HomeMy WebLinkAbout2021 Annual Comprehensive Financial Report
ANNUAL COMPREHENSIVE FINANCIAL REPORT
OF THE
CITY OF LAKE ELMO, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2021
Prepared By: Finance Department
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CITY OF LAKE ELMO, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
Letter of Transmittal 3
Certificate of Achievement for Excellence in Financial Reporting 9
Principal City Officials 11
Organization Chart 12
Independent Auditor's Report 15
Management's Discussion and Analysis 21
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position Statement 1 35
Statement of Activities Statement 2 36
Fund Financial Statements:
Balance Sheet - Governmental Funds Statement 3 38
Reconciliation of the Balance Sheet of Governmental Funds
To the Statement of Net Position Statement 4 39
Statement of Revenues, Expenditures and Changes in Fund Balance -
Governmental Funds Statement 5 40
Reconciliation of the Statement of Revenues, Expenditures and Changes
In Fund Balance of Governmental Funds to the Statement of Activities Statement 6 41
Statement of Net Position - Proprietary Funds Statement 7 42
Statement of Revenues, Expenses and Changes in Fund Net Position -
Proprietary Funds Statement 8 43
Statement of Cash Flows - Proprietary Funds Statement 9 44
Notes to Financial Statements 45
INTRODUCTORY SECTION
FINANCIAL SECTION
CITY OF LAKE ELMO, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
Required Supplementary Information:
Budgetary Comparison Schedule - General Fund Statement 10 84
Schedule of Changes in the Total OPEB Liability and Related Ratios Statement 11 88
Schedule of Proportionate Share of Net Pension Liability -
General Employees Retirement Fund Statement 12 89
Schedule of Pension Contributions -
General Employees Retirement Fund Statement 13 90
Schedule of Proportionate Share of Net Pension Liability -
Public Employees Police and Fire Fund Statement 14 91
Schedule of Pension Contributions -
Public Employees Police and Fire Fund Statement 15 92
Schedule of Changes in the Net Pension Liability and Related Ratios -
Lake Elmo Firefighters Relief Association Statement 16 93
Schedule of Contributions -
Lake Elmo Firefighters Relief Association Statement 17 94
Notes to RSI 95
Combining and Individual Nonmajor Fund Financial Statements:
Combining Balance Sheet - Nonmajor Governmental Funds Statement 18 100
Combining Statement of Revenues, Expenditures and Changes in Fund Balance -
Nonmajor Governmental Funds Statement 19 101
Subcombining Balance Sheet - Nonmajor Special Revenue Funds Statement 20 102
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Special Revenue Funds Statement 21 103
Subcombining Balance Sheet - Nonmajor Capital Project Funds Statement 22 105
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Capital Project Funds Statement 23 108
Balance Sheet - Debt Service Fund by Bond Issue Statement 24 112
Statement of Revenues, Expenditures and Changes in
Fund Balance - Debt Service Fund by Bond Issue Statement 25 114
CITY OF LAKE ELMO, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
Financial Trends:
Net Position by Component Table 1 120
Changes in Net Position Table 2 122
Fund Balances, Governmental Funds Table 3 126
Changes in Fund Balances, Governmental Funds Table 4 128
Revenue Capacity:
Tax Capacity and Estimated Actual Value of Taxable Property Table 5 131
Direct and Overlapping Property Tax Rates Table 6 132
Principal Property Taxpayers Table 7 133
Property Tax Levies and Collections Table 8 134
Water and Sanitary Sewer Charges by Customer Table 9 137
Debt Capacity:
Ratios of Outstanding Debt by Type Table 10 138
Ratios of Net General Bonded Debt Table 11 140
Direct and Overlapping Governmental Activities Debt Table 12 142
Legal Debt Margin Information Table 13 143
Pledged Revenue Coverage Table 14 144
Demographic and Economic Information:
Demographic and Economic Statistics Table 15 145
Principal Employers Table 16 147
Operating Information:
Full-Time Equivalent Employees By Function/Program Table 17 148
Operating Indicators by Function/Program Table 18 151
Capital Asset Statistics by Function/Program Table 19 152
STATISTICAL SECTION (UNAUDITED)
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INTRODUCTORY SECTION
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June 14, 2022
Honorable Mayor, Members of the City Council, and Citizens of the
City of Lake Elmo:
Minnesota Statutes require all cities to issue an annual report on its financial position and activity
prepared in accordance with generally accepted accounting principles (GAAP), under the
guidance of the Governmental Accounting Standards Board (GASB), and audited in accordance
with generally accepted auditing standards (GAAS) by a firm of licensed certified public
accountants or the Office of the State Auditor. Pursuant to that requirement, we hereby issue the
annual comprehensive financial report of the City of Lake Elmo, MN for the fiscal year ended
December 31, 2021.
This report consists of management’s representation concerning the finances of the City of Lake
Elmo. Consequently, management assumes full responsibility for the completeness, accuracy
and reliability of all the information presented in this report. To provide a reasonable basis for
making these representations, the management of the City of Lake Elmo has established a
thorough internal control system designed to both protect the City’s assets from loss, theft and
misuse and to compile all necessary information for the preparation of the City of Lake Elmo’s
financial statements in conformity with GAAP and GASB. As a management team, we assert that
the financial statements will be free from material misstatement and that the financial report is
reliable in all material respects.
The City of Lake Elmo’s financial statements have been audited by Redpath and Company, a firm
of licensed certified public accountants. The goal of the independent audit is to provide reasonable
assurance that the financial statements of the City of Lake Elmo for the fiscal year ended
December 31, 2021 are free from material misstatement. The independent audit involved
examining, on an approved 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 of Lake Elmo’s financial statements for fiscal year ended
December 31, 2021 are fairly presented in conformity with GAAP. The independent auditor’s
report is presented as the first component of the financial section of the report.
A “Single Audit” designed to meet the special needs of a federal grantor agency was not
performed for the year ended December 31, 2021 as the City’s federal expenditures did not meet
the single audit threshold for this additional independent audit.
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GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in form of the Management’s Discussion and Analysis
(MD&A). This letter of transmittal is included to complement the MD&A and should be read in
conjunction with it. The City of Lake Elmo’s MD&A can be found immediately following the report
of the independent auditors.
PROFILE OF THE GOVERNMENT
The City of Lake Elmo was incorporated in 1926 and is a statutory city in the State of Minnesota
six miles east of St. Paul Minnesota. Located in Washington County, it covers 25 square miles
and has an estimated 2020 population of 12,655 which represents 4,004 households.
Policy-making and legislative authority are vested in a governing council consisting of an elected
Mayor and four council members. Per Minnesota State Statute, the governing council is
responsible for passing ordinances, adopting an annual budget, appointing committees and hiring
both the city’s administrator and attorney. The City Administrator is responsible for carrying out
the policies and ordinances of the governing council and overseeing the day-to-day operations of
the city. The Council is elected on a non-partisan basis. The Mayor serves a four-year term and
council members serve a four-year staggered term, with two of these positions elected every two
years. The Mayor and the Council are elected at-large.
The City of Lake Elmo provides a full range of Services including fire protection services,
construction and maintenance of streets and infrastructure; recreational facilities; and water,
sanitary sewer and storm water utility services. The City contracts with the Washington County
Sheriff’s Department for police services.
The annual budget serves as the foundation for the City of Lake Elmo’s financial management
and fiscal stewardship. City departments and agencies of the City submit their requested budget
to the City Administrator and the Finance Director in order to compile a preliminary balanced
budget for submission to the City Council. The preliminary balanced budget is presented to the
City Council in September each year so that the preliminary property tax levy can be submitted
to Washington County by the annual due date. The preliminary property tax levy may be
decreased but not increased. The 2021 Adopted Budget and final property tax levy was required
to be adopted by and submitted to Washington County by December 28, 2020. Included in the
City annual budget process is the compilation of a Capital Improvement Plan which allows for
strategic planning of City infrastructure and equipment needs while maintaining a reasonable level
of debt and a strong unassigned fund balance. Quarterly budget to actual comparison reports
are provided to the City Council to keep them apprised of the financial performance of the City.
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 Lake
Elmo operates.
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LOCAL ECONOMY
Lake Elmo is home to numerous businesses that are leaders in their respective industries. New
residential developments platted since 2014 numbering approximately 2,871 have been
approved. In 2021 and early 2022, the City continued to see increased residential and commercial
growth and entered into several new development agreements:
Easton Village 7th addition – 26 New Single-Family Homes
Wildflower 4th addition – 41 New Single-Family Homes
Legacy at North Star 4th addition – 62 New Single-Family Homes
Union Park West 1st addition – 102 New Townhomes
Union Park West 2nd addition – 71 New Townhomes
Launch Properties and Crossroads Properties – Two-building business park
Enterprise Holdings – sale and rentals of vehicles
Further, several projects have been fully completed in 2021:
Boulder Ponds 3rd addition – 33 New Single-Family Homes
Boulder Ponds 4th addition – 95 Senior Assisted Living Units
Lake Elmo Senior Living (Independent Living) – 42-unit Senior Living three-story
apartment building and 18 Patio Homes (9 buildings)
The City’s highway infrastructure continues to make Lake Elmo a desirable residential location.
Rapid growth is further reflected in 2020 population estimates of 12,655, or an increase of 57%,
since the 2010 census.
New housing starts in 2021 numbered 297 with a total value of $128,265,000 and an average
value of $431,872. There were 5 new Commercial construction projects in 2021, and a number
of remodels and expansions. All these new starts have been built in 2021 or will be finished in
2022, which will greatly strengthen the existing tax base of the City.
LONG TERM FINANCIAL PLANNING
Total unassigned General Fund balance as of December 31, 2021 was 78% of the next year’s
general fund expenditures and other financing uses. Although the State Auditor recommends
maintaining a level of 35% - 50%, the City has consistently exceeded that rate, showing the City’s
financial strength.
The City’s 5-year Capital Improvement Plan serves as the foundation for long-term financial
planning. Funding needs for capital replacements are reflected in tax levies for the street renewal
and general fund asset replacements. Funding needs for capital infrastructure in the enterprise
funds are funded through user fees in those funds.
During 2017, Moody’s Investors Service increased the City’s long-term debt rating of AA+, and
reaffirmed this rating in 2020 and 2021. In their assessment of the City, Moody’s noted the
following:
Wealthy tax base favorably located in the Twin Cities metropolitan area with strong
resident incomes
Strong financial operations supported by ample reserves and liquidity
Low pension burden
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Projections for the next 5 years indicate that property tax contributions, user fees and investment
income will continue to grow based on planned development and expansion within the City.
RELEVANT FINANCIAL POLICIES
Trends of the past decade, changes in state tax law, and recent legislation indicate that the City
will have a greater reliance on property taxes as a source of financing for city operations in the
future and less reliance on the intergovernmental revenues (federal and state) and building permit
fees. Changes in state tax law over the past decade have resulted in funding changes for both
schools and local governments. The elimination of the homestead and agricultural credit aids
program, and large cuts in both local government aid and the market value homestead credit
programs resulted in revenue losses to the City. In addition, as the City continues toward full
development, we anticipate future decreases in building permit revenues.
MAJOR INITIATIVES
2021 was again an extremely robust year for the City due to continuation of on-going infrastructure
upgrades, projects, and oversight of on-going residential and commercial development activity.
Some of the 2021 infrastructure projects included the following:
Construction of a New City Center was approved and began in 2021. The New City Center
consists of a combined City Hall & Public Safety Facility. The new facility combines City Hall
staff and functions, the entire Fire Department, and a satellite office for Washington County
Sheriff’s department. This co-location involves renovating and expanding the City-owned
Brookfield Office building to concentrate civic resources into a single structure at the historic
core of the City. In addition, the Public Works facility will also be expanded to accommodate
City growth and expanded service needs. The project is expected to be completed Spring of
2023.
The Old Village Improvement project on phases V & VI of the project were under construction
in 2021. The projects cover full reconstruction of the streets as well as upgrading the existing
water system and installation of a new sewer system and storm water drainage system.
Heritage Farms Street and Utility Improvements to reconstruct approximately 1.2 miles of
residential streets and install a new sanitary sewer main.
The City began work on several expedited watermain projects to bring water to neighborhoods
with PFAS contamination at no cost to the City or residents due to grants from the MPCA.
These projects include watermain extensions, road construction and in some cases the
extension of sewer. Sewer costs of the project will be assessed 100% to the benefitting
property owners.
Well #5 Pumphouse in Tana Ridge Park was completed.
A stoplight was installed at Inwood Ave and 5th Street to improve safety of the intersection as
growth and development continue in the residential and commercial properties in the area.
Use of Parkland dedication fees to continue to make improvements to existing and new parks.
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AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association (GFOA) of the United States and Canada awarded
a Certificate of Achievement for Excellence in Financial Reporting to the City again for the fiscal
year ending December 31, 2020. This certificate is a prestigious national award recognizing
conformance with the highest standards for preparation for state and local government financial
reports.
In order to be awarded a Certificate of Achievement, a government unit must publish an easily
readable and efficiently organized Annual Comprehensive Financial Report, whose contents
conform to program standards. Such reports must satisfy both accounting principles generally
accepted in the United States of America and applicable legal requirements. A certificate is valid
for one year only.
The City of Lake Elmo is pleased to present its Annual Comprehensive Financial Report, which
will be submitted to the Government Finance Officers Association (GFOA) for consideration of a
Certificate of Achievement for Excellence in Financial Reporting for its financial reports for the
fiscal year ended December 31, 2021. The preparation of this report would not have been possible
without the efficient and dedicated services of the personnel of the City of Lake Elmo. Further,
we would like to express our appreciation to all members of the organization who assisted in
contributing to the preparation of the report. Credit must also be given to the Mayor and the City
Council for their unfailing support for maintaining the highest standards of management of the
City of Lake Elmo’s finances.
Respectfully submitted,
Kristina Handt Sam Magureanu
City Administrator Finance Director
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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Lake Elmo
Minnesota
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
December 31, 2020
Executive Director/CEO
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CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL CITY OFFICIALS
December 31, 2021
Term Expires
Mayor: Charles Cadenhead December 31, 2025
Councilmembers: Dale Dorschner January 2, 2023
Lisa McGinn January 2, 2023
Jeff Holtz January 1, 2025
Katrina Beckstrom January 1, 2025
Appointed Officials
City Administrator:Kristina Handt Appointed
Finance Director:Sam Magureanu Appointed
City Clerk:Julie Johnson Appointed
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=Ci�zen Appointees
=Contractor Rela�onship
Public Works
Operators
Public Works
Director Fire Chief
Planner Building
Inspector (2)Accountant Deputy Clerk Lead Worker Assistant Chief
CaptainsInternPermit
Technician
Assessor
Intern
U�lity Billing
Clerk
Ci�zens of Lake
Elmo
City
Administrator
City A�orney
Sheriff's Office
- Sergeant (1)
- Deputy (4)
Park Commission
Economic Development
Authority
Commissions Commi�ees
Seasonal
Public Works
FireFighters
(POC, PT)
City Engineer
ORGANIZATION CHART 202
Planning
Director Building Official Finance Director Assistant
Administrator City Clerk
Capital Improvement
Committee
Planning Commission
City Council
Fire Inspector
/Lieutenant 12
FINANCIAL SECTION
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55 5th Street East, Suite 1400, St. Paul, MN, 55101 www.redpathcpas.com
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Lake Elmo, Minnesota
Report on the Audit of the Financial Statements
Opinions
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 Lake
Elmo, Minnesota, as of and for the year ended December 31, 2021, and the related notes to
the financial statements, which collectively comprise the City of Lake Elmo, Minnesota's
basic financial statements as listed in the table of contents.
In our opinion, the accompanying 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 Lake Elmo, Minnesota, as of December 31, 2021, and the respective changes in
financial position, and, where applicable, cash flows thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America (GAAS) and the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States.
Our responsibilities under those standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. We are
required to be independent of the City of Lake Elmo, Minnesota and to meet our other ethical
responsibilities, in accordance with the relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinions.
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Report on Summarized Comparative Information
We have previously audited the City of Lake Elmo, Minnesota’s 2020 financial statements,
and we expressed unmodified audit opinions on the respective financial statements of the
governmental activities, the business-type activities, each major fund, and the aggregate
remaining fund information in our report dated June 4, 2021. In our opinion, the summarized
comparative information presented herein as of and for the year ended December 31, 2020 is
consistent, in all material respects, with the audited financial statements from which it has
been derived.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with accounting principles generally accepted in the United States
of America, and for the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the City
of Lake Elmo, Minnesota’s ability to continue as a going concern for twelve months beyond
the financial statement date, including any currently known information that may raise
substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinions. Reasonable assurance is a high level of assurance
but is not absolute assurance and therefore is not a guarantee that an audit conducted in
accordance with GAAS and Government Auditing Standards will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Misstatements
are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the
financial statements.
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In performing an audit in accordance with GAAS and Governmental Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the
audit.
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, and design and perform audit procedures responsive to
those risks. Such procedures include examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the City of Lake Elmo, Minnesota's
internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the City of Lake Elmo, Minnesota's
ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain
internal control related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, the budgetary comparison schedule, and the
schedules of OPEB and pension information, as listed in the table of contents, be presented to
supplement the basic financial statements. Such information is the responsibility of
management and, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide
any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
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Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Lake Elmo, Minnesota's basic financial statements. The
combining and individual nonmajor fund financial statements are presented for purposes of
additional analysis and are not a required part of the basic financial statements. Such
information is the responsibility of management and was derived from and relates directly to
the underlying accounting and other records used to prepare the basic financial statements.
The information has been subjected to the auditing procedures applied in the audit of the
basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements or to the basic financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in the
United States of America. In our opinion, the combining and individual nonmajor fund
financial statements are fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other
information comprises the introductory and statistical sections but does not include the basic
financial statements and our auditor's report thereon. Our opinions on the basic financial
statements do not cover the other information, and we do not express an opinion or any form
of assurance thereon. In connection with our audit of the basic financial statements, our
responsibility is to read the other information and consider whether a material inconsistency
exists between the other information and the basic financial statements, or the other
information otherwise appears to be materially misstated. If, based on the work performed,
we conclude that an uncorrected material misstatement of the other information exists, we are
required to describe it in our report.
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Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
June 14, 2022 on our consideration of the City of Lake Elmo, Minnesota’s internal control
over financial reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements and other matters. The purpose of that report is
solely to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on the effectiveness
of the City of Lake Elmo, Minnesota's internal control over financial reporting or on
compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City of Lake Elmo, Minnesota’s internal
control over financial reporting and compliance.
REDPATH AND COMPANY, LTD.
St. Paul, Minnesota
June 14, 2022
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MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Lake Elmo, 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, 2021. 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 and deferred outflows of resources of the City exceeded its liabilities and deferred
inflows of resources at the close of the most recent fiscal year by $130,891,464 (net
position). Of this amount, $31,990,087 (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 $24,791,436.
As of the close of the current fiscal year, the City’s governmental funds reported combined
ending fund balances of $30,410,931, an increase of $18,227,180. Of this amount,
$17,458,949 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 $5,618,812. Unassigned
fund balance for the General Fund was $5,618,812, or 78% of the next year’s total General
Fund expenditures and other financing uses.
Total outstanding debt increased by $14,519,000 during 2021. The increase is a result of the
City issuing the 2021A G.O. Improvement, CIP, and Refunding Bonds. The Bonds were
issued in order to finance a number of projects from the 2021-2025 CIP. Projects include the
New City Center and Public Works Addition, Heritage Farms Street and Utility, Tamarack
Farms Street, Hamlet on Sunfish Lake Sewer, Old Village 5 and 6. Further, the bonds
refunded the 2018A bonds, which were issued to pay for the purchase of the Brookfield
building, and refinancing the water and sewer portion of the 2013A bonds. The City used
cash to pre-pay the street portion of the 2013A bonds and only refinanced the water and
sewer portions of the bond.
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Management’s Discussion and Analysis
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.
The Statement of Net Position presents information on all of the City’s assets, deferred
outflows of resources, liabilities and deferred inflows of resources, with the net amount
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 works, culture and recreation, and
economic development. The business-type activities of the City include water, sewer and
storm sewer utilities.
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 two categories: governmental funds and proprietary funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial
statements focus on near-term inflows and outflows of spendable resources, as well as on
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Management’s Discussion and Analysis
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.
The City maintains six 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
Debt Service
Park Dedication
Vehicle Acquisition
Heritage Farms Street & Utility Improvements
City Hall/Fire Station Building Project
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. A budgetary
comparison schedule has been provided for the General Fund to demonstrate compliance
with its budget.
The basic governmental fund financial statements are statements 3 through 6 of this report.
Proprietary funds. The City maintains three 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, sewer and storm 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, sewer and storm 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.
23
Management’s Discussion and Analysis
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 9.
Other information. The combining statements referred to earlier in connection with non-
major governmental funds are presented immediately following the required supplementary
information. Combining and individual fund statements are presented as Statements 18
through 25.
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 and deferred outflows of resources exceeded
liabilities and deferred inflows of resources by $130,891,464 at the close of the most recent
fiscal year.
The largest portion of the City’s net position ($88,652,285, or 68%) 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 Lake Elmo’s Net Position
2021 2020 2021 2020 2021 2020
Assets:
Current and other assets $39,470,683 $18,815,135 $21,461,986 $20,448,133 $60,932,669 $39,263,268
Capital assets 52,689,633 45,484,720 77,034,129 64,643,579 129,723,762 110,128,299
Total assets 92,160,316 64,299,855 98,496,115 85,091,712 190,656,431 149,391,567
Deferred outflows of resources 823,855 389,102 153,623 41,513 977,478 430,615
Liabilities:
Long-term liabilities outstanding 29,274,372 17,125,639 23,095,670 20,453,002 52,370,042 37,578,641
Other liabilities 5,450,707 3,996,027 1,602,968 1,717,425 7,053,675 5,713,452
Total liabilities 34,725,079 21,121,666 24,698,638 22,170,427 59,423,717 43,292,093
Deferred inflows of resources 1,123,890 417,445 194,838 12,616 1,318,728 430,061
Net position:
Net investment in capital assets 34,784,806 29,694,288 53,867,479 44,371,375 88,652,285 74,065,663
Restricted 10,249,092 8,171,161 - - 10,249,092 8,171,161
Unrestricted 12,101,304 5,284,397 19,888,783 18,578,807 31,990,087 23,863,204
Total net position $57,135,202 $43,149,846 $73,756,262 $62,950,182 $130,891,464 $106,100,028
Governmental Activities Business-Type Activities Totals
24
Management’s Discussion and Analysis
$10,249,092 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
($31,990,087) 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.
Governmental Activities
Net position of governmental activities increased $13,985,356 during the year. The primary
reasons for the increase were developer contributed infrastructure in the amount of
$4,861,037, as well as a $5,250,000 transfer from Business-Type Activities to the City
Center Capital Project fund. This transfer represents the water and sewer contributions to the
City Center Project. Other factors that contributed to the change in net positions included
increased revenues from services, operating grants and contributions and general property tax
revenue.
Business-Type Activities
Net position of business-type activities increased $10,806,080 during the year. The most
significant reason for the increase was developer contributed infrastructure in the amount of
$4,919,108. The City also received $4,102,200 of connection charge revenue, for which the
offsetting expense is recognized in future years as depreciation expense. Other factors that
contributed to the change in net position included intergovernmental revenues for
$7,006,533. These were mostly related to reimbursements from the State in relation to the
3M grant for water infrastructure. Lastly, as noted above, transfers for $5,250,000 were done
during the year to contribute to the City Center Capital Project fund.
