HomeMy WebLinkAbout2023 Annual Comprehensive Financial ReportCity of Lake Elmo,
Minnesota
Annual Comprehensive
Financial Report
For the Year Ended December 31, 2023
Prepared by:
Finance Department
THE CITY OF
LAKE ELMO
CITY OF LAKE ELMO, MINNESOTA
TABLE OF CONTENTS
INTRODUCTORY SECTION:
LetterOf Transmittal............................................................................................................................................................ 2
Certificate Of Achievement For
Excellence In Financial Reporting................................................................................................................................ 7
CityCouncil And Officials................................................................................................................................................... 8
OrganizationalChart ............................................................................................................................................................. 9
FINANCIAL SECTION:
INDEPENDENT AUDITOR'S REPORT......................................................................................................................11
REQUIRED SUPPLEMENTARY INFORMATION:
Management's Discussion and Analysis..................................................................................................................... 15
BASIC FINANCIAL STATEMENTS:
Government -wide Financial Statements
Statementof Net Position.....................................................................................................................................
26
Statementof Activities.........................................................................................................................................
27
Fund Financial Statements
Balance Sheet — Governmental Funds..................................................................................................................
28
Reconciliation of the Balance Sheet — Governmental Funds
to the Statement of Net Position....................................................................................................................
30
Statement of Revenues, Expenditures, and
Changes in Fund Balances — Governmental Funds.......................................................................................
31
Reconciliation of Changes in Fund Balances of Governmental Funds
to the Statement of Activities........................................................................................................................
33
Statement of Net Position — Proprietary Funds....................................................................................................
34
Statement of Revenues, Expenses, and
Changes in Net Position — Proprietary Funds................................................................................................
35
Statement of Cash Flows — Proprietary Funds.....................................................................................................
36
Notes to the Basic Financial Statements.....................................................................................................................
38
REQUIRED SUPPLEMENTARY INFORMATION:
Budgetary Comparison Schedule — General Fund.......................................................................................................
72
Schedule of City's Proportionate Share of the Net Pension Liability..........................................................................
74
Schedule of City Pension Contributions......................................................................................................................
75
Schedule of Changes in Net Pension Liability (Asset) — Firefighters Relief Association ...........................................
76
Schedule of Changes in City's Net OPEB Liability....................................................................................................
77
Schedule of City OPEB Contributions........................................................................................................................
78
Notes to the Required Supplementary Information.....................................................................................................
79
CITY OF LAKE ELMO, MINNESOTA
TABLE OF CONTENTS (Continued)
SUPPLEMENTARY INFORMATION:
Combining Balance Sheet — Nonmajor Governmental Funds..................................................................................... 88
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances — Nonmajor Governmental Funds.............................................................................
89
Combining Balance Sheet — Nonmajor Special Revenue Funds.................................................................................
90
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances — Nonmajor Special Revenue Funds.........................................................................
91
Combining Balance Sheet — Nonmajor Capital Project Funds....................................................................................
92
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balances — Nonmajor Capital Project Funds............................................................................
95
Supplemental Combining Balance Sheet — Debt Service Fund...................................................................................
98
Supplemental Combining Schedule of Revenues, Expenditures, and
Changes in Fund Balance — Debt Service Fund.................................................................................................100
Scheduleof Indebtedness..........................................................................................................................................102
STATISTICAL SECTION (UNAUDITED):
Financial Trends
NetPosition by Component.......................................................................................................................................105
Changesin Net Position............................................................................................................................................107
Fund Balances — Governmental Funds......................................................................................................................
Ill
Changes in Fund Balances — Governmental Funds...................................................................................................113
Revenue Capacity
Tax Capacity and Estimated Actual Value of Taxable Property ...............................................................................115
Direct and Overlapping Property Tax Rates..............................................................................................................116
PrincipalProperty Taxpayers....................................................................................................................................117
Property Tax Levies and Collections.........................................................................................................................118
Water and Sanitary Sewer Charges by Customer......................................................................................................119
Debt Capacity
Ratiosof Outstanding Debt by Type.........................................................................................................................120
Ratios of Net General Bonded Debt..........................................................................................................................121
Direct and Overlapping Governmental Activities Debt.............................................................................................122
LegalDebt Margin Information................................................................................................................................123
PledgedRevenue Coverage.......................................................................................................................................124
Demographic and Economic Information
Demographicand Economic Statistics......................................................................................................................125
PrincipalEmployers..................................................................................................................................................126
Operating Information
Full -Time Equivalent Employees By Function/Program..........................................................................................127
Operating Indicators by Function/Program...............................................................................................................129
Capital Asset Statistics by Function/Program...........................................................................................................131
OTHER REQUIRED REPORTS:
Independent Auditor's Report on Internal Control Over Financial
Reporting and on Compliance and Other Matters Based on an
Audit of Financial Statements Performed in Accordance with
GovernmentAuditing Standards...............................................................................................................................133
Schedule of Findings and Responses................................................................................................................................135
CorrectiveAction Plans....................................................................................................................................................136
INTRODUCTORY
SECTION
THE CITY OF
LAKE ELMO
June 11, 2024
Honorable Mayor, Members of the City Council, and Citizens of the City of Lake Elmo:
Minnesota Statutes require all cities to issue an annual report on its financial position and activity prepared in accordance with
generally accepted accounting principles (GAAP), under the guidance of the Governmental Accounting Standards Board
(GASB), and audited in accordance with generally accepted auditing standards (GARS) by a firm of licensed certified public
accountants or the Office of the State Auditor. Pursuant to that requirement, we hereby issue the comprehensive annual financial
report of the City of Lake Elmo, MN for the fiscal year ended December 31, 2023.
This report consists of management's representation concerning the finances of the City of Lake Elmo. Consequently,
management assumes full responsibility for the completeness, accuracy and reliability of all the information presented in this
report. To provide a reasonable basis for making these representations, management has established a thorough internal control
system designed to both protect the City's assets from loss, theft and misuse and to compile all necessary information for the
preparation of the City of Lake Elmo's financial statements in conformity with GAAP and GASB. As a management team, we
assert that the financial statements will be free from material misstatement and that the financial report is reliable in all material
respects.
The City of Lake Elmo's financial statements have been audited by Schlenner Wenner and Co., a firm of licensed certified
public accountants. The goal of the independent audit is to provide reasonable assurance that the financial statements of the
City of Lake Elmo for the fiscal year ended December 31, 2023, are free from material misstatement. The independent audit
involved examining, on an approved test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management and evaluating the overall financial
statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering
an unmodified opinion that the City of Lake Elmo's financial statements for fiscal year ended December 31, 2023, are fairly
presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial
section of the report.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial
statements in form of the Management's Discussion and Analysis (MD&A). This letter of transmittal is included to complement
the MD&A and should be read in conjunction with it. The City of Lake Elmo's MD&A can be found immediately following
the report of the independent auditors.
3880 Laverne Avenue North • Lake Elmo • Minnesota 55042
Phone: (651) 747-3900 • www.lakeelmo.org
PROFILE OF THE GOVERNMENT
The City of Lake Elmo, incorporated in 1926, is a statutory city in the State of Minnesota six miles east of St. Paul, Minnesota.
Located in Washington County, it covers 25 square miles and has an estimated 2023 population of 14,033, which represents
5,206 households.
Policy -making and legislative authority are vested in a governing council consisting of an elected Mayor and four council
members. Per Minnesota State Statute, the governing council is responsible for passing ordinances, adopting an annual budget,
appointing committees and hiring both the city's administrator and attorney. The City Administrator is responsible for carrying
out the policies and ordinances of the governing council and overseeing the day-to-day operations of the city. The Council is
elected on a non -partisan basis. The Mayor serves a four-year term and council members serve a four-year staggered term, with
two of these positions elected every two years. The Mayor and the Council are elected at -large.
The City of Lake Elmo provides a full range of Services including fire protection, construction and maintenance of streets and
infrastructure, recreational facilities, and water, sanitary sewer and storm water utility services. The City contracts with the
Washington County Sheriff's Department for police services.
The annual budget serves as the foundation for the City of Lake Elmo's financial management and fiscal stewardship. City
departments and agencies of the City submit their requested budget to the City Administrator and the Finance Director in order
to compile a preliminary balanced budget for submission to the City Council. The preliminary balanced budget is presented to
the City Council in September each year so that the preliminary property tax levy can be submitted to Washington County by
the annual due date. The preliminary property tax levy may be decreased but not increased. The 2023 Adopted Budget and
final property tax levy were required to be adopted by and submitted to Washington County by December 28, 2022. Included
in the City's annual budget process is the compilation of a Capital Improvement Plan which allows for strategic planning of
City infrastructure and equipment needs while maintaining a reasonable level of debt and a strong unassigned fund balance.
Quarterly budget to actual comparison reports are provided to the City Council to keep them apprised of the financial
performance of the City.
FACTORS AFFECTING FINANCIAL CONDITION
The information presented in the financial statements is perhaps best understood when it is considered from the broader
perspective of the specific environment within which the City of Lake Elmo operates.
LOCAL ECONOMY
Lake Elmo is home to numerous businesses that are leaders in their respective industries. New residential developments platted
since 2014 numbering approximately 3,243 dwelling units have been approved.
In 2023 and early 2024, the city saw continued interest in residential and commercial growth. Projects started in earlier years
continue, including:
• Wildflower 4th addition — 41 new single-family homes
• Royal Golf 5th Addition — 43 new single-family homes
• Hendrix Apartments and Goddard School — 190-unit apartment building and daycare
• Drake Development - Tesla, Dairy Queen and two additional commercial lots
• Amira - 146 senior rental apt building
• Lil Explorers Daycare is under construction
• DeMontreville Convent is under construction
• Carmelite Church is under construction
• The Jesuit Retreat house is under construction
• Remodel and new accessory building at Royal Park Golf Clubhouse
New applications for building and development continue to come in. Some of which include:
• Northstar 1 st Addition — 107 new single-family homes
• Royal Golf 5th Addition — 43 new single-family homes
• Easton Village 6th and 7th Addition — 27 new single-family homes
• At Home Apartments — 40 twin homes
• Royal Golf 6th Addition — 46 new single-family homes
• Bridgewater — 4 Commercial lots and a future apartment site
Further, the following commercial building projects were fully completed in 2023:
• Kokoro Volleyball - 27,540 sq. ft. athletic facility
• 11160 & 11190 Hudson Blvd
• City Center additions
The City's highway infrastructure continues to make Lake Elmo a desirable residential location. Rapid growth is further
reflected in 2023 population estimates of 14,033 or an increase of 24% since the 2020 census.
New housing starts in 2023 numbered 168 with a total permit value of $55,067,525 and an average home value of $327,783.
There were three new commercial construction projects in 2023, and a number of remodels and expansions. All these new
developments have been built in 2023 or will be finished in 2024, which will greatly strengthen the existing tax base of the
City.
LONG TERM FINANCIAL PLANNING
Total unassigned General Fund balance as of December 31, 2023, was 110% of the next year's general fund expenditures and
other financing uses. Although the State Auditor recommends maintaining a level of 35% - 50%, the City has consistently
exceeded that rate, showing the City's financial strength.
In 2023, the City moved from a 5-year to a 10-year Capital Improvement Plan ("CIP"). The City's 10-year CIP serves as the
foundation for long-term financial planning. Funding needs for capital replacements are reflected in tax levies for the street
renewal and general fund asset replacements. Funding needs for capital infrastructure in the enterprise funds are funded through
user fees in those funds.
During 2017, Moody's Investors Service increased the City's long-term debt rating to Aal, and reaffirmed this rating in 2022,
2023, and 2024. In their assessment of the City, Moody's noted the following:
• Very strong financial position
• Full value per capita and resident income levels exceed the median for similarly rated peers nationally
Projections for the next five years indicate that property tax contributions, user fees, and investment income will continue to
grow based on planned development and expansion within the City.
RELEVANT FINANCIAL POLICIES
Trends of the past decade, changes in state tax law, and recent legislation indicate that the City will have a greater reliance on
property taxes as a source of financing for city operations in the future and less reliance on the intergovernmental revenues
(federal and state) and building permit fees. Changes in state tax law over the past decade have resulted in funding changes for
both schools and local governments. The elimination of the homestead and agricultural credit aids program, and large cuts in
both local government aid and the market value homestead credit programs resulted in revenue losses to the City. In addition,
as the City continues toward full development, we anticipate future decreases in building permit revenues.
MAJOR INITIATIVES
2023 was once again a year of robust growth for the City, due to the continuation of ongoing infrastructure upgrades, various
projects, as well as oversight of the ongoing residential and commercial development activities.
Some of the 2023 infrastructure projects included the following:
• The construction of a new City Center was approved and began in 2021, and was completed in the summer of 2023.
The new City Center consists of a combined City Hall and Public Safety Facility. This new facility brings together
City Hall staff and functions, the entire Fire Department, and a satellite office for the Washington County Sheriff s
department. This co -location involved renovating and expanding the City -owned Brookfield Office building to
consolidate civic resources within a single structure at the historic core of the city. Additionally, the Public Works
facility will also be expanded to accommodate City growth and increased service needs.
• The Old Village Phase VII Improvements started construction in 2023. This project covers full reconstruction of the
streets, upgrading the existing water system, and installation of a new sewer system and storm water drainage system.
• Extension of municipal sewer to the Tapestry development began in 2022 and was completed in 2023.
• Municipal sewer lines were extended along the City's western border in order to serve new development on the 180
acres the City received in a settlement with 3M in 2019. The new area will provide for business/industrial, commercial
and low -density housing options.
• The City continued work on several expedited water main projects to bring water to neighborhoods with PFAS
contamination at no cost to the city or residents due to grants from the MPCA. These projects include water main
extensions, road construction and in some cases the extension of sewer. Sewer costs of the project will be assessed
100% to the benefiting property owners. In 2023, the projects in Parkview Estates, Cardinal Ridge, Cardinal View,
Whistling Valley and Torre Pines were completed. The Stillwater Boulevard (CSAH 14) Trunk Watermain
Improvements are being constructed in 2024 using 100% 3M Settlement grant funds.
• Water Tower 3 began construction in 2022 to increase storage capacity in the southeast area of the city. Construction
was completed in 2023.
• The use of Parkland dedication fees continues to support improvements in existing and new parks. The 2023 Trail
Improvements included Stonegate Neighborhood Trail segments, Sunfish Pond trails, Hamlet on Sunfish Lake
connecting Trail, DeMontreville Wildlife connecting trail.
• As part of the City's Street Capital Improvement Program, neighborhood street and drainage improvements were
completed in Tamarack Farms, Fields of St. Croix 1st and 2nd Additions, and Beaut Crest Estates. In 2024, street and
drainage improvements are being constructed in Carriage Station and along Jamaca Court.
• Also, as part of the City's Street Capital Improvement Program, the 2024 Collector Roadway Improvements are being
constructed, including Hudson Boulevard, from Inwood Avenue (CSAH 13) to Julia Avenue; 15th Street from Inwood
Avenue (CSAH 13) to Oakdale/Lake Elmo city limits; and 30th Street, from Village Parkway to Lisbon Avenue.
AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement
for Excellence in Financial Reporting to the City of Lake Elmo for its annual comprehensive financial report for the fiscal year
ended December 31, 2022. In order to be awarded a Certificate of Achievement, a government must publish an easily readable
and efficiently organized Annual Comprehensive Financial Report. This report must satisfy both GAAP and applicable legal
requirements. This was the 10th consecutive year that the City of Lake Elmo has achieved this prestigious award.
A Certificate of Achievement is valid for a period of one year only. We believe that our current Annual Comprehensive
Financial Report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the
GFOA to determine its eligibility for another certificate.
The preparation of this report would not have been possible without the efficient and dedicated services of the Finance and
Administration Department Staff. We would like to express our appreciation to all members of the organization who assisted
in contributing to the preparation of the report. Credit must also be given to the Mayor and City Council for their unfailing
support for maintaining the highest standards of management of the City of Lake Elmo's finances.
Respectfully submitted,
/&/
1' ' �1
1#4
Nicole Miller
Clarissa Hadler
City Administrator
Finance Director
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Lake Elmo
Minnesota
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
December 31, 2022
r i �
Executive Director/CEO
7
CITY COUNCIL
Charles Cadenhead
Katrina Beckstrom
Matt Him
Jeff Holtz
Lisa McGinn
APPOINTED CITY OFFICIALS
Clark Schroeder
Clarissa Hadler
Julie Johnson
CITY OF LAKE ELMO, MINNESOTA
CITY COUNCIL AND OFFICIALS
FOR THE YEAR ENDED DECEMBER 31, 2023
Term Expires
Mayor
January 1, 2025
Council Member
January 1, 2025
Council Member
January 1, 2027
Council Member
January 1, 2025
Council Member
November 21, 2023
Interim City Administrator Appointed
Finance Director Appointed
City Clerk Appointed
H
Finance Director
Finance Coordinator
Payroll/AP Clerk
Utility BJlli ng Clerk
Contractor Relationship
Citizens
Direct Report
— — — — — —Indirect Report/technical supervisor
THE CITY OF
LAKE ELMO
ORGANIZATIONAL CHART
FOR THE YEAR ENDED DECEMBER 31, 2023
commissions City Council
Planning Commission
Parks Commission Committees
Economic Development Capital Improvement
Authority
City Administrator
City Attorney City Engineer Sheriff's Office
Scrgea nt(1)
EDeputy (4)
Community D evelopment Administrative Services Public Works Fire Chief
Di rector DI rector Director
Building Official Senior Planner City Clerk Asst. Public Works Director Assistant Fire Chief
Plan Reaiewer City Planner Deputy City Clerk Lead Worker Captains and Lieutenants
Jamie Colemer
Building Inspector Planning Assistant
Full-time Firefighters
Permit Technldan Operators I, II, III
Paid on Call Firefighters
Seasonals/Interns
9
FINANCIAL
SECTION
10
SCHLENNER
WENNELt&Q0.
CERTIFIED PUBLIC ACCOUNTANTS
& BUSINESS CONSULTANTS
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and City Council
City of Lake Elmo, Minnesota
Report on the Audit of the Financial Statements
Opinions
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, (the City) as of and for the year
ended December 31, 2023, and the related notes to the financial statements, which collectively comprise the City of Lake Elmo,
Minnesota's basic financial statements as listed in the table of contents.
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, 2023, and the respective changes in financial position and, where
applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit
of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical
responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Managementfor the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting
principles generally accepted in the United States of America, and for 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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in
the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for twelve months beyond the
financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
11
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance
is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance
with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement
when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would
influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and
design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal
control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial
doubt about the City's ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and
analysis, budgetary comparison information, pension schedules, and OPEB schedules listed in the table of contents be presented
to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of
the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential
part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required supplementary information in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of management about the methods
of preparing the information and comparing the information for consistency with management's responses to our inquiries, the
basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not
express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of
Lake Elmo, Minnesota's basic financial statements. The accompanying combining and individual nonmajor fund financial
statements and supplemental schedules, and schedule of indebtedness, are presented for purposes of additional analysis and are
not a required part of the basic financial statements.
12
The combining and individual nonmajor fund financial statements and supplemental schedules are the responsibility of
management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic
financial statements. The 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 and supplemental schedules are fairly stated, in all
material respects, in relation to the basic financial statements as a whole.
The schedule of indebtedness 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.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the
introductory and statistical sections but does not include the basic financial statements and our auditor's report thereon. Our
opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of
assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether
a material inconsistency exists between the other information and the basic financial statements, or the other information
otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material
misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 11, 2024 on our consideration
of the City of Lake Elmo, Minnesota's internal control over financial reporting and on our tests of its compliance with certain
provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and
not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of
Lake Elmo, Minnesota's internal control over financial reporting and compliance.
SCHLENNER WENNER & CO.
St. Cloud, Minnesota
June 11, 2024
13
REQUIRED SUPPLEMENTARY
INFORMATION
14
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2023
Our discussion and analysis of the City of Lake Elmo's financial performance provides an overview of the City's financial
activities for the year ended December 31, 2023. Please read it in conjunction with the independent auditor's report on page
11 and the City's financial statements, which begin on page 26.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of the City of Lake Elmo exceeded its liabilities and deferred inflows at the close of
the most recent fiscal year by $170,695,558 (net position). The unrestricted portion of net position, the portion used
to meet the City's ongoing obligations to citizens and creditors, is $35,000,611.
• The City's total net position increased $19,697,043 as a result of this year's operations.
• As of the close of the current fiscal year, the City of Lake Elmo's governmental funds reported a combined ending
fund balance of $20,685,436 which is a decrease of $3,750,158 in comparison with the prior year. The overall
unassigned fund balance is $8,427,607.
• At the end of the current fiscal year, unrestricted fund balance for the General Fund was $8,920,580, which is 143
percent of total 2023 General Fund expenditures and 110 percent of budgeted 2024 General Fund expenditures. The
City's Fund Balance policy is to maintain an unassigned fund balance in the General Fund of an amount that is not
less than 50 percent to 60 percent of the next year's budgeted expenditures of the General Fund.
• In the City's business -type activities, revenues decreased $5,022,857 (24.71 percent) and program expenses increased
$1,258,097 (19.95 percent). These changes are discussed in greater detail throughout the following pages.
• Total cost of all of the City's governmental activities' departments increased $1,720,576 (or 10.58 percent) in
aggregate.
• The City's General Fund generated more revenue than budgeted of $345,081, excluding transfers in from other funds.
Expenditures were less than budgeted by $1,034,906, excluding transfers to other funds. See additional details on
page 72.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of Net Position and the Statement of Activities
(on pages 26 and 27) provide information about the activities of the City as a whole and present a longer -term view of the
City's finances. Fund financial statements start on page 28. For governmental activities, these statements tell how these services
were financed in the short term as well as what remains for future spending. Fund financial statements also report the City's
operations in more detail than the government -wide statements by providing information about the City's most significant
funds.
15
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2023
USING THIS ANNUAL REPORT (Continued)
Reporting the City as a Whole
Our analysis of the City as a whole begins on page 17. One of the most important questions asked about the City's finances is,
"Is the City as a whole better off or worse off as a result of the year's activities?" The Statement of Net Position and the
Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this
question. These statements include all assets, deferred outflows/inflows of resources, and liabilities using the accrual basis of
accounting, which is similar to the accounting used by large private -sector companies. All of the current year's revenues and
expenses are taken into account regardless of when cash is received or paid.
These two statements report the City's net position and changes in net position. You can think of the City's net position (assets
plus deferred outflows, less liabilities plus deferred inflows) as one way to measure the City's financial health, or financial
position. Over time, increases or decreases in the City's net position are one indicator of whether its financial health is
improving or deteriorating. You will need to consider other nonfinancial factors, however, such as changes in the City's
property tax base, costs associated with current and future construction projects, and the condition of the City's roads, to assess
the overall health of the City.
In the Statement of Net Position and the Statement of Activities, we divide the City into two kinds of activities:
• Governmental Activities - Most of the City's basic services are reported here, including the fire, public works, parks, and
planning and zoning departments, along with general administration. Property taxes, special assessments, licenses, permits
and fees, and State aids finance most of these activities.
• Business -type Activities - The City charges a fee to customers to help it cover all or most of the cost of certain services it
provides. The City's water, sewer, and storm sewer systems are reported here.
Reporting the City's Most Significant Funds
Our analysis of the City's funds begins on page 19. The fund financial statements begin on page 28 and provide detailed
information about the most significant funds - not the City as a whole. Some funds are required to be established by State law
and by bond covenants. However, the City Council may establish other funds to help it control and manage money for particular
purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money. The City's two
kinds of funds (governmental and proprietary) use different accounting approaches.
• Governmental Funds - Most of the City's basic services are reported in governmental funds, which focus on how
money flows into and out of those funds and the balances left at year-end that are available for spending. These funds
are reported using an accounting method called modified accrual accounting, which measures cash and all other
financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term
view of the City's general government operations and the basic services it provides. Governmental fund information
helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance
the City's programs. We describe the relationship (or differences) between governmental activities (reported in the
Statement of Net Position and the Statement of Activities) and governmental funds in reconciliations following the
governmental fund financial statements.
• Proprietary Funds - When the City charges customers for the services it provides, these services are generally reported
in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement
of Net Position and the Statement of Activities. In fact, the City's proprietary funds are the same as the business -type
activities we report in the government -wide statements but provide more detail and additional information, such as
cash flows, for proprietary funds.
16
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2023
THE CITY AS A WHOLE
The City's combined net position increased $19,697,043 from a year ago. Our analysis below focuses on the net position
(Table 1) and changes in net position (Table 2) of the City's governmental and business -type activities.
Current and Other Assets
Net Capital Assets
Total Assets
Deferred Outflows of Resources
Current Liabilities
Noncurrent Liabilities
Total Liabilities
Deferred Inflows of Resources
Net Position:
Net Investment in
Capital Assets
Restricted
Unrestricted
Total Net Position
Table 1
Net Position
Governmental Business -Type
Activities Activities
2023 2022 2023 2022
$ 31,241,789 $ 35,836,750 $ 25,155,915 $ 26,273,660
87,653,206 71,799,214 99,382,500 90,076,157
118,894,995 107,635,964 124,538,415 116,349,817
Total
Government
2023
$ 56,397,704
187,035,706
243,433,410
2022
$ 62,110,410
161,875,371
223,985,781
1,100,857
1,375,926
116,538
181,480
1,217,395
1,557,406
5,122,759
6,459,882
2,213,887
1,980,429
7,336,646
8,440,311
34,161,649
34,230,125
29,627,608
30,027,530
63,789,257
64,257,655
39,284,408
40,690,007
31,841,495
32,007,959
71,125,903
72,697,966
2,687,021
1,836,690
142,323
10,016
2,829,344
1,846,706
54,209,637 39,647,112 69,826,808 59,998,083 124,036,445 99,645,195
11,658,502 12,475,169 - - 11,658,502 12,475,169
12,156,284 14,362,912 22,844,327 24,515,239 35,000,611 38,878,151
$ 78,024,423 $ 66,485,193 $ 92,671,135 $ 84,513,322 $170,695,558 $150,998,515
The net position of the City's governmental activities increased by $11,539,230 (17.36 percent). Unrestricted net position (the
part of net position that can be used to finance day-to-day operations without constraints established by debt covenants, enabling
legislation, or other legal requirements) decreased by $2,206,628 compared to the prior year.
The net position of the City's business -type activities increased by $8,157,813 (9.65 percent) from the prior year. Such increase
can be attributed primarily to the capital contributions of infrastructure assets that were received from private developers during
the year.
17
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2023
THE CITY AS A WHOLE (Continued)
REVENUE
Charges for Services
Operating Grants and
Contributions
Capital Grants and
Contributions
Property Taxes
Franchise Taxes
Intergovernmental
Investment Earnings (Losses)
Other
Total Revenues
PROGRAM EXPENSES
General Government
Public Safety
Public Works
Parks and Recreation
Interest and Other Charges
Water
Sewer
Storm Sewer
Total Expenses
Increase (Decrease) in Net Position
Before Transfers/Other Items
Table 2
Changes in Net Position
Governmental
Activities
2023 2022
Business -Type
Activities
2023 2022
Total
Government
2023 2022
$ 2,280,874 $ 2,889,869 $ 4,858,305 $ 5,284,821 $ 7,139,179 $ 8,174,690
1,102,707
391,306
-
-
1,102,707
391,306
9,895,930
4,783,094
9,838,374
15,257,903
19,734,304
20,040,997
7,822,031
7,488,228
-
-
7,822,031
7,488,228
68,884
77,694
-
-
68,884
77,694
246,056
703,388
46
2,146
246,102
705,534
1,137,908
(380,657)
604,235
(221,053)
1,742,143
(601,710)
46,528
23,384
-
-
46,528
23,384
22,600,918
15,976,306
15,300,960
20,323,817
37,901,878
36,300,123
1,220,552
1,055,405
-
-
1,220,552
1,055,405
3,228,801
2,939,066
-
-
3,228,801
2,939,066
4,627,872
4,831,584
-
-
4,627,872
4,831,584
526,835
415,377
-
-
526,835
415,377
815,944
716,093
-
-
815,944
716,093
-
-
3,982,238
3,280,875
3,982,238
3,280,875
-
-
2,524,280
2,071,858
2,524,280
2,071,858
-
-
1,057,111
952,799
1,057,111
952,799
10,420,004
9,957,525
7,563,629
6,305,532
17,983,633
16,263,057
12,180,914
6,018,781
7,737,331
14,018,285
19,918,245
20,037,066
Gain (Loss) on Disposal of Assets (221,202) 69,985 - -
Capital Asset Transfers (420,482) 3,261,225 420,482 (3,261,225)
(221,202) 69,985
Change in Net Position 11,539,230 9,349,991 8,157,813 10,757,060 19,697,043 20,107,051
Net Position - Beginning of Year 66,485,193 57,135,202 84,513,322 73,756,262 150,998,515 130,891,464
Net Position - End of Year $ 78,024,423 $ 66,485,193 $ 92,671,135 $ 84,513,322 $170,695,558 $150,998,515
The City's total revenues increased by $1,601,755 (4.41 percent). The total cost of all programs and services increased by
$1,720,576 (10.58 percent). Our following analysis separately considers the operations of governmental and business -type
activities.
18
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2023
THE CITY AS A WHOLE (Continued)
Governmental Activities
Revenue for the City's governmental activities increased by $6,624,612 (41.47 percent). This increase in revenue is primarily
due to an increase in revenues from capital grants and contributions, resulting from significant contributions of infrastructure
from developers during 2023. Total expenses increased $462,479 (4.64 percent), primarily due to increased expenses for public
safety along with a decrease in public works costs. Such changes in expenses have been reviewed in greater detail below.
