HomeMy WebLinkAbout03/24/2020LAUDERDALE CITY COUNCIL MEETING AGENDA
7:30 P.M. TUESDAY, MARCH 24, 2020
DUE TO THE CORONAVIRUS, MEETINGS WILL BE HELD
REMOTELY UNTIL THE CITY COUNCIL RESCINDS THE
EMERGENCY DECLARATION. CTV IS GETTING THE
SOFTWARE IN PLACE TO ALLOW THIS. DETAILS ON
HOW TO ACCESS THE MEETING WILL BE EMAILED AND
POSTED TO THE CITY'S WEBSITE AS SOON AS POSSIBLE
The City Council is meeting as a legislative body to conduct the business of the City according
to Robert's Rules of Order and the Standing Rules of Order and Business of the City Council.
Unless so ordered by the Mayor, citizen participation is limited to the times indicated and always
within the prescribed rules of conduct for public input at meetings.
1. CALL TO ORDER THE LAUDERDALE CITY COUNCIL MEETING
2. ROLL CALL
3. APPROVALS
a. Agenda
b. Minutes of the March 10, 2020 City Council Meeting
c. Claims Totaling $31,013.35
4. CONSENT
a. Payment of Claims during Emergency Declaration
b. Approve 2020 Garbage Haulers Licenses
5. SPECIAL ORDER OF BUSINESS/RECOGNITIONS/PROCLAMATIONS
6. INFORMATIONAL PRESENTATIONS / REPORTS
a. City Council Updates
7. PUBLIC HEARINGS
Public hearings are conducted so that the public affected by a proposal may have input into the
decision. During hearings all affected residents will be given an opportunity to speak pursuant to
the Robert's Rules of Order and the standing rules of order and business of the City Council.
8. DISCUSSION / ACTION ITEM
a. Resolution 032420A — Extending the Period of a Mayor -Declared Local Emergency
b. Accept the Audited 2019 Financial Reports
9. ITEMS REMOVED FROM THE CONSENT AGENDA
10. ADDITIONAL ITEMS
11. SET AGENDA FOR NEXT MEETING
a. Annual Update by Police Chief Jon Mangseth
b. Director Ramsey County Workforce Solutions, Ling Becker — April 28
c. National League of Cities Homeserve Program — May 12
d. Katie Engman of Association for Nonsmokers -MN — May 26
12. WORK SESSION
a. Opportunity for the Public to Address the City Council
Any member of the public may speak at this time on any item not on the agenda. In
consideration for the public attending the meeting, this portion of the meeting will be limited
to fifteen (15) minutes. Individuals are requested to limit their comments to four (4) minutes or
less. If the majority of the Council determines that additional time on a specific issue is
warranted, then discussion on that issue shall be continued at the end of the agenda. Before
addressing the City Council, members of the public are asked to step up to the microphone,
give their name, address, and state the subject to be discussed. All remarks shall be addressed
to the Council as a whole and not to any member thereof. No person other than members of the
Council and the person having the floor shall be permitted to enter any discussion without
permission of the presiding officer.
Your participation, as prescribed by the Robert's Rules of Order and the standing rules of order
and business of the City Council, is welcomed and your cooperation is greatly appreciated.
b. Community Development Update
13. ADJOURNMENT
LAUDERDALE CITY COUNCIL
MEETING MINUTES
Lauderdale City Hall
1891 Walnut Street
Lauderdale, MN 55113
Page 1 of 2 March 10, 2020
Call to Order
Mayor Pro Tem Dains called the Regular City Council meeting to order at 7:34 p.m.
Roll Call
Councilors present: Andi Moffatt, Jeff Dains, and Roxanne Grove.
Councilor absent: Kelly Dolphin, and Mayor Mary Gaasch.
Staff present: Heather Butkowski, City Administrator; Jim Bownik, Assistant to the City
Administrator; and Miles Cline, Deputy City Clerk
Approvals
Mayor Pro Tem Dains asked if there were any additions to the meeting agenda. There being
none, Councilor Moffatt moved and seconded by Councilor Grove to approve the agenda.
Motion carried unanimously.
Mayor Pro Tem Dains asked if there were any corrections to the minutes of the February 25,
2020 city council meeting. There being none, Councilor Grove moved and seconded by
Councilor Moffatt to approve the minutes of the February 25, 2020 city council meeting. Motion
carried unanimously.
Mayor Pro Tem Dains asked if there were any questions on the claims. There being none,
Councilor Moffatt moved and seconded by Councilor Grove to approve the claims totaling
$94,089.89. Motion carried unanimously.
Consent
Councilor Grove moved and seconded by Councilor Moffatt to approve the Consent Agenda
thereby approving the street sweeping service agreement with Mike McPhillips, Inc. and the
Cooperative Purchasing Connection participation agreement.
Informational Presentations/Reports
A. City Council Updates
Councilor Moffatt stated that she and Mayor Gaasch attended the annual meeting for the St. Paul
Area Chamber of Commerce on March 4. The meeting focused on housing and business
development in the East Metro.
Discussion/Action Items
A. CDBG Grant Agreement for Improvements at Skyview Park
Butkowski explained that per the agreement, Ramsey County is providing the City with $115,000 in
Community Development Block Grant funding for the purchase of new playground equipment and
accessibility improvements for Skyview Park. This grant is possible due to Lauderdale's census tract data
that identifies us as "low to moderate income."
LAUDERDALE CITY COUNCIL
MEETING MINUTES
Lauderdale City Hall
1891 Walnut Street
Lauderdale, MN 55113
Page 2 of 2 March 10, 2020
Councilor Moffatt made a motion to approve the Community Development Block Grant Program
Agreement between the Ramsey County Housing and Redevelopment Authority, a Political
Subdivision of the State of Minnesota, and the City of Lauderdale, a Minnesota Municipal
Corporation. This was seconded by Councilor Grove and carried unanimously.
B. Update by Real Estate Equities Regarding their Intent to Purchase 1795 Eustis Street
Patrick Ostrom from Real Estate Equities (REE) approached the Council to give an update on their plans
to acquire the former Lauderdale School site. In January, the State held a lottery for the distribution of
affordable housing tax credits and the Lauderdale project ended up too far down the list to be eligible for
the tax credits in the next couple of years. Instead, REE proposes changing the project from 100%
affordable housing, to a 20% affordable / 80% market rate mix. Due to the financing involved, they also
propose raising the age limit to 62 from 55. Jennifer Haskamp, the City's consulting planner, spoke to the
next steps in the land use application process.
Set Agenda for Next Meeting
Administrator Butkowski stated that the March 24 council meeting may include an update by
Master Properties on the development of Luther Seminary's land and a presentation from
Ramsey County on the upcoming census.
Work Session
A. Opportunity for the Public to Address the City Council
Mayor Pro Tem Dains opened the floor to anyone that wanted to address the Council.
Seth Malone, 1570 Eustis Street, asked if the City has plans to improve Eustis Street south of
Larpenteur Avenue. Dains explained that road segment was the responsibility of Ramsey County
and he would like to work with Seth on petitioning the County to make improvements.
There being no additional parties interested in speaking, Mayor Pro Tem Dains closed the floor.
B. Community Development Updates
Butkowski had no additional comments.
Adjournment
Councilor Moffatt moved and seconded by Councilor Grove to adjourn the meeting at 8:02 p.m.
Motion carried unanimously.
Respectfully submitted,
Miles Cline
Deputy City Clerk
CITY OF LAUDERDALE
LAUDERDALE CITY HALL
1891 WALNUT STREET
LAUDERDALE, MN 55113
651-792-7650
651-631-2066 FAX
Request for Council Action
To: Mayor and City Council
From: City Administrator
Meeting Date: March 24, 2020
Subject: List of Claims
The claims totaling $31,013.35 are provided for City Council review and approval that
includes check numbers 26829 to 26850.
Accounts Payable
Checks by Date - Detail by Check Date
User:
Printed:
MILES.CLINE
3/20/2020 12:41 PM
Check No Vendor No
Invoice No
Vendor Name
Description
Check Date
Reference
Check Amount
ACH 43
Public Employees Retirement Association
PR Batch 50600.03.2020 PERA Coordinated
PR Batch 50600.03.2020 PERA Coordinated
03/20/2020
PR Batch 50600.03.2020 PER
PR Batch 50600.03.2020 PER
Total for this ACH Check for Vendor 43:
ACH 44 Minnesota Department of Revenue
PR Batch 50600.03.2020 State Income Tax
ACH 45
ACH 46
26829 20
426718
426718
426718
26830 34
26831 65
16729418
26832 56
1Q2020
03/20/2020
PR Batch 50600.03.2020 Stat
Total for this ACH Check for Vendor 44:
ICMA Retirement Corporation
PR Batch 50600.03.2020 Deferred Comp
PR Batch 50600.03.2020 Deferred Comp
03/20/2020
PR Batch 50600.03.2020 Def
PR Batch 50600.03.2020 Def(
Total for this ACH Check for Vendor 45:
Internal Revenue Service 03/20/2020
PR Batch 50600.03.2020 FICA Employee Portio PR Batch 50600.03.2020 FIC.
PR Batch 50600.03.2020 FICA Employer Portio. PR Batch 50600.03.2020 FIC.
PR Batch 50600.03.2020 Medicare Employee Pc PR Batch 50600.03.2020 Mee
PR Batch 50600.03.2020 Federal Income Tax PR Batch 50600.03.2020 Fed(
PR Batch 50600.03.2020 Medicare Employer Po PR Batch 50600.03.2020 Mee
Total for this ACH Check for Vendor 46:
Total for 3/20/2020:
Abdo Eick & Meyers LLP 03/24/2020
2019 Audit
2019 Audit
2019 Audit
Total for Check Number 26829:
AFSCME MN Council 5 03/24/2020
PR Batch 50600.03.2020 Union Dues PR Batch 50600.03.2020 Unic
Allstream Inc.
Fax Line
Total for Check Number 26830:
03/24/2020
Total for Check Number 26831:
James Bownik 03/24/2020
1Q Mileage Reimbursement
Total for Check Number 26832:
1,170.76
1,014.66
2,185.42
648.76
648.76
1,073.71
1,658.68
2,732.39
1,136.73
1,136.73
265.87
1,730.45
265.87
4,535.65
10,102.22
870.00
870.00
4,060.00
5,800.00
210.24
210.24
52.73
52.73
33.37
33.37
AP Checks by Date - Detail by Check Date (3/20/2020 12:41 PM) Page 1
Check No Vendor No
Invoice No
Vendor Name
Description
Check Date
Reference
Check Amount
26833 282
032020
26834 184
032020
032020
26835 133
1Q2020
26836 25
EMCOM-008315
EMCOM-008330
EMCOM-008347
RISK -002038
26837 19
82987
26838 134
0098
26839 31
153778
Anastassia Bukingolts
Social Room Refund
Cintas
March Uniforms
March Uniforms
Miles Cline
IQ Mileage Reimbursement
County of Ramsey
PR Batch 50600.03.2020 Life Insurance
PR Batch 50600.03.2020 Long Term Disability
PR Batch 50600.03.2020 Short Tenn Disability
February Fleet Support
February 911 Dispatch Services
February CAD Services
Insurance Processing Fee
Ehlers and Associates Inc
1795 Eustis Redevelopment
Katrina Joseph
February Legal Services
Kennedy & Graven Chartered
February Legal Services
03/24/2020
Total for Check Number 26833:
03/24/2020
Total for Check Number 26834:
03/24/2020
Total for Check Number 26835:
03/24/2020
PR Batch 50600.03.2020 Life
PR Batch 50600.03.2020 Lon.
PR Batch 50600.03.2020 Shol
Total for Check Number 26836:
03/24/2020
Total for Check Number 26837:
03/24/2020
Total for Check Number 26838:
03/24/2020
Total for Check Number 26839:
26840 185 Lauderdale Certified Auto Repair Inc 03/24/2020
032020 February Fuel
032020 February Fuel
032020 February Fuel
26841 23
1NV1559119
26842 12
2020-025
26843 5
619861-02-20
Metro Sales Inc
Quarterly Copy Charges
Total for Check Number 26840:
03/24/2020
Total for Check Number 26841:
North Suburban Access Corporation 03/24/2020
February Webstreaming & Archiving
Premium Waters Inc
February Water Bottles
Total for Check Number 26842:
03/24/2020
52.50
52.50
22.06
22.06
44.12
28.06
28.06
295.06
95.67
64.67
6.24
1,060.57
205.40
25.00
1,752.61
442.50
442.50
925.00
925.00
1,575.00
1,575.00
115.80
540.39
115.80
771.99
276.20
276.20
278.83
278.83
7.50
AP Checks by Date - Detail by Check Date (3/20/2020 12:41 PM) Page 2
Check No Vendor No
Invoice No
Vendor Name
Description
Check Date
Reference
Check Amount
26844 135
0220572525
Total for Check Number 26843: 7.50
St Paul Pioneer Press 03/24/2020
Publish Ordinance 136.74
26845 26 Stantec Consulting Services Inc
1628746 Wetland Conservation Report
1628916 Street Improvements / Record Plans
Total for Check Number 26844: 136.74
03/24/2020
167.00
3,228.00
Total for Check Number 26845: 3,395.00
26846 91 Suburban Ace Hardware 03/24/2020
032020 Mounting Tape 9.99
Total for Check Number 26846: 9.99
26847 4 The Neighborhood Recycling Company Inc 03/24/2020
18841 February Single Unit Dwelling
18841 February Multi -Family Recycling Unit
26848 90 Verizon Wireless
9849485662 February Cell Phone
9849485662 February Cell Phone
9849485662 February Cell Phone
26849 7
8495299-0500-2
Waste Management Inc
March Public Works
2,862.72
397.44
Total for Check Number 26847: 3,260.16
03/24/2020
16.27
16.26
32.53
Total for Check Number 26848: 65.06
03/24/2020
478.05
Total for Check Number 26849: 478.05
26850 74 Xcel Energy 03/24/2020
675148571 February Street Lighting 422.00
675184835 Larpenteur Bridge Lights 36.09
675203346 2430 Larpenteur Avenue W 19.32
675320858 1885 Fulham Street 95.47
675320858 1917 Walnut Street 40.77
675320858 1885 Fulham Street 61.92
675320858 1917 Walnut Street 106.55
675488595 1891 Walnut Street 168.43
675488595 1891 Walnut Street 263.98
675488595 1795 Eustis Street 45.79
675549993 Larpenteur Avenue 55.16
Total for Check Number 26850: 1,315.48
Total for 3/24/2020: 20,91 1.13
Report Total (26 checks): 31,013.35
AP Checks by Date - Detail by Check Date (3/20/2020 12:41 PM) Page 3
LAUDERDALE COUNCIL
ACTION FORM
Action Requested
Consent X
Public Hearing
Discussion
Action
Resolution
Work Session
Meeting Date
March 24, 2020
ITEM NUMBER Accounts Payable Authority
STAFF INITIAL
APPROVED BY ADMINISTRATOR
DESCRIPTION OF ISSUE AND PAST COUNCIL ACTION:
Staff is requesting authorization to process accounts payable as needed until the emergency
declaration is rescinded. This authorization will be unnecessary if the City Council contin-
ues to meet remotely on its regular schedule. Should that differ, staff will need to send out
checks to remain in compliance with Minnesota Statutes 471.425, subdivision 2 which states
that 35 days from receipt of claim payment must be made for governing boards that meet at
least once per month. The government entity must pay interest on bills not paid in a timely
manner of 1.5% per month or part of a month. All claims will be included in the next possi-
ble council packet.
