2023 Monticello MN PAFR 2023 Popular Annual Financial Report (PAFR)
POPULAR ANNUAL
FINANCIAL REPORT
Fiscal Year Ended December 31, 2023
City of MonƟcello, Minnesota
2
Financial Report Message
The City of Monticello is pleased to present its eighth Popular Annual Financial Report (PAFR). The PAFR is
presented in conformity with Generally Accepted Accounting Principles (GAAP) and is a condensed version of
the 2023 Annual Comprehensive Financial Report (ACFR). Therefore, it does not include information on all the
city's funds. The report focuses on the General Fund and Community Center major governmental fund, the
enterprise funds, and the discretely presented Economic Development Authority (EDA) component unit.
The ACFR is a detailed account of the city's financial statements, footnotes, schedules, and statistics. The 2023
ACFR was prepared in conformance with GAAP, audited by Abdo and received an unmodified (clean) opinion.
A copy of the report can be found on the city's website at www.ci.monticello.mn.us/164/finance.
The PAFR provides a summary of the financial position of the city, and it shows where revenues come from to
operate the city and where those dollars are spent. The report is presented in an effort to inform residents and
other interested parties about the financial operations of the city in a simplified and easy-to-read format.
Thank you for your interest in your government. Please feel free to send any questions or comments on the
PAFR to sarah.rathlisberger@ci.monticello.mn.us.
Sarah Rathlisberger, CPFO Elizabeth Lindrud
Finance Director Finance Manager
Table of Contents
Financial Report Message ............................................................................................................. 2
Glossary of Accounting Terms ..................................................................................................... 3
City Structure ................................................................................................................................. 4
City Profile | Monticello By the Numbers ..................................................................................... 5
City Services .................................................................................................................................. 6
Financial Highlights ....................................................................................................................... 8
General Fund .................................................................................................................................. 9
Other Government Funds ........................................................................................................... 10
Community Enterprises .............................................................................................................. 11
What We Own ............................................................................................................................... 12
What We Owe ............................................................................................................................... 13
Tax Levy ....................................................................................................................................... 14
Sale Tax Snapshot ....................................................................................................................... 15
The mission of the city of Monticello is to
responsibly use our resources to provide quality
services and programs that foster a
dynamic community rooted in history and
preparing for a vibrant future.
2023 Popular Annual Financial Report (PAFR) 3
Glossary of Accounting Terms
Assigned funds are amounts set aside by the city for specific purposes that are not restricted or committed.
Committed funds are amounts that can only be used for a specific purpose by resolution of the City Council.
Current and other assets are resources with present service capacity that the city controls such as cash or
near cash items that can be used to liquidate liabilities due within a year.
Capital assets are nonfinancial assets that have an initial useful life of more than one year and are used in
providing services for the city and its residents.
Deferred inflows of resources represent an acquisition of net assets that applies to future periods (inflow of
resources during the year).
Deferred outflows of resources represent a consumption of net assets that applies to future periods (outflow
of resources during the year).
Fund a grouping of accounts segregated for a specific purpose.
General fund is the main operating fund for the city.
Long-term liabilities are obligations of the city including items such as bonds, loans, compensated absences,
pension liabilities and other city obligations, typically due beyond the current reporting period.
Modified accrual basis of accounting is the method of accounting where revenues are not recognized until
they are both measurable and available. Expenditures are recognized in the period when the liability is
liquidated rather than incurred.
Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by any
outstanding debt attributable to acquire capital assets, including accounts payable at year end.
Nonspendable funds are resources not in a spendable form, such as prepaid items.
Other liabilities are present obligations of the city that it has little or no discretion to avoid.
Restricted funds are to be used for an externally-imposed purpose
Restricted net position consists of net position with limitations imposed on its use through external restrictions
imposed by creditors, grantors, or other governments.
Statement of Activities presents information showing how the city’s net position changed during the reporting
year.
Statement of Net Position presents information on the city’s assets and deferred outflows of resources, less
liabilities and deferred inflows of resources, with the difference reported as net position. Over time, increases or
decreases in net position may serve as an indicator of whether the financial position of the city is improving or
deteriorating.
Tax Capacity Rate is a result of dividing the property tax levy by the taxable value of properties in a jurisdiction.
Unassigned funds are the remaining balance in the General fund OR negative balance in any other fund.
Unrestricted net position includes all other net position that does not meet the definition of “restricted” or “net
investment in capital assets.
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The city operates under the mayor-council form of
government on a nonpartisan basis. The mayor is
elected to serve a two-year term. Councilmembers
serve four-year staggered terms, with two
councilmembers elected every two years.
