HomeMy WebLinkAbout2014 Annual Comprehensive Financial ReportCITY OF LAKE ELMO, MINNESOTA
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2014
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 Funding Progress - Other Post Employment Benefits 83
Combining and Individual Fund Statements and Schedules
Combining Balance Sheet - Nonmajor Governmental Funds 86
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Governmental Funds 87
Combining Balance Sheet - Nonmajor Special Revenue Funds 88
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Special Revenue Funds 89
Combining Balance Sheet - Nonmajor Capital Projects Funds 90
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Capital Projects Funds 92
TABLE OF CONTENTS
CITY OF LAKE ELMO, MINNESOTA
For the Fiscal Year Ended December 31, 2014
FINANCIAL STATEMENTS
PAGE
FINANCIAL SECTION (CONTINUED)
Combining Statement of Net Position - Internal Service Funds 94
Combining Statement of Revenues, Expenses and Changes in Fund
Net Position - Internal Service Funds 95
Combining Statement of Cash Flows - Internal Service Funds 96
Combining Balance Sheet - Debt Service Funds 98
Combining Schedule of Revenues, Expenditures and Changes in Fund
Balances - Debt Service Funds 100
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual - Fall Festival Special Revenue Fund 102
Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual - Library Special Revenue Fund 103
Combining Schedule of Changes in Assets and Liabilities - Agency Funds 104
Supplemental Schedule of Sources and Uses - Redevelopment
Grant Program 105
STATISTICAL SECTION (UNAUDITED)REFERENCE
Net Position by Component Schedule 1 108
Changes in Net Position Schedule 2 110
Fund Balances, Governmental Funds Schedule 3 114
Changes in Fund Balances, Governmental Funds Schedule 4 116
Tax Capacity and Estimated Actual Value of Taxable Property Schedule 5 118
Property Tax Rates and Tax Levies - Direct and Overlapping Property
Tax Rates Schedule 6 119
Principal Property Taxpayers Schedule 7 120
Schedule of Property Tax Levies and Collections Schedule 8 122
Water and Sanitary Sewer Charges by Customer Schedule 9 124
Ratios of Outstanding Debt by Type Schedule 10 126
Ratios of General Bonded Debt Outstanding Schedule 11 128
Computation of Direct and Indirect General Obligation Bonded Debt
and Legal Debt Margin Schedule 12 130
Legal Debt Margin Information Schedule 13 132
Pledged Revenue Coverage Schedule 14 134
Demographic and Economic Statistics Schedule 15 135
Principal Employers Schedule 16 136
Full-Time Equivalent Employees by Function Schedule 17 138
Operating Indicators by Function/Program Schedule 18 140
Capital Assets Statistics by Function/Program Schedule 19 142
OTHER REPORT SECTION
Independent Auditor's Report on Minnesota Legal Compliance 145
CITY OF LAKE ELMO, MINNESOTA
FINANCIAL STATEMENTS
For the Fiscal Year Ended December 31, 2014
TABLE OF CONTENTS (CONTINUED)
CITY OF LAKE ELMO, MINNESOTA
INTRODUCTORY SECTION
DECEMBER 31, 2014
This Page Left Blank Intentionally
i
3800 Laverne Avenue North
Lake Elmo, MN 44042
651-747-3900 www.lakeelmo.org
May 19, 2015
To the Honorable Mayor, Members of the City Council, and Citizens of the
City of Lake Elmo:
State law requires that every general-purpose local government publish, within six months of
the close of each fiscal year, a complete set of audited financial statements. This report is
published to fulfill that requirement for the fiscal year ended December 31, 2014.
Management assumes full responsibility for the completeness and reliability of the information
contained in this report, based upon a comprehensive framework of internal control that it has
established for this purpose. Because the cost of internal control should not exceed anticipated
benefit, the objective is to provide reasonable, rather than absolute, assurance that the financial
statements are free of any material misstatements.
Smith, Schafer and Associates, Ltd, Certified Public Accountants, have issued an unmodified
(“clean”) opinion on the City of Lake Elmo, Minnesota’s (the City) financial statements for the
year ended December 31, 2014. The independent auditor’s report is located in the front of the
financial section of this report.
The Management’s Discussion and Analysis (MD&A) immediately follows the independent
auditor’s report and provides a narrative introduction, overview, and analysis of the basic
financial statements. The MD&A complements this letter of transmittal and should be read in
conjunction with it.
PROFILE OF THE GOVERNMENT
The City 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, the City covers 25 square miles
and has an estimated population of 8,773 which represents 2,844 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 the City Administrator, City Attorney and City Engineer. The City Administrator is
appointed by the Council and is the chief administrative officer of the City. The mayor and
council members each serve a four year term.
CITY OF LAKE ELMO, MINNESOTA
ii
The City provides a full range of municipal services. This includes general government
(administration, finance and planning), public safety (building inspection, police and fire), public
works (engineering and streets) and culture and recreation. In addition, the City has three
enterprise funds. These funds provide utilities, including water, sewer and storm water.
The annual budget serves as the foundation for the City's financial planning and control. City
departments submit their department budget requests to the City Administrator and Finance
Director for compilation and review. The City Administrator and Finance Director then bring the
proposed annual budget to the City Finance Committee for review and feedback prior to its
submission to the City Council. The preliminary balanced budget is presented to the City
Council prior to September 1st 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 2014 final budget and tax levy needed to be adopted by and submitted to
Washington County by December 28, 2013. 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.
LOCAL ECONOMY
Lake Elmo is home to numerous businesses that are leaders in their respective industries of
banking, education, medical, hotel and restaurants. In 2014, the economy in Lake Elmo was
strengthened by the addition of a new medical facility as well as a new convenience store, both
located in the I-94 Corridor. With the residential development growth in this area, it is
anticipated that additional businesses will seek out this location for expansion in the near future.
During 2014, the City worked on nine residential subdivisions in various stages of approval.
Overall, four residential final plants and seven preliminary plats were approved. During 2014, a
Memorandum of Understanding (MOU) with the Metropolitan Council was eliminated, which
relieves the City of mandated growth quotas and potential wastewater inefficiency fees.
LONG-TERM FINANCIAL PLANNING
Total unassigned General Fund balance as of December 31, 2014 was 84% of the total
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 fixed asset replacements. Funding needs for capital infrastructure in the
enterprise funds are funded through user fees in those funds.
During 2014, Moody’s Investors Service maintained the previously assigned long term rating of
Aa2. During 2014, the City also requested that Standard and Poor's provide their rating of the
City and as a result of this review, they upgraded their long term rating of the City to AA+.
CITY OF LAKE ELMO, MINNESOTA
iii
In their assessment of the City, Standard and Poor's noted the following:
Affluent tax base favorably located in the Twin Cities metropolitan area
Strong financial operations
Healthy General Fund reserves and very strong liquidity
Moderate direct debt burden
Very strong economy
Budgetary performance strong overall
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. This will continue to further strengthen fund balances while paying down the debt
incurred to build the City share of infrastructure related to those developments.
RELEVANT FINANCIAL POLICIES
One of the greatest accomplishments during 2014 was the successful negotiation of the
termination of the Memorandum of Understanding (MOU) with the Metropolitan Council. This
relieved the community of mandated growth quotas and potential wastewater inefficiency fees.
The Met Council was agreeable to negotiate the elimination of the MOU after the adoption of
the two major Comprehensive Plan Amendments in the I-94 and Village Planning Areas and the
extension of municipal utilities.
MAJOR INITIATIVES
2014 was a revolutionary year for the City due to a large amount of growth and development
activity. As a result, the City initialized the following critical infrastructure investment policies to
minimize risk to taxpayers:
Lake Elmo Avenue watermain commitments
100% assessment waivers/easement granting
Developer responsibility for payment of majority of costs related to 5th street ($15M
collector road). The City will participate in the cost of the oversizing of pipe which is
standard
Strictest Developer Agreement security standards in the East Metro.
In addition, the follow initiatives were undertaken during 2014:
Municipal consent for participation with Washington County on a joint project on CSAH
17. This project includes the replacement of old watermain and installation of sanitary
sewer and storm sewer while reconstructing of the streets.
Significant planning related to the CSAH 15 project which will be brought forward for
municipal consent in 2015.
Gateway Corridor project involvement to assist in the determination of the locally
preferred alternative for the regional project.
Extensive work with Union Pacific Railroad regarding the impact of the downtown project
as well as new development impacts at various locations.
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 Wally Nelson December 31, 2014
Council Member Mike Reeves December 31, 2014
Council Member Anne Smith December 31, 2016
AP POINTED OFFICIALS
City Administrator Dean Zuleger Continuous
Finance Director Cathy Bendel Continuous
City Clerk Adam Bell Continuous
FINANCE COMMITTEE
Wally Nelson, Committee Chair and City Council
Anne Smith, City Council
Terry Forrest, Retired CFO
Julie Fliflet, Director of Finance and Administration
CITY OF LAKE ELMO, MINNESOTA
ELECTED AND APPOINTED OFFICIALS
December 31, 2014
vii
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CITY OF LAKE ELMO, MINNESOTA
FINANCIAL SECTION
DECEMBER 31, 2014
This Page Left Blank Intentionally
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Members of
the City Council
City of Lake Elmo, Minnesota
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, 2014, 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 of 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 purposes 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, 2014, 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.
2
Honorable Mayor and Members of the City Council
City of Lake Elmo, Minnesota
Page 2
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 Schedule of Funding Progress -Other Post-
Employment Benefits on page 83 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 basic financial statements. The introductory section, combining
and individual nonmajor fund financial statements, supplemental information 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 and the supplementary
information 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
May 19, 2015
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, 2014.
FINANCIAL HIGHLIGHTS
The assets of the City of Lake Elmo, Minnesota exceeded its liabilities at the close of the
most recent fiscal year by $28,525,112 (net position). Of this amount, $6,506,342
(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 $2,334,390. The increase is attributed to the City's
business-type activities.
As of the close of the current fiscal year, the City of Lake Elmo, Minnesota’s governmental
funds reported combined ending fund balances of $6,148,403, an increase of $859,474 from
the prior year. This increase was due primarily to the issuance of the 2014A G.O.
improvement bonds.
At the end of the current fiscal year, unassigned fund balance for the general fund was
$2,542,038, or 83.7%of total general fund expenditures. The nonspendable portion of the
general fund balance as of December 31, 2014 ($638,963) related primarily to the interfund
loan to the Village Project fund and prepaid expenses.
The City's total noncurrent liabilities increased by $5,360,234 or 28%during the current fiscal
year. The increase was primarily related to this issuance of the 2014A G.O.
improvement/revenue bonds.
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-four individual governmental funds, eleven 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 and the infrastructure reserve 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 45-80 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 86-101
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
$28,525,112 at the close of the most recent fiscal year.
The largest portion of the City of Lake Elmo, Minnesota’s net position, $18,525,258 (65%)reflects
its investment in capital assets (e.g. land, buildings and improvements, and machinery and
equipment), less any related debt used to acquire those assets that is still outstanding. The City of
Lake Elmo, Minnesota uses these capital assets to provide services to citizens; consequently,
these assets are not available for future spending. Although the City of Lake Elmo, Minnesota's
investment in capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets
themselves cannot be used to liquidate these liabilities.
2014 2013 2014 2013 2014 2013
Current and other assets 7,399,479$ 6,568,146$ 8,094,107$ 9,515,965$ 15,493,586$ 16,084,111$
Capital assets 16,737,433 15,595,829 22,037,175 15,323,660 38,774,608 30,919,489
Total assets 24,136,912 22,163,975 30,131,282 24,839,625 54,268,194 47,003,600
Long-term liabilities outstanding 9,001,835 6,693,551 15,559,572 12,507,622 24,561,407 19,201,173
Other liabilities 665,117 594,759 516,558 1,016,946 1,181,675 1,611,705
Total liabilities 9,666,952 7,288,310 16,076,130 13,524,568 25,743,082 20,812,878
Net position:
Net investment in capital assets 7,957,840 9,056,353 10,567,418 6,855,807 18,525,258 15,912,160
Restricted 1,106,200 1,225,849 2,387,312 2,612,569 3,493,512 3,838,418
Unrestricted 5,405,920 4,593,463 1,100,422 1,846,681 6,506,342 6,440,144
Total net position 14,469,960$ 14,875,665$ 14,055,152$ 11,315,057$ 28,525,112$ 26,190,722$
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 (12%) represents resources
that are subject to external restrictions on how they may be used. The remaining balance of
unrestricted net position ($6,506,342) 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 decreased the City of Lake Elmo, Minnesota's
net position by $405,705 during 2014. Key elements of this decrease include:
Capital grants decreased by $807,021 from the prior year due primarily to construction aid
received from the State of Minnesota in 2013.
Public safety expenditures increased by $259,208 from the prior year due primarily to
repairs and maintenance costs in the fire department.
Business-type activities. Business-type activities increased the City of Lake Elmo, Minnesota's
net position by $2,740,095, accounting for the entire increase in the net position of the City of Lake
Elmo, Minnesota. This increase is due primarily to sewer and water access fees related to
development in the City, as well as capital grants received in the enterprise funds.
