statement 13 93
Schedule of Pension Contributions -
General Employees Retirement Fund Statement 14 94
INTRODUCTORY SECTION
FINANCIAL SECTION
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
Schedule of Proportionate Share of Net Pension Liability -
Public Employees Police and Fire Fund Statement 15 95
Schedule of Pension Contributions -
Public Employees Police and Fire Fund Statement 16 96
Schedule of Changes in the Net Pension Liability and Related Ratios -
Lino Lakes Public Safety Department - Fire Division Statement 17 97
Schedule of Contributions -
Lino Lakes Public Safety Department - Fire Division Statement 18 98
Notes to RSI 99
Combining and Individual Nonmajor Fund Financial Statements and Schedules:
Combining Balance Sheet - Nonmajor Governmental Funds Statement 19 105
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental Funds Statement 20 106
Subcombining Balance Sheet - Nonmajor Special Revenue Funds Statement 21 108
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Special Revenue Funds Statement 22 109
Subcombining Balance Sheet - Nonmajor Debt Service Funds Statement 23 112
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Debt Service Funds Statement 24 115
Subcombining Balance Sheet - Nonmajor Capital Project Funds Statement 25 121
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Capital Project Funds Statement 26 124
Special Revenue Fund - Program Recreation Schedule of Revenues, Expenditures
and Changes in Fund Balance - Budget and Actual Statement 27 128
Statement of Changes in Assets and Liabilities - Agency Funds Statement 28 129
CITY OF LINO LAKES, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
Financial Trends:
Net Position by Component Table 1 134
Changes in Net Position Table 2 136
Fund Balances, Governmental Funds Table 3 140
Changes in Fund Balances, Governmental Funds Table 4 142
Revenue Capacity:
Assessed and Actual Value of Taxable Property Table 5 144
Direct and Overlapping Property Tax Capacity Rates Table 6 145
Principal Property Taxpayers Table 7 147
Property Tax Levies and Collections Table 8 148
Debt Capacity:
Ratios of Outstanding Debt by Type Table 9 150
Ratios of Net General Bonded Debt Table 10 152
Direct and Overlapping Governmental Activities Debt Table 11 154
Legal Debt Margin Information Table 12 155
Demographic and Economic Information:
Demographic and Economic Statistics Table 13 156
Principal Employers Table 14 157
Operating Information:
Full-Time Equivalent City Government Employees By Function/Program Table 15 158
Operating Indicators by Function/Program Table 16 160
Capital Asset Statistics by Function/Program Table 17 162
Schedule of Long-Term Debt Exhibit 1 164
Schedule of Deferred Tax Levies Exhibit 2 166
Debt Service Payments to Maturity Exhibit 3 168
Insurance in Force Exhibit 4 170
Taxable Valuations, Tax Levies and Tax Rates Exhibit 5 172
STATISTICAL SECTION (UNAUDITED)
OTHER INFORMATION (UNAUDITED)
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INTRODUCTORY SECTION
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600 Town Center Parkway, Lino Lakes, MN 55014
Phone: 651-982-2400 · Fax: 651-982-2499
May 29, 2018
Honorable Mayor
Members of the City Council
Citizens of the City of Lino Lakes, Minnesota
Minnesota State law requires that cities over 2,500 population publish within six months of the close of
each fiscal year a complete set of financial statements presented in conformity with generally accepted
accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a
firm of licensed certified public accountants and submit them to the state auditor. Pursuant to that
requirement, we hereby issue the comprehensive annual financial report of the City of Lino Lakes,
Minnesota for the fiscal year ended December 31, 2017.
This report consists of management’s representations concerning the finances of the City of Lino Lakes.
Consequently, management assumes full responsibility for the completeness and reliability of all of the
information presented in this report. To provide a reasonable basis for making these representations,
management of the City of Lino Lakes has established a comprehensive internal control framework that is
designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient
reliable information for the preparation of the City of Lino Lakes’ financial statements in conformity with
GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive
framework of internal controls has been designed to provide reasonable rather than absolute assurance
that the financial statements will be free from material misstatement. As management, we assert that, to
the best of our knowledge and belief, this financial report is complete and reliable in all material respects.
The City of Lino Lakes’ financial statements have been audited by Redpath and Company, Ltd., a firm of
licensed certified public accountants. The goal of the independent audit was to provide reasonable
assurance that the financial statements of the City for the fiscal year ended December 31, 2017, are free of
material misstatement. The independent audit involved examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements; assessing the accounting principles used and
significant estimates made by management; and evaluating the overall financial statement presentation.
The independent auditor concluded, based upon the audit that there was a reasonable basis for rendering
an unmodified opinion that the City’s financial statements for the fiscal year ended December 31, 2017,
are fairly presented in conformity with GAAP. The independent auditors’ report is presented as the first
component of the financial section of this report.
GAAP require that management provide a narrative introduction, overview and analysis to accompany the
basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of
transmittal is designed to complement MD&A and should be read in conjunction with it. The City of Lino
Lakes’ MD&A can be found immediately following the report of the independent auditors.
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Profile of the Government
The City of Lino Lakes, incorporated in 1955, is a growing community in the southeast corner of the
County of Anoka. It covers an area of 33 square miles and has a population of approximately 21,100. The
population has more than doubled from the 1990 census figure of 8,807 and has grown by 25.8% since
2000. Within the City’s borders lies the 2,550 acre Rice Creek Chain of Lakes Regional Park. Access to
St. Paul and Minneapolis is provided by I-35W and I-35E.
The City Charter, as amended, establishes a mayor-council form of government and grants the city
council full policy-making and legislative authority to the mayor and four council members. The City
council is responsible, among other things, for passing ordinances, adopting the budget, appointing
committees, and hiring a City administrator. The City administrator has the responsibility of carrying out
the policies and ordinances of the City council, for overseeing the day-to-day operation of the city. The
City council is elected at-large on a non-partisan basis, with council members serving four-year terms and
the mayor serving a two-year term. Elections are held every two years with two council seats and the
mayor being up for election each election cycle.
The City provides a full range of municipal services. These services include: general government, public
safety (police, fire and building inspection), public services (streets, fleet, parks and recreation),
conservation of natural resources (environmental and solid waste abatement), community development,
public improvements, providing and maintaining sanitary and storm sewer, water infrastructure, and two
enterprise funds, the water and sewer funds.
The annual budget is the foundation for the City of Lino Lakes’ financial planning and control. All
divisions are required to submit appropriations requests to the City administrator for review and
consolidation into a proposed budget. The City administrator is responsible for submitting the proposed
annual budget to the City Council in August of each year. The city council is required to hold a public
hearing on the proposed budget and to adopt by resolution a final budget and certify it no later than
December 28. The budget amounts cannot increase beyond the estimated receipts except to the extent that
actual receipts exceed the estimate. Division directors may make transfers of appropriations within a
department, but transfers of appropriations between departments require council approval. Budget-to-
actual comparisons for the general fund and the recreation program fund, the only funds for which an
annual budget has been adopted, are provided in Statements 11 and 27, respectively.
Factors Affecting Financial Condition
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 Lino Lakes operates.
Local economy. The economic development effort established by the City Council in 1993 increased the
commercial/industrial tax base in the City from 3% of the total tax base to 9% in 2011. Development of
three industrial parks - Apollo Business Park on 35W, Marshan Industrial Park on Lake Drive, and the
Clearwater Creek Development Center on 35E, provided excellent opportunities for manufacturing and
distribution businesses to move their headquarters to Lino Lakes. Before the recession began in late 2007
the Lino Lakes Town Center, comprising approximately 200 acres surrounding the 35W/Lake Drive
interchange, was developing at a rapid pace. Super Target and Kohl’s anchor the shopping center
quadrant, while Apollo Business Park brought approximately 1,000 new employees to the area. Land was
purchased by Anoka County on a third quadrant for future development of a regional library. Due to
economic conditions, the County has pushed back construction of the library to a future date.
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Factors Affecting Financial Condition (Continued)
In 2004, the City entered into an agreement with a master developer to develop 40 acres in the southeast
quadrant of I-35W and Lake Drive. Called Legacy at Woods Edge, this mixed-use development is
intended to include diverse opportunities for housing, retail and office uses. To date, the development
includes the Lino Lakes Civic Complex (which houses the city hall and police station), the Chain of
Lakes YMCA, a 60-unit workforce housing project, 13,000 square feet of leasable commercial space, and
an assisted living facility. The Civic Complex and YMCA provide a civic and community focus as part of
the vision for Town Center. A workforce family housing and assisted living facility provide diversity in
housing to underserved populations within the City.
In 2006, the City placed a major focus on reconstruction of the 35W/Lake Drive interchange and
completion of public improvements in Legacy at Woods Edge to accommodate planned development and
completed the improvements by 2008. However, it became evident at the end of 2007 that development
was stalling. The recession has had negative impacts on the Legacy development. Both the master
developer and lender defaulted, sending the remaining 22 acres intended for townhomes and commercial
uses into tax forfeit. Development conditions have begun to improve relative to the Legacy property.
During 2013, the assisted living facility purchased an adjoining parcel to expand its current operation.
The 36-room addition was completed in 2014. In addition, the State Legislature approved City-initiated
special legislation which has allowed the City to acquire the tax forfeited property from the State at no
cost except for an administrative fee payable to Anoka County if future sale revenues exceed the value of
the special assessments on the property. The acquisition of this property will allow the City greater
control in marketing the property to potential developers. The solid foundation that was built and strong
interest by developers prior to the recession ensures that better economic times will once again bring the
interest in residential and commercial growth needed to complete the vision. Street, streetscape, water,
sewer, and storm water improvements, as well as a small community park, have been installed within the
development area and assessed to the development. The $11.1 million I-35W Interchange improvement
was financed through the joint efforts of MNDOT, Anoka County and the City of Lino Lakes. The City
has issued $4,215,000 in G.O. Tax Increment bonds and will use tax increment financing and Minnesota
State Aid funds to finance its portion of the project cost.
In anticipation of a strengthening economy, the City took the lead on developing the infrastructure needed
to service future growth on the 35E/County Road 14 interchange area. A major reconstruction of the
interchange completed a multi-year improvement of County Road 14 from Highway 61 in Hugo, through
Centerville, to 35W in Lino Lakes. The City portion of the cost for this bridge reconstruction project is
being financed through Anoka County, with the City issuing an initial $4.26 million General Obligation
Note to the County. Due to cost savings in this project the Note was amended to $3.695 million in 2011.
The city prepaid the Note with Anoka County in 2017 using MSA funds.
With both major interstate interchanges complete, the City is preparing for development of several
hundred acres in all quadrants of 35E/14. Interest in the commercial interchange has spurred the extension
of Otter Lake Road North east of I-35E and the extension of 21st Avenue west of I-35E, which will leave
the City well poised to accommodate significant future industrial, commercial and residential
development. A McDonald’s restaurant was completed in 2014 at CSAH 14 and Otter Lake Road. In
addition, Metropolitan Transit has constructed a 300 space Park and Ride at I35-E at CSAH 14 and 21st
Avenue.
Development activities continued to increase in 2017. Residential permit activity surpassed 100 for the
second consecutive year with 133 issued. Commercial development continues to show signs of recovery
as new construction activities and development planning emerges. National Builder, DR Horton
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continued development of the 112 unit Woods Edge townhome development. Lennar Homes received
planned unit development approval on the 871 lot Watermark development previously owned by aae
Mattamy Homes. Lennar is anticipating development of the site in 2018. The 402,000 square-foot
Distribution Alternatives building, developed by United Properties, was completed and occupied in 2017.
Long-term financial planning. The City’s currently adopted five-year financial plan identifies street and
utility improvements totaling $26,838,947 over the five-year period. These improvements are anticipated
to be funded through a number of funding sources, including special assessments, municipal state aid road
funds, the area and unit trunk fund, the stormwater management fund and voter-approved tax levies. The
five-year plan also includes funding projections for operations and operating impacts for the five-year
period. This plan is in the process of being revised to reflect the anticipated activity through the year
2022.
Relevant Financial Policies
The City uses a variety of financial policies to guide its fiscal actions and ensure fiscal stability.
Fund balance policy. The City had adopted a Fund Balance policy which identified the required
designated amounts in the Fund Balance of the General Fund at fiscal year-end and directed the transfer
of any excess revenues to other funds for specific purposes, as identified annually. For the year ended
December 31, 2011 and subsequent years, the City amended its Fund Balance policy to conform to the
requirements of GASB 54. The new policy targets the unassigned fund balance of the general fund in a
range of 40% to 50% of budgeted general fund expenditures and other financial uses. In addition, fund
balances are classified in compliance with GASB 54 according to the hierarchy of usable fund balance
resources. The unassigned general fund balance as of December 31, 2016 was $6,573,608 which is 64%
of general fund budgeted expenditures and other financing uses for the year.
Cash management policies and practices. The City’s policy is to invest all available moneys at
competitive rates in accordance with Minnesota law. Investments are made by minimizing credit and
market risks while maintaining a competitive yield. Funds are invested in certificates of deposit, state and
local securities, and U.S. government agencies. Cash is pooled in one account to provide maximum
return. The City Council reviews the investment policy annually.
The City’s investment policy’s primary objective is safety of principal. Therefore, all deposits were either
insured by Federal depository insurance or were collateralized as required by State Statute. Due to the
weakened economy, a historically low interest rate environment has persisted over the last several years
and has had a dramatic impact on the city’s investment earnings. The average interest income yield on
investments for 2017 was 0.62%. Total investment income also includes positive or negative changes in
the fair value of investments. Changes in fair value of investments during the current year resulted in
unrealized gains of $62,488, or 0.16%, for a total investment yield of 0.78%. The changes in fair value
during the current year, however, do not necessarily represent trends that will continue; nor is it always
possible to realize such amounts, especially in the case of temporary changes in the fair value of
investments the City intends to hold to maturity. It is the City’s practice to purchase and hold investments
to maturity and, accordingly, changes in fair value over the term of the City’s investments are expected to
net to book value.
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Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awards the
Certificate of Achievement for excellence in financial reporting to cities that meet certain criteria. The
City of Lino Lakes received this award for its comprehensive annual financial report for the year ended
December 31, 2016. This marks the twenty-second consecutive year the City has received this prestigious
award. A governmental unit must publish an easily readable and efficiently organized comprehensive
annual financial report, the contents of which conform to program requirements. This report must satisfy
both GAAP and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. The City is submitting the 2017 report
to GFOA for consideration of the Certificate of Achievement for Excellence in Financial Reporting. We
believe our current report continues to conform to the high standards of the Certificate program.
The timely preparation of this report could not have been accomplished without the dedicated services of
the Finance Department, auditors and other city staff. I want to express my appreciation to the Mayor and
City Council for their support for maintaining the highest standard of professionalism in the management
of the financial operation of the City.
Respectfully submitted,
Sarah R. Cotton
Director of Finance
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CITY OF LINO LAKES, MINNESOTA
PRINCIPAL CITY OFFICIALS
December 31, 2017
Term Expires
Mayor: Jeff Reinert December 31, 2017
Councilmembers: William Kusterman December 31, 2017
Rob Rafferty December 31, 2017
Melissa Maher December 31, 2019
Michael Manthey December 31, 2019
City Administrator: Jeff Karlson Appointed
Directors:
Community Development Michael Grochala Appointed
Finance Sarah Cotton Appointed
Public Safety John Swenson Appointed
Public Services Richard DeGardner Appointed
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FINANCIAL SECTION
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4810 White Bear Parkway, St. Paul, MN, 55110 651.426.7000 www.redpathcpas.com
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, 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 Lino Lakes, Minnesota, as of and for the year ended December 31, 2017, and the related
notes to the financial statements, which collectively comprise the City of Lino Lakes,
Minnesota’s basic financial statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America;
this includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’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 entity’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.
15
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City of Lino Lakes, Minnesota,
as of December 31, 2017, and the respective changes in financial position, and, where
applicable, cash flows thereof for the year then ended in accordance with accounting principles
generally accepted in the United States of America.
Emphasis of Matter
As described in Note 20 to the financial statements, the City of Lino Lakes, Minnesota adopted
new accounting guidance, GASB Statement No. 75, Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions for the year ended December 31, 2017. Our
opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, the budgetary comparison information, and the schedules
of OPEB and pension information, as listed in the table of contents, be presented to supplement
the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to be
an essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the
required supplementary information in accordance with auditing standards generally accepted in
the United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Lino Lakes, Minnesota’s basic financial statements. The
introductory section, combining and individual nonmajor fund financial statements and
schedules, statistical section and other information are presented for purposes of additional
analysis and are not a required part of the basic financial statements.
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The combining and individual nonmajor 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 nonmajor 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, the statistical section and other information 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.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
May 29, 2018, on our consideration of the City of Lino Lakes, Minnesota’s internal control over
financial reporting and on our tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements and other matters. The purpose of that report is to describe the
scope of our testing of internal control over financial reporting and compliance and the results of
that testing, and not to provide an opinion on internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City of Lino Lakes, Minnesota’s internal
control over financial reporting and compliance.
REDPATH AND COMPANY, LTD.
St. Paul, Minnesota
May 29, 2018
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MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Lino Lakes, Minnesota (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 in the introductory section of this report.
Financial Highlights
The assets of the City exceeded its liabilities at the close of the most recent fiscal year by
$93,293,613 (net position). Of this amount, $26,863,256 (unrestricted net position) may be
used to meet the City’s ongoing obligations to citizens and creditors in accordance with the
City's fund designations and fiscal policies.
The City’s total net position increased by $5,442,106.
As of the close of the current fiscal year, the City’s governmental funds reported combined
ending fund balances of $24,056,122, a decrease of $3,774,647. Of this amount, $5,289,641
is restricted by external constraints established by creditors, grantors, contributors, or by state
statutory provisions.
At the end of the current fiscal year, the general fund balance was $6,816,925. Unassigned
fund balance for the general fund was $6,573,608, or 65% of total general fund expenditures
and other financing uses.
Total outstanding debt decreased by $7,764,838 during 2017. Refunding bonds in the
amount of $3,575,000 were issued during November 2016, the proceeds from which were
used to pay off two bonds on February 1, 2017. In addition, the City prepaid the 2009A
Series Note with Anoka County.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic
financial statements. The City’s basic financial statements comprise three components: 1)
government-wide financial statements, 2) fund financial statements, and 3) notes to the
financial statements. This report also contains other supplementary information in addition
to the basic financial statements themselves.
Government-wide financial statements. The government-wide financial statements are
designed to provide readers with a broad overview of the City’s finances, in a manner similar
to a private-sector business.
19
Management’s Discussion and Analysis
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 City’s net position
changed during the most recent fiscal year. All changes in net position are reported as soon
as the underlying event giving rise to the change occurs, regardless of the timing of related
cash flows. Thus, revenues and expenses are reported in this statement for some items that
will only result in cash flows in future fiscal periods (e.g. uncollected taxes and earned but
unused 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 services, conservation of natural
resources and community development. The business-type activities of the City include a
water utility and sewer utility.
The government-wide financial statements are statements 1 and 2 of this report.
Fund Financial statements. A fund is a grouping of related accounts that is used to
maintain control over resources that have been segregated for specific activities or objectives.
The City, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City
can be divided into three categories: governmental funds, proprietary funds, and fiduciary
funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on
balances of spendable resources available at the end of the fiscal year. Such information may
be useful in evaluating a government’s near-term financial requirements.
Because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for governmental
funds with similar information presented for governmental activities in the government-wide
financial statements. By doing so, readers may better understand the long-term impact of the
City's near term financial decisions. Both the governmental fund balance sheet and
governmental fund statement of revenues, expenditures and change in fund balance provide a
reconciliation to facilitate this comparison between governmental funds and governmental
activities.
20
Management’s Discussion and Analysis
The City maintains five individual major governmental funds. Information is presented
separately in the governmental fund balance sheet and in the governmental fund statement of
revenues, expenditures and changes in fund balance for the following major funds:
General Fund
G.O. Improvement Bonds of 2005A – Debt Service Fund
G.O. Improvement Notes of 2009A – Debt Service Fund
G.O. Improvement Bonds of 2016B – Debt Service Fund
Area and Unit Charge – Capital Project Fund
Data from the other governmental funds are combined into a single, aggregated presentation.
Individual fund data for each of these nonmajor governmental funds is provided in the form
of combining statements elsewhere in this report.
The City adopts an annual appropriated budget for its General Fund and its Program
Recreation special revenue fund. A budgetary comparison schedule has been provided for
those funds to demonstrate compliance with this budget.
The basic governmental fund financial statements are statements 3 through 6 of this report.
Proprietary funds. The City maintains two enterprise funds as a part of its proprietary fund
type. Enterprise funds are used to report the same functions presented as business-type
activities in the government-wide financial statements. The City uses enterprise funds to
account for its water and sewer utilities.
The proprietary fund statements provide the same type of information as the government-
wide financial statements, only in more detail. The proprietary fund financial statements
provide separate information for the water and sewer funds, which are considered to be major
funds of the City. The basic proprietary fund financial statements are statements 7 through 9
of this report.
Fiduciary Funds. Fiduciary funds are used to account for resources held by the City as an
agent for individuals, private organizations, or other governments. Fiduciary funds are not
reflected by the government-wide financial statements because the resources of those funds
are not available to support the City’s own programs.
The basic fiduciary fund statements are Statements 10 and 28.
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 following Statement 10.
Other information. The combining statements referred to earlier in connection with non-
major governmental funds are presented immediately following the required supplementary
21
Management’s Discussion and Analysis
information. Combining and individual fund statements and schedules are presented as
Statements 19 through 27.
Government-Wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's
financial position. In the case of the City, assets exceeded liabilities by $93,293,613 at the
close of the most recent fiscal year.
The largest portion of the City’s net position ($54,700,209, or 59%) reflects its net
investment in capital assets (e.g. land, buildings, equipment, and infrastructure) less any
related debt used to acquire those assets that is still outstanding. 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 liquidate these liabilities.
City of Lino Lakes’ Net Position
2017 2016 2017 2016 2017 2016
Assets:
Current and other assets $32,942,034 $37,480,144 $15,272,668 $14,501,255 $48,214,702 $51,981,399
Capital assets 42,611,027 41,154,425 31,831,950 31,860,608 74,442,977 73,015,033
Total assets $75,553,061 $78,634,569 $47,104,618 $46,361,863 $122,657,679 $124,996,432
Deferred outflows of resources $5,625,220 $8,780,333 $97,118 $168,302 $5,722,338 $8,948,635
Liabilities:
Long-term liabilities outstanding $27,257,669 $42,409,997 $413,334 $468,598 $27,671,003 $42,878,595
Other liabilities 894,136 1,331,338 43,453 287,286 937,589 1,618,624
Total liabilities $28,151,805 $43,741,335 $456,787 $755,884 $28,608,592 $44,497,219
Deferred inflows of resources $6,410,858 $1,546,117 $66,954 $50,224 $6,477,812 $1,596,341
Net position:
Net investment in capital assets $22,868,259 $18,597,344 $31,831,950 $31,860,610 $54,700,209 $50,457,954
Restricted 11,730,147 13,342,852 - - 11,730,147 13,342,852
Unrestricted 12,017,212 10,187,254 14,846,045 13,863,447 26,863,257 24,050,701
Total net position $46,615,618 $42,127,450 $46,677,995 $45,724,057 $93,293,613 $87,851,507
Governmental Activities Business-Type Activities Totals
$11,730,147 of the City’s net position represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position
($26,863,257) may be used to meet ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three
categories of net position, both for the government as a whole, as well as for its separate
governmental and business-type activities.
22
Management’s Discussion and Analysis
The City’s net position increased by $5,442,106 during 2017. Key elements of this increase
are as follows:
City of Lino Lakes’ Changes in Net Position
2017 2016 2017 2016 2017 2016
Revenues:
Program revenues:
Charges for services $3,600,902 $2,744,984 $2,849,797 $2,754,219 $6,450,699 $5,499,203
Operating grants and contributions 1,106,014 722,858 - - 1,106,014 722,858
Capital grants and contributions 4,141,383 5,046,307 836,029 1,543,947 4,977,412 6,590,254
General revenues:
General property taxes 9,441,819 9,049,671 - - 9,441,819 9,049,671
Tax increment 312,152 293,829 - - 312,152 293,829
Grants and contributions not
restricted to specific programs 181,712 91,385 - - 181,712 91,385
Unrestricted investment earnings 207,792 210,142 106,488 107,119 314,280 317,261
Gain on disposal of capital assets 38,022 66,255 - - 38,022 66,255
Total revenues 19,029,796 18,225,431 3,792,314 4,405,285 22,822,110 22,630,716
Expenses:
General government 2,395,633 2,456,864 - - 2,395,633 2,456,864
Public safety 5,166,538 6,567,523 - - 5,166,538 6,567,523
Public services 5,492,395 6,228,893 - - 5,492,395 6,228,893
Conservation of naturual resources 200,016 216,905 - - 200,016 216,905
Community development 459,455 454,144 - - 459,455 454,144
Interest and fees on long-term debt 518,897 831,529 - - 518,897 831,529
Water - - 1,245,249 1,367,693 1,245,249 1,367,693
Sewer - - 1,901,821 1,850,962 1,901,821 1,850,962
Total expenses 14,232,934 16,755,858 3,147,070 3,218,655 17,380,004 19,974,513
Increase in net position before
special item and transfers 4,796,862 1,469,573 645,244 1,186,630 5,442,106 2,656,203
Special item - 1,333,166 - - - 1,333,166
Transfers (308,694) (914,414) 308,694 914,414 - -
Change in net position 4,488,168 1,888,325 953,938 2,101,044 5,442,106 3,989,369
Net position - January 1, as previously reported 42,819,930 40,754,159 45,724,057 43,800,459 88,543,987 84,554,618
Prior period adjustment (692,480) 177,446 - (177,446) (692,480) -
Net position - January 1, as restated 42,127,450 40,931,605 45,724,057 43,623,013 87,851,507 84,554,618
Net position - December 31 $46,615,618 $42,819,930 $46,677,995 $45,724,057 $93,293,613 $88,543,987
Business-Type Activities TotalsGovernmental Activities
Governmental Activities
Governmental activities increased the City’s net position by $4,488,168 during 2017. The
cumulative effect of increased charges for services and decreases in public safety expenses
and public services spending account for the increase in 2017. This increase was partially
offset by transfers out to business-type activities of $308,694.
23
Management’s Discussion and Analysis
Below are specific graphs which provide comparisons of the governmental activities
revenues and expenses:
Charges for services
19%
Operating grants and
contributions
6%
Capital grants and
contributions
22%
General property taxes
49%
Other revenue
4%
Governmental Activities - Revenues
General government
17%
Public safety
36%
Public Services
39%
Conservation of Natural
Resources
1%
Interest and Fees on Long-
Term Debt
4%
Community Development
3%
Governmental Activities - Expenses
24
Management’s Discussion and Analysis
Business-Type Activities
Business-type activities increased the City’s net position by $953,938 during 2017. The
increase was due to contributions of capital assets from private sources, as well as the City’s
governmental activities, in the amount of $1,006,239.
Below are specific graphs which provide comparisons of the business-type activities
revenues and expenses:
Charges for services
75%
Capital grants and
contributions
22%
Unrestricted investment
earnings
3%
Business-Type Activities - RevenuesBusiness-Type Activities - RevenuesBusiness-Type Activities - Revenues
Water
40%
Sewer
60%
Business-Type Activities - Expenses
25
Management’s Discussion and Analysis
Financial Analysis of the Government's Funds
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, unassigned fund balance
may serve as a useful measure of a government’s net resources available for spending at the
end of the fiscal year.
At the end of the current fiscal year, the City’s governmental funds reported combined
ending fund balances of $24,056,122. Approximately 22% of this total amount ($5,289,641)
constitutes fund balance restricted by external constraints established by creditors, grantors,
contributors, or by state statutory provisions. $344,976 of fund balance is not in a spendable
form, $175,401 has been committed, $14,581,669 has been assigned, and $3,664,435 is
unassigned.
The fund balance of the General Fund increased by $560,734 in 2017, while the City
anticipated the use of $518,000 of the general fund balance. Overall, signs of continued
economic recovery are being seen with increased building and development activities taking
place which resulted in increased license and permit revenues for the year. The City also saw
a significant increase in the number of roofing and siding permits issued during the year due
to a storm causing significant damage throughout the City in June of 2017. Finally, reduced
expenditures, primarily for personal services through vacant positions, fuel costs, and
professional and contractual services helped to increase the year end fund balance.
The G.O. Improvement Bonds of 2005A fund balance decreased by $226,135. The 2005A
series bonds were refunded in 2016 and the fund made a debt service payment of $2,420,000
in February 2017.
The G.O. Improvement Note of 2009A fund, to service the debt issued by Anoka County as
the City’s financial commitment for the I-35E interchange project, ended the year with a fund
balance of $0, a decrease of $22. The City prepaid the note in 2017 using MSA funds. As
deferred special assessments are received the MSA funds will be replenished. The
outstanding balance on the note as of December 31, 2017 was $0.
The G.O. Improvement Bonds of 2016B fund decreased by $1,932,000. The 2016B series
bonds were issued to refund the 2005A series bonds and fund the Legacy at Woods Edge
improvements. Future tax increment and land sale proceeds are expected to cover debt
service and the interfund loan payable.
The Area and Unit Charge fund has a total fund balance of $7,656,155, all of which is
assigned for financing capital improvements. The fund balance during the current year
increased by $1,389,955 due to the collection of prepaid special assessments and trunk utility
development fees.
26
Management’s Discussion and Analysis
The combined fund balance of other governmental funds decreased $3,567,167 during 2017.
Primary reasons for the decrease include the issuance of $1,600,000 of G.O. Tax Abatement
Refunding Bonds, Series 2016C, the proceeds from which were used to pay-off the G.O. Tax
Abatement Bonds of 2006C on February 1, 2017. Also, the fund balance of the Municipal
State Aid (MSA) Construction fund decreased $1,169,000 as MSA funds were used to
prepay the 2009A Note with Anoka County for the city’s share of the 35E Interchange
project.
Proprietary funds. The City’s proprietary funds provide the same type of information
found in the government-wide financial statements, but in more detail.
The water fund has total net position at year-end of $22,621,564, of which $5,455,247 is
unrestricted. The increase in net position of $602,293 was primarily due to capital
contributions, partially offset by a net operating loss.
The sewer fund has total net position at year-end of $24,056,431, of which $9,390,798 is
unrestricted. The increase in net position of $351,645 was primarily due to capital
contributions, partially offset by a net operating loss.
Budgetary Highlights
General Fund
The General Fund budget was amended several times during the year to reflect increased
revenues relative to building and licensing activities, state aid, and other operating transfers,
as well as changes in expenditure areas due to personnel vacancies, changes to professional
and contracted services, variances in supplies, investment in the Civic Complex air
conditioning units, and finally the transfer for the park land loan and the comprehensive plan
update budgeted over 3 years (2016-2018). The final amended expenditure budget was
$150,759 less than the original adopted budget.
