HomeMy WebLinkAbout2012 Annual Comprehensive Financial ReportCITY OF LAKE ELMO, MINNESOTA
FINANCIAL STATEMENTS
DECEMBER 31, 2012
CITY OF LAKE ELMO, MINNESOTA
FINANCIAL STATEMENTS
For the Fiscal Year Ended December 31, 2012
TABLE OF CONTENTS
REFERENCE
PAGE
INTRODUCTORY SECTION
Elected and Appointed Officials
i
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
15
Statement of Activities
FORM A-2
16
Fund Financial Statements
Balance Sheet - Governmental Funds
FORM B-1
20
Reconciliation of Net Position in the Government -wide
Financial Statements and Fund Balances in the Fund
Basis Financial Statements
FORM B-2
23
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Governmental Funds
FORM B-3
24
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
FORM B-4
27
Statement of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual - General Fund
FORM B-5
28
Combining Statement of Net Position - Proprietary Funds
FORM C-1
30
Combining Statement of Revenues, Expenses and Changes in
Net Position - Proprietary Funds
FORM C-2
34
Combining Statement of Cash Flows - Proprietary Funds
FORM C-3
36
Statement of Fiduciary Net Position - Fiduciary Funds
FORM D-1
37
Notes to Financial Statements
41
Required Supplemental Information
Schedule of Funding Progress - Other Post Employment Benefits
FORM E-1
79
Combining Nonmajor Fund Statements and Schedules
Combining Balance Sheet - Nonmajor Governmental Funds
FORM F-1
82
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Governmental Funds
FORM F-2
83
Combining Balance Sheet - Nonmajor Special Revenue Funds
FORM G-1
84
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Special Revenue Funds
FORM G-2
85
Combining Balance Sheet - Nonmajor Capital Projects Funds
FORM H-1
86
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Nonmajor Capital Projects Funds
FORM H-2
88
Combining Statement of Net Position - Internal Service Funds
FORM 1-1
90
Combining Statement of Revenues, Expenses and Changes in Fund
Net Position - Internal Service Funds
FORM I-2
91
Combining Statement of Cash Flows - Internal Service Funds
FORM 1-3
92
Statements of Revenues, Expenditures and Change in Fund Balance -
Budget and Actual - General Fund
FORM J-1
94
Combining Balance Sheet - Debt Service Funds
FORM K-1
98
Combining Statement of Revenues, Expenditures and Changes in Fund
Balances - Debt Service Funds
FORM K-2
100
Combining Schedule of Changes in Assets and Liabilities - Agency Funds
FORM L-1
102
OTHER REPORT SECTION
Independent Auditor's Report on Minnesota Legal Compliance
105
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CITY OF LAKE ELMO, MINNESOTA
INTRODUCTORY SECTION
DECEMBER 31, 2012
This Page'Leff Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
ELECTED AND APPOINTED OFFICIALS
December 31, 2012
POSITION NAME TERM EXPIRES
ELECTED OFFICIALS
City Council:
Mayor
Dean Johnston
December 31, 2012
Council Member
Brett Emmons
December 31, 2012
Council Member
Nicole Park
December 31, 2014
Council Member
Mike Pearson
December 31, 2014
Council Member
Anne Smith
December 31, 2012
APPOINTED OFFICIALS
City Administrator Dean Zuleger Continuous
Finance Director Cathy Bendel Continuous
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CITY OF LAKE ELMO, MINNESOTA
FINANCIAL SECTION
DECEMBER 31, 2012
This Page_ Left Blank Intentionally
ZIA MITH•SCHAFER
& A S S O C I A T E S, L T D. Members of American Institute of CPA's.
Certified Public Accountants and Consultants Private companies Practice Section, Minnesota Society of CPA's
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and Members of
the City Council
City of Lake Elmo, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund and the aggregate remaining fund information of the City of Lake Elmo, Minnesota,
as of and for the year ended December 31, 2012, 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, 2012, 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
Rochester Office • 220 South Broadway • Suite 102 • Rochester. MN 55904 • (PH (507) 288-3277 • FAX (507) 288-4571
Red Wing Office • 519 Bush Street • Red Wing, MN 55066 • PH (651) 388-2858 • FAX (651) 388-6414
Edina Office • 6800 France Avenue South • Suite 178 • Edina, MN 55435 • PH (952) 920-1455 • FAX (952) 920-6603
Honorable Mayor and Members of
the City Council
City of Lake Elmo, Minnesota
Page 2
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's
Discussion and Analysis on pages 3 through 13 and the Schedule of Funding Progress - Other Post -
Employment Benefits on page 73 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 financial statements. The introductory section and combining and
individual nonmajor fund financial statements 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 section has not been subjected to the auditing procedures applied in the audit of the basic
financial statements and, accordingly, we do not express an opinion or provide any assurance on it.
Maplewood, Minnesota
June 28, 2013
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, 2012.
New Accounting Pronouncement. The City implemented GASB 63, Financial Reporting of
Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position in fiscal year 2012.
This standard provides guidance for reporting deferred outflows of resources, deferred inflows of
resources and net position in a statement of financial position and related disclosures. The reader will
notice a change in terminology from "net assets" to "net position".
FINANCIAL HIGHLIGHTS
• The assets of the City of Lake Elmo, Minnesota exceeded its liabilities at the close of the
most recent fiscal year by $21,840,460 (net position). Of this amount, $2,310,132
(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 $194,070. 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 $6,972,221, an increase of $58,835 from
the prior year.
• At the end of the current fiscal year, unassigned fund balance for the general fund was
$2,414,692, or 88.1 % of total general fund expenditures. The nonspendable portion of the
general fund balance as of December 31, 2012 ($1,024,433) related to the interfund loan to
the Village Project fund and prepaid expenses.
• The City's total noncurrent liabilities increased by $4,550,014 or 36% during the current fiscal
year. The increase was primarily related to this issuance of the 2012A G.O. water revenue
crossover refunding bonds and the 2012B G.O. improvement bonds. The City continues to
carry the 2005A water revenue bonds until the point they are refunded with the proceeds of
the issuance of the 2012A G.O. water revenue crossover refunding 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.
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.
3
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
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 15-17 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.
The City of Lake Elmo, Minnesota maintains twenty-one individual governmental funds, eight 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 2012 street
improvements 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
4
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
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 28 and 94 to 97) to demonstrate
compliance with the budget.
The basic governmental fund financial statements can be found on pages 20-27 of this report.
Proprietary funds. The City of Lake Elmo, Minnesota maintains two different types of proprietary
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
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 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 30-36 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 37 of this report.
Notes to the financial statements. The notes provide additional information that is essential to a
full understanding of the data provided in the government -wide and fund financial statements. The
notes to the financial statements can be found on pages 41-75 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 82-102 of this report.
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
$21,840,460 at the close of the most recent fiscal year.
5
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
The largest portion of the City of Lake Elmo, Minnesota's net position, $15,571,217 (71 %) 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
Current and other assets
Capital assets
Total assets
Long-term liabilities outstanding
Other liabilities
Total liabilities
Net position:
Net investment in capital assets
Restricted
Unrestricted
Total net position
Governmental Business -Type
Activities Activities Total
$ 8,276,848 $ 5,861,208 $ 14,138, 056
14, 656,197 10, 870, 749 25, 526, 946
22, 933, 045 16, 731, 957 39, 665, 002
8,411,173
8,714,727
17,125,900
614,789
83,853
698,642
9,025,962
8,798,580
17, 824, 542
8,782,840
6,788,377
15, 571, 217
3,959,111
3,959,111
1,165,132
1,145, 000
2,310,132
$ 13, 907, 083 $ 7,933,377 $ 21, 840,460
An additional portion of the City of Lake Elmo, Minnesota's net position (18 percent) represents
resources that are subject to external restrictions on how they may be used. The remaining
balance of unrestricted net position ($2,310,132) 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.
6
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
Governmental activities. Governmental activities account for 64% of the City of Lake Elmo,
Minnesota's net position. The total increase in net position for governmental activities was
$132,815, accounting for 68% of the total increase in the net position of the City of Lake Elmo,
Minnesota. Key elements of this increase include:
• Charges for services increased by $131,701 from the prior year.
• Property tax revenue increased by $389,302 from the prior year.
Business -type activities. Business -type activities increased the City of Lake Elmo, Minnesota's
net position by $61,255 accounting for 32% 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.
City of Lake Elmo, Minnesota's Change in Net Position
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
Net position - beginning of year
Net position - end of year
Governmental
Business -Type
Activities
Activities
Total
$ 440,630
$ 936,125
$ 1,376,755
160,060
160,060
160,444
115,127
275,571
3,183,078
3,183,078
154,304
10,282
164,586
4,098,516
1,061,534
5,160,050
1,093,204
1,093,204
1,302,857
1,302,857
891,169
891,169
362,432
3621432
316,039
316,039
872,786
872,786
53,903
53,903
73,590
73,590
3,965,701
1,000,279
4,965,980
132,815
61,255
194,070
13,774,268
7,872,122
21,646,390
$ 13,907,083 $ 7,933,377 $ 21,840,460
ri
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
$1,500,000
$1,250,000
$1,000,000
$750,000
$500,000
$250,000
$0
end
�e
Ge°eta� 9°
90i
Jb"09
P
Revenues by Source - Governmental Activities
Operating grants
and contributions
4%
Capital grants and
contributions
4%
Charges for
services
11%
�°tKs eaC�°�
a
11
G �e
Other
_4%
it
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
$1,000,000
$750,000
$500,000
$250,000
$0
■Program revenues.
