HomeMy WebLinkAbout2013 Annual Comprehensive Financial ReportCITY OF LAKE ELMO, MINNESOTA
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2013
PREPARED BY:
FINANCE DIRECTOR'S OFFICE
FINANCE DIRECTOR
CATHY BENDEL
CITY OF LAKE ELMO, MINNESOTA
FINANCIAL STATEMENTS
For the Fiscal Year Ended December 31, 2013
TABLE OF CONTENTS
REFERENCE PAGE
INTRODUCTORY SECTION
Letter of Transmittal i
Elected and Appointed Officials v
Organizational Chart vi
FINANCIAL SECTION
Independent Auditor's Report
1
Management's Discussion and Analysis
3
Basic Financial Statements
Government -wide Financial Statements
Statement of Net Position
FORM A-1
17
Statement of Activities
FORM A-2
18
Fund Financial Statements
Balance Sheet - Governmental Funds
FORM B-1
22
Reconciliation of Net Position in the Government -wide
Financial Statements and Fund Balances in the Fund
Basis Financial Statements
FORM B-2
25
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Governmental Funds
FORM B-3
26
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
FORM B-4
29
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual - General Fund
FORM B-5
30
Combining Statement of Net Position - Proprietary Funds
FORM C-1
32
Combining Statement of Revenues, Expenses and Changes in
Net Position - Proprietary Funds
FORM C-2
36
Combining Statement of Cash Flows - Proprietary Funds
FORM C-3
38
Statement of Fiduciary Net Position - Fiduciary Funds
FORM D-1
40
Notes to Financial Statements
43
Required Supplemental Information
Schedule of Funding Progress - Other Post Employment Benefits
FORM E-1
81
Combining and Individual Fund Statements and Schedules
Combining Balance Sheet - Nonmajor Governmental Funds
FORM F-1
84
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Governmental Funds
FORM F-2
85
Combining Balance Sheet - Nonmajor Special Revenue Funds
FORM G-1
86
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Special Revenue Funds
FORM G-2
87
Combining Balance Sheet - Nonmajor Capital Projects Funds
FORM H-1
88
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Capital Projects Funds
FORM H-2
90
CITY OF LAKE ELMO, MINNESOTA
FINANCIAL STATEMENTS
For the Fiscal Year Ended December 31, 2013
TABLE OF CONTENTS (CONTINUED)
REFERENCE
PAGE
FINANCIAL SECTION (CONTINUED)
Combining Statement of Net Position - Internal Service Funds
FORM 1-1
92
Combining Statement of Revenues, Expenses and Changes in Fund
Net Position - Internal Service Funds
FORM 1-2
93
Combining Statement of Cash Flows - Internal Service Funds
FORM 1-3
94
Statements of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual - General Fund
FORM J-1
96
Combining Balance Sheet - Debt Service Funds
FORM K-1
100
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Debt Service Funds
FORM K-2
102
Combining Schedule of Changes in Assets and Liabilities - Agency Funds
FORM L-1
104
Supplemental Schedule of Sources and Uses - Redevelopment
Grant Program
FORM M-1
105
STATISTICAL SECTION (UNAUDITED)
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
INTRODUCTORY SECTION
DECEMBER 31, 2013
This Page Left Blank Intentionally
THE CITY OF
LA K E ELMO
3800 Laverne Avenue North
Lake Elmo, MN 44042
651-747-3900 www.lakeelmo.org
June 13, 2014
To the Honorable Mayor and Council Members of the City of Lake Elmo:
Minnesota Statutes require all cities to issue an annual report on its financial position and
activity prepared in accordance with generally accepted accounting principles (GAAP), under
the guidance of the Government Accounting Standard Board (GASB), and audited in
accordance with generally accepted auditing standards by a firm of licensed certified public
accountants or the Office of the State Auditor. Pursuant to that requirement, we hereby issue
the comprehensive annual financial report of the City of Lake Elmo, MN for the fiscal year
ended December 31, 2013.
This report consists of management's representation concerning the finances of the City of
Lake Elmo. Consequently, management assumes full responsibility for the completeness,
accuracy and reliability of all the information presented in this report. To provide a reasonable
basis for making these representations, the management of the City of Lake Elmo has
established a thorough internal control system designed to both protect the City's assets from
loss, theft and misuse and to compile all necessary information for the preparation of the City of
Lake Elmo's financial statements in conformity with GAAP and GASB. As a management team,
we assert that the financial statements will be free from material misstatement and that the
financial report is reliable in all material respects.
The City of Lake Elmo's financial statements have been audited by Smith, Schafer and
Associates, Ltd, a firm of licensed certified public accountants. The goal of the independent
audit was to provide reasonable assurance that the financial statements of the City of Lake
Elmo for the fiscal year ended December 31, 2013 are free rom material misstatement. The
independent audit involved examining, on an approved test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the accounting principles used
and significant estimates made by management and evaluating the overall financial statement
presentation. The independent auditor concluded, based upon the audit that there was a
reasonable basis for rendering an unqualified opinion that the City of Lake Elmo's financial
statements for fiscal year ended December 31, 2013 are fairly presented in conformity with
GAAP. The independent auditor's report is presented as the first component of the financial
section of the report.
A "Single Audit" designed to meet the special needs of a federal grantor agency was not
performed for the year ended December 31, 2013 as the City did not participate in any
programs that required this additional independent audit.
CITY OF LAKE ELMO, MINNESOTA
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in form of the Management's Discussion and
Analysis (MD &A). This letter of transmittal is included to complement the MD&A and should be
read in conjunction with it. The City of Lake Elmo's MD&A can be found immediately following
the report of the independent auditors.
PROFILE OF THE GOVERNMENT
The City of Lake Elmo was incorporated in 1926 and is a statutory city in the State of Minnesota
six miles east of St. Paul Minnesota. Located in Washington County, it covers 25 square miles
and has an estimated population of 8,773 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 both the city's administrator and attorney. The City Administrator is responsible for
carrying out the policies and ordinances of the governing council and overseeing the day-to-day
operations of the city. The Council is elected on a non -partisan basis. The Mayor serves a four-
year term and council members serve a four-year staggered term, with two of these positions
elected every two years. The Mayor and the Council are elected at -large.
The City of Lake Elmo provides a full range of Services including fire protection/emergency
services, construction and maintenance of streets and infrastructure; recreational facilities; and
water, sanitary sewer and storm water utility services. The City contracts with the Washington
County Sheriff's Department for police services.
The annual budget serves as the foundation for the City of Lake Elmo's financial management
and fiscal stewardship. Using performance based budgeting, all departments and agencies of
the city submit their requested budget to the City Administrator and the Finance Director in
order to compile a preliminary budget for submission to the Finance Committee for their
consideration. The Finance Committee then meets with the Department Heads to better
understand their proposed budgets to later submit a budget to the City Council. Two
workshops are held in August each year to determine priorities, set a preliminary levy and
schedule public hearings on the proposed budget that will be adopted no later than December
31, the close of the City's fiscal year. The appropriated budget is prepared by fund, function,
and department. Department Managers, after review by the City Administrator may make
transfers of appropriations within the department. Transfers of appropriations between funds,
however, require the special approval of the Finance Committee and the City Council. Budget
to actual comparisons are provided in this report for each governmental fund for which an
appropriated annual budget has been adopted.
CITY OF LAKE ELMO, MINNESOTA
FACTORS AFFECTING FINANCIAL CONDITION
To put the financial statements contained in this report in context, a cursory analysis of the
current environment within which Lake Elmo operates is warranted.
Economic condition and outlook: Although the city's tax base, as measured by total capacity
has remained relatively flat for the past three years, Lake Elmo property values have
maintained the highest value in Washington County since the 2008 recession, with home
valuation recovering to highest and best value in 2013. The installation of two major sewer lines
have spurred (8) new developments equaling over 1400 new homes and the City's highway
infrastructure has made Lake Elmo a desired residential location for white collar commuters
working in St. Paul or Minneapolis. Rapid growth is further reflected in 2013 population
estimates of 8,773, or an increase of 9% since the 2010 census.
New housing starts in 2013 numbered 37 with a total value of $17,410,169 and an average
value of $470,545 — one of the highest average values in Washington County. The city's tax
base is comprised of mainly residential homesteads (82.7%) and commercial/industrial property
(11 %). The balance consists of agricultural property (6.3%) and personal property (.1 %) The
median household income is $106,985 or 181 % of the state median.
Long-term financial planning: The City Council has taken an active role in establishing
financial policies that require 100% security from developers looking to build in Lake Elmo. This
includes requiring letters of credit at 125% of the development costs, full recovery escrow
agreements, and 100% developer paid infrastructure development agreements for utility
extensions in previously unserved areas of Lake Elmo. In addition, The City of Lake Elmo has
recently adopted several policies that affect its long term financial future. A partial list follows:
2030 Comprehensive Plan — The City recently adopted a comprehensive plan, adding
2,850 acres to two distinct Metropolitan Urban Service Areas: The 1-94 corridor and the
Old Village. This expansion allows for the development of 6,600 residential equivalent
utility units designed to serve a population of 20,500 by the year 2040, as forecasted by
the Metropolitan Council.
Transportation Planning — The City is an active participant with the State of Minnesota
and Washington County in the development of highway and mass transit corridors that
will improve transportation flow in the community. Planned improvements include a
remodeling of four country truck highways that serve 80%+ of the general population
and probable construction of a federally -subsidized bus rapid transit route that will serve
the City's business district adjacent to a 100,000 average daily transit interstate
highway.
Downtown Redevelopment — The City is in the process of redeveloping a classic
traditional downtown center with the help of the University of Minnesota Extension and a
newly formed Economic Development Authority that will study financial investment,
market analysis, efficient utility construction and functional parking. The city owns
several key downtown lots to be used as a catalyst in redevelopment that is expected to
be financed through the use of tax increment financing, a business improvement district
and private investment.
CITY OF LAKE ELMO, MINNESOTA
Long-term financial planning (continued)
Emerging Medical & Business Service Industry — The City is experiencing growth in
its Eagle Point Business Park from both the medical and business service industry. In
2013, one hundred additional jobs were created by a transportation logistics company
and in 2014 a major neurological clinic will be constructed in the park. In 2015, a new
$13 million specialty school will be constructed that serves exceptional children.
ACKNOWLEDGEMENTS
The City of Lake Elmo is pleased to present its first financial statement to the Government
Finance Officers Association (GFOA) for consideration of a Certificate of Achievement for
Excellence in Financial Reporting for its financial reports for the fiscal year ended December 31,
2013. This submittal culminates a two-year process of extensive financial review and policy
development by the City of Lake Elmo City Council, Finance Committee, Northland Strategies
and professional staff. Lake Elmo wishes to thank the staff of Smith, Schafer and Associates,
Ltd. for their assistance and review of the document.
Respectfully,
om" ���
Cathy Bendel
Finance Director
'D'a
Dean A. Zu g r
City Ad in tr t
iv
CITY OF LAKE ELMO, MINNESOTA
ELECTED AND APPOINTED OFFICIALS
December 31, 2013
POSITION NAME I I 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
APPOINTED OFFICIALS
City Administrator Dean Zuleger Continuous
Finance Director Cathy Bendel Continuous
City Clerk Adam Bell Continuous
v
CITY OF LAKE ELMO, MINNESOTA ORGANIZATIONAL CHART
Citizens
1
City Council
Commissions 1
Plavvwt Cmnmiulo I **% Administrator.
Park Cammiszivv 1 1
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Fire Chief D'rD e• of `OmmYe"y Finance Dir,
relvpm vnt I
Dist. Chiefs Planner ---finance Assisbill Deputy Clerk
1 r
Captains amipa Official Assessor Receptionist
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POCFFs Planning Assl. TaapayerRalativnl
Contractor Relationship o Citizen Appointees
Committees
5" AYvl Peace
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Hmvav Anourcn
Pu.blibUc, PS
Safeh'
PW l par"' --City Engine
Supt. er Shetilf
Equip
Operators
Palk Maintainer
/ THE CITY UP
LAKE ELMO
vi
CITY OF LAKE ELMO, MINNESOTA
FINANCIAL SECTION
DECEMBER 31, 2013
This Page Leff Blank Intentionally
ZIAMITH•SCHAFER
& ASSOCIATES, LTD.
Certified Public Accountants and Consultants
Honorable Mayor and Members of
the City Council
City of Lake Elmo, Minnesota
Members of American Institute of CPA's,
Private Companies Practice Section, Minnesota Society of CPA's
INDEPENDENT AUDITOR'S REPORT
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, 2013, 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, 2013, 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.
Maplewood Office • 2035 E County Road D • Suite A • Maplewood MN 55109 • PH (651) 770-8414 • FAX (651) 770-5175
Offices in: Edina. Red Wing, and Rochester • www.smithschafer.com
PrimeGlabal Member of PrimeGlobal, A Global Association of Independent Accounting Firms
Honorable Mayor and Members of the City Council
City of Lake Elmo, Minnesota
Page 2
Other Matters
Change in Accounting Standards
As described in Note 5 to the financial statements, the City adopted the provisions of Governmental
Accounting Standards Board (GASB) Statement No. 65, Items Previously Reported as Assets and Liabilities,
for the year ended December 31, 2013. Adoption of the provisions of this statement resulted in significant
changes to the classifications of certain components of the financial statements.
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 81 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, 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 are the responsibility of management and
were derived from and relate directly to the underlying accounting and other records used to prepare the basic
financial statements. Such information has been subjected to the auditing procedures applied in the audit of
the basic financial statements and certain additional procedures, including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the basic financial
statements or to the basic financial statements themselves, and other additional procedures in accordance
with auditing standards generally accepted in the United States of America. In our opinion, the combining and
individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic
financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
GotAAm
, &4k aJ a
Maplewood, Minnesota
June 13, 2014
2
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
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, 2013.
New Accounting Pronouncement. As described in Note 5 to the financial statements, the City
implemented GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, for the
year ended December 31, 2013. This standard established accounting and financial reporting
standards that retroactively reclassify, as deferred inflows of resources, certain items previously
reported as liabilities. In addition, debt issuance costs are no longer reported in the Statement of Net
Position under the new Standard.
FINANCIAL HIGHLIGHTS
• The assets of the City of Lake Elmo, Minnesota exceeded its liabilities at the close of the
most recent fiscal year by $26,190,722 (net position). Of this amount, $6,440,144
(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 $4,594,026. The increase is attributed to both
business -type and governmental 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 $5,288,929, a decrease of $1,683,292
from the prior year. This decrease was due primarily to capital project expenditures for which
bonds were issued in 2012 and to debt service expenditures made to refund the 2004A G.O.
CIP bonds.
• At the end of the current fiscal year, unassigned fund balance for the general fund was
$2,318,310, or 66.1 % of total general fund expenditures. The nonspendable portion of the
general fund balance as of December 31, 2013 ($859,072) related to the interfund loan to the
Village Project fund and prepaid expenses.