A condensed version of the Statement of Activities follows:
2014 2013 2014 2013 2014 2013
Revenues:
Program revenues:
Charges for services 552,830$ 466,897$ 2,247,060$ 840,650$ 2,799,890$ 1,307,547$
Operating grants and contributions 204,462 208,276 204,462 208,276
Capital grants and contributions 557,601 1,364,622 1,159,222 3,781,528 1,716,823 5,146,150
General revenues:
Property taxes 3,200,291 3,231,609 3,200,291 3,231,609
Other 215,735 48,820 19,337 30,346 235,072 79,166
Total revenues 4,730,919 5,320,224 3,425,619 4,652,524 8,156,538 9,972,748
Expenses:
General government 1,072,888 1,103,337 1,072,888 1,103,337
Public safety 1,530,609 1,277,798 1,530,609 1,277,798
Public works 1,032,426 1,273,977 1,032,426 1,273,977
Culture and recreation 448,361 424,687 448,361 424,687
Interest on long-term debt 165,028 133,694 165,028 133,694
Water 1,069,511 958,870 1,069,511 958,870
Sewer 353,438 119,370 353,438 119,370
Storm sewer 149,887 86,989 149,887 86,989
Total expenses 4,249,312 4,213,493 1,572,836 1,165,229 5,822,148 5,378,722
Increase in net position before transfers 481,607 1,106,731 1,852,783 3,487,295 2,334,390 4,594,026
Transfers (887,312) 887,312
Change in net position (405,705) 1,106,731 2,740,095 3,487,295 2,334,390 4,594,026
Net position - beginning of year 14,875,665 13,768,934 11,315,057 7,827,762 26,190,722 21,596,696
Net position - end of year 14,469,960$ 14,875,665$ 14,055,152$ 11,315,057$ 28,525,112$ 26,190,722$
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
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
$1,800,000
Expenses and Program Revenues -Governmental Activities
Program revenues
Expenses
Property taxes
68%
Charges for
services
12%
Capital grants and
contributions
12%
Operating grants
and contributions
4%Other
4%
Revenues by Source -Governmental Ac tivities
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
$2,250,000
Expenses and Program Revenues -Business-Type Ac tivities
Program revenues
Expenses
Charges for
services
66%
Capital grants and
contributions
34%
Other
0%
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 $6,148,403, an increase of $859,474 in comparison
with the prior year. Approximately 78%of this total fund balance, or $4,791,659, constitutes
assigned and unassigned fund balance, which is available for spending at the government’s
discretion. The remainder of the fund balance ($1,356,744) 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 $2,542,038. 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 83.7%of total 2014 general fund
expenditures.The general fund’s total fund balance increased by $3,619 during the current fiscal
year due primarily to an increase in building permits and related revenue and investment earnings
during the year.
The debt service fund decreased its fund balance by $35,055 due primarily to debt service
expenditures in excess of property taxes, special assessments and intergovernmental revenues
allocated to this fund.
The infrastructure reserve fund increased its fund balance by $29,968 due primarily to transfers
from the general fund.
The special revenue funds increased their overall fund balances by $112,120 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 described previously,
increased their collective fund balance by $748,822 due primarily to bond proceeds allocated to
these funds prior to incurring the intended capital outlay expenditures,which include extensive
expansion and improvement to the city parks system.
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 $436,035, $93,709 and $570,678, respectively. The water fund and
sewer fund increased their net position by $2,527,222 and $229,376,respectively,for the year
ended December 31, 2014. The storm sewer fund decreased its net position by $16,503 for the
year ended December 31, 2014. 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 $3,619. Revenues exceeded budget by $98,811 for the year ended December 31,
2014 due primarily to licenses and permits revenue related to new development in the City as well
as miscellaneous revenues related to a right-of-way transaction.
Total expenditures exceeded budget by $95,192 for the year. Four departments had expenditures
in excess of budget: general government expenditures exceeded budget by $8,140, public safety
expenditures exceeded budget by $40,883,public works expenditures exceeded budget by
$44,802 and culture and recreation exceeded budget by $1,367. The over expenditures in the
general government department were primarily related to lobbying costs related to capital projects
in the City during the year. The over expenditures in the public safety department were primarily
related to contracted police service costs,as well as repairs and maintenance costs and the
purchase of new safety equipment in the fire department in excess of budget. The over
expenditures in the public works department were primarily related to winter overtime costs and
street maintenance costs related to renting a spray patching machine for use in the City's five-stage
street maintenance program. The over expenditures in the culture and recreation department
related primarily to parks repairs and maintenance in excess of 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, 2014, amounted to $38,774,608
(net of accumulated depreciation). This investment in capital assets includes land, buildings and
improvements, and machinery and equipment. Total capital assets increased by $7,855,119, or
25%,for the year ended December 31, 2014, due primarily to completed construction projects and
additional construction in progress on various capital projects within the City.
2014 2013 2014 2013 2014 2013
Land 3,453,979$ 3,453,979$ 54,675$ 54,675$ 3,508,654$ 3,508,654$
Construction in progress 3,510,704 2,279,552 6,668,232 3,361,742 10,178,936 5,641,294
Buildings 2,760,350 2,842,852 2,760,350 2,842,852
Improvements other than buildings 510,821 428,727 510,821 428,727
Machinery and equipment 854,912 739,507 116,565 113,597 971,477 853,104
Infrastructure 5,646,667 5,851,212 15,197,703 11,793,646 20,844,370 17,644,858
Total 16,737,433$ 15,595,829$ 22,037,175$ 15,323,660$ 38,774,608$ 30,919,489$
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
$24,292,000 in bonds and certificates outstanding. This amount includes $3,925,000 of bonds
outstanding that will be refunded during 2015. The entire $24,292,000 outstanding comprises debt
backed by the full faith and credit of the government.
2014 2013 2014 2013 2014 2013
General obligation bonds 8,735,000$ 6,420,000$ 15,505,000$ 12,485,000$ 24,240,000$ 18,905,000$
General obligation certificates 52,000 102,000 52,000 102,000
Total 8,787,000$ 6,522,000$ 15,505,000$ 12,485,000$ 24,292,000$ 19,007,000$
Governmental Activities Business-Type Activities Total
City of Lake Elmo, Minnesota's Outstanding Debt
General Obligation Bonds and Certificates
The City of Lake Elmo, Minnesota's total bonds and certificates payable increased by $5,285,000
during the current fiscal year. The increase was due primarily to the issuance of the City's 2014A
general obligation improvement bonds.
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's taxable market value increased 1.8 percent from 2013 to 2014 and 13.2 percent
from 2014 to 2015.
There was a slight reduction to total property taxes levied in 2015 due to a 10% reduction in
the library component of the levy. This is due to a conscious effort by the City to reduce
general government spending in order to absorb the increase in the debt service levy. It is
a firm belief of City management that the operational costs related to growth should be paid
for by a corresponding increase in permit and related revenue.
The City has planned for a new minor collector road to be built (5th Street) in the I-94
Corridor and a new minor collector road (Village Parkway) in the Old Village. Both of these
roadways will be constructed by the development groups they are serving, representing
95% of the cost of construction (approximately $16 million), with the City paying for only
oversizing costs that serve as a benefit to the entire City.
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
13
Economic Factors and Next Year's Budgets and Rates (continued)
Plans are well underway for increased residential development with 1,912 new homes in
various stages of the approval process in the following areas:
o The I-94 Corridor represents a four-mile stretch along an interstate highway that is
served by three major interchanges. This area is scheduled for 1,273 new homes to
be built in the next six to eight years, representing $445 million in additional
incremental value. In addition, the corridor has experienced resurgence in
commercial activity with the construction of a medical clinic and a convenience store.
Plans are underway for the addition of a 90-unit senior center, a 100-employee
regional headquarters for an insurance company, and a $13.4 million special needs
K-12 school for Independent School District #916, a special facility that will serve 12
other school districts.
o The Old Village area represents a traditional downtown that is served by two major
highways (CTH 17 and CSAH 5). This area is scheduled for 557 homes to be built
in the next ten to twelve years, representing approximately $200 million in additional
incremental value. The area will be improved by the Lake Elmo Avenue Downtown
Improvement Project, a $12 million cooperative effort with Washington County. The
project will cover full reconstruction of the streets as well as upgrading the existing
water system and installation of a new sewer system and storm water drainage
system.
o The Inwood Avenue segment of the water line (for which $3.5 million in State
bonding proceeds were secured) will be built out in 2015-2016. This includes the
construction of a new water tower, booster station, reducing valves and the trunk
watermain improvements that are scheduled to serve the I-94 corridor.
o The City was able to remove itself from an onerous Memorandum of Understanding
from the Metropolitan Council with the adoption of two comprehensive plan
amendments and the installation of a force main sewer line that will serve the Old
Village.
Requests for Information
This financial report is designed to provide a general overview of the City of Lake Elmo,
Minnesota’s finances for all those with an interest in the City's finances. Questions concerning any
of the information provided in this report or requests for additional information should be addressed
to City of Lake Elmo, Minnesota, 3800 Laverne Avenue North, Lake Elmo, Minnesota, 55042.
This Page Left Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
FINANCIAL STATEMENTS
DECEMBER 31, 2014
This Page Left Blank Intentionally
See Notes to Financial Statements
17
Governmental Business-Type
Activities Activities Total
AS SETS
Cash and investments 6,616,118$ 990,993$ 7,607,111$
Cash with fiscal agent 3,848,031 3,848,031
Receivables, net of allowance 652,218 3,174,501 3,826,719
Due from other governmental units 175,003 3,157 178,160
Internal balances (77,425) 77,425
Prepaid expenses 33,565 33,565
Capital assets:
Nondepreciable 6,964,683 6,722,907 13,687,590
Depreciable, net 9,772,750 15,314,268 25,087,018
Total Assets 24,136,912 30,131,282 54,268,194
LIABILITIES
Accounts payable 445,252 360,400 805,652
Accrued expenses 47,078 4,782 51,860
Accrued interest 89,637 112,518 202,155
Escrow deposits 75,000 75,000
Due to other governmental units 38,858 38,858
Unearned revenue 8,150 8,150
Noncurrent liabilities:
Due within one year 707,738 393,914 1,101,652
Due in more than one year 8,294,097 15,165,658 23,459,755
Total Liabilities 9,666,952 16,076,130 25,743,082
NET POSITION
Net investment in capital assets 7,957,840 10,567,418 18,525,258
Restricted
Debt service 1,106,200 2,387,312 3,493,512
Unrestricted 5,405,920 1,100,422 6,506,342
Total Net Position 14,469,960$ 14,055,152$ 28,525,112$
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF NET POSITION
December 31, 2014
See Notes to Financial Statements
18
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Governmental activities:
General government 1,072,888$ 45,161$ $ $
Public safety 1,530,609 496,916 70,203
Public works 1,032,426 117,196 175,790
Culture and recreation 448,361 10,753 17,063 381,811
Interest on long-term debt 165,028
Total governmental activities 4,249,312 552,830 204,462 557,601
Business-Type activities:
Water 1,069,511 1,291,091 780,403
Sewer 353,438 741,054 378,819
Storm sewer 149,887 214,915
Total business-type activities 1,572,836 2,247,060 1,159,222
Total 5,822,148$ 2,799,890$ 204,462$ 1,716,823$
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
Net position - ending
Program Revenues
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2014
19
Governmental Business-Type
Activities Activities Total
(1,027,727)$ (1,027,727)$
(963,490) (963,490)
(739,440) (739,440)
(38,734) (38,734)
(165,028) (165,028)
(2,934,419) (2,934,419)
1,001,983$ 1,001,983
766,435 766,435
65,028 65,028
1,833,446 1,833,446
(2,934,419) 1,833,446 (1,100,973)
3,200,291 3,200,291
2,749 2,749
87,586 19,337 106,923
125,400 125,400
(887,312) 887,312
2,528,714 906,649 3,435,363
(405,705) 2,740,095 2,334,390
14,875,665 11,315,057 26,190,722
14,469,960$ 14,055,152$ 28,525,112$
Net (Expense) Revenue
and Changes in Net Position
This Page Left Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
FUND FINANCIAL STATEMENTS
DECEMBER 31, 2014
See Notes to Financial Statements
22
CITY OF LAKE ELMO, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2014
General Fund Debt Service
Infrastructure
Reserve
ASSETS
Cash and investments 2,734,444$ 798,705$ 832,036$
Receivables (Net of allowance for
uncollectibles)
Accounts 17,349 62,511
Delinquent taxes 61,285
Special assessments 321,620 66,799
Accrued interest 9,519
Due from other funds 129,721 23,304
Advances to other funds 605,398
Due from other governmental units 28,366 141,098 9,000
Prepaid expenses 33,565
TOTAL ASSETS 3,619,647$ 1,284,727$ 970,346$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
LIABILITIES
Accounts payable 323,900$ 13,500$ 103,682$
Escrow deposits payable
Accrued liabilities 45,311
Due to other funds 117,907 7,032
Unearned revenue 8,150
Advances from other funds
Total liabilities 377,361 131,407 110,714
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue:
Property taxes 61,285
Special assessments 321,620 66,799
Accounts receivable
Intergovernmental revenue 140,000
Total deferred inflows of resources 61,285 461,620 66,799
FUND BALANCE
Nonspendable 638,963
Restricted 717,781
Assigned 792,833
Unassigned 2,542,038 (26,081)
Total Fund Balance 3,181,001 691,700 792,833
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE 3,619,647$ 1,284,727$ 970,346$
23
Other
Governmental
Funds Total
2,223,844$ 6,589,029$
109,367 189,227
61,285
388,419
9,519
153,025
605,398
307 178,771
33,565
2,333,518$ 8,208,238$
4,526$ 445,608$
75,000 75,000
1,411 46,722
56,760 181,699
8,150
605,398 605,398
743,095 1,362,577
61,285
388,419
107,554 107,554
140,000
107,554 697,258
638,963
717,781
2,150,692 2,943,525
(667,823) 1,848,134
1,482,869 6,148,403
2,333,518$ 8,208,238$
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)6,148,403$
Capital assets used in governmental activities are not f inancial
resources and, therefore, are not reported in the funds:
Governmental funds - capital assets 22,179,867$
Accumulated depreciation (5,569,102)
16,610,765
Other long-term assets are not available to pay for current-period
expenditures and, theref ore, are unavailable in the f unds:
Delinquent property taxes 61,285$
Special assessments 388,419
Accounts receivable 107,554
Due from other governmental units 140,000
697,258
Long-term liabilities are not due and payable in the current period
and therefore are not reported in the funds:
Bonds payable (8,787,000)$
Compensated absences (83,085)
Post employment benefit obligation (139,158)
Accrued interest (89,637)
Unamortized bond premiums (66,045)
Unamortized bond discounts 73,453
(9,091,472)
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.105,006
Net position of governmental activities (page 17)14,469,960$
December 31, 2014
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
AN D CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2014
General Fund Debt Service
Infrastructure
Reserve
REVENUES
Taxes 2,461,340$ 484,814$ $
Licenses and permits 451,953
Intergovernmental 190,148 76,650 147,170
Charges for services 30,192
Fines and forfeitures 48,647
Special assessments 100,974 14,450
Dedication fees
Investment earnings 71,813 3,547 3,464
Miscellaneous revenue 148,253
TOTAL REVENUES 3,402,346 665,985 165,084
EXPENDITURES
Current
General government 1,046,906
Public safety 1,198,546
Public works 585,071
Culture and recreation 208,204
Capital Outlay
Public works 2,418,870
Culture and recreation
Debt Service
Principal 585,000
Interest and other charges 135,382
Bond issuance costs 16,603
TOTAL EXPENDITURES 3,038,727 720,382 2,435,473
Excess (deficiency) of revenues
over (under) expenditures 363,619 (54,397) (2,270,389)
OTHER FINANCING SOURCES (USES)
Issuance of debt 2,125,000
Premium (discount) on issuance of debt 21,949
Transfers (360,000) 19,342 153,408
TOTAL OTHER FINANCING SOURCES (USES)(360,000) 19,342 2,300,357
Net change in fund balances 3,619 (35,055) 29,968
FUND BALANCES, Beginning 3,177,382 726,755 762,865
FUND BALANCES, Ending 3,181,001$ 691,700$ 792,833$
27
Other
Governmental
Funds Total
256,957$ 3,203,111$
451,953
413,968
30,192
48,647
115,424
274,257 274,257
8,643 87,467
17,066 165,319
556,923 4,790,338
1,046,906
1,198,546
585,071
160,072 368,276
247,650 2,666,520
214,917 214,917
585,000
135,382
5,664 22,267
628,303 6,822,885
(71,380) (2,032,547)
725,000 2,850,000
9,571 31,520
197,751 10,501
932,322 2,892,021
860,942 859,474
621,927 5,288,929
1,482,869$ 6,148,403$
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)859,474$
Governmental funds report capital outlay as expenditures.