25
Management’s Discussion and Analysis
City of Lake Elmo’s Changes in Net Position
2021 2020 2021 2020 2021 2020
Revenues:
Program revenues:
Charges for services $2,847,821 $2,901,761 $2,773,787 $2,041,676 $5,621,608 $4,943,437
Operating grants and contributions 279,690 1,039,823 35,635 21,893 315,325 1,061,716
Capital grants and contributions 8,981,866 4,823,628 18,326,363 15,636,661 27,308,229 20,460,289
General revenues:
General property taxes 5,294,950 4,960,342 - - 5,294,950 4,960,342
Grants and contributions not
restricted to specific programs 4,639 4,337 - - 4,639 4,337
Unrestricted investment earnings (loss) (13,874) 348,766 (20,945) 286,350 (34,819) 635,116
Gain on disposal of assets 17,300 13,805 - - 17,300 13,805
Transfers 5,250,000 - (5,250,000) - - -
Total revenues 22,662,392 14,092,462 15,864,840 17,986,580 38,527,232 32,079,042
Expenses:
General government 1,052,188 1,008,916 - - 1,052,188 1,008,916
Public safety 3,091,321 2,681,784 - - 3,091,321 2,681,784
Public works 3,735,767 4,012,661 - - 3,735,767 4,012,661
Culture and recreation 391,240 428,083 - - 391,240 428,083
Economic development authority 53,264 46,371 - - 53,264 46,371
Interest on long-term debt 353,256 363,988 - - 353,256 363,988
Water - - 2,665,708 2,383,252 2,665,708 2,383,252
Sewer - - 1,563,008 1,481,586 1,563,008 1,481,586
Storm sewer - - 830,044 753,177 830,044 753,177
Total expenses 8,677,036 8,541,803 5,058,760 4,618,015 13,735,796 13,159,818
Change in net position 13,985,356 5,550,659 10,806,080 13,368,565 24,791,436 18,919,224
Net position - January 1 43,149,846 37,599,187 62,950,182 49,581,617 106,100,028 87,180,804
Net position - December 31 $57,135,202 $43,149,846 $73,756,262 $62,950,182 $130,891,464 $106,100,028
Business-Type Activities TotalsGovernmental Activities
26
Management’s Discussion and Analysis
Governmental Activities
Below are specific graphs which provide comparisons of the governmental activities
revenues and expenses:
27
Management’s Discussion and Analysis
Business-Type Activities
Below are specific graphs which provide comparisons of the business-type activities
revenues and expenses:
28
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 $30,410,931. Approximately 57%, or $17,458,949, of this total
amount constitutes fund balance restricted by external constraints established by creditors,
grantors, contributors, or by state statutory provisions. $0 of fund balance is not in a
spendable form, $7,673 has been committed, $7,571,501 has been assigned, and $5,372,808
is unassigned.
The fund balance of the General Fund increased by $385,171 in 2021, while the City
anticipated no change in General Fund balance. The primary reason for the increase was
caused by a net positive variance of revenues over expenditures of $1,084,653, which is
$793,907 more than budgeted. Licenses and permits exceeded budgets by $472,158 and
charges for services by $306,711. The positive variance was reduced by actual transfers
exceeding budgeted transfers by $408,736. A large portion of budgeted transfers included a
$260,746 transfer to the Vehicle Acquisition fund, and $378,736 of unbudgeted transfers to
the Village Project capital project fund. This transfer was approved during the year by
council in order to close down the fund and remove the fund deficit.
The Debt Service fund balance decreased by $662,636 primarily relating to the early
prepayment of the street portion of the 2013A G.O. Improvement Bond for $957,816. This
large expenditure was offset by $478,300 revenues collected from special assessment
prepayments in relation to the 2021 CIP projects, funded with special assessments. Other
factors that contributed related to debt service payments that were higher than the collected
revenues from property taxes and special assessments.
The Park Dedication fund balance increased by $1,830,367. This increase was the result of
park dedication fees collected from developers during the year. One large collection for
$1,000,000 was collected from one developer, Royal Golf 3rd Addition, and is restricted for
Ballfields improvements.
The Vehicle Acquisition fund balance decreased by $158,068. During the year, the City
incurred a total of $429,779 of capital outlay expenditures within the fund, $319,895 for the
purchase of equipment and vehicles for public safety. One large purchase for $259,558 for a
Tender and $57,372 for a public safety vehicle CV1 – Chevrolet Tahoe. Additionally,
$109,884 were spent for public works department for the acquisition of a Mack Plow Truck.
The expenditures above were partially offset by budgeted transfers from the General Fund
for $260,746.
29
Management’s Discussion and Analysis
The Heritage Farms Street & Utility Improvements fund balance increased by $295,817. This
increase was a result of capital outlay activity within the fund for $2,143,893. These
expenditures were offset with proceeds from the 2021A bond issuance for $2,439,248. This
project is expected to be completed in 2022.
The City Hall/Fire Station Building Project fund balance increased by $15,232,743. This
increase was the result of proceeds from the 2021A bond issuance. The total amount of bond
proceeds for the project were $10,539,438. Additionally, $5,250,000 of contributions were
transferred in to the fund from the water and sewer funds.
The combined fund balance of other governmental funds increased $1,303,786 during 2021.
The primary reason for the increase relates to proceeds from the 2021A bond issuance to
finance the 2021 CIP capital projects, including $3,030,460 of proceeds. These were offset
by public works capital outlay activity within the capital funds for $1,717,634.
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 $40,073,644, of which $4,723,160 is
unrestricted. The increase in net position of $6,422,372 was primarily due to capital
contributions of $1,837,010, intergovernmental revenues of $7,006,533 and $2,104,200 of
connection charges. The increase was partially offset by a transfer to the City Center project
fund for $3,750,000.
The sewer fund has total net position at year-end of $22,485,630, of which $13,709,112 is
unrestricted. The increase in net position of $3,097,469 was primarily due to capital
contributions of $1,476,603, connection charges of $1,998,000 and special assessments of
$2,143,642. The increase was partially offset by a transfer to the City Center project fund for
$1,500,000.
The storm sewer fund has total net position at year-end of $11,196,988, of which $1,456,511
is unrestricted. The increase in net position of $1,286,239 was due to capital contributions of
$1,605,495. The increase was partially offset by a net operating loss and interest and fees on
long-term debt.
Budgetary Highlights
General Fund
The General Fund budget was not amended during the year. The City budgeted for no change
in fund balance, while the actual increase in fund balance was $385,171.
Revenues were $828,833 over budget for the year. This was mainly due to licenses and
permits, which were over budget by $472,158 and charges for services, which were over
budget by $306,711.
30
Management’s Discussion and Analysis
Expenditures came in over budget by $34,926. Building inspection expenditures were over
budget by $305,378. The large variance from budget related to inspector contracted services
being over budget by $450,630. This was partially offset by a positive variance from budget
for $122,629 from personal services for building inspection, and an additional positive
variance from budget for public works for $108,627 in personal services.
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, 2021, amounted to $129,723,762 (net of accumulated
depreciation), an increase of $19,595,463 from the prior year. This investment in capital
assets includes land, construction in progress, buildings, other improvements, machinery and
equipment, and infrastructure. A large portion of the increase, $9,780,145, is due to 2021
capital contributions from private sources. Further, the City substantially completed the Old
Village Phase 5 & 6, Heritage Farms Street & Utility Improvement, and Tamarack Farm
Estates Street Improvements. Additionally, projects that were funded with the 3M state
grants for water infrastructure, such as, 38th/39th Street & Innsdale were also substantially
completed. Lastly, the City began preliminary work on the new City Center, with an
expected completion date of 2023.
City of Lake Elmo’s Capital Assets
(Net of Depreciation)
2021 2020 2021 2020 2021 2020
Land $3,453,979 $3,453,979 $3,668,869 $3,668,869 $7,122,848 $7,122,848
Construction in progress 4,903,907 637,739 9,961,990 5,843,234 14,865,897 6,480,973
Buildings 2,994,635 3,084,801 - - 2,994,635 3,084,801
Other improvements 1,444,544 1,546,483 - - 1,444,544 1,546,483
Machinery and equipment 2,905,174 2,811,392 138,668 168,092 3,043,842 2,979,484
Infrastructure 36,987,394 33,950,326 63,264,602 54,963,384 100,251,996 88,913,710
Total $52,689,633 $45,484,720 $77,034,129 $64,643,579 $129,723,762 $110,128,299
Governmental Activities Business-Type Activities Totals
Additional information on the City’s capital assets can be found in Note 5 to the financial
statements.
31
Management’s Discussion and Analysis
Long-term debt. At the end of the current fiscal year, the City had total bonded debt
outstanding of $49,655,000, an increase of $14,519,000, which was the amount of principal
retired during the year.
City of Lake Elmo’s Outstanding Debt
2021 2020 2021 2020 2021 2020
G.O. Improvement bonds $26,705,000 $13,695,000 $22,195,000 $19,710,000 $48,900,000 $33,405,000
G.O. Equipment certificates 755,000 850,000 - - 755,000 850,000
Taxable lease revenue bonds - 881,000 - - - 881,000
Total $27,460,000 $15,426,000 $22,195,000 $19,710,000 $49,655,000 $35,136,000
Business-Type Activities TotalsGovernmental Activities
Additional information on the City’s long-term debt can be found in Note 6 to the financial
statements.
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 Lake Elmo, 3880
Laverne Ave N, Suite 100, Lake Elmo, Minnesota, 55042.
32
BASIC FINANCIAL STATEMENTS
33
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34
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF NET POSITION Statement 1
December 31, 2021
With Comparative Totals For December 31, 2020
Governmental Business-Type
Activities Activities 2021 2020
Assets:
Cash and investments $35,612,736 $15,974,639 $51,587,375 $31,751,728
Accrued interest receivable 22,144 15,119 37,263 68,954
Due from other governmental units 10,709 665,541 676,250 790,668
Accounts receivable - net 2,635 777,087 779,722 749,614
Prepaid items - - - 573,239
Property taxes receivable 101,050 - 101,050 99,649
Special assessments receivable 3,215,987 4,029,600 7,245,587 4,856,343
Net pension asset 505,422 - 505,422 373,073
Capital assets - nondepreciable 8,357,886 13,630,859 21,988,745 13,603,821
Capital assets - net of accumulated depreciation 44,331,747 63,403,270 107,735,017 96,524,478
Total assets 92,160,316 98,496,115 190,656,431 149,391,567
Deferred outflows of resources related to pensions 823,855 153,623 977,478 430,615
Liabilities:
Accounts payable 948,763 256,195 1,204,958 588,573
Due to other governmental units - 20,401 20,401 234,894
Salaries and benefits payable 54,247 12,737 66,984 59,174
Contracts and retainage payable 124,102 324,991 449,093 166,838
Deposits payable 3,145,755 - 3,145,755 3,232,294
Accrued interest payable 156,834 159,644 316,478 381,450
Unearned revenue 1,021,006 829,000 1,850,006 1,050,230
Compensated absences payable:
Due within one year 64,280 21,255 85,535 102,812
Due in more than one year 21,427 7,085 28,512 34,271
Bonds payable:
Due within one year 1,870,000 1,345,000 3,215,000 3,452,000
Due in more than one year 26,454,553 21,496,659 47,951,212 32,443,798
Other postemployment benefits:
Due in more than one year 80,792 18,997 99,789 79,303
Net pension liability:
Due in more than one year 783,320 206,674 989,994 1,466,456
Total liabilities 34,725,079 24,698,638 59,423,717 43,292,093
Deferred inflows of resources related to pensions 1,123,890 194,838 1,318,728 430,061
Net position:
Net investment in capital assets 34,784,806 53,867,479 88,652,285 74,065,663
Restricted for:
Fire Relief Association pension plan 360,513 - 360,513 272,554
Debt service 6,864,359 - 6,864,359 6,620,135
Park improvements 3,024,220 - 3,024,220 1,193,853
Street improvements - - - 84,619
Unrestricted 12,101,304 19,888,783 31,990,087 23,863,204
Total net position $57,135,202 $73,756,262 $130,891,464 $106,100,028
Primary Government
Total
The accompanying notes are an integral part of these financial statements.
35
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
Program Revenues
Charges For
Functions/Programs Expenses Services
Primary government:
Governmental activities:
General government $1,052,188 $485,785
Public safety 3,091,321 2,199,655
Public works 3,735,767 104,817
Culture and recreation 391,240 25
Economic development authority 53,264 57,539
Interest and fees on long-term debt 353,256 -
Total governmental activities 8,677,036 2,847,821
Business-type activities:
Water 2,665,708 1,711,596
Sewer 1,563,008 549,567
Storm sewer 830,044 512,624
Total business-type activities 5,058,760 2,773,787
Total primary government $13,735,796 $5,621,608
The accompanying notes are an integral part of these financial statements.
36
Statement 2
Operating Capital
Grants and Grants and Governmental Business-Type
Contributions Contributions Activities Activities 2021 2020
$30,078 $26,668 ($509,657) $ - ($509,657) ($530,776)
83,160 - (808,506) - (808,506) 261,619
163,776 7,109,827 3,642,653 - 3,642,653 513,035
2,676 1,845,371 1,456,832 - 1,456,832 302,112
- - 4,275 - 4,275 41,407
- - (353,256) - (353,256) (363,988)
279,690 8,981,866 3,432,341 0 3,432,341 223,409
35,635 11,102,421 - 10,183,944 10,183,944 7,823,058
- 5,618,245 - 4,604,804 4,604,804 3,353,785
- 1,605,697 - 1,288,277 1,288,277 1,905,372
35,635 18,326,363 0 16,077,025 16,077,025 13,082,215
$315,325 $27,308,229 3,432,341 16,077,025 19,509,366 13,305,624
General revenues:
General property taxes 5,294,950 - 5,294,950 4,960,342
Grants and contributions not
restricted to specific programs 4,639 - 4,639 4,337
Unrestricted investment earnings (loss)(13,874)(20,945) (34,819) 635,116
Gain on disposal of capital assets 17,300 - 17,300 13,805
Transfers 5,250,000 (5,250,000) - -
Total general revenues and transfers 10,553,015 (5,270,945) 5,282,070 5,613,600
Change in net position 13,985,356 10,806,080 24,791,436 18,919,224
Net position - January 1 43,149,846 62,950,182 106,100,028 87,180,804
Net position - December 31 $57,135,202 $73,756,262 $130,891,464 $106,100,028
Program Revenues Net (Expense) Revenue and Changes
in Net Position - Primary Government
Total
The accompanying notes are an integral part of these financial statements.
37
CITY OF LAKE ELMO, MINNESOTA
BALANCE SHEET Statement 3
GOVERNMENTAL FUNDS
December 31, 2021
Heritage Farms City Hall /
Debt Park Vehicle Street & Utility Fire Station Other
General Fund Service Dedication Acquisition Improvements Bldg Project Governmental
(101) (300s) (404) (410) (434) (437) Funds
Assets 2021 2020
Cash and investments $9,577,831 $3,886,866 $3,022,945 $1,557,696 $234,866 $15,229,837 $2,102,695 $35,612,736 $15,760,221
Accrued interest receivable 7,576 2,696 2,155 925 167 7,115 1,510 22,144 36,118
Due from other governmental units 10,709 - - - - - - 10,709 3,305
Accounts receivable - net 2,635 - - - - - - 2,635 131,664
Prepaid items - - - - - - - - 21,206
Due from other funds 222,457 - - - - - - 222,457 1,497,284
Property taxes receivable:
Due from county 54,832 - - - - - - 54,832 44,828
Delinquent 46,218 - - - - - - 46,218 54,821
Special assessments receivable:
Due from county 409 1,339 - - - - - 1,748 1,055
Delinquent 66,114 708 - - - - - 66,822 1,892
Deferred - 3,129,584 - - - - 17,833 3,147,417 2,254,603
Total assets $9,988,781 $7,021,193 $3,025,100 $1,558,621 $235,033 $15,236,952 $2,122,038 $39,187,718 $19,806,997
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable $859,436 $ - $880 $406 $7,171 $16,786 $64,084 $948,763 $258,815
Salaries and benefits payable 54,247 - - - - - - 54,247 52,307
Contracts and retainage payable - - - - 95,911 - 28,191 124,102 -
Due to other funds - - - - - - 222,457 222,457 1,497,284
Deposits payable 3,070,755 - - - - - 75,000 3,145,755 3,232,294
Unearned revenue 273,199 - - - - - 747,807 1,021,006 271,230
Total liabilities 4,257,637 0 880 406 103,082 16,786 1,137,539 5,516,330 5,311,930
Deferred inflows of resources:
Unavailable revenue 112,332 3,130,292 - - - - 17,833 3,260,457 2,311,316
Fund balance:
Nonspendable - - - - - - - - 21,206
Restricted - 3,890,901 3,024,220 - 131,951 9,963,112 448,765 17,458,949 5,814,832
Committed - - - - - - 7,673 7,673 7,691
Assigned - - - 1,558,215 - 5,257,054 756,232 7,571,501 2,653,503
Unassigned 5,618,812 - - - - - (246,004) 5,372,808 3,686,519
Total fund balance 5,618,812 3,890,901 3,024,220 1,558,215 131,951 15,220,166 966,666 30,410,931 12,183,751
Total liabilities, deferred inflowsof resources, and fund balance $9,988,781 $7,021,193 $3,025,100 $1,558,621 $235,033 $15,236,952 $2,122,038 $39,187,718 $19,806,997
With Comparative Totals For December 31, 2020
Total Governmental Funds
The accompanying notes are an integral part of these financial statements.
38
CITY OF LAKE ELMO, MINNESOTA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL Statement 4
FUNDS TO THE STATEMENT OF NET POSITION
December 31, 2021
With Comparative Totals For December 31, 2020
2021 2020
Fund balance - total governmental funds (Statement 3) $30,410,931 $12,183,751
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 52,689,633 45,484,720
Net pension asset 505,422 373,073
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 46,218 54,821
Delinquent special assessments receivable 66,822 1,892
Deferred special assessments receivable 3,147,417 2,254,603
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 payable (27,460,000) (15,426,000)
Unamortized bond premiums (864,553) (364,432)
Accrued interest payable (156,834) (181,381)
Compensated absences payable (85,707) (109,369)
Other postemployment benefits (80,792) (65,397)
Net pension liability (783,320) (1,160,441)
Deferred outflows and inflows of resources related to pensions 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 823,855 521,451
Deferred inflows of resources (1,123,890) (417,445)
Net position of governmental activities (Statement 1) $57,135,202 $43,149,846
The accompanying notes are an integral part of these financial statements.
39
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND Statement 5
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
Heritage Farms City Hall /
Debt Park Vehicle Street & Utility Fire Station Other
General Fund Service Dedication Acquisition Improvements Bldg Project Governmental
(101) (300s) (404) (410)(434)(437)Funds
Revenues:2021 2020
General property taxes $3,865,164 $1,438,389 $ - $ - $ - $ - $ - $5,303,553 $4,947,133
Licenses and permits 1,485,658 - - - - - - 1,485,658 1,425,695
Intergovernmental 267,180 - - - - - 454,948 722,128 1,023,193
Charges for services 1,064,375 - - - - - 87,539 1,151,914 1,273,241
Fines and forfeits 45,749 - - - - - - 45,749 33,584
Special assessments 930 861,836 - - - - - 862,766 474,099
Park dedication fees - - 1,845,371 - - - - 1,845,371 714,558
Investment income (loss)(13,605) (19,864) 6,337 (6,335)462 19,631 (500) (13,874) 348,766
Miscellaneous 177,000 - - - - - - 177,000 183,711
Total revenues 6,892,451 2,280,361 1,851,708 (6,335)462 19,631 541,987 11,580,265 10,423,980
Expenditures:
Current:
General government 1,056,983 - - - - - - 1,056,983 1,009,543
Public safety 3,003,677 - - - - - - 3,003,677 2,641,770
Public works 1,488,448 - - - - - - 1,488,448 1,489,081
Culture and recreation 258,690 - - - - - - 258,690 310,066
Economic development authority - - - - - - 53,264 53,264 46,371
Capital outlay:
General government - - - - - 576,326 26,668 602,994 -
Public safety - - - 319,895 - - - 319,895 297,090
Public works - - 21,341 109,884 2,143,893 - 1,717,634 3,992,752 1,549,753
Debt service:
Principal - 2,760,000 - - - - 881,000 3,641,000 1,790,000
Interest and fiscal charges - 364,408 - - - - 61,389 425,797 420,299
Total expenditures 5,807,798 3,124,408 21,341 429,779 2,143,893 576,326 2,739,955 14,843,500 9,553,973
Revenues over (under) expenditures 1,084,653 (844,047) 1,830,367 (436,114) (2,143,431) (556,695) (2,197,968) (3,263,235) 870,007
Other financing sources (uses):
Transfers in - 113,792 - 260,746 - 5,250,000 508,182 6,132,720 1,900,244
Transfers out (699,482) - - - - - (183,238) (882,720) (1,900,244)
Issuance of debt - 67,619 - - 2,332,995 10,243,926 3,030,460 15,675,000 -
Bond premium - - - - 106,253 295,512 146,350 548,115 -
Proceeds from sale of capital assets - - - 17,300 - - - 17,300 13,805
Total other financing sources (uses)(699,482) 181,411 0 278,046 2,439,248 15,789,438 3,501,754 21,490,415 13,805
Net change in fund balance 385,171 (662,636) 1,830,367 (158,068) 295,817 15,232,743 1,303,786 18,227,180 883,812
Fund balance - January 1 5,233,641 4,553,537 1,193,853 1,716,283 (163,866) (12,577) (337,120) 12,183,751 11,299,939
Fund balance - December 31 $5,618,812 $3,890,901 $3,024,220 $1,558,215 $131,951 $15,220,166 $966,666 $30,410,931 $12,183,751
Total Governmental Funds
The accompanying notes are an integral part of these financial statements.
40
CITY OF LAKE ELMO, 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, 2021
With Comparative Totals For The Year Ended December 31, 2020
2021 2020
Net change in fund balance - total governmental funds (Statement 5) $18,227,180 $883,812
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 (2,557,696) (2,294,552)
Capital outlay 4,915,641 1,846,843
Capital outlay not capitalized (14,069) (525,221)
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 4,861,037 3,937,057
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 (8,603) 13,209
Change in delinquent special assessments receivable 64,930 (1,071)
Change in deferred special assessments receivable 892,814 (301,015)
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 issued (15,675,000) -
Premium on bonds issued (548,115) -
Repayment of principal 3,641,000 1,790,000
Amortization of bond premiums 47,994 47,993
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 24,547 8,318
Change in compensated absences payable 23,662 (46,621)
Change other post employment benefits liability (15,395) (4,081)
Governmental funds report pension contributions as expenditures, however pension
expense is reported in the Statement of Activities. This is the amount by which
pension expense differed from pension contributions. 105,429 195,988
Change in net position of governmental activities (Statement 2) $13,985,356 $5,550,659
The accompanying notes are an integral part of these financial statements.
41
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF NET POSITION Statement 7
PROPRIETARY FUNDS
December 31, 2021
Storm
Water (601) Sewer (602) Sewer (603) 2021 2020
Assets:
Current assets:
Cash and investments $4,820,465 $10,092,392 $1,061,782 $15,974,639 $15,991,507
Accrued interest receivable 6,103 8,259 757 15,119 32,836
Due from other governmental units 665,541 - - 665,541 787,363
Accounts receivable - net 216,168 141,113 419,806 777,087 617,950
Prepaid items - - - - 419,684
Total current assets 5,708,277 10,241,764 1,482,345 17,432,386 17,849,340
Noncurrent assets:
Special assessments receivable 316,158 3,672,068 41,374 4,029,600 2,598,793
Capital assets:
Land 3,668,869 - - 3,668,869 3,668,869
Construction in progress 6,908,569 3,053,421 - 9,961,990 5,843,234
Machinery and equipment 340,696 73,003 - 413,699 413,699
Infrastructure 44,483,712 19,219,271 14,128,874 77,831,857 66,599,944
Total capital assets 55,401,846 22,345,695 14,128,874 91,876,415 76,525,746
Less: Allowance for depreciation (9,796,976) (3,322,887) (1,722,423) (14,842,286) (11,882,167)
Net capital assets 45,604,870 19,022,808 12,406,451 77,034,129 64,643,579
Total assets 51,629,305 32,936,640 13,930,170 98,496,115 85,091,712
Deferred outflows of resources related to pensions 94,261 38,175 21,187 153,623 41,513
Liabilities:
Current liabilities:
Accounts payable 203,214 52,072 909 256,195 329,758
Due to other governmental units 97 20,304 - 20,401 234,894
Salaries and benefits payable 8,007 3,133 1,597 12,737 6,867
Contracts and retainage payable 224,643 100,348 - 324,991 166,838
Accrued interest payable 78,721 56,149 24,774 159,644 200,069
Unearned revenue 829,000 - - 829,000 779,000
Compensated absences payable - current portion 14,238 4,774 2,243 21,255 20,785
Bonds payable - current portion 825,000 315,000 205,000 1,345,000 1,455,000
Total current liabilities 2,182,920 551,780 234,523 2,969,223 3,193,211
Noncurrent liabilities:
Compensated absences payable - noncurrent portion 4,746 1,591 748 7,085 6,929
Bonds payable - noncurrent portion 9,204,743 9,830,942 2,460,974 21,496,659 18,650,366
Other postemployment benefits 11,151 5,096 2,750 18,997 13,906
Net pension liability 126,812 51,359 28,503 206,674 306,015
Total noncurrent liabilities 9,347,452 9,888,988 2,492,975 21,729,415 18,977,216
Total liabilities 11,530,372 10,440,768 2,727,498 24,698,638 22,170,427
Deferred inflows of resources related to pensions 119,550 48,417 26,871 194,838 12,616
Net position:
Net investment in capital assets 35,350,484 8,776,518 9,740,477 53,867,479 44,371,375
Unrestricted 4,723,160 13,709,112 1,456,511 19,888,783 18,578,807
Total net position $40,073,644 $22,485,630 $11,196,988 $73,756,262 $62,950,182
With Comparative Totals For December 31, 2020
Business-Type Activities - Enterprise Funds
Total
The accompanying notes are an integral part of these financial statements.