• The City's total noncurrent liabilities increased by $2,210,743 or 13% during the current fiscal
year. The increase was primarily related to this issuance of the 2013A 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.
3
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
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.
4
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
The City of Lake Elmo, Minnesota maintains twenty-four individual governmental funds, ten of
which are debt service funds. Information is presented separately in the governmental fund balance
sheet and in the governmental fund statement of revenues, expenditures, and changes in fund
balances for the general fund, the debt service fund, the village project 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 and 96 to 99) 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 32-39 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 40 of this report.
Notes to the Fnancial 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 43-78 of this report.
Other Information. The combining statements referred to earlier in connection with non -major
governmental funds and internal service funds can be found on pages 84-94 and pages 100-104 of
this report.
5
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
GOVERNMENT -WIDE FINANCIAL ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial
position. In the case of the City of Lake Elmo, Minnesota, assets exceeded liabilities by
$26,190,722 at the close of the most recent fiscal year.
The largest portion of the City of Lake Elmo, Minnesota's net position, $15,912,160 (61 %) 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.
City of Lake Elmo, Minnesota's Net Position
Governmental Activities
Business -Type Activities
Total
2013
2012
2013
2012
2013
2012
Current and other assets $ 6,568,146
$ 8,276,848
$ 9,615,965 $
5,861,208
$ 16,084,111
$14,138,056
Capital assets 15,695,829
14,656,197
15,323.660
10,870,749
30,919,489
25,526,946
Total assets 22,163,975
22,933,045
24,839,625
16,731,957
47,003,600
39,665,002
Long-term liabilities outstanding 6,693,551
8,411,173
12,507,622
8,714,727
19,201,173
17,125,900
Other liabilities 594,759
614,789
1,016.946
83,853
1,611,705
698,642
Total liabilities 7,288,310
9,026,962
13,5249568
8,798,580
20,812,878
17,824,542
Net position:
Net investment in capital assets 9,056,353
8,782,840
6.855.807
6.788,377
15.912,160
15,571,217
Restricted 1,225,849
4,205,247
2,612.569
39,153
3,838,418
4,244,400
Unrestricted 4,593,463
918,996
1,846.681
1,105,847
6,440,144
2,024,843
Total net position $ 14 875 665
_$ 13,907,083
$ 11,315,057 $
7,933,377
$ 26,190,722
$ 21,840,460
An additional portion of the City of Lake Elmo,
Minnesota's net position (15
percent)
represents
resources that are subject to external
restrictions
on how they
may be
used. The
remaining
balance of unrestricted net position ($6,440,144)
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.
C
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
Governmental activities. Governmental activities account for 57% of the City of Lake Elmo,
Minnesota's net position. The total increase in net position for governmental activities was
$1,106,731, accounting for 24% of the total increase in the net position of the City of Lake Elmo,
Minnesota. Key elements of this increase include:
• Capital grants increased by $1,204,178 from the prior year due primarily to construction aid
received from the State of Minnesota.
• Property tax revenue increased by $48,530 from the prior year due primarily to increased
collection of delinquent amounts.
Business -type activities. Business -type activities increased the City of Lake Elmo, Minnesota's
net position by $3,487,295 accounting for 76% of the total increase in the net position of the City of
Lake Elmo, Minnesota. This increase is due primarily to an increase in charges for services and
capital grants received in the enterprise funds.
Revenues:
Program revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues:
Property taxes
Other
Total revenues
Expenses:
General government
Public safety
Public works
Culture and recreation
Interest on long-term debt
Water
Sewer
Storm sewer
Total expenses
Change in net position
City of Lake Elmo, Minnesota's Change In Net Position
Governmental Activities
Business -Type
Activities
Total
2013
2012
2013
2012
2013
2012
$ 466,897
$ 440,630
$ 840,650
$ 936.125
$ 1,307,547 $
1,376,756
208.276
160,060
208,276
160,060
1,364,622
160,444
3,781.528
115,127
5,146.150
275,571
3,231,609
3.183,078
3.231.609
3.183,078
48,820
154,304
30,346
10,282
79,166
164,586
5,320,224
4.098716
4,652,524
1,061,534
9,972,748
5,160,050
1.103, 337
1,093.204
1,103,337
1.093.204
1.277,798
1.302.857
1,277,798
1,302,857
1.273,977
891.169
1,273.977
891,169
424.687
362,432
424,687
362.432
133,694
316,039
133.694
316.039
958,870
872,786
958,870
872.786
119,370
53,903
119,370
53,903
86,989
73,590
86,989
73,590
4,213,493
3,965,701
1,165,229
1,000,279
5,378,722
4,965,980
1,106,731
132.815
3,487.295
61,255
4.594.026
194.070
Net position as restated - beginning of year 13,768,934 13,774,268 7,827,762 7,872,122 21,596,696 21,646,390
Net position - end of year $ 14,875,665 $ 13,907,083 $ 11,315,057 $ 7,933,377 $ 26,190,722 $ 21,840,460
VA
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
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.
Expenses and Program Revenues - Governmental Activities
$1,600,000
$1,400,000
$1,200,000
$1.000,000
$800,000
$600,000
$400,000
$200,000
$0
1ep�
�
�e
eee�e\9e
G
Sake\i
Jb\��
P
Revenues by Source - Governmental Activities
Operating grants
and contributions
Other
-1%
Capital grants and
contributions \
25%
Charges for—"'--4�
services
9%
GJoe
Property taxes
61%
8
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
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.
Expenses and Program Revenues - Business -Type Activities
■Program revenues
ElExpenses
$3,500,000
$3.250,000
$3,000,000
$2,750.000
$2.500.000
$2,250.000
$2,000,000
$1,750,000
$1,500,000
$1,250,000
$1,000,000
$750,000
$500,000
$250,000
$0
�e4 suet a $et
Revenues by Source - Governmental Activities
Other
1 %
I \
Capital grants and
contributions
81%
Charges for
services
18%
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
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 $5,288,929, a decrease of $1,683,292 in comparison
with the prior year. Approximately 70 percent of this total fund balance, or $3,685,881, constitutes
assigned and unassigned fund balance, which is available for spending at the government's
discretion. The remainder of the fund balance ($1,603,048) 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 or 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 $2,318,310. 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 66% of total 2013 general fund expenditures.
The general fund's total fund balance decreased by $261,743 during the current fiscal year due
primarily to transfers to the Village Project capital project fund to fund the internal loan repayments
for 2012 and 2013.
The debt service fund decreased its fund balance by $2,774,044 due primarily to debt service
expenditures in excess of property taxes, special assessments and intergovernmental revenues
allocated to this fund.
The Village Project fund increased its fund balance by $395,950 as a result of transfers from the
general fund. The infrastructure reserve fund increased its fund balance by $853,009 due primarily
to the issuance of the 2013A general obligation improvement bonds.
The special revenue funds increased their overall fund balances by $162,575 due primarily to
property taxes allocated to those funds in excess of capital outlay expenditures.
The capital projects funds, other than the Village Project and infrastructure reserve funds described
previously, decreased their collective fund balance by $59,039 due primarily to capital outlay
expenditures in excess of special assessments and investment earnings allocated to the funds.
Proprietary funds. The City of Lake Elmo, Minnesota's proprietary funds provide the same type of
information found in the government -wide financial statements, but in more detail.
10
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
Unrestricted net position for water operations, sewer operations and storm sewer operations at the
end of the year amounted to $860,324, $498,972 and $487,385, respectively. The water fund,
sewer fund and storm sewer fund increased their net position by $266,245, $3,115,854 and
$105,196, respectively, for the year ended December 31, 2013. 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 a
$99,296 decrease in General Fund balance. The actual net change to the General Fund balance
was a decrease of $261,743. Revenues exceeded budget by $626,864 for the year ended
December 31, 2013 due primarily to intergovernmental revenue for which the City had not
budgeted. This intergovernmental revenue was from the Minnesota Investment Fund who awarded
$500,000 in financing to the City of Lake Elmo to be utilized to entice Valley Cartage to expand into
Minnesota. The program required Valley Cartage to privately finance a matching amount as well as
to bring 50 new jobs to the City of Lake Elmo within two years. As of December 31, 2013, this
threshold had been surpassed.
Total expenditures exceeded budget by $754,111 for the year. Two departments had expenditures
in excess of budget: general government expenditures exceeded budget by $661,868 and public
works expenditures exceeded budget by $133,702. The over expenditures in the general
government department were primarily related to the intergovernmental funds discussed in the
previous paragraph that were subsequently loaned (expended) to Valley Cartage who relocated
their corporate headquarters to the City. The 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.
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, 2013, amounted to $30,919,489
(net of accumulated depreciation). This investment in capital assets includes land, buildings and
improvements, and machinery and equipment. Total capital assets increased by $5,392,543, or
21%, for the year ended December 31, 2013, due primarily to completed construction projects and
additional construction in progress on various capital projects within the City.
City of Lake Elmo, Minnesota's Capital Assets
(net of depreciation)
Governmental Activities
Business -Type
Activities
Total
2013
2012
2013
2012
2013
2012
Land
$ 3.453,979 $
3.453.979 $
54.676
$ 54.675 $
3.508,654 $
3,508,654
Construction in progress
2,279.552
2,290,314
3.361,742
669.738
5,641.294
2.860.052
Buildings
2,842,852
2.925,354
2,842.852
2,925,354
Improvements other than buildings
428.727
493,629
428.727
493,529
Machinery and equipment
739,507
785,684
113,597
127.433
853,104
913.117
Infrastructure
6,851,212
4,707,337
11,793,646
10,118,903
17,644,858
14,826,240
Total
$ 15,595,829 $
14,656.197 $
15,323,660
$ 10,870,749 $
30,919 489 $
25,526,946
11
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
Additional information on the City of Lake Elmo, Minnesota's capital assets can be found in Note
3E beginning on page 59 of this report.
Long-term debt. At the end of the current fiscal year, the City of Lake Elmo, Minnesota had
$19,007,000 in bonds and certificates outstanding. The entire $19,007,000 outstanding comprises
debt backed by the full faith and credit of the government.
City of Lake Elmo, Minnesota's Outstanding Debt
General Obligation Bonds and Certificates
Governmental Activities Business -Type Activities Total
2013 2012 2013 2012 2013 2012
General obligation bonds
$ 6,420,000
$ 8,120,000
$ 12,485,000 $ 8,635,000 $ 18,905,000
$ 16,755,000
General obligation certificates
102,000
150,000
102,000
150,000
Total
$ 6,522,000
$ 8,270,000
$ 12,485,000 $ 8,635,000 $ 19,007,000
$ 16,905,000
The City of Lake Elmo, Minnesota's total bonds and certificates payable increased by $2,102,000
during the current fiscal year. The increase was due primarily to the issuance of the City's 2013A
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 1.2 percent from 2012 to 2013 and 1.8 percent
from 2013 to 2014.
• There was no change to total property taxes levied in 2014 from total property taxes levied
for 2013. 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 component of the levy.
• Plans are well underway for extensive development in the following areas:
o The 1-94 Corridor where a mixed use development featuring commercial/retail
business as well as residential. Some developers are entering the final plat stages
of this project.
o The Old Village re -development project of commercial and residential expansion
(expected completion in 2018). With the near completion of the sanitary sewer to
the Old Village/Downtown area, a number of interested parties have come forward
with concept plans for this area of the City as well.
o The Highway 36 Corridor residential expansion due to the completion of the new
federally funded bridge linking Minnesota and Wisconsin (targeted completion in
2017).
12
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
Economic Factors and Next Year's Budgets and Rates (continued)
o Improvements to the City's water distribution system including the Lake Elmo
Avenue line.
o Improvements to the Old Village sewer line
o The City recently secured $3,500,000 in state bonding funds in the 2014 State
Bonding Bill. These funds will directly pay for water infrastructure costs to support
development.
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.
13
This Page Leff Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
FINANCIAL STATEMENTS
DECEMBER 31, 2013
This Page Leff Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF NET POSITION
December 31, 2013
ASSETS
Cash and investments
Cash with fiscal agent
Receivables, net of allowance
Due from other governmental units
Prepaid expenses
Capital assets:
Nondepreciable
Depreciable, net
Total Assets
LIABILITIES
Accounts payable
Accrued expenses
Accrued interest
Escrow deposits
Due to other governmental units
Noncurrent liabilities:
Due within one year
Due in more than one year
Total Liabilities
NET POSITION
Net investment in capital assets
Restricted
Debt service
Unrestricted
Total Net Position
Governmental
Activities
Business -Type
Activities
FORM A-1
Total
$ 5,717,207
$ 1,405,987
$ 7,123,194
3,920,217
3,920,217
566,008
3,140,750
3,706,758
231,257
1,049, 011
1,280,268
53,674
53,674
5,733,531
3,416,417
9,149,948
9,8620298
11,907,243
21,769,541
22,163,975
24,839,625
47,003,600
428,556
962,785
1,391,341
40,465
5,069
45,534
50,738
48,560
99,298
75,000
75,000
532
532
620,184
368,914
989,098
6,073,367
12,138,708
18,212,075
7,288,310
13,524,568
20,812,878
9,056,353
6,855,807
15,912,160
1,225,849
2,612,569
3,838,418
41593,463
1,846,681
6,440,144
$ 14,875,665
$ 11,315,057
$ 26,190,722
See Notes to Financial Statements
17
Functions/Programs
Governmental activities:
General government
Public safety
Public works
Culture and recreation
Interest on long-term debt
Total governmental activities
Business -Type activities:
Water
Sewer
Storm sewer
Total business -type activities
Total
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2013
Program Revenues
Operating
Capital
Charges for
Grants and
Grants and
Expenses
Services
Contributions
Contributions
$ 1,103, 337
$ 32,778
$
$
1,277,798
414,472
57,257
1,273,977
2,647
113,610
1,360,557
424,687
17,000
37,409
4,065
133,694
4,213,493
466,897
208,276
1,364,622
958,870
596,421
608,841
119,370
53,142
3,172,687
86,989
191,087
1,165,229 840,650
3,781,528
$ 5,378,722 $ 1,307,547 $ 208,276 $ 5,146,150
General revenues:
General property taxes
Grants and contributions not restricted to specific programs
Interest earnings
Gain on sale of assets
Miscellaneous
Total general revenues
Change in net position
Net position as restated - beginning (Note 5)
Net position - ending
See Notes to Financial Statements
18
FORM A-2
Net (Expense) Revenue
and Changes in Net Position
Governmental Business -Type
Activities Activities Total
$ (1,070,559)
(806,069)
202,837
(366,213)
(133,694)
(2,173,698)
(2,173,698)
3,231,609
2,749
35,259
8,979
1,833
3,280,429
1,106,731
13,768,934
$ 14,875,665
$ 246,392
3,106,459
104,098
3,456,949
3,456,949
30,346
30,346
3,487,295
7,827,762
$ 11,315,057
$ (1,070,559)
(806,069)
202,837
(366,213)
(133,694)
(2,173,698)
246,392
3,106,459
104,098
3,456,949
1,283,251
3,231,609
2,749
65,605
8,979
1,833
3,310,775
4,594,026
21,596,696
$ 26,190,722
19
This Page Leff Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
FUND FINANCIAL STATEMENTS
DECEMBER 31, 2013
CITY OF LAKE ELMO, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2013
ASSETS
Cash and investments
Receivables (Net of allowance for
uncollectibles)
Accounts
Delinquent taxes
Special assessments
Accrued interest
Loan receivable, net of allowance
Of $500, 000
Due from other funds
Advances to other funds
Due from other governmental units
Prepaid expenses
TOTAL ASSETS
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
LIABILITIES
Accounts payable
Escrow deposits payable
Accrued liabilities
Due to other funds
Advances from other funds
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue:
Property taxes
Special assessments
Intergovernmental revenue
Total deferred inflows of resources
FUND BALANCE
Nonspendable
Restricted
Assigned
Unassigned
Total Fund Balance
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE
Infrastructure
General Fund Debt Service Village Project Reserve
-
$ 2,535,995 $ 757,476 $ $ 831,109
5,114
64,105
176,828 305,045
14,916
128,716
805,398
21,257 210,000
53,674
$ 3,629,175 $ 1,144,304 $ $ 1,136,154
$ 348,432 $ 13,545 $ $ 61,212
39,256
17,176 56,760 7,032
805,398
387,688 30,721 862,158 68,244
64,105
176,828 305,045
210,000
64,105 386,828 305,045
859,072
743,976
762,865
2,318,310 (17,221) (862,158)
3,1770382 726,755 (862,158) 762,865
$ 3,629,175 $ 1,144,304 $ $ 1,136,154
See Notes to Financial Statements
22
FORM B-1
Other
Governmental
Funds Total
$ 1,565,661 $ 5,690,241
5,114
64,105
481,873
14,916
128,716
805,398
231,257
53,674
$ 1,565,661 $ 7,475,294
$ 5,460 $ 428,649
75,000 75,000
1,116 40,372
80,968
805,398
81,576 1,430,387
64,105
481,873
210,000
755,978
859,072
743,976
1,490,066 2,252,931
(5,981) 1,432,950
1,484,085 5,288,929
$ 1,565,661 $ 7,475,294
23
This Page Leff Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
RECONCILIATION OF NET POSITION IN THE
GOVERNMENT -WIDE FINANCIAL STATEMENTS AND FUND BALANCES
IN THE FUND BASIS FINANCIAL STATEMENTS
December 31, 2013
Amounts reported for governmental activities in the statement of net assets are different because:
Total governmental fund balances (pages 22-23)
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds:
Governmental funds - capital assets $ 20,330,630
Accumulated depreciation (4,891,871)
Other long-term assets are not available to pay for current -period
expenditures and, therefore, are unavailable in the funds:
Delinquent property taxes $ 64,105
Special assessments 481,873
Due from other governmental units 210,000
Long-term liabilities are not due and payable in the current period
and therefore are not reported in the funds:
Bonds payable $ (6,522,000)
Compensated absences (76,551)
Post employment benefit obligation (136,898)
Accrued interest (50,738)
Unamortized bond premiums (17,476)
Unamortized bond discounts 59,374
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.