Revenues were $5,934 over budget for the year. General property tax, intergovernmental
revenue, and miscellaneous refunds and reimbursements were $66,444 under budget;
however, this variance was more than offset by greater than anticipated license and permit
revenues, fines and forfeits, and investment earnings.
Expenditures came in under budget by $311,492 due to many factors including lower than
expected personal service costs from vacant positions. Fuel and fleet maintenance supply
costs were much lower than anticipated and the Civic Complex air-conditioning upgrades
were not completed in 2017, resulting in favorability in capital outlay.
27
Management’s Discussion and Analysis
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, amounted to $74,442,977 (net of accumulated
depreciation), an increase of $1,427,942 from the prior year. This investment in capital
assets includes land, wetland credits, construction in progress, buildings, equipment,
vehicles, and infrastructure. The City completed the Shenandoah Area street improvements,
NorthPointe 2nd Addition infrastructure improvements, Fire Station #2, Pump House #6, the
reconditioning of Water Tower #1, Aqua Lane to Blackduck Drive water main
improvements, the build-out of two Ford F-650 light rescue fire vehicles, and the upgrade of
the air conditioning system (Phase I ) at the Civic Complex. The City has continued to work
to complete the Birch Street turn lanes and infrastructure improvements in 2017. In addition,
the City began land preparation activities for NorthPointe Park, the upgrade of the air
conditioning system (Phase II) at the Civic Complex, and the Council Chambers upgrade.
Developer lead infrastructure improvements at various stages of completion include
NorthPointe 3rd, 4th, 5th, and 6th Additions, Saddle Club 2nd and 3rdAdditions, Century Farms
6th Addition, Woods Edge 1st and 2nd Additions, Clearwater Creek, St Clair Estates, and
Chavez Estates.
City of Lino Lakes’ Capital Assets
(Net of Depreciation)
2017 2016 2017 2016 2017 2016
Land $3,320,059 $3,275,859 $ - $ - $3,320,059 $3,275,859
Wetland credits 162,372 - - - 162,372 -
Construction in progress 2,482,238 8,961,062 1,507,153 5,617,436 3,989,391 14,578,498
Buildings 6,376,011 2,706,355 - - 6,376,011 2,706,355
Office equipment and furniture 236,777 157,704 - - 236,777 157,704
Vehicles 2,016,355 1,370,732 - - 2,016,355 1,370,732
Machinery and shop equipment 1,133,624 1,017,332 147,568 167,440 1,281,192 1,184,772
Other equipment 267,096 206,385 - - 267,096 206,385
Infrastructure 26,616,495 23,458,996 30,177,229 26,075,734 56,793,724 49,534,730
Total $42,611,027 $41,154,425 $31,831,950 $31,860,610 $74,442,977 $73,015,035
Governmental Activities Business-Type Activities Totals
Additional information on the City’s capital assets can be found in Note 5 to the financial
statements.
28
Management’s Discussion and Analysis
Long-term debt. At the end of the current fiscal year, the City had total bonded debt
outstanding of $19,976,243. Of this amount, $14,714,250 comprises tax supported debt and
$4,905,000 is special assessment debt. All outstanding debt carries the general obligation
backing for which the City is liable in the event of default by the property owners subject to
the specific taxes, special assessments or revenues pledged to the retirement of the debt. In
addition, the City has a note payable to the City of Circle Pines for its share of the cost of
capital equipment to be used by the North Metro Telecommunications Commission in the
operation of a cable communications system in the amount of $233,475.
City of Lino Lakes’ Outstanding Debt
2017 2016 2017 2016 2017 2016
General obligation bonds $14,947,725 $18,460,250 $ - $ - $14,947,725 $18,460,250
G.O. special assessment bonds 4,905,000 7,795,000 - - 4,905,000 7,795,000
Note payable - Anoka County - 1,345,000 - - - 1,345,000
Bond premium 123,518 140,831 - - 123,518 140,831
Total $19,976,243 $27,741,081 $0 $0 $19,976,243 $27,741,081
Business-Type Activities TotalsGovernmental Activities
The City of Lino Lakes’ total bonded debt decreased by $7,764,838 during the current fiscal
year. The key factors for the change include the issuance of $311,000 of Certificates of
Indebtedness to finance capital equipment purchases, as well as principal retired in the
amount of $8,508,525 during the year.
Additional information on the City’s long-term debt can be found in Note 6.
Requests for information. This financial report is designed to provide a general overview
of the City’s finances for all those with an interest in the government’s finances. Questions
concerning any of the information provided in this report or requests for additional financial
information should be addressed to the Director of Finance, City of Lino Lakes, 600 Town
Center Parkway, Lino Lakes, Minnesota, 55014.
29
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30
BASIC FINANCIAL STATEMENTS
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32
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET POSITION Statement 1
December 31, 2017
Governmental Business-Type
Activities Activities Total
Assets:
Cash and investments $24,934,980 $13,921,698 $38,856,678
Accrued interest receivable 84,517 - 84,517
Due from other governmental units 133,556 1,614 135,170
Accounts receivable - net 51,052 376,957 428,009
Prepaid items 244,976 27,082 272,058
Internal balances (914,949) 914,949 -
Inventory - 30,368 30,368
Taxes receivable 100,047 - 100,047
Special assessments receivable 7,954,861 - 7,954,861
Long-term notes receivable 225,000 - 225,000
Net pension asset 127,994 - 127,994
Capital assets - nondepreciable 5,964,669 1,507,153 7,471,822
Capital assets - net of accumulated depreciation 36,646,358 30,324,797 66,971,155
Total assets 75,553,061 47,104,618 122,657,679
Deferred outflows of resources related to pensions 5,625,220 97,118 5,722,338
Liabilities:
Accounts payable and other current liabilities 736,608 43,453 780,061
Accrued interest payable 157,528 - 157,528
Compensated absences payable:
Due within one year 492,042 38,130 530,172
Due in more than one year 276,866 28,426 305,292
Other post employment benefits 738,061 8,480 746,541
Bonds and notes payable:
Due within one year 3,130,600 - 3,130,600
Due in more than one year 16,845,643 - 16,845,643
Net pension liability:
Due in more than one year 5,774,457 338,298 6,112,755
Total liabilities 28,151,805 456,787 28,608,592
Deferred inflows of resources:
Pension related 6,359,775 66,954 6,426,729
OPEB related 51,083 - 51,083
Total deferred inflows of resources 6,410,858 66,954 6,477,812
Net position:
Net investment in capital assets 22,868,259 31,831,950 54,700,209
Restricted for:
Debt service 10,564,305 - 10,564,305
Economic development 225,000 - 225,000
Tax increment purposes 479,695 - 479,695
Environmental improvements - nonexpendable 100,000 - 100,000
Environmental improvements - expendable 23,316 - 23,316
Other purposes 337,831 - 337,831
Unrestricted 12,017,212 14,846,045 26,863,257
Total net position $46,615,618 $46,677,995 $93,293,613
Primary Government
The accompanying notes are an integral part of these financial statements.
33
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2017
Program Revenues
Charges For
Functions/Programs Expenses Services
Primary government:
Governmental activities:
General government $2,395,633 $550,117
Public safety 5,166,538 2,249,152
Public services 5,492,395 801,633
Conservation of natural resources 200,016 -
Community development 459,455 -
Interest and fees on long-term debt 518,897 -
Total governmental activities 14,232,934 3,600,902
Business-type activities:
Water 1,245,249 1,150,834
Sewer 1,901,821 1,698,963
Total business-type activities 3,147,070 2,849,797
Total primary government $17,380,004 $6,450,699
The accompanying notes are an integral part of these financial statements.
34
Statement 2
Operating Capital
Grants and Grants and Governmental Business-Type
Contributions Contributions Activities Activities Total
$1,460 $ - ($1,844,056)$ - ($1,844,056)
351,258 - (2,566,128) - (2,566,128)
661,302 4,141,383 111,923 - 111,923
91,994 - (108,022) - (108,022)
- - (459,455) - (459,455)
- - (518,897) - (518,897)
1,106,014 4,141,383 (5,384,635)0 (5,384,635)
- 421,608 - 327,193 327,193
- 414,421 - 211,563 211,563
0 836,029 0 538,756 538,756
$1,106,014 $4,977,412 (5,384,635)538,756 (4,845,879)
General revenues:
General property taxes 9,441,819 - 9,441,819
Tax increment 312,152 - 312,152
Grants and contributions not
restricted to specific programs 181,712 - 181,712
Unrestricted investment earnings 207,792 106,488 314,280
Gain on disposal of capital assets 38,022 - 38,022
Transfers (308,694)308,694 -
Total general revenues and transfers 9,872,803 415,182 10,287,985
Change in net position 4,488,168 953,938 5,442,106
Net position - January 1, as previously reported 42,819,930 45,724,057 88,543,987
Prior period adjustment (692,480) - (692,480)
Net position - January 1, as restated 42,127,450 45,724,057 87,851,507
Net position - December 31 $46,615,618 $46,677,995 $93,293,613
Program Revenues
Net (Expense) Revenue and
Changes in Net Position
Primary Government
The accompanying notes are an integral part of these financial statements.
35
CITY OF LINO LAKES, MINNESOTA
BALANCE SHEET Statement 3
GOVERNMENTAL FUNDS
December 31, 2017
333 G.O. 342 G.O. Other Total
Improvement Improvement 406 Area and Governmental Governmental
General Fund Note of 2009A Bonds of 2016B Unit Charge Funds Funds
Assets
Cash and investments $6,648,162 $ - $944,886 $7,528,465 $9,813,467 $24,934,980
Accrued interest receivable 84,517 - - - - 84,517
Due from other governmental units 133,556 - - - - 133,556
Accounts receivable - net 23,758 - - 25,439 1,855 51,052
Prepaid items 243,317 - - - 1,659 244,976
Taxes receivable:
Due from county 23,611 - - - 6,789 30,400
Delinquent 56,559 - - - 13,088 69,647
Special assessments receivable:
Due from county - - - 2,400 798 3,198
Delinquent - - - 9,129 9,151 18,280
Deferred 329 2,639,483 2,994,379 1,117,458 1,181,734 7,933,383
Interfund loan receivable - - - 100,361 2,934,516 3,034,877
Long-term notes receivable - - - - 225,000 225,000
Total assets $7,213,809 $2,639,483 $3,939,265 $8,783,252 $14,188,057 $36,763,866
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $194,538 $ - $705 $510 $257,313 $453,066
Salaries payable 110,845 - - - 453 111,298
Due to other governmental units 34,613 - - - 12,176 46,789
Contracts payable - - - - 125,455 125,455
Interfund loan payable - - 2,876,643 - 1,073,183 3,949,826
Total liabilities 339,996 0 2,877,348 510 1,468,580 4,686,434
Deferred inflows of resources:
Unavailable revenue 56,888 2,639,483 2,994,379 1,126,587 1,203,973 8,021,310
Fund balance:
Nonspendable 243,317 - - - 101,659 344,976
Restricted - - - - 5,289,641 5,289,641
Committed - - - - 175,401 175,401
Assigned - - - 7,656,155 6,925,514 14,581,669
Unassigned 6,573,608 - (1,932,462) - (976,711) 3,664,435
Total fund balance 6,816,925 0 (1,932,462) 7,656,155 11,515,504 24,056,122
Total liabilities, deferred inflows
of resources, and fund balance $7,213,809 $2,639,483 $3,939,265 $8,783,252 $14,188,057 $36,763,866
The accompanying notes are an integral part of these financial statements.
36
CITY OF LINO LAKES, MINNESOTA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL Statement 4
FUNDS TO THE STATEMENT OF NET POSITION
December 31, 2017
Fund balance - total governmental funds (Statement 3) $24,056,122
Net position reported for governmental activities in the Statement of Net Position is
different because:
Certain assets used in governmental activities are not current financial resources and,
therefore, are not reported in the funds.
Capital assets 42,611,027
Net pension asset 127,994
Other long-term assets are not available to pay for current-period expenditures and
therefore, are reported as unavailable revenue in the funds:
Delinquent taxes receivable 69,647
Delinquent special assessments receivable 18,280
Deferred special assessments receivable 7,933,383
Long-term liabilities are not due and payable in the current period and, therefore, are not
reported in the funds. Long-term liabilities at year end consist of:
Bonds and notes payable (19,852,725)
Unamortized bond premiums (142,182)
Unamortized bond discounts 18,664
Accrued interest payable (157,528)
Compensated absences payable (768,908)
Other post employment benefits (738,061)
Net pension liability (5,774,457)
Deferred outflows and inflows of resources related to pensions and OPEB are associated
with long-term liabilities that are not due and payable in the current period, and therefore,
are not reported in the funds. Balances at year end are:
Deferred outflows of resources 5,625,220
Deferred inflows of resources (6,410,858)
Net position of governmental activities (Statement 1)$46,615,618
37
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2017
327 G.O.
Improvement
General Fund Bonds of 2005A
Revenues:
General property taxes $7,338,876 $ -
Tax increment - -
Licenses and permits 1,447,571 -
Intergovernmental 667,520 -
Special assessments 4,293 -
Charges for services 302,038 -
Fines and forfeits 147,977 -
Investment earnings 40,913 6,486
Miscellaneous 295,439 -
Total revenues 10,244,627 6,486
Expenditures:
Current:
General government 1,945,691 -
Public safety 4,347,108 -
Public services 2,178,725 -
Conservation of natural resources 183,392 -
Community development 426,653 -
Capital outlay:
General government 87,104 -
Public safety 66,587 -
Public services - -
Conservation of natural resources 8,247 -
Debt service:
Principal - 2,360,000
Interest and fiscal charges - 60,117
Total expenditures 9,243,507 2,420,117
Revenues over (under) expenditures 1,001,120 (2,413,631)
Other financing sources (uses):
Transfers in 439,373 2,187,503
Transfers out (879,759)(7)
Issuance of debt - -
Proceeds from sale of capital assets - -
Total other financing sources (uses)(440,386)2,187,496
Net change in fund balance 560,734 (226,135)
Fund balance - January 1 6,256,191 226,135
Fund balance - December 31 $6,816,925 $0
The accompanying notes are an integral part of these financial statements.
38
Statement 5
333 G.O. 342 G.O.
Improvement Improvement 406 Area and Other Total
Note of 2009A Bonds of 2016B Unit Charge Governmental Funds Governmental Funds
$ - $ - $ - $2,121,713 $9,460,589
- - - 312,152 312,152
- - - - 1,447,571
- - - 413,433 1,080,953
287,628 - 1,325,125 666,928 2,283,974
- - 257,468 768,275 1,327,781
- - - 465,616 613,593
- - 69,217 91,176 207,792
- - - 115,201 410,640
287,628 0 1,651,810 4,954,494 17,145,045
- - - 6,978 1,952,669
- - - 13,409 4,360,517
- - 25,307 1,210,380 3,414,412
- - - - 183,392
- - - 6,491 433,144
- - - 228,895 315,999
- - - 893,831 960,418
- - - 868,184 868,184
- - - - 8,247
1,345,000 - - 4,353,525 8,058,525
68,707 17,015 - 494,190 640,029
1,413,707 17,015 25,307 8,075,883 21,195,536
(1,126,079)(17,015)1,626,503 (3,121,389)(4,050,491)
1,126,057 272,506 - 2,959,004 6,984,443
- (2,187,503)(236,548)(3,819,110)(7,122,927)
- - - 311,000 311,000
- - - 103,328 103,328
1,126,057 (1,914,997)(236,548)(445,778)275,844
(22)(1,932,012)1,389,955 (3,567,167)(3,774,647)
22 (450)6,266,200 15,082,671 27,830,769
$0 ($1,932,462)$7,656,155 $11,515,504 $24,056,122
The accompanying notes are an integral part of these financial statements.
39
CITY OF LINO LAKES, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES,Statement 6
EXPENDITURES AND CHANGES IN FUND BALANCE OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2017
Net change in fund balance - total governmental funds (Statement 5) ($3,774,647)
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement
of Activities the cost of those assets is allocated over their estimated useful lives and
reported as depreciation expense:
Depreciation (2,959,683)
Capital outlay 2,152,848
Capital outlay not capitalized 118,240
Various other transactions involving capital assets increase (decrease) net position on
the Statement of Activities, but are not reported in governmental funds because they
do not provide (or use) current financial resources:
Contributions of infrastructure from private sources 2,380,713
Contributions of infrastructure to business-type activities (170,210)
Gain (loss) on disposal of capital assets (65,306)
Revenues in the Statement of Activities that do not provide current financial resources
are not reported as revenues in the funds:
Change in delinquent taxes receivable (18,770)
Change in delinquent special assessments receivable 5,570
Change in deferred special assessments receivable (544,874)
The issuance of long-term debt provides current financial resources to governmental
funds, while repayment of the principal of long-term debt consumes the current
financial resources of governmental funds. Neither transaction, however, has any
effect on net position. Also, governmental funds report the effects of bond premiums
and discounts when the debt is first issued, whereas amounts are deferred and amortized
over the life of the debt in the Statement of Activities.
Bonds and notes issued (311,000)
Repayment of principal 8,058,525
Amortization of bond premiums and discounts 17,313
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental
funds. Expenses reported in the Statement of Activities include the effects of the
changes in these expense accruals as follows:
Change in accrued interest payable 103,819
Change in compensated absences payable (34,493)
Change other post employment benefits liability and related deferred inflows of resources 483
Pension expense in governmental funds is measured by current year employee
contributions. Pension expense in the Statement of Activities is measured by the change
in the net pension liability and related deferred inflows and outflows of resources.
This is the amount by which pension expense differed from pension contributions.(470,360)
Change in net position of governmental activities (Statement 2)$4,488,168
The accompanying notes are an integral part of these financial statements.
40
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET POSITION Statement 7
PROPRIETARY FUNDS
December 31, 2017
601 Water 602 Sewer Total
Assets:
Current assets:
Cash and cash equivalents $5,477,346 $8,444,352 $13,921,698
Due from other governmental units - 1,614 1,614
Accounts receivable - net 157,008 219,949 376,957
Prepaid items 9,255 17,827 27,082
Inventory 30,368 - 30,368
Interfund loan receivable - 914,949 914,949
Total current assets 5,673,977 9,598,691 15,272,668
Noncurrent assets:
Capital assets:
Construction in progress 772,676 734,477 1,507,153
Equipment 143,429 331,225 474,654
Water and sewer systems 24,949,194 23,048,571 47,997,765
Total capital assets 25,865,299 24,114,273 49,979,572
Less: Allowance for depreciation (8,698,982) (9,448,640) (18,147,622)
Net capital assets 17,166,317 14,665,633 31,831,950
Total assets 22,840,294 24,264,324 47,104,618
Deferred outflows of resources related to pensions 48,559 48,559 97,118
Total assets and deferred outflows 22,888,853 24,312,883 47,201,736
Liabilities:
Current liabilities:
Accounts payable 8,256 7,054 15,310
Salaries payable 3,917 3,917 7,834
Due to other governments 11,683 2,769 14,452
Other accrued liabilities 3,289 2,568 5,857
Compensated absences payable - current portion 19,065 19,065 38,130
Total current liabilities 46,210 35,373 81,583
Noncurrent liabilities:
Compensated absences payable - noncurrent portion 14,213 14,213 28,426
Other post employment benefits 4,240 4,240 8,480
Net pension liability 169,149 169,149 338,298
Total noncurrent liabilities 187,602 187,602 375,204
Total liabilities 233,812 222,975 456,787
Deferred inflows of resources related to pensions 33,477 33,477 66,954
Total liabilities and deferred inflows 267,289 256,452 523,741
Net position:
Investment in capital assets 17,166,317 14,665,633 31,831,950
Unrestricted 5,455,247 9,390,798 14,846,045
Total net position $22,621,564 $24,056,431 $46,677,995
Business-Type Activities - Enterprise Funds
The accompanying notes are an integral part of these financial statements.
41
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND Statement 8
PROPRIETARY FUNDS
For The Year Ended December 31, 2017
601 Water 602 Sewer Totals
Operating revenues:
Charges for services $1,065,379 $1,672,456 $2,737,835
Hook-up charges 33,010 26,497 59,507
Water meter sales 37,606 - 37,606
Other operating revenue 14,839 10 14,849
Total operating revenues 1,150,834 1,698,963 2,849,797
Operating expenses:
Personal services 264,673 268,134 532,807
Materials and supplies 172,864 51,038 223,902
Contractual services 102,165 93,992 196,157
MCES sewer charges - 942,972 942,972
Depreciation 580,804 477,094 1,057,898
Utilities 102,877 41,297 144,174
Other 21,866 27,294 49,160
Total operating expenses 1,245,249 1,901,821 3,147,070
Operating income (loss)(94,415)(202,858)(297,273)
Nonoperating revenues:
Investment earnings 39,612 66,876 106,488
Income (loss) before contributions and transfers (54,803)(135,982)(190,785)
Contributions and transfers:
Capital contributions from private sources 421,608 414,421 836,029
Capital contributions from governmental activities 166,246 3,964 170,210
Transfer in 104,969 104,969 209,938
Transfer out (35,727)(35,727)(71,454)
Total contributions and transfers 657,096 487,627 1,144,723
Change in net position 602,293 351,645 953,938
Net position - January 1 22,019,271 23,704,786 45,724,057
Net position - December 31 $22,621,564 $24,056,431 $46,677,995
CHANGES IN FUND NET POSITION
Business-Type Activities - Enterprise Funds
The accompanying notes are an integral part of these financial statements.
42
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF CASH FLOWS Statement 9
PROPRIETARY FUNDS
For The Year Ended December 31, 2017
601 Water 602 Sewer Totals
Cash flows from operating activities:
Receipts from customers and users $1,136,110 $1,695,698 $2,831,808
Payment to suppliers (444,107) (1,301,838) (1,745,945)
Payment to employees (248,394) (252,391) (500,785)
Net cash flows provided by operating activities 443,609 141,469 585,078
Cash flows from noncapital financing activities:
Interfund loans provided to other funds - (355,839) (355,839)
Transfers in 104,969 104,969 209,938
Transfers out (35,727) (35,727) (71,454)
Net cash flows provided by (used in)
noncapital financing activities 69,242 (286,597) (217,355)
Cash flows from capital and related financing activities:
Acquisition of capital assets (23,000) - (23,000)
Net cash flows provided by (used in)
capital and related financing activities (23,000) 0 (23,000)
Cash flows from investing activities:
Investment earnings 39,612 66,876 106,488
Net increase (decrease) in cash and cash equivalents 529,463 (78,252) 451,211
Cash and cash equivalents - January 1 4,947,883 8,522,604 13,470,487
Cash and cash equivalents - December 31 $5,477,346 $8,444,352 $13,921,698
Reconciliation of operating income to net
cash provided by operating activities:
Operating income (loss) ($94,415) ($202,858) ($297,273)
Adjustments to reconcile operating income
(loss) to net cash flows from operating activities:
Depreciation 580,804 477,094 1,057,898
Changes in assets and liabilities:
Decrease (increase) in due from other governmental units - 409 409
Decrease (increase) in accounts receivable - net (14,724) (3,674) (18,398)
Decrease (increase) in prepaid items 906 1,259 2,165
Decrease (increase) in inventory 51,459 - 51,459
Decrease (increase) in deferred outflows of resources 35,592 35,592 71,184
Increase (decrease) in payables (96,700) (146,504) (243,204)
Increase (decrease) in other accrued liabilities (46) (582) (628)
Increase (decrease) in compensated absences 83 83 166
Increase (decrease) in other post employment benefits 4,240 4,240 8,480
Increase (decrease) in net pension liability (31,955) (31,955) (63,910)
Increase (decrease) in deferred inflows of resources 8,365 8,365 16,730
Total adjustments 538,024 344,327 882,351
Net cash provided by operating activities $443,609 $141,469 $585,078
Noncash investing, capital and financing activities:
Contributions of capital assets $587,854 $418,385 $1,006,239
Business-Type Activities - Enterprise Funds
The accompanying notes are an integral part of these financial statements.
43
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF NET POSITION Statement 10
FIDUCIARY FUNDS
December 31, 2017
Assets:
Cash and investments $1,719,511
Liabilities:
Deposits payable $1,719,511
The accompanying notes are an integral part of these financial statements.
44
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Lino Lakes, Minnesota (the City) is a public corporation formed under Minnesota Statute 410. As
such, the City is under home rule charter regulations and applicable statutory guidelines.
The basic financial statements of the City have been prepared in conformity with U.S. generally accepted
accounting principles as applied to governmental units by the Governmental Accounting Standards Board
(GASB). The following is a summary of significant accounting policies:
A. FINANCIAL REPORTING ENTITY
In accordance with GASB pronouncements and accounting principles generally accepted in the United
States of America, the financial statements of the reporting entity include those of the City (the primary
government) and its component units. The component units discussed below are included in the City’s
reporting entity because of the significance of their operational or financial relationships with the City.
COMPONENT UNITS
In conformity with accounting principles generally accepted in the United States of America, the
financial statements of the component units have been included in the financial report as blended
component units.
The Economic Development Authority (EDA) of Lino Lakes is an entity legally separate from the
City. However, for financial reporting purposes, the EDA is reported as if it were a part of the
City’s operation because the governing body is substantially the same as the governing body of the
City and a financial benefit or burden relationship exists between the City and the EDA. The EDA
does not issue separate financial statements. The Housing and Development Authority (HRA) of
Lino Lakes is an entity legally separate from the City. However, for financial reporting purposes,
the HRA is reported as if it were part of the City’s operations because the members of the City
Council serve as commission members and a financial benefit or burden relationship exists
between the City and the HRA. The HRA has not yet incurred any financial activity.
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 non-fiduciary activities of the primary government and its
component units. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely to a
significant extent on fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or
business-type activity are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or business-type activity. Program revenues include 1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or business-type activity and 2) grants and contributions that are restricted
to meeting the operational or capital requirements of a particular function or business-type activity.
Taxes and other items not included among program revenues are reported instead as general revenues.
The fund financial statements are provided for governmental funds, proprietary funds and fiduciary
funds, even though the latter are excluded from the government-wide financial statements. The
45
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
emphasis of governmental and proprietary fund financial statements is on major individual
governmental and enterprise funds, with each displayed as separate columns in the fund financial
statements. All remaining governmental and enterprise funds are aggregated and reported as nonmajor
funds.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions
associated with the principal activity of the fund. Exchange transactions are those in which each party
receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and
investment earnings, result from nonexchange transactions or incidental activities.
The City reports the following major governmental funds:
General Fund is the City’s primary operating fund. It accounts for all financial resources of the
general government, except those required to be accounted for in another fund.
General Obligation Improvement Bonds of 2005A Fund accounts for the accumulation of resources
for, and the payment of, interest, principal and related costs on general long-term debt. The fund
was closed in 2017.
General Obligation Improvement Note of 2009A Fund accounts for the accumulation of resources
for, and the payment of, interest, principal and related costs on general long-term debt. The note
was used to finance improvement projects at the I-35E and County Road 14 interchange.
General Obligation Improvement Bonds of 2016B Fund accounts for the accumulation of resources
for, and the payment of, interest, principal and related costs on general long-term debt.
Area and Unit Charge Fund accounts for the collection of water and sewer unit charges to be used
for debt payments and construction of governmental infrastructure.
The City reports the following major proprietary funds:
The Water Fund accounts for customer water service charges which are used to finance water
system operating expenses.
The Sewer Fund accounts for customer sewer service charges which are used to finance sanitary
sewer system operating expenses.
Additionally, the City reports the following fund type:
Agency funds account for assets held as an agent for individuals, private organizations and other
governmental units. The City’s agency fund accounts for pass-through contractor’s deposits
relating to prospective developments.
C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
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
46
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
imposed by the provider have been met. The City’s only fiduciary funds are agency funds. Agency
funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of
operations.
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 all revenues, except reimbursement grants, to be available if they are collected within 60
days of the end of the current fiscal period. Reimbursement grants are considered available if they are
collected within one year of the end of the current fiscal period. Expenditures generally are recorded
when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well
as expenditures related to compensated absences and claims and judgments, are recorded only when
payment is due.
Property taxes, special assessments, intergovernmental revenues, charges for services and interest
associated with the current fiscal period are all considered to be susceptible to accrual and so have been
recognized as revenues of the current fiscal period. Only the portion of special assessments receivable
due within the current fiscal period is considered to be susceptible to accrual as revenue of the current
period. All other revenue items are considered to be measurable and available only when cash is
received by the City.
As a general rule the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are transactions that would be treated as revenues,
expenditures or expenses if they involved external organizations, such as buying goods and services or
payments in lieu of taxes, are similarly treated when they involve other funds of the City. Elimination
of these charges would distort the direct costs and program revenues reported for the various functions
concerned.
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 water and sewer 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.
D. BUDGETS
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United
States of America. Annual appropriated budgets are adopted for the General Fund and the Program
Recreation Special Revenue Fund. Budgeted expenditure appropriations lapse at year-end. Budgeted
amounts are reported as originally adopted and as amended by the City Council. Budgeted expenditure
appropriations lapse at year end.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the
expenditure of monies are recorded in order to reserve that portion of the appropriation, is not employed
by the City because it is at present not considered necessary to assure effective budgetary control or to
facilitate effective cash management.
47
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
E. LEGAL COMPLIANCE – BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial
statements:
1. The City Administrator submits to the City Council a proposed operating budget (including the
General Fund and Program Recreation Special Revenue Fund) for the fiscal year commencing
the following January 1. The operating budget includes proposed expenditures and the means
of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through passage of a resolution on a departmental basis and can
expended by each department based upon detailed budget estimates for individual expenditure
accounts.
4. The City Administrator is authorized to transfer appropriations within any department budget.
Additional interdepartmental or interfund appropriations and deletions are or may be
authorized by the City Council with fund (contingency) reserves or additional revenues.
5. Formal budgetary integration is employed as a management control device during the year for
the General Fund.
6. Legal debt obligation indentures determine the appropriation level and debt service tax levies
for the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to
determine and calculate user charges. These debt service and budget amounts represent
general obligation bond indenture provisions and net income for operation and capital
maintenance and are not reflected in the financial statements.
7. A capital improvement program is reviewed periodically by the City Council for the Capital
Project Funds. However, appropriations for major projects are not adopted until the actual bid
award of the improvement. The appropriations are not reflected in the financial statements.
8. Expenditures may not legally exceed budgeted appropriations at the department level unless
approved by the City Council. Therefore, the legal level of budgetary control is at the
department level (i.e. administration, community development, public safety, public services,
and other).
9. The City Council may authorize transfers of budgeted amounts between City funds.
F. CASH AND INVESTMENTS
Cash and investment balances from all funds are pooled and invested to the extent available in
authorized investments. Investment income is allocated to individual funds on the basis of the fund's
equity in the cash and investment pool.
Investments are stated at fair value, except for investments in external investment pools that meet
GASB 79 requirements, which are stated at amortized cost. Interest earnings are accrued at year-end.
For purposes of the Statement of Cash Flows, the Proprietary Funds consider all highly liquid
investments with a maturity of three months or less when purchased to be cash equivalents. All of the
cash and investments allocated to the Proprietary Fund types have original maturities of 90 days or less.
Therefore, the entire balance in such fund types is considered cash equivalents.
