HomeMy WebLinkAbout2015 Annual Comprehensive Financial ReportCITY OF LAKE ELMO, MINNESOTA
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2015
PREPARED BY:
FINANCE DIRECTOR'S OFFICE
FINANCE DIRECTOR
CATHY BENDEL
PAGE
INTRODUCTORY SECTION
Letter of Transmittal i
GFOA Certificate of Achievement v
Elected and Appointed Officials vi
Organizational Chart vii
FINANCIAL SECTION
Independent Auditor's Report 1
Management's Discussion and Analysis 3
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 17
Statement of Activities 18
Fund Financial Statements
Balance Sheet - Governmental Funds 22
Reconciliation of Net Position in the Government-wide
Financial Statements and Fund Balances in the Fund
Basis Financial Statements 25
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Governmental Funds 26
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities 29
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual - General Fund 30
Combining Statement of Net Position - Proprietary Funds 34
Combining Statement of Revenues, Expenses and Changes in
Net Position - Proprietary Funds 38
Combining Statement of Cash Flows - Proprietary Funds 40
Statement of Fiduciary Net Position - Fiduciary Funds 42
Notes to Financial Statements 45
Required Supplemental Information
Schedule of City Contributions
General Employees Retirement Fund 91
Police and Fire FundPension Plan 91
Schedule of Proportionate Share of Net Pension Liability
General Employees Retirement Fund 92
Police and Fire FundPension Plan 92
City of Lake Elmo Fire Relief Association
Schedule of Funding Progress for the Fire Relief Association 93
Schedule of Employer Contributions for the Fire Relief Association 93
Schedule of Funding Progress - Other Post Employment Benefits 94
Combining and Individual Fund Statements and Schedules
Combining Balance Sheet - Nonmajor Governmental Funds 96
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Governmental Funds 97
Combining Balance Sheet - Nonmajor Special Revenue Funds 98
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Special Revenue Funds 99
TABLE OF CONTENTS
CITY OF LAKE ELMO, MINNESOTA
For the Fiscal Year Ended December 31, 2015
FINANCIAL STATEMENTS
PAGE
FINANCIAL SECTION (CONTINUED)
Combining Balance Sheet - Nonmajor Capital Projects Funds 100
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Capital Projects Funds 102
Combining Statement of Net Position - Internal Service Funds 104
Combining Statement of Revenues, Expenses and Changes in Fund
Net Position - Internal Service Funds 105
Combining Statement of Cash Flows - Internal Service Funds 106
Combining Balance Sheet - Debt Service Funds 108
Combining Schedule of Revenues, Expenditures and Changes in Fund
Balances - Debt Service Funds 110
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual - City Events Special Revenue Fund 112
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual - Library Special Revenue Fund 113
Combining Schedule of Changes in Assets and Liabilities - Agency Funds 114
STATISTICAL SECTION (UNAUDITED)REFERENCE
Net Position by Component Schedule 1 116
Changes in Net Position Schedule 2 118
Fund Balances, Governmental Funds Schedule 3 122
Changes in Fund Balances, Governmental Funds Schedule 4 124
Tax Capacity and Estimated Actual Value of Taxable Property Schedule 5 126
Property Tax Rates and Tax Levies - Direct and Overlapping Property
Tax Rates Schedule 6 127
Principal Property Taxpayers Schedule 7 128
Schedule of Property Tax Levies and Collections Schedule 8 130
Water and Sanitary Sewer Charges by Customer Schedule 9 132
Ratios of Outstanding Debt by Type Schedule 10 134
Ratios of General Bonded Debt Outstanding Schedule 11 136
Computation of Direct and Indirect General Obligation Bonded Debt
and Legal Debt Margin Schedule 12 138
Legal Debt Margin Information Schedule 13 140
Pledged Revenue Coverage Schedule 14 142
Demographic and Economic Statistics Schedule 15 143
Principal Employers Schedule 16 144
Full-Time Equivalent Employees by Function Schedule 17 146
Operating Indicators by Function/Program Schedule 18 148
Capital Assets Statistics by Function/Program Schedule 19 150
OTHER REPORT SECTION
Independent Auditor's Report on Minnesota Legal Compliance 153
CITY OF LAKE ELMO, MINNESOTA
FINANCIAL STATEMENTS
For the Fiscal Year Ended December 31, 2015
TABLE OF CONTENTS (CONTINUED)
CITY OF LAKE ELMO, MINNESOTA
INTRODUCTORY SECTION
DECEMBER 31, 2015
This Page Left Blank Intentionally
i
3800 Laverne Avenue North
Lake Elmo, MN 55042
651-747-3900 www.lakeelmo.org
June 9, 2016
To the Honorable Mayor, Members of the City Council, and Citizens of the
City of Lake Elmo:
I am pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Lake
Elmo, Minnesota for the year ended December 31, 2015.
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 Government Accounting Standard 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, 2015.
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 Smith, Schafer and
Associates, Ltd, a firm of licensed certified public accountants. The goal of the independent
audit was to provide reasonable assurance that the financial statements of the City of Lake
Elmo for the fiscal year ended December 31, 2015 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, 2015 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.
ii
A “Single Audit” designed to meet the special needs of a federal grantor agency was not
performed for the year ended December 31, 2015 as the City did not participate in any
programs that required this additional independent audit.
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 8,872 which represents 3,059 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/emergency
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 at the first meeting in September each year so that the preliminary tax levy can
be submitted to Washington County by the annual due date. The preliminary tax levy may be
lowered but not increased. The 2015 final budget and tax levy was required to be adopted by
and submitted to Washington County by December 28, 2015. 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 undesignated fund balance. Monthly budget to actual comparison reports
are provided to the Finance Committee and the City Council to keep them apprised of results to
date so they are aware of performance results compared to plans.
iii
FACTORS AFFECTING FINANCIAL CONDITION
To put the financial statements contained in this report in context, a cursory analysis of the
current environment within which Lake Elmo operates is warranted.
LOCAL ECONOMY
Lake Elmo is home to numerous businesses that are leaders in their respective industries. New
developments platted for approximately 1,900 new homes have been approved and are
underway. The City’s highway infrastructure continues to make Lake Elmo a desirable
residential location. Rapid growth is further reflected in 2015 population estimates of 8,872, or
an increase of 10% since the 2010 census.
New housing starts in 2015 numbered 139 with a total value of $46,784,101 and an average
value of $336,576. Commercial plans were presented for a new Insurance Agency, a special
needs K-12 school and a new senior center, all of which will be built in 2016 and will greatly
strengthen the existing tax base of the City.
LONG TERM FINANCIAL PLANNING
Total unassigned General Fund balance as of December 31, 2015 was 85.7% of the total 2015
General Fund expenditures. 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 2015, Moody’s Investors Service maintained the City's long term debt rating of Aa2. In
their assessment of the City, Moody’s noted the following:
Strong Finances supported by conservative budget strategies
Healthy unassigned fund balance
Strong Financial operations and healthy financial reserves and liquidity
Moderate debt burden
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
During 2015, the Metropolitan Council issued the 2015 System Statement for the City of Lake
Elmo which outlines the updated forecasts for the City as a result of the termination in 2014 of
the Memorandum of Understanding (MOU). The previous forecasted population number for
2040 was reduced from 20,500 to 18,200. Receipt of the system statement plans triggers a
community obligation to review and amend its comprehensive plan as necessary, within the
next three years.
iv
MAJOR INITIATIVES
2015 was a very busy year for the City due to continuation of on-going infrastructure upgrades
and projects as well as oversight of the on-going residential and commercial development
activity.
The 2015 infrastructure projects included the following:
Phase I of the joint project with Washington County on CSAH 17. This project included
the replacement of old watermain and installation of sanitary sewer and storm sewer
while reconstructing the streets.
39th Street project for street improvements and connection to City Sewer
Eagle Point Boulevard street reconstruction project
Continued work with the Union Pacific Railroad regarding the downtown project and a
new development impacting the Railroad at various locations.
Inwood Avenue water and sewer line
Diligent collection, tracking and reporting related to developer escrows to minimize
taxpayer risk.
2015 seal coating and crack filling project
Use of Parkland dedication fees to continue to make improvements to existing parks
and providing oversight to the new City parks being constructed by developers.
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, 2014. 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, 2015. This submittal culminates extensive financial work and
stringent oversight by the City of Lake Elmo City Council, Finance Committee, Northland
Strategies and professional staff. Lake Elmo wishes to thank the staff of Smith, Schafer and
Associates, Ltd. for their assistance and review of the document.
Respectfully,
Cathy Bendel
Finance Director
v
vi
POSITION NAME TERM EXPIRES
ELECTED OFFICIALS
City Council:
Mayor Mike Pearson December 31, 2016
Council Member Justin Bloyer December 31, 2016
Council Member Julie Fliflet December 31, 2018
Council Member Jill Lundgren December 31, 2018
Council Member Anne Smith December 31, 2016
APPOINTED OFFICIALS
Interim City Administrator Clark Schroeder Continuous
Finance Director Cathy Bendel Continuous
City Clerk Julie Johnson Continuous
FINANCE COMMITTEE
Julie Fliflet, Committee Chair and City Council
Anne Smith, City Council
Terry Forrest, Retired CFO
CITY OF LAKE ELMO, MINNESOTA
ELECTED AND APPOINTED OFFICIALS
December 31, 2015
vii
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CITY OF LAKE ELMO, MINNESOTA
FINANCIAL SECTION
DECEMBER 31, 2015
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INDEPENDENT AUDITOR'S REPORT
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, 2015, and the related notes to the financial statements, which
collectively comprise the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes the
design, implementation and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit includes 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 principles
used and the reasonableness of significant accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.
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, 2015, and the
respective changes in financial position and, where applicable, cash flows thereof and the budgetary
comparison for the General Fund for the year then ended in accordance with accounting principles generally
accepted in the United States of America.
Honorable Mayor and Members of the City Council
City of Lake Elmo, Minnesota
Page 2
Emphasis of Matter
As discussed in Note 5 to the financial statements, in 2015 the City adopted new accounting guidance,
Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for
Pensions and Governmental Accounting Standards Board (GASB) Statement No. 71, Pension Transition for
Contributions Made Subsequent to the Measurement Date -an amendment of GASB Statement No. 68. Our
opinions are not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's
Discussion and Analysis on pages 3 through 13 and the required supplemental 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
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 listed in the Table of Contents 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 and schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records used to
prepare the basic financial statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and certain additional procedures, including comparing
and reconciling such information directly to the underlying accounting and other records used to prepare the
basic financial statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion, the
information is 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.
Maplewood, Minnesota
June 9, 2016
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
3
As management of the City of Lake Elmo, Minnesota, we offer readers of the City's financial
statements this narrative overview and analysis of the financial activities of the City of Lake Elmo,
Minnesota for the fiscal year ended December 31, 2015.
New Accounting Pronouncement. The City implemented Governmental Accounting Standards
Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, and the related
GASB Statement No. 71, Pension Transitions for Contributions Made Subsequent to the
Measurement Date -an Amendment of GASB Statement No. 68, for the year ended December 31,
2015. These Statements established accounting and financial reporting standards for pensions.
FINANCIAL HIGHLIGHTS
The assets of the City of Lake Elmo, Minnesota exceeded its liabilities at the close of the
most recent fiscal year by $31,735,872 (net position). Of this amount,$7,519,931
(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 $3,768,343 during 2015.
As of the close of the current fiscal year, the City of Lake Elmo, Minnesota’s governmental
funds reported combined ending fund balances of $7,005,907, an increase of $857,504 from
the prior year. This increase was due primarily to property taxes and special assessments
collected in excess of capital outlay expenditures.
At the end of the current fiscal year, unassigned fund balance for the general fund was
$2,754,976, or 85.7%of total general fund expenditures. The nonspendable portion of the
general fund balance as of December 31, 2015 ($432,306) related to the interfund loan to the
Village Project fund and prepaid expenses.
The City's total noncurrent liabilities decreased by $879,005 or 4%during the current fiscal
year.
The City was recognized by the Government Finance Officers Association of the United
States and Canada (GFOA) for obtaining a Certificate of Achievement for Excellence in
Financial Reporting for the City's 2014 Comprehensive Annual Financial Report.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an introduction to the City of Lake Elmo,
Minnesota’s basic financial statements. The City's basic financial statements are comprised of the
following three components:1) government-wide financial statements, providing information for the
City as a whole, 2) fund financial statements,providing detailed information for the City's significant
funds, and 3) notes to the financial statements, providing additional information that is essential to
understanding the government-wide and fund statements. This report also contains other
supplementary information in addition to the basic financial statements themselves.
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
4
Government-wide financial statements. The government-wide financial statements are
designed to provide readers with a broad overview of the City of Lake Elmo, Minnesota’s finances,
in a manner similar to a private-sector business.
The statement of net position presents information on all of the City of Lake Elmo, Minnesota’s
assets and liabilities, with the difference between the two reported as net position. Over time,
increases or decreases in net position may serve as a useful indicator of whether the financial
position of the City of Lake Elmo, Minnesota 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 the 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 of Lake Elmo,
Minnesota that are principally supported by taxes and intergovernmental revenues (governmental
activities) from other functions that are intended to recover all or a significant portion of their costs
through user fees and charges (business-type activities). The governmental activities of the City of
Lake Elmo, Minnesota include general government, public safety, public works, and culture and
recreation. The business-type activities of the City of Lake Elmo, Minnesota include the water,
sewer and storm sewer funds.
The government-wide financial statements can be found on pages 17-19 of this report.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain
control over resources that have been segregated for specific activities or objectives. The City of
Lake Elmo, Minnesota, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City of
Lake Elmo, Minnesota can be divided into three categories:governmental funds, proprietary funds
and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government-wide financial statements. However, unlike
the government-wide financial statements, governmental fund financial statements focus on near-
term inflows and outflows of spendable resources,as well as on balances of spendable resources
available at the end of the fiscal year. Such information may be useful in evaluating a government’s
near-term financial requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government-wide financial statements. By
doing so, readers may better understand the long-term impact of the government’s near-term
financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures, and changes in fund balances provide a reconciliation to
facilitate this comparison between governmental funds and governmental activities.
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
5
The City of Lake Elmo, Minnesota maintains twenty-two individual governmental funds, twelve of
which are debt service funds. Information is presented separately in the governmental fund balance
sheet and in the governmental fund statement of revenues, expenditures, and changes in fund
balances for the general fund, the debt service fund,the infrastructure reserve fund and the vehicle
acquisition fund, all of which are considered to be major funds.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 or schedules
elsewhere in this report.
The City of Lake Elmo, Minnesota adopts an annual budget for its general fund. Budgetary
comparison statements have been provided for this fund (pages 30 to 33) to demonstrate
compliance with the budget.
The basic governmental fund financial statements can be found on pages 22-29 of this report.
Proprietary funds. There are two different types of proprietary funds -enterprise funds and
internal service funds. Enterprise funds are used to report the same functions presented as
business-type activities in the government-wide financial statements. The City of Lake Elmo,
Minnesota uses three enterprise funds to account for its water, sewer and storm sewer operations.
Internal service funds are an accounting device used to accumulate and allocate costs internally
among the City of Lake Elmo, Minnesota's various functions. The City of Lake Elmo, Minnesota
uses three internal service funds to account for certain capital acquisition activities. Because all of
these services predominantly benefit governmental rather than business-type functions, they have
been included within governmental activities in the government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial
statements, only in more detail. The proprietary fund financial statements provide separate
information for the water, sewer and storm sewer funds, all of which are considered to be major
funds of the City of Lake Elmo, Minnesota.
The proprietary fund financial statements can be found on pages 34-41 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties
outside the City. Fiduciary funds are not reflected in the government-wide financial statements
because the resources of those funds are not available to support the City's own programs. The
accounting use for fiduciary funds is much like that used for proprietary funds.
The basic fiduciary fund financial statement can be found on page 42 of this report.
Notes to the financial statements. The notes provide additional information that is essential to a
full understanding of the data provided in the government-wide and fund financial statements. The
notes to the financial statements can be found on pages 45-88 of this report.
Other Information. The combining statements referred to earlier in connection with non-major
governmental funds, debt service funds and internal service funds can be found on pages 96-111
of this report.
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
6
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government’s financial
position. In the case of the City of Lake Elmo, Minnesota, assets exceeded liabilities by
$31,735,872 at the close of the most recent fiscal year.
The largest portion of the City of Lake Elmo, Minnesota’s net position, $18,893,680 (60%)reflects
its investment in capital assets (e.g. land, buildings and improvements, and machinery and
equipment), less any related debt used to acquire those assets that is still outstanding. The City of
Lake Elmo, Minnesota uses these capital assets to provide services to citizens; consequently,
these assets are not available for future spending. Although the City of Lake Elmo, Minnesota's
investment in capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
2015 2014 2015 2014 2015 2014
Current and other assets 9,687,510$ 7,399,479$ 6,221,558$ 8,094,107$ 15,909,068$ 15,493,586$
Capital assets 18,527,639 16,737,433 22,792,835 22,037,175 41,320,474 38,774,608
Total assets 28,215,149 24,136,912 29,014,393 30,131,282 57,229,542 54,268,194
Deferred outflows of resources 171,032 67,075 238,107
Long-term liabilities outstanding 10,889,186 9,001,835 12,793,216 15,559,572 23,682,402 24,561,407
Other liabilities 1,265,752 665,117 645,372 516,558 1,911,124 1,181,675
Total liabilities 12,154,938 9,666,952 13,438,588 16,076,130 25,593,526 25,743,082
Deferred inflows of resources 119,126 19,125 138,251
Net position:
Net investment in capital assets 8,723,329 7,957,840 10,170,351 10,567,418 18,893,680 18,525,258
Restricted 3,446,142 1,106,200 1,876,119 2,387,312 5,322,261 3,493,512
Unrestricted 3,942,646 5,405,920 3,577,285 1,100,422 7,519,931 6,506,342
Total net position 16,112,117$ 14,469,960$ 15,623,755$ 14,055,152$ 31,735,872$ 28,525,112$
City of Lake Elmo, Minnesota's Net Position
Governmental Activities Business-Type Activities Total
An additional portion of the City of Lake Elmo, Minnesota's net position (17%) represents resources
that are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net position ($7,519,931) may be used to meet the government's ongoing obligations
to citizens and creditors.
At the end of the current fiscal year, the City of Lake Elmo, Minnesota is able to report positive
balances in all categories of net position for the City as a whole.
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
7
Governmental activities. Governmental activities increased the City of Lake Elmo, Minnesota's
net position by $2,064,314 during 2015. Key elements of this increase include:
Capital grants increased by $1,481,339 from the prior year due primarily to special
assessments related to the 2014 construction project.
Charges for services increased by $386,413 from the prior year due primarily to an increase
in the amount of building permits issued by the City.
Business-type activities. Business-type activities increased the City of Lake Elmo, Minnesota's
net position by $1,704,029. This increase is due primarily to the requirement for developments to
prepay the water and sewer access fees as the time they submit their final plat to the City.
A condensed version of the Statement of Activities follows:
2015 2014 2015 2014 2015 2014
Revenues:
Program revenues:
Charges for services 939,243$ 552,830$ 3,602,559$ 2,247,060$ 4,541,802$ 2,799,890$
Operating grants and contributions 249,094 204,462 249,094 204,462
Capital grants and contributions 2,038,940 557,601 1,159,222 2,038,940 1,716,823
General revenues:
Property taxes 3,204,119 3,200,291 3,204,119 3,200,291
Other 123,076 215,735 39,757 19,337 162,833 235,072
Total revenues 6,554,472 4,730,919 3,642,316 3,425,619 10,196,788 8,156,538
Expenses:
General government 1,134,132 1,072,888 1,134,132 1,072,888
Public safety 1,344,282 1,530,609 1,344,282 1,530,609
Public works 1,377,969 1,032,426 1,377,969 1,032,426
Culture and recreation 639,006 448,361 639,006 448,361
Interest on long-term debt 215,611 165,028 215,611 165,028
Water 1,363,043 1,069,511 1,363,043 1,069,511
Sewer 250,866 353,438 250,866 353,438
Storm sewer 103,536 149,887 103,536 149,887
Total expenses 4,711,000 4,249,312 1,717,445 1,572,836 6,428,445 5,822,148
Increase in net position before transfers 1,843,472 481,607 1,924,871 1,852,783 3,768,343 2,334,390
Transfers 220,842 (887,312) (220,842) 887,312
Change in net position 2,064,314 (405,705) 1,704,029 2,740,095 3,768,343 2,334,390
Net position - beginning of year as restated 14,047,803 14,875,665 13,919,726 11,315,057 27,967,529 26,190,722
Net position - end of year 16,112,117$ 14,469,960$ 15,623,755$ 14,055,152$ 31,735,872$ 28,525,112$
City of Lake Elmo, Minnesota's Change in Net Position
Governmental Activities Business-Type Activities Total
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
8
Below are specific graphs that provide comparisons of the governmental activities direct program
revenues with their expenditures. Any shortfalls in direct revenues are primarily supported by
property tax levy or general state aid.
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
Expenses and Program Revenues -Governmental Activities
Program revenues
Expenses
Property taxes
49%
Charges for
services
14%
Capital grants and
contributions
31%
Operating grants
and contributions
4%Other
2%
Revenues by Source -Governmental Activities
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
9
The following graphs related the business-type activity's program revenues with its expenditures.