Net position of governmental activities (page 17)
FORM B-2
$ 5,288,929
15,438,759
755,978
(6,744,289)
136,288
$ 14,875,665
See Notes to Financial Statements
25
REVENUES
Taxes
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Special assessments
Investment earnings (loss)
Miscellaneous revenue
TOTAL REVENUES
EXPENDITURES
Current
General government
Public safety
Public works
Culture and recreation
Capital Outlay
General government
Public safety
Public works
Culture and recreation
Debt Service
Principal
Interest and other charges
Bond issuance costs
TOTAL EXPENDITURES
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2013
Infrastructure
General Fund Debt Service Village Project Reserve
$ 2,489,837
374,974
690,316
6,113
52,110
11,631
16,775
3,641,756
1,527,732
1,174,145
614,270
187,152
$ 484,815 $ $
73,600
143,279
17,122
936,197
36,744
(1,002) (2,318)
718,816 (1,002) 970,623
3,048 1,570,537
3,348,000
171,148
7,870
3,503,299 3,519,148 3,048 1,578,407
Excess (deficiency) of revenues
over (under) expenditures
138,457
(2,800,332)
(4,050)
(607,784)
OTHER FINANCING SOURCES (USES)
Transfers
(400,200)
26,288
400,000
(144,004)
Issuance of debt
1,604,797
TOTAL OTHER FINANCING SOURCES (USES) (400,200)
26,288
400,000
1,460,793
Net change in fund balances
(261,743)
(2,774,044)
395,950
853,009
FUND BALANCES (DEFICIT), Beginning
3,439,125
3,500,799
(1,258,108)
(90,144)
FUND BALANCES (DEFICIT), Ending
$ 3,177,382
$ 726,755
$ (862,158)
$ 762,865
See Notes to Financial Statements
26
FORM B-3
Other
Govemmental
Funds Total
$ 256,957
$ 3,231,609
374,974
4,065
1,704,178
6,113
52,110
180,023
9,694
35,127
40,485
57,260
311,201 5,641,394
1,527,732
1,174,145
614,270
114,252 301,404
9,175
9,175
80,503
80,503
58,126
1,631,711
63,525
63,525
3,348,000
171,148
7,870
325,581 8,929,483
(14,380) (3,288,089)
117,916
1,604,797
117,916 1,604,797
103,536 (1,683,292)
1,380,549 6,972,221
$ 1,484,085 $ 5,288,929
27
This Page Left Blank Intentionally
FORM B-4
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, 2013
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - total governmental funds (pages 26-27) $ (1,683,292)
Governmental funds report capital outlay as expenditures.
However, in the statement of activities the cost of those assets
is allocated over their estimated useful lives and reported as
depreciation expense:
Capital outlay $ 1,565,276
Depreciation expense (591,707)
973,569
The net effect of various miscellaneous transactions involving capital
assets (i.e. sales, trade-ins and donations) is to increase net assets 8,979
Revenues in the statement of activities that do not provide current
financial resources are not reported as revenues in the funds:
Special assessments $ 235,737
Intergovernmental revenue (65,000)
170,737
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 $ (76,551)
Compensated absences, beginning of year 60,675
Post employment benefit obligation, end of year (136,898)
Post employment benefit obligation, beginning of year 66,505
(86,269)
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 $ 3,348,000
Issuance of long-term debt (1,600,000)
Change in accrued interest, bond premiums and
bond discounts 34,025
1,782,025
Internal service funds are used by management to charge the costs of
capital equipment replacement to individual funds. The net revenue
of certain activities of internal service funds is reported with
govermental activities in the government -wide financial statements (59,018)
Change in net position of governmental activities (page 19) $ 1,106,731
See Notes to Financial Statements
29
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, 2013
REVENUES
Taxes
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeits
Investment earnings
Miscellaneous Revenue
TOTAL REVENUES
EXPENDITURES
Current
General government
Public safety
Public works
Culture and recreation
TOTAL EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers
Net change in fund balance
FUND BALANCE, beginning
FUND BALANCE, ending
FORM B-5
Variance with
2013 Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 21466,762 $ 2,466,762 $ 2,489,837 $ 23,075
278,910
278,910
374,974
96,064
156,271
156,271
690,316
534,045
5,849
5,849
6,113
264
60,000
60,000
52,110
(7,890)
20,000
20,000
11,631
(8,369)
27,100
27,100
16,775
(10, 325)
3,014,892 3,014,892 3,641,756 626,864
865,864
865,864
1,527,732
(661,868)
1,212, 997
1,212,997
1,174,145
38,852
480,568
480,568
614,270
(133,702)
189,759
189,759
187,152
2,607
2,749,188 2,749,188 3,503,299 (754,111)
(365,000) (365,000) (400,200) (35,200)
(99,296) (99,296) (261,743) (162,447)
3,439,125 3,439,125 3,439,125
$ 3,339,829 $ 3,339,829 $ 3,177,382 $ (162,447)
See Notes to Financial Statements
30
This Page Left Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Net Position
December 31, 2013
ASSETS
Current Assets
Cash and investments
Cash with fiscal agent
Receivables
Accounts
Special assessments
Due from other governments
Due from other funds
Total Current Assets
Noncurrent Assets
Property and Equipment
Land
Machinery and equipment
Infrastructure
Construction in progress
Total Property and Equipment
Less: Accumulated depreciation
Net Property and Equipment
TOTAL ASSETS
Water Sewer Storm Sewer
$ 608,638 $ 566,631 $ 230,718
3,920,217
211,451 32,049 231,149
85,618 2,562,179 18,304
427,830 621,181
1,918 231915
5,255,672 3,782,040 5041 086
54,675
282,860
13, 709, 228 370,057 611,337
125,656 3,153,316 82,770
14,172,419 3,523,373 694,107
20800,306 195,409 70,524
11, 372,113 3,327,964 623,583
$ 16,627,785 $ 7,110,004 $ 1,127,669
See Notes to Financial Statements
32
Total
$ 1,405, 987
3,920,217
474,649
2,666,101
1,049,011
25,833
FORM C-1
Internal
Service Funds
$ 26,966
9,541,798 26,966
54,675
282,860
14, 690, 622
3,361,742
18, 389, 899
558,621
558,621
3,066,239 401,551
15, 323, 660 157,070
$ 24, 865,458 $ 184,036
33
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Net Position (Continued)
December 31, 2013
LIABILITIES AND NET POSITION
Current Liabilities
Accounts payable
Accrued salaries payable
Accrued interest payable
Due to other funds
Due to other governments
Current portion of compensated absences
Current portion of bonds payable
Total Current Liabilities
Long-term Liabilities
Other postemployment benefits payable
Compensated absences payable
Bonds payable and unamortized premium on
bonds, net of unamortized discount on bonds
Total Long-term Liabilities
Total Liabilities
Net Position
Net investment in capital assets
Restricted
Unrestricted
Total Net Position
TOTAL LIABILITIES AND
NET POSITION
Water
Sewer
Storm Sewer
$ 243,528
$ 711,678
$ 7,579
2,819
1,120
1,130
48,560
24,583
1,250
532
2,225
1,202
487
230,000
135,000
552,247
850,250
9,196
11,304
3,801
5,698
3,403
1,838
744
9,227,978 2,883,942
91242,685
2,889,581
6,442
9,794,932
3,739,831
15,638
5,923,202
309,022
623,583
49,327
2,562,179
1,063
860,324
498,972
487,385
61832,853 3,370,173 1,112, 031
$ 16, 627, 785 $ 7,110, 004 $ 1,127,669
See Notes to Financial Statements
34
Total
$ 962,785
5,069
48,560
25,833
532
3,914
365,000
Internal
Service Funds
47,748
1,411,693 47,748
20,803
5,985
12,111, 920
12,138, 708
13,550,401 47,748
6,855,807
2,612,569
1,846,681
11,315,057
1571070
(20,782)
136,288
$ 24, 865,458 $ 184,036
35
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Revenues, Expenses
and Changes in Net Position
For the Year Ended December 31, 2013
Operating Revenues
Operating Expenses
Personnel services
Supplies
Professional services
Repairs and maintenance
Insurance
Utilities
Depreciation
Total Operating Expenses
Operating Income (Loss)
Other Revenue (Expense)
Investment earnings
Rents
Capital contributions - special assessments
Amortization of deferred charges
Bond issuance costs
Intergovernmental revenue
Interest and fiscal expense
Total Other Revenue (Expense)
Income (Loss) Before Noncash Contributions
Noncash capital contributions
Net Income (Loss)
Net Position As Restated, Beginning
of Year (Note 5)
Net Position, End of Year
Water
$ 549,915
Sewer Storm Sewer
$ 53,142 $ 191,087
110,391
48,937
50,801
42,822
943
2,663
35,519
15,459
22,927
14,999
13,018
119
6,408
122,070
17,572
317,759
8,740
15,187
649,968
104,669
91,697
(100,053) (51,527) 99,390
19,853
9,395
1,098
46,506
74,111
2,551,506
4,708
(3,194)
54
(4,919)
(14,755)
427,830
621,181
(300,789)
259,398
3,167,381
5,806
159,345
3,115, 854
105,196
106,900
266,245
6,566,608
3,115, 854 105,196
254,319 1,006,835
$ 6,832,853 $ 3,370,173 $ 1,112,031
See Notes to Financial Statements
36
FORM C-2
Internal
Total Service Funds
$ 794,144 $
210,129
46,428
73,905
28,136 16,236
6,408
139,642
341,686 42,914
846,334 59,150
(52,190) (59,150)
30,346
46,506
2,630,325
(3,140)
(19,674)
1,049,011
(300,789)
3,432,585
132
132
3,380,395 (59, 018)
106,900
3,487,295 (59,018)
7,827,762 195,306
$ 11,315,057 $ 136,288
37
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Cash Flows
For the Year Ended December 31, 2013
Cash Flows from Operating Activities
Cash received from customers
Cash payments to suppliers
Cash payments to employees
Net Cash Provided By (Used In)
Operating Activities
Cash Flows From Investing Activities
Interest earnings received
Cash Flows from Noncapital Financing Activities
Rents received
(Increase) decrease in due from other funds
Increase (decrease) in due to other funds
Net Cash Provided By (Used In) Noncapital
Financing Activities
FORM C-3
Internal Service
Water Sewer Storm Sewer Total Funds
$ 558,024 $ 47,417 $ 185,160 $ 790,601 $
(4,430) (39,260) (20,003) (63,693) (16,236)
(104,277) (46,049) (47,449) (197,775)
449,317 1 (37,892) 117,708 529,133 (16,236)
19,853 9,395 1,098 30,346 132
46,506 46,506
(1,250) (1,250)
1,250 1,250
45,256 1,250 46,506
Cash Flows from Capital and Related Financing Activities
Acquisition of capital assets
(1,602,452)
(2,464,222)
(27,893) (4,094,567)
Connection fees received
106,900
106,900
Special assessments
32,828
870
20,352 54,050
Proceeds from issuance of long-term debt
1,005,000
3,010,000
4,015,000
Bond issuance costs
(4,919)
(14,755)
(19,674)
Increase in unamortized bond premiums
2,998
8,996
11,994
Principal paid on long-term debt
(165,000)
(165,000)
Interest paid on long-term debt
(303,855)
(303,855)
Net Cash Provided By (Used In) Capital and
Related Financing Activities (928,500) 540,889 (7,541) (395,152)
Net Increase (Decrease) in Cash
and Cash Equivalents
Cash and Cash Equivalents, January 1
Cash and Cash Equivalents, December 31
(414,074) 513,642 111,265 210,833 (16,104)
4,942,929 52,989 119,453 5,115,371 43,070
$ 4,528,855 $ 566,631 $ 230,718 $ 5,326,204 $ 26,966
Classified as:
Cash and investments $ 608,638 $ 566,631 $ 230,718 $ 1,405,987 $ 26,966
Cash with fiscal agent 3,920,217 3,920,217
Total Cash and Cash Equivalents, December 31 $ 4,528,855 $ 566,631 $ 230,718 $ 5,326,204 $ 26,966
See Notes to Financial Statements
38
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Cash Flows (Continued)
For the Year Ended December 31, 2013
RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES
Operating income (loss)
$ (100,053)
$ (51,527) $
99,390
$ (52,190) $ (59,150)
Adjustments to reconcile operating income to
net cash provided by operating activities
Depreciation
317,759
8,740
15,187
341,686 42,914
(Increase) decrease in:
Accounts receivable
8,109
(5,725)
(5,927)
(3,543)
Increase (decrease) in:
Accounts payable
219,707
7,732
5,706
233,145
Accrued salaries payable
1,412
509
332
2,253
Due to other governments
(2,319)
(2,319)
Other postemployment benefits payable
3,927
1,949
2,929
8,805
Compensated absences payable
775
430
91
1,296
Net Cash Provided By (Used In) Operating Activities
$ 449,317
$ (37,892) $
117,708
$ 529,133 $ (16,236)
Noncash Capital and Related Financing Activities
Amortization of deferred charges
$ 3,194
$ $
$ 3,194 $
Amortization of bond premiums
3,050
54
3,104
39
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF FIDUCIARY NET POSITION
ASSETS
Cash and investments
Accounts receivable
TOTAL ASSETS
LIABILITIES
Deposits payable
TOTAL LIABILITIES
FIDUCIARY FUNDS
December 31, 2013
FORM D-1
Agency Funds
$ 557,062
128
$ 557,190
$ 557,190
$ 557,190
See Notes to Financial Statements
40
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
This Page Leff Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
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.