OPTIONS:
STAFF RECOMMENDATION:
By approving the consent agenda, the Council authorizes accounts payable processing as
required by State Statutes until the emergency declaration is rescinded.
ACTION REQUESTED
Consent X
LAUDERDALE COUNCIL
MEETING DATE March 24, 2020
Special
ITEM NUMBER 2020 Garbage Hauler Licenses
Public Hearing
Report
STAFF INITIAL Jim
Discussion/Action
Resolution
Work
APPROVED BY ADMINISTRATOR
session
DESCRIPTION OF ISSUE AND PAST COUNCIL ACTION:
2/1/20-1/31/21 Garbage Hauler Licenses
The following garbage companies have completed the application process and paid their licensing fee.
Company Residential Trucks) Commercial Trucks
Waste Management 1 4
Advanced Disposal Services 2 1
Republic Services 1 3
Aspen Waste 0 2
Walter's 1 1
OPTIONS:
1) Approve as consent item.
2) Do not approve as consent item.
STAFF RECOMMENDATION:
By approving the consent agenda, the council is approving the 2020 garbage hauler licenses.
COUNCIL ACTION:
LAUDERDALE COUNCIL
ACTION FORM
Action Requested
Consent
Public Hearing
Discussion X
Action
Resolution X
Work Session
X
Meeting Date
March 24, 2020
ITEM NUMBER Emergency Declaration
STAFF INITIAL HB
it
APPROVED BY ADMINISTRATOR
DESCRIPTION OF ISSUE AND PAST COUNCIL ACTION:
On March 18, Mayor Gaasch declared a local emergency in the city of Lauderdale. In order for
the emergency declaration to continue, it must be ratified by the rest of the City Council. The
resolution ratifying the declaration follows.
OPTIONS:
STAFF RECOMMENDATION:
Motion to adopt resolution 032420A—A Resolution Enacted Pursuant to Minnesota Statutes
Section 12.29 Extending the Period of a Mayor -Declared Local Emergency.
COUNCIL ACTION:
RESOLUTION NO. 032420A
CITY OF LAUDERDALE
COUNTY OF RAMSEY
STATE OF MINNESOTA
A RESOLUTION ENACTED PURSUANT TO MINNESOTA STATUTES
SECTION 12.29 EXTENDING THE PERIOD OF
A MAYOR -DECLARED LOCAL EMERGENCY
WHEREAS, the Mayor of the City of Lauderdale, Minnesota by Mayoral Declaration No. 2020-
1 has declared that a local emergency is in effect in the City as of at 5:00 p.m. on March 18, 2020;
and
WHEREAS, the City Council of the City of Lauderdale agrees with the mayor's determination
and further finds that the local emergency will last for more than three days and that immediate
action to respond to the local emergency is needed in order to protect the health, safety and welfare
of the City and the community; and
WHEREAS, the Council finds that this emergency, which involves an outbreak of an infectious
disease (COVID-19), is a highly fluid and evolving situation, and in the interest of the public
health, a response or action may be needed that requires deviation from standard procedures for
procuring goods and services; and
WHEREAS, Minnesota Statutes Sections 12.29 and 12.37 authorize the actions taken in this
resolution and provide that emergency contracts and agreements are not subject to the normal
purchasing and competitive bidding requirements because of the local emergency.
NOW, THEREFORE, BE IT RESOLVED BY THE LAUDERDALE CITY
COUNCIL as follows:
1. The Mayor's Declaration of a local emergency is continued in effect until further action
of the City Council.
2. City staff is authorized to enter into agreements and contracts necessary for the
procurement of materials, equipment, and services required to respond to the local
emergency.
3. The Mayor and City Administrator are authorized to execute any agreements, contracts,
and related documents regarding the local emergency necessary to implement
corrective action relative to the local emergency to protect the health, safety and
welfare of the City and the community.
4. City staff is authorized to take any appropriate action and to prepare any appropriate
documents to facilitate the directives of the Council as set forth in this resolution.
5. The Mayor, City Administrator, City staff, City attorney, and City consultants are
authorized and directed to take any and all additional steps and actions necessary or
convenient in order to accomplish the intent of this resolution.
Adopted this 24" day of March, 2020.
Mary Gaasch, Mayor
Attest:
Heather Butkowski, City Clerk -Administrator
rl
LAUDERDALE COUNCIL
ACTION FORM
1
Action Requested
Consent
Public Hearing
Discussion X
Action
Resolution
Work Session
X
Meeting Date
March 24, 2020
ITEM NUMBER Audit Materials
STAFF INITIAL HB
APPROVED BY ADMINISTRATOR
DESCRIPTION OF ISSUE AND PAST COUNCIL ACTION:
Each year, a representative of Abdo, Eick, and Meyers presents the findings to the City Council.
Due to the coronavirus recommendations, staff cancelled the in-person presentation. A copy of
the audit, management letter, and their presentation are included in the packet. We can invite
them to participate in a remote meeting once we get the hang of it. In the interim, the Council
should accept the audit reports.
OPTIONS:
STAFF RECOMMENDATION:
Motion to accept the audit reports prepared by Abdo, Eick, and Meyers.
COUNCIL ACTION:
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City of Lauderdale
Lauderdale, Minnesota
For the Year Ended
December 31, 2019
ABDO
FICK &
_ /1E 1 .ELEJ,
Certified Public Accountants & Consultants
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City of Lauderdale, Minnesota
Annual Financial Report
Table of Contents
For the Year Ended December 31, 2019
Introductory Section
Elected and Appointed Officials
Financial Section
Independent Auditor's Report
Management's Discussion and Analysis
Basic Financial Statements
Government -wide Financial Statements
Statement of Net Position
Statement of Activities
Fund Financial Statements
Governmental Funds
Balance Sheet
Reconciliation of the Balance Sheet to the Statement of Net Position
Statement of Revenues, Expenditures and Changes in Fund Balances
Reconciliation of the Statement of Revenues, Expenditures and Changes
to the Statement of Activities
General Fund
Statement of Revenues, Expenditures and Changes in Fund Balances -
Proprietary Funds
Statement of Net Position
Statement of Revenues, Expenses and Changes in Net Position
Statement of Cash Flows
Notes to the Financial Statements
in Fund Balances
Budget and Actual
Required Supplementary Information
Schedule of Employer's Share of Public Employees Retirement Association Net Pension Liability -
General Employees Retirement Fund
Schedule of Employer's Public Employees Retirement Association Contributions -
General Employees Retirement Fund
Notes to the Required Supplementary Information - General Employee Retirement Fund
Combining and Individual Fund Financial Statements and Schedules
Nonmajor Governmental Funds
Combining Balance Sheet
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Nonmajor Special Revenue Funds
Combining Balance Sheet
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Communications Fund
Recycling Fund
Nonmajor Capital Projects Funds
Combining Balance Sheet
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual
Summary Financial Report
Revenues and Expenditures for General Operations
Other Required Report
Independent Auditor's Report
on Minnesota Legal Compliance
3
Page No.
7
11
15
27
28
32
33
34
35
36
37
38
39
41
64
64
65
68
69
70
71
72
73
74
75
77
80
83
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4
INTRODUCTORY SECTION
CITY OF LAUDERDALE
LAUDERDALE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
5
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6
Name
City of Lauderdale, Minnesota
Elected and Appointed Officials
For the Year Ended December 31, 2019
ELECTED
Title Term Expires
Mary Gaasch Mayor 12/31/20
Jeff Dains Council Member 12/31/20
Kelly Dolphin Council Member 12/31/20
Roxanne Grove Council Member 12/31/22
Andi Moffatt Council Member 12/31/22
APPOINTED
Heather Butkowski City Administrator
7
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8
FINANCIAL SECTION
CITY OF LAUDERDALE
LAUDERDALE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
9
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10
.BD0
HICK &
MEYERS LP
Certified Public Accountants d'- Consultants
INDEPENDENT AUDITOR'S REPORT
Honorable Mayor and City Council
City of Lauderdale, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -type activities, each
major fund and the aggregate remaining fund information of the City of Lauderdale, Minnesota (the City), as of and for the
year ended December 31, 2019, and the related notes to the financial statements, which collectively comprise the City's
basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation,
and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial
position of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund
information of the City as of December 31, 2019, and the respective changes in financial position, cash flows, where
applicable, and the budgetary comparison for the General fund for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
5201 Eden Avenue, Suite 250
Edina, MN 55436
952.835.9090 1 Fax 952.835.3261
11
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12
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and
Analysis Page 15 and the Schedule of Employer's Shares of the Net Pension Liability and the Schedule of Employer's
Contributions and the related note disclosures starting on page 62 be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is required by the Governmental
Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial
statements in 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.
Other Information
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the
City's basic financial statements as a whole. The introductory section and combining and individual fund financial
statements and schedules are presented for the purpose of additional analysis and are not a required part of the basic
financial statements.
The combining and individual fund financial statements and schedules are the responsibility of management and were
derived from and relate directly to the underlying accounting and other records used to prepare the financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and
certain additional procedures, including comparing and reconciling such information directly to the underlying accounting
and other records used to prepare the financial statements or to the 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 fund financial statements and schedules are fairly stated in all material respects, in relation to
the financial statements as a whole.
The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial
statements and, accordingly, we do not express an opinion or provide any assurance on it.
faivieittio Li"
ABDO, EICK & MEYERS, LLP
Minneapolis, Minnesota
March 13, 2020
13
ec)1")1c'
+ Process.
(;ohi
\uriilml S
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14
Management's Discussion and Analysis
As management of the City of Lauderdale, Minnesota (the City), we offer readers of the City's financial statements this
narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2019.
Financial Highlights
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources
at the close of the most recent fiscal year by $10,588,757 (net position). Of this amount, $3,202,472 (unrestricted
net position) may be used to meet the City's ongoing obligations to citizens and creditors.
• The City's total net position increased by $331,042. The majority of the increase can be attributed to unused
capital contributions, which are restricted for future transportation improvements.
• As of the dose of the current fiscal year, the City's governmental funds reported combined ending fund balances
of $3,567,414 a decrease of $550,186 in comparison with the prior year. The majority of the decrease is due to
the 2019 Infrastructure Improvement project that is held in construction work in process at December 31, 2019.
Approximately 22.1 percent of this total amount, $789,359, is unassigned fund balance.
• At the end of the current fiscal year, unassigned fund balance for the General fund was $789,359, or 56.4 percent
of 2019 budgeted expenditures.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City's basic financial statements. The City's
basic financial statements comprise three components: 1) government -wide financial statements, 2) fund financial
statements, and 3) notes to the financial statements. This report also contains other supplemental information in addition
to the basic financial statements themselves.
15
The following chart shows how the various parts of this annual report are arranged and related to one another:
Figure 1
Required Components of the
City's Annual Financial Report
Management's
Discussion and
Analysis
Government -
wide Financial
Statements
Summary
Basic
Financial
Statements
Required
Supplementary
Information
..'^,,'...-^.,-^.....'^
Fund
Financial
Statements
^
_
^
^
,
,
Notes to the
Financial
Statements
16
Detail
The following chart summarizes the major features of the City's financial statements, including the portion of the City's
activities they cover and the types of information they contain. The remainder of this overview section of Management's
Discussion and Analysis highlights the structure and contents of each of the statements:
Figure 2
Major Features of the Government -wide and Fund Financial Statements
17
Fund Financial Statements
Government -wide
Statements
Governmental Funds
Proprietary Funds
Scope
Entire City government
(except fiduciary funds)
and the City's component
units
The activities of the City that are
not proprietary or fiduciary, such
as police, fire and parks
Activities the City operates similar
to private businesses, such as the
water and sewer system
Required
financial
statements
• Statement of Net
Position
• Statement of
Activities
• Balance Sheet
• Statement of Revenues,
Expenditures, and Changes
in Fund Balances
• Statements of Net Position
• Statements of Revenues,
Expenses and Changes in
Fund Net Position
• Statements of Cash Flows
Accounting basis
and
measurement
focus
Accrual accounting and
economic resources
focus
Modified accrual accounting and
current financial resources focus
Accrual accounting and economic
resources focus
Type of
asset/liability
information
All assets and liabilities,
both financial and capital,
and short-term and long-
term
Only assets expected to be used
up and liabilities that come due
during the year or soon
thereafter; no capital assets
included
All assets and liabilities, both
financial and capital, and short -
term and long-term
Type of deferred
outflows/inflows
of resources
information
All deferred
outflows/inflows of
resources, regardless of
when cash is received or
paid
Only deferred outflows of
resources expected to be used
up and deferred inflows of
resources that come due during
the year or soon thereafter; no
capital assets included
All deferred outflows/inflows of
resources, regardless of when
cash is received or paid
Type of
inflow/outflow
information
All revenues and
expenses during year,
regardless of when cash
is received or paid
Revenues for which cash is
received during or soon after the
end of the year; expenditures
when goods or services have
been received and payment is
due during the year or soon
thereafter
All revenues and expenses during
the year, regardless of when cash
is received or paid
17
Government -wide Financial Statements. The government -wide financial statements are designed to provide readers
with a broad overview of the City's finances, in a manner similar to a private -sector business.
The statement of net position presents information on all of the City's assets and deferred outflows of resources and
liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or
decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or
deteriorating.
The statement of activities presents information showing how the City's net position changed during the most recent fiscal
year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless
of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will
only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes
and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a
significant portion of their costs through user fees and charges (business -type activities). The governmental activities of
the City include general government, public safety, public works, sanitation and recycling, culture and recreation,
miscellaneous and interest on bonds.
The government -wide financial statements start on page 27 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that
have been segregated for specific activities or objectives. The City, like other state and local government, uses fund
accounting to ensure and demonstrate compliance with finance -related legal requirements. All of the funds of the City can
be divided into two categories: governmental funds and proprietary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government -wide financial statements. However, unlike the government -wide financial
statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as
well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in
evaluating a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to
compare the information presented for governmental funds with similar information presented for governmental activities
in the government -wide financial statements. By doing so, readers may better understand the long-term impact by the
government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund
statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison
between governmental funds and governmental activities.
The City maintains eleven individual governmental funds. Information is presented separately in the governmental fund
balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balances for the
General fund, Street Improvement fund, TIF District No. 1-2 fund, and the 2019A G.O. Improvement Bonds fund, all of
which are considered to be major funds. Data from the other governmental funds are combined into a single aggregated
presentation.