42
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND Statement 8
PROPRIETARY FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
Storm
Water (601) Sewer (602) Sewer (603) 2021 2020
Operating revenues:
Charges for services $1,538,316 $539,130 $457,517 $2,534,963 $1,720,180
Water meter sales 149,944 - - 149,944 155,675
Other operating revenue 23,336 10,437 55,107 88,880 165,821
Total operating revenues 1,711,596 549,567 512,624 2,773,787 2,041,676
Operating expenses:
Personal services 411,561 135,765 67,497 614,823 630,426
Materials and supplies 212,515 16,062 5,935 234,512 213,890
Professional services 131,108 63,876 46,269 241,253 239,162
Repairs and maintenance 19,628 9,850 42,031 71,509 69,053
Utilities 138,466 284,641 - 423,107 331,431
Depreciation 1,467,694 880,861 611,565 2,960,120 2,600,589
Other 61,466 26,469 7,388 95,323 69,409
Total operating expenses 2,442,438 1,417,524 780,685 4,640,647 4,153,960
Operating income (loss)(730,842) (867,957) (268,061) (1,866,860) (2,112,284)
Nonoperating revenues (expenses):
Investment income (loss)(11,572) (7,335) (2,038) (20,945) 286,350
Intergovernmental revenue 35,635 - - 35,635 21,893
Interest and fees on long-term debt (223,270) (145,484) (49,359) (418,113) (464,055)
Total nonoperating operating revenues (expenses)(199,207) (152,819) (51,397) (403,423) (155,812)
Income (loss) before contributions and transfers (930,049) (1,020,776) (319,458) (2,270,283) (2,268,096)
Capital contributions:
Intergovernmental revenue 7,006,533 - - 7,006,533 4,774,955
Special assessments 154,678 2,143,642 202 2,298,522 119,844
Refunds and reimbursements - - - - 223,615
Capital contributions from private sources 1,837,010 1,476,603 1,605,495 4,919,108 6,946,150
Connection charges 2,104,200 1,998,000 - 4,102,200 3,572,097
Transfer out (3,750,000) (1,500,000) - (5,250,000) -
Total contributions and transfers 7,352,421 4,118,245 1,605,697 13,076,363 15,636,661
Change in net position 6,422,372 3,097,469 1,286,239 10,806,080 13,368,565
Net position - January 1 33,651,272 19,388,161 9,910,749 62,950,182 49,581,617
Net position - December 31 $40,073,644 $22,485,630 $11,196,988 $73,756,262 $62,950,182
CHANGES IN FUND NET POSITION
Business-Type Activities - Enterprise Funds
Total
The accompanying notes are an integral part of these financial statements.
43
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF CASH FLOWS Statement 9
PROPRIETARY FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
Storm
Water (601) Sewer (602) Sewer (603) 2021 2020
Cash flows from operating activities:
Receipts from customers and users $2,512,836 $500,866 $423,946 $3,437,648 $2,141,859
Payments to suppliers (501,152) (328,905) (104,019) (934,076) (1,108,499)
Payments to employees (394,804) (153,861) (83,800) (632,465) (484,601)
Net cash flows provided by (used in) operating activities 1,616,880 18,100 236,127 1,871,107 548,759
Cash flows from capital and related financing activities:
Intergovernmental revenue 6,340,992 - - 6,340,992 3,987,592
Special assessments 136,390 740,098 (8,773) 867,715 375,404
Refunds and reimbursements - - - - 223,615
Connection charges 2,154,200 1,998,000 - 4,152,200 3,622,097
Proceeds from issuance of bonds 605,002 6,026,615 - 6,631,617 -
Principal paid on long-term debt (1,385,000) (2,240,000) (200,000) (3,825,000) (1,380,000)
Interest and fees paid on long-term debt (264,270) (207,579) (57,014) (528,863) (505,151)
Acquisition of capital assets (7,693,521) (2,579,887) - (10,273,408) (5,608,382)
Transfer out (3,750,000) (1,500,000) - (5,250,000) -
Net cash flows provided by (used in)
capital and related financing activities (3,856,207) 2,237,247 (265,787) (1,884,747) 715,175
Cash flows from investing activities:
Investment earnings (2,980)411 (659) (3,228) 306,530
Net increase (decrease) in cash and cash equivalents (2,242,307) 2,255,758 (30,319) (16,868) 1,570,464
Cash and cash equivalents - January 1 7,062,772 7,836,634 1,092,101 15,991,507 14,421,043
Cash and cash equivalents - December 31 $4,820,465 $10,092,392 $1,061,782 $15,974,639 $15,991,507
Reconciliation of operating income to net
cash provided by operating activities:
Operating income (loss)($730,842) ($867,957) ($268,061) ($1,866,860) ($2,112,284)
Adjustments to reconcile operating income
(loss) to net cash flows from operating activities:
Intergovernmental revenue 35,635 - - 35,635 21,893
Depreciation 1,467,694 880,861 611,565 2,960,120 2,600,589
Changes in assets and liabilities:
Decrease (increase) in receivables 765,605 (48,701) (88,678) 628,226 78,290
Decrease (increase) in prepaid items - 419,684 - 419,684 (400,527)
Decrease (increase) in deferred outflows of resources (72,241) (26,113) (13,756) (112,110) (22,322)
Increase (decrease) in payables 62,031 (347,691) (2,396) (288,056) 214,973
Increase (decrease) in salaries and benefits payable 3,271 1,579 1,020 5,870 (9,120)
Increase (decrease) in compensated absences 4,965 (1,899) (2,440)626 5,951
Increase (decrease) in other post employment benefits 3,411 1,143 537 5,091 1,434
Increase (decrease) in net pension liability (35,507) (37,557) (26,277) (99,341) 179,932
Increase (decrease) in deferred inflows of resources 112,858 44,751 24,613 182,222 (10,050)
Total adjustments 2,347,722 886,057 504,188 3,737,967 2,661,043
Net cash provided by (used in) operating activities $1,616,880 $18,100 $236,127 $1,871,107 $548,759
Noncash investing, capital and financing activities:
Capital asset contributions $1,837,010 $1,476,603 $1,605,495 $4,919,108 $6,946,150
Total
Business-Type Activities - Enterprise Funds
The accompanying notes are an integral part of these financial statements.
44
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Lake Elmo, Minnesota (the City) is a statutory City under Optional Plan A as defined in the State of
Minnesota statutes. The City is governed by an elected Mayor and a four-member Council. The Council
exercises legislative authority and determines all matters of policy. The Council appoints personnel responsible
for the proper administration of all affairs relating to the City. 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
As required by 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. Generally, component units are legally separate organizations for which the officials of the
primary government are financially accountable.
COMPONENT UNITS
The City has one component unit, the Economic Development Authority (EDA). The financial
statements of the EDA are included as a blended component unit because its governing body is
substantively the same as the City Council, the City is in a relationship of financial burden with the
EDA, and because management of the City have operational responsibilities for the EDA. Separate
financial statements for the EDA are not prepared.
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 and proprietary funds. The 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.
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.
45
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Debt Service Fund is an accumulation of resources (primarily special assessments and property tax
revenues) for the payments of principal and interest on long-term general obligation debt of
governmental funds.
Park Dedication Fund accounts for the accumulation of resources (primarily park dedication fees)
that are used to make improvements to existing parks as well as building new parks.
Vehicle Acquisition Fund accounts for the accumulation of resources for the purchase of vehicles to
be used by various City departments.
Heritage Farms Street & Utility Improvements Fund accounts for the activities related to the
Heritage Farms streets improvements project. The improvements include the reconstruction of
approximately 1.2 miles of residential streets.
City Hall/Fire Station Building Project Fund accounts for the activities related to the construction
of a new City Center/Fire Station and Public Works addition. The project is expected to be
completed in 2023.
The City reports the following major proprietary funds:
The Water Fund accounts for the activities of the City’s water distribution operations.
The Sewer Fund accounts for revenues and costs associated with the City’s sewer system.
The Storm Sewer Fund accounts for costs associated with the City’s storm sewer system. These
costs are financed by the storm sewer surcharge.
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
imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be available when they are collectible within the
current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
City considers 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
46
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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, sewer and storm 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 legally adopted by Council resolution for the
General Fund and enterprise funds.
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.
The City follows these legal compliance procedures in establishing the budgetary data reflected in the
financial statements:
1. Budget requests are submitted by all department heads to the City Administrator and Finance
Director in July of each year. The Finance Director’s office compiles the budget request into
an overall preliminary City budget, balancing budget requests with available revenue.
2. In July, the Finance Committee reviews the budget and recommends the budget to the City
Council.
3. The preliminary budget is submitted to the City Council in September for its review and/or
modification.
4. City administration presents the proposed budget to the City Council which in turn, when
required, holds a truth-in-taxation public hearing on the proposed budget. The budget
resolution adopted by the City Council sets forth the budget at the department level for the
General Fund and the fund level for the enterprise funds.
5. All budgets appropriations lapse at the end of the fiscal year. The legal level of control (the
level on which expenditures may not legally exceed appropriations) for each budget is at the
department level. Administration cannot legally amend or transfer appropriations between
departments without the approval of the City Council once the budget has been approved. Any
over expenditures of appropriations or transfers of appropriated amounts must be approved by
the City Council.
47
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
6. Budgeted amounts are originally adopted, or as amended by the City Council. The budget
cannot be amended without approval by the City Council.
E. 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.
F. RECEIVABLES
The estimated portion of uncollectible property taxes and special assessments is not material and has not
been reported. Because utility bills are considered liens on property, no estimated uncollectible
amounts are established. Uncollectible amounts are not material for other receivables.
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.
48
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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
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
The original cost of materials and supplies has been recorded as expenditures/expenses at the time of
purchase. The City does not maintain material amounts of inventories of goods and supplies.
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. 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 $25,000 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. The costs of normal
maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not
49
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
capitalized. Major outlays for capital assets and improvements are capitalized as projects are
constructed.
Capital assets are depreciated using the straight-line method over the following estimated useful lives:
Useful Life
in Years
Buildings 10-50
Other Improvements 10-20
Machinery and Equipment 5-20
Infrastructure 20-40
L. COMPENSATED ABSENCES
It is the City’s policy to permit employees to accumulate earned but unused 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.
M. 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.
N. DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
In addition to assets, the statement of financial position reports a separate section for deferred outflows
of resources. This separate financial statement element represents a consumption of net assets 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 assets
that applies to future periods, and therefore, will not be recognized as an inflow of resources (revenue)
until that time. The City has pension 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 property
taxes and special assessments not collected within 60 days from year-end.
50
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
O. 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.
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
has delegated the power to assign fund balances to the City’s finance committee.
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.
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.
P. NET POSITION
Net position represents the difference between assets plus deferred outflows of resources and liabilities
plus deferred inflows of resources in the government-wide financial statements. Net investment in
capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding
balance of any long-term debt used to build or acquire the capital assets. Net position is reported as
restricted in the government-wide financial statements when there are limitations on its use through
external restrictions imposed by creditors, grantors or laws or regulations of other governments.
Q. 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 “due 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.
51
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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.
S. RECLASSIFICATIONS
Certain amounts presented in the prior year data have been reclassified in order to be consistent with the
current year’s presentation.
T. COMPARATIVE TOTALS
The basic financial statements, required supplementary information, and combining and individual
nonmajor fund financial statements include certain prior year summarized comparative information in
total but not at the level of detail required for a presentation in conformity with generally accepted
accounting principles. Accordingly, such information should be read in conjunction with the City’s
financial statements for the year ended December 31, 2020 from which the summarized information was
derived.
U. PENSION PLANS
COST SHARING MULTIPLE - EMPLOYER PLANS
For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension
expense, information about the fiduciary net position of the Public Employees Retirement Association
(PERA) and additions to/deductions from PERA’s fiduciary net position have been determined on the
same basis as they are reported by PERA except that PERA’s fiscal year end is June 30. For this
purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and
refunds are recognized when due and payable in accordance with the benefit terms. Investments are
reported at fair value.
SINGLE EMPLOYER PLAN
For purposes of measuring the net pension liability (asset), deferred outflows/inflows of resources, and
pension expense, information about the fiduciary net position of the Lake Elmo Firefighters Relief
Association (the Association) and additions to/deductions from the Association’s fiduciary net position
have been determined on the same basis as they were reported by the Association. For this purpose,
benefit payments are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
52
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 2 DEPOSITS AND INVESTMENTS
A. DEPOSITS
In accordance with Minnesota Statutes, the City maintains its deposits at depository banks authorized
by the City Council. All such banks are members of the Federal Reserve System.
Minnesota Statutes require that all City deposits be protected by insurance, surety bonds or collateral.
The market value of collateral pledged must equal 110% of deposits not covered by insurance or
bonds. Securities pledged as collateral are required to be held in safekeeping by the City or in a
financial institution other than that furnishing the collateral. Minnesota Statute 118A.03 identifies
allowable forms of collateral.
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. The City has no additional deposit policies addressing custodial
credit risk.
At December 31, 2021, the bank balance of the City’s deposits with financial institutions was
$35,841,489 and the carrying amount was $35,709,102. All deposits were covered by federal
depository insurance or by collateral pledged and held in the City’s name.
B. INVESTMENTSN
Subject to rating, yield, maturity and issuer requirements as prescribed by statute, Minnesota Statutes
118A.04 and 118A.05 authorize the City to invest in United States securities, state and local securities,
commercial paper, time deposits, high-risk mortgage-backed securities, temporary general obligation
bonds, repurchase agreements, Minnesota joint powers investment trusts and guaranteed investment
contracts.
At December 31, 2021, the City had the following investments and maturities:
Fair Less
Investment Type Rating Value Than 1 1 - 5 6 - 10
Brokered certificates of deposit Not rated $4,403,367 $1,296,828 $3,106,539 $ -
Federal Farm Credit Bank notes AAA 535,734 - 535,734 -
Federal Home Loan Bank notes AAA 7,651,581 - 7,651,581 -
Municipal bonds (1)3,240,845 242,614 2,205,062 793,169
Money market funds Not rated 44,998 44,998 - -
Total $15,876,525 $1,584,440 $13,498,916 $793,169
(1) $857,816 are rated AAA, $754,351 are rated AA,Total investments $15,876,525
$459,307 are rated AA+, $102,890 are rated Aa2,Deposits 35,709,102
$617,095 are rated Aa3, $204,668 are rated A+,Petty cash 1,748
$204,718 are rated A. Total cash and investments $51,587,375
Investment Maturities (in Years)
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.
The City has the following recurring fair value measurements at December 31, 2021:
53
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
The City has the following recurring fair value measurements at December 31, 2021:
Investment Type 12/31/2021 Level 1 Level 2 Level 3
Investments at fair value:
Brokered certificates of deposit $4,403,367 $ - $4,403,367 $ -
Municipal bonds 3,240,845 - 3,240,845 -
Federal Farm Credit Bank notes 535,734 - 535,734 -
Federal Home Loan Bank notes 7,651,581 - 7,651,581 -
15,831,527 $0 $15,831,527 $0
Investments not categorized:
Money market funds 44,998
Total investments $15,876,525
Fair Value Measurement Using
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 $10,000,000 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 investment policy states that
extended maturities may be utilized to take advantage of higher yields; however no more than 25% of
total investments should extend beyond five years and in no circumstance should any extend beyond ten
years. The City’s investment portfolio is structured 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
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, 2021, 15% of the City’s total cash and investments
were in notes issued by the Federal Home Loan Bank.
54
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 3 RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31, 2021 are as
follows:
Property Special
Taxes Assessments
Receivable Receivable Total
Major Funds:
General Fund $15,067 $32,762 $47,829
Debt Service Fund - 2,823,681 2,823,681
Water Fund - 226,363 226,363
Sewer Fund - 3,412,829 3,412,829
Storm Sewer Fund - 808 808
Nonmajor Funds - 17,833 17,833
Total $15,067 $6,514,276 $6,529,343
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 $46,218 $66,114 $112,332
Debt Service Fund - 3,130,292 3,130,292
Nonmajor Funds - 17,833 17,833
Total $46,218 $3,214,239 $3,260,457
55
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 5 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2021 was as follows:
Beginning Ending
Balance Increases Decreases Balance
Governmental activities:
Capital assets, not being depreciated:
Land $3,453,979 $ - $ - $3,453,979
Construction in progress 637,739 4,901,572 (635,404) 4,903,907
Total capital assets, not being depreciated 4,091,718 4,901,572 (635,404) 8,357,886
Capital assets, being depreciated:
Buildings 4,330,670 - - 4,330,670
Other improvements 2,780,348 - - 2,780,348
Machinery and equipment 5,478,510 426,344 (80,677) 5,824,177
Infrastructure 41,630,654 5,070,097 - 46,700,751
Total capital assets, being depreciated 54,220,182 5,496,441 (80,677) 59,635,946
Less accumulated depreciation for:
Buildings 1,245,870 90,165 - 1,336,035
Other improvements 1,233,865 101,939 - 1,335,804
Machinery and equipment 2,667,118 332,562 (80,677) 2,919,003
Infrastructure 7,680,327 2,033,030 - 9,713,357
Total accumulated depreciation 12,827,180 2,557,696 (80,677) 15,304,199
Total capital assets being depreciated - net 41,393,002 2,938,745 0 44,331,747
Governmental activities capital assets - net $45,484,720 $7,840,317 ($635,404) $52,689,633
Beginning Ending
Balance Increases Decreases Balance
Business-type activities:
Capital assets, not being depreciated:
Land $3,668,869 $ - $ - $3,668,869
Construction in progress 5,843,234 10,431,561 (6,312,805) 9,961,990
Total capital assets, not being depreciated 9,512,103 10,431,561 (6,312,805) 13,630,859
Capital assets, being depreciated:
Machinery and equipment 413,699 - - 413,699
Infrastructure 66,599,944 11,231,913 - 77,831,857
Total capital assets, being depreciated 67,013,643 11,231,913 0 78,245,556
Less accumulated depreciation for:
Machinery and equipment 245,607 29,424 - 275,031
Infrastructure 11,636,560 2,930,695 - 14,567,255
Total accumulated depreciation 11,882,167 2,960,119 0 14,842,286
Total capital assets being depreciated - net 55,131,476 8,271,794 0 63,403,270
Business-type activities capital assets - net $64,643,579 $18,703,355 ($6,312,805) $77,034,129
56
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Depreciation expense was charged to functions/programs of the City as follows:
Governmental activities:
General government $16,398
Public safety 147,495
Public works 2,257,449
Culture and recreation 136,354
Total depreciation expense - governmental activities $2,557,696
Business-type activities:
Water $1,467,694
Sewer 880,861
Storm sewer 611,565
Total depreciation expense - business-type activities $2,960,120
57
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 6 LONG-TERM DEBT
The City issues general obligation bonds to provide funds for economic development and for the acquisition and
construction of major capital assets including infrastructure. General obligation bonds have been issued for both
governmental and business-type activities. Bonds issued to provide funds for business-type activities are
reported in proprietary funds if they are expected to be repaid from proprietary revenues. General obligation
bonds are direct obligations and pledge the full faith and credit of the City. General obligation improvement
bonds are expected to be repaid, in part, from assessments to the benefited properties.
A summary of long-term debt outstanding at December 31, 2021 is as follows:
Issue Interest Maturity Payable
Date Rates Date 12/31/2021
Governmental Activities:
General obligation improvement bonds:
2010B CIP Refunding bonds 11/30/10 1.00% - 3.20% 02/01/25 $730,000
2011A Improvement bonds 10/01/11 1.25% - 2.30% 02/01/22 90,000
2012B Improvement bonds 08/16/12 1.25% - 1.90% 02/01/23 190,000
2014A Improvement bonds 07/15/14 2.00% - 3.50% 01/15/30 1,610,000
2015A Improvement bonds 08/13/15 2.00% - 3.00% 01/15/26 815,000
2016A Improvement bonds 06/01/16 2.00% 01/15/27 1,675,000
2017A Improvement bonds 06/08/17 2.50% - 3.00% 01/15/28 3,300,000
2019A Improvement bonds 10/24/19 2.00% - 3.00% 02/01/35 2,620,000
2021A Improvement bonds 12/07/21 1.75% - 3.00% 02/01/42 15,675,000
Total general obligation improvement bonds 26,705,000
General obligation equipment certificates:
2018A Equipment certificates 10/16/18 2.70% 02/01/28 755,000
Unamortized bond premiums 864,553
Compensated absences payable 85,707
Total governmental activities $28,410,260
Business-Type Activities:
General obligation revenue bonds:
2012A Refunding bonds 08/13/12 2.00% - 2.50% 12/01/30 $2,810,000
2014A Improvement bonds 07/15/14 2.00% - 3.50% 01/15/30 2,160,000
2015A Improvement bonds 08/13/15 2.00% - 3.00% 01/15/31 850,000
2016A Improvement bonds 06/01/16 2.00% 01/15/32 5,220,000
2017A Improvement bonds 06/01/17 2.50% - 3.00% 01/15/33 3,710,000
2019A Improvement bonds 10/24/19 2.00% - 3.00% 02/01/35 1,135,000
2021A Improvement bonds 12/07/21 1.75% - 3.00% 02/01/37 6,310,000
Total general obligation revenue bonds 22,195,000
Unamortized bond premiums 646,659
Compensated absences payable 28,340
Total business-type activities $22,869,999
58
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
CHANGES IN LONG-TERM DEBT
The following is a schedule of changes in City indebtedness for the year ended December 31, 2021:
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Governmental activities:
G.O. Improvement bonds $13,695,000 $15,675,000 $2,665,000 $26,705,000 $1,770,000
G.O. Equipment certificates 850,000 - 95,000 755,000 100,000
Taxable lease revenue bonds 881,000 - 881,000 - -
Unamortized bond premiums 364,432 548,115 47,994 864,553 -
Compensated absences payable 109,369 98,864 122,526 85,707 64,280
Total governmental activities $15,899,801 $16,321,979 $3,811,520 $28,410,260 $1,934,280
Business-type activities:
G.O. Revenue bonds $19,710,000 $6,310,000 $3,825,000 $22,195,000 $1,345,000
Unamortized bond premiums 395,366 321,617 70,324 646,659 -
Compensated absences payable 27,714 33,284 32,658 28,340 21,255
Total business-type activities $20,133,080 $6,664,901 $3,927,982 $22,869,999 $1,366,255
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 Principal Interest
2022 $1,770,000 $500,458 $100,000 $19,036 $1,345,000 $468,989
2023 2,380,000 577,122 100,000 16,336 1,810,000 487,575
2024 2,325,000 514,001 105,000 13,568 1,815,000 443,165
2025 2,295,000 450,550 110,000 10,665 1,865,000 397,603
2026 2,155,000 389,642 110,000 7,695 1,900,000 350,665
2027-2031 7,305,000 1,218,260 230,000 6,207 9,515,000 1,002,286
2032-2036 4,555,000 619,745 - - 3,635,000 160,595
2037-2041 3,295,000 225,314 - - 310,000 3,100
2042 625,000 6,641 - - - -
Total $26,705,000 $4,501,733 $755,000 $73,507 $22,195,000 $3,313,977
General ObligationGeneral Obligation General Obligation
Revenue BondsImprovement Bonds Equipment Certificates
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.