■Expenses
'14ake< 5a�at Sa�a�
y�o�
Revenues by Source - Governmental Activities
Other
Capital grants
contribution
11%
88%
Dr
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 $6,972,221, an increase of $58,835 in comparison with
the prior year. Approximately 17 percent of this total fund balance, or $1,165,505, constitutes
assigned and unassigned fund balance, which is available for spending at the government's
discretion. The remainder of the fund balance ($5,806,716) 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 $2,414,692. 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 represents 88% of total general fund expenditures. The
general fund's total fund balance increased by $525,205 during the current fiscal year due primarily
to increases in property taxes and building permits and improved collections of delinquent property
taxes.
The debt service fund decreased its fund balance by $33,943 due primarily to debt service
expenditures in excess of property taxes, special assessments and intergovernmental revenues
allocated to this fund.
The Village Project fund decreased its fund balance by $52,710 as a result of investment interest
owed to other funds related to the fund balance deficit in this fund. The 2012 street improvements
fund decreased its fund balance by $95,726 due primarily to capital outlay expenditures related to
the 2012 street improvement project in excess of debt proceeds and prior to the collection of
special assessments for these improvements.
The special revenue funds decreased their overall fund balances by $72,568 due primarily to
capital outlay expenditures in the library fund related to the purchase of the library building in
excess of property taxes allocated to that fund.
The capital projects funds, other than the village project and 2012 street improvements funds
described previously, decreased their collective fund balance by $211,423 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 $667,175, $81,867 and $395,958, respectively. The water fund
decreased its net position by $59,670 for the year ended December 31, 2012 while the sewer and
storm sewer increased their net position by $22,648 and $98,277, respectively. Other factors
concerning the finances of these three funds have already been addressed in the discussion of the
City of Lake Elmo, Minnesota's business -type activities.
General Fund Budgetary Highlights
The City's General Fund budget was not amended during the year. The budget called for no
change in General Fund balance. The actual net change to the General Fund balance was an
increase of $525,205. Revenues exceeded budget by $366,392 for the year ended December 31,
2012 due primarily to better than anticipated collection of property taxes and an increase in licenses
and permits revenue over expectations. Total expenditures exceeded budget by $16,187 for the
year. Two departments had expenditures in excess of budget: general government expenditures
exceeded budget by $56,119 and public safety expenditures exceeded budget by $28,396. These
over expenditures were primarily related to increased personnel and professional services
expenses. Additionally, the City had budgeted for $175,000 of transfers out that were not required
to be made.
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, 2012, amounted to $25,526,946
(net of accumulated depreciation). This investment in capital assets includes land, buildings and
improvements, and machinery and equipment. Total capital assets increased by $547,456, or
22%, for the year ended December 31, 2012, due primarily to construction in progress on various
capital projects within the City.
City of Lake Elmo, Minnesota's Capital Assets
Land
Construction in progress
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total
(net of depreciation)
Governmental
Business -Type
Activities
Activities
Total
$ 3,453,979
$ 54,675 $
3,508,654
2,290, 314
569,738
2,860,052
2,925,354
2,925,354
493,529
493,529
785,684
127,433
913,117
4,707,337
10,118,903
14,826,240
$ 14,656,197
$ 10, 870, 749 $
25, 526, 946
Additional information on the City of Lake Elmo, Minnesota's capital assets can be found in Note
3D beginning on page 56 of this report.
Long-term debt. At the end of the current fiscal year, the City of Lake Elmo, Minnesota had
$16,905,000 in bonds and certificates outstanding. The entire $16,905,000 outstanding comprises
debt backed by the full faith and credit of the government.
11
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
City of Lake Elmo, Minnesota's Outstanding Debt
General Obligation Bonds and Certificates
Governmental Business -Type
Activities Activities Total
General obligation bonds $ 8,120,000 $ 8,635,000 $ 16,755,000
General obligation certificates 150,000 150,000
Total $ 8,270,000 $ 8,635,000 $ 16,905,000
The City of Lake Elmo, Minnesota's total bonds and certificates payable increased by $4,454,000
during the current fiscal year. The increase was due primarily to the issuance of the City's 2012A
general obligation water revenue crossover refunding bonds and 2012B general obligation
improvement bonds.
The City of Lake Elmo, Minnesota maintains an Aa2 bond rating from Moody's for general
obligation debt.
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 decreased 8.5 percent from 2011 to 2012, and increased
1.2 percent from 2012 to 2013.
• Total property taxes levied for 2013 increased 1.6% percent over property taxes levied for
2012. This is primarily due to an increase in the debt service component of the levy.
• Plans are underway for extensive development in the following three areas:
o The 1-94 Corridor where a mixed use development featuring commercial/retail
business as well as residential (2012-2017).
o The Old Village re -development project of commercial and residential expansion
(2013-2018).
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).
o Provision of sanitary sewer service to the Old Village/Downtown area
o Improvements to the City's water distribution system including the Keats trunk water
main and development of Well No. 4.
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.
12
CITY OF LAKE ELMO, MINNESOTA
FINANCIAL STATEMENTS
DECEMBER 31, 2012
This Page Leff Blank Intentionally
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF NET POSITION
December 31, 2012
ASSETS
Cash and investments
Cash with fiscal agent
Receivables
Due from other governmental units
Prepaid expenses
Unamortized deferred charges
Capital assets:
Nondepreciable
Depreciable, net
Total Assets
LIABILITIES
Accounts payable
Accrued expenses
Accrued interest
Escrow deposits
Due to other governmental units
Unearned revenue
Noncurrent liabilities:
Due within one year
Due in more than one year
Total Liabilities
NET POSITION
Net investment in capital assets
Restricted
Debt service
Street improvement
City facilities
Unrestricted
Total Net Position
FORM A-1
Governmental
Business -Type
Activities
Activities
Total
$ 4,532,496
$ 1,097,692
$ 5,630,188
2,855,141
4,017,679
6,872,820
392,281
560,932
953,213
275,000
275,000
19,035
19,035
202,895
184,905
387,800
5,744,293
624,413
6,368,706
8,911,904
10,246,336
19,158,240
22,933,045
16,731,957
39,665,002
388,539
29,610
418,149
40,766
2,816
43,582
93,620
48,576
142,196
75,000
75,000
164
2,851
3,015
16,700
16,700
3,374,241
168,381
3,542,622
5,036,932
8,546,346
13,583,278
9,025,962
8,798,580
17,824,542
8,782,840
6,788,377
15,571,217
3,500,799
3,500,799
183,229
183,229
275,083
275,083
1,165,132
1,145,000
2,310,132
$ 13,907,083
$ 7,933,377
$ 21,840,460
See Notes to Financial Statements
15
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, 2012
Expenses
$ 1,093,204
1,302,857
891,169
362,432
316,039
Program Revenues
Operating Capital
Charges for Grants and Grants and
$ 48,476
379,557
3,256
9,341
$
38,823
103,166
18,071
160,444
3,965,701 440,630 160,060 160,444
872,786
53,903
73,590
1,000,279
$ 4,965,980
699,159
65,737
-A AAA
104,652
10,475
$ 1,376,755 $ 160,060 $ 275,571
General revenues:
General property taxes
Interest earnings
Miscellaneous
Total general revenues
Change in net position
Net position - beginning
Net position - ending
See Notes to Financial Statements
16
Net (Expense) Revenue
and Changes in Net Position
Governmental Business -Type
Activities Activities
$ (1,044,728)
(884,477)
(624,303)
(335,020)
(316,039)
(3,204,567)
FORM A-2
Total
$ (1,044,728)
(884,477)
(624,303)
(335,020)
(316,039)
(3,204,567)
$
(68,975)
(68,975)
22,309
22,309
97,639
97,639
50,973
50,973
(3,204,567)
50,973
(3,153,594)
3,183,078
3,183,078
111,705
10,282
121,987
42,599
42,599
3,337,382
10,282
3,347,664
132,815
61,255
194,070
13,774,268
7,872,122
21,646,390
$ 13,907,083 $
7,933,377
$ 21,840,460
17
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CITY OF LAKE ELMO, MINNESOTA
FUND FINANCIAL STATEMENTS
DECEMBER 31, 2012
ASSETS
Cash and investments
Cash with fiscal agent
Receivables (Net of allowance for
uncollectibles)
Accounts
Delinquent taxes
Special assessments
Accrued interest
Due from other funds
Advances to other funds
Due from other governmental units
Prepaid expenses
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
Escrow deposits payable
Accrued liabilities
Due to other governments
Due to other funds
Advances from other funds
Deferred revenue
Total liabilities
FUND BALANCE
Nonspendable
Restricted
Assigned
Unassigned
Total Fund Balance
TOTAL LIABILITIES AND
FUND BALANCE
CITY OF LAKE ELMO, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2012
2012 Street
General Fund Debt Service Village Project Improvements
$ 2,126, 829
$ 659,158 $
2,855,141
16,500
64,105
186,992
24,338
604,124
1,005,398
411202
275,000
19,035
$ 3,901,531
$ 3,976,291 $
$ 340,671 $ 13,500 $
40,766
164
$
$
$ 5,632
252,710 100,744
1,005,398
80,805 461,992
462,406 475,492 1,258,108 106,376
1,024,433
3,500,799
2,414,692 (1,258,108) (106,376)
3,439,125 3,500,799 (1,258,108) (106,376)
$ 3,901,531 $ 3,976,291 $ $
See Notes to Financial Statements
20
FORM B-1
Other
Governmental
Funds Total
$ 1,703,439 $ 4,489,426
2,855,141
16,500
64,105
59,144 246,136
24,338
112,576 716,700
1,005,398
316,202
19,035
$ 1,875,159 $ 9,752,981
$ 28,736
$ 388,539
75,000
75,000
40,766
164
315,498
668,952
1,005,398
59,144
601,941
478,378
2,780,760
1,024,433
458,312
3,959,111
1,244,900
1,244,900
(306,431)
743,777
1,396,781
6,972,221
$ 1,875,159 $ 9,752,981
21
This Page Left Blank Intentionally
FORM B-2
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, 2012
Amounts reported for governmental activities in the statement of net assets are different because:
Total governmental fund balances (pages 20-21) $ 6,972,221
Capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds:
Governmental funds - capital assets $ 18,754,088
Accumulated depreciation (4,297,875)
14,456,213
Other long-term assets are not available to pay for current -period
expenditures and, therefore, are deferred in the funds:
Delinquent property taxes $
64,105
Deferred special assessments
246,136
Due from other governmental units
275,000
585,241
Long-term liabilities are not due and payable in the current period
and therefore are not reported in the funds:
Bonds payable $
(8,270,000)
Compensated absences
(60,675)
Post employment benefit obligation
(66,505)
Accrued interest
(93,620)
Unamortized premium
(13,993)
Unamortized discount and bond issuance costs
202,895
(8,301,898)
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.