The City adopts an annual appropriated budget for its General fund and certain special revenue funds. A budgetary
comparison statement has been provided for the General fund and certain special revenue funds to demonstrate
compliance with this budget.
The basic governmental fund financial statements start on page 32 of this report.
Proprietary Funds. The City maintains one type of proprietary fund. Enterprise funds are used to report the same
functions presented as business -type activities in the government—wide financial statements. The City uses enterprise
funds to account for its Sewer and Storm Sewer operations.
Proprietary funds provide the same type of information as the government -wide financial statements, only in more detail.
The proprietary fund financial statements provide separate information for each of the enterprise funds which are
considered to be major funds of the City.
The basic proprietary fund financial statements start on page 37 of this report.
18
Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of
the data provided in the government -wide and fund financial statements. The notes to the financial statements start on
page 41 of this report.
Other Information. The combining and individual fund financial statements and schedules are presented following the
notes to the financial statements and start on page 68 of this report.
Government -wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of
the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $10,588,757
at the close of the most recent fiscal year.
The largest portion of the City's net position (64.4 percent) reflects its net investment in capital assets (e.g., land,
buildings, machinery and equipment); less any related debt used to acquire those assets that is still outstanding. The City
uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.
Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources
needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to
liquidate these liabilities.
City of Lauderdale's Summary of Net Position
Governmental Activities Business -type Activities
Increase Increase
2019 2018 (Decrease) 2019 2018 (Decrease)
Assets
Current and other assets $ 4,174,249 $ 4,185,142 $ (10,893) $ 1,509,798 $ 1,420,546 $ 89,252
Capital assets 6,200,696 4,706,410 1,494,286 1,645,198 1,701,771 (56,573)
Total Assets 10,374,945 8,891,552 1,483,393 3,154,996 3,122,317 32,679
Deferred Outflows of Resources
Deferred pension resources
18,063 39,641 (21,578) 5,812 12,896 (7,084)
Liabilities
Long-term liabilities
outstanding 2,586,838 1,568,092 1,018,746 88,962 86,859 2,103
Other liabilities 234,294 73,354 160,940 1,522 5,783 (4,261)
Total Liabilities 2,821,132 1,641,446 1,179,686 90,484 92,642 (2,158)
Deferred Inflows of Resources
Deferred pension resources
40,036 56,290 (16,254) 13,407 18,313 (4,906)
Net Position
Investment in capital assets 5,178,531 4,706,410 472,121 1,645,198 1,701,771 (56,573)
Restricted 562,556 910,976 (348,420) -
Unrestricted 1,790,753 1,616,071 174,682 1,411,719 1,322,487 89,232
Total Net Position $ 7,531,840 $ 7,233,457 $ 298,383 $ 3,056,917 $ 3,024,258 $ 32,659
The remaining balance of unrestricted net position ($3,202,472) may be used to meet the City's ongoing obligations to
citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both
for the City as a whole, as well as for its separate governmental and business -type activities. The same situation held true
for the prior fiscal year.
19
Governmental Activities. Governmental activities increased the City's net position by $298,383 and business -type
increased the City's net position by $32,659. Key elements of the increase are as follows:
City of Lauderdale's Changes in Net Position
Governmental Activities Business -type Activities
Increase Increase
2019 2018 (Decrease) 2019 2018 (Decrease)
Revenues
Program Revenues
Charges for services $ 225,589 $ 133,176 $ 92,413 $ 418,958 $ 394,302 $ 24,656
Operating grants
and contributions 5,742 5,832 (90) - -
Capital grants
and contributions 1,142,723 868,986 273,737 23,846 - 23,846
General Revenues
Property taxes 828,027 782,618 45,409
Grants and contributions not
restricted to specific program 545,259 614,941 (69,682) 178 557 (379)
Investment earnings 73,592 22,007 51,585 28,152 22,465 5,687
Gain on sale of capital asset 10,412 - 10,412
Total Revenues 2,831,344 2,427,560 403,784 471,134 417,324 53,810
Expenses
General government 463,927 420,291 43,636
Public safety 822,429 772,073 50,356 -
Public works 1,001,808 299,313 702,495
Sanitation and recycling 62,155 52,979 9,176 -
Culture and recreation 136,834 126,271 10,563 -
Miscellaneous 5,620 60,718 (55,098) - -
Debt service 72,188 51,798 20,390
Sewer - - 320,916 286,090 34,826
Storm sewer - 85,559 89,480 (3,921)
Total Expenses 2,564,961 1,783,443 781,518 406,475 375,570 30,905
Increase in net position
before transfers
Transfers
Change in Net Position
Net Position, January 1
266,383 644,117 (377,734) 64,659 41,754 22,905
32,000 32,000 (32,000) (32,000)
298,383 644,117 (345,734) 32,659 41,754 (9,095)
7,233,457 6,589,340 644,117 3,024,258 2,982,504 41,754
Net Position, December 31 $ 7,531,840 $ 7,233,457 $ 298,383 $ 3,056,917 $ 3,024,258 $ 32,659
20
Overall, the financial position of governmental activities remained relatively close to the prior year.
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
Expenses and Program Revenues - Governmental Activities
General Public Safety Public Works Sanitation and Culture and Miscellaneous Interest on
Government Recycling Recreation long term debt
® Expense ® Program Revenue
Revenues by Source - Governmental Activities
Grants and
Contributions Not
Restricted to
Specific Programs
19.3%
Investment
Earnings
2.6%
Gain on Sale of
Capital Asset
0.4%
Charges for
Services
7.9%
Operating Grants
and Contributions
0.2%
Property Taxes Capital Grants and
29.2% Contributions
40.4%
21
Business -type Activities. Business -type activities increased the City's net position by $32,659.The increase can be
attributed to charges for services over operating costs.
Financial Analysis of the Government's Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance -related legal
requirements.
Governmental Funds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows
and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In
particular, unassigned fund balance may serve as a useful measure of a government's net resources available for
spending at the end of the fiscal year.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of
$3,567,414, a decrease of $550,186 in comparison with the prior year. Approximately 22.1 percent of this total amount
($789,359) constitutes unassigned fund balance, which is available for spending at the City's discretion. The remainder of
fund is nonspendable ($3,629), restricted ($1,425,106), committed ($109,097), or assigned ($1,240,223).
The General fund is the chief operating fund of the City. At the end of the current year, unassigned fund balance of the
General fund was $789,359. As a measure of the General fund's liquidity, it may be useful to compare both unrestricted
fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 56.4 percent of total
General fund expenditures and 56.4 percent of the 2019 budget.
The fund balance of the City's General fund increased by $45,130 during the current fiscal year because revenue from
property taxes and interest on investments increased from the previous year.
The Street Improvement fund has a total fund balance of $521,941, a decrease of $748,548 from the previous year due to
an increase in capital outlay expenditures in the current year.
The TIF District No. 1-2 fund has a total fund balance of $1,190,546, a decrease of $211 from the previous year due to
capital outlay expenditures exceeding revenues from interest on investments.
The 2019A G.O. Improvement Bonds fund has a total fund balance of $101,597, an increase of $101,597 from the
previous year because new general obligation special assessment bonds were issued in the current year.
Proprietary Funds. The City's proprietary fund provides the same type of information found in the government -wide
financial statements, but in more detail.
The Sewer fund unrestricted net position of the Sewer operation amounted to $1,026,733.The total increase in net position
for the fund was $9,116.
The Storm Sewer fund unrestricted net position amounted to $384,986. The total increase in net position for the fund was
$23,543.
The factors concerning the finances of these funds have already been addressed in the discussion of the City's business -
type activities.
General Fund Budgetary Highlights
The original budget was not amended during the 2019 fiscal year. Revenues were more than budgetary estimates by
$43,033 and expenditures were less than budgetary estimates by $2,097. As a result the City experienced an overall
favorable budget variance.
22
Capital Asset and Debt Administration
Capital Assets. The City's investment in capital assets for its governmental and business -type activities as of
December 31, 2019, amounts to $7,845,894, (net of accumulated depreciation). This investment in capital assets includes
land, buildings and system, improvements, machinery and equipment, park facilities, roads, highways, and bridges. The
total decrease in the City's investment in capital assets for the current fiscal year was -22.4 percent (a -31.8 percent
decrease for governmental activities and a 3.3 percent increase for business -type activities).
City of Lauderdale's Capital Assets
(Net of Depreciation)
Governmental Activities Business -type Activities
Increase Increase
2019 2018 (Decrease) 2019 2018 (Decrease)
Land $ 322,040 $ 411,347 $ (89,307) $ - $ - $
Construction in Progress 1,736,980 - 1,736,980
Buildings 37,467 39,127 (1,660) -
Improvements other
than Buildings 67,048 84,180 (17,132) - - -
Machinery and Equipment 85,004 105,388 (20,384) 4,333 5,333 (1,000)
Infrastructure 3,952,157 4,066,368 (114,211) 1,640,865 1,696,438 (55,573)
Total $ 6,200,696 $ 4,706,410 $ 1,494,286 $ 1,645,198 $ 1,701,771 $ (56,573)
Additional information on the City's capital assets can be found in Note 3B starting on page 51 of this report.
Long-term Debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $2,317,165.
City of Lauderdale's Outstanding Debt
Governmental Activities Business Activities
Increase Increase
2019 2018 (Decrease) 2019 2018 (Decrease)
Bonds Payable $ 2,317,165 $ 1,295,000 $ 1,022,165 $ $ $
During 2019, the City issued 2019A G.O. Improvement Bonds for $1,000,000.
Additional information on the City's long-term debt can be found in Note 3D starting on page 53 of this report.
Economic Factors and Next Year's Budgets and Rates
• The City closed on the purchase of 1795 Eustis Street in May 2018. The City anticipates selling the property for
, redevelopment in 2020.
• Luther Theological Seminary selected a developer to buy six acres of real estate in Lauderdale. Application for
land use approvals are expected in 2020.
• Four new home were permitted in 2019. Two new home permits were approved so far in 2020.
Requests for Information
This financial report is designed to provide a general overview of the City's finances for all those with an interest in the
City's finances. Questions concerning any of the information provided in this report or requests for additional financial
information should be addressed to the City Administrator, Heather Butkowski, City of Lauderdale, 1891 Walnut Street,
Lauderdale, MN 55113.
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24
GOVERNMENT -WIDE FINANCIAL STATEMENTS
CITY OF LAUDERDALE
LAUDERDALE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
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26
City of Lauderdale, Minnesota
Statement of Net Position
December 31, 2019
Assets
Cash and temporary investments
Receivables
Accounts
Delinquent taxes
Interest
Special assessments
Due from other governments
Prepaid items
Land held for resale
Capital assets
Land and construction in progress
Depreciable buildings, property and equipment, net
Total Assets
Governmental Business -type
Activities Activities
Total
$ 2,648,605 $ 1,436,107 $ 4,084,712
4,541
26,708
2,957
389,908
1,768
3,629
1,096,133
2,059,020
4,141,676
10,374,945
Deferred Outflows of Resources
Deferred pension resources 18,063
60,070
13,621
1,645,198
64,611
26,708
2,957
389,908
1,768
17,250
1,096,133
2,059,020
5,786,874
3,154,996 13,529,941
5,812 23,875
Liabilities
Accounts payable 207,152 1,522 208,674
Salaries payable 4,143 4,143
Accrued interest payable 21,347 - 21,347
Due to other governments 1,652 - 1,652
Current liabilities - due within one year
Compensated absences payable 23,689 12,672 36,361
Noncurrent liabilities - due in more than one year
Compensated absences payable 18,193 18,193
Net pension liability 227,791 76,290 304,081
Bonds payable 2,317,165 2,317,165
Total Liabilities 2,821,132 90,484 2,911,616
Deferred Inflows of Resources
Deferred pension resources
40,036 13,407 53,443
Net Position
Investment in capital assets 5,178,531
Restricted for
Debt Service 455,621
Transportation 74,018
Street maintenance 32,917
Unrestricted 1,790,753
1,645,198 6,823,729
1,411,719
455,621
74,018
32,917
3,202,472
Total Net Position $ 7,531,840 $ 3,056,917 $ 10,588,757
The notes to the financial statements are an integral part of this statement.
27
City of Lauderdale, Minnesota
Statement of Activities
For the Year Ended December 31, 2019
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Governmental Activities
Current
General government
Public safety
Public works
Sanitation and recycling
Culture and recreation
Economic development
Interest on long term debt
Total Governmental Activities
Business -type Activities
Sewer
Storm sewer
Total Business -type Activities
Total
$ 463,927 $ 50,123 $ $
822,429 40,380 -
1,001,808
62,155 46,256 5,742
136,834 88,830 -
5,620
72,188
2,564,961 225,589
1,142,723
5,742 1,142,723
320,916 308,056 23,846
85,559 110,902
406,475 418,958 23,846
$ 2,971,436 $ 644,547 $ 5,742 $ 1,166,569
General Revenues and Transfers
Taxes
Property taxes, levied for general purposes
Franchise tax
Grants and contributions not restricted to specific programs
Investment earnings
Gain on sale of capital assets
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position, January 1
Net Position, December 31
The notes to the financial statements are an integral part of this statement.
28
Net (Expense) Revenue and
Changes in Net Position
Governmental Business -type
Activities Activities Total
$ (413,804) $
(782,049)
140,915
(10,157)
(48,004)
(5,620)
(72,188)
$ (413,804)
(782,049)
140,915
(10,157)
(48,004)
(5,620)
(72,188)
(1,190,907) (1,190,907)
(1,190,907)
10,986 10,986
25,343 25,343
36,329 36,329
36,329 (1,154,578)
809,908 809,908
18,119 18,119
545,259 178 545,437
73,592 28,152 101,744
10,412 - 10,412
32,000 (32,000) -
1,489,290 (3,670) 1,485,620
298,383 32,659 331,042
7,233,457 3,024,258 10,257,715
$ 7,531,840 $ 3,056,917 $ 10,588,757
The notes to the financial statements are an integral part of this statement.
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FUND FINANCIAL STATEMENTS
CITY OF LAUDERDALE
LAUDERDALE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
31
City of Lauderdale, Minnesota
Balance Sheet
Governmental Funds
December 31, 2019
Capital Projects Debt Service
2019A Other Total
Street TIF District G.O. Governmental Governmental
General Improvement No. 1-2 Improvement Bond: Funds Funds
Assets
Cash and temporary investments $ 777,769 $ 714,526 $ 94,413 $ 101,597 $ 960,300 $ 2,648,605
Receivables
Accounts - - - 4,541 4,541
Delinquent taxes 26,708 - - - 26,708
Interest 2,957 - - 2,957
Special assessments 191 - - 349,343 40,374 389,908
Due from other governments 1,706 62 - - 1,768
Prepaid items 2,979 - - 650 3,629
Land held for resale - 1,096,133 1,096,133
Total Assets $ 812,310 $ 714,588 $ 1,190,546 $ 450,940 $ 1,005,865 $ 4,174,249
Liabilities
Accounts payable $ 9,612 $ 192,647 $ - $ - $ 4,893 $ 207,152
Due to other governments 1,652 - - - - 1,652
Salaries payable 3,812 - 331 4,143
Total Liabilities 15,076 192,647 - - 5,224 212,947
Deferred Inflows of Resources
Unavailable revenue - property taxes 4,705 - - - 4,705
Unavailable revenue - special assessments 191 - - 349,343 39,649 389,183
Total Deferred Inflows of Resources 4,896 - - 349,343 39,649 393,888
Fund Balances
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total Fund Balances
2,979 - - 650 3,629
106,935 1,190,546 101,597 26,028 1,425,106
- - 109,097 109,097
415,006 - 825,217 1,240,223
789,359 - - - - 789,359
792,338 521,941 1,190,546 101,597 960,992 3,567,414
Total Liabilities, Deferred Inflows
of Resources and Fund Balances $ 812,310 $ 714,588 $ 1,190,546 $ 450,940 $ 1,005,865 $ 4,174,249
The notes to the financial statements are an integral part of this statement.
