2013 Monticello Annual Comprehensive Financial Report
City of Monticello, Minnesota
Comprehensive Annual Financial Report
Year Ended
December 31, 2013
CITY OF MONTICELLO
WRIGHT COUNTY, MINNESOTA
Comprehensive Annual Financial Report
Year Ended
December 31, 2013
Prepared By Finance Department
Wayne Oberg, Finance Director
Angie McIntire, Assistant Finance Director
Annie Zimmerman, Finance Assistant – AP
Pat Kovich, UB Specialist
Carolyn Granger, Finance Assistant
Heidi Eckerman, Payroll – Finance Clerk
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WRIGHT COUNTY, MINNESOTA
Page
INTRODUCTORY SECTION
CITY COUNCIL AND SUPPORT PERSONNEL i
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN
FINANCIAL REPORTING ii
ORGANIZATIONAL CHART BY DIVISION iii
FINANCE DIRECTOR’S LETTER OF TRANSMITTAL iv–vii
FINANCIAL SECTION
INDEPENDENT AUDITOR’S REPORT 1–3
MANAGEMENT’S DISCUSSION AND ANALYSIS 4–14
BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
Statement of Net Position15
Statement of Activities16
Fund Financial Statements
Governmental Funds
Balance Sheet17–18
Reconciliation of the Balance Sheet to the Statement of Net Position19
Statement of Revenue, Expenditures, and Changes in Fund Balances20–21
Reconciliation of the Statement of Revenue, Expenditures, and
Changes in Fund Balances to the Statement of Activities22
Proprietary Funds
Statement of Net Position23
Statement of Revenue, Expenses, and Changes in Fund Net Position24
Statement of Cash Flows25
Notes to Basic Financial Statements26–51
REQUIRED SUPPLEMENTARY INFORMATION
Monticello Fire Department Relief Association
Schedule of Funding Progress52
City of Monticello Other Post-Employment Benefits Plan
Schedule of Funding Progress52
CITY OF MONTICELLO
Table of Contents
WRIGHT COUNTY, MINNESOTA
Page
REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED)
Budgetary Comparison Schedules
Schedule of Revenue, Expenditures, and Changes in Fund Balances –
Budget and Actual
General Fund53–58
Community Center Special Revenue Fund59
Economic Development Authority Special Revenue Fund60
Notes to the Required Supplementary Information61
SUPPLEMENTAL INFORMATION
Combining and Individual Fund Statements
Nonmajor Governmental Funds62
Combining Balance Sheet63–64
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances65–66
Internal Service Funds67
Combining Statement of Net Position68
Combining Statement of Revenue, Expenses, and Changes in Net Position69
Combining Statement of Cash Flows70
STATISTICAL SECTION 71
Net Position by Component72–73
Changes in Net Position74–77
Fund Balances of Governmental Funds78–79
Changes in Fund Balances of Governmental Funds80–81
General Governmental Tax Revenues by Source82
Governmental Funds Tax Revenues by Source83
Tax Capacity Value and Estimated Market Value of Taxable Property 84–85
Property Tax Rates – Direct and Overlapping Governments86
Principal Property Taxpayers87–88
Property Tax Levies and Collections89–90
Water Sold by Type of Customer91
Utility Rates per Year 92–93
Ratios of Outstanding Debt by Type 94–95
Ratios of Net General Bonded Debt Outstanding96
Direct and Overlapping Governmental Activities Debt97
Legal Debt Margin Information 98–99
Pledged Revenue Coverage100
Demographic and Economic Statistics101
Principal Employers 102
Full-Time Equivalent City Government Employees by Function103–104
Operating Indicators by Function 105–106
Capital Asset Statistics by Function107–108
CITY OF MONTICELLO
Table of Contents (continued)
INTRODUCTORY SECTION
-i-
Term Expires
Clint Herbst12/31/2014Mayor
Lloyd Hilgart12/31/2014Councilmember
Tom Perrault 12/31/2016Councilmember
Glen Posusta12/31/2016Councilmember
Brian Stumpf12/31/2014Councilmember
City Administrator Jeff O’Neill
Finance Director Wayne Oberg, MBA, CPA
Public Works Director Vacant
Community Development DirectorAngela Schumann, AICP
Community Center Director Kitty Baltos
City EngineerWSB & Associates, Inc.