195,306
Net position of governmental activities (page 15)
$ 13,907,083
See Notes to Financial Statements
23
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
For the Year Ended December 31, 2012
REVENUES
Taxes
Licenses and permits
Intergovernmental
Charges for services
Fines and forfeitures
Special assessments
Investment earnings
Miscellaneous revenue
TOTAL REVENUES
EXPENDITURES
Current
General government
Public safety
Public works
Culture and recreation
Capital Outlay
Public safety
Public works
Culture and recreation
Debt Service
Principal
Interest and other charges
Bond issuance costs
TOTAL EXPENDITURES
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES
Issuance of debt
Net change in fund balances
FUND BALANCES (DEFICIT), Beginning
FUND BALANCES (DEFICIT), Ending
2012 Street
General Fund
Debt Service Village Project Improvements
$ 2,549,986
$ 411,669 $ $
330,819
162,029
75,225
5,726
58,385
97,552
90,983
14,864 (6,999)
69,450
3,267,378
599,310 (6,999)
1,034, 712
1,109, 937
446,541
150,983
5,711 918,898
406,000
227,253
40,000
41,828
2,742,173
633,253
45,711
960,726
525,205
(33,943)
(52,710)
(960,726)
865,000
525,205
(33,943)
(52,710)
(95,726)
2,913,920
3,534,742
(1,205,398)
(10,650)
$ 3,439,125
$ 3,500,799
$ (1,258,108)
$ (106,376)
See Notes to Financial Statements
24
FORM B-3
Other
Governmental
Funds Total
$ 260,078
$ 3,221,733
330,819
237,254
5,726
58,385
38,598
136.150
12,889
111,737
18,112
87,562
329,677 4,189,366
1,034,712
1,109,937
446,541
109,421 260,404
35,661 35,661
193,329 1,117,938
275,257 275,257
406,000
267,253
41,828
613,668 4,995,531
(283,991) (806,165)
865,000
(283,991) 58,835
1,680,772 6,913,386
$ 1,396,781 $ 6,972,221
25
This Page Leff 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, 2012
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - total governmental funds (pages 24-25) $ 58,835
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 $ 1,3870725
Depreciation expense (611,245)
776,480
Revenues in the statement of activities that do not provide current
financial resources are not reported as revenues in the funds:
Deferred revenue, end of year $ 585,241
Deferred revenue, beginning of year (674,827)
(89, 586)
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 $
(60,675)
Compensated absences, beginning of year
41,731
Post employment benefit obligation, end of year
(66,505)
Post employment benefit obligation, beginning of year
43,561
(41, 888)
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 $ 406,000
Issuance of long-term debt (865,000)
Change in accrued interest, bond premium, bond
discount and bond issuance costs 8,003
(450, 997)
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 (120,029)
Change in net position of governmental activities (page 17) $ 132,815
See Notes to Financial Statements
27
FORM B-5
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, 2012
Variance with
2012
Final Budget -
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Taxes
$ 2,490,403
$ 2,490,403
$ 2,549,986
$ 59,583
Licenses and permits
181,100
181,100
330,819
149,719
Intergovernmental
133,249
133,249
162,029
28,780
Charges for services
8,850
8,850
5,726
(3,124)
Fines and forfeits
53,000
53,000
58,385
5,385
Investment earnings
20,000
20,000
90,983
70,983
Miscellaneous Revenue
14,384
14,384
69,450
55,066
TOTAL REVENUES
2,900,986
2,900,986
3,267,378
366,392
EXPENDITURES
Current
General government
Public safety
Public works
Culture and recreation
TOTAL EXPENDITURES
Excess (deficiency) of revenues
over (under) expenditures
OTHER FINANCING SOURCES (USES)
Transfers to other funds
Net change in fund balance
FUND BALANCE, beginning
FUND BALANCE, ending
978,593
978,593
1,034,712
(56,119)
1,081,541
1,081,541
1,109,937
(28,396)
482,749
482,749
446,541
36,208
183,103
183,103
150,983
32,120
2,725,986 2,725,986 2,742,173 (16,187)
175,000 175,000 525,205 350,205
(175, 000) (175, 000) 175,000
525,205 525,205
2,913,920 2,913,920 2,913,920
$ 2,913,920 $ 2,913,920 $ 3,439,125 $ 525,205
See Notes to Financial Statements
28
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CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Net Position
December 31, 2012
ASSETS
Current Assets
Cash and investments
Cash with fiscal agent
Receivables
Accounts
Special assessments
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
Unamortized deferred charges
Total Noncurrent Assets
TOTAL ASSETS
Water Sewer Storm Sewer
$ 925,250 $ 52,989 $ 119,453
4,017,679
219,560 26,324
44,335 11,543
668
5,207,492 90,856
225,222
33,948
23,915
402,538
54,675
282,860
11, 745, 589 346,607 595,833
486,843 12,514 70,381
12, 569, 967 359,121 666,214
2,482,547 186,669 55,337
10, 0871420
184,905
1721452 610,877
10, 272, 325 172,452 610, 877
$ 15,479,817 $ 263,308 $ 1,013,415
See Notes to Financial Statements
30
Total
$ 1,097,692
4,017,679
4711106
89,826
24,583
FORM C-1
Internal
Service Funds
$ 43,070
5,700, 886 43,070
54,675
282,860
12,688,029
569,738
13, 595, 302
598,435
598,435
2,724,553 398,451
10, 870, 749 199,984
184,905
11,055,654 199,984
$ 16, 756, 540 $ 243,054
31
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Net Position (Continued)
December 31, 2012
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
Unamortized premium on bonds
Bonds payable
Total Long-term Liabilities
Total Liabilities
Net Position
Net investment in capital assets
Unrestricted
Total Net Position
TOTAL LIABILITIES AND
NET POSITION
Water
Sewer
Storm Sewer
$ 23,821
$ 31916
$ 1,873
1,407
611
798
48,576
24,583
2,851
1,907
11026
448
165, 000
268,145
5,553
3,119
7,377
11852
2,769
2,946
1,584
692
59,126
8,470,000
8,539,449
3,436
3,461
8,807,594
8,989
6,580
6,005,048
172,452
610,877
667,175
81,867
395,958
6,672,223
254,319
1,006,835
$ 151479,817 $ 263,308 $ 1,013,415
See Notes to Financial Statements
32
Internal
Total Service Funds
$ 29,610
2,816
481576
24,583
2,851
3,381
165,000
47,748
276,817 47,748
11,998
5,222
59,126
8,470,000
8,546,346
8,823,163 47,748
6,788,377 199,984
1,145,000 (4,678)
7,933,377 195,306
$ 16, 756, 540 $ 243,054
33
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Revenues, Expenses
and Changes in Net Position
For the Year Ended December 31, 2012
Water
Sewer
Storm Sewer
Operating Revenues
$ 634,607
$ 54,710
$ 147,162
Operating Expenses
Personnel services
841755
25,316
34,862
Supplies
37,903
21
3,236
Professional services
70,164
2,052
18,839
Repairs and maintenance
111768
194
1,465
Insurance
6,162
Utilities
111,800
171581
Depreciation
323,055
8,739
15,188
Total Operating Expenses
645,607
53,903
73,590
Operating Income (Loss)
(11,000)
807
73,572
Other Revenue (Expense)
Investment earnings
91305
339
638
Rents
46,001
Special assessments
18,551
11,027
24,067
Amortization of deferred charges
(6,050)
Interest expense
(221,129)
Total Other Revenue (Expense)
(153,322)
11,366
24,705
Income (Loss) Before Contributions
(164,322)
12,173
98,277
Capital contributions
104,652
10,475
Net Income (Loss)
(59,670)
22,648
98,277
Net Position, Beginning of Year
6,731,893
231,671
908,558
Net Position, End of Year
$ 6,672,223
$ 254,319
$ 1,006,835
See Notes to Financial Statements
34
Total
$ 836,479
144,933
41,160
91,055
13,427
6,162
129,381
346,982
773,100
63,379
10,282
46,001
53,645
(6,050)
(221,129)
(117,251)
(53,872)
115,127
61,255
7,872,122
FORM C-2
Internal
Service Funds
69,663
50,334
119,997
(119,997)
(32)
(32)
(120,029)
(120,029)
315,335
$ 7,933,377 $ 195,306
35
FORM C-3
CITY OF LAKE ELMO, MINNESOTA
PROPRIETARY FUNDS
Combining Statement of Cash Flows
For the Year Ended December 31, 2012
Internal Service
Water
Sewer
Storm Sewer
Total
Funds
Cash Flows from Operating Activities
Cash received from customers
$ 645,578
$ 57,782
$ 207,711
$ 911,071
$
Cash payments to suppliers
(241,762)
(17,934)
(26,314)
(286,010)
(77,444)
Cash payments to employees
(83,980)
(23,248)
(34,220)
(141,448)
Net Cash Provided By (Used In)
Operating Activities
319,836
16,600
147,177
483,613
(77,444)
Cash Flows From Investing Activities
Interest earnings received