32
City of Lauderdale, Minnesota
Reconciliation of the Balance Sheet
to the Statement of Net Position
Governmental Funds
December 31, 2019
Amounts reported for governmental activities in the statement of net position are different because
Total Fund Balances - Governmental Funds $ 3,567,414
Capital assets used in governmental activities are not financial
resources and therefore are not reported as assets in governmental fund.
Cost of capital assets
Less: accumulated depreciation
Long-term liabilities, including bonds payable, are not due and payable in the
current period and therefore are not reported as liabilities in the funds.
Long-term liabilities at year-end consist of
Compensated absences payable
Pension liability
Bonds payable
Bond premium
Delinquent property taxes receivable are not available soon enough to pay for the current periods
expenditures, and therefore are reported as deferred inflow of resources in the funds.
Special assessments receivable are not available soon enough to pay for the current periods
expenditures, and therefore are reported as deferred inflow of resources in the funds.
Governmental funds do not report long-term amounts related to pensions.
Deferred outflows of pension resources
Deferred inflows of pension resources
Governmental funds do not report a liability for accrued interest until due and payable.
8,608,991
(2,408,295)
(41,882)
(227,791)
(2,295,000)
(22,165)
4,705
389,183
18,063
(40,036)
(21, 347)
Total Net Position - Governmental Activities $ 7,531,840
The notes to the financial statements are an integral part of this statement.
33
City of Lauderdale, Minnesota
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended December 31, 2019
Capital Projects Debt Service
2019A Other Total
Street TIF District G.O. Governmental Governmental
General Improvement No. 1-2 Improvement Bonds Funds Funds
Revenues
Taxes $ 813,079 $ $ - $ - $ 18,119 $ 831,198
Licenses and permits 42,775 42,775
Intergovernmental 540,820 - - 5,742 546,562
Charges for services 17,205 46,256 63,461
Fines and forfeitures 29,977 - - - 29,977
Special assessments 2,303 - 88,130 - 90,433
Interest on investments 30,295 23,087 1,924 477 17,809 73,592
Miscellaneous 5,153 753,332 - - - 758,485
Total Revenues 1,481,607 776,419 1,924 88,607 87,926 2,436,483
Expenditures
Current
General government 370,627 - - 370,627
Public safety 822,660 - - - 822,660
Public works 111,519 - - 1,232 112,751
Sanitation and recycling - - 62,155 62,155
Culture and recreation 92,446 - 18,804 111,250
Economic development 1,225 - - 1,225
Capital outlay - 2,499,559 2,135 2,260 2,503,954
Debt service
Interest - 32,041 32,041
Bond issuance costs - 35,750 - - 35,750
Total Expenditures 1,398,477 2,535,309 2,135 116,492 4,052,413
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Bonds issued
Premium on bonds issued
Gain on sale of land held for resale
Total Other Financing
Sources (Uses)
83,130 (1,758,890) (211) 88,607 (28,566) (1,615,930)
(38,000)
987,010
23,332
(38,000) 1,010,342
12,990
70,000 70,000
(38,000)
1,000,000
23,332
10,412 10,412
12,990 80,412 1,065,744
Net Change in Fund Balances 45,130 (748,548) (211) 101,597 51,846 (550,186)
Fund Balances, January 1 747,208 1,270,489 1,190,757 - 909,146 4,117,600
Fund Balances, December31 $ 792,338 $ 521,941 $ 1,190,546 $ 101,597 $ 960,992 $ 3,567,414
The notes to the financial statements are an integral part of this statement.
34
City of Lauderdale, Minnesota
Reconciliation of the Statement of Revenues,
Expenditures and Changes in Fund Balances
to the Statement of Activities
Governmental Funds
For the Year Ended December 31, 2019
Amounts reported for governmental activities in the statement of activities are different because
Total Net Change in Fund Balances - Governmental Funds $ (550,186)
Capital outlays are reported in 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 outlays
Depreciation expense
The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins,
donations, and dispositions) is to decrease net position.
1,736,980
(153,387)
(89,307)
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 if governmental
funds. Neither transaction, however, has any effect on net position. Also, governmental funds report
the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts
are deferred and amortized in the statement of activities.
Bonds issued (1,000,000)
Premium on bonds issued (23,332)
Amortization of bond premium 1,167
Interest on long-term debt in the statement of activities differs from the amount reported in the
governmental fund because interest is recognized as an expenditure in the funds when it is due,
and thus requires the use of current financial resources. In the statement of activities, however
interest expense is recognized as the interest accrues, regardless of when it is due.
(5,564)
Long-term pension activity is not reported in governmental funds.
Pension expense (3,433)
Pension revenue from state contributions 532
Delinquent taxes and special assessment receivables are not available soon enough to pay for the current
period's expenditures, and therefore are reported as deferred inflow of resources in the funds.
Special assessments
Property taxes
Some expenses reported in the statement of activities do not require the use of current
financial resources and, therefore, are not reported as expenditures in governmental funds.
Compensated absences
387,088
(3,171)
996
Change in Net Position - Governmental Activities $ 298,383
The notes to the financial statements are an integral part of this statement.
35
City of Lauderdale, Minnesota
Statement of Revenues, Expenditures and Changes in Fund Balances -
Budget and Actual
General Fund
For the Year Ended December 31, 2019
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Revenues
Taxes $ 810,104 $ 810,104 $ 813,079 $ 2,975
Licenses and permits 35,850 35,850 42,775 6,925
Intergovernmental 540,820 540,820 540,820
Charges for services 11,800 11,800 17,205 5,405
Fines and forfeitures 30,000 30,000 29,977 (23)
Special assessments - 2,303 2,303
Interest on investments 6,000 6,000 30,295 24,295
Miscellaneous 4,000 4,000 5,153 1,153
Total Revenues 1,438,574 1,438,574 1,481,607 43,033
Expenditures
Current
General government 375,399 375,399 370,627 4,772
Public safety 811,723 811,723 822,660 (10,937)
Public works 100,630 100,630 111,519 (10,889)
Culture and recreation 92,822 92,822 92,446 376
Economic development 20,000 20,000 1,225 18,775
Total Expenditures 1,400,574 1,400,574 1,398,477 2,097
Excess of Revenues
Over Expenditures
Other Financing Uses
Transfers out
38,000 38,000 83,130 45,130
(38,000) (38,000) (38,000)
Net Change in Fund Balances 45,130 45,130
Fund Balances, January 1 747,208 747,208 747,208
Fund Balances, December 31 $ 747,208 $ 747,208 $ 792,338 $ 45,130
The notes to the financial statements are an integral part of this statement.
36
City of Lauderdale, Minnesota
Statement of Net Position
Proprietary Funds
December 31, 2019
Business -type Activities
Sewer Storm Sewer
Total
Assets
Current Assets
Cash and temporary investments $ 1,025,140 $ 410,967 $ 1,436,107
Accounts receivable 41,077 18,993 60,070
Prepaid items 13,381 240 13,621
Total Current Assets 1,079,598 430,200 1,509,798
Noncurrent Assets
Capital assets
Machinery and equipment 15,000 15,000
Infrastructure 2,190,470 - 2,190,470
Less accumulated depreciation (560,272) (560,272)
Total Noncurrent Assets 1,645,198 1,645,198
Total Assets 2,724,796
Deferred Outflows of Resources
Deferred pensions resources 3,141
Liabilities
Current Liabilities
Accounts payable
Compensated absences payable
Total Current Liabilities
Noncurrent Liabilities
Pension liability
800
6,723
7,523
430,200 3,154,996
2,671 5,812
722
5,949
6,671
1,522
12,672
14,194
41,237 35,053 76,290
Total Liabilities 48,760
Deferred Inflows of Resources
Deferred pension resources 7,246
Net Position
Investment in capital assets 1,645,198
Unrestricted 1,026,733
41,724 90,484
6,161 13,407
384,986
1,645,198
1,411,719
Total Net Position $ 2,671,931 $ 384,986 $ 3,056,917
The notes to the financial statements are an integral part of this statement.
37
City of Lauderdale, Minnesota
Statement of Revenues, Expenses and Changes in Net Position
Proprietary Funds
For the Year Ended December 31, 2019
Business -type Activities
Sewer Storm Sewer
Total
Operating Revenues
Charges for services $ 308,056 $ 110,902 $ 418,958
Operating Expenses
Personal services 80,812 67,871 148,683
Supplies 713 713 1,426
Other services and charges 182,818 16,975 199,793
Depreciation 56,573 56,573
Total Operating Expenses 320,916 85,559 406,475
Operating Income
Nonoperating Revenues
Other revenue
Interest income
Total Nonoperating Revenues
(12,860) 25,343 12,483
96
20,034
20,130
Income Before Capital Grants and Transfers 7,270
Capital grants
Transfers Out
Total Capital Grants and Transfers
Change in Net Position
Net Position, January 1
Net Position, December 31
82
8,118
8,200
178
28,152
28,330
33,543 40,813
23,846 23,846
(22,000) (10,000) (32,000)
1,846
9,116
2,662,815
(10,000) (8,154)
23,543 32,659
361,443 3,024,258
$ 2,671,931 $ 384,986 $ 3,056,917
The notes to the financial statements are an integral part of this statement.
38
City of Lauderdale, Minnesota
Statement of Cash Flows
Proprietary Funds
For the Year Ended December 31, 2019
Business -type Activities
Sewer Storm Sewer Total
Cash Flows from Operating Activities
Receipts from tenants and users $ 305,384 $ 109,695 $ 415,079
Payments to suppliers (188,120) (17,101) (205,221)
Payments to employees (78,228) (66,174) (144,402)
Net Cash Provided by Operating Activities 39,036 26,420 65,456
Cash Flows From Noncapital
And Related Financing Activities
Transfers out
Cash Flows from Capital and Related Financing Activities
Grants received
(22,000)
(10,000) (32,000)
23,846 - 23,846
Cash Flows from Investing Activities
Interest on investments 20,034
8,118 28,152
Net Increase in Cash and Cash Equivalents 60,916 24,538 85,454
Cash and Cash Equivalents, January 1 964,224 386,429 1,350,653
Cash and Cash Equivalents, December 31 $ 1,025,140 $ 410,967 $ 1,436,107
Reconciliation of Operating Income
to Net Cash Provided by Operating Activities
Operating income $ (12,860) $ 25,343 $ 12,483
Adjustments to reconcile operating income
to net cash provided by operating activities
Depreciation 56,573 - 56,573
Increase (decrease) in assets/deferred outflows
Accounts receivable (2,768) (1,289) (4,057)
Prepaid items 264 (5) 259
Pension liability 96 82 178
Deferred pension resources 3,792 3,292 7,084
Increase (decrease) in liabilities/deferred inflows
Accounts payable (4,853) 592 (4,261)
Compensated absences payable 424 289 713
Net pension liability 967 423 1,390
Deferred pension resources (2,599) (2,307) (4,906)
Net Cash Provided by
Operating Activities $ 39,036 $ 26,420 $ 65,456
The notes to the financial statements are an integral part of this statement.
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City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 1: Summary of Significant Accounting Policies
A. Reporting Entity
The City of Lauderdale, Minnesota (the City), operates under the "Optional Plan A" form of government as defined in the
State of Minnesota statutes. Under this plan, the government of the City is directed by a City Council composed of an
elected Mayor and four elected City Council members. The City Council exercises legislative authority and determines all
matters of policy. The City Council appoints personnel responsible for the proper administration of all affairs relating to the
City. The City has considered all potential units for which it is financially accountable, and other organizations for which
the nature and significance of their relationship with the City are such that exclusion would cause the City's financial
statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria
to be considered in determining financial accountability. These criteria include appointing a voting majority of an
organization's governing body, and (1) the ability of the City to impose its will on that organization or (2) the potential for
the organization to provide specific benefits to, or impose specific financial burdens on the primary government. The City
has no component units that meet the GASB criteria.
B. Government -wide and Fund Financial Statements
The government -wide financial statements (i.e., the statement of net position and the statement of activities) report
information on all of the nonfiduciary activities of the City. For the most part, the effect of interfund activity has been
removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for
support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset
by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Amounts
reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from
goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted
to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly
included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental and proprietary funds. Major individual governmental funds
and major individual enterprise funds are reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and
expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon
as all eligibility requirements imposed by the provider have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to
pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected
within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as
under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences
and claims and judgments, are recorded only when payment is due.
Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be
susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special
assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the
current period. All other revenue items are considered to be measurable and available only when cash is received by the
City.
41
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 1: Summary of Significant Accounting Policies (Continued)
Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is
recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the
year in which the resources are measurable and become available.
Non-exchange transactions, in which the City receives value without directly giving equal value in return, include property
taxes, grants, entitlement and donations. On an accrual basis, revenue from property taxes is recognized in the year for
which the tax is levied. Revenue from grants, entitlements and donations is recognized in the year in which all eligibility
requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the
resources are required to be used or the year when use is first permitted, matching requirements, in which the City must
provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are
provided to the City on a reimbursement basis. On a modified accrual basis, revenue from non-exchange transactions
must also be available before it can be recognized.
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Grants and
entitlements received before eligibility requirements are met are also recorded as unearned revenue.
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 certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
The City reports the following major governmental funds:
The General fund is the City's primary operating fund. It accounts for all financial resources of the City, except those
required to be accounted for in another fund.
The Street Improvement fund accounts for the acquisition of capital assets or construction of major capital projects not
being financed by proprietary funds.
The TIF District No. 1-2 fund accounts for activity related to the tax increment financing district 1-2.
The 2019A G.O. Improvement Bonds fund accounts for the resources accumulated and payments made for principal
and interest on long-term general obligation debt of the fund.
The City reports the following major proprietary funds:
The Sewer fund accounts for the costs associated with the City's sanitary sewer system and to ensure that user
charges are sufficient to pay for those costs.
The Storm Sewer fund accounts for the costs of the City's storm sewer system, which are financed by the storm
sewer surcharge, and to ensure that the user charges are sufficient to pay of those costs.
As a general rule, the effect of interfund activity has been eliminated from government -wide financial statements.