Economic Development DirectorVacant
Human Resource Manager Tracy Ergen
Deputy ClerkCathy Schuman
DMV Manager Ann Eckman
Liquor Store Manager Randall Johnsen
Utility SuperintendentMatt Theisen
Street SuperintendentTom Moores
Parks SuperintendentTom Pawelk
Building OfficialRon Hackenmueller
Fire ChiefSteve Joerg
City AttorneyJoel Jamnik, Campbell Knutson, P.A.
CITY OF MONTICELLO
CITY COUNCIL
SUPPORT PERSONNEL
City Council and Support Personnel
as of December 31, 2013
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-iv-
June 27, 2014
To the Honorable Mayor,
Members of the City Council,
and Citizens of Monticello, Minnesota
I am pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Monticello,
Minnesota (the City) for the fiscal year ended December 31, 2013. Responsibility for both the accuracy of
the data and the completeness and fairness of the presentation, including all disclosures, rests with the
City. To the best of our knowledge and belief, the enclosed data is accurate, in all material respects, and is
reported in a manner designed to present fairly the financial position and results of operations of the
various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the
City’s financial activities have been included.
Management assumes full responsibility for the completeness and reliability of the information contained
in this report, based upon a comprehensive framework of internal control that it has established for this
purpose. Because the cost of internal control should not exceed anticipated benefits, the objective is to
provide reasonable, rather than absolute, assurance that the financial statements are free of any material
misstatements.
The City’s financial statements have been audited by Malloy, Montague, Karnowski, Radosevich & Co.,
P.A. (MMKR), a firm of licensed certified public accountants. The goal of the independent audit was to
provide reasonable assurance that the financial statements of the City for the fiscal year ended
December 31, 2013 are free of material misstatements. The independent audit involved examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. The independent auditor concluded, based upon the audit, that there was
a reasonable basis for rendering an unmodified opinion that the City’s financial statements for the fiscal
year ended December 31, 2013, are fairly presented in conformity with accounting principles generally
accepted in the United States of America. The independent auditor’s report is presented as the first
component of the financial section of this report.
The preparation of this CAFR is a requirement of state law. Also, the CAFR is required by the bond
rating agencies before they will rate the City’s bonds. The report can be used by the City Council and the
citizens of the City to gain a better understanding of the financial condition of the City.
Accounting principles generally accepted in the United States of America require that management
provide a narrative introduction, overview, and analysis to accompany the basic financial statements in
the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to
complement the MD&A and should be read in conjunction with it. The City’s MD&A can be found
immediately following the report of the auditors.
-iv-
-v-
PROFILE OF THE CITY
The City is situated in a prime location on Interstate 94 between Minneapolis/St. Paul and the City of
St. Cloud. The City has experienced tremendous growth within the last 15 years in the residential,
commercial, office, and retail sectors. The City is a rapidly growing, freestanding urban fringe community
encompassing approximately 5,000 acres and a population nearing 13,000. The City is home to one of
Minnesota’s two nuclear power plants, both owned by Xcel Energy, Inc. (NYSE: XEL). With a small
carbon footprint, the Xcel plant is also the City’s largest employer and property taxpayer. Additionally,
Monticello’s business friendly environment provides a home for Cargill Kitchen Solutions. The privately-
owned, agri-giant is the City’s largest customer of water and sewage utility services.
The City was founded by second-generation Americans who migrated west in the mid-1800s. Early
settlers found the gently sloping banks and shallow river levels of the Mississippi River made a logical
place for a river crossing. Founded in 1856, the City grew quickly during the early settlement years and
then leveled to a population of about 1,300. It was this original settlement that became the core city and
survives today as downtown Monticello.
The City operates under the “Optional Plan A” form of government as defined in Minnesota Statutes.
Under this plan, the government of the City is directed by a City Council composed of an elected mayor
and four elected 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. Council members serve four-year terms, with two members elected every
two years. The mayor is elected for a two-year term. The mayor and members of the City Council are
elected at large.
The City provides a full range of services: the construction and maintenance of streets and other
infrastructure; snow removal; park and cemetery maintenance; recreational and cultural activities; water,
sewer, surface water, residential garbage, and recycling systems; community development, building
inspection, planning, police, fire, and liquor store operations; a city-run fiber optic system and community
center; and general government operations, including administration, finance/accounting, information
systems, community information, and general government buildings.
The City Council is required to adopt a final budget by late December for the subsequent year. The
budget is prepared by fund, function (e.g. public works), and department (e.g. streets and alleys).