43
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
44
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
45
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 village project fund accounts for engineering, planning and financing of the
village area developments and redevelopments.
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 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.
46
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
47
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
48
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
49
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
I. 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 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.
50
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 debt service 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
Sheet. The governmental funds report unavailable revenue from three sources:
property taxes, special assessments and loans receivable 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."
51
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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)
In accordance with GASB Statement No. 54, Fund Balance Reporting and
Governmental Fund Type Definitions, 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 fund balance amounts that are constrained for specific
purposes that are internally imposed by the City Council through formal action
(resolution), which is the City's highest level of decision -making authority.
Committed amounts remain binding unless removed by the City Council by
subsequent formal action.
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 City's finance committee also has financial oversight responsibility
for assignment of fund balances.
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.
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.
52
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities, Deferred Inflows of Resources and Net Position (Continued)
8. Interfund transactions
Quasi -external transactions 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 quasi -external transactions and
reimbursements, 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.
53
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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. Formal budgetary integration is
employed as a management control device during the year for the General Fund.
The City follows these legal compliance procedures in establishing the budgetary data
reflected in the financial statements.
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.
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 in the accompanying supplementary information reflect the
original budget and the final budget (which were the same for the year ended December
31, 2013).
The City does not use encumbrance accounting.
54
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. Stewardship, Compliance, and Accountability
C91
Expenditures Exceeding Appropriations
For the year ended December 31, 20131
$766,174 more than budget. The following
exceeding the latest amended budget:
the General Fund total expenditures were
General Fund departments had expenditures
2013 Budgeted 2013 Actual Amount Exceeding
Expenditures Expenditures Budgeted Amount
General government $ 865,864 $ 1,527,732 $ 661,868
Public works 480,568 614,270 133,702
The above listed over expenditures in the general government department were due
primarily to funds received from the State of Minnesota that were subsequently loaned
(expended) to a business who relocated their corporate headquarters to the City. This
expenditure was not included in the 2013 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.
All overexpenditures were approved by the City Council.
Fund Balance Deficits
As of December 31, 2013, the following funds had deficit fund balances:
Fund Amount
Major:
Village Project Capital Project $ 8621158
Nonmajor:
Manning Avenue/Highway 36 Capital Project 5,981
The fund balance deficits will be eliminated by future revenue and financing sources.
55
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 2013.
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.
56
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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
Cash
Certificates of Deposit
Municipal Bonds
U.S. Government Agencies and
State and Local Government Securities
Total cash and investments
N/A Not applicable or not available
Range of Maturities Rating Value
N/A NIA $ 3,616,220
12/18 N/A 1,970,948
12/18 A, AA3 667,883
3/23 AA+ 5, 345,422
$ 11,600,473
A reconciliation of cash and temporary investments as shown on the Statement of Net
Position for the City follows:
Carrying amount of deposits $ 3,616,220
Investments 7,984,253
Total $ 11,600,473
Government -wide
Cash and investments $ 7,123,194
Cash with fiscal agent 3,920,217
Fiduciary
Cash and investments 557,062
Total $ 11,600,473
57
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 2013 were as follows:
Issuer
State and Local Governments
Custodial Credit Risk
Investment Type Value
State and Local Government Securities $ 3,811,542
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, 2013, 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, 2013 were as follows:
Fund Type Washington County
General Fund $ 21,257
Debt Service Fund
Water Fund
Sewer Fund
Minnesota
Department of
Transportation
210,000
Minnesota
Department of
Employment and
Economic
Development
427,830
621,181
58
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
C. Accounts Receivable
Accounts receivable as of December 31, 2013 ($479,763) are expected to be collected in full.
Based upon management's assessment of the creditworthiness of the customers comprising the
receivable balance, no allowance for uncollectible accounts is necessary.
D. Loan Receivable
The City has recorded a $500,000 loan receivable related to passthrough grant funds that were
loaned to a business as an incentive for that business to relocate its corporate headquarters within
the City. The loan will be forgiven after two years if the business meets certain employment
milestones. Additionally, payments received on the loan, if any, will be remitted to the original
grantor. Therefore, the City has recorded an allowance for uncollectible loans to reserve the entire
balance of the loan receivable.
E. Capital Assets
Capital asset activity for the City for the year ended December 31, 2013 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
2,290,314
1,474,180
1,484,942
2,279,552
Total capital assets, not being depredated
5,744,293
1,474,180
1.484,942
5,733,531
Capital assets, being depredated:
Buildings
3,634,483
3,634,483
Improvements other than buildings
1,199,541
1,199,541
Machinery and equipment
2,673,887
111,095
48,547
2,736.435
Infrastructure
6,100.319
1.484,942
7,585,261
Total capital assets, being depredated
13.608.230
1.596,037
48,547
15,155,720
Less accumulated depredation for:
Building
709,129
82,502
791,631
Improvements other than buildings
706,012
64,802
770.814
Machinery and equipment
1,888,203
146,251
37,526
1.996.928
Infrastructure
1,392,982
341,067
1,734,049
Total accumulated depreciation
4,696,326
634,622
37,526
5,293,422
Total capital assets, being depreciated, net
8.911,904
961,415
11.021
9,862,298
Governmental activities capital assets, net
$ 14,656,197 $
2,435,595 $
1,495,963 $
15.595,829
59
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
E. Capital Assets (Continued)
Beginning
Business -Type Activities Balance Increases Decreases
Capital assets, not being depreciated:
Land $ 54,675 $ $
Construction in progress 569,738 4,771,147 1,979,143
Total capital assets, not being depreciated 624,413 4,771,147 1,979,143
Capital assets, being depreciated:
Machinery and equipment
Infrastructure
Total capital assets, being depreciated
Less accumulated depreciation for:
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total capital assets, being depreciated, net
Business -type activities capital assets, net
Ending
Balance
$ 54,675
3,361,742
3,416,417
282,860
282,860
12.688.029
2,002,593
14,690,622
12,970,889
2,002.593
14,973,482
155,427
13,836
169,263
2,569,126
327,850
2,896,976
2,724,553
341,686
3,066,239
10,246,336
1,660,907
11,907,243
$ 10,870,749 $
6,432,054 $ 1,979,143 $
15,323,660
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, 2013 was charged to functions/programs
as follows:
Governmental Activities
General government $ 21,334
Public safety 90,586
Public works 461,399
Culture and recreation 61,303
Total $ 634,622
Business -Type Activities
Water $ 317,759
Sewer 8,740
Storm sewer 15,187
Total $ 341,686
60
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
F. LonQ-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, 2013 is as follows:
General obligation bonds:
2009A Refunding Bonds
2009E Improvement Bonds
2010A Improvement Bonds
2010E CIP Crossover Refunding Bonds
2011A Improvement Bonds
2012B Improvement Bonds
2013A Improvement Bonds
General obligation certificates:
2006A Equipment Certificates
General obligation revenue bonds:
2005A Water Revenue Bonds
2009A Refunding Bonds
2012A Refunding Bonds
2013A Revenue Bonds
Other Liabilities:
Compensated Absences
Post Employment Benefit Obligation
Unamortized premium
Less: Unamortized discount
Total Long -Term Debt
Range of
Final
Balance
Issue Date
Interest Rates
Maturity
12/31/13
5/1/2009
3.00%
- 3.85%
2017
$ 210,000
10/1/2009
2.00%
- 3.05%
2020
430,000
11/15/2010
1.30%
- 2.80%
2021
575,000
11/15/2010
1.00%
- 3.20%
2025
1,970,000
10/1/2011
0.50%
- 2.30%
2022
770,000
8/16/2012
0.50%
-1.90%
2023
865,000
10/1/2013
2.00%
- 4.00%
2028
1,600,000
3/8/2006
4.00%
2015
102,000
8/10/2005
3.60% -
4.375%
2030
4,075,000
5/1/2009
3.00%
- 3.85%
2021
360,000
8/13/2012
2.00 -
2.50%
2030
4,035,000
10/1/2013
2.00%
-4.00%
2033
4,015,000
86,450
157,701
85,492
(135,470)
$ 19,201,173
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, 2013, the City
had not utilized $30,575,693 of its net legal debt margin.
61
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
F. Long -Term Debt (Continued)
The following is a summary
of the changes in long-term
debt obligations for the year
ended December 31, 2013:
Amounts
Beginning
Ending
Due Within
Balance
Additions
Reductions
Balance
One Year
GOVERNMENTAL ACTIVITIES
Bonds and Notes Payable:
General obligation bonds:
2004 CIP Bonds
$ 3.030.000 $
$ 3.030,000
$
$
2009A Refunding Bonds
275,000
65,000
210.000
70,000
2009B Improvement Bonds
490.000
60,000
430,000
60,000
2010A Improvement Bonds
645,000
70,000
575.000
70,000
2010B CIP Crossover Refunding Bonds
1,970.000
1,970,000
135.000
2011A Improvement Bonds
845,000
75,000
770,000
80,000
2012E Improvement Bonds
865,000
865.000
75,000
2013A Improvement Bonds
1.600,000
1,600,000
46,000
General obligation certificates:
2006A Equipment Certificates
150.000
48,000
102,000
50,000
Other Liabilities:
Compensated Absences
60,675
80,985
65,109
76,551
35,184
Post Employment Benefit Obligation
66,505
70,393
136,898
Unamortized premium
13,993
4,797
1,314
17,476
Less: Unamortized (discount)
(64,748)
(5,374)
(59,374)
Governmental Activities
Long Term Liabilities
8,346,425
1,756,175
3,409,049
6,693,551
620,184
BUSINESS -TYPE ACTIVITIES
Bonds and Notes Payable:
General obligation revenue bonds:
2005A Water Revenue Bonds
4,200,000
125,000
4,075,000
150.000
2009A Refunding Bonds
400,000
40,000
360,000
40,000
2012A Refunding Bonds
4,035,000
4,035,000
2013A Improvement Bonds
4,015.000
4,015.000
175,000
Other Liabilities:
Compensated Absences
8,603
7,768
6,472
9,899
3,914
Post Employment Benefit Obligation
11,998
8,805
20,803
Unamortized premium
59,126
11,994
3,104
68,016
Less: Unamortized (discount)
(79,289)
(3,193)
(76,096)
Business -Type Activities
Long -Term Liabilities
8,635,438
4,043,667
171,383
12,507,622
368,914
Total
$ 16,981863 $
5,799,742
$ 3$ 5�
$ 19,201,173
$$ 989,098
62
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
F. 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 seventeen 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, 2013 were as
follows:
General Obligation
General Obligation Revenue
Improvement Bonds
Equipment Certificates
Bonds
Year
Principal
Interest
Principal Interest
Principal
Interest
2014
$ 535,000
$ 129,821
$ 50,000 $ 4,080
$ 365,000 $
360,500
2015
615.000
130,576
52,000 2,080
4,165,000
374,839
2016
625,000
120,073
440,000
204,189
2017
560,000
108,777
440,000
194,989
2018
565,000
98,280
475,000
185,537
2019-2023
2,565,000
307,777
2,400,000
772,581
2024-2028
955,000
71,461
2,520,000
489,542
2029-2033
1,680,000
149,026
Totals $ 6 420 000 $ 966,764 $ 102,000 $ 6160 $ 12,485 000 $ 2 731,202
63
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
G. Interfund Receivables and Payables
The following schedule reports the interfund receivables and payables within the City's
funds as of December 31, 2013:
Major Governmental Funds:
General Fund
Debt Service
Village Project
Infrastructure Reserve
Subtotal
Proprietary Funds:
Water
Sewer
Storm Sewer
Subtotal
Internal Service Funds:
FFE Replacement
Total All Funds
Due From Due To
Other Funds Other Funds
$ 128,716 $
17,176
56,760
7,032
128,716 80,968
1,918 24,583
1,250
23,915
25,833 25,833
47,748
$ 154,549 $ 154,549
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.
64
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
G. Interfund Receivables and Payables (continued)
The City established an interfund loan from the General Fund to the Village Project fund.
At December 31, 2013, the outstanding balance was $805,398. The loan carries an
interest rate of 4 percent.
H. Interfund Transfers
The following schedule reports the interfund transfers within the City's funds as of
December 31, 2013:
Major Governmental Funds:
General Fund
Debt Service
Village Project
Infrastructure Reserve
Non -Major Governmental Funds
Total All Funds
$
Transfers In Transfers Out
$ 400,200
26,288
400,000
144,004
302,048 184,132
$ 728,336 $ 728,336
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.
65
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
I. Fund Equity
In accordance with the requirements of GASB Statement No. 54, below is a schedule of
ending fund balances as of December 31, 2013:
Nonspendable
Prepaid items
Advance to other funds
Total Nonspendable
Restricted
Debt service
Assigned
Fall festival
Library
City facilities
Infrastructure reserve
Park improvements
Vehicle acquisition
Total Assigned
Unassigned
Total Fund Balance
Other Total
Infrastructure Governmental Governmental
General Debt Service Village Project Reserve Funds Funds
$ 53,674 $ $ $ $ $ 53,674
805,398 805,398
859,072 859,072
743,976 743,976
7,373 7,373
82,265 82,265
268,707 268,707
762,865 762,865
891,059 891,059
240,662 240,662
762,865 1,490,066 2,252,931
2,318,310 (17,221) (862,158) (5,981) 1,432,950
$ 3,177,382 $ 726,755 $ 862,158 $ 762,865 $ 1,484,085 $ 5,288,929
66
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 year.