59
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
DEFERRED AD VALOREM TAX LEVIES – BONDED DEBT
General obligation bonds are backed by the full faith and credit of the City, including special assessment and
revenue bond issues. General Obligation improvement bond issues are 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.
CURRENT REFUNDINGS
On December 7, 2021, the City issued General Obligation Improvement, CIP, and Refunding Bonds in the
amount of $21,985,000. On December 7, 2021, $2,280,000 of the bonds, along with a bond premium, were used
to advance refund the 2022 through 2033 maturities of the 2013A General Obligation Bonds in the amount of
$2,370,000. The refunding will reduce the City’s total debt service payments over the last twelve years of the
bond by $313,674 and obtain an economic gain (difference between the present value of the debt service
payments on the old and new debt) by $315,814.
On December 7, 2021, the City issued General Obligation Improvement, CIP, and Refunding Bonds in the
amount of $21,985,000. On December 20, 2021, $815,000 of the bonds, along with a bond premium, were used
to advance refund the 2022 through 2034 maturities of the 2018A Taxable Lease Revenue Bonds in the amount
of $834,000. The refunding will reduce the City’s total debt service payments over the last thirteen years of the
bond by $149,393 and obtain an economic gain (difference between the present value of the debt service
payments on the old and new debt) by $153,251.
60
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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
2010A G.O. Improvement Infrastructure improvements 2011 - 2020 $ - $76,050 $6,774
2010B G.O. CIP Refunding Infrastructure improvements Ad valorem taxes 2011 - 2024 $776,345 $194,841 $207,338
2011A G.O. Improvement Infrastructure improvements 2012 - 2021 $91,035 $93,105 $5,345
2012A G.O. Refunding Water system improvements Water usage charges 2012 - 2030 $3,139,758 $270,644 $1,711,596
2012B G.O. Improvement Infrastructure improvements 2013 - 2022 $193,611 $94,375 $83,674
2013A G.O. Improvement Infrastructure improvements 2014 - 2033 $ - $3,662,081 $2,266,092
Ad valorem taxes,
2014A G.O. Improvement Infrastructure improvements Special assessments,2015 - 2029 $4,288,380 $543,178 $2,510,777
Water & Sewer charges
Ad valorem taxes,
2015A G.O. Improvement Infrastructure improvements Special assessments,2016 - 2030 $1,839,113 $288,864 $2,341,746
Water & Sewer charges
Ad valorem taxes,
2016A G.O. Improvement Infrastructure improvements Special assessments,2017 - 2031 $7,591,550 $834,800 $3,068,346
Water, Sewer, & Storm charges
Ad valorem taxes,
2017A G.O. Improvement Infrastructure improvements Special assessments,2018 - 2032 $7,950,121 $879,891 $3,193,725
Water, Sewer, & Storm charges
2018A G.O. Equipment Certificates Purchase of fire truck, dump truck Ad valorem taxes 2019 - 2027 $828,507 $116,668 $123,848
2018A Taxable Lease Revenue Purchase of city hall Lease revenues 2018 - 2033 $ - $935,747 $ -
Ad valorem taxes,
2019A G.O. Improvement Special assessments,2020 - 2034 $4,265,035 $406,056 $3,118,970
Water, Sewer, & Storm charges
Ad valorem taxes,
2021A G.O. Improvement Special assessments,2021-2042 $26,580,762 $ - $2,745,863
Water & Sewer charges
Current YearRevenue Pledged
Infrastructure improvements,
capital equipment
New city hall, fire station, law
enforcement facilitiy and public
works addition, and infrastructure
improvements
Ad valorem taxes, Special
assessments
Ad valorem taxes, Special
assessments
Ad valorem taxes, Special
assessments
Special assessments, Water &
Sewer charges
61
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 7 DEFINED BENEFIT PENSION PLANS – PERA
A. PLAN DESCRIPTION
The City participates in the following cost-sharing multiple-employer defined benefit pension plans
administered by the Public Employees Retirement Association of Minnesota (PERA). PERA’s defined
benefit pension plans are established and administered in accordance with Minnesota Statutes, Chapters
353 and 356. PERA’s defined benefit pension plans are tax qualified plans under Section 401(a) of the
Internal Revenue Code.
1. General Employees Retirement Fund (GERF)
All full-time (with the exception of employees covered by PEPFF) and certain part-time employees
of the City are covered by the General Employees Retirement Fund (GERF). GERF members
belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security.
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 local relief associations that
elected to merge with and transfer assets and administration to PERA.
B. BENEFITS PROVIDED
PERA provides retirement, disability, and death benefits. Benefit provisions are established by
state statute and can only be modified by the state legislature. Vested, terminated employees who
are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the
time they last terminated their public service.
1. GERF Benefits
Benefits are based on a member’s highest average salary for any five successive years of allowable
service, age, and years of credit at termination of service. Two methods are used to compute
benefits for PERA’s Coordinated members. Members hired prior to July 1, 1989 receive the higher
of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989.
Under Method 1, the accrual rate for Coordinated members is 1.2% of average salary for each of
the first ten years of service and 1.7% of average salary for each additional year. Under Method 2,
the accrual rate for Coordinated Plan members is 1.7% of average salary for all years of service.
For members hired prior to July 1, 1989 a full annuity is available when age plus years of service
equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal
retirement age is the age for unreduced Social Security benefits capped at 66.
Benefit increases are provided to benefit recipients each January. The postretirement increase is
equal to 50% of the cost-of-living adjustment (COLA) announced by the SSA, with a minimum
increase of at least 1% and a maximum of 1.5%. Recipients that have been receiving the annuity or
benefit for at least a full year as of the June 30 before the effective date of the increase will receive
the full increase. For recipients receiving the annuity or benefit for at least one month but less than
a full year as of the June 30 before the effective date of the increase will receive a reduced prorated
increase. For members retiring on January 1, 2024 or later, the increase will be delayed until
normal retirement age (age 65 if hired prior to July 1, 1989, or age 66 for individuals hired on or
62
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
after July 1, 1989). Members retiring under Rule of 90 are exempt from the delay to normal
retirement.
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 basis from 50% after ten years up
to 100% after twenty years of credited service. The annuity accrual rate is 3% of average salary for
each year of service. For PEPFF members who were first hired prior to July 1, 1989, a full annuity
is available when age plus years of service equal at least 90.
Benefit increases are provided to benefit recipients each January. The postretirement increase is
fixed at 1%. Recipients that have been receiving the annuity or benefit for at least 36 months as of
the June 30 before the effective date of the increase will receive the full increase. For recipients
receiving the annuity or benefit for at least 25 months but less than 36 months as of the June 30
before the effective date of the increase will receive a reduced prorated increase.
C. CONTRIBUTIONS
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution
rates can only be modified by the state Legislature.
1. GERF Contributions
Coordinated Plan members were required to contribute 6.5% of their annual covered salary in fiscal
year 2021 and the City was required to contribute 7.5% for Coordinated Plan members. The City’s
contributions to the GERF for the year ended December 31, 2021 were $120,362. The City’s
contributions were equal to the required contributions as set by state statute.
2. PEPFF Contributions
Police and Fire members were required to contribute 11.80% of their annual covered salary in fiscal
year 2021 and the City was required to contribute 17.70%. The City’s contributions to the PEPFF
for the year ended December 31, 2021 were $47,658. The City’s contributions were equal to the
required contributions as set by state statute.
D. PENSION COSTS
1. GERF Pension Costs
At December 31, 2021, the City reported a liability of $862,631 for its proportionate share of
GERF’s net pension liability. The City’s net pension liability reflected a reduction due to the State
of Minnesota’s contribution of $16 million. The State of Minnesota is considered a non-employer
contributing entity and the state’s contribution meets the definition of a special funding situation.
The State of Minnesota’s proportionate share of the net pension liability associated with the City
totaled $26,322. The net pension liability was measured as of June 30, 2021, 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,
63
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
2020 through June 30, 2021, relative to the total employer contributions received from all of
PERA’s participating employers. The City’s proportionate share was 0.0202% at the end of the
measurement period and 0.0207% for the beginning of the period.
City's proportionate share of the net pension liability $862,631
State of Minnesota’s proportionate share of the net
pension liability associated with the City 26,322
Total $888,953
For the year ended December 31, 2021, the City recognized pension expense of $31,156 for its
proportionate share of the GERF’s pension expense. In addition, the City recognized an additional
$2,124 as pension expense (and grant revenue) for its proportionate share of the State of
Minnesota’s contribution of $16 million to the GERF.
At December 31, 2021, 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 $5,235 $26,399
Changes in actuarial assumptions 526,704 19,007
Net collective difference between projected
and actual investment earnings 747,065
Changes in proportion 43,128 20,758
Contributions paid to PERA
subsequent to the measurement date 66,136 -
Total $641,203 $813,229
The $66,136 reported as deferred outflows of resources related to pensions resulting from City
contributions subsequent to the measurement date will be recognized as a reduction of the net
pension liability in the year ending December 31, 2022. Other amounts reported as deferred
outflows and inflows of resources related to pensions will be recognized in pension expense as
follows:
Year Ending Pension
December 31, Expense
2022 ($20,175)
2023 (582)
2024 (13,639)
2025 (203,766)
2026 -
Thereafter -
64
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
2. PEPFF Pension Costs
At December 31, 2021, the City reported a liability of $127,363 for its proportionate share of the
PEPFF’s net pension liability. The net pension liability was measured as of June 30, 2021 and the
total pension liability used to calculate the net pension liability was determined by an actuarial
valuation as of that date. The City’s proportionate share of the net pension liability was based on
the City’s contributions received by PERA during the measurement period for employer payroll
paid dates from July 1, 2020 through June 30, 2021, relative to the total employer contributions
received from all of PERA’s participating employers. The City’s proportionate share was 0.0165%
at the end of the measurement period and 0.0171% for the beginning of the period.
The State of Minnesota also contributed $18 million to PEPFF during the plan fiscal year ended
June 30, 2021. The contribution consisted of $9 million in direct state aid that meets the definition
of a special funding situation and $9 million in supplemental state aid that does not meet the
definition of a special funding situation. The direct state aid was paid on October 1, 2020.
Thereafter, by October 1 of each year, the state will pay $9 million to the PEPFF until full funding
is reached or July 1, 2048, whichever is earlier. The $9 million in supplemental state aid will
continue until the fund is 90% funded, or until the State Patrol Plan (administered by the Minnesota
State Retirement System) is 90% funded, whichever occurs later. Strong asset returns for the fiscal
year ended 2021 will accelerate the phasing out of these state contributions, although we do not
anticipate them to be phased out during the fiscal year ending 2022.
The State of Minnesota is included as a non-employer contributing entity in the PEPFF Schedule of
Employer Allocations and Schedule of Pension Amounts by Employer, Current Reporting Period
Only (pension allocation schedules) for the $9 million in direct state aid. PEPFF employers need to
recognize their proportionate share of the State of Minnesota’s pension expense (and grant revenue)
under GASB 68 special funding situation accounting and financial reporting requirements. For the
year ended December 31, 2021, the City recognized pension expense of $3,692 for its proportionate
share of the Police and Fire Plan’s pension expense. The City recognized an additional $1,040 as
pension expense (and grant revenue) for its proportionate share of the State of Minnesota’s
contribution of $9 million to the PEPFF.
The State of Minnesota is not included as a non-employer contributing entity in the Police and Fire
Pension Plan pension allocation schedules for the $9 million in supplemental state aid. The City
also recognized $1,485 for the year ended December 31, 2021 as revenue and an offsetting
reduction of net pension liability for its proportionate share of the State of Minnesota’s on-behalf
contributions to the Police and Fire Fund.
65
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
At December 31, 2021, 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 $24,281 $ -
Changes in actuarial assumptions 187,190 63,630
Net collective difference between projected
and actual investment earnings - 242,760
Changes in proportion 85,453 42,535
Contributions paid to PERA
subsequent to the measurement date 27,686 -
Total $324,610 $348,925
The $27,686 reported as deferred outflows of resources related to pensions resulting from City
contributions subsequent to the measurement date will be recognized as a reduction of the net pension
liability in the year ending December 31, 2022. Other amounts reported as deferred outflows and
inflows of resources related to pensions will be recognized in pension expense as outflows:
Year Ending Pension
December 31, Expense
2022 ($65,431)
2023 19,338
2024 (15,692)
2025 (30,110)
2026 39,894
Thereafter -
For governmental activities, the net pension liability for GERF and PEPFF will be liquidated by the
General Fund.
E. ACTUARIAL ASSUMPTIONS
The total pension liability in the June 30, 2021 actuarial valuation was determined using an individual
entry-age normal actuarial cost method and the following actuarial assumptions:
Inflation 2.25% per year
Investment Rate of Return 6.50%
The long-term investment rate of return is based on a review of inflation and investment return
assumptions from a number of national investment consulting firms. The review provided a range of
investment return rates deemed to be reasonable by the actuary. An investment return of 6.50% was
deemed to be within that range of reasonableness for financial reporting purposes.
Salary growth assumptions in the GERF range in annual increments from 10.25% after one year of
service to 3.0% after 29 years of service and 6.0% per year thereafter. In the PEPFF, salary growth
assumptions range from 11.75% after one year of service to 3.0% after 24 years of service.
66
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Mortality rates for GERF were based on the Pub-2010 General Employee Mortality Table. Mortality
rates for PEPFF were based on the Pub-2010 Public Safety Employee Mortality tables. The tables are
adjusted slightly to fit PERA’s experience. Cost of living benefit increases after retirement are assumed
to be 1.25% per year for GERF and 1.0% per year for PEPFF.
Actuarial assumptions for GERF are reviewed every four years. The most recent four-year experience
study for GERF was completed in 2019. The assumption changes were adopted by the Board and
become effective with the July 1, 2020 actuarial valuation. The most recent four-year experience study
for PEPFF was completed in 2020 and adopted by the Board and became effective with the July 1, 2021
actuarial valuation.
The following changes in actuarial assumptions and plan provisions occurred in 2021:
General Employees Fund
Changes in Actuarial Assumptions:
The investment return and single discount rates were changed from 7.50% to 6.50% for financial
reporting purposes.
The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020.
Police and Fire Fund
Changes in Actuarial Assumptions:
The investment return and single discount rates were changed from 7.50% to 6.50% for financial
reporting purposes.
The inflation assumption was changed from 2.50% to 2.25%.
The payroll growth assumption was changed from 3.25% to 3.00%.
The base mortality tables for healthy annuitants, disabled annuitants and employees were changed
from RP-2014 tables to Pub-2010 Public Safety Mortality tables. The mortality improvement scale
was changed from MP-2019 to MN-2020.
Assumed salary increase and retirement rates were modified as recommended in the July 14, 2020
experience study. The changes result in a decrease in gross salary increase rates, slightly more
unreduced retirements and fewer assumed early retirements.
Assumed rates of withdrawal were changed from select and ultimate rates to service-based rates.
The changes result in more assumed terminations.
Assumed rates of disability were increased for ages 25-44 and decreased for ages over 49. Overall,
proposed rates result in more projected disabilities.
Assumed percent married for active female members was changed from 60% to 70%.
67
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the
reasonableness on a regular basis of the long-term expected rate of return using a building-block method
in which best-estimate ranges of expected future rates of return are developed for each major asset class.
These ranges are combined to produce an expected long-term rate of return by weighting the expected
future rates of return by the target asset allocation percentages. The target allocation and best estimates
of geometric real rates of return for each major asset class are summarized in the following table:
Target Long-Term Expected
Asset Class Allocation Real Rate of Return
Domestic equity 33.5% 5.10%
International equity 16.5% 5.30%
Fixed income 25% 0.75%
Private markets 25% 5.90%
Total 100%
F. DISCOUNT RATE
The discount rate used to measure the total pension liability in 2021 was 6.5%. The projection of cash
flows used to determine the discount rate assumed that contributions from plan members and employers
will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net 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.
G. PENSION LIABILITY SENSITIVITY
The following presents the City’s proportionate share of the net pension liability, calculated using the
discount rate disclosed in the preceding paragraph, as well as what the City’s proportionate share of the
net pension liability would be if it were calculated using a discount rate one percentage point lower or
one percentage point higher than the current discount rate:
1% Decrease in 1% Increase in
Discount Rate (5.5%) Discount Rate (6.5%) Discount Rate (7.5%)
Proportionate share of the
GERF net pension liability $1,759,326 $862,631 $126,837
Proportionate share of the
PEPFF net pension liability $404,354 $127,363 ($99,702)
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.
68
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
I. PENSION EXPENSE
Pension expense recognized by the City for the year ended December 31, 2021 is as follows:
GERF $33,280
PEPFF 4,732
Fire Pension Plan (Note 8)(5,294)
Total $32,718
Note 8 DEFINED BENEFIT PENSION PLAN – LAKE ELMO FIREFIGHTERS RELIEF
ASSOCIATION
A. PLAN DESCRIPTION
The Lake Elmo Firefighters Relief Association (the Association) is the administrator of a single
employer Public Employee Retirement System (PERS) defined benefit pension plan established to
provide benefits for members of the Lake Elmo Fire Department. The plan was established and is
administered in accordance with Minnesota Statutes. As of the January 1, 2021 valuatioin date, plan
participants consisted of the following:
Retired members entitled to benefits,
but have not received them 5
Current members:
Fully vested (20 years or more) 1
Partially vested (10 years to 19 years) 8
Nonvested (less than 10 years)11
Total 25
B. BENEFITS PROVIDED
Twenty Year Service Pension
Each member who is at least 50 years of age; has retired from the Lake Elmo Fire Department; has
served at least twenty (20) years of active service with such department before retirement; and, has been
a member of the Association in good standing at least 10 years prior to such retirement; shall be entitled
to a pro-rated lump sum service pension in the amount of $5,850 for each completed full year of service
and pro-rated monthly for fractional years of service but not exceeding the maximum amount per year
of service allowed by law for the minimum average amount of available financing per firefighter as
prescribed by law. Members with 10 years of service receive partial vesting at 60% of the 20 year rate
and 4% is added for every one year of service beyond ten years up to 20 years.
69
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Death Benefits
Upon the death of an active or deferred member, the beneficiaries of deceased members shall be paid a
death benefit depending on the number of years of service:
Up to 10 years $5,850
10 years to 30 years That amount the deceased had earned as
retirement benefit had she/he retired on the date
of death and been fifty (50) years of age.
State Supplemental Benefits
Minnesota Statute 424A.10 provides for the payment of a supplemental benefit equal to ten percent of a
regular lump sum distribution up to a maximum of $1,000. The supplemental benefit is in lieu of a
State income tax exclusion for lump sum distributions and will no longer be available if State tax law is
modified to exclude lump sum distributions from State income tax. The Association qualifies for these
benefits.
C. CONTRIBUTIONS
Minnesota Statute Chapter 424A.092 specifies minimum support rates required on an annual basis. The
minimum support rates from the municipality and from state aid are determined as the amount required
to meet the normal cost plus amortizing any existing prior service costs over a ten-year period. The
Association is comprised of volunteers; therefore, there are no payroll expenditures (i.e., there are no
covered payroll percentage calculations). Contributions totaling $76,608 were made by the State of
Minnesota for the year ended December 31, 2020.
D. CHANGES IN THE NET PENSION ASSET
The net pension libility (asset) was measured using a one-year lookback as of December 31, 2020. The
total pension liability used to calculate the net pension liability (asset) was determined by an actuarial
valuation as of January 1, 2021 by applying an actuarial formula to specific census data certified by the
fire department.
70
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
At December 31, 2021, the City reported a net pension asset of $505,422.
The following table presents the changes in net pension asset during the year:
Plan Net
Total Fiduciary Pension
Pension Net Liability
Liability Position (Asset)
(a)(b)(a-b)
Balance at December 31, 2019 $724,844 $1,097,917 ($373,073)
Changes for the year:
Service cost 38,225 - 38,225
Interest cost 39,743 - 39,743
Assumption changes - - -
Plan Changes - - -
Projected investment earnings - - -
Contributions - State of MN - 76,608 (76,608)
Asset (gain) / loss (21,722) 118,822 (140,544)
Benefit payments - - -
Administrative expenses (6,057)(12,892)6,835
Net changes 50,189 182,538 (132,349)
Balance at December 31, 2020 $775,033 $1,280,455 ($505,422)
For the year ended December 31, 2021, the City recognized a reduction to pension expense in the
amount of $5,294.
At December 31, 2021, the City reported deferred outflows and inflows of resources from the following
sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between projected and
actual investment earnings $ - $60,830
Assumption changes 11,665 -
Liability gains - 95,744
Total $11,665 $156,574
71
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized
in pension expense as follows:
Year Ending Pension
December 31, Expense
2022 ($34,633)
2023 (15,352)
2024 (41,370)
2025 (26,043)
2026 (14,135)
Thereafter (13,376)
E. ACTUARIAL ASSUMPTIONS
The total pension asset was determined by an actuarial valuation as of December 31, 2020 using the
following actuarial assumptions, applied to all periods in the measurement:
Valuation date 1/1/2021
Measurement date (assets and funded status)12/31/2020
Actuarial cost method Entry age normal
Amortization method Level dollar amount
Closed 5 year period
Asset valuation method Market value
Actuarial assumptions:
Investment rate of return 5.25%
20-year municipal bond yield N/A
Projected salary increases 2.50%
Includes inflation at N/A
Cost-of-living adjustments N/A
Age of service retirement 50
Post retirement benefit increase N/A
Mortality Due to a small sample size,
assumed no pre-retirement
mortality. Post-retirement mortality
does not apply as the benefit
structure and form of payment do
not reflect lifetime benefits.
The long-term expected rate of return on pension plan investments was determined using a building-
block method in which best-estimates of expected future real rates of return (expected returns, net of
pension plan investment expense and inflation) are developed for each major asset class. These asset
class estimates are combined to produce the portfolio long-term expected rate of return by weighting the
expected future real rates of return by the current asset allocation percentage (or target allocation, if
available) and by adding expected inflation. All results are then rounded to the nearest quarter
percentage point.
72
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
The best-estimate of expected future real rates of return were developed by aggregating data from
several published capital market assumption surveys and deriving a single best-estimate based on the
average survey values. These capital market assumptions reflect both historical market experience as
well as diverse views regarding anticipated future returns. The expected inflation assumptions was
developed based on an analysis of historical experience blended with forward-looking expectations
available in market data.
Best estimates of geometric real and nominal rates of return for each major asset class included in the
pension plan’s asset allocation as of the measurement date are summarized in the following table:
Portfolio Expected
Asset Class Weight Class Return
Cash 15%1.80%
Fixed income 22%3.00%
Equities 62%6.80%
Other 1%7.00%
Total (weighted avg., rounded to 1/4%) 100%5.25%
F. DISCOUNT RATE
The discount rate used to measure the total pension liability was 5.25%. The liability discount rate was
developed using the alternative method described in paragraph 43 of GASB 67, which states that “if the
evaluations required by paragraph 41 can be made with sufficient reliability without a separate
projection of cash flows into and out of the pension plan, alternative methods may be applied in making
the evaluations.” The determination of the discount rate assumed that the plan’s current overfunded
status, combined with Minnesota statutory funding requirements, provide sufficient reliability that
projected plan assets will be adequate to pay future retiree benefits. Therefore, the plan’s long-term
expected return on plan investments was applied to all periods of projected benefit payments to
determine the total pension liability.
G. PENSION LIABILITY (ASSET) SENSITIVITY
The following presents the City’s net pension asset for the 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 (4.25%) Discount Rate (5.25%) Discount Rate (6.25%)
Net pension asset ($472,425)($505,422)($537,234)
H. PENSION PLAN FIDUCIARY NET POSITION
Detailed information about the Association plan’s fiduciary net position is available in a separately-
issued financial report that includes financial statements and required supplementary information. That
report may be obtained by contacting the Finance Director for the City of Lake Elmo.
73
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 9 POST-EMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB)
A. PLAN DESCRIPTION
In addition to providing the pension benefits described in Note 7 and 8, 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
RETIREES
At retirement, employees of the City receiving a retirement or disability benefit, or eligible to receive a
benefit, from a Minnesota public pension plan may continue to participate in the City’s group insurance
plan. Vesting requirements of three years if hired before July 1, 2010 or five years if hired on or after
July 1, 2010 generally apply.