9,305
339 638
10,282
(32)
Cash Flows from Noncapital Financing Activities
Rents received
46,001
46,001
(increase) decrease in due from other funds
(668)
(23,915)
(24,583)
13,676
Increase (decrease) in due to other funds
24,583
24,583
34,072
Net Cash Provided By (Used In) Noncapital
Financing Activities
69,916
(23,915)
46,001
47,748
Cash Flows from Capital and Related Financing Activities
Acquisition of capital assets
(117,712)
(12,514) (31,831)
(162,057)
(6,236)
Connection fees received
104,652
10,475
115,127
Special assessments
18,551
11,027 24,067
53,645
Proceeds from issuance of long-term debt
4,035,000
4,035,000
(Increase) in unamortized bond charges
(72,934)
(72,934)
Increase in unamortized bond premiums
53,363
53,363
Principal paid on long-term debt
(40,000)
(40,000)
Interest paid on long-term debt
(189,706)
(189,706)
Net Cash Provided By (Used In) Capital and
Related Financing Activities
3,791,214
8,988 (7,764)
3,792,438
(6,236)
Net Increase (Decrease) in Cash
and Cash Equivalents
Cash and Cash Equivalents, January 1
Cash and Cash Equivalents, December 31
4,190,271 25,927 116,136 4,332,334 (35,964)
752,658 27,062 3,317 783.037 79,034
$ 4,942,929 $ 52,989 $ 119,453 $ 5,115,371 $ 43,070
RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES
Operating income (loss) $
(11,000) $
807
$ 73,572 $
63,379 $
(119,997)
Adjustments to reconcile operating income to
net cash provided by operating activities
Depreciation
323,055
8,739
15,188
346,982
50,334
(Increase) decrease in:
Accounts receivable
(4,908)
14,099
59,351
68,542
Special assessments
15,879
(11,027)
1,198
6,050
Increase (decrease) in:
Accounts payable
(1,843)
1,914
(2,238)
(2,167)
(7,781)
Accrued salaries payable
133
323
445
901
Due to other governments
(2,122)
(536)
(2,658)
Other postemployment benefits payable
2,563
639
961
4,163
Compensated absences payable
(1,921)
1,106
(764)
(1,579)
Net Cash Provided By Operating Activities $
319,836 $
16,600
$ 147,177 $
483,613 $
(77,444)
Noncash Capital and Related Financing Activities
Amortization of deferred charges $
6,050 $
$ $
6,050 $
Amortization of bond premiums
1,345
1,345
See Notes to Financial Statements
36
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF FIDUCIARY NET POSITION
ASSETS
Cash and investments
Accounts receivable
TOTAL ASSETS
LIABILITIES
Accounts payable
Deposits payable
TOTAL LIABILITIES
FIDUCIARY FUNDS
December 31, 2012
FORM D-1
Agency Funds
$ 4271455
128
$ 427,583
$ 8,000
419,583
$ 4271583
See Notes to Financial Statements
37
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CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
This Page Left; 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. Regortina 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.
41
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 Accountinq 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.
42
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.
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.
The debt service fund accounts 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 2012 street improvements fund is an accumulation of resources and costs
associated with the 2012 Street Improvement project.
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.
43
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. Summary of Significant Accounting Policies (Continued)
C. Measurement Focus, Basis of Accountinq and Financial Statement Presentation
(Continued)
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.
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.
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)
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 and Net Position or Equity
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.
2. Receivables and parables
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."
46
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities and Net Position or Equity (Continued)
2. Receivables and payables (continued)
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
revenue in the governmental funds of the fund financial statements because they are
not known to be available to finance current expenditures.
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 charges ranging
from 4.5% to 7.0%. 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 revenue in the governmental funds of the fund financial
statements because they are not known to be available to finance current
expenditures.
46
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities and Net Position or Equity (Continued)
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.
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
47
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities and Net Position or Equity (Continued)
5. 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.
6. 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.
Bond premiums and discounts, as well as issuance costs, 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. Bond premiums and
discounts, as well as issuance costs, are deferred and amortized over the term of the
related debt. In the fund financial statements, governmental fund types recognize
bond premiums and discounts, as well as bond issuance costs, 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.
48
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities and Net Position or Equity (Continued
7. Fund equity
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."
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 Council has adopted a fund balance policy which delegates the
authority to assign amounts for specific purposes to the City Administrator or his or
her designee.
49
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. Summary of Significant Accounting Policies (Continued)
D. Assets, Liabilities and Net Position or Equity (Continued)
7. Fund equity (continued)
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.
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.
50
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.
1. Budget requests are submitted by all department heads to the City Administrator and
Finance Officer in August of each year. The Administrator's office compiles the
budget requests into an overall preliminary City budget, balancing budget requests
with available revenue.
2. The preliminary budget is submitted to the City Council in September for its review
and/or modification.
3. City administration presents the proposed budget to the City Council which in turn,
when required, holds a truth -in -taxation public hearing on the proposed budget. The
budget resolution adopted by the City Council sets forth the budget at the department
level for the General Fund.
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, 2012).
The City does not use encumbrance accounting.
51
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. Stewardship, Compliance, and Accountability
B. Expenditures Exceeding Appropriations
For the year ended December 31, 2012, the General Fund total expenditures were $16,187
more than budget. The following General Fund departments had expenditures exceeding
the latest amended budget:
2012 Budgeted 2012 Actual Amount Exceeding
Expenditures Expenditures Budgeted Amount
General government $ 978,593 $ 1,034,712 $ 56,119
Public safety 1,081,541 1,109,937 28,396
The above listed overexpenditures were approved by the City Council.
C. Fund Balance Deficits
As of December 31, 2012, the following funds had deficit fund balances:
Fund
Major:
Village Project
2012 Street Improvements
Nonmajor:
Development
Fall Festival
Library
Infrastructure Reserve
Manning Avenue/Highway 36
South of 10th Street
Amount
$ 1,258,108
106,376
200
59
72,678
90,144
6,319
137,031
The fund balance deficits will be eliminated by future revenue and financing sources.
62
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, 2012.
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.