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
Insurance:
The City has outstanding claims subject to its insurance deductible. Although the outcome
of these actions are not presently determinable, in the opinion of management, the
resolution of these matters will not have a material adverse effect on the financial condition
of the City.
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, 2013. 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.
67
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. Other Information (Continued)
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 20 active 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 2013, the City did not contribute anything to the plan. Plan
members receiving benefits contribute 100 percent of their premium costs.
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.
68
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. Other Information (Continued)
C. Other Post Employment Benefits (Continued)
Annual Other Postemployment Benefit Cost and Net Other Postemployment Benefit
Obligations (Continued)
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
$ 59,848
Interest on net OPEB obligations
3,047
Adjustment to ARC
16,303
Annual OPEB cost
79,198
Contributions during the year
Increase in net OPEB obligation
79,198
Net OPEB, beginning of year
78,503
Net OPEB, ending of year
$ 157,701
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, 2013, 2012 and 2011 are
as follows:
Fiscal Year
Annual
Percentage
Net OPEB
Ended
OPEB Cost
Contributed
Obligation
12/31 /2011
$ 17,336
0%
$ 51,396
12/31 /2012
27,107
0%
78,503
12/31 /2013
79,198
0%
157,701
69
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. Other Information (Continued)
C. Other Post Employment Benefits (Continued)
Funded Status and Funding Progress
As of January 1, 2013, the actuarial accrued liability for benefits was $293,220, all of which
was unfunded. The covered payroll (annual payroll of active employees covered by the
plan) was $913,884, and the ratio of the unfunded actuarial accrued liability to the covered
payroll was 32.1 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 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.
70
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. Other Information (Continued)
C. Other Post Emaloyment 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 an 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 - 2013 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, 2013 was thirty years.
71
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 was established and is 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.
72
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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. Vested, terminated employees who
are entitled to benefits but are not receiving them yet are bound by the provisions in
effect at the time they last terminated their public service.
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, 60 Empire Drive #200, St. Paul,
Minnesota, 55103-2088 or by calling (651) 296-7460 or 1-800-652-9026.
73
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 2013. In 2013, 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, 2013, 2012
and 2011 were $81,475, $64,694 and $56,576, respectively. The City's contributions
were equal to the contractually required contributions for each year as set by state
statute.
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 Firefighters 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
seven 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.
74
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 2013, 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, 2013. 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 $54,778 (including the 10% supplemental
reimbursement) for the year ended December 31, 2013.
75
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 2012:
Annual pension cost - total
$ 541778
Contributions made:
City
State Aid - pass -through
54,778
Actuarial valuation date
12/31/13
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
76
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 City's net pension obligation for the Association for the years ended December 31,
2013, 2012 and 2011 are as follows:
Disclosure
2013
2012
2011
Annual Pension Cost (APC)
$ 54,778
$ 39,324
$ 47,867
Percentage of APC Contributed
100%
100%
100%
Net Pension Obligation
N/A
N/A
N/A
Membership of the Association at December 31, 2013 was comprised of the following:
Retired members entitled to benefits
but have not received them
Current Members:
Vested (Fully or Partially)
Non -Vested
Total Plan Members
E. Schedule of Funding Progress
Assets in
Excess of
Actuarial
Actuarial
Actuarial
(Unfunded)
Valuation
Value of
Accrued
Accrued
Date
Assets
Liabilitiy
Liability
12/31/2013
$ 1,075,460
$ 784,527
$ 290,933
12/31 /2012
919,992
717,847
202,145
12/31 /2011
887,064
752,729
134,335
F. Related Party Investments
0
7
14
27
Pension
Benefit Per
Funded
Year of
Ratio
Service
137.1 %
$ 3,400
128.2%
3,100
117.8%
3,100
As of December 31, 2013, and for the year then ended, the Association held no
securities issued by the City or other related parties.
77
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. Change in Accounting Standards and Prior Period Adjustment
During the year ended December 31, 2013, the City implemented Governmental Accounting
Standards Board (GASB) Statement No. 65, Items Previously Reported as Assets and Liabilities.
This standards required retroactive implementation which resulted in the restatement of beginning
balances in the December 31, 2013 financial statements.
The following schedule reconciles the previously reported December 31, 2012 balances to the
amounts reported in the December 31, 2013 financial statements:
Governmental Activities
Business -Type Activities
Proprietary Funds:
Water Fund
Sewer Fund
Storm Sewer Fund
Total Proprietary Funds
Net Position December
311 2012 as Previously
Reported
Restatement for Write- Net Position
off of Unamortized December 31, 2012 as
Bond Issuance Costs Restated
$ 13, 907, 083 $ (138,149) $ 13, 768, 934
$ 7,933,377 $ (105, 615) . $ 7,827,762
$ 6,672,223
254,319
1,006,835
$ 7,933,377
$ (105,615)
$ (105,615)
6. Accounting Standards Issued But Not Yet Adopted
$ 6,566,608
254,319
1,006,835
$ 7,827,762
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.
78
CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTAL INFORMATION
December 31, 2013
This Page Left Blank Intentionally
FORM E-1
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF FUNDING PROGRESS - OTHER POST EMPLOYMENT BENEFITS
For the Year Ended December 31, 2013
Unfunded
Actuarial Actuarial
Actuarial Actuarial
UAAL as a
Valuation Value of
Accrued Accrued Funded
Covered
Percentage of
Date Assets
Liabilitiy Liability Ratio
Payroll
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%
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.
81
This Page Leff Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
COMBINING AND INDIVIDUAL
FUND STATEMENTS AND SCHEDULES
December 31, 2013
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2013
ASSETS
Cash and investments
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
Accrued liabilities
Escrow deposits payable
Total liabilities
FUND BALANCE (DEFICIT)
Restricted
Assigned
Unassigned
Total Fund Balance (Deficit)
TOTAL LIABILITIES AND FUND BALANCE
Special
Revenue
FORM F-1
Capital
Projects Total
$ 95,978 $ 1,469,683 $ 1,565,661
$ 5,224 $ 236 $ 5,460
1,116 1,116
75,000 75,000
6,340 75,236 81,576
89,638 1,400,428 1,490,066
(5,981) (5,981)
89,638 1,394,447 1,484,085
$ 95,978 $ 1,469,683 $ 1,565,661
84
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2013
REVENUES
Taxes
Intergovernmental revenue
Investment earnings
Miscellaneous revenue
TOTAL REVENUES
EXPENDITURES
Current
Culture and recreation
Capital Outlay
General government
Public safety
Public works
Culture and recreation
TOTAL EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers
Net change in fund balances
FUND BALANCES (DEFICIT), Beginning
FUND BALANCES (DEFICIT), Ending
Special
Revenue
$ 256,957 $
417
40,485
297,859
1141252
Capital
Projects
4,065
9,277
13,342
FORM F-2
Total
$ 256,957
4,065
9,694
40,485
311,201
1141252
9,175
9,175
80,503
80,503
58,126
58,126
21,232 421293
631525
135,484 190,097
325,581
1621575
(72, 937)
$ 89,638
117,716
117,916
(59, 039)
103,536
1,453,486
1,380,549
$ 1,394,447 $ 1,484,085
85
FORM G-1
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2013
Development Fall Festival LibraryTotal
ASSETS
Cash and investments $ 735 $ 7,373 $ 87,870 $ 95,978
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable $ 735 $ $ 4,489 $ 5,224
Accrued liabilities 1,116 _ 1,116
Total liabilities 735 5,605 6,340
FUND BALANCE
Assigned 7,373 82,265 89,638
TOTAL LIABILITIES AND
FUND BALANCE $ 735 $ 7,373 $ 87,870 $ 95,978
86
FORM G-2
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For the Year Ended December 31, 2013
Development Fall Festival Library Total
REVENUES
Taxes $ $ $ 256,957 $ 256,957
Investment earnings 417 417
Miscellaneous revenue 22,004 18,481 40,485
TOTAL REVENUES 22,004 275,855 297,859
EXPENDITURES
Current
Culture and recreation
14,572
99,680
114,252
Capital Outlay
Culture and recreation
21,232
21,232
TOTAL EXPENDITURES
14,572
120,912
135,484
OTHER FINANCING SOURCES (USES)
Transfers 200
200
Net change in fund balances 200
7,432
154,943
162,575
FUND BALANCES (DEFICIT), Beginning (200)
(59)
(72,678)
(72,937)
FUND BALANCES, Ending $ $
7,373
$ 82,265
$ 89,638
87
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2013
ASSETS
Cash and investments
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
Escrow deposits payable
Total liabilities
FUND BALANCE (DEFICIT)
Assigned
Unassigned
Total Fund Balance (Deficit)
TOTAL LIABILITIES AND FUND BALANCE
Park
Vehicle
Dedication
Acquisition
City Facilities
$ 891,295
$ 240,662
$ 268,707
$ 236
$
$
236
891,059
240,662
268,707
891,059
240,662
268,707
$ 891,295
$ 240,662
$ 268,707
88
FORM H-1
Manning
Avenue/Hwy 2011 Street 2012 Street South of 10th
36 Improvements Improvements Street Total
$ 69,019 $ $ $ $ 1,469,683
$ $ $ $ $ 236
75,000 75,000
75,000 75,236
1,400,428
(5,981) (5,981)
(5,981) 1,394,447
$ 69,019 $ $ $ $ 1,469,683
89
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, 2013
REVENUES
Intergovernmental revenue
Investment earnings (loss)
TOTAL REVENUES
EXPENDITURES
Capital Outlay
General government
Public safety
Public works
Culture and recreation
TOTAL EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers
Net change in fund balances
FUND BALANCES (DEFICIT), Beginning
FUND BALANCES (DEFICIT), Ending
Park
Dedication
Vehicle
Acquisition
City Facilities
$ 4,065 $ $
4,371 11181 2,799
8,436 11181 2,799
9,175
80,503
42,293
42,293 80,503 9,175
(33, 857) (79, 322)
(6,376)
924,916 319,984 275,083
$ 891,059 $ 240,662 $ 268,707
90
FORM H-2
Manning
Avenue/Hwy
2011 Street
2012 Street
South of 10th
36
Improvements
Improvements
Street
Total
$
$
$
$
$ 4,065
338
903
(280)
(35)
9,277
338
903
(280)
(35)
13,342
9,175
80,503
51,188
6,938
58,126
42,293
51,188
6,938
190,097
(184,132)
157,844
144,004
117,716
338
(183, 229)
106,376
137,031
(59, 039)
(6,319)
183,229
(106,376}
(137,031)
1,453,486
$ (5,981)
$
$
$
$ 1,394,447
91
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
December 31, 2013
ASSETS
Current Assets
Cash and investments
Noncurrent Assets
Property and Equipment
Machinery and equipment
Less: Accumulated depreciation
Net Property and Equipment
TOTAL ASSETS
LIABILITIES AND NET POSITION
Current Liabilities
Due to other funds
Net Position
Net investment in capital assets
Unrestricted
Total Net Position
TOTAL LIABILITIES AND
NET POSITION
Radio IT FFE
Replacement Replacement Replacement
FORM 1-1
Total
$ 26,966 $ $ $ 26,966
99,851 95,617 363,153 558,621
53,393 63,395 284,763 401,551
46,458 32,222 78,390 157,070
$ 73,424 $ 32,222 $ 78,390 $ 184,036
$ $ $ 47,748 $ 47,748
46,458 32,222 78,390 157,070
26,966 (47,748) (20,782)
73,424 32,222 30,642 136,288
$ 73,424 $ 32,222 $ 78,390 $ 184,036
92
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2013
Operating Expenses
Repairs and maintenance
Depreciation
Total Operating Expenses
Other Revenue (Expense)
Investment earnings
Net (Loss)
Net Position, Beginning of Year
Net Position, End of Year
FORM 1-2
Radio
IT
FFE
Replacement
Replacement
Replacement
Total
$
$ 16,236
$
$ 16,236
8,321
5,319
29,274
42,914
8,321
21,555
29,274
59,150
(8,189) (21,555) (29,274) (59,018)
81,613 53,777 59,916 195,306
$ 73,424 $ 32,222 $ 30,642 $ 136,288
93
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2013
Cash Flows from Operating Activities
Cash payments to suppliers
Cash Flows From Investing Activities
Interest earnings received
Net Increase (Decrease) in Cash and Cash Equivalents
FORM 1-3
Radio IT FFE
Replacement Replacement Replacement Total
$ $ (16,236) $ $ (16,236)
132 132
132 (16,236)
(16,104)
Cash and Cash Equivalents, Beginning of Year
26,834
16,236
43,070
Cash and Cash Equivalents, End of Year
$ 26,966
$ $
$ 26,966
RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating (loss)
$ (8,321)
$ (21,555) $ (29,274)
$ (59,150)
Adjustments to reconcile operating income to
net cash provided by operating activities
Depreciation
8,321
5,319 29,274
42,914
Net Cash Provided By (Used In) Operating Activities
$
$ (16,236) $
$ (16,236)
94
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CITY OF LAKE ELMO, MINNESOTA