Policymaking and legislative authority are vested in
the city council. The council is responsible for
passing policies, ordinances, and resolutions. The
council adopts the annual tax levy and budget.
Council appointed boards, commissions and
committees usually include at least one
councilmember. A council-appointed city
administrator is responsible for implementing
policies and providing general operational
oversight.
Mayor Lloyd Hilgart
Lloyd.Hilgart@ci.monticello.mn.us
Term Expires December 31, 2024
Councilmember Lee Martie
Lee.Martie@ci.monticello.mn.us
Term Expires December 31, 2024
Councilmember Sam Murdoff
Sam.Murdoff@ci.monticello.mn.us
Term Expires December 31, 2024
Councilmember Charlotte Gabler
Charlotte.Gabler@ci.monticello.mn.us
Term Expires December 31, 2026
Councilmember Tracy Hinz
Tracy.Hinz@ci.monticello.mn.us
Term Expires December 31, 2026
All Councilmembers
AllCityCouncilAddresses@ci.monticello.mn.us
From left to right: Mayor Lloyd Hilgart, Lee Martie, Sam
Murdoff, Charlotte Gabler and Tracy Hinz
City Structure
2023 Popular Annual Financial Report (PAFR) 5
The city of Monticello, organized as a municipality in 1856, has the Mississippi River as its north border. The
city is located approximately 45 miles northwest of the Minneapolis/St. Paul metropolitan area along the I-94
corridor in Wright County. The city benefits from employment opportunities in the area and a relatively low
unemployment rate of 2.8%.
The city provides its residents and businesses with a full range of municipal services consisting of law
enforcement (contracted) and fire protection, the construction and maintenance of streets and other
infrastructure, a community center for recreation activities, park operations and maintenance, and general
administrative services. In addition, the city operates six enterprises: water, sewer, stormwater, and fiber optics
utilities along with a liquor store and deputy registrar (DMV).
The city of Monticello continues to grow. In 2023, the city issued 46
permits for new homes and 7 permits for commercial buildings.
For 2023, the city's population was estimated at 15,087, an increase
of about 4%, from the 2020 Census number of 14,460. The city
currently occupies 9.4 square miles but could ultimately expand to
20.8 square miles as portions of Monticello Township may be
annexed through an orderly annexation agreement.
City Profile
Est. Population
15,087 | 14,619
City Tax Rate
34.99 | 36.54
City & Overlapping
Tax Rate
86.88 | 97.00
Median Household
Income
$80,290 | $73,651
Unemployment Rate
2.8% | 3.3%
Number of Households
5,548 | 5,379
School Enrollment
4,237 | 4,206
Registered Voters
9,440| 8,791
Monticello By the Numbers 2023| 2022
Full Time Employees
62 | 58
MCC Memberships
1,918 | 1,767
Library Programs
134 | 133
Liquor Store
Transactions
240,982| 249,604
DMV Vehicle
Transactions
77,870 | 77,515
New Residential Permits
46| 35
Values of Permits Issued
$76.1M | $42.0M
Fire Calls
389 | 384
Avg. Daily Water
Consumption
1.784 MG | 1.717 MG
Water Utility
Customers
4,645 | 4,621
Wastewater Treated
433 MG | 425 MG
Area in Square Miles
9.417 | 9.417
Streetlights
973 | 973
Parks
30 | 30
Acres of Parkland
365 | 365
Miles of Streets/Trails
82/43 | 81/43
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Where the money goes...
Governmental Activities:
Basic city services primarily support by taxes & intergovernmental revenues.
Where the money comes from...
Revenues: The most significant revenue
source for governmental activities is property
taxes. Charges for services is primarily
generated by the Community Center. Capital
grants and contributions include special
assessments and grants from other
governments for capital asset acquisition.
Expenses: Public works expenses are the most
significant, followed by recreation & culture, and
public safety. Public works includes
engineering, streets, ice & snow removal, shop
& garage, and street lighting. Recreation &
culture includes parks, cemetery, senior center,
and community center expenditures. Public
safety includes building inspections, fire
department and Wright County police services.
City Services
2023 Popular Annual Financial Report (PAFR) 7
Revenues: The most significant revenue source
for business-type activities is charges for
services including fees for water, sewer,
stormwater, and fiber optic utilities, as well as
liquor store sales, and deputy registrar
processing fees. Capital grants & contributions
include access and trunk charges related to new
development.