53
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
Total cash and investments
N/A Not applicable or not available
Range of Maturities Rating
N/A
NIA
6/14
N/A
12/22
AAA
3/22
AAA
Value
$ 2,585,134
800,642
2,442,489
7,102,198
$ 12,930,463
A reconciliation of cash and temporary investments as shown on the Statement of Net
Position for the City follows:
Carrying amount of deposits $ 2,585,134
Investments 10,345,329
Total $ 12,930,463
Government -wide
Cash and investments $ 5,630,188
Cash with fiscal agent 6,872,820
Fiduciary
Cash and investments 427,455
Total $ 12,930,463
54
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, 2012 were as follows:
Issuer
Lake Elmo Bank
Morgan Stanley
U.S. Treasury
Custodial Credit Risk
Investment Type
Value
Money Market Savings
$ 1,717,817
Money Market Account
701,960
U.S. Government Agencies
6,873,448
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, 2012, all investments were
insured or registered or the securities were held by the City or its agent in the City's name.
B. Accounts Receivable
Accounts receivable as of December 31, 2012 ($487,606) 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.
C. Due from Other Governmental Units
Amounts due from other governmental units as of December 31, 2012 were as follows:
Minnesota
Department of
Fund Type Washington County Transportation
General Fund $ 41,202 $
Debt Service 275,000
55
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
D. Capital Assets
Capital asset activity for the City for the year ended December 31, 2012 was as follows:
Governmental Activities
Capital assets, not being depreciated:
Land
Construction in progress
Total capital assets, not being depreciated
Capital assets, being depreciated:
Buildings
Improvements other than buildings
Machinery and equipment
Infrastructure
Total capital assets, being depreciated
Less accumulated depreciation for:
Building
Improvements other than buildings
Machinery and equipment
Infrastructure
Total accumulated depreciation
Total capital assets, being depreciated, net
Governmental activities capital assets, net
Beginning
Balance Increases Decreases
Ending
Balance
$ 3,453,979 $
$
$
3,453,979
1,397,963
1,118,268
225,917
2,290,314
4,851,942
1,118,268
225,917
5,744,293
3,393,346
241,137
3,634,483
1,199,541
1,199, 541
2,664,939
34,555
25,607
2,673,887
5,874,402
225,917
6,100,319
13,132,228
501,609
25,607
13,608,230
628,637
80,492
709,129
641,209
64,803
706,012
1,726,011
187,799
25,607
1,888,203
1,064,497
328,485
1,392,982
4,060,354
661,579
25,607
4,696,326
9,071,874
(159,970)
8,911,904
$ 13,923,816 $
958,298 $
225,917 $
14,656,197
56
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
D. Capital Assets (Continued)
Beginning
Ending
Business -Type Activities
Balance
Increases Decreases
Balance
Capital assets, not being depreciated:
Land
$ 36,573
$ 18,102 $
$ 54,675
Construction in progress
425,783
143,955
569,738
Total capital assets, not being depreciated
462,356
162,057
624,413
Capital assets, being depreciated:
Machinery and equipment
282,860
282,860
Infrastructure
12,688,029
12,688,029
Total capital assets, being depreciated
12,970,889
12,970,889
Less accumulated depreciation for:
Machinery and equipment
136,294
19,133
155,427
Infrastructure
2.241,277
327,849
2,569,126
Total accumulated depreciation
2,377,571
346,982
2,724,553
Total capital assets, being depreciated, net
10,593,318
(346,982)
10,246,336
Business -type activities capital assets, net
$ 11,055,674
$ (203,027) $
$ 10,870,749
Depreciation expense for the year ended December 31, 2012 was charged to functions/programs
as follows:
Governmental Activities
General government $ 28,449
Public safety 106,398
Public works 457,486
Culture and recreation 69,246
Total $ 661,579
Business -Type Activities
Water $ 323,055
Sewer 8,739
Storm sewer 15,188
Total $ 346,982
57
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
E. Long -Term Debt
The City issues general obligation bonds to provide funds for economic development and
for the acquisition and construction of major capital assets including infrastructure.
General obligation bonds have been issued for both governmental and business -type
activities. Bonds issued to provide funds for business -type activities are reported in
proprietary funds if they are expected to be repaid from proprietary revenues.
General obligation bonds are direct obligations and pledge the full faith and credit of the
City. General obligation improvement bonds are expected to be repaid, in part, from
assessments to the benefited properties.
A summary of long-term debt outstanding at December 31, 2012 is as follows:
General obligation bonds:
2004A CIP Bonds
2009A Refunding Bonds
2009B Improvement Bonds
2010A Improvement Bonds
2010B CIP Crossover Refunding Bonds
2011A Improvement Bonds
2012E Improvement Bonds
General obligation certificates:
2006A Equipment Certificates
General obligation revenue bonds:
2005A Water Revenue Bonds
2009A Refunding Bonds
2012A Refunding Bonds
Other Liabilities:
Compensated Absences
Post Employment Benefit Obligation
Unamortized premium
Total Long -Term Debt
Range of
Final
Balance
Issue Date
Interest Rates
Maturity
12/31/12
11/1/2004
3.45%
2013
$ 3,030,000
5/1/2009
3.00% - 3.85%
2017
275,000
10/1/2009
2.00% - 3.05%
2020
490,000
11/15/2010
0.75% - 2.80%
2021
645,000
11/15/2010
1.00% - 3.20%
2025
1,970,000
10/1/2011
0.50% - 2.30%
2022
845,000
8/16/2012
0.50% -1.90%
2023
865,000
3/8/2006
4.00%
2015
150,000
8/10/2005
3.50% - 4.375%
2030
4,200,000
5/1/2009
3.00% - 3.85%
2021
400,000
8/13/2012
2.00 - 2.50%
2030
4,035,000
69,278
78,503
73,119
$ 17,125, 900
Liquidation of the compensated absences liability occurs within the department and fund
for which the corresponding employees are assigned.
68
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
E. Long -Term Debt (Continued)
The following is a summary of the changes in long-term debt obligations for the year
ended December 31, 2012:
Amounts
Beginning
Ending
Due Within
Accrued
Balance
Additions
Reductions
Balance
One Year
Interest
GOVERNMENTAL ACTIVITIES
Bonds and Notes Payable:
General obligation bonds:
2004 CIP Bonds
$ 3,205.000
$
$ 175.000
$ 3.030,000
$ 3,030.000
$ 51,455
2009A Refunding Bonds
340.000
65,000
275,000
65,000
1,857
2009E Improvement Bonds
545,000
55,000
490,000
60,000
5,666
2010A Improvement Bonds
710,000
65,000
645,000
70,000
5,226
2010E CIP Crossover Refunding Bonds
1,970,000
1,970,000
19,420
2011A Improvement Bonds
845,000
845,000
75,000
5,251
2012E Improvement Bonds
865,000
865,000
4,245
General obligation certificates:
2006A Equipment Certificates
196,000
46,000
150,000
48,000
500
Other Liabilities:
Compensated Absences
41,731
65,182
46,238
60,675
26,241
Post Employment Benefit Obligation
43,561
22,944
66,505
Unamortized premium
15,137
1,144
13,993
Governmental Activities
Long -Term Liabilities
7,911,429
953,126
453,382
8,411,173
3,374,241
93,620
BUSINESS -TYPE ACTIVITIES
Bonds and Notes Payable:
General obligation revenue bonds:
2005A Water Revenue Bonds
4,200,000
4,200,000
125,000
14,585
2009A Refunding Bonds
440,000
40,000
400.000
40,000
2012A Refunding Bonds
4,035,000
4,035,000
33,991
Other Liabilities:
Compensated Absences
10,182
3,991
5,570
8,603
3,381
Post Employment Benefit Obligation
7,835
4,163
11,998
Unamortized premium
7,108
53,363
1,345
59,126
Business -Type Activities
Long -Term Liabilities
4,665,125
4,096,517
46,915
8,714,727
168,381
48,576
Total
$ 12,576,554
$ 5,049,643
$ 500,297
$ 17,125,900
$ 3,5�
$ 1
59
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
E. Long -Term Debt (Continued)
In August 2012, the City issued $4,035,000 in general obligation water revenue
crossover refunding bonds with interest rates ranging from 2.00% to 2.50%. Proceeds
from this bond issuance will be used to refund the remaining principal of the 2005A water
revenue bonds in 2015. This refunding will result in a $455,000 reduction to total debt
service payments over the next eighteen 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, 2012 were as
follows:
General Obligation
General Obligation Revenue
Improvement Bonds
Equipment Certificates
Bonds
Year
Principal
Interest
Principal
Interest
Principal
Interest
2013
$ 3,300,000
$ 164,256
$ 48,000
$ 6,000
$ 165,000 $
303,431
2014
490,000
97,394
50,000
4,080
190,000
269,174
2015
510,000
90,371
52,000
2,080
3,965,000
262,574
2016
520,000
81,968
235,000
95,924
2017
455,000
72,772
235,000
90,824
2018-2022
2,195, 000
220,251
1,315,000
367,896
2023-2027
650,000
27,406
1,530,000
219,438
2028-2030
1,000,000
48,776
Totals $ 8,120,000 $ 754,418 $ 150,000 $ 12,160 $ 8,635,000 $ 1,658,037
60
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
F. Interfund Receivables and Payables
The following schedule reports the interfund receivables and payables within the City's
funds as of December 31, 2012:
Major Governmental Funds:
General Fund
Village Project
2012 Street Improvements
Subtotal
Non -Major Governmental Funds:
Special Revenue
Development
Fall Festival
Library
Capital Projects
Infrastructure Reserve
City Facilities
South of 10th Street
Subtotal
Total Governmental Funds
Proprietary Funds:
Water
Storm Sewer
Subtotal
Internal Service Funds:
FFE Replacement
Total All Funds
Due From Due To
Other Funds Other Funds
$ 604,124 $
252,710
100,744
604,124 353,454
200
59
112,576
65,691
112,576
136,972
112,576 315,498
716,700 668,952
668 24,583
23,915
24,583 24,583
47,748
$ 741,283 $ 741,283
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.
