HomeMy WebLinkAbout2019 Annual Comprehensive Financial Report
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COMPREHENSIVE ANNUAL FINANCIAL REPORT
OF THE
CITY OF LAKE ELMO, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
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 7
Principal City Officials 9
Organization Chart 10
Independent Auditor's Report 13
Management's Discussion and Analysis 17
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position Statement 1 31
Statement of Activities Statement 2 32
Fund Financial Statements:
Balance Sheet - Governmental Funds Statement 3 34
Reconciliation of the Balance Sheet of Governmental Funds
To the Statement of Net Position Statement 4 35
Statement of Revenues, Expenditures and Changes in Fund Balance -
Governmental Funds Statement 5 36
Reconciliation of the Statement of Revenues, Expenditures and Changes
In Fund Balance of Governmental Funds to the Statement of Activities Statement 6 37
Statement of Net Position - Proprietary Funds Statement 7 38
Statement of Revenues, Expenses and Changes in Fund Net Position -
Proprietary Funds Statement 8 39
Statement of Cash Flows - Proprietary Funds Statement 9 40
Notes to Financial Statements 41
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 82
Schedule of Changes in the Total OPEB Liability and Related Ratios Statement 11 86
Schedule of Proportionate Share of Net Pension Liability -
General Employees Retirement Fund Statement 12 87
Schedule of Pension Contributions -
General Employees Retirement Fund Statement 13 88
Schedule of Proportionate Share of Net Pension Liability -
Public Employees Police and Fire Fund Statement 14 89
Schedule of Pension Contributions -
Public Employees Police and Fire Fund Statement 15 90
Schedule of Changes in the Net Pension Liability and Related Ratios -
Lake Elmo Firefighters Relief Association Statement 16 91
Schedule of Contributions -
Lake Elmo Firefighters Relief Association Statement 17 92
Notes to RSI 93
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 22 104
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balance - Nonmajor Capital Project Funds Statement 23 106
Balance Sheet - Debt Service Fund by Bond Issue Statement 24 108
Statement of Revenues, Expenditures and Changes in
Fund Balance - Debt Service Fund by Bond Issue Statement 25 110
CITY OF LAKE ELMO, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
Financial Trends:
Net Position by Component Table 1 116
Changes in Net Position Table 2 118
Fund Balances, Governmental Funds Table 3 122
Changes in Fund Balances, Governmental Funds Table 4 124
Revenue Capacity:
Tax Capacity and Estimated Actual Value of Taxable Property Table 5 126
Direct and Overlapping Property Tax Rates Table 6 127
Principal Property Taxpayers Table 7 129
Property Tax Levies and Collections Table 8 130
Water and Sanitary Sewer Charges by Customer Table 9 133
Debt Capacity:
Ratios of Outstanding Debt by Type Table 10 134
Ratios of Net General Bonded Debt Table 11 136
Direct and Overlapping Governmental Activities Debt Table 12 138
Legal Debt Margin Information Table 13 139
Pledged Revenue Coverage Table 14 140
Demographic and Economic Information:
Demographic and Economic Statistics Table 15 141
Principal Employers Table 16 143
Operating Information:
Full-Time Equivalent Employees By Function/Program Table 17 144
Operating Indicators by Function/Program Table 18 146
Capital Asset Statistics by Function/Program Table 19 148
STATISTICAL SECTION (UNAUDITED)
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INTRODUCTORY SECTION
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June 26, 2020
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
comprehensive annual financial report of the City of Lake Elmo, MN for the fiscal year ended
December 31, 2019.
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, 2019 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, 2019 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, 2019 as the City did not participate in any programs
that required 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 population of 11,105 which represents 3,902 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 budget for
submission to the Finance Committee for their consideration. The Finance Committee then meets
with the Department Heads to better understand their proposed budgets to later submit a budget
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 2019 Adopted Budget and final property tax levy was required to be adopted by
and submitted to Washington County by December 28, 2018. 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
Finance Committee and 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 number approximately 2,690 have been approved.
The City’s highway infrastructure continues to make Lake Elmo a desirable residential location.
Rapid growth is further reflected in 2019 population estimates of 11,105 or an increase of 38%
since the 2010 census.
New housing starts in 2019 numbered 244 with a total value of $76,387,708 and an average value
of $339,962. There were two new Commercial construction projects in 2019, and a number of
remodels and expansions. All these new starts have been built in 2019 or will be finished in 2020,
which will greatly strengthen the existing tax base of the City.
LONG TERM FINANCIAL PLANNING
Total unassigned General Fund balance as of December 31, 2019 was 69% 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 2018 and 2019. In their assessment of the City, Moody’s noted the
following:
Strong financial operations supported by healthy reserves and liquidity
Healthy unassigned fund balance
Affluent tax base favorably located in Twin Cities metropolitan area
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
2019 was again an extremely robust year for the City due to continuation of on-going infrastructure
upgrades, projects, as well as oversight of the on-going residential and commercial development
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activity.
Some of the 2019 infrastructure projects included the following:
The Old Village Improvement project is well underway and preliminary survey work began
on Phases V & VI of the project which are anticipated to be constructed starting 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.
The City began work on three 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.
A stoplight and road improvements were constructed at Hudson Blvd N and Keats Ave 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.
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 (CAFR) to the City again for
the fiscal year ending December 31, 2018. 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 CAFR, 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 Comprehensive Annual 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, 2019. 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 Neil Soltis
City Administrator Interim Finance Director
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CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL CITY OFFICIALS
December 31, 2019
Term Expires
Mayor:Mike Pearson December 31, 2020
Councilmembers:Justin Bloyer December 31, 2020
Christine Nelson December 31, 2020
Dale Dorschner December 31, 2022
Lisa McGinn December 31, 2022
Appointed Officials
City Administrator:Kristina Handt Appointed
Finance Director:Sue Iverson Appointed
City Clerk:Julie Johnson Appointed
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=Citizen Appointees
=Contractor Relationship
Public Works
Public Works
Director Fire Chief
Planner Building
Inspector (2)Accountant Deputy Clerk Lead Worker Assistant Chief
CaptainsInternPermit
Technician
Assessor
Intern
Citizens of Lake
Elmo
City
Administrator
City Attorney
Sheriff's Office
- Sergent (1)
- Deputy (4)
Park Commission
Economic Development
Authority
Commissions Committees
Seasonal
Public Works
FireFighters
(POC, PT)
City Engineer
ORGANIZATION CHART 2019
Planning Director Building Official Finance Director Assistant
Administrator City Clerk
Environmental
Finance
Human Resources
Maintenance Advisory
Public Safety
Planning Commission
City Council
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FINANCIAL SECTION
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55 E 5th Street Suite 1400, St. Paul, MN, 55101 651.426.7000 www.redpathcpas.com
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Lake Elmo, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the City of Lake
Elmo, Minnesota as of and for the year ended December 31, 2019, 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.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business-type activities, each major
fund, and the aggregate remaining fund information of the City of Lake Elmo, Minnesota, as of
December 31, 2019, 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.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, the budgetary comparison 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, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board, who considers it to be an essential part
of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United
States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We do not express an opinion or provide any assurance on the
information because the limited procedures do not provide us with sufficient evidence to express an
opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Lake Elmo Minnesota’s basic financial statements. The
introductory section, combining and individual nonmajor fund financial statements, and statistical
section are presented for purposes of additional analysis and are not a required part of the basic
financial statements.
The combining and individual nonmajor fund financial statements are the responsibility of
management and were derived from and relate directly to the underlying accounting and other
records used to prepare the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards
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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.
The introductory and statistical sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements and, accordingly, we do not express an opinion or provide
any assurance on them.
Report on Summarized Comparative Information
We have previously audited the City of Lake Elmo, Minnesota’s 2018 financial statements, and we
expressed an unmodified audit opinion 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 September 9, 2019. In our opinion, the summarized comparative
information presented herein as of and for the year ended December 31, 2018 is consistent, in all
material respects, with the audited financial statements from which it has been derived.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
June 26, 2020 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 26, 2020
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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, 2019. 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 $87,180,804 (net position).
Of this amount, $20,760,331 (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 $28,350,684.
As of the close of the current fiscal year, the City’s governmental funds reported combined
ending fund balances of $11,299,939, an increase of $2,224,441. Of this amount, $5,973,451
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 $4,314,184. Unassigned
fund balance for the General Fund was $4,286,022, or 69% of the next year’s total General
Fund expenditures and other financing uses.
Total outstanding debt increased by $1,080,000 during 2019. General Obligation
Improvement Bonds were issued in the amount of $4,055,000. Payments on outstanding debt
during the year totaled $2,975,000.
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.
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Management’s Discussion and Analysis
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
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.
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Management’s Discussion and Analysis
The City maintains four 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
Vehicle Acquisition
CSAH 19 / Hudson Boulevard Interchange
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.
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 23.
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Management’s Discussion and Analysis
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 $87,180,804 at the close of the most recent
fiscal year.
The largest portion of the City’s net position ($57,823,714, or 66%) 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
2019 2018 2019 2018 2019 2018
Assets:
Current and other assets $18,130,671 $16,913,225 $18,043,809 $15,262,935 $36,174,480 $32,176,160
Capital assets 42,520,593 31,754,062 54,588,238 40,252,925 97,108,831 72,006,987
Total assets 60,651,264 48,667,287 72,632,047 55,515,860 133,283,311 104,183,147
Deferred outflows of resources 629,643 805,439 19,191 36,680 648,834 842,119
Liabilities:
Long-term liabilities outstanding 18,898,928 17,510,865 21,680,463 21,835,082 40,579,391 39,345,947
Other liabilities 4,047,165 4,572,075 1,366,492 1,460,036 5,413,657 6,032,111
Total liabilities 22,946,093 22,082,940 23,046,955 23,295,118 45,993,048 45,378,058
Deferred inflows of resources 735,627 784,982 22,666 32,106 758,293 817,088
Net position:
Net investment in capital assets 24,771,065 15,396,520 33,052,649 18,382,934 57,823,714 33,779,454
Restricted 8,596,759 10,121,648 - - 8,596,759 10,121,648
Unrestricted 4,231,363 1,086,636 16,528,968 13,842,382 20,760,331 14,929,018
Total net position $37,599,187 $26,604,804 $49,581,617 $32,225,316 $87,180,804 $58,830,120
Governmental Activities Business-Type Activities Totals
$8,596,759 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
($20,760,331) 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.
20
Management’s Discussion and Analysis
Governmental Activities
Net position of governmental activities increased $10,994,383 during the year. The primary
reasons for the increase were developer contributed infrastructure in the amount of
$8,843,797, as well as increased operating grants and contributions, general property tax
revenue and investment earnings.
Business-Type Activities
Net position of business-type activities increased $17,356,301 during the year. The most
significant reason for the increase was developer contributed infrastructure in the amount of
$11,845,548. The City also received $2,008,433 of connection charge revenue, for which the
offsetting expense is recognized in future years as depreciation expense.
During 2019, the City and 3M Company entered into a settlement agreement relating to the
presence of perfluorochemicals (PFCs) in the City’s municipal water supply. As part of the
settlement, the City received $2,700,000 of cash and parcels of land located within the City
with an estimated acquisition value of $3,420,000. The City incurred $1,567,821 of
professional service fees relating to the settlement. The net amount of these items
($4,552,179) is reported as an extraordinary item in the business-type activities.
21
Management’s Discussion and Analysis
City of Lake Elmo’s Changes in Net Position
2019 2018 2019 2018 2019 2018
Revenues:
Program revenues:
Charges for services $2,356,070 $2,396,114 $1,648,689 $1,527,299 $4,004,759 $3,923,413
Operating grants and contributions 795,483 248,915 122,350 - 917,833 248,915
Capital grants and contributions 11,076,353 4,970,565 14,114,787 7,466,627 25,191,140 12,437,192
General revenues:
General property taxes 4,181,914 3,610,106 - - 4,181,914 3,610,106
Grants and contributions not
restricted to specific programs 4,956 6,868 - 956 4,956 7,824
Unrestricted investment earnings 331,010 115,583 411,206 96,425 742,216 212,008
Gain on disposal of assets 44,927 8,991 - - 44,927 8,991
Extraordinary item - - 4,552,179 - 4,552,179 -
Total revenues 18,790,713 11,357,142 20,849,211 9,091,307 39,639,924 20,448,449
Expenses:
General government 1,181,219 1,266,269 - - 1,181,219 1,266,269
Public safety 2,058,419 2,161,082 - - 2,058,419 2,161,082
Public works 3,728,247 2,192,092 - - 3,728,247 2,192,092
Culture and recreation 361,730 524,445 - - 361,730 524,445
Economic development authority 71,609 47,702 - - 71,609 47,702
Interest on long-term debt 395,106 352,376 - - 395,106 352,376
Water - - 1,940,148 2,068,178 1,940,148 2,068,178
Sewer - - 1,082,997 846,032 1,082,997 846,032
Storm sewer - - 469,765 315,967 469,765 315,967
Total expenses 7,796,330 6,543,966 3,492,910 3,230,177 11,289,240 9,774,143
Increase in net position before transfers 10,994,383 4,813,176 17,356,301 5,861,130 28,350,684 10,674,306
Transfers - 840 - (840) - -
Change in net position 10,994,383 4,814,016 17,356,301 5,860,290 28,350,684 10,674,306
Net position - January 1, 26,604,804 19,314,109 32,225,316 23,670,935 58,830,120 42,985,044
as previously reported
Prior period adjustment - 2,476,679 - 2,694,091 - 5,170,770
Net position - January 1, as restated 26,604,804 21,790,788 32,225,316 26,365,026 58,830,120 48,155,814
Net position - December 31 $37,599,187 $26,604,804 $49,581,617 $32,225,316 $87,180,804 $58,830,120
Business-Type Activities TotalsGovernmental Activities
22
Management’s Discussion and Analysis
Governmental Activities
Below are specific graphs which provide comparisons of the governmental activities
revenues and expenses:
23
Management’s Discussion and Analysis
Business-Type Activities
Below are specific graphs which provide comparisons of the business-type activities
revenues and expenses:
24
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 $11,299,939. Approximately 53% of this total amount ($5,973,451)
constitutes fund balance restricted by external constraints established by creditors, grantors,
contributors, or by state statutory provisions. $28,162 of fund balance is not in a spendable
form, $24,070 has been committed, $1,746,202 has been assigned, and $3,528,054 is
unassigned.
The fund balance of the General Fund decreased by $461,462 in 2019, while the City
anticipated the use of $124,000 of the General Fund balance. The primary reason for the
decrease is the delay of the 2018 mill and overlay project until 2019 in order to obtain better
bids.
The Debt Service fund balance increased by $254,731, primarily relating to the 2019A G.O.
Improvement Bonds. A portion of the bond proceeds ($172,320) as well as special
assessment revenue in the amount of $71,533 were recorded in the 2019A fund to pay for
future debt service requirements.
The Vehicle Acquisition fund balance increased by $365,400. 2019A bond proceeds in the
amount of $698,984 were deposited into the fund during 2019, of which $447,848 was
unspent at year-end.
The CSAH 19 / Hudson Boulevard Interchange fund balance decreased by $252,102 due to
construction costs exceeding revenue earned in 2019. The City will receive revenue from
Washington County in 2020 to offset some of the deficit in the fund. The remaining deficit is
planned to be funded through the General Fund in 2020.
The combined fund balance of other governmental funds increased $2,317,874 during 2019.
The primary reason for the increase was the issuance of the 2019A G.O. Improvement Bonds
to finance expenditures of the Old Village Phase 4 and 2018 Street Improvement projects,
most of which were incurred prior to 2019.
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 $25,699,536, of which $6,179,187 is
unrestricted. The increase in net position of $9,710,927 was primarily due to capital
25
Management’s Discussion and Analysis
contributions of $4,698,595 and the extraordinary item previously mentioned in the amount
of $4,552,179.
The sewer fund has total net position at year-end of $15,892,048, of which $8,944,170 is
unrestricted. The increase in net position of $3,908,541 was primarily due to capital
contributions and connection charges, partially offset by a net operating loss and interest and
fees on long-term debt.
The storm sewer fund has total net position at year-end of $7,990,033, of which $1,405,611
is unrestricted. The increase in net position of $3,736,833 was almost entirely due to capital
contributions.
Budgetary Highlights
General Fund
The General Fund budget was not amended during the year. The City budgeted for a
$124,000 decrease in fund balance, while the actual decrease in fund balance was $461,462.
Revenues were $56,702 over budget for the year. This is mainly due to general property
taxes, which were under budget by $227,233, offset by charges for services, investment
income and miscellaneous revenue, which were over budget by $117,364, $78,298 and
$67,594, respectively.
Expenditures came in over budget by $364,164 due to the delay of the 2018 mill and overlay
project to 2019. The delay allowed the City to obtain better pricing.
26
Management’s Discussion and Analysis
Capital Asset and Debt Administration
Capital assets. The City’s investment in capital assets for its governmental and business-
type activities as of December 31, 2019, amounted to $97,108,831 (net of accumulated
depreciation), an increase of $25,101,844 from the prior year. This investment in capital
assets includes land, construction in progress, buildings, other improvements, machinery and
equipment, and infrastructure. The City substantially completed the Old Village Phase 4
project, road and stoplight improvements at Hudson Blvd and Keats Ave, and the 2018
Streets project. The City completed a new park in the Wildflower/Village Preserve
developments and is nearing completion of the Lions Park improvements. In addition, the
City began the Trunk Highway 36/CSAH 15 Interchange project, Old Village Phases 5 and 6,
and three expedited watermain projects to existing neighborhoods.
City of Lake Elmo’s Capital Assets
(Net of Depreciation)
2019 2018 2019 2018 2019 2018
Land $3,453,979 $3,453,979 $3,668,869 $248,869 $7,122,848 $3,702,848
Construction in progress 618,039 5,497,408 236,301 3,003,858 854,340 8,501,266
Buildings 3,176,258 3,124,409 - - 3,176,258 3,124,409
Improvements other than buildings 1,364,127 394,950 - - 1,364,127 394,950
Machinery and equipment 2,375,168 1,532,331 89,981 84,780 2,465,149 1,617,111
Infrastructure 31,533,022 17,750,985 50,593,087 36,915,418 82,126,109 54,666,403
Total $42,520,593 $31,754,062 $54,588,238 $40,252,925 $97,108,831 $72,006,987
Governmental Activities Business-Type Activities Totals
Additional information on the City’s capital assets can be found in Note 5 to the financial
statements.
27
Management’s Discussion and Analysis
Long-term debt. At the end of the current fiscal year, the City had total bonded debt
outstanding of $38,306,000, an increase of $1,080,000. The key factors for the change
include the issuance of $4,055,000 of 2019A General Obligation Improvement Bonds to
finance capital equipment purchases and City projects, as well as principal retired in the
amount of $2,975,000 during the year.