Since this activity requires significant physical assets to operate, any excess revenues are held for
planned capital expenditures to keep pace with growing demand for services.
$0
$250,000
$500,000
$750,000
$1,000,000
$1,250,000
$1,500,000
$1,750,000
$2,000,000
Expenses and Program Revenues -Business-Type Activities
Program revenues
Expenses
Charges for
services
99%
Capital grants and
contributions
0%
Other
1%
Revenues by Source -Governmental Activities
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
10
Financial Analysis of the Government's Funds
As noted earlier, the City of Lake Elmo, Minnesota uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements.
Governmental funds. The focus of the City of Lake Elmo, Minnesota’s governmental funds is to
provide information on near-term inflows, outflows, and balances of spendable resources. Such
information is useful in assessing the City of Lake Elmo, Minnesota’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.
As of the end of the current fiscal year, the City of Lake Elmo, Minnesota’s governmental funds
reported combined ending fund balances of $7,005,907, an increase of $857,504 in comparison
with the prior year. Approximately $4,091,963 of this total fund balance, or 58%, constitutes
assigned and unassigned fund balance, which is available for spending at the government’s
discretion. The remainder of the fund balance ($2,913,944) is restricted and nonspendable to
indicate that it is not available for new spending because it has already been restricted by creditors,
grantors or regulations of other governments, has been expensed for prepaid items, or is
unavailable because the funds have been loaned to another fund.
The general fund is the chief operating fund of City of Lake Elmo, Minnesota. At the end of the
current fiscal year, unassigned fund balance of the general fund was $2,754,976.As a measure of
the general fund's liquidity, it may be useful to compare the unassigned fund balance to total fund
expenditures. Unassigned fund balance represented 85.7%of total 2015 general fund
expenditures.The general fund’s total fund balance increased by $6,281 during the current fiscal
year due primarily to an increase in building permits and related revenue during the year.
The debt service fund increased its fund balance by $1,782,808 due to property taxes, special
assessments and intergovernmental revenues allocated to this fund in excess of debt service
expenditures.
The infrastructure reserve fund decreased its fund balance by $552,341 due primarily to capital
outlay expenditures in excess of revenue allocated to this fund and transfers from this fund to other
funds.
The vehicle acquisition fund decreased its fund balance by $655,175 due primarily to the City
taking delivery in 2015 for the Fire Truck, which was funded through debt issuance in 2014.
The special revenue funds increased their overall fund balances by $32,588 due primarily to
property taxes allocated to those funds in excess of current expenditures for culture and recreation.
The capital projects funds, other than the infrastructure reserve fund and vehicle acquisition fund
described previously, increased their collective fund balance by $243,343 due primarily to transfers
received from other funds.
Proprietary funds. The City of Lake Elmo, Minnesota's proprietary funds provide the same type of
information found in the government-wide financial statements, but in more detail.
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
11
Unrestricted net position for water operations, sewer operations and storm sewer operations at the
end of the year amounted to $1,883,661, $999,140 and $694,484, respectively. The water fund,
sewer fund and storm sewer fund increased their net position by $307,338, $1,135,930 and
$260,761,respectively,for the year ended December 31, 2015. Other factors concerning the
finances of these three funds have already been addressed in the discussion of the City of Lake
Elmo, Minnesota's business-type activities.
General Fund Budgetary Highlights
The City's General Fund budget was not amended during the year. The budget called for no
change in General Fund balance. The actual net change to the General Fund balance was an
increase of $6,281. Revenues were less than budget by $130,451 for the year ended December
31, 2015 due primarily to a decrease in property taxes collected. This was a result of the budget
assuming a higher average home valuation than those being built.
Total expenditures were less than budget by $136,732 for the year. Two departments had
expenditures in excess of budget: general government expenditures exceeded budget by $41,257
and culture and recreation exceeded budget by $76,567. The over expenditures in the general
government department were primarily related to legal expenses incurred over the amounts
budgeted. The over expenditures in the culture and recreation department related primarily to
staffing changes which were not reflected in the 2015 budget.
Capital Asset and Debt Administration
Capital assets. The City of Lake Elmo, Minnesota’s investment in capital assets for its
governmental and business-type activities as of December 31, 2015, amounted to $41,320,474
(net of accumulated depreciation). This investment in capital assets includes land, buildings and
improvements, and machinery and equipment. Total capital assets increased by $2,545,866, or
7%,for the year ended December 31, 2015, due primarily to completed construction projects and
additional construction in progress on various capital projects within the City.
2015 2014 2015 2014 2015 2014
Land 3,453,979$ 3,453,979$ 248,869$ 54,675$ 3,702,848$ 3,508,654$
Construction in progress 2,857,416 3,510,704 4,193,729 6,668,232 7,051,145 10,178,936
Buildings 2,649,349 2,760,350 2,649,349 2,760,350
Improvements other than buildings 439,669 510,821 439,669 510,821
Machinery and equipment 1,609,507 854,912 100,512 116,565 1,710,019 971,477
Infrastructure 7,517,719 5,646,667 18,249,725 15,197,703 25,767,444 20,844,370
Total 18,527,639$ 16,737,433$ 22,792,835$ 22,037,175$ 41,320,474$ 38,774,608$
TotalBusiness-Type ActivitiesGovernmental Activities
City of Lake Elmo, Minnesota's Capital Assets
(net of depreciation)
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
12
Additional information on the City of Lake Elmo, Minnesota’s capital assets can be found in Note
3D beginning on page 61 of this report.
Long-term debt. At the end of the current fiscal year, the City of Lake Elmo, Minnesota had
$22,296,219 in bonds, certificates and notes outstanding. The entire outstanding comprises debt
backed by the full faith and credit of the government.
2015 2014 2015 2014 2015 2014
General obligation bonds 9,740,000$ 8,735,000$ 12,535,000$ 15,505,000$ 22,275,000$ 24,240,000$
General obligation certificates 52,000 52,000
General obligation notes payable 21,219 21,219
Total 9,761,219$ 8,787,000$ 12,535,000$ 15,505,000$ 22,296,219$ 24,292,000$
Governmental Activities Business-Type Activities Total
City of Lake Elmo, Minnesota's Outstanding Debt
General Obligation Bonds, Certificates and Notes
The City of Lake Elmo, Minnesota's total bonds and certificates payable decreased by $1,995,781
during the current fiscal year. The decrease was due primarily to the refunding of the City's 2005A
water revenue bonds. A more detailed breakdown of these obligations can be found in Note 3E
beginning on page 63 of this report.
The City of Lake Elmo, Minnesota maintains an AA2 bond rating from Moody's Investor Service for
general obligation debt. The City has also recently been upgraded by Standard and Poor's to a
AA+ bond rating.
State statutes limit the amount of general obligation debt a Minnesota City may issue to 3% of its
market value of taxable property. Net debt is payable solely from ad valorem taxes. The City is
currently well within this limit.
Economic Factors and Next Year's Budgets and Rates
The City planned a new minor collector road to be built (5th Street) in the I-94
Corridor and many segments were completed in 2015. A new minor collector road
(Village Parkway) in the Old Village has been planned out by the City with initial
sections having been built out in 2015.
Plans continue with subsequent phases of the multi-phased developments which
were approved by the City.
The Cities taxable market value increased 13% from 2014 to 2015 and 4% from
2015 to 2016.
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
13
Economic Factors and Next Year's Budgets and Rates (continued)
There was a slight reduction in the amount of total property taxes levied in 2016.
This was comprised of the General Fund budget being 10% lower than 2015, which
helped to offset increases to the debt service and library components of the tax levy.
Development continues to be strong in the new development areas. The 2016
budget anticipates the building of 140 new homes and the continuation of
commercial expansion.
The Lake Elmo Avenue Downtown project with Washington County is well underway
and Phase I was completed in 2015. Phase II of the project will be completed in
2016. The project covers 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 Inwood Avenue segment of the water line (for which the $3.5M in State Bonding
proceeds were secured) has moved into construction. This includes the construction
of a new water tower, booster station and the truck water main improvements.
Requests for Information
This financial report is designed to provide a general overview of the City of Lake Elmo,
Minnesota’s finances for all those with an interest in the City's finances. Questions concerning any
of the information provided in this report or requests for additional information should be addressed
to City of Lake Elmo, Minnesota, 3800 Laverne Avenue North, Lake Elmo, Minnesota, 55042.
This Page Left Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
FINANCIAL STATEMENTS
DECEMBER 31, 2015
This Page Left Blank Intentionally
See Notes to Financial Statements
17
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments 8,026,696$ 3,335,904$ 11,362,600$
Receivables, net of allowance 1,211,879 2,804,927 4,016,806
Due from other governmental units 120,605 2,012 122,617
Internal balances (77,425) 77,425
Prepaid expenses 30,816 1,290 32,106
Net pension asset 374,939 374,939
Capital assets:
Nondepreciable 6,311,395 4,442,598 10,753,993
Depreciable, net 12,216,244 18,350,237 30,566,481
Total Assets 28,215,149 29,014,393 57,229,542
DEFERRED OUTFLOWS OF RESOURCES
Unamortized deferred amount on refunding 27,609 48,858 76,467
Deferred outflows from pension activity 143,423 18,217 161,640
Total Deferred Outflows of Resources 171,032 67,075 238,107
LIABILITIES
Accounts payable 1,025,536 353,044 1,378,580
Accrued expenses 58,992 5,469 64,461
Accrued interest 99,424 108,475 207,899
Escrow deposits 75,000 75,000
Due to other governmental units 14,384 14,384
Unearned revenue 6,800 164,000 170,800
Noncurrent liabilities:
Due within one year 847,559 620,953 1,468,512
Due in more than one year 9,201,194 12,034,591 21,235,785
Net pension liability 840,433 137,672 978,105
Total Liabilities 12,154,938 13,438,588 25,593,526
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pension activity 119,126 19,125 138,251
NET POSITION
Net investment in capital assets 8,723,329 10,170,351 18,893,680
Restricted
Debt service 3,446,142 1,876,119 5,322,261
Unrestricted 3,942,646 3,577,285 7,519,931
Total Net Position 16,112,117$ 15,623,755$ 31,735,872$
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF NET POSITION
December 31, 2015
See Notes to Financial Statements
18
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Governmental activities:
General government 1,134,132$ 42,706$ $ $
Public safety 1,344,282 866,708 85,261
Public works 1,377,969 3,615 135,152 1,900,782
Culture and recreation 639,006 26,214 28,681 138,158
Interest on long-term debt 215,611
Total governmental activities 4,711,000 939,243 249,094 2,038,940
Business-Type activities:
Water 1,363,043 1,850,240
Sewer 250,866 1,523,067
Storm sewer 103,536 229,252
Total business-type activities 1,717,445 3,602,559
Total 6,428,445$ 4,541,802$ 249,094$ 2,038,940$
General revenues:
General property taxes
Grants and contributions not restricted to specific programs
Interest earnings
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning, as originally stated
Restatement due to change in accounting standards (Note 5)
Net position - beginning, as restated
Net position - ending
Program Revenues
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2015
19
Governmental Business-Type
Activities Activities Total
(1,091,426)$ (1,091,426)$
(392,313) (392,313)
661,580 661,580
(445,953) (445,953)
(215,611) (215,611)
(1,483,723) (1,483,723)
487,197$ 487,197
1,272,201 1,272,201
125,716 125,716
1,885,114 1,885,114
(1,483,723) 1,885,114 401,391
3,204,119 3,204,119
2,749 2,749
46,589 39,757 86,346
73,738 73,738
220,842 (220,842)
3,548,037 (181,085) 3,366,952
2,064,314 1,704,029 3,768,343
14,469,960 14,055,152 28,525,112
(422,157) (135,426) (557,583)
14,047,803 13,919,726 27,967,529
16,112,117$ 15,623,755$ 31,735,872$
Net (Expense) Revenue
and Changes in Net Position
This Page Left Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
FUND FINANCIAL STATEMENTS
DECEMBER 31, 2015
See Notes to Financial Statements
22
CITY OF LAKE ELMO, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2015
General Fund Debt Service
Infrastructure
Reserve
ASSETS
Cash and investments 2,994,027$ 2,568,653$ 769,626$
Receivables (Net of allowance for
uncollectibles)
Accounts 8,470 70,497
Delinquent taxes 43,188
Special assessments 950,579 17,833
Accrued interest 13,758
Due from other funds 158,195
Advances to other funds 405,398
Due from other governmental units 40,595 70,458 9,552
Prepaid expenses 26,908
TOTAL ASSETS 3,690,539$ 3,589,690$ 867,508$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
LIABILITIES
Accounts payable 397,699$ $ 602,151$
Escrow deposits payable
Accrued liabilities 55,570
Due to other funds 94,603 7,032
Unearned revenue 6,800
Advances from other funds
Total liabilities 460,069 94,603 609,183
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue:
Property taxes 43,188
Special assessments 950,579 17,833
Accounts receivable
Intergovernmental revenue 70,000
Total deferred inflows of resources 43,188 1,020,579 17,833
FUND BALANCE
Nonspendable 432,306
Restricted 2,477,730
Assigned 240,492
Unassigned 2,754,976 (3,222)
Total Fund Balance 3,187,282 2,474,508 240,492
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE 3,690,539$ 3,589,690$ 867,508$
23
Vehicle
Acquisition
Other
Governmental
Funds Total
66,684$ 1,600,443$ 7,999,433$
107,554 186,521
43,188
968,412
13,758
158,195
405,398
120,605
3,908 30,816
66,684$ 1,711,905$ 9,926,326$
$ 26,401$ 1,026,251$
75,000 75,000
2,707 58,277
57,904 159,539
6,800
405,398 405,398
567,410 1,731,265
43,188
968,412
107,554 107,554
70,000
107,554 1,189,154
3,908 436,214
2,477,730
66,684 1,461,566 1,768,742
(428,533) 2,323,221
66,684 1,036,941 7,005,907
66,684$ 1,711,905$ 9,926,326$
This Page Left Blank Intentionally
See Notes to Financial Statements
25
Amounts reported for governmental activities in the statement of net assets are different because:
Total governmental fund balances (pages 22-23)7,005,907$
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds:
Governmental funds - capital assets 24,518,596$
Accumulated depreciation (6,118,955)
18,399,641
Other long-term assets are not available to pay for current-period
expenditures and, therefore, are unavailable in the funds:
Delinquent property taxes 43,188$
Special assessments 968,412
Accounts receivable 107,554
Due from other governmental units 70,000
1,189,154
Long-term liabilities are not due and payable in the current period
and therefore are not reported in the funds:
Bonds and notes payable (9,761,219)$
Net pension liability (asset), deferred outflows and
inflows from pension activity (441,197)
Compensated absences (70,161)
Post employment benefit obligation (174,282)
Accrued interest (99,424)
Unamortized deferred amount on refunding 27,609
Unamortized bond premiums (93,353)
Unamortized bond discounts 50,262
(10,561,765)
Internal service funds are used by management to charge the cost
of services to individual funds. The assets and liabilities are
included in the governmental statement of net position.79,180
Net position of governmental activities (page 17)16,112,117$
December 31, 2015
CITY OF LAKE ELMO, MINNESOTA
RECONCILIATION OF NET POSITION IN THE
GOVERNMENT-WIDE FINANCIAL STATEMENTS AND FUND BALANCES
IN THE FUND BASIS FINANCIAL STATEMENTS
See Notes to Financial Statements
26
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2015
General Fund Debt Service
Infrastructure
Reserve
REVENUES
Taxes 2,506,141$ 484,814$ $
Licenses and permits 828,494
Intergovernmental 222,352 74,550
Charges for services 35,796
Fines and forfeitures 48,739
Special assessments 1,263,642 52,597
Dedication fees
Investment earnings 23,501 8,199 5,422
Miscellaneous revenue 2,860
TOTAL REVENUES 3,667,883 1,831,205 58,019
EXPENDITURES
Current
General government 1,025,320
Public safety 1,203,765
Public works 686,401
Culture and recreation 229,595
Unallocated 69,403
Capital Outlay
Public safety
Public works 1,747,493
Culture and recreation
Debt Service
Principal 667,000
Interest and other charges 203,702
Bond issuance costs 21,037
TOTAL EXPENDITURES 3,214,484 870,702 1,768,530
Excess (deficiency) of revenues
over (under) expenditures 453,399 960,503 (1,710,511)
OTHER FINANCING SOURCES (USES)
Issuance of debt 1,490,000
Premium on issuance of debt 29,558
(Discount) on issuance of debt (10,472)
Sale of capital assets
Transfers (447,118) 822,305 (350,916)
TOTAL OTHER FINANCING SOURCES (USES)(447,118) 822,305 1,158,170
Net change in fund balances 6,281 1,782,808 (552,341)
FUND BALANCES, Beginning 3,181,001 691,700 792,833
FUND BALANCES, Ending 3,187,282$ 2,474,508$ 240,492$
27
Vehicle
Acquisition
Other
Governmental
Funds Total
$ 231,261$ 3,222,216$
828,494
296,902
35,796
48,739
1,316,239
138,158 138,158
525 8,768 46,415
96,195 99,055
525 474,382 6,032,014
1,025,320
1,203,765
686,401
228,154 457,749
69,403
811,722 811,722
1,747,493
170,297 170,297
342 667,342
36 203,738
1,836 22,873
813,936 398,451 7,066,103
(813,411) 75,931 (1,034,089)
130,000 1,620,000
2,579 32,137
(914) (11,386)
30,000 30,000
(3,429) 200,000 220,842
158,236 200,000 1,891,593
(655,175) 275,931 857,504
721,859 761,010 6,148,403
66,684$ 1,036,941$ 7,005,907$
This Page Left Blank Intentionally
See Notes to Financial Statements
29
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - total governmental funds (pages 26-27)857,504$
Governmental funds report capital outlay 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:
Capital outlay capitalized 2,595,264$
Depreciation expense (789,356)
1,805,908
The net effect of various miscellaneous transactions involving
capital assets (i.e. sales, trade-ins and donations) is to
decrease net assets (38,593)
Revenues in the statement of activities that do not provide current
financial resources are not reported as revenues in the funds:
Special assessments 579,993$
Property taxes (18,097)
Intergovernmental revenue (70,000)
491,896
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:
Compensated absences, end of year (70,161)$
Compensated absences, beginning of year 83,085
Post employment benefit obligation, end of year (174,282)
Post employment benefit obligation, beginning of year 139,158
(22,200)
Bond, contract and loan proceeds provide current financial resources
to governmental funds, but issuing debt increase long-term
liabilities in the statement of net position. Repayment of long-term
debt is an expenditure in the governmental funds, but the
repayment reduces long-term liabilities in the statement of net
position:
Principal retirement on long-term debt 667,342$
Issuance of long-term debt (1,620,000)
Change in net pension liability (19,040)
Change in deferred amount on refunding 27,609
Change in accrued interest, bond premiums and
bond discounts (60,286)
(1,004,375)
Internal service funds are used by management to charge the costs of
capital equipment replacement to individual funds. The net revenue
of certain activities of internal service funds is reported with
govermental activities in the government-wide financial statements (25,826)
Change in net position of governmental activities (page 19)2,064,314$
CITY OF LAKE ELMO, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2015
See Notes to Financial Statements
30
Variance with
2015 Final Budget-
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes
Property 2,718,180$ 2,718,180$ 2,434,229$ (283,951)$
Franchise 47,500 47,500 71,912 24,412
Total Taxes 2,765,680 2,765,680 2,506,141 (259,539)
Licenses and Permits
Business 12,530 12,530 12,781 251
Nonbusiness 785,614 785,614 815,713 30,099
Total Licenses and Permits 798,144 798,144 828,494 30,350
Intergovernmental
MSA - maintenance 101,696 101,696 119,464 17,768
Fire state aid 41,500 41,500 58,166 16,666
Other 2,749 2,749 29,034 26,285
County and local 15,500 15,500 15,688 188
Total Intergovernmental 161,445 161,445 222,352 60,907
Charges for Services 10,425 10,425 35,796 25,371
Fines and forfeits 48,000 48,000 48,739 739
Investment earnings 10,000 10,000 23,501 13,501
Miscellaneous Revenue 4,640 4,640 2,860 (1,780)
TOTAL REVENUES 3,798,334$ 3,798,334$ 3,667,883$ (130,451)$
Budgeted Amounts
CITY OF LAKE ELMO, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2015
See Notes to Financial Statements
31
Variance with
2015 Final Budget-
Actual Positive
Original Final Amounts (Negative)
EXPENDITURES
General Government
Mayor and Council
Personnel services 27,955$ 27,955$ 27,665$ 290$
Other services and charges 13,000 13,000 21,452 (8,452)
Total Mayor and Council 40,955 40,955 49,117 (8,162)
Election
Other services and charges 1,050 1,050 1,880 (830)
Finance and Administration
Personnel services 372,668 372,668 393,984 (21,316)
Supplies 6,500 6,500 8,379 (1,879)
Other services and charges 52,795 52,795 36,236 16,559
Total Finance and Administration 431,963 431,963 438,599 (6,636)
Communications
Personnel services 51,191 51,191 16,579 34,612
Other services and charges 19,651 19,651 11,771 7,880
Total Communications 70,842 70,842 28,350 42,492
City Facilities
Supplies 350 350 478 (128)
Other services and charges 49,885 49,885 60,523 (10,638)
Total City Facilities 50,235 50,235 61,001 (10,766)
Professional Services
Assessor 32,000 32,000 46,659 (14,659)
Accounting and auditing 33,000 33,000 36,056 (3,056)
Legal 45,000 45,000 100,075 (55,075)
Engineering 54,800 54,800 33,146 21,654
Total Professional Services 164,800 164,800 215,936 (51,136)
Budgeted Amounts
CITY OF LAKE ELMO, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (CONTINUED)
For the Year Ended December 31, 2015
See Notes to Financial Statements
32
Variance with
2015 Final Budget-
Actual Positive
Original Final Amounts (Negative)
EXPENDITURES
General Government
Planning and Zoning
Personnel services 192,818$ 192,818$ 185,187$ 7,631$
Supplies 2,550 2,550 2,619 (69)
Other services and charges 28,850 28,850 42,631 (13,781)
Total Planning and Zoning 224,218 224,218 230,437 (6,219)
Total General Government 984,063 984,063 1,025,320 (41,257)
Public Safety
Police
Contracted services 517,799 517,799 527,462 (9,663)
Fire Protection
Personnel services 237,507 237,507 234,450 3,057
2% fire aid 37,324 37,324 58,166 (20,842)
Supplies 41,142 41,142 33,317 7,825
Other services and charges 106,663 106,663 97,153 9,510
Total Fire Protection 422,636 422,636 423,086 (450)
Building Inspector
Personnel services 201,382 201,382 134,715 66,667
Supplies 8,300 8,300 1,858 6,442
Other services and charges 113,875 113,875 45,774 68,101
Total Building Inspector 323,557 323,557 182,347 141,210
Animal Control
Other services and charges 6,800 6,800 11,415 (4,615)
Criminal Legal 50,000 50,000 55,710 (5,710)
Emergency Communications 7,000 7,000 3,745 3,255
Total Public Safety 1,327,792$ 1,327,792$ 1,203,765$ 124,027$
Budgeted Amounts
CITY OF LAKE ELMO, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (CONTINUED)
For the Year Ended December 31, 2015
See Notes to Financial Statements
33
Variance with
2015 Final Budget-
Actual Positive
Original Final Amounts (Negative)
EXPENDITURES
Public Works
General
Personnel services 241,595$ 241,595$ 212,881$ 28,714$
Supplies 356,278 356,278 328,696 27,582
Other services and charges 109,900 109,900 117,414 (7,514)
Total General 707,773 707,773 658,991 48,782
Trees 6,000 6,000 1,500 4,500
Street Lighting 28,000 28,000 25,910 2,090
Total Public Works 741,773 741,773 686,401 55,372
Culture and Recreation
Parks
Personnel services 120,728 120,728 195,242 (74,514)
Supplies 7,750 7,750 9,463 (1,713)
Other services and charges 24,550 24,550 24,890 (340)
Total Culture and Recreation 153,028 153,028 229,595 (76,567)
Other Unallocated
Compensation adjustments 35,000 35,000 *35,000
IT and telephone expense 109,560 109,560 69,403 40,157
Total Other Unallocated 144,560 144,560 69,403 75,157
Total Expenditures 3,351,216 3,351,216 3,214,484 136,732
Excess (deficiency) of revenues
over (under) expenditures 447,118 447,118 453,399 6,281
OTHER FINANCING SOURCES (USES)
Transfers (447,118) (447,118) (447,118)
NET CHANGE IN FUND BALANCE 6,281 6,281
FUND BALANCE, January 1 3,181,001 3,181,001 3,181,001
FUND BALANCE, December 31 3,181,001$ 3,181,001$ 3,187,282$ 6,281$
Budgeted Amounts
CITY OF LAKE ELMO, MINNESOTA
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (CONTINUED)
For the Year Ended December 31, 2015
* Actual compensation adjustments were $34,297 which are reflected in the departmental budgets.