DISABLED POLICE AND FIREFIGHTERS
The City continues to pay the employer’s contribution toward health coverage for firefighters disabled in the
line of duty and deceased firefighter’s dependents if the firefighter was killed in the line of duty, per Minnesota
Statute 299A.465, until age 65. Dependent coverage is included, if the dependents were covered at the time of
the disability. During 2021, no benefits were paid for firefighters disabled or 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.
C. PARTICIPANTS
As of the December 31, 2019 actuarial valuation, participants of the plan consisted of:
Active employees 23
Inactive employees or beneficiaries
currently receiving benefits 0
Total 23
74
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
D. TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY
The City’s total OPEB liability of $99,789 was measured as of December 31, 2020 and was determined
by an actuarial valuation as of December 31, 2019. Changes in the total OPEB liability during 2021
were:
Balance - beginning of year $79,303
Changes for the year:
Service cost 13,859
Interest 2,541
Changes of benefit terms -
Differences between expected and actual experience -
Changes in assumptions 5,583
Benefit payments (1,497)
Net changes 20,486
Balance - end of year $99,789
For governmental activities, the OPEB liability is liquidated by the General Fund. The estimated
amount due within one year is immaterial, and therefore, is not separately presented on the Statement of
Net Position.
E. ACTUARIAL ASSUMPTIONS AND OTHER INPUTS
All costs and liabilities under the plan were determined in accordance with the Alternative Measurement
Method prescribed by GASB Statement No. 75 for employers with under 100 plan participants. The
total OPEB liability in the December 31, 2019 actuarial valuation was determined using the following
actuarial assumptions and other inputs, applied to all periods included in the measurement, unless
otherwise specified:
Inflation 2.50%
Salary increases 2.50%
Discount rate 2.00%
Investment rate of return 2.00%
Healthcare cost trend rates 6.20% for 2020; gradually decreasing
over several decades to an ultimate rate of
4.00% for 2075 and later years
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 Fidelity 20-Year Municipal GO AA Index as of December 31, 2020.
40% of the employees currently electing coverage are assumed to elect coverage in the same plan and
coverage level at retirement, continue coverage to age 65 and then waive coverage. Employees currently
waiving coverage are assumed to waive coverage at retirement. Retirement age is assumed to be the
latest of age 62, plan eligibility or current age.
For retirees, actual disability status was used. 100% of current and future retirees under age 65 are
assumed to become Medicare eligible at the later of age 65 or retirement. Actual Medicare status was
used for retired members.
75
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Changes in actuarial assumptions since the previous valuation include:
The discount rate was changed from 2.75% to 2.00%
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 (1.00%) or 1% higher
(3.00%) than the current discount rate:
1% Decrease Discount Rate 1% Increase
(1.00%)(2.00%)(3.00%)
Total OPEB liability $107,805 $99,789 $92,427
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 (5.2%
decreasing to 3.0%) or 1% higher (7.2% decreasing to 5.0%) than the current healthcare cost trend rates:
Healthcare Cost
1% Decrease Trend Rates 1% Increase
(5.2% decreasing to 3.0%) (6.2% decreasing to 4.0%) (7.2% decreasing to 5.0%)
Total OPEB liability $88,082 $99,789 $114,292
H. OPEB EXPENSE AND DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
RELATED TO OPEB
For the year ended December 31, 2021, the City recognized $20,486 of OPEB expense.
In accordance with the Alternative Measurement Method, gains and losses due to experience and
assumption changes are recognized immediately. In addition, there were no contributions between the
measurement date and reporting date because the City has no retirees and no active employees who
were expected to retire during 2021. Therefore, there are no deferred outflows or inflows of resources
related to OPEB as of December 31, 2021.
76
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 10 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. DEFICIT FUND BALANCES
The following funds reported a deficit fund balance at December 31, 2021:
Deficit
Fund Balance
Nonmajor Governmental Funds:
CSAH 19 / Hudson Blvd Interchange (425) ($137,281)
CSAH 13 Phase 2 (427) (18,885)
Inwood and 5th Street Stoplight (429) (28,202)
CSAH 15 Manning Avenue Phase 3 (433) (3,525)
CSAH 15 Manning Avenue and 30th Street (438) (7,541)
TH36 Lake Elmo Avenue Improvements (440) (1,702)
2022 Street Improvements (441) (48,868)
The City intends to fund these deficits during 2022 with bond proceeds, MSA revenue, and transfers
from the General Fund.
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:
Elections $3,150 $5,112 $1,962
City facilities 22,963 27,347 4,384
Planning and zoning 275,408 301,327 25,919
Public safety:
Building inspection 926,142 1,231,520 305,378
Animal control 13,000 14,161 1,161
All expenditure overages were approved by the City Council through the disbursement approval
process. Also of note, General Fund license and permit revenue exceeded budgeted by $472,158.
77
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 11 DUE FROM AND DUE TO OTHER FUNDS
Interfund payables and receivables are representative of lending/borrowing arrangements to cover deficit cash
balances at year-end. All balances are expected to be eliminated within one year.
A summary of due from and due to balances at December 31, 2021 is as follows:
Due From Due To
Other Funds Other Funds
Major Funds:
General Fund $222,457 $ -
Nonmajor Funds:
CSAH 19 / Hudson Blvd Interchange - 137,281
CSAH 13 Phase 2 - 18,722
Inwood and 5th Street Stoplight - 28,202
CSAH 15 Manning Avenue Phase 3 - 3,525
CSAH 15 Manning Avenue and 30th Street - 7,476
TH36 Lake Elmo Avenue Improvements - 1,507
2022 Street Improvements - 25,744
$222,457 $222,457
Note 12 INTERFUND TRANSFERS
Individual fund transfers for fiscal year 2021 are as follows:
Transfer In Transfer Out
Major Funds:
General Fund $ - $699,482
Debt Service Fund 113,792 -
Vehicle Acquisition 260,746 -
City Hall/Fire Station Building Project 5,250,000 -
Water Fund - 3,750,000
Sewer Fund - 1,500,000
Nonmajor Funds:
Economic Development Authority 30,000 -
Infrastructure Reserve - 69,446
Village Project 378,736 -
CSAH 15/CSAH 14 Realignment 16,904 -
Old Village Phase 4 - 23,774
2018 Street Improvements - 90,018
Manning Corridor and Safety Management 3,086 -
2019 Street and Utility Project 5,731
Inwood and 79th Street Stoplight 73,725 -
Total $6,132,720 $6,132,720
During 2021, transfers were made to provide financing for economic development, debt service, capital
expenditures, and to close out unused funds. These transfers are routine and consistent with past practices.
78
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 13 FUND BALANCE
At December 31, 2021, a summary of the governmental fund balance classifications is as follows:
Heritage Farms City Hall / Other
Park Vehicle Street & Utility Fire Station Governmental
General Debt Service Dedication Acquistion Improvements Building Project Funds Total
Nonspendable:
Prepaid items $ - $ - $ - $ - $ - $ - $ - $ -
Restricted for:
Debt service - 3,890,901 - - - - - 3,890,901
Capital improvements - - - - 131,951 9,963,112 448,765 10,543,828
Park improvements:
Ball parks - - 1,000,000 - - - - 1,000,000
Other parks improvements - - 2,024,220 - - - - 2,024,220
Total restricted 0 3,890,901 3,024,220 0 131,951 9,963,112 448,765 17,458,949
Committed for:
Lions Park - - - - - - 7,673 7,673
Assigned for:
Vehicle Acquisition - - - 1,558,215 - - - 1,558,215
City Hall/Fire Station Building Project - - - - - 5,257,054 - 5,257,054
American Rescue Plan Act - - - - - - 2,444 2,444
Economic Development Authority - - - - - - 12,056 12,056
Infrastructure Reserve - - - - - - 563,997 563,997
City Facilities - - - - - - 96,655 96,655
Manning and Hudson Future Stoplight - - - - - - 11,197 11,197
Railroad Crossing Improvements - - - - - - 68,219 68,219
Manning and Highway 36 Interchange - - - - - - 1,664 1,664
Total assigned 0 0 0 1,558,215 0 5,257,054 756,232 7,571,501
Unassigned 5,618,812 - - - - - (246,004) 5,372,808
Total fund balance $5,618,812 $3,890,901 $3,024,220 $1,558,215 $131,951 $15,220,166 $966,666 $30,410,931
The City Council has formally adopted a fund balance policy for the General Fund. The City’s policy is to
maintain unassigned fund balance in the General Fund with a target floor of 50-60% of the subsequent budgeted
fiscal year expenditures. At December 31, 2021, actual unassigned fund balance of the General Fund was 78%
of 2022 budgeted expenditures.
Note 14 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, 2021.
79
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
C. COMMITTED CONTRACTS
At December 31, 2021, the City had commitments of $19,362,667 for uncompleted construction
contracts. In addition, the City has entered into construction contracts totaling approximately
$13,564,000 during 2022 for various projects.
Note 15 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.
80
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 16 RECENTLY ISSUED ACCOUNTING STANDARDS
The Governmental Accounting Standards Board (GASB) recently approved the following statements which were
not implemented for these financial statements:
Statement No. 87 Leases. The provisions of this Statement are effective for reporting periods beginning
after June 15, 2021.
Statement No. 92 Omnibus 2020. The provisions of this Statement are effective for reporting periods
beginning after June 15, 2021.
Statement No. 94 Public-Private and Public-Public Partnerships and Availability Payment Arrangements.
The provisions of this Statement are effective for reporting periods beginning after June 15, 2022.
Statement No. 96 Subscription – Based Information Technology Arrangements. The provisions of this
Statement are effective for reporting periods beginning after June 15, 2022.
Statement No. 99 Omnibus 2022. The provisions of this Statement contain multiple effective dates, the first
being for reporting periods beginning after June 15, 2022.
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.
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82
REQUIRED SUPPLEMENTARY INFORMATION
83
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 1 of 4
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Budgeted Amounts
2021 Actual
Amounts
Variance with
Final Budget -
Positive
(Negative)
2020 Actual
Amounts
Original Final
Revenues:
General property taxes $3,824,879 $3,824,879 $3,865,164 $40,285 $3,534,627
Licenses and permits:
Business 42,870 42,870 80,857 37,987 60,816
Non-business 970,630 970,630 1,404,801 434,171 1,364,879
Total licenses and permits 1,013,500 1,013,500 1,485,658 472,158 1,425,695
Intergovernmental:
MSA - maintenance 151,755 151,755 163,776 12,021 173,566
Fire state aid 64,000 64,000 80,470 16,470 76,608
Other state aid 4,820 4,820 10,983 6,163 23,020
County and local 1,500 1,500 11,951 10,451 -
Total intergovernmental 222,075 222,075 267,180 45,105 273,194
Charges for services 757,664 757,664 1,064,375 306,711 1,022,028
Fines and forfeits 35,000 35,000 45,749 10,749 33,584
Special assessments - - 930 930 164,236
Investment income (loss)77,000 77,000 (13,605) (90,605) 164,236
Miscellaneous 133,500 133,500 177,000 43,500 183,711
Total revenues 6,063,618 6,063,618 6,892,451 828,833 6,801,311
See accompanying notes to the required supplementary information.
84
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 2 of 4
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Budgeted Amounts
2021 Actual
Amounts
Variance with
Final Budget -
Positive
(Negative)
2020 Actual
Amounts
Original Final
Expenditures:
General government:
Mayor and city council:
Current:
Personal services $27,786 $27,786 $27,774 $12 $27,792
Supplies 4,757 4,757 4,132 625 1,755
Other services and charges 24,750 24,750 22,724 2,026 19,994
Total mayor and city council 57,293 57,293 54,630 2,663 49,541
Finance and Administration:
Current:
Personal services 339,918 339,918 331,656 8,262 261,246
Supplies 6,600 6,600 4,611 1,989 2,128
Other services and charges 292,426 292,426 257,858 34,568 341,927
Total finance and administration 638,944 638,944 594,125 44,819 605,301
Elections:
Current:
Personal services - - 1,606 (1,606) 9,655
Other services and charges 3,150 3,150 3,506 (356) 3,093
Total elections 3,150 3,150 5,112 (1,962) 12,748
Communications:
Current:
Personal services 38,627 38,627 34,967 3,660 33,183
Other services and charges 11,139 11,139 9,475 1,664 9,721
Total communications 49,766 49,766 44,442 5,324 42,904
City Facilities:
Current:
Supplies 900 900 127 773 124
Other services and charges 22,063 22,063 27,220 (5,157) 28,202
Total city facilities 22,963 22,963 27,347 (4,384) 28,326
Engineering:
Current:
Other services and charges 40,000 40,000 30,000 10,000 30,000
Total engineering 40,000 40,000 30,000 10,000 30,000
Planning and Zoning:
Current:
Personal services 230,934 230,934 201,391 29,543 205,566
Supplies 150 150 2,092 (1,942)110
Other services and charges 44,324 44,324 97,844 (53,520) 30,758
Total planning and zoning 275,408 275,408 301,327 (25,919) 236,434
Total general government 1,087,524 1,087,524 1,056,983 30,541 1,005,254
See accompanying notes to the required supplementary information.
85
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 3 of 4
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Budgeted Amounts
2021 Actual
Amounts
Variance with
Final Budget -
Positive
(Negative)
2020 Actual
Amounts
Original Final
Expenditures (continued):
Public safety:
Police:
Current:
Contracted services $920,183 $920,183 $901,120 $19,063 $761,969
Other services and charges 1,800 1,800 - 1,800 -
Total police 921,983 921,983 901,120 20,863 761,969
Fire protection:
Current:
Personal services 598,939 598,939 486,897 112,042 406,657
Fire state aid 64,000 64,000 80,470 (16,470) 76,608
Supplies 45,279 45,279 50,199 (4,920) 29,640
Other services and charges 175,594 175,594 187,584 (11,990) 206,047
Total fire protection 883,812 883,812 805,150 78,662 718,952
Building inspection:
Current:
Personal services 550,584 550,584 427,955 122,629 319,006
Supplies 5,700 5,700 4,423 1,277 2,821
Other services and charges 369,858 369,858 799,142 (429,284) 776,664
Capital outlay - - - - -
Total building inspection 926,142 926,142 1,231,520 (305,378) 1,098,491
Animal control:
Current:
Other services and charges 13,000 13,000 14,161 (1,161) 13,066
Prosecution:
Current:
Other services and charges 51,000 51,000 50,212 788 48,392
Emergency communications:
Current:
Other services and charges 3,350 3,350 1,514 1,836 900
Total public safety 2,799,287 2,799,287 3,003,677 (204,390) 2,641,770
See accompanying notes to the required supplementary information.
86
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND Page 4 of 4
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
1508682
Budgeted Amounts
2021 Actual
Amounts
Variance with
Final Budget -
Positive
(Negative)
2020 Actual
Amounts
Original Final
Expenditures (continued):
Public works:
Current:
Personal services $632,569 $632,569 $523,942 $108,627 $538,411
Supplies 184,700 184,700 160,759 23,941 188,759
Other services and charges 793,925 793,925 803,747 (9,822) 748,929
Total public works 1,611,194 1,611,194 1,488,448 122,746 1,476,099
Culture and Recreation:
Parks:
Current:
Personal services 121,944 121,944 126,603 (4,659) 148,001
Supplies 18,300 18,300 18,798 (498) 20,183
Other services and charges 134,623 134,623 113,289 21,334 141,882
Total culture and recreation 274,867 274,867 258,690 16,177 310,066
Total expenditures 5,772,872 5,772,872 5,807,798 (34,926) 5,433,189
Revenue over (under) expenditures 290,746 290,746 1,084,653 793,907 1,368,122
Other financing (uses):
Transfers in - - - - 765,079
Transfers out (290,746) (290,746) (699,482) (408,736) (1,049,508)
Total other financing (uses) (290,746) (290,746) (699,482) (408,736) (284,429)
Net change in fund balance $ - $ - 385,171 $385,171 919,457
Fund balance, January 1 5,233,641 4,314,184
Fund balance, December 31 $5,618,812 $5,233,641
See accompanying notes to the required supplementary information.
87
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS
For The Last Ten Years
2021 2020 2019 2018
Total OPEB liability:
Service cost $13,859 $9,793 $9,525 $8,200
Interest 2,541 3,101 2,431 2,264
Changes of benefit terms - - - -
Differences between expected and actual experience - (14,291) - -
Changes in assumptions 5,583 6,912 (2,098)2,246
Benefit payments (1,497) - - -
Net change in total OPEB liability 20,486 5,515 9,858 12,710
Total OPEB liability - beginning 79,303 73,788 63,930 51,220
Total OPEB liability - ending $99,789 $79,303 $73,788 $63,930
Covered-employee payroll $1,455,967 $1,831,326 $1,605,997 $1,483,782
Total OPEB liability as a percentage of covered-employee payroll 6.9%4.3%4.6%4.3%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2018 and is intended to
show a ten year trend. Additional years will be added as they become available.
See accompanying notes to the required supplementary information.
88
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 12
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY -
GENERAL EMPLOYEES RETIREMENT FUND
For The Last Ten Years
State's City's
City's City's Proportionate Proportionate
Proportionate Proportionate Share (Amount) Share of the Net Plan Fiduciary
Share Share (Amount) of the Net Pension Liability Net Position as a
Measurement Fiscal Year (Percentage) of of the Net Pension Liability as a Percentage Percentage of the
Date Ending the Net Pension Pension Associated with Covered of its Covered Total Pension
June 30, December 31, Liability Liability (a) City (b) Total (a+b) Payroll (c) Payroll ((a+b)/c) Liability
2014 2014 0.0191%$897,222 $ - $897,222 $979,703 91.6%78.2%
2015 2015 0.0169%875,846 - 875,846 975,250 89.8%78.2%
2016 2016 0.0159%1,291,001 16,853 1,307,854 1,041,540 125.6%68.9%
2017 2017 0.0189%1,206,564 15,173 1,221,737 1,209,466 101.0%75.9%
2018 2018 0.0191%1,059,590 34,710 1,094,300 1,283,088 85.3%79.5%
2019 2019 0.0193%1,067,054 33,165 1,100,219 1,364,625 80.6%80.2%
2020 2020 0.0207%1,241,060 38,201 1,279,261 1,476,621 86.6%79.1%
2021 2021 0.0202%862,631 26,322 888,953 1,456,866 61.0%87.0%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2014 and is intended to
show a ten year trend. Additional years will be reported as they become available.
See accompanying notes to the required supplementary information.
89
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 13
SCHEDULE OF PENSION CONTRIBUTIONS - GENERAL EMPLOYEES RETIREMENT FUND
For The Last Ten Years
Statutorily Contributions in Contribution Contributions as a
Fiscal Year Required Relation to the Deficiency Covered Percentage of
Ending Contribution Statutorily Required (Excess)Payroll Covered
December 31,(a)Contribution (b)(a-b)(c)Payroll (b/c)
2014 $73,182 $73,182 $ - $1,009,407 7.25%
2015 70,582 70,582 - 941,092 7.5%
2016 85,649 85,649 - 1,141,987 7.5%
2017 95,794 95,794 - 1,276,944 7.5%
2018 96,960 96,960 - 1,294,100 7.5%
2019 108,779 108,779 - 1,450,387 7.5%
2020 109,289 109,289 - 1,457,195 7.5%
2021 120,362 120,362 - 1,609,407 7.5%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2014 and is intended to
show a ten year trend. Additional years will be reported as they become available.
See accompanying notes to the required supplementary information.
90
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 14
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY -
PUBLIC EMPLOYEES POLICE AND FIRE FUND
For The Last Ten Years
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
2014 2014 0.0090%$97,204 $84,098 115.6%87.1%
2015 2015 0.0090%102,261 86,600 118.1%86.6%
2016 2016 0.0090%361,186 87,111 414.6%63.9%
2017 2017 0.0100%135,012 105,846 127.6%85.4%
2018 2018 0.0163%173,741 172,287 100.8%88.8%
2019 2019 0.0193%205,468 203,030 101.2%89.3%
2020 2020 0.0171%225,396 194,511 115.9%87.2%
2021 2021 0.0165%127,363 194,379 65.5%93.7%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2014 and is intended to
show a ten year trend. Additional years will be reported as they become available.
See accompanying notes to the required supplementary information.
91
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 15
SCHEDULE OF PENSION CONTRIBUTIONS - PUBLIC EMPLOYEES POLICE AND FIRE FUND
For The Last Ten Years
Statutorily Contributions in Contribution Contributions as a
Fiscal Year Required Relation to the Deficiency Covered Percentage of
Ending Contribution Statutorily Required (Excess)Payroll Covered
December 31,(a)Contribution (b) (a-b)(c)Payroll (b/c)
2014 $13,035 $13,035 - $85,195 15.30%
2015 14,257 14,257 - 88,005 16.20%
2016 13,967 13,967 - 86,216 16.20%
2017 20,327 20,327 - 125,475 16.20%
2018 30,990 30,990 - 191,350 16.20%
2019 39,225 39,225 - 231,416 16.95%
2020 27,492 27,492 - 155,365 17.70%
2021 47,658 47,658 - 269,254 17.70%
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2014 and is intended to
show a ten year trend. Additional years will be reported as they become available.
See accompanying notes to the required supplementary information.
92
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 16
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS -
LAKE ELMO FIREFIGHTERS RELIEF ASSOCIATION
For The Last Ten Years
Fiscal year ending - December 31,2021 2020 2019 2018 2017 2016
Measurement date - December 31,2020 2019 2018 2017 2016 2015
Total pension liability:
Service cost $38,225 $37,293 $28,420 $27,727 $27,579 $28,520
Interest 39,743 42,177 36,119 35,544 36,976 37,130
Changes of assumptions - - 8,730 - 11,690 -
Plan changes - - 325,127 - - -
Gain or loss (27,779) - (80,312) - (46,403) -
Benefit payments - (253,525) (100,987) - - (191,582)
Net change in total pension liability 50,189 (174,055) 217,097 63,271 29,842 (125,932)
Total pension liability - beginning 724,844 898,899 681,802 618,531 588,689 714,621
Total pension liability - ending (a) $775,033 $724,844 $898,899 $681,802 $618,531 $588,689
Plan fiduciary net position:
Contributions - State of Minnesota $76,608 $69,975 $65,533 $61,147 $59,136 $61,166
Net Investment income (loss) 118,822 127,902 (61,227) 156,879 70,101 (48,240)
Benefit payments - (253,525) (100,987) - - (191,582)
Administrative expense (12,892) (15,741) (13,392) (14,093) (17,419) (13,314)
Net change in plan fiduciary net position 182,538 (71,389) (110,073) 203,933 111,818 (191,970)
Plan fiduciary net position - beginning 1,097,917 1,169,306 1,279,379 1,075,446 963,628 1,155,598
Plan fiduciary net position - ending (b) $1,280,455 $1,097,917 $1,169,306 $1,279,379 $1,075,446 $963,628
Net pension liability/(asset) - ending (a) - (b) ($505,422) ($373,073) ($270,407) ($597,577) ($456,915) ($374,939)
Plan fiduciary net position as a percentage of the total pension liability 165.2% 151.5% 130.1% 187.6% 173.9% 163.7%
Covered payroll*N/A N/A N/A N/A N/A N/A
Net pension liability as a percentage of covered employee payroll N/A N/A N/A N/A N/A N/A
*The Relief Association is comprised of volunteers, therefore, there are no payroll expenditures.
(i.e., there are no covered payroll amounts or percentage calculations.)
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2016 and is intended to
show a ten year trend. Additional years will be reported as they become available.
See accompanying notes to the required supplementary information.
93
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 17
SCHEDULE OF CONTRIBUTIONS - LAKE ELMO FIREFIGHTERS RELIEF ASSOCIATION
For The Last Ten Years
Statutorily Contributions in Contribution Contributions as a
Fiscal Year Required Relation to the Deficiency Covered Percentage of
Ending Contribution Statutorily Required (Excess) Payroll* Covered*
December 31,(a)Contribution (b)(a-b)(c)Payroll (b/c)
2016 $ - $61,166 ($61,166) N/A N/A
2017 - 59,136 (59,136) N/A N/A
2018 - 61,147 (61,147) N/A N/A
2019 - 65,533 (65,533) N/A N/A
2020 - 69,975 (69,975) N/A N/A
2021 - 76,608 (76,608) N/A N/A
*The Relief Association is comprised of volunteers, therefore, there are no payroll expenditures.