61
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Detailed Notes on All Funds (Continued)
F. Interfund Receivables and Payables (Continued)
The City established an interfund loan from the General Fund to the Village Project fund.
At December 31, 2012, the outstanding balance was $1,005,398. The loan carries an
interest rate of 4 percent.
G. Fund Equity
In accordance with the requirements of GASB Statement No. 54, below is a schedule of
ending fund balances as of December 31, 2012:
Nonspendable
Prepaid items
Advance to other funds
Total Nonspendable
Restricted
Debt service
Street improvement
City facilities
Total Restricted
Assigned
Park improvements
Vehicle acquisition
Total Assigned
Unassigned
Total Fund Balance
Other Total
2012 Street Governmental Governmental
General Debt Service Village Project Improvements Funds Funds
$ 19,035 $ $ $ $ $ 19,035
1,005,398 1.005,398
1,024,433 1,024,433
3,500,799 3,500,799
183,229 183,229
275.083 275,083
3,500,799 458,312 3,959.111
924.916 924,916
319,984 319.984
1,244,900 1,244,900
2,414,692 (1,258,108) (106,376) (306,431) 743,777
$ 3.439,125 $ 3,500,799 $ (1,258,108) �$ 006,376)„ $ 1.396,781 $ 6,972,221
62
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 Contin- eQ ncies
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:
There were several pending lawsuits in which the City was involved as of December 31,
2012. 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.
63
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 12 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 2012, 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.
64
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
$ 20,397
Interest on net OPEB obligations
1,041
Adjustment to ARC
5,669
Annual OPEB cost
271107
Contributions during the year
Increase in net OPEB obligation
271107
Net OPEB, beginning of year
51,396
Net OPEB, ending of year
$ 78,503
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, 2012, 2011 and 2010 are
as follows:
Fiscal Year
Annual
Percentage
Net OPEB
Ended
OPEB Cost
Contributed
Obligation
12/31 /2010
$ 171131
0%
$ 34,060
12/31 /2011
17,336
0%
51,396
12/31 /2012
27,107
0%
78,503
65
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, 2012, the actuarial accrued liability for benefits was $101,981, all of which
was unfunded. The covered payroll (annual payroll of active employees covered by the
plan) was $932,540, and the ratio of the unfunded actuarial accrued liability to the covered
payroll was 10.9 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.
66
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. Other Information (Continued)
C. Other Post Employment Benefits (Continued)
Methods and Assumptions (Continued)
Mortality - Life expectancies were based on mortality tables from the National Center for
Health Statistics. The 2004 United States Life Tables for Males and Females was used.
Turnover- Non -group -specific age -based turnover data from GASB Statement No. 45 were
used as the basis for assigning active members a probability of remaining employed until
the assumed retirement age and for developing 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 - 2012 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 5.0 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, 2012 was thirty years.
67
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 three 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.
68
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 reduce the monthly normal annuity amount, because the annuity is
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.
69
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 Township makes annual contributions to the pension plans equal to the amount
required by state statutes. GERF Basic Plan members and Coordinated Plan
members are required to contribute 9.1 % and 6.25%, respectively, of their annual
covered salary in 2012. The City of Lake Elmo, Minnesota is 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, 2012, 2011 and 2010
were $64,694, $56,576 and $52,277, 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 Firefighter's Relief Association (the Association). The Association is
administrator of a single -employer defined benefit pension plan available to firefighters
that operates under the provisions of Minnesota Laws 1951, Chapter 550, as amended
and Minnesota State Statutes Section 317, as amended. It is governed by a Board of
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.
70
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, 2012, the pension benefit level was at $3,100 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, 2012. 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 $39,324 (including the 10% supplemental
reimbursement) for the year ended December 31, 2012.
71
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
$ 39,324
Contributions made:
City
State Aid - pass -through
39,324
Actuarial valuation date
12/31 /12
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
72
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,
2011, 2010 and 2009 (most current information available) are as follows:
Disclosure
Annual Pension Cost (APC)
Percentage of APC Contributed
Net Pension Obligation
2012 2011 2010
$ 39,324 $ 47,867 $ 55,081
100% 100% 100%
N/A N/A N/A
Membership of the Association at December 31, 2011 (most current information
available) was comprised of the following:
Terminated members entitled to benefits
but have not received them
6
Current Members:
Vested (Fully or Partially)
8
Non -Vested
15
Total Plan Members
29
E. Schedule of Funding Progress (most current information available shown)
Assets in
Excess of
Pension
Actuarial
Actuarial
Actuarial
(Unfunded)
Benefit Per
Valuation
Value of
Accrued
Accrued
Funded
Year of
Date
Assets
Liabilitiy
Liability
Ratio
Service
12/31 /2012
$ 919,992
$ 717,847
$ 202,145
128.2%
$ 3,100
12/31 /2011
887,064
752,729
134,335
117.8%
3,100
12/31 /2010
863,494
715,984
147,510
120.6%
3,100
F. Related Party Investments
As of December 31, 2012, and for the year then ended, the Association held no
securities issued by the City or other related parties.
73
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. Other Information (Continued)
E. Deferred Compensation Plans - Statewide
Under Minnesota statute 353.028, subdivision 2, City managers or administrators may
elect to be excluded from membership in PERA. They must choose exclusion within six
months of the day they begin employment. The law also provides for refunds of
contributions made before the election. If they elect exclusion, they and their cities may
agree that the cities will defer and contribute additional compensation on behalf of the
employees to a deferred compensation program. The program must meet federal
income tax laws. The City contribution cannot exceed the amount it would have made
under the PERA contribution.
Prior to 2012, the City Administrator was covered by deferred compensation plan 457(b)
administered by ICMA-RC. The City contributed $6,230 and $6,759 for the years ended
December 31, 2011 and 2010, respectively.
In general, any amount of compensated deferred and any income attributable to the
amounts so deferred shall be includible in gross income only for the taxable year in which
such compensation or other income is paid to the participant or other beneficiary.
Under federal requirements, a plan meets distribution requirements if under the plan
amounts will not be made available to participants or beneficiaries earlier than (1) the
calendar year in which the participant attains age 70 1/2, (2) when the participant has a
severance from employment with the employer, or (3) when the participant is faced with
an unforeseeable emergency (determined in the manner prescribed by the Secretary in
regulations).
ICMA-RC issues a publicly available financial report that includes financial statements
and required supplementary information for the 457(b) plan. That report may be
obtained by writing to ICMA-RC Headquarters, 777 North Capitol Street, NE Washington,
DC 20002 or by calling 202-962-4600.
74
CITY OF LAKE ELMO, MINNESOTA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. New Accounting Pronouncements
GASB 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources,
and Net Position, implemented this year, provides financial reporting guidance for deferred
outflows of resources and deferred inflows of resources. The Statement of Net Assets is
renamed the Statement of Net Position and includes four components: assets, deferred outflows
of resources, liabilities and deferred inflows of resources. The City has determined they have no
deferred outflows or inflows as defined by this standard.
Management has not currently determined what, if any, impact implementation of the following
statements may have on the financial statements of the City.
GASB 65, Items Previously Reported as Assets and Liabilities, will be effective for the City
beginning with its year ending December 31, 2013. This statement requires certain items that are
currently reported as assets and liabilities to be reclassified as deferred outflows of resources,
deferred inflows of resources, or current -period outflows and inflows.
75
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CITY OF LAKE ELMO, MINNESOTA
REQUIRED SUPPLEMENTAL INFORMATION
December 31, 2012
This Page Leff Blank Intentionally .
FORM E-1
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF FUNDING PROGRESS - OTHER POST EMPLOYMENT BENEFITS
For the Year Ended December 31, 2012
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
1/1/2012 $
$ 101,981 $ 101,981 0% $ 932,540 10.94%
Actuarial valuations are provided every two or 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.