See Notes to Financial Statements
34
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Net Position
December 31, 2015
Water Sewer Storm Sewer
ASSETS
Current Assets
Cash and investments 2,038,821$ 850,198$ 446,885$
Receivables
Accounts 357,771 296,810 244,474
Special assessments 487,294 1,401,674 16,904
Due from other governments 703 1,295 14
Due from other funds 54,305 23,915
Prepaid expenses 1,290
Total Current Assets 2,884,589 2,605,572 732,192
Noncurrent Assets
Property and Equipment
Land 248,869
Machinery and equipment 300,587
Infrastructure 18,803,656 2,761,352 611,337
Construction in progress 406,826 3,654,702 132,201
Total Property and Equipment 19,759,938 6,416,054 743,538
Less: Accumulated depreciation 3,774,797 249,448 102,450
Net Property and Equipment 15,985,141 6,166,606 641,088
Total Assets 18,869,730 8,772,178 1,373,280
DEFERRED OUTFLOWS OF RESOURCES
Deferred charges on refunding 48,858
Deferred outflows from pension activity 11,014 4,416 2,787
Total Deferred Outflows of Resources 59,872$ 4,416$ 2,787$
35
Total
Internal
Service Funds
3,335,904$ 27,263$
899,055
1,905,872
2,012
78,220
1,290
6,222,353 27,263
248,869
300,587 585,689
22,176,345
4,193,729
26,919,530 585,689
4,126,695 457,691
22,792,835 127,998
29,015,188 155,261
48,858
18,217
67,075$ $
See Notes to Financial Statements
36
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Net Position (Continued)
December 31, 2015
Water Sewer Storm Sewer
LIABILITIES
Current Liabilities
Accounts payable 243,094$ 106,865$ 3,085$
Accrued salaries payable 3,398 1,266 805
Accrued interest payable 58,677 49,798
Due to other funds 795
Due to other governments 2,293 7,455 4,636
Unearned revenue 164,000
Current portion of compensated absences 3,543 1,567 843
Current portion of bonds payable 415,000 200,000
Total Current Liabilities 890,800 366,951 9,369
Long-term Liabilities
Other postemployment benefits payable 14,005 3,885 6,806
Compensated absences payable 1,747 330 334
Net pension liability 83,240 33,372 21,060
Bonds payable and unamortized premium on
bonds, net of unamortized discount on bonds 8,342,715 3,664,769
Total Long-term Liabilities 8,441,707 3,702,356 28,200
Total Liabilities 9,332,507 4,069,307 37,569
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pension activity 11,563 4,636 2,926
NET POSITION
Net investment in capital assets 7,227,426 2,301,837 641,088
Restricted
Debt service 474,445 1,401,674
Unrestricted 1,883,661 999,140 694,484
Total Net Position 9,585,532$ 4,702,651$ 1,335,572$
37
Total
Internal
Service Funds
353,044$ $
5,469
108,475
795 76,081
14,384
164,000
5,953
615,000
1,267,120 76,081
24,696
2,411
137,672
12,007,484
12,172,263
13,439,383 76,081
19,125
10,170,351 127,998
1,876,119
3,577,285 (48,818)
15,623,755$ 79,180$
See Notes to Financial Statements
38
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Revenues, Expenses
and Changes in Net Position
For the Year Ended December 31, 2015
Water Sewer Storm Sewer
Operating Revenues 562,998$ 128,147$ 219,127$
Operating Expenses
Personnel services 128,647 51,275 35,908
Supplies 118,762 926 4,423
Professional services 36,652 21,653 47,242
Repairs and maintenance 10,140 1,131
Insurance 6,799
Utilities 141,214 23,205
Depreciation 557,627 42,224 15,963
Total Operating Expenses 999,841 140,414 103,536
Operating Income (Loss)(436,843) (12,267) 115,591
Other Revenue (Expense)
Investment earnings 26,985 9,928 2,844
Rents 49,742
Future infrastructure charges 1,237,500 1,394,920
Miscellaneous revenue 10,125
Bond issuance costs (12,919) (3,953)
Interest and fiscal expense (350,283) (106,499)
Total Other Revenue (Expense)951,025 1,294,396 12,969
Income (Loss) Before Transfers
and Contributions 514,182 1,282,129 128,560
Capital contributions - special assessments
Transfers in 84,569 94,845 132,201
Transfers out (291,413) (241,044)
Change in net position 307,338 1,135,930 260,761
Net Position, Beginning, as
originally stated 9,360,075 3,599,549 1,095,528
Restatement (Note 5)(81,881) (32,828) (20,717)
Net Position, Beginning, as restated 9,278,194 3,566,721 1,074,811
Net Position, End of Year 9,585,532$ 4,702,651$ 1,335,572$
39
Total
Internal
Service Funds
910,272$ $
215,830
124,111
105,547
11,271
6,799
164,419
615,814 26,000
1,243,791 26,000
(333,519) (26,000)
39,757 174
49,742
2,632,420
10,125
(16,872)
(456,782)
2,258,390 174
1,924,871 (25,826)
311,615
(532,457)
1,704,029 (25,826)
14,055,152 105,006
(135,426)
13,919,726
15,623,755$ 79,180$
See Notes to Financial Statements
40
Water Sewer Storm Sewer Total
Internal Service
Funds
Cash Flows from Operating Activities
Cash received from customers 1,945,846$ 1,415,374$ 207,496$ 3,568,716$ $
Cash payments to suppliers (308,194) (89,610) (47,463) (445,267)
Cash payments to employees (122,496) (50,862) (34,501) (207,859)
Net Cash Provided By (Used In)
Operating Activities 1,515,156 1,274,902 125,532 2,915,590
Cash Flows From Investing Activities
Interest earnings received 26,985 9,928 2,844 39,757 174
Cash Flows from Noncapital Financing Activities
Rents received 49,742 49,742
Increase in due to other funds 27,330
Transfers from other funds 84,569 94,845 132,201 311,615
Transfers to other funds (291,413) (241,044) (532,457)
Net Cash Provided By (Used In) Noncapital
Financing Activities (157,102) (146,199) 132,201 (171,100) 27,330
Cash Flows from Capital and Related Financing Activities
Acquisition of capital assets (652,351) (586,922) (132,201) (1,371,474) (27,330)
Special assessments 298,753 214,304 5,763 518,820
Proceeds from issuance of long-term debt 915,000 280,000 1,195,000
Bond issuance costs (12,919) (3,953) (16,872)
Increase in unamortized bond premiums 10,261 2,723 12,984
Principal paid on long-term debt (4,015,000) (150,000) (4,165,000)
Interest paid on long-term debt (355,648) (105,177) (460,825)
Net Cash Provided By (Used In) Capital and
Related Financing Activities (3,811,904) (349,025) (126,438) (4,287,367) (27,330)
Net Increase (Decrease) in Cash
and Cash Equivalents (2,426,865) 789,606 134,139 (1,503,120) 174
Cash and Cash Equivalents, January 1 4,465,686 60,592 312,746 4,839,024 27,089
Cash and Cash Equivalents, December 31 2,038,821$ 850,198$ 446,885$ 3,335,904$ 27,263$
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Cash Flows
For the Year Ended December 31, 2015
41
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES Water Sewer Storm Sewer Total
Internal Service
Funds
Operating income (loss)(436,843)$ (12,267)$ 115,591$ (333,519)$ (26,000)$
Adjustments to reconcile operating income to
net cash provided by operating activities
Depreciation 557,627 42,224 15,963 615,814 26,000
Change in net pension liability 1,908 764 482
Future infrastructure charges, included
in nonoperating revenue 1,237,500 1,394,920 2,632,420
Miscellaneous revenue, included in
nonoperating revenue 10,125
(Increase) decrease in:
Accounts receivable (20,938) (106,398) (21,910) (149,246)
Due from other governments 2,286 (1,295) 154 1,145
Prepaid expenses (1,290) (1,290)
Increase (decrease) in:
Accounts payable 5,036 (11,958) (434) (7,356)
Accrued salaries payable 837 47 (197) 687
Due to other governments 337 (29,447) 4,636 (24,474)
Unearned revenue 164,000 164,000
Other postemployment benefits payable 2,546 79 1,044 3,669
Compensated absences payable 860 (477) 78 461
Net Cash Provided By (Used In) Operating Activities 1,515,156$ 1,274,902$ 125,532$ 2,915,590$ $
Noncash Capital and Related Financing Activities
Amortization of deferred charges 4,479$ 342$ $ 4,821$ $
Amortization of bond premiums 5,938 1,205 7,143
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Cash Flows (Continued)
For the Year Ended December 31, 2015
See Notes to Financial Statements
42
Agency Funds
ASSETS
Cash and investments 1,827,170$
Accounts receivable 128
TOTAL ASSETS 1,827,298$
LIABILITIES
Accounts payable 99,952$
Deposits payable 1,727,346
TOTAL LIABILITIES 1,827,298$
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
December 31, 2015
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
This Page Left Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
45
1.Summary of Significant Accounting Policies
The financial statements of the City of Lake Elmo, Minnesota (the City) have been prepared in
conformity with generally accepted accounting principles (GAAP) as applied to governmental
units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting
body for establishing governmental accounting and financial reporting principles. The more
significant of the City's accounting principles are described below.
A.Reporting Entity
The City operates 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
City has considered all potential component units for which it is financially accountable,
and other organizations for which the nature and significance of their relationship with the
City are such that exclusion would cause the City's financial statements to be misleading
or incomplete. GASB has set forth criteria to be considered in determining financial
accountability for a component unit. These criteria include appointing a voting majority of
the component unit's governing body, and 1) the ability of the primary government to
impose its will on that component unit, or 2) the potential for the component unit to provide
specific benefits to, or impose specific financial burdens on the primary government. The
City has no component units.
Related Organizations
The Lake Elmo Firemen's Relief Association (Association) is organized as a legally
separate entity from the City by its members to provide pension and other benefits to its
members in accordance with Minnesota statutes. The membership appoints the board of
the Association and separate financial statements are issued by the Association. All
funding is conducted in accordance with Minnesota statutes. Although the City levies
property taxes for the Association, the Association is fiscally independent to determine and
levy taxes. The City's portion of the pension benefit costs related to the Association is
included in the general fund. The Association does not have any significant operational or
financial relationship with the City.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
46
1.Summary of Significant Accounting Policies (Continued)
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 nonfiduciary activities of the City.
Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business-type activities, which rely to a
significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segment is offset by program revenues. Direct expenses are those that
are clearly identifiable with a specific function or segment. Program revenues include 1)
charges to customers or applicants who purchase, use, or directly benefit from goods,
services, or privileges provided by a given function or segment and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds
and fiduciary funds, even though the latter are excluded from the government-wide
financial statements. Major individual governmental funds and major individual
enterprise funds are reported as separate columns in the fund financial statements.
C.Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting, as are the proprietary fund
financial statements. Revenues are recorded when earned and expenses are recorded
when a liability is incurred, regardless of the timing of related cash flows. Property taxes
are recognized as revenues in the year for which they are levied. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met.
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting. Revenues
are recognized as soon as they are both measurable and available. Revenues are
considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the City
considers revenues to be available if they are collected within 60 days of the end of the
current fiscal period.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
47
1.Summary of Significant Accounting Policies (Continued)
C.Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
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 when payment is due.
Property taxes, licenses and permits, 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.
Revenue resulting from exchange transactions, in which each party gives and receives
essentially equal value, is recorded on the accrual basis when the exchange takes
place. On a modified accrual basis, revenue is recorded in the year in which the
resources are measureable and become available.
Non-exchange transactions, in which the City receives value without directly giving equal
value in return, include property taxes, grants and donations. On an accrual basis,
revenue from property taxes is recognized in the year for which the tax is levied.
Revenue from grants and donations is recognized in the year in which all eligibility
requirements have been satisfied. Eligibility requirements include timing requirements,
which specify the year in when the resources are required to be used or the year when
use is first permitted; matching requirements, in which the City must provide local
resources to be used for a specific purpose; and expenditure requirements, in which the
resources are provided to the City on a reimbursement basis. On a modified accrual
basis, revenue from non-exchange transactions must also be available before it is
recognized.
Unearned revenue is recorded when assets are recognized before revenue recognition
criteria have been satisfied. Grants received before eligibility requirements other than
time requirements are met are recorded as unearned revenue. Grants received before
time requirements are met are recorded as a deferred inflow of resources.
The City reports the following major governmental funds:
The general fund is the government’s primary operating fund. It accounts for all
financial resources of the City, except those required to be accounted for in
another fund.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
48
1.Summary of Significant Accounting Policies (Continued)
C.Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
The debt service fund is an accumulation of resources (special assessments and
property tax revenues) for the payments of principal and interest on long-term
general obligation debt of governmental funds.
The infrastructure reserve fund accounts for the accumulation of funds for the
current and future road and street infrastructure projects.
The vehicle acquisition fund accounts for the accumulation of funds for the
purchase of vehicles to be used by various City departments.
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.
Additionally, the City reports the following fund types:
Internal service funds are used to account for the replacement of radios,
information technology and furniture, fixtures and equipment expenses of the
governmental activities. Internal service funds operate in a manner similar to
enterprise funds; however, they accumulate funding primarily from other
departments within the City on a cost reimbursement basis.
Fiduciary funds account for assets held by the City in a trustee capacity or as an
agent on behalf of others.
Agency funds are custodial in nature and do not present results of operations or
have a measurement focus. Agency funds are accounted for using the modified
accrual basis of accounting. These funds are used to account for assets that the
City holds for others in an agency capacity.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
49
1.Summary of Significant Accounting Policies (Continued)
C.Measurement Focus, Basis of Accounting and Financial Statement Presentation
(Continued)
As a general rule the effect of interfund activity has been eliminated from the
government-wide financial statements. Exceptions to this general rule are payments-in-
lieu of taxes and other charges between the City's enterprise funds and various other
functions of the City. Elimination of these charges would distort the direct costs and
program revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants
for goods, services, or privileges provided, 2) operating grants and contributions, and 3)
capital grants and contributions, including special assessments. Internally dedicated
resources are reported as general revenues rather than as program revenues. Likewise,
general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from 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 City's 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 of capital assets. All other
revenues and expenses are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's
policy to use restricted resources first, then unrestricted resources as they are needed.
D.Assets, Liabilities, Deferred Inflows of Resources and Net Position
1.Cash and investments (including cash equivalents)
Cash balances from all funds (including cash equivalents) are pooled and invested to
the extent available in various securities as authorized by Minnesota statutes.
Earnings from the pooled investments are allocated to the respective funds on the
basis of applicable cash balance (or due from other funds balance) participation by
each fund.
Investments are stated at fair value, based upon quoted market prices at the reporting
date. Cash and cash equivalents for purposes of the basic financial statements
includes amounts in demand deposits as well as all investments held by the City.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
50
1.Summary of Significant Accounting Policies (Continued)
D.Assets, Liabilities, Deferred Inflows of Resources and Net Position (Continued)
2.Receivables and payables
Activity between funds that are representative of lending/borrowing arrangements
outstanding at the end of the fiscal year are referred to as either "due to/from other
funds" (i.e., the current portion of interfund loans) or "advances to/from other funds"
(i.e., the non-current portion of interfund loans). All other outstanding balances
between funds are reported as "due to/from other funds." Any residual balances
outstanding between the governmental activities and business-type activities are
reported in the government-wide financial statements as "interfund balances."
Advances between funds, if any, are offset by a fund balance reserve account in
applicable governmental funds to indicate that they are not available for appropriation
and are not expendable available financial resources.
Property tax levies are set by the City Council in December of each year and are
certified to Washington County for collection in the following year. In Minnesota,
counties act as collection agents for all property taxes. The County spreads all levies
over taxable property. Such taxes become a lien on January 1, of the following year,
and are recorded as receivables by the City at that date. Revenues from property
taxes are accrued and recognized in the year collectible, net of delinquencies.
Real property taxes may be paid by taxpayers in two equal installments on May 15 and
October 15. Personal property taxes may be paid on February 28 and June 30. The
County provides tax settlements to cities and other taxing districts normally during the
months of January, July and December.
Taxes which remain unpaid at December 31 are classified as delinquent taxes
receivable.The net amount of delinquent taxes receivable are fully offset by deferred
inflows of resources in the governmental funds of the fund financial statements
because they are not known to be available to finance current expenditures.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
51
1.Summary of Significant Accounting Policies (Continued)
D.Assets, Liabilities, Deferred Inflows of Resources and Net Position (Continued)
2.Receivables and payables (continued)
Assessments are levied at various times upon City Council resolution for property
owner improvements made by the City. Generally, assessment collections are
deferred over periods ranging from ten to twenty years with interest charged at 2%
over the borrowing rate. Revenue from these assessments is recognized when
assessed in the government-wide financial statements and as the annual installments
become collectible in the governmental funds of the fund financial statements. Annual
installments not collected as of each December 31 are classified as delinquent
assessments receivable. The net amount of delinquent assessments receivable are
fully offset by deferred inflows of resources in the governmental funds of the fund
financial statements because they are not known to be available to finance current
expenditures.
3.Capital assets
Capital assets, which include property, plant, equipment, and infrastructure assets
(e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable
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. Such assets are recorded at historical cost or estimated
historical cost if purchased or constructed. 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. Donated capital assets are recorded at estimated fair market value at
the date of donation.