GENERAL FUND
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL
For the Year Ended December 31, 2013
REVENUES
Taxes
Property
Franchise
Total Taxes
Licenses and Permits
Business
Nonbusiness
Total Licenses and Permits
Intergovernmental
MSA - maintenance
Fire state aid
Other
County and local
Total Intergovernmental
Charges for Services
Fines and forfeits
Investment earnings
Miscellaneous Revenue
TOTAL REVENUES
FORM J-1
Variance with
2013 Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 2,422,277
$ 2,422,277
$ 2,449,985 $
27,708
44,485
44,485
39,852
(4,633)
2,466,762
2,466,762
2,489,837
23,075
4,800
4,800
15,215
10,415
274,110
274,110
359,759
85,649
278,910
278,910
374,974
96,064
98,022
98,022
98,022
2,749
2,749
53,778
51,029
40,000
40,000
506,228
466,228
15,500
15,500
32,288
16,788
156,271
156,271
690,316
534,045
5,849
5,849
6,113
264
60,000
60,000
52,110
(7,890)
20,000
20,000
11,631
(8,369)
27,100
27,100
16,775
(10, 325)
$ 3,014,892
$ 3,014,892
$ 3,641,756 $
626,864
96
FORM J-1
CITY OF LAKE ELMO, MINNESOTA
GENERAL FUND
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (CONTINUED)
For the Year Ended December 31, 2013
Variance with
2013
Final Budget -
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
EXPENDITURES
General Government
Mayor and Council
Personnel services
$ 27,692 $
27,692
$ 25,833
$ 1,859
Other services and charges
12,111
12,111
26,360
(14,249)
Total Mayor and Council
39,803
39,803
52,193
(12,390)
Election
Other services and charges 11,950 11,950 1,003 10,947
Administration
Personnel services
317,407
317,407
355,514
(38,107)
Supplies
6,499
6,499
6,988
(489)
Other services and charges
52,504
52,504
65,561
(13,057)
Total Administration
376,410
376,410
428,063
(51,653)
Communications
Personnel services 40,272 40,272 24,976 15,296
Other services and charges 44,961 44,961 42,525 2,436
Total Communications 85,233 85,233 67,501 17,732
Building
Supplies 1,500 1,500 44 1,456
Other services and charges 34,900 34,900 29,613 5,287
Total Building 36,400 36,400 29,657 6,743
Professional Services
Assessor
25,500
25,500
49,142
(23,642)
Accounting and auditing
30,500
30,500
41,004
(10,504)
Legal
48,000
48,000
59,097
(11, 097)
Engineering
60,000
60,000
37,241
22,759
Total Professional Services
164,000
164,000
186,484
(22,484)
Economic Development $ $ $ 500,000 $ (500,000)
97
FORM J-1
CITY OF LAKE ELMO, MINNESOTA
GENERAL FUND
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (CONTINUED)
For the Year Ended December 31, 2013
Variance with
2013
Final Budget -
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
EXPENDITURES
General Government
Planning and Zoning
Personnel services
$ 129,968
$ 129,968
$ 210,249
$ (80,281)
Supplies
600
600
5,094
(4,494)
Other services and charges
21,500
21,500
47,488
(25,988)
Total Planning and Zoning
152,068
152,068
262,831
(110,763)
Total General Government 865,864 865,864 1,527,732 (661,868)
Public Safety
Police
Contracted services 560,000 560,000 497,001 62,999
Fire Protection
Personnel services
265,707
265,707
223,668
42,039
2% fire aid
40,000
40,000
53,778
(13,778)
Supplies
50,490
50,490
43,354
7,136
Other services and charges
128,579
128,579
121,125
7,454
Total Fire Protection
484,776
484,776
441,925
42,851
Building Inspector
Personnel services 95,860 95,860 118,222 (22,362)
Supplies 1,495 (1,495)
Other services and charges 8,361 8,361 45,072 (36,711)
Total Building Inspector 104,221 104,221 164,789 (60,568)
Animal Control
Other services and charges 7,000 7,000 14,677 (7,677)
Criminal Legal 51,000 51,000 51,953 (953)
Emergency Communications 6,000 6,000 3,800 2,200
Total Public Safety $ 1,212,997 $ 1,212,997 $ 1,174,145 $ 38,852
98
CITY OF LAKE ELMO, MINNESOTA
GENERAL FUND
STATEMENTS OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (CONTINUED)
For the Year Ended December 31, 2013
EXPENDITURES
Public Works
General
Personnel services
Supplies
Other services and charges
Total General
Trees
Street Lighting
Total Public Works
Culture and Recreation
Parks
Personnel services
Supplies
Other services and charges
Total Culture and Recreation
FORM J-1
Variance with
2013 Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 198,594 $
198,594 $
241,002 $
(42,408)
135,300
135,300
210,493
(75,193)
116,474
116,474
124,721
(8,247)
450,368
450,368
576,216
(125,848)
5,000
5,000
11,325
(6,325)
25,200 25,200 26,729 (1,529)
480,568 480,568 6147270 (133,702)
159,465
159,465
150,939
8,526
5,700
5,700
9,945
(4,245)
24,594
24,594
26,268
(1,674)
189,759 189,759 187,152 2,607
Total Expenditures 2,749,188 2,749,188 3,503,299 (754,111)
OTHER FINANCING SOURCES (USES)
Transfers (365,000) (365,000) (400,200) (35,200)
NET CHANGE IN FUND BALANCE (464,296) (464,296) (261,743) 202,553
FUND BALANCE, January 1 3,439,125 3,439,125 3,439,125
FUND BALANCE, December 31 $ 2,974,829 $ 2,974,829 $ 3,177,382 $ 202,553
99
ASSETS
Cash and investments
Receivables (Net of allowance for
uncollectibles)
Special assessments
Due from other governmental units
TOTAL ASSETS
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
DEBT SERVICE FUNDS
December 31, 2013
2002 GO 2006A GO 2009A GO
Improvement 2004 GO CIP Equipment Refunding
Bonds Bonds Certificates Bonds
$ 466 $ $ 23,698 $ 2,378
210,000
$ 466 $ $ 23,698 $ 212,378
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCE
LIABILITIES
Accounts payable $ $ $ $
Due to other funds
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue:
Special assessments
Intergovernmental revenue 210,000
Total deferred inflows of resources 210,000
FUND BALANCE (DEFICIT)
Restricted
Unassigned
Total fund balance (deficit)
466
23,698 2,378
466 23,698 2,378
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCE $ 466 $ $ 23,698 $ 212,378
100
FORM K-1
2009E GO
2010A GO
2011A GO
2012B GO 2013A GO
Improvement
Improvement
2010E GO
Improvement
Improvement Improvement
Bonds
Bonds
CIP Bonds
Bonds
Bonds Bonds
Total
$ 156,813
$ 135,992
$ 79,490
$ 326,983
$ $ 31,656
$ 757,476
44,501
72,660
59,667
176,828
210,000
$ 201,314
$ 208,652
$ 79,490
$ 386,650
$ $ 31,656
$ 1,144,304
$ $ $ $ 13,500 $ 45 $ $ 13,545
17,176 17,176
13,500 17,221 30,721
44,501 72,660 59,667 176,828
210,000
44,501 72,660 59,667 386,828
156,813 135,992 79,490 313,483 31,656 743,976
(17,221) (17,221)
156,813 135,992 79,490 313,483 (17,221) 31,656 726,755
$ 201,314 $ 208,652 $ 79,490 $ 386,650 $ $ 31,656 $ 1,144, 304
101
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
DEBT SERVICE FUNDS
For the Year Ended December 31, 2013
2002 GO
2006A GO
2009A GO
Improvement
2004 GO CIP
Equipment
Refunding
Bonds
Bonds
Certificates
Bonds
REVENUES
Taxes
$
$
$ 56,700
$
Intergovernmental
73,600
Special assessments
302
Investment earnings
3
13,163
367
11
TOTAL REVENUES
305
13,163
57,067
73,611
EXPENDITURES
Debt Service
Principal
2,845,000
48,000
65,000
Interest and other charges
6,000
8,600
TOTAL EXPENDITURES
2,845,000
54,000
73,600
OTHER FINANCING SOURCES (USES)
Transfers
(192,900)
Net change in fund balances
305
(3,024,737)
3,067
11
FUND BALANCES, Beginning
161
3,024,737
20,631
2,367
FUND BALANCES, Ending
$ 466
$
$ 23,698
$ 2,378
102
FORM K-2
2009B GO
2010A GO
2011A GO
2012E GO
2013A GO
Improvement
Improvement
2010E GO
Improvement
Improvement
Improvement
Bonds
Bonds
CIP Bonds
Bonds
Bonds
Bonds
Total
$ 53,379
$ 62,314
$ 180,000
$ 75,412
$ 57,010
$
$ 484,815
73,600
10,249
12,572
656
88,000
31,500
143,279
763
697
504
731
727
156
17,122
64,391
75,583
180,504
76,799
145,737
31,656
718,816
60,000
70,000
185,000
75,000
3,348,000
11,783
12,435
108,914
12,571
10,845
171,148
71,783
82,435
293,914
87,571
10,845
3,519,148
192,900
184,132
(157,844)
26,288
(7,392)
(6,852)
79,490
173,360
(22,952)
31,656
(2,774,044)
164,205
142,844
140,123
5,731
3,500,799
$ 156,813
$ 135,992
$ 79,490
$ 313,483
$ (17,221)
$ 31,656
$ 726,755
103
FORM L-1
CITY OF LAKE ELMO, MINNESOTA
COMBINING SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES
AGENCYFUNDS
For the Year Ended December 31, 2013
Balance
Balance
January 1
Additions
Deletions
December 31
ESCROW
ASSETS
Cash and investments
$
427,583
$
414,025
$
284,418
$
557,190
LIABILITIES
Accounts payable
$
8,000
$
236,371
$
244,371
$
Deposits payable
419,583
425,125
287,518
557,190
TOTAL LIABILITIES
$
427,583
$
661,496
$
531,889
$
557,190
YELLOW RIBBON
ASSETS
Cash and investments
$
(128)
$
$
$
(128)
Accounts receivable
128
128
TOTAL ASSETS
$
$
$
$
TOTAL AGENCY FUNDS
ASSETS
Cash and investments
$
427,455
$
414,025
$
284,418
$
557,062
Accounts receivable
128
128
TOTAL ASSETS
$
427,583
$
414,025
$
284,418
$
557,190
LIABILITIES
Accounts payable
$
8,000
$
236,371
$
244,371
$
Deposits payable
419,583
425,125
287,518
557,190
TOTAL LIABILITIES
$
427,583
$
661,496
$
531,889
$
557,190
104
CITY OF LAKE ELMO, MINNESOTA
REDEVELOPMENT GRANT PROGRAM
Supplemental Schedule of Sources and Uses
For the Year Ended December 31, 2013
SOURCES*
USES **
Keats Avenue watermain construction
Keats Avenue watermain engineering
Well #4 pumphouse construction
Well #4 pumphouse engineering
Design and engineering
Forcemain construction
Gravity sanitary sewer construction
Lift station construction
TOTAL USES
Water (1) Sewer (2)
FORM M-1
Total
$ 427,830 $ 621,181 $ 1,049,011
$ 292,327
$ 292,327
33,343
33,343
85,940
85,940
16,220
16,220
50,000
50,000
441,302
441,302
45,000
45,000
84,879
84,879
$ 427,830
$ 621,181
$ 1,049,011
(1) Redevelopment Grant Program RDGP-10-0012-o-FY10
(2) Redevelopment Grant Program RDGP-10-0013-o-FY10
* Reimbursement was not received by the City until 2014. However, these amounts were
recorded under the full accrual method in the proprietary funds and therefore were recorded as
revenue in 2013, the period during which the funds were expended.
** Amounts expended for grant purposes are recorded under the full accrual method in the
proprietary funds and therefore were recorded as a noncurrent asset (construction in progress)
rather than current period expenses.
105
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CITY OF LAKE ELMO, MINNESOTA
STATISTICAL SECTION (UNAUDITED)
December 31, 2013
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 Paae
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.
CITY OF LAKE ELMO, MINNESOTA
NET POSITION BY COMPONENT
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
Fiscal Year
2013
2012
2011
2010
Governmental activities
Net investment in capital assets
$
9,056,353
$
8,782,840
$
8,553,984
$
8,368,479
Restricted
1,225,849
4,205,247
2,664,689
2,057,467
Unrestricted
4,593,463
918,996
2,555,596
3,439,106
Total governmental activities net position
$
141875,665
$
13,907,083
$
13,774,269
$
13,865,052
Business -type activities
Net investment in capital assets
$
6,855,807
$
6,788,377
$
6.422,782
$
6,713,292
Restricted
2,612,569
39,153
Unrestricted
1,846,681
1,105,847
1,449, 340
1,193,509
Total business -type activities net position
$
11,315,057
$
7,933,377
$
7,872,122
$
7,906,801
Primary government
Net investment in capital assets
$
15.912,160
$
15.571.217
$
14,976,766
$
15,081,771
Restricted
3,838,418
4,244,400
2.664,689
2,057,467
Unrestricted
6,440,144
2,024,843
4,004,936
4,632,615
Total primary government net position
$
26,190,722
$
21,840,460
$
21,646,391
$
21,771,853
108
Schedule 1
2009 2008 2007 2006 2005 2004
$
7,983.822
$
7.151,543
$
5.648,702
$
3.535,882
$
1,002,073
$
2,227,645
1,399.968
718.617
711,966
1,071,105
1,020, 372
566,886
3,824,156
4,698,858
5,139,270
4,620,785
6,969,165
3,891,861
$
13,207,946
$
12,569,018
$
111499,938
$
9,227,772
$
8,991,610
$
6 686 392
$
6.644,334
$
6,181,055
$
5,617,960
$
5,961,996
$
2.324,276
$
1,284,121
1,056, 968
951,793
1,080,666
706,170
(529, 295)
560,598
$
7,701,302
$
7,132,848
$
6,698,626
$
6,668,166
$
1,794,981
$
1.844,719
$
14,628,156
$
13,332,598
$
11,266,662
$
9,497,878
$
3,326.349
$
3,511.766
1,399,968
718,617
711,966
1,071,105
1,020,372
566,886
4,881,124
5,650,651
6,219,936
5,326,955
6,439,870
4,452,459
$
20.909,248
$
19,701,866
$
18,198,564
$
15,895,938
$
10,786,591
$
8,531,111
109
Expenses
Governmental activities:
General government
Public safety
Public works
Culture and recreation
Interest on long-term debt
Total governmental activities expenses
Business -Type activities:
Water
Sewer
Storm sewer
Total business -type activities expenses
Total primary government expenses
Program Revenues
Governmental activities:
Charges for services:
General government
Public safety
Public works
Culture and recreation
Operating grants and contributions
Capital grants and contributions
Total governmental activities program revenues
Business -type activities:
Charges for services:
Water
Sewer
Storm sewer
Operating grants and contributions
Capital grants and contributions
Total business -type activities program revenues
Total primary government program revenues
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
Fiscal Year
2013 2012 2011 2010
$ 1,103,337 $
1.093.204 $
1,036,038 $
980,456
1,277,798
1,302,857
1,107,050
1.171,158
1,273,977
891.169
1,008,686
1,135,351
424,687
362,432
247,845
239.389
133,694
316,039
266,730
222,404
4,213,493
3,965,701
3,666,349
3,748,758
958.870
872,786
845.474
898,319
119,370
53,903
73,797
61,513
86,989
73,590
142,517
151,384
1,165,229
1,000,279
1,061,788
1,111,216
$ 5,378,722 $
4,966 980 $
4,728,137 $
4,859,974
$ 32,778 $
48,476 $
2-2,058 $
18,296
414,472
379,557
283,813
320,242
2,647
3,256
3,058
3,425
17,000
9,341
10,800
208,276
160,060
184,476
168,491
1,364,622
160,444
222,488
1,090,419
2,039,795
761,134
715,893
1,611,673
596,421
699,159
575,534
562,585
53,142
65,737
53,012
48,508
191,087
171,229