Exceptions to this general rule are charges between the City's sewer function and various other functions of the City.
Elimination of these charges would distort the direct costs and program revenues reported for the various functions
concerned.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a proprietary
fund's principal ongoing operations. The principal operating revenues of the City's enterprise fund are charges to
customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services,
administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are
reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources
first, then unrestricted resources as they are needed.
42
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 1: Summary of Significant Accounting Policies (Continued)
D. Assets, Deferred Outflows of Resources, Liabilities, Deferred Inflows of Resources and Net Position/Fund
Balance
Deposits and Investments
The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments
with original maturities of three months or less from date of acquisition. The proprietary funds' portion in the government -
wide cash and temporary investments pool is considered to be cash and cash equivalents for purposes of the statement
of cash flows.
Cash balances from all funds are pooled and invested, to the extent available, in certificates of deposit and other
authorized investments. Earnings from such investments are allocated on the basis of applicable participation by each of
the funds.
The City may invest idle funds as authorized by Minnesota statutes, as follows:
1. Direct obligations or obligations guaranteed by the United States or its agencies.
2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the
highest credit rating, rated in one of the two highest rating categories by a statistical rating agency, and have a
final maturity of thirteen months or less.
3. General obligations of a state or local government with taxing powers rated "A" or better; revenue obligations
rated "AA" or better.
4. General obligations of the Minnesota Housing Finance Agency rated "A" or better
5. Obligation of a school district with an original maturity not exceeding 13 months and (i) rated in the highest
category by a national bond rating service or (ii) enrolled in the credit enhancement program pursuant to statute
section 126C.55.
6. Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System.
7. Commercial paper issued by United States banks corporations or their Canadian subsidiaries, of highest quality
category by at least two nationally recognized rating agencies, and maturing in
270 days or less.
8. Repurchase or reverse repurchase 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.
9. Guaranteed Investment Contracts (GIC's) issued or guaranteed by a United States commercial bank, a domestic
branch of a foreign bank, a United States insurance company, or its Canadian subsidiary, whose similar debt
obligations were rated in one of the top two rating categories by a nationally recognized rating agency.
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted
accounting principles. 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. The City's recurring fair value measurements are listed in detail on page 50
and are valued using a matrix pricing model (Level 2 inputs).
The City has the following recurring fair value measurements as of December 31, 2019:
• Negotiable certificates of deposit of $1,310,547 are valued using a matrix pricing model (Level 2 inputs)
43
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 1: Summary of Significant Accounting Policies (Continued)
The Minnesota Municipal Money Market Fund is regulated by Minnesota statutes and the Board of Directors of the
League of Minnesota Cities and is an external investment pool not registered with the Securities Exchange Commission
(SEC) that follows the regulatory rules of the SEC. In accordance with GASB Statement No. 79, the City's investment in
this pool is valued at amortized cost, which approximates fair value. There are no restrictions or limitations on
withdrawals from the 4M Liquid Asset Fund. Investments in the 4M Plus must be deposited for a minimum of 14 calendar
days. Withdrawals prior to the 14 -day restriction period will be subject to a penalty equal to seven days interest on the
amount withdrawn. Seven days' notice of redemption is required for withdrawals of investments in the 4M Term Series
withdrawn prior to the maturity date of that series. A penalty could be assessed as necessary to recoup the Series for any
charges, losses, and other costs attributable to the early redemption. Financial statements of the 4M Fund can be
obtained by contracting RBC Global Management at 100 South Fifth Street, Suite 2300, Minneapolis, MN 55402-1240.
Property Taxes
The City Council annually adopts a tax levy in December and certifies it to the County for collection the following year. The
County is responsible for collecting all property taxes for the City. These taxes attach an enforceable lien on taxable
property within the City on January 1 and are payable by the property owners in two installments. The taxes are collected
by the County Treasurer and tax settlements are made to the City during January, July and December each year.
In the fund financial statements, taxes that remain unpaid at December 31 are classified as delinquent taxes receivable
and are fully offset by deferred inflow of resources, because they are not known to be available to finance current
expenditures. Delinquent taxes receivable include the past six years' uncollected taxes. The billings are considered past
due 60 days after the respective tax billing date, at which time the applicable property is subject to lien, and penalties and
interest are assessed..
Accounts Receivable
Accounts receivable include amounts billed for services provided before year end. Unbilled utility enterprise fund
receivables are also included for services provided in 2019. The City annually certifies delinquent sewer accounts to the
County for collection in the following year. Therefore, there has been no allowance for doubtful accounts established.
Special Assessments
Special assessments represent the financing for public improvements paid for by benefiting property owners. These
assessments are recorded as receivables upon certification to the County. In the fund financial statements, special
assessments that remain unpaid at December 31 are classified as delinquent special assessments receivable. All
governmental special assessments receivable are offset by a deferred inflow of resources in the fund financial statements.
Interfund Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year
are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other
funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due
to/from other funds." Any residual balances outstanding between the governmental activities and business -type activities
are reported in the government -wide financial statements as "internal balances."
Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in
both government -wide and fund financial statements.
44
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 1: Summary of Significant Accounting Policies (Continued)
Assets Held for Resale
Assets held for resale represent property purchased by the City with the intent to sell in order to increase tax base or to
attract new businesses. These assets are stated at the lower of costs or net realizable value. During the year ended
December 31, 2019, management has reviewed the cost value reported for these assets and has indicated the properties
are fairly presented for financial reporting purposes.
Capital Assets
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and
similar items) are reported in the applicable governmental or business -type activities columns in the government -wide
financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000
(amount not rounded) and an estimated useful life in excess of two years. Such assets are recorded at historical cost or
estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date
of donation.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives
are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the
construction phase of capital assets of business -type activities is included as part of the capitalized value of the assets
constructed.
In the case of initial capitalization of general infrastructure assets (i.e., those reported by governmental activities), the City
chose to include items dating back to June 30, 1980. The City was able to estimate the historical cost for the initial
reporting of these assets through backtrending (i.e., estimating the current replacement cost of the infrastructure to be
capitalized and using an appropriate price -level index to deflate the cost to the acquisition year or estimated acquisition
year). As the City constructs or acquires capital assets each period, including infrastructure assets, they are capitalized
and reported at historical cost. The reported value excludes normal maintenance and repairs which are essentially
amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful
life beyond the original estimate.
Property, plant and equipment of the City are depreciated using the straight line method over the following estimated
useful lives:
Assets
Useful Lives
in Years
Buildings and Improvements 7 - 40
Improvements other than Buildings 15 - 40
Machinery and Equipment 3 - 20
Infrastructure 25 - 50
Deferred Outflows of Resources
In addition to assets, the statement of net position will sometimes report a separate section for deferred outflows of
resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net
position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure)
until then. The City has only one item that qualifies for reporting in this category. Accordingly, the item, deferred pension
resources, is reported only in the statements of net position. This item results from actuarial calculations and current year
pension contributions made subsequent to the measurement date.
45
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 1: Summary of Significant Accounting Policies (Continued)
Pensions
For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense,
information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions
to/deductions from PERA's fiduciary net position have been determined on the same basis as they are reported by PERA
except that PERA's fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer payroll
paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value. The General fund is typically used to liquidate the governmental net pension
liability.
The total pension expense for the for the year ended December 31, 2019 was $37,661. The components of pension
expense are noted in the plan summaries in Note 4.
Compensated Absences
The City's policy allows for the carryover of unused vacation and sick leave to the next calendar year. Unused vacation
and sick leave is accrued to the fund from which it is expected to be liquidated. Half of unused sick leave earned is
payable upon separation from the City if the employee has been employed by the City for ten or more years. Three
employees met the ten-year requirement at year end. The General fund is typically used to liquidate governmental
compensated absences payable.
Long-term Obligations
In the government -wide financial statements, and proprietary fund types in the fund financial statements, long-term debt
and other long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities,
or proprietary fund type statement of net position. The recognition of bond premiums and discounts are amortized over the
life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or
discount. Bond issuance costs are reported as an expense in the period incurred.
In the fund financial statements, governmental fund types recognized bond premiums and discounts, as well as bond
issuance costs, during the current period. The face amount of debt issued is reported as other financing sources.
Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are
reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are
reported as debt service expenditures.
Deferred Inflows of Resources
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net
position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.
The government has only one type of item, which arises only under a modified accrual basis of accounting that qualifies
as needing to be reported in this category. Accordingly, the item, unavailable revenue, is reported only in the
governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: property
taxes and special assessments. These amounts are deferred and recognized as an inflow of resources in the period that
the amounts become available.
The City has an additional item which qualifies for reporting in this category. The item, deferred pension resources, is
reported only in the statements of net position and results from actuarial calculations.
46
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 1: Summary of Significant Accounting Policies (Continued)
Fund Balance
In the fund financial statements, fund balance is divided into five classifications based primarily on the extent to which the
City is bound to observe constraints imposed upon the use of resources reported in the governmental funds. These
classifications are defined as follows:
Nonspendable - Amounts that cannot be spent because they are not in spendable form, such as prepaid items.
Restricted - Amounts related to externally imposed constraints established by creditors, grantors or contributors; or
constraints imposed by state statutory provisions.
Committed - Amounts constrained for specific purposes that are internally imposed by formal action (resolution) of the
City Council, which is the City's 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 constrained for specific purposes that are internally imposed. In governmental funds other than
the General fund, assigned fund balance represents all remaining amounts that are not classified as nonspendable
and are neither restricted nor committed. In the General fund, assigned amounts represent intended uses established
by the City Council itself or by an official to which the governing body delegates the authority. The City Council has
adopted a fund balance policy which delegates the authority to assign amounts for specific purposes to the City
Administrator.
Unassigned - The residual classification for the General fund and also negative residual amounts in other funds.
The City considers restricted amounts to be spent first when both restricted and unrestricted fund balance is available.
Additionally, the City would first use committed, then assigned, and lastly unassigned amounts of unrestricted fund
balance when expenditures are made.
The City has formally adopted a fund balance policy for the General fund. The City's policy is to maintain a minimum
unassigned fund balance of an amount not less than 45 percent of budgeted expenditures of the General fund for cash-
flow timing needs.
Net Position
In the government -wide financial statements, net position represents the difference between assets and deferred outflows
of resources and liabilities and deferred inflows of resources. Net position is displayed in three components:
a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any
outstanding debt attributable to acquire capital assets.
b. Restricted net position - Consists of net position balances restricted when there are limitations imposed on their
use through external restrictions imposed by creditors, grantors, laws or regulations of other governments.
c. Unrestricted net position - All other net position balances that do not meet the definition of "restricted" or "net
investment in capital assets".
47
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 2: Stewardship, Compliance, and Accountability
A. Budgetary Information
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of
America for the General fund and special revenue funds. All annual appropriations lapse at fiscal year-end. The City does
not use encumbrance accounting.
In early summer of each year, the City Administrator works with staff to prepare a draft budget that identifies spending
priorities. The City Administrator presents to the Council in August for review and discussion. The preliminary levy is
established by the Council in September. The City Council holds a public hearing and the final budget and levy is
adopted in early December.
The appropriated budget is prepared by fund, function, and department. The City's department heads may make transfers
of appropriations within a department. Transfers of appropriations between departments require the approval of the City
Administrator. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed
appropriations) is the department level. Budgeted amounts are as originally adopted, or as amended by the City Council.
There were no budget amendments in 2019.
B. Excess of Expenditures Over Appropriations
For the year ended December 31, 2019 expenditures exceeded appropriations in the following funds.
Excess of
Expenditures
Over
Fund Budget Actual Appropriations
Communications $ 18,230 $ 18,804 $ 574
Recycling 61,846 62,040 194
The excess expenditures were funded by revenues in excess of expectations or available fund balance.
48
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds
A. Deposits and Investments
Deposits
Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City's deposits and
investments may not be returned or the City will not be able to recover collateral securities in the possession of an outside
party. In accordance with Minnesota statutes and as authorized by the City Council, the City maintains deposits at those
depository banks, all of which are members of the Federal Reserve System.
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, with the exception of
irrevocable standby letters of credit issued by Federal Home Loan Banks as this type of collateral only requires collateral
pledged equal to 100 percent of the deposits not covered by insurance or bonds.
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;
• General obligation securities of any state or local government with taxing powers which is rated "A" or better by a
national bond rating service, or revenue obligation securities of any state or local government with taxing powers
which is rated "AA" or better by a national bond rating service;
• General obligation securities of a local government with taxing powers may be pledged as collateral against funds
deposited by that same local government entity;
• Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by
written evidence that the bank's public debt is rated "AA" or better by Moody's Investors Service, Inc., or Standard
& Poor's Corporation; and
• Time deposits that are fully 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 year end, the City's carrying amount of deposits was $317,002 and the bank balance was $346,877. The bank balance
was covered by federal depository insurance and collateralized with securities held by the pledging financial institution's
trust department or agent in the City's name.
49
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
Investments
At year end, the City's investment balances were as follows:
Credit Segmented
Quality/ Time Fair Value Measurement Using
Type of Investment Ratings (1) Distribution (2) Amount Level 1 Level 2 Level 3
Pooled Investments at Amortized Costs
Broker Money Market N/A less than 6 months $ 113,619
4M Fund P1 less than 6 months 1,422,331
4M Plus Fund P1 less than 6 months 920,813
Non -pooled Investments at Fair Value
Negotiable Certificates of Deposit N/A less than 1 year 800,960 $
Negotiable Certificates of Deposit N/A 1 to 5 Years 509,587
Total Investments
- $ 800,960 $
509,587
$ 3,767,310 $ - $ 1,310,547 $
(1) Ratings provided by Moody's credit rating agency.
(2) Interest rate risk is disclosed using the segmented time distribution method.
N/A Indicates not applicable or available.
Investment Policy
It is the policy of the City to invest public funds in a manner, which will provide the highest investment return with the
maximum security while meeting the daily cash flow demands of the City in accordance with all Minnesota and local
statutes governing the investment of public funds.
The investments of the City are subject to the following risks:
• Credit Risk. 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 and the City's investment policy limit the City's investments.
• Custodial Credit Risk. The custodial credit risk for investments is the risk that, in the event of the 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 specifically addresses
custodial credit risk by limiting the amount that the City may invest in any one financial institution.
• Concentration of Credit Risk. The concentration of credit risk is the risk of loss attributed to the magnitude of a
government's investment in a single issuer. The City's investment policy limits investments in any one investment
company to a maximum of 60 percent of the investment portfolio or $2,000,000 (whichever) is less.
• Interest Rate Risk. The interest rate risk is the risk that changes in interest rates will adversely affect the fair value
of an investment. In accordance with its investment policy, the City manages its exposure to declines in fair
values by limiting the maturity of its investment portfolio to less than ten years.