Table 3 presents the cost of each of the City's programs - general government, public safety, public works, parks and recreation,
and Interest and Other Charges - as well as each program's net cost (total cost less revenues generated by the activities). The
net cost shows the financial burden that was placed on the City's taxpayers by each of these functions. Activities (net of capital
outlay which is excluded from Table 3) were generally comparable to the prior year as operations remained fairly consistent
with the prior year, with the exception of -
Public works net cost of services decreased $5,268,818, due to decreases in maintenance project costs, in conjunction
with an increase in revenues from contributed infrastructure previously discussed.
• Public safety net cost of services increased $326,777 primarily due to four firefighters transitioning to full time service,
along with an increase in contracted law enforcement expenses.
Table 3
Governmental Activities
Total Cost
Net Cost
of Services
of Services
2023
2022
2023
2022
General Government $
1,220,552 $
1,055,405 $
672,353 $
620,275
Public Safety
3,228,801
2,939,066
962,514
635,737
Public Works
4,627,872
4,831,584
(5,551,896)
(283,078)
Parks and Recreation
526,835
415,377
241,578
204,253
Economic Development
-
-
-
(24)
Interest and Other Charges
815,944
716,093
815,944
716,093
Totals $
10,420,004 $
9,957,525 $
(2,859,507) $
1,893,256
Business -type Activities
Revenues of the City's business -type activities (see Table 2) decreased by $5,022,857 (24.71 percent) and program expenses
increased by $1,258,097 (19.95 percent). The decrease in revenues is due primarily to a decrease in MPCA grant revenues
recognized in 2023 as compared to 2022. The increase in expenses is due largely to an increase in depreciation expense being
recognized in 2023, due to various projects being finalized and placed into service. Additionally, the City incurred additional
costs related to professional service fees, water meters, and supplies.
THE CITY'S FUNDS
Governmental Funds
As the City completed the year, its governmental funds (as presented in the balance sheet on page 28) reported a combined
fund balance of $20,685,436. This is a decrease of $3,750,158 from the prior year. Operations were comparable to the prior
year, with the exception of an increase in investment earnings of $1,072,572 in 2023 as compared to unrealized investment
losses of $419,853 incurred in 2022. Additionally, the City incurred fewer expenditures related to the City Hall and Fire Station
building project as the project neared completion at the end of 2023. Financial information specific to the governmental funds
is detailed on the following page. Such information was derived from the fund financials.
19
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2023
THE CITY'S FUNDS (Continued)
General
Fund Balance December 31, Increase
or Funds 2023 2022 (Decrease)
$ 8,920,580 $ 7,540,239 $ 1,380,341
The fund balance of the General Fund increased by $1,380,341 compared to 2022. Details of the General Fund's revenues and
expenditures are displayed below:
General Fund Revenues
■ Property Taxes
■ Franchise Taxes
■ Licenses, Permits, and Fees
■ Intergovernmental
■ Charges for Services
■ Fines
■ Investment Earnings
■ Lease Interest
■ Miscellaneous
The City received the majority of its funding in the General Fund in the form of grants and funding received from property
taxes (63.90 percent), licenses, permits, and fees (14.27 percent), charges for services (9.93 percent), and other governmental
agencies (4.80 percent). Overall, the City's General Fund revenues were comparable to the prior year, with the exception of
property taxes that increased as planned with the 2023 levy.
911
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2023
THE CITY'S FUNDS (Continued)
General Fund Expenditures
■ General Government
■ Public Safety
Public Works
■ Parks and Recreation
■ Capital Outlay
A significant portion of the City's General Fund expenditures are used for public safety (48.79 percent). Remaining
expenditures are used primarily for public works (20.63 percent) and general government (19.50 percent). Expenditures are
comparable to the prior year.
Debt Service Fund
Fund Balance December 31, Increase
Funds 2023 2022 (Decrease)
$ 5,026,712 $ 4,535,578 $ 491,134
The Debt Service fund balance increased as a result of an increase in property tax and assessment revenue.
City Hall / Fire Station Bldg Project Fund $ 1,448,996 $ 6,720,887 $ (5,271,891)
The City Hall / Fire Station Bldg Project fund balance decreased due to substantial capital outlay expenditures being incurred
throughout the year for the construction of the City Hall and Fire Station project.
2023 Street Improvements $ 287,830 $ (53,095) $ 340,925
The 2023 Street Improvements fund balance increased due to the City receiving bond proceeds during the year in relation to
their 2023A G.O. Improvement and Utility Revenue Bond issuance.
21
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2023
THE CITY'S FUNDS (Continued)
General Fund Budgetary Highlights
The City's General Fund generated more revenue than budgeted of $345,081, excluding transfers in from other funds.
Expenditures were less than those budgeted by $1,034,906, excluding transfers to other funds. Budgetary deviations were
mostly distributed across departments but resulted most significantly from street maintenance and storm sewers, building
inspections, and administration and finance costs being less than anticipated.
Proprietary Funds
As the City completed the year, its business -type activities reported a combined net position of $92,671,135. This is an increase
of $8,157,813 from the prior year. The following is a summary of the City's major proprietary funds:
Water
Net Position December 31, Increase
Major Funds 2023 2022 (Decrease)
$ 50,291,225 $ 46,447,856 $ 3,843,369
The Water Fund net position increased due to significant intergovernmental revenues received from the MPCA in relation to
various projects during the year, as well as revenues being recognized in relation to infrastructure assets conveyed to the City
by local developers.
Sewer
$ 27,604,510 $ 25,298,195 $ 2,306,315
The Sewer Fund net position increased due to the City receiving developer contributed infrastructure during the year,
$2,060,698 of which was recognized in this fund.
Storm Sewer
$ 14,775,400 $ 12,767,271 $ 2,008,129
The Storm Sewer Fund net position increased due to the City receiving developer contributed infrastructure during the year,
$2,402,156 of which was recognized in this fund.
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2023
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At the end of 2023, the City had a net investment of $187,035,706 in a broad range of capital assets, including land, buildings,
improvements, machinery and equipment, roads, and water, sewer, and storm sewer infrastructure. This amount represents a
net increase of $25,160,335 (15.54 percent) from last year. More detailed information about the City's capital assets is
presented in Note 2.C. to the financial statements.
Significant capital asset activity from throughout the year consisted of the following:
• Developer contributions of infrastructure exceeded $14.9 million in total.
• Costs incurred during the year for the City Hall and Fire Station project exceeded $5.7 million.
• Costs incurred for various water utility projects exceeded $4.8 million.
Table 4
Capital Assets Net of Depreciation
Governmental
Business -Type
Activities
Activities
Totals
2023
2022
2023 2022
2023
2022
Land
$ 3,453,979
$ 3,453,979
$ 3,668,869 $ 3,668,869
$ 7,122,848 $
7,122,848
Construction In Progress
18,614,757
15,400,699
11,204,477 15,221,987
29,819,234
30,622,686
Buildings
2,814,305
2,904,470
- -
2,814,305
2,904,470
Other Improvements
2,092,035
1,347,725
- -
2,092,035
1,347,725
Machinery and Equipment
6,923,964
6,102,725
83,657 110,168
7,007,621
6,212,893
Infrastructure
53,754,166
42,589,616
84,425,497 71,075,133
138,179,663
113,664,749
Totals $ 87,653,206 $ 71,799,214 $ 99,382,500 $ 90,076,157 $187,035,706 $161,875,371
Debt
At year-end, the City had $62,093,296 in gross debt versus $61,209,616 last year (an increase of 1.44 percent), as shown in
Table 5. See additional information regarding these issuances in Note 2.D. to the financial statements.
Table 5
Outstanding Debt at Year -End
Governmental
Business -Type
Activities
Activities
Totals
2023
2022
2023 2022
2023
2022
G.O. Improvement Bonds
$29,860,000
$28,830,000
$28,115,000 $28,440,000
$57,975,000
$57,270,000
G.O. Equipment Certificates
555,000
655,000
- -
555,000
655,000
G.O. Tax Abatement Bonds
1,010,000
1,010,000
- -
1,010,000
1,010,000
Unamortized Bond Premium
1,321,965
1,110,679
1,082,925 1,030,720
2,404,890
2,141,399
Compensated Absences
110,115
93,109
38,291 40,108
148,406
133,217
Totals
$ 32,857,080
$ 31,698,788
$ 29,236,216 $ 29,510,828
$ 62,093,296
$ 61,209,616
23
CITY OF LAKE ELMO, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
DECEMBER 31, 2023
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
• An update to the City's long-range financial management plan was completed in 2023 and now includes inflated
averages for capital expenses such as roads and equipment in the 5-10 year horizon. The City is projected to have
small annual increases in its tax rate over the next 10-year period while still meeting current service needs, adding a
public works position, and funding capital needs while maintaining a fund balance above the City's policy of 50-60%
of next year's expenses.
• Utility rate adjustments continue in accordance with the City's long-range financial management plan. For 2024,
water and sewer rates were increased by 3% and stormwater rates had no increase.
• Market interest rates on investments trended higher in 2023 and have held relatively steady in 2024. The City is
holding various investments that were purchased prior to 2022 that have lower rates of return due to the
aforementioned increases. As a result, these investments have some unrealized losses that would only be recognized
if the City had to sell them before maturity. The City has sufficient cash and does not anticipate selling before maturity.
• The City is currently exploring sites for two new wells. These wells will need a treatment plant for PFAS which will
be funded by 3M settlement dollars. These efforts are likely to take two to three years to complete. Other major water
capital projects on the horizon include trunk main extensions and connecting existing neighborhoods vulnerable to
PFAS to municipal water service; projects which are also funded by 3M settlement funds.
• The City received a total of $1,006,489 in American Recover Plan Act (ARPA) funding in two installments in 2021
and 2022. All funds have been expended by early 2024. Projects included the extension of fiber to the public works
building and municipal sewer trunk mains to city owned land on the western edge of town.
• With its proximity to Minneapolis/St. Paul downtown area, easy access from a number of state highways, exceptional
recreational offerings and low tax rate, Lake Elmo remains an attractive area for new residents and businesses. The
City is seeing an increase in development interest for multi -family housing as well as from commercial and
business/industrial developers. There remain hundreds of acres available for development in both the downtown area
as well as along the I-94 corridor.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general
overview of the City's finances and to show the City's accountability for the money it receives. If you have questions about
this report or need additional financial information, contact City Hall at 3880 Laverne Avenue North, Lake Elmo, Minnesota
55042.
24
BASIC FINANCIAL STATEMENTS
25
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF NET POSITION
DECEMBER 31, 2023
ASSETS
Cash, Cash Equivalents, and Investments
Property Taxes Receivable
Assessments Receivable
Accounts Receivable
Interest Receivable
Due from Other Governments
Leases Receivable
Capital Assets Not Being Depreciated
Capital Assets Being Depreciated (Net)
Net Pension Asset
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES
Pensions
LIABILITIES
Accounts Payable
Salaries Payable
Construction Contracts Payable
Deposits Payable
Due to Other Governments
Payroll Deductions and Employer Contributions
Unearned Revenue
Accrued Interest Payable
Compensated Absences Payable:
Due Within One Year
Due After One Year
Bonds Payable:
Due Within One Year
Due After One Year
Net OPEB Liability:
Due After One Year
Net Pension Liability:
Due After One Year
TOTAL LIABILITIES
DEFERRED INFLOWS OF RESOURCES
Pensions
Leases
TOTAL DEFERRED INFLOWS OF RESOURCES
NET POSITION
Net Investment in Capital Assets
Restricted
Unrestricted
TOTAL NET POSITION
Governmental Business -Type
Activities Activities Totals
$ 25,090,109 $
18,830,867 $
43,920,976
103,590
-
103,590
3,682,997
5,360,653
9,043,650
857
762,788
763,645
61,968
44,060
106,028
120,246
157,547
277,793
1,616,780
-
1,616,780
22,068,736
14,873,346
36,942,082
65,584,470
84,509,154
150,093,624
565,242
-
565,242
118,894,995
124,538,415
243,433,410
1,100,857
116,538
1,217,395
953,199
360,038
1,313,237
82,494
46,289
128,783
696,604
357,767
1,054,371
2,380,136
-
2,380,136
117,613
526,360
643,973
52,653
-
52,653
440,089
575,000
1,015,089
399,971
348,433
748,404
82,586
28,718
111,304
27,529
9,573
37,102
2,705,000
2,315,000
5,020,000
30,041,965
26,882,925
56,924,890
65,774
23,351
89,125
1,238,795
368,041
1,606,836
39,284,408
31,841,495
71,125,903
1,147,438
142,323
1,289,761
1,539,583
-
1,539,583
2,687,021
142,323
2,829,344
54,209,637
69,826,808
124,036,445
11,658,502
-
11,658,502
12,156,284
22,844,327
35,000,611
$ 78,024,423 $
92,671,135 $
170,695,558
See accompanying notes. 26
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2023
Program Revenues
Net (Expense) Revenue and Changes in Net Position
Operating
Capital
Primary Government
Charges for
Grants and
Grants and
Governmental
Business -Type
Functions/Programs
Expenses
Services
Contributions
Contributions
Activities
Activities
Total
Governmental Activities:
General Government
$ 1,220,552 $
350,081
$ 198,118
$ -
$ (672,353)
$ - $
(672,353)
Public Safety
3,228,801
1,587,586
678,701
-
(962,514)
-
(962,514)
Public Works
4,627,872
60,388
223,450
9,895,930
5,551,896
-
5,551,896
Parks and Recreation
526,835
282,819
2,438
-
(241,578)
-
(241,578)
Interest and Other Charges
815,944
-
-
-
(815,944)
-
(815,944)
Total Governmental Activities
10,420,004
2,280,874
1,102,707
9,895,930
2,859,507
-
2,859,507
Business -Type Activities:
Water
3,982,238
2,804,479
-
4,848,900
-
3,671,141
3,671,141
Sewer
2,524,280
1,442,607
-
2,579,955
-
1,498,282
1,498,282
Storm Sewer
1,057,111
611,219
-
2,409,519
-
1,963,627
1,963,627
Total Business -Type Activities
7,563,629
4,858,305
-
9,838,374
-
7,133,050
7,133,050
TOTALS
$ 17,983,633 $
7,139,179
$ 1,102,707
$ 19,734,304
2,859,507
7,133,050
9,992,557
General Revenues:
Property Taxes
7,822,031
-
7,822,031
Franchise Taxes
68,884
-
68,884
Intergovernmental
246,056
46
246,102
Investment Earnings
(Losses)
1,137,908
604,235
1,742,143
Gain (Loss) on Sale of Assets
(221,202)
-
(221,202)
Miscellaneous
46,528
-
46,528
Total General Revenues
9,100,205
604,281
9,704,486
Capital Asset Transfers
(420,482)
420,482
-
Total General Revenues and
Transfers
8,679,723
1,024,763
9,704,486
CHANGE IN NET POSITION
NET POSITION - BEGINNING OF YEAR
NET POSITION - END OF YEAR
11,539,230 8,157,813 19,697,043
66,485,193 84,513,322 150,998,515
$ 78,024,423 $ 92,671,135 $ 170,695,558
See accompanying notes. 27
CITY OF LAKE ELMO, MINNESOTA
BALANCESHEET
GOVERNMENTAL FUNDS
DECEMBER 31, 2023
Capital Project Funds
City Hall / Fire
2023 Street
Total Nonmajor
Total
Debt Service
Station Bldg
Improvements
Governmental
Governmental
General Fund
Fund
Project Fund
Fund
Funds
Funds
ASSETS
Cash, Cash Equivalents, and Investments
$ 12,190,097
$ 59011,444
$ 2,0449541
$ 395,053
$ 5,448,974
$ 25,090,109
Property Taxes Receivable
103,590
-
-
-
-
103,590
Assessments Receivable
66,113
3,596,335
-
-
20,549
3,682,997
Accounts Receivable
857
-
-
-
-
857
Interest Receivable
26,324
8,525
10,006
1,127
15,986
61,968
Due from Other Governments
120,246
-
-
-
-
120,246
Due from Other Funds
-
-
-
-
449,894
449,894
Leases Receivable
1,616,780
-
-
-
-
1,616,780
TOTAL ASSETS
$ 14,124,007
$ 8,616,304
$ 2,054,547
$ 396,180
$ 5,935,403
$ 31,126,441
LIABILITIES
Accounts Payable
$ 775,749
$ -
$ 16,511
$ 38,351
$ 122,588
$ 953,199
Salaries Payable
82,494
-
-
-
-
82,494
Payroll Deductions and
Employer Contributions
52,653
-
-
-
-
52,653
Construction Contracts Payable
-
-
589,040
69,999
37,565
696,604
Deposits Payable
2,380,136
-
-
-
-
2,380,136
Due to Other Governments
117,613
-
-
-
-
117,613
Due to Other Funds
-
-
-
-
449,894
449,894
Unearned Revenue
136,600
-
-
-
303,489
440,089
Total Liabilities
3,545,245
-
605,551
108,350
913,536
5,172,682
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue:
Property Taxes
52,486
-
-
-
-
52,486
Special Assessments
66,113
3,589,592
-
-
20,549
3,676,254
Leases
1,539,583
-
-
-
-
1,539,583
Total Deferred Inflows of Resources
1,658,182
3,589,592
-
-
20,549
5,268,323
See accompanying notes.
28
CITY OF LAKE ELMO, MINNESOTA
BALANCE SHEET (Continued)
GOVERNMENTAL FUNDS
DECEMBER 31, 2023
Capital Project Funds
City Hall / Fire
2023 Street
Total Nonmajor
Total
Debt Service
Station Bldg
Improvements
Governmental
Governmental
General Fund Fund
Project Fund
Fund
Funds
Funds
FUND BALANCES
Restricted
$ - $ 5,026,712
$ -
$ 287,830
$ 3,154,339
$ 8,468,881
Committed
- -
-
-
20,334
20,334
Assigned
- -
1,448,996
-
2,319,618
3,768,614
Unassigned
8,920,580 -
-
-
(492,973)
8,427,607
Total Fund Balances
8,920,580 5,026,712
1,448,996
287,830
5,001,318
20,685,436
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES,
AND FUND BALANCES $ 14,124,007 $ 8,616,304 $ 2,054,547 $ 396,180 $ 5,935,403 $ 31,126,441
See accompanying notes. 29
CITY OF LAKE ELMO, MINNESOTA
RECONCILIATION OF THE BALANCE SHEET — GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
DECEMBER 31, 2023
Total Fund Balances - Governmental Funds
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Capital assets used in governmental activities are not current financial resources
and, therefore, are not reported as assets in the governmental funds:
Capital Assets
$ 108,951,993
Accumulated Depreciation
(21,298,787)
Capital Assets (Net)
Long-term liabilities are not due and payable in the current period and, therefore,
are not reported as liabilities in the governmental funds Balance Sheet:
Bond Principal Payable
(31,425,000)
Bond Premium, Net of Accumulated Amortization
(1,321,965)
Compensated Absences
(110,115)
The net OPEB liability represents the present value of projected unfunded future
postemployment benefits other than pensions, as determined by an actuary as
of the most recent measurement date. Such liability and related balances do not
represent the impending use of current financial resources and, therefore, are
not reported in the governmental funds:
Net OPEB Liability
The net pension asset/liability and related deferred outflows/inflows represent
the allocation of pension obligations to the City. Such balances are not reported
in the governmental funds:
Net Pension Asset
Net Pension Liability
Deferred Outflows - Pensions
Deferred Inflows - Pensions
Interest on long-term debt is recognized as an expenditure when due and payable
in the governmental funds. Therefore, interest is not accrued in the governmental
funds Balance Sheet, but is accrued in the Statement of Net Position:
Other long-term assets are not available to pay for current -period expenditures
and, therefore, are reported as unavailable in the governmental funds:
Property Taxes Receivable
Special Assessments Receivable
TOTAL NET POSITION OF GOVERNMENTAL ACTIVITIES
$ 20,685,436
87,653,206
(32,857,080)
(65,774)
565,242
(1,238,795)
1,100,857
(1,147,438)
(720,134)
(399,971)
52,486
3,676,254
3,728,740
$
78,024,423
See accompanying notes. 30
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2023
REVENUES
Property Taxes
Franchise Taxes
Special Assessments
Licenses, Permits, and Fees
Intergovernmental
Charges for Services
Fines
Investment Earnings (Losses)
Lease Interest
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Current:
General Government
Public Safety
Public Works
Parks and Recreation
Capital Outlay
Debt Service:
Principal
Interest and Other Charges
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
Capital Project Funds
City Hall / Fire 2023 Street Total Nonmajor Total
Debt Service Station Bldg Improvements Governmental Governmental
General Fund Fund Project Fund Fund Funds Funds
$ 5,142,534 $
2,677,138 $
- $
- $ - $
7,819,672
68,884
-
-
- -
68,884
-
900,116
-
- 8,938
909,054
1,148,190
-
-
- -
1,148,190
386,492
-
148,862
- 796,177
1,331,531
798,787
-
-
- 282,819
1,081,606
45,402
-
-
- -
45,402
345,953
119,653
352,664
5,077 249,225
1,072,572
65,336
-
-
- -
65,336
46,277
-
18,686
- 21,230
86,193
8,047,855
3,696,907
520,212
5,077 1,358,389
13,628,440
1,213,697
-
- -
-
1,213,697
3,037,244
-
- -
-
3,037,244
1,284,334
-
- 70,466
417
1,355,217
409,753
-
- -
739
410,492
280,584
-
5,792,103 2,192,180
3,541,629
11,806,496
-
2,480,000
- -
-
2,480,000
-
818,194
- 32,498
12,397
863,089
6,225,612
3,298,194
5,792,103 2,295,144
3,555,182
21,166,235
1,822,243
398,713
(5,271,891) (2,290,067)
(2,196,793)
(7,537,795)
See accompanying notes. 31
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES (Continued)
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2023
Capital Project Funds
City Hall / Fire
2023 Street
Total Nonmajor
Total
Debt Service
Station Bldg
Improvements
Governmental
Governmental
General Fund
Fund
Project Fund
Fund
Funds
Funds
OTHER FINANCING SOURCES (USES)
Sale of Assets
$ -
$ -
$ -
$ -
$ 60,600
$ 60,600
Bond Issuance
-
92,421
-
2,401,498
916,081
3,410,000
Premium on Bond Issuance
-
-
-
229,494
87,543
317,037
Transfers In
-
-
-
-
466,799
466,799
Transfers Out
(441,902)
-
-
-
(24,897)
(466,799)
TOTAL OTHER FINANCING
SOURCES (USES)
(441,902)
92,421
-
2,630,992
1,506,126
3,787,637
NET CHANGE IN FUND BALANCES
1,380,341
491,134
(5,271,891)
340,925
(690,667)
(3,750,158)
FUND BALANCES - BEGINNING
7,540,239
4,535,578
6,720,887
(53,095)
5,691,985
24,435,594
FUND BALANCES - ENDING
$ 8,920,580
$ 5,026,712
$ 1,448,996
$ 287,830
$ 5,001,318
$ 20,685,436
See accompanying notes. 32
CITY OF LAKE ELMO, MINNESOTA
RECONCILIATION OF CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2023
Net Change in Fund Balances - Total Governmental Funds $ (3,750,158)
Amounts reported for governmental activities in the Statement of Activities are
different due to the following:
Capital outlays are reported in the governmental funds as expenditures. However,
in the Statement of Activities, the cost of those assets is allocated over the
estimated useful lives as depreciation expense:
Capital Outlay Capitalized - Capital Assets $ 11,630,302
Depreciation Expense (3,388,205)
Capital Assets Acquired via Donation 8,314,179
Capital Assets Transferred to Proprietary Funds (420,482)
Loss on Disposal of Assets (281,802)
15,853,992
The issuance of long-term debt provides current financial resources to
governmental funds while the repayment of principal of long-term debt
consumes the current financial resources of governmental funds. Neither
transaction, however, has any effect on net position. Also, governmental
funds report the effect of premiums and discounts when debt is first issued,
whereas these amounts are deferred and amortized in the Statement of
Activities. The amounts below detail the effects of these differences in the
treatment of long-term debt and related items:
Bond Principal Repayments
2,480,000
Bond Issuance
(3,410,000)
Premium on Bond Issuance
(317,037)
Amortization of Bond Premium
105,751
(1,141,286)
Interest on long-term debt in the Statement of Activities differs from the amounts
reported in the governmental funds because interest is recognized as an
expenditure in the funds only when it is due. In the Statement of Activities,
however, interest expense is recognized as the interest accrues, regardless
of when it is due:
(58,606)
Under the modified accrual basis of accounting, certain revenues cannot be
recognized until they are available to liquidate liabilities of the current period:
Property Taxes 2,359
Special Assessments 672,697
675,056
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 the governmental funds:
Compensated Absences (17,006)
Certain liabilities do not represent the impending use of current resources.
Therefore, the change in such liabilities and related deferrals are not
reported in the governmental funds:
Net OPEB Liability and Deferred Outflows/Inflows of Resources 5,736
Net Pension Asset/Liability and Deferred Outflows/Inflows of Resources (28,498)
(22,762)
CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES $ 11,539,230
See accompanying notes. 33
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
DECEMBER 31, 2023
ASSETS
Current Assets:
Cash and Cash Equivalents
Assessments Receivable
Accounts Receivable
Interest Receivable
Due from Other Governments
Total Current Assets
Noncurrent Assets:
Capital Assets Not Being Depreciated
Capital Assets Being Depreciated (Net)
Assessments Receivable
Total Noncurrent Assets
TOTAL ASSETS
DEFERRED OUTFLOWS OF RESOURCES
Pensions
LIABILITIES
Current Liabilities:
Accounts Payable
Salaries Payable
Construction Contracts Payable
Due to Other Governments
Unearned Revenue
Accrued Interest
Compensated Absences
Bonds Due Within One Year
Total Current Liabilities
Noncurrent Liabilities:
Compensated Absences
Bonds Due After One Year
Net OPEB Liability
Net Pension Liability
Total Noncurrent Liabilities
TOTAL LIABILITIES
Storm Sewer
Water Fund Sewer Fund Fund Totals
$ 5,792,477 $
11,621,118 $
1,417,272
$ 18,830,867
114,234
348,951
42,479
505,664
252,593
194,187
316,008
762,788
12,174
28,516
3,370
44,060
157,547
-
-
157,547
6,329,025
12,192,772
1,779,129
20,300,926
12,717,895
2,155,451
-
14,873,346
46,064,811
23,124,777
15,319,566
84,509,154
387,114
4,467,073
802
4,854,989
59,169,820
29,747,301
15,320,368
104,237,489
65,498,845
41,940,073
17,099,497
124,538,415
73,095
29,201
14,242
116,538
318,353
37,964
3,721
360,038
26,838
13,060
6,391
46,289
272,612
85,155
-
357,767
475,605
50,755
-
526,360
575,000
-
-
575,000
150,391
177,270
20,772
348,433
19,530
6,426
2,762
28,718
1,150,000
950,000
215,000
2,315,000
2,988,329
1,320,630
248,646
4,557,605
6,510
2,142
921
9,573
11,949,402
12,909,025
2,024,498
26,882,925
15,330
5,303
2,718
23,351
231,588
92,063
44,390
368,041
12,202,830
13,008,533
2,072,527
27,283,890
15,191,159
14,329,163
2,321,173
31,841,495
DEFERRED INFLOWS OF RESOURCES
Pensions 89,556 35,601 17,166 142,323
NET POSITION
Net Investment in Capital Assets
Unrestricted
TOTAL NET POSITION
45,410,692
11,336,048
13,080,068
69,826,808
4,880,533
16,268,462
1,695,332
22,844,327
$ 50,291,225 $
27,604,510 $
14,775,400 $
92,671,135
See accompanying notes. 34
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2023
Storm Sewer
Water Fund Sewer Fund Fund Totals
OPERATING REVENUES
Charges for Services $ 1,932,608 $ 760,781 $ 580,896 $ 3,274,285
OPERATING EXPENSES
Wages and Benefits
Materials and Supplies
Repairs and Maintenance
Professional Services
Insurance
Utilities
Miscellaneous
Depreciation
TOTAL OPERATING EXPENSES
NET OPERATING INCOME (LOSS)
NONOPERATING INCOME (EXPENSE)
Special Assessments
Intergovernmental
Connection Fees
Capital Contributions from Private Sources
Investment Earnings (Losses)
Miscellaneous
Interest and Other Charges
TOTAL NONOPERATING
INCOME (EXPENSE)
CHANGE IN NET POSITION PRIOR
TO TRANSFERS
TRANSFERS
Interfund Capital Asset Transfers
521,477
242,151
106,356
869,984
368,133
23,370
9,453
400,956
73,786
28,718
49,132
151,636
250,034
117,318
46,110
413,462
25,923
15,790
3,728
45,441
178,976
553,361
422
732,759
62,638
65,446
9,791
137,875
2,148,531
1,121,402
791,557
4,061,490
3,629,498
2,167,556
1,016,549
6,813,603
(1,696,890)
(1,406,775)
(435,653)
(3,539,318)
18,013
519,257
7,363
544,633
2,666,737
11
6
2,666,754
866,200
648,700
-
1,514,900
2,164,179
2,060,698
2,402,156
6,627,033
172,199
387,540
44,496
604,235
5,671
33,126
30,323
69,120
(352,740)
(356,724)
(40,562)
(750,026)
5,540,259
3,292,608
2,443,782
11,276,649
3,843,369 1,885,833
420,482
2,008,129 7,737,331
- 420,482
CHANGE IN NET POSITION 3,843,369
2,306,315
2,008,129
8,157,813
NET POSITION - BEGINNING OF YEAR 46,447,856
25,298,195
12,767,271
84,513,322
NET POSITION - END OF YEAR $ 50,291,225 $
27,604,510 $
14,775,400 $
92,671,135
See accompanying notes. 35
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2023
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash Received from Customers
Cash Paid to Suppliers
Cash Paid to Employees
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Taxes and Intergovernmental
Other Receipts from Customers
NET CASH PROVIDED (USED) BY
NONCAPITAL FINANCING
ACTIVITIES
Storm Sewer
Water Fund Sewer Fund Fund Totals
$ 1,836,037 $ 697,414 $ 529,068 $ 3,062,519
(859,674) (956,258) (120,221) (1,936,153)
(448,628) (217,144) (101,632) (767,404)
527,735 (475,988) 307,215 358,962
29 11 6 46
742,671 545,026 30,323 1,318,020
742,700 545,037 30,329 1,318,066
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Special Assessments
262,583
929,033
39,549
1,231,165
Intergovernmental and Other
4,413,883
-
-
4,413,883
Purchases of Capital Assets
(5,001,498)
(1,568,407)
-
(6,569,905)
Payments on Bond Principal
(1,200,000)
(915,000)
(210,000)
(2,325,000)
Proceeds from Debt Issuance
529,114
1,609,114
-
2,138,228
Cash Paid for Interest and Other Charges
(384,987)
(373,724)
(48,332)
(807,043)
NET CASH PROVIDED (USED) BY
CAPITAL AND RELATED FINANCING
ACTIVITIES
(1,380,905)
(318,984)
(218,783)
(1,918,672)
CASH FLOWS FROM INVESTING
ACTIVITIES
Investment Income 164,363 368,602 42,210 575,175
Net Change in Cash and Cash Equivalents 53,893 118,667 160,971 333,531
Cash and Cash Equivalents - Beginning of Year 5,738,584 11,502,451 1,256,301 18,497,336
Cash and Cash Equivalents - End of Year $ 5,792,477 $ 11,621,118 $ 1,417,272 $ 18,830,867
See accompanying notes. 36
CITY OF LAKE ELMO, MINNESOTA
STATEMENT OF CASH FLOWS (Continued)
PROPRIETARY FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2023
RECONCILIATION OF NET OPERATING
INCOME (LOSS) TO NET CASH
PROVIDED (USED) BY OPERATING
ACTIVITIES
Net Operating Income (Loss)
Adjustments to Reconcile Net Operating
Income (Loss) to Net Cash Provided
(Used) by Operating Activities:
Depreciation Expense
Changes in Assets, Liabilities,
and Deferrals:
Accounts Receivable
Special Assessments
Accounts Payable
Due to Other Governments
Salaries Payable
Compensated Absences
Net OPEB Liability
Net Pension Liability
Deferred Outflows of
Resources - Pensions
Deferred Inflows of
Resources - Pensions
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES
SCHEDULE OF NONCASH CAPITAL
AND RELATED FINANCING
ACTIVITIES
Contribution of Capital Assets from
Private Sources
Contribution of Capital Assets from
Governmental Activities
Storm Sewer
Water Fund Sewer Fund Fund Totals
$ (1,696,890) $ (1,406,775) $ (435,653) $ (3,539,318)
2,148,531
1,121,402
791,557
4,061,490
(13,374)
(29,096)
(9,821)
(52,291)
(83,197)
(34,271)
(42,007)
(159,475)
99,816
(26,251)
(1,585)
71,980
-
(126,004)
-
(126,004)
17,991
9,368
5,099
32,458
(227)
(477)
(1,113)
(1,817)
199
(1,075)
(844)
(1,720)
(65,081)
(32,589)
(25,920)
(123,590)
36,455
16,719
11,768
64,942
83,512
33,061
15,734
132,307
$ 527,735 $
(475,988) $
307,215 $
358,962
$ 2,164,179 $ 2,060,698 $ 2,402,156 $ 6,627,033
$ - $ 420,482 $ - $ 420,482
See accompanying notes. 37
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Lake Elmo, Minnesota (the City) have been prepared in conformity with accounting
principles generally accepted in the United States of America (GAAP) as applied to governmental units. GAAP includes all
relevant Governmental Accounting Standards Board (GASB) pronouncements.