79
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CITY OF LAKE ELMO, MINNESOTA
COMBINING AND INDIVIDUAL
FUND STATEMENTS AND SCHEDULES
December 31, 2012
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2012
ASSETS
Cash and investments
Receivables (Net of allowance for
uncollectibles)
Special assessments
Due from other funds
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
Escrow deposits payable
Due to other funds
Deferred revenue
Total liabilities
FUND BALANCE (DEFICIT)
Restricted
Assigned
Unassigned
Total Fund Balance (Deficit)
TOTAL LIABILITIES AND
FUND BALANCE
FORM F-1
Special Capital
Revenue Projects Total
$ 43,143 $ 1,660,296 $ 1,703,439
59,144 59,144
112,576 112, 576
$ 43,143 $ 1,832,016 $ 1,875,159
$ 3,245 $ 25,491 $ 28,736
751000 75,000
1121835 202,663 315,498
59,144 59,144
116,080 362,298 478,378
458,312 458,312
1,244,900 19244,900
(72,937) (233,494) (306,431)
(72,937) 1,469,718 1,396,781
$ 431143 $ 1,832,016 $ 11875,159
82
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2012
REVENUES
Taxes
Special assessments
Investment earnings
Miscellaneous revenue
TOTAL REVENUES
EXPENDITURES
Current
Culture and recreation
Capital Outlay
Public safety
Public works
Culture and recreation
TOTAL EXPENDITURES
Net change in fund balances
FUND BALANCES (DEFICIT), Beginning
FUND BALANCES (DEFICIT), Ending
Special Capital
Revenue Projects
FORM F-2
Total
$ 260,078 $ $ 260,078
38,598 38,598
12,889 12,889
18,112 18,112
278,190 51,487 329,677
109,421 109,421
35,661
35,661
200 193,129
193,329
241,137 34,120
275,257
350,758 2621910
613,668
(72,568) (211,423) (283,991)
(369) 1,681,141 1,680,772
$ (72,937) $ 1,4699718 $ 1,396,781
83
FORM G-1
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2012
Development Fall Festival Library Total
ASSETS
Cash and investments $ $ $ 43,143 $ 43,143
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable $ $ $ 3,245 $ 3,245
Due to other funds 200 59 112,576 112,835
Total liabilities 200 59 115,821 116,080
FUND BALANCE (DEFICIT)
Unassigned (200) (59) (72,678) (72,937)
Total Fund Balance (Deficit) (200) (59) (72,678) (72,937)
TOTAL LIABILITIES AND
FUND BALANCE $ $ $ 43,143 $ 43,143
84
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, 2012
REVENUES
Taxes
Miscellaneous revenue
TOTAL REVENUES
EXPENDITURES
Current
Culture and recreation
Capital Outlay
Public works
Culture and recreation
TOTAL EXPENDITURES
Net change in fund balances
FUND BALANCES (DEFICIT), Beginning
FUND BALANCES (DEFICIT), Ending
Development
FORM G-2
$ $ 260,078 $ 260,078
8,701 9,411 18,112
8,701 269,489 278,190
15,874
93,547
109,421
200
200
241,137
241,137
200
15,874
334,684
350,758
(200)
(7,173)
(65,195)
(72,568)
7,114
(7,483)
(369)
$ (200) $
(59)
$ (72,678)
$ (72,937)
85
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
December 31, 2012
ASSETS
Cash and investments
Receivables (Net of allowance for
uncollectibles)
Special assessments
Due from other funds
TOTAL ASSETS
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
Escrow deposits payable
Due to other funds
Deferred revenue
Total liabilities
FUND BALANCE (DEFICIT)
Restricted
Assigned
Unassigned
Total Fund Balance (Deficit)
TOTAL LIABILITIES AND
FUND BALANCE
Park Infrastructure
Dedication Reserve
$ 925,895 $
59,144
Vehicle
Acquisition
$ 319,984
$ 925,895 $ 59,144 $ 319,984
$ 979 $ 241453 $
65,691
59,144
979 149,288
924,916
319,984
(90,144)
924,916 (90,144) 319,984
$ 925,895 $ 59,144 $ 319,984
86
FORM H-1
Manning
Avenue/Hwy
2011 Street
South of 10th
City Facilities
36
Improvements
Street
Total
$
162,507
$ 68,681
$ 183,229
$
$
1,660,296
59,144
112,576
112,576
$
275,083
$ 68,681
$ 183,229
$
$
1,832,016
$
$
$
$ 59
$
25,491
75,000
75,000
136,972
202,663
59,144
75,000
137,031
362,298
275,083
183,229
458,312
1,244,900
(6,319)
(137,031)
(233,494)
275,083
(6,319)
183,229
(137, 031)
1,469, 718
$
275,083
$ 68,681
$ 183,229
$
$
1,832,016
87
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, 2012
REVENUES
Special assessments
Investment earnings
TOTAL REVENUES
EXPENDITURES
Capital Outlay
Public safety
Public works
Culture and recreation
TOTAL EXPENDITURES
Net change in fund balances
FUND BALANCES (DEFICIT), Beginning
FUND BALANCES (DEFICIT), Ending
Park
Infrastructure
Vehicle
Dedication
Reserve
Acquisition
$
$ 38,598
$
6,395
(604)
2,212
6,395
37,994
2,212
35,661
177,397
34,120
34,120
177,397
35,661
(27,725)
(139,403)
(33,449)
9521641
49,259
353,433
$ 924,916
$ (90,144)
$ 319,984
88
FORM H-2
Manning
Avenue/Hwy
2011 Street
South of 10th
City Facilities
36
improvements
Street
Total
$
$
$
$
$ 38,598
3,998
475
1,360
(947)
12,889
3,998
475
1,360
(947)
51,487
35,661
3,077
12,655
193,129
34,120
3,077
12,655
262,910
3,998
475
(1,717)
(13,602)
(211,423)
2711085
(6,794)
184,946
(123,429)
1,681,141
$ 275,083
$ (6,319)
$ 183,229
$ (137,031)
$ 1,469,718
89
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
December 31, 2012
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
FORM 1-1
Radio IT FFE
Replacement Replacement Replacement Total
$ 26,834 $ 16,236 $ $ 43,070
99,851 135,431 363,153 598,435
45,072 97,890 255,489 398,451
54,779 37,541 107,664 199,984
$ 81,613 $ 53,777 $ 107,664 $ 243,054
$ $ $ 47,748 $ 47,748
54,779 37,541 107,664 199,984
26,834 16,236 (47,748) (4,678)
81,613 53,777 59,916 195,306
$ 81,613 $ 53,777 $ 107,664 $ 243,054
90
FORM 1-2
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, 2012
Radio
IT
FFE
Replacement
Replacement
Replacement
Total
Operating Expenses
Repairs and maintenance
$
$ 1,314
$ 68,349
$ 69,663
Depreciation
8,321
12,435
29,578
50,334
Total Operating Expenses
8,321
13,749
97,927
119,997
Other Revenue (Expense)
Investment earnings
186
112
(330)
(32)
Net (Loss)
(8,135)
(13,637)
(98,257)
(120,029)
Net Position, Beginning of Year
89,748
67,414
158,173
315,335
Net Position, End of Year
$ 81,613 $ 53,777 $ 59,916 $ 195,306
91
Cash Flows from Operating Activities
Cash payments to suppliers
Cash Flows From Investing Activities
FORM 1-3
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For the Year Ended December 31, 2012
Radio IT FFE
Replacement Replacement Replacement Total
$ $ (1,314) $ (76,130) $ (77,444)
Interest earnings received 186 112 (330) (32)
Cash Flows from Noncapital Financing Activities
Decrease in due from other funds 13,676 13,676
Increase in due to other funds 34,072 34,072
Net Cash Provided By Noncapital Financing Activities 13,676 34,072 47,748
Cash Flows from Capital and Related Financing Activities
Acquisition of capital assets - (6,236) (6,236)
Net Increase (Decrease) in Cash and Cash Equivalents 13,862 (7,438) (42,388) (35,964)
Cash and Cash Equivalents, Beginning of Year 12,972 23,674 42,388 79,034
Cash and Cash Equivalents, End of Year $ 26,834 $ 16,236 $ $ 43,070
RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating income (loss) $ (8,321) $ (13,749) $ (97,927) $ (119,997)
Adjustments to reconcile operating income to
net cash provided by operating activities
Depreciation 8,321 12,435 29,578 50,334
Increase (decrease) in:
Accounts payable (7,781) (7,781)
Net Cash Provided By (Used In) Operating Activities $ $ (1,31q $ (76,130) $ (77,444)
92
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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, 2012
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
2012 Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 2,451,903
$ 2,451,903
$ 2,507,990 $
56,087
38,500
38,500
41,996
3,496
2,490,403
2,490,403
2,549,986
59,583
10,250
10,250
12,935
2,685
170,850
170,850
317,884
147,034
181,100
181,100
330,819
149,719
75,000
75,000
87,578
12,578
40,000
40,000
38,823
(1,177)
2,749
2,749
(2,749)
15,500
15,500
35,628
20,128
133,249
133,249
162,029
28,780
8,850
8,850
5,726