50
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
Cash and Investments Summary
A reconciliation of cash and temporary investments as shown on the statement of net position for the City follows:
Carrying Amount of Deposits
Investments
Cash on Hand
Total Cash and Temporary Investments
B. Capital Assets
Capital asset activity for the year ended December 31, 2019 was as follows:
Governmental Activities
Capital Assets not being Depreciated
Land
Construction in progress
Total Capital Assets not being Depreciated
Capital Assets, being Depreciated
Buildings
Improvements
other than buildings
Machinery and equipment
Infrastructure
Total Capital Assets being Depreciated
Less Accumulated Depreciation for
Buildings
Improvements other
than buildings
Machinery and equipment
Infrastructure
Total Accumulated Depreciation
Total Capital Assets being Depreciated, Net
Governmental Activities Capital Assets, Net
Beginning
Balance
Increases
$ 411,347 $
- 1,736,980
411,347 1,736,980
241,031
282,535
315,840
5,710,565
6,549,971
(201,904)
(198,355)
(210,452)
(1,644,197)
(1,660)
(17,132)
(20,384)
(114,211)
(2,254,908) (153,387)
4,295,063
(153,387)
Decreases
Total
Reporting
Entity
$ 317,002
3,767,310
400
$ 4,084,712
Ending
Balance
$ (89,307) $ 322,040
- 1,736,980
(89,307) 2,059,020
241,031
282,535
315,840
5,710,565
6,549,971
(203,564)
(215,487)
(230,836)
(1,758,408)
(2,408,295)
4,141,676
$ 4,706,410 $ 1,583,593 $ (89,307) $ 6,200,696
51
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
Beginning Ending
Balance Increases Decreases Balance
Business -type Activities
Capital Assets being Depreciated
Infrastructure $ 2,190,470 $ $ - $ 2,190,470
Machinery and equipment 15,000 - 15,000
Total Capital Assets being Depreciated 2,205,470 2,205,470
Less Accumulated Depreciation for
Infrastructure (494,032) (55,573) (549,605)
Machinery and equipment (9,667) (1,000) (10,667)
Total Accumulated Depreciation (503,699) (56,573) (560,272)
Total Capital Assets Being Depreciated, Net 1,701,771
(56,573) 1,645,198
Business -type Activities Capital Assets, Net $ 1,701,771 $ (56,573) $ - $ 1,645,198
Depreciation expense was charged to functions/programs of the City as follows:
Governmental Activities
General government
Public works
Culture and recreation
$ 3,003
125,616
24,768
Total Depreciation Expense - Governmental Activities $ 153,387
Business -type Activities
Sewer $ 56,573
Construction Commitments
The City has an active construction project as of December 31, 2019. The project include various street and road
improvements. At year end the City's commitments with contractors are as follows:
Project
Spent Remaining
to Date Commitment
Project Name
2019 Infrastructure Improvements $ 2,056,433 $ 212,661
52
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
C. Interfund Receivables, Payables and Transfers
The City made transfer during the fiscal year 2019 as shown and described below:
Fund
Transfer In
Other
Governmental
Funds
Transfer Out
General $ 38,000
Sewer 22,000
Storm Water 10,000
Total Transfers Out $ 70,000
Transfers were made for the following purposes:
• $22,000 was transferred from the Sewer fund to the other governmental funds to fund capital improvements.
• $10,000 was transferred from the Storm Water fund to the other governmental funds to fund capital
improvements.
• $38,000 was transferred from the General fund to the other governmental funds to fund capital purchases.
D. Long-term Debt
General Obligation Special Assessment Bonds
The following bonds were issued to finance various capital improvements and will be repaid from special assessments
levied on the properties benefiting from the improvements and from ad valorem tax levies. All special assessment debt is
backed by the full faith and credit of the City. Each year the combined assessment and tax levy equals 105 percent of the
amount required for debt service. The excess of 5 percent is to cover any delinquencies in tax or assessment payments.
Description
Authorized Interest Issue Maturity Balance at
and Issued Rate Date Date Year End
G.O. Improvement Bonds,
Series 2019A $ 1,000,000 1.50 - 3.00 % 06/26/19 02/01/30 $ 1,000,000
53
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
The annual service requirements to maturity for the general obligation special assessment bonds are as follows:
Year Ending Governmental Activities
December 31, Principal Interest
2020
2021
2022
2023
2024
2025 - 2029
2030
100,000
100,000
100,000
100,000
500,000
100,000
Total
$ 23,865 $ 23,865
21,000 121,000
19,500 119,500
17,938 117,938
16,313 116,313
50,000 550,000
1,500 101,500
Total $ 1,000,000 $ 150,116 $ 1,150,116
General Obligation Tax Increment Bonds
The following bonds were issued for redevelopment projects. The bonds will be repaid from future net revenues pledged
from the additional tax increments resulting from increased tax capacity of the redevelopment properties in the Tax
Increment District No. 1-2 or land sale proceeds.
Description
Authorized Interest Issue Maturity Balance at
and Issued Rate Date Date Year End
G.O. Tax Increment Revenue Bonds,
Series 2018A $ 1,295,000 1.950 % 05/01/18 02/01/21 $ 1,295,000
Annual debt service requirements to maturity for general obligation tax increment bonds are as follows:
Year Ending Governmental Activities
December 31, Principal Interest Total
2020
2021
$ $ 25,253 $ 25,253
1,295,000 12,626 1,307,626
Total $ 1,295,000 $ 37,879 $ 1,332,879
54
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
Changes in Long-term Liabilities
Long-term liability activity for the year ended December 31, 2019, was as follows:
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Governmental Activities
Bonds payable
G.O. improvement bonds $ - $ 1,000,000 $ - $ 1,000,000 $
G.O. tax increment bonds 1,295,000 - 1,295,000
Total bonds payable 1,295,000 1,000,000 2,295,000
Unamortized premium on bonds 23,332 (1,167) 22,165
Compensated Absences Payable 42,878 22,693 (23,689) 41,882 23,689
Governmental Activity
Long-term Liabilities $ 1,337,878 $ 1,046,025 $ (24,856) $ 2,359,047 $ 23,689
Business -type Activities
Compensated Absences Payable $ 11,959 $ 13,385 $ (12,672) $ 12,672 $ 12,672
55
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 3: Detailed Notes on All Funds (Continued)
E. Components of Fund Balance
At December 31, 2019, portions of the City's fund balance are not available for appropriation due to not being in
spendable form (Nonspendable), legal restrictions (Restricted), City Council action (Committed), policy and/or intent
(Assigned). The following is a summary of the components of fund balance:
Fund
Fund Balance - Nonspendable
General
Communications
Total Fund Balance - Nonspendable
Fund Balance - Restricted
Transportation
TIF District No. 1-2
2018A G.O. TIF Revenue Bonds
2019A G.O. Improvement Bonds
Street maintenance
Total fund balance - Restricted
Fund Balance - Committed
Communications
Recycling
Total Fund Balance - Committed
Fund Balance - Assigned
Capital improvement - streets
General capital improvement
Development
Park improvement
Total Fund Balance - Assigned
Fund Balance - Unassigned
General
Purpose Amount
Prepaid items
Prepaid items
$ 2,979
650
3,629
Traportation Improvements 74,018
Tax increments 1,190,546
Debt service 26,028
Debt service 101,597
Street maintenance 32,917
Cable access
Recycling
Street capital
Capital purchases
Development
Park capital
1,425,106
15,980
93,117
109,097
415,006
157,831
390,545
276,841
1,240,223
789,359
Total Fund Balance $ 3,567,414
56
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 4: Defined Benefit Pension Plan - Statewide
A. Plan Description
The City participates in the following cost-sharing multiple -employer defined benefit pension plans administered by the
Public Employees Retirement Association of Minnesota (PERA). PERA's defined benefit pension plans are established
and administered in accordance with Minnesota statutes, chapters 353 and 356. PERA's defined benefit pension plans
are tax qualified plans under Section 401(a) of the Internal Revenue Code.
General Employees Retirement Plan (GERP)
All full-time and certain part-time employees of the City, other than teachers, are covered by the General Employees
Retirement Plan (GERP). GERP members belong to the Coordinated Plan. Coordinated Plan members are covered by
Social Security and Basic Plan members are not.
B. 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.
GERP Benefits
GERP 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 1.2 percent of
average salary for each of the first 10 years of service and 1.7 percent of average salary for each additional year. Under
Method 2, the accrual rate for Coordinated members is 1.7 percent for average salary 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.
Annuities, disability benefits and survivor benefits are increased effective every January 1. Beginning January 1, 2019, the
postretirement increase will be 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 1.5 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. For
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. For members retiring on January 1, 2024, or later,
the increase will be delayed until normal retirement age (age 65 if hired prior to July 1, 1989, or age 66 for individuals
hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt from the delay to normal retirement.
C. 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 2019 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 ending December 31, 2019, 2018 and 2017 were $29,770, $28,591 and $27,025
respectively. The City's contributions were equal to the required contributions for each year as set by state statute.
57
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 4: Defined Benefit Pension Plan - Statewide (Continued)
D. Pension Costs
General Employees Fund Pension Costs
At December 31, 2019, the City reported a liability of $304,083 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 to the fund in 2019. 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 $9,500. The net pension liability was measured as of
June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial
valuation as of that date. The City's proportion of the net pension liability was based on the City's contributions received
by PERA during the measurement period for employer payroll paid dates from July 1, 2018 through June 30, 2019relative
to the total employer contributions received from all of PERA's participating employers. At June 30, 2019, the City's
proportionate share was 0.0055 percent which was the same as its proportion measured as of June 30,2018.
City's Proportionate Share of the Net Pension Liability
State of Minnesota's Proportionate Share of the Net Pension
Liability Associated with the City
$ 304,083
9,500
Total $ 313,583
For the year ended December 31, 2019, the City recognized pension expense of $36,950 for its proportionate share of the
General Employees Plan's pension expense. In addition, the City recognized an additional $711 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, 2019, the City reported its proportionate share of the General Employees Plan's deferred outflows of
resources and deferred inflows of resources, and its contributions subsequent to the measurement date, from the
following sources:
Differences between Expected and
Actual Economic Experience
Changes in Actuarial Assumptions
Net Difference between Projected and
Actual Earnings on Plan Investments
Changes in Proportion
Contributions paid to PERA subsequent
to the Measurement Date
Deferred Deferred
Outflows Inflows
of Resources of Resources
$ 4,429 $ 15,663
11,742
19,600
4,573 6,438
14,873
Total $ 23,875 $ 53,443
58
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 4: Defined Benefit Pension Plan - Statewide (Continued)
The $14,873 reported as deferred outflows of resources related to pensions resulting from the City's contributions
subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended
December 31, 2020. Other amounts reported as deferred outflows and inflows of resources related to pensions will be
recognized in pension expense as follows:
2020 $ (16,575)
2021 (22,270)
2022 (6,088)
2023 492
F. Actuarial Assumptions
The total pension liability in the June 30, 2019 actuarial valuation was determined using an individual entry -age normal
actuarial cost method and the following actuarial assumptions:
Inflation 2.50% per year
Active Member Payroll Growth 3.25% per year
Investment Rate of Return 7.50%
Salary increases were based on a service -related table. Mortality rates for active members, retirees, survivors and
disabilitants were based on RP -2014 tables for males or females, as appropriate, with slight adjustments to fit PERA's
experience. Cost of living benefit increases after retirement for retirees are assumed to be 1.25 percent per year for
General Employees Plan and 1.0 percent per year for Police and Fire Plan.
Actuarial assumptions used in the June 30, 2019 valuation were based on the results of actuarial experience studies. The
most recent four-year experience study in the General Employees plan was completed in 2019. The most recent four-
year experience study for the Police and Fire Plan was completed in 2016. Economic assumptions were updated in 2018
based on a review of inflation and investment return assumptions.
The following changes in actuarial assumptions and plan provisions occurred in 2019:
General Employees Fund
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.
59
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 4: Defined Benefit Pension Plan - Statewide (Continued)
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
Private Markets
Fixed Income
International Equity
Cash Equivalents
Long-term
Target Expected Real
Allocation Rate of Return
35.5 %
25.0
20.0
17.5
2.0
Total 100.00 %
F. Discount Rate
5.10 %
5.30
0.75
5.90
The discount rate used to measure the total pension liability in 2019 was 7.50 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 Fund was
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.
G. Pension Liability Sensitivity
The following presents the City's proportionate share of the net pension liability for all plans it participates in, calculated
using the discount rate disclosed in the preceding paragraph, as well as what the City's proportionate share of the net
pension liability would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher
than the current discount rate:
General Employees Fund
H. Pension Plan Fiduciary Net Position
City Proportionate Share of NPL
1 Percent 1 Percent
Decrease (6.50%) Current (7.50%) Increase (8.50%)
$ 499,896 $ 304,081 $ 142,400
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.orq.
60
City of Lauderdale, Minnesota
Notes to the Financial Statements
December 31, 2019
Note 5: Other Information
A. Risk Management
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 for which the City carries commercial insurance. The City obtains
insurance through participation in the League of Minnesota Cities Insurance Trust (LMCIT), which is a risk sharing pool
with approximately 800 other governmental units. The City pays an annual premium to LMCIT for its workers
compensation and property and casualty insurance. The LMCIT is self-sustaining through member premiums and will
reinsure for claims above a prescribed dollar amount for each insurance event. Settled claims have not exceeded the
City's coverage in any of the past three fiscal years.
Liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably
estimated. An excess coverage insurance policy covers individual claims in excess of $1,000,000. Liabilities, if any,
include an amount for claims that have been incurred but not reported (IBNRs). The City's management is not aware of
any incurred but not reported claims.
B. Legal Debt Margin
The City's statutory debt limit is computed as 3.0 percent of the taxable market value of property within the City. Long-
term debt issued and financed partially or entirely by special assessments, tax increments or the net revenues of
enterprise fund operations is excluded from the debt limit computation. The City has no debt which is applied against the
statutory debt limit.
C. Concentrations
The City receives a significant amount of its annual General fund revenue from the State of Minnesota from the Local
Government Aid (LGA) program. The amount received in 2019 was $539,622 for LGA. This accounted for 36 percent of
General fund revenue.
D. Tax Increment Financing Districts
The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any
disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated
that they are not aware of any instances of noncompliance, which would have a material effect on the financial
statements.
Note 6: Conduit Debt Obligations
Conduit debt obligations are certain limited -obligation revenue bonds or similar instruments issued for express purpose of
providing capital financing for a specific third party. The City has issued revenue bonds to provide funding to private -
sector entities for projects deemed to be in public interest. Although these bonds bear the name of the City, the City has
no obligation for such debt. Accordingly, the bonds are not reported as liabilities in the financial statements of the City.