The City has a mayor -council form of government that is governed by an elected mayor and four -member council. The City
provides the following services: water, sewer, and storm sewer utilities, recreation, public improvements, public safety,
planning and zoning, and general administrative services.
LA. FINANCIAL REPORTING ENTITY
The City's financial reporting entity is comprised of the primary governmental unit of the City of Lake Elmo, Minnesota.
In determining the financial reporting entity, the City complies with the provisions of GASB Statement No. 14, The Financial
Reporting Entity, and includes all component units of which the City appointed a voting majority of the units' board; the City
is either able to impose its will on the unit or a financial benefit or burden relationship exists.
Blended Component Units
Blended component units are separate legal entities that meet the component unit criteria described above and whose governing
body is the same or substantially the same as the City Council or the component unit provides services entirely to the City.
These component units' funds are blended into those of the City's by appropriate activity type to compose the primary
government presentation. Currently, the City has the following blended component unit:
Economic Development Authority of the City of Lake Elmo
The Economic Development Authority (EDA) of Lake Elmo is an entity legally separate from the City. The EDA
provides services primarily to the City of Lake Elmo and the City Council appoints the EDA's board members.
Therefore, the EDA has been reported as a blended component unit of the City. The EDA does not issue its own
separate financial statements.
The financial activity of the Authority is performed by the City of Lake Elmo and treated as routine City business.
Discretely Presented Component Units
Discretely presented component units are separate legal entities that meet the component unit criteria described above but do
not meet the criteria for blending. Currently, the City has no discretely presented component units.
Related Organizations
The Lake Elmo Firefighters Relief Association (the Association) is organized as a non-profit organization, legally separate
from the City, to provide pension and other benefits to its members in accordance with Minnesota Statutes. Its board of directors
is appointed by the membership of the Association and not by the City Council and the Association issues its own set of
financial statements. All funding is conducted in accordance with applicable Minnesota Statutes, whereby State aids flow to
the Association, and the Association pays benefits directly to its members. Because the Association is fiscally independent of
the City, the financial statements of the Association have not been included within the City's reporting entity. The City's portion
of the costs of the Association's pension benefits is included in the general fund under public safety.
38
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
LB. BASIS OF PRESENTATION
Government -wide Financial Statements
The Statement of Net Position and Statement of Activities display information about the reporting government as a whole.
They include all funds of the reporting entity except for fiduciary funds (of which the City has none). The government -wide
statements distinguish between governmental and business -type activities. Governmental activities generally are financed
through taxes, intergovernmental revenues, and other nonexchange revenues. Business -type activities are financed in whole
or in part by fees charged to external parties for goods and services.
Fund Financial Statements
Fund financial statements of the reporting entity are organized into funds, each of which is considered to be a separate
accounting entity. Each fund is accounted for by providing a separate set of self -balancing accounts that constitute its assets,
deferred outflows, liabilities, deferred inflows, fund equity, revenues, and expenditures/expenses. Funds are organized into
two major categories: governmental and proprietary. An emphasis is placed on major funds within the governmental and
proprietary categories. A fund is considered major if it is the primary operating fund of the City or meets the following criteria:
• Total assets and deferred outflows, liabilities and deferred inflows, revenues, or expenditures/expenses of that
individual governmental or proprietary fund are at least 10 percent of the corresponding total for all funds of that
category or type; and
• Total assets and deferred outflows, liabilities and deferred inflows, revenues, or expenditures/expenses of that
individual governmental or proprietary fund are at least 5 percent of the corresponding total for all governmental and
proprietary funds combined.
The City reports the following major governmental funds:
The General Fund is the primary operating fund of the City and is always classified as a major fund. It is used to
account for all activities except those legally or administratively required to be accounted for in other funds.
The Debt Service Fund accounts for the accumulation of financial resources for the payment of interest and principal
on general long-term debt of the City other than debt service payments made by proprietary funds. Ad valorem taxes
and special assessments are used for the payment of principal and interest on the City's indebtedness.
The City Hall I Fire Station Bldg Project Fund is a capital project fund used to account for financial resources related
to the construction of a new City Center/Fire Station and Public Works addition. The project was substantially
completed in 2023 and is expected to be capitalized in 2024.
The 2023 Street Improvements Fund is a capital project fund used to account for financial resources related to the
street improvement project that was initiated in 2023.
The City reports the following major proprietary funds:
The Water Fund accounts for the activities of the City's water distribution operations.
The Sewer Fund accounts for revenues and costs associated with the City's sewer system.
The Storm Sewer Fund accounts for costs associated with the City's storm sewer system. These costs are financed by
the storm sewer surcharge.
39
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
I.B. BASIS OF PRESENTATION (Continued)
The City reports the following nonmajor governmental fund types:
The Special Revenue Funds account for funds received by the City with a specific purpose.
The Capital Project Funds account for financial resources to be used for the acquisition or construction of capital
projects (other than those financed by proprietary funds).
1.C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis
of accounting refers to "when" transactions are recorded regardless of the measurement focus applied.
Measurement Focus
On the government -wide Statement of Net Position and the Statement of Activities, both governmental and business -type
activities are presented using the economic resources measurement focus as defined in the second bullet point below. In the
fund financial statements, the current financial resources measurement focus or the economic resources measurement focus is
used as appropriate:
• All governmental funds utilize a current financial resources measurement focus. Only current financial assets and
liabilities are generally included on their balance sheets. Their operating statements present sources and uses of
available financial resources during a given period. These funds use fund balance as their measure of available
financial resources at the end of the period.
• The government -wide financial statements and proprietary funds utilize an economic resources measurement focus.
The accounting objectives of this measurement focus are the determination of operating income, changes in net
position (or cost recovery), financial position, and cash flows. All assets, deferred outflows, liabilities, and deferred
inflows (whether current or noncurrent) associated with their activities are reported. Proprietary fund equity is
classified as net position.
Basis of Accounting
In the government -wide Statement of Net Position and Statement of Activities, both governmental and business -type activities
are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when
earned and expenses are recorded when the liability is incurred, or economic asset used. Revenues, expenses, gains, losses,
assets, and liabilities resulting from exchange and exchange -like transactions are recognized when the exchange takes place.
In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under this
modified accrual basis of accounting, revenues are recognized when "measurable and available." Measurable means knowing
or being able to reasonably estimate the amount. Available means collectible within the current period or within sixty days
after year end. Expenditures (including capital outlay) are recorded when the related fund liability is incurred, except for general
obligation bond principal and interest which are reported when due.
All proprietary funds utilize the accrual basis of accounting.
40
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
LD. BUDGETARY INFORMATION
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for the General Fund. The
appropriated budget is prepared by fund, function, and department. The City of Lake Elmo's department heads may make
transfers of appropriations within a department. Transfers of appropriations between departments require the approval of the
Council. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is
the department level.
Appropriations in all budgeted funds lapse at the end of the fiscal year. Encumbrance accounting, under which purchase orders,
contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the
appropriation, is not employed by the City because it is at present not considered necessary to assure effective budgetary control
or to facilitate effective cash management.
101 110WOaBPI IIuF.1%IOP
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows,
liabilities, and deferred inflows, and disclosure of contingent assets and liabilities at the date of the financial statements.
Estimates also affect reported amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates.
LF. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND EQUITY
Cash and Cash Equivalents
For purposes of the Statements of Net Position, "cash, cash equivalents, and investments" includes all demand, savings, and
money market savings accounts for the City, as well as certain investments discussed below. For the purpose of the proprietary
fund Statement of Cash Flows, "cash and cash equivalents" include all demand, savings, money market savings accounts, and
highly liquid investments. All investments allocated to the Proprietary Funds have original maturities of 90 days or less and
are therefore considered to be cash equivalents.
Investments
Investments are stated at their fair value as determined in accordance with the fair value hierarchy. Short-term investments are
reported at amortized cost, provided that the fair value of those investments is not significantly affected by the impairment of
the credit standing of the issuer or by other factors. Securities traded on a national or international exchange are valued at the
last reported sales price at current exchange rates. Investments that do not have an established market are reported at estimated
fair value. Certificates of deposit are stated at cost, plus accrued interest, which approximates fair market value.
Net appreciation (depreciation) in fair value of investments includes net unrealized and realized gains and losses. Purchases
and sales of securities are recorded on a trade -date basis.
See Note 2.A. for additional information related to Cash, Cash Equivalents, and Investments.
Interfund Receivables and Payables
During the course of operations, transactions occur between individual funds that may result in amounts owed between funds.
Those related to good and services type transactions are classified as "due to and from other funds." Short-term interfund loans
are reported as "due to and from other funds." Long-term interfund loans are reported as "advances from and to other funds."
Interfund receivables and payables between funds within governmental activities, as well as interfund receivables and payables
between funds within business -type activities, are eliminated in the Statement of Net Position. See Note 2.E. for details of
interfund transactions, including receivables and payables at year-end.
41
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
LF. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND EQUITY
(Continued)
Prepaid Expenditures/Expenses
Prepaids, if any, represent expenditures/expenses paid during the current year to be recognized in future periods.
Receivables
In the government -wide statements, receivables consist of all revenues earned at year-end and not yet received. Allowances
for uncollectible accounts receivable are based upon historical trends and the periodic aging of accounts receivable and not
deemed necessary at year end. Major receivable balances for the governmental activities include taxes, special assessments
and amount due from other governments. Business -type activities report utility charges and assessments as their major
receivables.
In the fund financial statements, material receivables in governmental funds include revenue accruals such as taxes,
assessments, other intergovernmental revenues, fines, and charges for services since they are usually both measurable and
available. Revenues collectible but not available are deferred in the fund financial statements in accordance with the modified
accrual basis, but are not deferred in the government -wide financial statements in accordance with the accrual basis. Interest
and investment earnings are recorded when earned only if paid within 60 days since they would be considered both measurable
and available. Proprietary fund material receivables consist of all revenues earned at year-end and not yet received. Utility
accounts receivable and assessments compose the majority of proprietary fund receivables. Allowances for uncollectible
accounts receivable are based upon historical trends and the periodic aging of accounts receivable. No allowances are deemed
necessary at year end.
Leases Receivable
Lease receivables are determined based on future lease payments to be received under each corresponding lease agreement
over the lease term, discounted using the interest rate applied to the leasing arrangement. If not defined in the lease agreement,
implicit interest rates are determined based on the estimated incremental borrowing rate. Collections under the leasing
arrangements are recorded as a reduction to the corresponding lease receivable, as well as lease interest revenues.
Upon initial execution of lease, a corresponding deferred inflow of resources balance is recorded. This balance is amortized on
a straight-line basis over the term of the lease, resulting in the recognition of lease revenues.
Capital Assets
The accounting treatment over property, plant, and equipment (capital assets) depends on whether the assets are used in
governmental or proprietary fund operations and whether they are reported in the government -wide or fund financial statements.
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 and an estimated
useful life in excess of one year.
The range of estimated useful lives by type of asset is as follows:
Buildings 10-50 years
Other Improvements 10-20 years
Machinery and Equipment 5-25 years
Infrastructure 20-40 years
42
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
LF. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND EQUITY
(Continued)
Government -wide Statements
In the government -wide financial statements, capital outlay expenditures are accounted for as capital assets. All capital assets
are valued at historical cost or estimated historical cost if actual is unavailable, except for donated capital assets which are
recorded at their estimated acquisition value at the date of donation.
Depreciation of all exhaustible capital assets is recorded as an allocated expense in the Statement of Activities, with
accumulated depreciation reflected in the Statement of Net Position. Depreciation is provided over the assets' estimated useful
lives using the straight-line method.
Fund Financial Statements
In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay
expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for
the same as in the government -wide statements.
Accounts Payable
Payables in the governmental and proprietary funds are composed almost entirely of payables to vendors.
Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused personal time off (PTO), compensatory time, and
sick pay benefits. All PTO, compensatory time, and the portion of sick pay allowable as severance pay is accrued as incurred
in the government -wide and proprietary fund financial statements. The current portion is calculated based on historical trends.
A liability for these amounts is reported in governmental funds only if they have matured, for example, as the result of an
employee's resignation or retirement. In the event a liability is recorded in the governmental funds, General Fund resources
would typically be used to liquidate the compensated absences.
Long -Term Debt
The accounting treatment of long-term debt and other long-term debt obligations depends on whether the liabilities pertain to
governmental fund operations or proprietary fund operations and whether they are reported in the government -wide or fund
financial statements.
All long-term debt to be repaid from governmental and business -type resources are reported as liabilities in the government -
wide statements. The long-term debt consists primarily of bonds payable, but also includes various other obligations.
Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The debt proceeds are
reported as other financing sources and payment of principal and interest are reported as expenditures. The accounting for
proprietary funds is the same in the fund statements as it is in the government -wide statements.
Postemployment Benefits Other Than Pensions (OPEB)
Under the provisions of the various employee and union contracts, the City provides health insurance coverage for varying
lengths of time if certain age and minimum years of service requirements are met.
43
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
LF. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND EQUITY
(Continued)
Net Pension Asset/Liability
The net pension asset represents the Lake Elmo Firefighters Relief Association's net pension asset as of the most recent actuarial
measurement date. The net pension liability represents the City's allocation of its pro-rata share of the net pension liabilities
of the Statewide pension plans administered by the Public Employees Retirement Administration (PERA).
PERA
For purposes of measuring the net pension asset and liability, deferred outflows/inflows of resources, and pension expense,
information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions
to/deductions from PERA's fiduciary net position have been determined on the same basis as they are reported by PERA. For
this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments, and refunds are
recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Deferred Outflows/Inflows of Resources
In addition to assets, the Statements of Net Position report a separate section for deferred outflows of resources. This element
represents a consumption of net position that applies to future periods and, therefore, will not be recognized as an outflow of
resources (expense) until that time. The City reports deferred outflows of resources in the government -wide and proprietary
fund Statements of Net Position in relation to the activity of the pension funds in which City employees participate.
In addition to liabilities, the Statements of Net Position and Balance Sheet report a separate section for deferred inflows of
resources. This element represents an acquisition of net position or fund balance that applies to future periods and, therefore,
will not be recognized as an inflow of resources (revenue) until that time. A previously discussed, the City reports deferred
inflows of resources in both the governmental fund Balance Sheet and the government -wide Statement of Net Position in
relation to its leasing activities. The City also reports property taxes and special assessments as deferred inflows of resources
in the governmental fund financial statements, in accordance with the modified accrual basis of accounting. Accordingly, such
amounts are deferred and recognized as inflows of resources in the period that they become available. In addition, the City
reports deferred inflows of resources in the government -wide and proprietary fund Statements of Net Position in relation to the
activity of pension funds in which City employees participate.
See Notes 3 and 4 for additional information pertaining to the deferred outflows and deferred inflows recorded to account for
pension activities.
Equity Classifications
Government -wide Financial Statements
Equity is classified as net position and displayed in three components:
Net Investment in Capital Assets — Consists of capital assets including restricted capital assets, net of accumulated
depreciation and reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are
attributable to the acquisition, construction, or improvement of those assets.
Restricted — The portion of net position for which use is constrained by 1) external groups such as creditors, grantors,
contributors, or laws or regulations of other governments; or 2) law through constitutional provisions or enabling
legislation.
Unrestricted — Remaining balance of net position that does not meet the definition of "restricted" or "net investment
in capital assets."
It is the City's policy to consider restricted net position to its depletion before unrestricted net position is applied.
44
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
LF. ASSETS, LIABILITIES, DEFERRED OUTFLOWS/INFLOWS OF RESOURCES, AND EQUITY
(Continued)
Governmental Fund Financial Statements
In the fund financial statements, governmental funds report fund balances as either nonspendable, restricted, committed,
assigned, or unassigned. When the City incurs an expenditure for which it may use either restricted or unrestricted fund
balances, it uses restricted fund balances first unless unrestricted fund balances will have to be returned because they were not
used. When the City incurs an expenditure for purposes for which amounts in any unrestricted fund balance classification
could be used, it uses fund balances in the following order: Committed, assigned, unassigned.
Nonspendable — Includes amounts that cannot be spent because they are either not in spendable form, or legally or
contractually required to be maintained intact. There are no nonspendable fund balances at December 31, 2023.
Restricted — That portion of fund balance which is not available for appropriation, or which has been legally segregated
for a specific purpose.
Committed — Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action
(resolution) of the City Council, which is the highest level of decision -making authority. Committed amounts cannot be
used for any other purpose unless the City Council modifies or rescinds the commitment by resolution.
Assigned — Amounts that are constrained by the City's intent to be used for specific purposes but are neither restricted nor
committed. The City Council has delegated the power to assign fund balances to the City Administrator and/or the Finance
Director.
Unassigned — This classification represents fund balance that has not been assigned to other funds and that has not been
restricted, committed, or assigned to specific purposes within the General Fund. The City strives to maintain a minimum
unassigned fund balance in the General Fund of an amount that is not less than 50% to 60% of the next year's budgeted
expenditures of the General Fund.
See Note 2.F. for additional disclosures.
Proprietary Fund Financial Statements
Proprietary fund equity is classified the same as in the government -wide statements, as described on the previous page.
1.G. REVENUES, EXPENDITURES, AND EXPENSES
Property Tax
Under state law, municipalities are limited in their ability to levy a property tax. The City levies its property tax for the
subsequent year during the month of December. Washington County is the collecting agency for the levy and remits the
collections to the City. In the fund financial statements, property taxes are recorded as revenue in the period levied to the extent
they are collected within 60 days of year-end.
The City certifies its levy to the County each year in December, for collection the following year. The County creates the tax
list for all taxable property in the City and applies the applicable tax rate to the tax capacity of individual properties to arrive at
the actual tax for each property. The County also collects all special assessments, except for certain prepayments paid directly
to the City. The County collects all taxes and assessments, except as noted above. The County mails copies of all real estate
and personal property tax statements. Each year, property owners are required to pay one half of their real estate taxes by May
15 and the balance by October 15. Penalties and interest are assessed to property owners who do not pay their property taxes
and special assessments by the due dates.
45
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
1.G. REVENUES, EXPENDITURES, AND EXPENSES (Continued)
Delinquent taxes receivable include the past six years' uncollected taxes. Delinquent taxes have been offset by deferred inflows
of resources for taxes not received within 60 days after year end in the fund financial statements.
Special Assessments
Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment
improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years
usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by
the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future
installments without interest or prepayment penalties.
Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is
made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go
delinquent, the property is subject to tax forfeit sale and the first proceeds of that sale (after costs, penalties, and expenses of
sale) are remitted to the City in payment of delinquent special assessments. Generally, the City will collect the full amount of
its special assessments not adjusted by City Council or court action. Pursuant to State Statutes, a property shall be subject to a
tax forfeit sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property
is subject to such sale after five years.
Within the government -wide financial statements, the City recognizes special assessment revenue in the period that the
assessment roll was adopted by the City Council. Uncollectible special assessments are not material and have not been reported.
Within the fund financial statements, the revenue from special assessments is recognized by the City when it becomes
measurable and available to finance expenditures of the current fiscal period. In practice, current and delinquent special
assessments received by the City are recognized as revenue for the current year. Special assessments are collected by the County
and remitted by December 31 (remitted to the City the following January) and are also recognized as revenue for the current
year. All remaining delinquent, deferred, and special deferred assessments receivable in governmental funds are completely
offset by deferred inflows of resources.
Operating Revenues and Expenses
Operating revenues and expenses for proprietary funds are those that result from providing services and producing and
delivering goods and/or services. It also includes all revenue and expenses not related to capital and noncapital financing or
investing activities.
Expenditures/Expenses
In the government -wide financial statements, expenses are classified by function for both governmental and business -type
activities.
In the fund financial statements, expenditures are classified as follows:
Governmental Funds - By Character Current (further classified by Function)
Capital Outlay
Debt Service
Proprietary Fund - By Operating and Nonoperating
In the fund financial statements, governmental funds report expenditures of financial resources. Proprietary funds report
expenses relating to use of economic resources.
46
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
1.G. REVENUES, EXPENDITURES, AND EXPENSES (Continued)
Interfund Transfers
Permanent reallocation of resources between funds of the reporting entity are classified as interfund transfers. For the purpose
of the Statement of Activities, all interfund transfers between individual governmental funds, as well as all interf ind transfers
between individual proprietary funds, have been eliminated. See additional information at Note 2.E.
I.F. RECLASSIFICATIONS
Certain amounts from 2022 have been reclassified to conform to the 2023 presentation in the Management's Discussion and
Analysis section.
NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS
The following notes present detail information to support the amounts reported in the basic financial statements for its various
assets, liabilities, deferred outflows/inflows of resources, equity, revenues, and expenditures/expenses.
2.A. CASH, CASH EQUIVALENTS, AND INVESTMENTS
Deposits
In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City
Council. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market
value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds (100% if collateral pledged
is irrevocable standby letters of credit issued by the Federal Home Loan Bank). The City complies with such laws.
Authorized collateral in lieu of a corporate surety bond includes:
• United States government Treasury bills, Treasury notes, Treasury bonds;
• Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service
available to the government entity;
• A general obligation of a state or local government, with taxing powers, rated "A" or better;
• A revenue obligation of a state or local government, with taxing powers, rated "AA" or better;
• Unrated general obligation securities of a local government, with taxing powers, pledged as collateral against funds
deposited by that same local government entity;
• Irrevocable standby letter of credit issued by a Federal Home Loan Bank accompanied by written evidence that the
Federal Home Loan Bank's public debt is rated "AA" or better by Moody's or Standard and Poor's; or
• Time deposits insured by any federal agency.
Minnesota Statutes require that all collateral shall be placed in safekeeping in a restricted account at a Federal Reserve Bank,
or in an account at a trust department of a commercial bank or other financial institution that is not owned or controlled by the
financial institution furnishing the collateral. The selection should be approved by the City.
At December 31, 2023, the City's deposits, including certificates of deposit, were not exposed to custodial credit risk. The
City's deposits were sufficiently covered by federal depository insurance and collateral held by the City's agent in the City's
name.
47
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued)
2.A. CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
Investments
The City may also invest idle funds as authorized by Minnesota Statutes as follows: direct obligations guaranteed by the United
States or its agencies; shares of investment companies registered under the Federal Investment Company Act of 1940 that
received the highest credit rating, are rated in one of the two highest rating categories by a statistical rating agency, and all of
the investments have a final maturity of 13 months or less; general obligations rated "A" or better; revenue obligations rated
"AA" or better; general obligations of the Minnesota Housing Finance Agency rated "A" or better; bankers' acceptances of
United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States
corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating
agencies, and maturing in 270 days or less; Guaranteed Investment Contracts guaranteed by a United States commercial bank,
domestic branch of a foreign bank, or a United States insurance company, and with a credit quality in one of the top two highest
categories; repurchase or reverse purchase agreements and securities lending agreements with financial institutions qualified
as a "depository" by the government entity, with banks that are members of the Federal Reserve System with capitalization
exceeding $10,000,000, a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York,
or certain Minnesota securities broker -dealers. The City does not have any investment policies that would further limit
investment choices.
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally
accepted in the United State of America. The hierarchy is based on the valuation inputs used to measure the fair value of the
asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable
inputs; Level 3 inputs are significant unobservable inputs.
Investment balances at December 31, 2023 are as follows:
Investment
Money Market Funds
U.S. Government Bonds
Municipal Bonds
S & P's Investment Maturities (in Y
Credit Fair Value
Rating Level
Fair Less
Value Than 1
N/A N/A $ 1,068,433 $ 1,068,433 $
AA+ Level 8,167,665 4,449,294
A to AAA Level 2 3,482,216 443,620
1-5 6-10
3,718,371
2,470,534 568,062
Brokered Certificates of Deposit NR
Level 2 3,819,039
2,569,814
1,249,225 -
Totals
$ 16,537,353
$ 8,531,161
$ 7,438,130 $ 568,062
The investments of the City are subject to the following risks:
• Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are
provided by various credit rating agencies and where applicable, indicate associated credit risk. Minnesota Statutes
limit the City's investments. The City's policy to minimize credit risk includes limiting investing funds to those
allowable under Minnesota Statute 118A, annually appointing all financial institutions where investments are held,
and diversifying the investment portfolio. This is measured by the assignment of a rating by a nationally recognized
statistical rating organization.
48
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued)
2.A. CASH, CASH EQUIVALENTS, AND INVESTMENTS (Continued)
Custodial credit risk is the risk that in the event of a failure of the counterparty to a transaction, a government will not
be able to recover the value of investment or collateral securities that are in the possession of an outside party. The
City's investment policy requires its brokers to be licensed with the appropriate federal and state agencies. A minimum
capital requirement of $10,000,000 and at least five years of operation is mandatory. Investments in securities are held
by the City's broker -dealers. The securities at each broker -dealer are insured $500,000 through SIPC. Each broker -
dealer has provided additional protection by providing additional insurance. This insurance is subject to aggregate
limits applied to all of the broker -dealer's accounts.
Concentration of Credit Risk is the risk associated with the magnitude of the City's investments (considered five
percent or more) in the investments of a single issuer, excluding U.S. guaranteed investments (such as treasuries),
investment pools, and mutual funds. The City's investment policy allows no more than 5 percent of the overall
portfolio to be invested in a single issuer, except for the securities of the U.S. Government, or a maximum of 25
percent with any individual counter party in an external investment pool. At December 31, 2023, the City did not have
a significant concentration of credit risk.
• Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The
City's investment policy states that extended maturities may be utilized to take advantage of higher yields; however
no more than 25 percent of total investments should extend beyond five years and in no circumstance should any
extend beyond ten years. The City's investment portfolio is structured so that securities mature to meet cash
requirements for ongoing operations.