Major outlays for capital assets and improvements are capitalized as projects are
constructed. Interest incurred during the construction phase of capital assets of
business-type activities is included as part of the capitalized value of the assets
constructed, net of interest earned on the invested debt proceeds over the same
period.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
52
1.Summary of Significant Accounting Policies (Continued)
D.Assets, Liabilities, Deferred Inflows of Resources and Net Position (Continued)
3.Capital assets (continued)
Property, plant and equipment are capitalized when acquired, and depreciation is
provided using the straight-line method applied over the following estimated useful
lives of the assets.
Useful Life
in Years
Buildings and Improvements 10 -50
Infrastructure 20 -40
Other Improvements 10 -25
Machinery and Equipment 5 -20
4.Postemployment benefits other than pensions
Under Minnesota Statute 471.61, subdivision 2b., public employers must allow retirees
and their dependents to continue coverage indefinitely in an employer-sponsored
health care plan, under the following conditions: 1) retirees must be receiving (or
eligible to receive) an annuity from a Minnesota public pension plan, 2) coverage must
continue in group plan until age 65, and retirees must pay no more than the group
premium, and 3) retirees may obtain dependent coverage immediately before
retirement. All premiums are funded on a pay-as-you-go basis. The postemployment
benefit obligation liability was determined using the alternative measurement method,
in accordance with GASB Statement No. 45.
5.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 statements of net position.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
53
1.Summary of Significant Accounting Policies (Continued)
D.Assets, Liabilities, Deferred Inflows of Resources and Net Position (Continued)
5.Long-term obligations (continued)
Bond premiums and discounts are deferred and amortized over the life of the bonds
using the effective interest method. Bonds payable are reported net of the applicable
bond premium or discount. 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. Issuance costs, whether or not withheld from the
actual debt proceeds received, are reported as current expenditures.
6.Pensions
For purposes of measuring the net pension liability, deferred outflows/inflows of
resources and pension expense, information about the fiduciary net position of the
Public Employees Retirement Association (PERA) and additions to/deductions from
PERA's fiduciary net position have been determined on the same basis as they are
reported by PERA except that PERA's fiscal year end is June 30. For this purpose,
plan contributions are recognized as of employer payroll paid dates and benefit
payments and refunds are recognized when due and payable in accordance with the
benefit terms. Investments are reported at fair value.
7.Net Position and Fund Balance
In the government-wide and proprietary financial statements, net position is classified
in the following categories:
Net Investment in Capital Assets –This amount consists of capital assets net of
accumulated depreciation and reduced by outstanding debt attributed to the
acquisition, construction, or improvement of the assets.
Restricted Net Position –This amount is restricted by external creditors, grantors,
contributors, laws or regulations of other governments.
Unrestricted Net Position –This amount is all net position that does not meet the
definition of “net investment in capital assets” or “restricted net position.”
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
54
1.Summary of Significant Accounting Policies (Continued)
D.Assets, Liabilities, Deferred Inflows of Resources and Net Position (Continued)
7.Net Position and Fund Balance (continued)
The City classifies governmental fund balances as follows:
Non-spendable –includes fund balance amounts that cannot be spent either
because it is not in spendable form or because of legal or contractual restraints.
Restricted –This amount is restricted by external creditors, grantors, contributors,
laws or regulations of other governments.
Committed –includes amounts that can be used only for the specific purposes
imposed by formal action (resolution) of the City Council, which is the City's highest
level of decision-making authority. Those committed amounts cannot be used for
any other purpose unless the Council rescinds or changes the specified use by
taking the same type of action (resolution) it employed to previously commit those
amounts.
Assigned –includes fund balance amounts that are intended to be used for specific
purposes that are neither considered restricted or committed. The City Council, by
majority vote, may assign fund balances to be used for specific purposes when
appropriate. The Council has delegated the power to assign fund balances to the
City's finance committee. Unlike commitments, assignments generally only exist
temporarily. In other words, an additional action does not normally have to be taken
for the removal of an assignment. Conversely, as discussed above, an additional
action is essential to either remove or revise a commitment.
Unassigned –includes positive fund balances within the General Fund which have
not been classified within the above mentioned categories and negative fund
balances in other governmental funds.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
55
1.Summary of Significant Accounting Policies (Continued)
D.Assets, Liabilities, Deferred Inflows of Resources and Net Position (Continued)
7.Net Position and Fund Balance (continued)
The City considers restricted/committed amounts to be spent first when both restricted
and unrestricted fund balance is available unless there are legal documents/contracts
that prohibit doing this, such as a grant agreement requiring dollar for dollar spending.
Additionally, the City would first use committed, then assigned and lastly unassigned
amounts when expenditures are made. The City Council has formally adopted a fund
balance policy for the General Fund. The City's policy is to maintain a minimum
unassigned fund balance in the General Fund equal to 50 percent of budgeted
expenditures to ensure funds are available at all times to meet cash flow needs and
accommodate emergency contingency concerns.
8.Interfund transactions
Interfund services provided and used are accounted for as revenues, expenditures or
expenses. Transactions that constitute reimbursements to a fund for
expenditures/expenses or revenues/income initially made from it that are properly
applicable to another fund are recorded as expenditures/expenses or revenues/income
in the fund that is reimbursed. All other interfund transactions, except interfund
services provided and used, are reported as transfers.
E.Concentration of Credit Risk
Financial instruments which expose the City to a concentration of credit risk consist
primarily of cash investments and accounts and loans receivable. Credit risk related to
cash and investments is discussed in Note 3A. The City's accounts and loans receivable
are concentrated geographically, and for the most part, amounts are due from individuals
residing in and businesses located in the City of Lake Elmo, Minnesota.
F.Use of Estimates
The preparation of financial statements in accordance with accounting principles generally
accepted in the United States of America (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.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
56
2.Stewardship, Compliance and Accountability
A.Budgetary Information
Annual 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 the special revenue funds. Formal
budgetary integration is employed as a management control device during the year for
these funds.
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 Officer in August of each year. The Administrator's office compiles the
budget requests into an overall preliminary City budget, balancing budget requests
with available revenue.
2.The preliminary budget is submitted to the City Council in September for its review
and/or modification.
3.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 special revenue funds.
4.All budgeted 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.
5.Budgeted amounts are as originally adopted, or as amended by the City Council. The
budget cannot be amended without approval by the City Council.
All budget amounts presented as a basic financial statement or in the accompanying
supplementary information reflect the original budget and the final budget (which were
the same for the year ended December 31, 2015).
The City does not use encumbrance accounting.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
57
2.Stewardship, Compliance, and Accountability
B.Expenditures Exceeding Appropriations
For the year ended December 31, 2015, the General Fund total expenditures were $95,192
more than budget. The following funds and General Fund departments had expenditures
exceeding the latest amended budget:
2015 Budgeted
Expenditures
2015 Actual
Expenditures
Amount Exceeding
Budgeted Amount
General Fund:
General government 984,063$ 1,025,320$ 41,257$
Culture and recreation 153,028 229,595 76,567
City Events Fund 2,380 2,380
The above listed over expenditures in the general government department were due
primarily to legal expenses incurred over the amounts budgeted. The above listed over
expenditures in the culture and recreation department were primarily related to a staffing
changes not factored into the 2015 budget. The expenditures in excess of budget for the
City Events fund were related to unanticipated expenditures in the current year.
All overexpenditures were approved by the City Council.
C.Fund Balance Deficits
As of December 31, 2015, the following funds had deficit fund balances:
Fund Amount
Nonmajor:
City Events Special Revenue 1,144$
Village Project Capital Project 422,169
Manning Avenue/Highway 36 Capital Project 5,220
The fund balance deficits will be eliminated by future revenue and financing sources.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
58
3.Detailed Notes on All Funds
A.Deposits and Investments
In accordance with applicable Minnesota statutes, the City maintains deposits at
depository banks authorized by the City Council. All such depositories are members of
the Federal Reserve System.
Minnesota statutes require that all deposits be protected by insurance, surety bond or
collateral. The market value of collateral pledged must equal 110% of the deposits not
covered by insurance or surety bonds. Authorized collateral includes certain state or
local government obligations and legal investments described in the investment policy
section. Minnesota Statutes require that securities pledged as collateral be held in
safekeeping by the City Treasurer or in a financial institution other than the institution
furnishing the collateral.
The City's deposits were entirely covered by federal depository insurance or collateral at
December 31, 2015.
Investment Policy
The City does not maintain a formal investment policy that limits investment maturities as
a means of managing its exposure to fair value losses arising from increasing interest
rates or that would limit its investment choices as a means of managing its exposure to
credit risk.
The City is authorized by Minnesota Statutes to invest idle funds as follows:
(a)Direct obligations or obligations guaranteed by the United States or its agencies.
(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.
(c)General obligations of the State of Minnesota or its municipalities.
(d)Bankers acceptances of United States banks eligible for purchase by the Federal
Reserve System.
(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 agreements with banks that are members of the Federal Reserve System
with capitalization exceeding $10,000,000, a reporting dealer to the Federal Reserve
Bank of New York, or certain Minnesota securities broker-dealers.
(g)Money market funds with institutions that have portfolios consisting exclusively of United
States Treasury obligations and Federal Agency issues.
(h)Guaranteed investment contracts (gic's) issued or guaranteed by United States
commercial banks or domestic branches of foreign banks or United States insurance
companies and with a credit quality in one of the top two highest categories.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
59
3.Detailed Notes on All Funds (Continued)
A.Deposits and Investments (Continued)
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair
value of an investment. Generally, the longer the maturity of an investment, the greater the
sensitivity of its fair value to changes in market interest rates. One of the ways that the City
manages its exposure to interest rate risk is by purchasing a combination of shorter and
longer term investments and by timing cash flows from maturities so that a portion of the
portfolio is maturing or coming close to maturity evenly over time as necessary to provide
the cash flow and liquidity needs for operation.
The following is a summary of the City of Lake Elmo, Minnesota's cash and investment
portfolio including the range of maturities and investment ratings by type of investment:
Investment Range of Maturities Rating Value
Cash N/A N/A 6,758,782$
Certificates of Deposit 10/22 N/A 4,932,107
Municipal Bonds 12/18 A 365,072
U.S. Government Agencies and
State and Local Government Securities 8/21 AAA 1,133,809
Total cash and investments 13,189,770$
N/A Not applicable or not available
A reconciliation of cash and temporary investments as shown on the Statement of Net
Position for the City follows:
Carrying amount of deposits 6,758,782$
Investments 6,430,988
Total 13,189,770$
Government-wide
Cash and investments 11,362,600$
Fiduciary
Cash and investments 1,827,170
Total 13,189,770$
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
60
3.Detailed Notes on All Funds (Continued)
A.Deposits and Investments (Continued)
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to
the holder of the investment. The City's investments are rated by various credit rating
agencies, where applicable, to indicate the associated credit risk. Investment ratings by
investment type (as applicable) are included in the preceding summary of investments.
Concentration of Credit Risk
Investments in any one issuer that represented 5% or more of total investments as of
December 31, 2015 were as follows:
Issuer Investment Type Value
Lake Elmo Bank Money Market Savings 5,864,891$
Lake Elmo Bank Certificates of Deposit 2,000,000
The City routinely reviews its deposits to determine that pledged securities are adequate to
cover any uninsured deposits.
Custodial Credit Risk
For an investment, custodial credit risk is the risk that, in the event of the failure of the
counter party, the City will not be able to recover the value of its investment securities that
are in the possession of an outside party. At December 31, 2015, all investments were
insured or registered or the securities were held by the City or its agent in the City's name.
B.Due from Other Governmental Units
Amounts due from other governmental units as of December 31, 2015 were as follows:
Fund Type Washington County
Valley Branch
Watershed District
Minnesota
Department of
Transportation Total
General Fund 40,595$ $ $ 40,595$
Debt Service Fund 458 70,000 70,458
Infrastructure Reserve Fund 552 9,000 9,552
Water Fund 703 703
Sewer Fund 1,295 1,295
Storm Sewer Fund 14 14
Total 43,617$ 9,000$ 70,000$ 122,617$
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
61
3.Detailed Notes on All Funds (Continued)
C.Accounts and Loans Receivable
Accounts receivable as of December 31, 2015 are expected to be collected in full. Based
upon management's assessment of the creditworthiness of the customers comprising the
receivable balance, no allowance for uncollectible accounts is necessary.
D.Capital Assets
Capital asset activity for the City for the year ended December 31, 2015 was as follows:
Beginning Ending
Governmental Activities Balance Increases Decreases Balance
Capital assets, not being depreciated:
Land $ 3,453,979 $ $ $ 3,453,979
Construction in progress 3,510,704 1,725,305 2,378,593 2,857,416
Total capital assets, not being depreciated 6,964,683 1,725,305 2,378,593 6,311,395
Capital assets, being depreciated:
Buildings 3,634,483 100,941 3,533,542
Improvements other than buildings 1,347,650 1,347,650
Machinery and equipment 2,995,642 918,850 177,417 3,737,075
Infrastructure 7,796,030 2,378,593 10,174,623
Total capital assets, being depreciated 15,773,805 3,297,443 278,358 18,792,890
Less accumulated depreciation for:
Building 874,133 72,408 62,348 884,193
Improvements other than buildings 836,829 71,152 907,981
Machinery and equipment 2,140,730 164,255 177,417 2,127,568
Infrastructure 2,149,363 507,541 2,656,904
Total accumulated depreciation 6,001,055 815,356 239,765 6,576,646
Total capital assets, being depreciated, net 9,772,750 2,482,087 38,593 12,216,244
Governmental activities capital assets, net 16,737,433$ 4,207,392$ 2,417,186$ 18,527,639$
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
62
3.Detailed Notes on All Funds (Continued)
D.Capital Assets (Continued)
Beginning Ending
Business-Type Activities Balance Increases Decreases Balance
Capital assets, not being depreciated:
Land $ 54,675 $ 194,194 $ $ 248,869
Construction in progress 6,668,232 1,177,280 3,651,783 4,193,729
Total capital assets, not being depreciated 6,722,907 1,371,474 3,651,783 4,442,598
Capital assets, being depreciated:
Machinery and equipment 300,587 300,587
Infrastructure 18,524,562 3,651,783 22,176,345
Total capital assets, being depreciated 18,825,149 3,651,783 22,476,932
Less accumulated depreciation for:
Machinery and equipment 184,022 16,053 200,075
Infrastructure 3,326,859 599,761 3,926,620
Total accumulated depreciation 3,510,881 615,814 4,126,695
Total capital assets, being depreciated, net 15,314,268 3,035,969 18,350,237
Business-type activities capital assets, net 22,037,175$ 4,407,443$ 3,651,783$ 22,792,835$
Certain assets in the City's business-type activities have been partially funded by grants from the
State of Minnesota and therefore are considered jointly owned property. In the unlikely event the
City would sell these assets, the City would be required to reimburse the State up to the full
amount of the grants.
Depreciation expense for the year ended December 31, 2015 was charged to functions/programs
as follows:
Governmental Activities
General government 10,574$
Public safety 98,666
Public works 626,982
Culture and recreation 79,134
Total 815,356$
Business-Type Activities
Water 557,627$
Sewer 42,224
Storm sewer 15,963
Total 615,814$
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
63
3.Detailed Notes on All Funds (Continued)
E.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, 2015 is as follows:
Range of Final Balance
Issue Date Interest Rates Maturity 12/31/15
General obligation bonds:
2009A Refunding Bonds 5/1/2009 3.00%2016 70,000$
2009B Improvement Bonds 10/1/2009 2.00% - 3.05%2020 310,000
2010A Improvement Bonds 11/15/2010 1.85% - 2.80%2021 435,000
2010B CIP Crossover Refunding Bonds 11/15/2010 1.40% - 3.20%2025 1,685,000
2011A Improvement Bonds 10/1/2011 1.25% - 2.30%2022 610,000
2012B Improvement Bonds 8/16/2012 0.75% - 1.90%2023 710,000
2013A Improvement Bonds 10/1/2013 2.00% - 3.75%2028 1,450,000
2014A Improvement Bonds 7/15/2014 2.00% - 3.50%2030 2,850,000
2015A Improvement Bonds 8/13/2015 2.00% - 3.00%2031 1,620,000
General obligation note payable:
Note Payable - Lake Elmo Bank 11/20/2015 1.99%2020 21,219
General obligation revenue bonds:
2009A Refunding Bonds 5/1/2009 3.00% - 3.85%2021 280,000
2012A Refunding Bonds 8/13/2012 2.00% - 2.50%2030 4,035,000
2013A Improvement Bonds 10/1/2013 2.00% - 4.00%2033 3,640,000
2014A Improvement Bonds 7/15/2014 2.00% - 3.50%2030 3,385,000
2015A Improvement Bonds 8/13/2015 2.00% - 3.00%2031 1,195,000
Other Liabilities:
Compensated Absences 78,525
Post Employment Benefit Obligation 198,978
Unamortized premium 231,360
Less: Unamortized discount (100,785)
Total Long-Term Debt 22,704,297$
Liquidation of the compensated absences liability occurs within the department and fund
for which the corresponding employees are assigned. The City is subject to statutory
limitation by the State of Minnesota for bonded indebtedness payable principally from
property taxes. As of December 31, 2015, the City had not utilized $35,161,610 of its net
legal debt margin.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
64
3.Detailed Notes on All Funds (Continued)
E.Long-Term Debt (Continued)
The following is a summary of the changes in long-term debt obligations for the year
ended December 31, 2015:
Amounts
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
GOVERNMENTAL ACTIVITIES
Bonds and Notes Payable:
General obligation bonds:
2009A Refunding Bonds 140,000$ $ 70,000$ 70,000$ 70,000$
2009B Improvement Bonds 370,000 60,000 310,000 60,000
2010A Improvement Bonds 505,000 70,000 435,000 70,000
2010B CIP Crossover Refunding Bonds 1,835,000 150,000 1,685,000 150,000
2011A Improvement Bonds 690,000 80,000 610,000 85,000
2012B Improvement Bonds 790,000 80,000 710,000 85,000
2013A Improvement Bonds 1,555,000 105,000 1,450,000 105,000
2014A Improvement Bonds 2,850,000 2,850,000 180,000
2015A Improvement Bonds 1,620,000 1,620,000
General obligation certificates:
2006A Equipment Certificates 52,000 52,000
General obligation note payable:
Note Payable - Lake Elmo Bank 21,561 342 21,219 4,153
Other Liabilities:
Compensated Absences 83,085 71,931 84,855 70,161 38,406
Post Employment Benefit Obligation 139,158 35,124 174,282
Unamortized premium 66,045 32,137 4,829 93,353
Less: Unamortized (discount)(73,453) (11,386) (34,577) (50,262)
Governmental Activities
Long-Term Liabilities 9,001,835 1,769,367 722,449 10,048,753 847,559
BUSINESS-TYPE ACTIVITIES
Bonds and Notes Payable:
General obligation revenue bonds:
2005A Water Revenue Bonds 3,925,000 3,925,000
2009A Refunding Bonds 320,000 40,000 280,000 40,000
2012A Refunding Bonds 4,035,000 4,035,000 195,000
2013A Improvement Bonds 3,840,000 200,000 3,640,000 205,000
2014A Improvement Bonds 3,385,000 3,385,000 175,000
2015A Improvement Bonds 1,195,000 1,195,000
Other Liabilities:
Compensated Absences 7,903 23,175 22,714 8,364 5,953
Post Employment Benefit Obligation 21,027 3,669 24,696
Unamortized premium 121,445 23,706 7,144 138,007
Less: Unamortized (discount)(95,803) (8,398) (53,678) (50,523)
Business-Type Activities
Long-Term Liabilities 15,559,572 1,237,152 4,141,180 12,655,544 620,953
Total 24,561,407$ 3,006,519$ 4,863,629$ 22,704,297$ 1,468,512$
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
65
3.Detailed Notes on All Funds (Continued)
E.Long-Term Debt (Continued)
In August 2012, the City issued $4,035,000 in general obligation water revenue
crossover refunding bonds with interest rates ranging from 2.00% to 2.50%. Proceeds
from this bond issuance were used to refund the remaining principal of the 2005A water
revenue bonds in 2015. This refunding resulted in a $455,000 reduction to total debt
service payments over the next sixteen years. This resulted in an economic gain
(difference between the present values of the debt service payments on the old and new
debt) of approximately $366,000.