(i.e., there are no covered payroll amounts or percentage calculations.)
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2016 and is intended to
show a ten year trend. Additional years will be reported as they become available.
See accompanying notes to the required supplementary information.
94
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2021
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.
2021 Changes in Actuarial Assumptions:
The discount rate was changed from 2.75% to 2.00%.
2020 Changes in Actuarial Assumptions:
The discount rate was changed from 3.71% to 2.75% based on updated 20-year municipal bond
rates.
Healthcare trend rates were reset to reflect updated cost increase expectations, including the repeal
of the Affordable Care Act’s Excise Tax on high-cost health insurance plans. In addition, the
medical trend rate adjustments to reflect the projected effect of the Affordable Care Act’s Excise
Tax on high-cost health insurance plans was removed because the tax was repealed.
Medical per capita claims costs were updated to reflect recent experience.
Salary increase rates were updated from the rates used in the July 1, 2017 PERA General
Employees Plan valuation to the rates used in the July 1, 2019 valuation.
Mortality rates were updated from the RP-2014 tables to the rates used in the July 1, 2019 PERA
General Employees Plan actuarial valuation.
The inflation assumption was changed from 2.75% to 2.50% based on an updated historical
analysis of inflation rates and forward-looking market expectations.
2019 Changes in Actuarial Assumptions:
The discount rate was changed from 3.31% to 3.71%.
Note C PENSION INFORMATION
PERA – General Employees Retirement Fund
2021 Changes in Actuarial Assumptions:
The investment return and single discount rates were changed from 7.50% to 6.50% for financial
reporting purposes.
The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020.
2020 Changes in Actuarial Assumptions:
The price inflation assumption was decreased from 2.50% to 2.25%.
The payroll growth assumption was decreased from 3.25% to 3.00%.
Assumed salary increase rates were decreased 0.25% and assumed rates of retirement were
changed resulting in more unreduced (normal) retirements and slightly fewer Rule of 90 and early
retirements. Assumed rates of termination and disability were also changed.
Base mortality tables were changed from RP-2014 tables to Pub-2010 tables, with adjustments.
95
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2021
The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019.
The spouse age difference was changed from two years older for females to one year older.
The assumed number of married male new retirees electing the 100% Joint & Survivor option
changed from 35% to 45%. The assumed number of married female new retirees electing the
100% Joint & Survivor option changed from 15% to 30%. The corresponding number of married
new retirees electing the Life annuity option was adjusted accordingly.
2020 Changes in Plan Provisions:
Augmentation for current privatized members was reduced to 2.0% for the period July 1, 2020
through December 31, 2023 and 0.0% after. Augmentation was eliminated for privatizations
occurring after June 30, 2020.
2019 Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018.
2019 Changes in the Plan Provisions:
The employer supplemental contribution was changed prospectively, decreasing from $31.0
million to $21.0 million per year. The State’s special funding contribution was changed
prospectively, requiring $16.0 million due per year through 2031.
2018 Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2015 to MP-2017.
The assumed benefit increase was changed from 1.00% per year through 2044 and 2.50% per year
thereafter to 1.25% per year.
2017 Changes in Actuarial Assumptions:
The Combined Service Annuity (CSA) loads were changed from 0.8% for active members and
60% for vested and non-vested deferred members. The revised CSA loads are now 0.0% for
active member liability, 15.0% for vested deferred member liability and 3.0% for non-vested
deferred member liability.
The assumed post-retirement benefit increase rate was changed from 1.0% per year for all years
to 1.0% per year through 2044 and 2.5% per year thereafter.
2016 Changes in Actuarial Assumptions:
The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2035
and 2.5% per year thereafter to 1.0% per year for all future years.
The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was
changed from 7.9% to 7.5%.
Other assumptions were changed pursuant to the experience study dated June 30, 2015. The
assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25%
for payroll growth and 2.50% for inflation.
96
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2021
PERA – Public Employees Police and Fire Fund
2021 Changes in Actuarial Assumptions:
The investment return and single discount rates were changed from 7.50% to 6.50% for financial
reporting purposes.
The inflation assumption was changed from 2.50% to 2.25%.
The payroll growth assumption was changed from 3.25% to 3.00%.
The base mortality tables for healthy annuitants, disabled annuitants and employees were changed
from RP-2014 tables to Pub-2010 Public Safety Mortality tables. The mortality improvement
scale was changed from MP-2019 to MN-2020.
Assumed salary increase and retirement rates were modified as recommended in the July 14, 2020
experience study. The changes result in a decrease in gross salary increase rates, slightly more
unreduced retirements and fewer assumed early retirements.
Assumed rates of withdrawal were changed from select and ultimate rates to service-based rates.
The changes result in more assumed terminations.
Assumed rates of disability were increased for ages 25-44 and decreased for ages over 49.
Overall, proposed rates result in more projected disabilities.
Assumed percent married for active female members was changed from 60% to 70%.
2020 Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2018 to MP-2019.
2019 Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018.
2018 Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2016 to MP-2017.
2017 Changes in Actuarial Assumptions:
The single discount rate was changed from 5.6% to 7.5%.
Assumed salary increases were changed as recommended in the June 30, 2016 experience study.
The net effect is proposed rates that average 0.34% lower than the previous rates.
Assumed rates of retirement were changed, resulting in fewer retirements.
The Combined Service Annuity (CSA) load was 30% for vested and non-vested deferred
members. The CSA has been changed to 33% 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% for the first three years of service. Rates beyond
the select period of three years were adjusted, resulting in more expected terminations overall.
Assumed percentage of married female members was decreased from 65% to 60%.
Assumed age difference was changed from separate assumptions for male members (wives
assumed to be three years younger) and female members (husbands assumed to be four years
older) to the assumption that males are two years older than females.
The assumed percentage of female members electing Joint and Survivor annuities was increased.
97
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2021
The assumed post-retirement benefit increase rate was changed from 1.00% for all years to 1.00%
per year through 2064 and 2.50% thereafter.
2016 Changes in Actuarial Assumptions:
The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2037
and 2.5% per year thereafter to 1.0% per year for all future years.
The assumed investment return was changed from 7.9% to 7.5%. The single discount rate
changed from 7.9% to 5.6%.
The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to
3.25% for payroll growth and 2.50% for inflation.
Single Employer – Fire Division
2018 Changes
Changes in Benefit Terms:
The benefit level increased from $3,400 to $5,850 for each year of service.
98
COMBINING AND INDIVIDUAL NONMAJOR
FUND FINANCIAL STATEMENTS
99
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET Statement 18
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2021
Special Capital
Revenue Project
Assets 2021 2020
Cash and investments $517,589 $1,585,106 $2,102,695 $2,431,717
Accrued interest receivable 361 1,149 1,510 5,236
Accounts receivable - - - 100,435
Due from other funds - - - 16,059
Special assessments receivable:
Deferred - 17,833 17,833 17,833
Total assets $517,950 $1,604,088 $2,122,038 $2,571,280
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable $19,200 $44,884 $64,084 $71,080
Contracts and retainage payable - 28,191 28,191 -
Due to other funds - 222,457 222,457 1,455,847
Deposits payable - 75,000 75,000 75,000
Unearned revenue 476,577 271,230 747,807 271,230
Total liabilities 495,777 641,762 1,137,539 1,873,157
Deferred inflows of resources:
Unavailable revenue - 17,833 17,833 17,833
Fund balance:
Restricted - 448,765 448,765 1,278,472
Committed 7,673 - 7,673 7,691
Assigned 14,500 741,732 756,232 920,043
Unassigned - (246,004) (246,004) (1,525,916)
Total fund balance 22,173 944,493 966,666 680,290
Total liabilities, deferred inflows
of resources, and fund balance $517,950 $1,604,088 $2,122,038 $2,571,280
With Comparative Totals For December 31, 2020
Total Nonmajor
Governmental Funds
100
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 19
CHANGES IN FUND BALANCE
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
Special Capital
Revenue Project
Revenues:2021 2020
Intergovernmental $26,668 $428,280 $454,948 $749,999
Charges for services 57,539 30,000 87,539 251,213
Park dedication fees - - - 714,558
Investment income (loss) 806 (1,306) (500) 67,964
Total revenues 85,013 456,974 541,987 1,783,734
Expenditures:
Current:
General government - - - 4,289
Public works - - - 12,982
Economic development authority 53,264 - 53,264 46,371
Capital outlay:
General government 26,668 - 26,668 -
Public works - 1,717,634 1,717,634 1,250,434
Debt service:
Principal 881,000 - 881,000 -
Interest and fiscal charges 61,389 - 61,389 1,700
Total expenditures 1,022,321 1,717,634 2,739,955 1,315,776
Revenues over (under) expenditures (937,308) (1,260,660) (2,197,968) 467,958
Other financing sources:
Transfers in 30,000 478,182 508,182 45,661
Transfers out - (183,238) (183,238) (850,736)
Issuance of debt 815,000 2,215,460 3,030,460 -
Bond premium 45,450 100,900 146,350 -
Total other financing sources 890,450 2,611,304 3,501,754 (805,075)
Net change in fund balance (46,858) 1,350,644 1,303,786 (337,117)
Fund balance - January 1 69,031 (406,151) (337,120) 1,017,407
Fund balance - December 31 $22,173 $944,493 $966,666 $680,290
Reconciliation of beginning fund balance to prior year ending fund balance:
Prior year ending fund balance reported above $680,290
Reclassification of the Park Dedication (404) fund balance, now presented as major (1,193,853)
Reclassification of the Heritage Farms Street & Utility Improvements (434) fund balance, now presented as major 163,866
Reclassification of the City Hall / Fire Station Bldg Project (437) fund balance, now presented as major 12,577
Fund balance - January 1, 2021 as reported on this statement ($337,120)
Governmental Funds
Total Nonmajor
101
CITY OF LAKE ELMO, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 20
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2021
Economic
Lions Park Development ARPA
Sign Program Authority Fund
(207) (221) (252)
Assets 2021 2020
Cash and investments $7,668 $15,420 $494,501 $517,589 $69,506
Accrued interest receivable 5 3 353 361 321
Total assets $7,673 $15,423 $494,854 $517,950 $69,827
Liabilities and Fund Balance
Liabilities:
Accounts payable $ - $3,367 $15,833 $19,200 $796
Unearned revenue - - 476,577 476,577 -
Total liabilities 0 3,367 492,410 495,777 796
Fund balance:
Committed 7,673 - - 7,673 7,691
Assigned - 12,056 2,444 14,500 61,340
Total fund balance 7,673 12,056 2,444 22,173 69,031
Total liabilities and fund balance $7,673 $15,423 $494,854 $517,950 $69,827
With Comparative Totals For December 31, 2020
Total Nonmajor
Special Revenue Funds
102
CITY OF LAKE ELMO, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,Statement 21
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
Economic
Lions Park Development ARPA
Sign Program Authority Fund
(207) (221) (252)
Revenues:2021 2020
Intergovernmental $ - $ - $26,668 $26,668 $749,999
Charges for services - 57,539 - 57,539 87,778
Investment income (loss) (18) (1,620) 2,444 806 22,638
Total revenues (18) 55,919 29,112 85,013 860,415
Expenditures:
Current:
General government - - - - 4,289
Economic development authority - 53,264 - 53,264 46,371
Capital outlay:
General government - - 26,668 26,668 -
Debt service:
Principal - 881,000 - 881,000 -
Interest and fiscal charges - 61,389 - 61,389 1,700
Total expenditures 0 995,653 26,668 1,022,321 52,360
Revenues over (under) expenditures (18) (939,734) 2,444 (937,308) 808,055
Other financing sources (uses):
Transfers in - 30,000 - 30,000 30,000
Transfers out - - - - (850,736)
Issuance of debt - 815,000 - 815,000 -
Bond premium - 45,450 - 45,450 -
Total other financing sources (uses) 0 890,450 0 890,450 (820,736)
Net change in fund balance (18) (49,284) 2,444 (46,858) (12,681)
Fund balances - January 1 7,691 61,340 - 69,031 81,712
Fund balances - December 31 $7,673 $12,056 $2,444 $22,173 $69,031
Special Revenue Funds
Total Nonmajor
103
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104
CITY OF LAKE ELMO, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 22
NONMAJOR CAPITAL PROJECT FUNDS Page 1 of 2
December 31, 2021
Manning and CSAH 19 /
Infrastructure Hudson Future Hudson Blvd
Reserve City Facilities Stoplight Interchange
(409)(411)(423)(425)
Assets
Cash and investments $563,577 $96,586 $261,011 $ -
Accrued interest receivable 420 69 186 -
Accounts receivable - - - -
Due from other funds - - - -
Special assessments receivable:
Deferred 17,833 - - -
Total assets $581,830 $96,655 $261,197 $0
Liabilities, Deferred Inflows of Resources,
and Fund Balance
Liabilities:
Accounts payable $ - $ - $ - $ -
Contracts and retainage payable - - - -
Due to other funds - - - 137,281
Deposits payable - - - -
Unearned revenue - - 250,000 -
Total liabilities 0 0 250,000 137,281
Deferred inflows of resources:
Unavailable revenue 17,833 - - -
Fund balance (deficit):
Restricted - - -
Assigned 563,997 96,655 11,197 -
Unassigned - - - (137,281)
Total fund balance (deficit)563,997 96,655 11,197 (137,281)
Total liabilities, deferred inflows
of resources, and fund balance $581,830 $96,655 $261,197 $0
With Comparative Totals For December 31, 2020
105
CITY OF LAKE ELMO, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2021
With Comparative Totals For December 31, 2020
Inwood and Railroad
CSAH 13 5th Street Crossing Old Village
Phase 2 Stoplight Improvements Phases 5 & 6
(427)(429)(430)(431)
Assets
Cash and investments $ - $ - $89,568 $370,152
Accrued interest receivable - - 64 264
Accounts receivable - - - -
Due from other funds - - - -
Special assessments receivable:
Deferred - - - -
Total assets $0 $0 $89,632 $370,416
Liabilities, Deferred Inflows of Resources,
and Fund Balance
Liabilities:
Accounts payable $163 $ - $183 $18,908
Contracts and retainage payable - - - 28,191
Due to other funds 18,722 28,202 - -
Deposits payable - - - -
Unearned revenue - - 21,230 -
Total liabilities 18,885 28,202 21,413 47,099
Deferred inflows of resources:
Unavailable revenue - - - -
Fund balance (deficit):
Restricted - - - 323,317
Assigned - - 68,219 -
Unassigned (18,885)(28,202) - -
Total fund balance (deficit)(18,885)(28,202)68,219 323,317
Total liabilities, deferred inflows
of resources, and fund balance $0 $0 $89,632 $370,416
106
Statement 22
Page 2 of 2
CSAH 15 Manning and Tamarack Farm CSAH 15 TH36 Lake
Manning Avenue Highway 36 Estates Street Manning Avenue Elmo Avenue 2022 Street
Phase 3 Interchange Improvements and 30th Street Improvements Improvements
(433) (435) (436) (438) (440) (441)
2021 2020
$ - $76,609 $127,603 $ - $ - $ - $1,585,106 $2,362,211
- 55 91 - - - 1,149 4,915
- - - - - - - 100,435
- - - - - - - 16,059
- - - - - - 17,833 17,833
$0 $76,664 $127,694 $0 $0 $0 $1,604,088 $2,501,453
$ - $ - $2,246 $65 $195 $23,124 $44,884 $70,284
- - - - - - 28,191 -
3,525 - - 7,476 1,507 25,744 222,457 1,455,847
- 75,000 - - - - 75,000 75,000
- - - - - - 271,230 271,230
3,525 75,000 2,246 7,541 1,702 48,868 641,762 1,872,361
- - - - - - 17,833 17,833
- - 125,448 - - - 448,765 1,278,472
- 1,664 - - - - 741,732 858,703
(3,525) - - (7,541) (1,702) (48,868) (246,004) (1,525,916)
(3,525) 1,664 125,448 (7,541) (1,702) (48,868) 944,493 611,259
$0 $76,664 $127,694 $0 $0 $0 $1,604,088 $2,501,453
Capital Project Funds
Total Nonmajor
107
CITY OF LAKE ELMO, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
CSAH 15 /
Infrastructure CSAH 14
Reserve City Facilities Village Project Realignment
(409)(411)(413)(414)
Revenues:
Intergovernmental $ - $ - $ - $ -
Charges for services - - - -
Park dedication fees - - - -
Investment income (loss)(598)(219) - -
Total revenues (598)(219)0 0
Expenditures:
Current:
Public works - - - -
Capital outlay:
Public works (150) - - 7,357
Total expenditures (150)0 0 7,357
Other financing sources (uses):
Transfers in - - 378,736 16,904
Transfers out (69,446) - - -
Issuance of debt - - - -
Bond premium - - - -
Total other financing sources (uses)(69,446)0 378,736 16,904
Net change in fund balance (69,894)(219)378,736 9,547
Fund balances - January 1 633,891 96,874 (378,736)(9,547)
Fund balances - December 31 $563,997 $96,655 $0 $0
108
Statement 23
Page 1 of 2
Manning and Manning Corridor CSAH 19 /2019 Street
Old Village 2018 Street Hudson Future and Safety Hudson Blvd and Utility
Phase 4 Improvements Stoplight Management Interchange Project
(421)(422)(423)(424)(425)(426)
$ - $ - $ - $ - $428,280 $ -
- - - - - -
- - - - - -
(81)(309)(591) - - -
(81)(309)(591)0 428,280 0
- - - - - -
- - - - - -
000000
- - - 3,086 - 5,731
(23,774)(90,018) - - - -
- - - - - -
- - - - - -
(23,774)(90,018)0 3,086 0 5,731
(23,855)(90,327)(591)3,086 428,280 5,731
23,855 90,327 11,788 (3,086)(565,561)(5,731)
$0 $0 $11,197 $0 ($137,281)$0
109
CITY OF LAKE ELMO, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCE
NONMAJOR CAPITAL PROJECT FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
Inwood and Railroad CSAH 15
CSAH 13 5th Street Crossing Old Village Manning Avenue
Phase 2 Stoplight Improvements Phases 5 & 6 Phase 3
(427)(429)(430)(431)(433)
Revenues:
Intergovernmental $ - $ - $ - $ - $ -
Charges for services - 30,000 - - -
Park dedication fees - - - - -
Investment income (loss) - - (313)728 -
Total revenues 0 30,000 (313)728 0
Expenditures:
Current:
Public works - - - - -
Capital outlay:
Public works 8,250 24,297 16,217 942,020 455
Total expenditures 8,250 24,297 16,217 942,020 455
Other financing sources (uses):
Transfers in - 73,725 - - -
Transfers out - - - - -
Issuance of debt - - - 1,449,780 -
Bond premium - - - 66,028 -
Total other financing sources (uses)0 73,725 0 1,515,808 0
Net change in fund balance (8,250)79,428 (16,530)574,516 (455)
Fund balances - January 1 (10,635)(107,630)84,749 (251,199)(3,070)
Fund balances - December 31 ($18,885)($28,202)$68,219 $323,317 ($3,525)
110
Statement 23
Page 2 of 2
Manning and Tamarack Farm CSAH 15 TH36 Lake
Highway 36 Estates Street Manning Avenue Elmo Avenue 2022 Street
Interchange Improvements and 30th Street Improvements Improvements
(435)(436)(438)(440)(441)
2021 2020
$ - $ - $ - $ - $ - $428,280 $ -
- - - - - 30,000 163,435
- - - - - - 714,558
(174)251 - - - (1,306)45,326
(174)251 0 0 0 456,974 923,319
- - - - - - 12,982
- 661,077 7,541 1,702 48,868 1,717,634 1,250,434
0 661,077 7,541 1,702 48,868 1,717,634 1,263,416
- - - - - 478,182 15,661
- - - - - (183,238) -
- 765,680 - - - 2,215,460 -
- 34,872 - - - 100,900 -
0 800,552 0 0 0 2,611,304 15,661
(174)139,726 (7,541)(1,702)(48,868)1,350,644 (324,436)
1,838 (14,278) - - - (406,151)935,695
$1,664 $125,448 ($7,541)($1,702)($48,868)$944,493 $611,259
Reconciliation of beginning fund balance to prior year ending fund balance:
Prior year ending fund balance reported above $611,259
Reclassification of the Park Dedication (404) fund balance, now presented as major (1,193,853)
Reclassification of the Heritage Farms Street & Utility Improvements (434) fund balance, now presented as major 163,866
Reclassification of the City Hall / Fire Station Bldg Project (437) fund balance, now presented as major 12,577
Fund balance - January 1, 2021 as reported on this statement ($406,151)
Capital Project Funds
Total Nonmajor
111
CITY OF LAKE ELMO, MINNESOTA
BALANCE SHEET
DEBT SERVICE FUND BY BOND ISSUE
December 31, 2021
2010B GO 2011A GO 2012B GO 2014A GO
CIP Bonds Improvement Improvement Improvement
(318) Bonds (319) Bonds (321) Bonds (323)
Assets
Cash and investments $191,086 $181,262 $70,620 $1,008,700
Accrued interest receivable 136 181 - 719
Property taxes receivable:
Due from county - - - -
Special assessments receivable:
Due from county - - 179 323
Delinquent - - 170 -
Deferred - 10,293 33,868 148,826
Total assets $191,222 $191,736 $104,837 $1,158,568
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Due to other funds $ - $ - $ - $ -
Deferred inflows of resources:
Unavailable revenue - 10,293 34,038 148,826
Fund balance (deficit):
Restricted 191,222 181,443 70,799 1,009,742
Assigned - - - -
Total fund balance (deficit) 191,222 181,443 70,799 1,009,742
Total liabilities, deferred inflows of
resources, and fund balance $191,222 $191,736 $104,837 $1,158,568
With Comparative Totals For December 31, 2020
112
Statement 24
2015A GO 2016A GO 2017A GO 2019 2018A GO 2021A GO
Improvement Improvement Improvement Improvement Equipment Cert. Improvement
Bonds (324) Bonds (326) Bonds (327) Bonds (329) Bonds (330) Bonds (331)
2021 2020
$142,250 $694,051 $307,101 $722,288 $22,145 $547,363 $3,886,866 $4,573,126
101 495 219 434 16 395 2,696 9,585
- - - - - - - 11,208
- - 837 - - - 1,339 1,055
538 - - - - - 708 1,597
324,520 578,213 453,270 311,482 - 1,269,112 3,129,584 2,175,600
$467,409 $1,272,759 $761,427 $1,034,204 $22,161 $1,816,870 $7,021,193 $6,772,171
$ - $ - $ - $ - $ - $ - $ - $41,437
325,058 578,213 453,270 311,482 - 1,269,112 3,130,292 2,177,197
142,351 694,546 308,157 722,722 22,161 547,758 3,890,901 4,536,360
- - - - - - - 17,177
142,351 694,546 308,157 722,722 22,161 547,758 3,890,901 4,553,537
$467,409 $1,272,759 $761,427 $1,034,204 $22,161 $1,816,870 $7,021,193 $6,772,171
Total Debt Service Fund
113
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCE
DEBT SERVICE FUND BY BOND ISSUE
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
2009B GO 2010A GO 2010B GO 2011A GO 2012B GO 2013A GO 2014A GO
Improvement Improvement CIP Bonds Improvement Improvement Improvement Improvement
Bonds (316) Bonds (317) (318) Bonds (319) Bonds (321) Bonds (322) Bonds (323)
Revenues:
General property taxes $ - $ - $207,338 $ - $67,313 $ - $205,117
Special assessments 140 6,774 - 5,345 16,361 4,929 44,497
Investment income (loss) (254) (1,858) 307 (940) - (6,972) (2,997)
Total revenues (114) 4,916 207,645 4,405 83,674 (2,043) 246,617
Expenditures:
Debt service:
Principal - 75,000 170,000 90,000 90,000 920,000 215,000
Interest and fiscal charges - 1,050 25,255 3,600 4,870 37,816 47,988
Total expenditures 0 76,050 195,255 93,600 94,870 957,816 262,988
Revenues over (under) expenditures (114) (71,134) 12,390 (89,195) (11,196) (959,859) (16,371)
Other financing sources (uses):
Transfers in - - - - 122,555 - -
Transfers out (17,063) (11,646) - - - (93,846) -
Issuance of debt - - - - - - -
Total other financing sources (uses)(17,063) (11,646)0 0 122,555 (93,846)0
Net change in fund balance (17,177) (82,780) 12,390 (89,195) 111,359 (1,053,705) (16,371)
Fund balances - January 1 17,177 82,780 178,832 270,638 (40,560) 1,053,705 1,026,113
Fund balances - December 31 $0 $0 $191,222 $181,443 $70,799 $0 $1,009,742
114
Statement 25
2015A GO 2016A GO 2017A GO 2019 2018A GO 2021A GO
Improvement Improvement Improvement Improvement Equipment Cert. Improvement Interfund
Bonds (324) Bonds (326) Bonds (327) Bonds (329) Bonds (330) Bonds (331) Elimination
2021 2020
$12,722 $188,999 $339,904 $293,148 $123,848 $ - $ - $1,438,389 $1,412,506
67,861 105,560 80,034 52,035 - 478,300 - 861,836 474,099
(2,235) (2,285) (3,086) (2,290) 57 2,689 - (19,864) 82,990
78,348 292,274 416,852 342,893 123,905 480,989 0 2,280,361 1,969,595
170,000 265,000 430,000 240,000 95,000 - - 2,760,000 1,790,000
20,437 36,150 87,874 76,850 21,668 850 - 364,408 418,599
190,437 301,150 517,874 316,850 116,668 850 0 3,124,408 2,208,599
(112,089) (8,876) (101,022) 26,043 7,237 480,139 - (844,047) (239,004)
- - - 113,792 - - (122,555) 113,792 85,657
- - - - - - 122,555 - -
- - - - - 67,619 - 67,619 -
0 0 0 113,792 0 67,619 0 181,411 85,657
(112,089) (8,876) (101,022) 139,835 7,237 547,758 0 (662,636) (153,347)
254,440 703,422 409,179 582,887 14,924 - - 4,553,537 4,706,884
$142,351 $694,546 $308,157 $722,722 $22,161 $547,758 $0 $3,890,901 $4,553,537
Total Debt Service Fund
115
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116
STATISTICAL SECTION (UNAUDITED)
117
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118
This part of the City of Lake Elmo, Minnesota's Annual Comprehensive Financial Report presents detailed
information as a context for understanding what the information in the financial statements, note disclosures
and required supplementary information says about the City's overall financial health.