Deposits and Investments Summary
A reconciliation of cash and investments as shown on the Statements of Net Position for the City follows:
Carrying Amount of Deposits $ 27,383,623
Investments 16,537,353
Total $ 43,920,976
Government -wide
Cash, Cash Equivalents, and Investments $ 43,920,976
2.B. LEASE RECEIVABLES
The City has executed various arrangements under which the City leases property to external parties. A summary of the
pertinent terms for these leasing arrangements, as well as the corresponding lease receivables, is presented below:
Governmental Activities
Original
Total Annual
Interest
Maturity
Remaining
Description
Amount
Lease Payment
Rate(s)
Date
Amount
Wireless Site Lease
$ 58,510
$20,441
3.25%
12/31/2024
$ 20,140
Wireless Site Lease
548,874
$2,500 - $55,902
5.50%
11/30/2047
548,855
Wireless Site Lease
696,030
$27,987 - $55,425
3.25%
6/30/2043
664,780
Land Lease
400,078
$21,012 - $31,847
3.25%
12/31/2043
383,005
Total Governmental Activities Lease Receivables
$ 1,616,780
49
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued)
2.B. LEASE RECEIVABLES (Continued)
During the year ended December 31, 2023, the City recognized revenues from leasing activities under the arrangements above
within governmental activities in the amount of $157,353.
2.C. CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2023 is as follows:
Balance at
01/01/23 Additions
Disposals
Balance at
Transfers 12/31/23
Governmental Activities
Capital Assets not Being
Depreciated
Land $ 3,453,979 $ - $ - $ - $ 3,453,979
Construction In Progress 15,400,699 11,011,594 (281,802) (7,515,734) 18,614,757
Total Capital Assets not Being
Depreciated 18,854,678 11,011,594 (281,802) (7,515,734) 22,068,736
Capital Assets Being Depreciated
Buildings
Other Improvements
Machinery and Equipment
Infrastructure
Total Capital Assets Being
Depreciated
Less: Accumulated Depreciation
4,330,670 -
2,780,348 -
9,202,576 618,707
54,585,691 8,314,180
70,899,285 8,932,887
- - 4,330,670
- 841,131 3,621,479
(44,167) 726,787 10,503,903
- 5,527,334 68,427,205
(44,167) 7,095,252 86,883,257
Buildings
(1,426,200)
(90,165) -
- (1,516,365)
Other Improvements
(1,432,624)
(96,820) -
- (1,529,444)
Machinery and Equipment
(3,099,851)
(524,255) 44,167
- (3,579,939)
Infrastructure
(11,996,074)
(2,676,965) -
- (14,673,039)
Total Accumulated Depreciation
(17,954,749)
(3,388,205) 44,167
- (21,298,787)
Total Capital Assets Being
Depreciated, Net 52,944,536 5,544,682 - 7,095,252 65,584,470
Capital Assets, Net $ 71,799,214 $ 16,556,276 $ (281,802) $ (420,482) $ 87,653,206
Depreciation is charged to governmental activities as follows:
General Government $ 11,911
Public Safety 168,454
Public Works 3,091,536
Parks and Recreation 116,304
Total Depreciation Expense $ 3,388,205
50
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued)
2.C. CAPITAL ASSETS (Continued)
Balance at
Balance at
01/01/23
Additions Disposals
Transfers
12/31/23
Business -Type Activities
Capital Assets not Being
Depreciated
Land
$ 3,668,869
$ - $ -
$ -
$ 3,668,869
Construction In Progress
15,221,987
6,218,737 -
(10,236,247)
11,204,477
Total Capital Assets not Being
Depreciated
18,890,856
6,218,737 -
(10,236,247)
14,873,346
Capital Assets Being Depreciated
Machinery and Equipment
413,699
- -
-
413,699
Infrastructure
89,134,681
6,728,614 -
10,656,729
106,520,024
Total Capital Assets Being
Depreciated
89,548,380
6,728,614 -
10,656,729
106,933,723
Less: Accumulated Depreciation
Machinery and Equipment
(303,531)
(26,511) -
-
(330,042)
Infrastructure
(18,059,548)
(4,034,979) -
-
(22,094,527)
Total Accumulated Depreciation
(18,363,079)
(4,061,490) -
-
(22,424,569)
Total Capital Assets Being
Depreciated, Net
71,185,301
2,667,124 -
10,656,729
84,509,154
Capital Assets, Net
$ 90,076,157
$ 8,885,861 $ -
$ 420,482
$ 99,382,500
2.D. NONCURRENT LIABILITIES
The reporting entity's long-term debt is segregated between the amounts to be repaid from governmental activities and amounts
to be repaid from business -type activities.
Debt Detail
General Obligation Bonds and Certificates
The City of Lake Elmo issues general obligation bonds and certificates to finance the acquisition and construction of major
capital facilities and infrastructure throughout the City. General obligation bonds and certificates have been issued for both
activities pertaining to governmental and business -type operations. All bonds are direct obligations of the City and pledge the
full faith and credit of the City.
51
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued)
2.D. NONCURRENT LIABILITIES (Continued)
As of December 31, 2023, the long-term debt of the financial reporting entity, excluding compensated absences payable and
the net pension and OPEB liabilities, consists of the following:
Original Interest
Description Issue Amount Rates
Governmental Activities
General Obligation Improvement Bonds:
GO Refunding Bonds, Series 2010B $
GO Improvement Bonds, Series 2014A
GO Improvement Bonds, Series 2015A
GO Improvement Bonds, Series 2016A
GO Improvement Bonds, Series 2017A
GO Improvement Bonds, Series 2019A
GO Improvement Bonds, Series 2021A
GO Improvement Bonds, Series 2022A
GO Improvement Bonds, Series 2023A
Total General Obligation Improvement Bonds
General Obligation Equipment Certificates:
GO Equipment Certificates, Series 2018A
General Obligation Tax Abatement Bonds:
GO Tax Abatement Bonds, Series 2022A
Total Governmental Activities Debt
Business -Type Activities
General Obligation Revenue Bonds:
GO Refunding Bonds, Series 2012A $
GO Improvement Bonds, Series 2014A
GO Improvement Bonds, Series 2015A
GO Improvement Bonds, Series 2016A
GO Improvement Bonds, Series 2017A
GO Improvement Bonds, Series 2019A
GO Improvement Bonds, Series 2021A
GO Improvement Bonds, Series 2022A
GO Improvement Bonds, Series 2023A
Total Business -Type Activities Debt
Final Maturity Balance
Date Outstanding
1,970,000
1.00 -
3.20%
2025
2,850,000
2.00 -
3.50%
2030
1,620,000
2.00 -
3.00%
2026
2,690,000
2.00 -
2.00%
2027
4,565,000
2.50 -
2.50%
2028
2,860,000
2.00 -
3.00%
2035
15,675,000
1.75 -
3.00%
2042
3,895,000
3.00 -
5.00%
2038
3,410,000
4.00 -
5.00%
2034
940,000 2.70 - 2.70%
1,010,000 3.00 - 5.00%
$ 375,000
1,160,000
480,000
1,135,000
2,405,000
2,080,000
14,920,000
3,895,000
3,410,000
29,860,000
2028 555,000
2033 1,010,000
$ 31,425,000
4,035,000
2.00 - 2.50%
2030
$ 2,230,000
3,385,000
2.00 - 3.50%
2030
1,720,000
1,195,000
2.00 - 3.00%
2031
690,000
6,855,000
2.00 - 2.00%
2032
4,355,000
4,480,000
2.50 - 3.00%
2033
3,165,000
1,195,000
2.00 - 3.00%
2035
1,000,000
6,310,000
1.75 - 3.00%
2037
5,880,000
7,590,000
3.00 - 5.00%
2037
7,075,000
2,000,000
4.00 - 5.00%
2038
2,000,000
$ 28,115,000
52
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued)
2.D. NONCURRENT LIABILITIES (Continued)
Changes in Noncurrent Liabilities
The following is a summary of changes in noncurrent liabilities, excluding the net pension and OPEB liabilities, for the year
ended December 31, 2023:
Type of Debt
Governmental Activities
G.O. Improvement Bonds
G.O. Equipment Certificates
G.O. Tax Abatement Bonds
Unamortized Bond Premium
Compensated Absences
Total
Business -Type Activities
G.O. Revenue Bonds
Unamortized Bond Premium
Compensated Absences
Total
Amounts Due
Balance Balance Within
01/01/23 Additions Deductions 12/31/23 One Year
$ 28,830,000 $ 3,410,000 $ (2,380,000) $ 29,860,000 $ 2,520,000
655,000
- (100,000) 555,000 105,000
1,010,000
- - 1,010,000 80,000
1,110,679
317,037 (105,751) 1,321,965 -
93,109
17,006 - 110,115 82,586
$ 31,698,788 $ 3,744,043 $ (2,585,751) $ 32,857,080 $ 2,787,586
$ 28,440,000 $ 2,000,000 $ (2,325,000) $ 28,115,000 $ 2,315,000
1,030,720 138,228 (86,023) 1,082,925 -
40,108 - (1,817) 38,291 28,718
$ 29,510,828 $ 2,138,228 $ (2,412,840) $ 29,236,216 $ 2,343,718
Governmental activity debt is typically funded through the Debt Service Fund. Business -Type activity debt is typically funded
through the Water Fund, Sewer Fund, and Storm Sewer Fund. Compensated absences are funded through the funds to which
the respective employees' wages are allocated.
53
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued)
2.D. NONCURRENT LIABILITIES (Continued)
Annual Debt Service Requirements
At December 31, 2023, the estimated annual debt service requirements to maturity, including principal and interest and
excluding compensated absences payable and net pension and OPEB liabilities, are as follows:
Years Ending
December 31,
2024
2025
2026
2027
2028
2029-2033
2034-2038
2039-2042
Totals
Years Ending
December 31,
2024
2025
2026
2027
2028
2029-2033
2034-2038
Totals
Governmental Activities
G.O. Improvement Bonds
Principal
Interest
Total
$ 2,520,000
$ 840,309 $
3,360,309
2,770,000
748,837
3,518,837
2,655,000
663,554
3,318,554
2,570,000
580,626
3,150,626
2,330,000
500,179
2,830,179
8,510,000
1,569,357
10,079,357
6,080,000
568,813
6,648,813
2,425,000
103,917
2,528,917
G.O. Equipment Certificates
Principal
Interest
Total
$ 105,000
$ 13,568 $
118,568
110,000
10,665
120,665
110,000
7,695
117,695
115,000
4,656
119,656
115,000
1,551
116,551
$ 29,860,000 $ 5,575,592 $ 35,435,592 $ 555,000 $ 38,135 $ 593,135
Governmental Activities
G.O. Tax Abatement Bonds
Principal
Interest
Total
$ 80,000
$ 43,700 $
123,700
85,000
39,575
124,575
90,000
35,200
125,200
95,000
30,575
125,575
95,000
25,825
120,825
565,000
53,925
618,925
Business -Type Activities
G.O. Revenue Bonds
Principal
Interest
Total
$ 2,315,000
$ 815,121
$ 3,130,121
2,355,000
738,521
3,093,521
2,410,000
666,583
3,076,583
2,480,000
592,238
3,072,238
2,565,000
514,600
3,079,600
11,170,000
1,430,706
12,600,706
4,820,000
299,074
5,119,074
$ 1,010,000 $ 228,800 $ 1,238,800 $ 28,115,000 $ 5,056,843 $ 33,171,843
Interest expense totals $1,650,918 in the Statement of Activities (included in Debt Service, Water, Sewer, and Storm Sewer
lines). Interest expenditures total $788,295 for the Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds (included in the line Interest and Other Charges) and $804,017 in the Statement of Revenues, Expenses,
and Changes in Net Position - Proprietary Funds (included in the line Interest and Other Charges).
54
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued)
2.E. INTERFUND TRANSACTIONS AND BALANCES
Operating transfers consist of the following for the year ended December 31, 2023:
Major Funds
General
Nonmajor Funds
Infrastructure Reserve Fund
Transfers In
Nonmajor
Transfers Capital Project
Out Funds
Total
$ 441,902 $ 441,902 $ 441,902
24,897 24,897 24,897
$ 466,799 $ 466,799 $ 466,799
Transfers are used to (a) move revenues from the fund that statute or budget requires to collect them to the fund that statute or
budget requires to expend them and to (b) use unrestricted revenues collected in the General Fund to finance various programs
accounted for in other funds in accordance with budgetary authorizations.
Interfund balances at year-end are as follows:
Due To Fund
Infrastructure Reserve Fund
Infrastructure Reserve Fund
Infrastructure Reserve Fund
Infrastructure Reserve Fund
Infrastructure Reserve Fund
Infrastructure Reserve Fund
Infrastructure Reserve Fund
Infrastructure Reserve Fund
Infrastructure Reserve Fund
Infrastructure Reserve Fund
Short -Term Balances
Due From Fund
Old Village Phases 5 & 6 Fund
CSAH 13 Phase 2 Fund
CSAH 15 Manning Avenue Phase 3 Fund
CSAH 15 Manning Avenue & 30th Street Fund
TH36 Lake Elmo Avenue Improvements Fund
CASH 15 (Manning Ave) Phase 3 Fund
2024 Street & Utility Improvement Fund
Hudson Blvd Imp-Seg A-InwdHdrx Fund
15th Street N Improvement Fund
30th St N Gap Segmt Improvement Fund
Total Short -Term Interfund Balance
Government Fund Elimination
Government -wide Internal Balances
Interfund balances are to be repaid as cash flows become available.
Amount Reason
$ 252,849
Eliminate negative cash
48,389
Eliminate negative cash
3,525
Eliminate negative cash
14,512
Eliminate negative cash
5,499
Eliminate negative cash
1,482
Eliminate negative cash
31,336
Eliminate negative cash
48,215
Eliminate negative cash
21,684
Eliminate negative cash
22,403
Eliminate negative cash
449,894
(449,894)
55
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued)
2.F. FUND EQUITY
At December 31, 2023, governmental fund equity consists of the following:
General Fund
Unassigned
Debt Service Fund
Restricted for Debt Service
City Hall/Fire Station Bldg Project Fund
Assigned for City Hall/Fire Station Project
2023 Street Improvements Fund
Restricted for 2023 Street Improvements
Nonmajor Governmental Funds
Restricted for Capital Projects
Restricted for Park Improvements
Restricted for the Development of Ball Parks
Committed for Lions Park
Assigned for Economic Development Authority
Assigned for ARPA Purchases
Assigned for Vehicle Acquisition
Assigned for Infrastructure Reserve
Assigned for City Facilities
Assigned for Manning and Hudson Future Stoplight
Assigned for Railroad Crossing Improvements
Assigned for Manning and Highway 36 Interchange
Unassigned
Total Nonmajor Governmental Funds Balance
Restricted Committed Assigned Unassigned
$ 8,920,580
$ 5,026,712 $ - $ - $ -
$ 1,448,996 $ -
$ 287,830 $ - $ - $ -
$ 730,006 $ - $ - $ -
1,424,333 - - -
1,000,000 - - -
- 20,334 - -
- - 12,355 -
- - 10,589 -
- - 1,502,126 -
- - 636,610 -
- - 98,874 -
- - 17,195 -
- - 39,297 -
- - 2,572 -
- - - (492,973)
$ 3,154,339 $ 20,334 $ 2,319,618 $ (492,973)
56
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued)
2.17. FUND EQUITY (Continued)
Deficit fund balances in individual funds at December 31, 2023 consist of the following:
Fund
Nonmajor Governmental Funds
Deficit
CSAH 13 Phase 2 Fund
$
(48,389)
Old Village Phases 5 & 6
$
(257,973)
CSAH 15 Manning Avenue Phase 3 Fund
$
(3,525)
CSAH 15 Manning Avenue & 30th Street Fund
$
(14,512)
TH36 Lake Elmo Avenue Improvements Fund
$
(5,849)
CASH 15 (Manning Ave) Phase 3 Fund
$
(1,552)
2024 Street & Utility Improvement Fund
$
(56,882)
Hudson Blvd Imp-Seg A-InwdHdrx Fund
$
(53,827)
15th Street N Improvement Fund
$
(25,032)
30th St N Gap Segmt Improvement Fund
$
(25,432)
Fund deficits are expected to be recovered through future assessments, tax levies, tax increment, or transfers.
NOTE 3 DEFINED BENEFIT PENSION PLANS — STATEWIDE
Plan Description
The City participates in the following cost -sharing multiple -employer defined benefit pension plans administered by the Public
Employees Retirement Association of Minnesota (PERA). PERA's defined benefit pension plans are established and
administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA's defined benefit pension plans are tax
qualified plans under Section 401(a) of the Internal Revenue Code.
General Employees Retirement Plan
All full time and certain part-time employees of the City of Lake Elmo are covered by the General Employees Plan. General
Employees Plan members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security.
Public Employees Police and Fire Plan
The Police and Fire Plan, originally established for police officers and firefighters not covered by a local relief association,
now covers all police officers and firefighters hired since 1980. Effective July 1, 1999, the Police and Fire Plan also covers
police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and
administration to PERA.
Benefits Provided
PERA provides retirement, disability, and death benefits. Benefit provisions are established by State Statute and can only be
modified by the State Legislature. 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.
57
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 3 DEFINED BENEFIT PENSION PLANS — STATEWIDE (Continued)
General Employees Plan Benefits
General Employees Plan benefits are based on a member's highest average salary for any five successive years of allowable
service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated
Plan members. Members hired prior to July 1, 1989 receive the higher of Method 1 or Method 2 formulas. Only Method 2 is
used for members hired after June 30, 1989. Under Method 1, the accrual rate for Coordinated members is 1.20 percent for
each of the first 10 years of service and 1.70 percent for each additional year. Under Method 2, the accrual rate for Coordinated
members is 1.70 percent for all years of service. For members hired prior to July 1, 1989, a full annuity is available when age
plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement
age is the age for unreduced Social Security benefits capped at 66.
Benefit increases are provided to benefit recipients each January. The postretirement increase is equal to 50 percent of the
cost -of -living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1 percent and a maximum of
1.50 percent. Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before the
effective date of the increase will receive the full increase. Recipients receiving the annuity or benefit for at least one month
but less than a full year as of the June 30 before the effective date of the increase will receive a reduced prorated increase. In
2023, legislation repealed the statute delaying increases for members retiring before full retirement age.
Police and Fire Plan Benefits
Benefits for Police and Fire Plan members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from
50 percent after five years up to 100 percent after ten years of credited service. Benefits for Police and Fire Plan members first
hired after June 30, 2014, vest on a prorated basis from 50 percent after ten years up to 100 percent after twenty years of
credited service. The annuity accrual rate is 3 percent of average salary for each year of service. For Police and Fire Plan
members who were first hired prior to July 1, 1989, a full annuity is available when age plus years of service equal at least 90.
Benefit increases are provided to benefit recipients each January. The postretirement increase is fixed at 1 percent. Recipients
that have been receiving the annuity or benefit for at least 36 months as of the June 30 before the effective date of the increase
will receive the full increase. Recipients receiving the annuity or benefit for at least 25 months but less than 36 months as of
the June 30 before the effective date of the increase will receive a reduced prorated increase.
In 2023, the legislature allocated funding for a one-time lump -sum payment to General Employee and Police and Fire Plan
benefit recipients. Eligibility criteria and the payment amount is specified in statute. The one-time payment is non -compounding
towards future benefits.
Contributions
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified
by the State Legislature.
General Employees Fund Contributions
Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary in fiscal year 2023 and the
City was required to contribute 7.50 percent for Coordinated Plan members. The City's contributions to the General Employees
Fund for the year ended December 31, 2023 were $135,093. The City's contributions were equal to the required contributions
as set by State Statute.
Police and Fire Fund Contributions
Police and Fire Plan members were required to contribute 11.80 percent of their annual covered salary in the fiscal year 2023
and the City was required to contribute 17.70 percent for the Police and Fire Plan members. The City's contributions to the
Police and Fire Fund for the year ended December 31, 2023 were $72,744. The City's contributions were equal to the required
contributions as set by State Statute.
58
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 3 DEFINED BENEFIT PENSION PLANS — STATEWIDE (Continued)
Pension Costs
General Employees Fund Pension Costs
At December 31, 2023, the City reported a liability of $1,185,480 for its proportionate share of the General Employees Fund's
net pension liability. The City's net pension liability reflected a reduction due to the State of Minnesota's contribution of $16
million. The State of Minnesota is considered a non -employer contributing entity and the State's contribution meets the
definition of a special funding situation. The State of Minnesota's proportionate share of the net pension liability associated
with the City totaled $32,703.
The net pension liability was measured as of June 30, 2023, and the total pension liability used to calculate the net pension
liability was determined by an actuarial valuation as of that date. The City's proportionate of the net pension liability was based
on the City's contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2022
through June 30, 2023, relative to the total employer contributions received from all of PERA's participating employers. The
City's proportionate share was 0.0212 percent at the end of the measurement period and 0.0232 percent for the beginning of
the period.
City's proportionate share of the net pension liability: $1,185,480
State of Minnesota's proportionate share of the net pension
liability associated with the City 32,703
Total 1 218 183
For the year ended December 31, 2023, the City recognized pension expense of negative $8,377 for its proportionate share of
the General Employees Plan's pension expense. In addition, the City recognized an additional $147 as pension expense (and
grant revenue) for its proportionate share of the State of Minnesota's contribution of $16 million to the General Employees
Fund.
At December 31, 2023, the City reported its proportionate share of the General Employees Plan's deferred outflows of resources
and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows of Deferred Inflows of
Resources Resources
Differences between expected
and actual economic experience $ 39,814 $ 7,781
Changes in actuarial assumptions 183,941 324,930
Difference between projected
and actual investment earnings 17,369 -
Changes in proportionate share 64,057 125,720
Contributions paid to PERA subsequent
to the measurement date 70,700 -
Total Deferred Outflows/Inflows $ 375,881 $ 458,431
The $70,700 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2024.
59
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 3 DEFINED BENEFIT PENSION PLANS — STATEWIDE (Continued)
Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension
expense as follows:
Year ended
December 31, Pension Expense
2024 $ 30,096
2025 $ (160,031)
2026 $ 2,403
2027 $ (25,716)
Police and Fire Fund Pension Costs
At December 31, 2023, the City reported a liability of $421,356 for its proportionate share of the Police and Fire Fund's net
pension liability. The net pension liability was measured as of June 30, 2023, and the total pension liability used to calculate
the net pension liability was determined by an actuarial valuation as of that date. The City's proportionate share of the net
pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll
paid dates from July 1, 2022 through June 30, 2023, relative to the total employer contributions received from all of PERA's
participating employers. The City's proportionate share was 0.0244 percent at the end of the measurement period and 0.0256
percent for the beginning of the period.
The State of Minnesota contributed $18 million to the Police and Fire Fund in the plan fiscal year ended June 30, 2023. The
contribution consisted of $9 million in direct State aid that does meet the definition of a special funding situation and $9 million
in supplemental State aid that does not meet the definition of a special funding situation. The $9 million direct State was paid
on October 1, 2022. Thereafter, by October 1 of each year, the State will pay $9 million to the Police and Fire Fund until full
funding is reached or July 1, 2048, whichever is earlier. The $9 million in supplemental State aid will continue until the fund
is 90 percent funded, or until the State Patrol Plan (administered by the Minnesota State Retirement System) is 90 percent
funded, whichever occurs later. The State of Minnesota's proportionate share of the net pension liability associated with the
City totaled $16,984.
City's proportionate share of the net pension liability: $421,356
State of Minnesota's proportionate share of the net pension
liability associated with the City 16,984
Total
438 340
The State of Minnesota is included as a non -employer contributing entity in the Police and Fire Retirement Plan Schedule of
Employer Allocations and Schedule of Pension Amounts by Employer, Current Reporting Period Only (pension allocation
schedules) for the $9 million in direct State aid. Police and Fire Plan employers need to recognize their proportionate share of
the State of Minnesota's pension expense (and grant revenue) under GASB 68 special funding situation accounting and
financial reporting requirements. For the year ended December 31, 2023, the City recognized pension expense of negative
$19,749 for its proportionate share of the Police and Fire Plan's pension expense. The City recognized negative $1,023 as
grant revenue and pension expense for its proportionate share of the State of Minnesota's pension expense for the contribution
of $9 million to the Police and Fire Fund.
The State of Minnesota is not included as a non -employer contributing entity in the Police and Fire Pension Plan pension
allocation schedules for the $9 million in supplemental State aid. The City recognized $2,199 for the year ended December
31, 2023 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesota's
on -behalf contributions to the Police and Fire Fund.
O
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 3 DEFINED BENEFIT PENSION PLANS — STATEWIDE (Continued)
At December 31, 2023, the City reported its proportionate share of the Police and Fire Plan's deferred outflows of resources
and deferred inflows of resources related to pensions from the following sources:
Differences between expected
and actual economic experience
Changes in actuarial assumptions
Difference between projected
and actual investment earnings
Changes in proportionate share
Contributions paid to PERA subsequent
to the measurement date
Total Deferred Outflows/Inflows
Deferred Outflows of Deferred Inflows of
Resources Resources
111,602 $ -
451,054 591,512
49,067 -
51,977 54,486
44,846
$ 708,546 $ 645,998
The $44,846 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2024. Other
amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as
follows:
Year ended
December 31,
Pension Expense
2024
$
36,860
2025
$
22,441
2026
$
92,446
2027
$
(20,801)
2028
$
(113,244)
Total Pension Expense
The total pension expense for all plans recognized by the City for the year ended December 31, 2023, including amortization
of deferred balances, was $164,798.
Long -Term Expected Return on Investment
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a
regular basis of the long-term expected rate of return using a building-block method in which best -estimate ranges of expected
future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term
rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation
and best estimates of geometric real rates of return for each major asset class are summarized in the following table:
Asset Class
Domestic Equity
International Equity
Fixed Income
Private Markets
Total
Tareet Allocation
33.50%
16.50%
25.00%
25.00%
100%
Long -Term Expected Real
Rate of Return
5.10%
5.30%
0.75%
5.90%
61
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 3 DEFINED BENEFIT PENSION PLANS — STATEWIDE (Continued)
Actuarial Methods and Assumptions
The total pension liability in the June 30, 2023, actuarial valuation was determined using an individual entry -age normal
actuarial cost method. The long-term rate of return on pension plan investments used in the determination of the total liability
is 7.00 percent. This assumption is based on a review of inflation and investments return assumptions from a number of national
investment consulting firms. The review provided a range of investment return rates deemed to be reasonable by the actuary.
An investment return of 7.00 percent was deemed to be within that range of reasonableness for financial reporting purposes.
Inflation is assumed to be 2.25 percent for the General Employees Plan and 2.25 percent for the Police and Fire Plan. Benefit
increases after retirement are assumed to be 1.25 percent for the General Employees Plan and 1.00 percent for the Police and
Fire Plan.
Salary growth assumptions in the General Employees Plan range in annual increments from 10.25 percent after one year of
service to 3.00 percent after 27 years of service. In the Police and Fire Plan, salary growth assumptions range from 11.75
percent after one year of service to 3.00 percent after 24 years of service.
Mortality rates for the General Employees Plan are based on the Pub-2010 General Employee Mortality Table. Mortality rates
for the Police and Fire Plan are based on the Pub-2010 Public Safety Employee Mortality tables. The tables are adjusted slightly
to fit PERA's experience.
Actuarial assumptions for the General Employees Plan are reviewed every four years. The most recent four-year experience
study for the General Employees Plan was completed in 2022. The assumption changes were adopted by the Board and became
effective with the July 1, 2023 actuarial valuation. The most recent four-year experience studies for the Police and Fire Plan
were completed in 2020 and were adopted by the Board and became effective with the July 1, 2021 actuarial valuation.
The following changes in actuarial assumptions and plan provisions occurred in 2023:
General Employees Fund
Changes in Actuarial Assumptions:
• The investment return assumption and single discount rate were changed from 6.50 percent to 7.00 percent.
Changes in Plan Provisions
• An additional one-time direct state aid contribution of $170.1 million will be contributed to the Plan on October 1,
2023.
• The vesting period of those hired after June 30, 2010 was changed from five years of allowable service to three years
of allowable service.
• The benefit increase delay for early retirements on or after January 1, 2024 was eliminated.
• A one-time, non -compounding benefit increase of 2.50 percent minus the actual 2024 adjustment will be payable in a
lump sum for calendar year 2024 by March 31, 2024.
Police and Fire Fund
Changes in Actuarial Assumptions:
• The investment return assumption was changed from 6.50 percent to 7.00 percent.
• The single discount rate changed from 5.40 percent to 7.0 percent.
62
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 3 DEFINED BENEFIT PENSION PLANS — STATEWIDE (Continued)
Changes in Plan Provisions:
• Additional one-time direct state aid contribution of 19.4 million will be contributed to the Plan on October 1, 2023.
• Vesting requirement for new hires after June 30, 2014 was changed from a graded 20-year vesting schedule to a graded
10-year vesting schedule, with 50 percent vesting after five years, increasing incrementally to 100 percent after 10
years.
• A one-time, non -compounding benefit increase of 3.00 percent will be payable in a lump sum for calendar year 2024
by March 31, 2024.
• Psychological treatment is required effective July 1, 2023, prior to approval for a duty disability benefit for a
psychological condition relating to the member's occupation.
• The total and permanent duty disability benefit was increased, effective July 1, 2023.
Discount Rate
The discount rate used to measure the total pension liability in 2023 was 7.00 percent. The projection of cash flows used to
determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota
Statutes. Based on these assumptions, the fiduciary net position of the General Employees and Police and Fire Plans were
projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the
total pension liability.
Pension Liability Sensitivity
The following table presents the City's proportionate share of the net pension liability for all plans it participates in, calculated
using the discount rate disclosed in the preceding paragraph, as well as what the City's proportionate share of the net pension
liability would be if it were calculated using a discount rate one percentage point lower or one percentage point higher than the
current discount rate:
Net Pension Liability at Different Discount Rates
General Employees Fund Police and Fire Fund
1% Decrease in Discount Rate 6.00% $ 2,097,210 6.00% $ 836,021
Current Discount Rate 7.00% $ 1,185,480 7.00% $ 421,356
1% Increase in Discount Rate 8.00% $ 435,548 8.00% $ 80,446
Pension Plan Fiduciary Net Position
Detailed information about each pension plan's fiduciary net position is available in a separately issued PERA financial report
that includes financial statements and required supplementary information. That report may be obtained on the Internet at
www.mnpera.org.