Debt service requirements to maturity for long-term debt, excluding compensated
absences and post employment benefit obligation, as of December 31, 2015 were as
follows:
Year Principal Interest Principal Interest Principal Interest
2016 805,000$ 219,667$ 4,153$ 385$ 615,000$ 316,957$
2017 910,000 204,652 4,236 301 705,000 303,642
2018 930,000 187,305 4,321 216 750,000 289,355
2019 955,000 168,603 4,408 129 760,000 274,106
2020 975,000 148,508 4,101 41 765,000 258,525
2021-2025 3,865,000 447,843 3,920,000 1,037,004
2026-2030 1,300,000 91,458 4,300,000 507,351
2031-2033 720,000 52,144
Totals 9,740,000$ 1,468,034$ 21,219$ 1,072$ 12,535,000$ 3,039,082$
General Obligation
Improvement Bonds
General Obligation Note
Payable
General Obligation Revenue
Bonds
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
66
3.Detailed Notes on All Funds (Continued)
F.Interfund Receivables and Payables
The following schedule reports the interfund receivables and payables within the City's
funds as of December 31, 2015:
Due From Due To
Other Funds Other Funds
Major Governmental Funds:
General Fund 158,195$ $
Debt Service 94,603
Infrastructure Reserve 7,032
Subtotal 158,195 101,635
Nonmajor Governmental Funds:
City Events 1,144
Village Project 56,760
Subtotal 57,904
Proprietary Funds:
Water 795
Sewer 54,305
Storm Sewer 23,915
Subtotal 78,220 795
Internal Service Funds:
FFE Replacement 76,081
Total All Funds 236,415$ 236,415$
Interfund receivables and payables are the result of expenditures of funds prior to the
collection of special assessments, property taxes and other revenues. All interfund
balances will be repaid as the revenues are collected by the individual funds.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
67
3.Detailed Notes on All Funds (Continued)
F.Interfund Receivables and Payables (continued)
The City established an interfund loan from the General Fund to the Village Project fund.
At December 31, 2015, the outstanding balance was $405,398. The loan carries an
interest rate of 4 percent.
G.Interfund Transfers
The following schedule reports the interfund transfers within the City's funds as of
December 31, 2015:
Transfers In Transfers Out
Major Governmental Funds:
General Fund $ 447,118$
Debt Service 822,305
Infrastructure Reserve 350,916
Vehicle Acquisition 3,429
Non-Major Governmental Funds 200,000
Proprietary Funds:
Water 84,569 291,413
Sewer 94,845 241,044
Storm sewer 132,201
Total All Funds 1,333,920$ 1,333,920$
Transfers are used to move unassigned revenues to finance various programs that the
government must account for in other funds in accordance with budgetary authorizations.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
68
3.Detailed Notes on All Funds (Continued)
H.Fund Equity
In accordance with the requirements of GASB Statement No. 54, below is a schedule of
ending fund balances as of December 31, 2015:
General Debt Service
Infrastructure
Reserve
Vehicle
Acquisition
Other
Governmental
Funds
Total
Governmental
Funds
Nonspendable
Prepaid items 26,908$ $ $ $ 3,908$ 30,816$
Advance to other funds 405,398 405,398
Total Nonspendable 432,306 3,908 436,214
Restricted
Debt service 2,477,730 2,477,730
Assigned
Library 231,581 231,581
City facilities 271,669 271,669
Infrastructure improvements 240,492 8,051 248,543
Park improvements 950,265 950,265
Vehicle acquisition 66,684 66,684
Total Assigned 240,492 66,684 1,461,566 1,768,742
Unassigned 2,754,976 (3,222) (428,533) 2,323,221
Total Fund Balance 3,187,282$ 2,474,508$ 240,492$ 66,684$ 1,036,941$ 7,005,907$
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
69
4.Other Information
A.Risk Management
The City is exposed to various risks of loss related to torts: theft of, damage to, or
destruction of assets; errors or omissions; injuries to employees; and natural disasters.
The City participates in the League of Minnesota Cities Insurance Trust (LMCIT) to provide
its general liability and property coverage. The LMCIT is a public entity risk pool currently
operating as a common risk management and insurance program for participating
Minnesota Cities. All Cities in the LMCIT are jointly and severally liable for all claims and
expenses of the pool. The amount of any liability in excess of assets of the pool may be
assessed to the participating cities if a deficiency occurs. The City purchases commercial
insurance for property values in excess of the LMCIT policy limits and all other risks of loss.
Settled claims have not exceeded the LMCIT or commercial coverage in any of the past
three fiscal years.
Worker's compensation insurance is also purchased through the LMCIT. The worker
compensation program is a retrospectively rated contract with premiums or required
contributions based primarily on the experience rates of the participating cities. There were
no significant reductions in insurance coverage from the previous year or settlements in
excess of insurance coverage for any of the past three fiscal years.
B.Commitments and Contingencies
General Litigation:
Although the City is occasionally involved in litigation, management was unaware of any
pending lawsuits in which the City was involved as of December 31, 2015. It is the opinion
of management that any potential claim regarding any lawsuits against the City would be
covered by the liability insurance of the City and that any potential claim against the City
would not affect the financial statements.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
70
4.Other Information (Continued)
B.Commitments and Contingencies (Continued)
Operating Lease:
The City is obligated under a lease agreement for office space accounted for as an
operating lease. Expenditures under this operating lease for the year ended December 31,
2015 totaled $29,532. The following is a schedule by year of future minimum rental
payments required under the lease as of December 31, 2015:
Year Ending
December 31,Amount
2016 30,147$
2017 31,992
2018 32,301
2019 24,921
Total 119,361$
C.Other Post Employment Benefits
Plan Description
The City administers a single-employer defined benefit healthcare plan ("the Retiree Health
Plan"). The plan provides healthcare insurance for eligible retirees and their spouses
through the City's group health insurance plan until Medicare age, which covers both active
and retired members. During 2015, there were 24 active participants and no retiree
participants. Benefit provisions are established by the Council. The Retiree Health Plan
does not issue a publicly available financial report.
Funding Policy
The City has historically funded these liabilities on a pay-as-you-go basis. Contribution
requirements are negotiated between the City and union representatives on a per contract
basis. At the present time, no retiree benefits are provided except the allowance to
continue health insurance that is mandated by Minnesota Law. The City does not
contribute any of the cost of current-year premiums for eligible retired plan members or
their spouses. Plan members receiving benefits contribute 100 percent of their premium
costs.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
71
4.Other Information (Continued)
C.Other Post Employment Benefits (Continued)
Annual Other Postemployment Benefit Cost and Net Other Postemployment Benefit
Obligations
The City's annual other postemployment benefit (OPEB) cost (expense) is calculated based
on the annual required contribution of the employer (ARC). The City has elected to
calculate the ARC and related information using the alternative measurement method
permitted by GASB Statement No. 45 for employers in plans with fewer than one hundred
total plan members. The ARC represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal cost each year and to amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed thirty years. The following table
shows the components of the City's annual OPEB cost for the year, the amount actually
contributed to the plan, and changes in the City's net OPEB obligation:
Annual required contribution 47,328$
Interest on net OPEB obligations 1,820
Adjustment to ARC (10,357)
Annual OPEB cost 38,791
Contributions during the year
Increase in net OPEB obligation 38,791
Net OPEB, beginning of year 160,185
Net OPEB, ending of year 198,976$
The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan,
and the net OPEB obligation for fiscal years ended December 31, 2015, 2014 and 2013 are
as follows:
Fiscal Year
Ended
Annual
OPEB Cost
Percentage
Contributed
Net OPEB
Obligation
12/31/2013 79,198$ 0%157,701$
12/31/2014 2,484 0%160,185
12/31/2015 38,791 0%198,976
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
72
4.Other Information (Continued)
C.Other Post Employment Benefits (Continued)
Funded Status and Funding Progress
As of January 1, 2015, the actuarial accrued liability for benefits was $186,284, all of which
was unfunded. The covered payroll (annual payroll of active employees covered by the
plan) was $1,041,665, and the ratio of the unfunded actuarial accrued liability to the
covered payroll was 17.88 percent.
The projection of future benefit payments for an ongoing plan involves estimates of the
value of reported amounts and assumptions about the probability of occurrence of events
far into the future. Examples include assumptions about future employment, mortality, and
the healthcare cost trend. Amounts determined regarding the funded status of the plan and
the annual required contributions of the employer are subject to continual revisions as
actual results are compared with past expectations and new estimates are made about the
future. The schedule of funding progress, presented as required supplementary
information following the notes to financial statements, presents multi-year trend
information about whether the actuarial value of plan assets is increasing or decreasing
over time relative to the actuarial accrued liabilities for benefits.
Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan
(the plan as understood by the employer and plan members) and include the types of
benefits provided at the time of each valuation and the historical pattern of sharing of
benefit costs between the employer and plan members to that point. The actuarial
methods and assumptions used include techniques that are designed to reduce the effects
of short-term volatility in actuarial accrued liabilities and the actuarial value of assets,
consistent with the long-term perspective of the calculations. The projected unit credit cost
method was used.
The following simplifying assumptions were made:
Retirement age for active employees -Based on the historical average retirement age for
the covered group, active plan members were assumed to retire at age 63, or at the first
subsequent year in which the member would qualify for benefits. In addition, spouses of
retired employees were assumed to continue on the plan for the lesser of eighteen months
after the retired employee reaches Medicare age or until the spouse reaches Medicare age.
Marital status -Marital status of members at the calculation date was assumed to continue
throughout retirement.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
73
4.Other Information (Continued)
C.Other Post Employment Benefits (Continued)
Methods and Assumptions (Continued)
Mortality -Life expectancies were based on mortality tables from the National Center for
Health Statistics. The 2004 United States Life Tables for Males and Females was used.
Turnover -Non-group-specific age-based turnover data from GASB Statement No. 45 were
used as the basis for assigning active members a probability of remaining employed until
the assumed retirement age and for developing expected future working lifetime
assumptions for purposes of allocation to periods the present value of total benefits to be
paid.
Healthcare cost trend rate -The expected rate of increase in healthcare insurance
premiums was based on projections of the Office of the Actuary at the Centers for
Medicare & Medicaid Services. A rate of 2.0 percent initially, rising to an ultimate rate of
6.0 percent after six years, was used.
Health insurance premiums -2015 health insurance premiums for retirees were used as
the basis for calculation of the present value of total benefits to be paid.
Inflation rate -The expected long-term inflation assumption of 4.00 percent was based on
projected changes in the Consumer Price Index for Urban Wage Earners and Clerical
Workers (CPI-W).
Payroll growth rate -The expected long-term payroll growth rate was assumed to equal the
rate of inflation.
Based on the historical and expected return of the City's short-term investment portfolio, a
discount rate of 4.0 percent was used. In addition, a simplified version of the entry age
actuarial cost method was used. The unfunded actuarial accrued liability is being
amortized as a level percentage of projected payroll on an open basis. The remaining
amortization period at December 31, 2015 was thirty years.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
74
4.Other Information (Continued)
D.Pension Plans
1.Public Employees Retirement Association (PERA) -Defined Benefit
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 under Section 401(a) of the Internal
Revenue Code.
1.General Employees Retirement Fund (GERF) -All full-time and certain part-time
employees of the City of Lake Elmo are covered by the General Employees
Retirement Fund (GERF). GERF members belong to either the Coordinated Plan
or the Basic Plan. Coordinated Plan members are covered by Social Security and
Basic Plan members are not. The Basic Plan was closed to new members in 1967.
All new members must participate in the Coordinated Plan.
2.Public Employees Police and Fire Fund (PEPFF) -The PEPFF, originally
established for police officers and firefighters not covered by a local relief
association, now covers all police officers and firefighters hired since 1980.
Effective July 1, 1999, the PEPFF also covers police officers and firefighters
belonging to a local relief association that elected to merge with and transfer
assets and administration to PERA.
Benefits Provided
PERA provides retirement, disability and death benefits. Benefit provisions are
established by state statute and can only be modified by the state legislature.
Benefit increases are provided to benefit recipients each January. Increases are
related to the funding ratio of the plan. Members in plans that are at least 90 percent
funded for two consecutive years are given 2.5% increases. Members in plans that
have not exceeded 90% funded, or have fallen below 80%, are given 1% increases.
The benefit provisions stated in the following paragraph of this section are current
provisions and apply to active plan participants. Vested, terminated employees who
are entitled to benefits but are not receiving them yet are bound by the provisions in
effect at the time they last terminated their public service.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
75
4.Other Information (Continued)
D.Pension Plans (Continued)
1.Public Employees Retirement Association (PERA) -Defined Benefit (Continued)
A.Plan Description (continued)
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 and Basic Plan
members. The retiring member receives the higher of step-rate benefit accrual formula
(Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual
rate for a Basic Plan member is 2.2% of average salary for each of the first ten years
of service and 2.7% for each remaining year. The annuity accrual rate for a
Coordinated Plan member is 1.2% of average salary for each of the first ten years and
1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of
average salary for Basic Plan members and 1.7% for Coordinated Plan members for
each year of service. For members 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. Disability benefits are available for
vested members and are based upon years of service and average high-five salary.
2.PEPFF Benefits
Benefits for the PEPFF members first hired after June 30, 2010, but before July 1,
2014, vest on a prorated basis from 50% after five years up to 100% after ten years of
credited service. Benefits for PEPFF members first hired after June 30, 2014, vest on
a prorated basis from 50% after ten years up to 100% after twenty years of credited
service. The annuity accrual rate is 3% of average salary for each year of service. For
PEPFF who were first hired prior to July 1, 1989, a full annuity is available when age
plus years of service equal at least 90.
B.Contributions
Minnesota Statutes Chapter 353 sets the rates for employer and employee
contributions. Contribution rates can only be modified by the state legislature.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
76
4.Other Information (Continued)
D.Pension Plans (Continued)
1.Public Employees Retirement Association (PERA) -Defined Benefit (Continued)
B.Contributions (continued)
1.GERF Contributions
Basic Plan members and Coordinated Plan members were required to contribute 9.1%
and 6.50%, respectively, of their annual covered salary in calendar year 2015. The
City was required to contribute 11.78% of pay for Basic Plan members and 7.50% for
Coordinated Plan members in calendar year 2015. The City's contributions to the
GERF for the year ended December 31, 2015 were $70,582. The City's contributions
were equal to the required contributions as set by state statute.
2.PEPFF Contributions
Plan members were required to contribute 10.8% of their annual covered salary in
calendar year 2015. The City was required to contribute 16.20% of pay for PEPFF
members in calendar year 2015. The City's contributions to the PEPFF for the year
ended December 31, 2015 were $14,257. The City's contributions were equal to the
required contributions as set by state statute.
C.Pension Costs
1.GERF Pension Costs
At December 31, 2015, the City reported a liability of $875,846 for its proportionate
share of the GERF's net pension liability. The net pension liability was measured as of
June 30, 2015, and the total pension liability used to calculate the net pension liability
was determined by an actuarial valuation as of that date. The City's proportion of the
net pension liability was based on the City's contributions received by PERA during the
measurement period for employer payroll paid dates from July 1, 2014 through June
30, 2015, relative to the total employer contributions received from all of PERA's
participating employers. At June 30, 2015,the City's proportion was .0169% at the
end of the measurement period and .0191% for the beginning of the period.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
77
4.Other Information (Continued)
D.Pension Plans (Continued)
1.Public Employees Retirement Association (PERA) -Defined Benefit (Continued)
C.Pensions Costs (continued)
1.GERF Pension Costs (continued)
For the year ended December 31, 2015, the City recognized pension expense of
$90,912 for its proportionate share of the GERF's pension expense.
At December 31, 2015, 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 of
Resources
Deferred
Inflows of
Resources
Differences between expected and actual
economic experience $ 44,158$
Difference between projected and actual
investment earnings 82,912
Changes in proportion 77,510
Contributions paid to PERA subsequent to
the measurement date 32,981
Total 115,893$ 121,668$
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
78
4.Other Information (Continued)
D.Pension Plans (Continued)
1.Public Employees Retirement Association (PERA) -Defined Benefit (Continued)
C.Pensions Costs (continued)
1.GERF Pension Costs (continued)
$32,981 reported as deferred outflows of resources related to pensions resulting from
City contributions subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the year ended December 31, 2016. Other
amounts reported as deferred outflows and inflows of resources related to pensions
will be recognized in pension expense as follows:
Year ending June 30:
Pension Expense
Amount
2016 (19,827)$
2017 (19,827)
2018 (19,829)
2019 20,727
2.PEPFF Pension Costs
At December 31, 2015, the City reported a liability of $102,261 for its proportionate
share of the PEPFF's net pension liability. The net pension liability was measured as
of June 30, 2015, and the total pension liability used to calculate the net pension
liability was determined by an actuarial valuation as of that date. The City's proportion
of the net pension liability was based on the City's contributions received by PERA
during the measurement period for employer payroll paid dates from July 1, 2014
through June 30, 2015, relative to the total employer contributions received from all of
PERA's participating employers. At June 30, 2015, the City's proportion was .009% at
the end of the measurement period and .009% for the beginning of the period.
For the year ended December 31, 2015, the City recognized pension expense of
$17,622 for its proportionate share of the PEPFF's pension expense. The City also
recognized $810 for the year ended December 31, 2015, as pension expense (and
grant revenue) 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.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
79
4.Other Information (Continued)
D.Pension Plans (Continued)
1.Public Employees Retirement Association (PERA) -Defined Benefit (Continued)
C.Pensions Costs (continued)
2.PEPFF Pension Costs (continued)
At December 31, 2015, 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 of
Resources
Deferred
Inflows of
Resources
Differences between expected and actual
economic experience $ 16,583$
Difference between projected and actual
investment earnings 17,817
Contributions paid to PERA subsequent to
the measurement date 7,219
Total 25,036$ 16,583$
$7,219 reported as deferred outflows of resources related to pensions resulting from
City contributions subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the year ended December 31, 2016. Other
amounts reported as deferred outflows and inflows of resources related to pensions
will be recognized in pension expense as follows:
Year ending June 30:
Pension Expense
Amount
2016 (1,074)$
2017 (1,074)
2018 (1,076)
2019 4,453
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
80
4.Other Information (Continued)
D.Pension Plans (Continued)
1.Public Employees Retirement Association (PERA) -Defined Benefit (Continued)
D.Actuarial Assumptions
The total pension liability in the June 30, 2015 actuarial valuation was determined
using the following actual assumptions:
Inflation 2.75% per year
Active Member Payroll Growth 3.50% per year
Investment Rate of Return 7.90%
Salary increases were based on a service-related table. Mortality rates for active
members, retirees, survivors and disabilitants were based on RP-2000 tables for
males or females, as appropriate, with slight adjustments. Benefit increases for
retirees are assumed to be 1% effective every January 1st through 2026 and 2.5%
thereafter.
Actuarial assumptions used in the June 30, 2015 valuation were based on the result of
actuarial experience studies. The experience study in the GERF was for the period
from July 1, 2004 through June 30, 2008, with an update of economic assumptions in
2014. Experience studies have not been prepared for PERA's other plans, but
assumptions are reviewed annually. There were no changes in actuarial assumptions
in 2015.
The long-term expected rate of return on pension plan investments is 7.9%. The State
Board of Investment, which manages the investments of PERA, prepares an analysis
of the reasonableness of the long-term expected rate of return on a regular basis
using a building-block method in which best-estimate ranges of expected future rates
of return are developed for each major asset class. These ranges are combined to
produce an expected long-term rate of return by weighting the expected future rates of
return by the target asset allocation percentages.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
81
4.Other Information (Continued)
D.Pension Plans (Continued)
1.Public Employees Retirement Association (PERA) -Defined Benefit (Continued)
D.Actuarial Assumptions (continued)
The target allocation and best estimates of arithmetic real rates of return for each
major asset class are summarized in the following table:
Asset Class Target Allocation Long-Term Expected
Real Rate of Return
Domestic Stocks 45%5.50%
International Stocks 15%6.00%
Bonds 18%1.45%
Alternative Assets 20%6.40%
Cash 2%0.50%
E. Discount Rate
The discount rate used to measure the total pension liability was 7.9%. The projection
of cash flows used to determine the discount rate assumed that employee and
employer contributions will be made at the rate specified in statute. Based on that
assumption, each of the pension plan's fiduciary net position was projected to be
available to make all projected future benefit payments of current active and inactive
employees. 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.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
82
4.Other Information (Continued)
D.Pension Plans (Continued)
1.Public Employees Retirement Association (PERA) -Defined Benefit (Continued)
F.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
Discount Rate
(6.9%)
Discount Rate
(7.9%)
1% Increase in
Discount Rate
(8.9%)
City's proportionate share of the
GERF net pension liability 1,377,141$ 875,845$ 461,853$
City's proportionate share of the
PEPFF net pension liability 199,308 102,260 22,083
Total 1,576,449$ 978,105$ 483,936$
G. Pension Plan Fiduciary Net Position
Detailed information about each pension plan's fiduciary net position is available in a
separately-issued PERA financial report that includes financial statements and
required supplementary information. That report may be obtained on the Internet at
www.mnpera.org; by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota,
55103-2088; or by calling (651) 296-7460 or 1-800-652-9026.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
83
4.Other Information (Continued)
D.Pension Plans (Continued)
2.Lake Elmo Firefighter's Relief Association
A.Plan Description
The Lake Elmo Firefighter's Relief Association administers a single-employer defined
benefit pension plan available to volunteer firefighters. As of December 31, 2015, the
plan covered 20 active firefighters and 5 vested terminated firefighters whose pension
benefits are deferred. The plan was established and is administered in accordance
with Minnesota Statutes, Chapters 69 and 424A. The December 31, 2015 information
is the latest reported for this Plan.
B.Benefits Provided
Volunteer firefighters for the City are members of the Lake Elmo Firefighter's Relief
Association. Association members are eligible to receive a lump sum benefit after 20
years of service with a minimum retirement age of 50. Currently retirees receive a
benefit of $3,400 for every year of service. These benefit provisions and all other
requirements are consistent with State statutes. Volunteers of the fire department are
not required to contribute to the relief association. Members with 10 years of service
receive partial vesting at 60% of the 20-year rate and 4% added for every one year of
service beyond ten years up to 20 years.