City of Lake Elmo’s Outstanding Debt
2019 2018 2019 2018 2019 2018
G.O. Improvement bonds $15,350,000 $14,105,000 $21,090,000 $21,255,000 $36,440,000 $35,360,000
G.O. Equipment certificates 940,000 940,000 - - 940,000 940,000
Taxable lease revenue bonds 926,000 926,000 - - 926,000 926,000
Total $17,216,000 $15,971,000 $21,090,000 $21,255,000 $38,306,000 $37,226,000
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.
28
BASIC FINANCIAL STATEMENTS
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30
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF NET POSITION Statement 1
December 31, 2019
With Comparative Totals For December 31, 2018
Governmental Business-Type
Activities Activities 2019 2018
Assets:
Cash and investments $14,490,025 $14,421,043 $28,911,068 $24,908,815
Accrued interest receivable 42,978 53,016 95,994 61,827
Due from other governmental units 551,456 58,372 609,828 9,254
Accounts receivable - net 29,255 637,868 667,123 534,300
Prepaid items 28,162 19,157 47,319 33,459
Property taxes receivable 55,894 - 55,894 76,402
Special assessments receivable 2,559,828 2,854,353 5,414,181 6,281,696
Net pension asset 373,073 - 373,073 270,407
Capital assets - nondepreciable 4,072,018 3,905,170 7,977,188 12,204,114
Capital assets - net of accumulated depreciation 38,448,575 50,683,068 89,131,643 59,802,873
Total assets 60,651,264 72,632,047 133,283,311 104,183,147
Deferred outflows of resources related to pensions 629,643 19,191 648,834 842,119
Liabilities:
Accounts payable 167,028 44,362 211,390 235,482
Due to other governmental units 41,925 305,317 347,242 926,487
Salaries and benefits payable 86,263 15,987 102,250 101,838
Contracts and retainage payable 121,103 15,444 136,547 282,370
Deposits payable 3,168,417 - 3,168,417 3,113,076
Accrued interest payable 189,699 206,382 396,081 397,628
Unearned revenue 272,730 779,000 1,051,730 975,230
Compensated absences payable:
Due within one year 47,061 16,322 63,383 67,879
Due in more than one year 15,687 5,441 21,128 22,627
Bonds payable:
Due within one year 1,790,000 1,380,000 3,170,000 2,975,000
Due in more than one year 15,838,425 20,140,145 35,978,570 34,983,180
Other postemployment benefits:
Due in more than one year 61,316 12,472 73,788 63,930
Net pension liability:
Due in more than one year 1,146,439 126,083 1,272,522 1,233,331
Total liabilities 22,946,093 23,046,955 45,993,048 45,378,058
Deferred inflows of resources related to pensions 735,627 22,666 758,293 817,088
Net position:
Net investment in capital assets 24,771,065 33,052,649 57,823,714 33,779,454
Restricted for:
Debt service 7,057,638 - 7,057,638 8,216,475
Vehicle acquisition 447,848 - 447,848 806,427
Park improvements 734,100 - 734,100 851,785
Street improvements 84,619 - 84,619 -
Fire Relief Association pension plan 272,554 - 272,554 246,961
Unrestricted 4,231,363 16,528,968 20,760,331 14,929,018
Total net position $37,599,187 $49,581,617 $87,180,804 $58,830,120
Primary Government
Total
The accompanying notes are an integral part of these financial statements.
31
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2019
With Comparative Totals For The Year Ended December 31, 2018
Program Revenues
Charges For
Functions/Programs Expenses Services
Primary government:
Governmental activities:
General government $1,181,219 $553,870
Public safety 2,058,419 1,574,359
Public works 3,728,247 126,721
Culture and recreation 361,730 1,430
Economic development authority 71,609 99,690
Interest and fees on long-term debt 395,106 -
Total governmental activities 7,796,330 2,356,070
Business-type activities:
Water 1,940,148 962,003
Sewer 1,082,997 306,041
Storm sewer 469,765 380,645
Total business-type activities 3,492,910 1,648,689
Total primary government $11,289,240 $4,004,759
The accompanying notes are an integral part of these financial statements.
32
Statement 2
Operating Capital
Grants and Grants and Governmental Business-Type
Contributions Contributions Activities Activities 2019 2018
$39,271 $ - ($588,078) $ - ($588,078) ($879,753)
82,292 - (401,768) - (401,768) (145,601)
667,526 10,952,853 8,018,853 - 8,018,853 2,434,466
6,394 123,500 (230,406) - (230,406) (15,979)
- - 28,081 - 28,081 30,871
- - (395,106) - (395,106) (352,376)
795,483 11,076,353 6,431,576 0 6,431,576 1,071,628
122,350 5,831,157 - 4,975,362 4,975,362 1,151,573
- 4,495,155 - 3,718,199 3,718,199 2,971,369
- 3,788,475 - 3,699,355 3,699,355 1,640,807
122,350 14,114,787 0 12,392,916 12,392,916 5,763,749
$917,833 $25,191,140 6,431,576 12,392,916 18,824,492 6,835,377
General revenues:
General property taxes 4,181,914 - 4,181,914 3,610,106
Grants and contributions not
restricted to specific programs 4,956 - 4,956 7,824
Unrestricted investment earnings 331,010 411,206 742,216 212,008
Gain on disposal of capital assets 44,927 - 44,927 8,991
Extraordinary item - 4,552,179 4,552,179 -
Total general revenues and
extraordinary item 4,562,807 4,963,385 9,526,192 3,838,929
Change in net position 10,994,383 17,356,301 28,350,684 10,674,306
Net position - January 1, as previously reported 26,604,804 32,225,316 58,830,120 42,985,044
Prior period adjustment - - - 5,170,770
Net position - January 1, as restated 26,604,804 32,225,316 58,830,120 48,155,814
Net position - December 31 $37,599,187 $49,581,617 $87,180,804 $58,830,120
Program Revenues Net (Expense) Revenue and Changes
in Net Position - Primary Government
Total
The accompanying notes are an integral part of these financial statements.
33
CITY OF LAKE ELMO, MINNESOTA
BALANCE SHEET Statement 3
GOVERNMENTAL FUNDS
December 31, 2019
CSAH 19 /
Debt Vehicle Hudson Blvd Other
General Fund Service Acquisition Interchange Governmental
(101) (300s) (410) (425) Funds
Assets 2019 2018
Cash and investments $6,384,770 $4,716,520 $1,241,787 $ - $2,146,948 $14,490,025 $13,360,456
Accrued interest receivable 15,730 15,756 4,370 - 7,122 42,978 31,548
Due from other governmental units 6,410 - - 477,468 67,578 551,456 9,254
Accounts receivable - net 13,948 - 15,307 - - 29,255 3,985
Prepaid items 28,162 - - - - 28,162 19,346
Due from other funds 1,185,555 - - - - 1,185,555 2,484,378
Property taxes receivable:
Due from county 14,282 - - - - 14,282 34,377
Delinquent 41,612 - - - - 41,612 42,025
Special assessments receivable:
Due from county - 1,247 - - - 1,247 1,997
Delinquent 295 2,668 - - - 2,963 1,476
Deferred - 2,537,785 - - 17,833 2,555,618 3,138,354
Total assets $7,690,764 $7,273,976 $1,261,464 $477,468 $2,239,481 $18,943,153 $19,127,196
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable $113,068 $400 $ - $ - $53,560 $167,028 $156,380
Due to other governmental units 41,925 - - - - 41,925 659,240
Salaries and benefits payable 86,263 - - - - 86,263 93,034
Contracts and retainage payable - - - 91,376 29,727 121,103 92,505
Due to other funds - 26,239 - 638,194 521,122 1,185,555 2,484,378
Deposits payable 3,093,417 - - - 75,000 3,168,417 3,113,076
Unearned revenue - - - - 272,730 272,730 271,230
Total liabilities 3,334,673 26,639 0 729,570 952,139 5,043,021 6,869,843
Deferred inflows of resources:
Unavailable revenue 41,907 2,540,453 - - 17,833 2,600,193 3,181,855
Fund balance:
Nonspendable 28,162 - - - - 28,162 19,346
Restricted - 4,706,884 447,848 - 818,719 5,973,451 6,133,168
Committed - - - - 24,070 24,070 11,003
Assigned - - 813,616 - 932,586 1,746,202 1,198,909
Unassigned 4,286,022 - - (252,102) (505,866) 3,528,054 1,713,072
Total fund balance 4,314,184 4,706,884 1,261,464 (252,102) 1,269,509 11,299,939 9,075,498
Total liabilities, deferred inflows
of resources, and fund balance $7,690,764 $7,273,976 $1,261,464 $477,468 $2,239,481 $18,943,153 $19,127,196
With Comparative Totals For December 31, 2018
Total Governmental Funds
The accompanying notes are an integral part of these financial statements.
34
CITY OF LAKE ELMO, MINNESOTA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL Statement 4
FUNDS TO THE STATEMENT OF NET POSITION
December 31, 2019
With Comparative Totals For December 31, 2018
2019 2018
Fund balance - total governmental funds (Statement 3) $11,299,939 $9,075,498
Net position reported for governmental activities in the Statement of Net Position is
different because:
Certain assets used in governmental activities are not current financial resources and,
therefore, are not reported in the funds.
Capital assets 42,520,593 29,277,383
Net pension asset 373,073 270,407
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 41,612 42,025
Delinquent special assessments receivable 2,963 1,476
Deferred special assessments receivable 2,555,618 3,138,354
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 (17,216,000) (15,971,000)
Unamortized bond premiums (412,425) (307,054)
Accrued interest payable (189,699) (186,610)
Compensated absences payable (62,748) (70,660)
Other postemployment benefits (61,316) (54,021)
Net pension liability (1,146,439) (1,108,130)
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 629,643 805,439
Deferred inflows of resources (735,627) 784,982
Net position of governmental activities (Statement 1)$37,599,187 $25,698,089
The accompanying notes are an integral part of these financial statements.
35
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND Statement 5
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2019
With Comparative Totals For The Year Ended December 31, 2018
CSAH 19 /
Debt Vehicle Hudson Blvd Other
General Fund Service Acquisition Interchange Governmental
(101) (300s) (410) (425) Funds
Revenues:2019 2018
General property taxes $2,966,393 $1,215,934 $ - $ - $ - $4,182,327 $3,610,508
Licenses and permits 1,055,038 - - - - 1,055,038 1,317,648
Intergovernmental 269,907 - - 1,977,992 572,062 2,819,961 247,178
Charges for services 884,885 - - 43,900 150,557 1,079,342 899,808
Fines and forfeits 36,696 - - - - 36,696 49,203
Special assessments - 649,487 - - - 649,487 1,398,155
Park dedication fees - - - - 123,500 123,500 502,802
Investment income 118,298 121,530 33,976 - 57,206 331,010 115,583
Miscellaneous 192,494 - - - 9,000 201,494 129,455
Total revenues 5,523,711 1,986,951 33,976 2,021,892 912,325 10,478,855 8,270,340
Expenditures:
Current:
General government 1,136,908 - - - - 1,136,908 1,208,145
Public safety 1,948,269 - - - - 1,948,269 1,644,159
Public works 1,869,082 - - - 6,524 1,875,606 1,227,521
Culture and recreation 263,979 - - - 1,281 265,260 241,761
Economic development authority - - - - 71,609 71,609 47,702
Capital outlay:
Public safety 24,000 - 856,832 - - 880,832 7,837
Public works - - 188,403 2,273,994 805,573 3,267,970 3,314,434
Culture and recreation - - - - 205,841 205,841 328,148
Economic development authority - - - - - - 901,670
Debt service:
Principal - 1,615,000 - - - 1,615,000 1,175,000
Interest and fiscal charges - 401,037 12,328 - 41,449 454,814 230,822
Total expenditures 5,242,238 2,016,037 1,057,563 2,273,994 1,132,277 11,722,109 10,327,199
Revenues over (under) expenditures 281,473 (29,086) (1,023,587) (252,102) (219,952) (1,243,254) (2,056,859)
Other financing sources (uses):
Transfers in - 111,497 645,076 - 424,600 1,181,173 56,209
Transfers out (742,935) - - - (43,638) (786,573) (173,190)
Issuance of debt - 4,152 698,984 - 2,156,864 2,860,000 1,866,000
Bond premium - 168,168 - - - 168,168 -
Proceeds from sale of capital assets - - 44,927 - - 44,927 8,991
Total other financing sources (uses)(742,935) 283,817 1,388,987 0 2,537,826 3,467,695 1,758,010
Net change in fund balance (461,462) 254,731 365,400 (252,102) 2,317,874 2,224,441 (298,849)
Fund balance - January 1, as previously reported 4,775,646 4,452,153 896,064 - (1,048,365) 9,075,498 8,259,817
Prior period adjustment - - - - - - 1,114,530
Fund balance - January 1, as restated 4,775,646 4,452,153 896,064 0 (1,048,365) 9,075,498 9,374,347
Fund balance - December 31 $4,314,184 $4,706,884 $1,261,464 ($252,102) $1,269,509 $11,299,939 $9,075,498
Total Governmental Funds
The accompanying notes are an integral part of these financial statements.
36
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, 2019
With Comparative Totals For The Year Ended December 31, 2018
2019 2018
Net change in fund balance - total governmental funds (Statement 5)$2,224,441 ($298,849)
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 (1,481,392) (1,122,854)
Capital outlay 4,354,643 4,552,089
Capital outlay not capitalized (555,917) (24,494)
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 8,843,797 2,136,991
Contributions of infrastructure to business-type activities (394,600) -
Gain (loss) on disposal of capital assets - (214,210)
Transfer of capital assets from the Internal Service Funds - 144,582
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 (413)(402)
Change in delinquent special assessments receivable 1,487 1,476
Change in deferred special assessments receivable (582,736) 931,141
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 (2,860,000) (1,866,000)
Premium on bonds issued (168,168) -
Repayment of principal 1,615,000 1,175,000
Amortization of bond premiums 62,797 38,780
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 (3,089) (160,334)
Change in compensated absences payable 7,912 (8,823)
Change other post employment benefits liability (7,295) (11,053)
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.(62,084) (432,263)
Internal service funds are used by management to charge the cost of certain activities
to individual funds. Net revenues (expenses) of certain activities of internal service
funds are reported within the governmental activities Statement of Activities. - (26,761)
Change in net position of governmental activities (Statement 2)$10,994,383 $4,814,016
The accompanying notes are an integral part of these financial statements.
37
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF NET POSITION Statement 7
PROPRIETARY FUNDS
December 31, 2019
Storm
Water (601) Sewer (602) Sewer (603) 2019 2018
Assets:
Current assets:
Cash and investments $6,608,007 $6,805,012 $1,008,024 $14,421,043 $11,548,359
Accrued interest receivable 23,488 24,589 4,939 53,016 30,279
Due from other governmental units 58,372 - - 58,372 -
Accounts receivable - net 176,446 93,439 367,983 637,868 530,315
Prepaid items - 19,157 - 19,157 14,113
Total current assets 6,866,313 6,942,197 1,380,946 15,189,456 12,123,066
Noncurrent assets:
Special assessments receivable 299,549 2,485,002 69,802 2,854,353 3,139,869
Capital assets:
Land 3,668,869 - - 3,668,869 248,869
Construction in progress 155,586 80,715 - 236,301 3,003,858
Machinery and equipment 293,186 24,927 - 318,113 330,045
Infrastructure 34,022,798 15,373,892 10,249,843 59,646,533 44,160,073
Total capital assets 38,140,439 15,479,534 10,249,843 63,869,816 47,742,845
Less: Allowance for depreciation (6,989,032) (1,679,575) (612,971) (9,281,578) (7,489,920)
Net capital assets 31,151,407 13,799,959 9,636,872 54,588,238 40,252,925
Total assets 38,317,269 23,227,158 11,087,620 72,632,047 55,515,860
Deferred outflows of resources related to pensions 14,122 3,377 1,692 19,191 36,680
Liabilities:
Current liabilities:
Accounts payable 26,635 17,671 56 44,362 79,102
Due to other governmental units 8,733 295,909 675 305,317 267,247
Salaries and benefits payable 10,065 4,088 1,834 15,987 8,804
Contracts and retainage payable 7,273 8,171 - 15,444 189,865
Accrued interest payable 97,725 83,108 25,549 206,382 211,018
Unearned revenue 729,000 50,000 - 779,000 704,000
Compensated absences payable - current portion 9,200 4,418 2,704 16,322 14,884
Bonds payable - current portion 770,000 435,000 175,000 1,380,000 1,360,000
Total current liabilities 1,658,631 898,365 205,818 2,762,814 2,834,920
Noncurrent liabilities:
Compensated absences payable - noncurrent portion 3,067 1,473 901 5,441 4,962
Bonds payable - noncurrent portion 10,853,785 6,408,910 2,877,450 20,140,145 20,320,126
Other postemployment benefits 6,913 3,567 1,992 12,472 9,909
Net pension liability 92,780 22,184 11,119 126,083 125,201
Total noncurrent liabilities 10,956,545 6,436,134 2,891,462 20,284,141 20,460,198
Total liabilities 12,615,176 7,334,499 3,097,280 23,046,955 23,295,118
Deferred inflows of resources related to pensions 16,679 3,988 1,999 22,666 32,106
Net position:
Net investment in capital assets 19,520,349 6,947,878 6,584,422 33,052,649 18,382,934
Unrestricted 6,179,187 8,944,170 1,405,611 16,528,968 13,842,382
Total net position $25,699,536 $15,892,048 $7,990,033 $49,581,617 $32,225,316
With Comparative Totals For December 31, 2018
Business-Type Activities - Enterprise Funds
Total
The accompanying notes are an integral part of these financial statements.