(3,124)
53,000
53,000
58,385
5,385
20,000
20,000
90,983
70,983
14,384
14,384
69,450
55,066
$ 2,900,986
$ 2,900,986
$ 3,267,378 $
366,392
94
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, 2012
Variance with
2012
Final Budget -
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
EXPENDITURES
General Government
Mayor and Council
Personnel services
$ 17,692 $
17,692
$ 17,728
$ (36)
Other services and charges
17,700
17,700
8,981
8,719
Total Mayor and Council
35,392
35,392
26,709
8,683
Election
Other services and charges 11,950 11,950 14,124 (2,174)
Administration
Personnel services
333,327
333,327
352,085
(18,758)
Supplies
8,000
8,000
11,953
(3,953)
Other services and charges
79,411
79,411
87,055
(7,644)
Total Administration
420,738
420,738
451,093
(30,355)
Communications
Personnel services 13,276 13,276 13,334 (58)
Other services and charges 44,400 44,400 39,676 4,724
Total Communications 57,676 57,676 53,010 4,666
Building
Supplies 1,400 1,400 570 830
Other services and charges 38,400 38,400 34,537 3,863
Total Building 39,800 39,800 35,107 4,693
Professional Services
Assessor
46,000
46,000
44,978
1,022
Accounting and auditing
60,000
60,000
91,048
(31,048)
Legal
65,000
65,000
71,250
(6,250)
Engineering
70,000
70,000
69,864
136
Total Professional Services
$ 241,000 $
241,000 $
277,140 $
(36,140)
95
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, 2012
Variance with
2012
Final Budget -
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
EXPENDITURES
General Government
Planning and Zoning
Personnel services
$ 142,937 $
142,937
$ 120,715
$ 22,222
Supplies
750
750
1,202
(452)
Other services and charges
28,350
28,350
55,612
(27,262)
Total Planning and Zoning
172,037
172,037
177,529
(5,492)
Total General Government 978,593 978,593 1,034,712 (56,119)
Public Safety
Police
Contracted services 493,000 493,000 492,995 5
Fire Protection
Personnel services
226,950
226,950
225,006
1,944
2% fire aid
40,000
40,000
37,324
2,676
Supplies
25,500
25,500
36,890
(11,390)
Other services and charges
135,850
135,850
111,756
24,094
Total Fire Protection
428,300
428,300
410,976
17,324
Building Inspector
Personnel services
80,651
80,651
91,249
(10,598)
Supplies
500
500
1,738
(1,238)
Other services and charges
14,390
14,390
47,940
(33,550)
Total Building Inspector
95,541
95,541
140,927
(45,386)
Animal Control
Supplies 100 100 100
Other services and charges 7,600 7,600 2,121 5,479
Total Animal Control 7,700 7,700 2,121 5,579
Criminal Legal 51,000 51,000 51,474 (474)
Emergency Communications
6,000
6,000
11,444
(5,444)
Total Public Safety
$ 1,081,541
$ 1,081,541
$ 1,109,937 $
(28,396)
96
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, 2012
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
Total Expenditures
Excess (deficiency) of revenues
over (under) expenditures
FORM J-1
Variance with
2012 Final Budget -
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 205,924 $
205,924 $
191,052 $
14,872
133,100
133,100
91,635
41,465
114,225
114,225
118,932
(4,707)
453,249
453,249
401,619
51,630
5,000
5,000
4,126
874
24,500 24,500 40,796 (16,296)
482,749 482,749 446,541 36,208
145,103
145,103
120,905
24,198
8,400
8,400
6,218
2,182
29,600
29,600
23,860
5,740
183,103 183,103 150,983 32,120
2,725,986 2,725,986 2,742,173 (16,187)
175,000 175,000 525,205 350,205
OTHER FINANCING SOURCES (USES)
Transfers out (175,000) (175,000) 175,000
NET CHANGE IN FUND BALANCE 525,205 525,205
FUND BALANCE, January 1 2,913,920 2,913,920 2,913,920
FUND BALANCE, December 31 $ 2,913,920 $ 2,913,920 $ 3,439,125 $ 525,205
97
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
DEBT SERVICE FUNDS
December 31, 2012
2002 GO
2006A GO
2009A GO
Improvement
2004 GO CIP
Equipment
Refunding
Bonds
Bonds
Certificates
Bonds
ASSETS
Cash and investments
$ 161
$ 169,596
$ 20,631
$ 2,367
Cash with fiscal agent
2,855,141
Receivables (Net of allowance for
uncollectibles)
Special assessments
Due from other governmental units
275,000
TOTAL ASSETS
$ 161
$ 3,024,737
$ 20,631
$ 277,367
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
$
$
$
$
Deferred revenue
275,000
Total liabilities
275,000
FUND BALANCE
Restricted 161 3,024,737 20,631 2,367
TOTAL LIABILITIES AND
FUND BALANCE $ 161 $ 3,024,737 $ 20,631 $ 277,367
98
2009B GO
2010A GO
Improvement
Improvement
Bonds
Bonds
$ 164,205
$ 142,844
FORM K-1
2011A GO 2012B GO
Improvement Improvement
Bonds Bonds Total
$ 153,623 $ 5,731 $ 659,158
2,855,141
50,376 73,516 63,100 186,992
275,000
$ 214,581 $ 216,360 $ 216,723 $ 5,731 $ 3,976,291
$ $ $ 13,500 $ $ 13,500
50,376 73,516 63,100 461,992
50,376 73,516 76,600 475,492
164,205 142,844 140,123 5,731 3,500,799
$ 214,581 $ 216,360 $ 216,723 $ 5,731 $ 3,976,291
99
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
DEBT SERVICE FUNDS
For the Year Ended December 31, 2012
REVENUES
Taxes
Intergovernmental
Special assessments
Investment earnings
TOTAL REVENUES
EXPENDITURES
Debt Service
Principal
Interest and other charges
Bond issuance costs
TOTAL EXPENDITURES
Net change in fund balances
FUND BALANCES, Beginning
FUND BALANCES, Ending
2002 GO 2006A GO 2009A GO
Improvement 2004 GO CIP Equipment Refunding
Bonds Bonds Certificates Bonds
$ $ 160,000 $ 56,532 $
161
3,540
175,000
172,987
347,987
161 (184,447)
75,225
142 2,367
56,674 77,592
46,000 65,000
7,840 10,225
53,54U 75,225
2,834 2,367
$ 161 $ 3,024,737 $ 20,631 $ 2,367
100
FORM K-2
2009B GO
2010A GO
2011A GO
2012B GO
Improvement
Improvement
Improvement
Improvement
Bonds
Bonds
Bonds
Bonds
Total
$ 54,639
$ 64,498
$ 76,000
$
$ 411,669
75,225
11,631
12,982
72,778
97,552
1,127
988
969
5,731
14,864
67,397
78,468
149,747
5,731
599,310
55,000 65,000
12,913 12,786 10,502
406,000
227,253
67,913
77,786
10,502
633,253
(516)
682
139,245
5,731 (33,943)
164,721
142,162
878
3,534,742
$ 164,205 $
142,844
$ 140,123 $
5,731 $ 3,500,799
101
FORM L-1
CITY OF LAKE ELMO, MINNESOTA
COMBINING SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES
AGENCYFUNDS
For the Year Ended December 31, 2012
Balance Balance
January 1 Additions Deletions December 31
ESCROW
ASSETS
Cash and investments $ 335,383 $ 299,300 $ 207,100 $ 427,583
LIABILITIES
Accounts payable $ 5,000 $ 180,100 $ 177,100 $ 8,000
Deposits payable 330,383 316,300 227,100 419,583
TOTAL LIABILITIES $ 335,383 $ 496,400 $ 404,200 $ 427,583
YELLOW RIBBON
ASSETS
Cash and investments $ (128) $ $ $ (128)
Accounts receivable 128 128
TOTALASSETS $ $ $ $
TOTAL AGENCY FUNDS
ASSETS
Cash and investments $ 335,255 $ 299,300 $ 207,100 $ 427,455
Accounts receivable 128 128
TOTAL ASSETS $ 335,383 $ 299,300 $ 207,100 $ 427,583
LIABILITIES
Accounts payable $ 5,000 $ 180,100 $ 177,100 $ 8,000
Deposits payable 330,383 316,300 227,100 419,583
TOTAL LIABILITIES $ 335,383 $ 496,400 $ 404,200 $ 427,583
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CITY OF LAKE ELMO, MINNESOTA
OTHER REPORT SECTION
December 31, 2012
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SMITH•SCHAFER
& ASSOCIATES, LTD.
Certified Public Accountants and Consultants
Members of American Institute of CPA's,
Private 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, 2012, and the related notes to the
financial statements, and have issued our report thereon dated June 28, 2013.
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 28, 2013
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Rochester Office • 220 South Broadway • Suite 102 • Rochester, MN 55904 • (PH (507) 288-3277 • FAX (507) 288-4571
Red Wing Office • 519 Bush Street • Red Wing, MN 55066 • PH (651) 388-2858 • FAX (651) 388-6414
Edina Office • 6800 France Avenue South • Suite 1781 OFsiina, MN 55435 • PH (952) 920-1455 • FAX (952) 920-6603
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