However, in the statement of activities the cost of those assets
is allocated over their estimated usef ul lives and reported as
depreciation expense:
Capital outlay capitalized 2,747,050$
Depreciation expense (677,231)
Capital assets contributed to the enterprise funds (897,813)
1,172,006
Revenues in the statement of activities that do not provide current
financial resources are not reported as revenues in the f unds:
Special assessments (93,454)$
Property taxes (2,820)
Park dedication fees 107,554
Intergovernmental revenue (70,000)
(58,720)
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 (83,085)$
Compensated absences, beginning of year 76,551
Post employment benefit obligation, end of year (139,158)
Post employment benefit obligation, beginning of year 136,898
(8,794)
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 585,000$
Issuance of long-term debt (2,850,000)
Change in accrued interest, bond premiums and
bond discounts (73,389)
(2,338,389)
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 f unds is reported with
govermental activities in the government-wide financial statements (31,282)
Change in net position of governmental activities (page 19)(405,705)$
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, 2014
See Notes to Financial Statements
30
Variance with
2014 Final Budget-
Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes
Property 2,718,180$ 2,718,180$ 2,417,238$ (300,942)$
Franchise 44,802 44,802 44,102 (700)
Total Taxes 2,762,982 2,762,982 2,461,340 (301,642)
Licenses and Permits
Business 9,815 9,815 7,570 (2,245)
Nonbusiness 294,076 294,076 444,383 150,307
Total Licenses and Permits 303,891 303,891 451,953 148,062
Intergovernmental
MSA - maintenance 98,022 98,022 101,696 3,674
Fire state aid 41,500 41,500 53,446 11,946
Other 3,899 3,899 19,506 15,607
County and local 15,500 15,500 15,500
Total Intergovernmental 158,921 158,921 190,148 31,227
Charges for Services 5,741 5,741 30,192 24,451
Fines and forfeits 48,000 48,000 48,647 647
Investment earnings 20,000 20,000 71,813 51,813
Miscellaneous Revenue 4,000 4,000 148,253 144,253
TOTAL REVENUES 3,303,535$ 3,303,535$ 3,402,346$ 98,811$
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, 2014
See Notes to Financial Statements
31
Variance with
2014 Final Budget-
Actual Positive
Original Final Amounts (Negative)
EXPENDITURES
General Government
Mayor and Council
Personnel services 27,956$ 27,956$ 27,732$ 224$
Other services and charges 17,314 17,314 12,164 5,150
Total Mayor and Council 45,270 45,270 39,896 5,374
Election
Other services and charges 13,350 13,350 9,875 3,475
Administration
Personnel services 372,119 372,119 357,914 14,205
Supplies 6,300 6,300 6,612 (312)
Other services and charges 52,405 52,405 93,541 (41,136)
Total Administration 430,824 430,824 458,067 (27,243)
Communications
Personnel services 18,615 18,615 26,740 (8,125)
Other services and charges 60,514 60,514 57,267 3,247
Total Communications 79,129 79,129 84,007 (4,878)
Building
Supplies 225 225 360 (135)
Other services and charges 26,908 26,908 26,920 (12)
Total Building 27,133 27,133 27,280 (147)
Professional Services
Assessor 30,500 30,500 42,728 (12,228)
Accounting and auditing 31,500 31,500 42,331 (10,831)
Legal 60,000 60,000 45,078 14,922
Engineering 48,000 48,000 36,463 11,537
Total Professional Services 170,000 170,000 166,600 3,400
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, 2014
See Notes to Financial Statements
32
Variance with
2014 Final Budget-
Actual Positive
Original Final Amounts (Negative)
EXPENDITURES
General Government
Planning and Zoning
Personnel services 219,310$ 219,310$ 226,595$ (7,285)$
Supplies 2,750 2,750 2,476 274
Other services and charges 51,000 51,000 32,110 18,890
Total Planning and Zoning 273,060 273,060 261,181 11,879
Total General Government 1,038,766 1,038,766 1,046,906 (8,140)
Public Safety
Police
Contracted services 500,000 500,000 515,604 (15,604)
Fire Protection
Personnel services 234,394 234,394 228,656 5,738
2% fire aid 37,324 37,324 53,446 (16,122)
Supplies 44,900 44,900 31,846 13,054
Other services and charges 120,662 120,662 142,327 (21,665)
Total Fire Protection 437,280 437,280 456,275 (18,995)
Building Inspector
Personnel services 134,493 134,493 122,345 12,148
Supplies 2,060 2,060 1,755 305
Other services and charges 20,748 20,748 34,642 (13,894)
Total Building Inspector 157,301 157,301 158,742 (1,441)
Animal Control
Other services and charges 6,282 6,282 10,086 (3,804)
Criminal Legal 51,000 51,000 54,466 (3,466)
Emergency Communications 5,800 5,800 3,373 2,427
Total Public Safety 1,157,663$ 1,157,663$ 1,198,546$ (40,883)$
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, 2014
See Notes to Financial Statements
33
Variance with
2014 Final Budget-
Actual Positive
Original Final Amounts (Negative)
EXPENDITURES
Public Works
General
Personnel services 265,814$ 265,814$ 264,003$ 1,811$
Supplies 138,200 138,200 168,700 (30,500)
Other services and charges 102,455 102,455 124,404 (21,949)
Total General 506,469 506,469 557,107 (50,638)
Trees 5,000 5,000 5,350 (350)
Street Lighting 28,800 28,800 22,614 6,186
Total Public W orks 540,269 540,269 585,071 (44,802)
Culture and Recreation
Parks
Personnel services 173,782 173,782 168,258 5,524
Supplies 8,912 8,912 16,575 (7,663)
Other services and charges 24,143 24,143 23,371 772
Total Culture and Recreation 206,837 206,837 208,204 (1,367)
Total Expenditures 2,943,535 2,943,535 3,038,727 (95,192)
Excess (deficiency) of revenues
over (under) expenditures 360,000 360,000 363,619 3,619
OTHER FINANCING SOURCES (USES)
Transfers (360,000) (360,000) (360,000)
NET CHANGE IN FUND BALANCE 3,619 3,619
FUND BALANCE, January 1 3,177,382 3,177,382 3,177,382
FUND BALANCE, December 31 3,177,382$ 3,177,382$ 3,181,001$ 3,619$
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, 2014
See Notes to Financial Statements
34
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Net Position
December 31, 2014
Water Sewer Storm Sewer
AS SETS
Current Assets
Cash and investments 617,655$ 60,592$ 312,746$
Cash with fiscal agent 3,848,031
Receivables
Accounts 336,833 190,412 222,564
Special assessments 786,047 1,615,978 22,667
Due from other governments 2,989 168
Due from other funds 54,305 23,915
Total Current Assets 5,591,555 1,921,287 582,060
Noncurrent Assets
Property and Equipment
Land 54,675
Machinery and equipment 300,587
Infrastructure 17,551,239 361,986 611,337
Construction in progress 1,201,086 5,467,146
Total Property and Equipment 19,107,587 5,829,132 611,337
Less: Accumulated depreciation 3,217,170 207,224 86,487
Net Property and Equipment 15,890,417 5,621,908 524,850
TOTAL ASSETS 21,481,972$ 7,543,195$ 1,106,910$
35
Total
Internal
Service Funds
990,993$ 27,089$
3,848,031
749,809
2,424,692
3,157
78,220
8,094,902 27,089
54,675
300,587 558,621
18,524,562
6,668,232
25,548,056 558,621
3,510,881 431,953
22,037,175 126,668
30,132,077$ 153,757$
See Notes to Financial Statements
36
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Net Position (Continued)
December 31, 2014
Water Sewer Storm Sewer
LIABILITIES AND NET POSITION
Current Liabilities
Accounts payable 238,058$ 118,823$ 3,519$
Accrued salaries payable 2,561 1,219 1,002
Accrued interest payable 64,042 48,476
Due to other funds 795
Due to other governments 1,956 36,902
Current portion of compensated absences 2,225 1,202 487
Current portion of bonds payable 240,000 150,000
Total Current Liabilities 549,637 356,622 5,008
Long-term Liabilities
Other postemployment benefits payable 11,459 3,806 5,762
Compensated absences payable 2,205 1,172 612
Bonds payable and unamortized premium on
bonds, net of unamortized discount on bonds 11,558,596 3,582,046
Total Long-term Liabilities 11,572,260 3,587,024 6,374
Total Liabilities 12,121,897 3,943,646 11,382
Net Position
Net investment in capital assets 8,152,706 1,889,862 524,850
Restricted
Debt service 771,334 1,615,978
Unrestricted 436,035 93,709 570,678
Total Net Position 9,360,075 3,599,549 1,095,528
TOTAL LIABILITIES AND
NET POSITION 21,481,972$ 7,543,195$ 1,106,910$
37
Total
Internal
Service Funds
360,400$ $
4,782
112,518
795 48,751
38,858
3,914
390,000
911,267 48,751
21,027
3,989
15,140,642
15,165,658
16,076,925 48,751
10,567,418 126,668
2,387,312
1,100,422 (21,662)
14,055,152 105,006
30,132,077$ 153,757$
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, 2014
Water Sewer Storm Sewer
Operating Revenues 396,256$ 31,054$ 214,915$
Operating Expenses
Personnel services 111,441 47,036 45,242
Supplies 40,195 975 2,784
Professional services 32,022 146,676 48,617
Repairs and maintenance 33,778 837 37,659
Insurance 5,432
Utilities 102,627 23,073
Depreciation 416,864 11,815 15,963
Total Operating Expenses 742,359 230,412 150,265
Operating Income (Loss)(346,103) (199,358) 64,650
Other Revenue (Expense)
Investment earnings 16,668 1,430 1,239
Rents 46,935
Future infrastructure charges 847,900 710,000
Bond issuance costs (19,994) (6,563)
Intergovernmental revenue 663,994 378,819
Interest and fiscal expense (307,158) (116,463) (459)
Total Other Revenue (Expense)1,248,345 967,223 780
Net Income (Loss) Before Transfers
and Contributions 902,242 767,865 65,430
Capital contributions 731,665 166,148
Capital contributions - special assessments 116,409 837
Transfers in 784,801
Transfers out (7,895) (704,637) (82,770)
Net Income (Loss)2,527,222 229,376 (16,503)
Net Position, Beginning of Year 6,832,853 3,370,173 1,112,031
Net Position, End of Year 9,360,075$ 3,599,549$ 1,095,528$
39
Total
Internal
Service Funds
642,225$ $
203,719
43,954
227,315
72,274 999
5,432
125,700
444,642 30,402
1,123,036 31,401
(480,811) (31,401)
19,337 119
46,935
1,557,900
(26,557)
1,042,813
(424,080)
2,216,348 119
1,735,537 (31,282)
897,813
117,246
784,801
(795,302)
2,740,095 (31,282)
11,315,057 136,288
14,055,152$ 105,006$
See Notes to Financial Statements
40
Water Sewer Storm Sewer Total
Internal Service
Funds
Cash Flows from Operating Activities
Cash received from customers 1,118,774$ 582,691$ 219,806$ 1,921,271$ $
Cash payments to suppliers (218,100) (727,514) (93,120) (1,038,734) (999)
Cash payments to employees (112,742) (47,598) (45,438) (205,778)
Net Cash Provided By (Used In)
Operating Activities 787,932 (192,421) 81,248 676,759 (999)
Cash Flows From Investing Activities
Interest earnings received 16,668 1,430 1,239 19,337 119
Cash Flows from Noncapital Financing Activities
Rents received 46,935 46,935
(Increase) decrease in due from other funds 1,918 (54,305) (52,387)
Increase (decrease) in due to other funds (23,788) (1,250) (25,038) 1,003
Transfers to other funds (7,895) (2,606) (10,501)
Net Cash Provided By (Used In) Noncapital
Financing Activities 17,170 (58,161) (40,991) 1,003
Cash Flows from Capital and Related Financing Activities
Acquisition of capital assets (3,775,676) (1,518,430) (5,294,106)
Intergovernmental revenue received for the
acquisition of capital assets 663,994 378,819 1,042,813
Special assessments 197,792 244,170 441,962
Proceeds from issuance of long-term debt 2,545,000 840,000 3,385,000
Bond issuance costs (19,994) (6,563) (26,557)
Increase in unamortized bond premiums 26,269 8,624 34,893
Principal paid on long-term debt (230,000) (135,000) (365,000)
Interest paid on long-term debt (292,324) (68,507) (459) (361,290)
Net Cash Provided By (Used In) Capital and
Related Financing Activities (884,939) (256,887) (459) (1,142,285)
Net Increase (Decrease) in Cash
and Cash Equivalents (63,169) (506,039) 82,028 (487,180) 123
Cash and Cash Equivalents, January 1 4,528,855 566,631 230,718 5,326,204 26,966
Cash and Cash Equivalents, December 31 4,465,686$ 60,592$ 312,746$ 4,839,024$ 27,089$
Classified as:
Cash and investments 617,655$ 60,592$ 312,746$ 990,993$ 27,089$
Cash with fiscal agent 3,848,031 3,848,031
Total Cash and Cash Equivalents, December 31 4,465,686$ 60,592$ 312,746$ 4,839,024$ 27,089$
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Cash Flows
For the Year Ended December 31, 2014
41
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES Water Sewer Storm Sewer Total
Internal Service
Funds
Operating income (loss)(346,103)$ (199,358)$ 64,650$ (480,811)$ (31,401)$
Adjustments to reconcile operating income to
net cash provided by operating activities
Depreciation 416,864 11,815 15,963 444,642 30,402
Future infrastructure charges, included
in nonoperating revenue 847,900 710,000 1,557,900
(Increase) decrease in:
Accounts receivable (125,382) (158,363) 4,891 (278,854)
Increase (decrease) in:
Accounts payable (5,470) (592,855) (4,060) (602,385)
Accrued salaries payable (258) 99 (128) (287)
Due to other governments 1,424 36,902 38,326
Other postemployment benefits payable 155 5 64 224
Compensated absences payable (1,198) (666) (132) (1,996)
Net Cash Provided By (Used In) Operating Activities 787,932$ (192,421)$ 81,248$ 676,759$ (999)$
Noncash Capital and Related Financing Activities
Amortization of deferred charges 3,517$ 125$ $ 3,642$ $
Amortization of bond premiums 4,165 645 4,810
Transfer of capital assets 82,770 (82,770)
Transfer of special assessments receivable
to the fund where the asset was capitalized
in the current year 702,031 (702,031)
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Cash Flows (Continued)
For the Year Ended December 31, 2014
See Notes to Financial Statements
42
Agency Funds
AS SETS
Cash and investments 795,189$
Accounts receivable 128
TOTAL ASSETS 795,317$
LIABILITIES
Accounts payable 20,293$
Deposits payable 775,024
TOTAL LIABILITIES 795,317$
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
December 31, 2014
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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 current and future road and street
infrastructure projects.