NOTE 4 DEFINED BENEFIT PENSION PLAN — FIREFIGHTERS RELIEF ASSOCIATION
Plan Description
Firefighters of the City of Lake Elmo are members of the Lake Elmo Firefighters Relief Association. The Association is the
administrator of the single -employer defined benefit pension plan available to firefighters. The plan is administered pursuant
to Minnesota Statutes Chapter 69, Chapter 424A, and the Association's by-laws. As of the most recent valuation date,
membership includes 19 active participants and 11 inactive members who are entitled to future benefits. The plan issues a
stand-alone financial statement.
63
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 4 DEFINED BENEFIT PENSION PLAN — FIREFIGHTERS RELIEF ASSOCIATION (Continued)
Benefits Provided
Each member who is at least 50 years of age, has retired from the Lake Elmo Fire Department, has served at least 20 years of
active service with such department before retirement shall be entitled to a lump sum service pension in the amount of $5,850
for each year of active Fire Department service. Members electing retirement with at least 10 years of service will be eligible
for at least 60 percent of this benefit, increasing by 4 percent for each additional year of service up to 20 years.
If a member of the Association shall become permanently or totally disabled, the Association shall pay the sum $5,850 for each
year the member was an active member of the City of Lake Elmo Fire Department. A death benefit is also available, which is
payable to a survivor.
Minnesota Statutes Section 424A.10 provides for the payment of a supplemental benefit equal to 10% of a regular lump sum
distribution up to a maximum of $1,000. The supplemental benefit is in lieu of state income tax exclusion for lump sum
distributions and will no longer be available if State tax law is modified to exclude lump sum distributions from State income
tax. The Association qualifies for these benefits.
Contributions
Minnesota Statutes Chapter 424A.092 specifies minimum support rates required on an annual basis. The minimum support
rates from the municipality and from state aid are determined as the amount required to meet the normal cost plus amortizing
any existing prior service costs over a 10-year period. The significant actuarial assumptions used to compute the municipal
support are specified in Minnesota Statutes. The association is comprised of volunteers; therefore, there are no payroll
expenditures (i.e. there are no covered payroll percentage calculations).
The plan is funded in part by fire state aid and, if necessary, City contributions. The State of Minnesota distributed to the City
$117,613 in fire state aid, which the City remitted to the Relief Association during the year ended December 31, 2023. Required
employer contributions are calculated annually based on statutory provisions. The City did not have a statutorily -required
contribution to the plan for the year ended December 31, 2023.
Pension Costs
At December 31, 2023, the City of Lake Elmo reported a net pension asset of $565,242 for the Firefighters Relief Association's
plan. The net pension asset was measured as of December 31, 2022, as determined by an actuarial valuation as of January 1,
2023.
For the year ended December 31, 2023, the City recognized pension expense of negative $79,352 for the Association. The
City also recognized $101,778, as pension expense (and grant revenue) for State of Minnesota's contributions to the Association
during the measurement period.
64
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 4 DEFINED BENEFIT PENSION PLAN — FIREFIGHTERS RELIEF ASSOCIATION (Continued)
The following table presents the changes in net pension asset during the measurement period.
Total Pension
Plan Fiduciary
Liability
Net Position
Beginning Balance 12/31/21
$ 864,850
$ 1,462,205
Service Cost
47,844
-
Interest on Pension Liability
45,031
-
Assumption Changes
(15,405)
-
Projected Investment Earnings
-
76,145
Contributions (State)
-
101,778
Asset (Gain)/Loss
(124,184)
(241,246)
Benefit Payouts
(109,933)
(109,933)
Administrative Fee
-
(15,504)
Net Changes
(156,647)
(188,760)
Balance End of Year 12/31/22
$ 708,203
$ 1,273,445
Net Pension
Liability (Asset)
$ (597,355)
47,844
45,031
(15,405)
(76,145)
(101,778)
117,062
15,504
32,113
$ (565,242)
At December 31, 2023, the City of Lake Elmo reported deferred outflows of resources and deferred inflows of resources related
to the pension from the following sources:
Differences between expected
and actual economic experience
Changes in actuarial assumptions
Difference between projected
and actual investment earnings
Total Deferred Outflows/Inflows
Deferred Outflows of Deferred Inflows of
Resources Resources
$ - $ 171,852
7,387 13,480
125,581
$ 132,968 $ 185,332
Amounts reported as deferred outflows and inflows of resources related to the pension will be recognized in pension expense
as follows:
Year ended
December 31,
Pension Expense
2024
$
(19,998)
2025
$
(4,669)
2026
$
7,233
2027
$
20,132
2028
$
(20,164)
2029-2030
$
(34,898)
65
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 4 DEFINED BENEFIT PENSION PLAN — FIREFIGHTERS RELIEF ASSOCIATION (Continued)
Actuarial Assumptions
The total pension asset measured at December 31, 2022 was determined using the entry age normal actuarial cost method and
the following actuarial assumptions:
Assumptions
Investment Rate of Return (Discount)
Expected Long -Term Rate of Return
Salary Increases
Interest on Deferred Amounts
The following changes in actuarial assumptions and plan provisions occurred in 2023:
Changes in Plan Provisions:
• There were no changes to plan provisions since the prior valuation.
Changes in Actuarial Assumptions:
• The discount rate changed from 5.25 percent to 5.75 percent.
Pension Liability Sensitivity
Rates
5.75%
5.75%
2.50%
0.00%
The following presents the City's net pension asset for the Firefighters Relief Association's plan, calculated using the discount
rate disclosed in the preceding paragraph, as well as what the City's net pension asset would be if it were calculated using a
discount rate one percent lower or one percent higher than the current discount rate:
Net Pension Asset
Plan Investments
1 % Decrease in
Discount Rate (4.75%)
$ 533,647
Discount Rate (5.75%)
$ 565,242
1 % Increase in
Discount Rate (6.75%)
$ 593,879
Asset Allocation
The long-term expected rate of return on pension plan investments is 5.75 percent. The target allocation and best estimates of
geometric real rates of return for each major asset class of the Association's pension fund investments are summarized in the
following table:
Asset Class
Cash
Fixed Income
Equities
Pension Plan Fiduciary Net Position
Target Allocation
12.00%
28.00%
60.00%
Long -Term Expected
Real Rate of Return
2.00%
3.10%
7.90%
Detailed information about the pension plan's fiduciary net position is available in a separately issued financial report that
includes financial statements and required supplementary information. That report may be obtained by contacting the City Hall
at 3880 Laverne Avenue North, Lake Elmo, Minnesota 55042.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 5 POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Plan Description
The City administers a single -employer defined benefit plan (the Plan) that provides health insurance to eligible employees and
their spouses through the City's health insurance plan. As of the most recent actuarial valuation date, there are 23 active
employees electing coverage and no retirees electing coverage. Benefit and eligibility provisions are established through
negotiations between the City and the City's employees. The Plan does not issue a publicly available financial report.
Benefits Provided
At retirement, employees of the City receiving a retirement or disability benefit, or eligible to receive a benefit, from a
Minnesota public pension plan may continue to participate in the City's group insurance plan. Vesting requirements of three
years if hired before July 1, 2010 or five years if hired on or after July 1, 2010 generally apply.
The City is legally required to include any retirees for who it provides health insurance coverage in the same insurance pool as
its active employees until the retiree reaches Medicare eligibility, regardless of whether the premiums are paid by the City or
the retiree. Consequently, participating retirees are considered to receive a secondary benefit known as an "implicit rate
subsidy." This benefit arises from the assumption that the retiree is receiving a more favorable premium rate than they would
otherwise be able to obtain if purchasing insurance on their own, due to being included in the same pool with the City's younger
and statistically healthier active employees.
Contributions
The City has historically funded these liabilities on a pay-as-you-go basis, in the amounts contractually required to satisfy the
benefit terms discussed above. For the year ended December 31, 2023, the City did not make any direct contributions to the
plan.
Net OPEB Liabilities, OPEB Expense, and Deferred Outflows/Inflows of Resources
At December 31, 2023, the City reported a net OPEB liability of $89,125 for the City's plan. The net OPEB liability was
measured as of December 31, 2022, based on an actuarial valuation as of December 31, 2021.
For the year ended December 31, 2023, the City recognized OPEB expense of negative $7,456.
In accordance with the Alternative Measurement Method, gains and losses due to experience and assumption changes are
recognized immediately. In addition, there were no contributions between the measurement date and reporting date because
the City has no retirees and no active employees who were expected to retire during 2023. Therefore, there are no deferred
outflows or inflows of resources related to OPEB as of December 31, 2023.
67
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 5 POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (Continued)
Changes in the Net OPEB Liability
The following table summarizes changes in the net OPEB liability for the year ended December 31, 2023:
Changes in Total OPEB Liability (TOL)
Balance at January 1st $ 96,581
Service Cost 14,941
Interest Cost 1,987
Changes in Assumptions (17,298)
Benefit Payments (7,086)
Balance at December 31 st $ 89,125
Actuarial Assumptions
The following is a summary of pertinent actuarial assumptions and methods utilized, applied to all periods included in the
measurement, unless otherwise specified:
Key Methods and Assumptions Used in Valuation of Total OPEB Liability
Actuarial Information:
Valuation Date
December 31, 2021
Measurement Date
December 31, 2022
Actuarial Cost Method
Entry Age Normal level percentage of pay
Actuarial Assets
None
Actuarial Assumptions:
Discount Rate 4.05%
Inflation 2.50%
Bond Yield 2.50%
Medical Trend Rate 6.80% for 2022, gradually decreasing to an ultimate rate of
3.90% by 2075 and later years
Dental Trend Rate None
Mortality rates were based on the Pub-2010 General mortality tables with projected mortality improvements based on scale
MP-2021, and other adjustments.
Changes in Plan Provisions:
• There were no changes in plan provisions since the prior valuation.
Changes in Actuarial Assumptions:
• The discount rate was changed from 1.84 percent to 4.05 percent based on updated 20-year municipal bonds rates.
68
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 5 POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (Continued)
Net OPEB Liability Sensitivity
The following presents the net OPEB liability, calculated using the discount rate disclosed in the preceding section, as well as
what the City's net OPEB liability would be if it were calculated using a discount rate one percentage point lower or one
percentage point higher than the current discount rate:
Sensitivity of Net OPEB Liability at Current Single Discount Rate
Rates Amounts
1% Increase in Discount Rate 5.05% $85,450
Current Discount Rate 4.05% $89,125
1% Decrease in Discount Rate 3.05% $96,508
The following presents the net OPEB liability, calculated using the healthcare cost trend rates disclosed in the preceding section,
as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are one
percentage point lower or one percentage point higher than the current healthcare cost trend rates:
Sensitivity of Net OPEB Liability at Current Healthcare Cost Trend Rate
Amounts
1% Increase in Healthcare Trend Rates $101,252
Current Healthcare Trend Rates $89,125
1% Decrease in Healthcare Trend Rates $79,153
NOTE 6 OTHER NOTES
6.A. RISK MANAGEMENT
Claims and Judgements
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions;
injuries to employees; and natural disasters. To manage these risks, the City purchases commercial insurance. The City retains
risk for the deductible portions of the insurance. The amounts of these deductibles are considered immaterial to the financial
statements. There were no significant reductions in insurance from the previous year settlements in excess of insurance for any
of the past two years.
Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated.
Liabilities, if any, include an amount for claims that have been incurred but not reported. The City's management is not aware
of any incurred but not reported claims.
6.B. OTHER EMPLOYEE BENEFITS
The City provides eligible employees future retirement benefits through participation in the Minnesota Deferred Compensation
Plan (MNDCP), which is a Section 457 plan administered by the Minnesota State Retirement System. Eligible employees of
the City may begin participating in the MNDCP commencing on the date of their employment by electing to have a portion of
their pay contributed to the Plan. Certain employees are eligible to receive a City match of employee contributions up to the
qualifying amounts set forth in their employment contracts, and there are no vesting requirements related to such contributions.
The City's contributions to the plan total $3,509 for the year ended December 31, 2023.
69
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 6 OTHER NOTES (Continued)
6.C. COMMITMENTS
During the year, the City entered into various contracts for construction services. At December 31, 2023, remaining
commitments related to these projects total $1,099,565.
6.1). CONTINGENCIES
The City has received notice from the Minnesota Department of Natural Resources (DNR) indicating that the volume of water
being drawn from City wells has exceeded the amount appropriated to the City under the corresponding permit. The City is
currently pursuing options for obtaining an increase to this appropriation but may be subject to fines imposed by the DNR. At
this time, the range of such fines cannot be reasonably determined.
6.E. SUBSEQUENT EVENTS
Subsequent to year end but prior to the issuance of these financial statements, the City accepted bids for various construction
projects, engineering services, and equipment in the amount of $3,217,586.
Additionally, the City expects to issue G.O. Improvement Bonds in the amount of $5,230,000 to finance these projects.
70
REQUIRED SUPPLEMENTARY
INFORMATION
71
CITY OF LAKE ELMO, MINNESOTA
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
FOR THE YEAR ENDED DECEMBER 31, 2023
REVENUES
Taxes
Property Taxes
Franchise Taxes
Gravel Tax
Total Taxes
Licenses and Permits
Intergovernmental Revenue
State Revenue
Market Value Credit
Police and Fire Aid
Other State Grants and Aids
County Revenue
Other County Grants and Aids
Total Intergovernmental Revenue
Charges for Services
General Government
Other Public Safety
Streets and Highways
Total Charges for Services
Fines and Forfeitures
Miscellaneous Revenue
Investment Earnings (Losses)
Lease Interest
Refunds and Reimbursements
Contributions and Donations
Other Miscellaneous
Total Miscellaneous Revenue
TOTAL REVENUES
Budget
Actual
Variance with
Amounts -
Amounts
Budget
Original and
Budgetary
Over
Final
Basis
(Under)
$ 5,103,517 $ 5,142,477 $ 38,960
70,000 68,884 (1,116)
- 57 57
5,173,517 5,211,418 37,901
1,256,495 1,148,190 (108,305)
-
4,588
4,588
80,000
117,613
37,613
182,100
225,035
42,935
14,000
39,256
25,256
276,100
386,492
110,392
255,662
327,360
71,698
650,000
470,911
(179,089)
1,500
516
(984)
907,162
798,787
(108,375)
45,402 15,402
35,000
345,953
310,953
-
65,336
65,336
5,000
(2,858)
(7,858)
11,000
12,759
1,759
8,500
36,376
27,876
59,500
457,566
398,066
7,702,774
8,047,855
345,081
72
CITY OF LAKE ELMO, MINNESOTA
BUDGETARY COMPARISON SCHEDULE — GENERAL FUND (Continued)
FOR THE YEAR ENDED DECEMBER 31, 2023
EXPENDITURES
General Government
Mayor and Council
Administration and Finance
Other General Government
Total General Government
Public Safety
Police
Current
Fire
Current
Capital Outlay
Building Inspections
Current
Other Public Safety
Current
Total Public Safety
Public Works
Street Maintenance and Storm Sewers
Snow and Ice Removal
Street Engineering
Street Lighting
Capital Outlay - Other
Total Public Works
Culture and Recreation
Parks and Recreation
Current
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
To Other Funds
NET CHANGE IN FUND BALANCE
FUND BALANCE - BEGINNING
FUND BALANCE - ENDING
Budget
Actual
Variance with
Amounts -
Amounts
Budget
Original and
Budgetary
Over
Final
Basis
(Under)
$ 59,960 $ 56,842 $ (3,118)
886,439 720,606 (165,833)
590,592 436,249 (154,343)
1,536,991 1,213,697 (323,294)
1,049,784
1,050,555
771
1,348,769
1,233,415
(115,354)
205,000
205,268
268
917,351
690,772
(226,579)
67,500
62,502
(4,998)
3,588,404
3,242,512
(345,892)
1,556,382
1,124,231
(432,151)
62,000
67,773
5,773
14,000
26,526
12,526
49,000
65,804
16,804
25,000
75,316
50,316
1,706,382
1,359,650
(346,732)
428,741 409,753 (18,988)
7,260,518 6,225,612 (1,034,906)
442,256 1,822,243 1,379,987
(425,000) (441,902) (16,902)
$ 17,256 1,380,341 $ 1,363,085
7,540,239
$ 8,920,580
73
For the
Measurement
Year Ended
June 30,
City's
Proportion of the
Net Pension
Liability (Asset)
City's
Proportionate
Share of the
Net Pension
Liability
(Asset) (a)
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF CITY'S PROPORTIONATE
SHARE OF THE NET PENSION LIABILITY
LAST TEN YEARS (Presented Prospectively)
State's
Proportionate
Share of the Net
Pension Liability
Associated with
the City (b)
City's
Proportionate
Share of the Net
Pension Liability
and the State's
Proportionate
Share of the Net
Pension Liability
Associated with
the City (a+b)
City's
Covered
Payroll (c)
City's
Proportionate
Share of the Net
Pension Liability
(Asset) as a
Percentage of
its Covered
Payroll ((a+b)/c)
Plan
Fiduciary Net
Position as a
Percentage
of the Total
Pension
Liability
General Employees
Retirement Pension
Plan
2023
0.0212%
$
1,185,480
$
32,703
$
1,218,183
$
1,728,760
70.5%
83.1%
2022
0.0232%
$
1,837,447
$
53,688
$
1,891,135
$
1,776,733
106.4%
76.7%
2021
0.0202%
$
862,631
$
26,322
$
888,953
$
1,456,866
61.0%
87.0%
2020
0.0207%
$
1,241,060
$
38,201
$
1,279,261
$
1,476,621
86.6%
79.1%
2019
0.0193%
$
1,067,054
$
33,165
$
1,100,219
$
1,364,625
80.6%
80.2%
2018
0.0191%
$
1,059,590
$
34,710
$
1,094,300
$
1,283,088
85.3%
79.5%
2017
0.0189%
$
1,206,564
$
15,173
$
1,221,737
$
1,209,466
101.0%
75.9%
2016
0.0159%
$
1,291,001
$
16,853
$
1,307,854
$
1,041,540
125.6%
68.9%
2015
0.0169%
$
875,846
$
-
$
875,846
$
975,250
89.8%
78.2%
2014
0.0191%
$
897,222
$
-
$
897,222
$
979,703
91.6%
78.2%
Public Employees Police and Fire Pension Plan
2023
0.0244%
$
421,356
$
16,984
$
438,340
$
301,836
145.2%
86.5%
2022
0.0256%
$
1,114,011
$
48,633
$
1,162,644
$
292,842
397.0%
70.5%
2021
0.0165%
$
127,363
$
5,712
$
133,075
$
194,379
68.5%
93.7%
2020
0.0171%
$
225,396
$
5,309
$
230,705
$
194,511
118.6%
87.2%
2019
0.0193%
$
205,468
$
2,605
$
208,073
$
203,030
102.5%
89.3%
2018
0.0163%
$
173,741
$
1,467
$
175,208
$
172,287
101.7%
88.8%
2017
0.0100%
$
135,012
$
-
$
135,012
$
105,846
127.6%
85.4%
2016
0.0090%
$
361,186
$
-
$
361,186
$
87,111
414.6%
63.9%
2015
0.0090%
$
102,261
$
-
$
102,261
$
86,600
118.1%
86.6%
2014
0.0090%
$
97,204
$
-
$
97,204
$
84,098
115.6%
87.1%
74
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF CITY PENSION CONTRIBUTIONS
LAST TEN YEARS (Presented Prospectively)
Contributions in
Relation to the
Contributions as
For the Fiscal
Statutorily
Statutorily
Contribution
City's
a Percentage of
Year Ended
Required
Required
Deficiency
Covered
Covered
December 31,
Contribution
Contribution
(Excess)
Payroll
Payroll
General Employees Retirement Pension Plan
2023
$
135,093
$
135,093
$
-
$
1,801,240
7.5%
2022
$
132,383
$
132,383
$
-
$
1,765,107
7.5%
2021
$
120,362
$
120,362
$
-
$
1,609,407
7.5%
2020
$
109,289
$
109,289
$
-
$
1,457,195
7.5%
2019
$
108,779
$
108,779
$
-
$
1,450,387
7.5%
2018
$
96,960
$
96,960
$
-
$
1,294,100
7.5%
2017
$
95,794
$
95,794
$
-
$
1,276,944
7.5%
2016
$
85,649
$
85,649
$
-
$
1,141,987
7.5%
2015
$
70,582
$
70,582
$
-
$
941,092
7.5%
2014
$
73,182
$
73,182
$
-
$
1,009,407
7.2%
Public Employees
Police and Fire Pension Plan
2023
$
72,744
$
72,744
$
-
$
410,983
17.7%
2022
$
49,674
$
49,674
$
-
$
280,644
17.7%
2021
$
47,658
$
47,658
$
-
$
269,254
17.7%
2020
$
27,492
$
27,492
$
-
$
155,365
17.7%
2019
$
39,225
$
39,225
$
-
$
231,416
16.9%
2018
$
30,990
$
30,990
$
-
$
191,350
16.2%
2017
$
20,327
$
20,327
$
-
$
125,475
16.2%
2016
$
13,967
$
13,967
$
-
$
86,216
16.2%
2015
$
14,257
$
14,257
$
-
$
88,005
16.2%
2014
$
13,035
$
13,035
$
-
$
85,195
15.3%
Volunteer Fire Relief Association
2023
$
-
$
-
$
-
N/A
N/A
2022
$
-
$
-
$
-
N/A
N/A
2021
$
-
$
76,608
$
(76,608)
N/A
N/A
2020
$
-
$
69,975
$
(69,975)
N/A
N/A
2019
$
-
$
65,533
$
(65,533)
N/A
N/A
2018
$
-
$
61,147
$
(61,147)
N/A
N/A
2017
$
-
$
59,136
$
(59,136)
N/A
N/A
2016
$
-
$
61,166
$
(61,166)
N/A
N/A
75
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF CHANGES IN NET PENSION LIABILITY (ASSET)
FIREFIGHTERS RELEIF ASSOCIATION
LAST TEN YEARS (Presented Prospectively)
Measurement Year Ended December 31,
2022 2021 2020 2019 2018 2017 2016 2015
Changes in Total Pension Liability (TPL)
Balance at January 1st $ 864,850 $ 775,033 $ 724,844 $ 898,899 $ 681,802 $ 618,531 $ 588,689 $ 714,621
Service Cost
47,844
46,677 38,225 37,293 28,420
27,727 27,579 28,520
Interest on the TPL
45,031
43,140 39,743 42,177 36,119
35,544 36,976 37,130
Assumption Changes
(15,405)
- - - 8,730
- 11,690 -
Plan Changes
-
- - - 325,127
- - -
Actuarial Experience (Gains)/Losses
(124,184)
- (27,779) - (80,312)
- (46,403) -
Benefit Payments
(109,933)
- - (253,525) (100,987)
- - (191,582)
Balance at December 31 st
Plan Fiduciary Net Position (PFNP)
Balance at January 1 st
Fire State Aid
Projected Investment Income
Gain or Loss
Total Additions
Benefit Payments
Administrative Expenses
Total Reductions
$ 708,203 $ 864,850 $ 775,033 $ 724,844 $ 898,899 $ 681,802 $ 618,531 $ 588,689
$ 1,462,205 $ 1,280,455 $ 1,097,917 $ 1,169,306 $ 1,279,379 $ 1,075,446 $ 963,628 $ 1,155,598
101,778
80,470
76,608
69,975
65,533
61,147
59,136
61,166
76,145
68,948
118,822
127,902
(61,227)
156,879
70,101
(48,240)
(241,246)
47,138
-
-
-
-
-
-
(63,323)
196,556
195,430
197,877
4,306
218,026
129,237
12,926
(109,933)
-
-
(253,525)
(100,987)
-
-
(191,582)
(15,504)
(14,806)
(12,892)
(15,741)
(13,392)
(14,093)
(17,419)
(13,314)
(125,437)
(14,806)
(12,892)
(269,266)
(114,379)
(14,093)
(17,419)
(204,896)
Balance at December 31st $ 1,273,445 $ 1,462,205 $ 1,280,455 $ 1,097,917 $ 1,169,306 $ 1,279,379 $ 1,075,446 $ 963,628
Net Pension Liability (Asset) - December 31st $ (565,242) $ (597,355) $ (505,422) $ (373,073) $ (270,407) $ (597,577) $ (456,915) $ (374,939)
Plan Fiduciary Net Position as a Percentage of
Total Pension Liability (Asset) 179.8% 169.1% 165.2% 151.5% 130.1% 187.6% 173.9% 163.7%
Note: The schedule is provided prospectively with the City's fiscal year ended December 31, 2016 (December 31, 2015 measurement date) and is intended to show a ten year trend.
Additional years will be reported as they become available.
76
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF CHANGES IN CITY'S NET OPEB LIABILITY
LAST TEN YEARS (Presented Prospectively)
Measurement Year Ended December 31,
2022 2021 2020 2019 2018 2017
Changes in Total OPEB Liability (TOL)
Balance at January 1st $
96,581 $
99,789 $
79,303 $
73,788 $
63,930 $
51,220
Service Cost
14,941
15,989
13,859
9,793
9,525
8,200
Interest on the TPL
1,987
2,300
2,541
3,101
2,431
2,264
Assumption Changes
(17,298)
(4,833)
5,583
6,912
(2,098)
2,246
Differences Between Expected and
Actual Experience
-
(15,088)
-
(14,291)
-
-
Benefit Payments
(7,086)
(1,576)
(1,497)
-
-
-
Balance at December 31st $
89,125 $
96,581 $
99,789 $
79,303 $
73,788 $
63,930
Covered Payroll for Active Members $
1,996,038 $
1,743,100 $
1,455,967 $
1,831,326 $
1,605,997 $
1,483,782
Net OPEB Liability / Covered Payroll
4.5%
5.5%
6.9%
4.3%
4.6%
4.3%
Note: The schedule is provided prospectively beginning with the City's
fiscal year ended December 31, 2018 (December 31, 2017 measurement date) and is intended
to show a ten year trend. Additional years will be reported as they become available.
77
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF CITY OPEB CONTRIBUTIONS
LAST TEN YEARS (Presented Prospectively)
Contributions in
Relation to the Contributions as
For the Contractually Contractually Contribution City's a Percentage of
Year Ended Required Required Deficiency Covered Covered
December 31, Contribution Contribution (Excess) Payroll Payroll
Other Post -Employment Benefits
2023 $
- $
- $
- $
2,115,800
0.0%
2022 $
- $
- $
- $
1,786,678
0.0%
2021 $
- $
- $
- $
1,743,100
0.0%
2020 $
- $
- $
- $
1,455,967
0.0%
2019 $
- $
- $
- $
1,831,326
0.0%
2018 $
- $
- $
- $
1,605,997
0.0%
2017 $
- $
- $
- $
1,483,782
0.0%
Note: The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2017 and is
intended to show a ten year trend. Additional years will be reported as they become available.
78
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2023
NOTE 1 PUBLIC EMPLOYEES RETIREMENT PLAN — GENERAL EMPLOYEES FUND
2023 Changes
Changes in Actuarial Assumptions
• The investment return assumption and single discount rate were changed from 6.50 percent to 7.00 percent.
Changes in Plan Provisions
• An additional one-time direct state aid contribution of $170.1 million will be contributed to the Plan on October 1,
2023.
• The vesting period of those hired after June 30, 2010 was changed from five years of allowable service to three years
of allowable service.
• The benefit increase delay for early retirements on or after January 1, 2024 was eliminated.
• A one-time, non -compounding benefit increase of 2.50 percent minus the actual 2024 adjustment will be payable in a
lump sum for calendar year 2024 by March 31, 2024.
2022 Changes
Changes in Actuarial Assumptions
• The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2021 Changes
Changes in Actuarial Assumptions
• The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting
purposes.
• The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020.
Chanizes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2020 Changes
Changes in Actuarial Assumptions
• The price inflation assumption was decreased from 2.50 percent to 2.25 percent.
• The payroll growth assumption was decreased from 3.25 percent to 3.00 percent.
• Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect
is assumed rates that average 0.25 percent less than previous rates.
• Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The changes result
in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements.
• Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The new rates
are based on service and are generally lower than the previous rates for years 2-5 and slightly higher thereafter.
• Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The change results
in fewer predicted disability retirements for males and females.
• The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010
General Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the RP-
2014 disabled annuitant mortality table to the PUB-2010 General/Teacher disabled annuitant mortality table, with
adjustments.
• The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019.
• The assumed spouse age difference was changed from two years older for females to one year older.
79
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2023
NOTE 1 PUBLIC EMPLOYEES RETIREMENT PLAN - GENERAL EMPLOYEES FUND (Continued)
• The assumed number of married male new retirees electing the 100 percent Joint & Survivor option changed from
35.00 percent to 45.00 percent. The assumed number of married female new retirees electing the 100 percent Joint &
Survivor option changed from 15.00 percent to 30.00 percent. The corresponding number of married new retirees
electing the Life annuity option was adjusted accordingly.
Changes in Plan Provisions
• Augmentation for current privatized members was reduced to 2.00 percent for the period July 1, 2020 through
December 31, 2023 and 0.00 percent after. Augmentation was eliminated for privatizations occurring after June 30,
2020.
2019 Changes
Changes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions
• The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million
per year. The State's special funding contribution was changed prospectively, requiring $16.0 million due per year
through 2031.
2018 Changes
Changes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2015 to MP-2017.
• The assumed benefit increase was changed from 1.00 percent per year through 2044 and 2.50 percent per year
thereafter to 1.25 percent per year.
Changes in Plan Provisions
• The augmentation adjustment in early retirement factors is eliminated over a five-year period starting July 1, 2019,
resulting in actuarial equivalence after June 30, 2024.