235,252
185,425
17,000
32,721
3,781,528
115,127
75,885
418,400
4,622,178
1,051, 252
956,683
1,247,639
$ 6,661,973 $
1,812,386 $
1,672,576 $
2,859,312
110
Schedule 2
2009 2008 2007 2006 2005 2004
$ 971,677 $
1,168,625 $
914,212 $
900,278 $
876.056 $
781.229
1,125,464
1,002,408
956,649
1,009,494
931,155
919,139
872,045
868,804
1,247.398
1,358,801
349,111
341,134
248,856
228,393
333,164
232,878
169,495
215,785
218,319
237,753
207,648
215,381
211,475
74,210
3,436,361
3,505,983
3,659.071
3,716,832
2,537.292
2,331,497
857,014
849,018
735.499
764,282
432,810
364.575
59,243
63,400
125,773
55.827
44.503
49,079
140,365
123,902
78,807
129,946
12,148
71,760
1,056,622
1,036,320
940,079
950,055
489,461
485,414
$ 4,492.983 $
4,542,303 $
4,599,150 $
4,666,887 $
3,026,753 $
2,816.911
$ 15,631 $
19,430 $
28,890 $
29,612 $
40,536 $
97,448
270.653
295,353
365,327
594,779
365,703
270,159
6,584
3,833
18,573
4,035
5,591
4,984
61,274
31,828
211.571
17,400
174,433
140,176
94,185
163,421
86,082
251,271
798,687
1,345,803
1,371,489
4,664,817
1,871,596
345,942
1,265,988
1,804,595
1,939,738
5,488,492
2,581,079
987,204
479,430
467.336
471,226
351.733
281,835
244,693
45,146
44,568
99,581
139,057
32,381
23,158
149,407
134,674
138,092
45
72.000
85,513
30,100
776,473
684,400
298,928
1,112,374
1,480,556
1,330, 978
1,007, 827
1,603,209
386,216
353,364
$ 2,746,544 $
3,135,573 $
2,947,565 $
7,091,701 $
2,967,295 $
1,340,568
111
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Accrual Basis of Accounting)
Fiscal Year
2013
2012
2011
2010
Net (Expense) Revenue
Governmental Activities
$ (2,173,698) $
(3,204.567)
$
(2,950,456)
$
(2,137,085)
Business -type activities
3,456,949
50,973
(105,105)
136,423
Total primary government net revenue
$ 1,283,251 $
3153 594
$
(3,055,561)
$
(2,000,662
General Revenues and Other Changes
In Net Position
Governmental activities:
General property taxes
$ 3,231,609 $
3,183,078
$
2,793,776
$
2,711,067
Grants and contributions not restricted
to specific programs
2,749
10,628
9,771
Interest income
35,259
111,705
94,501
113,989
Miscellaneous
1,833
42,599
20,405
17,311
Gain on sale of capital assets
8,979
Transfers
(59,637)
(57,947)
Total governmental activities
3,280,429
3,337,382
2,859,673
2,794,191
Business -type activities:
Interest income
30,346
10,282
10,789
11,129
Transfers
59,637
57,947
Total business -type activities
30,346
10,282
70,426
69,076
Total primary government
$ 3,310,775 $
3,347,664
$
2,939,099
$
2,863,267
Change in Net Position
Governmental activities
$ 1,106,731 $
132,815
$
(90.783)
$
657,106
Business -type activities
3,487,295
61,255
(34,679)
205,499
Total primary government
$ 4,594,026 $
194,070
$ (125,462)
$
862,605
112
Schedule 2
(continued)
2009
2008
2007
2006
2005
2004
$ (2,170,373) $
(1,701,388)
$ (1,719.333) $
1,771,660 $
43,787 $
(1,344,293)
423,934
294,658
67,748
653,154
(103,245)
032,050)
$ (1,746,439) $
(1,406,730)
$ (1,651,585} $
2,424,814 $
(59.458) $
(1,476,343)
$
2,718,691
$
2,568,705
$
2,424.782
$
2,174,377
$
1,916,352
$
1,695,648
8,764
57,390
46,154
38,342
107,080
60,694
160.679
209.539
335,578
317.896
195,715
93,801
41,827
50,865
33,204
8,517
42,284
269,375
(129,177)
(116,031)
(424,940)
(4,066,113)
2,809,301
2,770,468
2,414,778
(1,535,498)
2,261,431
2,119,518
15,343
23,533
94,325
153,918
53,507
23,107
129,177
116,031
424,940
4,066,113
144,520
139,564
519,265
4,220,031
53,507
23,107
$
2,953,821
$
2,910,032
$
2,934,043
$
2,684,533
$
2,314,938
$
2,142,625
$
638,928
$
1,069,080
$
695,445
$
236,162
$
2,305,218
$
775,225
568,454
434,222
587,013
4,873,185
(49,738)
(108,943)
$
11207,382
$
1,503,302
$
1,282,458
$
5,109,347
$
2,255,480
$
666,282
113
General fund
Reserved
Unreserved
Nonspendable
Unassigned
Total general fund
CITY OF LAKE ELMO, MINNESOTA
FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Modred Accrual Basis of Accounting)
2013 2012 2011 2010
2009
$ $ $ $ 1,068,950 $ 1,032,570
1,617,211 1,403,240
859,072 1.024,433 1.206,209
2,318,310 2,414,692 1,707,711
3,177,382 3,439,125 2,913,920 2,686,161 2,435,810
All other
governmental funds
Reserved
3,605,250
1,422,049
Unreserved
504,106
1,077,659
Restricted
743.976
3,959,111
4,691,748
Committed
7,114
Assigned
2,252,931
1,244,900
654,358
Unassigned
(885,360)
(1,670,915)
(1,353,754)
Total all other
governmental funds
2,111,547
3,533,096
3,999,466
4,109,356
2,499,708
Total governmental funds
$ 5,288,929
$ 6,972,221
$ 6,913,386 $
6,795,517 $
4,935,518
Note: The City implemented GASB Statement No. 54 in 2011, therefore, classifications of fund balance have changed.
114
Schedule 3
2008
2007
2006
2005
2004
$ 1,015.753 $
1,003,823
$ 503,823 $
500,000 $
500,000
1,395,088
1,251,127
1,768,505
1,745,735
1,873,923
2,254,950
2.245,735
2,410,841
2,272,328
2,373,923
727,673 698,683 725,337 562,883 188,509
1.976,379 2,554,808 2,419,112 4,795,939 5,425,439
2,704,052 3,253,491 3,144,449 5,358,822 5,613,948
$ 5114 893 $ 5,508,441 $ 5,416,777 $ 7,604,557 $ 7,987,871
115
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST FISCAL TEN YEARS
(Modified Accrual Basis of Accounting)
2013
2012
2011
2010
2009
Revenues
Taxes
$ 3,231,609 $
3.221,733 $
2,790,773 $
2,737,225 $
2,685.894
Licenses and permits
374,974
330,819
230.419
261,450
225,166
Intergovernmental
1,704,178
237,254
276,638
239,244
288,881
Charges for services
6,113
5,726
14,691
22,416
11,433
Fines and forfeitures
52,110
58,385
63,819
68,897
54,052
Special assessments
180,023
136,150
153,536
134.257
73,013
Investment earnings
35,127
111,737
94,066
113,033
160,679
Miscellaneous revenue
57,260
87.562
48.217
84.860
61.533
Total Revenues
5,641,394
4,189,366
3,672,159
3,661,382
3,560,651
EXPENDITURES
Current
General government
1,527,732
1.034,712
1,016,898
921,590
929,960
Public safety
1,174.145
1,109,937
996,733
1.064,176
988,082
Public works
614,270
446,541
447,629
473,293
459,703
Culture and recreation
301.404
260,404
168,747
168,971
180.965
Debt service
Principal
3,348,000
406,000
344,000
313,000
361,000
Interest and other charges
171.148
267,253
251,385
216.820
229,175
Bond issuance costs
7,870
41,828
34,327
74,580
45,056
Capital outlay
1,784,914
1,428,856
1,029.183
1,203,309
998.031
Total Expenditures
8,929,483
4,995,531
4,288,902
4,435,739
4,191,972
Excess (deficiency) of revenues
over (under) expenditures (3,288,089) (806,165) (616,743) (774,357) (631,321)
OTHER FINANCING
SOURCES (USES)
Issuance of debt
1,604,797
865,000
845,000
2,680,000
1,110,000
Premium (Discount) on issuance
of debt
4,356
17,756
Payment to bond escrow agent
(525,000)
Sale of property
9,190
Transfers in
204,972
314,698
1,466,041
Transfers out
(315,360)
(361698)
(1,626,041)
Total other financing
sources (uses)
1,604,797
865,000
734,612
2,634,356
451,946
Net change in fund balances
$ (1,683,292) $
58,835
$ 117,869
$ 11859,999
$ (179,375)
Debt service as a percentage
of noncapital expenditures
49.26%
18.88%
18.26%
16.39%
18.48%
116
Schedule 4
2008
2007
2006
2005
2004
$ 2,523,332 $
2,416,861 $
2,164,117 $
1.908,357 $
1,697,236
242,074
315.975
406,225
245,252
181,069
261,743
384,160
255,018
94,511
401,901
15,623
39,163
152,472
108,137
139,507
60,919
57,652
69,729
58,441
52,015
102,929
75,993
147,368
179,219
190.837
209,539
335,578
317,896
195,715
93,801
177.599
1.094.478
4.622.737
576.555
47.292
3,593,758
4,719,860
8,135,562
3,366,187
2r.,803,658
1,108, 737
942,131
879,167
851,645
766.841
882,135
984,090
950,669
881.905
848.439
438,591
459.478
523,938
286,756
261,144
154,011
160.940
129,806
109,153
108,213
280,000
334,000
265,000
130,000
130,000
235,450
206,020
220,115
165,985
144,720
888,382
2,281,938
7,797.647
1,334,583
1,012,366
3,987,306
5,368,597
10.766,342
3,760,027
3,271,723
(393,548)
(648,737)
(2,630,780)
(393,840)
(468,065)
443,000 4,090,000
10,526 430,000
8,500 778,074 162,129 206,598 149,000
(8,500) (778,074) (162,129) (206,598) (149,000)
443,000 10,526 4.520,000
$ (393,548) $ (648,737) $ (2,187,780) _$ (383,314) $ 4,051,935
16.63% 17.50% 16.34% 12.20% 12.16%
117
SCHEDULES
CITY OF LAKE ELMO, MINNESOTA
TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Total
Estimated
Tax Capacity
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
2004 $ 791,585,500 $
8,490,773 $
180,991
$ 8,671,784 $
8.671,784
19.315
% 0.01
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
(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
Gass 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.
118
Schedule 6
CITY OF LAKE ELMO, MINNESOTA
PROPERTY TAX RATES AND TAX LEVIES
DIRECT AND OVERLAPPING PROPERTY TAX RATES
LAST TEN FISCAL YEARS
(Percent of Tax Capacity)
City
of Lake Elmo
Overlapping
Rates
Operating
Debt
Total
Range of Tax Rates
Tax
Service
City
for Independent
Range of Tax Rates
Special
Range of Total
Fiscal
Rate
Tax Rate
Tax Rate
School Districts Washington
for
Taxing
Direct and Ovelapping
Year
Urban
Urban
Urban
622, 832 and 834 County
Watershed Districts
Districts
Tax Rates
2004
19.315 %
%
19.315 %
20.829 - 27.116 % 31.201 %
1.206 -
6.382 %
3.058 %
75.609 - 87.072 %
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 26.958
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
Source: Washington County Taxation Division
Note: The City's direct property tax rate is determined by dividing the amount of tax levied by the City Council
by the City's total tax capacity.
'Overlapping rates are those of local and county governments that apply to property owners within the City
of Lake Elmo. Not all overlapping rates apply to all City of Lake Elmo property owners. Although the property tax rates
apply to all city property owners, some city properties lie within the geographical boundaries of different
school and watershed districts.
(1) Beginning in 2012, operating tax rate urban includes library levy component
119
SCHEDULE7
CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
2013
2004
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
1.77 %
Xcel Energy
204,686
2
1.76
156,870
2
1.81 %
Bremer Financial Services Inc
197,474
3
1.70
197,768
1
2.28
MHC Cimarron LLC
134,090
4
1.15
133,703
4
1.54
United Land LLC
121,976
5
1.05
111,708
5
1.29
Tartan Park LLC
100,643
6
0.87
HOA Hotels
89,880
7
0.77
Danate Proper Inv I LLC
76,762
8
0.66
Eagle Point II LLC
71,064
9
0.61
Davis Estates LTD
64,912
10
0.56
United Properties Inv LLC
66,644
7
0.77
Machine Shed LLC
63,154
8
0.73
E. Metro Medical Bldg, LLC
141,670
3
1.63
Lake Elmo Foundation
80,519
6
0.93
State Bank of Lake Elmo
32,124
9
0.37
Individuals
28,242
10
0.33
TOTAL
$ 1,266,829
10.89 %
$ 1,012,402
11.67 %
(1) Source: Washington County Taxation Division
120
This Page Left Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Fiscal
Collected within the
Year
Taxes Levied
Net Tax Levy
Fiscal Year of the Levy
Collections
Ended
for the
for the
Percentage
in Subsequent
December 31
Fiscal Year
Fiscal Year (1)
Amount
of Net Levy
Years
2004 $
1,717,820
$ 1,658,159 $
1,641,720
99.01 $
15,941
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
73,618
2009
2,708,155
2,672,623
2,624,026
98.18
46,854
2010
2,743,346
2,705,782
2,645,536
97.77
57,206
2011
2,789,559
20745,785
2,692,423
98.06
50,143
2012
3,113, 017
3,110, 478
3,071,202
98.74
31,279
2013
3,163,359
3,160,524
3,133,764
99.15
(1) Tax Levy adjusted for powerlines, market value credits and AG program credits
122
Schedule 8
Delinquent
Total Collections to Date
Total
Taxes As A
Percentage
Delinquent
% Of Total
Amount
of Net Levy
Taxes
Net Tax Levy
1,657,661
99.97 $
498
0.03
1,874,911
99.97
577
0.03
2,110,613
99.98
343
0.02
2,394,822
100.00
0.00
2,559,015
99.99
212
0.01
2,670,880
99.93
1,743
0.07
2,702,742
99.89
3,040
0.11
2,742,566
99.88
3,219
0.12
3,102,481
99.74
7,997
0.26
3,133,764
99.15
26,760
0.85
123
CITY OF LAKE ELMO, MINNESOTA
WATER AND SANITARY SEWER CHARGES BY CUSTOMER
LAST TEN FISCAL YEARS
Water (in millions of gallons)
Type of Customer
2013
2012
2011
2010 *
2009
Residential
120.676
154.747
105.290
95.704
122.461
Commercial Service
8.253
10.405
6.872
7.261
7.989
Total gallons
128.929
165.152
112.162
102.965
130.450
Total direct rate per 1,000 gallons - residential
$ 2.140
$ 2.140
$ 2.140
$ 2.100
$ 2.15
Total direct rate per 1,000 gallons - commercial
$ 3.110
$ 3.110
$ 3.110
$ 3.050
$ 3.10
Sanitary Sewer (in millions of gallons)
Type of Customer
2013
2012
2011
2010 *
2009
Residential
0.000
0.000
0.000
0.000
0.000
Commercial Service
6.149
6.172
6.961
7.086
5.381
Total gallons
6.149
6.172
6.961
7.086
5.381
Total direct rate per 1,000 gallons
$ 4.500
$ 4.500
$ 4.500
$ 4.350
$ 4.080
* City converted to a tiered rate structure effective January 1, 2010; lowest tier rate listed for 2010-2013
(a) City did not have city -owned sewer system until 2005
124
Schedule 9
2008
2007
2006
2005
2004
120.986
108.649
70.255
45.724
49.163
7.851
8.746
6.126
6.064
6.076
128.837
117.395
76.381
51.788
55.239
$ 2.05
$ 2.05
$ 1.75
$ 1.75
$ 1.70
$ 3.00
$ 3.00
$ 2.60
$ 2.60
$ 2.44
2008
2007
2006
2005
2004
0.000
0.000
0.000
0.000
0.000
5.130
4.409
8.107
8.564
a
5.130
4.409
8.107
8.564
0.000
$ 3.710
$ 2.750
$ 2.500
$ 2.500
(a)
125
Fiscal
Year
CITY OF LAKE ELMO, MINNESOTA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Special
Assessment
Bonds
Other Governmental Activities Debt
Certificates
of
Indebtedness
Capital
Improvement
Bonds
Total
Governmental
Activities
Debt
2004 $
1,195, 000 $
$
4,090,000 $
5,285,000
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
3,120,000
150,000
5,000,000
8,270,000
2013
4,450, 000
102,000
1,970,000
6,522,000
Note: Details of the city's outstanding debt can be found in the notes to
the financial statements.