38
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND Statement 8
PROPRIETARY FUNDS
For The Year Ended December 31, 2019
With Comparative Totals For The Year Ended December 31, 2018
Storm
Water (601) Sewer (602) Sewer (603)2019 2018
Operating revenues:
Charges for services $851,114 $299,779 $344,211 $1,495,104 $1,365,322
Water meter sales 97,342 - - 97,342 115,036
Other operating revenue 13,547 6,262 36,434 56,243 46,941
Total operating revenues 962,003 306,041 380,645 1,648,689 1,527,299
Operating expenses:
Personal services 216,859 87,235 47,399 351,493 256,763
Materials and supplies 120,781 12,181 6,649 139,611 180,867
Professional services 143,127 54,634 49,794 247,555 381,958
Repairs and maintenance 71,885 30,714 23,368 125,967 227,907
Utilities 80,744 184,172 8 264,924 209,944
Depreciation 1,015,919 526,989 280,141 1,823,049 1,466,685
Other 26,789 14,143 4,800 45,732 21,908
Total operating expenses 1,676,104 910,068 412,159 2,998,331 2,746,032
Operating income (loss)(714,101) (604,027) (31,514) (1,349,642) (1,218,733)
Nonoperating revenues (expenses):
Investment income 183,386 190,342 37,478 411,206 96,425
Intergovernmental revenue 122,350 - - 122,350 956
Interest and fees on long-term debt (257,766) (172,929) (57,606) (488,301) (484,145)
Gain (loss) on disposal of capital assets (6,278) - - (6,278) -
Total nonoperating operating revenues (expenses)41,692 17,413 (20,128)38,977 (386,764)
Income (loss) before contributions and transfers (672,409) (586,614) (51,642) (1,310,665) (1,605,497)
Contributions, transfers and extraordinary item:
Capital contributions:
Intergovernmental revenue 138,894 - - 138,894 -
Special assessments 11,968 109,944 - 121,912 1,476,668
Capital contributions from private sources 4,698,595 3,358,478 3,788,475 11,845,548 3,324,179
Capital contributions from governmental activities - - 394,600 394,600 -
Connection charges 981,700 1,026,733 - 2,008,433 2,665,780
Transfer out - - (394,600) (394,600)(840)
Extraordinary item 4,552,179 - - 4,552,179 -
Total contributions, transfers and extraordinary item 10,383,336 4,495,155 3,788,475 18,666,966 7,465,787
Change in net position 9,710,927 3,908,541 3,736,833 17,356,301 5,860,290
Net position - January 1, as previously reported 15,988,609 11,983,507 4,253,200 32,225,316 23,670,935
Prior period adjustment - - - - 2,694,091
Net position - January 1, as restated 15,988,609 11,983,507 4,253,200 32,225,316 26,365,026
Net position - December 31 $25,699,536 $15,892,048 $7,990,033 $49,581,617 $32,225,316
CHANGES IN FUND NET POSITION
Business-Type Activities - Enterprise Funds
Total
The accompanying notes are an integral part of these financial statements.
39
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF CASH FLOWS Statement 9
PROPRIETARY FUNDS
For The Year Ended December 31, 2019
With Comparative Totals For The Year Ended December 31, 2018
Storm
Water (601) Sewer (602) Sewer (603)2019 2018
Cash flows from operating activities:
Receipts from customers and users $986,547 $292,214 $301,054 $1,579,815 $1,385,109
Payments to suppliers (492,171) (247,927) (85,405) (825,503) (1,282,713)
Payments to employees (202,981) (82,787) (45,131) (330,899) (285,808)
Net cash flows provided by (used in) operating activities 291,395 (38,500) 170,518 423,413 (183,412)
Cash flows from noncapital financing activities:
Transfers out - - - - (840)
Interfund loan payments from other funds - - - - 78,220
Interfund loan payments to other funds - - - - (795)
Net cash flows provided by (used in)
noncapital financing activities 0 0 0 0 76,585
Cash flows from capital and related financing activities:
Intergovernmental revenue 138,894 - - 138,894 -
Special assessments 16,751 415,976 - 432,727 939,586
Connection charges 1,056,700 1,026,733 - 2,083,433 2,840,780
Extraordinary item 1,132,179 - - 1,132,179 -
Proceeds from issuance of bonds 393,683 440,262 Yes 833,945 -
Principal paid on long-term debt (760,000) (425,000) (175,000) (1,360,000) (625,000)
Interest and fees paid on long-term debt (281,195) (185,489) (64,113) (530,797) (312,660)
Acquisition of capital assets (520,164) (158,749) - (678,913) (914,869)
Transfer out - - (394,600) (394,600) -
Net cash flows provided by (used in)
capital and related financing activities 1,176,848 1,113,733 (633,713) 1,656,868 1,927,837
Cash flows from investing activities:
Investment earnings 169,715 180,926 37,828 388,469 66,146
Net increase (decrease) in cash and cash equivalents 1,637,958 1,256,159 (425,367) 2,468,750 1,887,156
Cash and cash equivalents - January 1 4,970,049 5,548,853 1,029,457 11,548,359 9,661,203
Cash and cash equivalents - December 31 $6,608,007 $6,805,012 $604,090 $14,017,109 $11,548,359
Reconciliation of operating income to net
cash provided by operating activities:
Operating income (loss)($714,101) ($604,027) ($31,514) ($1,349,642) ($1,218,733)
Adjustments to reconcile operating income
(loss) to net cash flows from operating activities:
Intergovernmental revenue 122,350 - - 122,350 956
Depreciation 1,015,919 526,989 280,141 1,823,049 1,466,685
Changes in assets and liabilities:
Decrease (increase) in receivables (97,806) (13,827) (79,591) (191,224) (143,146)
Decrease (increase) in prepaid items - (5,044) - (5,044) (6,435)
Decrease (increase) in deferred outflows of resources 12,869 3,077 1,543 17,489 7,894
Increase (decrease) in payables (48,845) 52,961 (786) 3,330 (253,694)
Increase (decrease) in salaries and benefits payable 4,148 2,419 616 7,183 2,637
Increase (decrease) in compensated absences 1,680 (232)469 1,917 3,533
Increase (decrease) in other post employment benefits 1,479 690 394 2,563 1,970
Increase (decrease) in net pension liability 649 155 78 882 (64,232)
Increase (decrease) in deferred inflows of resources (6,947) (1,661)(832) (9,440) 19,153
Total adjustments 1,005,496 565,527 202,032 1,773,055 1,035,321
Net cash provided by (used in) operating activities $291,395 ($38,500) $170,518 $423,413 ($183,412)
Noncash investing, capital and financing activities:
Capital asset contributions $4,698,595 $3,358,478 $4,183,075 $12,240,148 $3,324,179
Extraordinary item - value of land received $3,420,000 $ - $ - $3,420,000 $ -
Loss on disposal of capital assets ($6,278) $ - $ - ($6,278) $ -
Total
Business-Type Activities - Enterprise Funds
The accompanying notes are an integral part of these financial statements.
40
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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.
RELATED ORGANIZATION
The Lake Elmo Firefighters Relief Association (the Association) is organized as a nonprofit
organization, legally separate from the City, by its members to provide pension and other benefits to
such members in accordance with Minnesota Statutes. The Association’s Board of Trustees is appointed
by the membership of the Association and not by the City Council. All funding is conducted in
accordance with Minnesota Statutes, whereby state aid flows to the Association, tax levies are
determined by the Association and the Association pays benefits directly to its members. The
Association may certify tax levies to Washington County directly if the City does not carry out this
function. Because the Association is fiscally independent of the City, the financial statements of the
Association have not been included within the City’s reporting entity.
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.
41
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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.
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.
Vehicle Acquisition Fund accounts for the accumulation of resources for the purchase of vehicles to
be used by various City departments.
CSAH 19 / Hudson Boulevard Interchange Fund accounts for the accumulation of resources used
for CSAH 19 and Hudson Boulevard intersection improvements.
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
42
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
days of the end of the current fiscal period. Reimbursement grants are considered available if they are
collected within one year of the end of the current fiscal period. Expenditures generally are recorded
when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well
as expenditures related to compensated absences and claims and judgments, are recorded only when
payment is due.
Property taxes, special assessments, intergovernmental revenues, charges for services and interest
associated with the current fiscal period are all considered to be susceptible to accrual and so have been
recognized as revenues of the current fiscal period. Only the portion of special assessments receivable
due within the current fiscal period is considered to be susceptible to accrual as revenue of the current
period. All other revenue items are considered to be measurable and available only when cash is
received by the City.
As a general rule the effect of interfund activity has been eliminated from the government-wide
financial statements. Exceptions to this general rule are transactions that would be treated as revenues,
expenditures or expenses if they involved external organizations, such as buying goods and services or
payments in lieu of taxes, are similarly treated when they involve other funds of the City. Elimination
of these charges would distort the direct costs and program revenues reported for the various functions
concerned.
Proprietary Funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of
the water, 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.
43
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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.
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.
44
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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.
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.
45
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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 capitalized. Major outlays for capital assets and improvements are capitalized as projects
are constructed.
Property, plant and equipment is depreciated using the straight-line method over the following
estimated useful lives:
Useful Life
in Years
Buildings and Improvements 10-50
Infrastructure 20-40
Other Improvements 10-25
Machinery and Equipment 5-20
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.
46
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
N. DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
In addition to assets, the statement of financial position will sometimes report a separate section for
deferred outflows of resources. This separate financial statement element represents a consumption of
net position that applies to future periods and so will not be recognized as an outflow of resources
(expense) that time. The City has one item that qualifies for reporting in the category. It is the pension
related deferred outflows of resources reported in the government-wide Statement of Net Position and
the proprietary funds Statement of Net Position.
In addition to liabilities, the statement of financial position reports a separate section for deferred
inflows of resources. This separate financial statement element represents an acquisition of net position
that applies to future periods, and therefore, will not be recognized as an inflow of resources (revenue)
until that time. The City has pension related deferred inflows of resources reported in the government-
wide Statement of Net Pension and the proprietary funds Statements of Net Position. The City also has
a type of item, which arises only under a modified accrual basis of accounting, that qualifies for
reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the
governmental fund balance sheet. The governmental funds report unavailable revenues from the
following sources: property taxes and special assessments not collected within 60 days from year-end.
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.
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CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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.
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, 2018 from which the summarized information
was derived.
48
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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.
Note 2 DEPOSITS AND INVESTMENTS
A. DEPOSITS
In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized
by the City Council, all of which are members of the Federal Reserve System.
Custodial Credit Risk – Custodial credit risk is the risk that in the event of a bank failure, the City’s
deposits may not be returned to it. Minnesota Statutes require that insurance, surety bonds or collateral
protect all City deposits. The market value of collateral pledged must equal 110% of deposits not
covered by insurance or bonds. The City has no additional deposit policies addressing custodial credit
risk. At December 31, 2019, the bank balance of the City’s deposits was insured by the FDIC or
covered by pledged collateral held in the City’s name.
Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City
Treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral
includes the following:
a) United States government treasury bills, treasury notes, treasury bonds;
b) Issues of United States government agencies and instrumentalities as quoted by a recognized
industry quotation service available to the government entity;
c) General obligation securities of any state or local government with taxing powers which is rated
“A” or better by a national bond rating service, or revenue obligation securities of any state or local
government with taxing powers which is rated “AA” or better by a national bond rating service;
49
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
d) General obligation securities of a local government with taxing powers may be pledged as
collateral against funds deposited by that same local government entity;
e) Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality
accompanied by written evidence that the bank’s public debt is rated “AA” or better by Moody’s
Investors Service, Inc. or Standard & Poor’s Corporation; and
f) Time deposits that are fully insured by the Federal Deposits Insurance Corporation.
At December 31, 2019, the carrying amount of the City’s deposits with financial institutions was
$1,134,630.
B. INVESTMENTS
Minnesota Statutes authorize the City to invest in the following:
a) Direct obligations or obligations guaranteed by the United States or its agencies, its
instrumentalities, or organizations created by an act of congress, excluding mortgage-backed
securities defined as high risk.
b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and
whose only investments are in securities described in (a) above, general obligation tax-exempt
securities, or repurchase or reverse repurchase agreements.
c) State and local securities as follows:
1) any security which is a general obligation of any state or local government with taxing powers
which is rated “A” or better by a national bond rating service;
2) any security which is a revenue obligation of any state or local government with taxing powers
which is rated “AA” or better by a national bond rating service; and
3) a general obligation of the Minnesota Housing Finance Agency which is a moral obligation of
the State of Minnesota and is rated “A” or better by a national bond rating agency.
d) Bankers acceptance of United States banks.
e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the
highest quality, and maturing in 270 days or less.
f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve
System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government
securities to the Federal Reserve Bank of New York; certain Minnesota securities broker-dealers;
or, a bank qualified as a depositor.
g) General obligation temporary bonds of the same governmental entity issued under section 429.091,
subdivision 7; 469.178, subdivision 5; or 475.61, subdivision 6.
50
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
At December 31, 2019, the City had the following investments and maturities:
Fair Less
Investment Type Rating Value Than 1 1 - 5 6 - 10
Wells Fargo money market Not rated $40,921 $40,921 $ - $ -
Northland Securities money market Not rated 421,467 421,467 - -
4M Fund money market Not rated 5,792,324 5,792,324 - -
First Resource Bank money market Not rated 4,079,595 4,079,595 - -
Brokered certificates of deposit Not rated 9,357,304 2,731,374 6,625,930 -
Municipal bonds Aaa 3,896,168 - 2,057,871 1,838,297
Federal Farm Credit Bank notes Aaa 2,585,067 - 688,144 1,896,923
Federal Home Loan Bank notes Aaa 250,005 - - 250,005
Federal Home Loan Mortgage Corp. notes Aaa 775,054 - 775,054 -
Federal National Mortgage Assn. notes Aaa 576,785 - 576,785 -
Total $27,774,690 $13,065,681 $10,723,784 $3,985,225
Total investments $27,774,690
Deposits 1,134,630
Petty cash 1,748
Total cash and investments $28,911,068
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, 2019:
Investment Type 12/31/2019 Level 1 Level 2 Level 3
Investments at fair value:
Brokered certificates of deposit $9,357,304 $ - $9,357,304 $ -
Municipal bonds 3,896,168 - 3,896,168 -
Federal Farm Credit Bank notes 2,585,067 - 2,585,067 -
Federal Home Loan Bank notes 250,005 - 250,005 -
Federal Home Loan Mortgage Corp. notes 775,054 - 775,054 -
Federal National Mortgage Assn. notes 576,785 - 576,785 -
$17,440,383 $0 $17,440,383 $0
Investments not categorized:
Wells Fargo money market 40,921 `
Northland Securities money market 421,467
First Resource Bank money market 4,079,595
4M Fund money market 5,792,324
Total investments $27,774,690
Fair Value Measurement Using
51
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
The 4M Fund is an external investment pool investment which is regulated by Minnesota Statutes and
the Board of Directors of the League of Minnesota Cities. It is an unrated pool and the fair value of the
position in the pool is the same as the value of pool shares. The pool is managed to maintain a portfolio
weighted average maturity of no greater than 60 days and seeks to maintain a constant net asset value
(NAV) of $1 per share. The pool measures its investments at amortized cost in accordance with GASB
Statement No. 79. The 4M Plus Fund requires funds to be deposited for a minimum of 14 calendar
days. Withdrawals prior to the 14-day restriction period are subject to penalty equal to 7 days interest
on the amount withdrawn.
C. INVESTMENT RISKS
Custodial Credit Risk – Investments – For investments in securities, custodial credit risk is the risk
that in the event of failure of the counterparty to a transaction, the City will not be able to recover
the value of its investment securities that are in the possession of an outside party. Investments
in investment pools and money markets are not evidenced by securities that exist in physical or
book entry form, and therefore are not subject to custodial credit risk disclosures. The City’s
investment policy requires its brokers be licensed with the appropriate federal and state agencies. A
minimum capital requirement of $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, 2019, 9% of the City’s investments were invested in
the Federal Farm Credit Bank notes.
52
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
Note 3 RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31, 2019 are as
follows:
Property Special
Taxes Assessments
Receivable Receivable Total
Major Funds:
General Fund $23,335 $165 $23,500
Debt Service Fund - 2,400,307 2,400,307
Water Fund - 228,966 228,966
Sewer Fund - 2,371,008 2,371,008
Storm Sewer Fund - 718 718
Nonmajor Funds - 17,833 17,833
Total $23,335 $5,018,997 $5,042,332
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 $41,612 $295 $41,907
Debt Service Fund - 2,540,453 2,540,453
Nonmajor Funds - 17,833 17,833
Total $41,612 $2,558,581 $2,600,193
53
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
Note 5 CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2019 was as follows:
Beginning
Balance, Ending
As Restated Increases Decreases Balance
Governmental activities:
Capital assets, not being depreciated:
Land $3,453,979 $ - $ - $3,453,979
Construction in progress 5,497,408 3,798,726 (8,678,095) 618,039
Total capital assets, not being depreciated 8,951,387 3,798,726 (8,678,095) 4,072,018
Capital assets, being depreciated:
Buildings 4,194,075 136,595 - 4,330,670
Improvements other than buildings 1,482,436 1,022,238 - 2,504,674
Machinery and equipment 4,223,115 1,068,175 (239,491) 5,051,799
Infrastructure 22,491,956 14,900,284 - 37,392,240
Total capital assets, being depreciated 32,391,582 17,127,292 (239,491) 49,279,383
Less accumulated depreciation for:
Buildings 1,069,666 84,746 - 1,154,412
Improvements other than buildings 1,087,486 53,061 - 1,140,547
Machinery and equipment 2,690,784 225,338 (239,491) 2,676,631
Infrastructure 4,740,971 1,118,247 - 5,859,218
Total accumulated depreciation 9,588,907 1,481,392 (239,491) 10,830,808
Total capital assets being depreciated - net 22,802,675 15,645,900 0 38,448,575
Governmental activities capital assets - net $31,754,062 $19,444,626 ($8,678,095) $42,520,593
Beginning
Balance, Ending
As Restated Increases Decreases Balance
Business-type activities:
Capital assets, not being depreciated:
Land $248,869 $3,420,000 $ - $3,668,869
Construction in progress 3,003,858 538,601 (3,306,158) 236,301
Total capital assets, not being depreciated 3,252,727 3,958,601 (3,306,158) 3,905,170
Capital assets, being depreciated:
Machinery and shop equipment 330,045 25,737 (37,669) 318,113
Infrastructure 44,160,073 15,486,460 - 59,646,533
Total capital assets, being depreciated 44,490,118 15,512,197 (37,669) 59,964,646
Less accumulated depreciation for:
Machinery and equipment 245,265 14,258 (31,391) 228,132
Infrastructure 7,244,655 1,808,791 - 9,053,446
Total accumulated depreciation 7,489,920 1,823,049 (31,391) 9,281,578
Total capital assets being depreciated - net 37,000,198 13,689,148 (6,278) 50,683,068
Business-type activities capital assets - net $40,252,925 $14,227,749 ($3,312,436) $54,588,238
54
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
Depreciation expense was charged to functions/programs of the City as follows:
Governmental activities:
General government $17,656
Public safety 98,635
Public works 1,277,624
Culture & recreation 87,477
Total depreciation expense - governmental activities $1,481,392
Business-type activities:
Water $1,015,919
Sewer 526,989
Storm sewer 280,141
Total depreciation expense - business-type activities $1,823,049
55
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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, 2019 is as follows:
Issue Interest Maturity Payable
Date Rates Date 12/31/19
Governmental Activities:
General obligation improvement bonds:
2009B Improvement bonds 10/01/09 3.00% - 3.05% 01/15/20 $60,000
2010A Improvement bonds 11/15/10 2.35% - 2.80% 02/01/21 150,000
2010B CIP refunding bonds 11/15/10 2.05% - 3.20% 02/01/25 1,065,000
2011A Improvement bonds 10/01/11 1.25% - 2.30% 02/01/22 270,000
2012B Improvement bonds 08/16/12 1.25% - 1.90% 02/01/23 370,000
2013A Improvement bonds 10/01/13 2.00% - 3.75% 07/15/28 1,030,000
2014A Improvement bonds 07/15/14 2.00% - 3.5% 01/15/30 2,040,000
2015A Improvement bonds 08/13/15 2.00% - 3.00% 01/15/26 1,155,000
2016A Improvement bonds 06/01/16 2.00% 01/15/27 2,195,000
2017A Improvement bonds 06/08/17 2.50% - 3.00% 01/15/28 4,155,000
2019A Improvement bonds 10/24/19 2.00% - 3.00% 02/01/30 2,860,000
Total general obligation improvement bonds 15,350,000
General obligation equipment certificates:
2018A Equipment certificates 10/16/18 2.70% - 2.70% 02/01/28 940,000
Taxable lease revenue bonds:
2018A Taxable lease revenue bonds 06/28/18 4.50% - 4.50% 01/15/34 926,000
Unamortized bond premiums 412,425
Compensated absences payable 62,748
Total governmental activities $17,691,173
Business-Type Activities:
General obligation revenue bonds:
2012A Refunding bonds 08/13/12 2.00% - 2.50% 12/01/30 $3,225,000
2013A Improvement bonds 10/01/13 2.00% - 4.00% 07/15/33 2,800,000
2014A Improvement bonds 07/15/14 2.00% - 3.50% 01/15/30 2,590,000
2015A Improvement bonds 08/13/15 2.00% - 3.00% 01/15/31 995,000
2016A Improvement bonds 06/01/16 2.00% 01/15/32 6,055,000
2017A Improvement bonds 06/01/16 2.50% - 3.00% 01/15/33 4,230,000
2019A Improvement bonds 10/24/19 2.00% - 3.00% 02/01/35 1,195,000
Total general obligation revenue bonds 21,090,000
Unamortized bond premiums 430,145
Compensated absences payable 21,763
Total business-type activities $21,541,908
56
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
CHANGES IN LONG-TERM DEBT
The following is a schedule of changes in City indebtedness for the year ended December 31, 2019:
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Governmental activities:
G.O. Improvement bonds $14,105,000 $2,860,000 $1,615,000 $15,350,000 $1,655,000
G.O. Equipment certificates 940,000 - - 940,000 90,000
Taxable lease revenue bonds 926,000 - - 926,000 45,000
Unamortized bond premiums 307,054 168,168 62,797 412,425 -
Compensated absences payable 70,660 122,309 130,221 62,748 47,061
Total governmental activities $16,348,714 $3,150,477 $1,808,018 $17,691,173 $1,837,061
Business-type activities:
G.O. Revenue bonds $21,255,000 $1,195,000 $1,360,000 $21,090,000 $1,380,000
Unamortized bond premiums 425,126 42,879 37,860 430,145 -
Compensated absences payable 19,846 40,193 38,276 21,763 16,322
Total business-type activities $21,699,972 $1,278,072 $1,436,136 $21,541,908 $1,396,322
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 Principal Interest
2020 $1,655,000 $351,468 $90,000 $24,165 $45,000 $40,658 $1,380,000 $504,661
2021 1,855,000 329,700 95,000 21,668 47,000 38,588 1,455,000 481,694
2022 1,835,000 285,961 100,000 19,036 49,000 36,428 1,560,000 449,804
2023 1,790,000 241,835 100,000 16,336 51,000 34,178 1,565,000 415,069
2024 1,715,000 196,714 105,000 13,568 53,000 31,838 1,585,000 377,784
2025-2029 6,090,000 391,788 450,000 24,567 303,000 120,354 8,510,000 1,280,803
2030-2034 410,000 5,338 - - 378,000 44,006 4,940,000 266,839
2035-2039 - - - - - - 95,000 1,067
Total $15,350,000 $1,802,804 $940,000 $119,340 $926,000 $346,050 $21,090,000 $3,777,721
Improvement Bonds Equipment Certificates
General ObligationGeneral Obligation General Obligation
Revenue Bonds
Taxable Lease
Revenue Bonds
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.