48
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Permanently restricted cash and investments represents the principal and earnings portion of resources
received that must be retained in a permanent fund. Only earnings from these funds may be used for
purposes that support environmental maintenance and improvements.
G. PROPERTY TAX REVENUE RECOGNITION
The City Council annually adopts a tax levy and certifies it to the County in December (levy/assessment
date) of each year for collection in the following year. The County is responsible for billing and
collecting all property taxes for itself, the City, the local School District and other taxing authorities.
Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real
property taxes are payable (by property owners) on May 15 and October 15 of each calendar year.
Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes
are collected by the County and remitted to the City on or before July 15 and December 15 of the same
year. Delinquent collections for November and December are received the following January. The
City has no ability to enforce payment of property taxes by property owners. The County possesses this
authority.
Within the government-wide financial statements, the City recognizes property tax revenue in the
period for which taxes were levied. Uncollectible property taxes are not material and have not been
reported.
Within the governmental fund financial statements, the City recognizes property tax revenue when it
becomes both measurable and available to finance expenditures of the current period. In practice,
current and delinquent taxes and received by the City in July, December, and the following January are
recognized as revenue for the current year. Taxes collected by the county by December 31 (remitted to
the City the following January) are classified as due from county. Taxes not collected by the county by
December 31 are classified as delinquent taxes receivable. Delinquent taxes receivable are fully offset
by deferred inflows of resources because they are not available to finance current expenditures.
The City's property tax revenue includes payments from the Metropolitan Revenue Distribution (Fiscal
Disparities Formula) per State Statute 473F. This statute provides a means of spreading a portion of the
taxable valuation of commercial/industrial real property to various taxing authorities within the defined
metropolitan area. The valuation "shared" is a portion of commercial/industrial property valuation
growth since 1971.
H. SPECIAL ASSESSMENT REVENUE RECOGNITION
Special assessments are levied against benefited properties for the cost or a portion of the cost of special
assessment improvement projects in accordance with State Statutes. These assessments are collectible
by the City over a term of years usually consistent with the term of the related bond issue. Collection of
annual installments (including interest) is handled by the County Auditor in the same manner as
property taxes. Property owners are allowed to (and often do) prepay future installments without
interest or prepayment penalties.
Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that
property until full payment is made or the amount is determined to be excessive by the City Council or
court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit
sale and the first proceeds of that sale (after costs, penalties and expenses of sale) are remitted to the
49
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
City in payment of delinquent special assessments. Generally, the City will collect the full amount of
its special assessments not adjusted by City Council or court action. Pursuant to State Statutes, a
property shall be subject to a tax forfeit sale after three years unless it is homesteaded, agricultural or
seasonal recreational land in which event the property is subject to such sale after five years.
Within the government-wide financial statements, the City recognizes special assessment revenue in the
period that the assessment roll was adopted by the City Council. Uncollectible special assessments are
not material and have not been reported.
Within the fund financial statements, the revenue from special assessments is recognized by the City
when it becomes measurable and available to finance expenditures of the current fiscal period. In
practice, current and delinquent special assessments received by the City are recognized as revenue for
the current year. Special assessments are collected by the County and remitted by December 31
(remitted to the City the following January) and are also recognized as revenue for the current year. All
remaining delinquent, deferred and special deferred assessments receivable in governmental funds are
completely offset by deferred inflows of resources.
I. INVENTORY
For governmental funds, the original cost of materials and supplies are recorded as expenditures at the
time of purchase. These funds do not maintain material amounts of inventories.
Inventories of the proprietary funds are stated at cost, which approximates market, using the first-in,
first-out (FIFO) method.
J. PREPAID ITEMS
Certain prepayments 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.
K. INTERFUND TRANSACTIONS
During the course of operations, numerous transactions occur between individual funds for goods
provided or services rendered. Interfund services provided and used are accounted for as revenues,
expenditures or expenses. Transactions that constitute reimbursements to a fund for expenditures /
expenses initially made from it that are properly applicable to another fund, are recorded as
expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund
that is reimbursed.
The City provides temporary advances to funds that have insufficient cash balances by means of an
advance from another fund. Such advances are classified as “advances to/from other funds.” Long-
term interfund loans are classified as “interfund loan receivable/payable.” Any residual balances
outstanding between the governmental activities and business-type activities are reported in the
government-wide financial statements as “internal balances.” All other interfund transactions are
reported as transfers.
50
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
L. CAPITAL ASSETS
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g. roads,
sidewalks, street lights, 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 $2,500 and an estimated useful life in excess of
one year. Such assets are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at acquisition value at the date of donation. All
existing City infrastructure has been capitalized regardless of date placed in service.
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. Major outlays for capital assets and improvements are
capitalized as projects are constructed. Interest incurred during the construction phase of capital assets
of business-type activities is included as part of the capitalized value of the assets constructed. For the
year ended December 31, 2017, no interest was capitalized in connection with construction in progress.
Depreciation on exhaustible assets is recorded as an allocated expense in the Statement of Activities
with accumulated depreciation reflected in the Statement of Net Position. Capital assets are depreciated
using the straight-line method over their estimated useful lives. Since surplus assets are sold for an
immaterial amount when declared as no longer needed for City purposes, no salvage value is taken into
consideration for depreciation purposes. Useful lives vary from 3 to 30 years for buildings, office
furniture and equipment, vehicles, machine shop and equipment and other assets, and 15 to 50 years for
infrastructure.
M. COMPENSATED ABSENCES
It is the City’s policy to permit employees to accumulate earned but unused vacation, PTO (Personal
Time Off), extended leave and sick pay benefits. All vacation pay and PTO and the portion of sick pay
allowable as severance is accrued in the government-wide and proprietary fund financial statements.
The current portion is calculated based on historical trends.
N. 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 amortized over the life of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and discounts
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.
O. DEFINED BENEFIT PENSION PLANS
For purposes of measuring the net pension liability, deferred outflows and inflows of resources, and
pension expense, information about the fiduciary net position of the Public Employees Retirement
Association (PERA) and additions to and deductions from PERA’s fiduciary net position have been
51
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
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.
P. DEFERRED OUTFLOWS AND 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 future periods and so will not be recognized as an outflow of resources
(expense) that time. The City has one item that qualifies for reporting in the category. It is the pension
related deferred outflows of resources reported in the government-wide Statement of Net Position and
the proprietary funds Statement of Net Position.
In addition to liabilities, the statement of financial position reports a separate section for deferred
inflows of resources. This separate financial statement element represents an acquisition of net position
that applies to future periods, and therefore, will not be recognized as an inflow of resources (revenue)
until that time. The City has pension and OPEB related deferred inflows of resources reported in the
government-wide Statement of Net Pension and the proprietary funds Statements of Net Position. The
City also has a type of item, which arises only under a modified accrual basis of accounting, that
qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in
the governmental fund balance sheet. The governmental funds report unavailable revenues from the
following sources: property taxes and special assessments not collected within 60 days from year-end.
Q. FUND BALANCE CLASSIFICATIONS
In the fund financial statements, governmental funds report fund balance in classifications that disclose
constraints for which amounts in those funds can be spent. These classifications are as follows:
Nonspendable - consists of amounts that are not in spendable form, such as prepaid items and
corpus of any permanent fund.
Restricted - consists of amounts related to externally imposed constraints established by creditors,
grantors or contributors; or constraints imposed by state statutory provisions.
Committed - consists of internally imposed constraints. These constraints are established by a
resolution approved by the City Council, and committed amounts cannot be used for any other
purpose unless the City Council removes or changes the specified use by resolution.
Assigned - consists of internally imposed constraints for the specific purpose of the City’s intended
use. These constraints are established by the City Council and/or management. The City Council
passed a resolution authorizing the Finance Director to assign fund balances and their intended
uses.
Unassigned - is the residual classification for the general fund and also reflects negative residual
amounts in other funds.
When both restricted and unrestricted resources are available for use, it is the City’s policy to first use
restricted resources, and then use unrestricted resources as they are needed.
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
When committed, assigned or unassigned resources are available for use, it is the City’s policy to use
resources in the following order: 1) committed 2) assigned and 3) unassigned.
The City formally adopted a fund balances policy for the general fund. The policy establishes an
unassigned fund balance range of 40% - 50% of general fund operating expenditures.
R. USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted accounting principles
(GAAP) requires management to make estimates that affect amounts reported in the financial
statements during the reporting period. Actual results could differ from such estimates.
Note 2 DEPOSITS AND INVESTMENTS
A. DEPOSITS
In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized
by the City Council, all of which are members of the Federal Reserve System.
Custodial Credit Risk – Custodial credit risk is the risk that in the event of a bank failure, the City’s
deposits may not be returned to it. Minnesota Statutes require that insurance, surety bonds or collateral
protect all City deposits. The market value of collateral pledged must equal 110% of deposits not
covered by insurance or bonds. The City has no additional deposit policies addressing custodial credit
risk. At December 31, 2017, the bank balance of the City’s deposits was insured by the FDIC or
covered by pledged collateral held in the City’s name.
Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City
Treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral
includes the following:
a) United States government treasury bills, treasury notes, treasury bonds;
b) Issues of United States government agencies and instrumentalities as quoted by a recognized
industry quotation service available to the government entity;
c) General obligation securities of any state or local government with taxing powers which is rated
“A” or better by a national bond rating service, or revenue obligation securities of any state or local
government with taxing powers which is rated “AA” or better by a national bond rating service;
d) General obligation securities of a local government with taxing powers may be pledged as
collateral against funds deposited by that same local government entity;
e) Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality
accompanied by written evidence that the bank’s public debt is rated “AA” or better by Moody’s
Investors Service, Inc. or Standard & Poor’s Corporation; and
f) Time deposits that are fully insured by the Federal Deposits Insurance Corporation.
At December 31, 2017, the carrying amount of the City’s deposits with financial institutions was
$257,836.
53
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
B. INVESTMENTS
Minnesota Statutes authorize the City to invest in the following:
a) Direct obligations or obligations guaranteed by the United States or its agencies, its
instrumentalities, or organizations created by an act of congress, excluding mortgage-backed
securities defined as high risk.
b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and
whose only investments are in securities described in (a) above, general obligation tax-exempt
securities, or repurchase or reverse repurchase agreements.
c) State and local securities as follows:
1) any security which is a general obligation of any state or local government with taxing powers
which is rated “A” or better by a national bond rating service;
2) any security which is a revenue obligation of any state or local government with taxing powers
which is rated “AA” or better by a national bond rating service; and
3) a general obligation of the Minnesota Housing Finance Agency which is a moral obligation of
the State of Minnesota and is rated “A” or better by a national bond rating agency.
d) Bankers acceptance of United States banks.
e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the
highest quality, and maturing in 270 days or less.
f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve
System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government
securities to the Federal Reserve Bank of New York; certain Minnesota securities broker-dealers;
or, a bank qualified as a depositor.
g) General obligation temporary bonds of the same governmental entity issued under section 429.091,
subdivision 7; 469.178, subdivision 5; or 475.61, subdivision 6.
54
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
At December 31, 2017, the City had the following investments and maturities:
Fair Less
Investment Type Rating Value Than 1 1 - 5 6 - 8
Wells Fargo money market NR $4,275,289 $4,275,289 $ - $ -
Morgan Stanley money market NR 24,165 24,165 - -
4M Fund NR 7,207,927 7,207,927 - -
Brokered CD's NR 16,419,585 6,887,755 8,413,876 1,117,954
Municipal bonds * 10,908,237 1,568,897 8,746,306 593,034
Federal Home Loan Mortgage Corp.AAA 1,482,210 - - 1,482,210
Total $40,317,413 $19,964,033 $17,160,182 $3,193,198
NR - Not Rated Total investments $40,317,413
* AAA $1,975,589; AA+ $463,359 Deposits 257,836
AA $3,507,002; AA- $2,967,505 Petty cash 940
A+ $710,532 Total cash and investments $40,576,189
Investment Maturities (in Years)
These amounts are presented in the financial statements as follows:
Cash and investments:
Governmental and business-type (Statement 1)$38,856,678
Fiduciary (Statement 10)1,719,511
Total $40,576,189
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. The hierarchy has three levels. Level 1 investments are valued using inputs that are
based on quoted prices in active markets for identical assets. Level 2 investments are valued using
inputs that are based on quoted prices for similar assets or inputs that are observable, either directly or
indirectly. Level 3 investments are valued using inputs that are unobservable.
55
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
The City has the following recurring fair value measurements at December 31, 2017:
Investment Type 12/31/2017 Level 1 Level 2 Level 3
Investments at fair value:
Brokered CD's $16,419,585 $ - $16,419,585 $ -
Municipal bonds 10,908,237 - 10,908,237 -
Federal Home Loan Mortgage Corp.1,482,210 - 1,482,210 -
$0 $28,810,032 $0
Investments not categorized:
Wells Fargo money market 4,275,289 `
Morgan Stanley money market 24,165
4M Fund 7,207,927
Total investments $40,317,413
Fair Value Measurement Using
The 4M Fund is an external investment pool investment which is regulated by Minnesota Statutes and
the Board of Directors of the League of Minnesota Cities. It is an unrated pool and the fair value of the
position in the pool is the same as the value of pool shares. The pool is managed to maintain a portfolio
weighted average maturity of no greater than 60 days and seeks to maintain a constant net asset value
(NAV) of $1 per share. The pool measures its investments at amortized cost in accordance with GASB
Statement No. 79. The 4M Plus Fund requires funds to be deposited for a minimum of 14 calendar
days. Withdrawals prior to the 14-day restriction period are subject to penalty equal to 7 days interest
on the amount withdrawn.
C. INVESTMENT RISKS
Custodial Credit Risk – Investments – For investments in securities, custodial credit risk is the risk
that in the event of failure of the counterparty to a transaction, the City will not be able to recover
the value of its investment securities that are in the possession of an outside party. Investments
in investment pools and money markets are not evidenced by securities that exist in physical or
book entry form, and therefore are not subject to custodial credit risk disclosures. The City’s
investment policy requires its brokers be licensed with the appropriate federal and state agencies. A
minimum capital requirement of $5,000,000 and at least five years of operation is mandatory.
Investments in securities are held by the City’s broker-dealers. The securities at each broker-dealer are
insured $500,000 through SIPC. Each broker-dealer has provided additional protection by providing
additional insurance. This insurance is subject to aggregate limits applied to all of the broker-dealer’s
accounts.
Interest Rate Risk – Interest rate risk is the risk that changes in interest rates will adversely affect the
fair value of an investment. Generally, the longer the maturity of an investment, the greater the
sensitivity of its fair value to changes in market interest rates. The City’s policy to minimize interest
rate risk includes investing primarily in short-term securities and structuring the investment portfolio so
that securities mature to meet cash requirements for ongoing operations.
Credit Risk – Credit risk is the risk than an issuer of an investment will not fulfill its obligation to the
holder of the investment. The City’s policy to minimize credit risk includes limiting investing funds to
those allowable under Minnesota Statute 118A, annually appointing all financial institutions where
56
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
investments are held, and diversifying the investment portfolio. This is measured by the assignment of
a rating by a nationally recognized statistical rating organization.
Concentration of Credit Risk – Concentration of credit risk is the risk of loss that may be attributed to
the magnitude of a government’s investment in a single issuer. The City places no limit on the amount
it may invest in any one issuer. At December 31, 2017, no individual investments exceeded 5% of the
City’s total investment portfolio.
Note 3 RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31, 2017 are as
follows:
Property Special
Taxes Assessments Notes
Receivable Receivable Receivable Total
Major Funds:
General Fund $35,344 $ - $ - $35,344
G.O. Improvement Note of 2009A - 2,630,915 - 2,630,915
G.O. Improvement Bonds of 2016B - 2,994,379 - 2,994,379
Area and Unit Charge - 1,029,733 - 1,029,733
Nonmajor Funds 8,179 1,042,887 225,000 1,276,066
Total $43,523 $7,697,914 $225,000 $7,966,437
Note 4 UNAVAILABLE REVENUE
Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not
considered to be available to liquidate liabilities of the current period. At the end of the current fiscal year, the
various components of unavailable revenue reported in the governmental funds are as follows:
Property Special
Taxes Assessments
Receivable Receivable Total
Major Funds:
General Fund $56,559 $329 $56,888
G.O. Improvement Note of 2009A - 2,639,483 2,639,483
G.O. Improvement Bonds of 2016B - 2,994,379 2,994,379
Area and Unit Charge - 1,126,587 1,126,587
Nonmajor Funds 13,088 1,190,885 1,203,973
Total $69,647 $7,951,663 $8,021,310
57
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Note 5 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2017 was as follows:
Beginning Ending
Balance Increases Decreases Transfers Balance
Governmental activities:
Capital assets, not being depreciated:
Land $3,275,859 $44,200 $ - $ - $3,320,059
Wetland credits - 162,372 - - 162,372
Construction in progress 8,961,062 2,742,038 (9,050,652) (170,210) 2,482,238
Total capital assets, not being depreciated 12,236,921 2,948,610 (9,050,652) (170,210) 5,964,669
Capital assets, being depreciated:
Buildings 6,891,847 4,029,901 - - 10,921,748
Office equipment and furniture 659,440 124,186 - - 783,626
Vehicles 3,417,668 1,102,354 (175,204) - 4,344,818
Machinery and shop equipment 2,309,413 275,921 (28,017) - 2,557,317
Other equipment 1,034,126 77,284 - - 1,111,410
Infrastructure 80,738,460 5,144,197 - - 85,882,657
Total capital assets, being depreciated 95,050,954 10,753,843 (203,221)0 105,601,576
Less accumulated depreciation for:
Buildings 4,185,492 360,245 - - 4,545,737
Office equipment and furniture 501,736 45,113 - - 546,849
Vehicles 2,046,936 396,889 (115,362) - 2,328,463
Machinery and shop equipment 1,292,081 154,165 (22,553) - 1,423,693
Other equipment 827,741 16,573 - - 844,314
Infrastructure 57,279,464 1,986,698 - - 59,266,162
Total accumulated depreciation 66,133,450 2,959,683 (137,915)0 68,955,218
Total capital assets being depreciated - net 28,917,504 7,794,160 (65,306) (170,210) 36,646,358
Governmental activities capital assets - net $41,154,425 $10,742,770 ($9,115,958) ($170,210) $42,611,027
Beginning Ending
Balance Increases Decreases Transfers Balance
Business-type activities:
Capital assets, not being depreciated:
Construction in progress $5,617,436 $1,006,237 ($5,116,520) $ - $1,507,153
Capital assets, being depreciated:
Machinery and shop equipment 474,654 - - - 474,654
Water and sewer systems 42,858,242 4,969,313 - 170,210 47,997,765
Total capital assets, being depreciated 43,332,896 4,969,313 0 170,210 48,472,419
Accumulated depreciation for:
Machinery and shop equipment 307,215 19,870 - - 327,085
Water and sewer systems 16,782,509 1,038,028 - - 17,820,537
Total accumulated depreciation 17,089,724 1,057,898 0 0 18,147,622
Total capital assets being depreciated - net 26,243,172 3,911,415 0 170,210 30,324,797
Business-type activities capital assets - net $31,860,608 $4,917,652 ($5,116,520) $170,210 $31,831,950
58
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Depreciation expense was charged to functions/programs of the City as follows:
Governmental activities:
General government $361,534
Public safety 346,690
Public services 2,248,202
Conservation of natural resources 850
Community development 2,407
Total depreciation expense - governmental activities $2,959,683
Business-type activities:
Water $580,804
Sewer 477,094
Total depreciation expense - business-type activities $1,057,898
59
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Note 6 LONG-TERM DEBT
The City issues general obligation bonds and certificates of indebtedness to provide funds for the acquisition and
construction of major capital facilities and equipment. City indebtedness at December 31, 2017 consisted of the
following:
Final
Issue Maturity Interest Original Payable
Date Date Rate Issue 12/31/17
Governmental activities:
General Obligation Bonds:
2015A Certificates of Indebtedness 02/01/15 12/31/18 1.00% $198,250 $66,250
2015B Certificates of Indebtedness 08/25/15 12/31/20 1.50%963,000 593,000
2016A Certificates of Indebtedness 02/01/16 12/31/19 1.00%469,000 314,000
2017A Certifciates of Indebtedness 03/01/17 12/31/20 1.00%311,000 311,000
G.O. CIP Refunding Bonds, Series 2006E 11/01/06 02/01/18 4.00% 2,990,000 425,000
G.O. TIF Bonds, Series 2007A 07/15/07 02/01/24 4.00% - 4.125% 4,215,000 1,625,000
G.O. Refunding Bonds, Series 2012A 11/15/12 02/01/24 1.00% - 2.00% 2,015,000 1,270,000
G.O. Bonds 2015A 08/01/15 02/01/31 2.00% - 3.00% 3,095,000 2,905,000
EDA Lease Revenue Bonds 2015B 10/01/15 04/01/36 2.00% - 3.00% 4,350,000 4,185,000
G.O. Utility Revenue Bonds, Series 2016A 11/23/16 02/01/27 2.00% 1,420,000 1,420,000
G.O. Tax Abatement Refunding Bonds 2016C 11/23/16 02/01/23 1.00% - 1.50% 1,600,000 1,600,000
Total General Obligation Bonds 21,626,250 14,714,250
Special Assessment Bonds:
G.O. Imp & Utility Revenue Bonds, Series 2010A 07/09/10 02/01/20 2.00% - 3.00% 1,000,000 325,000
G.O. Improvement Bonds, Series, 2013A 07/15/13 02/01/24 1.25% - 4.00% 615,000 435,000
G.O. Improvement Bonds, Series 2014A 11/20/14 02/01/26 0.40% - 2.30% 2,645,000 2,170,000
G.O. Improvement Refunding Bonds, Series 2016B 11/23/16 02/01/21 0.875% - 1.50% 1,975,000 1,975,000
Total Special Assessment Bonds 6,235,000 4,905,000
G.O. Capital Note, Series 2016A 04/14/16 2/1/2026 2.00%294,525 233,475
Unamortized bond premiums 199,750 142,182
Unamortized bond discounts (51,997) (18,664)
Compensated absences payable N/A 768,908
Total Government Activities $28,303,528 $20,745,151
Business-Type Activities:
Compensated absences payable N/A $66,556
60
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
CHANGES IN LONG-TERM DEBT
The following is a schedule of changes in City indebtedness for the year ended December 31, 2017:
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Governmental Activities:
General obligation bonds $18,196,250 $311,000 $3,793,000 $14,714,250 $2,084,250
Special assessment bonds 7,795,000 - 2,890,000 4,905,000 1,015,000
Total bonded debt 25,991,250 311,000 6,683,000 19,619,250 3,099,250
Improvement note 1,345,000 - 1,345,000 - -
Capital note 264,000 - 30,525 233,475 31,350
Unamortized bond premiums 166,322 - 24,140 142,182 -
Unamortized bond discounts (25,491) - (6,827) (18,664) -
Compensated absences payable 734,415 614,868 580,375 768,908 492,042
Total governmental activities $28,475,496 $925,868 $8,656,213 $20,745,151 $3,622,642
Business-Type Activities:
Compensated absences payable $66,390 $44,663 $44,497 $66,556 $38,130
DESCRIPTIONS OF LONG-TERM DEBT
General Obligation Bonds – The bonds were issued for improvements or projects which benefited the City as a
whole and, therefore, are repaid from ad valorem levies.
Special Assessment Bonds – The bonds were issued to finance various improvements and will be repaid
primarily from special assessments levied on the properties benefiting from the improvements. However, some
issues are partly financed by ad valorem levies.
Improvement Note – This note was used to finance improvement projects at the I-35E and County Road 14
interchange and was repaid primarily with special assessments levied on the properties benefiting from the
improvements.
Capital Note – This note was issued to fund the cost of the acquisition of capital equipment to be used by the
North Metro Telecommunications Commission in the operation of a cable communications system. The note
will be repaid from franchise fee revenue.
Utility Revenue Bonds – These bonds were issued to finance various improvements in the water fund and will be
repaid primarily from pledged revenues derived from the constructed assets.
61
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
DEBT SERVICE REQUIREMENTS
Future principal and interest payments required to retire long-term debt are as follows:
Years Ending
December 31 Principal Interest Principal Interest
2018 $3,099,250 $417,929 $31,350 $4,670
2019 2,679,000 365,296 32,175 4,042
2020 2,506,000 320,811 33,000 3,399
2021 2,150,000 274,974 33,000 2,739
2022 1,440,000 236,339 33,825 4,191
2023-2027 4,675,000 742,488 70,125 -
2028-2032 1,970,000 361,919 - -
2033-2037 1,100,000 90,000 - -
Total $19,619,250 $2,809,756 $233,475 $19,041
Bonded Debt Capital Note
It is not practicable to determine the specific year for payment of long-term compensated absences payable. For
governmental activities, compensated absences are liquidated by the General Fund. For business-type activities,
compensated absences are liquidated by the Water and Sewer Funds.
DEFERRED AD VALOREM TAX LEVIES – BONDED DEBT
All long-term bonded indebtedness is backed by the full faith and credit of the City, including special assessment
and revenue bond issues. General Obligation bond issues are financed by ad valorem tax levies and special
assessment bond issues are partially financed by ad valorem tax levies in addition to special assessments levied
against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem tax
levies is sold, specific annual amounts of such tax levies are stated in the bond resolution and the County
Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject
to cancellation when and if the City has provided alternative sources of financing. The City Council is required
to levy any additional taxes found necessary for full payment of principal and interest.
The future scheduled tax levies are not shown as assets in the accompanying financial statements. Future
scheduled tax levies for all bonds outstanding at December 31, 2017 totaled $13,005,401.
CURRENT REFUNDINGS
On November 23, 2016, the City issued $1,975,000 of Taxable General Obligation Improvement Refunding
Bonds, Series 2016B with an average interest rate of 1.29%. On February 1, 2017, the net proceeds were used to
redeem the 2018 through 2021 maturities of the Taxable General Obligation Improvement Bonds, Series 2005A
with interest rates of 5.00% - 5.15%. The City refunded the bonds to reduce its total debt service payments over
four years by $145,931 and to obtain an economic gain (difference between the present value of the debt service
payments on the old and new debt) of $130,682.
On November 23, 2016, the City issued $1,600,000 of General Obligation Tax Abatement Refunding Bonds,
Series 2016C with an average interest rate of 1.34%. On February 1, 2017, the net proceeds were used to
redeem the 2018 through 2023 maturities of the General Obligation Tax Abatement Bonds, Series 2006C with
interest rates of 4.25% - 4.30%. The City refunded the bonds to reduce its total debt service payments over six
62
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NOTES TO FINANCIAL STATEMENTS
December 31, 2017
years by $133,718 and to obtain an economic gain (difference between the present value of the debt service
payments on the old and new debt) of $124,952.
REVENUE PLEDGED
Future revenue pledged for the payment of long-term debt is as follows:
Remaining Principal Pledged
Term of Principal and Interest Revenue
Bond Issue Use of Proceeds Type Pledge and Interest Paid Received
Certificates of Indebtedness Equipment purchases Ad valorem taxes 2015 - 2020 $1,316,355 $606,792 $633,871
2006E G.O. CIP Bonds Infrastructure improvements Ad valorem taxes 2007 - 2017 $433,500 $431,657 $462,493
2007A G.O. TIF Bonds Infrastructure improvements MSA funding via 2008 - 2023 $1,874,899 $475,481 $475,481
transfers, tax increment
2011 - 2019 $339,925 $111,955 $46,247
2012A G.O. Bonds Infrastructure improvements Ad valorem taxes and 2013 - 2023 $1,328,093 $242,020 $200,014
Special assessments
2013A Improvement Bonds Infrastructure improvements Special assessments 2014 - 2023 $494,160 $76,853 $63,606
2014A Improvement Bonds Infrastructure improvements Special assessments 2015 - 2025 $2,294,501 $402,927 $251,212
2015A G.O. Bonds Infrastructure improvements Ad valorem taxes 2016 - 2030 $3,397,356 $257,817 $271,621
2015B EDA Lease Revenue Bonds Construction of a fire station Ad valorem taxes 2016 - 2035 $5,687,956 $299,942 $315,855
2016A Capital Note Cable communications equipment Franchise fees 2016 - 2025 $252,516 $37,595 $37,595
2016A Utility Revenue Bonds Water infrastructure improvements 2017 - 2026 $1,565,300 $20,269 $274,474
2016B Improvement Bonds Infrastructure improvements Special assessments, 2017 - 2020 $2,028,048 $17,015 $ -
tax increment
2016C G.O. Tax Abatement Bonds Infrastructure improvements Ad valorem taxes 2017 - 2022 $1,668,913 $14,671 $259,710
Trunk utility charges via
transfers
Revenue Pledged Current Year
2010A Improvement and Utility
Revenue Bonds
General and water infrastructure
improvements
Special assessments and
trunk charges
Note 7 CONDUIT DEBT
The City has issued Industrial Development Revenue Bonds and Commercial Revenue Notes to provide
financial assistance to private-sector entities for the acquisition and construction of industrial and commercial
facilities which are deemed to be in the public interest. The bonds are secured by the property financed and are
payable solely from payments on the underlying mortgage loans. Upon repayment of the bonds, ownership of
the acquired facilities transfers to the private sector entity served by the bond issue. The City is not obligated in
any manner for the repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
accompanying financial statements. At December 31, 2017, one series of Industrial Revenue Bonds was
outstanding with an aggregate remaining principal balance of $60,000, and one series of Commercial Revenue
Notes was outstanding with an aggregate remaining principal balance of $1,097,227.
Note 8 DEFINED BENEFIT PENSION PLANS – PERA
A. PLAN DESCRIPTION
The City participates in the following cost-sharing multiple-employer defined benefit pension plans
administered by the Public Employees Retirement Association of Minnesota (PERA). PERA’s defined
benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters
353 and 356. PERA’s defined benefit pension plans are tax qualified plans under Section 401(a) of the
Internal Revenue Code.
1. General Employees Retirement Fund (GERF)
All full-time (with the exception of employees covered by PEPFF) and certain part-time employees
of the City are covered by the General Employees Retirement Fund (GERF). GERF members
belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by
Social Security and Basic Plan members are not. The Basic Plan was closed to new members in
1967. All new members must participate in the Coordinated Plan.
2. Public Employees Police and Fire Fund (PEPFF)
The PEPFF, originally established for police officers and firefighters not covered by a local relief
association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999,
the PEPFF also covers police officers and firefighters belonging to a local relief association that
elected to merge with and transfer assets and administration to PERA.
B. BENEFITS PROVIDED
PERA provides retirement, disability, and death benefits. Benefit provisions are established by state
statute and can only be modified by the state legislature.
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.
1. GERF Benefits
Benefits are based on a member’s highest salary for any five successive years of allowable service,
age, and years of credit at termination of service. Two methods are used to compute benefits for
PERA’s Coordinated and Basic Plan members. The retiring member receives the higher of a step-
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NOTES TO FINANCIAL STATEMENTS
December 31, 2017
rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1,
the annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first ten
years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan
member is 1.2% of average salary for each of the first ten years and 1.7% for each remaining year.
Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members and
1.7% for Coordinated Plan members for each year of service. For members hire 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.