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.Deferred Inflows
In addition to liabilities, statements of financial position or balance sheets will
sometimes report a separate section for deferred inflows of resources. This separate
financial statement element represents an acquisition of net position that applies to
future periods and so will not be recognized as an inflow of resources (revenue) until
that time. The city has only one type of this item, which arises under a modified
accrual basis of accounting, which qualifies for reporting in this category. Accordingly,
the item, unavailable revenues, is reported only in the governmental funds Balance
Sheets. The governmental funds report unavailable revenue from three sources:
property taxes, special assessments and loans and other receivables not collected
within 60 days of year end. These amounts are deferred and recognized as an inflow
of resources in the period the amounts become available.
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, 2014).
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, 2014, the General Fund total expenditures were $95,192
more than budget. The following General Fund departments had expenditures exceeding
the latest amended budget:
2014 Budgeted
Expenditures
2014 Actual
Expenditures
Amount Exceeding
Budgeted Amount
General government 1,038,766$ 1,046,906$ 8,140$
Public safety 1,157,663 1,198,546 40,883
Public works 540,269 585,071 44,802
Culture and recreation 206,837 208,204 1,367
The above listed over expenditures in the general government department were due
primarily to funds expended to secure state bonding revenue to aid in various construction
projects. This expenditure was not included in the 2014 budget. The above listed over
expenditures in the public safety department were primarily related to repairs to a City fire
truck that were not included in the 2014 budget. The above listed over expenditures in the
public works department were primarily related to increased staffing costs and street
maintenance expenditures as a result of a harsh winter and severe summer storms that
were not anticipated when preparing the 2014 budget. The over expenditures in the culture
and recreation department listed above were primarily related to repairs and maintenance
expenditures in excess of budgeted amounts.
All overexpenditures were approved by the City Council.
C.Fund Balance Deficits
As of December 31, 2014, the following funds had deficit fund balances:
Fund Amount
Nonmajor:
Village Project Capital Project 662,158$
Manning Avenue/Highway 36 Capital Project 5,665
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, 2014.
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 $10,000,000, a reporting dealer to the Federal Reserve
Bank of New York, or certain Minnesota securities broker-dealers.
(g)Money market funds with institutions that have portfolios consisting exclusively of United
States Treasury obligations and Federal Agency issues.
(h)Guaranteed investment contracts (gic's) issued or guaranteed by United States
commercial banks or domestic branches of foreign banks or United States insurance
companies and with a credit quality in one of the top two highest categories.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
59
3.Detailed Notes on All Funds (Continued)
A.Deposits and Investments (Continued)
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair
value of an investment. Generally, the longer the maturity of an investment, the greater the
sensitivity of its fair value to changes in market interest rates. One of the ways that the City
manages its exposure to interest rate risk is by purchasing a combination of shorter and
longer term investments and by timing cash flows from maturities so that a portion of the
portfolio is maturing or coming close to maturity evenly over time as necessary to provide
the cash flow and liquidity needs for operation.
The following is a summary of the City of Lake Elmo, Minnesota's cash and investment
portfolio including the range of maturities and investment ratings by type of investment:
Investment Range of Maturities Rating Value
Cash N/A N/A 4,775,023$
Certificates of Deposit 11/19 N/A 2,640,686
Municipal Bonds 12/18 A 366,478
U.S. Government Agencies and
State and Local Government Securities 10/19 AAA 4,468,144
Total cash and investments 12,250,331$
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 4,775,023$
Investments 7,475,308
Total 12,250,331$
Government-wide
Cash and investments 7,607,111$
Cash with fiscal agent 3,848,031
Fiduciary
Cash and investments 795,189
Total 12,250,331$
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, 2014 were as follows:
Issuer Investment Type Value
State and Local Governments State and Local Government Securities 3,848,031$
Wells Fargo Money Market Account 694,877
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, 2014, 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, 2014 were as follows:
Fund Type Washington County
Valley Branch
Watershed District
Minnesota
Department of
Transportation Total
General Fund 28,366$ $ $ 28,366$
Debt Service Fund 1,098 140,000 141,098
Infrastructure Reserve Fund 9,000 9,000
Manning Avenue/Hwy 36 Fund 307 307
Water Fund 2,989 2,989
Storm Sewer Fund 168 168
Total 32,621$ 9,000$ 140,307$ 181,928$
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, 2014 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.
In addition, in 2013 the City recorded a $500,000 loan receivable related to pass through
grant funds that were loaned to a business as an incentive for that business to relocate its
corporate headquarters within the City. Payments received on the loan, if any, were to be
remitted to the original grantor. Therefore, the City recorded an allowance for uncollectible
loans to reserve the entire balance of the loan receivable. The loan was to be forgiven
after two years if the business met certain employment milestones. The business
exceeded these milestones during 2014 and therefore the loan was forgiven ahead of
schedule in 2014.
D.Capital Assets
Capital asset activity for the City for the year ended December 31, 2014 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 2,279,552 2,339,734 1,108,582 3,510,704
Total capital assets, not being depreciated 5,733,531 2,339,734 1,108,582 6,964,683
Capital assets, being depreciated:
Buildings 3,634,483 3,634,483
Improvements other than buildings 1,199,541 148,109 1,347,650
Machinery and equipment 2,736,435 259,207 2,995,642
Infrastructure 7,585,261 210,769 7,796,030
Total capital assets, being depreciated 15,155,720 618,085 15,773,805
Less accumulated depreciation for:
Building 791,631 82,502 874,133
Improvements other than buildings 770,814 66,015 836,829
Machinery and equipment 1,996,928 143,802 2,140,730
Infrastructure 1,734,049 415,314 2,149,363
Total accumulated depreciation 5,293,422 707,633 6,001,055
Total capital assets, being depreciated, net 9,862,298 (89,548) 9,772,750
Governmental activities capital assets, net 15,595,829$ 2,250,186$ 1,108,582$ 16,737,433$
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 $ $ $ 54,675
Construction in progress 3,361,742 6,250,688 2,944,198 6,668,232
Total capital assets, not being depreciated 3,416,417 6,250,688 2,944,198 6,722,907
Capital assets, being depreciated:
Machinery and equipment 282,860 17,727 300,587
Infrastructure 14,690,622 3,842,011 8,071 18,524,562
Total capital assets, being depreciated 14,973,482 3,859,738 8,071 18,825,149
Less accumulated depreciation for:
Machinery and equipment 169,263 14,759 184,022
Infrastructure 2,896,976 429,883 3,326,859
Total accumulated depreciation 3,066,239 444,642 3,510,881
Total capital assets, being depreciated, net 11,907,243 3,415,096 8,071 15,314,268
Business-type activities capital assets, net 15,323,660$ 9,665,784$ 2,952,269$ 22,037,175$
The City capitalizes all costs associated with certain street projects in the governmental funds,
then contributes the portions related to water, sewer and storm sewer to their respective funds.
Therefore, the decrease in construction in progress for governmental activities is greater than
the increase in capital assets being depreciated. In addition, 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, 2014 was charged to functions/programs
as follows:
Governmental Activities
General government 20,668$
Public safety 83,585
Public works 537,432
Culture and recreation 65,948
Total 707,633$
Business-Type Activities
Water 416,864$
Sewer 11,815
Storm sewer 15,963
Total 444,642$
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, 2014 is as follows:
Range of Final Balance
Issue Date Interest Rates Maturity 12/31/14
General obligation bonds:
2009A Refunding Bonds 5/1/2009 3.00% - 3.85%2016 140,000$
2009B Improvement Bonds 10/1/2009 2.00% - 3.05%2020 370,000
2010A Improvement Bonds 11/15/2010 1.30% - 2.80%2021 505,000
2010B CIP Crossover Refunding Bonds 11/15/2010 1.40% - 3.20%2025 1,835,000
2011A Improvement Bonds 10/1/2011 1.25% - 2.30%2022 690,000
2012B Improvement Bonds 8/16/2012 0.50% - 1.90%2023 790,000
2013A Improvement Bonds 10/1/2013 2.00% - 3.75%2028 1,555,000
2014A Improvement Bonds 7/15/2014 2.00% - 3.50%2030 2,850,000
General obligation certificates:
2006A Equipment Certificates 3/8/2006 4.00%2015 52,000
General obligation revenue bonds:
2005A Water Revenue Bonds 8/10/2005 3.70% - 4.375%2030 3,925,000
2009A Refunding Bonds 5/1/2009 3.00% - 3.85%2021 320,000
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 3,840,000
2014A Improvement Bonds 7/15/2014 2.00% - 3.50%2030 3,385,000
Other Liabilities:
Compensated Absences 90,988
Post Employment Benefit Obligation 160,185
Unamortized premium 187,490
Less: Unamortized discount (169,256)
Total Long-Term Debt 24,561,407$
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, 2014, the City had not utilized $33,779,943 of its net
legal debt margin.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
64
3.Detailed Notes on All Funds (Continued)
E.Long-Term Debt (Continued)
The following is a summary of the changes in long-term debt obligations for the year
ended December 31, 2014:
Amounts
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
GOVERNMENTAL ACTIVITIES
Bonds and Notes Payable:
General obligation bonds:
2009A Refunding Bonds 210,000$ $ 70,000$ 140,000$ 70,000$
2009B Improvement Bonds 430,000 60,000 370,000 60,000
2010A Improvement Bonds 575,000 70,000 505,000 70,000
2010B CIP Crossover Refunding Bonds 1,970,000 135,000 1,835,000 150,000
2011A Improvement Bonds 770,000 80,000 690,000 80,000
2012B Improvement Bonds 865,000 75,000 790,000 80,000
2013A Improvement Bonds 1,600,000 45,000 1,555,000 105,000
2014A Improvement Bonds 2,850,000 2,850,000
General obligation certificates:
2006A Equipment Certificates 102,000 50,000 52,000 52,000
Other Liabilities:
Compensated Absences 76,551 86,461 79,927 83,085 40,738
Post Employment Benefit Obligation 136,898 2,260 139,158
Unamortized premium 17,476 51,179 2,610 66,045
Less: Unamortized (discount)(59,374) (19,659) (5,580) (73,453)
Governmental Activities
Long-Term Liabilities 6,693,551 2,970,241 661,957 9,001,835 707,738
BUSINESS-TYPE ACTIVITIES
Bonds and Notes Payable:
General obligation revenue bonds:
2005A Water Revenue Bonds 4,075,000 150,000 3,925,000 150,000
2009A Refunding Bonds 360,000 40,000 320,000 40,000
2012A Refunding Bonds 4,035,000 4,035,000
2013A Improvement Bonds 4,015,000 175,000 3,840,000 200,000
2014A Improvement Bonds 3,385,000 3,385,000
Other Liabilities:
Compensated Absences 9,899 6,845 8,841 7,903 3,914
Post Employment Benefit Obligation 20,803 224 21,027
Unamortized premium 68,016 58,239 4,810 121,445
Less: Unamortized (discount)(76,096) (23,349) (3,642) (95,803)
Business-Type Activities
Long-Term Liabilities 12,507,622 3,426,959 375,009 15,559,572 393,914
Total 19,201,173$ 6,397,200$ 1,036,966$ 24,561,407$ 1,101,652$
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 will be used to refund the remaining principal of the 2005A water
revenue bonds in 2015. This refunding will result in a $455,000 reduction to total debt
service payments over the next sixteen years. This will result in an economic gain
(difference between the present values of the debt service payments on the old and new
debt) of approximately $366,000.