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.
57
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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
2009B G.O. Improvement Infrastructure improvements 2010 - 2019 $60,915 $67,821 $49,900
2010A G.O. Improvement Infrastructure improvements 2011 - 2020 $154,200 $80,081 $68,962
2010B G.O. CIP Refunding Infrastructure improvements Ad valorem taxes 2011 - 2024 $1,165,224 $192,980 $205,989
2011A G.O. Improvement Infrastructure improvements 2012 - 2021 $279,180 $91,790 $83,850
2012A G.O. Refunding Water system improvements Water usage charges 2012 - 2030 $3,690,246 $284,044 $851,114
2012B G.O. Improvement Infrastructure improvements 2013 - 2022 $383,891 $92,201 $88,808
2013A G.O. Improvement Infrastructure improvements 2014 - 2033 $4,758,894 $447,570 $1,155,899
Ad valorem taxes,
2014A G.O. Improvement Infrastructure improvements Special assessments, 2015 - 2029 $5,383,336 $550,278 $1,567,569
Water & sewer charges
Ad valorem taxes,
2015A G.O. Improvement Infrastructure improvements Special assessments, 2016 - 2030 $2,416,691 $293,514 $1,255,257
Water & sewer charges
2016A G.O. Improvement Infrastructure improvements 2017 - 2031 $9,249,700 $826,550 $1,812,591
2017A G.O. Improvement Infrastructure improvements 2018 - 2032 $9,722,090 $883,890 $1,947,950
2018A G.O. Equipment Certificates Purchase of fire truck, dump truck Ad valorem taxes 2019 - 2027 $1,059,340 $20,093 $ -
2018A Taxable Lease Revenue Purchase of city hall Lease revenues 2018 - 2033 $1,272,050 $43,638 $99,690
2019A G.O. Improvement Infrastructure improvements, capital equipment 2020 - 2034 $4,756,158 $ - $1,566,637
Ad valorem taxes,
Special assmts, Water,
Sewer, Storm charges
Ad valorem taxes,
Special assessments
Ad valorem taxes,
Special assessments
Ad valorem taxes,
Special assessments
Ad valorem taxes,
Special assessments
Special assessments,
Water & Sewer charges
Ad valorem taxes,
Special assmts, Water,
Sewer, Storm charges
Current Year
Ad valorem taxes,
Special assmts, Water,
Sewer, Storm charges
Revenue Pledged
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.
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CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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 a local relief association that
elected to merge with and transfer assets and administration to PERA.
B. BENEFITS PROVIDED
PERA provides retirement, disability, and death benefits. Benefit provisions are established by state
statute and can only be modified by the state legislature. Vested, terminated employees who are entitled
to benefits but are not receiving them yet are bound by the provisions in effect at the time they last
terminated their public service.
1. GERF Benefits
Benefits are based on a member’s highest average salary for any five successive years of allowable
service, age, and years of credit at termination of service. Two methods are used to compute
benefits for PERA's Coordinated Plan members. Members hired prior to July 1, 1989, receive the
higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after June 30,
1989. Under Method 1, the accrual rate for Coordinated Plan 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.
Annuities, disability benefits, and survivor benefits are increased effective every January 1.
Beginning January 1, 2019, the postretirement increase will be equal to 50 percent 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 after July 1, 1989).
Members retiring under Rule of 90 are exempt from the delay to normal retirement.
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CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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. A full, unreduced pension is earned when members are age 55 and
vested, or for members who were first hired prior to July 1, 1989, when age plus years of service
equal at least 90.
Annuities, disability benefits, and survivor benefits are increased effective every January 1.
Beginning January 1, 2019, the postretirement increase will be fixed at 1 percent. 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 2019; the City was required to contribute 7.5% for Coordinated Plan members. The City
contributions to the GERF for the year ended December 31, 2019 were $108,779. The City
contributions were equal to the required contributions as set by state statute.
2. PEPFF Contributions
Police and Fire member’s contribution rates increased from 10.8% of pay to 11.3% and employer
rates increased from 16.2% to 16.95% on January 1, 2019. The City contributions to the PEPFF
for the year ended December 31, 2019 were $39,225. The City contributions were equal to the
required contributions as set by state statute.
60
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
D. PENSION COSTS
1. GERF Pension Costs
At December 31, 2019, the City reported a liability of $1,067,054 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 to the fund in 2019. 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 $33,165. The net pension liability was measured as of June 30,
2019, 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, 2018 through June 30, 2019, relative to the total employer
contributions received from all of PERA’s participating employers. At June 30, 2019, the City’s
proportionate share was 0.0193%, which was an increase of 0.0002% from its proportionate share
measured as of June 30, 2018.
City's proportionate share of the net pension liability $1,067,054
State of Minnesota’s proportionate share of the net pension
liability associated with the City 33,165
Total $1,100,219
For the year ended December 31, 2019, the City recognized pension expense of $184,344 for its
proportionate share of the GERF’s pension expense. In addition, the City recognized an additional
$2,484 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, 2019, 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 $29,642 $ -
Changes in actuarial assumptions - 84,085
Net collective difference between projected
and actual investment earnings - 107,737
Changes in proportion 76,318 -
Contributions paid to PERA
subsequent to the measurement date 56,455 -
Total $162,415 $191,822
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CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
$56,455 reported as deferred outflows of resources related to pensions resulting from City
contributions subsequent to the measurement date will be recognized as a reduction of the net
pension liability during 2020. Other amounts reported as deferred outflows and inflows of
resources related to pensions will be recognized in pension expense as follows:
Year Ended Pension
December 31, Expense
2020 $8,694
2021 (78,016)
2022 (18,258)
2023 1,718
Thereafter -
2. PEPFF Pension Costs
At December 31, 2019, the City reported a liability of $205,468 for its proportionate share of the
PEPFF’s net pension liability. The net pension liability was measured as of June 30, 2019 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, 2018 through June 30, 2019, relative to the total employer contributions
received from all of PERA’s participating employers. At June 30, 2019, the City’s proportionate
share was 0.0193%, which was an increase of 0.0030% from its proportionate share measured as of
June 30, 2018. The City also recognized $2,605 for the year ended December 31, 2019 as revenue
(and an offsetting reduction of net pension liability) for its proportionate share of the State of
Minnesota’s on-behalf contributions to the PEPFF. Legislation passed in 2013 required the State
of Minnesota to begin contributing $9 million to the PEPFF each year, starting in fiscal year 2014
until the plan is 90 percent funded or until the State Patrol Plan (administered by the Minnesota
State Retirement System) is 90 percent funded, whoever occurs later. In addition, the state will pay
$4.5 million on October 1, 2018 and October 1, 2019 in direct state aid. Thereafter, by October 1
of each year, the state will pay $9 million until full funding is reached or July 1, 2048, whichever is
earlier.
For the year ended December 31, 2019, the City recognized pension expense of $62,873 for its
proportionate share of the PEPFF’s pension expense.
62
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
At December 31, 2019, 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 $8,862 $39,044
Changes in actuarial assumptions 202,091 239,303
Net collective difference between projected
and actual investment earnings - 39,021
Changes in proportion 241,114 134,780
Contributions paid to PERA
subsequent to the measurement date 20,548 -
Total $472,615 $452,148
The $20,548 reported as deferred outflows of resources related to pensions resulting from City
contributions subsequent to the measurement date will be recognized as a reduction of the net
pension liability during 2020. Other amounts reported as deferred outflows and inflows of
resources related to pensions will be recognized in pension expense as follows:
Year Ended Pension
December 31, Expense
2020 $11,880
2021 (6,015)
2022 (70,625)
2023 58,519
2024 6,160
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, 2019 actuarial valuation was determined using an individual
entry-age normal actuarial cost method and the following actuarial assumptions:
Inflation 2.50% per year
Active Member Payroll Growth 3.25% per year
Investment Rate of Return 7.50%
Salary increases were based on a service-related table. Mortality rates for active members, retirees,
survivors, and disabilitants for all plans were based on RP 2014 tables for males or females, as
appropriate, with slight adjustments to fit PERA’s experience. Cost of living benefit increases after
retirement for retirees are assumed to be 1.25% per year for the General Employees Plan 1.0% per year
for the Police and Fire Plan.
63
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
Actuarial assumptions used in the June 30, 2019 valuation were based on the results of actuarial
experience studies. The most recent four-year experience study in the General Employees Plan was
completed in 2019. The most recent four-year experience study for Police and Fire Plan was completed
in 2016.
The following changes in actuarial assumptions and plan provisions occurred in 2019:
General Employees Fund
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in 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.
Police and Fire Fund
Changes in Actuarial Assumptions
The mortality projection scale was changed from MP-2017 to MP-2018
Changes in the Plan Provisions
There have been no changes since the prior valuation.
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 35.5% 5.10%
Private Markets 25.0% 5.90%
Fixed Income 20.0% 0.75%
International Equity 17.5% 5.90%
Cash Equivalents 2.0% 0.00%
Totals 100%
F. DISCOUNT RATE
The discount rate used to measure the total pension liability in 2019 was 7.5%. The projection of cash
flows used to determine the discount rate assumed that contributions from plan members and employees
will be made at the rate set in Minnesota statutes. Based on that assumption, the fiduciary net position
of the GERF and the PEPFF was projected to be available to make all projected future benefit payments
64
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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 for all plans it
participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what
the City’s proportionate share of the net pension liability would be if it were calculated using a discount
rate 1 percentage point lower or 1 percentage point higher than the current discount rate:
1% Decrease in 1% Increase in
Discount Rate (6.5%) Discount Rate (7.5%) Discount Rate (8.5%)
City's proportionate share of the
GERF net pension liability $1,754,179 $1,067,054 $499,695
City's proportionate share of the
PEPFF net pension liability $449,115 $205,468 $4
H. PENSION PLAN FIDUCIARY NET POSITION
Detailed information about each pension plan’s fiduciary net position is available in a separately-issued
PERA financial report that includes financial statements and required supplementary information. That
report may be obtained at www.mnpera.org.
I. PENSION EXPENSE
Pension expense recognized by the City for the year ended December 31, 2019 is as follows:
GERF $186,828
PEPFF 62,873
Fire Pension Plan (Note 8) 39,725
Total $289,426
65
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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) 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 December 31, 2019, 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)5
Nonvested (less than 10 years)12
Total 23
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.
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
66
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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 $69,975 were made by the State of
Minnesota in accordance with State Statute requirements for the year ended December 31, 2019.
D. CHANGES IN THE NET PENSION ASSET
At December 31, 2019, the City reported a net pension asset of $373,073. The net pension asset was
measured as of December 31, 2019. The total pension liability used to calculate the net pension asset in
accordance with GASB 68 was determined by PERA applying an actuarial formula to specific census
data certified by the fire department.
The following table presents the changes in net pension asset during the year:
Plan Net
Total Fiduciary Pension
Pension Net Liability
Liability Position (Asset)
(a)(b)(a-b)
Beginning balance December 31, 2018 $898,899 $1,169,306 ($270,407)
Changes for the year:
Service cost 37,293 - 37,293
Interest cost 42,177 - 42,177
Assumption changes - - -
Plan Changes - - -
Projected investment earnings - - -
Contributions - State of MN - 69,975 (69,975)
Asset (gain) / loss - 127,902 (127,902)
Benefit payments (253,525) (253,525) -
Administrative expenses - (15,741)15,741
Net changes (174,055) (71,389) (102,666)
Balance end of year December 31, 2019 $724,844 $1,097,917 ($373,073)
For the year ended December 31, 2019, the City recognized pension expense of $39,725.
67
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
At December 31, 2019, 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 $ - $24,020
Assumption changes 13,804 -
Liability gains - 90,303
Total $13,804 $114,323
Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized
in pension expense as follows:
Year Ended Pension
December 31, Expense
2020 ($22,223)
2021 (20,015)
2022 (734)
2023 (26,752)
2024 (11,426)
Thereafter (19,369)
68
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
E. ACTUARIAL ASSUMPTIONS
The total pension asset was determined by an actuarial valuation as of December 31, 2019 using the
following actuarial assumptions, applied to all periods in the measurement:
Valuation date 1/1/2019
Measurement date (assets and funded status)12/31/2019
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 3.50%
Projected salary increases 2.50%
Includes inflation at N/A
Cost-of-living adjustments 4.00%
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 expected investment return and discount rate for 2019 is 5.25%.
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.
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.
69
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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 20.00%2.25%
Fixed income 25.00%3.40%
Equities 55.00%7.40%
Other 0.00%6.00%
Total (weighted avg, rounded to 1/4%)100.00%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 ($345,945)($373,073)($413,564)
H. PENSION PLAN FIDUCIARY NET POSITION
Detailed information about the Association plan’s fiduciary net position at December 31, 2019 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.
70
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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 2019, 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, 2017 actuarial valuation, participants of the plan consisted of:
Active employees 17
Inactive employees or beneficiaries
currently receiving benefits 0
Total 17
71
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
D. TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY
The City’s total OPEB liability of $73,788 was measured as of December 31, 2018 and was determined
by an actuarial valuation as of December 31, 2017. Changes in the total OPEB liability during 2019
were:
Balance - beginning of year $63,930
Changes for the year:
Service cost 9,525
Interest 2,431
Changes of benefit terms -
Differences between expected and actual experience -
Changes in assumptions (2,098)
Benefit payments -
Net changes 9,858
Balance - end of year $73,788
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, 2017 actuarial valuation was determined
using the following actuarial assumptions and other inputs, applied to all periods included in the
measurement, unless otherwise specified:
Inflation 2.75%
Salary increases 2.75%
Discount rate 3.71%
Investment rate of return 3.71%
Healthcare cost trend rates 6.90% for 2018; gradually decreasing
over several decades to an ultimate rate of
4.40% for 2074 and later years
The discount rate is 3.71%, an increase of .40% from the prior year.
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, 2018.
Mortality rates were based on the RP-2014 mortality tables with projected mortality improvements
based on scale MP-2018, and other adjustments.
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
72
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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.
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 (2.71%) or 1% higher
(4.71%) than the current discount rate:
1% Decrease Discount Rate 1% Increase
(2.71%) (3.71%) (4.71%)
Total OPEB liability $79,171 $73,788 $68,856
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 (5.9%
decreasing to 3.4%) or 1% higher (7.9% decreasing to 5.4%) than the current healthcare cost trend
rates:
Healthcare Cost
1% Decrease Trend Rates 1% Increase
(5.9% decreasing to 3.4%) (6.9% decreasing to 4.4%) (7.9% decreasing to 5.4%)
Total OPEB liability $66,424 $73,788 $82,717
H. OPEB EXPENSE AND DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
RELATED TO OPEB
For the year ended December 31, 2019, the City recognized $9,858 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 2019. Therefore, there are no deferred outflows or inflows of resources
related to OPEB as of December 31, 2019.