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 5-9
These tables contain information to help the reader assess the City's most significant local
revenue source, property taxes, as well as water and sanitary sewer rates and gallons sold.
Debt Capacity Tables 10-14
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 15-16
These tables offer demographic and economic indicators to help the reader understand the
environment within which the City's financial activities take place.
Operating Information Tables 17-19
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
119
CITY OF LAKE ELMO, MINNESOTA
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2021 2020 2019 2018
Governmental activities:
Net investment in capital assets $34,784,806 $29,694,288 $24,771,065 $15,396,520
Restricted 10,249,092 8,171,161 8,596,759 10,121,648
Unrestricted 12,101,304 5,284,397 4,231,363 1,086,636
Total governmental activities net position $57,135,202 $43,149,846 $37,599,187 $26,604,804
Business-type activities:
Net investment in capital assets $53,867,479 $44,371,375 $33,052,649 $18,382,934
Restricted - - - -
Unrestricted 19,888,783 18,578,807 16,528,968 13,842,382
Total business-type activities net position $73,756,262 $62,950,182 $49,581,617 $32,225,316
Primary government:
Net investment in capital assets $88,652,285 $74,065,663 $57,823,714 $33,779,454
Restricted 10,249,092 8,171,161 8,596,759 10,121,648
Unrestricted 31,990,087 23,863,204 20,760,331 14,929,018
Total primary government net position $130,891,464 $106,100,028 $87,180,804 $58,830,120
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 2018. Net position was restated for 2017 to reflect the reporting of the OPEB liability
and OPEB related deferred inflows of resources. Net position for years prior to 2017 was not restated.
120
Table 1
2017 2016 2015 2014 2013 2012
$8,883,320 $9,032,535 $8,723,329 $7,957,840 $9,056,353 $8,782,840
5,057,169 4,704,133 3,446,142 1,106,200 1,225,849 4,205,247
4,818,383 4,136,292 3,942,646 5,405,920 4,593,463 918,996
$18,758,872 $17,872,960 $16,112,117 $14,469,960 $14,875,665 $13,907,083
$12,180,378 $12,506,474 $10,170,351 $10,567,418 $6,855,807 $6,788,377
2,695,734 1,473,164 1,876,119 2,387,312 2,612,569 39,153
9,151,417 6,400,375 3,577,285 1,100,422 1,846,681 1,105,847
$24,027,529 $20,380,013 $15,623,755 $14,055,152 $11,315,057 $7,933,377
$21,063,698 $21,539,009 $18,893,680 $18,525,258 $15,912,160 $15,571,217
7,752,903 6,177,297 5,322,261 3,493,512 3,838,418 4,244,400
13,969,800 10,536,667 7,519,931 6,506,342 6,440,144 2,024,843
$42,786,401 $38,252,973 $31,735,872 $28,525,112 $26,190,722 $21,840,460
121
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2021 2020 2019 2018
Expenses
Governmental activities:
General government $1,052,188 $1,008,916 $1,181,219 $1,266,269
Public safety 3,091,321 2,681,784 2,058,419 2,161,082
Public works 3,735,767 4,012,661 3,728,247 2,192,092
Culture and recreation 391,240 428,083 361,730 524,445
Economic Development Authority 53,264 46,371 71,609 47,702
Interest and fees on long-term debt 353,256 363,988 395,106 352,376
Total governmental activities expenses 8,677,036 8,541,803 7,796,330 6,543,966
Business-type activities:
Water 2,665,708 2,383,252 1,940,148 2,068,178
Sewer 1,563,008 1,481,586 1,082,997 846,032
Storm sewer 830,044 753,177 469,765 315,967
Total business-type activities expenses 5,058,760 4,618,015 3,492,910 3,230,177
Total primary government expenses $13,735,796 $13,159,818 $11,289,240 $9,774,143
Program revenues
Governmental activities:
Charges for services:
General government $485,785 $421,792 $553,870 $379,378
Public safety 2,199,655 2,146,319 1,574,359 1,938,163
Public works 104,817 243,060 126,721 -
Culture and recreation 25 2,812 1,430 -
Economic Development Authority 57,539 87,778 99,690 78,573
Operating grants and contributions 279,690 1,039,823 795,483 248,915
Capital grants and contributions 8,981,866 4,823,628 11,076,353 4,970,565
Total governmental activities program revenues 12,109,377 8,765,212 14,227,906 7,615,594
Business-type activities:
Charges for services:
Water 1,711,596 1,239,404 962,003 951,985
Sewer 549,567 432,583 306,041 252,614
Storm sewer 512,624 369,689 380,645 322,700
Operating grants and contributions 35,635 21,893 122,350 -
Capital grants and contributions 18,326,363 15,636,661 14,114,787 7,466,627
Total business-type activities 21,135,785 17,700,230 15,885,826 8,993,926
Total primary government program revenues $33,245,162 $26,465,442 $30,113,732 $16,609,520
122
Table 2
Page 1 of 2
2017 2016 2015 2014 2013 2012
$1,503,251 $1,358,370 $1,134,132 $1,072,888 $1,103,337 $1,093,204
1,528,253 1,308,360 1,344,282 1,530,609 1,277,798 1,302,857
2,800,044 1,698,566 1,377,969 1,032,426 1,273,977 891,169
1,299,551 660,947 639,006 448,361 424,687 362,432
- - - - - -
225,910 178,266 215,611 165,028 133,694 316,039
7,357,009 5,204,509 4,711,000 4,249,312 4,213,493 3,965,701
2,022,446 1,409,832 1,363,043 1,069,511 958,870 872,786
1,030,058 380,650 250,866 353,438 119,370 53,903
213,514 150,302 103,536 149,887 86,989 73,590
3,266,018 1,940,784 1,717,445 1,572,836 1,165,229 1,000,279
$10,623,027 $7,145,293 $6,428,445 $5,822,148 $5,378,722 $4,965,980
$206,856 $51,009 $42,706 $45,161 $32,778 $48,476
2,101,890 1,752,522 866,708 496,916 414,472 379,557
- - 3,615 - 2,647 3,256
- - 26,214 10,753 17,000 9,341
- - - - - -
229,960 235,214 249,094 204,462 208,276 160,060
2,290,265 1,452,469 2,038,940 557,601 1,364,622 160,444
4,828,971 3,491,214 3,227,277 1,314,893 2,039,795 761,134
2,628,848 1,801,228 1,850,240 1,291,091 596,421 699,159
2,435,749 1,315,948 1,523,067 741,054 53,142 65,737
289,375 213,233 229,252 214,915 191,087 171,229
- - - - - -
1,489,922 3,464,567 - 1,159,222 3,781,528 115,127
6,843,894 6,794,976 3,602,559 3,406,282 4,622,178 1,051,252
$11,672,865 $10,286,190 $6,829,836 $4,721,175 $6,661,973 $1,812,386
123
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2021 2020 2019 2018
Net (expense) revenue:
Governmental activities $3,432,341 $223,409 $6,431,576 $1,071,628
Business-type activities 16,077,025 13,082,215 12,392,916 5,763,749
Total primary government, net 19,509,366 13,305,624 18,824,492 6,835,377
General revenues and other changes in net position:
Governmental activities:
General property taxes 5,294,950 4,960,342 4,181,914 3,610,106
Unrestricted grants and contributions 4,639 4,337 4,956 6,868
Unrestricted investment earnings (loss) (13,874) 348,766 331,010 115,583
Miscellaneous - - - -
Gain on disposal of capital assets 17,300 13,805 44,927 8,991
Transfers 5,250,000 - - 840
Total governmental activities 10,553,015 5,327,250 4,562,807 3,742,388
Business-type activities:
Unrestricted grants and contributions - - - 956
Unrestricted investment earnings (loss)(20,945)286,350 411,206 96,425
Extraordinary item - - 4,552,179 -
Transfers (5,250,000) - - (840)
Total business-type activities (5,270,945)286,350 4,963,385 96,541
Total primary government $5,282,070 $5,613,600 $9,526,192 $3,838,929
Change in net position:
Governmental activities $13,985,356 $5,550,659 $10,994,383 $4,814,016
Business-type activities 10,806,080 13,368,565 17,356,301 5,860,290
Total primary government change in net position $24,791,436 $18,919,224 $28,350,684 $10,674,306
GASB 68 was implemented in 2015. Pension expense for years prior to 2015 was not restated.
GASB 75 was implemented in 2018. OPEB expense for years prior to 2018 was not restated.
124
Table 2
Page 2 of 2
2017 2016 2015 2014 2013 2012
($2,528,038) ($1,713,295) ($1,483,723) ($2,934,419) ($2,173,698) ($3,204,567)
3,577,876 4,854,192 1,885,114 1,833,446 3,456,949 50,973
1,049,838 3,140,897 401,391 (1,100,973) 1,283,251 (3,153,594)
3,040,413 3,226,739 3,204,119 3,200,291 3,231,609 3,183,078
2,749 8,584 2,749 2,749 2,749 -
48,987 43,228 46,589 87,586 35,259 111,705
158,350 52,479 73,738 125,400 1,833 42,599
- - - - 8,979 -
- 143,105 220,842 (887,312) - -
3,250,499 3,474,135 3,548,037 2,528,714 3,280,429 3,337,382
- 748 - - - -
46,757 44,423 39,757 19,337 30,346 10,282
- - - - - -
- (143,105)(220,842)887,312 - -
46,757 (97,934)(181,085)906,649 30,346 10,282
$3,297,256 $3,376,201 $3,366,952 $3,435,363 $3,310,775 $3,347,664
$722,461 $1,760,840 $2,064,314 ($405,705)$1,106,731 $132,815
3,624,633 4,756,258 1,704,029 2,740,095 3,487,295 61,255
$4,347,094 $6,517,098 $3,768,343 $2,334,390 $4,594,026 $194,070
125
CITY OF LAKE ELMO, MINNESOTA
FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2021 2020 2019 2018
General Fund:
Nonspendable $ - $21,206 $28,162 $18,951
Committed - - - -
Unassigned 5,618,812 5,212,435 4,286,022 4,756,695
Total general fund 5,618,812 5,233,641 4,314,184 4,775,646
All other governmental funds:
Nonspendable - - - 395
Restricted 17,458,949 5,814,832 5,973,451 6,133,168
Committed 7,673 7,314 24,070 11,003
Assigned 7,571,501 2,653,880 1,746,202 1,198,909
Unassigned (246,004)(1,525,916)(757,968)(3,043,623)
Total all other governmental funds 24,792,119 6,950,110 6,985,755 4,299,852
Total governmental funds $30,410,931 $12,183,751 $11,299,939 $9,075,498
126
Table 3
2017 2016 2015 2014 2013 2012
$410,193 $409,222 $432,306 $638,963 $859,072 $1,024,433
200,000 200,000 - - - -
3,499,133 3,279,815 2,754,976 2,542,038 2,318,310 2,414,692
4,109,326 3,889,037 3,187,282 3,181,001 3,177,382 3,439,125
675,000 - 3,908 - - -
2,849,956 3,248,230 2,477,730 717,781 743,976 3,959,111
- - - - - -
1,307,216 1,504,656 1,768,742 2,943,525 2,252,931 1,244,900
(681,681)(418,169)(431,755)(693,904)(885,360)(1,670,915)
4,150,491 4,334,717 3,818,625 2,967,402 2,111,547 3,533,096
$8,259,817 $8,223,754 $7,005,907 $6,148,403 $5,288,929 $6,972,221
127
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2021 2020 2019 2018
Revenues:
General property taxes $5,303,553 $4,947,133 $4,182,327 $3,610,508
Licenses and permits 1,485,658 1,425,695 1,055,038 1,317,648
Intergovernmental 722,128 1,023,193 2,819,961 247,178
Charges for services 1,151,914 1,273,241 1,079,342 899,808
Fines and forfeits 45,749 33,584 36,696 49,203
Special assessments 862,766 474,099 649,487 1,398,155
Park dedication fees 1,845,371 714,558 123,500 502,802
Investment earnings (13,874) 348,766 331,010 115,583
Miscellaneous 177,000 183,711 201,494 129,455
Total revenues 11,580,265 10,423,980 10,478,855 8,270,340
Expenditures:
Current:
General government 1,056,983 1,005,254 1,136,908 1,208,145
Public safety 3,003,677 2,641,770 1,948,269 1,644,159
Public works 1,488,448 1,493,370 1,875,606 1,227,521
Culture and recreation 258,690 310,066 265,260 241,761
Economic Development Authority 53,264 46,371 71,609 47,702
Debt service:
Principal 3,641,000 1,790,000 1,615,000 1,175,000
Interest and fiscal charges 425,797 420,299 454,814 230,822
Capital outlay 4,915,641 1,846,843 4,354,643 4,552,089
Total expenditures 14,843,500 9,553,973 11,722,109 10,327,199
Excess (deficiency) of revenues over expenditures (3,263,235)870,007 (1,243,254)(2,056,859)
Other financing sources (uses):
Issuance of debt 6,126,989 - 2,860,000 1,866,000
Premium on issuance of debt (876,989) - 168,168 -
(Discount) on issuance of debt 15,675,000 - - -
Proceeds from sale of capital assets 548,115 13,805 44,927 8,991
Transfers in - 1,900,244 1,181,173 56,209
Transfers out 17,300 (1,900,244)(786,573)(173,190)
Total other financing sources (uses) 21,490,415 13,805 3,467,695 1,758,010
Net change in fund balance $18,227,180 $883,812 $2,224,441 ($298,849)
Debt service as a percentage of noncapital expenditures 40.9% 26.8% 26.1% 24.2%
Debt service as a percentage of total expenditures 27.4% 23.1% 17.7% 13.6%
128
Table 4
2017 2016 2015 2014 2013 2012
$3,042,074 $3,231,674 $3,222,216 $3,203,111 $3,231,609 $3,221,733
2,046,462 1,713,918 828,494 451,953 374,974 330,819
1,023,864 282,874 296,902 413,968 1,704,178 237,254
137,920 38,608 35,796 30,192 6,113 5,726
41,418 49,505 48,739 48,647 52,110 58,385
455,493 897,323 1,316,239 115,424 180,023 136,150
265,783 171,708 138,158 274,257 - -
48,987 43,228 46,415 87,467 35,127 111,737
265,133 77,491 99,055 165,319 57,260 87,562
7,327,134 6,506,329 6,032,014 4,790,338 5,641,394 4,189,366
1,502,904 1,358,306 1,094,723 1,046,906 1,527,732 1,034,712
1,470,726 1,262,040 1,203,765 1,198,546 1,174,145 1,109,937
1,185,828 893,644 686,401 585,071 614,270 446,541
603,292 500,689 457,749 368,276 301,404 260,404
- - - - - -
910,000 826,219 667,342 585,000 3,348,000 406,000
463,570 242,392 226,611 157,649 179,018 309,081
5,860,917 3,126,782 2,729,512 2,881,437 1,784,914 1,428,856
11,997,237 8,210,072 7,066,103 6,822,885 8,929,483 4,995,531
(4,670,103) (1,703,743) (1,034,089) (2,032,547) (3,288,089) (806,165)
4,565,000 2,690,000 1,620,000 2,850,000 1,604,797 865,000
166,068 102,877 32,137 31,520 - -
(26,302) (14,392) (11,386) - - -
1,400 - 30,000 - - -
- 143,105 220,842 10,501 - -
- - - - - -
4,706,166 2,921,590 1,891,593 2,892,021 1,604,797 865,000
$36,063 $1,217,847 $857,504 $859,474 ($1,683,292) $58,835
22.4% 21.0% 20.6% 18.8% 49.4% 20.0%
11.4% 13.0% 12.7% 10.9% 39.5% 14.3%
129
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130
CITY OF LAKE ELMO, MINNESOTA
TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Table 5
Last Ten Fiscal Years
Total % of Tax
Taxable Total Adjusted City Capacity to
Payable Market Real Personal Tax Tax Urban Tax Total Estimated
Year Value Property Property Capacity Capacity (1) Rate Market Value
2012 $1,037,557,100 $11,525,623 $229,157 $11,754,780 $11,555,676 27.271 1.13%
2013 1,028,011,400 11,392,876 237,584 11,630,460 11,384,320 29.259 1.13%
2014 1,046,031,000 11,504,611 238,764 11,743,375 11,393,889 27.761 1.12%
2015 1,184,578,800 12,938,515 243,104 13,181,619 13,072,105 23.798 1.11%
2016 1,224,463,300 13,386,725 266,218 13,652,943 13,441,204 23.121 1.12%
2017 1,316,618,700 14,520,320 292,938 14,813,258 14,631,062 20.018 1.13%
2018 1,452,554,500 16,054,044 326,744 16,380,788 15,359,350 22.442 1.13%
2019 1,648,277,500 18,184,317 345,172 18,529,489 18,249,623 22.927 1.12%
2020 1,901,067,300 20,907,484 345,800 21,253,284 20,021,726 23.476 1.12%
2021 2,009,618,900 21,975,125 374,464 22,349,589 21,116,953 23.638 1.11%
(1) Tax Capacity adjusted for captured tax increment, fiscal disparities, and transmission lines.
Valuations are determined as of January 1 of year preceding tax collection year. The County determines a property's tax capacity by
multiplying a property's estimated market value times the property's class rate which is determined by its use. The total City tax levy divided
by the total City tax capacity determines a percentage, the City tax rate, that is applied to each parcel's tax capacity to determine the tax amount.
Tax Capacity
131
CITY OF LAKE ELMO, MINNESOTA
DIRECT AND OVERLAPPING PROPERTY TAX RATES Table 6
Last Ten Fiscal Years
(Percent of Tax Capacity)
Operating Debt Total Special
Fiscal Tax Service Tax Washington Taxing
Year Rate Tax Rate Rate County Districts
2012 23.679 (1) 3.592 27.271 22.333 - 38.360 31.939 2.340 - 4.906 2.909 86.792 105.385
2013 23.555 5.704 29.259 22.017 - 37.104 31.548 0.779 - 5.306 4.857 88.460 108.074
2014 23.472 4.289 27.761 23.150 - 39.770 30.243 0.761 - 5.066 4.641 86.556 107.481
2015 20.121 3.677 23.798 21.120 - 35.860 27.691 0.692 - 4.769 4.183 77.484 96.301
2016 18.184 4.937 23.121 19.849 - 35.569 27.860 0.075 - 5.111 4.568 75.473 96.229
2017 14.083 5.934 20.017 20.390 - 34.093 27.852 0.839 - 5.275 4.345 73.443 91.582
2018 16.107 (2) 6.335 22.442 19.349 - 32.161 29.709 0.819 - 5.021 3.072 75.391 92.405
2019 16.258 (2) 6.670 22.927 18.442 - 31.894 29.305 0.808 - 5.263 3.994 75.476 93.383
2020 16.777 (2) 6.700 23.477 15.321 - 29.926 28.610 0.766 - 4.850 3.738 71.911 90.600
2021 17.178 (2) 6.460 23.638 17.277 - 29.554 27.244 0.742 - 4.835 3.593 72.494 88.864
Source: Washington County Taxation Division
The City's direct property tax rate is determined by dividing the amount of tax levied by the City Council by the City's total tax capacity
Overlapping rates are those of local and county governments that apply to property owners within the City of Lake Elmo. Not all
overlapping rates apply to all City of Lake Elmo property owners. Although the property tax rates apply to all city property owners,
some city properties lie within the geographical boundaries of different school and watershed districts.