Debt service requirements to maturity for long-term debt, excluding compensated
absences and post employment benefit obligation, as of December 31, 2014 were as
follows:
Year Principal Interest Principal Interest Principal Interest
2015 615,000$ 201,213$ 52,000$ 2,080$ 4,165,000$ 462,379$
2016 805,000 188,910 615,000 289,979
2017 770,000 173,714 645,000 276,979
2018 775,000 159,017 680,000 263,427
2019 785,000 143,215 685,000 249,123
2020-2024 3,400,000 463,572 3,495,000 1,020,094
2025-2029 1,420,000 131,780 3,805,000 566,952
2030-2033 165,000 2,888 1,415,000 96,364
Totals 8,735,000$ 1,464,309$ 52,000$ 2,080$ 15,505,000$ 3,225,297$
General Obligation
Improvement Bonds Equipment Certificates
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, 2014:
Due From Due To
Other Funds Other Funds
Major Governmental Funds:
General Fund 129,721$ $
Debt Service 23,304 117,907
Infrastructure Reserve 7,032
Subtotal 153,025 124,939
Nonmajor Governmental Funds:
Village Project 56,760
Proprietary Funds:
Water 795
Sewer 54,305
Storm Sewer 23,915
Subtotal 78,220 795
Internal Service Funds:
FFE Replacement 48,751
Total All Funds 231,245$ 231,245$
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, 2014, the outstanding balance was $605,398. 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, 2014:
Transfers In Transfers Out
Major Governmental Funds:
General Fund $ 360,000$
Debt Service 19,342
Infrastructure Reserve 160,000 6,592
Non-Major Governmental Funds 200,000 2,249
Proprietary Funds:
Water 784,801 7,895
Sewer 704,637
Storm sewer 82,770
Total All Funds 1,164,143$ 1,164,143$
Transfers are used to move unassigned general fund revenues to finance various
programs that the government must account for in other funds in accordance with
budgetary authorizations. Additionally, during 2014, a one-time transfer was made from the
sewer fund to the water fund to move receivables for special assessments to the fund that
incurred the expenditures for the improvements that were assessed.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
68
3.Detailed Notes on All Funds (Continued)
G.Interfund Transfers (continued)
In the government-wide statement of net position, transfers in/out are comprised of:
Governmental Funds:
Transfers in 379,342$
Transfers out (368,841)
Captial assets transferred from government activities to
business-type activities (897,813)
Government-wide Statement of Activities - Transfers in (out)(887,312)$
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, 2014:
General Debt Service
Infrastructure
Reserve
Other
Governmental
Funds
Total
Governmental
Funds
Nonspendable
Prepaid items 33,565$ $ $ $ 33,565$
Advance to other funds 605,398 605,398
Total Nonspendable 638,963 638,963
Restricted
Debt service 717,781 717,781
Assigned
Fall festival 990 990
Library 200,768 200,768
City facilities 269,935 269,935
Infrastructure improvements 792,833 792,833
Park improvements 957,140 957,140
Vehicle acquisition 721,859 721,859
Total Assigned 792,833 2,150,692 2,943,525
Unassigned 2,542,038 (26,081) (667,823) 1,848,134
Total Fund Balance 3,181,001$ 691,700$ 792,833$ 1,482,869$ 6,148,403$
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
Capital Assets:
During 2014, the City entered into a contract for the purchase of a fire truck and related
equipment in 2015 at a total price of $714,884.
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, 2014. 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,
2014 totaled $7,383. The following is a schedule by year of future minimum rental
payments required under the lease as of December 31, 2014:
Year Ending
December 31,Amount
2015 29,532$
2016 30,147
2017 31,992
2018 32,301
2019 24,921
Total 148,893$
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. There are 19 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. For fiscal year 2014, the City did not contribute anything to the plan as there
were no retiree participants. 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 37,730$
Interest on net OPEB obligations 1,509
Adjustment to ARC (36,755)
Annual OPEB cost 2,484
Contributions during the year
Increase in net OPEB obligation 2,484
Net OPEB, beginning of year 157,701
Net OPEB, ending of year 160,185$
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, 2014, 2013 and 2012 are
as follows:
Fiscal Year
Ended
Annual
OPEB Cost
Percentage
Contributed
Net OPEB
Obligation
12/31/2012 27,107$ 0%78,503$
12/31/2013 79,198 0%157,701
12/31/2014 2,484 0%160,185
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, 2014,the actuarial accrued liability for benefits was $204,437, all of which
was unfunded. The covered payroll (annual payroll of active employees covered by the
plan) was $1,022,592, and the ratio of the unfunded actuarial accrued liability to the
covered payroll was 19.99 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 -2014 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, 2014 was thirty years.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
74
4.Other Information (Continued)
D.Pension Plans
The following disclosures are made in accordance with GASB Statement No. 50:
1.Public Employees Retirement Association (PERA) -Defined Benefit
A.Plan Description
All full-time and certain part-time employees of the City of Lake Elmo, Minnesota are
covered by defined benefit plans administered by the Public Employees Retirement
Association of Minnesota (PERA). PERA administers the General Employees
Retirement Fund (GERF), which is a cost-sharing, multiple-employer retirement plan.
This plan is established and administered in accordance with Minnesota Statutes,
Chapters 353 and 356.
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. All
new members must participate in the Coordinated Plan.
PERA provides retirement benefits as well as disability benefits to members, and
benefits to survivors upon death of eligible members. Benefits are established by state
statute, and vest after five years of credited service. The defined retirement 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 percent of average salary for each of the first 10
years of service and 2.7 percent for each remaining year. The annuity accrual rate for
a Coordinated Plan member is 1.2 percent of average salary for each of the first 10
years and 1.7 percent for each remaining year. Under method 2, the annuity accrual
rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for
Coordinated Plan members for each year of service. For GERF members hired prior to
July 1, 1989 whose annuity is calculated using Method 1, a full annuity is available
when age plus years of service equal 90. Normal retirement age is 65 for Basic and
Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for
unreduced Social Security benefits capped at 66 for Coordinated members hired on or
after July 1, 1989. A reduced retirement annuity is also available to eligible members
seeking early retirement.
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)
There are different types of annuities available to members upon retirement. A single-
life annuity is a lifetime annuity that ceases upon the death of the retiree--no survivor
annuity is payable. There are also various types of joint and survivor annuity options
available which will be payable over joint lives. Members may also leave their
contributions in the fund upon termination of public service in order to qualify for a
deferred annuity at retirement age. Refunds of contributions are available at any time
to members who leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this section are current
provisions and apply to active plan participants.
PERA issues a publicly available financial report that includes financial statements and
required supplementary information for GERF. 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)
76
4.Other Information (Continued)
D.Pension Plans (Continued)
1.Public Employees Retirement Association (PERA) -Defined Benefit (Continued)
B.Funding Policy
Minnesota Statutes Chapter 353 sets the rates for employer and employee
contributions. These statutes are established and amended by the state legislature.
The City makes annual contributions to the pension plans equal to the amount
required by state statutes. GERF Basic Plan members and Coordinated Plan
members were required to contribute 9.1% and 6.25%, respectively, of their annual
covered salary in 2014. In 2014, the City of Lake Elmo, Minnesota was required to
contribute the following percentages of annual covered payroll: 11.78%for Basic Plan
members and 7.25% for Coordinated Plan members. The City's contributions to the
Public Employees Retirement Fund for the years ending December 31, 2014, 2013
and 2012 were $85,794, $81,475 and $64,694, respectively. The City's contributions
were equal to the contractually required contributions for each year as set by state
statute. Contribution rates will increase on January 1, 2015 in the Coordinated Plan
(6.5% for members and 7.5% for employers).
2.Lake Elmo Volunteer Firefighter's Relief Association
A.Plan Description
Volunteer fire fighters of the City of Lake Elmo, Minnesota are members of the Lake
Elmo Volunteer Firefighter's Relief Association (the Association). The Association is
administrator of a single-employer defined benefit pension plan available to firefighters
that operates under the provisions of Minnesota Laws 1951, Chapter 550,as amended
and Minnesota State Statutes Section 317, as amended. It is governed by a Board of
six officers and trustees elected by the members of the Association for two-year terms.
The Chief of the Lake Elmo Fire Department, the Mayor and Clerk of the City of Lake
Elmo, Minnesota are ex officio, non-voting members of the Board of Trustees.
The Lake Elmo Volunteer Firefighter's Relief Association issues a publicly available
financial report that includes financial statements for the Organization. That report
may be obtained by contacting the Fire Department at the City of Lake Elmo,
Minnesota.
For financial reporting purposes, the Association's financial statements are not
included in the City of Lake Elmo, Minnesota's financial statements because the
Association is not a component unit of the City.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
77
4.Other Information (Continued)
D.Pension Plans (Continued)
2.Lake Elmo Volunteer Firefighter's Relief Association (Continued)
A.Plan Description (Continued)
The Association maintains a separate special fund to accumulate assets to fund the
retirement benefits earned by the Association's membership. Funds available for
retirement benefits are supplemented by investment income.
B.Pension Benefits
Benefits are payable in a lump sum, based upon years of service, to eligible members
of the Association. At December 31, 2014, the pension benefit level was at $3,400 per
year of service.
C.Funding Policy
Minnesota Statutes specify minimum contributions that may be required from the City
on an annual basis. These statutes are established and amended by the state
legislature. The Association is comprised of volunteers; therefore, members have no
contribution requirements. No contribution to the plan was required to be made by the
City for the year ended December 31, 2014. The Association also receives funding
from the State of Minnesota two-percent fire premium tax. The City receives the
contributions and is required by state statute to pass this through as payment to the
Association. This contribution amounted to $53,446 (including the supplemental State
reimbursement) for the year ended December 31, 2014.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
78
4.Other Information (Continued)
D.Pension Plans (Continued)
2.Lake Elmo Volunteer Firefighter's Relief Association (Continued)
D.Annual Pension Cost and Net Pension Obligation as of and for the year ended
December 31, 2014:
Annual pension cost - total 53,446$
Contributions made:
City
State Aid - pass-through 53,446
Actuarial valuation date 12/31/14
Actuarial cost method Entry age normal
Amortization method Level dollar closed
Remaining amortization period:
Normal cost 20 years
Prior service cost 10 years
Asset valuation method Fair value
Actuarial assumptions:
Investment rate of return 5%
Projected salary increases N/A
Inflation rate N/A
Cost of living adjustments None
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
79
4.Other Information (Continued)
D.Pension Plans (Continued)
2.Lake Elmo Volunteer Firefighter's Relief Association (Continued)
D.Annual Pension Cost and Net Pension Obligation (Continued)
The net pension obligation for the Association for the years ended December 31,
2014, 2013 and 2012 are as follows:
2014 2013 2012
Annual Pension Cost (APC)53,446$ 54,778$ 39,324$
Percentage of APC Contributed 100%100%100%
Net Pension Obligation N/A N/A N/A
Disclosure
Membership of the Association at December 31, 2014 was comprised of the following:
Retired members entitled to benefits
but have not received them 6
Current Members:
Vested (Fully or Partially)7
Non-Vested 14
Total Plan Members 27
E.Schedule of Funding Progress
Valuation
Date
Net Position
Available for
Benefits
Accrued
Liabilitiy
Assets in
Excess of
Accrued
Liability
Funded
Ratio
Pension
Benefit Per
Year of
Service
12/31/2014 1,155,598$ 868,722$ 286,876$ 133.0%3,400$
12/31/2013 1,075,460 784,527 290,933 137.1%3,400
12/31/2012 919,992 717,847 202,145 128.2%3,100
F.Related Party Investments
As of December 31, 2014, and for the year then ended, the Association held no
securities issued by the City or other related parties.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
80
5.Accounting Standards Issued But Not Yet Adopted
GASB 68, Accounting and Financial Reporting for Pensions, will be effective for the City beginning
with its year ending December 31, 2015. This statement requires the reporting of unfunded
pension liabilities in the government-wide and proprietary financial statements. Management has
not determined the impact adoption of this new standard will have on the City's financial position.
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTAL INFORMATION
December 31, 2014
This Page Left Blank Intentionally
83
FORM E-1
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF FUNDING PROGRESS -OTHER POST EMPLOYMENT BENEFITS
For the Year Ended December 31, 2014
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%
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.