Transfers of appropriations between funds require the approval of the City Council. The legal level of
budgetary control is the department level in the General Fund and fund level in all other funds. Budget
amendments require City Council approval.
FINANCIAL PLANNING AND THE LOCAL ECONOMY
The City is recovering slowly from recent economic woes that have affected other communities in Wright
County and throughout the state of Minnesota. The nuclear power plant provides the City with a relatively
stable tax and employment base. During the economic downturn, new commercial development came to
virtual standstill and today growth remains anemic. However, the City lost very few of its local
businesses, although some reduced their workforce and scaled back operations. The rapid residential
growth starting nearly a decade ago has slowed significantly but the City was not hit with a large number
of foreclosed homes.
In the past, the state of Minnesota has reduced local government aid (LGA) and the market value
homestead credit (MVHC) to cities and counties as a way to balance its own budget. Since the City does
not receive LGA, the City’s finances are relatively insulated from the state’s budget problems. In 2012,
the state eliminated the MVHC and replaced it with a Market Value Exclusion program, which the City
incorporated into its 2013 budget. The new program shifted more of the tax burden to nonresidential
property taxpayers.
-vi-
The economy and housing market has also affected city revenues for building permits. The City issued
1,199 building permits in 2004 with a total valuation of $62,300,360. In 2013, the City issued 659 permits
with a total valuation of $15,821,223. Inquiries, fielded by the Building Department, indicate 2014
residential housing permits (new) will likely surpass 2013 totals.
Fortunately, the City does not rely on the state as a major funding source (LGA). In addition, the City has
budgeted conservatively over the years, resulting in very modest growth in the property tax levy. To assist
external stakeholders, the City is exploring various ways to better represent its financial position, such as
the elimination of all interfund loans/receivables in 2012. Other initiatives include consolidating funds
with similar purposes, distributing unallocated expenses and aggregating similar costs for distribution as
single amounts to each budget unit (IT Services – Internal Services Fund) in 2013.
MAJOR INITIATIVES
The City has two major ongoing initiatives and one new initiative for 2013. The first ongoing initiative is
the revitalization of its historic downtown. The downtown is the oldest part of the City and many of the
buildings are in need of maintenance. In addition, the amount of traffic on State Highway 25 and
County Road 75 makes both vehicle and pedestrian traffic difficult to move from one area of the
downtown to another. Because of these issues, a number of the store fronts are unoccupied. To address
these issues, the City completed an Embracing Downtown Monticello initiative with the goal to identify
needed improvements and enhancements, which will once again make the downtown area a vibrant
shopping and resident destination. The challenge moving forward will be the implementation of the plan
and creating development opportunities within the downtown area for new and existing businesses.
The other ongoing initiative is the joint purchase with Wright County of Bertram Chain of Lakes
properties. The City and Wright County have already acquired 750 acres of the 1,200 acre site. The
1,200 acre site includes four pristine lakes and woodlands, which when purchased will become a regional
park. Wright County and the City have obtained matching grant funds from the state to purchase
additional acreage in 2014.
INTERNAL CONTROL
The management of the City is responsible for establishing and maintaining internal control designed to
ensure that the assets of the City are protected from loss, theft, or misuse and that adequate accounting
data is compiled to allow for the preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America. The City’s internal controls are designed to
provide reasonable, but not absolute assurance that these objectives are met. The concept of reasonable
assurance recognizes that: 1) the cost of a control should not exceed the benefits likely to be derived, and
2) the valuation of cost and benefit requires estimates and judgments by management. The City’s internal
controls are subject to periodic evaluation by management and the Finance Department staff of the City.
BUDGETING CONTROLS
In addition, the City maintains budgetary controls. The objective of these budgetary controls is to assure
compliance with legal provisions embodied in the annual appropriated budget approved by the City
Council. Activities of the General Fund are included in the annual appropriated budget. The level of
budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount)
is established by department within the General Fund. The City Council also adopts a five-year Capital
Improvement Program as a financial planning document for its capital project and enterprise funds. As
demonstrated by the statements and schedules included in the financial section of this report, the City
continues to meet its responsibility for sound financial management.
-vii-
ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City for its CAFR for the fiscal
year ended December 31, 2012. This was the third year that the City has achieved this prestigious award.
In order to be awarded a Certificate of Achievement, the City had to publish an easily readable and
efficiently organized CAFR. This report must satisfy both accounting principles generally accepted in the
United States of America and applicable legal requirements.