2. PEPFF Benefits
Benefits for the PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a
prorated basis from 50% after five years up to 100% after ten years of credited service. Benefits
for PEPFF members first hired after June 30, 2014, vest on a prorated bases from 50% after ten
years up to 100% after twenty years of credited service. The annuity accrual rate is 3% of average
salary for each year of service. For PEPFF members who were first hired prior to July 1, 1989, a
full annuity is available when age plus years of service equal at least 90.
C. CONTRIBUTIONS
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution
rates can only be modified by the state legislature.
1. GERF Contributions
Basic Plan members and Coordinated Plan members were required to contribute 9.1% and 6.5%,
respectively, of their annual covered salary in calendar year 2017. The City was required to
contribute 11.78% of pay for Basic Plan members and 7.5% for Coordinated Plan members in
calendar year 2017. The City contributions to the GERF for the year ended December 31, 2017
were $192,510. The City contributions were equal to the required contributions as set by state
statute.
2. PEPFF Contributions
Plan members were required to contribute 10.8% of their annual covered salary in calendar year
2017. The City was required to contribute 16.2% of pay for PEPFF members in calendar year
2017. The City contributions to the PEPFF for the year ended December 31, 2017 were $416,665.
The City contributions were equal to the required contributions as set by state statute.
D. PENSION COSTS
1. GERF Pension Costs
At December 31, 2017, the City reported a liability of $2,642,949 for its proportionate share of
GERF’s net pension liability. The City’s net pension liability reflected a reduction due to the State
of Minnesota’s contribution of $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
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
associated with the City totaled $33,230. 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 proportionate
share was 0.0414%, which was an increase of 0.0027% from its proportionate share measured as of
June 30, 2016.
For the year ended December 31, 2017, the City recognized pension expense of $380,051 for its
proportionate share of the GERF’s pension expense. In addition, the City recognized an additional
$960 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota’s
contribution of $6 million to the GERF.
At December 31, 2017, the City reported its proportionate share of the GERF’s deferred outflows
of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual economic experience $87,104 $171,203
Changes in actuarial assumptions 438,787 264,956
Difference between projected and
actual investment earnings 19,277 -
Changes in proportion 118,300 86,926
Contributions paid to PERA
subsequent to the measurement date 95,266 -
Total $758,734 $523,085
$95,266 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 during 2018. Other amounts reported as deferred outflows and inflows of
resources related to pensions will be recognized in pension expense as follows:
Year Ended Pension
December 31, Expense
2018 $100,060
2019 163,129
2020 (10,618)
2021 (112,188)
2022 -
Thereafter -
2. PEPFF Pension Costs
At December 31, 2017, the City reported a liability of $3,469,806 for its proportionate share of the
PEPFF’s net pension liability. 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
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
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 was 0.257%, which
was a decrease of 0.002% from its proportion measured as of June 30, 2016. The City also
recognized $23,130 for the year ended December 31, 2017 as revenue (and an offsetting reduction
of net pension liability) for its proportionate share of the State of Minnesota’s on-behalf
contributions to the PEPFF. Legislation passed in 2013 required the State of Minnesota to begin
contributing $9 million to the PEPFF each year, starting in fiscal year 2014.
For the year ended December 31, 2017, the City recognized pension expense of $874,127 for its
proportionate share of the PEPFF’s pension expense.
At December 31, 2017, the City reported its proportionate share of the PEPFF’s deferred outflows
of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual economic experience $79,868 $927,062
Changes in actuarial assumptions 4,540,933 4,926,263
Difference between projected and
actual investment earnings 46,997 -
Changes in proportion 75,053 27,560
Contributions paid to PERA
subsequent to the measurement date 220,753 -
Total $4,963,604 $5,880,885
A total of $220,753 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 during 2018. Other amounts reported as deferred outflows and inflows of
resources related to pensions will be recognized in pension expense as outflows:
Year Ended Pension
December 31, Expense
2018 $73,515
2019 73,518
2020 (53,354)
2021 (256,922)
2022 (974,791)
Thereafter -
The net pension liability will be liquidated by the general, water and sewer funds.
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
E. ACTUARIAL ASSUMPTIONS
The total pension liability in the June 30, 2017 actuarial valuation was determined using the following
actuarial assumptions:
Inflation 2.50% per year
Active member payroll growth 3.25% per year
Investment rate of return 7.50%
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 the GERF and PEPFF 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 GERF through 2044 and PEPFF through
2064 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 GERF was completed in 2015.
The most recent five-year experience study for PEPFF was completed in 2016.
The following changes in actuarial assumptions occurred in 2017:
General Employees Fund
The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active
members and 60 percent for vested and non-vested deferred members. The revised CSA
loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred
member liability and 3.0 percent for non-vested deferred member liability.
The assumed post-retirement benefit increase rate was changed from 1.0 percent per year for
all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter.
Police and Fire Fund
The single discount rate was changed from 5.6% to 7.5%.
Assumed salary increases were changed as recommended in the June 30, 2016 experience
study. The net effect is proposed rates that average 0.34 percent lower than the previous
rates.
Assumed rates of retirement were changed, resulting in fewer retirements.
The Combined Service Annuity (CSA) load was 30 percent for vested and non-vested deferred
members. The CSA has been changed to 33 percent for vested members and 2 percent for
non-vested members.
The base mortality table for healthy annuitants was changed from the RP-2000 fully
generational table to the RP-2014 fully generational table (with a base year of 2006), with
male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from
Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed
from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees.
Assumed termination rates were decreased to 3.0 percent for the first three years of service.
Rates beyond the select period of three years were adjusted, resulting in more expected
terminations overall.
Assumed percentage of married female members was decreased from 65 percent to 60 percent.
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Assumed age difference was changed from separate assumptions for male members (wives
assumed to be three years younger) and female members (husbands assumed to be four years
older) to the assumption that males are two years older than females.
The assumed percentage of female members electing Joint and Survivor annuities was
increased.
The assumed post-retirement benefit increase rate was changed from 1.00 perfect for all years
to 1.00 percent per year through 2064 and 2.50 percent thereafter.
The long-term expected rate of return on pension plan investments is 7.5%. The State Board of
Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a
regular basis of the long-term expected rate of return using a building-block method in which best-
estimate ranges of expected future rates of return are developed for each major asset class. These
ranges are combined to produce an expected long-term rate of return by weighting the expected future
rates of return by the target asset allocation percentages. The target allocation and best estimates of
geometric real rates of return for each major asset are summarized in the following table:
Target Long-Term Expected
Asset Class Allocation Real Rate of Return
Domestic stocks 39%5.10%
International stocks 19%5.30%
Bonds 20%0.75%
Alternative assets 20%5.90%
Cash 2%0.00%
Totals 100%
F. DISCOUNT RATE
The discount rate used to measure the total pension liability was 7.5%. The projection of cash flows
used to determine the discount rate assumed that contributions from plan members and employees will
be made at the rate set in Minnesota statutes. Based on that assumption, the fiduciary net position of the
GERF and the PEPFF 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. At
June 30, 2016, the Police and Fire Fund projected benefit payments to exceed the funds projected
fiduciary net position after June 30, 2056 and therefore used a single discount rate of 5.6%, which as
stated above, increased to 7.5% at June 30, 2017.
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
G. PENSION LIABILITY SENSITIVITY
The following presents the City’s proportionate share of the net pension liability for all plans it
participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what
the City’s proportionate share of the net pension liability would be if it were calculated using a discount
rate 1 percentage point lower or 1 percentage point higher than the current discount rate:
1% Decrease in 1% Increase in
Discount Rate (6.5%) Discount Rate (7.5%) Discount Rate (8.5%)
City's proportionate share of the
GERF net pension liability $4,099,410 $2,642,949 $1,450,571
City's proportionate share of the
PEPFF net pension liability $6,534,657 $3,469,806 $939,602
City's proportionate share of the
H. PENSION PLAN FIDUCIARY NET POSITION
Detailed information about each pension plan’s fiduciary net position is available in a separately-issued
PERA financial report that includes financial statements and required supplementary information. That
report may be obtained at www.mnpera.org.
I. PENSION EXPENSE
Pension expense recognized by the City for the year ended December 31, 2017 is as follows:
GERF $381,011
PEPFF 874,127
Fire Pension Plan (Note 9)45,088
Total $1,300,226
Note 9 DEFINED BENEFIT PENSION PLAN – FIRE DIVISION
A. PLAN DESCRIPTION
The Lino Lakes Public Safety Department – Fire Division participates in the Statewide Volunteer
Firefighter Retirement Plan (SVF), an agent multiple-employer lump-sum defined benefit pension plan
administered by the Public Employees Retirement Association of Minnesota (PERA). The SVF plan
covers volunteer firefighters of municipal fire departments or independent nonprofit firefighting
corporations that have elected to join the plan. At December 31, 2017 (measurement date), the plan
covered 23 active firefighters and zero vested terminated fire fighters whose pension benefits are
deferred. The plan is established and administered in accordance with Minnesota Statutes, Chapter
353G.
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
B. BENEFITS PROVIDED
The SVF provides lump-sum retirement, death, and supplemental benefits to covered firefighters and
survivors. Benefits are paid based on the number of years of service multiplied by a benefit level per
year of service approved by the City of Lino Lakes. Members are eligible for a lump-sum retirement
benefit at 50 years of age with five years of service. Plan provisions include a pro-rated vesting
schedule that increases from 5 years at 40% through 20 years at 100%.
C. CONTRIBUTIONS
The SVF is funded by fire state aid, investment earnings and, if necessary, employer contributions as
specified in Minnesota statutes, and voluntary City contributions. The State of Minnesota contributed
$113,797 in fire state aid to the plan for the year ended December 31, 2017. Required employer
contributions are calculated annually based on statutory provisions. The City’s statutorily-required
contributions to the SVF plan for the year ended December 31, 2017 were $0. The City’s contributions
were equal to the required contributions as set by state statute, if applicable. In addition, the City made
voluntary contributions of $58,800 to the plan.
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
D. PENSION COSTS
At December 31, 2017, the City reported a net pension asset of $127,994 for the SVF plan. The net
pension asset was measured as of December 31, 2017. The total pension liability used to calculate the
net pension asset in accordance with GASB 68 was determined by PERA applying an actuarial formula
to specific census data certified by the fire department. The following table presents the changes in net
pension liability during the year.
Plan Net
Total Fiduciary Pension
Pension Net Liability
Liability Position (Asset)
(a)(b)(a-b)
Beginning balance December 31, 2016 $55,240 $44,527 $10,713
Changes for the year:
Service cost 47,952 - 47,952
Interest on pension liability 6,191 - 6,191
Actuarial experience (gains) / losses (11,672) - (11,672)
Projected investment earnings - 2,672 (2,672)
Contributions - employer - 58,800 (58,800)
Contributions - State of MN - 113,797 (113,797)
Asset (gain) / loss - 6,481 (6,481)
Benefit payouts - - -
PERA administrative fee - (572)572
Net changes 42,471 181,178 (138,707)
Balance end of year December 31, 2017 $97,711 $225,705 ($127,994)
There were no benefit provision changes during the measurement period.
For the year ended December 31, 2017, the City recognized pension expense of $45,088.
At December 31, 2017, the City reported deferred inflows of resources from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between projected and
actual investment earnings $ - $5,264
Differences between expected and
actual economic experience - 17,495
Total $0 $22,759
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized
in pension expense as follows:
Year Ended Pension
December 31, Expense
2018 ($6,955)
2019 (6,956)
2020 (5,215)
2021 (3,633)
2022 -
Thereafter -
E. ACTUARIAL ASSUMPTIONS
The total pension liability at December 31, 2017, was determined using the entry age normal actuarial
cost method and the following actuarial assumptions:
Retirement eligibility at the later of age 50 or 20 years of service
Investment rate of return of 6.0%
Inflation rate of 3.0%
There were no changes in actuarial assumptions in 2017
F. DISCOUNT RATE
The discount rate used to measure the total pension liability was 6.0%. The projection of cash flows
used to determine the discount rate assumed that contributions to the SVF plan will be made as
specified in statute. Based on that assumption and considering the funding ratio of the plan, the
fiduciary net position was projected to be available to make all projected future benefit payments of
current active and inactive members. Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total pension
liability.
G. PENSION LIABILITY SENSITIVITY
The following presents the City’s net pension asset for the SVF plan, calculated using the discount rate
disclosed in the preceding paragraph, as well as what the City’s net pension asset would be if it were
calculated using a discount rate 1% lower or 1% higher than the current discount rate:
1% Decrease in 1% Increase in
Discount Rate (5.0%) Discount Rate (6.0%) Discount Rate (7.0%)
Net pension asset $118,348 $127,994 $136,963
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CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
H. PLAN INVESTMENTS
1. Investment Policy
The Minnesota State Board of Investment (SBI) is established by Article XI of the Minnesota
Constitution to invest all state funds. Its membership as specified in the Constitution is comprised
of the Governor (who is designated as chair of the Board), State Auditor, Secretary of State and
State Attorney General.
All investments undertaken by the SBI are governed by the prudent person rule and other standards
codified in Minnesota Statutes, Chapter 11A and Chapter 353G.
Within the requirements defined by state law, the SBI, with assistance of the SBI staff and the
Investment Advisory Council, establishes investment policies for all funds under its control. These
investment policies are tailored to the particular needs of each fund and specify investment
objectives, risk tolerance, asset allocation, investment management structure and specific
performance standards. Studies guide the on-going management of the funds and are updated
periodically.
2. Asset Allocation
To match the long-term nature of the pension obligations, the SBI maintains a strategic asset
allocation for the Statewide Volunteer Firefighter Retirement Plan (VOLP) that includes
allocations to domestic equity, international equity, bonds and cash equivalents. The long-term
target asset allocation and long-term expected real rate of return is the following:
Target Long-Term Expected
Asset Class Allocation Real Rate of Return
Domestic Stocks 35%5.10%
International Stocks 15%5.30%
Bonds 45%0.75%
Cash 5%0.00%
100%
The 6% long-term expected rate of return on pension plan investments was determined using a
building-block method. Best estimates for expected future real rates of return (expected returns,
net of inflation) were developed for each asset class using both long-term historical returns and
long-term capital market expectations from a number of investment management and consulting
organizations. The asset class estimates and the target allocations were then combined to produce a
geometric, long-term expected real rate of return for the portfolio. Inflation expectations were
applied to derive the nominal rate of return for the portfolio.
3. Description of significant investment policy changes during the year
The SBI made no significant changes to their investment policy during fiscal year 2017 for the
Statewide Volunteer Firefighter Retirement Plan.
74
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
I. PENSION PLAN FIDUCIARY NET POSITION
Detailed information about the SVF plan’s fiduciary net position at June 30, 2017 is available in a
separately-issued PERA financial report that includes financial statements and required supplementary
information. That report may be obtained at www.mnpera.org.
Note 10 POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB)
A. PLAN DESCRIPTION
In addition to providing the pension benefits described in Note 8 and 9, the City provides post-
employment health care benefits, as defined in paragraph B, through its group health insurance plan
(the plan). The plan is a single-employer defined benefit OPEB plan administered by the City. The
authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a and
299A.465. The benefits, benefit levels, employee contributions and employer contributions are
governed by the City and can be amended by the City through its personnel manual and collective
bargaining agreements with employee groups. No assets are accumulated in a trust that meets the
criteria in paragraph 4 of GASB Statement No. 75.
B. BENEFITS PROVIDED
The City is required by State Statute to allow retirees to continue participation in the City’s group health
insurance plan if the individual terminates service with the City through service retirement or disability
retirement. Active employees, who retire from the City when over age 50 and with 20 years of service,
may continue coverage with respect to both themselves and their eligible dependent(s) under the City’s
health benefits program until age 65.
The City provides health coverage for peace officers or firefighters disabled or killed in the line of duty
in accordance with Minnesota Statute 299A.465. The amount of coverage provided is equal to the
employer portion of health insurance premiums that would have otherwise been paid if the officer or
firefighter was an active employee. During 2017, benefits were provided to one officer disabled in the
line of duty and one officer killed in the line of duty.
All health care coverage is provided through the City’s group health insurance plans. The retiree is
required to pay 100% of their premium cost for the City-sponsored group health insurance plan in
which they participate. The premium is a blended rate determined on the entire active and retiree
population. Since the projected claims costs for retirees exceed the blended premium paid by retirees,
the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those
afforded to active employees. Upon a retiree reaching age 65, Medicare becomes the primary insurer
and the City’s plan becomes secondary.
75
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
C. PARTICIPANTS
As of the January 1, 2017 actuarial valuation, participants of the plan consisted of:
Active employees 46
Inactive employees or beneficiaries
currently receiving benefits 6
Total 52
D. TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY
The City’s total OPEB liability of $746,540 was measured as of December 31, 2017, and was
determined by an actuarial valuation as of January 1, 2017. Changes in the total OPEB liability during
2017 were:
Balance - beginning of year $789,627
Changes for the year:
Service cost 16,990
Interest 22,542
Changes of benefit terms -
Differences between expected and actual experience (51,083)
Changes in assumptions -
Benefit payments (31,536)
Net changes (43,087)
Balance - end of year $746,540
E. ACTUARIAL ASSUMPTIONS AND OTHER INPUTS
The total OPEB liability in the January 1, 2017 actuarial valuation was determined using the following
actuarial assumptions and other inputs, applied to all periods included in the measurement, unless
otherwise specified:
Inflation 3.50%
Salary increases 3.50%
Discount rate 2.85%
Investment rate of return 2.85%
Healthcare cost trend rates 8.00% for 2017, decreasing 1.00% per year to
an ultimate rate of 3.00% for 2022 and beyond
Retirees' share of benefit-related costs 100%
Since the plan is funded on a pay-as-you-go basis, both the discount rate and the investment rate of
return was based on the 20 year AA rated municipal bond rate as of November 22, 2017, obtained from
www.fmsbonds.com/market-yields.
Mortality rates were based on the SOA RP-2014 Total Dataset Mortality tables with Scale MP-2014 and
Improvement Scale BB.
76
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Based on past experience of the plan, 90% of future retirees are assumed to continue medical coverage
until age 65. 50% of police/fire employees are assumed to retire at age 55, the balance at age 65. 50%
of other City employees are assumed to retire at age 62, the balance at age 65.
F. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE DISCOUNT
RATE
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB
liability would be if it were calculated using a discount rate that is 1% lower (1.85%) or 1% higher
(3.85%) than the current discount rate:
1% Decrease Discount Rate 1% Increase
(1.85%)(2.85%)(3.85%)
Total OPEB liability $831,489 $746,540 $671,756
G. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE HEALTHCARE
COST TREND RATES
The following presents the total OPEB liability of the City, as well as what the City’s total OPEB
liability would be if it were calculated using healthcare cost trend rates that are 1% lower (7%
decreasing to 2%) or 1% higher (9% decreasing to 4%) than the current healthcare cost trend rates:
Healthcare Cost
1% Decrease Trend Rates 1% Increase
(7% decreasing to 2%) (8% decreasing to 3%) (9% decreasing to 4%)
Total OPEB liability $661,327 $746,540 $845,440
H. OPEB EXPENSE AND DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
RELATED TO OPEB
For the year ended December 31, 2017, the City recognized $39,532 of OPEB expense. At December
31, 2017, the City reported deferred outflows and inflows of resources related to OPEB from the
following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected
and actual experience $0 $51,083
77
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Amounts reported as deferred outflows and inflows of resources related to OPEB will be recognized in
OPEB expense as follows:
Year Ended OPEB
December 31,Expense
2018 ($3,923)
2019 (3,923)
2020 (3,923)
2021 (3,923)
2022 (3,923)
Thereafter (31,468)
($51,083)
Note 11 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. DEFICIT FUND BALANCES
The City has deficit fund balances at December 31, 2017 as follows:
Fund Balance
Deficit
Nonmajor Governmental Funds:
G.O. Improvement Bonds of 2016B ($1,932,462)
Tax Increment Financing 1-11 (777,999)
Tax Increment Financing 1-12 (1,044)
2018 Street Reconstruction (197,668)
The City intends to fund these deficits through future tax levies, special assessment levies, tax
increments, transfers from other funds, and various other sources.
B. EXPENDITURES IN EXCESS OF BUDGET
The following is a listing of departments within the General Fund that exceeded budget appropriations:
Final
Budget Actual Overage
General government:
Engineering/planning $105,706 $111,441 $5,735
Government buildings 603,318 636,089 32,771
Public services:
Parks 639,281 664,740 25,459
Recreation 246,949 248,031 1,082
Additionally, actual expenditures of the Program Recreation Special Revenue Fund exceeded final
budgeted expenditures by $26,511.
78
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Note 12 INTERFUND RECEIVABLES AND PAYABLES
Long-term interfund loans are classified as interfund loan receivable/payable. A summary of such loans at
December 31, 2017 is as follows:
Receivable Payable
Major Funds:
G.O. Improvement Bonds of 2016B $ - $2,876,643
Area and Unit Charge 100,361 -
Sewer Fund 914,949 -
Nonmajor Funds:
Closed Bond Fund 616,983 -
Building and Facilities 2,317,533 -
Dedicated Parks - 100,361
Tax Increment Financing 1-11 - 775,154
2018 Street Reconstruction - 197,668
$3,949,826 $3,949,826
Note 13 INTERFUND TRANSFERS
Individual fund transfers for fiscal year 2017 are as follows:
Transfer In Transfer Out
Major Funds:
General Fund $439,373 $879,759
G.O. Improvement Bonds of 2005A 2,187,503 7
G.O. Improvement Note of 2009A 1,126,057 -
G.O. Improvement Bonds of 2016B 272,506 2,187,503
Area and Unit Charge - 236,548
Water Fund 104,969 35,727
Sewer Fund 104,969 35,727
Nonmajor governmental funds 2,959,004 3,819,110
Total $7,194,381 $7,194,381
During 2017, transfers were made to provide funding for capital improvement projects and capital outlay in
accordance with the City’s capital improvement plan. Transfers were also made to provide resources for debt
service payments, to close capital project funds and debt service funds, and to allocate financial resources to
funds that received benefit from services provided by another fund. These transfers are routine and consistent
with past practices.
79
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Note 14 FUND BALANCE
At December 31, 2017, a summary of the governmental fund balance classifications is as follows:
G.O.Other
General Improvement Area and Governmental
Fund Bonds of 2016B Unit Charge Funds Total
Nonspendable:
Prepaid items $243,317 $ - $ - $1,659 $244,976
Corpus of permanent fund - - - 100,000 100,000
Total nonspendable 243,317 0 0 101,659 344,976
Restricted for:
Debt service - - - 4,223,799 4,223,799
Economic development - - - 225,000 225,000
Blue Heron Days - - - 6,965 6,965
Narcotics and forfeiture funds - - - 330,866 330,866
Tax increment purposes - - - 479,695 479,695
Environmental purposes - - - 23,316 23,316
Total restricted 0 0 0 5,289,641 5,289,641
Committed for:
Economic development - - - 88,251 88,251
Cable TV purposes - - - 83,946 83,946
Recreation purposes - - - 3,204 3,204
Total committed 0 0 0 175,401 175,401
Assigned for:
Capital improvements - - 7,656,155 6,925,514 14,581,669
Unassigned 6,573,608 (1,932,462) - (976,711) 3,664,435
Total fund balance $6,816,925 ($1,932,462) $7,656,155 $11,515,504 $24,056,122
Note 15 PROPERTY UNDER LEASE AGREEMENT
The City entered into an agreement to lease space within the City Hall Complex, which at year end had a cost of
$4,744,742 and a net book value of $1,805,168, to New Creations Child Care and Learning Center, LLC. The lease is
dated July 1, 2014 and continues through June 30, 2019. The lease requires escalating annual lease payments of
between $5.94 and $8.65 per square foot over the lease term, for a total of $330,904.
Approximate future minimum lease payments receivable under the noncancelable operating lease are as follows:
Year Ending
December 31, Amount
2018 $77,901
2019 39,522
$117,423
80
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Note 16 TAX INCREMENT DISTRICTS
The City is the administrating authority for three tax increment districts. The City’s tax increment districts are
subject to review by the State of Minnesota Office of the State Auditor (OSA). Any disallowed claims or misuse
of tax increments could become a liability of the applicable fund. Management has indicated that they are not
aware of any instances of noncompliance which could have a material effect on the financial statements.
The following table reflects values at December 31, 2017:
TIF 1-5 TIF 1-11 TIF 1-12
Cottage TIF 1-10 Woods Clearwater
Homesteads Panattoni Edge Creek
Authorizing law M.S. 469 M.S. 469 M.S. 469 M.S. 469
Year established 1994 2004 2005 2006
Final year of district 2022 2023 2031 2026
Net tax capacity:
Original $128 $15,869 $7,241 $11,731
Current (payable 2017)34,052 232,094 135,973 11,731
Captured - retained $33,924 $216,225 $128,732 $0
Note 17 COMMITMENTS AND CONTINGENCIES
A. LITIGATION
Existing and pending lawsuits, claims and other actions in which the City is a defendant are either
covered by insurance, of an immaterial amount, or, in the judgment of the City’s management, remotely
recoverable by plaintiffs.
B. FEDERAL AND STATE FUNDS
The City receives financial assistance from federal and state governmental agencies in the form of
grants. The disbursement of funds received under these programs generally requires compliance with
the terms and conditions specified in the grant agreements and is subject to audit by the grantor
agencies. Any disallowed claims resulting from such audits could become a liability of the applicable
fund. However, in the opinion of management, any such disallowed claims will not have a material
effect on any of the financial statements of the individual fund types included herein or on the overall
financial position of the City at December 31, 2017.
C. COMMITTED CONTRACTS
At December 31, 2017, the City had commitments of $194,558 for uncompleted construction contracts.
81
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Note 18 RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets, errors
and omissions, injuries to employees and natural disasters.
Workers compensation coverage is provided through a pooled self-insurance program through the League of
Minnesota Cities Insurance Trust (LMCIT). The City pays an annual premium to LMCIT. The City is subject
to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through Workers
Compensation Reinsurance Association (WCRA) as required by law. For workers compensation, the City is not
subject to a deductible. The City’s workers compensation coverage is retrospectively rated. With this type of
coverage, final premiums are determined after loss experience is known. The amount of premium adjustment, if
any, is considered immaterial and not recorded until received or paid.
Property and casualty insurance is provided through a pooled self-insurance program through the LMCIT. The
City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed
necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess of various
amounts. The City retains risk for the deductible portion of the insurance policies and for any exclusions from
the insurance policies. These amounts are considered immaterial to the financial statements.
The City continues to carry commercial insurance for all other risks of loss, including disability and employee
health insurance.
There were no significant reductions in insurance from the previous year or settlements in excess of insurance
coverage for any of the past three fiscal years.
Note 19 RECENTLY ISSUED ACCOUNTING STANDARDS
The Governmental Accounting Standards Boards (GASB) recently approved the following statements which
were not implemented for these financial statements:
Statement No. 83 Certain Asset Retirement Obligations. The provisions of this Statement are effective for
reporting periods beginning after June 15, 2018.
Statement No. 84 Fiduciary Activities. The provisions of this Statement are effective for reporting periods
beginning after December 15, 2018.
Statement No. 85 Omnibus 2017. The provisions of this Statement are effective for reporting periods
beginning after June 15, 2017.
Statement No. 86 Certain Debt Extinguishment Issues. The provisions of this Statement are effective for
reporting periods beginning after June 15, 2017.
Statement No. 87 Leases. The provisions of this Statement are effective for reporting periods beginning
after December 15, 2019.
Statement No. 88 Certain Disclosures Related to Debt, including Direct Borrowings and Direct
Placements. The provisions of this Statement are effective for reporting periods beginning after June 15,
2018.
82
CITY OF LINO LAKES, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
The effect these standards may have on future financial statements is not determinable at this time, but it is
expected that Statement No. 87 may have a material impact.
Note 20 CHANGE IN ACCOUNTING PRINCIPLE
For the year ended December 31, 2017, the City implemented GASB Statement No. 75, Accounting and Financial
Reporting for Postemployment Benefits Other Than Pensions. GASB Statement No. 75 established new accounting
and financial reporting requirements for governments whose employees are provided OPEB. See Note 10 for further
information.