C.Contributions
The Plan is funded by fire state aid, investment earnings and, if necessary, employer
contributions as specified in Minnesota statutes, and voluntary City contributions. The
State of Minnesota contributed $61,166 in state aid to the plan on behalf of the
Association for the year ended December 31, 2015. This contribution was recorded as
a revenue and an expenditure in the City's general fund. The City levies property
taxes for the benefit of the Association and passes through state aids allocated to the
plan, all in accordance with State statutes. During 2015, at the Association's direction,
the City did not levy any property taxes to be paid to the Association.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
84
4.Other Information (Continued)
D.Pension Plans (Continued)
2.Lake Elmo Firefighter's Relief Association (Continued)
D.Pension Costs
At December 31, 2015, the City reported a net pension asset of $374,939 for the plan.
The net pension asset was measured as of December 31, 2015. The total pension
liability used to calculate the net pension asset in accordance with GASB 68 was
determined by applying an actuarial formula to specific census data certified by the fire
department as of December 31, 2015. The following table presents the changes in net
pension liability during the year.
Total
Pension
Liability (a)
Plan
Fiduciary Net
Position (b)
Net Pension
Liability
(Asset) (a-b)
Beginning Balance 12/31/14 714,621$ 1,155,598$ (440,977)$
Changes for the Year
Service cost 28,520 28,520
Interest on pension liability 37,130 37,130
Net investment income (48,240) 48,240
Contributions (employer)
Contributions (state)61,166 (61,166)
Contributions (other)
Benefit payouts (191,582) (191,582)
Administrative expenses (13,314) 13,314
Net Changes (125,932) (191,970) 66,038
Balance End of Year 12/31/15 588,689$ 963,628$ (374,939)$
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
85
4.Other Information (Continued)
D.Pension Plans (Continued)
2.Lake Elmo Firefighter's Relief Association (Continued)
D.Pension Costs (continued)
At December 31, 2015, the Association reported deferred inflows of resources and
deferred outflows of resources related to pension from the following sources:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Difference between projected and actual
investment earnings 20,711$ $
Total 20,711$ $
Amounts reported as deferred outflows and inflows of resources related to pensions will be
recognized in pension expense as follows:
Year ending June 30:
Pension Expense
Amount
2016 5,178$
2017 5,178
2018 5,178
2019 5,177
E.Actuarial Assumptions
The total pension liability at December 31, 2015 was determined using the entry age
normal actuarial cost method and the following actuarial assumptions:
Retirement eligibility at the later of age 50 or 20 years of serviceInvestment rate of return of 6.0%Inflation rate 4.0%
There were no changes in actuarial assumptions in 2015.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
86
4.Other Information (Continued)
D.Pension Plans (Continued)
2.Lake Elmo Firefighter's Relief Association (Continued)
F.Discount Rate
The discount rate used to measure the total pension liability was 6.0%. The projection
of cash flows used to determine the discount rate assumed that contributions to the
Plan will be made as specified in statute. Based on that assumption and considering
the funding ratio of the plan, the fiduciary net position was projected to be available to
make all projected future benefit payments of current active and inactive members.
Therefore, the long-term expected rate of return on pension plan investments was
applied to all periods of projected benefit payments to determine the total pension
liability.
G.Pension Liability Sensitivity
The following presents the City's net pension asset for the Association's 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
Discount Rate
(5.0%)
Discount Rate
(6.0%)
1% Increase in
Discount Rate
(7.0%)
Net pension liability (asset)(353,634)$ (374,939)$ (394,937)$
H.Plan Investments
1.Investment Policy
All investments undertaken by the plan are governed by the prudent person rule
and other standards codified in Minnesota Statutes, Chapter 11A and Chapter
356A. Within the requirements defined by state law, the Plan establishes
investment policy for all funds under its control. These investment policies are
tailored to the particular needs of each fund and specify investment objectives, risk
tolerance, asset allocation, investment management structure and specific
performance standards. Studies guide the ongoing management of the funds and
are updated periodically.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
87
4.Other Information (Continued)
D.Pension Plans (Continued)
2.Lake Elmo Firefighter's Relief Association (Continued)
2.Asset Allocation
The long-term target asset allocation and long-term expected real rate of return of
the Plan's assets is as follows:
Asset Class
Target
Allocation
Long-Term
Expected Real
Rate of Return
Cash 18.00%2.00%
Fixed income 20.00%4.50%
Equities 60.00%7.50%
Other 2.00%6.00%
Total 100%6.00%
The long-term return on assets has been set based on the plan's target investment
allocation along with long-term return expectations by asset class. When there is
sufficient historical evidence of market outperformance, historical average returns
may be considered.
3.Description of significant investment policy changes during the year
The Plan made no significant changes to their investment policy during the year.
I.Pension Plan Fiduciary Net Position
Detailed information about the Lake Elmo Firefighter's Relief Association plan's
fiduciary net position as of December 31, 2015 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.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
88
5.Change in Accounting Standards
During the year ended December 31, 2015, the City implemented Governmental Accounting
Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions
and Governmental Accounting Standards Board (GASB) Statement No. 71, Pension Transition for
Contributions Made Subsequent to the Measurement Date -an amendment of GASB Statement
No. 68. The cumulative effect of applying these statements is reported as a restatement of
beginning net position.
Following is a reconciliation of the previously reported December 31, 2014 balances with the
amounts reported on the December 31, 2015 financial statements:
Activities/Fund
Net Position
December 31, 2014,
as Previously
Reported
Restatement for Net
Pension (Liability)
Asset
Net Position
December 31, 2014,
as Restated
Governmental Activities 14,469,960$ (422,157)$ 14,047,803$
Business-Type Activities 14,055,152$ (135,426)$ 13,919,726$
Proprietary Funds:
Water Fund 9,360,075$ (81,881)$ 9,278,194$
Sewer Fund 3,599,549 (32,828) 3,566,721
Storm Sewer Fund 1,095,528 (20,717) 1,074,811
Total Proprietary Funds 14,055,152$ (135,426)$ 13,919,726$
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTAL INFORMATION
December 31, 2015
This Page Left Blank Intentionally
91
Year Ended
December 31
Statutorily
Required
Contribution
(a)
Contributions
in Relation to
Statutorily
Required
Contribution
(b)
Contribution
Deficiency
(Excess) (a-b)
Covered
Employee
Payroll (d)
Contributions as a
Percentage of
Covered Payroll
(b/d)
2014 73,182$ 73,182$ $ 1,009,407$ 7.2%
2015 70,582 70,582 941,092 7.5%
2016
2017
2018
2019
2020
2021
2022
2023
Year Ended
December 31
Statutorily
Required
Contribution
(a)
Contributions
in Relation to
Statutorily
Required
Contribution
(b)
Contribution
Deficiency
(Excess) (a-b)
Covered
Employee
Payroll (d)
Contributions as a
Percentage of
Covered Payroll
(b/d)
2014 13,035$ 13,035$ $ 85,195$ 15.3%
2015 14,257 14,257 88,005 16.2%
2016
2017
2018
2019
2020
2021
2022
2023
PERA Public Employees Police and Fire Fund Pension Plan
December 31, 2015
CITY OF LAKE ELMO, MINNESOTA
Schedule of City Contributions
PERA General Employees Retirement Fund
December 31, 2015
Schedule of City Contributions
92
Fiscal Year
Ended June 30
Proportionate
(Percentage) of
Net Pension
Liability (Asset)
Proportionate
Share (Amount) of
the Net Pension
Liability (Asset) (a)
Covered-
Employee
Payroll (b)
Proportionate
Share (Amount) of
the Net Pension
Liability (Asset) as
a Percentage of its
Covered Employee
Payroll (a/b)
Plan Fiduciary
Net Position as a
Percentage of the
Total Pension
Liability
2014 0.0191%897,222$ 1,009,407$88.9%78.7%
2015 0.0169%875,846 941,092 93.1%78.2%
2016
2017
2018
2019
2020
2021
2022
2023
Fiscal Year
Ended June 30
Proportionate
(Percentage) of
Net Pension
Liability (Asset)
Proportionate
Share (Amount) of
the Net Pension
Liability (Asset) (a)
Covered-
Employee
Payroll (b)
Proportionate
Share (Amount) of
the Net Pension
Liability (Asset) as
a Percentage of its
Covered Employee
Payroll (a/b)
Plan Fiduciary
Net Position as a
Percentage of the
Total Pension
Liability
2014 0.0090%97,204$ 85,195$ 114.1%87.1%
2015 0.0090%102,261 88,005 116.2%86.6%
2016
2017
2018
2019
2020
2021
2022
2023
PERA Public Employees Police and Fire Fund Pension Plan
December 31, 2015
CITY OF LAKE ELMO, MINNESOTA
Schedule of Proportionate Share of Net Pension Liability
PERA General Employees Retirement Fund
December 31, 2015
Schedule of Proportionate Share of Net Pension Liability
93
CITY OF LAKE ELMO, MINNESOTA
Schedule of Funding Progress for the Fire Relief Association
December 31, 2015
Actuarial
Valuation Date
Actuarial Accrued
Liability (AAL)
Valuation of Plan
Assets (a)
Actuarial
Valuation of Plan
Assets (b)
Net Pension
Liability (Asset)
(a-b)
12/31/15 588,689$ 963,628$ (374,939)$
CITY OF LAKE ELMO, MINNESOTA
Schedule of Employer Contributions for the Fire Relief Association
December 31, 2015
2015 2014
Actuarially determined contributions $ $
Actual contributions paid
Contributions deficiency (excess)$ $
94
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF FUNDING PROGRESS -OTHER POST EMPLOYMENT BENEFITS
For the Year Ended December 31, 2015
Actuarial
Valuation
Date
Actuarial
Value of
Assets
Actuarial
Accrued
Liability
Unfunded
Actuarial
Accrued
Liability
Funded
Ratio
Covered
Payroll
UAAL as a
Percentage of
Covered Payroll
1/1/2009 $ 112,761$ 112,761$ 0%892,528$ 12.63%
1/1/2012 101,981 101,981 0%932,540 10.94%
1/1/2013 293,220 293,220 0%913,884 32.09%
1/1/2014 204,437 204,437 0%1,022,592 19.99%
1/1/2015 186,284 186,284 0%1,041,665 17.88%
Actuarial valuations are provided every one to three years unless events occur (e.g. plan changes,
layoffs, etc.) that would materially impact results. See Note 4C in the Notes to Financial
Statements for more details on this schedule.
CITY OF LAKE ELMO, MINNESOTA
COMBINING AND INDIVIDUAL
FUND STATEMENTS AND SCHEDULES
December 31, 2015
96
Special
Revenue
Capital
Projects Total
ASSETS
Cash and investments 260,689$ 1,339,754$ 1,600,443$
Receivables (net of allowance of
uncollectibles)
Accounts 107,554 107,554
Prepaid expenses 3,908 3,908
TOTAL ASSETS 264,597$ 1,447,308$ 1,711,905$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
LIABILITIES
Accounts payable 26,401$ $ 26,401$
Accrued liabilities 2,707 2,707
Due to other funds 1,144 56,760 57,904
Advances from other funds 405,398 405,398
Escrow deposits payable 75,000 75,000
Total liabilities 30,252 537,158 567,410
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue:
Accounts receivable 107,554 107,554
FUND BALANCE (DEFICIT)
Nonspendable 3,908 3,908
Assigned 231,581 1,229,985 1,461,566
Unassigned (1,144) (427,389) (428,533)
Total Fund Balance (Deficit)234,345 802,596 1,036,941
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE 264,597$ 1,447,308$ 1,711,905$
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2015
97
Special
Revenue
Capital
Projects Total
REVENUES
Taxes 231,261$ $ 231,261$
Dedication fees 138,158 138,158
Investment earnings 1,496 7,272 8,768
Miscellaneous revenue 27,985 68,210 96,195
TOTAL REVENUES 260,742 213,640 474,382
EXPENDITURES
Current
Culture and recreation 228,154 228,154
Capital Outlay
Culture and recreation 170,297 170,297
TOTAL EXPENDITURES 228,154 170,297 398,451
Excess (deficiency) of revenues
over (under) expenditures 32,588 43,343 75,931
OTHER FINANCING SOURCES (USES)
Transfers 200,000 200,000
Net change in fund balances 32,588 243,343 275,931
FUND BALANCES, Beginning 201,757 559,253 761,010
FUND BALANCES, Ending 234,345$ 802,596$ 1,036,941$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2015
98
City Events Library Total
ASSETS
Cash and investments $ 260,689$ 260,689$
Prepaid expenses 3,908 3,908
TOTAL ASSETS $ 264,597$ 264,597$
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable $ 26,401$ 26,401$
Due to other funds 1,144 1,144
Accrued liabilities 2,707 2,707
Total liabilities 1,144 29,108 30,252
FUND BALANCE (DEFICIT)
Nonspendable 3,908 3,908
Assigned 231,581 231,581
Unassigned (1,144) (1,144)
Total fund balance (deficit)(1,144) 235,489 234,345
TOTAL LIABILITIES AND
FUND BALANCE (DEFICIT)$ 264,597$ 264,597$
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2015
99
City Events Library Total
REVENUES
Taxes $ 231,261$ 231,261$
Investment earnings 1,496 1,496
Miscellaneous revenue 246 27,739 27,985
TOTAL REVENUES 246 260,496 260,742
EXPENDITURES
Current
Culture and recreation 2,380 225,774 228,154
Net change in fund balances (2,134) 34,722 32,588
FUND BALANCES, Beginning 990 200,767 201,757
FUND BALANCES (DEFICIT), Ending (1,144)$ 235,489$ 234,345$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For the Year Ended December 31, 2015
100
Park
Dedication City Facilities Village Project
ASSETS
Cash and investments 950,265$ 271,669$ 39,989$
Accounts receivable 107,554
TOTAL ASSETS 1,057,819$ 271,669$ 39,989$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
LIABILITIES
Due to other funds $ $ 56,760$
Advances from other funds 405,398
Escrow deposits payable
Total liabilities 462,158
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue:
Accounts receivable 107,554
FUND BALANCE (DEFICIT)
Assigned 950,265 271,669
Unassigned (422,169)
Total fund balance (deficit)950,265 271,669 (422,169)
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE 1,057,819$ 271,669$ 39,989$
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2015
101
Manning
Avenue/Hwy
36
Washington
County
Downtown
Project Total
69,780$ 8,051$ 1,339,754$
107,554
69,780$ 8,051$ 1,447,308$
$ $ 56,760$
405,398
75,000 75,000
75,000 537,158
107,554
8,051 1,229,985
(5,220) (427,389)
(5,220) 8,051 802,596
69,780$ 8,051$ 1,447,308$
102
Park
Dedication City Facilities Village Project
REVENUES
Dedication fees 138,158$ $ $
Investment earnings (loss)6,064 1,734 (1,022)
Miscellaneous 19,200 41,010
TOTAL REVENUES 163,422 1,734 39,988
EXPENDITURES
Capital Outlay
Culture and recreation 170,297
Excess (deficiency) of revenues
over (under) expenditures (6,875) 1,734 39,988
OTHER FINANCING SOURCES (USES)
Transfers 200,000
Net change in fund balances (6,875) 1,734 239,988
FUND BALANCES (DEFICIT), Beginning 957,140 269,935 (662,157)
FUND BALANCES (DEFICIT), Ending 950,265$ 271,669$ (422,169)$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECT FUNDS
For the Year Ended December 31, 2015
103
Manning
Avenue/Hwy
36
Washington
County
Downtown
Project Total
$ $ 138,158$
445 51 7,272
8,000 68,210
445 8,051 213,640
170,297
445 8,051 43,343
200,000
445 8,051 243,343
(5,665) 559,253
(5,220)$ 8,051$ 802,596$
104
Radio
Replacement
IT
Replacement
FFE
Replacement Total
ASSETS
Current Assets
Cash and investments 27,263$ $ $ 27,263$
Noncurrent Assets
Property and Equipment
Machinery and equipment 99,851 95,355 390,483 585,689
Less: Accumulated depreciation 70,035 72,441 315,215 457,691
Net Property and Equipment 29,816 22,914 75,268 127,998
TOTAL ASSETS 57,079$ 22,914$ 75,268$ 155,261$
LIABILITIES AND NET POSITION
Current Liabilities
Due to other funds $ $ 76,081$ 76,081$
Net Position
Net investment in capital assets 29,816 22,914 75,268 127,998
Unrestricted 27,263 (76,081) (48,818)
Total Net Position 57,079 22,914 (813) 79,180
TOTAL LIABILITIES AND
NET POSITION 57,079$ 22,914$ 75,268$ 155,261$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
December 31, 2015
105
Radio
Replacement
IT
Replacement
FFE
Replacement Total
Operating Expenses
Depreciation 8,321$ 4,654$ 13,025$ 26,000$
Other Revenue (Expense)
Investment earnings (loss)174 174
Net (Loss)(8,147) (4,654) (13,025) (25,826)
Net Position, Beginning of Year 65,226 27,568 12,212 105,006
Net Position, End of Year 57,079$ 22,914$ (813)$ 79,180$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2015
106
Radio
Replacement
IT
Replacement
FFE
Replacement Total
Cash Flows From Investing Activities
Investment earnings (losses)174$ $ $ 174$
Cash Flows From Noncapital Financing Activities
Increase in due to other funds 27,330 27,330
Cash Flows From Capital and Related Financing Activities
Acquisition of capital assets (27,330) (27,330)
Net Increase (Decrease) in Cash and Cash Equivalents 174 174
Cash and Cash Equivalents, Beginning of Year 27,089 27,089
Cash and Cash Equivalents, End of Year 27,263$ $ $ 27,263$
RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating (loss)(8,321)$ (4,654)$ (13,025)$ (26,000)$
Adjustments to reconcile operating income to
net cash provided by operating activities
Depreciation 8,321 4,654 13,025 26,000
Net Cash Provided By (Used In) Operating Activities $ $ $ $
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2015
This Page Left Blank Intentionally
108
2002 GO
Improvement
Bonds
2004 GO CIP
Bonds
2006A GO
Equipment
Certificates
2009A GO
Refunding
Bonds
2009B GO
Improvement
Bonds
ASSETS
Cash and investments 473$ $ 29,408$ 2,075$ 116,733$
Receivables (Net of allowance for
uncollectibles)
Special assessments 29,362
Due from other governmental units 70,000 3
TOTAL ASSETS 473$ $ 29,408$ 72,075$ 146,098$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
LIABILITIES
Accounts payable $ $ $ $ $
Due to other funds
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue:
Special assessments 29,362
Intergovernmental revenue 70,000
Total deferred inflows of resources 70,000 29,362
FUND BALANCE (DEFICIT)
Restricted 473 29,408 2,075 116,736
Unassigned
Total fund balance (deficit)473 29,408 2,075 116,736
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE 473$ $ 29,408$ 72,075$ 146,098$
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
DEBT SERVICE FUNDS
December 31, 2015
109
2010A GO
Improvement
Bonds
2010B GO
CIP Bonds
2011A GO
Improvement
Bonds
2012B GO
Improvement
Bonds
2013A GO
Improvement
Bonds
2014A GO
Improvement
Bonds
2015A GO
Improvement
Bonds Total
124,122$ 112,711$ 311,600$ 13,499$ 1,106,834$ 676,949$ 74,249$ 2,568,653$
48,480 45,790 141,600 32,640 652,707 950,579
455 70,458
172,602$ 112,711$ 357,390$ 155,554$ 1,139,474$ 1,329,656$ 74,249$ 3,589,690$
$ $ $ $ $ $ $ $
17,176 77,427 94,603
17,176 77,427 94,603
48,480 45,790 141,600 32,640 652,707 950,579
70,000
48,480 45,790 141,600 32,640 652,707 1,020,579
124,122 112,711 311,600 1,029,407 676,949 74,249 2,477,730
(3,222) (3,222)
124,122 112,711 311,600 (3,222) 1,029,407 676,949 74,249 2,474,508
172,602$ 112,711$ 357,390$ 155,554$ 1,139,474$ 1,329,656$ 74,249$ 3,589,690$
110
2002 GO
Improvement
Bonds
2004 GO CIP
Bonds
2006A GO
Equipment
Certificates
2009A GO
Refunding
Bonds
2009B GO
Improvement
Bonds
REVENUES
Taxes $ $ 56,784$ $ 24,617$
Intergovernmental 74,550
Special assessments 8,918
Investment earnings 5 188 14 578
TOTAL REVENUES 5 56,972 74,564 34,113
EXPENDITURES
Debt Service
Principal 52,000 70,000 60,000
Interest and other charges 2,080 4,558 9,384
TOTAL EXPENDITURES 54,080 74,558 69,384
Excess (deficiency) of revenues
over (under) expenditures 5 2,892 6 (35,271)
OTHER FINANCING SOURCES (USES)
Transfers (53) 26,242
Net change in fund balances 5 (53) 2,892 6 (9,029)
FUND BALANCES (DEFICIT), Beginning 468 53 26,516 2,069 125,765
FUND BALANCES (DEFICIT), Ending 473$ $ 29,408$ 2,075$ 116,736$
CITY OF LAKE ELMO, MINNESOTA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
DEBT SERVICE FUNDS
For the Year Ended December 31, 2015
111
2010A GO
Improvement
Bonds
2010B GO
CIP Bonds
2011A GO
Improvement
Bonds
2012B GO
Improvement
Bonds
2013A GO
Improvement
Bonds
2014A GO
Improvement
Bonds
2015A GO
Improvement
Bonds Total
60,403$ 202,815$ 76,600$ 63,595$ $ $ $ 484,814$
74,550
12,939 20,980 27,119 695,598 498,088 1,263,642
792 713 1,989 86 450 3,384 8,199
74,134 203,528 99,569 90,800 696,048 501,472 1,831,205
70,000 150,000 80,000 80,000 105,000 667,000
10,682 44,312 11,367 10,315 40,205 70,799 203,702
80,682 194,312 91,367 90,315 145,205 70,799 870,702
(6,548) 9,216 8,202 485 550,843 430,673 960,503
53 500,938 220,876 74,249 822,305
(6,548) 9,269 8,202 485 1,051,781 651,549 74,249 1,782,808
130,670 103,442 303,398 (3,707) (22,374) 25,400 691,700
124,122$ 112,711$ 311,600$ (3,222)$ 1,029,407$ 676,949$ 74,249$ 2,474,508$
112
Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES
Investment earnings $ $ $ $
Miscellaneous revenue 246 246
TOTAL REVENUES 246 246
EXPENDITURES
Current
Culture and recreation 2,380 (2,380)
Net change in fund balances (2,134) (2,134)
FUND BALANCES, Beginning 990 990 990
FUND BALANCES, Ending 990$ 990$ (1,144)$ (2,134)$
Note: The City adopted a $0 activity budget in this fund for the year ended December 31, 2015.