A certificate of Achievement is valid for a period of one year only. We believe that our current CAFR
continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the
GFOA to determine its eligibility for another certificate.
The 2013 CAFR meets the highest professional standards and was prepared in a timely and cost effective
manner. The preparation of this report would not have been possible without the efficient and dedicated
service of the entire staff of the finance department, especially Assistant Finance Director,
Angie McIntire, and through the helpful guidance and assistance from our auditing firm, MMKR. I wish
to express my appreciation to all members of the department who assisted and contributed to the
preparation of this report. Credit also must be given to the Mayor, City Council, and City Administrator
for their unfailing support for maintaining the highest standards of professionalism in the management of
the City’s finances.
Respectfully submitted,
Wayne W. Oberg, MBA, CPA
Finance Director
FINANCIAL SECTION
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INDEPENDENT AUDITOR’S REPORT
To the City Council and Management
City of Monticello, Minnesota
REPORT ON THE FINANCIAL STATEMENTS
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 Monticello, Minnesota (the City)
as of and for the year ended December 31, 2013, and the related notes to the financial statements, which
collectively comprise the City’s basic financial statements as listed in the table of contents.
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from 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.
(continued)
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OPINIONS
In our opinion, the financial statements referred to on the previous page 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, 2013, and the
respective changes in financial position and, where applicable, cash flows thereof for the year then ended,
in accordance with accounting principles generally accepted in the United States of America.
CHANGE IN ACCOUNTING PRINCIPLE
As described in Note 1 of the notes to basic financial statements, in 2013 the City adopted new
accounting guidance, Governmental Accounting Standards Board (GASB) Statement No. 65, Items
Previously Reported as Assets and Liabilities. Our opinion is not modified with respect to this matter.
EMPHASIS OF MATTER
As discussed in Note 12 of the notes to basic financial statements, during the year ended December 31,
2012, the City technically defaulted on the outstanding Monticello Telecommunications Revenue Bonds,
Series 2008 due to lack of payment of a regularly scheduled interest payment on this issue. Our opinion is
not modified with respect to this matter.
OTHER MATTERS
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis, the Schedules of Funding Progress, and the Budgetary Comparison Schedules,
as listed in the table of contents, be presented to supplement the basic financial statements. Such
information, although not a part of the basic financial statements, is required by the GASB 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 opinions on the financial statements that collectively
comprise the City’s basic financial statements. The introductory section, the supplemental information,
and the statistical section, as listed in the table of contents, are presented for purposes of additional
analysis and are not required parts of the basic financial statements.
The supplemental information is the responsibility of management and was derived from and relates
directly to the underlying accounting and other records used to prepare the basic financial statements.
Such information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or to
the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the combining nonmajor
fund statements are fairly stated, in all material respects, in relation to the basic financial statements as a
whole.
(continued)
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The introductory and statistical sections have not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on them.
OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS
In accordance with Government Auditing Standards, we have also issued our report dated June 27, 2014
on our consideration of the City’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City’s internal control over financial
reporting and compliance.
Minneapolis, Minnesota
June 27, 2014
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CITY OF MONTICELLO
Management’s Discussion and Analysis
Year Ended December 31, 2013
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As management of the City of Monticello, Minnesota (the City), we offer the readers of these financial
statements this narrative overview and analysis of the City’s financial activities for the fiscal year ended
December 31, 2013. The data for fiscal 2012 in this document has been restated as a result of a change in
fund structure, change in accounting principle, and prior period adjustment all reported in fiscal 2013.
FINANCIAL HIGHLIGHTS
The assets of the City exceeded its liabilities at year-end by $102,834,596 (net position). Of this amount,
$19,950,937 (unrestricted net position) may be used to meet the City’s ongoing obligations to citizens and
creditors.
As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund
balances of $23,152,201, a decrease of $12,288,444. Nonspendable, restricted, committed, and assigned
uses of fund balance totaled $19,495,738, leaving an unassigned fund balance of $3,656,463.
At the end of the current fiscal year, unassigned fund balance for the General Fund was $3,656,463, or
56.9 percent, of total General Fund expenditures for 2013. The City targets 45 percent of next year’s
expenditure budget as the optimum fund balance level, providing a reserve for cash flow during the first
six months of each subsequent year until property tax receipts are released from the county treasurer’s
office and distributed to the local levels of government. The state auditor recommends that local
governments maintain an unrestricted fund balance of approximately 35–50 percent of operating revenues
or no less than five months of operating expenditures for the General Fund. The General Fund’s heavy
dependence on property tax revenues validates the 45 percent target. (Source: Minnesota Office of the
State Auditor: Fund Balance Reporting and Governmental Fund Type Definitions, based on
Governmental Accounting Standards Board (GASB) Statement No. 54, 2010–1003 Revised July 2012).