The standard required retroactive implementation which resulted in a restatement of net position for governmental
activities at December 31, 2016. Certain amounts necessary to fully restate 2016 financial statements are not
determinable, therefore, prior year comparative amounts have not been restated. Details of the prior period adjustment
are as follows:
Governmental
Activities
Net position - January 1, 2017, as previously reported $42,819,930
Prior period adjustment:
Effect of implementing GASB Statement No. 75 (692,480)
Net position - January 1, 2017, as restated $42,127,450
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REQUIRED SUPPLEMENTARY INFORMATION
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CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 1 of 6
For The Year Ended December 31, 2017
Budgeted Amounts
2017 Actual
Amounts
Variance
with Final
Budget -
Positive
(Negative)
Original Final
Revenues:
General propery taxes:
Current and delinquent $7,410,431 $6,407,494 $6,359,583 ($47,911)
Fiscal disparities - 977,937 975,939 (1,998)
Excess tax increments - 3,000 3,354 354
Total general property taxes 7,410,431 7,388,431 7,338,876 (49,555)
Licenses and permits:
Business 126,229 141,229 146,709 5,480
Non-business 486,524 1,238,524 1,300,862 62,338
Total licenses and permits 612,753 1,379,753 1,447,571 67,818
Intergovernmental:
State:
Police state aid 195,000 230,000 229,395 (605)
OTS grant 110,000 85,000 84,385 (615)
MSA maintenance 255,000 240,000 241,138 1,138
Other 14,000 22,000 29,108 7,108
County solid waste grant 107,409 107,409 83,494 (23,915)
Total intergovernmental 681,409 684,409 667,520 (16,889)
Special assessments 14,500 4,500 4,293 (207)
Charges for services:
General government 11,100 26,100 27,030 930
Engineering and planning fees 15,000 25,000 25,459 459
Public safety 189,200 189,200 187,988 (1,212)
Public services 25,500 16,500 11,561 (4,939)
Investment management charge to other funds 50,000 50,000 50,000 -
Total charges for services 290,800 306,800 302,038 (4,762)
Fines and forfeits 175,600 145,600 147,977 2,377
Investment earnings 30,000 30,000 40,913 10,913
Miscellaneous:
Gas franchise fees 70,000 50,000 54,689 4,689
Building lease revenue 102,848 102,848 102,848 -
Refunds and reimbursements 40,000 40,000 29,052 (10,948)
Donations 5,000 500 500 -
Other 2,500 105,852 108,350 2,498
Total miscellaneous 220,348 299,200 295,439 (3,761)
Total revenues 9,435,841 10,238,693 10,244,627 5,934
86
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 2 of 6
For The Year Ended December 31, 2017
Budgeted Amounts
2017 Actual
Amounts
Variance
with Final
Budget -
Positive
(Negative)
Original Final
Expenditures:
General government:
Mayor and city council:
Current:
Personal services 43,733 43,733 38,966 4,767
Other services and charges 18,000 18,500 19,541 (1,041)
Contractual services 17,500 17,500 17,265 235
Total mayor and city council 79,233 79,733 75,772 3,961
Elections:
Current:
Personal services 10,130 10,130 8,685 1,445
Supplies 800 800 257 543
Other services and charges 1,200 1,200 1,923 (723)
Contractual services - - 382 (382)
Capital outlay 4,600 4,600 4,685 (85)
Total elections 16,730 16,730 15,932 798
Administration:
Current:
Personal services 472,255 455,255 447,735 7,520
Other services and charges 21,860 21,860 18,450 3,410
Contractual services 10,500 10,500 9,481 1,019
Total administration 504,615 487,615 475,666 11,949
Finance:
Current:
Personal services 317,635 320,835 319,495 1,340
Supplies 1,000 1,000 246 754
Other services and charges 207,088 207,088 181,219 25,869
Contractual services 101,067 101,067 101,932 (865)
Total finance 626,790 629,990 602,892 27,098
Cable TV:
Current:
Personal services 2,340 2,340 2,477 (137)
Capital outlay 500 500 - 500
Total cable TV 2,840 2,840 2,477 363
Legal consultants:
Current:
Contractual services 140,000 120,000 111,902 8,098
87
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 3 of 6
For The Year Ended December 31, 2017
Budgeted Amounts
2017 Actual
Amounts
Variance
with Final
Budget -
Positive
(Negative)
Original Final
Expenditures: (continued)
General government: (continued)
Engineering/planning:
Current:
Contractual services 105,706 105,706 111,441 (5,735)
Charter commission:
Current:
Other services and charges 2,500 2,500 624 1,876
Government buildings:
Current:
Personal services 2,460 2,460 2,452 8
Supplies 48,400 48,400 47,139 1,261
Other services and charges 361,258 361,258 426,293 (65,035)
Contractual services 64,200 64,200 77,786 (13,586)
Capital outlay 37,000 127,000 82,419 44,581
Total government buildings 513,318 603,318 636,089 (32,771)
Total general government 1,991,732 2,048,432 2,032,795 15,637
Public safety:
Police:
Current:
Personal services 3,562,824 3,562,824 3,436,882 125,942
Supplies 33,150 33,150 27,183 5,967
Other services and charges 100,176 100,176 107,373 (7,197)
Contractual services 56,520 56,520 41,702 14,818
Capital outlay 35,000 35,000 34,036 964
Total police 3,787,670 3,787,670 3,647,176 140,494
Fire protection:
Current:
Personal services 474,411 474,411 425,694 48,717
Supplies 16,050 16,050 8,135 7,915
Other services and charges 50,545 50,545 47,648 2,897
Contractual services 28,380 28,380 22,532 5,848
Capital outlay 36,614 36,614 32,551 4,063
Total fire protection 606,000 606,000 536,560 69,440
Building inspection:
Current:
Personal services 227,428 224,128 221,715 2,413
Supplies 1,650 1,650 591 1,059
Other services and charges 9,110 9,110 6,502 2,608
Contractual services 1,000 1,000 1,151 (151)
Capital outlay 600 600 - 600
Total building inspection 239,788 236,488 229,959 6,529
Total public safety 4,633,458 4,630,158 4,413,695 216,463
88
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 4 of 6
For The Year Ended December 31, 2017
Budgeted Amounts
2017 Actual
Amounts
Variance
with Final
Budget -
Positive
(Negative)
Original Final
Expenditures: (continued)
Public services:
Streets:
Current:
Personal services 552,424 565,979 539,862 26,117
Supplies 159,000 166,097 124,256 41,841
Other services and charges 109,600 109,600 149,997 (40,397)
Contractual services 198,000 73,000 95,822 (22,822)
Total streets 1,019,024 914,676 909,937 4,739
Fleet:
Current:
Personal services 118,315 121,704 121,627 77
Supplies 194,000 165,000 139,794 25,206
Other services and charges 62,427 62,427 59,779 2,648
Contractual services 57,000 57,000 34,817 22,183
Total fleet 431,742 406,131 356,017 50,114
Parks:
Current:
Personal services 477,081 483,081 464,841 18,240
Supplies 26,500 26,500 29,574 (3,074)
Other services and charges 39,000 54,000 62,612 (8,612)
Contractual services 55,700 75,700 107,713 (32,013)
Total parks 598,281 639,281 664,740 (25,459)
Recreation:
Current:
Personal services 234,199 227,299 226,836 463
Supplies 2,500 2,500 2,756 (256)
Other services and charges 16,150 16,150 18,001 (1,851)
Contractual services 1,000 1,000 438 562
Total recreation 253,849 246,949 248,031 (1,082)
Total public services 2,302,896 2,207,037 2,178,725 28,312
89
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 5 of 6
For The Year Ended December 31, 2017
Budgeted Amounts
2017 Actual
Amounts
Variance
with Final
Budget -
Positive
(Negative)
Original Final
Expenditures: (continued)
Conservation of natural resources:
Forestry:
Current:
Personal services 37,457 37,457 36,540 917
Supplies 4,350 4,350 5,276 (926)
Other services and charges 380 380 352 28
Contractual services 15,000 15,000 8,704 6,296
Capital outlay 7,700 7,700 8,247 (547)
Total forestry 64,887 64,887 59,119 5,768
Environmental:
Current:
Personal services 54,215 47,215 44,785 2,430
Supplies 1,000 1,000 802 198
Other services and charges 9,150 9,150 6,876 2,274
Contractual services 1,100 1,100 1,133 (33)
Total environmental 65,465 58,465 53,596 4,869
Solid waste abatement:
Current:
Personal services 54,900 54,900 47,074 7,826
Other services and charges 11,500 11,500 11,298 202
Contractual services 41,000 41,000 20,552 20,448
Total solid waste abatement 107,400 107,400 78,924 28,476
Total conservation of natural resources 237,752 230,752 191,639 39,113
Community development:
Community development:
Current:
Personal services 210,269 183,469 182,500 969
Supplies 100 100 41 59
Other services and charges 8,150 11,650 11,732 (82)
Contractual services 900 900 905 (5)
Total community development 219,419 196,119 195,178 941
Economic development:
Current:
Personal services 21,617 18,617 17,783 834
Other services and charges 90,100 90,100 85,327 4,773
Contractual services 400 400 695 (295)
Total economic development 112,117 109,117 103,805 5,312
90
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 6 of 6
For The Year Ended December 31, 2017
Budgeted Amounts
2017 Actual
Amounts
Variance
with Final
Budget -
Positive
(Negative)
Original Final
Expenditures: (continued)
Planning and zoning commission:
Current:
Personal services 101,684 101,684 101,579 105
Supplies 200 200 34 166
Other services and charges 16,250 16,250 10,792 5,458
Contractual services 40,250 15,250 15,265 (15)
Total planning and zoning commission 158,384 133,384 127,670 5,714
Total community development 489,920 438,620 426,653 11,967
Other:
Contingency 50,000 - - -
Total expenditures 9,705,758 9,554,999 9,243,507 311,492
Revenues over (under) expenditures (269,917) 683,694 1,001,120 317,426
Other financing sources (uses):
Transfers in 317,717 439,373 439,373 -
Transfers out (565,800) (879,152) (879,759) (607)
Total other financing sources (uses)(248,083) (439,779) (440,386) (607)
Net change in fund balance ($518,000) $243,915 560,734 $316,819
Fund balance - January 1 6,256,191
Fund balance - December 31 $6,816,925
91
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 12
SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS
For The Year Ended December 31, 2017
2017
Total OPEB liability:
Service cost $16,990
Interest 22,542
Changes of benefit terms -
Differences between expected and actual experience (51,083)
Changes in assumptions -
Benefit payments (31,536)
Net change in total OPEB liability (43,087)
Total OPEB liability - beginning 789,627
Total OPEB liability - ending $746,540
Covered-employee payroll $3,499,836
Total OPEB liability as a percentage of covered-employee payroll 21.3%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2017 and is intended to
show a ten year trend. Additional years will be added as they become available.
92
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 13
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY -
GENERAL EMPLOYEES RETIREMENT FUND
For The Year Ended December 31, 2017
City's City's
Proportionate Proportionate Plan
State's Share of the Share of the Fiduciary
Proportionate Net Pension Net Net
Share Liability Pension Position
City's City's (Amount) and the State's Liability as a
Proportionate Proportionate of the Net Proportionate as a Percentage
Share Share (Amount) Pension Share of the Net Percentage of the
Measurement Fiscal Year (Percentage) of of the Net Liability Pension Liability of its Total
Date Ending the Net Pension Pension Associated Associated with Covered Covered Pension
June 30, December 31, Liability Liability (a) with City (b) City (a+b) Payroll (c) Payroll ((a+b)/c) Liability
2015 2015 0.0410%$2,124,883 $ - $2,124,883 $2,407,426 88.3%78.2%
2016 2016 0.0387%3,142,248 41,033 3,183,281 2,401,546 132.6% 68.9%
2017 2017 0.0414%2,642,949 33,230 2,676,179 2,666,880 100.3% 75.9%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
93
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 14
SCHEDULE OF PENSION CONTRIBUTIONS - GENERAL EMPLOYEES RETIREMENT FUND
For The Year Ended December 31, 2017
Statutorily Contributions in Contribution Contributions as a
Fiscal Year Required Relation to the Deficiency Covered Percentage of
Ending Contribution Statutorily Required (Excess) Payroll Covered
December 31, (a) Contribution (b) (a-b) (c) Payroll (b/c)
2015 $182,102 $182,102 $ - $2,428,027 7.5%
2016 193,684 193,684 - 2,582,452 7.5%
2017 192,510 192,510 - 2,566,800 7.5%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
94
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 15
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY -
PUBLIC EMPLOYEES POLICE AND FIRE FUND
For The Year Ended December 31, 2017
Proportionate Share
Proportionate of the Net Pension Plan Fiduciary
Proportion Share (Amount) Liability as a Net Position as
Measurement Fiscal Year (Percentage) of of the Net Percentage of its a Percentage
Date Ending the Net Pension Pension Covered Covered of the Total
June 30, December 31, Liability Liability (a) Payroll (b) Payroll (a/b) Pension Liability
2015 2015 0.2490%$2,829,223 $2,284,973 123.8%86.6%
2016 2016 0.2590%10,394,121 2,495,778 416.5%63.9%
2017 2017 0.2570%3,469,806 2,643,314 131.3%85.4%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
95
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 16
SCHEDULE OF PENSION CONTRIBUTIONS - PUBLIC EMPLOYEES POLICE AND FIRE FUND
For The Year Ended December 31, 2017
Statutorily Contributions in Contribution Contributions as a
Fiscal Year Required Relation to the Deficiency Covered Percentage of
Ending Contribution Statutorily Required (Excess) Payroll Covered
December 31, (a) Contribution (b) (a-b) (c) Payroll (b/c)
2015 $393,551 $393,551 $ - $2,429,327 16.2%
2016 424,970 424,970 - 2,623,271 16.2%
2017 416,665 416,665 - 2,572,006 16.2%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
96
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 17
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS -
LINO LAKES PUBLIC SAFETY DEPARTMENT - FIRE DIVISION
For The Year Ended December 31, 2017
Fiscal year ending and measurement date December 31, 2017 December 31, 2016
Total pension liability:
Service cost $47,952 $38,419
Interest on pension liability 6,191 3,568
Changes of benefit terms - -
Differences between expected and actual experience (11,672)(7,804)
Changes of assumptions - -
Benefit payments, including refunds of employee contributions - -
Net change in total pension liability 42,471 34,183
Total pension liability - beginning 55,240 21,057
Total pension liability - ending (a)$97,711 $55,240
Plan fiduciary net position:
Contributions - employer $58,800 $44,394
Contributions - State of Minnesota 113,797 -
Net investment income 9,153 133
Benefit payments, including refunds of employee contributions - -
Administrative expense (572) -
Net change in plan fiduciary net position 181,178 44,527
Plan fiduciary net position - beginning 44,527 -
Plan fiduciary net position - ending (b)$225,705 $44,527
Net pension liability/(asset) - ending (a) - (b)($127,994)$10,713
Plan fiduciary net position as a percentage of the total pension liability 231.0%80.6%
Covered payroll N/A N/A
Net pension liability as a percentage of covered employee payroll N/A N/A
N/A - the Lino Lakes Fire Department is comprised of paid on-call firefighters, whose pay does
not meet the definition of covered payroll.
The City created its own fire department in 2016. Therefore, information prior to 2016 is not available.
97
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 18
SCHEDULE OF CONTRIBUTIONS - LINO LAKES PUBLIC SAFETY DEPARTMENT - FIRE DIVISION
For The Year Ended December 31, 2017
Statutorily Contributions in Contribution Contributions as a
Fiscal Year Required Relation to the Deficiency Covered Percentage of
Ending Contribution Statutorily Required (Excess) Payroll Covered-Employee
December 31, (a) Contribution (b) (a-b) (c) Payroll (b/c)
2016 $ - $44,394 ($44,394) N/A N/A
2017 - 58,800 (58,800) N/A N/A
N/A - the Lino Lakes Fire Department is comprised of paid on-call firefighters, whose pay does not
meet the defintion of covered payroll.
The City created its own fire department in 2016. Therefore, information prior to 2016 is not available.
98
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2017
Note A LEGAL COMPLIANCE – BUDGETS
The General Fund budget is legally adopted on a basis consistent with accounting principles generally accepted
in the United States of America. The legal level of budgetary control is at the department level for the General
Fund.
Note B OPEB INFORMATION
No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75 to pay
related benefits. There are no factors that affect trends in the amounts reported, such as changes of benefit
terms or assumptions.
Note C PENSION INFORMATION
PERA – General Employees Retirement Fund
2017 Changes
Changes in Actuarial Assumptions:
The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members
and 60 percent for vested and non-vested deferred members. The revised CSA loads are now 0.0
percent for active member liability, 15.0 percent for vested deferred member liability and 3.0
percent for non-vested deferred member liability.
The assumed post-retirement benefit increase rate was changed from 1.0 percent per year for all
years to 1.0 percent per year through 2044 and 2.5 percent 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, and inflation were decreased by 0.25% to 3.25%
for payroll growth and 2.50% for inflation.
PERA – Public Employees Police and Fire Fund
2017 Changes
Changes in Actuarial Assumptions:
The single discount rate was changed from 5.6% to 7.5%.
Assumed salary increases were changed as recommended in the June 30, 2016 experience study.
The net effect is proposed rates that average 0.34 percent lower than the previous rates.
99
CITY OF LINO LAKES, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2017
Assumed rates of retirement were changed, resulting in fewer retirements.
The Combined Service Annuity (CSA) load was 30 percent for vested and non-vested deferred
members. The CSA has been changed to 33 percent for vested members and 2 percent for non-
vested members.
The base mortality table for healthy annuitants was changed from the RP-2000 fully generational
table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted
by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP-
2016. The base mortality table for disabled annuitants was changed from the RP-2000 disabled
mortality table to the mortality tables assumed for healthy retirees.
Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates
beyond the select period of three years were adjusted, resulting in more expected terminations
overall.
Assumed percentage of married female members was decreased from 65 percent to 60 percent.
Assumed age difference was changed from separate assumptions for male members (wives
assumed to be three years younger) and female members (husbands assumed to be four years
older) to the assumption that males are two years older than females.
The assumed percentage of female members electing Joint and Survivor annuities was increased.
The assumed post-retirement benefit increase rate was changed from 1.00 percent for all years to
1.00 percent per year through 2064 and 2.50 percent thereafter.
2016 Changes
Changes in Actuarial Assumptions:
The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2037
and 2.5% per year thereafter to 1.0% per year for all future years.
The assumed investment return was changed from 7.9% to 7.5%. The single discount rate
changed from 7.9% to 5.6%.
The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to
3.25% for payroll growth and 2.50% for inflation.
Single Employer – Fire Division
There are no factors that affect trends in the amounts reported, such as change of benefit terms or
assumptions. With only two years reported in the RSI, there is no additional information to include in the
notes.
100
COMBINING AND INDIVIDUAL NONMAJOR
FUND FINANCIAL STATEMENTS AND SCHEDULES
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102
SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for the proceeds of specific revenue sources that
are legally restricted to expenditures for specified purposes.
DEBT SERVICE FUNDS
Debt Service Funds are used to account for the accumulation of resources for, and payment of,
interest, principal and related costs on general long-term debt.
CAPITAL PROJECT FUNDS
Capital Project Funds account for financial resources to be used for the acquisition or
construction of major capital facilities (other than those financed by Proprietary Funds).
PERMANENT FUNDS
Permanent Funds account for financial resources that are legally restricted to the extent that only
earnings, and not the principal, may be used for purposes that support the City’s programs.
The City maintains one permanent fund – the Environment and Stewardship Fund. This fund
accounts for the use of funds received for environmental maintenance and improvements in the
Foxborough area, as well as funds received for the Preserve area.
103
NONMAJOR GOVERNMENTAL FUNDS
104
CITY OF LINO LAKES, MINNESOTA
COMBINING BALANCE SHEET Statement 19
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2017
Permanent
Fund Total
Environment and Nonmajor
Special Debt Capital Stewardship Governmental
Revenue Service Project Fund Funds
Assets
Cash and investments $622,865 $4,220,235 $4,847,051 $123,316 $9,813,467
Accounts receivable - net - - 1,855 - 1,855
Prepaid items 1,659 - - - 1,659
Taxes receivable:
Due from county - 6,784 5 - 6,789
Delinquent - 12,845 243 - 13,088
Special assessments receivable:
Due from county - 231 567 - 798
Delinquent - 1,074 8,077 - 9,151
Deferred - 850,252 331,482 - 1,181,734
Interfund loan receivable - - 2,934,516 - 2,934,516
Long-term notes receivable 225,000 - - - 225,000
Total assets $849,524 $5,091,421 $8,123,796 $123,316 $14,188,057
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable $106,378 $3,450 $147,485 $ - $257,313
Salaries payable 453 - - - 453
Due to other governments 2,802 - 9,374 - 12,176
Contracts payable - - 125,455 - 125,455
Interfund loan payable - - 1,073,183 - 1,073,183
Total liabilities 109,633 3,450 1,355,497 0 1,468,580
Deferred inflows of resources:
Unavailable revenue - 864,172 339,801 - 1,203,973
Fund balance:
Nonspendable 1,659 - - 100,000 101,659
Restricted 562,831 4,223,799 479,695 23,316 5,289,641
Committed 175,401 - - - 175,401
Assigned - - 6,925,514 - 6,925,514
Unassigned - - (976,711) - (976,711)
Total fund balance 739,891 4,223,799 6,428,498 123,316 11,515,504
Total liabilities, deferred inflows
of resources, and fund balance $849,524 $5,091,421 $8,123,796 $123,316 $14,188,057
105
CITY OF LINO LAKES, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 20
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2017
Permanent
Fund Total
Environment and Nonmajor
Special Debt Capital Stewardship Governmental
Revenue Service Project Fund Funds
Revenues:
General property taxes $ - $2,121,680 $33 $ - $2,121,713
Tax increment - - 312,152 - 312,152
Intergovernmental - - 413,433 - 413,433
Special assessments - 364,742 302,186 - 666,928
Charges for services 175,110 - 593,165 - 768,275
Fines and forfeits 465,616 - - - 465,616
Investment earnings 4,536 21,265 64,414 961 91,176
Miscellaneous 33,046 37,595 36,060 8,500 115,201
Total revenues 678,308 2,545,282 1,721,443 9,461 4,954,494
Expenditures:
Current:
General government - - 6,978 - 6,978
Public safety 13,409 - - - 13,409
Public services 179,480 - 1,030,900 - 1,210,380
Community development 607 - 5,884 - 6,491
Capital outlay:
General government - - 228,895 - 228,895
Public safety 85,638 - 808,193 - 893,831
Public services 108,219 - 759,965 - 868,184
Debt service:
Principal - 4,353,525 - - 4,353,525
Interest and fiscal charges - 488,354 5,836 - 494,190
Total expenditures 387,353 4,841,879 2,846,651 0 8,075,883
Revenues over (under) expenditures 290,955 (2,296,597) (1,125,208) 9,461 (3,121,389)
Other financing sources (uses):
Transfers in 88,959 1,595,477 1,274,568 - 2,959,004
Transfers out (121,656) (588,899) (3,108,555) - (3,819,110)
Issuance of debt - - 311,000 - 311,000
Proceeds from sale of capital assets - - 103,328 - 103,328
Total other financing sources (uses) (32,697) 1,006,578 (1,419,659) 0 (445,778)
Net change in fund balance 258,258 (1,290,019) (2,544,867) 9,461 (3,567,167)
Fund balance - January 1 481,633 5,513,818 8,973,365 113,855 15,082,671
Fund balance - December 31 $739,891 $4,223,799 $6,428,498 $123,316 $11,515,504
106
SPECIAL REVENUE FUNDS
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are
legally restricted to expenditures for particular purposes. The City maintained the following
nonmajor Special Revenue Funds during the year.
Program Recreation – established to account for various self-supporting recreational
programs.
Economic Development Authority – established to account for the receipt and uses of
funds for economic development purposes.
Cable TV Fund – established to account for activities relating to Cable TV.
Blue Heron Days – established to account for the activities associated with the Blue
Heron Days festival.
Federal Narcotics – established to account for activities associated with the receipt and
use of federal narcotics forfeitures.
State Narcotics – established to account for activities associated with the receipt and use
of state narcotics forfeitures
DUI Forfeitures – established to account activities associated with the receipt and use of
DUI forfeitures.
107
CITY OF LINO LAKES, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 21
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2017
Total
203 Nonmajor
201 Economic Special
Program Development 204 Cable 205 Blue 206 Federal 207 State 208 DUI Revenue
Recreation Authority TV Fund Heron Days Narcotics Narcotics Forfeitures Funds
Assets
Cash and investments $9,186 $88,456 $186,113 $8,244 $262,269 $23,636 $44,961 $622,865
Prepaid items 1,460 - - 199 - - - 1,659
Long-term notes receivable - 225,000 - - - - - 225,000
Total assets $10,646 $313,456 $186,113 $8,443 $262,269 $23,636 $44,961 $849,524
Liabilities and Fund Balance
Liabilities:
Accounts payable $2,932 $ - $102,167 $1,279 $ - $ - $ - $106,378
Due to other governments 2,802 - - - - - - 2,802
Salaries payable 248 205 - - - - - 453
Total liabilities 5,982 205 102,167 1,279 0 0 0 109,633
Fund balance:
Nonspendable 1,460 - - 199 - - - 1,659
Restricted - 225,000 - 6,965 262,269 23,636 44,961 562,831
Committed 3,204 88,251 83,946 - - - - 175,401
Total fund balance 4,664 313,251 83,946 7,164 262,269 23,636 44,961 739,891
Total liabilities and fund balance $10,646 $313,456 $186,113 $8,443 $262,269 $23,636 $44,961 $849,524
108
CITY OF LINO LAKES, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,Statement 22
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2017
Total
203 Nonmajor
201 Economic Special
Program Development 204 Cable 205 Blue 206 Federal 207 State 208 DUI Revenue
Recreation Authority TV Fund Heron Days Narcotics Narcotics Forfeitures Funds
Revenues:
Charges for services $108,892 $ - $66,218 $ - $ - $ - $ - $175,110
Fines and forfeits - - - - 433,941 11,024 20,651 465,616
Investment earnings 370 104 1,408 65 2,148 146 295 4,536
Miscellaneous - - - 22,731 - 5,377 4,938 33,046
Total revenues 109,262 104 67,626 22,796 436,089 16,547 25,884 678,308
Expenditures:
Current:
Public safety - - - - 679 6,143 6,587 13,409
Public services 142,696 - 9,533 27,251 - - - 179,480
Community development - 607 - - - - - 607
Capital outlay:
Public safety - - - - 81,396 - 4,242 85,638
Public services - - 108,219 - - - - 108,219
Total expenditures 142,696 607 117,752 27,251 82,075 6,143 10,829 387,353
Revenues over (under) expenditures (33,434) (503) (50,126) (4,455) 354,014 10,404 15,055 290,955
Other financing sources (uses):
Transfers in - 88,959 - - - - - 88,959
Transfers out - - - - (121,656) - - (121,656)
Total other financing sources (uses) 0 88,959 0 0 (121,656) 0 0 (32,697)
Net change in fund balance (33,434) 88,456 (50,126) (4,455) 232,358 10,404 15,055 258,258
Fund balance - January 1 38,098 224,795 134,072 11,619 29,911 13,232 29,906 481,633
Fund balance - December 31 $4,664 $313,251 $83,946 $7,164 $262,269 $23,636 $44,961 $739,891
109
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110
DEBT SERVICE FUNDS
Debt Service Funds are used to account for the accumulation of resources for, and the payment
of, interest, principal and related costs on general long-term debt. The City’s Debt Service Funds
account for four types of bonded indebtedness:
General Debt Bonds – are repaid primarily from property taxes.
Improvement Bonds and Notes – are repaid primarily from special assessments.
Public Facility Lease Revenue Bonds – are repaid primarily from lease revenues received
from the EDA leasing the buildings to the City of Lino Lakes and other tenants.
Revenue Bonds – these bonds were issued to finance various improvements and will be
repaid primarily from pledged revenues derived from the constructed assets.
Capital Note – this note was issued to finance cable communications equipment and will
be repaid from revenues derived from franchise fees.
111
CITY OF LINO LAKES, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2017
334 G.O.
331 G.O. 332 G.O. Improvement
315 CIP TIF and Utility 335 G.O.
Certificates Bonds Bonds Bonds Bonds
of Indebtedness of 2006E of 2007A of 2010A of 2012A
Assets
Cash and investments $184,203 $970,261 $149,951 $849 $317,957
Taxes receivable:
Due from county 2,021 1,489 - - 567
Delinquent 3,572 3,335 - - 1,148
Special assessments receivable:
Due from county - - - - -
Delinquent - - - - -
Deferred - - - 447 16,420
Total assets $189,796 $975,085 $149,951 $1,296 $336,092
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable $ - $255 $255 $255 $255
Deferred inflows of resources:
Unavailable revenue 3,572 3,335 - 447 17,569
Fund balance:
Restricted 186,224 971,495 149,696 594 318,268
Total liabilities, deferred inflows of
resources, and fund balance $189,796 $975,085 $149,951 $1,296 $336,092
112
Statement 23
339 EDA 341 G.O. 343 G.O. Total
336 G.O. 337 G.O. Lease 340 G.O. Utility Tax Nonmajor
Improvement Improvement 338 G.O. Revenue Capital Revenue Abatement Debt
Bonds Bonds Bonds Bonds Note Bonds Bonds Service
of 2013A of 2014A of 2015A of 2015B of 2016A of 2016A of 2016C Funds
$287,008 $1,035,505 $450,068 $257,616 $253 $254,460 $312,104 $4,220,235
- - 863 1,004 - - 840 6,784
- - 1,336 1,554 - - 1,900 12,845
- 231 - - - - - 231
- 1,074 - - - - - 1,074
452,098 381,287 - - - - - 850,252
$739,106 $1,418,097 $452,267 $260,174 $253 $254,460 $314,844 $5,091,421
$255 $255 $255 $255 $ - $705 $705 $3,450
452,098 382,361 1,336 1,554 - - 1,900 864,172
286,753 1,035,481 450,676 258,365 253 253,755 312,239 4,223,799
$739,106 $1,418,097 $452,267 $260,174 $253 $254,460 $314,844 $5,091,421
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CITY OF LINO LAKES, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,Statement 24
EXPENDITURES AND CHANGES IN FUND BALANCE Page 1 of 2
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2017
330 G.O.
328 G.O. 329 G.O. Utility 331 G.O.
315 Improvement Tax Abatement Revenue CIP
Certificates of Bonds Bonds Bonds Bonds
Indebtedness of 2005B of 2006C of 2006D of 2006E
Revenues:
General property taxes $633,871 $221 $966 $ - $462,493
Special assessments 131 4,886 159 21,036 276
Investment earnings 2,252 254 1,348 1,019 5,202
Miscellaneous - - - - -
Total revenues 636,254 5,361 2,473 22,055 467,971
Expenditures:
Debt service:
Principal 583,000 - 1,755,000 70,000 405,000
Interest and fiscal charges 23,792 - 37,448 1,452 26,657
Total expenditures 606,792 0 1,792,448 71,452 431,657
Revenues over (under) expenditures 29,462 5,361 (1,789,975) (49,397) 36,314
Other financing sources (uses):
Transfers in - - - 71,454 -
Transfers out - (36,463) (67,132) (209,939) -
Total other financing sources (uses)0 (36,463) (67,132) (138,485)0
Net change in fund balance 29,462 (31,102) (1,857,107) (187,882) 36,314
Fund balance - January 1 156,762 31,102 1,857,107 187,882 935,181
Fund balance - December 31 $186,224 $0 $0 $0 $971,495
115
CITY OF LINO LAKES, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2017
334 G.O.
332 G.O. Improvement 336 G.O.
TIF and Utility 335 G.O. Improvement
Bonds Bonds Bonds Bonds
of 2007A of 2010A of 2012A of 2013A
Revenues:
General property taxes $ - $ - $176,943 $ -
Special assessments - 247 23,071 63,606
Investment earnings - - 1,348 1,642
Miscellaneous - - - -
Total revenues 0 247 201,362 65,248
Expenditures:
Debt service:
Principal 400,000 100,000 225,000 60,000
Interest and fiscal charges 75,481 11,955 17,020 16,853
Total expenditures 475,481 111,955 242,020 76,853
Revenues over (under) expenditures (475,481) (111,708) (40,658) (11,605)
Other financing sources (uses):
Transfers in 475,481 46,000 - -
Transfers out - - - -
Total other financing sources (uses)475,481 46,000 0 0
Net change in fund balance 0 (65,708) (40,658) (11,605)
Fund balance - January 1 149,696 66,302 358,926 298,358
Fund balance - December 31 $149,696 $594 $318,268 $286,753
116
Statement 24
Page 2 of 2
339 EDA 341 G.O. 343 G.O. Total
337 G.O. Lease 340 G.O. Utility Tax Nonmajor
Improvement 338 G.O. Revenue Capital Revenue Abatement Debt
Bonds Bonds Bonds Note Bonds Bonds Service
of 2014A of 2015A of 2015B of 2016A of 2016A of 2016C Funds
$ - $271,621 $315,855 $ - $ - $259,710 $2,121,680
251,212 55 63 - - - 364,742
5,758 705 1,079 140 - 518 21,265
- - - 37,595 - - 37,595
256,970 272,381 316,997 37,735 0 260,228 2,545,282
370,000 190,000 165,000 30,525 - - 4,353,525
32,927 67,817 134,942 7,070 20,269 14,671 488,354
402,927 257,817 299,942 37,595 20,269 14,671 4,841,879
(145,957)14,564 17,055 140 (20,269) 245,557 (2,296,597)
465,084 195,852 - - 274,474 67,132 1,595,477
(269,412) - (5,953) - - - (588,899)
195,672 195,852 (5,953)0 274,474 67,132 1,006,578
49,715 210,416 11,102 140 254,205 312,689 (1,290,019)
985,766 240,260 247,263 113 (450)(450) 5,513,818
$1,035,481 $450,676 $258,365 $253 $253,755 $312,239 $4,223,799
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CAPITAL PROJECT FUNDS
Capital Project Funds account for the acquisition or construction of major capital facilities other
than those financed by Proprietary Funds. The City maintained the following nonmajor Capital
Project Funds during the year:
Closed Bond Fund – to account for excess funds from matured bond issues.