• Interest credited on member contributions decreased from 4.00 percent to 3.00 percent, beginning July 1, 2018.
• Deferred augmentation was changed to 0.00 percent, effective January 1, 2019. Augmentation that has already
accrued for deferred members will still apply.
• Contribution stabilizer provisions were repealed.
• Postretirement benefit increases were changed from 1.00 percent per year with a provision to increase to 2.50 percent
upon attainment of 90.00 percent funding ratio to 50.00 percent of the Social Security Cost of Living Adjustment, not
less than 1.00 percent and not more than 1.50 percent, beginning January 1, 2019.
• For retirements on or after January 1, 2024, the first benefit increase is delayed until the retiree reaches normal
retirement age; does not apply to Rule of 90 retirees, disability benefit recipients, or survivors.
• Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
2017 Changes
Changes in Actuarial Assumptions
• The Combined Service Annuity (CSA) loads were changed from 0.80 percent for active members and 60.00 percent
for vested and non -vested deferred members. The revised CSA load are now 0.00 percent for active member liability,
15.00 percent for vested deferred member liability, and 3.00 percent for non -vested deferred member liability.
• The assumed postretirement benefit increase rate was changed from 1.00 percent per year for all years to 1.00 percent
per year through 2044 and 2.50 percent per year thereafter.
80
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2023
NOTE 1 PUBLIC EMPLOYEES RETIREMENT PLAN — GENERAL EMPLOYEES FUND (Continued)
Changes in Plan Provisions
• The State's contribution for the Minneapolis Employees Retirement Fund equals $16,000,000 in 2017 and 2018, and
$6,000,000 thereafter.
• The Employer Supplemental Contribution for the Minneapolis Employees Retirement Fund changed from
$21,000,000 to $31,000,000 in calendar years 2019 to 2031. The State's contribution changed from $16,000,000 to
$6,000,000 in calendar years 2019 to 2031.
2016 Changes
Changes in Actuarial Assumptions
• The assumed postretirement benefit increase rate was changed from 1.00 percent per year through 2035 and 2.50
percent per year thereafter to 1.00 percent per year for all years.
• The assumed investment return was changed from 7.90 percent to 7.50 percent. The single discount rate changed
from 7.90 percent to 7.50 percent.
• Other assumptions were changed pursuant to the experience study June 30, 2015. The assumed future salary increases,
payroll growth, and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for
inflation.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2015 Changes
Changes in Actuarial Assumptions
• The assumed postretirement benefit increase rate was changed from 1.00 percent per year through 2030 and 2.50
percent per year thereafter to 1.00 percent per year through 2035 and 2.50 percent per year thereafter.
Changes in Plan Provisions
• On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General Employees Fund,
which increased the total pension liability by $1.1 billion and increase the fiduciary plan net position by $892 million.
Upon consolidation, state and employer contributions were revised; the State's contribution of $6.0 million, which
meets the special funding situation definition, was due September 2015.
NOTE 2 PUBLIC EMPLOYEES RETIREMENT PLAN — POLICE AND FIRE FUND
2023 Changes
Changes in Actuarial Assumptions
• The investment return assumption was changed from 6.50 percent to 7.00 percent.
• The single discount rate changed from 5.40 percent to 7.0 percent.
Changes in Plan Provisions
• Additional one-time direct state aid contribution of 19.4 million will be contributed to the Plan on October 1, 2023.
• Vesting requirement for new hires after June 30, 2014 was changed from a graded 20-year vesting schedule to a graded
10-year vesting schedule, with 50 percent vesting after five years, increasing incrementally to 100 percent after 10
years.
• A one-time, non -compounding benefit increase of 3.00 percent will be payable in a lump sum for calendar year 2024
by March 31, 2024.
• Psychological treatment is required effective July 1, 2023, prior to approval for a duty disability benefit for a
psychological condition relating to the member's occupation.
81
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2023
NOTE 2 PUBLIC EMPLOYEES RETIREMENT PLAN — POLICE AND FIRE FUND (Continued)
• The total and permanent duty disability benefit was increased, effective July 1, 2023.
2022 Changes
Changes in Actuarial Assumptions
• The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021.
• The single discount rate changed from 6.50 percent to 5.40 percent.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2021 Changes
Changes in Actuarial Assumptions
• The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting
purposes.
• The inflation assumption was changed from 2.50 percent to 2.25 percent.
• The payroll growth assumption was changed from 3.25 percent to 3.00 percent.
• The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010
Public Safety Mortality table. The mortality improvement scale was changed from MP-2019 to MN-2020.
• The base mortality table for disabled annuitants was changed from the RP-2014 healthy annuitant mortality table (with
future mortality improvement according to Scale MP-2019) to the Pub-2010 Public Safety disabled annuitant mortality
table (with future mortality improvement according to Scale MP-2020).
• Assumed rates of salary increase were modified as recommended in the July 14, 2020 experience study. The overall
impact is a decrease in gross salary increase rates.
• Assumed rates of retirement were changed as recommended in the July 14, 2020 experience study. The changes result
in slightly more unreduced retirements and fewer assumed early retirements.
• Assumed rates of withdrawal were changed from select and ultimate rates to service -based rates. The changes result
in more assumed terminations.
• Assumed rates of disability were increased for ages 25-44 and decreased for ages over 49. Overall, proposed rates
result in more projected disabilities.
• Assumed percent married for active female members was changed from 60.00 percent to 70.00 percent. Minor changes
to form of payment assumptions were applied.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2020 Changes
Changes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2018 to MP-2019.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2019 Changes
Changes in Actuarial Assumptions
0 The mortality projection scale was changed from MP-2017 to MP-2018.
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2023
NOTE 2 PUBLIC EMPLOYEES RETIREMENT PLAN - POLICE AND FIRE FUND (Continued)
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2018 Changes
Chanjzes in Actuarial Assumptions
• The mortality projection scale was changed from MP-2016 to MP-2017.
Changes in Plan Provisions
• Postretirement benefit increases were changed to 1.00 percent for all years, with no trigger.
• An end date of July 1, 2048 was added to the existing $9.0 million state contribution.
• New annual State aid will equal $4.5 million in fiscal years 2019 and 2020, and $9.0 million thereafter until the plan
reaches 100 percent funding, or July 1, 2048, if earlier.
• Member contributions were changed from 10.80 percent to 11.30 percent of pay, effective January 1, 2019 and 11.80
percent of pay, effective January 1, 2020.
• Employer contributions were changed from 16.20 percent to 16.95 percent of pay, effective January 1, 2019 and 17.70
percent of pay, effective January 1, 2020.
• Interest credited on member contributions decreased from 4.00 percent to 3.00 percent, beginning July 1, 2018.
• Deferred augmentation was changed to 0.00 percent, effective January 1, 2019. Augmentation that has already
accrued for deferred members will still apply.
• Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
2017 Changes
Changes in Actuarial Assumptions
• Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is
proposed rates that average 0.34 percent lower than the previous rates.
• Assumed rates of retirement were changed, resulting in fewer retirements.
• The Combined Service Annuity (CSA) load was 30.00 percent for vested and non -vested, deferred members. The
CSA has been changed to 33.00 percent for vested members and 2.00 percent for non -vested members.
• The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014
fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality
improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants
was changed from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees.
• Assumed termination rates were decreased to 3.00 percent for the first three years of service. Rates beyond the select
period of three years were adjusted, resulting in more expected terminations overall.
• Assumed percentage of married female members was decreased from 65.00 percent to 60.00 percent.
• Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years
younger) and female members (husbands assumed to be four years older) to the assumption that males are two years
older than females.
• The assumed percentage of female members electing joint and survivor annuities was increased.
• The assumed postretirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year
through 2064 and 2.50 percent thereafter.
• The single discount rate was changed from 5.60 percent per annum to 7.50 percent per annum.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
83
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2023
NOTE 2 PUBLIC EMPLOYEES RETIREMENT PLAN — POLICE AND FIRE FUND (Continued)
2016 Changes
Changes in Actuarial Assumptions
• The assumed post -retirement benefit increase rate was changed from 1.00 percent per year through 2037 and 2.50
percent thereafter to 1.00 percent per year for all future years.
• The assumed investment return was changed from 7.90 percent to 7.50 percent.
• The single discount rate changed from 7.90 percent to 5.60 percent.
• The assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent to 3.25 percent for
payroll growth and 2.50 percent for inflation.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2015 Changes
Changes in Actuarial Assumptions
• The assumed postretirement benefit increase rate was changed from 1.00 percent per year through 2030 and 2.50
percent per year thereafter to 1.00 percent per year through 2037 and 2.50 percent per year thereafter.
Changes in Plan Provisions
• The post -retirement benefit increase to be paid after attainment of the 90 percent funding threshold was changed, from
inflation up to 2.50 percent, to a fixed rate of 2.50 percent.
NOTE 3 DEFINED BENEFIT PENSION PLAN — FIREFIGHTERS RELIEF ASSOCIATION
2022 Changes
Changes in Actuarial Assumptions
• The discount rate changed from 5.25 percent to 5.75 percent.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2021 Changes
Changes in Actuarial Assumptions
• There have been no changes in actuarial assumptions since the previous valuation.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2020 Changes
Changes in Actuarial Assumptions
• There have been no changes in actuarial assumptions since the previous valuation.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
84
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2023
NOTE 3 DEFINED BENEFIT PENSION PLAN — FIREFIGHTERS RELIEF ASSOCIATION (Continued)
2019 Changes
Changes in Actuarial Assumptions
• There have been no changes in actuarial assumptions since the previous valuation.
Chanizes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2018 Changes
Changes in Actuarial Assumptions
• There have been no changes in actuarial assumptions since the previous valuation.
Changes in Plan Provisions
• The benefit level increased from $3,400 to $5,850 for each year of service.
NOTE 4 OTHER POSTEMPLOYMENT BENEFIT PLAN
2023 Changes
Changes in Actuarial Assumptions
• The discount rate was changed from 1.84 percent to 4.05 percent based on updated 20-year municipal bonds rates.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2022 Changes
Changes in Actuarial Assumptions
• The discount rate was changed from 2.00 percent to 1.84 percent based on updated 20-year municipal bonds rates.
• Healthcare trend rates were reset to reflect updated cost increase expectations.
• Medical per capita claims costs were updated to reflect recent experience.
• Withdrawal, mortality, and salary increase rates were updated from the rates used in the 7/1/2019 PERA General
Employees Plan valuation to the rates used in the 7/1/2022 valuation.
Changes in Plan Provisions
• Retiree premiums were updated to current levels.
2021 Changes
Changes in Actuarial Assumptions
• The discount rate was changed from 2.75 percent to 2.00 percent.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
85
CITY OF LAKE ELMO, MINNESOTA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2023
NOTE 4 OTHER POSTEMPLOYMENT BENEFIT PLAN (Continued)
2020 Changes
Changes in Actuarial Assumptions
• The discount rate was changed from 3.71 percent to 2.75 percent based on updated 20-year municipal bond rates.
• Healthcare trend rates were reset to reflect updated cost increase expectations, including the repeal of the Affordable
Care Act's Excise Tax on high -cost health insurance plans. In addition, the medical trend rate adjustments to reflect
the projected effect of the Affordable Care Act's Excise Tax on high -cost health insurance plans was removed because
the tax was repealed.
• Medical per capita claims costs were updated to reflect recent experience.
• Salary increase rates were updated from the rates used in the July 1, 2017 PERA General Employees Plan valuation
to the rates used in the July 1, 2019 valuation.
• Mortality rates were updated from the RP-2014 tables to the rates used in the July 1, 2019 PERA General Employees
Plan actuarial valuation.
• The inflation assumption was changed from 2.75 percent to 2.50 percent based on an updated historical analysis of
inflation rates and forward -looking market expectations.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
2019 Changes
Changes in Actuarial Assumptions
• The discount rate was changed from 3.31 percent to 3.71 percent.
Changes in Plan Provisions
• There have been no changes in plan provisions since the previous valuation.
.IA
SUPPLEMENTARY INFORMATION
87
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERMENTAL FUNDS
DECEMBER 31, 2023
ASSETS
Cash, Cash Equivalents, and Investments
Assessments Receivable
Interest Receivable
Due from Other Funds
TOTAL ASSETS
LIABILITIES
Accounts Payable
Construction Contracts Payable
Due to Other Funds
Unearned Revenue
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue:
Special Assessments
FUND BALANCES
Restricted
Committed
Assigned
Unassigned
Total Fund Balances
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES
Total Nonmajor Total Nonmajor Total Nonmajor
Special Revenue Capital Project Governmental
Funds Funds Funds
$ 96,048 $ 5,352,926 $ 5,448,974
- 20,549 20,549
719 15,267 15,986
- 449,894 449,894
$ 96,767 $ 5,838,636 $ 5,935,403
$ - $ 122,588 $ 122,588
37,565 37,565
449,894 449,894
53,489 250,000 303,489
53,489 860,047 913,536
20,549 20,549
-
3,154,339
3,154,339
20,334
-
20,334
22,944
2,296,674
2,319,618
-
(492,973)
(492,973)
43,278
4,958,040
5,001,318
$ 96,767 $
5,838,636 $
5,935,403
88
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
NONMAJOR GOVERMENTAL FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2023
REVENUES
Special Assessments
Intergovernmental
Charges for Services
Investment Earnings (Losses)
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Current:
Public Works
Parks and Recreation
Capital Outlay
Debt Service:
Interest and Other Charges
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Sale of Assets
Bond Issuance
Premium on Bond Issuance
Transfers In
Transfers Out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
Total Nonmajor Total Nonmajor Total Nonmajor
Special Revenue Capital Project Governmental
Funds Funds Funds
$ - $
8,938 $
8,938
242,390
553,787
796,177
5,700
277,119
282,819
15,120
234,105
249,225
-
21,230
21,230
263,210
1,095,179
1,358,389
417 417
- 739 739
242,390 3,299,239 3,541,629
- 12,397 12,397
242,390 3,312,792 3,555,182
20,820 (2,217,613) (2,196,793)
- 60,600 60,600
- 916,081 916,081
- 87,543 87,543
- 466,799 466,799
- (24,897) (24,897)
- 1,506,126 1,506,126
20,820 (711,487) (690,667)
22,458 5,669,527 5,691,985
$ 43,278 $ 4,958,040 $ 5,001,318
89
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
DECEMBER 31, 2023
Economic Total Nonmajor
Lions Park Sign Development Special Revenue
Program Fund Authority Fund ARPA Fund Funds
ASSETS
Cash, Cash Equivalents, and Investments $ 20,286 $ 12,324 $ 63,438 $ 96,048
Interest Receivable 48 31 640 719
TOTAL ASSETS $ 20,334 $ 12,355 $ 64,078 $ 96,767
LIABILITIES
Unearned Revenue $ - $ - $ 53,489 $ 53,489
FUND BALANCES
Committed 20,334 - - 20,334
Assigned - 12,355 10,589 22,944
Total Fund Balances 20,334 12,355 10,589 43,278
TOTAL LIABILITIES
AND FUND BALANCES $ 20,334 $ 12,355 $ 64,078 $ 96,767
.I
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, 2023
REVENUES
Intergovernmental
Charges for Services
Investment Earnings (Losses)
TOTAL REVENUES
EXPENDITURES
Capital Outlay
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
Economic Total Nonmajor
Lions Park Sign Development Special Revenue
Program Fund Authority Fund ARPA Fund Funds
$ 242,390 $ 242,390
5,700 - - 5,700
514 412 14,194 15,120
6,214 412 256,584 263,210
- - 242,390 242,390
6,214 412 14,194 20,820
14,120 11,943 (3,605) 22,458
$ 20,334 $ 12,355 $ 10,589 $ 43,278
91
ASSETS
Cash, Cash Equivalents,
and Investments
Assessments Receivable
Interest Receivable
Due from Other Funds
TOTAL ASSETS
LIABILITIES
Accounts Payable
Construction Contracts Payable
Due to Other Funds
Unearned Revenue
Total Liabilities
DEFERRED INFLOWS OF
RESOURCES
Unavailable Revenue:
Special Assessments
FUND BALANCES
Restricted
Assigned
Unassigned
Total Fund Balance
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES,
AND FUND BALANCES
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECT FUNDS
DECEMBER 31, 2023
Heritage Farms
Street & Utility Manning &
Park Dedication Vehicle Improvements Infrastructure City Facilities Hudson Future CSAH 13 Phase
Fund Acquisition Fund Fund Reserve Fund Fund Stoplight Fund 2 Fund
$ 2,474,283 $ 1,499,404 $ 232,757 $ 185,083 $ 98,628 $ 266,529 $ -
- - - 20,549 - - -
7,551 2,722 585 1,633 246 666 -
- - - 449,894 - - -
$ 2,481,834 $ 1,502,126 $ 233,342 $ 657,159 $ 98,874 $ 267,195 $ -
$ 57,501
- - - - - - 48,389
- - - - - 250,000 -
57,501 - - - - 250,000 48,389
- - - 20,549 - - -
2,424,333 - 233,342 - - - -
- 1,502,126 - 636,610 98,874 17,195 -
- - - - - - (48,389)
2,424,333 1,502,126 233,342 636,610 98,874 17,195 (48,389)
$ 2,481,834 $ 1,502,126 $ 233,342 $ 657,159 $ 98,874 $ 267,195 $ -
92
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET (Continued)
NONMAJOR CAPITAL PROJECT FUNDS
DECEMBER 31, 2023
Railroad
Tamarack Farm
CSAH 15
TH36 Lake
Crossing
Old Village CSAH 15 Manning &
Estates Street
Manning Avenue
Elmo Avenue
Improvements
Phases 5 & 6 Manning Avenue Highway 36
Improvements
& 30th Street
Improvements
Fund
Fund Phase 3 Fund Interchange Fund
Fund
Fund
Fund
ASSETS
Cash, Cash Equivalents,
and Investments
$ 53,220
$ -
$ -
$ 2,566
$
123,333
$ -
$ -
Assessments Receivable
-
-
-
-
-
-
-
Interest Receivable
147
-
-
6
308
-
-
Due from Other Funds
-
-
-
-
-
-
-
TOTAL ASSETS
$ 53,367
$ -
$ -
$ 2,572
$
123,641
$ -
$ -
LIABILITIES
Accounts Payable
$ 14,070
$ 5,124
$ -
$ -
$
200
$ -
$ 350
Construction Contracts Payable
-
-
-
-
-
-
-
Due to Other Funds
-
252,849
3,525
-
-
14,512
5,499
Unearned Revenue
-
-
-
-
-
-
-
Total Liabilities
14,070
257,973
3,525
-
200
14,512
5,849
DEFERRED INFLOWS OF
RESOURCES
Unavailable Revenue:
Special Assessments
-
-
-
-
-
-
-
FUND BALANCES
Restricted
-
-
-
-
123,441
-
-
Assigned
39,297
-
-
2,572
-
-
-
Unassigned
-
(257,973)
(3,525)
-
-
(14,512)
(5,849)
Total Fund Balance
39,297
(257,973)
(3,525)
2,572
123,441
(14,512)
(5,849)
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES,
AND FUND BALANCES
$ 53,367
$ -
$ -
$ 2,572
$
123,641
$ -
$ -
93
CITY OF LAKE ELMO, MINNESOTA
COMBINING BALANCE SHEET (Continued)
NONMAJOR CAPITAL PROJECT FUNDS
DECEMBER 31, 2023
2024 Street &
30th St N Gap
2022 Street CSAH 15 Utility Hudson Blvd 15th Street N
Segmt Total Nonmajor
Improvements Old Village (Manning Ave) Improvement Imp-Seg A- Improvement
Improvement Capital Project
Fund Phase 7 Fund Phase 3 Fund Fund InwdHdrx Fund Fund
Fund Funds
ASSETS
Cash, Cash Equivalents,
and Investments
$ 353,727
$
63,396
$
-
$ -
$
-
$
-
$
-
$
5,352,926
Assessments Receivable
-
-
-
-
-
-
-
20,549
Interest Receivable
902
501
-
-
-
-
-
15,267
Due from Other Funds
-
-
-
-
-
-
-
449,894
TOTAL ASSETS
$ 354,629
$
63,897
$
-
$ -
$
-
$
-
$
-
$
5,838,636
LIABILITIES
Accounts Payable
$ 288
$
7,450
$
70
$ 25,546
$
5,612
$
3,348
$
3,029
$
122,588
Construction Contracts Payable
-
37,565
-
-
-
-
-
37,565
Due to Other Funds
-
-
1,482
31,336
48,215
21,684
22,403
449,894
Unearned Revenue
-
-
-
-
-
-
-
250,000
Total Liabilities
288
45,015
1,552
56,882
53,827
25,032
25,432
860,047
DEFERRED INFLOWS OF
RESOURCES
Unavailable Revenue:
Special Assessments
-
-
-
-
-
-
-
20,549
FUND BALANCES
Restricted
354,341
18,882
-
-
-
-
-
3,154,339
Assigned
-
-
-
-
-
-
-
2,296,674
Unassigned
-
-
(1,552)
(56,882)
(53,827)
(25,032)
(25,432)
(492,973)
Total Fund Balance
354,341
18,882
(1,552)
(56,882)
(53,827)
(25,032)
(25,432)
4,958,040
TOTAL LIABILITIES, DEFERRED
INFLOWS OF RESOURCES,
AND FUND BALANCES
$ 354,629
$
63,897
$
-
$ -
$
-
$
-
$
-
$
5,838,636
94
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, 2023
REVENUES
Special Assessments
Intergovernmental
Charges for Services
Investment Earnings (Losses)
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Current:
Public Works
Parks and Recreation
Capital Outlay
Debt Service:
Interest and Other Charges
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER)
EXPENDITURES
OTHER FINANCING
SOURCES (USES)
Sale of Assets
Bond Issuance
Premium on Bond Issuance
Transfers In
Transfers Out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES- BEGINNING
FUND BALANCES - ENDING
Heritage Farms
Street & Utility
Manning &
Park Dedication
Vehicle
Improvements
Infrastructure
City Facilities
Hudson Future
CSAH 13 Phase
Fund
Acquisition Fund
Fund
Reserve Fund
Fund
Stoplight Fund
2 Fund
$ -
$ -
$ -
$ 8,938 $
-
$ -
$ -
-
553,787
-
-
-
-
-
277,119
-
-
-
-
-
-
111,431
47,614
6,592
21,170
3,477
9,398
2,273
388,550
601,401
6,592
30,108
3,477
9,398
2,273
739
-
-
-
-
-
1,041,913
846,545
3,156
-
-
(1,055)
1,042,652
846,545
3,156
-
-
-
(1,055)
(654,102)
(245,144)
3,436
30,108
3,477
9,398
3,328
-
60,600
-
-
-
-
-
-
425,000
-
-
-
-
-
-
-
-
(24,897)
-
-
-
-
485,600
-
(24,897)
-
-
-
(654,102)
240,456
3,436
5,211
3,477
9,398
3,328
3,078,435
1,261,670
229,906
631,399
95,397
7,797
(51,717)
$ 2,424,333
$ 1,502,126
$ 233,342
$ 636,610 $
98,874
$ 17,195
$ (48,389)
95
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES (Continued)
NONMAJOR CAPITAL PROJECT FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2023
Railroad
Tamarack Farm
CSAH 15
TH36 Lake
Crossing
Old Village
CSAH 15
Manning &
Estates Street
Manning Avenue
Elmo Avenue
Improvements
Phases 5 & 6
Manning Avenue
Highway 36
Improvements
& 30th Street
Improvements
Fund
Fund
Phase 3 Fund
Interchange Fund
Fund
Fund
Fund
REVENUES
Special Assessments
$ -
$ -
$ -
$ -
$ -
$ -
$ -
Intergovernmental
-
-
-
-
-
-
-
Charges for Services
-
-
-
-
-
-
-
Investment Earnings (Losses)
2,444
2,616
-
1,906
4,403
6,444
-
Miscellaneous
21,230
-
-
-
-
-
-
TOTAL REVENUES
23,674
2,616
-
1,906
4,403
6,444
-
EXPENDITURES
Current:
Public Works
-
-
-
-
-
-
-
Parks and Recreation
-
-
-
-
-
-
Capital Outlay
53,887
252,176
-
-
439
613
3,139
Debt Service:
Interest and Other Charges
-
-
-
-
-
-
-
TOTAL EXPENDITURES
53,887
252,176
-
-
439
613
3,139
EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER)
EXPENDITURES
(30,213)
(249,560)
-
1,906
3,964
5,831
(3,139)
OTHER FINANCING
SOURCES (USES)
Sale of Assets
-
-
-
-
-
-
-
Bond Issuance
-
-
-
-
-
-
-
Premium on Bond Issuance
-
-
-
-
-
-
-
Transfers In
41,799
-
-
-
-
-
-
Transfers Out
-
-
-
-
-
-
-
TOTAL OTHER FINANCING
SOURCES (USES)
41,799
-
-
-
-
-
-
NET CHANGE IN FUND BALANCES
11,586
(249,560)
-
1,906
3,964
5,831
(3,139)
FUND BALANCES- BEGINNING
27,711
(8,413)
(3,525)
666
119,477
(20,343)
(2,710)
FUND BALANCES - ENDING
$ 39,297
$ (257,973)
$ (3,525)
$ 2,572
$ 123,441
$ (14,512)
$ (5,849)
96
CITY OF LAKE ELMO, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES (Continued)
NONMAJOR CAPITAL PROJECT FUNDS
FOR THE YEAR ENDED DECEMBER 31, 2023
REVENUES
Special Assessments
Intergovernmental
Charges for Services
Investment Earnings (Losses)
Miscellaneous
TOTAL REVENUES
EXPENDITURES
Current:
Public Works
Parks and Recreation
Capital Outlay
Debt Service:
Interest and Other Charges
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF
REVENUES OVER (UNDER)
EXPENDITURES
OTHER FINANCING
SOURCES (USES)
Sale of Assets
Bond Issuance
Premium on Bond Issuance
Transfers In
Transfers Out
TOTAL OTHER FINANCING
SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES- BEGINNING
FUND BALANCES - ENDING
2024 Street &
30th St N Gap
2022 Street CSAH 15 Utility Hudson Blvd 15th Street N
Segmt Total Nonmajor
Improvements Old Village (Manning Ave) Improvement Imp-Seg A- Improvement
Improvement Capital Project
Fund Phase 7 Fund Phase 3 Fund Fund InwdHdrx Fund Fund
Fund Funds
$ - $ - $ - $ - $ - $ - $ - $ 8,938
- 553,787
- 277,119
12,078 2,259 - - - - - 234,105
- - - - - - - 21,230
12,078 2,259 - - - - - 1,095,179
- 179 - 238 - - - 417
- - - - - - - 739
16,234 919,705 1,552 56,644 53,827 25,032 25,432 3,299,239
- 12,397 - - - - - 12,397
16,234 932,281 1,552 56,882 53,827 25,032 25,432 3,312,792
(4,156) (930,022) (1,552) (56,882) (53,827) (25,032) (25,432) (2,217,613)
60,600
916,081 - - - - - 916,081
87,543 - - - - - 87,543
- - - - - - 466,799
- - - - - - (24,897)
1,003,624 - - - - - 1,506,126
(4,156) 73,602 (1,552) (56,882) (53,827) (25,032) (25,432) (711,487)
358,497 (54,720) - - - - - 5,669,527
$ 354,341 $ 18,882 $ (1,552) $ (56,882) $ (53,827) $ (25,032) $ (25,432) $ 4,958,040
97
ASSETS
Cash, Cash Equivalents, and Investments
Assessments Receivable
Interest Receivable
TOTAL ASSETS
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue:
Special Assessments
FUND BALANCES
Restricted
TOTAL DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
CITY OF LAKE ELMO, MINNESOTA
SUPPLEMENTAL COMBINING BALANCE SHEET
DEBT SERVICE FUND
DECEMBER 31, 2023
2012B GO 2014A GO 2015A GO 2016A GO 2017A GO
2010B GO CIP Improvement Improvement Improvement Improvement Improvement
Bonds Fund Bonds Fund Bonds Fund Bonds Fund Bonds Fund Bonds Fund
$ 216,937 $ (23,678) $ 973,597 $ 5,781 $ 673,764 $ 70,867
- 1,831 82,273 237,703 432,646 368,683
291 - 2,136 - 1,328 -
$ 217,228 $ (21,847) $ 1,058,006 $ 243,484 $ 1,107,738 $ 439,550
$ - $ 1,333 $ 81,913 $ 237,703 $ 432,268 $ 366,313
217,228 (23,180) 976,093 5,781 675,470 73,237
$ 217,228 $ (21,847) $ 1,058,006 $ 243,484 $ 1,107,738 $ 439,550
M
CITY OF LAKE ELMO, MINNESOTA
SUPPLEMENTAL COMBINING BALANCE SHEET (Continued)
DEBT SERVICE FUND
DECEMBER 31, 2023
ASSETS
Cash, Cash Equivalents, and Investments
Assessments Receivable
Interest Receivable
TOTAL ASSETS
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue:
Special Assessments
FUND BALANCES
Restricted
TOTAL DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
2019 2018A GO 2021A GO 2022A GO 2023A GO
Improvement Equipment Cert. Improvement Improvement Improvement Total Debt
Bonds Fund Bonds Fund Bonds Fund Bonds Fund Bonds Fund Service Fund
$ 765,500 $
36,738 $ 1,632,366 $
335,618 $
323,954 $
5,011,444
227,014
- 1,159,735
296,200
790,250
3,596,335
1,510
- 2,722
284
254
8,525
$ 994,024 $
36,738 $ 2,794,823 $
632,102 $
1,114,458 $
8,616,304
$ 226,067 $ - $ 1,157,545 $ 296,200 $ 790,250 $ 3,589,592
767,957 36,738 1,637,278 335,902 324,208 5,026,712
$ 994,024 $ 36,738 $ 2,794,823 $ 632,102 $ 1,114,458 $ 8,616,304
CITY OF LAKE ELMO, MINNESOTA
SUPPLEMENTAL COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE
DEBT SERVICE FUND
FOR THE YEAR ENDED DECEMBER 31, 2023
REVENUES
Property Taxes
Special Assessments
Investment Earnings (Losses)
TOTAL REVENUES
EXPENDITURES
Debt Service:
Principal
Interest and Other Charges
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Bond Issuance
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
2012B GO
2010B GO CIP Improvement
Bonds Fund Bonds Fund
$ 206,656 $
4,274
210,930
2014A GO
Improvement
Bonds Fund
2015A GO
Improvement
Bonds Fund
2016A GO
Improvement
Bonds Fund
- $ 200,091 $ - $ 193,409 $
16,693 39,212 57,869 73,055
435 31,164 2,250 19,818
17,128 270,467 60,119 286,282
2017A GO
Improvement
Bonds Fund
342,660
61,531
' V' '/7J
180,000
95,000
225,000
170,000
275,000
455,000
15,011
1,398
38,965
14,020
25,450
65,813
195,011
96,398
263,965
184,020
300,450
520,813
15,919
(79,270)
6,502
(123,901)
(14,168)
(116,020)
(79,270)
(14,168)
15,919
(123,901)
6,502
(116,020)
201,309
56,090
969,591
129,682
689,638
189,257
$ 217,228 $
(23,180) $
976,093 $
5,781 $
675,470 $
73,237
100
CITY OF LAKE ELMO, MINNESOTA
SUPPLEMENTAL COMBINING SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE (Continued)
DEBT SERVICE FUND
FOR THE YEAR ENDED DECEMBER 31, 2023
REVENUES
Property Taxes
Special Assessments
Investment Earnings (Losses)
TOTAL REVENUES
EXPENDITURES
Debt Service:
Principal
Interest and Other Charges
TOTAL EXPENDITURES
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Bond Issuance
2019
2018A GO
2021A GO
2022A GO
2023A GO
Improvement
Equipment Cert.