The City’s total long-term liabilities decreased by $12,988,974 (19.6 percent) during 2013. Principal
payments made on outstanding debt totaled $5,435,000. Refunding payments made on outstanding debt
totaled $10,690,000. The City issued 2013 G.O. Certificates of Indebtedness, Series 2013A in the amount
of $500,000 and G.O. Wastewater Treatment Bonds, Series 2013B for $3,000,000.
OVERVIEW OF THE FINANCIAL STATEMENTS
Management’s Discussion and Analysis (MD&A) is intended to serve as an introduction to the City’s
basic financial statements, which are comprised of three components: 1) government-wide financial
statements, 2) fund financial statements, and 3) notes to basic financial statements. This report also
contains other supplementary information in addition to the basic financial statements.
-5-
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 private sector
businesses.
The Statement of Net Position presents information on all of the City’s assets and liabilities, with the
difference between the two reported as net position. Over time, increases or decreases in net position may
serve as a useful indicator of whether the financial position of the City 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
(delinquent taxes and special assessments).
Both of the government-wide financial statements distinguish functions of the City that are principally
supported by taxes and intergovernmental revenue (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 provided by the City include general government, public safety,
public works, sanitation, culture and recreation, and economic development. Business-type activities
include water, sewage, liquor, deputy registrar, and fiber optics activities.
The government-wide financial statements include not only the City itself (known as the primary
government), but also the Economic Development Authority (EDA). The EDA is a legally separate entity
which functions, in essence, as a department of the City, to provide redevelopment assistance through the
administration of various programs. Therefore, the EDA has been included as an integral part of the
City’s financial statements.
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 governments, 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.
COMPONENTS OF
THE COMPREHENSIVE ANNUAL FINANCIAL REPORT
Management’s
Discussion and
Analysis
Basic
Financial
Statements
Required
Supplementary
Information
Government-Wide
Financial
Statements
Fund
Financial Statements
Notes to the
Financial Statements
Summary Detail
-6-
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 the 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 of the government’s near-term financing
decisions. Both the governmental funds Balance Sheet and Statement of Revenue, Expenditures, and
Changes in Fund Balances provide a reconciliation to facilitate the comparison between governmental
funds and governmental activities.
The City maintains several individual governmental funds. Information is presented separately in the
governmental funds Balance Sheet and in the governmental funds Statement of Revenue, Expenditures,
and Changes in Fund Balances for the General Fund, Community Center Special Revenue Fund, EDA
Special Revenue Fund, Debt Service Fund, Capital Outlay Revolving Capital Projects Fund, Sanitary
Sewer Access Capital Projects Fund, and Capital Projects Fund, all of which are considered to be major
funds. Data from the remaining governmental funds are combined into a single, aggregated presentation.
Individual fund data for each of these nonmajor governmental funds is provided in the form of combining
statements elsewhere in this report.
The City adopts an annual budget for its General Fund and major special revenue funds. A budgetary
comparison schedule has been provided for the General Fund and major special revenue funds to
demonstrate compliance with the adopted budgets.
Proprietary Funds – The City maintains two different types of proprietary funds. Enterprise funds are
used to report the same functions presented as business-type activities in the government-wide financial
statements. The City maintains five enterprise funds which are considered proprietary funds. 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 water and sewage service
operations, liquor sales operation, deputy registrar, and fiber optics operation. Internal service funds are
an accounting device used to accumulate and allocate costs internally amount the City’s various
functions. The City uses internal service funds to account for information technology (IT) services and
central equipment services. Because these internal service fund activities predominantly benefit
governmental rather than business-type functions, they have been included within governmental activities
in the government-wide financial statements.
Proprietary funds provide the same type of information as the government-wide financial statements, only
in more detail. The proprietary fund financial statements provide separate information for each of the
enterprise operations.
The internal service funds are combined into a single, aggregated presentation in the proprietary fund
financial statements. Individual fund data for the internal service funds is provided in the form of
combining statements elsewhere in this report.
Notes to Basic Financial Statements – The notes to basic financial statements provide additional
information that is essential to obtaining a full understanding of the data provided in the government-wide
and fund financial statements.