Building and Facilities – to account for the activities associated with the maintenance and
replacement of municipal buildings and facilities.
Capital Equipment Revolving – to account for proceeds from Equipment Certificates and
funds held to purchase capital equipment.
Office Equipment Revolving – to account for the receipt and use of funds for office
equipment purchases.
Dedicated Parks – to account for the receipts and use of monies collected from park
dedication fees.
Tax Increment Financing Funds – to account for development projects financed with tax
increments.
Municipal State Aid (MSA) Construction – to account for the financing of future
reconstruction of state aid eligible streets.
Street Maintenance – to account for money received from levies, assessments, and
developer charges for future street maintenance projects.
Surface Water Management – to account for the financing of surface water management
and storm water improvements.
Street Reconstruction – to account for the financing of future reconstruction of City
streets.
Surface Water Maintenance – to account for surface water maintenance activities.
21st Ave Extension – this fund accounts for activities relating to the construction
performed in the expansion of 21st Avenue within the City.
Fire House #2 Construction – this fund accounts for activities relating to the construction
of Fire House #2.
Well #6 Construction – this fund accounts for activities relating to the construction of
Well # 6 and well house.
119
Northpointe Improvements – this fund accounts for activities relating to the construction
of streets and utilities within the Northpointe development.
Birch Street / Centerville Road Improvements – this fund accounts for activities relating
to the construction of street improvements and sanitary sewer in conjunction with Fire
House #2.
2015 Street Reconstruction – this fund accounts for the construction and improvements to
Shenandoah Street.
Blackduck / Aqua Lane Watermain Extension – this fund accounts for activities relating
to the trunk watermain improvements along Aqua Lane to north of Blackduck Drive.
2040 Comp Plan Update – this fund accounts for the financing sources received and
expenditures incurred to update the City’s 2040 Comprehensive Plan.
2018 Street Reconstruction – this fund accounts for street and utility improvements
within the West Shadow Lake Drive and LaMotte neighborhoods.
120
CITY OF LINO LAKES, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 25
NONMAJOR CAPITAL PROJECT FUNDS Page 1 of 2
December 31, 2017
402 Capital 403 Office 405 411 Tax 417 Tax
301 Closed 401 Building Equipment Equipment Dedicated Increment Increment
Bond Fund and Facilities Revolving Revolving Parks Financing 1-5 Financing 1-10
Assets
Cash and investments $ - $190,359 $434,623 $45,356 $420,647 $290,444 $190,157
Accounts receivable - net - 1,855 - - - - -
Taxes receivable:
Due from county 5 - - - - - -
Delinquent 243 - - - - - -
Special assessments receivable:
Due from county - - - - - - -
Delinquent 4,801 - - - - - -
Deferred 43,291 - - - - - -
Interfund loan receivable 616,983 2,317,533 - - - - -
Total assets $665,323 $2,509,747 $434,623 $45,356 $420,647 $290,444 $190,157
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable $ - $2,500 $9,588 $1,373 $ - $ - $ -
Due to other governments 4,579 - - - - 425 481
Contracts payable - - - - 11,626 - -
Interfund loan payable - - - - 100,361 - -
Total liabilities 4,579 2,500 9,588 1,373 111,987 425 481
Deferred inflows of resources:
Unavailable revenue 48,334 - - - - - -
Fund balance:
Restricted - - - - - 290,019 189,676
Assigned 612,410 2,507,247 425,035 43,983 308,660 - -
Unassigned - - - - - - -
Total fund balance 612,410 2,507,247 425,035 43,983 308,660 290,019 189,676
Total liabilities, deferred inflows of
resources, and fund balance $665,323 $2,509,747 $434,623 $45,356 $420,647 $290,444 $190,157
121
CITY OF LINO LAKES, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2017
418 Tax 419 Tax 421
Increment Increment 420 MSA Street
Financing 1-11 Financing 1-12 Construction Maintenance
Assets
Cash and investments $ - $ - $843,374 $362,495
Accounts receivable - net - - - -
Taxes receivable:
Due from county - - - -
Delinquent - - - -
Special assessments receivable:
Due from county - - - -
Delinquent - - - -
Deferred - - - -
Interfund loan receivable - - - -
Total assets $0 $0 $843,374 $362,495
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable $ - $ - $ - $81,227
Due to other governments 2,845 1,044 - -
Contracts payable - - - 21,026
Interfund loan payable 775,154 - - -
Total liabilities 777,999 1,044 0 102,253
Deferred inflows of resources:
Unavailable revenue - - - -
Fund balance:
Restricted - - - -
Assigned - - 843,374 260,242
Unassigned (777,999)(1,044) - -
Total fund balance (777,999)(1,044)843,374 260,242
Total liabilities, deferred inflows of
resources, and fund balance $0 $0 $843,374 $362,495
122
Statement 25
Page 2 of 2
Total
484 2040 Nonmajor
422 Surface 424 Surface 478 Fire 481 Birch St/ Comp 485 2018 Capital
Water 423 Street Water House # 2 Centerville Rd Plan Street Project
Management Reconstruction Maintenance Construction Improvements Update Reconstruction Funds
$995,093 $706,274 $105,798 $92,081 $133,592 $36,758 $ - $4,847,051
- - - - - - - 1,855
- - - - - - - 5
- - - - - - - 243
567 - - - - - - 567
3,276 - - - - - - 8,077
203,449 84,742 - - - - - 331,482
- - - - - - - 2,934,516
$1,202,385 $791,016 $105,798 $92,081 $133,592 $36,758 $0 $8,123,796
$15,428 $ - $2,349 $1,888 $ - $33,132 $ - $147,485
- - - - - - - 9,374
- - 2,610 90,193 - - - 125,455
- - - - - - 197,668 1,073,183
15,428 0 4,959 92,081 0 33,132 197,668 1,355,497
206,725 84,742 - - - - - 339,801
- - - - - - - 479,695
980,232 706,274 100,839 - 133,592 3,626 - 6,925,514
- - - - - - (197,668) (976,711)
980,232 706,274 100,839 0 133,592 3,626 (197,668) 6,428,498
$1,202,385 $791,016 $105,798 $92,081 $133,592 $36,758 $0 $8,123,796
123
CITY OF LINO LAKES, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31, 2017
402 Capital 403 Office 405
301 Closed 401 Building Equipment Equipment Dedicated
Bond Fund and Facilities Revolving Revolving Parks
Revenues:
General property taxes $33 $ - $ - $ - $ -
Tax increment - - - - -
Intergovernmental - - - - -
Special assessments 14,775 - - - -
Charges for services - 186,278 - - 361,788
Investment earnings 4,781 1,974 5,244 407 4,227
Miscellaneous - - 19,235 - 338
Total revenues 19,589 188,252 24,479 407 366,353
Expenditures:
Current:
General government 5,539 1,439 - - -
Public services - - - - -
Community development - - - - -
Capital outlay:
General government - 217,986 - 10,909 -
Public safety - - 805,140 3,053 -
Public services - - 305,912 1,710 339,636
Debt service:
Interest and fiscal charges - - - - 5,836
Total expenditures 5,539 219,425 1,111,052 15,672 345,472
Revenues over (under) expenditures 14,050 (31,173) (1,086,573) (15,265)20,881
Other financing sources (uses):
Transfers in 36,464 - - 25,000 50,000
Transfers out (317,717) - - - (14,257)
Issuance of debt - - 311,000 - -
Proceeds from sale of capital assets - - 103,328 - -
Total other financing sources (uses)(281,253)0 414,328 25,000 35,743
Net change in fund balance (267,203) (31,173) (672,245)9,735 56,624
Fund balance - January 1 879,613 2,538,420 1,097,280 34,248 252,036
Fund balance - December 31 $612,410 $2,507,247 $425,035 $43,983 $308,660
124
Statement 26
Page 1 of 2
411 Tax 417 Tax 418 Tax 419 Tax 421 422 Surface
Increment Increment Increment Increment 420 MSA Street Water 423 Street
Financing 1-5 Financing 1-10 Financing 1-11 Financing 1-12 Construction Maintenance Management Reconstruction
$ - $ - $ - $ - $ - $ - $ - $ -
39,653 151,542 120,957 - - - - -
- - - - 397,433 - - -
- - - - - - 273,219 14,192
- - - - - 45,099 - -
2,036 1,804 - - 18,822 3,256 6,516 5,412
- - - - 16,487 - - -
41,689 153,346 120,957 0 432,742 48,355 279,735 19,604
- - - - - - - -
- - - - - 512,091 48,147 -
568 1,256 3,016 1,044 - - - -
- - - - - - - -
- - - - - - - -
- - - - - - 24,349 -
- - - - - - - -
568 1,256 3,016 1,044 0 512,091 72,496 0
41,121 152,090 117,941 (1,044) 432,742 (463,736) 207,239 19,604
- - - - - 540,800 67,927 -
- (151,542) (120,957) - (1,601,538) - (30,355) -
- - - - - - - -
- - - - - - - -
0 (151,542) (120,957) 0 (1,601,538) 540,800 37,572 0
41,121 548 (3,016) (1,044) (1,168,796) 77,064 244,811 19,604
248,898 189,128 (774,983) - 2,012,170 183,178 735,421 686,670
$290,019 $189,676 ($777,999) ($1,044) $843,374 $260,242 $980,232 $706,274
125
CITY OF LINO LAKES, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31, 2017
424 Surface 477 478 Fire 479 480
Water 21st Ave House # 2 Well #6 Northpointe
Maintenance Extension Construction Construction Improvements
Revenues:
General property taxes $ - $ - $ - $ - $ -
Tax increment - - - - -
Intergovernmental - - - - -
Special assessments - - - - -
Charges for services - - - - -
Investment earnings 1,175 - 710 222 2,555
Miscellaneous - - - - -
Total revenues 1,175 0 710 222 2,555
Expenditures:
Current:
General government - - - - -
Public services 106,608 - - - -
Community development - - - - -
Capital outlay:
General government - - - - -
Public safety - - - - -
Public services - 1,851 4,339 13,813 199
Debt service:
Interest and fiscal charges - - - - -
Total expenditures 106,608 1,851 4,339 13,813 199
Revenues over (under) expenditures (105,433) (1,851) (3,629) (13,591)2,356
Other financing sources (uses):
Transfers in 125,000 269,412 5,953 - -
Transfers out - (67,927) - (9,291) (324,645)
Issuance of debt - - - - -
Proceeds from sale of capital assets - - - - -
Total other financing sources (uses)125,000 201,485 5,953 (9,291) (324,645)
Net change in fund balance 19,567 199,634 2,324 (22,882) (322,289)
Fund balance - January 1 81,272 (199,634) (2,324) 22,882 322,289
Fund balance - December 31 $100,839 $0 $0 $0 $0
126
Statement 26
Page 2 of 2
483 Blackduck/ 484 2040 Total
481 Birch St/ 482 2015 Aqua Lane Comp 485 2018 Nonmajor
Centerville Rd Street Watermain Plan Street Capital
Improvements Reconstruction Extension Update Reconstruction Project Funds
$ - $ - $ - $ - $ - $33
- - - - - 312,152
- - - 16,000 - 413,433
- - - - - 302,186
- - - - - 593,165
1,042 1,279 2,952 - - 64,414
- - - - - 36,060
1,042 1,279 2,952 16,000 0 1,721,443
- - - - - 6,978
- - - 166,386 197,668 1,030,900
- - - - - 5,884
- - - - - 228,895
- - - - - 808,193
878 652 66,626 - - 759,965
- - - - - 5,836
878 652 66,626 166,386 197,668 2,846,651
164 627 (63,674) (150,386) (197,668) (1,125,208)
- - - 154,012 - 1,274,568
- (195,852) (274,474) - - (3,108,555)
- - - - - 311,000
- - - - - 103,328
0 (195,852) (274,474) 154,012 0 (1,419,659)
164 (195,225) (338,148) 3,626 (197,668) (2,544,867)
133,428 195,225 338,148 - - 8,973,365
$133,592 $0 $0 $3,626 ($197,668) $6,428,498
127
CITY OF LINO LAKES, MINNESOTA
SPECIAL REVENUE FUND - PROGRAM RECREATION Statement 27
SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For The Year Ended December 31, 2017
Budgeted Amounts
2017 Actual
Amounts
Variance
with Final
Budget -
Positive
(Negative)
Original Final
Revenues:
Charges for services $127,235 $127,235 $108,892 ($18,343)
Investment earnings - - 370 370
Total revenues 127,235 127,235 109,262 (17,973)
Expenditures:
Public services:
Current:
Personal services 57,325 57,325 56,010 1,315
Supplies 36,160 36,160 32,811 3,349
Other services and charges - - 8,836 (8,836)
Contractual services 22,000 22,000 45,039 (23,039)
Capital outlay 700 700 - 700
Total expenditures 116,185 116,185 142,696 (26,511)
Revenues over (under) expenditures 11,050 11,050 (33,434) (44,484)
Other financing sources (uses):
Transfers out (10,000) (10,000) - (10,000)
Net change in fund balance $1,050 $1,050 (33,434) ($34,484)
Fund balance - January 1 38,098
Fund balance - December 31 $4,664
128
CITY OF LINO LAKES, MINNESOTA
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Statement 28
AGENCY FUNDS
For The Year Ended December 31, 2017
Balance Balance
January 1,December 31,
2017 Additions Deletions 2017
Assets:
Cash and investments $825,373 $1,070,581 $176,443 $1,719,511
Liabilities:
Deposits payable $825,373 $1,070,581 $176,443 $1,719,511
129
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130
STATISTICAL SECTION (UNAUDITED)
131
- This page intentionally left blank -
132
This part of the City of Lino Lakes, Minnesota'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.
Table
Number
Financial Trends Tables 1-4
These tables contain trend information to help the reader understand how the City's financial
performance and well-being have changed over time.
Revenue Capacity Tables 5-8
These tables contain information to help the reader assess the City's most significant local
revenue source, the property tax.
Debt Capacity Tables 9-12
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.
Demographic and Economic Information Tables 13-14
These tables offer demographic and economic indicators to help the reader understand the
environment wihthin which the City's financial activities take place.
Operating Information Tables 15-17
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.
Sources: Unless otherwise noted, the information in these tables is derived from the comprehensive
financial reports for the relevant year.
STATISTICAL SECTION (UNAUDITED)
Contents
133
CITY OF LINO LAKES, MINNESOTA
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2008 2009 2010 2011
Governmental activities:
Net investment in capital assets $28,472,865 $23,400,453 $22,562,217 $24,600,103
Restricted 9,870,676 9,414,474 8,428,025 11,598,803
Unrestricted 10,790,359 15,926,322 16,738,885 13,463,210
Total governmental activities net position $49,133,900 $48,741,249 $47,729,127 $49,662,116
Business-type activities:
Net investment in capital assets $30,372,670 $30,071,840 $29,648,461 $29,216,866
Unrestricted 9,028,778 10,112,207 10,728,626 11,201,362
Total business-type activities net position $39,401,448 $40,184,047 $40,377,087 $40,418,228
Primary government:
Net investment in capital assets $58,845,535 $53,472,293 $52,210,678 $53,816,969
Restricted 9,870,676 9,414,474 8,428,025 11,598,803
Unrestricted 19,819,137 26,038,529 27,467,511 24,664,572
Total primary government net position $88,535,348 $88,925,296 $88,106,214 $90,080,344
GASB 68 was implemented in 2015. Net position was restated for 2014 to reflect the reporting of net pension liability
and pension related deferred outflows of resources. Net position for years prior to 2014 was not restated.
GASB 75 was implemented in 2017. Net position was restated for 2016 to reflect the reporting of the OPEB liability
and OPEB related deferred inflows of resources. Net position for years prior to 2016 was not restated.
134
Table 1
2012 2013 2014 2015 2016 2017
$22,166,342 $22,241,821 $19,540,807 $18,230,746 $18,597,344 $22,868,259
11,595,112 11,000,033 8,666,357 8,635,293 13,342,852 11,730,147
17,639,038 16,849,636 20,527,704 13,888,120 10,187,254 12,017,212
$51,400,492 $50,091,490 $48,734,868 $40,754,159 $42,127,450 $46,615,618
$28,798,095 $28,423,284 $27,556,022 $29,127,829 $31,860,610 $31,831,950
12,102,013 12,999,182 13,888,278 14,672,630 13,863,447 14,846,045
$40,900,108 $41,422,466 $41,444,300 $43,800,459 $45,724,057 $46,677,995
$50,964,437 $50,665,105 $47,096,829 $47,358,575 $50,457,954 $54,700,209
11,595,112 11,000,033 8,666,357 8,635,293 13,342,852 11,730,147
29,741,051 29,848,818 34,415,982 28,560,750 24,050,701 26,863,257
$92,300,600 $91,513,956 $90,179,168 $84,554,618 $87,851,507 $93,293,613
135
CITY OF LINO LAKES, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2008 2009 2010 2011
Expenses
Governmental activities:
General government $2,323,358 $2,201,439 $1,987,415 $1,990,137
Public safety 4,051,162 4,299,366 3,971,261 4,019,101
Public services 8,528,574 5,341,113 5,092,970 9,329,451
Conservation of natural resources 184,624 215,607 197,571 139,544
Community development 1,114,158 1,005,997 1,105,254 617,747
Interest and fees on long-term debt 1,045,781 928,668 1,064,172 927,535
Total governmental activities expenses 17,247,657 13,992,190 13,418,643 17,023,515
Business-type activities:
Water 1,020,770 1,089,569 1,045,901 966,643
Sewer 1,287,943 1,432,107 1,466,847 1,638,063
Total business-type activities expenses 2,308,713 2,521,676 2,512,748 2,604,706
Total primary government expenses $19,556,370 $16,513,866 $15,931,391 $19,628,221
Program revenues
Governmental activities:
Charges for services:
General government $79,844 $101,741 $98,403 $103,687
Public safety 1,296,418 725,747 691,005 713,985
Public services 600,325 594,168 605,207 593,263
Conservation of natural resources 3,660 3,858 4,153 4,392
Community development 11,623 8,667 14,148 5,138
Operating grants and contributions 693,065 682,797 617,450 593,798
Capital grants and contributions 1,094,789 1,357,015 1,388,984 7,347,613
Total governmental activities program revenues 3,779,724 3,473,993 3,419,350 9,361,876
Business-type activities:
Charges for services:
Water 1,058,493 1,365,817 1,087,013 1,090,104
Sewer 1,472,093 1,502,164 1,498,218 1,494,188
Operating grants and contributions - 62,710 - -
Capital grants and contributions 10,117 8,769 8,709 1,462
Total business-type activities 2,540,703 2,939,460 2,593,940 2,585,754
Total primary government program revenues $6,320,427 $6,413,453 $6,013,290 $11,947,630
136
Table 2
Page 1 of 2
2012 2013 2014 2015 2016 2017
$1,883,961 $1,566,388 $2,036,550 $2,016,351 $2,456,864 $2,395,633
4,046,415 3,950,197 4,107,759 5,135,865 6,567,523 5,166,538
6,795,150 5,376,671 5,880,030 7,971,712 6,228,893 5,492,395
184,051 141,204 159,649 186,111 216,905 200,016
430,121 404,726 407,448 432,268 454,144 459,455
837,755 951,842 618,680 632,876 831,529 518,897
14,177,453 12,391,028 13,210,116 16,375,183 16,755,858 14,232,934
949,121 927,800 965,641 1,394,897 1,367,693 1,245,249
1,527,637 1,584,395 1,628,258 2,089,842 1,850,962 1,901,821
2,476,758 2,512,195 2,593,899 3,484,739 3,218,655 3,147,070
$16,654,211 $14,903,223 $15,804,015 $19,859,922 $19,974,513 $17,380,004
$129,151 $93,118 $103,072 $818,468 $520,231 $550,117
642,745 697,584 763,470 199,498 1,359,426 2,249,152
668,128 632,002 621,221 603,866 865,327 801,633
19,297 1,347 1,882 - - -
16,940 28,118 39,395 - - -
450,179 527,368 840,676 526,107 722,858 1,106,014
5,125,693 941,960 335,733 1,176,732 5,046,307 4,141,383
7,052,133 2,921,497 2,705,449 3,324,671 8,514,149 8,848,299
1,371,809 1,208,742 965,425 1,014,836 1,094,897 1,150,834
1,505,781 1,516,397 1,564,099 1,621,633 1,659,322 1,698,963
- - 263,024 263,024 - -
20,018 883 1,035 3,035,031 1,543,947 836,029
2,897,608 2,726,022 2,793,583 5,934,524 4,298,166 3,685,826
$9,949,741 $5,647,519 $5,499,032 $9,259,195 $12,812,315 $12,534,125
137
CITY OF LINO LAKES, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2008 2009 2010 2011
Net (expense) revenue:
Governmental activities ($13,467,933) ($10,518,197) ($9,999,293) ($7,661,639)
Business-type activities 231,990 417,784 81,192 (18,952)
Total primary government, net (13,235,943) (10,100,413) (9,918,101) (7,680,591)
General revenues and other changes in net position:
Governmental activities:
Property taxes 9,424,697 9,808,324 8,764,183 8,768,805
Unrestricted grants and contributions 129,607 11,321 4,389 4,072
Unrestricted investment earnings 576,071 429,325 225,677 251,250
Gain on disposal of capital assets 12,512 12,644 - 37,579
Special item - withdrawal from fire district - - - -
Transfers (994,202) (136,068) (7,078) 66,122
Total governmental activities 9,148,685 10,125,546 8,987,171 9,127,828
Business-type activities:
Unrestricted investment earnings 274,498 228,747 104,770 126,215
Transfers 994,202 136,068 7,078 (66,122)
Total business-type activities 1,268,700 364,815 111,848 60,093
Total primary government $10,417,385 $10,490,361 $9,099,019 $9,187,921
Change in net position:
Governmental activities ($4,319,248) ($392,651) ($1,012,122) $1,466,189
Business-type activities 1,500,690 782,599 193,040 41,141
Total primary government change in net position ($2,818,558) $389,948 ($819,082) $1,507,330
GASB 68 was implemented in 2015. Pension expense for years prior to 2015 was not restated.
GASB 75 was implemented in 2017. OPEB expense for years prior to 2017 was not restated.
138
Table 2
Page 2 of 2
2012 2013 2014 2015 2016 2017
($7,125,320) ($9,469,531) ($10,504,667) ($13,050,512) ($8,241,709) ($5,384,635)
420,850 213,827 199,684 2,449,785 1,079,511 538,756
(6,704,470) (9,255,704) (10,304,983) (10,600,727) (7,162,198) (4,845,879)
8,610,709 8,563,595 8,806,886 9,243,236 9,343,500 9,753,971
4,941 4,442 4,443 5,363 91,385 181,712
202,828 (54,204) 265,695 112,961 210,142 207,792
4,175 - 1,727 17,836 66,255 38,022
- - - - 1,333,166 -
41,043 (353,304) 69,294 66,834 (914,414) (308,694)
8,863,696 8,160,529 9,148,045 9,446,230 10,130,034 9,872,803
102,073 (44,773) 154,468 51,167 107,119 106,488
(41,043) 353,304 (69,294) (66,834) 914,414 308,694
61,030 308,531 85,174 (15,667) 1,021,533 415,182
$8,924,726 $8,469,060 $9,233,219 $9,430,563 $11,151,567 $10,287,985
$1,738,376 ($1,309,002) ($1,356,622) ($3,604,282) $1,888,325 $4,488,168
481,880 522,358 284,858 2,434,118 2,101,044 953,938
$2,220,256 ($786,644) ($1,071,764) ($1,170,164) $3,989,369 $5,442,106
139
CITY OF LINO LAKES, MINNESOTA
FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2008 2009 2010 2011
General Fund:
Reserved $190,825 $196,568 $181,471 $ -
Unreserved 5,393,316 5,191,396 5,445,334 -
Nonspendable - - - 165,079
Unassigned - - - 5,440,101
Total general fund $5,584,141 $5,387,964 $5,626,805 $5,605,180
All other governmental funds:
Reserved reported in:
Special revenue funds $226,973 $227,176 $227,342 $ -
Capital projects funds 812,400 736,772 658,875 -
Debt service funds 3,405,272 3,457,349 2,986,102 -
Permanent funds 100,000 100,000 100,000 -
Unreserved reported in:
Special revenue funds 106,573 93,956 110,471 -
Capital projects funds 5,927,411 11,611,835 12,537,841 -
Debt service funds - (558,443) (1,093,765) -
Permanent funds 22,224 15,824 12,676 -
Nonspendable - - - 906,010
Restricted - - - 2,658,010
Committed - - - 110,568
Assigned - - - 10,808,268
Unassigned - - - (3,154,496)
Total all other governmental funds $10,600,853 $15,684,469 $15,539,542 $11,328,360
Total all funds $16,184,994 $21,072,433 $21,166,347 $16,933,540
The City implemented GASB Statement No. 54 for the fiscal year ended December 31, 2011. Information
for years prior to 2011 is presented in accordance with fund balance classifications in effect at that time.
140
Table 3
2012 2013 2014 2015 2016 2017
$ - $ - $ - $ - $ - $ -
- - - - - -
180,786 176,797 253,471 220,677 225,114 243,317
5,053,031 5,209,286 5,053,064 5,725,736 6,031,077 6,573,608
$5,233,817 $5,386,083 $5,306,535 $5,946,413 $6,256,191 $6,816,925
$ - $ - $ - $ - $ - $ -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
823,113 101,710 101,302 101,177 101,220 101,659
3,041,524 3,651,550 2,830,526 2,637,638 6,502,424 5,289,641
115,196 121,075 152,078 163,239 170,950 175,401
15,573,179 15,710,702 18,027,773 15,022,852 15,778,480 14,581,669
(3,262,728) (3,393,547) (375,851) (3,815,304) (978,496) (2,909,173)
$16,290,284 $16,191,490 $20,735,828 $14,109,602 $21,574,578 $17,239,197
$21,524,101 $21,577,573 $26,042,363 $20,056,015 $27,830,769 $24,056,122
141
CITY OF LINO LAKES, MINNESOTA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2008 2009 2010 2011
Revenues:
Property taxes $9,095,085 $9,561,570 $8,647,488 $8,655,971
Licenses and permits 802,135 307,714 330,138 322,030
Intergovernmental 1,004,476 1,259,016 1,176,863 1,331,914
Special assessments 950,188 968,995 851,270 904,522
Charges for services 872,534 778,163 780,044 812,604
Fines and forfeits 133,531 111,807 127,203 154,020
Investment earnings 576,071 429,325 225,677 251,244
Miscellaneous 516,415 513,306 502,992 460,710
Total revenues 13,950,435 13,929,896 12,641,675 12,893,015
Expenditures:
Current:
General government 2,058,267 1,918,246 1,730,390 1,773,515
Public safety 3,806,389 4,122,352 3,798,106 3,791,329
Public services 6,575,568 3,071,646 2,848,232 3,251,923
Conservation of natural resources 183,024 209,466 185,232 134,122
Community development 1,113,232 1,005,095 1,098,682 624,286
Capital outlay 585,875 501,806 282,938 4,209,593
Debt service:
Principal 1,749,000 1,908,000 1,866,000 2,030,000
Interest and fiscal charges 1,074,052 994,809 1,042,883 983,129
Bond issuance costs - - - -
Total expenditures 17,145,407 13,731,420 12,852,463 16,797,897
Excess (deficiency) of revenues over expenditures (3,194,972) 198,476 (210,788) (3,904,882)
Other financing sources (uses):
Proceeds from sale of capital assets 13,750 35,700 20,600 50,953
Issuance of debt 209,000 4,596,000 1,170,000 120,000
Premium on bonds issued - 11,141 10,980 -
Payment to refunded bond escrow agent - - (965,000) -
Loan payable reapportionment - - - (565,000)
Transfers in 4,763,391 1,413,985 1,195,747 2,971,715
Transfers out (4,796,159) (1,367,863) (1,127,625) (2,905,593)
Total other financing sources (uses)189,982 4,688,963 304,702 (327,925)
Special item - withdrawal from fire district - - - -
Net change in fund balance ($3,004,990) $4,887,439 $93,914 ($4,232,807)
Debt service as a percentage of noncapital expenditures 17.0%21.9%23.1%23.9%
Debt service as a percentage of total expenditures 16.5%21.1%22.6%17.9%
142
Table 4
2012 2013 2014 2015 2016 2017
$8,560,340 $8,475,214 $8,612,011 $8,950,507 $9,369,090 $9,772,741
319,172 431,654 407,681 551,202 895,581 1,447,571
5,267,570 500,963 823,025 679,627 706,944 1,080,953
816,998 2,130,519 1,278,202 703,141 4,400,635 2,283,974
744,633 717,300 731,640 696,501 1,293,556 1,327,781
155,956 119,079 149,653 127,803 251,653 613,593
202,825 (53,466)265,794 112,915 210,142 207,792
414,088 384,749 767,477 766,072 417,448 410,640
16,481,582 12,706,012 13,035,483 12,587,768 17,545,049 17,145,045
1,619,215 1,569,722 1,692,175 1,643,966 1,845,667 1,952,669
3,861,265 3,744,957 3,845,732 11,895,482 4,333,080 4,360,517
4,396,406 3,956,766 4,156,497 4,779,696 3,203,837 3,414,412
176,318 134,127 149,292 191,038 201,635 183,392
435,154 418,533 402,750 422,935 425,402 433,144
616,931 291,135 674,488 1,566,057 3,044,615 2,152,848
2,145,000 2,214,000 3,664,000 2,802,511 2,769,525 8,058,525
831,875 774,172 696,780 542,166 816,362 640,029
47,054 17,137 - 62,831 98,906 -
14,129,218 13,120,549 15,281,714 23,906,682 16,739,029 21,195,536
2,352,364 (414,537) (2,246,231) (11,318,914)806,020 (4,050,491)
4,175 16,727 1,727 54,522 72,182 103,328
2,165,000 808,000 3,140,000 8,606,250 5,464,000 311,000
- 6,558 - 114,960 41,497 -
- (435,000) - - - -
- - - - - -
1,979,457 1,722,541 2,608,534 3,392,971 3,521,180 6,984,443
(1,910,435) (1,650,817) (2,539,240) (3,336,137) (3,241,959) (7,122,927)
2,238,197 468,009 3,211,021 8,832,566 5,856,900 275,844
- - - - 1,111,834 -
$4,590,561 $53,472 $964,790 ($2,486,348) $7,774,754 ($3,774,647)
22.0%23.3%29.9%15.0%26.2%45.4%
21.1%22.8%28.5%14.0%21.4%41.0%
143
CITY OF LINO LAKES, MINNESOTA
ASSESSED AND ACTUAL VALUE OF TAXABLE PROPERTY Table 5
Last Ten Fiscal Years
Estimated
Commercial/Total Taxable Taxable
Payable Residential Industrial Personal Assessed Total Direct Market
Year Property Property Property Value Tax Rate Value
2008 $18,382,645 $3,431,107 $279,102 $22,092,854 38.97 $2,021,961,000
2009 18,919,087 4,002,349 275,496 23,196,932 38.73 2,102,473,000
2010 17,978,917 3,800,004 291,904 22,070,825 37.91 2,001,889,600
2011 16,214,698 3,223,901 303,964 19,742,563 42.04 1,804,121,500
2012 14,743,557 2,945,026 310,870 17,999,453 42.89 1,640,455,854
2013 13,693,905 2,571,769 336,047 16,601,721 46.77 1,519,857,242
2014 13,646,798 2,450,473 341,974 16,439,245 46.68 1,509,921,169
2015 15,455,516 2,536,783 347,316 18,339,615 43.77 1,694,366,064
2016 15,472,329 2,609,482 359,006 18,440,817 46.02 1,699,288,883
2017 16,480,328 2,767,099 396,378 19,643,805 45.14 1,808,417,118
The tax capacity (assessed taxable value) of the property is calculated by applying a statutory formula
to the estimated market value of the property.