(1) Includes Library Levy component effective 1/1/2012 due to pulling out of Washington County
(2) Excludes Library Levy component effective 1/1/2018 due to going back to Washington County
Watershed Districts
Overlapping Rates
Range of Total
Direct and Overlapping
Tax Rates
City Direct Rate
Range of Tax
Rates for ISD's
622, 832 & 834
Range of Tax
Rates for
132
CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS Table 7
Current Year and Nine Years Ago
Percentage Percentage
of Total of Total
Taxable City Tax Taxable City Tax
Tax Capacity Tax Capacity
Taxpayer Capacity Rank Value Capacity Rank Value
Xcel Energy $268,750 1 1.20% $204,686 2 1.76%
Dakota Upreit LP 240,344 2 1.08% - -
Bremer Financial Services Inc 220,998 3 0.99% 197,474 3 1.70%
MLL High Pointe LLC 200,950 4 0.90% - -
Eagle Point Medical Building LLC 144,160 5 0.65% - -
HOA Hotels LLC 143,396 6 0.64% - -
Auto-Owners Life Insurance Co. 99,104 7 0.44% - -
HSRE Lake Elmo LLC 97,436 8 0.44% - -
HC Golf Land LLC 117,489 9 0.53% - -
MHC Cimarron LLC 139,482 10 0.62% - -
IRET Properties - - 205,342 1 1.77%
MHC Cimarron LLC - - 134,090 4 1.15%
United Land LLC - - 121,976 5 1.05%
Tartan Park LLC - - 100,643 6 0.87%
HOA Hotels - - 89,880 7 0.77%
Danate Proper Inv I LLC - - 76,762 8 0.66%
Eagle Point II LLC - - 71,064 9 0.61%
Davis Estates LTD - - 64,912 10 0.56%
Total $1,672,109 7.48%$1,266,829 10.89%
Source: Washington County Taxation Division
2021 2012
133
CITY OF LAKE ELMO, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Collected within the
Taxes Levied Net Tax Levy Fiscal Year of the Levy
Fiscal for the for the Percentage
Year Fiscal Year Fiscal Year (1)Amount of Net Levy
2012 $3,113,017 $3,110,478 $3,071,202 98.74%
2013 3,163,359 3,160,524 3,133,764 99.15%
2014 3,163,359 3,160,285 3,128,695 99.00%
2015 3,113,017 3,133,137 3,112,989 99.36%
2016 3,112,204 3,112,204 3,068,116 98.58%
2017 2,950,426 2,950,426 2,935,173 99.48%
2018 3,596,601 3,592,491 3,574,859 99.51%
2019 4,179,840 4,175,590 4,149,059 99.36%
2020 4,949,823 4,945,184 4,864,708 98.37%
2021 5,263,268 5,258,656 5,205,793 98.99%
(1) Tax Levy adjusted for powerline and market value credits and AG program credits prior to 2016
134
Table 8
Collections in Total Collections to Date Outstanding Delinquent Taxes
Subsequent Percentage Delinquent as a Percentage of
Years Amount of Net Levy Taxes Total Net Tax Levy
$39,267 $3,110,469 100.00% - 0.00%
26,760 3,160,524 100.00% - 0.00%
31,590 3,160,285 100.00%1,507 0.00%
19,874 3,132,863 99.99%1,644 0.01%
42,044 3,110,160 99.93%2,087 0.07%
12,485 2,947,183 99.89%2,331 0.11%
13,239 3,586,447 99.83%2,990 0.17%
19,244 4,149,059 99.36%4,103 0.64%
43,075 4,907,782 99.24%37,402 0.76%
50,910 5,256,703 99.96%1,953 0.04%
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136
CITY OF LAKE ELMO, MINNESOTA
WATER AND SANITARY SEWER CHARGES BY CUSTOMER Table 9
Last Ten Fiscal Years
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Water (in millions of gallons):
Residential 323,632 203,453 173.925 96.882 93.513 98.044 84.007 98.573 120.676 154.747
Commercial service 202,586 157,170 87.935 22.189 16.603 29.379 21.653 12.156 8.253 10.405
Total gallons 526,218 360,623 261.860 119.071 110.116 127.423 105.660 110.729 128.929 165.152
Total direct rate per 1,000 gallons:
Residential 2.14 2.12 2.12 2.06 2.00 2.14 2.14 2.14 2.14 2.14
Commercial service 3.33 3.30 3.30 3.20 3.11 3.11 3.11 3.11 3.11 3.11
Sanitary Sewer (in millions of gallons):
Residential (1)75,550 46,170 41.003 32.409 38.340 6.812 3.794 - - -
Commercial service 16,021 11,779 12.943 12.267 6.807 9.125 8.179 6.532 6.149 6.172
Total gallons 91,571 57,949 53.946 44.676 45.147 15.937 11.973 6.532 6.149 6.172
Total direct rate per 1,000 gallons 4.70 4.65 4.60 4.55 4.50 4.50 4.50 4.50 4.50 4.50
(1) City did not have any residential sanitary sewer customers in 2014 and prior
137
CITY OF LAKE ELMO, MINNESOTA
RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
G.O. G.O. G.O. Capital Other
Fiscal Improvement Equipment Improvement Notes and
Year Bonds Certificates Plan Bonds Bonds
2012 $3,100,092 $150,000 $4,969,153 $ -
2013 4,436,967 102,000 1,941,135 -
2014 6,919,568 52,000 1,808,024 -
2015 8,095,288 - 1,687,803 21,219
2016 10,210,038 - 1,537,530 -
2017 14,151,671 - 1,382,249 -
2018 13,185,126 940,000 1,226,928 926,000
2019 14,697,425 940,000 1,065,000 926,000
2020 13,159,432 850,000 900,000 881,000
2021 26,839,553 755,000 730,000 -
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.
Governmental Activities
138
Table 10
Business-Type
Activities
Total G.O. Utility Percentage
Governmental Revenue Total Primary of Personal Per
Activities Bonds Government Income Capita
$8,219,245 $8,314,837 $16,534,082 3.9%$2,049
6,480,102 12,476,920 18,957,022 4.5%2,349
8,779,592 15,530,642 24,310,234 6.8%3,013
9,804,310 12,622,484 22,426,794 6.0%2,779
11,747,568 18,990,395 30,737,963 8.2%3,809
15,533,920 22,866,787 38,400,707 8.8%3,990
16,278,054 21,680,126 37,958,180 7.6%3,608
17,628,425 21,520,145 39,148,570 6.5%3,525
15,426,000 20,105,366 35,136,000 5.4%3,164
28,324,553 22,841,659 51,166,212 6.0%4,043
139
CITY OF LAKE ELMO, MINNESOTA
RATIOS OF NET GENERAL BONDED DEBT
Last Ten Fiscal Years
G.O. G.O. G.O. Capital G.O. Utility
Fiscal Improvement Equipment Improvement Revenue
Year Bonds Certificates Plan Bonds Bonds
2012 $3,100,092 $150,000 $4,969,153 $8,314,837
2013 4,436,967 102,000 1,941,135 12,476,920
2014 6,919,568 52,000 1,808,024 15,530,642
2015 8,095,288 - 1,687,803 12,622,484
2016 10,210,038 - 1,537,530 18,990,395
2017 14,151,671 - 1,382,249 22,866,787
2018 13,185,126 940,000 1,226,928 21,680,126
2019 14,697,425 940,000 1,065,000 21,520,145
2020 13,159,432 850,000 900,000 20,105,366
2021 26,839,553 755,000 730,000 22,841,659
Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See Table 5 for taxable market value
See Table 15 for population data
* Net of crossover debt
General Bonded Debt Outstanding
140
Table 11
Percentage
Less: Amounts Net General of Actual
Available in Debt Bonded Debt Taxable Value Per
Total*Service Funds Outstanding of Property Capita (Net)
$16,534,082 ($3,500,799)$13,033,283 1.26%1,615
18,957,022 (729,753) 18,227,269 1.77%2,259
24,310,234 (691,700) 23,618,534 2.26%2,927
22,405,575 (2,477,730) 19,927,845 1.68%2,470
30,737,963 (3,215,590) 27,522,373 2.25%3,411
38,400,707 (3,524,956) 34,875,751 2.65%3,623
37,032,180 (4,461,692) 32,570,488 2.24%3,096
38,222,570 (4,716,520) 33,506,050 2.03%3,017
34,255,000 (4,530,993) 29,724,007 1.56%2,677
51,166,212 (3,893,266) 47,272,946 2.35%3,566
141
CITY OF LAKE ELMO, MINNESOTA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT Table 12
As of December 31, 2021
Estimated
Estimated Share of
Debt Percentage Overlapping
Outstanding Applicable*Debt
Overlapping debt:
Independent School District # 622 $443,420,000 (1) 38%$170,094,887
Independent School District # 832 39,990,000 (1) 81%32,514,367
Independent School District # 834 80,735,000 (1) 18%14,282,589
Washington County 113,905,000 (1) 5%6,116,439
Metropolitan Council 1,897,693,968 (1) 7%126,147,543
Total overlapping debt 349,155,825
City direct debt $28,324,553 100%28,324,553
Total direct and overlapping debt $377,480,378
*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 Washington County.
Debt outstanding data provided by each governmental unit.
142
CITY OF LAKE ELMO, MINNESOTA
LEGAL DEBT MARGIN INFORMATION Table 13
Last Ten Fiscal Years
Legal Debt Margin Calculation for Fiscal Year 2021
Market value $2,009,618,900
Applicable percentage 3%
Debt limit 60,288,567
Debt applicable to limit:
Total bonded debt 51,166,212
Less:
Special assessment bonds (26,839,553)
Utility revenue bonds (22,841,659)
Amount set aside for repayment of G.O. debt (213,231)
1,271,769
Legal debt margin $59,016,798
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
2012 8,069 $32,054,064 $2,099,369 $29,954,695 6.55% $260
2013 8,069 32,470,203 1,894,510 30,575,693 5.83% 235
2014 8,069 35,537,364 1,757,421 33,779,943 4.95% 218
2015 8,069 36,733,899 1,572,289 35,161,610 4.28% 195
2016 8,069 38,035,233 2,102,343 35,932,890 5.53% 261
2017 9,625 38,556,774 1,846,657 36,710,117 4.79% 192
2018 10,521 43,576,635 2,018,280 41,558,355 4.63% 192
2019 11,105 49,448,325 1,839,548 47,608,777 3.72% 166
2020 11,105 57,032,019 850,000 56,182,019 1.49% 77
2021 12,655 60,288,567 1,485,000 58,803,567 2.46% 117
Legal Debt Margin Calculation for Fiscal Years 2012 Through 2021
143
CITY OF LAKE ELMO, MINNESOTA
PLEDGED REVENUE COVERAGE Table 14
Last Ten Fiscal Years
Net
Payable Gross Operating Available
Year Revenue (1) Expenses (2) Revenue Principal Interest Coverage
2012 $946,407 $426,118 $520,289 $40,000 $221,129 199%
2013 3,501,321 504,648 2,996,673 165,000 300,789 643%
2014 2,266,397 678,394 1,588,003 365,000 424,080 201%
2015 3,642,316 627,977 3,014,339 4,165,000 456,782 65%
2016 3,407,097 757,862 2,649,235 615,000 380,969 266%
2017 6,651,513 1,505,420 5,146,093 705,000 513,768 422%
2018 5,767,128 1,279,347 4,487,781 625,000 312,660 479%
2019 4,190,240 1,175,282 3,014,958 1,360,000 509,863 161%
2020 6,243,582 1,553,371 4,690,211 1,380,000 504,661 249%
2021 9,147,164 1,680,527 7,466,637 3,825,000 514,210 172%
(1) Gross revenue includes investment earnings, infrastructure charges and special assessments.
(2) Operating expenses do not include interest, depreciation, or amortization expense.
(3) Details regarding the City's outstanding debt can be found in the notes to the financial statements.
G.O. Utility Revenue Bonds
Debt Service (3)
144
CITY OF LAKE ELMO, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS Table 15
Last Ten Fiscal Years
Personal Per
Income (4)Capita State City
Fiscal (thousands Personal Unemployment Unemployment
Year Population (1)of dollars)Income (2) Rate (3) Rate (3)
2012 8,069 $420,242 $52,081 5.4%4.9%
2013 8,069 420,879 52,160 4.6%4.0%
2014 8,069 357,723 44,333 3.8%3.7%
2015 8,069 371,602 46,053 3.2%2.9%
2016 8,069 374,345 46,393 3.8%3.3%
2017 9,625 438,563 45,565 3.3%3.3%
2018 10,521 497,896 47,324 2.8%2.7%
2019 11,105 601,991 54,209 3.5%2.8%
2020 11,105 652,352 58,744 4.9%4.0%
2021 12,655 851,277 67,268 2.6%2.2%
Sources:
(1) Metropolitan Council 2000/2010-Census Bureau; updated for staff estimate starting in 2017
(2) United States Census Bureau
(3) Estimate based on County unemployment rate provided by Minnesota Department of
Employment and Economic Development
(4) The estimated personal income for the City of Lake Elmo is calculated by taking the per capita
income and multiplying it by the City's population.
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146
CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL EMPLOYERS Table 16
Current Year and Nine Years Ago
Percentage of Percentage of
Total City Total City
Employer Employees Rank Employment(1)Employees Rank Employment(1)
3M Company (Maplewood)11,000 1 47.3% 9,500 1 56.3%
Andersen Corp (Bayport)4,500 2 19.3% 1,850 2 11.0%
ISD No. 622 ( North St. Paul-Maplewood-Oakdale) 1,830 3 7.9% -
Woodwinds Health (Woodbury)1,500 4 6.4% 1,070 4 6.3%
ISD 834 (Stillwater)1,162 5 5.0% 1,037 5 6.2%
HealthEast Care/St. John's Hospital (Maplewood)973 6 4.2% -
Washington County (Stillwater)940 7 4.0% 1,138 3 6.7%
Presbyterian Homes/Boutwells (Oak Park Heights) 500 8 2.1% -
Ecowater Systems, Inc. (Woodbury)440 9 1.9% 440 7 2.6%
Bremer Bank Operations Ctr (Lake Elmo)425 10 1.8% 400 8 2.4%
MN Correctional Facility ( Oak Park Hts) - - - 725 6 4.3%
Imation Corp (Oakdale) - - - 390 9 2.3%
SunAmerica Financial Group (Woodbury) - - - 310 10 1.8%
(1)City staff estimate
2021 2012
147
CITY OF LAKE ELMO, MINNESOTA
FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION/PROGRAM
Last Ten Fiscal Years
2021 2020 2019 2018
General Government:
Administration 1.93 1.98 2.70 2.70
Finance 0.82 0.72 1.05 1.05
Planning and Zoning 1.95 1.95 2.10 2.10
Total General Government 4.70 4.65 5.85 5.85
Public Safety:
Fire 1.42 1.42 3.80 3.80
Building Inspections 4.91 4.91 4.20 4.20
Total Public Safety 6.33 6.33 8.00 8.00
Public Works:
Streets and Roadways 6.47 4.80 4.80 4.80
Parks and Recreation:
Parks 1.01 2.25 2.20 2.20
Communications 0.42 0.42 0.50 0.50
Total Governmental Activities 18.93 18.45 21.35 21.35
Business-type Activities:
Water Utility 2.98 2.75 2.50 2.50
Sewer Utility 1.05 1.40 1.15 1.15
Storm Sewer Utility 0.54 0.90 0.80 0.80
Total Business-Type Activities 4.57 5.05 4.45 4.45
Total 23.50 23.50 25.80 25.80
Source: City's Adopted Budgets
Full-Time-Equivalent Employees as of December 31,
148
Table 17
2017 2016 2015 2014 2013 2012
2.45 2.45 3.20 3.55 3.55 3.15
1.20 1.20 0.80 1.25 1.25 0.50
2.21 2.21 2.75 2.70 2.95 1.55
5.86 5.86 6.75 7.50 7.75 5.20
3.80 3.80 1.50 1.55 2.05 1.60
4.21 4.21 3.15 1.55 1.30 0.95
8.01 8.01 4.65 3.10 3.35 2.55
4.55 4.55 3.90 3.20 3.21 3.05
3.00 3.00 1.85 3.30 2.74 2.52
- - 0.70 0.35 0.40 0.15
21.42 21.42 17.85 17.45 17.45 13.47
2.00 2.00 2.45 2.60 2.10 1.85
1.66 1.66 1.30 0.70 0.70 0.30
0.80 0.00 0.00 0.00 0.00 0.00
4.46 3.66 3.75 3.30 2.80 2.15
25.88 25.08 21.60 20.75 20.25 15.62
Full-Time-Equivalent Employees as of December 31,
149
CITY OF LAKE ELMO, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
2021 2020 2019 2018
Planning and Zoning:
Conditional use permits 1 1 6 6
Interim use permits - - - -
Minor subdivisions 2 - 1 1
Plats / planned unit developments 7 5 13 13
Rezonings 8 1 4 4
Site plans - 3 - -
Variances 6 5 6 6
Fire:
Total emergency responses 568 546 461 461
EMS responses 355 317 317 317
Fire responses 213 229 144 144
Building Inspections:
Residential permit valuations (thousands of dollars)$128,265 $88,038 $113,913 $113,913
Commercial permit valuations (thousands of dollars $12,548 $11,761 $3,217 $3,217
New residential units (1)297 263 245 245
New commercial units 5 19 - -
Water Utility:
Number of customers 4,229 3,559 2,317 2,317
Average quarterly consumption (2)89 76 56 56
(millions of gallons)
Sanitary Sewer Utility:
Number of customers 2,971 2,363 1,253 1,253
Average quarterly flow (3)19 18 11 11
(millions of gallons)
Sources: Various City Department's annual financial report statistics
(1) Excludes fire/demolition rebuilds
(2) Residential and Commercial; rate increase effective 1/1/2010 to encourage conservation
(3) Billed and measured based on water usage; new developer homes built in 2015 but not yet sold/occupied so no impact to flow
150
Table 18
2017 2016 2015 2014 2013 2012
5 3 2 4 2 3
2 2 1 1 1 -
1 2 2 - 2 1
10 11 9 17 1 -
5 3 2 11 2 7
1 1 - - 2 1
6 4 2 2 5 4
456 430 429 358 448 399
313 268 274 237 280 262
143 162 32 21 28 28
$86,710 $119,301 $50,401 $23,032 $19,979 $20,320
$1,185 $2,003 $1,952 $7,309 $966 $2,351
299 240 140 41 32 31
1 1 1 3 - -
1,727 1,538 1,234 1,073 1,051 1,016
28 18 18 19 21 15
712 321 96 45 29 29
12 14 74 77 77 75
151
CITY OF LAKE ELMO, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Table 19
Last Ten Fiscal Years
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Fire:
Stations 2 2 2 2 2 2 2 2 2 2
Public Works:
Bituminous streets (miles)94.80 92 112 112 103 103 65 65 63 63
Gravel streets (miles)0.5 0.5 0.5 1 2 2 2 2 2 2
Storm sewer (miles)50 48 33 33 30 30 25 25 25 25
Parks & Recreation:
Acres of parkland 517 427 427 427 420 420 420 420 420 420
Number of parks 24 24 24 24 17 17 17 17 17 17
Water Utility:
Water towers 3 3 3 3 3 3 3 3 2 2
Miles of watermain 75 73 58 58 50 50 43 40 39 37
Number of fire hydrants 735 707 559 559 415 415 378 351 293 280
Sanitary Sewer Utility:
Miles of sanitary sewer 33 32 29 29 8 8 4 3 3 3
Lift Stations 6 7 5 5 4 4 4 4 3 3
Sources: Various City Department's annual financial report statistics
152
55 5th Street East, Suite 1400, St. Paul, MN, 55101 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 Lake Elmo, 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 Lake Elmo, Minnesota, as of and for the year ended December 31, 2021, and the related
notes to the financial statements, which collectively comprise the City of Lake Elmo, Minnesota's
basic financial statements, and have issued our report thereon dated June 14, 2022.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City of Lake
Elmo, Minnesota's internal control over financial reporting (internal control) as a basis for designing
audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions
on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the
City of Lake Elmo, Minnesota's internal control. Accordingly, we do not express an opinion on the
effectiveness of the City of Lake Elmo, Minnesota's internal control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses
or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that
were not identified. However, as described in the accompanying schedule of findings and responses,
we identified certain deficiencies in internal control that we consider to be material weaknesses and
significant deficiencies.
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. We consider the deficiency described in the accompanying schedule of
findings and responses as item 2021-01 to be a material weakness.
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
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance. We consider the deficiency described in the accompanying schedule of findings and
responses as item 2021-02 to be a significant deficiency.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Lake Elmo, 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 financial statements. 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.
City of Lake Elmo, Minnesota’s Responses to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City of Lake
Elmo, Minnesota’s responses to the findings identified in our audit and described in the accompanying
schedule of findings and responses. The City of Lake Elmo, Minnesota’s responses were not
subjected to the other auditing procedures applied in the audit of the financial statements and,
accordingly, we express no opinion on the response.
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 Lake Elmo, 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 Lake
Elmo, Minnesota’s internal control and compliance. Accordingly, this communication is not suitable
for any other purpose.
REDPATH AND COMPANY, LTD.
St. Paul, Minnesota
June 14, 2022
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF FINDINGS AND RESPONSES
For The Year Ended December 31, 2021
2021-01 Financial Statement Corrections
Criteria: A City’s internal controls should allow management or employees, in the normal
course of performing their assigned functions, to prevent or detect misstatements on a timely
basis.
Condition: Audit procedures detected material misstatements relating to accounts
receivable, construction in progress / project expenses, retainage payable and MPCA grant
revenue. All misstatements occurred in the water, sewer and storm sewer enterprise funds.
Cause: The error relating to accounts receivable occurred because the 4th quarter utility
billing report was not reconciled to the general ledger. Other misstatements likely occurred
due to the complexities of properly accounting for all project costs and related grant
revenue.
Effect: Inadequate controls over the year-end closing process results in an increased risk
that financial statement misstatements may occur and not be detected on a timely basis.
Recommendation: We recommend staff continue their efforts to appropriately account for
the transactions and account balances of the City.
Views of Responsible Officials and Corrective Action Plan: It is the intent of the City’s staff to
minimize the number of audit adjustments needed each year.
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF FINDINGS AND RESPONSES
For The Year Ended December 31, 2021
2021-02 Lack of Ideal Segregation of Duties
Criteria: Generally, a system of internal control contemplates segregation of duties such that
no individual has responsibility to execute a transaction, has physical access to the related
assets, and has responsibility or authority to record the transaction.
Condition: The same employee is responsible for preparing and reviewing bank
reconciliations, as well as recording and approving adjusting journal entries.
Cause: This condition is common to organizations of this size due to a limited number of
staff in the finance department.
Effect: The lack of ideal segregation of duties subjects the City to a higher risk that errors
or fraud could occur and not be detected in a timely manner.
Recommendation: Any modifications of internal controls in this area must be viewed from
a cost/benefit perspective.
Views of Responsible Officials and Corrective Action Plan: Due to limited number of
employees it is not possible to provide for the complete segregation of duties. The City has
established other safeguards to compensate for this, such as establishing procedures and
processes that require multiple checks and balances.
55 5th Street East, Suite 1400, St. Paul, MN, 55101 www.redpathcpas.com
COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE
To the Honorable Mayor and
Members of the City Council
City of Lake Elmo, 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 Lake
Elmo, Minnesota for the year ended December 31, 2021. 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 or our audit. We have communicated such information in our
letter to you dated April 26, 2022. Professional standards also require that we communicate
to you the following information related to our audit.
Significant Audit Matters
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 of Lake Elmo, Minnesota are described in
Note 1 to the financial statements. No new accounting policies were adopted and the
application of existing policies was not changed during 2021. We noted no transactions
entered into by the City of Lake Elmo, Minnesota 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.
The most sensitive estimates affecting the City’s financial statements are estimates used to
calculate the net pension asset and liability, the pension related deferred outflows and inflows
of resources, and pension expense. These estimates are based on actuarial studies. We
evaluated the key factors and assumptions used to develop the estimates in determining that
they are reasonable in relation to the financial statements taken as a whole.
City of Lake Elmo, 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 6 – Long-Term Debt and
Note 10 – Stewardship, Compliance and Accountability.
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. The uncorrected misstatements or the
matters underlying them could potentially cause future period financial statements to be
materially misstated, even though, in our judgment, such uncorrected misstatements are
immaterial to the financial statements under audit. The following material misstatements
detected as a result of audit procedures were corrected by management:
Accounts receivable of the water, sewer and storm sewer funds were understated by
$172,137.
Construction in progress of the water and sewer funds was understated, and project
costs were overstated, by $324,992.
MPCA grant revenue of the water fund was understated by $212,311.
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.
City of Lake Elmo, Minnesota
Communication With Those Charged With Governance
Page 3
Management Representations
We have requested certain representations from management that are included in the
management representation letter dated June 14, 2022.
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 of Lake Elmo,
Minnesota’s financial statements or a determination of the type of auditor’s opinion that may
be expressed on those statements, our professional standards require the consulting
accountant to check with us to determine that the consultant has all the relevant facts. To our
knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles
and auditing standards, with management each year prior to retention as the City of Lake
Elmo, Minnesota’s auditors. However, these discussions occurred in the normal course of
our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to the management’s discussion and analysis, the
budgetary comparison schedule, and the schedules of OPEB and pension information, as
listed in the table of contents, 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, 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
City of Lake Elmo, Minnesota
Communication With Those Charged With Governance
Page 4
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 and statistical sections, which accompany
the financial statements but are not RSI. Such information has not been subjected to 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.
Restriction on Use
This information is intended solely for the information and use of the City Council and
management of the City of Lake Elmo, 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
June 14, 2022
55 5th Street East, Suite 1400, St. Paul, MN, 55101 www.redpathcpas.com
MINNESOTA LEGAL COMPLIANCE REPORT
To the Honorable Mayor and
Members of the City Council
City of Lake Elmo, 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 Lake Elmo, Minnesota, as of and for
the year ended December 31, 2021, and the related notes to the financial statements, which
collectively comprise the City of Lake Elmo, Minnesota’s basic financial statements, and
have issued our report thereon dated June 14, 2022.
In connection with our audit, nothing came to our attention that caused us to believe that the
City of Lake Elmo, Minnesota failed to comply with the provisions of the contracting and
bidding, deposits and investments, conflicts of interest, public indebtedness, claims and
disbursements, and miscellaneous provisions sections of the Minnesota Legal Compliance
Audit Guide for Cities, promulgated by the State Auditor pursuant to Minnesota Statute
§6.65, insofar as they relate to accounting matters. 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 Lake Elmo, Minnesota’s noncompliance with the above referenced provisions,
insofar as they relate to accounting matters.
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
June 14, 2022