Other Information – Additional information on nonmajor funds can be found in the supplemental
information section of this report.
-7-
GOVERNMENT-WIDE FINANCIAL ANALYSIS
City of Monticello’s Net Position
20132012, as Restated20132012, as Restated20132012, as Restated
Current and other assets33,703,304$ 51,124,570$ 13,326,965$ 12,274,504$ 47,030,269$ 63,399,074$
Capital assets66,933,820 69,058,542 46,906,128 46,357,019 113,839,948 115,415,561
Total assets100,637,124 120,183,112 60,233,093 58,631,523 160,870,217 178,814,635
Long-term liabilities 23,575,940 39,551,731 29,670,082 26,683,265 53,246,022 66,234,996
Other liabilities1,187,058 1,647,574 3,602,541 1,534,702 4,789,599 3,182,276
Total liabilities24,762,998 41,199,305 33,272,623 28,217,967 58,035,621 69,417,272
Net position
Net investment in
capital assets44,268,757 40,868,506 20,496,832 22,687,306 64,765,589 63,555,812
Restricted18,118,070 21,513,894 – – 18,118,070 21,513,894
Unrestricted13,487,299 16,601,407 6,463,638 7,726,250 19,950,937 24,327,657
Total net position75,874,126$ 78,983,807$ 26,960,470$ 30,413,556$ 102,834,596$ 109,397,363$
Governmental ActivitiesBusiness-Type ActivitiesTotal
In 2013, current and other assets are lower than 2012, mainly due to the use of restricted assets for the
payment of refunded debt. Capital assets are lower from annual depreciation on assets. Other liability
increases are from additional accrued interest on debt the City has technically defaulted on.
As noted earlier, net position may serve over time as a useful indicator of a government’s financial
position. The City’s assets exceeded its liabilities by $102,834,596 at the end of 2013.
A portion of the City’s net position (63.0 percent) reflects its investment in capital assets (e.g. land,
buildings, machinery and equipment, and infrastructure) less any related outstanding debt used to acquire
those assets. The City uses these capital assets to provide services to citizens; consequently, these assets
are not available for future spending. Although the City’s investment in its capital assets is reported net of
related debt, it should be noted that the resources needed to repay this debt must be provided from other
resources, since the capital assets themselves cannot be used to liquidate these liabilities.
A portion of the City’s net position (19.4 percent) reflects its unrestricted net assets which may be used to
meet the City’s ongoing obligations to citizens and creditors.
At the end of 2013, the City was able to report positive balances in all three categories of net position, both
for the government as a whole and for its separate governmental and business-type activities.
Governmental Activities – Total net position in the City’s governmental activities decreased due to the
adjustment for unrealized loss on marking investments to market value at year-end in accordance with
accounting standards of the GASB.
Business-Type Activities – The shifts in net investment in capital assets and unrestricted net position in
the City’s business-type activities during 2013 are mainly related to depreciation on capital assets.
-8-
City of Monticello’s Changes in Net Position
20132012, as Restated20132012, as Restated 20132012, as Restated
Revenues
Program revenues
Charges for services2,178,816$ 1,930,655$ 6,577,342$ 6,573,467$ 8,756,158$ 8,504,122$
Operating grants and contributions293,710 252,784 – – 293,710 252,784
Capital grants and contributions1,079,738 1,841,915 – – 1,079,738 1,841,915
General revenues
Property taxes8,927,164 8,746,348 – – 8,927,164 8,746,348
Franchise taxes320,640 339,518 – – 320,640 339,518
General grants and aids65,228 38,618 – – 65,228 38,618
Investment earnings(189,128) 756,603 (117,175) 275,708 (306,303) 1,032,311
Gain on sale of assets3,885 11,575 – – 3,885 11,575
Other 489,782 540,247 65,468 100,712 555,250 640,959
Total revenues13,169,835 14,458,263 6,525,635 6,949,887 19,695,470 21,408,150
Expenses
General government 1,623,727 1,876,836 – – 1,623,727 1,876,836
Public safety 1,884,981 1,819,378 – – 1,884,981 1,819,378
Public works5,163,461 5,045,729 – – 5,163,461 5,045,729
Sanitation487,268 500,037 – – 487,268 500,037
Culture and recreation2,875,260 2,693,598 – – 2,875,260 2,693,598
Economic development1,005,813 803,594 – – 1,005,813 803,594
Interest and fiscal charges235,265 1,269,183 – – 235,265 1,269,183
Water – – 1,009,600 1,092,320 1,009,600 1,092,320
Sewage – – 2,466,660 2,480,657 2,466,660 2,480,657
Liquor – – 689,559 662,002 689,559 662,002