This Page Left Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
COMBINING AN D INDIVIDUAL
FUND STATEMENTS AND SCHEDULES
December 31, 2014
86
Special
Revenue
Capital
Projects Total
ASSETS
Cash and investments 207,388$ 2,016,456$ 2,223,844$
Receivables (net of allowance of
uncollectibles)
Accounts 109,367 109,367
Due from other governmental units 307 307
TOTAL ASSETS 207,388$ 2,126,130$ 2,333,518$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
LIABILITIES
Accounts payable 4,219$ 307$ 4,526$
Accrued liabilities 1,411 1,411
Due to other funds 56,760 56,760
Advances from other funds 605,398 605,398
Escrow deposits payable 75,000 75,000
Total liabilities 5,630 737,465 743,095
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue:
Accounts receivable 107,554 107,554
FUND BALANCE (DEFICIT)
Restricted
Assigned 201,758 1,948,934 2,150,692
Unassigned (667,823) (667,823)
Total Fund Balance (Deficit)201,758 1,281,111 1,482,869
TOTAL LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE 207,388$ 2,126,130$ 2,333,518$
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2014
87
Special
Revenue
Capital
Projects Total
REVENUES
Taxes 256,957$ $ 256,957$
Dedication f ees 274,257 274,257
Investment earnings 695 7,948 8,643
Miscellaneous revenue 17,066 17,066
TOTAL REVENUES 274,718 282,205 556,923
EXPENDITURES
Current
Culture and recreation 160,072 160,072
Capital Outlay
Public works 247,650 247,650
Culture and recreation 2,526 212,391 214,917
Debt Service
Bond issuance costs 5,664 5,664
TOTAL EXPENDITURES 162,598 465,705 628,303
Excess (def iciency) of revenues
over (under) expenditures 112,120 (183,500) (71,380)
OTHER FINANCING SOURCES (USES)
Issuance of debt 725,000 725,000
Premium (discount) on issuance of debt 9,571 9,571
Transfers 197,751 197,751
TOTAL OTHER FINANCING SOURCES (USES) 932,322 932,322
Net change in fund balances 112,120 748,822 860,942
FUND BALANCES, Beginning 89,638 532,289 621,927
FUND BALANCES, Ending 201,758$ 1,281,111$ 1,482,869$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AN D CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2014
88
Fall Festival Library Total
AS SETS
Cash and investments 990$ 206,398$ 207,388$
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable $ 4,219$ 4,219$
Accrued liabilities 1,411 1,411
Total liabilities 5,630 5,630
FUND BALANCE
Assigned 990 200,768 201,758
TOTAL LIABILITIES AND
FUND BALANCE 990$ 206,398$ 207,388$
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2014
89
Fall Festival Library Total
REVENUES
Taxes $ 256,957$ 256,957$
Investment earnings 19 676 695
Miscellaneous revenue 3,396 13,670 17,066
TOTAL REVENUES 3,415 271,303 274,718
EXPENDITURES
Current
Culture and recreation 9,798 150,274 160,072
Capital Outlay
Culture and recreation 2,526 2,526
TOTAL EXPENDITURES 9,798 152,800 162,598
Net change in fund balances (6,383) 118,503 112,120
FUND BALANCES, Beginning 7,373 82,265 89,638
FUND BALANCES, Ending 990$ 200,768$ 201,758$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AN D CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For the Year Ended December 31, 2014
90
Park
Dedication
Vehicle
Acquisition City Facilities
AS SETS
Cash and investments 957,140$ 720,046$ 269,935$
Receivables (net of allowance f or
uncollectibles)
Accounts 107,554 1,813
Due from other governmental units
TOTAL ASSETS 1,064,694$ 721,859$ 269,935$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
LIABILITIES
Accounts payable $ $ $
Due to other funds
Advances from other funds
Escrow deposits payable
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue:
Accounts receivable 107,554
FUND BALANCE (DEFICIT)
Assigned 957,140 721,859 269,935
Unassigned
Total Fund Balance (Deficit)957,140 721,859 269,935
TO TAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE 1,064,694$ 721,859$ 269,935$
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2014
91
Village Project
Manning
Avenue/Hwy
36 Total
$ 69,335$ 2,016,456$
109,367
307 307
$ 69,642$ 2,126,130$
$ 307$ 307$
56,760 56,760
605,398 605,398
75,000 75,000
662,158 75,307 737,465
107,554
1,948,934
(662,158) (5,665) (667,823)
(662,158) (5,665) 1,281,111
$ 69,642$ 2,126,130$
92
Park
Dedication
Vehicle
Acquisition City Facilities
REVENUES
Dedication fees 274,257$ $ $
Investment earnings (loss)4,215 2,189 1,228
TOTAL REVENUES 278,472 2,189 1,228
EXPENDITURES
Capital Outlay
Public works 247,650
Culture and recreation 212,391
Debt Service
Bond issuance costs 5,664
TOTAL EXPENDITURES 212,391 253,314
Excess (deficiency) of revenues
over (under) expenditures 66,081 (251,125) 1,228
OTHER FINANCING SOURCES (USES)
Issuance of debt 725,000
Premium (discount) on issuance of debt 9,571
Transfers (2,249)
TOTAL OTHER FINANCING SOURCES (USES) 732,322
Net change in fund balances 66,081 481,197 1,228
FUND BALANCES (DEFICIT), Beginning 891,059 240,662 268,707
FUND BALANCES (DEFICIT), Ending 957,140$ 721,859$ 269,935$
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, 2014
93
Village Project
Manning
Avenue/Hwy
36 Total
$ $ 274,257$
316 7,948
316 282,205
247,650
212,391
5,664
465,705
316 (183,500)
725,000
9,571
200,000 197,751
200,000 932,322
200,000 316 748,822
(862,158) (5,981) 532,289
(662,158)$ (5,665)$ 1,281,111$
94
Radio
Replacement
IT
Replacement
FFE
Replacement Total
AS SETS
Current Assets
Cash and investments 27,089$ $ $ 27,089$
Noncurrent Assets
Property and Equipment
Machinery and equipment 99,851 95,617 363,153 558,621
Less: Accumulated depreciation 61,714 68,049 302,190 431,953
Net Property and Equipment 38,137 27,568 60,963 126,668
TOTAL ASSETS 65,226$ 27,568$ 60,963$ 153,757$
LIABILITIES AND NET POSITION
Current Liabilities
Due to other funds $ $ 48,751$ 48,751$
Net Position
Net investment in capital assets 38,137 27,568 60,963 126,668
Unrestricted 27,089 (48,751) (21,662)
Total Net Position 65,226 27,568 12,212 105,006
TOTAL LIABILITIES AND
NET POSITION 65,226$ 27,568$ 60,963$ 153,757$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
December 31, 2014
95
Radio
Replacement
IT
Replacement
FFE
Replacement Total
Operating Expenses
Repairs and maintenance $ $ 999$ 999$
Depreciation 8,321 4,654 17,427 30,402
Total Operating Expenses 8,321 4,654 18,426 31,401
Other Revenue (Expense)
Investment earnings (loss)123 (4) 119
Net (Loss)(8,198) (4,654) (18,430) (31,282)
Net Position, Beginning of Year 73,424 32,222 30,642 136,288
Net Position, End of Year 65,226$ 27,568$ 12,212$ 105,006$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES
AN D CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2014
96
Radio
Replacement
IT
Replacement
FFE
Replacement Total
Cash Flows from Operating Activities
Cash payments to suppliers $ $ (999)$ (999)$
Cash Flows From Noncapital Financing Activities
Increase in due to other funds 1,003 1,003
Cash Flows From Investing Activities
Investment earnings (losses)123 (4) 119
Net Increase (Decrease) in Cash and Cash Equivalents 123 123
Cash and Cash Equivalents, Beginning of Year 26,966 26,966
Cash and Cash Equivalents, End of Year 27,089$ $ $ 27,089$
RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating (loss)(8,321)$ (4,654)$ (18,426)$ (31,401)$
Adjustments to reconcile operating income to
net cash provided by operating activities
Depreciation 8,321 4,654 17,427 30,402
Net Cash Provided By (Used In) Operating Activities $ $ (999)$ (999)$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2014
This Page Left Blank Intentionally
98
2002 GO
Improvement
Bonds
2004 GO CIP
Bonds
2006A GO
Equipment
Certificates
2009A GO
Refunding
Bonds
2009B GO
Improvement
Bonds
ASSETS
Cash and investments 468$ 23,357$ 26,516$ 2,069$ 125,765$
Receivables (Net of allowance for
uncollectibles)
Special assessments 36,110
Due from other funds
Due from other governmental units 140,000
TOTAL ASSETS 468$ 23,357$ 26,516$ 142,069$ 161,875$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
LIABILITIES
Accounts payable $ $ $ $ $
Due to other funds 23,304
Total liabilities 23,304
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue:
Special assessments 36,110
Intergovernmental revenue 140,000
Total deferred inflows of resources 140,000 36,110
FUND BALANCE (DEFICIT)
Restricted 468 53 26,516 2,069 125,765
Unassigned
Total fund balance (deficit)468 53 26,516 2,069 125,765
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE 468$ 23,357$ 26,516$ 142,069$ 161,875$
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
DEBT SERVICE FUNDS
December 31, 2014
99
2010A GO
Improvement
Bonds
2010B GO
CIP Bonds
2011A GO
Improvement
Bonds
2012B GO
Improvement
Bonds
2013A GO
Improvement
Bonds
2014A GO
Improvement
Bonds Total
129,859$ 80,138$ 316,846$ 13,234$ 55,053$ 25,400$ 798,705$
58,450 51,560 175,500 321,620
23,304 23,304
811 52 235 141,098
189,120$ 103,442$ 368,458$ 188,969$ 55,053$ 25,400$ 1,284,727$
$ $ 13,500$ $ $ $ 13,500$
17,176 77,427 117,907
13,500 17,176 77,427 131,407
58,450 51,560 175,500 321,620
140,000
58,450 51,560 175,500 461,620
130,670 103,442 303,398 25,400 717,781
(3,707) (22,374) (26,081)
130,670 103,442 303,398 (3,707) (22,374) 25,400 691,700
189,120$ 103,442$ 368,458$ 188,969$ 55,053$ 25,400$ 1,284,727$
100
2002 GO
Improvement
Bonds
2004 GO CIP
Bonds
2006A GO
Equipment
Certificates
2009A GO
Refunding
Bonds
2009B GO
Improvement
Bonds
REVENUES
Taxes $ $ 56,784$ $ 30,487$
Intergovernmental 76,650
Special assessments 8,393
Investment earnings 2 53 114 11 645
TOTAL REVENUES 2 53 56,898 76,661 39,525
EXPENDITURES
Debt Service
Principal 50,000 70,000 60,000
Interest and other charges 4,080 6,970 10,573
TOTAL EXPENDITURES 54,080 76,970 70,573
Excess (deficiency) of revenues
over (under) expenditures 2 53 2,818 (309) (31,048)
OTHER FINANCING SOURCES (USES)
Transfers
Net change in fund balances 2 53 2,818 (309) (31,048)
FUND BALANCES (DEFICIT), Beginning 466 23,698 2,378 156,813
FUND BALANCES (DEFICIT), Ending 468$ 53$ 26,516$ 2,069$ 125,765$
CITY OF LAKE ELMO, MINNESOTA
COMBINING SCHEDULE OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
DEBT SERVICE FUNDS
For the Year Ended December 31, 2014
101
2010A GO
Improvement
Bonds
2010B GO
CIP Bonds
2011A GO
Improvement
Bonds
2012B GO
Improvement
Bonds
2013A GO
Improvement
Bonds
2014A GO
Improvement
Bonds Total
61,358$ 205,020$ 72,400$ 58,765$ $ $ 484,814$
76,650
14,280 8,077 41,024 23,200 6,000 100,974
605 364 1,468 30 197 58 3,547
76,243 205,384 81,945 99,819 23,397 6,058 665,985
70,000 135,000 80,000 75,000 45,000 585,000
11,565 46,432 12,030 11,305 32,427 135,382
81,565 181,432 92,030 86,305 77,427 720,382
(5,322) 23,952 (10,085) 13,514 (54,030) 6,058 (54,397)
19,342 19,342
(5,322) 23,952 (10,085) 13,514 (54,030) 25,400 (35,055)
135,992 79,490 313,483 (17,221) 31,656 726,755
130,670$ 103,442$ 303,398$ (3,707)$ (22,374)$ 25,400$ 691,700$
102
Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES
Investment earnings $ $ 19$ 19$
Miscellaneous revenue 25,000 25,000 3,396 (21,604)
TOTAL REVENUES 25,000 25,000 3,415 (21,585)
EXPENDITURES
Current
Culture and recreation 19,000 19,000 9,798 9,202
Net change in fund balances 6,000 6,000 (6,383) (12,383)
FUND BALANCES, Beginning 7,373 7,373 7,373
FUND BALANCES, Ending 13,373$ 13,373$ 990$ (12,383)$
Budgeted Amounts
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCES - BUDGET AND ACTUAL
FALL FESTIVAL SPECIAL REVENUE FUND
For the Year Ended December 31, 2014
103
Variance with
Final Budget
Favorable
Original Final Actual (Unfavorable)
REVENUES
Taxes 256,957$ 256,957$ 256,957$ $
Investment earnings 676 676
Miscellaneous revenue 11,400 11,400 13,670 2,270
TOTAL REVENUES 268,357 268,357 271,303 2,946
EXPENDITURES
Current
Culture and recreation 265,857 265,857 150,274 115,583
Capital Outlay
Culture and recreation 1,500 1,500 2,526 (1,026)
TOTAL EXPENDITURES 267,357 267,357 152,800 114,557
Net change in fund balances 1,000 1,000 118,503 117,503
FUND BALANCES, Beginning 82,265 82,265 82,265
FUND BALANCES, Ending 83,265$ 83,265$ 200,768$ 117,503$
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, 2014
104
Balance Balance
January 1 Additions Deletions December 31
ESCROW
ASSETS
Cash and investments 557,190$ 730,088$ 491,961$ 795,317$
LIABILITIES
Accounts payable $ 423,819$ 403,526$ 20,293$
Deposits payable 557,190 859,281 641,447 775,024
TOTAL LIABILITIES 557,190$ 1,283,100$ 1,044,973$ 795,317$
YELLOW RIBBON
ASSETS
Cash and investments (128)$ $ $ (128)$
Accounts receivable 128 128
TOTAL ASSETS $ $ $ $
TOTAL AGENCY FUNDS
ASSETS
Cash and investments 557,062$ 730,088$ 491,961$ 795,189$
Accounts receivable 128 128
TOTAL ASSETS 557,190$ 730,088$ 491,961$ 795,317$
LIABILITIES
Accounts payable $ 423,819$ 403,526$ 20,293$
Deposits payable 557,190 859,281 641,447 775,024
TOTAL LIABILITIES 557,190$ 1,283,100$ 1,044,973$ 795,317$
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AG ENCY FUNDS
For the Year Ended December 31, 2014
105
Water (1)Sewer (2)Total
SOURCES 572,170$ 378,819$ 950,989$
USES **
Keats Avenue watermain construction 18,071$ $ 18,071$
Keats Avenue watermain engineering 1,043 1,043
Lake Elmo Avenue watermain construction 212,209 212,209
Lake Elmo Avenue watermain engineering 16,350 16,350
Well #4 pumphouse construction 289,974 289,974
Well #4 pumphouse engineering 34,523 34,523
Forcemain construction 163,698 163,698
Lif t station construction 215,121 215,121
TOTAL USES 572,170$ 378,819$ 950,989$
(1) Redevelopment Grant Program RDGP-10-0012-o-FY10
(2) Redevelopment Grant Program RDGP-10-0013-o-FY10
** Amounts expended for grant purposes are recorded under the full accrual method in the
proprietary funds and therefore were recorded as a noncurrent asset (property and equipment)
rather than current period expenses.
CITY OF LAKE ELMO, MINNESOTA
REDEVELOPMENT GRANT PROGRAM
Supplemental Schedule of Sources and Uses
For the Year Ended December 31, 2014
This Page Left Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
December 31, 2014
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.108
Revenue Capacity
These schedules contain information to help the reader assess the City's
most significant local revenue source, the property tax.118
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.126
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.135
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.138
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.