73
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
Note 10 STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
A. DEFICIT FUND BALANCES
The City has deficit fund balances at December 31, 2019 as follows:
Fund Balance
Deficit
Major Governmental Funds:
CSAH 19 / Hudson Blvd Interchange ($252,102)
Nonmajor Governmental Funds:
Village Project (378,736)
CSAH 15 / CSAH 14 Realignment (1,817)
Manning Corridor and Safety Management (635)
2019 Street and Utility Project (5,731)
CSAH 13 Phase 2 (4,003)
Old Village Phases 5 & 6 (62,778)
CSAH 15 Manning Avenue Phase 3 (720)
Heritage Farms Street & Utility Improvements (51,339)
Manning and Highway 36 Interchange (107)
The City intends to fund these deficits during 2020 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:
Finance and administration $712,966 $715,041 $2,075
Elections 1,660 2,639 979
Public safety:
Fire protection 701,433 732,990 31,557
Building inspection 404,908 468,607 63,699
Animal control 9,000 19,902 10,902
Prosecution 45,792 46,434 642
Emergency communications 1,780 1,933 153
Public works 1,408,135 1,869,082 460,947
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.
74
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
A summary of due from and due to balances at December 31, 2019 is as follows:
Due from other Due to other
Funds Funds
Major Funds:
General Fund $1,185,555 $ -
Debt Service Fund - 26,239
CSAH 19/Hudson Blvd Interchange - 638,194
Nonmajor Funds:
Village Project - 378,736
CSAH 15 / CSAH 14 Realignment - 2,073
Manning Corridor and Safety Mgmt - 635
2019 Street and Utility Project - 5,731
CSAH 13 Phase 2 - 4,003
Old Village Phases 5 & 6 - 62,117
Stonegate Utility & Street Improvements - 48,134
CSAH 15 Manning Avenue Phase 3 - 720
Heritage Farms Street & Utility Impr. - 18,973
$1,185,555 $1,185,555
Note 12 INTERFUND TRANSFERS
Individual fund transfers for fiscal year 2019 are as follows:
Transfer In Transfer Out
Major Funds:
General Fund $ - $742,935
Debt Service Fund 111,497 -
Vehicle Acquisition 645,076 -
Storm Sewer - 394,600
Nonmajor funds:
Economic Development Authority 30,000 43,638
Old Village Phase 4 394,600 -
Total $1,181,173 $1,181,173
During 2019, transfers were made to provide financing for debt service and capital expenditures. A transfer was
also made to provide resources to the Economic Development Authority. These transfers are routine and
consistent with past practices.
75
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
Note 13 FUND BALANCE
At December 31, 2019, a summary of the governmental fund balance classifications is as follows:
CSAH 19 / Other
Vehicle Hudson Blvd Governmental
General Debt Service Acquistion Interchange Funds Total
Nonspendable:
Prepaid items $28,162 $ - $ - $ - $ - $28,162
Restricted:
Debt service - 4,706,884 - - - 4,706,884
Vehicle acquisition - - 447,848 - - 447,848
Park improvements - - - - 734,100 734,100
Street improvements - - - - 84,619 84,619
Total restricted 0 4,706,884 447,848 0 818,719 5,973,451
Committed for:
Lions Park - - - - 7,314 7,314
Economic development - - - - 16,756 16,756
Total committed 0 0 0 0 24,070 24,070
Assigned for:
Lions Park - - - - 240 240
Economic development - - - - 57,402 57,402
Infrastructure improvements - - - - 743,653 743,653
City facilities - - - - 95,157 95,157
Manning & Hudson future stop light - - - - 7,145 7,145
Railroad crossing improvements - - - - 28,989 28,989
Vehicle acquistion - - 813,616 - - 813,616
Total assigned 0 0 813,616 0 932,586 1,746,202
Unassigned 4,286,022 - - (252,102) (505,866) 3,528,054
Total fund balance $4,314,184 $4,706,884 $1,261,464 ($252,102) $1,269,509 $11,299,939
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.
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
76
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
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, 2019.
C. COMMITTED CONTRACTS
At December 31, 2019, the City had commitments of $127,618 for uncompleted construction contracts.
In addition, the City has entered into construction contracts totaling approximately $3,635,000 during
2020.
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.
Note 16 PRESENTATION OF PERFORMANCE DEPOSITS
For the year ended December 31, 2019, the City implemented GASB Statement No. 84, Fiduciary Activities.
Based on the guidance provided by GASB 84, the City’s performance deposits no longer meet the definition of a
fiduciary activity. Therefore, the amounts and activity previously reported in fiduciary funds are now reported
in the General Fund.
GASB 84 also requires that changes resulting from the statement be applied retroactively. As such, $2,916,175
of Cash and Investments, $31,149 of Accounts Payable and $2,885,026 of Deposits Payable previously
presented in fiduciary funds of the City’s 2018 financial statements are now presented in the 2018 comparative
column of the statement of net position and the balance sheet – governmental funds of the City’s 2019 financial
statements. This reclassification did not have an effect on beginning net position or fund balance.
77
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
Note 17 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. 91 Conduit Debt Obligations. The provisions of this Statement are effective for reporting
periods beginning after December 15, 2021.
Statement No. 92 Omnibus 2020. The provisions of this Statement are effective for reporting periods
beginning after June 15, 2021.
Statement No. 93 Replacement of Interbank Offered Rates. The provisions of this Statement contain
multiple effective dates, the first being for reporting periods beginning after June 15, 2020.
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.
The effect these standards may have on future financial statements is not determinable at this time, but it is
expected that Statement No. 87 may have a material impact.
Note 18 PRIOR PERIOD ADJUSTMENT
During 2019, the City identified $10,631,940 of previously unrecorded infrastructure assets which were
constructed by private developers and contributed to the City during 2017 and 2018. Comparative 2018 totals of
the statement of activities and the statement of revenues, expenses and changes in fund net position – proprietary
funds have been restated to record the 2018 contributions. A prior period adjustment to restate beginning net
position as of January 1, 2018 is presented to adjust for the 2017 contributions.
A summary of the prior period adjustment is as follows:
Governmental Storm Business-Type
Activities Water Sewer Sewer Activities Total
Net position, as
previously reported $21,991,134 $14,133,240 $10,376,847 $1,696,959 $26,207,046 $48,198,180
2018 contributions 2,136,991 885,924 804,542 1,633,713 3,324,179 5,461,170
2017 contributions 2,476,679 969,445 802,118 922,528 2,694,091 5,170,770
Total contributions 4,613,670 1,855,369 1,606,660 2,556,241 6,018,270 10,631,940
Net position, as
restated $26,604,804 $15,988,609 $11,983,507 $4,253,200 $32,225,316 $58,830,120
78
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2019
Note 19 EXTRAORDINARY ITEM
During 2019, the City and 3M Company entered into a settlement agreement relating to the presence of
perfluorochemicals (PFCs) in the City’s municipal water supply. As part of the settlement, the City received
$2,700,000 of cash and parcels of land located within the City with an estimated acquisition value of $3,420,000.
The City incurred $1,567,821 of professional service fees relating to the settlement. Because the transaction is
considered to be unusual in nature and infrequent in occurrence, an extraordinary item has been reported. The
net amount of the extraordinary item, which is recorded in the Water Fund, is $4,552,179.
Note 20 SUBSEQUENT EVENTS AND UNCERTAINTIES
The COVID-19 pandemic continues to cause rapidly changing disruptions worldwide. Management has
evaluated these conditions and believes that it is not possible to reasonably estimate the financial impact, if any,
of COVID-19 on the City’s financial statements at December 31, 2019.
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80
REQUIRED SUPPLEMENTARY INFORMATION
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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, 2019
With Comparative Actual Amounts For The Year Ended December 31, 2018
Budgeted Amounts
2019 Actual
Amounts
Variance with
Final Budget -
Positive
(Negative)
2018 Actual
Amounts
Original Final
Revenues:
General property taxes $3,193,626 $3,193,626 $2,966,393 ($227,233) $2,396,720
Licenses and permits:
Business 9,400 9,400 14,090 4,690 17,650
Non-business 1,047,500 1,047,500 1,040,948 (6,552) 1,299,998
Total licenses and permits 1,056,900 1,056,900 1,055,038 (1,862) 1,317,648
Intergovernmental:
MSA - maintenance 151,727 151,727 159,509 7,782 144,502
Fire state aid 60,000 60,000 68,975 8,975 64,533
Other state aid 7,569 7,569 17,673 10,104 19,660
County and local 15,766 15,766 23,750 7,984 4,190
Total intergovernmental 235,062 235,062 269,907 34,845 232,885
Charges for services 767,521 767,521 884,885 117,364 821,235
Fines and forfeits 49,000 49,000 36,696 (12,304) 49,203
Special assessments - - - - 21,116
Investment income 40,000 40,000 118,298 78,298 78,634
Miscellaneous 124,900 124,900 192,494 67,594 117,455
Total revenues 5,467,009 5,467,009 5,523,711 56,702 5,034,896
See accompanying notes to the required supplementary information.
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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, 2019
With Comparative Actual Amounts For The Year Ended December 31, 2018
Budgeted Amounts
2019 Actual
Amounts
Variance with
Final Budget -
Positive
(Negative)
2018 Actual
Amounts
Original Final
Expenditures:
General government:
Mayor and city council:
Current:
Personal services $27,893 $27,893 $27,781 $112 $27,893
Supplies 2,425 2,425 1,078 1,347 1,000
Other services and charges 21,901 21,901 22,613 (712) 18,268
Total mayor and city council 52,219 52,219 51,472 747 47,161
Finance and Administration:
Current:
Personal services 434,496 434,496 458,074 (23,578) 398,435
Supplies 98,225 98,225 85,167 13,058 142,482
Other services and charges 180,245 180,245 171,800 8,445 189,735
Total finance and administration 712,966 712,966 715,041 (2,075) 730,652
Elections:
Current:
Personal services - - 795 (795) 6,397
Other services and charges 1,660 1,660 1,844 (184) 2,354
Total elections 1,660 1,660 2,639 (979) 8,751
Communications:
Current:
Personal services 43,191 43,191 36,823 6,368 39,126
Other services and charges 11,785 11,785 11,904 (119) 51,861
Total communications 54,976 54,976 48,727 6,249 90,987
City Facilities:
Current:
Supplies 800 800 726 74 801
Other services and charges 66,639 66,639 30,263 36,376 43,695
Total city facilities 67,439 67,439 30,989 36,450 44,496
Engineering:
Current:
Other services and charges 39,000 39,000 38,482 518 31,770
Capital outlay 35,000 35,000 - 35,000 -
Total engineering 74,000 74,000 38,482 35,518 31,770
Planning and Zoning:
Current:
Personal services 211,365 211,365 202,382 8,983 184,984
Supplies 2,500 2,500 567 1,933 752
Other services and charges 37,416 37,416 46,609 (9,193) 68,592
Total planning and zoning 251,281 251,281 249,558 1,723 254,328
Total general government 1,214,541 1,214,541 1,136,908 77,633 1,208,145
See accompanying notes to the required supplementary information.
83
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, 2019
With Comparative Actual Amounts For The Year Ended December 31, 2018
Budgeted Amounts
2019 Actual
Amounts
Variance with
Final Budget -
Positive
(Negative)
2018 Actual
Amounts
Original Final
Expenditures (continued):
Public safety:
Police:
Current:
Contracted services $701,768 $701,768 $702,403 ($635) $665,309
Other services and charges 1,000 1,000 - 1,000 1,800
Total police 702,768 702,768 702,403 365 667,109
Fire protection:
Current:
Personal services 432,285 432,285 444,303 (12,018) 368,849
Fire state aid 60,000 60,000 68,975 (8,975) 64,533
Supplies 44,925 44,925 36,959 7,966 42,741
Other services and charges 164,223 164,223 182,753 (18,530) 150,040
Total fire protection 701,433 701,433 732,990 (31,557) 626,163
Building inspection:
Current:
Personal services 343,962 343,962 274,337 69,625 276,737
Supplies 7,500 7,500 4,014 3,486 3,706
Other services and charges 29,446 29,446 166,256 (136,810) 16,450
Capital outlay 24,000 24,000 24,000 - -
Total building inspection 404,908 404,908 468,607 (63,699) 296,893
Animal control:
Current:
Other services and charges 9,000 9,000 19,902 (10,902) 10,930
Prosecution:
Current:
Other services and charges 45,792 45,792 46,434 (642) 42,164
Emergency communications:
Current:
Other services and charges 1,780 1,780 1,933 (153)900
Total public safety 1,865,681 1,865,681 1,972,269 (106,588) 1,644,159
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 4 of 4
For The Year Ended December 31, 2019
With Comparative Actual Amounts For The Year Ended December 31, 2018
653543
Budgeted Amounts
2019 Actual
Amounts
Variance with
Final Budget -
Positive
(Negative)
2018 Actual
Amounts
Original Final
Expenditures (continued):
Public works:
Current:
Personal services $452,242 $452,242 $572,353 ($120,111) $518,636
Supplies 757,800 757,800 1,053,870 (296,070) 376,186
Other services and charges 198,093 198,093 242,859 (44,766) 245,856
Capital outlay - - - - 57,443
Total public works 1,408,135 1,408,135 1,869,082 (460,947) 1,198,121
Culture and Recreation:
Parks:
Current:
Personal services 223,775 223,775 117,755 106,020 113,248
Supplies 18,300 18,300 17,582 718 8,702
Other services and charges 143,861 143,861 128,642 15,219 116,499
Capital outlay - - - - 21,003
Total culture and recreation 385,936 385,936 263,979 121,957 259,452
Contingency reserve 3,781 3,781 - 3,781 -
Total expenditures 4,878,074 4,878,074 5,242,238 (364,164) 4,309,877
Revenue over (under) expenditures 588,935 588,935 281,473 307,462 725,019
Other financing (uses):
Transfers out (712,935) (712,935) (742,935) (30,000) (143,046)
Net change in fund balance ($124,000) ($124,000) (461,462) $277,462 581,973
Fund balance, January 1, as previously reported 4,775,646 4,109,326
Prior period adjustment - 84,347
Fund balance, January 1, as restated 4,775,646 4,193,673
Fund balance, December 31 $4,314,184 $4,775,646
See accompanying notes to the required supplementary information.
85
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
2019 2018
Total OPEB liability:
Service cost $9,525 $8,200
Interest 2,431 2,264
Changes of benefit terms - -
Differences between expected and actual experience - -
Changes in assumptions (2,098)2,246
Benefit payments - -
Net change in total OPEB liability 9,858 12,710
Total OPEB liability - beginning 63,930 51,220
Total OPEB liability - ending $73,788 $63,930
Covered-employee payroll $1,605,997 $1,483,782
Total OPEB liability as a percentage of covered-employee payroll 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.
86
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%
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.
87
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%
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.
88
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%
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 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%
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 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 and measurement date
December 31,
2019
December 31,
2018
December 31,
2017
December 31,
2016
December 31,
2015
Total pension liability:
Service cost $37,293 $28,420 $27,727 $27,579 $28,520
Interest 42,177 36,119 35,544 36,976 37,130
Changes of assumptions - 8,730 - 11,690 -
Plan changes - 325,127 - - -
Gain or loss - (80,312) - (46,403) -
Benefit payments (253,525) (100,987) - - (191,582)
Net change in total pension liability (174,055) 217,097 63,271 29,842 (125,932)
Total pension liability - beginning 898,899 681,802 618,531 588,689 714,621
Total pension liability - ending (a)$724,844 $898,899 $681,802 $618,531 $588,689
Plan fiduciary net position:
Contributions - State of Minnesota $69,975 $65,533 $61,147 $59,136 $61,166
Net investment income 127,902 (61,227) 156,879 70,101 (48,240)
Benefit payments (253,525) (100,987) - - (191,582)
Administrative expense (15,741) (13,392) (14,093) (17,419) (13,314)
Net change in plan fiduciary net position (71,389) (110,073) 203,933 111,818 (191,970)
Plan fiduciary net position - beginning 1,169,306 1,279,379 1,075,446 963,628 1,155,598
Plan fiduciary net position - ending (b)$1,097,917 $1,169,306 $1,279,379 $1,075,446 $963,628
Net pension liability/(asset) - ending (a) - (b)($373,073) ($270,407) ($597,577) ($456,915) ($374,939)
Plan fiduciary net position as a percentage of the total pension liability 151.5% 130.1% 187.6% 173.9% 163.7%
Covered payroll*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
*The Relief Association is comprised of volunteers, therefore, there are no payroll expenditures.
(i.e., there are no covered payroll amounts or percentage calculations.)
See accompanying notes to the required supplementary information.
91
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)
2015 $ - $61,166 ($61,166) N/A N/A
2016 - 59,136 (59,136) N/A N/A
2017 - 61,147 (61,147) N/A N/A
2018 - 65,533 (65,533) N/A N/A
2019 - 69,975 (69,975) 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.)
See accompanying notes to the required supplementary information.
92
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2019
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.
2019 Changes
Changes in Actuarial Assumptions:
The discount rate was changed from 3.31% to 3.71%.
Note C PENSION INFORMATION
PERA – General Employees Retirement Fund
2019 Changes
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018
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
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2015 to MP-2017.
The assumed benefit increase was changed from 1.0 percent per year through 2044 and 2.50
percent per year thereafter to 1.25 percent per year.
2017 Changes
Changes in Actuarial Assumptions:
The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members
and 60 percent for vested and non-vested deferred members. The revised CSA loads are now 0.0
percent for active member liability, 15.0 percent for vested deferred member liability and 3.0
percent for non-vested deferred member liability.
The assumed post-retirement benefit increase rate was changed from 1.0 percent per year for all
years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter.
93
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2019
2016 Changes
Changes in Actuarial Assumptions:
The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2035
and 2.5% per year thereafter to 1.0% per year for all future years.
The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was
changed from 7.9% to 7.5%.
Other assumptions were changed pursuant to the experience study dated June 30, 2015. The
assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25%
for payroll growth and 2.50% for inflation.
94
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2019
PERA – Public Employees Police and Fire Fund
2019 Changes
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2017 to MP-2018
2018 Changes
Changes in Actuarial Assumptions:
The mortality projection scale was changed from MP-2016 to MP-2017.
2017 Changes
Changes in Actuarial Assumptions:
The single discount rate was changed from 5.6% to 7.5%.
Assumed salary increases were changed as recommended in the June 30, 2016 experience study.
The net effect is proposed rates that average 0.34 percent lower than the previous rates.
Assumed rates of retirement were changed, resulting in fewer retirements.
The Combined Service Annuity (CSA) load was 30 percent for vested and non-vested deferred
members. The CSA has been changed to 33 percent for vested members and 2 percent for non-
vested members.
The base mortality table for healthy annuitants was changed from the RP-2000 fully generational
table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted
by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP-
2016. The base mortality table for disabled annuitants was changed from the RP-2000 disabled
mortality table to the mortality tables assumed for healthy retirees.
Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates
beyond the select period of three years were adjusted, resulting in more expected terminations
overall.
Assumed percentage of married female members was decreased from 65 percent to 60 percent.
Assumed age difference was changed from separate assumptions for male members (wives
assumed to be three years younger) and female members (husbands assumed to be four years
older) to the assumption that males are two years older than females.
The assumed percentage of female members electing Joint and Survivor annuities was increased.