Deputy registrar – – 293,531 253,031 293,531 253,031
Fiber optics – – 5,240,871 5,228,428 5,240,871 5,228,428
Total expenses13,275,775 14,008,355 9,700,221 9,716,438 22,975,996 23,724,793
Increase in net position
before transfers(105,940) 449,908 (3,174,586) (2,766,551) (3,280,526) (2,316,643)
Transfers278,500 (2,095,489) (278,500) 2,095,489 – –
Change in net position172,560 (1,645,581) (3,453,086) (671,062) (3,280,526) (2,316,643)
Net position –
Beginning of year, as previously reported78,983,807 80,863,181 30,413,556 31,574,264 109,397,363 112,437,445
Prior period adjustment(3,282,241) – – – (3,282,241) –
Change in accounting principle – (233,793) – (489,646) – (723,439)
Beginning of year, as restated75,701,566 80,629,388 30,413,556 31,084,618 106,115,122 111,714,006
Net position – end of year75,874,126$ 78,983,807$ 26,960,470$ 30,413,556$ 102,834,596$ 109,397,363$
TotalGovernmental ActivitiesBusiness-Type Activities
The City’s net position decreased in fiscal 2013 by $3,280,526. This decrease was the result of continued
declining operations of the City’s Fiber Optics Fund in 2013, which includes interest expense of $1,936,848
in this fund.
In fiscal 2013, the City reported a change in accounting principle for the implementation of GASB
Statement No. 65, which impacted the January 1, 2012 balance by $233,793 for governmental funds and
$489,646 for enterprise funds.
During the year ended December 31, 2013, the City recorded a prior period adjustment to the government
activities to adjust special assessment receivable due to the recording of duplicate special assessments in
prior years and special assessments recorded as a receivable in prior years for projects that were never
assessed to the property owners by the City. The net effect on the beginning net position as of January 1,
2012, was $3,282,241.
-9-
GOVERNMENTAL ACTIVITIES – REVENUES
Revenues by Source – Governmental Activities
Revenues for the City’s governmental activities decreased by $1,288,428. The major components of this
decrease are explained as follows:
Capital grants and contributions decreased by $762,177 from special assessments to property
owners for their share of projects.
Investment earnings decreased by $945,731. This decrease was caused by the unrealized loss on
marking investments to market value at year-end in accordance with GASB standards.
Expenses – City expenses for governmental activities decreased by $732,580, or 5.2 percent. This decrease
is primarily due to decreases in general government. Interest and fiscal charges were lower in fiscal 2013
mainly from refunding bonds.
General Grants and
Aids
< 1%
Charges for Services
17%
Investment Earnings
(1%)
Operating Grants and
Contributions
2%
Other
4%
Capital Grants and
Contributions
8%
Franchise Taxes
2%
Property Taxes
68%
-10-
BUSINESS-TYPE ACTIVITIES
Revenues by Source – Business-Type Activities
Business-type activities decreased the City’s net position by $3,453,086. The rates for each city utility
service operated as enterprise funds are reviewed annually and adjusted by City Council action. This assures
that operating revenues are independently sufficient to cover their own operating expenses and provide for
their own capital equipment replacement needs. Capital grants and contributions may be required for future
facility replacement needs as current and future projected rates may be insufficient for their ultimate
replacement.
Compared with the prior year, business-type activity investment earnings decreased because of the
unrealized loss on marking investments to market value at year-end
Expenses – Expenses across all five enterprise funds were relatively stable when compared with the prior
year. Declining personal service costs, especially in the Fiber Optics Fund, is the leading factor in the
decrease of overall business-type expenses. However, fluctuations in the other expense categories muted
the impact of this decline. Restructuring in Fiber Optics Fund operations lead to a decrease in staffing. In
some cases, staff reductions were at least partially offset by increases in professional services.
Charges for
Services
101%
Other
1%
Investment
Earnings
(2%)
-11-
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
receipts, uses, 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 $23,152,201, a decrease of $12,288,444. Of this total amount, $3,656,463 is unassigned fund
balance. The remainder of the fund balance is nonspendable, restricted, or assigned for a variety of
purposes.