Expenses: The largest use of funds within
business-type activities is for the liquor store,
which includes cost of goods sold. Sewer and
Fiber Optics expenses are also significant; the
city contracts with Veolia to run its wastewater
treatment plant and with Arvig to manage its
fiber optic network.
Business-Type Activities:
City services intended to recover all or a significant portion of their costs through user charges.
Where the money comes from...
Where the money goes...
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Monticello
Value
Statements
Financial Highlights
Revenues increased 36.4% in 2023.
Governmental charges for services
increased 22.6% as Community Center
operations are back to normal levels.
Grants and aids increased by $4,844,674
due to the County contribution towards the
Downtown Project and other State aids.
The investment earnings increased by
$2,232,309 as market rates remained
elevated. Property taxes increased 6.2%
due to a levy increase, and business-type charges for services increased 1.1%.
Expenses increased 3.5% from 2022 to 2023. The most significant change was in the parks department
($909,458) was the city begins to treat for Emerald Ash Borer.
Government-wide Financial Activity
Net position increased mostly due to grants
received related to capital asset acquisitions
and construction. Strong investment returns
also contributed to the increase.
Leadership Stewardship
We are all leaders. Leadership is
not a position, it’s a work ethic.
We lead by example, seeking
ways to improve the organization
through teamwork, collaboration,
and communication.
We are entrusted with public
resources for the betterment of
the entire city. We strive to
balance minimal cost and high
value to maximize public benefit
from our actions and decision.
2023 Popular Annual Financial Report (PAFR) 9
Revenues have increased every year with higher tax
levies and increases in charges for services.
Expenditures increased slightly in 2023 as a result of the
increase in the cost of supplies, fuel and utilities.
The city's policy is to maintain a year-end fund balance
of 60-75% of the following year's budgeted expenditures,
which allows the city to pay expenditures until it receives
its first property tax settlement in June. The 2023 year-
end unassigned fund balance is $7,416,654 or of the
2024 budget, or 55% of the 2024 budget.
General Fund Revenues by Category
The chart to the right shows a breakdown of revenues
by category. In 2023 property taxes continue to be the
primary revenue source, making up 62.8% of actual
revenues, while budgeted property taxes were 72.9% of
budgeted revenues. Why? Non-tax revenue sources
are more conservatively estimated. Revenues for 2023
totaled $13,213,643 compared to a budgeted
$11,480,000. Intergovernmental revenue exceeded
budget by $711,094 (138%). Charges for services,
intergovernmental, and other revenues also contributed
General Fund Expenditures by
Function
The chart to the left shows a breakdown of
expenditures by function. In 2023 the total
expenditures were $11,329,416 which was
$144,584 under the budgeted $11,474,000.
The largest decrease ($222,637) came from
public works due to the mild winter and
lower maintenance and street lighting costs.
General Fund
Responsiveness Integrity Community
We strive to strengthen,
promote, and assist the
community we serve. We create
a sense of connection and
belonging for all people. We
seek to understand the diverse
needs of our community. We
encourage community
engagement and opportunities
to connect our residents,
businesses, and visitors.
We are open and honest. We
conduct ourselves in a
transparent, ethical, and legal
manner to earn the trust of
employees and the public. We
act in the best interest of the
city. We build credibility by
accepting feedback, owning our
actions, and providing reliable
follow through.
We believe in providing timely,
courteous, and respectful
service to the public and each
other. We live this every day by
listening, responding, and going
the extra mile.
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Discretely Presented Component Unit
A discretely presented component unit is a related, but
distinct, entity which is reported in the city’s financial report
separately from the financial data of the primary
government. The Economic Development Authority (EDA)
Fund in Monticello is one such component unit. One of the
EDA’s primary focuses is improving Monticello’s original
downtown. Redevelopment on the Block 52 area began in
late 2022 and will continue through 2024.
Other Governmental Funds
Community Center Special Revenue Fund
The Monticello Community Center (MCC) is a full-service facility with
amenities including gym memberships, fitness classes, climbing wall,
aquatics, child indoor play, concessions, room rentals, and more. The
MCC hosts various events including a weekly summer farmers market,
movies in the park, and Music on the Mississippi concert series.
Revenues are mostly comprised of charges to members and users.
Some funding comes from a tax levy. The MCC also utilized the city’s
remaining $410,000 in ARPA funding in 2023. Charges for services
increased $319,808 (16.7%), and expenditures increased $285,005
(15.3%) due to
increased activity and
memberships as well
as repairs to the
waterslide stairs.
Monticello’s special revenue funds also include the Small Cities Devel-
opment Program (SCDP) and Cemetery funds.