126
Business -Type Activities
Total
utility Business
Revenue Activities
Bonds Debt
Schedule 10
Total
Primary Percentage
Government of Personal
Debt Income
$ 640,000 $
640,000 $
5,925,000
0.02
5,215,000
5,215,000
10, 370, 000
0.04
5,015,000
5,015,000
10, 348, 000
0.03
4,810,000
4,810,000
9,809,000
0.03
4,730,000
4,730,000
9,449,000
0.03
4,715,000
4,715,000
9,658,000
0.03
4,680,000
4,680,000
11,990,000
0.03
4,640,000
4,640,000
12,451,000
0.03
8,635,000
8,635,000
16, 905, 000
0.04
121485, 000
12,485, 000
19, 007, 000
NIA
Per
Capita
$ 863
1,511
1,508
1,429
1,377
1,407
1,486
1,543
2,095
2,356
127
CITY OF LAKE ELMO, MINNESOTA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
General Bonded Debt Outstanding
Special
Certificates
Capital
Fiscal
Assessment
of
Improvement
Year
Bonds
Indebtedness
Bonds
2004
$ 1,195,000
$ $
4,090,000
2005
1,065,000
4,090,000
2006
955,000
40,000
4,005,000
2007
780,000
364,000
3,855,000
2008
695,000
324,000
3,700,000
2009
1,120, 000
283,000
3,540,000
2010
1,725,000
240,000
5,345,000
2011
2,440, 000
196,000
5,175, 000
2012
3,120, 000
150,000
5,000,000
2013
4,450, 000
102,000
11970,000
Utility
Revenue
Bonds
Total
$ 640,000
$ 5,925,000
5,215,000
10, 370, 000
5,015,000
10,015,000
4,810,000
9,809,000
4,730,000
9,449,000
4,715,000
9,658,000
4,680,000
11,990,000
4,640,000
12,451,000
8,635,000
16, 905, 000
12,485, 000
19, 007, 000
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
128
Less:
Available
in Debt
Service
$ 188,509
562,883
725,337
698,683
727,673
1,422,049
3,605,250
3,534,742
3,500,799
726,753
Net
General
Bonded
Debt
Outstanding
$ 5,736,491
9,807,117
9,289,663
9,110,317
8,721,327
8,235,951
8,384,750
8,916,258
13,404,201
19,733,753
Schedule 11
Percentage
of Actual
Taxable Value
of Property
0.72
1.08
0.91
0.81
0.76
0.68
0.70
0.78
1.29
1.92
Per
Capita
$ 836
1,429
1,354
1,327
1,271
1,200
1,039
1,105
1,661
2,446
129
Schedule 12
CITY OF LAKE ELMO, MINNESOTA
COMPUTATION OF DIRECT AND INDIRECT GENERAL OBLIGATION BONDED DEBT
AND LEGAL DEBT MARGIN
December 31, 2013
Estimated
Estimated Share of
Debt Percentage Overlapping
Governmental Unit Outstanding Applicable (a) Debt
Debt repaid with property taxes
Independent School District #622 $150,550,000 3.10% $ 4,667,050
Independent School District #832 63,230,000 4.70% 2,971,810
Independent School District #834 43,730,000 14.10% 6,165,930
Other debt
Washington County 139,195,000 4.50% 6,263,775
Metropolitan Council 219,230,000 1.10% 2,411,530
Subtotal, overlapping debt 22,480,095
City direct debt 5,795,713 100.00% 5,795,713
Total direct and overlapping debt $ 28,275,808
Sources: Tax capacity data to estimate applicable percentages provided by Washington County.
Debt outstanding data provided by each governmental unit.
Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule
estimates the portion of the outstanding debt of those overlapping governments that is bome 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 bome 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.
(8) 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.
130
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Debt limit
Total net debt applicable to limit
Legal debt margin
Total net debt applicable to the limit
as a percentage of debt limit
CITY OF LAKE ELMO, MINNESOTA
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
(Dollars in Thousands)
Fiscal Year
2013 2012 2011 2010 2009
$32,470,203 $32,054,064 $31,126,713 $34,288,095 $36,036,402
1,894,510 2,099,369 2,148,203 2,195,153 271,142
$30,575,693 $29,954,695 $28,978,510 $32,092,942 $35,765,260
5.83% 6.55% 6.90% 6.40% 0.75%
The legal debt limit for municipalities in Minnesota was increased in 2008 from 2% to 3% of the market value of
taxable property. This limit applies only to the City's general obligation tax levy bonds and excludes special
assessment, tax increment and tax abatement bonds.
132
Schedule 13
Legal Debt Margin Calculation for the Fiscal Year 2013
Taxable Market Value $1,082,340,100
Debt Limit (3% of market value) 32,470,203
Debt applicable to limit:
General obligation bonds 2,072,000
Less: Amount set aside for repayment
of general obligation debt 177,490
Total net debt applicable to limit 1,894,510
Legal debt margin $ 30,575,693
2008 2007 2006 2005 2004
$36,242,169 $22,620,202 $20,351,938 $18,208,774 $ 15,831,710
315,169 358,220 400, 384
$35,927,000 $22,261,982 $19.951,554 $18,208,774 $ 15,831,710
0.87% 1.58% 1.97% 0.00% 0.00%
133
Schedule 14
CITY OF LAKE ELMO, MINNESOTA
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
Utility Revenue Bonds
Net
Fiscal Gross Operating Available Debt Service (3)
Year Revenue(l) Expenses (2)
2004
$ 3761471
$ 370,066 $
2005
439,723
294,616
2006
1,757,127
529,313
2007
1,011,400
595,824
2008
715,611
536,475
2009
776,899
513,226
2010
920,768
563,896
2011
891,587
516,157
2012
946,407
426,118
2013
3,501,321
504,648
Zevenue Principal Interest Coverage
6,405 $ 25,000 $ 29,465 0.12
145,107 25,000 1071468 1.10
1,227,814 200,000 223,214 2.90
415,576 205,000 211,482 1.00
179,136 80,000 202,224 0.63
263,673 530,000 208,303 0.36
356,872 35,000 191,156 1.58
375,430 40,000 190,094 1.63
520,289 40,000 221,129 1.99
2,996,673 165,000 300,789 6.43
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.
134
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.
134
SCHEDULE 15
CITY OF LAKE ELMO, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
PERSONAL
INCOME
PER CAPITA
STATE
CITY
(thousands of
PERSONAL
UNEMPLOYMENT
UNEMPLOYMENT
YEAR
POPULATION (1)
dollars)
INCOME (2)
RATE (3)
RATE (3)
2004
6,863
$ 292,172
$ 42,572
4.3
3.4
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
NIA
NIA
4.6
4.0
Sources: (1) Metropolitan Council 2000/2010-Census Bureau
(2) Bureau of Economic Analysis - Washington County, Minnesota
(3) Estimate based on County unemployment rate provided by Minnesota Department of
Employment and Economic Development
135
SCHEDULE16
CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
2013
2004
Percentage of
Percentage of
Total City
Total City
Employer
Employees (1)
Rank
Employment (2)
Employees 0)
Rank
Employment (2)
3M Company (Maplewood)
9,500
1
48.7%
12,774
1
54.3%
Andersen Corp (Bayport)
1,850
2
9.5%
Washington County (Stillwater)
1,138
3
5.8%
Woodwinds Health (Woodbury)
1,070
4
5.5%
ISD 834 (Stillwater)
1,037
5
5.3%
2,050
2
8.7%
MN Correctional Facility (Oak Park Hts)
725
6
3.7°%
Ecowater Systems, Inc. (Woodbury)
440
7
2.3%
450
6
1.9%
Bremer Bank Operations Ctr (Lake Elmo)
400
8
2.1 °%
400
7
1.7%
Imation Corp (Oakdale)
380
9
1.9°%
500
5
2.1°%
SunAmerica Financial Group (Woodbury)
310
10
1.6°%
Fortis Company (Woodbury)
1,300
3
5.5°%
3M Company (Woodbury)
940
4
4.0%
High Pointe Health Campus (Lake Elmo)
200
8
0.8%
Lake Elmo Inn Inc.
80
10
0.3°%
Machine ShedlWildwood Inn (Lake Elmo)
150
9
0.6%
(1) City staff estimate of total global employees for each employer
(2) City staff estimate
136
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CITY OF LAKE ELMO, MINNESOTA
FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
Function
Administration
Finance
Planning and Zoning
General Government
Fire
Building Inspections
Public Safety
Streets and Roadways
Public Works
Parks
Parks and Recreation
2013
2012
2011
2010
2009
3.55
3.15
3.15
3.15
3.18
1.25
0.50
0.50
0.50
0.50
2.95
1.55
1.55
1.55
1.75
7.75
5.20
5.20
5.20
5.43
2.05
1.60
1.10
1.10
1.10
1.30
0.95
0.95
0.95
1.95
3.35
2.55
2.05
2.05
3.05
3.21
3.05
3.05
3.05
3.05
3.21
3.05
3.05
3.05
3.05
2.74
2.52
2.52
2.52
3.10
2.74
2.52
2.52
2.52
3.10
Community Development
0.40
0.15
0.15
0.15
0.19
0.40
0.15
0.15
0.15
0.19
Total Governmental Activities
17.45
13.47
12.97
12.97
14.82
Water Utility
2.10
1.85
1.85
1.85
1.85
Sewer Utility
0.70
0.30
0.30
0.30
0.30
Total Business Activities
2.80
2.15
2.15
2.15
2.15
Totals for Organization
20.25
15.62
15.12
15.12
16.97
Source: City's Adopted Budgets
138
Schedule 17
2008
2007
2006
2006
2004
3.75
2.40
2.44
2.52
2.21
1.00
1.29
1.30
1.16
0.83
1.75
2.15
1.95
1.12
1.49
6.50
5.84
5.69
4.80
4.53
1.10
1.26
0.23
0.40
0.39
1.20
2.68
2.18
2.25
2.19
2.30
3.94
2.41
2.65
2.58
3.05
2.78
3.08
2.60
2.40
3.05
2.78
3.08
2.60
2.40
2.72
3.40
3.00
1.29
1.21
2.72
3.40
3.00
1.29
1.21
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
14.57
15.96
14.18
11.34
10.72
2.30
2.02
2.02
1.56
1.88
0.35
0.22
0.20
0.18
0.40
2.65
2.24
2.22
1.74
2.28
17.22
18.20
16.40
13.08
13.00
139
CITY OF LAKE ELMO, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Function/Program
2013
2012
2011
2010
2009
Planning and Zoning
Conditional use permits
2
3
0
0
2
Interim use permits
1
0
3
1
0
Minor subdivisions
2
1
0
0
2
Plats/Planned unit developments
1
0
0
0
0
Rezonings
2
7
0
0
1
Site plans
2
1
0
1
1
Variances
5
4
6
2
5
Fire
Total emergency responses
448
399
315
361
319
EMS responses
280
262
195
211
205
Fire responses
28
28
24
14
24
Building Inspections
Residential permit valuations
(thousands of dollars)
19,979
20,320
16,133
15,889
12,903
Commercial permit valuations
(thousands of dollars)
966
2,351
2,590
2,013
1,617
New residential units
32
31
24
26
29
New commercial units
0
0
0
1
1
Water Utility
Number of customers
1,051
1,016
998
967
941
Average daily consumption
(thousands of gallons)
21
15
14
18
24
Sanitary Sewer Utility
Number of customers
29
29
29
29
28
Average daily flow
(thousands of gallons)
77
75
71
72
68
(a) City did not have city -owned sewer system until 2005
Sources: Various City Department's annual
budget workload measurements
140
Schedule 18
2008
2007
2006
2006
2004
1
3
3
6
4
1
1
0
0
0
1
1
0
4
3
0
0
3
2
1
1
1
0
5
0
0
1
12
7
2
6
8
9
5
10
294
369
313
340
328
204
244
202
222
211
20
46
26
31
28
16,525
22,739
18,727
17,019
12,885
1,370
3,600
25,744
5,532
3,218
23
29
30
21
13
0
1
6
3
0
935
918
735
712
683
28
26
24
27
25
28
26
18
14
0
73
66
49
29
(a)
141
Schedule 19
CITY OF
LAKE ELMO, MINNESOTA
CAPITAL
ASSETS
STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Function/Program
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
Fire
Stations
2
2
2
2
2
2
2
2
2
2
Public Works
Bituminous streets (miles)
63
63
63
62
62
62
62
57
54
54
Gravel streets (miles)
2
2
2
2
3
3
3
3
3
3
Street lights
142
137
137
137
137
137
137
137
137
137
Storm sewer (miles)
25
25
25
25
25
23
23
22
20
20
Park & Recreation
Acres of parkland
451
451
451
451
451
451
451
451
443
443
Number of parks
17
17
17
17
17
17
17
17
16
16
Water Utility
Water towers
2
2
2
2
2
2
1
1
1
1
Miles of watermain
39
37
37
37
37
34
26
20
20
20
Number of fire hydrants
293
280
280
280
280
280
233
225
221
221
Sanitary Sewer Utility
Miles of sanitary sewer
3
3
3
3
3
3
3
3
3
3
Life stations
3
3
3
3
3
3
3
3
3
3
Sources: Various City Department's annual financial report statistics
142
CITY OF LAKE ELMO, MINNESOTA
OTHER REPORT SECTION
December 31, 2013
This Page Leff Blank lnfendonally
SMITH•SCHAFER
& ASSOCIATES, LTD.
Certified Public Accountants and Consultants
Members of American Institute of CPA's.
Ovate Companies Practice Section, Minnesota Society of CPA's
INDEPENDENT AUDITOR'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, 2013, and the related notes to the
financial statements, and have issued our report thereon dated June 13, 2014.
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
June 13, 2014
Maplewood Office • 2035 E County Road D • Suite A • Maplewood MN 55109 • PH (651) 770-8414 • FAX (651) 770-5175
Offices in: Edina, Red Wing, and Rochester • www.smithschafer.com
PrimeGlobal Member of PrimeGlobal, A Global Association of Independent Accounting Firms
146
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