108
CITY OF LAKE ELMO, MINNESOTA
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
2014 2013 2012 2011
Net investment in capital assets 7,957,840$ 9,056,353$ 8,782,840$ 8,553,984$
Restricted 1,106,200 1,225,849 4,205,247 2,664,689
Unrestricted 5,405,920 4,593,463 918,996 2,555,596
Total governmental activities net position 14,469,960$ 14,875,665$ 13,907,083$ 13,774,269$
Business-type activities
Net investment in capital assets 10,567,418$ 6,855,807$ 6,788,377$ 6,422,782$
Restricted 2,387,312 2,612,569 39,153
Unrestricted 1,100,422 1,846,681 1,105,847 1,449,340
Total business-type activities net position 14,055,152$ 11,315,057$ 7,933,377$ 7,872,122$
Primary government
Net investment in capital assets 18,525,258$ 15,912,160$ 15,571,217$ 14,976,766$
Restricted 3,493,512 3,838,418 4,244,400 2,664,689
Unrestricted 6,506,342 6,440,144 2,024,843 4,004,936
Total primary government net position 28,525,112$ 26,190,722$ 21,840,460$ 21,646,391$
Governmental activities
Fiscal Year
109
Schedule 1
2010 2009 2008 2007 2006 2005
8,368,479$ 7,983,822$ 7,151,543$ 5,648,702$ 3,535,882$ 1,002,073$
2,057,467 1,399,968 718,617 711,966 1,071,105 1,020,372
3,439,106 3,824,156 4,698,858 5,139,270 4,620,785 6,969,165
13,865,052$ 13,207,946$ 12,569,018$ 11,499,938$ 9,227,772$ 8,991,610$
6,713,292$ 6,644,334$ 6,181,055$ 5,617,960$ 5,961,996$ 2,324,276$
1,193,509 1,056,968 951,793 1,080,666 706,170 (529,295)
7,906,801$ 7,701,302$ 7,132,848$ 6,698,626$ 6,668,166$ 1,794,981$
15,081,771$ 14,628,156$ 13,332,598$ 11,266,662$ 9,497,878$ 3,326,349$
2,057,467 1,399,968 718,617 711,966 1,071,105 1,020,372
4,632,615 4,881,124 5,650,651 6,219,936 5,326,955 6,439,870
21,771,853$ 20,909,248$ 19,701,866$ 18,198,564$ 15,895,938$ 10,786,591$
110
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
2014 2013 2012 2011
Expenses
Governmental activities:
General government 1,072,888$ 1,103,337$ 1,093,204$ 1,036,038$
Public safety 1,530,609 1,277,798 1,302,857 1,107,050
Public works 1,032,426 1,273,977 891,169 1,008,686
Culture and recreation 448,361 424,687 362,432 247,845
Interest on long-term debt 165,028 133,694 316,039 266,730
Total governmental activities expenses 4,249,312 4,213,493 3,965,701 3,666,349
Business-Type activities:
Water 1,069,511 958,870 872,786 845,474
Sewer 353,438 119,370 53,903 73,797
Storm sewer 149,887 86,989 73,590 142,517
Total business-type activities expenses 1,572,836 1,165,229 1,000,279 1,061,788
Total primary government expenses 5,822,148$ 5,378,722$ 4,965,980$ 4,728,137$
Program Revenues
Governmental activities:
Charges for services:
General government 45,161$ 32,778$ 48,476$ 22,058$
Public safety 496,916 414,472 379,557 283,813
Public works 2,647 3,256 3,058
Culture and recreation 10,753 17,000 9,341
Operating grants and contributions 204,462 208,276 160,060 184,476
Capital grants and contributions 557,601 1,364,622 160,444 222,488
Total governmental activities program revenues 1,314,893 2,039,795 761,134 715,893
Business-type activities:
Charges for services:
Water 1,291,091 596,421 699,159 575,534
Sewer 741,054 53,142 65,737 53,012
Storm sewer 214,915 191,087 171,229 235,252
Operating grants and contributions 17,000
Capital grants and contributions 1,159,222 3,781,528 115,127 75,885
Total business-type activities program revenues 3,406,282 4,622,178 1,051,252 956,683
Total primary government program revenues 4,721,175$ 6,661,973$ 1,812,386$ 1,672,576$
Fiscal Year
111
Schedule 2
2010 2009 2008 2007 2006 2005
980,456$ 971,677$ 1,168,625$ 914,212$ 900,278$ 876,056$
1,171,158 1,125,464 1,002,408 956,649 1,009,494 931,155
1,135,351 872,045 868,804 1,247,398 1,358,801 349,111
239,389 248,856 228,393 333,164 232,878 169,495
222,404 218,319 237,753 207,648 215,381 211,475
3,748,758 3,436,361 3,505,983 3,659,071 3,716,832 2,537,292
898,319 857,014 849,018 735,499 764,282 432,810
61,513 59,243 63,400 125,773 55,827 44,503
151,384 140,365 123,902 78,807 129,946 12,148
1,111,216 1,056,622 1,036,320 940,079 950,055 489,461
4,859,974$ 4,492,983$ 4,542,303$ 4,599,150$ 4,666,887$ 3,026,753$
18,296$ 15,631$ 19,430$ 28,890$ 29,612$ 40,536$
320,242 270,653 295,353 365,327 594,779 365,703
3,425 6,584 3,833 18,573 4,035 5,591
10,800 61,274 31,828 211,571
168,491 174,433 140,176 94,185 163,421 86,082
1,090,419 798,687 1,345,803 1,371,489 4,664,817 1,871,596
1,611,673 1,265,988 1,804,595 1,939,738 5,488,492 2,581,079
562,585 479,430 467,336 471,226 351,733 281,835
48,508 45,146 44,568 99,581 139,057 32,381
185,425 149,407 134,674 138,092 45 72,000
32,721 30,100
418,400 776,473 684,400 298,928 1,112,374
1,247,639 1,480,556 1,330,978 1,007,827 1,603,209 386,216
2,859,312$ 2,746,544$ 3,135,573$ 2,947,565$ 7,091,701$ 2,967,295$
112
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
2014 2013 2012 2011
Net (Expense) Revenue
Governmental Activities (2,934,419)$ (2,173,698)$ (3,204,567)$ (2,950,456)$
Business-type activities 1,833,446 3,456,949 50,973 (105,105)
Total primary government net revenue (1,100,973)$ 1,283,251$ (3,153,594)$ (3,055,561)$
General Revenues and Other Changes
In Net Position
Governmental activities:
General property taxes 3,200,291$ 3,231,609$ 3,183,078$ 2,793,776$
Grants and contributions not restricted
to specific programs 2,749 2,749 10,628
Interest income 87,586 35,259 111,705 94,501
Miscellaneous 125,400 1,833 42,599 20,405
Gain on sale of capital assets 8,979
Transfers (887,312) (59,637)
Total governmental activities 2,528,714 3,280,429 3,337,382 2,859,673
Business-type activities:
Interest income 19,337 30,346 10,282 10,789
Transfers 887,312 59,637
Total business-type activities 906,649 30,346 10,282 70,426
Total primary government 3,435,363$ 3,310,775$ 3,347,664$ 2,930,099$
Change in Net Position
Governmental activities (405,705)$ 1,106,731$ 132,815$ (90,783)$
Business-type activities 2,740,095 3,487,295 61,255 (34,679)
Total primary government 2,334,390$ 4,594,026$ 194,070$ (125,462)$
Fiscal Year
113
Schedule 2
(continued)
2010 2009 2008 2007 2006 2005
(2,137,085)$ (2,170,373)$ (1,701,388)$ (1,719,333)$ 1,771,660$ 43,787$
136,423 423,934 294,658 67,748 653,154 (103,245)
(2,000,662)$ (1,746,439)$ (1,406,730)$ (1,651,585)$ 2,424,814$ (59,458)$
2,711,067$ 2,718,691$ 2,568,705$ 2,424,782$ 2,174,377$ 1,916,352$
9,771 8,764 57,390 46,154 38,342 107,080
113,989 160,679 209,539 335,578 317,896 195,715
17,311 41,827 50,865 33,204
8,517 42,284
(57,947) (129,177) (116,031) (424,940) (4,066,113)
2,794,191 2,809,301 2,770,468 2,414,778 (1,535,498) 2,261,431
11,129 15,343 23,533 94,325 153,918 53,507
57,947 129,177 116,031 424,940 4,066,113
69,076 144,520 139,564 519,265 4,220,031 53,507
2,863,267$ 2,953,821$ 2,910,032$ 2,934,043$ 2,684,533$ 2,314,938$
657,106$ 638,928$ 1,069,080$ 695,445$ 236,162$ 2,305,218$
205,499 568,454 434,222 587,013 4,873,185 (49,738)
862,605$ 1,207,382$ 1,503,302$ 1,282,458$ 5,109,347$ 2,255,480$
114
CITY OF LAKE ELMO, MINNESOTA
FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Modified Accrual Basis of Accounting)
2014 2013 2012 2011 2010
General fund
Reserved $ $ $ $ 1,068,950$
Unreserved 1,617,211
Nonspendable 638,963 859,072 1,024,433 1,206,209
Unassigned 2,542,038 2,318,310 2,414,692 1,707,711
Total general fund 3,181,001 3,177,382 3,439,125 2,913,920 2,686,161
All other
governmental funds
Reserved 3,605,250
Unreserved 504,106
Restricted 717,781 743,976 3,959,111 4,691,748
Committed 7,114
Assigned 2,943,525 2,252,931 1,244,900 654,358
Unassigned (693,904) (885,360) (1,670,915) (1,353,754)
Total all other
governmental funds 2,967,402 2,111,547 3,533,096 3,999,466 4,109,356
Total governmental funds 6,148,403$ 5,288,929$ 6,972,221$ 6,913,386$ 6,795,517$
Note: The City implemented GASB Statement No. 54 in 2011, therefore, classifications of fund balance have changed.
115
Schedule 3
2009 2008 2007 2006 2005
1,032,570$ 1,015,753$ 1,003,823$ 503,823$ 500,000$
1,403,240 1,395,088 1,251,127 1,768,505 1,745,735
2,435,810 2,410,841 2,254,950 2,272,328 2,245,735
1,422,049 727,673 698,683 725,337 562,883
1,077,659 1,976,379 2,554,808 2,419,112 4,795,939
2,499,708 2,704,052 3,253,491 3,144,449 5,358,822
4,935,518$ 5,114,893$ 5,508,441$ 5,416,777$ 7,604,557$
116
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST FISCAL TEN YEARS
(Modified Accrual Basis of Accounting)
2014 2013 2012 2011 2010
Revenues
Taxes 3,203,111$ 3,231,609$ 3,221,733$ 2,790,773$ 2,737,225$
Licenses and permits 451,953 374,974 330,819 230,419 261,450
Intergovernmental 413,968 1,704,178 237,254 276,638 239,244
Charges for services 30,192 6,113 5,726 14,691 22,416
Fines and forfeitures 48,647 52,110 58,385 63,819 68,897
Special assessments 115,424 180,023 136,150 153,536 134,257
Dedication fees 274,257
Investment earnings 87,467 35,127 111,737 94,066 113,033
Miscellaneous revenue 165,319 57,260 87,562 48,217 84,860
Total Revenues 4,790,338 5,641,394 4,189,366 3,672,159 3,661,382
EXPENDITURES
Current
General government 1,046,906 1,527,732 1,034,712 1,016,898 921,590
Public safety 1,198,546 1,174,145 1,109,937 996,733 1,064,176
Public works 585,071 614,270 446,541 447,629 473,293
Culture and recreation 368,276 301,404 260,404 168,747 168,971
Debt service
Principal 585,000 3,348,000 406,000 344,000 313,000
Interest and other charges 135,382 171,148 267,253 251,385 216,820
Bond issuance costs 22,267 7,870 41,828 34,327 74,580
Capital outlay 2,881,437 1,784,914 1,428,856 1,029,183 1,203,309
Total Expenditures 6,822,885 8,929,483 4,995,531 4,288,902 4,435,739
Excess (deficiency) of revenues
over (under) expenditures (2,032,547) (3,288,089) (806,165) (616,743) (774,357)
OTHER FINANCING
SOURCES (USES)
Issuance of debt 2,850,000 1,604,797 865,000 845,000 2,680,000
Premium (Discount) on issuance
of debt 31,520 4,356
Payment to bond escrow agent
Sale of property
Transfers in 10,501 204,972 314,698
Transfers out (315,360) (364,698)
Total other financing
sources (uses)2,892,021 1,604,797 865,000 734,612 2,634,356
Net change in fund balances 859,474$ (1,683,292)$ 58,835$ 117,869$ 1,859,999$
Debt service as a percentage
of noncapital expenditures 17.67%47.79%18.66%17.43%15.11%
117
Schedule 4
2009 2008 2007 2006 2005
2,685,894$ 2,523,332$ 2,416,861$ 2,164,117$ 1,908,357$
225,166 242,074 315,975 406,225 245,252
288,881 261,743 384,160 255,018 94,511
11,433 15,623 39,163 152,472 108,137
54,052 60,919 57,652 69,729 58,441
73,013 102,929 75,993 147,368 179,219
160,679 209,539 335,578 317,896 195,715
61,533 177,599 1,094,478 4,622,737 576,555
3,560,651 3,593,758 4,719,860 8,135,562 3,366,187
929,960 1,108,737 942,131 879,167 851,645
988,082 882,135 984,090 950,669 881,905
459,703 438,591 459,478 523,938 286,756
180,965 154,011 160,940 129,806 109,153
361,000 280,000 334,000 265,000 130,000
229,175 235,450 206,020 220,115 165,985
45,056
998,031 888,382 2,281,938 7,797,647 1,334,583
4,191,972 3,987,306 5,368,597 10,766,342 3,760,027
(631,321) (393,548) (648,737) (2,630,780) (393,840)
1,110,000 443,000
17,756
(525,000)
9,190 10,526
1,466,041 8,500 778,074 162,129 206,598
(1,626,041) (8,500) (778,074) (162,129) (206,598)
451,946 443,000 10,526
(179,375)$ (393,548)$ (648,737)$ (2,187,780)$ (383,314)$
17.81%15.42%14.69%12.76%12.07%
118
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
2005 $910,438,700 $9,790,389 $190,625 $9,981,014 $9,981,014 19.375 %0.01
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
(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
119
Schedule 6
Operating Debt Total
Tax Service City Special
Fiscal Rate Tax Rate Tax Rate Washington Taxing
Year Urban Urban Urban County Districts
2005 19.375 %%19.375 %19.468 -24.219 %28.599 %1.606 -5.415 %2.736 %71.784 -80.344 %
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
Source: W ashington 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
120
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
IRET Properties 205,342$ 1 1.56 %147,422$ 3 1.51 %
Xcel Energy 208,806 2 1.58 164,712 2 1.68
Bremer Financial Services Inc 197,474 3 1.50 196,854 1 2.01
MHC Cimarron LLC 134,090 4 1.02 134,090 4 1.37
HOA Hotels 108,150 5 0.82 111,644 6 1.14
Tartan Park LLC 100,647 6 0.76
Danate Proper Inv I LLC 76,762 7 0.58
Eagle Point II LLC 71,064 8 0.54
Davis Estates LTD 64,912 9 0.49
United Properties Inv LLC 62,460 10 0.47 49,892 8 0.51
United Land LLC 111,708 5 1.14
Lake Elmo Foundation 91,379 7 0.93
State Bank of Lake Elmo 33,276 9 0.34
Individuals 29,344 10 0.30
TOTAL 1,229,707$ 9.33 %1,070,321$ 10.93 %
(1) Source: W ashington County Taxation Division
2005
CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
2014
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122
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
2005 $1,923,978 $1,875,488 $1,856,610 98.99 $18,301
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
(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
123
Schedule 8
Delinquent
Total Taxes As A
Percentage Delinquent % Of Total
Amount of Net Levy Taxes Net Tax Levy
$1,874,911 99.97 $577 0.03
2,110,613 99.98 343 0.02
2,394,822 100.00 0.00
2,559,227 100.00 0.00
2,672,617 100.00 6 0.00
2,705,159 99.98 623 0.02
2,744,704 99.96 1,081 0.04
3,107,919 99.92 2,559 0.08
3,157,488 99.90 3,036 0.10
3,128,695 99.00 31,591 1.00
Total Collections to Date
124
Water (in millions of gallons)
Type of Customer 2014 2013 2012 2011 2010*
Residential 98.573 120.676 154.747 105.290 95.704
Commercial Service 12.156 8.253 10.405 6.872 7.261
Total gallons 110.729 128.929 165.152 112.162 102.965
Total direct rate per 1,000 gallons - residential 2.14$ 2.14$ 2.14$ 2.14$ 2.10$
Total direct rate per 1,000 gallons - commercial 3.11$ 3.11$ 3.11$ 3.11$ 3.05$
Sanitary Sewer (in millions of gallons)
Type of Customer 2014 2013 2012 2011 2010*
Residential (1)0.000 0.000 0.000 0.000 0.000
Commercial Service 6.532 6.149 6.172 6.961 7.086
Total gallons 6.532 6.149 6.172 6.961 7.086
Total direct rate per 1,000 gallons 4.50$ 4.50$ 4.50$ 4.50$ 4.35$
(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 2010-2014
CITY OF LAKE ELMO, MINNESOTA
WATER AND SANITARY SEWER CHARGES BY CUSTOMER
LAST TEN FISCAL YEARS
125
2009 2008 2007 2006 2005
122.461 120.986 108.649 70.255 45.724
7.989 7.851 8.746 6.126 6.064
130.450 128.837 117.395 76.381 51.788
2.15$ 2.05$ 2.05$ 1.75$ 1.75$
3.10$ 3.00$ 3.00$ 2.60$ 2.60$
2009 2008 2007 2006 2005
0.000 0.000 0.000 0.000 0.000
5.381 5.130 4.409 8.107 8.564
5.381 5.130 4.409 8.107 8.564
4.08$ 3.71$ 2.75$ 2.50$ 2.50$
Schedule 9
126
Total
Special Certificates Capital Governmental
Fiscal Assessment of Improvement Activities
Year Bonds Indebtedness Bonds Debt
2005 $1,065,000 $$4,090,000 $5,155,000
2006 925,000 403,000 4,005,000 5,333,000
2007 780,000 364,000 3,855,000 4,999,000
2008 695,000 324,000 3,700,000 4,719,000
2009 1,120,000 283,000 3,540,000 4,943,000
2010 1,725,000 240,000 5,345,000 7,310,000
2011 2,440,000 196,000 5,175,000 7,811,000
2012 3,100,092 150,000 4,969,153 8,219,245
2013 4,436,967 102,000 1,941,135 6,480,102
2014 6,919,568 52,000 1,808,024 8,779,592
Note: Details of the city's outstanding debt can be found in the notes to
the financial statements.