Source: Anoka County, Minnesota Assessors' Office
144
CITY OF LINO LAKES, MINNESOTA
DIRECT AND OVERLAPPING PROPERTY TAX CAPACITY RATES Table 6
Last Ten Fiscal Years
(rate per $100 of Tax Capacity)
General Centennial Other Total Direct and
Fiscal Basic Obligation Total School District Anoka Taxing Total Overlapping
Year Rate Debt Service Direct ISD # 12 County Districts Overlapping Tax Rate
2008 34.560 4.407 38.967 35.258 31.078 6.956 73.292 112.259
2009 34.716 4.017 38.733 34.593 32.078 5.611 72.282 111.015
2010 34.086 3.819 37.905 37.285 35.189 5.879 78.353 116.258
2011 37.425 4.616 42.041 43.695 39.952 6.278 89.925 131.966
2012 37.501 5.393 42.894 40.010 41.146 6.691 87.847 130.741
2013 40.964 5.810 46.774 43.681 44.411 6.940 95.032 141.806
2014 39.784 6.899 46.683 46.186 43.239 6.712 96.137 142.820
2015 37.819 5.951 43.770 36.562 38.123 6.021 80.706 124.476
2016 35.025 10.994 46.019 36.426 38.894 6.405 81.725 127.744
2017 35.105 10.035 45.140 29.097 36.841 5.810 71.748 116.888
The majority of the City is serviced by School District 12. Rates for debt service are based on each year's requirements.
Source: Anoka County Property Records and Tax Division
City Direct Rate Overlapping Rates
145
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146
CITY OF LINO LAKES, MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS Table 7
Current Year and Nine Years Ago
Percentage Percentage
of Total City of Total City
Taxable Taxable Taxable Taxable
Net Tax Net Tax Net Tax Net Tax
Taxpayer Capacity Rank Capacity Capacity Rank Capacity
Target Corporation $214,636 1 1.09% $278,554 1 1.26%
Northern States Power Co 200,922 2 1.02% 143,459 3 0.65%
WI MN AB BIYNAH LLC 196,198 3 1.00% - - -
Moline Concrete Products 113,360 4 0.58% 131,936 5 0.60%
Gargaro Properties LLC 111,084 5 0.57% 100,390 8 0.45%
Taylor Corporation 94,804 6 0.48% 129,568 6 0.59%
Kohl's Department Store 87,250 7 0.44% 140,306 4 0.64%
Minnegasco Inc 81,806 8 0.42% - - -
Marmon/Keystone Corp 78,202 9 0.40% - - -
Lino Lakes Assisted Living LLC 73,803 10 0.38% - - -
Lino Lakes Realty LLC - - 265,694 2 1.20%
Legacy Holdings LLC - - 122,134 7 0.55%
Lino Lakes Business Center LLC - - 96,204 9 0.44%
F&G Incorporated - - 94,476 10 0.43%
Total $1,252,065 6.38% $1,502,721 6.81%
Source: Anoka County
2017 2008
147
CITY OF LINO LAKES, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Collected within the
Taxes Levied for the Fiscal Year Fiscal Year of Levy
Percentage
Fiscal Operating Debt Total Tax of
Year Tax Levy Tax Levy Levy Amount Levy
2008 $7,973,236 $893,720 $8,866,956 $8,581,974 96.8%
2009 8,295,172 949,166 9,244,338 8,982,756 97.2%
2010 7,816,232 879,182 8,695,414 8,400,439 96.6%
2011 7,719,240 940,760 8,660,000 8,486,845 98.0%
2012 7,192,818 1,034,441 8,227,259 8,095,502 98.4%
2013 7,190,538 1,025,090 8,215,628 8,094,911 98.5%
2014 7,098,922 1,197,122 8,296,044 8,229,986 99.2%
2015 7,490,578 1,195,494 8,686,072 8,630,830 99.4%
2016 7,018,572 2,039,856 9,058,428 9,022,964 99.6%
2017 7,360,431 2,131,424 9,491,855 9,439,688 99.5%
Current year levies and collections include State levy related credits, but do not include tax increment levies and collections.
148
Table 8
Total Collections to Date
Collections in Percentage Outstanding Percentage
Subsequent of Delinquent of Levy
Years Amount Levy Taxes Outstanding
$129,219 $8,711,193 98.2%$155,763 1.8%
194,540 9,177,296 99.3%67,042 0.7%
182,890 8,583,329 98.7%112,085 1.3%
126,993 8,613,838 99.5%46,162 0.5%
77,752 8,173,254 99.3%54,005 0.7%
68,948 8,163,859 99.4%51,769 0.6%
40,447 8,270,433 99.7%25,611 0.3%
25,712 8,656,542 99.7%29,530 0.3%
9,770 9,032,734 99.7%25,694 0.3%
- 9,439,688 99.5%52,167 0.5%
149
CITY OF LINO LAKES, MINNESOTA
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
Business-Type
Governmental Activities Activities
General
General Special Other Obligation
Fiscal Obligation Assessments Long-Term Revenue
Year Bonds Payable Debt Bonds
2008 $11,184,000 $11,365,000 $ - $1,530,000
2009 10,712,000 10,265,000 4,260,000 1,170,000
2010 10,141,000 9,175,000 4,260,000 795,000
2011 9,421,000 7,985,000 3,695,000 405,000
2012 10,331,000 7,095,000 3,695,000 -
2013 9,610,000 5,975,000 3,695,000 -
2014 9,036,000 7,640,000 2,080,000 -
2015 16,377,291 6,620,000 1,720,000 -
2016 18,337,081 7,795,000 1,609,000 -
2017 14,837,768 4,905,000 233,475 -
Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See the Demographic and Economic Statistics schedule for personal income and population data.
(1) Personal income information is not yet available for 2017 from the Bureau of Economic Analysis Report
150
Table 9
Total Percentage Percentage
Primary of Assessed of Personal Per
Government Market Value Income Capita
$24,079,000 1.19%3.08%$1,205
26,407,000 1.24%3.44%1,301
24,371,000 1.22%3.13%1,206
21,506,000 1.19%2.59%1,049
21,121,000 1.29%2.46%1,024
19,280,000 1.27%2.19%925
18,756,000 1.24%2.04%888
24,717,291 1.46%2.64%1,205
27,741,081 1.63%2.84%1,334
19,976,243 1.10%(1)946
151
CITY OF LINO LAKES, MINNESOTA
RATIOS OF NET GENERAL BONDED DEBT
Last Ten Fiscal Years
General Special Total
Fiscal Obligation Assessments Primary
Year Bonds Payable Government
2008 $11,184,000 $11,365,000 $22,549,000
2009 10,712,000 10,265,000 20,977,000
2010 10,141,000 9,175,000 19,316,000
2011 9,421,000 7,985,000 17,406,000
2012 10,331,000 7,095,000 17,426,000
2013 9,610,000 5,975,000 15,585,000
2014 9,036,000 7,640,000 16,676,000
2015 16,377,291 6,620,000 22,997,291
2016 18,337,081 7,795,000 26,132,081
2017 14,837,768 4,905,000 19,742,768
Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See the Demographic and Economic Statistics schedule for population data.
Governmental Activities
152
Table 10
Less: Amounts Percentage
Per Available in Debt Net of Assessed Per
Capita (Total)Service Funds Bonded Debt Market Value Capita (Net)
$1,128 $3,405,272 $19,143,728 0.95%$958
1,033 3,457,349 17,519,651 0.82%863
955 2,986,102 16,329,898 0.82%808
849 2,638,129 14,767,871 0.82%720
845 3,035,557 14,390,443 0.88%698
748 3,357,196 12,227,804 0.80%587
789 2,501,738 14,174,262 0.94%671
1,121 2,813,226 20,184,065 1.19%984
1,256 8,420,263 17,711,818 1.04%851
935 5,171,905 14,570,863 0.86%690
153
CITY OF LINO LAKES, MINNESOTA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT Table 11
As of December 31, 2017
Estimated
Estimated Share of
Debt Percentage Overlapping
Outstanding Applicable*Debt
Overlapping debt:
Anoka County $110,265,000 6.2%$6,816,325
ISD 12 95,953,685 44.2%42,382,122
ISD 624 88,915,000 3.2%2,808,741
ISD 831 159,565,000 7.2%11,467,589
Metropolitan Council 1,484,038,432 0.6%8,469,233
Rice Creek Watershed District 343,818 33.2%114,215
Anoka County Railroad Authority 24,310,000 6.2% 1,502,787
Total overlapping 73,561,012
City of Lino Lakes direct debt $19,976,243 100%19,976,243
Total direct and overlapping debt $93,537,255
*For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed
property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable
assessed value that is within the City's boundaries and dividing it by each unit's total taxable assessed value.
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule
estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses
of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt
burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer
is a resident, and therefore responsible for repaying the debt, of each overlapping government.
Sources: taxable value data used to estimate applicable percentages provided by the County Property Appraiser. Debt
outstanding data provided by each governmental unit.
154
CITY OF LINO LAKES, MINNESOTA
LEGAL DEBT MARGIN INFORMATION Table 12
Last Ten Fiscal Years
Legal Debt Margin Calculation for Fiscal Year 2017
Market value $1,808,417,118
Applicable percentage 3%
Debt limit 54,252,514
Debt applicable to limit:
Total bonded debt 19,976,243
Less:
Special assessment bonds (4,905,000)
Tax abatement bonds (1,600,000)
Tax increment bonds (1,625,000)
Utility revenue bonds (1,420,000)
10,426,243
Legal debt margin $43,826,271
Net Debt
Net Debt Legal Amount of Debt Applicable
Fiscal Debt Applicable to Debt Applicable to to Limit
Year Population Limit Limit Margin Debt Limit Per Capita
2008 19,987 $60,658,830 $3,804,000 $56,854,830 6.27% $190
2009 20,305 64,036,746 3,642,000 60,394,746 5.69% 179
2010 20,216 60,622,086 3,386,000 57,236,086 5.59% 167
2011 20,505 54,123,645 2,961,000 51,162,645 5.47% 144
2012 20,625 49,213,676 4,591,000 44,622,676 9.33% 223
2013 20,833 45,595,717 4,280,000 41,315,717 9.39% 205
2014 21,129 45,297,635 4,191,000 41,106,635 9.25% 198
2015 20,519 50,830,982 11,941,250 38,889,732 23.49% 582
2016 20,803 50,978,666 10,122,081 40,856,585 19.86% 487
2017 21,117 54,252,514 10,426,243 43,826,271 19.22% 494
Legal Debt Margin Calculation for Fiscal Years 2008 Through 2017
155
CITY OF LINO LAKES, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS Table 13
Last Ten Fiscal Years
(2) (2)
Personal Per
Income Capita (3) (4)
Fiscal (1)(thousands Personal School Unemployment
Year Population of dollars)Income Enrollment Rate
2008 19,987 $781,132 $39,082 6,768 6.9%
2009 20,305 768,341 37,840 6,725 7.8%
2010 20,216 777,912 38,480 6,523 7.1%
2011 20,505 831,170 40,535 6,426 5.9%
2012 20,625 857,753 41,588 6,421 5.6%
2013 20,833 879,903 42,236 6,392 4.5%
2014 21,129 917,252 43,412 6,410 3.4%
2015 20,519 934,764 45,556 6,371 3.3%
2016 20,803 975,682 46,901 6,473 3.9%
2017 21,117 Not available Not available 6,500 3.1%
Sources:
(1) Estimates from Metropolitan Council, except for 2010 which is per the U.S. Census and 2016 which is a city estimate.
(2) Information from Bureau of Economic Analysis Report. Anoka County statistics used as local information is unavailable.
(3) Information from ISD # 12 website (audit report).
(4) Information from MN Department of Employment and Economic Development. Anoka County statistics used as local
information is unavailable.
156
CITY OF LINO LAKES, MINNESOTA
PRINCIPAL EMPLOYERS Table 14
Current Year and Nine Years Ago
Percentage Percentage
of Total City of Total City
Employer Employees Rank
Employment(1)Employees Rank Employment(1)
State of Minnesota Corrections 460 1 23.2% 600 1 33.1%
ISD 12 - Centennial Schools 391 2 19.7% - - -
Target Corporation 260 3 13.1% 240 3 13.2%
Curtis 1000 (AdGraphics/Taylor Corp 200 4 10.1% 260 2 -
Kohls 123 5 6.2% 160 5 8.8%
Molin Concrete Products 120 6 6.1% 135 6 7.4%
YMCA 120 7 6.1% 130 7 7.2%
Distribution Alternatives 120 8 6.1% - - -
Rehbein Transit, Inc.100 9 5.1% - - -
Anoka County Juvenile Center 86 10 4.3% - - -
Customer Manufacturing - - - 160 4 8.8%
Synovis Interventional Systems - - - 70 8 3.9%
Summit Fire Protection - - - 60 9 3.3%
Total 1,980 1,815
(1)The statistic for total City employment is not available, therefore the percentage represents the percentage of
the top ten listed.
Information about the 10th largest employer of 2008 is not available.
Source: City of Lino Lakes Official Statements and employer surveys
2017 2008
157
CITY OF LINO LAKES, MINNESOTA
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
Last Ten Fiscal Years
2008 2009 2010 2011
General Government:
Administration 5.00 5.00 4.00 3.50
Seniors 0.63 0.63 0.63 -
Finance 3.50 3.50 3.00 3.00
Economic Development 1.00 1.00 1.00 1.00
Planning 2.00 2.00 2.00 1.00
Community Development 2.75 2.75 2.25 2.00
Building 1.00 1.00 1.00 -
Other 1.40 1.40 1.40 0.70
Total General Government 17.28 17.28 15.28 11.20
Public Safety:
Sworn Officers 27.00 27.00 27.00 25.00
Civilians 4.75 4.75 4.25 4.00
Fire - - - -
Building Inspection 4.25 4.25 2.75 2.50
Total Public Safety 36.00 36.00 34.00 31.50
Public Works:
Streets 7.35 7.35 6.85 7.00
Other 1.15 1.15 1.15 1.00
Total Public Works 8.50 8.50 8.00 8.00
Parks, Recreation and Forestry 9.80 9.80 9.30 9.00
Water 2.15 2.15 2.15 2.15
Sewer 2.15 2.15 2.15 2.15
Total 75.88 75.88 70.88 64.00
Source: City Finance Office
Full-Time-Equivalent Employees as of December 31,
158
Table 15
2012 2013 2014 2015 2016 2017
3.50 3.50 3.50 3.50 4.00 4.00
- - - - - -
3.00 3.00 3.00 3.00 3.50 3.50
1.00 - - - - -
1.00 1.00 1.00 1.00 1.00 1.00
2.00 2.00 2.00 2.00 2.00 2.00
- - - - - -
0.70 0.70 0.70 0.70 0.65 0.65
11.20 10.20 10.20 10.20 11.15 11.15
25.00 25.00 25.00 26.00 27.00 27.00
3.00 3.00 4.00 4.00 4.50 4.50
- - 1.00 1.00 1.50 1.50
2.50 2.50 2.00 2.00 2.50 2.50
30.50 30.50 32.00 33.00 35.50 35.50
7.00 7.00 7.00 7.00 6.50 6.65
1.00 1.00 1.00 1.00 1.50 1.50
8.00 8.00 8.00 8.00 8.00 8.15
9.00 8.70 8.70 8.70 7.75 7.90
2.15 2.30 2.30 2.30 2.30 2.70
2.15 2.30 2.30 2.30 2.30 2.70
63.00 62.00 63.50 64.50 67.00 68.10
Full-Time-Equivalent Employees as of December 31,
159
CITY OF LINO LAKES, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
2008 2009 2010 2011
General Government:
Elections 2 1 2 1
Registered voters 12,723 11,805 12,284 11,705
Number of votes cast 11,051 4,354 8,545 4,314
Voter participation (registered)86.9%36.9%69.6%36.9%
Public Safety:
Police:
Calls for Service 6,871 6,353 6,398 6,384
Traffic Citations & Warnings 3,252 3,187 2,743 2,604
Part I Crime Rate 1,461 1,075 982 1,117
Part II Crime Rate 3,767 3,151 2,911 2,911
Police:
Case Numbers Generated
Avg Response Time (Emergency & Non-Emergency)
Part I Crime Offenses
Part II Crime Offenses
Clearance Rate
Fire:
Fire Call Load
Fire Property Loss
Fire Property Saved
Fire Inspections
Inspections:
Building Permits (1) (2)5,041 1,535 509 452
Value of Building Permits $15,852,780 $9,586,160 $11,295,493 $11,192,264
Public Works:
General Maintenance (hours)6,129 5,870 4,945 7,416
Street Mantenance (hours)3,851 3,267 3,099 4,352
Fleet Maintenance (hours)5,043 4,782 4,850 4,214
Snow Plowing/Sanding (hours)1,353 950 1,638 1,534
Culture and Recreation:
Parks
Park Maintenance (hours)11,136 12,406 9,257 9,813
Utilities:
Water Maintenance (hours)5,716 5,041 3,560 3,568
Sanitary Sewer Maintenance (hours)3,760 3,486 3,531 3,557
(1) 4,337 and 581 repair permits issued in 2008 - 2009, respectively, due to storm damage.
(2) Increase in permits issued - June 2017 storm damage.
(3) The Public Safety Department modified the metrics maintained for business purposes in 2016.
Those changes are reflected in the 2016 and 2017 Operating Indicators.
Source: Various City Departments
160
Table 16
2012 2013 2014 2015 2016 2017
212121
13,478 12,020 12,610 12,143 13,636 12,624
11,546 1,575 7,854 4,085 11,562 2,165
85.7% 13.1% 62.3% 33.6% 84.8% 17.1%
6,344 6,210 6,281 6,210 6,210 (3)
2,694 2,597 2,296 2,199 2,199 (3)
983 918 631 1,226 1,091 (3)
2,396 2,144 1,836 2,395 3,635 (3)
16,321 18,199
5:26 minutes 4:42 minutes
224 176
746 808
73% 82%
269 316
$694,000 $325,100
$10,511,300 $6,342,100
53 117
459 490 431 654 761 5,422
$10,751,626 $17,683,665 $13,535,514 $26,570,593 $53,390,619 $50,984,047
6,939 3,994 5,200 7,839 5,534 6,313
5,926 5,740 3,840 3,347 4,053 3,765
3,945 4,548 4,746 4,322 4,437 3,986
594 1,639 2,141 754 960 928
9,739 8,480 8,537 8,332 9,698 8,576
3,585 3,119 3,189 3,240 3,539 3,278
3,517 3,109 3,178 3,240 3,539 3,278
161
CITY OF LINO LAKES, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Table 17
Last Ten Fiscal Years
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Public Safety:
Police:
Stations 1111111111
Patrol Units 12 12 12 12 12 12 12 12 12 12
Fire:
Stations 1111111222
Fire Trucks 5555555778
Public Works:
Lights 673 673 673 673 673 673 673 673 815 838
Vehicles 29 29 29 29 29 29 29 29 39 39
City Streets (miles)100.7 100.7 100.7 100.7 100.7 100.7 100.7 100.7 100.7 100.7
Culture & Recreation:
Parks:
Parks 18 18 18 18 18 18 18 18 17 18
Park Acres 141 141 141 141 141 141 141 141 139.6 147
Trails (miles)26 26 26 26 26 26 26 26 29.75 30
Park Shelters 7776666666
Basketball Courts 6666666666
Fishing Pier 111111111-
Skating Rinks 4444444443
Soccer Fields 8888888864
Baseball/Softball Fields 20 20 20 20 20 20 20 20 8 8
Tennis Courts 222222222-
Playgrounds 16 16 16 16 16 16 16 16 15 16
Water:
Distribution System (miles)74.7 74.7 74.7 74.7 74.7 74.7 74.7 74.7 85.6 99.4
Water Connections 4,247 4,340 4,382 4,424 4,452 4,484 4,520 4,542 4,649 4,738
Gallons Pumped (millions)590 589 498 492 609 536 536 449 452 494
Number of Fire Hydrants 538 538 538 538 538 538 538 1024 1024 1028
Water Tower Capacity (millions gallons)2222222222
Sanitary Sewer:
Collection System (miles)69.8 69.8 69.8 69.8 69.8 69.8 69.8 77.9 77.9 87.0
Sewer Connections 4,447 4,486 4,530 4,567 4,567 4,624 4,685 4,685 4,817 4,976
Storm Sewer:
Pipe (miles)41.4 41.4 41.4 41.4 41.4 41.4 41.4 41.4 53.7 54.1
Source: Various City Departments
162
OTHER INFORMATION (UNAUDITED)
163
CITY OF LINO LAKES, MINNESOTA
SCHEDULE OF LONG-TERM DEBT
December 31, 2017
Final
Interest Issue Maturity
Rates Date Date
Long-term debt:
General Obligation Bonds:
2014A Certificates of Indebtedness 1.00%2/1/14 12/31/17
2015A Certificates of Indebtedness 1.00%2/1/15 12/31/18
2015B Certificates of Indebtedness 1.50% 8/25/15 12/31/20
2016A Certificates of Indebtedness 1.00%2/1/16 12/31/19
2017A Certificates of Indebtedness 1.00%3/1/17 12/31/20
G.O. Tax Abatement Bonds, Series 2006C 4.00% - 4.30% 8/15/06 2/1/17
G.O. Utility Revenue Bonds, Series 2006D 4.00% - 4.15% 8/15/06 2/1/17
G.O. CIP Refunding Bonds, Series 2006E 4.00% 11/1/06 2/1/18
G.O. TIF Bonds, Series 2007A 4.00% - 4.125% 7/15/17 2/1/24
G.O. Refunding Bonds, Series 2012A 1.00% - 2.00% 11/15/12 2/1/24
G.O. Bonds 2015A 2.00% - 3.00% 8/1/15 2/1/31
EDA Lease Revenue Bonds 2015B 2.00% - 3.00% 10/1/15 4/1/36
G.O. Utility Revenue Bonds, Series 2016A 2.00% 11/23/16 2/1/27
G.O. Tax Abatement Refunding Bonds 2016C 1.00% - 1.50% 11/23/16 2/1/23
Total General Obligation Bonds
Special Assessment Bonds:
G.O. Improvement Bonds, Series 2005A 4.35% - 5.15% 11/1/05 2/1/17
G.O. Imp & Utility Revenue Bonds, Series 2010A 2.00% - 3.00% 7/9/10 2/1/20
G.O. Improvement Bonds, Series, 2013A 1.25% - 4.00% 7/15/13 2/1/24
G.O. Improvement Bonds, Series 2014A 0.40% - 2.30% 11/20/14 2/1/26
G.O. Improvement Refunding Bonds, Series 2016B 0.875% - 1.50% 11/23/16 2/1/21
Total Special Assessment Bonds
G.O. Improvement Note, Series 2009A 3.70% - 4.00% 8/1/09 8/1/20
G.O. Capital Note, Series 2016A 2.00% 4/14/16 2/1/26
Total long-term debt
164
Exhibit 1
Payable Payable Principal
Original Prior January 1, December 31, Due in
Issue Payments 2017 Issued Payments 2017 2018
$495,000 $327,000 $168,000 $ - $168,000 $ - $ -
198,250 65,000 133,250 - 67,000 66,250 66,250
963,000 177,000 786,000 - 193,000 593,000 195,000
469,000 - 469,000 - 155,000 314,000 156,000
311,000 - - 311,000 - 311,000 102,000
2,460,000 705,000 1,755,000 - 1,755,000 - -
570,000 500,000 70,000 - 70,000 - -
2,990,000 2,160,000 830,000 - 405,000 425,000 425,000
4,215,000 2,190,000 2,025,000 - 400,000 1,625,000 190,000
2,015,000 520,000 1,495,000 - 225,000 1,270,000 230,000
3,095,000 - 3,095,000 - 190,000 2,905,000 195,000
4,350,000 - 4,350,000 - 165,000 4,185,000 170,000
1,420,000 - 1,420,000 - - 1,420,000 130,000
1,600,000 - 1,600,000 - - 1,600,000 225,000
25,151,250 6,644,000 18,196,250 311,000 3,793,000 14,714,250 2,084,250
5,550,000 3,190,000 2,360,000 - 2,360,000 - -
1,000,000 575,000 425,000 - 100,000 325,000 105,000
615,000 120,000 495,000 - 60,000 435,000 60,000
2,645,000 105,000 2,540,000 - 370,000 2,170,000 370,000
1,975,000 - 1,975,000 - - 1,975,000 480,000
11,785,000 3,990,000 7,795,000 0 2,890,000 4,905,000 1,015,000
4,260,000 2,915,000 1,345,000 - 1,345,000 - -
294,525 30,525 264,000 - 30,525 233,475 31,350
$41,490,775 $13,579,525 $27,600,250 $311,000 $8,058,525 $19,852,725 $3,130,600
2017
165
CITY OF LINO LAKES, MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIES
December 31, 2017
Year of Certificates of Certificates of Certificates of
Levy/Indebtedness Indebtedness Indebtedness
Collection 2015A 2015B 2016A
2017/2018 $70,258 $214,090 $167,097
2018/2019 - 213,119 167,559
2019/2020 - 214,216 -
2020/2021 - - -
2021/2022 - - -
2022/2023 - - -
2023/2024 - - -
2024/2025 - - -
2025/2026 - - -
2026/2027 - - -
2027/2028 - - -
2028/2029 - - -
2029/2030 - - -
2030/2031 - - -
2031/2032 - - -
2032/2033 - - -
2033/2034 - - -
2034/2035 - - -
$70,258 $641,425 $334,656
166
Exhibit 2
G.O.
G.O. EDA Lease Tax Abatement
Certificates of Refunding G.O.Revenue Refunding
Indebtedness Bonds Bonds Bonds Bonds
2017A 2012A 2015A 2015B 2016C Total
$113,087 $176,390 $274,378 $319,397 $276,176 $1,610,873
111,395 180,012 270,178 315,722 289,097 1,547,082
111,353 178,080 271,228 317,297 301,570 1,393,744
- 175,896 266,923 316,877 313,567 1,073,263
- 178,794 267,868 316,299 325,054 1,088,015
- 176,109 273,958 320,814 - 770,881
- - 274,588 319,764 - 594,352
- - 269,863 318,557 - 588,420
- - 269,798 317,192 - 586,990
- - 222,364 315,669 - 538,033
- - 222,626 319,239 - 541,865
- - 222,758 317,244 - 540,002
- - 221,708 320,342 - 542,050
- - - 317,231 - 317,231
- - - 319,200 - 319,200
- - - 318,780 - 318,780
- - - 317,940 - 317,940
- - - 316,680 - 316,680
$335,835 $1,065,281 $3,328,238 $5,724,244 $1,505,464 $13,005,401
167
CITY OF LINO LAKES, MINNESOTA
DEBT SERVICE PAYMENTS TO MATURITY
December 31, 2017
Certificates of Certificates of Certificates of
Indebtedness Indebtedness Indebtedness
2015A 2015B 2016A
Bonds payable $66,250 $593,000 $314,000
Future interest payable 663 17,880 4,720
$66,913 $610,880 $318,720
Payments to maturity:
2018 $66,913 $203,895 $159,140
2019 - 202,970 159,580
2020 - 204,015 -
2021 - - -
2022 - - -
2023 - - -
2024 - - -
2025 - - -
2026 - - -
2027 - - -
2028 - - -
2029 - - -
2030 - - -
2031 - - -
2032 - - -
2033 - - -
2034 - - -
2035 - - -
2036 - - -
$66,913 $610,880 $318,720
168
Exhibit 3
Page 1 of 2
G.O. CIP G.O.
Certificates of Refunding G.O. TIF Refunding G.O.
Indebtedness Bonds Bonds Bonds Bonds
2017A 2006E 2007A 2012A 2015A
$311,000 $425,000 $1,625,000 $1,270,000 $2,905,000
8,842 8,500 249,899 58,092 492,355
$319,842 $433,500 $1,874,899 $1,328,092 $3,397,355
$107,702 $433,500 $252,126 $244,660 $258,262
106,090 - 254,326 242,590 259,312
106,050 - 261,026 170,520 255,312
- - 267,126 168,560 256,263
- - 272,504 166,400 252,163
- - 282,016 169,001 253,013
- - 285,775 166,361 258,712
- - - - 259,263
- - - - 254,481
- - - - 254,362
- - - - 209,400
- - - - 209,587
- - - - 209,150
- - - - 208,075
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
$319,842 $433,500 $1,874,899 $1,328,092 $3,397,355
169
CITY OF LINO LAKES, MINNESOTA
DEBT SERVICE PAYMENTS TO MATURITY
December 31, 2017
G.O. Tax
EDA Lease G.O. Utility Abatement
Revenue Revenue Refunding
Bonds Bonds Bonds
2015B 2016A 2016C
Bonds payable $4,185,000 $1,420,000 $1,600,000
Future interest payable 1,502,956 145,300 68,913
$5,687,956 $1,565,300 $1,668,913
Payments to maturity:
2018 $300,888 $157,100 $244,150
2019 302,437 159,450 261,678
2020 298,937 161,700 273,770
2021 299,488 158,900 285,422
2022 299,012 156,100 296,605
2023 298,388 158,250 307,288
2024 302,538 155,350 -
2025 301,462 152,450 -
2026 300,237 154,500 -
2027 298,863 151,500 -
2028 297,338 - -
2029 300,587 - -
2030 298,613 - -
2031 301,106 - -
2032 298,062 - -
2033 298,800 - -
2034 298,200 - -
2035 297,200 - -
2036 295,800 - -
$5,687,956 $1,565,300 $1,668,913
170
Exhibit 3
Page 2 of 2
G.O.