The assumed post-retirement benefit increase rate was changed from 1.00 percent for all years to
1.00 percent per year through 2064 and 2.50 percent thereafter.
95
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2019
2016 Changes
Changes in Actuarial Assumptions:
The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2037
and 2.5% per year thereafter to 1.0% per year for all future years.
The assumed investment return was changed from 7.9% to 7.5%. The single discount rate
changed from 7.9% to 5.6%.
The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to
3.25% for payroll growth and 2.50% for inflation.
96
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO RSI
December 31, 2019
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.
97
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98
COMBINING AND INDIVIDUAL NONMAJOR
FUND FINANCIAL STATEMENTS
99
CITY OFLAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET Statement 18
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2019
Special Capital
Revenue Project
Assets 2019 2018
Cash and investments $85,131 $2,061,817 $2,146,948 $2,401,651
Accrued interest receivable 303 6,819 7,122 (1,789)
Due from other governmental units - 67,578 67,578 6,718
Prepaid items - - - 395
Due from other funds - - - 16,399
Special assessments receivable:
Deferred - 17,833 17,833 17,833
Total assets $85,434 $2,154,047 $2,239,481 $2,441,207
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable $2,222 $51,338 $53,560 $11,366
Due to other governmental units - - - 559,828
Contracts and retainage payable - 29,727 29,727 8,707
Due to other funds - 521,122 521,122 394,513
Deposits payable - 75,000 75,000 75,000
Unearned revenue 1,500 271,230 272,730 271,230
Total liabilities 3,722 948,417 952,139 1,320,644
Deferred inflows of resources:
Unavailable revenue - 17,833 17,833 17,833
Fund balance:
Nonspendable - - - 395
Restricted - 818,719 818,719 874,588
Committed 24,070 - 24,070 11,003
Assigned 57,642 874,944 932,586 1,109,272
Unassigned - (505,866) (505,866) (892,528)
Total fund balance 81,712 1,187,797 1,269,509 1,102,730
Total liabilities, deferred inflows
of resources, and fund balance $85,434 $2,154,047 $2,239,481 $2,441,207
With Comparative Totals For December 31, 2018
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, 2019
With Comparative Totals For The Year Ended December 31, 2018
Special Capital
Revenue Project
Revenues:2019 2018
Intergovernmental $9,236 $562,826 $572,062 $14,293
Charges for services 108,097 42,460 150,557 78,573
Park dedication fees - 123,500 123,500 502,802
Investment income 2,363 54,843 57,206 (4,817)
Miscellaneous - 9,000 9,000 -
Total revenues 119,696 792,629 912,325 590,851
Expenditures:
Current:
Public works 5,616 908 6,524 86,843
Culture and recreation 1,281 - 1,281 3,312
Economic development authority 71,609 - 71,609 47,702
Capital outlay:
Public works - 805,573 805,573 976,444
Culture and recreation - 205,841 205,841 307,145
Economic development authority - - - 901,670
Debt service:
Interest and fiscal charges 1,700 39,749 41,449 21,583
Total expenditures 80,206 1,052,071 1,132,277 2,344,699
Revenues over (under) expenditures 39,490 (259,442) (219,952) (1,753,848)
Other financing sources:
Transfers in 30,000 394,600 424,600 25,225
Transfers out (43,638) - (43,638) -
Issuance of debt - 2,156,864 2,156,864 926,000
Total other financing sources (13,638) 2,551,464 2,537,826 951,225
Net change in fund balance 25,852 2,292,022 2,317,874 (802,623)
Fund balance - January 1, as previously reported 55,860 (1,104,225) (1,048,365) 885,542
Prior period adjustment - - - 1,019,811
Fund balance - January 1, as restated 55,860 (1,104,225) (1,048,365) 1,905,353
Fund balance - December 31 $81,712 $1,187,797 $1,269,509 $1,102,730
Reconciliation of beginning fund balance to prior year ending fund balance:
Prior year ending fund balance reported above 1,102,730
Reclassification of the Old Village Phase 4 fund balance, now presented as non-major (1,037,202)
Reclassification of the 2018 Street Improvements fund balance, now presented as non-major (1,113,893)
Fund balance - January 1, 2019 as reported on this statement ($1,048,365)
Governmental Funds
Total Nonmajor
101
CITY OF LAKE ELMO, MINNESOTA
SUBCOMBINING BALANCE SHEET Statement 20
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2019
Economic
Lions Park Development
Sign Program Authority
(207)(221)
Assets 2019 2018
Cash and investments $7,528 $77,603 $85,131 $60,648
Accrued interest receivable 26 277 303 138
Due from other governmental units - - - 6,718
Prepaid items - - - 395
Total assets $7,554 $77,880 $85,434 $67,899
Liabilities and Fund Balance
Liabilities:
Accounts payable $ - $2,222 $2,222 $1,701
Due to other funds - - - 10,338
Unearned revenue - 1,500 1,500 -
Total liabilities 0 3,722 3,722 12,039
Fund balance:
Nonspendable - - - 395
Restricted - - - 22,803
Committed 7,314 16,756 24,070 11,003
Assigned 240 57,402 57,642 25,279
Unassigned - - - (3,620)
Total fund balance 7,554 74,158 81,712 55,860
Total liabilities, deferred inflows
of resources, and fund balance $7,554 $77,880 $85,434 $67,899
With Comparative Totals For December 31, 2018
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, 2019
With Comparative Totals For The Year Ended December 31, 2018
Economic
Lions Park State Hwy 36 Development
Sign Program Corridor Plan Authority
(207) (208) (221)
Revenues:2019 2018
Intergovernmental $ - $9,236 $ - $9,236 $14,293
Charges for services 8,407 - 99,690 108,097 78,573
Investment income 210 - 2,153 2,363 615
Total revenues 8,617 9,236 101,843 119,696 93,481
Expenditures:
Current:
Public works - 5,616 - 5,616 18,106
Culture and recreation 1,281 - - 1,281 3,312
Economic development authority - - 71,609 71,609 47,702
Capital outlay:
Economic development authority - - - - 901,670
Debt service:
Interest and fiscal charges - - 1,700 1,700 21,583
Total expenditures 1,281 5,616 73,309 80,206 992,373
Revenues over (under) expenditures 7,336 3,620 28,534 39,490 (898,892)
Other financing sources (uses):
Transfers in - - 30,000 30,000 25,225
Transfers out - - (43,638) (43,638)
Issuance of debt - - - - 926,000
Total other financing sources (uses)0 0 (13,638) (13,638) 951,225
Net change in fund balance 7,336 3,620 14,896 25,852 52,333
Fund balances - January 1, as previously reported 218 (3,620) 59,262 55,860 7,394
Prior period adjustment - - - - (3,867)
Fund balances - January 1, as restated 218 (3,620) 59,262 55,860 3,527
Fund balances - ending $7,554 $0 $74,158 $81,712 $55,860
Special Revenue Funds
Total Nonmajor
103
CITY OF LAKE ELMO, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2019
CSAH 15 /Manning and
Park Infrastructure CSAH 14 Old Village 2018 Street Hudson Future
Dedication Reserve City Facilities Village Project Realignment Phase 4 Improvements Stop Light
(404)(409)(411)(413)(414)(421)(422)(423)
Assets
Cash and investments $738,847 $702,857 $94,823 $ - $ - $49,062 $88,756 $256,243
Accrued interest receivable 2,600 2,131 334 - 256 - 596 902
Due from other governmental units - 9,000 - - - - - -
Due from other funds - - - - - - - -
Special assessments receivable:
Deferred - 17,833 - - - - - -
Total assets $741,447 $731,821 $95,157 $0 $256 $49,062 $89,352 $257,145
Liabilities, Deferred Inflows of Resources,
and Fund Balance
Liabilities:
Accounts payable $1,750 $ - $ - $ - $ - $ - $ - $ -
Due to other governmental units - - - - - - - -
Contracts and retainage payable 5,597 - - - - 24,130 - -
Due to other funds - - - 378,736 2,073 - - -
Deposits payable - - - - - - - -
Unearned revenue - - - - - - - 250,000
Total liabilities 7,347 0 0 378,736 2,073 24,130 0 250,000
Deferred inflows of resources:
Unavailable revenue - 17,833 - - - - - -
Fund balance (deficit):
Restricted 734,100 - - - - - 84,619 -
Assigned - 713,988 95,157 - - 24,932 4,733 7,145
Unassigned - - - (378,736) (1,817) - - -
Total fund balance (deficit)734,100 713,988 95,157 (378,736) (1,817) 24,932 89,352 7,145
Total liabilities, deferred inflows
of resources, and fund balance $741,447 $731,821 $95,157 $0 $256 $49,062 $89,352 $257,145
With Comparative Totals For December 31, 2018
104
Statement 22
Manning Corridor 2019 Street Railroad Stonegate CSAH 15 Heritage Farms Manning and
and Safety and Utility CSAH 13 Crossing Old Village Utility & Street Manning Avenue Street & Utility Highway 36
Management Project Phase 2 Improvements Phases 5 & 6 Improvements Phase 3 Improvements Interchange
(424)(426) (427)(430)(431)(432)(433)(434)(435)
2019 2018
$ - $ - $ - $52,088 $ - $4,248 $ - $ - $74,893 $2,061,817 $2,341,003
- - - - - - - - - 6,819 (1,927)
- - - - - 58,578 - - - 67,578 -
- - - - - - - - - - 16,399
- - - - - - - - - 17,833 17,833
$0 $0 $0 $52,088 $0 $62,826 $0 $0 $74,893 $2,154,047 $2,373,308
$ - $ - $ - $1,869 $661 $14,692 $ - $32,366 $ - $51,338 $9,665
- - - - - - - - - - 559,828
- - - - - - - - - 29,727 8,707
635 5,731 4,003 - 62,117 48,134 720 18,973 - 521,122 384,175
- - - - - - - - 75,000 75,000 75,000
- - - 21,230 - - - - - 271,230 271,230
635 5,731 4,003 23,099 62,778 62,826 720 51,339 75,000 948,417 1,308,605
- - - - - - - - - 17,833 17,833
- - - - - - - - - 818,719 851,785
- - - 28,989 - - - - - 874,944 1,083,993
(635) (5,731) (4,003) - (62,778) - (720) (51,339)(107) (505,866) (888,908)
(635) (5,731) (4,003) 28,989 (62,778)0 (720) (51,339)(107) 1,187,797 1,046,870
$0 $0 $0 $52,088 $0 $62,826 $0 $0 $74,893 $2,154,047 $2,373,308
Capital Project Funds
Total Nonmajor
105
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, 2019
With Comparative Totals For The Year Ended December 31, 2018
CSAH 15 /Manning and Manning Corridor
Park Infrastructure CSAH 14 Old Village 2018 Street Hudson Future and Safety
Dedication Reserve City Facilities Village Project Realignment Phase 4 Improvements Stop Light Management
(404)(409)(411)(413)(414)(421)(422)(423)(424)
Revenues:
Intergovernmental $ - $ - $ - $ - $500,000 $ - $ - $ - $ -
Charges for services - - - - - - - - -
Park dedication fees 123,500 - - - - - - - -
Investment income 19,943 18,152 2,576 317 1,977 - 4,733 7,145 -
Miscellaneous - 9,000 - - - - - - -
Total revenues 143,443 27,152 2,576 317 501,977 0 4,733 7,145 0
Expenditures:
Current:
Public works - 908 - - - - - - -
Capital outlay:
Public works 55,287 303,668 - - - 192,430 58,639 - 635
Culture and recreation 205,841 - - - - - - - -
Debt service:
Interest and fiscal charges - - - - - 16,154 23,595 - -
Total expenditures 261,128 304,576 0 0 0 208,584 82,234 0 635
Other financing sources (uses):
Transfers in - - - - - 394,600 - - -
Issuance of debt - - - - - 876,118 1,280,746 - -
Total other financing sources (uses)0 0 0 0 0 1,270,718 1,280,746 0 0
Net change in fund balance (117,685) (277,424)2,576 317 501,977 1,062,134 1,203,245 7,145 (635)
Fund balances - January 1, as previously reported 851,785 991,412 92,581 (379,053) (503,794) (1,037,202) (1,113,893) - -
Prior period adjustment - - - - - - - - -
Fund balances - January 1, as restated 851,785 991,412 92,581 (379,053) (503,794) (1,037,202) (1,113,893)0 0
Fund balances - ending $734,100 $713,988 $95,157 ($378,736) ($1,817) $24,932 $89,352 $7,145 ($635)
106
Statement 23
2019 Street Railroad Stonegate CSAH 15 Heritage Farms Manning and
and Utility CSAH 13 Crossing Old Village Utility & Street Manning Avenue Street & Utility Highway 36
Project Phase 2 Improvements Phases 5 & 6 Improvements Phase 3 Improvements Interchange
(426)(427)(430)(431)(432)(433)(434)(435)
2019 2018
$ - $ - $ - $ - $62,826 $ - $ - $ - $562,826 $ -
- - 42,460 - - - - - 42,460 -
- - - - - - - - 123,500 502,802
- - - - - - - - 54,843 (5,432)
- - - - - - - - 9,000 -
0 0 42,460 0 62,826 0 0 0 792,629 497,370
- - - - - - - - 908 68,737
- 3,673 13,471 62,778 62,826 720 51,339 107 805,573 976,444
- - - - - - - - 205,841 307,145
- - - - - - - - 39,749 -
0 3,673 13,471 62,778 62,826 720 51,339 107 1,052,071 1,352,326
- - - - - - - - 394,600 -
- - - - - - - - 2,156,864 -
0 0 0 0 0 0 0 0 2,551,464 0
0 (3,673)28,989 (62,778)0 (720)(51,339)(107) 2,292,022 (854,956)
(5,731)(330) - - - - - - (1,104,225)878,148
- - - - - - - - - 1,023,678
(5,731)(330)0 0 0 0 0 0 (1,104,225) 1,901,826
($5,731)($4,003)$28,989 ($62,778)$0 ($720)($51,339)($107) $1,187,797 $1,046,870
Reconciliation of beginning fund balance to prior year ending fund balance:
Prior year ending fund balance reported above 1,046,870
Reclassification of the Old Village Phase 4 fund balance, now presented as non-major (1,037,202)
Reclassification of the 2018 Street Improvements fund balance, now presented as non-major (1,113,893)
Fund balance - January 1, 2019 as reported on this statement ($1,104,225)
Capital Project Funds
Total Nonmajor
107
CITY OF LAKE ELMO, MINNESOTA
BALANCE SHEET
DEBT SERVICE FUND BY BOND ISSUE
December 31, 2019
2009B GO 2010A GO 2010B GO 2011A GO 2012B GO
Improvement Improvement CIP Bonds Improvement Improvement
Bonds (316) Bonds (317) (318) Bonds (319) Bonds (321)
Assets
Cash and investments $72,281 $91,934 $165,452 $280,248 $ -
Accrued interest receivable 287 324 582 986 -
Special assessments receivable:
Due from county - - - - 202
Delinquent - - - - 648
Deferred 5,803 14,000 - 20,080 56,640
Total assets $78,371 $106,258 $166,034 $301,314 $57,490
Liabilities, Deferred Inflows of Resources, and Fund Balance
Liabilities:
Accounts payable $ - $ - $ - $ - $ -
Due to other funds - - - - 26,169
Total liabilities 0 0 0 0 26,169
Deferred inflows of resources:
Unavailable revenue 5,803 14,000 - 20,080 57,288
Fund balance (deficit):
Restricted 72,568 92,258 166,034 281,234 (25,967)
Total liabilities, deferred inflows of
resources, and fund balance $78,371 $106,258 $166,034 $301,314 $57,490
With Comparative Totals For December 31, 2018
108
Statement 24
2013A GO 2014A GO 2015A GO 2016A GO 2017A GO 2019 2018A GO
Improvement Improvement Improvement Improvement Improvement Improvement Equipment Cert.
Bonds (322) Bonds (323) Bonds (324) Bonds (326) Bonds (327) Bonds (329) Bonds (330)
2019 2018
$1,161,255 $995,053 $355,918 $684,760 $469,392 $440,227 $ - $4,716,520 $4,461,692
3,153 3,434 1,314 2,424 1,703 1,549 - 15,756 11,012
8 - - 736 301 - - 1,247 1,997
- - - 2,020 - - - 2,668 1,181
16,320 245,284 423,810 751,959 604,934 398,955 - 2,537,785 3,120,521
$1,180,736 $1,243,771 $781,042 $1,441,899 $1,076,330 $840,731 $0 $7,273,976 $7,596,403
$ - $ - $ - $ - $ - $400 $ - $400 $ -
- - - - - - 70 26,239 22,548
0 0 0 0 0 400 70 26,639 22,548
16,320 245,284 423,810 753,979 604,934 398,955 - 2,540,453 3,121,702
1,164,416 998,487 357,232 687,920 471,396 441,376 (70) 4,706,884 4,452,153
$1,180,736 $1,243,771 $781,042 $1,441,899 $1,076,330 $840,731 $0 $7,273,976 $7,596,403
Total Debt Service Fund
109
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, 2019
With Comparative Totals For The Year Ended December 31, 2018
2009B GO 2010A GO 2010B GO 2011A GO 2012B GO 2013A GO
Improvement Improvement CIP Bonds Improvement Improvement Improvement
Bonds (316) Bonds (317) (318) Bonds (319) Bonds (321) Bonds (322)
Revenues:
General property taxes $43,580 $59,356 $205,989 $76,719 $65,275 $ -
Special assessments 6,320 9,606 - 7,131 23,533 5,006
Investment income 2,197 2,488 4,503 7,604 14 24,003
Total revenues 52,097 71,450 210,492 91,454 88,822 29,009
Expenditures:
Debt service:
Principal 65,000 75,000 160,000 85,000 85,000 105,000
Interest and fiscal charges 3,316 5,576 33,475 7,285 7,201 31,806
Total expenditures 68,316 80,576 193,475 92,285 92,201 136,806
Revenues over (under) expenditures (16,219) (9,126) 17,017 (831) (3,379) (107,797)
Other financing sources (uses):
Transfers in - - - - - -
Transfers out - - - - - -
Issuance of debt - - - - - -
Bond premium - - - - - -
Total other financing sources (uses)0 0 0 0 0 0
Net change in fund balance (16,219) (9,126) 17,017 (831) (3,379) (107,797)
Fund balances - January 1, as previously reported 88,787 101,384 149,017 282,065 (22,588) 1,272,213
Prior period adjustment - - - - - -
Fund balances - January 1, as restated 88,787 101,384 149,017 282,065 (22,588) 1,272,213
Fund balances - ending $72,568 $92,258 $166,034 $281,234 ($25,967) $1,164,416
110
Statement 25
2014A GO 2015A GO 2016A GO 2017A GO 2018A Taxable 2019 2018A GO
Improvement Improvement Improvement Improvement Lease Revenue Improvement Equipment Cert.