Budgeted Amounts
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
CITY EVENTS SPECIAL REVENUE FUND
For the Year Ended December 31, 2015
113
Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES
Taxes 231,261$ 231,261$ 231,261$ $
Investment earnings 1,496 1,496
Miscellaneous revenue 11,400 11,400 27,739 16,339
TOTAL REVENUES 242,661 242,661 260,496 17,835
EXPENDITURES
Current
Culture and recreation 242,661 242,661 225,774 16,887
Net change in fund balances 34,722 34,722
FUND BALANCES, Beginning 200,767 200,767 200,767
FUND BALANCES, Ending 200,767$ 200,767$ 235,489$ 34,722$
Budgeted Amounts
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
LIBRARY SPECIAL REVENUE FUND
For the Year Ended December 31, 2015
114
Balance Balance
January 1 Additions Deletions December 31
ESCROW
ASSETS
Cash and investments 795,317$ 1,883,128$ 851,147$ 1,827,298$
LIABILITIES
Accounts payable 20,293$ 1,150,054$ 1,070,395$ 99,952$
Deposits payable 775,024 2,127,974 1,175,652 1,727,346
TOTAL LIABILITIES 795,317$ 3,278,028$ 2,246,047$ 1,827,298$
YELLOW RIBBON
ASSETS
Cash and investments (128)$ $ $ (128)$
Accounts receivable 128 128
TOTAL ASSETS $ $ $ $
TOTAL AGENCY FUNDS
ASSETS
Cash and investments 795,189$ 1,883,128$ 851,147$ 1,827,170$
Accounts receivable 128 128
TOTAL ASSETS 795,317$ 1,883,128$ 851,147$ 1,827,298$
LIABILITIES
Accounts payable 20,293$ 1,150,054$ 1,070,395$ 99,952$
Deposits payable 775,024 2,127,974 1,175,652 1,727,346
TOTAL LIABILITIES 795,317$ 3,278,028$ 2,246,047$ 1,827,298$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDS
For the Year Ended December 31, 2015
CITY OF LAKE ELMO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
December 31, 2015
This part of the City's comprehensive annual financial report presents detailed information as a
context for understanding what the information in the financial statements, note disclosures and
required supplementary information says about the City's overall financial health.
Content Page
Financial Trends
These schedules contain trend information to help the reader understand
how the City's financial performance and well-being have changed over
time.116
Revenue Capacity
These schedules contain information to help the reader assess the City's
most significant local revenue source, the property tax.126
Debt Capacity
These schedules present information to help the reader assess the
affordability of the City's current levels of outstanding debt and the City's
ability to issue additional debt in the future.134
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the
reader understand the environment within which the City's financial activities
take place.143
Operating Information
These schedules 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.146
Sources: Unless otherwise noted, the information in these schedules is derived from the
comprehensive annual financial reports for the relevant year. The City implemented GASB
Statement 34 in 2004; schedules presenting government-wide information include information
beginning in that year.
116
CITY OF LAKE ELMO, MINNESOTA
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
2015 2014 2013 2012
Net investment in capital assets 8,723,329$ 7,957,840$ 9,056,353$ 8,782,840$
Restricted 3,446,142 1,106,200 1,225,849 4,205,247
Unrestricted 3,942,646 5,405,920 4,593,463 918,996
Total governmental activities net position 16,112,117$ 14,469,960$ 14,875,665$ 13,907,083$
Business-type activities
Net investment in capital assets 10,170,351$ 10,567,418$ 6,855,807$ 6,788,377$
Restricted 1,876,119 2,387,312 2,612,569 39,153$
Unrestricted 3,577,285 1,100,422 1,846,681 1,105,847
Total business-type activities net position 15,623,755$ 14,055,152$ 11,315,057$ 7,933,377$
Primary government
Net investment in capital assets 18,893,680$ 18,525,258$ 15,912,160$ 15,571,217$
Restricted 5,322,261 3,493,512 3,838,418 4,244,400
Unrestricted 7,519,931 6,506,342 6,440,144 2,024,843
Total primary government net position 31,735,872$ 28,525,112$ 26,190,722$ 21,840,460$
NOTE: The City adopted GASB Statement No. 65 in 2013. Amounts in this schedule prior to 2012 have not been
restated for GASB Statement No. 65.
The City adopted GASB Statements No. 68 and 71 in 2015. Amounts in this schedule prior to 2015 have not been
restated for GASB Statements No. 68 and 71.
Governmental activities
Fiscal Year
117
Schedule 1
2011 2010 2009 2008 2007 2006
8,553,984$ 8,368,479$ 7,983,822$ 7,151,543$ 5,648,702$ 3,535,882$
2,664,689 2,057,467 1,399,968 718,617 711,966 1,071,105
2,555,596 3,439,106 3,824,156 4,698,858 5,139,270 4,620,785
13,774,269$ 13,865,052$ 13,207,946$ 12,569,018$ 11,499,938$ 9,227,772$
6,422,782$ 6,713,292$ 6,644,334$ 6,181,055$ 5,617,960$ 5,961,996$
1,449,340 1,193,509 1,056,968 951,793 1,080,666 706,170
7,872,122$ 7,906,801$ 7,701,302$ 7,132,848$ 6,698,626$ 6,668,166$
14,976,766$ 15,081,771$ 14,628,156$ 13,332,598$ 11,266,662$ 9,497,878$
2,664,689 2,057,467 1,399,968 718,617 711,966 1,071,105
4,004,936 4,632,615 4,881,124 5,650,651 6,219,936 5,326,955
21,646,391$ 21,771,853$ 20,909,248$ 19,701,866$ 18,198,564$ 15,895,938$
118
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
2015 2014 2013 2012
Expenses
Governmental activities:
General government 1,134,132$ 1,072,888$ 1,103,337$ 1,093,204$
Public safety 1,344,282 1,530,609 1,277,798 1,302,857
Public works 1,377,969 1,032,426 1,273,977 891,169
Culture and recreation 639,006 448,361 424,687 362,432
Interest on long-term debt 215,611 165,028 133,694 316,039
Total governmental activities expenses 4,711,000 4,249,312 4,213,493 3,965,701
Business-Type activities:
Water 1,363,043 1,069,511 958,870 872,786
Sewer 250,866 353,438 119,370 53,903
Storm sewer 103,536 149,887 86,989 73,590
Total business-type activities expenses 1,717,445 1,572,836 1,165,229 1,000,279
Total primary government expenses 6,428,445$ 5,822,148$ 5,378,722$ 4,965,980$
Program Revenues
Governmental activities:
Charges for services:
General government 42,706$ 45,161$ 32,778$ 48,476$
Public safety 866,708 496,916 414,472 379,557
Public works 3,615 2,647 3,256
Culture and recreation 26,214 10,753 17,000 9,341
Operating grants and contributions 249,094 204,462 208,276 160,060
Capital grants and contributions 2,038,940 557,601 1,364,622 160,444
Total governmental activities program revenues 3,227,277 1,314,893 2,039,795 761,134
Business-type activities:
Charges for services:
Water 1,850,240 1,291,091 596,421 699,159
Sewer 1,523,067 741,054 53,142 65,737
Storm sewer 229,252 214,915 191,087 171,229
Operating grants and contributions
Capital grants and contributions 1,159,222 3,781,528 115,127
Total business-type activities program revenues 3,602,559 3,406,282 4,622,178 1,051,252
Total primary government program revenues 6,829,836$ 4,721,175$ 6,661,973$ 1,812,386$
Fiscal Year
119
Schedule 2
2011 2010 2009 2008 2007 2006
1,036,038$ 980,456$ 971,677$ 1,168,625$ 914,212$ 900,278$
1,107,050 1,171,158 1,125,464 1,002,408 956,649 1,009,494
1,008,686 1,135,351 872,045 868,804 1,247,398 1,358,801
247,845 239,389 248,856 228,393 333,164 232,878
266,730 222,404 218,319 237,753 207,648 215,381
3,666,349 3,748,758 3,436,361 3,505,983 3,659,071 3,716,832
845,474 898,319 857,014 849,018 735,499 764,282
73,797 61,513 59,243 63,400 125,773 55,827
142,517 151,384 140,365 123,902 78,807 129,946
1,061,788 1,111,216 1,056,622 1,036,320 940,079 950,055
4,728,137$ 4,859,974$ 4,492,983$ 4,542,303$ 4,599,150$ 4,666,887$
22,058$ 18,296$ 15,631$ 19,430$ 28,890$ 29,612$
283,813 320,242 270,653 295,353 365,327 594,779
3,058 3,425 6,584 3,833 18,573 4,035
10,800 61,274 31,828
184,476 168,491 174,433 140,176 94,185 163,421
222,488 1,090,419 798,687 1,345,803 1,371,489 4,664,817
715,893 1,611,673 1,265,988 1,804,595 1,939,738 5,488,492
575,534 562,585 479,430 467,336 471,226 351,733
53,012 48,508 45,146 44,568 99,581 139,057
235,252 185,425 149,407 134,674 138,092 45
17,000 32,721 30,100
75,885 418,400 776,473 684,400 298,928 1,112,374
956,683 1,247,639 1,480,556 1,330,978 1,007,827 1,603,209
1,672,576$ 2,859,312$ 2,746,544$ 3,135,573$ 2,947,565$ 7,091,701$
120
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
2015 2014 2013 2012
Net (Expense) Revenue
Governmental Activities (1,483,723)$ (2,934,419)$ (2,173,698)$ (3,204,567)$
Business-type activities 1,885,114 1,833,446 3,456,949 50,973
Total primary government net revenue 401,391$ (1,100,973)$ 1,283,251$ (3,153,594)$
General Revenues and Other Changes
In Net Position
Governmental activities:
General property taxes 3,204,119$ 3,200,291$ 3,231,609$ 3,183,078$
Grants and contributions not restricted
to specific programs 2,749 2,749 2,749
Interest income 46,589 87,586 35,259 111,705
Miscellaneous 73,738 125,400 1,833 42,599
Gain on sale of capital assets 8,979
Transfers 220,842 (887,312)
Total governmental activities 3,548,037 2,528,714 3,280,429 3,337,382
Business-type activities:
Interest income 39,757 19,337 30,346 10,282
Transfers (220,842) 887,312
Total business-type activities (181,085) 906,649 30,346 10,282
Total primary government 3,366,952$ 3,435,363$ 3,310,775$ 3,347,664$
Change in Net Position
Governmental activities 2,064,314$ (405,705)$ 1,106,731$ 132,815$
Business-type activities 1,704,029 2,740,095 3,487,295 61,255
Total primary government 3,768,343$ 2,334,390$ 4,594,026$ 194,070$
Fiscal Year
121
Schedule 2
(continued)
2011 2010 2009 2008 2007 2006
(2,950,456)$ (2,137,085)$ (2,170,373)$ (1,701,388)$ (1,719,333)$ 1,771,660$
(105,105) 136,423 423,934 294,658 67,748 653,154
(3,055,561)$ (2,000,662)$ (1,746,439)$ (1,406,730)$ (1,651,585)$ 2,424,814$
2,793,776$ 2,711,067$ 2,718,691$ 2,568,705$ 2,424,782$ 2,174,377$
10,628 9,771 8,764 57,390 46,154 38,342
94,501 113,989 160,679 209,539 335,578 317,896
20,405 17,311 41,827 50,865 33,204
8,517
(59,637) (57,947) (129,177) (116,031) (424,940) (4,066,113)
2,859,673 2,794,191 2,809,301 2,770,468 2,414,778 (1,535,498)
10,789 11,129 15,343 23,533 94,325 153,918
59,637 57,947 129,177 116,031 424,940 4,066,113
70,426 69,076 144,520 139,564 519,265 4,220,031
2,930,099$ 2,863,267$ 2,953,821$ 2,910,032$ 2,934,043$ 2,684,533$
(90,783)$ 657,106$ 638,928$ 1,069,080$ 695,445$ 236,162$
(34,679) 205,499 568,454 434,222 587,013 4,873,185
(125,462)$ 862,605$ 1,207,382$ 1,503,302$ 1,282,458$ 5,109,347$
122
CITY OF LAKE ELMO, MINNESOTA
FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Modified Accrual Basis of Accounting)
2015 2014 2013 2012 2011
General fund
Reserved $ $ $ $ $
Unreserved
Nonspendable 432,306 638,963 859,072 1,024,433 1,206,209$
Unassigned 2,754,976 2,542,038 2,318,310 2,414,692 1,707,711
Total general fund 3,187,282 3,181,001 3,177,382 3,439,125 2,913,920
All other
governmental funds
Reserved
Unreserved
Nonspendable 3,908
Restricted 2,477,730 717,781 743,976 3,959,111 4,691,748
Committed 7,114
Assigned 1,768,742 2,943,525 2,252,931 1,244,900 654,358
Unassigned (431,755) (693,904) (885,360) (1,670,915) (1,353,754)
Total all other
governmental funds 3,818,625 2,967,402 2,111,547 3,533,096 3,999,466
Total governmental funds 7,005,907$ 6,148,403$ 5,288,929$ 6,972,221$ 6,913,386$
Note: The City implemented GASB Statement No. 54 in 2011, therefore, classifications of fund balance have changed.
123
Schedule 3
2010 2009 2008 2007 2006
1,068,950$ 1,032,570$ 1,015,753$ 1,003,823$ 503,823$
1,617,211 1,403,240 1,395,088 1,251,127 1,768,505
2,686,161 2,435,810 2,410,841 2,254,950 2,272,328
3,605,250 1,422,049 727,673 698,683 725,337
504,106 1,077,659 1,976,379 2,554,808 2,419,112
4,109,356 2,499,708 2,704,052 3,253,491 3,144,449
6,795,517$ 4,935,518$ 5,114,893$ 5,508,441$ 5,416,777$
124
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST FISCAL TEN YEARS
(Modified Accrual Basis of Accounting)
2015 2014 2013 2012 2011
Revenues
Taxes 3,222,216$ 3,203,111$ 3,231,609$ 3,221,733$ 2,790,773$
Licenses and permits 828,494 451,953 374,974 330,819 230,419
Intergovernmental 296,902 413,968 1,704,178 237,254 276,638
Charges for services 35,796 30,192 6,113 5,726 14,691
Fines and forfeitures 48,739 48,647 52,110 58,385 63,819
Special assessments 1,316,239 115,424 180,023 136,150 153,536
Dedication fees 138,158 274,257
Investment earnings 46,415 87,467 35,127 111,737 94,066
Miscellaneous revenue 99,055 165,319 57,260 87,562 48,217
Total Revenues 6,032,014 4,790,338 5,641,394 4,189,366 3,672,159
EXPENDITURES
Current
General government 1,025,320 1,046,906 1,527,732 1,034,712 1,016,898
Public safety 1,203,765 1,198,546 1,174,145 1,109,937 996,733
Public works 686,401 585,071 614,270 446,541 447,629
Culture and recreation 457,749 368,276 301,404 260,404 168,747
Unallocated 69,403
Debt service
Principal 667,342 585,000 3,348,000 406,000 344,000
Interest and other charges 203,738 135,382 171,148 267,253 251,385
Bond issuance costs 22,873 22,267 7,870 41,828 34,327
Capital outlay 2,729,512 2,881,437 1,784,914 1,428,856 1,029,183
Total Expenditures 7,066,103 6,822,885 8,929,483 4,995,531 4,288,902
Excess (deficiency) of revenues
over (under) expenditures (1,034,089) (2,032,547) (3,288,089) (806,165) (616,743)
OTHER FINANCING
SOURCES (USES)
Issuance of debt 1,620,000 2,850,000 1,604,797 865,000 845,000
Premium on issuance of debt 32,137 31,520
(Discount) on issuance of debt (11,386)
Payment to bond escrow agent
Sale of property 30,000
Transfers in 10,501 204,972
Transfers out 220,842 (315,360)
Total other financing
sources (uses)1,891,593 2,892,021 1,604,797 865,000 734,612
Net change in fund balances 857,504$ 859,474$ (1,683,292)$ 58,835$ 117,869$
Debt service as a percentage
of noncapital expenditures 19.48%17.67%47.79%18.66%17.43%
125
Schedule 4
2010 2009 2008 2007 2006
2,737,225$ 2,685,894$ 2,523,332$ 2,416,861$ 2,164,117$
261,450 225,166 242,074 315,975 406,225
239,244 288,881 261,743 384,160 255,018
22,416 11,433 15,623 39,163 152,472
68,897 54,052 60,919 57,652 69,729
134,257 73,013 102,929 75,993 147,368
113,033 160,679 209,539 335,578 317,896
84,860 61,533 177,599 1,094,478 4,622,737
3,661,382 3,560,651 3,593,758 4,719,860 8,135,562
921,590 929,960 1,108,737 942,131 879,167
1,064,176 988,082 882,135 984,090 950,669
473,293 459,703 438,591 459,478 523,938
168,971 180,965 154,011 160,940 129,806
313,000 361,000 280,000 334,000 265,000
216,820 229,175 235,450 206,020 220,115
74,580 45,056
1,203,309 998,031 888,382 2,281,938 7,797,647
4,435,739 4,191,972 3,987,306 5,368,597 10,766,342
(774,357) (631,321) (393,548) (648,737) (2,630,780)
2,680,000 1,110,000 443,000
4,356 17,756
(525,000)
9,190
314,698 1,466,041 8,500 778,074 162,129
(364,698) (1,626,041) (8,500) (778,074) (162,129)
2,634,356 451,946 443,000
1,859,999$ (179,375)$ (393,548)$ (648,737)$ (2,187,780)$
15.11%17.81%15.42%14.69%12.76%
126
SCHEDULE 5
Total
Estimated Total Adjusted City % of Tax Capacity
Payable Market Real Personal Tax Tax Urban Tax to Total Estimated
Year Value Property Property Capacity Capacity (1)Rate Market Value
2006 $1,017,596,900 $12,678,177 $221,613 $12,899,790 $12,899,790 19.351 %0.01
2007 1,131,010,100 12,506,910 207,913 12,714,823 12,714,823 19.274 0.01
2008 1,146,659,500 12,750,173 203,610 12,953,783 12,953,783 20.553 0.01
2009 1,208,072,300 13,490,182 201,896 13,692,078 13,692,078 19.810 0.01
2010 1,201,213,400 13,394,423 202,299 13,596,722 13,596,722 20.479 0.01
2011 1,142,936,500 12,678,177 221,613 12,899,790 12,899,790 21.832 0.01
2012 1,037,557,100 11,525,623 229,157 11,754,780 11,754,780 27.271 0.01
2013 1,028,011,400 11,392,876 237,584 11,630,460 11,630,460 29.259 0.01
2014 1,046,031,000 11,504,611 238,764 11,743,375 11,743,375 27.761 0.01
2015 1,184,578,800 12,938,515 243,104 13,181,619 13,181,619 23.798 0.01
(1) Tax Capacity adjusted for captured tax increment, fiscal disparities, and transmission lines.