Other Governmental Activities Debt
CITY OF LAKE ELMO, MINNESOTA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
127
Total Total
Utility Business Primary Percentage
Revenue Activities Government of Personal Per
Bonds Debt Debt Income Capita
$5,215,000 $5,215,000 $10,370,000 0.04 $1,511
5,015,000 5,015,000 10,348,000 0.03 1,508
4,810,000 4,810,000 9,809,000 0.03 1,429
4,730,000 4,730,000 9,449,000 0.03 1,377
4,715,000 4,715,000 9,658,000 0.03 1,407
4,680,000 4,680,000 11,990,000 0.03 1,486
4,640,000 4,640,000 12,451,000 0.03 1,543
8,314,837 8,314,837 16,534,082 0.04 2,049
12,476,920 12,476,920 18,957,022 0.05 2,349
15,530,642 15,530,642 24,310,234 N/A 3,013
Schedule 10
Business-Type Activities
128
Special Certificates Capital Utility
Fiscal Assessment of Improvement Revenue
Year Bonds Indebtedness Bonds Bonds Total
2005 $1,065,000 $$4,090,000 $5,215,000 10,370,000$
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
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
129
Net
Less:General Percentage
Available Bonded of Actual
in Debt Debt Taxable Value Per
Service Outstanding of Property Capita
$562,883 9,807,117$ 1.08 1,429$
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 2.01 2,927
Schedule 11
130
Schedule 12
Estimated
Estimated Share of
Debt Percentage Overlapping
Governmental Unit Outstanding Ap plicable (a)Debt
Debt repaid with property taxes
Independent School District #622 132,665,000$3.10%4,112,615$
Independent School District #832 60,030,000 4.70%2,821,410
Independent School District #834 39,690,000 14.10%5,596,290
Other debt
Washington County 172,765,000 4.50%7,774,425
Metropolitan Council 220,775,000 1.10%2,428,525
Subtotal, overlapping debt 22,733,265
City direct debt 8,779,592 100.00%8,779,592
Total direct and overlapping debt 31,512,857$
Sources: Tax capacity data to estimate applicable percentages provided by W ashington 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, 2014
COMPUTATION OF DIRECT AND INDIRECT GENERAL OBLIGATION BONDED DEBT
CITY OF LAKE ELMO, MINNESOTA
AN D LEGAL DEBT MARGIN
This Page Left Blank Intentionally
132
2014 2013 2012 2011 2010
Debt limit 35,537,364$32,470,203$32,054,064$31,126,713$34,288,095$
Total net debt applicable to limit 1,757,421 1,894,510 2,099,369 2,148,203 2,195,153
Legal debt margin 33,779,943$30,575,693$29,954,695$28,978,510$32,092,942$
Total net debt applicable to the limit
as a percentage of debt limit 4.95%5.83%6.55%6.90%6.40%
The legal debt lim it 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
133
Taxable Market Value 1,184,578,800$
Debt Limit (3% of market value)35,537,364
Debt applicable to limit:
General obligation bonds 1,887,000
Less: Amount set aside for repayment
of general obligation debt 129,579
Total net debt applicable to limit 1,757,421
Legal debt margin 33,779,943$
2009 2008 2007 2006 2005
36,036,402$36,242,169$22,620,202$20,351,938$18,208,774$
271,142 315,169 358,220 400,384
35,765,260$35,927,000$22,261,982$19,951,554$18,208,774$
0.75%0.87%1.58%1.97%0.00%
Schedule 13
Legal Debt Margin Calculation for the Fiscal Year 2014
134
Schedule 14
Net
Fiscal Gross Operating Available
Year Revenue (1)Expenses (2)Revenue Principal Interest Coverage
2005 439,723$ 294,616$ 145,107$ 25,000$ 107,468$ 1.10
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 776,899 513,226 263,673 530,000 208,303 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
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)
135
SCHEDULE 15
PERSONAL
INCOME PER CAPITA STATE CITY
(thousands of PERSONAL UNEMPLOYMENT UNEMPLOYMENT
YEAR POPULATION (1)dollars)INCOME (2)RATE (3)RATE (3)
2005 6,863 $294,553 $42,919 4.2 3.6
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 N/A N/A 3.8 3.7
Sources: (1) Metropolitan Council 2000/2010-Census Bureau
(2) Bureau of Economic Analysis - W ashington 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
136
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 46.7%12,774 1 54.3%
Andersen Corp (Bayport)1,875 2 9.5%
Washington County (Stillwater)1,142 3 5.9%
Woodwinds Health (Woodbury)1,085 4 5.6%
Fortis Company (W oodbury)1,300 3 5.5%
ISD 834 (Stillwater)1,046 5 5.4%2,050 2 8.7%
3M Company (W oodbury)940 4 4.0%
MN Correctional Facility (Oak Park Hts)730 6 3.7%
Ecowater Systems, Inc. (Woodbury)440 7 2.3%450 6 1.9%
Bremer Bank Operations Ctr (Lake Elmo)415 8 2.1%400 7 1.7%
Imation Corp (Oakdale)360 9 1.8%500 5 2.1%
SunAmerica Financial Group (Woodbury)310 10 1.6%
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
2005
CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
2014
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138
Function 2014 2013 201 2011 2010
Administration 3.55 3.55 3.15 3.15 3.15
Finance 1.25 1.25 0.50 0.50 0.50
Planning and Zoning 2.70 2.95 1.55 1.55 1.55
General Government 7.50 7.75 5.20 5.20 5.20
Fire 1.55 2.05 1.60 1.10 1.10
Building Inspections 1.55 1.30 0.95 0.95 0.95
Public Safety 3.10 3.35 2.55 2.05 2.05
Streets and Roadways 3.20 3.21 3.05 3.05 3.05
Public Works 3.20 3.21 3.05 3.05 3.05
Parks 3.30 2.74 2.52 2.52 2.52
Parks and Recreation 3.30 2.74 2.52 2.52 2.52
Community Development 0.35 0.40 0.15 0.15 0.15
0.35 0.40 0.15 0.15 0.15
Total Governmental Activities 17.45 17.45 13.47 12.97 12.97
Water Utility 2.60 2.10 1.85 1.85 1.85
Sewer Utility 0.70 0.70 0.30 0.30 0.30
Total Business Activities 3.30 2.80 2.15 2.15 2.15
Totals for Organization 20.75 20.25 15.62 15.12 15.12
Source: City's Adopted Budgets
CITY OF LAKE ELMO, MINNESOTA
FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
139
Schedule 17
2009 2008 2007 2006 2005
3.18 3.75 2.40 2.44 2.52
0.50 1.00 1.29 1.30 1.16
1.75 1.75 2.15 1.95 1.12
5.43 6.50 5.84 5.69 4.80
1.10 1.10 1.26 0.23 0.40
1.95 1.20 2.68 2.18 2.25
3.05 2.30 3.94 2.41 2.65
3.05 3.05 2.78 3.08 2.60
3.05 3.05 2.78 3.08 2.60
3.10 2.72 3.40 3.00 1.29
3.10 2.72 3.40 3.00 1.29
0.19 0.00 0.00 0.00 0.00
0.19 0.00 0.00 0.00 0.00
14.82 14.57 15.96 14.18 11.34
1.85 2.30 2.02 2.02 1.56
0.30 0.35 0.22 0.20 0.18
2.15 2.65 2.24 2.22 1.74
16.97 17.22 18.20 16.40 13.08
140
Function/Program 2014 2013 2012 2011 2010
Planning and Zoning
Conditional use permits 4 2 3 0 0
Interim use permits 1 1 0 3 1
Minor subdivisions 0 2 1 0 0
Plats/Planned unit developments 17 1 0 0 0
Rezonings 11 2 7 0 0
Site plans 0 2 1 0 1
Variances 2 5 4 6 2
Fire
Total emergency responses 358 448 399 315 361
EMS responses 237 280 262 195 211
Fire responses 21 28 28 24 14
Building Inspections
Residential permit valuations
(thousands of dollars)23,032 19,979 20,320 16,133 15,889
Commercial permit valuations
(thousands of dollars)7,309 966 2,351 2,590 2,013
New residential units 41 32 31 24 26
New commercial units 3 0 0 0 1
Water Utility
Number of customers 1,073 1,051 1,016 998 967
Average daily consumption
(thousands of gallons)19 21 15 14 18
Sanitary Sewer Utility
Number of customers 45 29 29 29 29
Average daily f low
(thousands of gallons)77 77 75 71 72
Sources: Various City Department's annual budget workload measurements
CITY OF LAKE ELMO, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
141
Schedule 18
2009 2008 2007 2006 2005
2 1 3 3 6
0 1 1 0 0
2 1 1 0 4
0 0 0 3 2
1 1 1 0 5
1 0 1 12 7
5 6 8 9 5
319 294 369 313 340
205 204 244 202 222
24 20 46 26 31
12,903 16,525 22,739 18,727 17,019
1,617 1,370 3,600 25,744 5,532
29 23 29 30 21
1 0 1 6 3
941 935 918 735 712
24 28 26 24 27
28 28 26 18 14
68 73 66 49 29
142
Function/Program 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005
Fire
Stations 2 2 2 2 2 2 2 2 2 2
Public Works
Bituminous streets (miles)65 63 63 63 62 62 62 62 57 54
Gravel streets (miles)2 2 2 2 2 3 3 3 3 3
Street lights 144 142 137 137 137 137 137 137 137 137
Storm sewer (miles)25 25 25 25 25 25 23 23 22 20
Park & Recreation
Acres of parkland 451 451 451 451 451 451 451 451 451 443
Number of parks 17 17 17 17 17 17 17 17 17 16
Water Utility
Water towers 3 2 2 2 2 2 2 1 1 1
Miles of watermain 40 39 37 37 37 37 34 26 20 20
Number of fire hydrants 351 293 280 280 280 280 280 233 225 221
Sanitary Sewer Utility
Miles of sanitary sewer 3 3 3 3 3 3 3 3 3 3
Lift stations 4 3 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, 2014
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145
INDEPENDENT AU DITOR'S REPORT ON MINNESOTA LEGAL COMPLIANCE
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, 2014, and the related notes to the
financial statements,and have issued our report thereon dated May 19, 2015.
The Minnesota Legal Compliance Audit Guide for Political Subdivisions,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 Political Subdivisions. 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.
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
May 19, 2015
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