Bonds (323) Bonds (324) Bonds (326) Bonds (327) Bonds (328) Bonds (329) Bonds (330)
2019 2018
$203,885 $25,113 $189,419 $346,598 $ - $ - $ - $1,215,934 $1,213,788
212,791 79,251 128,068 106,248 - 71,533 - 649,487 1,377,039
26,609 10,077 18,719 13,153 - 12,163 - 121,530 34,776
443,285 114,441 336,206 465,999 0 83,696 0 1,986,951 2,625,603
210,000 170,000 250,000 410,000 - - - 1,615,000 1,175,000
56,538 27,238 46,400 109,001 43,638 9,400 20,163 401,037 204,739
266,538 197,238 296,400 519,001 43,638 9,400 20,163 2,016,037 1,379,739
176,747 (82,797) 39,806 (53,002) (43,638) 74,296 (20,163) (29,086) 1,245,864
- - - 47,766 43,638 - 20,093 111,497 1,317
- - - - - - - - (30,144)
- - - - - 4,152 - 4,152 -
- - - - - 168,168 - 168,168 -
0 0 0 47,766 43,638 172,320 20,093 283,817 (28,827)
176,747 (82,797) 39,806 (5,236)0 246,616 (70) 254,731 1,217,037
821,740 440,029 648,114 476,632 - 194,760 - 4,452,153 3,224,987
- - - - - - - - 10,129
821,740 440,029 648,114 476,632 0 194,760 0 4,452,153 3,235,116
$998,487 $357,232 $687,920 $471,396 $0 $441,376 ($70) $4,706,884 $4,452,153
Total Debt Service Fund
111
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112
STATISTICAL SECTION (UNAUDITED)
113
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114
This part of the City of Lake Elmo, Minnesota's Comprehensive Annual Financial Report presents detailed
information as a context for understanding what the information in the financial statements, note disclosures
and required supplementary information says about the City's overall financial health.
Table
Number
Financial Trends Tables 1-4
These tables contain trend information to help the reader understand how the City's financial
performance and well-being have changed over time.
Revenue Capacity Tables 5-9
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
115
CITY OF LAKE ELMO, MINNESOTA
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2019 2018 2017 2016
Governmental activities:
Net investment in capital assets $24,771,065 $15,396,520 $8,883,320 $9,032,535
Restricted 8,596,759 10,121,648 5,057,169 4,704,133
Unrestricted 4,231,363 1,086,636 4,818,383 4,136,292
Total governmental activities net position $37,599,187 $26,604,804 $18,758,872 $17,872,960
Business-type activities:
Net investment in capital assets $33,052,649 $18,382,934 $12,180,378 $12,506,474
Restricted - - 2,695,734 1,473,164
Unrestricted 16,528,968 13,842,382 9,151,417 6,400,375
Total business-type activities net position $49,581,617 $32,225,316 $24,027,529 $20,380,013
Primary government:
Net investment in capital assets $57,823,714 $33,779,454 $21,063,698 $21,539,009
Restricted 8,596,759 10,121,648 7,752,903 6,177,297
Unrestricted 20,760,331 14,929,018 13,969,800 10,536,667
Total primary government net position $87,180,804 $58,830,120 $42,786,401 $38,252,973
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.
116
Table 1
2015 2014 2013 2012 2011 2010
$8,723,329 $7,957,840 $9,056,353 $8,782,840 $8,553,984 $8,368,479
3,446,142 1,106,200 1,225,849 4,205,247 2,664,689 2,057,467
3,942,646 5,405,920 4,593,463 918,996 2,555,596 3,439,106
$16,112,117 $14,469,960 $14,875,665 $13,907,083 $13,774,269 $13,865,052
$10,170,351 $10,567,418 $6,855,807 $6,788,377 $6,422,782 $6,713,292
1,876,119 2,387,312 2,612,569 39,153 - -
3,577,285 1,100,422 1,846,681 1,105,847 1,449,340 1,193,509
$15,623,755 $14,055,152 $11,315,057 $7,933,377 $7,872,122 $7,906,801
$18,893,680 $18,525,258 $15,912,160 $15,571,217 $14,976,766 $15,081,771
5,322,261 3,493,512 3,838,418 4,244,400 2,664,689 2,057,467
7,519,931 6,506,342 6,440,144 2,024,843 4,004,936 4,632,615
$31,735,872 $28,525,112 $26,190,722 $21,840,460 $21,646,391 $21,771,853
117
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2019 2018 2017 2016
Expenses
Governmental activities:
General government $1,181,219 $1,266,269 $1,503,251 $1,358,370
Public safety 2,058,419 2,161,082 1,528,253 1,308,360
Public works 3,728,247 2,192,092 2,800,044 1,698,566
Culture and recreation 361,730 524,445 1,299,551 660,947
Economic Development Authority 71,609 47,702 - -
Interest and fees on long-term debt 395,106 352,376 225,910 178,266
Total governmental activities expenses 7,796,330 6,543,966 7,357,009 5,204,509
Business-type activities:
Water 1,940,148 2,068,178 2,022,446 1,409,832
Sewer 1,082,997 846,032 1,030,058 380,650
Storm sewer 469,765 315,967 213,514 150,302
Total business-type activities expenses 3,492,910 3,230,177 3,266,018 1,940,784
Total primary government expenses $11,289,240 $9,774,143 $10,623,027 $7,145,293
Program revenues
Governmental activities:
Charges for services:
General government $553,870 $379,378 $206,856 $51,009
Public safety 1,574,359 1,938,163 2,101,890 1,752,522
Public works 126,721 - - -
Culture and recreation 1,430 - - -
Economic Development Authority 99,690 78,573 - -
Operating grants and contributions 795,483 248,915 229,960 235,214
Capital grants and contributions 11,076,353 4,970,565 2,290,265 1,452,469
Total governmental activities program revenues 14,227,906 7,615,594 4,828,971 3,491,214
Business-type activities:
Charges for services:
Water 962,003 951,985 2,628,848 1,801,228
Sewer 306,041 252,614 2,435,749 1,315,948
Storm sewer 380,645 322,700 289,375 213,233
Operating grants and contributions 122,350 - - -
Capital grants and contributions 14,114,787 7,466,627 1,489,922 3,464,567
Total business-type activities 15,885,826 8,993,926 6,843,894 6,794,976
Total primary government program revenues $30,113,732 $16,609,520 $11,672,865 $10,286,190
118
Table 2
Page 1 of 2
2015 2014 2013 2012 2011 2010
$1,134,132 $1,072,888 $1,103,337 $1,093,204 $1,036,038 $980,456
1,344,282 1,530,609 1,277,798 1,302,857 1,107,050 1,171,158
1,377,969 1,032,426 1,273,977 891,169 1,008,686 1,135,351
639,006 448,361 424,687 362,432 247,845 239,389
- - - - - -
215,611 165,028 133,694 316,039 266,730 222,404
4,711,000 4,249,312 4,213,493 3,965,701 3,666,349 3,748,758
1,363,043 1,069,511 958,870 872,786 845,474 898,319
250,866 353,438 119,370 53,903 73,797 61,513
103,536 149,887 86,989 73,590 142,517 151,384
1,717,445 1,572,836 1,165,229 1,000,279 1,061,788 1,111,216
$6,428,445 $5,822,148 $5,378,722 $4,965,980 $4,728,137 $4,859,974
$42,706 $45,161 $32,778 $48,476 $22,058 $18,296
866,708 496,916 414,472 379,557 283,813 320,242
3,615 - 2,647 3,256 3,058 3,425
26,214 10,753 17,000 9,341 - 10,800
- - - - - -
249,094 204,462 208,276 160,060 184,476 168,491
2,038,940 557,601 1,364,622 160,444 222,488 1,090,419
3,227,277 1,314,893 2,039,795 761,134 715,893 1,611,673
1,850,240 1,291,091 596,421 699,159 575,534 562,585
1,523,067 741,054 53,142 65,737 53,012 48,508
229,252 214,915 191,087 171,229 235,252 185,425
- - - - 17,000 32,721
- 1,159,222 3,781,528 115,127 75,885 418,400
3,602,559 3,406,282 4,622,178 1,051,252 956,683 1,247,639
$6,829,836 $4,721,175 $6,661,973 $1,812,386 $1,672,576 $2,859,312
119
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2019 2018 2017 2016
Net (expense) revenue:
Governmental activities $6,431,576 $1,071,628 ($2,528,038) ($1,713,295)
Business-type activities 12,392,916 5,763,749 3,577,876 4,854,192
Total primary government, net 18,824,492 6,835,377 1,049,838 3,140,897
General revenues and other changes in net position:
Governmental activities:
General property taxes 4,181,914 3,610,106 3,040,413 3,226,739
Unrestricted grants and contributions 4,956 6,868 2,749 8,584
Unrestricted investment earnings 331,010 115,583 48,987 43,228
Miscellaneous - - 158,350 52,479
Gain on disposal of capital assets 44,927 8,991 - -
Transfers - 840 - 143,105
Total governmental activities 4,562,807 3,742,388 3,250,499 3,474,135
Business-type activities:
Unrestricted grants and contributions - 956 - 748
Unrestricted investment earnings 411,206 96,425 46,757 44,423
Extraordinary item 4,552,179 - - -
Transfers - (840) - (143,105)
Total business-type activities 4,963,385 96,541 46,757 (97,934)
Total primary government $9,526,192 $3,838,929 $3,297,256 $3,376,201
Change in net position:
Governmental activities $10,994,383 $4,814,016 $722,461 $1,760,840
Business-type activities 17,356,301 5,860,290 3,624,633 4,756,258
Total primary government change in net position $28,350,684 $10,674,306 $4,347,094 $6,517,098
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.
120
Table 2
Page 2 of 2
2015 2014 2013 2012 2011 2010
($1,483,723) ($2,934,419) ($2,173,698) ($3,204,567) ($2,950,456) ($2,137,085)
1,885,114 1,833,446 3,456,949 50,973 (105,105) 136,423
401,391 (1,100,973) 1,283,251 (3,153,594) (3,055,561) (2,000,662)
3,204,119 3,200,291 3,231,609 3,183,078 2,793,776 2,711,067
2,749 2,749 2,749 - 10,628 9,771
46,589 87,586 35,259 111,705 94,501 113,989
73,738 125,400 1,833 42,599 20,405 17,311
- - 8,979 - - -
220,842 (887,312) - - (59,637)(57,947)
3,548,037 2,528,714 3,280,429 3,337,382 2,859,673 2,794,191
- - - - - -
39,757 19,337 30,346 10,282 10,789 11,129
- - - - - -
(220,842)887,312 - - 59,637 57,947
(181,085)906,649 30,346 10,282 70,426 69,076
$3,366,952 $3,435,363 $3,310,775 $3,347,664 $2,930,099 $2,863,267
$2,064,314 ($405,705)$1,106,731 $132,815 ($90,783)$657,106
1,704,029 2,740,095 3,487,295 61,255 (34,679)205,499
$3,768,343 $2,334,390 $4,594,026 $194,070 ($125,462)$862,605
121
CITY OF LAKE ELMO, MINNESOTA
FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2019 2018 2017 2016
General Fund:
Reserved $ - $ - $ - $ -
Unreserved - - - -
Nonspendable 28,162 18,951 410,193 409,222
Committed - - 200,000 200,000
Unassigned 4,286,022 4,756,695 3,499,133 3,279,815
Total general fund 4,314,184 4,775,646 4,109,326 3,889,037
All other governmental funds:
Reserved - - - -
Unreserved - - - -
Nonspendable - 395 675,000 -
Restricted 5,973,451 6,133,168 2,849,956 3,248,230
Committed 24,070 11,003 - -
Assigned 1,746,202 1,198,909 1,307,216 1,504,656
Unassigned (757,968) (3,043,623) (681,681) (418,169)
Total all other governmental funds 6,985,755 4,299,852 4,150,491 4,334,717
Total governmental funds $11,299,939 $9,075,498 $8,259,817 $8,223,754
The City implemented GASB Statement No. 54 for the fiscal year ended December 31, 2011. Information
for years prior to 2011 is presented in accordance with fund balance classifications in effect at that time.
122
Table 3
2015 2014 2013 2012 2011 2010
$ - $ - $ - $ - $ - $1,068,950
- - - - - 1,617,211
432,306 638,963 859,072 1,024,433 1,206,209 -
- - - - - -
2,754,976 2,542,038 2,318,310 2,414,692 1,707,711 -
3,187,282 3,181,001 3,177,382 3,439,125 2,913,920 2,686,161
- - - - - 3,605,250
- - - - - 504,106
3,908 - - - - -
2,477,730 717,781 743,976 3,959,111 4,691,748 -
- - - - 7,114 -
1,768,742 2,943,525 2,252,931 1,244,900 654,358 -
(431,755)(693,904)(885,360) (1,670,915) (1,353,754) -
3,818,625 2,967,402 2,111,547 3,533,096 3,999,466 4,109,356
$7,005,907 $6,148,403 $5,288,929 $6,972,221 $6,913,386 $6,795,517
123
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2019 2018 2017 2016
Revenues:
General property taxes $4,182,327 $3,610,508 $3,042,074 $3,231,674
Licenses and permits 1,055,038 1,317,648 2,046,462 1,713,918
Intergovernmental 2,819,961 247,178 1,023,864 282,874
Charges for services 1,079,342 899,808 137,920 38,608
Fines and forfeits 36,696 49,203 41,418 49,505
Special assessments 649,487 1,398,155 455,493 897,323
Park dedication fees 123,500 502,802 265,783 171,708
Refunds and reimbursements - - - 21,390
Investment earnings 331,010 115,583 48,987 43,228
Miscellaneous 201,494 129,455 265,133 56,101
Total revenues 10,478,855 8,270,340 7,327,134 6,506,329
Expenditures:
Current:
General government 1,136,908 1,208,145 1,502,904 1,358,306
Public safety 1,948,269 1,644,159 1,470,726 1,262,040
Public works 1,875,606 1,227,521 1,185,828 893,644
Culture and recreation 265,260 241,761 603,292 500,689
Economic Development Authority 71,609 47,702 - -
Debt service:
Principal 1,615,000 1,175,000 910,000 826,219
Interest and fiscal charges 454,814 230,822 463,570 242,392
Capital outlay 4,354,643 4,552,089 5,860,917 3,126,782
Total expenditures 11,722,109 10,327,199 11,997,237 8,210,072
Excess (deficiency) of revenues over expenditures (1,243,254) (2,056,859) (4,670,103) (1,703,743)
Other financing sources (uses):
Issuance of debt 2,860,000 1,866,000 4,565,000 2,690,000
Premium on issuance of debt 168,168 - 166,068 102,877
(Discount) on issuance of debt - - (26,302) (14,392)
Proceeds from sale of capital assets 44,927 8,991 1,400 -
Transfers in 1,181,173 56,209 - 143,105
Transfers out (786,573) (173,190) - -
Total other financing sources (uses)3,467,695 1,758,010 4,706,166 2,921,590
Net change in fund balance $2,224,441 ($298,849) $36,063 $1,217,847
Debt service as a percentage of noncapital expenditures 26.1%24.2%22.4%21.0%
Debt service as a percentage of total expenditures 17.7%13.6%11.4%13.0%
124
Table 4
2015 2014 2013 2012 2011 2010
$3,222,216 $3,203,111 $3,231,609 $3,221,733 $2,790,773 $2,737,225
828,494 451,953 374,974 330,819 230,419 261,450
296,902 413,968 1,704,178 237,254 276,638 239,244
35,796 30,192 6,113 5,726 14,691 22,416
48,739 48,647 52,110 58,385 63,819 68,897
1,316,239 115,424 180,023 136,150 153,536 134,257
138,158 274,257 - - - -
- - - - - -
46,415 87,467 35,127 111,737 94,066 113,033
99,055 165,319 57,260 87,562 48,217 84,860
6,032,014 4,790,338 5,641,394 4,189,366 3,672,159 3,661,382
1,094,723 1,046,906 1,527,732 1,034,712 1,016,898 921,590
1,203,765 1,198,546 1,174,145 1,109,937 996,733 1,064,176
686,401 585,071 614,270 446,541 447,629 473,293
457,749 368,276 301,404 260,404 168,747 168,971
- - - - - -
667,342 585,000 3,348,000 406,000 344,000 313,000
226,611 157,649 179,018 309,081 285,712 291,400
2,729,512 2,881,437 1,784,914 1,428,856 1,029,183 1,203,309
7,066,103 6,822,885 8,929,483 4,995,531 4,288,902 4,435,739
(1,034,089) (2,032,547) (3,288,089)(806,165)(616,743)(774,357)
1,620,000 2,850,000 1,604,797 865,000 845,000 2,680,000
32,137 31,520 - - - 4,356
(11,386) - - - - -
30,000 - - - - -
220,842 10,501 - - 204,972 314,698
- - - - (315,360)(364,698)
1,891,593 2,892,021 1,604,797 865,000 734,612 2,634,356
$857,504 $859,474 ($1,683,292)$58,835 $117,869 $1,859,999
20.6%18.8%49.4%20.0%19.3%18.7%
12.7%10.9%39.5%14.3%14.7%13.6%
125
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
2010 $1,201,213,400 $13,394,423 $202,299 $13,596,722 $13,596,722 20.479 1.13%
2011 1,142,936,500 12,678,177 221,613 12,899,790 12,899,790 21.882 1.13%
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%
(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
126
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
2010 18.033 2.446 20.479 19.734 -26.389 27.775 1.511 -4.153 2.558 72.057 81.354
2011 19.448 2.384 21.832 20.300 -34.330 29.772 1.725 -4.275 2.664 76.293 92.873
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
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
Rates for
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
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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
HSRE-MN High Pointe LLC $290,136 1 1.57% $239,610 1 1.76%
Xcel Energy 237,868 2 1.28% 171,806 3 1.26%
Dakota Upreit LP 226,956 3 1.22% - -
Bremer Financial Services Inc 220,998 4 1.19% 195,538 2 1.44%
MHC Cimarron LLC 145,360 5 0.78% - -
HOA Hotels LLC 143,396 6 0.77% - -
Eagle Point Medical Building LLC 144,160 7 0.78% - -
HC Golf Land LLC 130,608 8 0.70% - -
Auto-Owners Life Insurance Co. 94,068 9 0.51% - -
Danate Proper Inv I LLC 77,250 10 0.42% - -
Moline Plow - - 139,208 4 1.02%
Lake Elmo Foundation, Inc - - 138,922 5 1.02%
Lakeland Harbor SPE LLC - - 134,090 6 0.99%
United Land LLC - - 119,478 7 0.88%
United Properties Inv, LLC - - 109,468 8 0.81%
Davis Estates LTD - - 81,328 9 0.60%
Bri-mar Co Inc. Etal. - - 63,518 10 0.47%
Total $1,710,800 9.23%$1,392,966 10.24%
Source: Washington County Taxation Division
2019 2010
129
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
2010 $2,743,346 $2,705,782 $2,645,536 97.77%
2011 2,789,559 2,745,785 2,692,423 98.06%
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 4,149,590 99.38%
(1) Tax Levy adjusted for powerline and market value credits and AG program credits prior to 2016
130
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
$60,231 $2,705,767 100.00%$15 0.00%
53,348 2,745,771 100.00%14 0.00%
39,267 3,110,469 100.00%9 0.00%
26,760 3,160,524 100.00% - 0.00%
31,590 3,160,285 100.00% - 0.00%
19,874 3,132,863 99.99%274 0.01%
42,044 3,110,160 99.93%2,044 0.07%
12,010 2,947,183 99.89%3,243 0.11%
11,588 3,586,447 99.83%6,044 0.17%
- 4,149,590 99.38%26,530 0.64%
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132
CITY OF LAKE ELMO, MINNESOTA
WATER AND SANITARY SEWER CHARGES BY CUSTOMER Table 9
Last Ten Fiscal Years
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Water (in millions of gallons):
Residential 173.925 96.882 93.513 98.044 84.007 98.573 120.676 154.747 105.290 95.704
Commercial service 87.935 22.189 16.603 29.379 21.653 12.156 8.253 10.405 6.872 7.261
Total gallons 261.860 119.071 110.116 127.423 105.660 110.729 128.929 165.152 112.162 102.965
Total direct rate per 1,000 gallons:
Residential 2.20 2.20 2.14 2.14 2.14 2.14 2.14 2.14 2.14 2.10
Commercial service 3.30 3.30 3.20 3.11 3.11 3.11 3.11 3.11 3.11 3.05
Sanitary Sewer (in millions of gallons):
Residential (1)41.003 32.409 38.340 6.812 3.794 - - - - -
Commercial service 12.943 12.267 6.807 9.125 8.179 6.532 6.149 6.172 6.961 7.086
Total gallons 53.946 44.676 45.147 15.937 11.973 6.532 6.149 6.172 6.961 7.086
Total direct rate per 1,000 gallons 4.60 4.55 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.35
(1) City did not have any residential sanitary sewer customers in 2014 and prior
133
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
2010 $1,725,000 $240,000 $5,345,000 $ -
2011 2,440,000 196,000 5,175,000 -
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
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
134
Table 10
Business-Type
Activities
Total G.O. Utility Percentage
Governmental Revenue Total Primary of Personal Per
Activities Bonds Government Income Capita
$7,310,000 $4,680,000 $11,990,000 3.1%$1,486
7,811,000 4,640,000 12,451,000 3.0%1,543
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
135
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
2010 $1,725,000 $240,000 $5,345,000 $4,680,000
2011 2,440,000 196,000 5,175,000 4,640,000
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
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
136
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)
$11,990,000 ($3,605,250)$8,384,750 0.70%$1,039
12,451,000 (3,534,742) 8,916,258 0.78%1,105
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
137
CITY OF LAKE ELMO, MINNESOTA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT Table 12
As of December 31, 2019
Estimated
Estimated Share of
Debt Percentage Overlapping
Outstanding Applicable*Debt
Overlapping debt:
Independent School District # 622 $385,025,000 3.1%$11,935,775
Independent School District # 832 45,805,000 4.7%2,152,835
Independent School District # 834 93,370,000 14.1%13,165,170
Washington County 136,685,000 4.8%6,560,880
Metropolitan Council 1,555,384,035 1.1%17,109,224
Total overlapping debt 50,923,884
City direct debt $18,347,323 100%17,628,425
Total direct and overlapping debt $68,552,309
*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.