NOTE - 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
CITY OF LAKE ELMO, MINNESOTA
TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
127
Schedule 6
Operating Debt Total
Tax Service City Special
Fiscal Rate Tax Rate Tax Rate Washington Taxing
Year Urban Urban Urban County Districts
2006 16.477 %2.874 %19.351 %19.471 -23.075 %26.968 %1.794 -4.408 %2.427 %70.011 -76.229 %
2007 19.274 19.274 17.698 -22.628 25.673 1.315 -4.580 2.331 66.291 -74.486
2008 20.553 20.553 17.404 -22.691 25.936 1.608 -4.532 2.367 67.868 -76.079
2009 17.059 2.751 19.810 17.714 -24.480 26.371 1.545 -4.002 2.351 67.791 -77.014
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
Source: Washington County Taxation Division
Note: 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) Beginning in 2012, operating tax rate urban includes library levy component
(Percent of Tax Capacity)
Watershed Districts
Range of TotalRange of Tax Rates
forSchool Districts
Range of Tax Rates
City of Lake Elmo
CITY OF LAKE ELMO, MINNESOTA
for Independent
Tax Rates622, 832 and 834
Direct and Ovelapping
Overlapping Rates
PROPERTY TAX RATES AND TAX LEVIES
DIRECT AND OVERLAPPING PROPERTY TAX RATES
LAST TEN FISCAL YEARS
128
SCHEDULE 7
Percentage Percentage
of Total City of Total City
Taxable Tax Taxable Tax
Tax Capacity Tax Capacity
Taxpayers (1)Capacity Rank Value Capacity Rank Value
Xcel Energy 223,288$ 1 1.64 %163,774$ 3 1.49 %
IRET Properties 205,342 2 1.50 224,440 1 2.04
Dakota Upreit LP 179,262 3 1.31
Bremer Financial Services Inc 169,652 4 1.24 196,854 2 1.79
MHC Cimarron LLC 136,610 5 1.02 134,090 5 1.22
Heart of America 108,150 6 0.79 139,208 4 1.26
Tartan Park LLC 100,704 7 0.74
Norman James LLC 64,976 8 0.48
Davis Estates LTD 64,912 9 0.48
Danate Proper Inv I LLC 59,250 10 0.43
United Land LLC 108,508 6 0.99
Lake Elmo Foundation 91,591 7 0.83
United Properties Inv LLC 49,892 8 0.45
State Bank of Lake Elmo 33,276 9 0.30
Leonard Investments LLC 26,868 10 0.24
TOTAL 1,312,146$ 9.63 %1,168,501$ 10.61 %
(1) Source: Washington County Taxation Division
2006
CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
2015
This Page Left Blank Intentionally
130
Fiscal
Year Taxes Levied Net Tax Levy Collections
Ended for the for the Percentage in Subsequent
December 31 Fiscal Year Fiscal Year (1)Amount of Net Levy Years
2006 $2,149,941 $2,110,956 $2,081,289 98.59 $29,324
2007 2,428,644 2,394,822 2,357,634 98.45 37,188
2008 2,597,983 2,559,227 2,485,397 97.12 73,830
2009 2,708,155 2,672,623 2,624,026 98.18 48,591
2010 2,743,346 2,705,782 2,645,536 97.77 59,623
2011 2,789,559 2,745,785 2,692,423 98.06 52,281
2012 3,113,017 3,110,478 3,071,202 98.74 36,717
2013 3,163,359 3,160,524 3,133,764 99.15 23,724
2014 3,163,359 3,160,285 3,128,695 99.00 14,605
2015 3,113,017 3,133,137 3,112,989 99.36
(1) Tax Levy adjusted for powerlines, market value credits and AG program credits
Fiscal Year of the Levy
Collected within the
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
131
Schedule 8
Delinquent
Total Taxes As A
Percentage Delinquent % Of Total
Amount of Net Levy Taxes Net Tax Levy
$2,110,613 99.98 $343 0.02
2,394,822 100.00 0.00
2,559,227 100.00 0.00
2,672,617 100.00 6 0.00
2,705,159 99.98 623 0.02
2,744,704 99.96 1,081 0.04
3,107,919 99.92 2,559 0.08
3,157,488 99.90 3,036 0.10
3,143,300 99.46 16,985 0.54
3,112,989 99.36 20,148 0.64
Total Collections to Date
132
Water (in millions of gallons)
Type of Customer 2015 2014 2013 2012 2011
Residential 84.007 98.573 120.676 154.747 105.290
Commercial Service 21.653 12.156 8.253 10.405 6.872
Total gallons 105.660 110.729 128.929 165.152 112.162
Total direct rate per 1,000 gallons - residential 2.14$ 2.14$ 2.14$ 2.14$ 2.14$
Total direct rate per 1,000 gallons - commercial 3.11$ 3.11$ 3.11$ 3.11$ 3.11$
Sanitary Sewer (in millions of gallons)
Type of Customer 2015 2014 2013 2012 2011
Residential (1)3.794 0.000 0.000 0.000 0.000
Commercial Service 8.179 6.532 6.149 6.172 6.961
Total gallons 11.973 6.532 6.149 6.172 6.961
Total direct rate per 1,000 gallons 4.50$ 4.50$ 4.50$ 4.50$ 4.50$
(1) City did not have any residential sanitary sewer customers in 2014 and prior
* City converted to a tiered rate structure effective January 1, 2010; lowest tier rate listed for 2010-2015
CITY OF LAKE ELMO, MINNESOTA
WATER AND SANITARY SEWER CHARGES BY CUSTOMER
LAST TEN FISCAL YEARS
133
2010*2009 2008 2007 2006
95.704 122.461 120.986 108.649 70.255
7.261 7.989 7.851 8.746 6.126
102.965 130.450 128.837 117.395 76.381
2.10$ 2.15$ 2.05$ 2.05$ 1.75$
3.05$ 3.10$ 3.00$ 3.00$ 2.60$
2010*2009 2008 2007 2006
0.000 0.000 0.000 0.000 0.000
7.086 5.381 5.130 4.409 8.107
7.086 5.381 5.130 4.409 8.107
4.35$ 4.08$ 3.71$ 2.75$ 2.50$
Schedule 9
134
Total
Special Certificates Capital Governmental
Fiscal Assessment of Improvement Note Activities
Year Bonds Indebtedness Bonds Payable Debt
2006 $925,000 $403,000 $4,005,000 $$5,333,000
2007 780,000 364,000 3,855,000 4,999,000
2008 695,000 324,000 3,700,000 4,719,000
2009 1,120,000 283,000 3,540,000 4,943,000
2010 1,725,000 240,000 5,345,000 7,310,000
2011 2,440,000 196,000 5,175,000 7,811,000
2012 3,100,092 150,000 4,969,153 8,219,245
2013 4,436,967 102,000 1,941,135 6,480,102
2014 6,919,568 52,000 1,808,024 8,779,592
2015 8,095,288 1,687,803 21,219 9,804,310
Note: Details of the city's outstanding debt can be found in the notes to
the financial statements.
Other Governmental Activities Debt
CITY OF LAKE ELMO, MINNESOTA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
135
Total Total
Utility Business Primary Percentage
Revenue Activities Government of Personal Per
Bonds Debt Debt Income Capita
$5,015,000 $5,015,000 $10,348,000 0.03 $1,508
4,810,000 4,810,000 9,809,000 0.03 1,429
4,730,000 4,730,000 9,449,000 0.03 1,377
4,715,000 4,715,000 9,658,000 0.03 1,407
4,680,000 4,680,000 11,990,000 0.03 1,486
4,640,000 4,640,000 12,451,000 0.03 1,543
8,314,837 8,314,837 16,534,082 0.04 2,049
12,476,920 12,476,920 18,957,022 0.05 2,349
15,530,642 15,530,642 24,310,234 0.03 3,013
12,622,484 12,622,484 22,426,794 N/A 2,779
Schedule 10
Business-Type Activities
136
Special Certificates Capital Utility
Fiscal Assessment of Improvement Revenue
Year Bonds Indebtedness Bonds Bonds Total
2006 $955,000 $40,000 $4,005,000 $5,015,000 10,015,000$
2007 780,000 364,000 3,855,000 4,810,000 9,809,000
2008 695,000 324,000 3,700,000 4,730,000 9,449,000
2009 1,120,000 283,000 3,540,000 4,715,000 9,658,000
2010 1,725,000 240,000 5,345,000 4,680,000 11,990,000
2011 2,440,000 196,000 5,175,000 4,640,000 12,451,000
2012 3,100,092 150,000 4,969,153 8,314,837 16,534,082
2013 4,436,967 102,000 1,941,135 12,476,920 18,957,022
2014 6,919,568 52,000 1,808,024 15,530,642 24,310,234
2015 8,095,288 1,687,803 12,622,484 22,405,575
Note: Details regarding the city's outstanding debt can be found in the notes to the
financial statements.
See Schedule 15 for population data
See Schedule 5 for estimated market value information
Source: City of Lake Elmo Finance Department
General Bonded Debt Outstanding
CITY OF LAKE ELMO, MINNESOTA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
137
Net
Less:General Percentage
Available Bonded of Actual
in Debt Debt Taxable Value Per
Service Outstanding of Property Capita
$725,337 9,289,663$ 0.91 1,354$
698,683 9,110,317 0.81 1,327
727,673 8,721,327 0.76 1,271
1,422,049 8,235,951 0.68 1,200
3,605,250 8,384,750 0.70 1,039
3,534,742 8,916,258 0.78 1,105
3,500,799 13,033,283 1.26 1,615
726,753 18,230,269 1.77 2,259
691,700 23,618,534 2.26 2,927
2,477,730 19,927,845 1.68 2,470
Schedule 11
138
Schedule 12
Estimated
Estimated Share of
Debt Percentage Overlapping
Governmental Unit Outstanding Applicable (a)Debt
Debt repaid with property taxes
Independent School District #622 114,100,000$3.10%3,537,100$
Independent School District #832 50,740,000 4.70%2,384,780
Independent School District #834 136,865,000 14.10%19,297,965
Other debt
Washington County 164,020,000 4.15%6,806,830
Metropolitan Council 206,020,000 1.10%2,266,220
Subtotal, overlapping debt 34,292,895
City direct debt 9,804,310 100.00%9,804,310
Total direct and overlapping debt 44,097,205$
Sources: Tax capacity data to estimate applicable percentages provided by Washington County.
Debt outstanding data provided by each governmental unit.
Note: 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 of Lake Elmo. 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 therfore responsible for repaying the debt, of each overlapping government.
(a) For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using tax capacity values.
Applicable percentages were estimated by determining the portion of another governmental unit's tax capacity value that is
within the city's boundaries and dividing it by each unit's total tax capacity value.
December 31, 2015
COMPUTATION OF DIRECT AND INDIRECT GENERAL OBLIGATION BONDED DEBT
CITY OF LAKE ELMO, MINNESOTA
AND LEGAL DEBT MARGIN
This Page Left Blank Intentionally
140
2015 2014 2013 2012 2011
Debt limit 36,733,899$35,537,364$32,470,203$32,054,064$31,126,713$
Total net debt applicable to limit 1,572,289 1,757,421 1,894,510 2,099,369 2,148,203
Legal debt margin 35,161,610$33,779,943$30,575,693$29,954,695$28,978,510$
Total net debt applicable to the limit
as a percentage of debt limit 4.28%4.95%5.83%6.55%6.90%
The legal debt limit for municipalities in Minnesota was increased in 2008 from 2% to 3% of the market value of
taxable property. This limit applies only to the City's general obligation tax levy bonds and excludes special
assessment, tax increment and tax abatement bonds.
LAST TEN FISCAL YEARS
(Dollars in Thousands)
Fiscal Year
CITY OF LAKE ELMO, MINNESOTA
LEGAL DEBT MARGIN INFORMATION
141
Taxable Market Value 1,224,463,300$
Debt Limit (3% of market value)36,733,899
Debt applicable to limit:
General obligation bonds 1,685,000
Less: Amount set aside for repayment
of general obligation debt 112,711
Total net debt applicable to limit 1,572,289
Legal debt margin 35,161,610$
2010 2009 2008 2007 2006
34,288,095$36,036,402$36,242,169$22,620,202$20,351,938$
2,195,153 271,142 315,169 358,220 400,384
32,092,942$35,765,260$35,927,000$22,261,982$19,951,554$
6.40%0.75%0.87%1.58%1.97%
Schedule 13
Legal Debt Margin Calculation for the Fiscal Year 2015
142
Schedule 14
Net
Fiscal Gross Operating Available
Year Revenue (1)Expenses (2)Revenue Principal Interest Coverage
2006 1,757,127$ 529,313$ 1,227,814$ 200,000$ 223,214$ 2.90
2007 1,011,400 595,824 415,576 205,000 211,482 1.00
2008 715,611 536,475 179,136 80,000 202,224 0.63
2009 776,899 513,226 263,673 530,000 208,803 0.36
2010 920,768 563,896 356,872 35,000 191,156 1.58
2011 891,587 516,157 375,430 40,000 190,094 1.63
2012 946,407 426,118 520,289 40,000 221,129 1.99
2013 3,501,321 504,648 2,996,673 165,000 300,789 6.43
2014 2,266,397 678,394 1,588,003 365,000 424,080 2.01
2015 3,642,316 627,977 3,014,339 4,165,000 456,782 0.65
Notes: (1) Gross revenue includes investment earnings, hook-up 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.
CITY OF LAKE ELMO, MINNESOTA
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
Utility Revenue Bonds
Debt Service (3)
143
SCHEDULE 15
PERSONAL
INCOME PER CAPITA STATE CITY
(thousands of PERSONAL UNEMPLOYMENT UNEMPLOYMENT
YEAR POPULATION (1)dollars)INCOME (2)RATE (3)RATE (3)
2006 6,863 $308,512 $44,953 4.4 3.6
2007 6,863 323,426 47,126 5.0 4.2
2008 6,863 329,774 48,051 6.3 5.8
2009 6,863 317,997 46,335 7.6 7.1
2010 8,069 383,834 47,569 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 N/A N/A 3.2 2.9
Sources: (1) Metropolitan Council 2000/2010-Census Bureau
(2) Bureau of Economic Analysis - Washington County, Minnesota
(3) Estimate based on County unemployment rate provided by Minnesota Department of
Employment and Economic Development
CITY OF LAKE ELMO, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
144
SCHEDULE 16
Employer Employees (1)Rank
Percentage of
Total City
Employment (2)Employees (1)Rank
Percentage of
Total City
Employment (2)
3M Company (Maplewood)9,100 1 39.0%12,774 1 54.2%
Andersen Corp (Bayport)2,400 2 10.3%
Washington County (Stillwater)1,600 3 6.9%
Healtheast Care/St. Johns Hospital (Maplewood)1,200 4 5.1%
Woodwinds Health (Woodbury)1,100 5 4.7%
Fortis Company (Woodbury)1,300 3 5.5%
ISD 834 (Stillwater)1,050 6 4.5%2,050 2 8.7%
3M Company (Woodbury)940 4 4.0%
Ecowater Systems, Inc. (Woodbury)440 7 1.9%450 6 1.9%
Bremer Bank Operations Ctr (Lake Elmo)425 8 1.8%400 7 1.7%
MN Correctional Facility (Oak Park Hts)355 9 1.5%
SunAmerica Financial Group (Woodbury)310 10 1.3%
Imation (Oakdale)500 5 2.1%
High Pointe Health Campus (Lake Elmo)200 8 0.8%
Lake Elmo Inn Inc.80 10 0.3%
Machine Shed/Wildwood Inn (Lake Elmo)150 9 0.6%
(1) City staff estimate of total global employees for each employer
(2) City staff estimate
2006
CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
2015
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146
Function 2015 2014 2013 2012 2011
Administration 3.20 3.55 3.55 3.15 3.15
Finance 0.80 1.25 1.25 0.50 0.50
Planning and Zoning 2.75 2.70 2.95 1.55 1.55
General Government 6.75 7.50 7.75 5.20 5.20
Fire 1.50 1.55 2.05 1.60 1.10
Building Inspections 3.15 1.55 1.30 0.95 0.95
Public Safety 4.65 3.10 3.35 2.55 2.05
Streets and Roadways 3.90 3.20 3.21 3.05 3.05
Public Works 3.90 3.20 3.21 3.05 3.05
Parks 1.85 3.30 2.74 2.52 2.52
Parks and Recreation 1.85 3.30 2.74 2.52 2.52
Communications 0.70 0.35 0.40 0.15 0.15
0.70 0.35 0.40 0.15 0.15
Total Governmental Activities 17.85 17.45 17.45 13.47 12.97
Water Utility 2.45 2.60 2.10 1.85 1.85
Sewer Utility 1.30 0.70 0.70 0.30 0.30
Total Business Activities 3.75 3.30 2.80 2.15 2.15
Totals for Organization 21.60 20.75 20.25 15.62 15.12
Source: City's Adopted Budgets
CITY OF LAKE ELMO, MINNESOTA
FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
147
Schedule 17
2010 2009 2008 2007 2006
3.15 3.18 3.75 2.40 2.44
0.50 0.50 1.00 1.29 1.30
1.55 1.75 1.75 2.15 1.95
5.20 5.43 6.50 5.84 5.69
1.10 1.10 1.10 1.26 0.23
0.95 1.95 1.20 2.68 2.18
2.05 3.05 2.30 3.94 2.41
3.05 3.05 3.05 2.78 3.08
3.05 3.05 3.05 2.78 3.08
2.52 3.10 2.72 3.40 3.00
2.52 3.10 2.72 3.40 3.00
0.15 0.19 0.00 0.00 0.00
0.15 0.19 0.00 0.00 0.00
12.97 14.82 14.57 15.96 14.18
1.85 1.85 2.30 2.02 2.02
0.30 0.30 0.35 0.22 0.20
2.15 2.15 2.65 2.24 2.22
15.12 16.97 17.22 18.20 16.40
148
Function/Program 2015 2014 2013 2012 2011
Planning and Zoning
Conditional use permits 2 4 2 3 0
Interim use permits 1 1 1 0 3
Minor subdivisions 2 0 2 1 0
Plats/Planned unit developments 9 17 1 0 0
Rezonings 2 11 2 7 0
Site plans 0 0 2 1 0
Variances 2 2 5 4 6
Fire
Total emergency responses 429 358 448 399 315
EMS responses 274 237 280 262 195
Fire responses 32 21 28 28 24
Building Inspections
Residential permit valuations 50,401 23,032 19,979 20,320 16,133
(thousands of dollars)
Commercial permit valuations 1,952 7,309 966 2,351 2,590
(thousands of dollars)
New residential units (1)140 41 32 31 24
New commercial units 1 3 0 0 0
Water Utility
Number of customers 1,234 1,073 1,051 1,016 998
Average daily consumption (2)18 19 21 15 14
(thousands of gallons)
Sanitary Sewer Utility
Number of customers 82 45 29 29 29
Average daily flow (3)
(thousands of gallons)74 77 77 75 71
Sources: Various City Department's annual budget workload measurements
(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 2014 but not yet sold
or occupied so no impact to flows
CITY OF LAKE ELMO, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
149
Schedule 18
2010 2009 2008 2007 2006
0 2 1 3 3
1 0 1 1 0
0 2 1 1 0
0 0 0 0 3
0 1 1 1 0
1 1 0 1 12
2 5 6 8 9
361 319 294 369 313
211 205 204 244 202
14 24 20 46 26
15,889 12,903 16,525 22,739 18,727
2,013 1,617 1,370 3,600 25,744
26 29 23 29 30
1 1 0 1 6
967 941 935 918 735
18 24 28 26 24
29 28 28 26 18
72 68 73 66 49
150
Function/Program 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006
Fire
Stations 2 2 2 2 2 2 2 2 2 2
Public Works
Bituminous streets (miles)65 65 63 63 63 62 62 62 62 57
Gravel streets (miles)2 2 2 2 2 2 3 3 3 3
Street lights 144 144 142 137 137 137 137 137 137 137
Storm sewer (miles)25 25 25 25 25 25 25 23 23 22
Park & Recreation
Acres of parkland 451 451 451 451 451 451 451 451 451 451
Number of parks 17 17 17 17 17 17 17 17 17 17
Water Utility
Water towers 3 3 2 2 2 2 2 2 1 1
Miles of watermain 43 40 39 37 37 37 37 34 26 20
Number of fire hydrants 378 351 293 280 280 280 280 280 233 225
Sanitary Sewer Utility
Miles of sanitary sewer 4 3 3 3 3 3 3 3 3 3
Lift stations 4 4 3 3 3 3 3 3 3 3
Sources: Various City Department's annual financial report statistics
CITY OF LAKE ELMO, MINNESOTA
CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Schedule 19
CITY OF LAKE ELMO, MINNESOTA
OTHER REPORT SECTION
December 31, 2015
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MINNESOTA LEGAL COMPLIANCE
Independent Auditor's 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, 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, 2015, and the related notes to the financial statements,and have issued our
report thereon dated June 9, 2016.
The Minnesota Legal Compliance Audit Guide for Cities,promulgated by the State Auditor pursuant to
Minnesota State Statutes Sec. 6.65, contains seven categories of compliance to be tested: contracting
and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and
disbursements, miscellaneous provisions and tax increment financing. Our audit considered all of the
listed categories, except that we did not test for compliance with the provisions for tax increment financing
because the City has not established a tax increment financing district.
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 Minnesota Legal Compliance Audit Guide for
Cities, except as described below. 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.
As of December 31, 2015, the City's records showed uncashed checks held for more than
three years. These checks were not reported and paid to the State Commission of
Commerce pursuant to Minn. Stat. Sections 345.41 and 345.43.
As of December 31, 2015, collateral pledged to secure the City's deposits did not equal at
least on hundred ten percent of the uninsured amount on deposit.
This report is intended solely for the information and use of those charged with governance and
management of the City of Lake Elmo, Minnesota and the State Auditor and is not intended to be and
should not be used by anyone other than these specified parties.
Maplewood, Minnesota
June 9, 2016
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