As of December 31, 2019 the following issues were outstanding:
Name
Original
Amount Balance
Date of Issue of Issue Outstanding
Catholic Eldercare 12/1/2014 $ 9,300,000 $ 7,725,226
Benedictine Health System 7/14/2016 10,000,000 9,467,297
Catholic Eldercare 11/7/2017 9,000,000 9,000,000
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62
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF LAUDERDALE
LAUDERDALE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
63
City of Lauderdale, Minnesota
Required Supplementary Information
December 31, 2019
Schedule of Employer's Share of PERA Net Pension Liability - General Employees Fund
Fiscal
Year
Ending
City's
Proportion of
the Net Pension
Liability
City's
Proportionate
Share of
the Net Pension
Liability
(a)
State's
Proportionate
Share of
the Net Pension
Liability
Associated with
the City
(b)
City's
Covered
Total Payroll
(a+b) (c)
City's
Proportionate
Share of the
Net Pension
Liability as a
Percentage of
Covered
Payroll
((a+b)/c)
06/30/19
06/30/18
06/30/17
06/30/16
06/30/15
0.0055 % $ 304,081 $
0.0055 305,114
0.0057 363,882
0.0054 438,453
0.0054 279,856
9,500
9,738
4,555
5,757
$313,581 $389,732
314,852 371,496
368,437 365,590
444,210 335,413
279,856 318,761
80.5 %
82.1
99.5
130.7
87.8
Plan Fiduciary
Net Position
as a Percentage
of the Total
Pension Liability
80.2
79.5
75.9
68.9
78.2
Note: Schedule is intended to show 10 -year trend. Additional years will be reported as they become available.
Schedule of Employer's PERA Contributions - General Employees Fund
Year
Ending
12/31/19
12/31/18
12/31/17
12/31/16
12/31/15
Contributions in
Relation to the
Statutorily Statutorily
Required Required
Contribution Contribution
(a) (b)
$ 29,770
28,591
27,025
25,156
23,836
29,770
28,591
27,025
25,156
23,836
Contribution
Deficiency
(Excess)
(a -b)
City's
Covered
Payroll
(c)
396,933
381,213
360,333
335,413
317,813
Contributions as
a Percentage of
Covered Payroll
(b/c)
Note: Schedule is intended to show 10 -year trend. Additional years will be reported as they become available.
64
7.5 %
7.5
7.5
7.5
7.5
City of Lauderdale, Minnesota
Required Supplementary Information (Continued)
December 31, 2019
Notes to the Required Supplementary Information - General Employees Fund
Changes in Actuarial Assumptions
2019 - The mortality projection scale was changed from MP -2017 to MP -2018.
2018 - The morality 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.
2017 - The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for
vested and non -vested deferred members. The revised CSA loads are now 0.0 percent for active member liability, 15.0
percent for vested deferred member liability and 3.0 percent for non -vested deferred member liability. The assumed post-
retirement benefit increase rate was changed from 1.0 percent per year for all years to 1.0 percent per year through 2044
and 2.5 percent per year thereafter.
2016 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2035 and 2.5
percent per year thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from
7.9 percent to 7.5 percent. The single discount rate was changed from 7.9 percent to 7.5 percent. Other assumptions
were changed pursuant to the experience study dated 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.
2015 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5
percent per year thereafter to 1.0 percent per year through 2035 and 2.5 percent per year thereafter.
Changes in Plan Provisions
2019 - 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 - 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 - 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.
2015 - 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 increased the fiduciary plan net position by $892 million.
Upon consolidation, state and employer contributions were revised.
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66
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES
CITY OF LAUDERDALE
LAUDERDALE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
67
City of Lauderdale, Minnesota
Nonmajor Governmental Funds
Combining Balance Sheet
December 31, 2019
Debt Service
2018A
Special G.O. TIF Capital
Revenue Revenue Bonds Projects
Total
Assets
Cash and temporary investments $ 109,055 $ 26,028 $ 825,217 $ 960,300
Receivables
Accounts 4,541 - - 4,541
Special assessments 40,374 - - 40,374
Prepaid items 650 - - 650
Total Assets $ 154,620 $ 26,028 $ 825,217 $ 1,005,865
Liabilities
Accounts payable $ 4,893 $
Salaries payable 331
Total Liabilities 5,224
Deferred Inflows of Resources
Unavailable revenue - special assessments
$ 4,893
331
5,224
39,649 - 39,649
Fund Balances
Nonspendable 650 - 650
Restricted - 26,028 26,028
Committed 109,097 - - 109,097
Assigned - - 825,217 825,217
Total Fund Balances 109,747 26,028 825,217 960,992
Total Liabilities, Deferred Inflows
of Resources and Fund Balances $ 154,620 $ 26,028 $ 825,217 $ 1,005,865
68
City of Lauderdale, Minnesota
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
For the Year Ended December 31, 2019
Debt Service Total
2018A Nonmajor
Special G.O. TIF Capital Governmental
Revenue Revenue Bonds Projects Funds
Revenues
Taxes
Franchise fees $ 18,119 $ $ $ 18,119
Intergovernmental 5,742 - - 5,742
Charges for services 46,256 - 46,256
Interest on investments 2,161 632 15,016 17,809
Total Revenues 72,278 632 15,016 87,926
Expenditures
Current
Public works
Sanitation and recycling
Culture and recreation
Capital outlay
Economic development
Debt service
Interest and other
Total Expenditures
Excess (Deficiency) of Revenues
Under (Over) Expenditures
Other Financing Sources
Transfers in
Gain on sale of land held for resale
Total Other Financing Source
Net Change in Fund Balances
Fund Balances, January 1
Fund Balances, December 31
62,040
18,804
1,232
115
2,260
1,232
62,155
18,804
2,260
32,041 32,041
80,844 32,041
(8,566) (31,409)
(8,566) (31,409)
3,607 116,492
11,409 (28,566)
70,000 70,000
10,412 10,412
80,412 80,412
91,821 51,846
118,313 57,437 733,396 909,146
$ 109,747 $ 26,028 $ 825,217 $ 960,992
69
City of Lauderdale, Minnesota
Nonmajor Special Revenue Funds
Combining Balance Sheet
December 31, 2019
226 227
Communications Recycling Total
Assets
Cash and temporary investments $ 13,010 $ 96,045 $ 109,055
Receivables
Accounts 4,541 4,541
Special assessments 40,374 40,374
Prepaid items 650 650
Total Assets $ 18,201 $ 136,419 $ 154,620
Liabilities
Accounts payable $ 1,478 $ 3,415 $ 4,893
Salaries payable 93 238 331
Total Liabilities 1,571 3,653 5,224
Deferred Inflows of Resources
Unavailable revenue - special assessments
39,649 39,649
Fund Balances
Nonspendable 650 650
Committed 15,980 93,117 109,097
Total Fund Balances 16,630 93,117 109,747
Total Liabilities, Deferred Inflows
of Resources and Fund Balances $ 18,201 $ 136,419 $ 154,620
70
City of Lauderdale, Minnesota
Nonmajor Special Revenue Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
For the Year Ended December 31, 2019
226 227
Communications Recycling Total
Revenues
Taxes
Franchise fees $ 18,119 $ $ 18,119
Intergovernmental 5,742 5,742
Charges for services - 46,256 46,256
Interest on investments 298 1,863 2,161
Total Revenues 18,417 53,861 72,278
Expenditures
Current
Sanitation and recycling
Personal services 26,532 26,532
Other services and charges - 35,508 35,508
Culture and recreation
Personal services 9,706 9,706
Other services and charges 9,098 9,098
Total Expenditures 18,804 62,040 80,844
Net Change in Fund Balances (387) (8,179) (8,566)
Fund Balances, January 1 17,017 101,296 118,313
Fund Balances, December 31 $ 16,630 $ 93,117 $ 109,747
71
City of Lauderdale, Minnesota
Communications Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual
For the Year Ended December 31, 2019
(With Comparative Actual Amounts for the Year Ended December 31, 2018)
2019 2018
Final Actual Variance with Actual
Budget Amounts Final Budget Amounts
Revenues
Taxes
Franchise fees $ 20,000 $ 18,119 $ (1,881) $ 19,426
Interest on investments 40 298 258 214
Total Revenues 20,040 18,417 (1,623) 19,640
Expenditures
Current
Culture and recreation
Personal services 9,530 9,706 (176) 9,228
Other services and charges 8,700 9,098 (398) 7,978
Total Expenditures 18,230 18,804 (574) 17,206
Net Change in Fund Balances 1,810 (387) (2,197) 2,434
Fund Balances, January 1 17,017 17,017 14,583
Fund Balances, December 31 $ 18,827 $ 16,630 $ (2,197) $ 17,017
72
City of Lauderdale, Minnesota
Recycling Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual
For the Year Ended December 31, 2019
(With Comparative Actual Amounts for the Year Ended December 31, 2018)
2019 2018
Final Actual Variance with Actual
Budget Amounts Final Budget Amounts
Revenues
Intergovernmental
County $ 6,000 $ 5,742 $ (258) $ 5,832
Charges for services
Sanitation 45,460 46,256 796 43,044
Interest on investments 1,000 1,863 863 1,524
Total Revenues 52,460 53,861 1,401 50,400
Expenditures
Current
Sanitation and recycling
Personal services 22,996 26,532 (3,536) 22,550
Other services and charges 38,850 35,508 3,342 30,429
Total Expenditures 61,846 62,040 (194) 52,979
Net Change in Fund Balances
Fund Balances, January 1
Fund Balances, December 31
(9,386) (8,179)
1,207 (2,579)
101,296 101,296 - 103,875
$ 91,910 $ 93,117 $ 1,207 $ 101,296
73
Assets
Cash and temporary investments
City of Lauderdale, Minnesota
Nonmajor Capital Projects Funds
Combining Balance Sheet
December 31, 2019
404 414 415 401
General
Park Housing Capital
Improvement Development Redevelopment Improvement Total
$ 276,841 $ 390,545 $ - $ 157,831 $ 825,217
Fund Balances
Assigned $ 276,841 $ 390,545 $ - $ 157,831 $ 825,217
74
City of Lauderdale, Minnesota
Nonmajor Capital Projects Funds
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
For the Year Ended December 31, 2019
Revenues
Interest on investments
Expenditures
Current
Public works
Sanitation and recycling
Capital outlay
Economic development
Total Expenditures
404 414 415 401
General
Park Housing Capital
Improvement Development Redevelopment Improvement Total
$ 5,580 $ 6,705 $ - $ 2,731 $ 15,016
1,232 - - - 1,232
115 115
1,232
2,260
2,260 115
2,260
3,607
Excess (Deficiency) Of Revenues
Over (Under) Expenditures 4,348 4,445 (115) 2,731 11,409
Other Financing Sources
Transfers in - 38,000 - 32,000 70,000
Gain on sale of land held for resale - 10,412 - 10,412
Total Other Financing Sources - 38,000 10,412 32,000 80,412
Net Change in Fund Balances 4,348 42,445 10,297 34,731 91,821
Fund Balances, January 1 272,493 348,100 (10,297) 123,100 733,396
Fund Balances, December 31 $ 276,841 $ 390,545 $ - $ 157,831 $ 825,217
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City of Lauderdale, Minnesota
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual (Continued on the Following Pages)
For the Year Ended December 31, 2019
(With Comparative Actual Amounts for the Year Ended December 31, 2018)
Revenues
Taxes
Property taxes
Licenses and permits
Business
Nonbusiness
Total licenses and permits
2019 2018
Budgeted Amounts Actual Variance with Actual
Original Final Amounts Final Budget Amounts
$ 810,104 $ 810,104 $ 813,079 $ 2,975 $ 762,857
3,750 3,750 4,250 500
32,100 32,100 38,525 6,425
35,850 35,850 42,775 6,925
4,625
39,834
44,459
Intergovernmental
State
Local government aid 539,622 539,622 539,622 539,562
Other state grants 1,198 1,198 1,198 - 1,198
Total intergovernmental 540,820 540,820 540,820 540,760
Charges for services
General government 10,500 10,500 15,295 4,795 15,267
Public safety 600 600 1,210 610 1,833
Culture and recreation 700 700 700 1,531
Total charges for services 11,800 11,800 17,205 5,405 18,631
Fines and forfeitures 30,000 30,000 29,977 (23) 25,488
Special assessments - 2,303 2,303 3,914
Interest on investments 6,000 6,000 30,295 24,295 267
Miscellaneous
Contributions and donations 2,500 2,500 2,159 (341) 2,382
Other 1,500 1,500 2,994 1,494 4,229
Total miscellaneous 4,000 4,000 5,153 1,153 6,611
Total Revenues 1,438,574
1,438,574 1,481,607 43,033 1,402,987
77
City of Lauderdale, Minnesota
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual (Continued)
For the Year Ended December 31, 2019
(With Comparative Actual Amounts for the Year Ended December 31, 2018)
2019 2018
Budgeted Amounts Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Expenditures
Current
General government
Legislative and executive
Personal services $ 17,802 $ 17,802 $ 17,807 $ (5) $ 17,802
Supplies 250 250 - 250 138
Other services and charges 9,750 9,750 8,473 1,277 7,125
Total legislative and executive 27,802 27,802 26,280 1,522 25,065
Administration
Personal services 169,102 169,102 171,852 (2,750) 168,318
Supplies 7,500 7,500 7,502 (2) 4,716
Other services and charges 43,000 43,000 35,975 7,025 35,088
Total administration 219,602 219,602 215,329 4,273 208,122
Election, audit, and legal fees
Personal services 15,157 15,157 15,358 (201) 18,448
Supplies 2,800 2,800 2,703 97 2,848
Other services and charges 42,500 42,500 48,907 (6,407) 49,045
Total election, audit, and legal fees 60,457 60,457 66,968 (6,511) 70,341
Planning and zoning
Personal services 20,738 20,738 21,176 (438) 32,553
Supplies 1,500 1,500 1,128 372 1,336
Other services and charges 45,300 45,300 39,746 5,554 62,488
Total planning and zoning 67,538 67,538 62,050 5,488 96,377
Total general government 375,399
375,399 370,627
4,772 399,905
Public safety
Police
Other services and charges 729,011 729,011 729,063 (52) 709,240
Fire
Other services and charges 35,300
Building inspections
Personal services
Other services and charges
Total building inspections
42,312
5,100
47,412
Total public safety 811,723
35,300 42,207
42,312 45,080
5,100 6,310
47,412 51,390
811,723 822,660
78
(6,907) 33,519
(2,768) 25,619
(1,210) 5,475
(3,978) 31,094
(10,937) 773,853
City of Lauderdale, Minnesota
General Fund
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual (Continued)
For the Year Ended December 31, 2019
(With Comparative Actual Amounts for the Year Ended December 31, 2018)
2019 2018
Budgeted Amounts Actual Variance with Actual
Original Final Amounts Final Budget Amounts
Expenditures (Continued)
Current (continued)
Public works
Streets and highways
Personal services $ 50,230 $ 50,230 $ 52,017 $ (1,787) $ 54,655
Supplies 4,850 4,850 4,609 241 5,178
Other services and charges 38,550 38,550 48,769 (10,219) 61,132
Total streets and highways 93,630 93,630 105,395 (11,765) 120,965
Street lighting
Other services and charges 7,000 7,000 6,124 876 5,756
Total public works
100,630 100,630 111,519 (10,889) 126,721
Culture and recreation
Parks and recreation
Personal services 82,522 82,522 81,559 963 76,701
Supplies 500 500 1,029 (529) 688
Other services and charges 9,800 9,800 9,858 (58) 10,786
Total culture and recreation 92,822 92,822 92,446 376 88,175
Economic development
Other services and charges 20,000
Total Expenditures 1,400,574
Excess of Revenues
Over Expenditures 38,000
20,000 1,225
1,400,574 1,398,477
38,000 83,130
18,775 7,710
2,097 1,396,364
45,130 6,623
Other Financing Sources (Uses)
Transfers in - - - 4,005
Transfers out (38,000) (38,000) (38,000) - (38,000)
Total Other Financing
Sources (Uses) (38,000) (38,000) (38,000) - (33,995)
Net Change in Fund Balances - 45,130 45,130 (27,372)
Fund Balances, January 1 747,208 747,208 747,208 - 774,580
Fund Balances, December 31 $ 747,208 $ 747,208 $ 792,338 $ 45,130 $ 747,208
79
City of Lauderdale, Minnesota
Summary Financial Report
Revenues and Expenditures For General Operations
Governmental Funds
For the Years Ended December 31, 2019 and 2018
Percent
Total Increase
2019 2018 (Decrease)
Revenues
Taxes $ 831,198 $ 782,283 6.25 %
Licenses and permits 42,775 44,459 (3.79)
Intergovernmental 546,562 563,039 (2.93)
Charges for services 63,461 61,675 2.90
Fines and forfeitures 29,977 25,488 17.61
Special assessments 90,433 3,914 2,210.50
Interest on investments 73,592 22,007 234.40
Miscellaneous 758,485 924,187 (17.93)
Total Revenues $ 2,436,483 $ 2,427,052 0.39
Per Capita $ 1,012 $ 1,000 1.14 %
Expenditures
Current
General government $ 370,627 $ 399,905 (7.32) %
Public safety 822,660 773,853 6.31
Public works 112,751 126,721 (11.02)
Sanitation and recycling 62,155 52,979 17.32
Economic development 1,225 7,710 (84.11)
Culture and recreation 111,250 105,381 5.57
Capital outlay 2,503,954 131,649 1,801.99
Debt service
Interest and bond issuance costs 67,791 36,015 88.23
Total Expenditures
Per Capita
$ 4,052,413 $ 1,634,213 147.97 %
$ 1,683 $ 674 149.83 %
Total Long-term Indebtedness $ 2,317,165 $ 1,295,000 N/A
Per Capita 962 534 N/A
General Fund Balance - December 31 $ 792,338 $ 747,208 6.04 %
Per Capita 329 308 6.83
The purpose of this report is to provide a summary of financial information concerning the City of Lauderdale to interested
citizens. The complete financial statements may be examined at City Hall, 1891 Walnut Street, Lauderdale, MN 55113.