Governmental Funds
The governmental funds operate on the modified
accrual basis of accounting and include various fund
types including:
General Fund - accounts for all financial resources
except those accounted for in another fund.
Special revenue funds - account for revenues
restricted by law or administrative action for specific
purposes.
Debt service funds - account for the activity related to
long-term debt principal, interest, and related costs.
Capital project funds - account for the acquisition or
construction of major governmental capital facilities. Graph does not include other financing sources (uses) including bond proceeds.
The new fire station construction took place in
2019. In 2021 and 2022 the planning process
for The Pointes at Cedar and development
preparation at the Otter Creek Industrial Park
began.
2023 Popular Annual Financial Report (PAFR) 11
Hi-Way Liquors
Hi-Way Liquors operations are accounted for in the
Liquor enterprise fund. The liquor store is conveniently
located along the west side of State Hwy 25 near the
only Mississippi River crossing within approximately 25
miles. The excellent location and experienced
management team combined to achieve the 13th
highest gross sales out of the 176 municipally run liquor
stores in Minnesota in 2022. (2023 report not yet
available).
The store’s overall gross profit margin is roughly 25%.
Profits generated from the liquor store support various
city projects. Liquor and related product sales once
again exceeded the $7 million threshold in 2023. Sales
have remained high, but are trending back towards pre-
pandemic levels.
The net position decreased $1,444,664 in 2023.
$2,250,000 in profits from the liquor store were used in
2023 to help fund the Downtown Roadway &
Pedestrian Improvement Project and Bertram Chain of
Lakes Phase I Improvement Project.
Stop in today for friendly service and a great selection
of beer, wine, liquor, and more!
Deputy Registrar
Monticello’s Department of Motor Vehicles (DMV)
operations are reflected in the Deputy Registrar
enterprise fund.
The DMV showed a decrease in net position of
$940,468 in 2023. $1,750,000 in profits were used to
help fund the Downtown Roadway & Pedestrian
Improvement Project. The number of transactions
processed decreased 0.7% and revenue per transaction
increased by 123% from 2022 due to larger pension
expenses.
The DMV provides the following services:
$20 fast track title transfers (title received within 3
business days)
Duplicate titles printed in-house same day
Duplicate driver’s license (change of address or lost)
All of your DNR needs including fishing & hunting
licenses and boat transfers
Notary services
And more!
Community Enterprises
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2023 Major Projects & Purchases
Completed Projects
Storm Water Improvements
2022 Street Improvements
Began or continued work on the following projects
Downtown Roadway & Pedestrian Improvements
Pinewood Elementary Safe Routes to School
School Boulevard Safe Routes to School
7th Street Retaining Wall and Sidewalk
Flashing Yellow Lights
Bertram Chain of Lakes Phase 2 Improvements
Supervisory Control and Data Acquisition (SCADA)
improvements to water and sewer system
Purchase of various pieces of equipment
Building Department Vehicle
Facilities Maintenance Vehicle
Streets Department Vehicle
Two Kubotas, Bobcat, Caterpillar, Toro Spray master,
Trailer, Bobcat Sweeper, and Toro Mower
Front Loader and Ironworker
Fiber installation for Stoney Brook, Delta Modular, and
Headwaters developments
Liquor Store coolers
Dishwasher and freezer for the MCC
Boilers for the Library
What We Own
Long-term Financial Planning
The city has developed a Capital Improvement Plan (CIP), which is a five-year forecast of the city’s facility,
equipment, and infrastructure needs. Items in the first year of the CIP are incorporated into the annual budget.
Items in the later years are less certain, but are identified for long-term planning. A long term financial planning
model was created in 2022, which is updated annually.
Both the city’s debt load and annual debt service property tax levy are evaluated for large projects requiring debt
issuance. Current year revenues, grants and one-time use of reserves provide pay-as-you-go financing for
smaller projects.
Downtown Roadway & Pedestrian
Improvements Project
2023 Popular Annual Financial Report (PAFR) 13
Monticello Bond Rating
In 2023, Moody’s upgraded the city's bond rating to Aa3. An Aa3 is a high grade. A high bond
rating is important because it results in lower interest costs when issuing debt.
The amount of bonds outstanding at year-end 2023 was $17,815,000 compared to the 2022
year-end amount of $20,240,000. The city initially planned to issue debt in 2023, but did not due
to project timing uncertainty.
Aa3
The city’s long-term liabilities outstanding at the end of 2023
totaled $23,380,059.