Improvement
Improvement
Improvement
Total Debt
Bonds Fund
Bonds Fund
Bonds Fund
Bonds Fund
Bonds Fund
Service Fund
$ 297,138
$ 123,569
$ 1,025,930 $
287,685
$ -
$ 2,677,138
39,858
-
167,399
187,049
257,450
900,116
21,812
-
36,315
1,838
1,145
119,653
358,808
123,569
1,229,644
476,572
258,595
3,696,907
275,000
100,000
705,000
- - 2,480,000
61,676
16,335
357,669
195,049 26,808 818,194
336,676
116,335
1,062,669
195,049 26,808 3,298,194
22,132
7,234
166,975
281,523 231,787 398,713
92,421 92,421
NET CHANGE IN FUND BALANCES 22,132
7,234
166,975
281,523
324,208 491,134
FUND BALANCES - BEGINNING 745,825
29,504
1,470,303
54,379
- 4,535,578
FUND BALANCES - ENDING $ 767,957 $
36,738 $
1,637,278 $
335,902 $
324,208 $ 5,026,712
101
GOVERNMENTAL INDEBTEDNESS
General Obligation Improvement Bonds
2010B G.O. Refunding Bonds
2012B G.O. Improvement Bonds
2014A G.O. Improvement Bonds
2015A G.O. Improvement Bonds
2016A G.O. Improvement Bonds
2017A G.O. Improvement Bonds
2019A G.O. Improvement Bonds
2021A G.O. Improvement Bonds
2022A G.O. Improvement Bonds
2023A G.O. Improvement Bonds
CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF INDEBTEDNESS
FOR THE YEAR ENDED DECEMBER 31, 2023
(UNAUDITED)
Initial
Outstanding
Outstanding
Principal
Issue
Interest
Maturity
Authorized
Balance
Balance
Due Within
Dates
Rates
Dates
Issue
01/01/23
Issued Paid
12/31/23
One Year
11/30/2010
1.00 - 3.20%
2/l/2025
$ 1,970,000
$ 555,000
$ - $ 180,000
$ 375,000
$ 185,000
8/16/2012
0.50 - 1.90%
2/l/2023
865,000
95,000
- 95,000
-
-
7/15/2014
2.00 - 3.50%
1/15/2030
2,850,000
1,385,000
- 225,000
1,160,000
230,000
8/13/2015
2.00 - 3.00%
1/15/2026
1,620,000
650,000
- 170,000
480,000
155,000
6/8/2016
2.00%
1/15/2027
2,690,000
1,410,000
- 275,000
1,135,000
280,000
6/8/2017
2.50%
1/15/2028
4,565,000
2,860,000
- 455,000
2,405,000
465,000
10/24/2019
2.00 - 3.00%
2/l/2035
2,860,000
2,355,000
- 275,000
2,080,000
285,000
12/7/2021
1.75-3.00%
2/l/2042
15,675,000
15,625,000
- 705,000
14,920,000
725,000
8/16/2022
3.00 - 5.00%
2/l/2038
3,895,000
3,895,000
- -
3,895,000
195,000
7/6/2023
4.00 - 5.00%
2/l/2034
3,410,000
-
3,410,000 -
3,410,000
-
40,400,000
28,830,000
3,410,000 2,380,000
29,860,000
2,520,000
General Obligation Equipment Certificates
2018A G.O. Equipment Certificates 10/16/2018 2.70% 2/l/2028 940,000 655,000 - 100,000 555,000 105,000
General Obligation Tax Abatement Bonds
2022A G.O. Tax Abatement Bonds 8/16/2022 3.00 - 5.00% 2/l/2033 1,010,000 1,010,000
TOTAL GOVERNMENTAL DEBTS
BUSINESS -TYPE INDEBTEDNESS
General Obligation Revenue Bonds
2012A G.O. Water Crossover Refunding Bonds
2014A G.O. Improvement Bonds
2015A G.O. Improvement Bonds
2016A G.O. Improvement Bonds
2017A G.O. Improvement Bonds
2019A G.O. Improvement Bonds
2021A G.O. Improvement Bonds
2022A G.O. Improvement Bonds
2023A G.O. Improvement Bonds
TOTAL BUSINESS -TYPE DEBTS
TOTAL INDEBTEDNESS
- 1,010,000 80,000
42,350,000 30,495,000 3,410,000 2,480,000 31,425,000 2,705,000
8/16/2012
2.00 -
2.50%
12/1/2030
4,035,000
2,530,000
- 300,000
2,230,000
290,000
7/15/2014
2.00 -
3.50%
1/15/2030
3,385,000
1,940,000
- 220,000
1,720,000
225,000
8/13/2015
2.00 -
3.00%
1/15/2031
1,195,000
770,000
- 80,000
690,000
80,000
6/8/2016
2.00%
1/15/2032
6,855,000
4,790,000
- 435,000
4,355,000
445,000
6/8/2017
2.50 -
3.00%
1/15/2033
4,480,000
3,440,000
- 275,000
3,165,000
285,000
10/24/2019
2.00 -
3.00%
2/l/2035
1,195,000
1,070,000
- 70,000
1,000,000
75,000
12/7/2021
1.75 -
3.00%
2/l/2037
6,310,000
6,310,000
- 430,000
5,880,000
415,000
8/16/2022
3.00 -
5.00%
2/l/2037
7,590,000
7,590,000
- 515,000
7,075,000
375,000
7/6/2023
4.00 -
5.00%
2/l/2034
2,000,000
-
2,000,000 -
2,000,000
125,000
37,045,000
28,440,000
2,000,000 2,325,000
28,115,000
2,315,000
$ 79,395,000 $ 58,935,000 $ 5,410,000 $ 4,805,000 $ 59,540,000 $ 5,020,000
102
STATISTICAL SECTION
(UNAUDITED)
103
CITY OF LAKE ELMO, MINNESOTA
STATISTICAL SECTION
(UNAUDITED)
This part of the City of Lake Elmo, Minnesota's Annual Comprehensive Financial Report presents detailed information as a
context for understanding what the information in the financial statements, note disclosures and required supplementary
information says about the City's overall financial health.
Contents
Pages
Financial Trends 105-114
These tables contain trend information to help the reader understand how the City's financial
performance and well-being have changed over time.
Revenue Capacity 115-119
These tables contain information to help the reader assess the City's most significant local
revenue source, property taxes, as well as water and sanitary sewer rates and gallons sold.
Debt Capacity 120-124
These tables present information to help the reader assess the affordability of the City's
current levels of outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information 125-126
These tables offer demographic and economic indicators to help the reader understand the
environment within which the City's financial activities take place.
Operating Information 127-131
These tables contain service and infrastructure data to help the reader understand how the
information in the City's financial report relates to the services the City provides and the
activities it performs.
Sources: Unless otherwise noted, the information in these tables is derived from the comprehensive
financial reports for the relevant year.
104
Governmental Activities:
Net Investment in Capital Assets
Restricted
Unrestricted
Total Governmental Activities Net Position
Business -Type Activities:
Net Investment in Capital Assets
Restricted
Unrestricted
Total Business -Type Activities Net Position
Primary Government:
Net Investment in Capital Assets
Restricted
Unrestricted
Total Primary Government Net Position
CITY OF LAKE ELMO, MINNESOTA
NET POSITION BY COMPONENT
LAST TEN YEARS
2023
2022
2021
2020 2019
$ 54,209,637
$
39,647,112
$
34,784,806
$
29,694,288
$
24,771,065
11,658,502
12,475,169
10,249,092
8,171,161
8,596,759
12,156,284
14,362,912
12,101,304
5,284,397
4,231,363
$ 78,024,423
$
66,485,193
$
57,135,202
$
43,149,846
$
37,599,187
$ 69,826,808
$
59,998,083
$
53,867,479
$
44,371,375
$
33,052,649
22,844,327
24,515,239
19,888,783
18,578,807
16,528,968
$ 92,671,135
$
84,513,322
$
73,756,262
$
62,950,182
$
49,581,617
$ 124,036,445
$
99,645,195
$
88,652,285
$
74,065,663
$
57,823,714
11,658,502
12,475,169
10,249,092
8,171,161
8,596,759
35,000,611
38,878,151
31,990,087
23,863,204
20,760,331
$ 170,695,558
$
150,998,515
$
130,891,464
$
106,100,028
$
87,180,804
GASB 68 was implemented in 2015. Net position was restated for 2014 to reflect the reporting of net pension liability
and pension related deferred outflows of resources. Net position for years prior to 2014 was not restated.
GASB 75 was implemented in 2018. Net position was restated for 2017 to reflect the reporting of the OPEB liability
and OPEB related deferred inflows of resources. Net position for years prior to 2017 was not restated.
GASB 87 was implemented in 2022. Net position for years prior to 2022 was not restated.
105
CITY OF LAKE ELMO, MINNESOTA
NET POSITION BY COMPONENT (Continued)
LAST TEN YEARS
2018
2017
2016
2015
2014
Governmental Activities:
Net Investment in Capital Assets
$
15,396,520
$
8,883,320
$
9,032,535
$
8,723,329
$
7,957,840
Restricted
10,121,648
5,057,169
4,704,133
3,446,142
1,106,200
Unrestricted
1,086,636
4,818,383
4,136,292
3,942,646
5,405,920
Total Governmental Activities Net Position
$
26,604,804
$
18,758,872
$
17,872,960
$
16,112,117
$
14,469,960
Business -Type Activities:
Net Investment in Capital Assets
$
18,382,934
$
12,180,378
$
12,506,474
$
10,170,351
$
10,567,418
Restricted
-
2,695,734
1,473,164
1,876,119
2,387,312
Unrestricted
13,842,382
9,151,417
6,400,375
3,577,285
1,100,422
Total Business -Type Activities Net Position
$
32,225,316
$
24,027,529
$
20,380,013
$
15,623,755
$
14,055,152
Primary Government:
Net Investment in Capital Assets
$
33,779,454
$
21,063,698
$
21,539,009
$
18,893,680
$
18,525,258
Restricted
10,121,648
7,752,903
6,177,297
5,322,261
3,493,512
Unrestricted
14,929,018
13,969,800
10,536,667
7,519,931
6,506,342
Total Primary Government Net Position
$
58,830,120
$
42,786,401
$
38,252,973
$
31,735,872
$
28,525,112
106
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION
LAST TEN YEARS
Expenses
Governmental Activities:
General Government
$ 1,220,552 $
1,055,405
$ 1,052,188
$ 1,008,916
$ 1,181,219
Public Safety
3,228,801
2,939,066
3,091,321
2,681,784
2,058,419
Public Works
4,627,872
4,831,584
3,735,767
4,012,661
3,728,247
Parks and Recreation
526,835
415,377
391,240
428,083
361,730
Economic Development Authority
-
-
53,264
46,371
71,609
Debt Service
815,944
716,093
353,256
363,988
395,106
Total Governmental
Activities Expenses
10,420,004
9,957,525
8,677,036
8,541,803
7,796,330
Business -Type Activities:
Water
3,982,238
3,280,875
2,665,708
2,383,252
1,940,148
Sewer
2,524,280
2,071,858
1,563,008
1,481,586
1,082,997
Storm Sewer
1,057,111
952,799
830,044
753,177
469,765
Total Business -Type
Activities Expenses
7,563,629
6,305,532
5,058,760
4,618,015
3,492,910
Total Primary Government
Expenses $
17,983,633
$ 16,263,057
$ 13,735,796
$ 13,159,818
$ 11,289,240
Program Revenues
Governmental Activities:
Charges for Services:
General Government $
350,081
$ 409,126
$ 485,785
$ 421,792
$ 553,870
Public Safety
1,587,586
2,215,965
2,199,655
2,146,319
1,574,359
Public Works
60,388
58,414
104,817
243,060
126,721
Parks and Recreation
282,819
206,340
25
2,812
1,430
Economic Development Authority
-
24
57,539
87,778
99,690
Operating Grants and Contributions
1,102,707
391,306
279,690
1,039,823
795,483
Capital Grants and Contributions
9,895,930
4,783,094
8,981,866
4,823,628
11,076,353
Total Governmental Activities
Program Revenues
13,279,511
8,064,269
12,109,377
8,765,212
14,227,906
Business -Type Activities:
Charges for services:
Water
2,804,479
3,241,839
1,711,596
1,239,404
962,003
Sewer
1,442,607
1,499,393
549,567
432,583
306,041
Storm Sewer
611,219
543,589
512,624
369,689
380,645
Operating Grants and Contributions
-
-
35,635
21,893
122,350
Capital Grants and Contributions
9,838,374
15,257,903
18,326,363
15,636,661
14,114,787
Total Business -Type Activities
14,696,679
20,542,724
21,135,785
17,700,230
15,885,826
Total Primary Government
Program Revenues $ 27,976,190 $ 28,606,993 $ 33,245,162 $ 26,465,442 $ 30,113,732
107
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION (Continued)
LAST TEN YEARS
Expenses
Governmental Activities:
General Government
$ 1,266,269 $
1,503,251
$ 1,358,370
$ 1,134,132
$ 1,072,888
Public Safety
2,161,082
1,528,253
1,308,360
1,344,282
1,530,609
Public Works
2,192,092
2,800,044
1,698,566
1,377,969
1,032,426
Parks and Recreation
524,445
1,299,551
660,947
639,006
448,361
Economic Development Authority
47,702
-
-
-
-
Debt Service
352,376
225,910
178,266
215,611
165,028
Total Governmental
Activities Expenses
6,543,966
7,357,009
5,204,509
4,711,000
4,249,312
Business -Type Activities:
Water
2,068,178
2,022,446
1,409,832
1,363,043
1,069,511
Sewer
846,032
1,030,058
380,650
250,866
353,438
Storm Sewer
315,967
213,514
150,302
103,536
149,887
Total Business -Type
Activities Expenses
3,230,177
3,266,018
1,940,784
1,717,445
1,572,836
Total Primary Government
Expenses $
9,774,143
$ 10,623,027
$ 7,145,293
$ 6,428,445
$ 5,822,148
Program Revenues
Governmental Activities:
Charges for Services:
General Government $
379,378
$ 206,856
$ 51,009
$ 42,706
$ 45,161
Public Safety
1,938,163
2,101,890
1,752,522
866,708
496,916
Public Works
-
-
-
3,615
-
Parks and Recreation
-
-
-
26,214
10,753
Economic Development Authority
78,573
-
-
-
-
Operating Grants and Contributions
248,915
229,960
235,214
249,094
204,462
Capital Grants and Contributions
4,970,565
2,290,265
1,452,469
2,038,940
557,601
Total Governmental Activities
Program Revenues
7,615,594
4,828,971
3,491,214
3,227,277
1,314,893
Business -Type Activities:
Charges for services:
Water
951,985
2,628,848
1,801,228
1,850,240
1,291,091
Sewer
252,614
2,435,749
1,315,948
1,523,067
741,054
Storm Sewer
322,700
289,375
213,233
229,252
214,915
Operating Grants and Contributions
-
-
-
-
-
Capital Grants and Contributions
7,466,627
1,489,922
3,464,567
-
1,159,222
Total Business -Type Activities
8,993,926
6,843,894
6,794,976
3,602,559
3,406,282
Total Primary Government
Program Revenues $ 16,609,520 $ 11,672,865 $ 10,286,190 $ 6,829,836 $ 4,721,175
108
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION (Continued)
LAST TEN YEARS
Net (Expense) Revenue:
Governmental Activities $
2,859,507
$ (1,893,256)
$ 3,432,341
$ 223,409
$ 6,431,576
Business -Type Activities
7,133,050
14,237,192
16,077,025
13,082,215
12,392,916
Total Primary Government, net
9,992,557
12,343,936
19,509,366
13,305,624
18,824,492
General Revenues and Other
Changes in Net Position:
Governmental Activities:
General Property Taxes
7,890,915
7,565,922
5,294,950
4,960,342
4,181,914
Unrestricted Grants
and Contributions
246,056
703,388
4,639
4,337
4,956
Unrestricted Investment
Earnings (Losses)
1,137,908
(380,657)
(13,874)
348,766
331,010
Miscellaneous
46,528
23,384
-
-
-
Gain (Loss) on Disposal of
Capital Assets
(221,202)
69,985
17,300
13,805
44,927
Transfers
(420,482)
3,261,225
5,250,000
-
-
Total Governmental Activities
8,679,723
11,243,247
10,553,015
5,327,250
4,562,807
Business -Type Activities:
Unrestricted Grants
and Contributions
46
2,146
-
-
-
Unrestricted Investment
Earnings (Losses)
604,235
(221,053)
(20,945)
286,350
411,206
Extraordinary Item
-
-
-
-
4,552,179
Transfers
420,482
(3,261,225)
(5,250,000)
-
-
Total Business -Type Activities
1,024,763
(3,480,132)
(5,270,945)
286,350
4,963,385
Total Primary Government $
9,704,486
$ 7,763,115
$ 5,282,070
$ 5,613,600
$ 9,526,192
Change in Net Position:
Governmental Activities $ 11,539,230 $ 9,349,991 $ 13,985,356 $ 5,550,659 $ 10,994,383
Business -Type Activities 8,157,813 10,757,060 10,806,080 13,368,565 17,356,301
Total Primary Government
Change in Net Position $ 19,697,043 $ 20,107,051 $ 24,791,436 $ 18,919,224 $ 28,350,684
GASB 68 was implemented in 2015. Pension expense for years prior to 2015 was not restated.
GASB 75 was implemented in 2018. OPEB expense for years prior to 2018 was not restated.
GASB 87 was implemented in 2022. Lease revenue for years prior to 2022 was not restated.
109
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN NET POSITION (Continued)
LAST TEN YEARS
Net (Expense) Revenue:
Governmental Activities
$ 1,071,628
$ (2,528,038)
$ (1,713,295)
$ (1,483,723)
$ (2,934,419)
Business -Type Activities
5,763,749
3,577,876
4,854,192
1,885,114
1,833,446
Total Primary Government, net
6,835,377
1,049,838
3,140,897
401,391
(1,100,973)
General Revenues and Other
Changes in Net Position:
Governmental Activities:
General Property Taxes
3,610,106
3,040,413
3,226,739
3,204,119
3,200,291
Unrestricted Grants
and Contributions
6,868
2,749
8,584
2,749
2,749
Unrestricted Investment
Earnings (Losses)
115,583
48,987
43,228
46,589
87,586
Miscellaneous
-
158,350
52,479
73,738
125,400
Gain (Loss) on Disposal of
Capital Assets
8,991
-
-
-
-
Transfers
840
-
143,105
220,842
(887,312)
Total Governmental Activities
3,742,388
3,250,499
3,474,135
3,548,037
2,528,714
Business -Type Activities:
Unrestricted Grants
and Contributions
956
-
748
-
-
Unrestricted Investment
Earnings (Losses)
96,425
46,757
44,423
39,757
19,337
Extraordinary Item
-
-
-
-
-
Transfers
(840)
-
(143,105)
(220,842)
887,312
Total Business -Type Activities
96,541
46,757
(97,934)
(181,085)
906,649
Total Primary Government
$ 3,838,929
$ 3,297,256
$ 3,376,201
$ 3,366,952
$ 3,435,363
Change in Net Position:
Governmental Activities $ 4,814,016 $ 722,461 $ 1,760,840 $ 2,064,314 $ (405,705)
Business -Type Activities 5,860,290 3,624,633 4,756,258 1,704,029 2,740,095
Total Primary Government
Change in Net Position $ 10,674,306 $ 4,347,094 $ 6,517,098 $ 3,768,343 $ 2,334,390
110
CITY OF LAKE ELMO, MINNESOTA
FUND BALANCES — GOVERNMENTAL FUNDS
LAST TEN YEARS
2023
2022
2021
2020
2019
General Fund:
Nonspendable
$ - $
-
$ -
$ 21,206
$ 28,162
Committed
-
-
-
-
-
Unassigned
8,920,580
7,540,239
5,618,812
5,212,435
4,286,022
Total General Fund
8,920,580
7,540,239
5,618,812
5,233,641
4,314,184
All Other Governmental Funds:
Nonspendable
-
-
-
-
-
Restricted
8,468,881
9,933,623
17,458,949
5,814,832
5,973,451
Committed
20,334
14,120
7,673
7,314
24,070
Assigned
3,768,614
7,145,740
7,571,501
2,653,880
1,746,202
Unassigned
(492,973)
(198,128)
(246,004)
(1,525,916)
(757,968)
Total all Other Governmental Funds
11,764,856
16,895,355
24,792,119
6,950,110
6,985,755
Total Governmental Funds
$ 20,685,436 $
24,435,594
$ 30,410,931
$ 12,183,751
$ 11,299,939
ill
CITY OF LAKE ELMO, MINNESOTA
FUND BALANCES — GOVERNMENTAL FUNDS (Continued)
LAST TEN YEARS
2018 2017
2016
2015
2014
General Fund:
Nonspendable
$ 18,951 $ 410,193 $
409,222 $
432,306 $
638,963
Committed
- 200,000
200,000
-
-
Unassigned
4,756,695 3,499,133
3,279,815
2,754,976
2,542,038
Total General Fund
4,775,646 4,109,326
3,889,037
3,187,282
3,181,001
All Other Governmental Funds:
Nonspendable
395
675,000
-
3,908
-
Restricted
6,133,168
2,849,956
3,248,230
2,477,730
717,781
Committed
11,003
-
-
-
-
Assigned
1,198,909
1,307,216
1,504,656
1,768,742
2,943,525
Unassigned
(3,043,623)
(681,681)
(418,169)
(431,755)
(693,904)
Total all Other Governmental Funds
4,299,852
4,150,491
4,334,717
3,818,625
2,967,402
Total Governmental Funds
$ 9,075,498 $
8,259,817
$ 8,223,754
$ 7,005,907
$ 6,148,403
112
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
LAST TEN YEARS
Revenues:
General Property Taxes
$ 7,888,556
$ 7,562,013
$ 5,303,553
$ 4,947,133
$ 4,182,327
Licenses and Permits
1,148,190
1,646,539
1,485,658
1,425,695
1,055,038
Intergovernmental
1,331,531
1,121,633
722,128
1,023,193
2,819,961
Charges for Services
1,081,606
1,170,762
1,151,914
1,273,241
1,079,342
Fines and Forfeits
45,402
34,711
45,749
33,584
36,696
Special Assessments
909,054
570,486
862,766
474,099
649,487
Park Dedication Fees
-
-
1,845,371
714,558
123,500
Investment Earnings (Losses)
1,072,572
(419,853)
(13,874)
348,766
331,010
Lease Interest
65,336
39,196
-
-
-
Miscellaneous
86,193
150,426
177,000
183,711
201,494
Total Revenues
13,628,440
11,875,913
11,580,265
10,423,980
10,478,855
Expenditures:
Current:
General Government
1,213,697
1,017,210
1,056,983
1,005,254
1,136,908
Public Safety
3,037,244
2,701,216
3,003,677
2,641,770
1,948,269
Public Works
1,355,217
1,763,030
1,488,448
1,493,370
1,875,606
Parks And Recreation
410,492
282,789
258,690
310,066
265,260
Economic Development Authority
-
-
53,264
46,371
71,609
Debt service:
Principal
2,480,000
1,870,000
3,641,000
1,790,000
1,615,000
Interest and Fiscal Charges
863,089
611,636
425,797
420,299
454,814
Capital Outlay
11,806,496
14,912,731
4,915,641
1,846,843
4,354,643
Total Expenditures
21,166,235
23,158,612
14,843,500
9,553,973
11,722,109
Excess (Deficiency) of Revenues
Over Expenditures
(7,537,795)
(11,282,699)
(3,263,235)
870,007
(1,243,254)
Other Financing Sources (Uses):
Issuance of Debt
3,410,000
4,905,000
6,126,989
-
2,860,000
Premium on Issuance of Debt
317,037
326,200
(876,989)
-
168,168
(Discount) on Issuance of Debt
-
-
15,675,000
-
-
Proceeds from Sale of Capital Assets
60,600
76,162
548,115
13,805
44,927
Transfers In
466,799
252,074
-
1,900,244
1,181,173
Transfers Out
(466,799)
(252,074)
17,300
(1,900,244)
(786,573)
Total Other Financing
Sources (Uses)
3,787,637
5,307,362
21,490,415
13,805
3,467,695
Net Change in Fund Balance
$ (3,750,158)
$ (5,975,337)
$ 18,227,180
$ 883,812 $
2,224,441
Debt Service as a Percentage of
Noncapital Expenditures
35.1%
28.3%
40.9%
26.8%
26.1%
Debt Service as a Percentage of
Total Expenditures
15.8%
10.7%
27.4%
23.1%
17.7%
113
CITY OF LAKE ELMO, MINNESOTA
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS (Continued)
LAST TEN YEARS
Revenues:
General Property Taxes
$ 3,610,508
$ 3,042,074
$ 3,231,674
$ 3,222,216
$ 3,203,111
Licenses and Permits
1,317,648
2,046,462
1,713,918
828,494
451,953
Intergovernmental
247,178
1,023,864
282,874
296,902
413,968
Charges for Services
899,808
137,920
38,608
35,796
30,192
Fines and Forfeits
49,203
41,418
49,505
48,739
48,647
Special Assessments
1,398,155
455,493
897,323
1,316,239
115,424
Park Dedication Fees
502,802
265,783
171,708
138,158
274,257
Investment Earnings (Losses)
115,583
48,987
43,228
46,415
87,467
Lease Interest
-
-
-
-
-
Miscellaneous
129,455
265,133
77,491
99,055
165,319
Total Revenues
8,270,340
7,327,134
6,506,329
6,032,014
4,790,338
Expenditures:
Current:
General Government
1,208,145
1,502,904
1,358,306
1,094,723
1,046,906
Public Safety
1,644,159
1,470,726
1,262,040
1,203,765
1,198,546
Public Works
1,227,521
1,185,828
893,644
686,401
585,071
Parks And Recreation
241,761
603,292
500,689
457,749
368,276
Economic Development Authority
47,702
-
-
-
-
Debt service:
Principal
1,175,000
910,000
826,219
667,342
585,000
Interest and Fiscal Charges
230,822
463,570
242,392
226,611
157,649
Capital Outlay
4,552,089
5,860,917
3,126,782
2,729,512
2,881,437
Total Expenditures
10,327,199
11,997,237
8,210,072
7,066,103
6,822,885
Excess (Deficiency) of Revenues
Over Expenditures
(2,056,859)
(4,670,103)
(1,703,743)
(1,034,089)
(2,032,547)
Other Financing Sources (Uses):
Issuance of Debt
1,866,000
4,565,000
2,690,000
1,620,000
2,850,000
Premium on Issuance of Debt
-
166,068
102,877
32,137
31,520
(Discount) on Issuance of Debt
-
(26,302)
(14,392)
(11,386)
-
Proceeds from Sale of Capital Assets
8,991
1,400
-
30,000
-
Transfers In
56,209
-
143,105
220,842
10,501
Transfers Out
(173,190)
-
-
-
Total Other Financing
Sources (Uses)
1,758,010
4,706,166
2,921,590
1,891,593
2,892,021
Net Change in Fund Balance
$ (298,849) $
36,063 $
1,217,847 $
857,504 $
859,474
Debt Service as a Percentage of
Noncapital Expenditures
24.2%
22.4%
21.0%
20.6%
18.8%
Debt Service as a Percentage of
Total Expenditures
13.6%
11.4%
13.0%
12.7%
10.9%
114
CITY OF LAKE ELMO, MINNESOTA
TAX CAPACITY AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN YEARS
Total
% of Tax
Taxable
Tax Capacity
Total
Adjusted
City
Capacity to
Payable
Market
Real
Personal
Tax
Tax
Urban Tax
Total Estimated
Year
Value
Property
Property
Capacity
Capacity (1)
Rate
Market Value
2014
$ 1,046,031,000
$ 11,504,611
$ 238,764
$ 11,743,375
$ 11,393,889
27.761
1.12%
2015
1,184,578,800
12,938,515
243,104
13,181,619
13,072,105
23.798
1.11%
2016
1,224,463,300
13,386,725
266,218
13,652,943
13,441,204
23.121
1.12%
2017
1,316,618,700
14,520,320
292,938
14,813,258
14,631,062
20.018
1.13%
2018
1,452,554,500
16,054,044
326,744
16,380,788
15,359,350
22.442
1.13%
2019
1,648,277,500
18,184,317
345,172
18,529,489
18,249,623
22.927
1.12%
2020
1,901,067,300
20,907,484
345,800
21,253,284
20,021,726
23.476
1.12%
2021
2,009,618,900
21,975,125
374,464
22,349,589
21,116,953
23.638
1.11%
2022
2,231,230,900
24,469,045
287,646
24,756,691
23,487,099
30.546
1.11%
2023
2,862,780,200
31,639,649
309,460
31,949,109
30,606,781
24.064
1.12%
(1) Tax Capacity adjusted for captured tax increment, fiscal disparities, and transmission lines.