138
CITY OF LAKE ELMO, MINNESOTA
LEGAL DEBT MARGIN INFORMATION Table 13
Last Ten Fiscal Years
Legal Debt Margin Calculation for Fiscal Year 2019
Market value $1,648,277,500
Applicable percentage 3%
Debt limit 49,448,325
Debt applicable to limit:
Total bonded debt 39,148,570
Less:
Special assessment bonds (14,697,425)
Lease revenue bonds (926,000)
Utility revenue bonds (21,520,145)
Amount set aside for repayment of G.O. debt (165,452)
1,839,548
Legal debt margin $47,608,777
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
2010 8,069 $34,288,095 $2,195,153 $32,092,942 6.40%$272
2011 8,069 31,126,713 2,148,203 28,978,510 6.90%266
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
Legal Debt Margin Calculation for Fiscal Years 2010 Through 2019
139
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
2010 $920,768 $563,896 $356,872 $35,000 $191,156 158%
2011 891,587 516,157 375,430 40,000 190,094 163%
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%
(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)
140
CITY OF LAKE ELMO, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS Table 15
Last Ten Fiscal Years
Personal Per
Income (2)Capita State City
Fiscal (thousands Personal Unemployment Unemployment
Year Population (1)of dollars)Income (2) Rate (3)Rate (3)
2010 8,069 $383,915 $47,579 7.0%6.4%
2011 8,069 409,203 50,713 5.8%5.2%
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%
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
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142
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)12,000 1 52.4% 10,100 1 56.4%
Andersen Corp (Bayport)2,622 2 11.4% - - -
Healtheast Care/St. Johns Hospital (Maplewood) 1,429 3 6.2% - - -
Washington County (Stillwater)1,258 4 5.5% - - -
ISD 834 (Stillwater)1,143 5 5.0% 1,005 3 5.6%
Woodwinds Health (Woodbury)1,100 6 4.8% 485 5 2.7%
MN Correctional Facility (Oak Park Hts)515 7 2.2% - - -
Ecowater Systems, Inc. (Woodbury)440 8 1.9% 400 6 2.2%
Bremer Bank Operations Ctr (Lake Elmo)425 9 1.9% 400 7 2.2%
DiaSorin, Inc. (Stillwater)350 10 1.5% - - -
The Hartford (Woodbury) - - - 1,021 2 5.7%
Imation (Oakdale) - - - 500 4 2.8%
High Pointe Health Campus (Lake Elmo) - - - 180 8 1.0%
Lake Elmo Inn Inc. - - - 125 9 0.7%
Machine Shed/Wildwood Inn (Lake Elmo) - - - 110 10 0.6%
(1)City staff estimate
2019 2010
143
CITY OF LAKE ELMO, MINNESOTA
FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION/PROGRAM
Last Ten Fiscal Years
2019 2018 2017 2016
General Government:
Administration 2.70 2.70 2.45 2.45
Finance 1.05 1.05 1.20 1.20
Planning and Zoning 2.10 2.10 2.21 2.21
Total General Government 5.85 5.85 5.86 5.86
Public Safety:
Fire 3.80 3.80 3.80 3.80
Building Inspections 4.20 4.20 4.21 4.21
Total Public Safety 8.00 8.00 8.01 8.01
Public Works:
Streets and Roadways 4.80 4.80 4.55 4.55
Parks and Recreation:
Parks 2.20 2.20 3.00 3.00
Communications 0.50 0.50 - -
Total Governmental Activities 21.35 21.35 21.42 21.42
Business-type Activities:
Water Utility 2.50 2.50 2.00 2.00
Sewer Utility 1.15 1.15 1.66 1.66
Storm Sewer Utility 0.80 0.80 0.80 0.00
Total Business-Type Activities 4.45 4.45 4.46 3.66
Total 25.80 25.80 25.88 25.08
Source: City's Adopted Budgets
Full-Time-Equivalent Employees as of December 31,
144
Table 17
2015 2014 2013 2012 2011 2010
3.20 3.55 3.55 3.15 3.15 3.15
0.80 1.25 1.25 0.50 0.50 0.50
2.75 2.70 2.95 1.55 1.55 1.55
6.75 7.50 7.75 5.20 5.20 5.20
1.50 1.55 2.05 1.60 1.10 1.10
3.15 1.55 1.30 0.95 0.95 0.95
4.65 3.10 3.35 2.55 2.05 2.05
3.90 3.20 3.21 3.05 3.05 3.05
1.85 3.30 2.74 2.52 2.52 2.52
0.70 0.35 0.40 0.15 0.15 0.15
17.85 17.45 17.45 13.47 12.97 12.97
2.45 2.60 2.10 1.85 1.85 1.85
1.30 0.70 0.70 0.30 0.30 0.30
0.00 0.00 0.00 0.00 0.00 0.00
3.75 3.30 2.80 2.15 2.15 2.15
21.60 20.75 20.25 15.62 15.12 15.12
Full-Time-Equivalent Employees as of December 31,
145
CITY OF LAKE ELMO, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
2019 2018 2017 2016
Planning and Zoning:
Conditional use permits 6 6 5 3
Interim use permits - - 2 2
Minor subdivisions 1 1 1 2
Plats / planned unit developments 13 13 10 11
Rezonings 4 4 5 3
Site plans - - 1 1
Variances 6 6 6 4
Fire:
Total emergency responses 461 461 456 430
EMS responses 317 317 313 268
Fire responses 144 144 143 162
Building Inspections:
Residential permit valuations (thousands of dollars) $113,913 $113,913 $86,710 $119,301
Commercial permit valuations (thousands of dollars)$3,217 $3,217 $1,185 $2,003
New residential units (1)245 245 299 240
New commercial units - - 1 1
Water Utility:
Number of customers 2,317 2,317 1,727 1,538
Average quarterly consumption (2)56 56 28 18
(millions of gallons)
Sanitary Sewer Utility:
Number of customers 1,253 1,253 712 321
Average quarterly flow (3)11 11 12 14
(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 flows
146
Table 18
2015 2014 2013 2012 2011 2010
2 4 2 3 - -
1 1 1 - 3 1
2 - 2 1 - -
9 17 1 - - -
2 11 2 7 - -
- - 2 1 - 1
2 2 5 4 6 2
429 358 448 399 315 361
274 237 280 262 195 211
32 21 28 28 24 14
$50,401 $23,032 $19,979 $20,320 $16,133 $15,889
$1,952 $7,309 $966 $2,351 $2,590 $2,013
140 41 32 31 24 26
1 3 - - - 1
1,234 1,073 1,051 1,016 998 967
18 19 21 15 14 18
96 45 29 29 29 29
74 77 77 75 71 72
147
CITY OF LAKE ELMO, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Table 19
Last Ten Fiscal Years
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
Fire:
Stations 2 2 2 2 2 2 2 2 2 2
Public Works:
Bituminous streets (miles)112 112 103 103 65 65 63 63 63 62
Gravel streets (miles)0.5 0.5 2 2 2 2 2 2 2 2
Storm sewer (miles)33 33 30 30 25 25 25 25 25 25
Parks & Recreation:
Acres of parkland 427 427 420 420 420 420 420 420 420 420
Number of parks 24 24 17 17 17 17 17 17 17 17
Water Utility:
Water towers 3 3 3 3 3 3 2 2 2 2
Miles of watermain 58 58 50 50 43 40 39 37 37 37
Number of fire hydrants 559 559 415 415 378 351 293 280 280 280
Sanitary Sewer Utility:
Miles of sanitary sewer 29 29 8 8 4 3 3 3 3 3
Lift Stations 5 5 4 4 4 4 3 3 3 3
Sources: Various City Department's annual financial report statistics
148
55 E 5th Street Suite 1400, St. Paul, MN, 55101 651.426.7000 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, 2019, 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 26, 2020.
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, except as
described in the Schedule of Findings and Responses as item 2019-004. 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 26, 2020
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF FINDINGS AND RESPONSES
For The Year Ended December 31, 2019
2019-004 Prompt Payment of Bills
Criteria: Minnesota Statute 471.425, subdivisions 2a reads as follows:
471.425 PROMPT PAMENT OF LOCAL GOVERNMENT BILLS.
Subd. 2. Payment required.
A municipality must pay each vendor obligation according to the terms of the contract or,
if no contract terms apply, within the standard payment period unless the municipality in good
faith disputes the obligation. Standard payment period is defined as follows:
(a) For municipalities who have governing boards which have regularly scheduled meetings at
least once a month, the standard payment period is defined as within 35 days of the date of receipt.
Condition and context: During our audit, we noted the payment to Metropolitan Council
for August 2019 waste water services was not made until June 2020.
Cause: The invoice was transmitted to the City in July 2019 during a time of staff
turnover.
Effect: Untimely payments may subject the City to interest and late fees, although no such fees
were charged in this instance.
Recommendation: We recommend the City pay all vendor invoices in accordance with
Minnesota Statute 471.425.
Views of Responsible Officials and Corrective Action Plan: Staff will review and investigate
any significant variances when completing quarterly financial reports.
55 E 5th Street Suite 1400, St. Paul, MN, 55101 651.426.7000 www.redpathcpas.com
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and
Members of the City Council
City of 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, 2019, 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 26, 2020.
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) to
determine the audit procedures that are appropriate in the circumstances for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the City of 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 have not been identified. However, as described in the
accompanying schedule of findings and responses, we did identify 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 deficiencies described
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
in the accompanying schedule of findings and responses as items 2019-001 and 2019-002 to be
material weaknesses.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
that is less severe than a material weakness, yet important enough to merit the attention by
those charged with governance. We consider the deficiency described in the accompanying
schedule of findings and responses as item 2019-003 to be a significant deficiency.
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 determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of our audit, and accordingly, we do not express such an opinion. The results of our
tests disclosed no instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards.
City of Lake Elmo, Minnesota’s Responses to Findings
The City of Lake Elmo, Minnesota’s responses to the findings identified in our audit are
described in the accompanying schedule of findings and responses. The City of Lake Elmo,
Minnesota’s responses were not subjected to the auditing procedures applied in the audit of the
financial statements and, accordingly, we express no opinion on them.
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 26, 2020
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF FINDINGS AND RESPONSES
For The Year Ended December 31, 2019
2019-001 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: While preparing for the 2019 audit, City staff detected that infrastructure assets
totalling $10,904,086 were contributed by developers to the City during 2017 and 2018.
These assets were previously unrecorded. As a result, a prior period adjustment was made
to restate beginning equity balances.
In addition, auditors detected material audit adjustments to grant receivables, capital assets,
accounts payable and contracts payable.
Cause: Accounting complexities relating to rapid development, staff turnover and
continued clean up and reconciliation of all balance sheet accounts contributed to the cause
of many adjustments.
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: Once subdivision improvements
are accepted by the City Council, finance department staff will contact engineering to get data
to record those assets in the appropriate fund.
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, 2019
2019-002 Maintaining an Accurate List of Outstanding Escrows
Criteria: A listing of outstanding escrow balances should be maintained, and the total
outstanding balance should be reconciled to the general ledger.
Condition: The City maintains a listing of outstanding amounts held for each customer and
tracks receipts and disbursements of escrow activity using its general ledger software.
However, the amount reported in the general ledger is approximately $843,000 greater than
the amount held according to the escrow listings.
Cause: Prior to rapid development occurring in the City, receipt and disbursement
information available in the general ledger was likely sufficient. However, additional
procedures to better track and reconcile escrows appear to have never been implemented to
keep pace with the increased activity of the corresponding accounts.
Effect: By not maintaining a system to track each customer’s oustanding balance, there is
an increased risk that expenses incurred by the City may not be applied to the customer’s
escrow balance, or that the incorrect amount may be refunded to the customer.
Additionally, it can be difficult to track the righful owner of any old, unclaimed escrows.
Recommendation: We understand City staff have reconciled the escrow activity since
2015. During the last year, staff have also compiled a listing of outstanding escrow
balances in an attempt to reconcile it to the general ledger. We recommend these efforts be
continued.
Views of Responsible Officials and Corrective Action Plan: Building permit escrow and
developer escrow information will be updated at least monthly going forward. Monthly
statements will be sent to developers.
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF FINDINGS AND RESPONSES
For The Year Ended December 31, 2019
2019-003 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 lask 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 E 5th Street Suite 1400, St. Paul, MN, 55101 651.426.7000 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 (the City) for the year ended December 31, 2019. Professional standards
require that we provide you with information about our responsibilities under generally accepted
auditing standards and Government Auditing Standards, as well as certain information related to
the planned scope and timing of our audit. We have communicated such information in our
letter to you dated January 6, 2020. 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 are described in Note 1 to the financial
statements. As described in Note 16 to the financial statements, the City implemented GASB
Statement No. 84, Fiduciary Activities for the year ended December 31, 2019. As a result,
escrow deposits held by the City are now reported on the Statement of Net Position (Statement 1)
and in the General Fund (Statement 3).
We noted no transactions entered into by the City during the year for which there is a lack of
authoritative guidance or consensus. All significant transactions have been recognized in the
financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management
and are based on management’s knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because
of their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected. We believe the most sensitive
estimates affecting the City’s financial statements were the discount rate and other pension
related assumptions used to measure the net pension asset / liability, pension related deferred
inflows and outflows, and pension expense, as well as assumptions used to measure the OPEB
City of Lake Elmo, Minnesota
Communication With Those Charged With Governance
Page 2
liability. The discount rate and other pension and OPEB assumptions are based on actuarial
studies. We evaluated the key factors and assumptions used to develop these estimates in
determining that they are reasonable in relation to the financial statements taken as a whole.
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,
Note 18 – Prior Period Adjustment, and Note 19 – Extraordinary Item.
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. Material misstatements detected as a result of audit
procedures are summarized in the Schedule of Findings and Responses as Finding 2019-001.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting,
or auditing matter, whether or not resolved to our satisfaction, that could be significant to the
financial statements or the auditor’s report. We are pleased to report that no such disagreements
arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the
management representation letter dated June 26, 2020.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a “second opinion” on certain situations. If a
consultation involves application of an accounting principle to the City’s financial statements or
City of Lake Elmo, Minnesota
Communication With Those Charged With Governance
Page 3
a determination of the type of auditor’s opinion that may be expressed on those statements, our
professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts. To our knowledge, there were no such consultations with
other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the City’s auditors.
However, these discussions occurred in the normal course of our professional relationship and
our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to the management’s discussion and analysis, the
budgetary comparison schedule, and the schedules of OPEB and pension information, which are
required supplementary information (RSI) that supplements the basic financial statements. Our
procedures consisted of inquiries of management regarding the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the
basic financial statements. We did not audit the RSI and do not express an opinion or provide
any assurance on the RSI.
We were engaged to report on the combining and individual nonmajor fund financial statements
which accompany the financial statements but are not RSI. With respect to this supplementary
information, we made certain inquiries of management and evaluated the form, content, and
methods of preparing the information to determine that the information complies with accounting
principles generally accepted in the United States of America, the method of preparing it has not
changed from the prior period, and the information is appropriate and complete in relation to our
audit of the financial statements. We compared and reconciled the supplementary information to
the underlying accounting records used to prepare the financial statements or to the financial
statements themselves.
We were not engaged to report on the introductory and statistical sections which accompany the
financial statements but are not RSI. Such information has not been subjected to the auditing
procedures applied in the audit of the basic financial statements, and accordingly, we do not
express an opinion or provide any assurance on it.
City of Lake Elmo, Minnesota
Communication With Those Charged With Governance
Page 4
Restrictions on Use
This information is intended solely for the use of the City Council and management of the City
of 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 26, 2020