What We Owe
Debt Service & Capital Project Funds
The city has one combined debt service fund made up of seven sub-funds for
the various governmental debt issuances outstanding. The fund balance is
restricted for repayment of debt.
The Capital Projects Fund is the only major capital project fund of the city. This
fund accounts for the majority of governmental buildings and infrastructure
projects, some of which are detailed on page 12. The nonmajor capital projects
funds include street lighting improvement, park & pathway improvement, and
park dedication.
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As taxpayers go, none is larger in Monticello than Xcel Energy (Xcel), also known as Northern States Power
(NSP). The company operates a nuclear power plant located inside Monticello’s western boundary. The
company has made two uprate improvements in the last eleven years, absorbing a larger share of the city’s
property tax levy. Xcel’s share of the taxes paid increased from 40% to 62% and back down to 50% in that time.
Consequently, the city has one of the lowest tax capacity rates in Wright County.
Independent School District 882 surpassed Xcel as Monticello’s largest employer, with 684 employees. Neither
Xcel nor the school district are Monticello’s largest utility customer, however. Cargill Kitchen Solutions
generates $475,204 or 15.8% of the sewer utility operating revenue and $110,002 or 5.2% of the water utility
revenue. Cargill operates a plant that produces further-processed egg products in the breakfast category for
restaurants and food manufacturers.
The City Council adopts a tax levy for the General Fund, Monticello
Community Center Fund, Debt Service Fund, and Capital Projects Fund.
The Economic Development Authority Levy is adopted by the EDA Board
and the City Council. The levy for taxes payable in 2023 was $12,452,000
which is $711,000 (6.1%) higher than the 2022 levy of $11,741,000.
The city's estimated market value of all properties within the city grew from
$2.47 billion to $2.70 billion in 2023 (for taxes payable in 2024). Residential
properties saw a 10.9% increase, commercial properties saw a 21.4%
increase, and apartments experienced a 17.5% increase in market value.
Largest Taxpayer, Employers, and Customers
Your tax dollar is divided up between three
governmental authorities. Monticello
collects 42 cents for every tax dollar for the
City services. The remaining portions are
divided amount Wright County and
Independent School District #882.
Tax Levy
2023 Popular Annual Financial Report (PAFR) 15
Monticello is proposing a local sales tax because we
believe its an option to fund two regional
recreation projects.
The Bertram Chain of Lakes Regional Athletic Park
and The Pointes at Cedar Recreational Area are
both existing projects that haven’t been fully built out
yet. Knowing they will require additional investment, we
looked at our funding options for future phases. Minnesota has specific requirements for when a sales tax can
be used, and both of Monticello's’ projects qualify.
We believe our voters deserve the chance to decide if they would support using a sales tax revenue to pay for
the next phases of theses projects. If approved, the sales tax revenue would come from people who shop in
Monticello, no matter where they live. A recent study estimated 68.6% of the sales tax revenue would
comes from non-residents. The reginal revenue would be used for the two regionally valuable projects:
Bertram and The Pointes. In turn, local property taxes would be used for city operations and other vital projects
in our community.
The City is proposing ONE half-cent sales tax (1/2 cent for every $1 spent) that would be used to fund the
projects. It would follow the state sales tax guidelines and wouldn’t apply to essentials like groceries,
medications, baby products or clothing. A list of non-taxable items can be found on our website.
Voters will consider the sales tax on their General Election ballot on Tuesday, Nov. 5, 2024. They can
approve the sales tax for both, one, or neither of the projects. If approved by voters, the sales tax would take
effect in 2025 and last a maximum of 20 years. It does not automatically renew.
A list of Sales Tax FAQs and project information can be found on the City’s website and at
https://bit.ly/MontiSalesTax!
Bertram Chain of Lakes Regional Athletic Park
The Pointes at Cedar Recreational Area
Sales Tax Snapshot
16
The Government Finance Officers Association (GFOA), with more than 20,000 professionals, is
dedicated to enhancing and promoting the professional management of governments for the public
benefit. Since 1906, the GFOA has been accomplishing this mission by identifying and developing
the highest quality financial policies and practices and promoting them to the public through educa-
tion, training, and leadership.
The GFOA has established several highly regarded professional recognition programs to encour-
age state and local governments of all types and sizes to improve the quality of their financial man-
agement and to recognize their achievement.
Each award is valid for one year. The City of Monticello has received the following awards:
Financial Awards
Popular Annual Financial
Report: 2015—2022
Annual Comprehensive
Financial Report: 2009—2022
Distinguished Budget
Presentation Award: 2009—2024