Valuations are determined as of January 1 of year preceding tax collection year. The County determines a property's tax capacity by
multiplying a property's estimated market value times the property's class rate which is determined by its use. The total City tax levy
divided by the total City tax capacity determines a percentage, the City tax rate, that is applied to each parcel's tax capacity to determine
the tax amount.
115
CITY OF LAKE ELMO, MINNESOTA
DIRECT AND OVERLAPPING PROPERTY TAX RATES
LAST TEN YEARS
City
Direct Rate
Overlapping
Rates
Operating
Debt
Total
Range
of Tax
Range
of Tax
Special
Range of Total
Fiscal
Tax
Service
Tax
Rates for ISD's
Washington
Rates for
Taxing
Direct and Overlapping
Year
Rate
Tax Rate
Rate
622, 832 & 834
County
Watershed Districts
Districts
Tax Rates
2014
23.472
4.289
27.761
23.150
- 39.770
30.243
0.761
- 5.066
4.641
86.556
107.481
2015
20.121
3.677
23.798
21.120
- 35.860
27.691
0.692
- 4.769
4.183
77.484
96.301
2016
18.184
4.937
23.121
19.849
- 35.569
27.860
0.075
- 5.111
4.568
75.473
96.229
2017
14.083
5.934
20.017
20.390
- 34.093
27.852
0.839
- 5.275
4.345
73.443
91.582
2018
16.107
(1)
6.335
22.442
19.349
- 32.161
29.709
0.819
- 5.021
3.072
75.391
92.405
2019
16.258
(1)
6.670
22.927
18.442
- 31.894
29.305
0.808
- 5.263
3.994
75.476
93.383
2020
16.777
(1)
6.700
23.477
15.321
- 29.926
28.610
0.766
- 4.850
3.738
71.911
90.600
2021
17.178
(1)
6.460
23.638
17.277
- 29.554
27.244
0.742
- 4.835
3.593
72.494
88.864
2022
20.505
(1)
10.041
30.546
19.502
- 32.173
27.526
0.718
- 4.437
3.483
81.775
97.476
2023
15.803
8.261
24.064
17.143
- 29.825
23.620
0.654
- 3.867
2.974
68.456
83.462
Source: Washington County Taxation Division
The City's direct property tax rate is determined by dividing the amount of tax levied by the City Council by the City's total tax capacity.
Overlapping rates are those of local and county governments that apply to property owners within the City of Lake Elmo. Not all
overlapping rates apply to all City of Lake Elmo property owners. Although the property tax rates apply to all city property owners,
some city properties lie within the geographical boundaries of different school and watershed districts.
(1) Excludes Library Levy component effective 1/1/2018 due to going back to Washington County
116
CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO
2023
2014
Percentage
Percentage
of Total
of Total
Taxable
City Tax
Taxable
City Tax
Tax
Capacity
Tax
Capacity
Taxpayer
Capacity
Rank
Value
Capacity
Rank
Value
Continental 483 Fund Llc
$ 336,784
1
1.05%
Dakota Upreit Lp
279,546
2
0.87%
-
-
Bremer Financial Services Inc
257,388
3
0.81%
197,474
3
1.68%
Drp Mn 2 Llc
213,398
4
0.67%
-
-
Boulder Ponds Senior Living Llc
205,021
5
0.64%
-
-
Mill High Pointe Llc
199,384
6
0.62%
-
-
Xcel Energy
192,270
7
0.60%
208,806
2
1.78%
Arbor Glen Senior Living Llc
174,051
8
0.54%
-
-
Eagle Point Medical Building Llc
172,324
9
0.54%
-
-
Lake Elmo Independent Living Llc
165,724
10
0.52%
-
-
IRET Properties
-
-
205,342
1
1.75%
MHC Cimarron LLC
-
-
134,090
4
1.14%
HOA Hotels LLC
-
-
108,150
5
0.92%
Tartan Park LLC
-
-
100,647
6
0.86%
Danate Proper Inv I LLC
-
76,762
7
0.65%
Eagle Point 11 LLC
-
71,064
8
0.61%
Davis Estates LTD
-
-
64,912
9
0.55%
United Properties Inv LLC
-
-
62,460
10
0.53%
Total
$ 2,195,890
6.87%
$ 1,229,707
10.47%
Source: Washington County Taxation Division
117
CITY OF LAKE ELMO, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN YEARS
Collected within the
Taxes Levied
Net Tax Levy
Fiscal Year of the Levy
Collections in
Total Collections to Date
Outstanding
Delinquent Taxes
Fiscal
for the
for the
Percentage
Subsequent
Percentage
Delinquent
as a Percentage of
Year
Fiscal Year
Fiscal Year (1)
Amount
of Net Levy
Years
Amount
of Net Levy
Taxes
Total Net Tax Lev}
2014
$ 3,163,359
$ 3,160,285
$ 3,128,695
99.00%
$ 31,590
$ 3,160,285
100.00%
$ -
0.00%
2015
3,113,017
3,133,137
3,112,989
99.36%
19,874
3,132,863
99.99%
274
0.01%
2016
3,112,204
3,112,204
3,068,116
98.58%
42,044
3,110,160
99.93%
2,044
0.07%
2017
2,950,426
2,950,426
2,935,173
99.48%
12,485
2,947,658
99.91%
2,768
0.09%
2018
3,596,601
3,592,491
3,574,859
99.51%
13,239
3,588,098
99.88%
4,393
0.12%
2019
4,179,840
4,175,590
4,149,059
99.36%
19,244
4,168,303
99.83%
7,287
0.17%
2020
4,949,823
4,945,184
4,864,708
98.37%
43,075
4,907,782
99.24%
37,402
0.76%
2021
5,263,268
5,258,656
5,205,793
98.99%
50,910
5,256,703
99.96%
1,953
0.04%
2022
7,468,748
7,463,868
7,372,100
98.77%
61,909
7,434,009
99.60%
29,860
0.40%
2023
7,798,403
7,793,724
7,738,743
99.29%
47,873
7,786,616
99.91%
7,108
0.09%
(1) Tax Levy adjusted for powerline and market value credits and AG program credits prior to 2016
118
CITY OF LAKE ELMO, MINNESOTA
WATER AND SANITARY SEWER CHARGES BY CUSTOMER
LAST TEN YEARS
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Water (in millions of gallons):
Residential
399.645
351.923
323.632
203.453
173.925
96.882
93.513
98.044
84.007
98.573
Commercial service
36.773
46.427
50.822
157.170
87.935
22.189
16.603
29.379
21.653
12.156
Total gallons
436.418
398.350
374.454
360.623
261.860
119.071
110.116
127.423
105.660
110.729
Total direct rate per 1,000 gallons:
Residential (2)
2.18
2.16
2.14
2.12
2.12
2.06
2.00
2.14
2.14
2.14
Commercial service (2)
3.39
3.36
3.33
3.30
3.30
3.20
3.11
3.11
3.11
3.11
Sanitary Sewer (in millions of gallons):
Residential (1)
105.255
96.361
75.550
46.170
41.003
32.409
38.340
6.812
3.794
Commercial service
22.900
20.432
16.021
11.779
12.943
12.267
6.807
9.125
8.179
Total gallons
128.155
116.793
91.571
57.949
53.946
44.676
45.147
15.937
11.973
Total direct rate per 1,000 gallons
4.80
4.75
4.70
4.65
4.60
4.55
4.50
4.50
4.50
(1) City did not have any residential sanitary sewer customers in 2014 and prior
(2) City uses tiers, rate represents first tier, up to 15,000 gallons rate
4.50
119
CITY OF LAKE ELMO, MINNESOTA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN YEARS
Business -Type
Governmental Activities
Activities
G.O.
G.O.
G.O. Capital
Other
Total
G.O. Utility
Percentage
Fiscal
Improvement
Equipment
Improvement
Notes and
Governmental
Revenue
Total Primary
of Personal
Per
Year
Bonds
Certificates
Plan Bonds
Bonds
Activities
Bonds
Government
Income
Capita
2014
$ 6,919,568
$ 52,000
$ 1,808,024 $
-
$ 8,779,592
$ 15,530,642
$ 24,310,234
6.8%
3,013
2015
8,095,288
-
1,687,803
21,219
9,804,310
12,622,484
22,426,794
6.0%
2,779
2016
10,210,038
-
1,537,530
-
11,747,568
18,990,395
30,737,963
8.2%
3,809
2017
14,151,671
-
1,382,249
-
15,533,920
22,866,787
38,400,707
8.8%
3,990
2018
13,185,126
940,000
1,226,928
926,000
16,278,054
21,680,126
37,958,180
7.6%
3,608
2019
14,697,425
940,000
1,065,000
926,000
17,628,425
21,520,145
39,148,570
6.5%
3,525
2020
13,159,432
850,000
900,000
881,000
15,790,432
20,105,366
35,895,798
5.5%
3,232
2021
26,839,553
755,000
730,000
-
28,324,553
22,841,659
51,166,212
6.0%
4,043
2022
29,385,678
655,000
555,000
1,010,000
31,605,678
29,470,720
61,076,398
5.9%
4,519
2023
30,806,965
555,000
375,000
1,010,000
32,746,965
29,197,925
61,944,890
6.0%
4,584
Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See the Demographic and Economic Statistics schedule for personal income and population data.
120
CITY OF LAKE ELMO, MINNESOTA
RATIOS OF NET GENERAL BONDED DEBT
LAST TEN YEARS
General Bonded Debt Outstanding
Percentage
G.O.
G.O.
G.O. Capital
Other
G.O. Utility
Less: Amounts
Net General
of Actual
Fiscal
Improvement
Equipment
Improvement
Notes and
Revenue
Available in Debt
Bonded Debt
Taxable Value
Per
Year
Bonds
Certificates
Plan Bonds
Bonds
Bonds
Total*
Service Funds
Outstanding
of Property
Capita (Net)
2014
$ 6,919,568
$ 52,000
$ 1,808,024
$ -
$ 15,530,642
$ 24,310,234
$ (691,700)
$ 23,618,534
2.26%
2,927
2015
8,095,288
-
1,687,803
21,219
12,622,484
22,426,794
(2,477,730)
19,949,064
1.68%
2,472
2016
10,210,038
-
1,537,530
-
18,990,395
30,737,963
(3,215,590)
27,522,373
2.25%
3,411
2017
14,151,671
-
1,382,249
-
22,866,787
38,400,707
(3,524,956)
34,875,751
2.65%
3,623
2018
13,185,126
940,000
1,226,928
926,000
21,680,126
37,958,180
(4,461,692)
33,496,488
2.31%
3,184
2019
14,697,425
940,000
1,065,000
926,000
21,520,145
39,148,570
(4,716,520)
34,432,050
2.09%
3,101
2020
13,159,432
850,000
900,000
881,000
20,105,366
35,895,798
(4,530,993)
31,364,805
1.65%
2,824
2021
26,839,553
755,000
730,000
-
22,841,659
51,166,212
(3,893,266)
47,272,946
2.35%
3,736
2022
29,385,678
655,000
555,000
1,010,000
29,470,720
61,076,398
(4,535,578)
56,540,820
2.53%
4,184
2023
30,806,965
555,000
375,000
1,010,000
29,197,925
61,944,890
(5,026,712)
56,918,178
1.99%
4,212
Details regarding the City's outstanding debt can be found in the notes to the financial statements.
See Table 5 for taxable market value
See Table 15 for population data
* Net of crossover debt
121
CITY OF LAKE ELMO, MINNESOTA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF DECEMBER 31, 2023
Overlapping Debt:
Independent School District # 622
Independent School District # 832
Independent School District # 834
Washington County
Metropolitan Council
Total Overlapping Debt
City Direct Debt
Total Direct and Ovcrlapping Debt
Estimated
Debt
Percentage
Outstanding
Applicable*
$ 427,615,000
(1)
11.3%
45,045,000
(1)
2.3%
74,620,000
(1)
15.0%
98,060,000
(1)
6.0%
1,694,829,000
(1)
0.1%
$ 32,746,965
100%
Estimated
Share of
Overlapping
Debt
$ 48,246,736
1,023,702
11,204,552
5,910,269
1,170, 806
67,556,065
32,746,965
$ 100,303,030
*For debt repaid with property taxes, the percentage of overlapping debt applicable is estimated using taxable assessed
property values. Applicable percentages were estimated by determining the portion of another governmental unit's taxable
assessed value that is within the City's boundaries and dividing it by each unit's total taxable assessed value.
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule
estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses
of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire
debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every
taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government.
Sources: Taxable value data used to estimate applicable percentages provided by Washington County.
Debt outstanding data provided by each governmental unit.
122
CITY OF LAKE ELMO, MINNESOTA
LEGAL DEBT MARGIN INFORMATION
LAST TEN YEARS
Legal Debt Margin Calculation for Fiscal Year 2023
Pay 2023 Market Value
Applicable Percentage
Debt Limit
Debt Applicable to Limit:
Series 2010B
Series2017A
Series 2018A
Series 2019A
Series 2021A
Series 2021A
Refunding
Equipment Portion
Equipment Cert.
Equipment Portion
2018A Refunding
City Hall
Total Debt Applicable to Debt Limit
Legal Debt Margin
$ 2,862,780,200
3%
85,883,406
375,000
125,000
555,000
490,000
710,000
9,895,000
12,150,000
$ 73,733,406
Legal Debt Margin Calculation for Fiscal Years 2014 Through 2023
Net Debt
Net Debt Legal Amount of Debt Applicable
Fiscal Debt Applicable to Debt Applicable to to Limit
Year Population Limit Limit Margin Debt Limit Per Capita
2014
8,069
$ 35,537,364 $
1,757,421 $
33,779,943
4.95% $
218
2015
8,069
36,733,899
1,572,289
35,161,610
4.28%
195
2016
8,069
38,035,233
2,102,343
35,932,890
5.53%
261
2017
9,625
38,556,774
1,846,657
36,710,117
4.79%
192
2018
10,521
43,576,635
2,018,280
41,558,355
4.63%
192
2019
11,105
49,448,325
1,839,548
47,608,777
3.72%
166
2020
11,105
57,032,019
850,000
56,182,019
1.49%
77
2021
12,655
60,288,567
1,485,000
58,803,567
2.46%
117
2022
12,655
66,936,927
12,990,000
53,946,927
19.41%
1,026
2023
13,514
85,883,406
12,150,000
73,733,406
14.15%
899
123
CITY OF LAKE ELMO, MINNESOTA
PLEDGED REVENUE COVERAGE
LAST TEN YEARS
G.O. Utility Revenue Bonds
Net
Payable
Gross
Operating
Available
Debt Service (3)
Year
Revenue(l)
Expenses (2)
Revenue
Principal
Interest
2014
$ 2,266,397
$ 678,394
$ 1,588,003
$ 365,000
$ 424,080
2015
3,642,316
627,977
3,014,339
4,165,000
456,782
2016
3,407,097
757,862
2,649,235
615,000
380,969
2017
6,651,513
1,505,420
5,146,093
705,000
513,768
2018
5,767,128
1,279,347
4,487,781
625,000
312,660
2019
4,190,240
1,175,282
3,014,958
1,360,000
509,863
2020
6,243,582
1,553,371
4,690,211
1,380,000
504,661
2021
9,147,164
1,680,527
7,466,637
3,825,000
514,210
2022
6,911,305
2,086,151
4,825,154
1,345,000
468,989
2023
5,938,053
2,752,113
3,185,940
2,325,000
775,011
(1) Gross revenue includes investment earnings, infrastructure charges and special assessments.
(2) Operating expenses do not include interest, depreciation, or amortization expense.
(3) Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Coverage
201%
65%
266%
422%
479%
161%
249%
172%
266%
103%
124
CITY OF LAKE ELMO, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN YEARS
Personal
Per
Income (4)
Capita
State
City
Fiscal
(thousands
Personal
Unemployment
Unemployment
Year
Population (1)
of dollars)
Income (2)
Rate (3)
Rate (3)
2014
8,069
$ 357,723
$ 44,333
3.8%
3.7%
2015
8,069
371,602
46,053
3.2%
2.9%
2016
8,069
374,345
46,393
3.8%
3.3%
2017
9,625
438,563
45,565
3.3%
3.3%
2018
10,521
497,896
47,324
2.8%
2.7%
2019
11,105
601,991
54,209
3.5%
2.8%
2020
11,105
652,352
58,744
4.9%
4.0%
2021
12,655
851,277
67,268
2.6%
2.2%
2022
13,514
1,036,970
76,733
3.4%
2.9%
2023
13,514
1,038,064
76,814
1.9%
1.7%
Sources:
(1) Metropolitan Council; 2022 most recent
(2) United States Census Bureau
(3) Estimate based on County unemployment rate provided by Minnesota Department of
Employment and Economic Development
(4) The estimated personal income for the City of Lake Elmo is calculated by taking the per capita
income and multiplying it by the City's population.
125
CITY OF LAKE ELMO, MINNESOTA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
2023 2014
Percentage of
Percentage of
Total City
Total City
Employer
Employees
Rank
Employment(1)
Employees
Rank
Employment(1)
3M Company (Maplewood)
10,000
1
43.1%
9,100
1
48.7%
Andersen Corp (Bayport)
5,000
2
21.5%
1,875
2
9.5%
ISD No. 622 ( North St. Paul -Maplewood -Oakdale)
1,830
3
7.9%
-
Woodwinds Health (Woodbury)
1,500
4
6.5%
1,085
4
5.5%
Washington County (Stillwater)
1,386
5
6.0%
1,142
3
5.8%
ISD 834 (Stillwater)
1,162
6
5.0%
1,046
5
5.3%
HealthEast Care/St. John's Hospital (Maplewood)
973
7
4.2%
-
Presbyterian Homes/Boutwells (Oak Park Heights)
500
8
2.2%
-
Ecowater Systems, Inc. (Woodbury)
440
9
1.9%
440
7
2.3%
Bremer Bank Operations Ctr (Lake Elmo)
425
10
1.8%
415
8
2.1%
MN Correctional Facility ( Oak Park Hts)
-
-
-
730
6
3.7%
Imation Corp (Oakdale)
-
-
-
360
9
1.9%
SunAmerica Financial Group (Woodbury)
-
-
-
310
10
1.6%
(')City staff estimate
126
General Government:
Administration
Finance
Planning and Zoning
Total General Government
Public Safety:
Fire
Building Inspections
Total Public Safety
Public Works:
Streets and Roadways
Parks and Recreation:
Parks
Communications
Total Governmental Activities
Business -type Activities:
Water Utility
Sewer Utility
Storm Sewer Utility
Total Business -Type Activities
Total
Source: City's Adopted Budgets
CITY OF LAKE ELMO, MINNESOTA
FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION/PROGRAM
LAST TEN YEARS
Full -Time -Equivalent Employees as of December 31,
2023 2022
2021
2020
2019
1.93 1.93
1.93
1.98
2.70
1.66 0.82
0.82
0.72
1.05
4.35 2.75
1.95
1.95
2.10
7.94 5.50
4.70
4.65
5.85
7.82 2.32
1.42
1.42
3.80
6.78 5.21
4.91
4.91
4.20
14.60 7.53
6.33
6.33
8.00
5.17 5.64
6.47
4.80
4.80
1.46 1.18
1.01
2.25
2.20
0.42 0.42
0.42
0.42
0.50
29.58 20.27
18.93
18.45
21.35
4.49 3.76
2.98
2.75
2.50
1.92 1.59
1.05
1.40
1.15
1.01 0.89
0.54
0.90
0.80
7.42 6.23
4.57
5.05
4.45
37.00 26.50
23.50
23.50
25.80
127
CITY OF LAKE ELMO, MINNESOTA
FULL-TIME EQUIVALENT EMPLOYEES BY FUNCTION/PROGRAM (Continued)
LAST TEN YEARS
Full -Time -Equivalent Employees as of December 31,
2018 2017 2016 2015 2014
General Government:
Administration
Finance
Planning and Zoning
Total General Government
Public Safety:
Fire
Building Inspections
Total Public Safety
Public Works:
Streets and Roadways
Parks and Recreation:
Parks
Communications
Total Governmental Activities
Business -type Activities:
Water Utility
Sewer Utility
Storm Sewer Utility
Total Business -Type Activities
Total
2.70
2.45
2.45
3.20
3.55
1.05
1.20
1.20
0.80
1.25
2.10
2.21
2.21
2.75
2.70
5.85
5.86
5.86
6.75
7.50
3.80
3.80
3.80
1.50
1.55
4.20
4.21
4.21
3.15
1.55
8.00
8.01
8.01
4.65
3.10
4.80
4.55
4.55
3.90
3.20
2.20
3.00
3.00
1.85
3.30
0.50
-
-
0.70
0.35
21.35
21.42
21.42
17.85
17.45
2.50
2.00
2.00
2.45
2.60
1.15
1.66
1.66
1.30
0.70
0.80
0.80
-
-
-
4.45
4.46
3.66
3.75
3.30
25.80
25.88
25.08
21.60
20.75
128
CITY OF LAKE ELMO, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN YEARS
2023
2022
2021
2020
2019
Planning and Zoning:
Conditional use permits
2
7
1
1
5
Interim use permits
2
-
-
-
Minor subdivisions
2
-
2
-
1
Plats / planned unit developments
10
5
7
5
8
Rezonings
8
2
8
1
4
Site plans
-
-
-
3
Variances
5
10
6
5
5
Other (new in 2023)
9
Fire:
Total emergency responses
1047
790
568
546
541
EMS responses
652
493
355
317
383
Fire responses
395
297
213
229
158
Building Inspections:
Residential permit valuations (thousands of dollars) $
55,067 $
69,557 $
100,189 $
98,294 $
Commercial permit valuations (thousands of dollars) $
14,577 $
25,189 $
12,548 $
11,761 $
New residential units (1)
195
200
297
309
New commercial units
3
6
5
11
Water Utility:
Number of customers
3466
3,196
2,863
2,522
Average quarterly consumption (2)
108
100
89
76
(millions of gallons)
Sanitary Sewer Utility:
Number of customers
2504
2,206
1,937
1,612
Average quarterly flow (3)
32
29
19
18
(millions of gallons)
Sources: Various City Department's annual financial report statistics
(1) Excludes fire/demolition rebuilds
(2) Residential and Commercial
(3) Billed and measured based on water usage; new developer homes
built in 2015
but not yet sold/occupied
so no impact
to flows
76,378
3,146
44
2
2,423
69
1,436
16
129
CITY OF LAKE ELMO, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM (Continued)
LAST TEN YEARS
2018 2017 2016 2015 2014
Planning and Zoning:
Conditional use permits
Interim use permits
Minor subdivisions
Plats / planned unit developments
Rezonings
Site plans
Variances
Other (new in 2023)
Fire:
Total emergency responses
EMS responses
Fire responses
Building Inspections:
Residential permit valuations (thousands of dollars) $
Commercial permit valuations (thousands of dollars) $
New residential units (1)
New commercial units
Water Utility:
Number of customers
Average quarterly consumption (2)
(millions of gallons)
Sanitary Sewer Utility:
Number of customers
Average quarterly flow (3)
(millions of gallons)
6 5
3
2 4
- 2
2
1 1
1 1
2
2
13 10
11
9 17
4 5
3
2 11
-
6 6
4
2 2
461
456
430
429
358
317
313
268
274
237
144
143
162
32
21
113,913 $
86,710 $
119,301 $
50,401 $
23,032
3,217 $
1,185 $
2,003 $
1,952 $
7,309
245
299
240
140
41
-
1
1
1
3
2,317
1,727
1,538
1,234
1,073
56
28
18
18
19
1,253 712 321 96 45
11 12 14 74 77
130
CITY OF LAKE ELMO, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
LAST TEN YEARS
2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Fire:
Stations 1 2 2 2 2 2 2 2 2
Public Works:
Bituminous streets (miles)
97
97
94.80
92
112
112
103
103
65
Gravel streets (miles)
0.5
0.5
0.5
0.5
0.5
1
2
2
2
Storm sewer (miles)
56.8
52.5
50
48
33
33
30
30
25
Parks & Recreation:
Acres of parkland
526
517
517
427
427
427
420
420
420
Number of parks
25
24
24
24
24
24
17
17
17
Water Utility:
Water towers
3
3
3
3
3
3
3
3
3
Miles of watermain
89.6
81.6
75
73
58
58
50
50
43
Number of fire hydrants
902
812
735
707
559
559
415
415
378
Sanitary Sewer Utility:
Miles of sanitary sewer
40.1
36.1
33
32
29
29
8
8
4
Lift Stations
8
8
6
7
5
5
4
4
4
2
65
2
25
420
17
3
40
351
3
4
131
OTHER REQUIRED REPORTS
132
SCHLENNER
WENNELR&CO.
CERTIFIED PUBLIC ACCOUNTANTS
& BUSINESS CONSULTANTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE
AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Honorable Mayor and City Council
City of Lake Elmo, Minnesota
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the
United States, the financial statements of the governmental activities, the business -type activities, each major fund, and the
aggregate remaining fund information of the City of Lake Elmo, Minnesota, (the City) as of and for the year ended December
31, 2023, and the related notes to the financial statements, which collectively comprise the City of Lake Elmo's basic financial
statements and have issued our report thereon dated June 11, 2024.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City of Lake Elmo's internal control over
financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the
purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's
internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in
the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A
material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility
that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely
basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not
designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and
therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during
our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We identified
certain deficiencies in internal control, described in the accompanying Schedule of Findings and Responses as item 2023-001
that we consider to be a significant deficiency.
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Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement,
we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion
on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
Minnesota Legal Compliance
In connection with our audit, nothing came to our attention that caused us to believe that the City of Lake Elmo failed to comply
with the provisions of the contracting - bid laws, depositories of public funds and investments, conflicts of interest, public
indebtedness, claims and disbursements, and miscellaneous provisions sections of the Minnesota Legal Compliance Audit
Guide for Cities, promulgated by the State Auditor pursuant to Minn. Stat. § 6.65, insofar as they relate to accounting matters.
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's noncompliance with the
above referenced provisions, insofar as they relate to accounting matters.
City of Lake Elmo's Response to Findings
Government Auditing Standards require the auditor to perform limited procedures on the City of Lake Elmo's response to the
findings identified in our audit and described in the accompanying Schedule of Findings and Responses and Corrective Action
Plans. The City's response was not subjected to the other auditing procedures applied in the audit of the financial statements
and, accordingly, we express no opinion on the response.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of
that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This report is
an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal
control and compliance. Accordingly, this communication is not suitable for any other purpose.
SCHLENNER WENNER & CO.
St. Cloud, Minnesota
June 11, 2024
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CITY OF LAKE ELMO, MINNESOTA
SCHEDULE OF FINDINGS AND RESPONSES
FOR THE YEAR ENDED DECEMBER 31, 2023
FINANCIAL STATEMENT FINDINGS IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Finding 2023-001 Limited Segregation of Duties
Condition: Throughout the year, the same employee was often responsible for preparing and reviewing bank
reconciliations, as well as recording and approving adjusting journal entries. Additionally, the
individual primarily responsible for completing bank reconciliations was also an authorized signer
for the City's checking account.
Criteria: The City should adopt an internal control structure that properly segregates the various functions of
each accounting cycle. This means no single person should be in a position to both initiate and
approved a transaction, as well as have access to the related physical assets involved with the
transaction. In other words, an employee should not be in a position to both commit an irregularity
and cover it up.
Cause: Limited number of staff members in the finance department, as well as temporary vacancies in the
Finance Director and City Administrator roles.
Effect: The lack of ideal segregation of duties could expose the City to heightened risk that errors or fraud
could occur and not be detected in a timely manner.
Recommendation: We recommend the City review and evaluate current procedures for the purpose of implementing
additional oversight and segregation of duties to the extent that is determined to be feasible.
Views of Responsible
Officials And Planned
Corrective Actions: Management agrees with the recommendation. See corresponding Corrective Action Plan.
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CITY OF LAKE ELMO, MINNESOTA
CORRECTIVE ACTION PLANS
FOR THE YEAR ENDED DECEMBER 31, 2023
FINANCIAL STATEMENT FINDINGS IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Finding 2023-001 Limited Segregation of Duties
1. Explanation of Disagreement with Audit Finding
There is no disagreement with the audit finding.
2. Actions Planned in Response to Finding
The City will review and evaluate current processes, procedures, and employee roles within the Finance Department.
To the extent possible, the City will implement additional controls to mitigate the lack of segregation of duties.
3. Official Responsible
Nicole Miller, City Administrator, is the official responsible for ensuring corrective action.
4. Planned Completion Date
December 31, 2024.
5. Plan to Monitor Completion
The City Council will be monitoring this Corrective Action Plan.
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