G.O. Imp & G.O. G.O. Improvement
Utility Revenue Improvement Improvement Refunding G.O. Capital
Bonds Bonds Bonds Bonds Note
2010A 2013A 2014A 2016B 2016A Total
$325,000 $435,000 $2,170,000 $1,975,000 $233,475 $19,852,725
14,925 59,160 124,502 53,048 19,041 2,828,796
$339,925 $494,160 $2,294,502 $2,028,048 $252,516 $22,681,521
$113,175 $74,460 $399,633 $501,575 $36,020 $3,553,199
110,025 72,900 406,158 506,780 36,217 3,080,513
116,725 71,100 401,788 505,868 36,399 2,863,210
- 69,000 406,390 513,825 35,739 2,460,713
- 71,500 162,055 - 35,904 1,712,243
- 68,900 159,280 - 36,053 1,732,189
- 66,300 161,151 - 36,184 1,432,371
- - 162,645 - - 875,820
- - 35,402 - - 744,620
- - - - - 704,725
- - - - - 506,738
- - - - - 510,174
- - - - - 507,763
- - - - - 509,181
- - - - - 298,062
- - - - - 298,800
- - - - - 298,200
- - - - - 297,200
- - - - - 295,800
$339,925 $494,160 $2,294,502 $2,028,048 $252,516 $22,681,521
171
CITY OF LINO LAKES, MINNESOTA
INSURANCE IN FORCE Exhibit 4
December 31, 2017
Amount
General Liability:
Bodily Injury/Property Damage $2,000,000
Personal Injury/Police Professional Liability 2,000,000
Medical Expense Occurrence Limit 2,500
Medical Expense Aggregate 10,000
Property Damage ($1,000 Deductible)
Property:
Buildings and Contents (including Mobile and EDP - Electronic Equipment & Valuable Papers)37,927,418
Faithful Performance Blanket Bond 500,000
Storage Tank Liability 250,000
Rented/Leased Equipment ($1,000 Deductible)500,000
Public Official and Employee Liability ($1,000 Deductible each occurrence)1,500,000
Automotive:
Bodily Injury and Property Damage 2,000,000
Comprehensive and Collision Actual Cash Value
Uninsured Motorists 200,000
Worker's Compensation Statutory
Employer Liability 1,500,000
Umbrella Liability 1,000,000
Crime - Theft Disappearance and Destruction ($1,000 Deductible)250,000
Coverage
172
CITY OF LINO LAKES, MINNESOTA
TAXABLE VALUATIONS, TAX LEVIES AND TAX RATES Exhibit 5
Tax Capacity Tax Capacity
Values Values
2016/2017 2015/2016
Taxable valuations:
Total $19,643,805 $18,440,817
Fiscal disparities:
Distribution 2,792,112 2,755,743
Contribution (1,168,180) (1,115,822)
Less: Captured Tax Increment Value (293,970) (261,525)
$20,973,767 $19,819,213
Tax Tax
Certified Capacity Certified Capacity
Levy Rate Levy Rate
Taxes Levied:
Revenue $7,360,431 35.105 $7,018,572 35.025
Bond and Interest 2,131,424 10.035 2,039,856 10.994
Totals $9,491,855 45.140 $9,058,428 46.019
The tax capacity rate is based on the total certified levy net of the fiscal disparity distribution.
173
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174
4810 White Bear Parkway, St. Paul, MN, 55110 651.426.7000 www.redpathcpas.com
MINNESOTA LEGAL COMPLIANCE REPORT
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States
of America, and the standards applicable to financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, the financial statements of the
governmental activities, the business-type activities, each major fund, and the aggregate
remaining fund information of the City of Lino Lakes, Minnesota as of and for the year ended
December 31, 2017, and the related notes to the financial statements, which collectively
comprise the City of Lino Lakes, Minnesota’s basic financial statements and have issued our
report thereon dated May 29, 2018.
The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor
pursuant to Minn. Stat. § 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 City of
Lino Lakes, Minnesota 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 of Lino Lakes, Minnesota’s
noncompliance with the above referenced provisions.
The purpose of this report is solely to describe the scope of our testing of compliance and the
results of that testing, and not to provide an opinion on compliance. Accordingly, this
communication is not suitable for any other purpose.
REDPATH AND COMPANY, LTD.
St. Paul, Minnesota
May 29, 2018
4810 White Bear Parkway, St. Paul, MN, 55110 651.426.7000 www.redpathcpas.com
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited, in accordance with the auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States, the financial
statements of the governmental activities, the business-type activities, each major fund, and the
aggregate remaining fund information of the City of Lino Lakes, Minnesota as of and for the
year ended December 31, 2017, and the related notes to the financial statements, which
collectively comprise the City of Lino Lakes, Minnesota’s basic financial statements and have
issued our report thereon dated May 29, 2018.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City of
Lino Lakes, Minnesota’s internal control over financial reporting (internal control) to
determine the audit procedures that are appropriate in the circumstances for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the City of Lino Lakes, Minnesota’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the City of Lino Lakes,
Minnesota’s internal control.
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 entity’s financial statements will not be
prevented, or detected and corrected on a timely basis. 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 the attention of those charged with governance.
Our consideration of internal control was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control
that might be material weaknesses or significant deficiencies. Given these limitations, during
our audit we did not identify any deficiencies in internal control that we consider to be material
weaknesses. However, material weaknesses may exist that have not been identified.
Independent Auditor’s Report on Internal Control over
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
Page 2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Lino Lakes, Minnesota’s
financial statements are free from material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts and grant agreements, noncompliance
with which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the City of Lino Lakes, Minnesota’s internal control or on compliance. This report is an
integral part of an audit performed in accordance with Government Auditing Standards in
considering the City of Lino Lakes, Minnesota’s internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
REDPATH AND COMPANY, LTD.
St. Paul, Minnesota
May 29, 2018
4810 White Bear Parkway, St. Paul, MN, 55110 651.426.7000 www.redpathcpas.com
COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE
To the Honorable Mayor and
Members of the City Council
City of Lino Lakes, Minnesota
We have audited the financial statements of the governmental activities, the business-type
activities, each major fund and the aggregate remaining fund information of the City of Lino
Lakes, Minnesota (the City) for the year ended December 31, 2017. Professional standards
require that we provide you with information about our responsibilities under generally accepted
auditing standards and Government Auditing Standards, as well as certain information related to
the planned scope and timing of our audit. We have communicated such information in our
letter to you dated April 16, 2018. Professional standards also require that we communicate to
you the following information related to our audit.
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 Note 1 to the financial
statements. As described in Notes 10 and 20 to the financial statements, the City implemented
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits
Other Than Pensions for the year ended December 31, 2017. As a result, the liability reported
for OPEB on the City’s full-accrual financial statements significantly increased. Beginning net
position of governmental activities has also been restated to account for this change.
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
financial statements 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. We believe the
most sensitive estimate affecting the City’s financial statements was the discount rate used to
measure the net pension liability. This rate is based on actuarial studies. We evaluated the key
factors and assumptions used to develop this estimate in determining that it is reasonable in
relation to the financial statements taken as a whole.
City of Lino Lakes, Minnesota
Communication With Those Charged With Governance
Page 2
Certain financial statement disclosures are particularly sensitive because of their
significance to financial statement users. Determining sensitivity is subjective, however, we
believe the disclosures most likely to be considered sensitive are Note 8 – Defined Benefit
Pension Plans – PERA and Note 20 – Change in Accounting Principle.
The financial statement disclosures are neutral, consistent and clear.
Difficulties Encountered in Performing the Audit
We encountered no 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. There were no uncorrected misstatements that have an effect
on our opinion on the financial statements. In addition, none of the misstatements detected as a
result of audit procedures and corrected by management were material, either individually or in
the aggregate, to each opinion unit’s financial statements taken as a whole.
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 have requested certain representations from management that are included in the
management representation letter dated May 29, 2018.
Management Consultations with Other Independent 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.
City of Lino Lakes, Minnesota
Communication With Those Charged With Governance
Page 3
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.
Receivables related to the Legacy at Woods Edge Development
At December 31, 2017, the balance of receivables related to the Legacy at Woods Edge
Development was $6,646,176. The receivables are presented in the financial statements as
special assessments receivable ($2,994,379) and interfund loans receivable ($3,651,797).
Collection of these amounts is dependent upon receiving sufficient proceeds from land sales and
tax increment. Management believes all amounts are collectible.
Other Matters
We applied certain limited procedures to the management’s discussion and analysis, the
budgetary comparison information, and the schedules of OPEB and pension information, which
are required supplementary information (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.
We were engaged to report on the combining and individual nonmajor fund financial
statements and schedules which accompany the financial statements but are not RSI. With
respect to this supplementary information, we made certain inquiries of management and
evaluated the form, content, and methods of preparing the information to determine that the
information complies with accounting principles generally accepted in the United States of
America, the method of preparing it has not changed from the prior period, and the information
is appropriate and complete in relation to our audit of the financial statements. We compared
and reconciled the supplementary information to the underlying accounting records used to
prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the introductory section, the statistical section or the
other information which accompany the financial statements but are not RSI. Such information
has 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 it.
City of Lino Lakes, Minnesota
Communication With Those Charged With Governance
Page 4
Restrictions on Use
This information is intended solely for the use of the City Council and management of the
City of Lino Lakes, Minnesota and is not intended to be, and should not be, used by anyone other
than these specified parties.
REDPATH AND COMPANY, LTD.
St. Paul, Minnesota
May 29, 2018
City of Lino Lakes, Minnesota
2017 Audit Review
June 4, 2018
Andy Hering, CPA
Phone: 651-407-5877
Email: ahering@redpathcpas.com
1
Excellence in Financial Reporting
2
Follow Up On 2016 Findings
Internal Controls
•Financial Statement Corrections finding which was triggered by an
adjustment to the allocation of the net pension liability
•Item Corrected
Minnesota Legal Compliance
•The City held two fixed income mutual funds which did not appear to
be allowable investments under Statute 118A.04
•Item Corrected by selling the mutual funds on 5/24/17
3
Reports Issued by Auditor
Opinion on the Fair Presentation of the Financial Statements
Report on Internal Controls
Report on Minnesota Legal Compliance
Communication to Those Charged with Governance
4
Opinion on Financial Statements
What did we do?
•Audited the financial statements, which are the responsibility of
management.
How did we do it?
•Audit Standards
–GAAS (AICPA)
–GAGAS (GAO)
•Plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
What is the result?
•An unmodified opinion was issued on the 2017 financial statements.
5
Report on Internal Controls
What did we do?
•We gained an understanding of internal controls in place and their
effectiveness in order to design our audit procedures for expressing an
opinion on the financial statements.
How did we do it?
•Obtain understanding of controls on each major class of transaction
and account balance.
•Select a sample of transactions and perform detailed tests to
determine adherence to controls in place and effectiveness.
What is the result?
•No internal control findings.
6
Report on Minnesota Legal Compliance
What did we do?
•Followed the audit guide published by the Office of the State Auditor. The
guide consists of seven sections:
–Depositories of public funds and investments
–Conflicts of interest
–Public indebtedness
–Contracting bid laws
–Claims and disbursements
–Tax increment
–Miscellaneous provisions
How did we do it?
•Select sample of transactions to test for compliance with statutory provisions.
What is the result?
•No legal compliance findings.
7
Communication to Those Charged with Governance
Accounting policies used and/or changed
•No significant accounting policies were changed during 2017
•One new accounting standard was implemented during 2017
–GASB 75 Accounting and Financial Reporting for Postemployment
Benefits Other Than Pensions
The liability for such benefits is now calculated differently
Implementing the standard resulted in a restatement to beginning equity in
the amount of $692,000
Accounting estimates in the financial statements.
•The discount rate used to measure the net pension liability ($6,113,000)
No difficulties encountered in performing the audit.
No disagreements with management.
Other Matters
•Legacy at Woods Edge receivables
•Property tax collection rate –99.5% for 2017.
8
Pensions
9
General Police
Employees and Fire
Plan Plan Total
1 Change in net pension liability:
2 Change in actuarial assumptions (1)($265,000)($4,926,000)($5,191,000)
3 Change in proportion (2)165,000 (67,000)98,000
4 Experience difference (3)87,000 80,000 167,000
5 Earnings difference (4)(449,000)(1,101,000)(1,550,000)
6 Lino Lakes' share of 2017 pension expense 163,000 (459,000)(296,000)
7 Contributions to the plan by City of Lino Lakes (200,000)(428,000)(628,000)
8 Contributions to the plan by State of Minnesota - (23,000)(23,000)
9 Decrease in net pension liability (499,000)(6,924,000)(7,423,000)
10 Beginning net pension liability 3,142,000 10,394,000 13,536,000
11 Ending net pension liability $2,643,000 $3,470,000 $6,113,000
1. The discount rate was increased from 5.6% to 7.5% for the Police and Fire Plan. The change occurred because
funds are now expected to be available to make all future benefit payments of current plan members.
2. The City's proportion is based upon its contributions to the plan in comparison to all participants.
3. This is the change between expected and actual experience in the measurement of the pension liability.
4. This is the difference between projected and actual earnings on plan investments.
Summary of Financial Activity
10
Notes:
•Debt service funds –approximately $3.5M of cash on hand at 12/31/16 was used
to refund two bonds on 2/1/17
•$1.1M of MSA funds were used to pay off the Note Payable to Anoka Co
•Enterprise funds –unrestricted fund balance increased 983,000 to $14.8M
Change Fund Cash
Debt Interfund in Fund Balance Balance
Fund Type Revenue Expenditures Issued Transfers Balance 12/31/2017 12/31/2017
General Fund $10,245,000 $9,244,000 $ - ($440,000)$561,000 $6,817,000 $6,648,000
Special Revenue Funds 678,000 387,000 - (33,000)258,000 740,000 623,000
Debt Service Funds 2,840,000 8,693,000 - 2,406,000 (3,447,000)2,291,000 5,165,000
Capital Project Funds 3,476,000 2,872,000 311,000 (2,071,000)(1,156,000)14,085,000 12,376,000
Permanent Funds 9,000 - - - 9,000 123,000 123,000
Enterprise Funds 3,963,000 3,147,000 - 138,000 954,000 46,678,000 13,922,000
Total $21,211,000 $24,343,000 $311,000 $ - ($2,821,000)$70,734,000 $38,857,000
General Fund Summary
11
Favorable
Final (Unfavorable)
Budget Actual Variance
Revenues $10,239,000 $10,245,000 $6,000
Expenditures 9,555,000 9,244,000 311,000
Revenues over expenditures 684,000 1,001,000 317,000
Other financing sources (uses):
Transfers in 439,000 439,000 -
Transfers out (879,000)(879,000) -
Total other financing sources (uses)(440,000)(440,000)0
Net change in fund balance $244,000 $561,000 $317,000
General Fund 5 Year History
12
Fund Balance
Interfund Ending as a Percent of
Transfers Increase Fund Expenditures &
Revenues Expenditures (Net)(Decrease)Balance Transfers Out
2013 $8,696,000 $7,988,000 ($556,000)$152,000 $5,386,000 63%
2014 8,729,000 8,253,000 (555,000)(79,000)5,307,000 60%
2015 9,350,000 8,601,000 (110,000)639,000 5,946,000 65%
2016 9,417,000 8,904,000 (203,000)310,000 6,256,000 65%
2017 10,245,000 9,244,000 (440,000)561,000 6,817,000 67%
General Fund Monthly Cash Balances
13
Special Revenue Funds
14
Change Fund
Interfund in Fund Balance
Fund Revenue Expenditures Transfers Balance 12/31/2017 Comments
Program Recreation $109,300 $142,700 $ - ($33,400)$4,700
Fund balance has decreased by
$109,000 over the past three
years.
Economic Development Authority 100 600 89,000 88,500 313,300
Transfer in from American Legion
land sale; EDA has a $225,000
note receivable due in 2037.
Cable TV Fund 67,600 117,800 - (50,200)83,900 Expenditures for Council
Chambers upgrade.
Blue Heron Days 22,800 27,300 - (4,500)7,200 Expenditures are supported by
contributions and donations.
Federal Narcotics 436,100 82,000 (121,700)232,400 262,300 City's share from a 2010 federal
narcotics case - settled in 2017.
State Narcotics 16,500 6,100 - 10,400 23,600 Routine activity for 2017.
DUI Forfeitures 25,900 10,800 - 15,100 45,000 Routine activity for 2017.
Totals $678,300 $387,300 ($32,700)$258,300 $740,000
Debt Service Funds
15
Final
Future Maturity
Delinquent Scheduled Principal &Final
Fund Taxes and Deferred Interest Maturity
Balance Future Assmts Tax Levies Total Payments Date
Special Assessment Debt:
Imp and Utility Bonds of 2010A $600 $400 $ - $1,000 $340,000 2/1/20
Improvement Bonds of 2013A 287,000 452,000 - 739,000 494,000 2/1/24
Improvement Bonds of 2014A 1,036,000 382,000 - 1,418,000 2,295,000 2/1/26
Improvement Bonds of 2016B (1,932,000)2,994,000 - 1,062,000 2,028,000 2/1/21
Other Debt Supported by Taxes and User Fees:
Certificates of Indebtedness 186,000 4,000 1,382,000 1,572,000 1,316,000 12/31/18-20
CIP Bonds of 2006E 971,000 3,000 - 974,000 434,000 2/1/18
TIF Bonds of 2007A 150,000 - - 150,000 1,875,000 2/1/24
Bonds of 2012A 318,000 18,000 1,065,000 1,401,000 1,328,000 2/1/24
Bonds of 2015A 451,000 1,000 3,328,000 3,780,000 3,397,000 2/1/31
Lease Revenue Bonds of 2015B 258,000 2,000 5,724,000 5,984,000 5,688,000 4/1/36
Capital Note of 2016A 300 - - 300 253,000 2/1/26
Utility Revenue Bonds of 2016A 254,000 - - 254,000 1,565,000 2/1/27
Tax Abatement Bonds of 2016C 312,000 2,000 1,505,000 1,819,000 1,669,000 2/1/23
Total special assessment debt $2,291,900 $3,858,400 $13,004,000 $19,154,300 $22,682,000
Fund Description
December 31, 2017
16
Capital Project Funds
Revenue Change Fund
and Debt Interfund in Fund Balance
Fund Proceeds Expenditures Transfers Balance 12/31/2017 Comments
Closed Bond Fund $20,000 $6,000 ($281,000)($267,000)$612,000 317k transfer to the General Fund
Building and Facilities 188,000 219,000 - (31,000)2,507,000 Expenditures include AC upgrade,
Police Dept furniture
Capital Equipment Revolving 438,000 1,111,000 - (673,000)425,000
2 pumpers and a ladder truck
purchased in 2017 from Centennial
FD proceeds
Office Equipment Revolving 1,000 16,000 25,000 10,000 44,000 Variety of smaller purchases funded
by a General Fund transfer
Dedicated Parks 366,000 345,000 36,000 57,000 309,000 Park Dedication fees spent on
NorthPointe Park improvements
Area and Unit Charge 1,652,000 25,000 (237,000)1,390,000 7,656,000
$1,325,000 of assmt revenue,
transfers to fund debt service and
capital projects
Tax Increment Financing 1-5 42,000 1,000 - 41,000 290,000 TIF 1-5 has no current obligations
Tax Increment Financing 1-10 153,000 1,000 (152,000) - 190,000 TIF revenue transferred to
Improvement Bonds of 2016B fund
Tax Increment Financing 1-11 121,000 3,000 (121,000)(3,000)(778,000)TIF revenue transferred to
Improvement Bonds of 2016B fund
Tax Increment Financing 1-12 - 1,000 - (1,000)(1,000)Clearwater Creek TIF District - new
MSA Construction 433,000 - (1,602,000)(1,169,000)843,000 Transfers to TIF Bonds of 2007A & to
pay off the 2009A Note to Anoka Co
Street Maintenance 48,000 512,000 541,000 77,000 260,000 Rec'd transfer from General Fund to
finance 2017 street maint projects
Surface Water Management 280,000 72,000 37,000 245,000 980,000 $273,000 of assmt revenue
Street Reconstruction 20,000 - - 20,000 706,000 No 2017 projects
Surface Water Maintenance 1,000 107,000 125,000 19,000 101,000 Rec'd transfer from General Fund to
finance 2017 projects
21st Avenue Extension - 2,000 201,000 199,000 - Project completed, fund closed
Fire House # 2 Construction 1,000 4,000 6,000 3,000 - Project completed, fund closed
Well # 6 Construction - 14,000 (9,000)(23,000) - Project completed, fund closed
NorthPointe Improvements 3,000 - (325,000)(322,000) - Project completed, fund closed
Birch St / Centerville Rd Improvements 1,000 1,000 - - 134,000 Project nearly complete @ 12/31/17
2015 Street Reconstruction 1,000 1,000 (196,000)(196,000) - Project completed, fund closed
Blackduck / Aqua Lane Watermain Imp 3,000 67,000 (274,000)(338,000) - Project completed, fund closed
2040 Comp Plan Update 16,000 166,000 154,000 4,000 4,000 Received transfers from General
Fund and Area and Unit Charge Fund
2018 Street Reconstruction - 198,000 - (198,000)(198,000)West Shadow Lake Drive and LaMotte
neighborhood projects
Totals $3,788,000 $2,872,000 ($2,072,000)($1,156,000)$14,084,000
Enterprise Funds –Change in Net Position
17
2017 2016 2017 2016
Water Water Sewer Sewer
Fund Fund Fund Fund
Operating revenue $1,151,000 $1,095,000 $1,699,000 $1,659,000
Operating expenses 1,245,000 1,331,000 1,902,000 1,718,000
Operating loss (94,000)(236,000)(203,000)(59,000)
Non-operating revenue (expense)39,000 3,000 67,000 (66,000)
Capital contributions 588,000 1,974,000 418,000 765,000
Transfers in (out)69,000 (35,000)69,000 (245,000)
Change in net position $602,000 $1,706,000 $351,000 $395,000
Cash $5,477,000 $4,948,000 $8,444,000 $8,523,000
Unrestricted net position $5,455,000 $4,883,000 $9,391,000 $8,980,000
Enterprise Funds –Cash Flow
18
2017 2016 2017 2016
Water Water Sewer Sewer
Fund Fund Fund Fund
Cash flows from:
Operating activities $444,000 $261,000 $141,000 $559,000
Investment income 39,000 40,000 67,000 67,000
Transfers / Interfund loans 69,000 (35,000)(287,000)(245,000)
Acquisition of capital assets (23,000)(1,056,000) - -
Increase (decrease) in cash 529,000 (790,000)(79,000)381,000
Cash - January 1 4,948,000 5,738,000 8,523,000 8,142,000
Cash - December 31 $5,477,000 $4,948,000 $8,444,000 $8,523,000
WS – Item 4
WORK SESSION STAFF REPORT
Work Session Item No. 4
Date: June 4, 2018
To: City Council
From: Michael Grochala
Re: Watermark Project Status
Background
In June of 2016, the City Council passed Resolution No. 16-51 approving the PUD
Development Stage Plan/Preliminary Plat for Watermark. On December 11, 2017 the
City Council approved Resolution No. 17-133, amending the Watermark PUD
Development Stage Plan.
Since the approvals in December staff has been working with Lennar to revise the
preliminary development plans based on the conditions of approval. The following
actions will be brought forward over the next few months:
1. Rice Creek Watershed District (RCWD) Comprehensive Stormwater
Management Plan (CSMP). The CSMP defines the trunk drainage plan and
stormwater management requirements for approximately 1,400 acres between
Peltier Lake and the municipal border with Hugo. RCWD will be considering
approval of the plan at their June 6, 2018 meeting. Once approved the City can
move forward with design on the Peltier Lake Outlet improvements.
2. Grading and Trunk Utility improvements. Lennar is proposing to commence
grading and trunk utility improvements. Staff is reviewing the construction plans
and preparing the Grading and Trunk Utility Improvement agreement. Staff is
anticipating consideration by the City Council at the June 29, 2018 meeting.
3. Final Stage Plan/Final Plat. Lennar is preparing submittal on the Final Stage Plan
and Final Plat for it’s first phase. Staff expects Planning and Zoning Board
review in July. City Council action is expected in August. Approvals will also
include consideration of the Master Development Agreement. Phase 1 includes
approximately 193 lots.
4. Peltier Lake Outlet Improvements. WSB is continuing to work on the land
appraisals. Staff is preparing a funding plan for review by City Council. The
primary funding source is Surface Water Management Trunk funds. The project
will include an assessment agreement with Mattamy/Lennar.
Requested Council Direction
None. Update only.
Attachments
1. None
WS – Item 5
WORK SESSION STAFF REPORT
Work Session Item No. 5
Date: June 4, 2018
To: City Council
From: Jeff Karlson, City Administrator
Re: City Website Redesign
Background
At the May 7th work session, the City Council requested additional information about the
Responsive Website Design upgrade proposed by GovOffice. Mike Chaloupka of
GovOffice prepared the information below to address the Council’s questions. He also
provided links to three city webpages that were upgraded to the Responsive Website
Design.
Why Responsive Website Design (RWD)? The number of U.S. residents using
smartphones increases each year, and the number of visits to government websites
increases annually, too. To extend service to the public whose choice of device is a
smartphone—don’t forget about tablets, too—a fully mobile-friendly RWD website is the
answer, as it conforms to any device from large desktop monitors to small smartphone
screens in either portrait or landscape view.
Why Now? RWD is not only the future, it is the present. All professional organizations,
including local governments, should be looking at RWD for its next website design/
redesign. Many local governments across the country have already made the switch.
Generally, local governments are slow to adopt new Internet technologies, so while RWD
itself is not new, it is a new concept to cities. Most cities, including Minnesota cities, do
not yet have a Responsive Website Design. Making the switch now to RWD will serve
the City of Lino Lakes’ citizens better right away. Lino Lakes would become a model of
excellence.
Below are links to the RWD of two Minnesota cities and a third to a city in Iowa that has
a feature which may appeal to Lino Lakes.
http://www.cityofluverne.org/
http://pinecity.govoffice.com/
http://www.cityofforestcity.com/
Luverne and Pine City are excellent examples of cities that have high quality images to
showcase on their website. Lino Lakes has images like these on the current website and
will have access to the same high quality images for use on the new website.
The large homepage images slide on a loop that are self-administered, meaning they may
be put up and taken down at any time and at no additional cost. While neither Luverne
nor Pine City is doing so at the moment, their images may be captioned and linked to any
webpage. Presently, the City of Lino Lakes does have the Image Slider feature, but it
appears on a much smaller scale and is not Responsive. The redesign will take care of
that.
Further, the City’s current design has four Selectable Background Images, which is a nice
feature, but those four images are locked in and cannot be swapped for others without a
charge. The same goes for the five framed images immediately atop the body of the
pages (called “image banners”). Image banners are now considered a dated feature on
websites, and the new RWD will not have them.
Finally, both Luverne and Pine City do a nice job of having pertinent information on the
homepage without going overboard. GovOffice believes in simple, navigable
homepages, but clients may decide for themselves how deep they wish to go.
Accordingly, GovOffice RWDs are designed to maximize available horizontal space to
support a lot of homepage content in the event a client wishes to do that. Because of that
capability, even with all of the content on Lino Lakes’ current homepage, the amount of
scrolling required to see all homepage content on the new, Responsive Design will be
less than it is today on the City’s fixed width display (only 2/3 of screen width supports
self-admin. content).
The reason for sharing the City of Forest City, Iowa’s RWD is the incorporation of a
specific feature: Image Carousel, found immediately above News & Announcements and
Meeting Calendar on the homepage. This feature may be substituted for the Filmstrip
feature (Filmstrip appears just above Image Carousel). Forest City chose to have both
Filmstrip and Image Carousel, but they are somewhat redundant. Both are terrific, self-
admin features, but only one is important to have. Again, Lino Lakes may choose either
Filmstrip or Image Carousel, and it will be covered by the proposal.
Pricing and Payment
1. The Budget Payment Plan ($3925 per year for 3 years) is not required. If the City
wishes to upgrade to a Responsive Website Design (RWD), but not spread its upgrade
cost evenly over a 3-year period, a one-time purchase of the Progressive RWD
package may be made in the amount of $7,995.
2. The $7995 charge, whether paid in a lump sum or rolled into a 3-year Budget
Payment Plan, includes more than a Responsive Website Design. Also involved will
be the City’s first major, professional rework of its navigation menu since it became a
client in December 2004. Also included is additional Content Service, specifically, a
Homepage Setup performed by the GovOffice Team. A Homepage Setup ensures
that the homepage looks and performs at its very best at launch.
3. If the three-year Budget Payment Plan is selected (the City need not provide us an
answer until toward the end of its first three years), there are several benefits: (1) the
City may spread the cost of the upgrade evenly over a three-year period, and there is
no charge added to enroll in this program; (2) all rates within the Agreement (Service
& Maintenance, Graphic Design, Content Services, and SSL SuperForms Module)
are locked-in, insulating the City from any rate increase that may take place over the
next three years; and (3) if the City renews the Agreement in 2021, GovOffice will
repeat all of the services in the 2018 Agreement, and the City’s annual rate will
remain the same. Thus, the City is insulated from any rate increase for the next six
years and will know what its payment will be, thereby making annual budgeting
easier.
Requested Council Direction
Does the Council wish to move forward with the new design? The three-year budget
plan would be paid for out of the Cable TV Fund, which is specifically for expenditures
associated with Cable TV programming and communications.
WS – Item 6
WORK SESSION STAFF REPORT
Work Session Item No. 6
Date: June 4, 2018
To: City Council
From: Lisa Hogstad-Osterhues
Re: Park Board Opening
Background
A Park Board member has resigned from the board leaving an open seat.
Council recently interviewed five candidates. The incumbent was chosen to fill the seat.
The candidates who were not selected are as follows: Andrea Schmidt, Danielle
Seraphine, Elizabeth Dobson and Melyssa Mdumuka.
Requested Council Direction
Council direction on filling the open Park Board position.
Attachment
None
Item #8
Monthly Progress Report
June 4, 2018
Item Last Action Taken Staff Status
Digital Scanning Project 8/7/17 – City Clerk provided a written
report of what has been completed
Julie Staff is utilizing a volunteer to
augment the process
White Bear Lake Restoration
Assn. v. Dept. of Natural
Resources (DNR)
5/11/18 – The DNR filed an appeal to the
Minnesota Court of Appeals regarding
the district court’s October 4, 2017
judgment and all related decisions
Jeff A legislative bill was signed
into law prohibiting the DNR
from enforcing the judge’s
orders until July 2019
Upgrade of HD Audio/Visual
Equipment in Council
Chambers and Control Room
4/23/18 – Another project manager was
assigned to complete punch list items
Jeff Legs will be installed under
the dais, caulk will be
replaced, and trim work on
podium will be finished
Culvert Maintenance ACD
10-22-32
7/5/17 – Staff was directed to monitor the
culvert and to work with the RCWD on a
longer term solution
Mike RCWD cleaned the culvert.
Staff continues to monitor it.
Labor Negotiations Update AFSCME – City gave union “last, best
final offer”
Local 49 – Final offer was made, but no
further action has been taken
LELS 299 (Police Officers) – Filed for
arbitration
LELS 260 (Sergeants) – Filed for
mediation
Jeff LELS 260 – Mediation
scheduled for June 20th
LELS 299 – Arbitration
scheduled for August 15
Employment Update Staff will make a hiring recommendation
at the June 11 Council meeting to fill the
vacant police officer position
Jeff Selection process is underway
for following positions: Police
Officer and POC Fire
Lieutenant