Questions about this report should be directed to Heather Butkowski, City Administrator at (651)792-7650.
80
OTHER REQUIRED REPORT
CITY OF LAUDERDALE
LAUDERDALE, MINNESOTA
FOR THE YEAR ENDED
DECEMBER 31, 2019
81
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BLANK INTENTIONALLY
82
ABDO
SICK &
MEYERS
Certified Public Accountants d Consultants
INDEPENDENT AUDITOR'S REPORT
ON MINNESOTA LEGAL COMPLIANCE
Honorable Mayor and City Council
City of Lauderdale, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of America, the financial
statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund
information of City of Lauderdale, Minnesota (the City) as of and for the year ended December 31, 2019, and the related
notes to the financial statements, which collectively comprise the City's basic financial statements, and have issued our
report thereon dated March 13, 2020.
The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to Minnesota statute
§6.65, contains seven categories of compliance to be tested: contracting and bidding, deposits and investments, conflicts
of interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment financing. Our
audit considered all of the listed categories. In connection with our audit, nothing came to our attention that caused us to
believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities.
However, our audit was not directed primarily toward procedures, other matters may have come to our attention regarding
the City's noncompliance with the above referenced provisions. Accordingly, had we performed additional procedures,
other matters may have come to our attention regarding the City's noncompliance with the above referenced provisions.
This report is intended solely for the information and use of those charged with governance and management of the City
of Lauderdale and the State Auditor and is not intended to be, and should not be, used by anyone other than these
specified parties.
ia4tivioto
ABDO, EICK & MEYERS, LLP
Minneapolis, Minnesota
March 13, 2020
5201 Eden Avenue, Suite 250
Edina, MN 55436
952.835.9090 I Fax 952.835.3261
83
Management Communication
City of Lauderdale
Lauderdale, Minnesota
For the Year Ended
December 31, 2019
ABDO
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Ceritf ed Pu<c Accountants fi (. msultant.s
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ABDO
EICK� &
MEYERS E W LLP
Certified Public Accountants d Consultants
Management, Honorable Mayor and City Council
City of Lauderdale, Minnesota
March 13, 2020
We have audited the financial statements of the governmental activities, the business -type activities, each major fund and
the aggregate remaining fund information of the City of Lauderdale, Minnesota (the City) for the year ended
December 31, 2019 and have issued out report thereon dated March 13, 2020. Professional standards require that we
provide you with information about our responsibilities under generally accepted auditing standards as well as certain
information related to the planned scope and timing of our audit. We have communicated such information in our letter
dated October 15, 2019. Professional standards also require that we communicate to you the following information related
to our audit.
Our Responsibility Under Auditing Standards Generally Accepted in the United States of America
As stated in our engagement letter, our responsibility, as described by professional standards, is to plan and perform our
audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement and
are fairly presented in accordance with accounting principles generally accepted in the United States of America. Because
an audit is designed to provide reasonably, but not absolute, assurance and because we did not perform a detailed
examination of all transactions, there is a risk that material errors, fraud, or illegal acts may exist and not be detected by
us.
Our responsibility is to plan and perform the audit to obtain reasonable, but not absolute, assurance that the financial
statements are free of material misstatement. As part of our audit, we considered the internal control over financial
reporting of the City. Such considerations were solely for the purpose of determining our audit procedures and not to
provide any assurance concerning such internal control over financial reporting. We are responsible for communicating
significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing
the financial reporting process. However, we are not required to design procedures specifically to identify such matters.
Significant Audit Findings
In planning and performing our audit of the financial statements, we considered the City's internal control over financial
reporting (internal control) to determine the 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.
Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be
material weaknesses. However, material weaknesses may exist that have not been identified.
5201 Eden Avenue, Suite 250
Edina, MN 55436
952.835.9090 1 Fax 952.835.3261
2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we
performed tests of compliance with certain provisions of laws, regulations, contracts and grants. However, the objective of
our tests was not to provide an opinion on compliance with such provisions. While our audit provides a reasonable basis
for our opinion, it does not provide a legal determination on the City's compliance with those requirements. The results of
our tests disclosed no instances of noncompliance or other matters that are required to be reported in accordance with
Minnesota statutes.
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting
policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted
and the application of existing policies were not changed during the year ended December 31, 2019. We noted no
transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All
significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on
management's knowledge and experience about past and current events and assumption about future events. Certain
accounting estimates are particularly sensitive because of their significance to the financial statements and because of the
possibility that future events affecting the City may differ significantly from those expected. The most sensitive estimates
made relate to estimated historical costs of capital assets, depreciation on capital assets, and the liability for the City's
pensions.
• Management's estimate of its pension liability is based on several factors including, but not limited to, anticipated
investment return rate, retirement age for active employees, life expectancy, salary increases and form of annuity
payment upon retirement.
• Management's estimate of depreciation is based on estimated useful lives of the assets. We evaluated the key
factors and assumptions used to develop depreciation in determining that it is reasonable in relation to the
financial statements taken as a whole.
The disclosures in the financial statements are neutral, consistent, and clear. Certain financial statement disclosures are
particularly sensitive because of their significance to financial statement users.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than
those that are clearly trivial, and communicate them to the appropriate level of management. In addition, none of the
misstatements detected as a result of audit procedures and corrected by management were material, either individually or
in the aggregate, to each opinion unit's financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a financial accounting,
reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our
audit.
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Management Representations
We have requested certain representations from management that are included in the management representation letter
dated March 13, 2020.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar
to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the
governmental unit's financial statements or a determination of the type of auditor's opinion that may be expressed on
those statements, our professional standards require the consulting accountant to check with us to determine that the
consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with
management each year prior to retention as the City's auditors. However, these discussions occurred in the normal
course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to the required supplementary information (RSI) (Management's Discussion and
Analysis, the Schedules of Employer's Share of the Net Pension Liability, the Schedules of Employer's Contributions, and
the Schedule of Changes in Net Pension Liability and Related Ratios), which is information that supplements the basic
financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit
the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the supplementary information (combining and individual fund financial statements and
schedules), which accompany the financial statements but are not RSI. With respect to this supplementary information,
we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to
determine that the information complies with accounting principles generally accepted in the United States of America, the
method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation
to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying
accounting records used to prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the introductory section which accompany the financial statements but is not RSI. We
did not audit or perform other procedures on this other information and we do not express an opinion or provide any
assurance on it.
4
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Future Accounting Standard Changes
The following Governmental Accounting Standards Board (GASB) Statements have been issued and may have an impact
on future City financial statements: (1)
GASB Statement No. 87 - Leases
Summary
The objective of this Statement is to better meet the information needs of financial statement users by improving
accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments'
financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified
as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of
the contract. It establishes a single model for lease accounting based on the foundational principle that leases are
financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability
and an intangible right -to -use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow
of resources, thereby enhancing the relevance and consistency of information about governments' leasing activities.
Effective Date and Transition
The requirements of this Statement are effective for reporting periods beginning after December 15, 2019. Earlier
application is encouraged.
Leases should be recognized and measured using the facts and circumstances that exist at the beginning of the period of
implementation (or, if applied to earlier periods, the beginning of the earliest period restated). However, lessors should not
restate the assets underlying their existing sales -type or direct financing leases. Any residual assets for those leases
become the carrying values of the underlying assets.
How the Changes in This Statement Will Improve Accounting and Financial Reporting
This Statement will increase the usefulness of governments' financial statements by requiring reporting of certain lease
liabilities that currently are not reported. It will enhance comparability of financial statements among governments by
requiring lessees and lessors to report leases under a single model. This Statement also will enhance the decision -
usefulness of the information provided to financial statement users by requiring notes to financial statements related to the
timing, significance, and purpose of a government's leasing arrangements.
GASB Statement No. 89 - Accounting for Interest Cost Incurred before the End of a Construction Period
Summary
The objectives of this Statement are (1) to enhance the relevance and comparability of information about capital assets
and the cost of borrowing for a reporting period and (2) to simplify accounting for interest cost incurred before the end of a
construction period.
This Statement establishes accounting requirements for interest cost incurred before the end of a construction period.
Such interest cost includes all interest that previously was accounted for in accordance with the requirements of
paragraphs 5-22 of Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre -
November 30, 1989 FASB and AICPA Pronouncements, which are superseded by this Statement. This Statement
requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in
which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a
result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital
asset reported in a business -type activity or enterprise fund.
This Statement also reiterates that in financial statements prepared using the current financial resources measurement
focus, interest cost incurred before the end of a construction period should be recognized as an expenditure on a basis
consistent with governmental fund accounting principles.
5
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Future Accounting Standard Changes (Continued)
Effective Date and Transition
The requirements of this Statement are effective for reporting periods beginning after December 15, 2019. Earlier
application is encouraged. The requirements of this Statement should be applied prospectively.
How the Changes in This Statement Will Improve Accounting and Financial Reporting
The requirements of this Statement will improve financial reporting by providing users of financial statements with more
relevant information about capital assets and the cost of borrowing for a reporting period. The resulting information also
will enhance the comparability of information about capital assets and the cost of borrowing for a reporting period for both
governmental activities and business -type activities.
GASB Statement No. 91 - Conduit Debt Obligations
Summary
The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers
and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated
with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives by clarifying the
existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer;
establishing standards for accounting and financial reporting of additional commitments and voluntary commitments
extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures.
All conduit debt obligations involve the issuer making a limited commitment. Some issuers extend additional commitments
or voluntary commitments to support debt service in the event the third party is, or will be, unable to do so.
An issuer should not recognize a conduit debt obligation as a liability. However, an issuer should recognize a liability
associated with an additional commitment or a voluntary commitment to support debt service if certain recognition criteria
are met. As long as a conduit debt obligation is outstanding, an issuer that has made an additional commitment should
evaluate at least annually whether those criteria are met. An issuer that has made only a limited commitment should
evaluate whether those criteria are met when an event occurs that causes the issuer to reevaluate its willingness or ability
to support the obligor's debt service through a voluntary commitment.
This Statement also addresses arrangements—often characterized as leases—that are associated with conduit debt
obligations. In those arrangements, capital assets are constructed or acquired with the proceeds of a conduit debt
obligation and used by third -party obligors in the course of their activities. Payments from third -party obligors are intended
to cover and coincide with debt service payments. During those arrangements, issuers retain the titles to the capital
assets. Those titles may or may not pass to the obligors at the end of the arrangements.
This Statement requires issuers to disclose general information about their conduit debt obligations, organized by type of
commitment, including the aggregate outstanding principal amount of the issuers' conduit debt obligations and a
description of each type of commitment. Issuers that recognize liabilities related to supporting the debt service of conduit
debt obligations also should disclose information about the amount recognized and how the liabilities changed during the
reporting period.
Effective Date and Transition
The requirements of this Statement are effective for reporting periods beginning after December 15, 2020. Earlier
application is encouraged.
6
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Future Accounting Standard Changes (Continued)
How the Changes in This Statement Will Improve Accounting and Financial Reporting
The requirements of this Statement will improve financial reporting by eliminating the existing option for issuers to report
conduit debt obligations as their own liabilities, thereby ending significant diversity in practice. The clarified definition will
resolve stakeholders' uncertainty as to whether a given financing is, in fact, a conduit debt obligation. Requiring issuers to
recognize liabilities associated with additional commitments extended by issuers and to recognize assets and deferred
inflows of resources related to certain arrangements associated with conduit debt obligations also will eliminate diversity,
thereby improving comparability in reporting by issuers. Revised disclosure requirements will provide financial statement
users with better information regarding the commitments issuers extend and the likelihood that they will fulfill those
commitments. That information will inform users of the potential impact of such commitments on the financial resources of
issuers and help users assess issuers' roles in conduit debt obligations.
(1) Note. From GASB Pronouncements Summaries. Copyright 2019 by the Financial Accounting Foundation, 401 Merritt 7,
Norwalk, CT 06856, USA, and is reproduced with permission.
Restriction on Use
This purpose of this communication is solely for the information and use of the City Council and management of the City
and is not intended to be, and should not be used by anyone other than those specified parties.
Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the
accounting records and related data. The comments and recommendations in the report are purely constructive in nature,
and should be read in this context.
If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your
convenience. We wish to thank you for the continued opportunity to be of service and for the courtesy and cooperation
extended to us by your staff.
?rMiuw�liP
ABDO, EICK & MEYERS, LLP
Minneapolis, Minnesota
March 13, 2020
7
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