The City’s General Fund balance increased $436,056 during the current fiscal year. Each of the main
activities of the General Fund were completed efficiently and effectively as authorized within the adopted
budget, except general government and public safety by $6,705 and $22,727, respectively.
Community Center Special Revenue Fund – The increase in the Community Center Special Revenue
Fund balance was the result of an increase in memberships and transfers from other funds in excess of
Natatorium Project costs.
EDA Special Revenue Fund – The EDA Special Revenue Fund balance decreased due to an increase in
developer payments and expenses related to the relocation of a business purchased as part of the
Montgomery Farms property in the prior year.
Debt Service Fund – The main revenue source is the collection of special assessments, with the annual
principal and interest on debt as the main expenditure. Reserves decreased by $10,202,817 due to
scheduled payment on the 2005 Improvements Bonds refunded during fiscal 2013 for $10,690,000.
Capital Outlay Revolving Capital Projects Fund – The decrease in fund balance of $1,945,695,
reducing fund balance to zero, was due to the transfer of land held for resale to the Capital Projects Fund
of $1,137,888 and transfers to the Capital Equipment Internal Service Fund and the Fiber Optics Fund.
Sanitary Sewer Access Capital Projects Fund – The Sanitary Sewer Access Capital Projects Fund
balance decreased by $1,866,876, reducing the fund balance to zero, due to the transfer of funds for the
Sanitary Sewer Access Capital Projects Fund’s share of debt service payments. Future access charges will
be credited to the Sewage Fund.
Capital Projects Fund – The Capital Projects Fund’s resources increased $1,568,091 in the current year,
primarily due to the transfer of land held for resale from the Capital Outlay Revolving Capital Projects
Fund totaling $1,137,888.
Proprietary Funds – The City’s proprietary funds provide the same type of information found in the
government-wide financial statements, but in more detail.
Water Fund – Net position decreased $242,502 due to a 10 percent increase in rates and a decrease in
consumption during the year. In addition, the Water Fund transferred $413,500 to other funds.
-12-
Sewage Fund – Net position decreased $508,012. The Sewage Fund had an operating loss of $377,206.
The depreciable cost of assets is not fully offset by the sewage rates and, therefore, the Sewage Fund had
an operating loss in fiscal 2013.
Liquor Fund – The City’s liquor operations ended the year with a decrease in net position. The City’s
Liquor Fund had operating net income of $629,014 and transferred $650,000 to other funds.
Fiber Optics Fund – In 2007, the City started its Fiber Optics Project, which installed a fiber optics
system to every premise in the City to provide customers with phone, high-speed internet, and cable
television services as a self-supporting system with competitive pricing. The system began operations in
the spring of 2010 and system construction was essentially complete by the end of 2011. As of
December 31, 2013, the Fiber Optics Fund had bonds payable of $26,445,000. In July 2012, The City
went into technical default on these bonds when it did not make a monthly deposit into a debt service
account as required by bond indenture. Subsequently, the City did not make any scheduled fiscal 2013
principal and interest payments on the bonds.
Deputy Registrar Fund – The City’s deputy registrar operations ended the year with an increase in net
position. The City’s Deputy Registrar Fund had operating income of $162,246 and transferred $75,000 to
the Community Center Fund.
GENERAL FUND BUDGETARY HIGHLIGHTS
General Fund revenues for 2013 were over budget by $161,977. Property taxes collected were $45,602
above budget, largely the result of delinquent tax collections. In addition, miscellaneous revenue was
$133,142 over budget mostly due to insurance dividends.
General Fund expenditures for 2013 were $286,079 under budget. Conservative council efforts and
vacant positions contributed to the positive budget variance.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets – The City’s investment in capital assets for its governmental and business-type activities
amounts to $113,839,948 as of December 31, 2013, net of accumulated depreciation. This investment in
capital assets includes fire and public works equipment, parks and recreation facilities, buildings, roads,
sewage, water, and storm sewer utilities. This amount represents a net decrease (including additions and
deductions) of $1,575,613 over last year.
-13-
City of Monticello’s Capital Assets
20132012, as Restated20132012, as Restated20132012, as Restated
Land11,919,531$ 11,298,862$ 1,197,945$ 1,197,945$ 13,117,476$ 12,496,807$
Construction in progress3,492,384 3,157,351 2,407,995 79,019 5,900,379 3,236,370
Buildings 13,709,653 13,709,653 6,820,979 6,820,979 20,530,632 20,530,632
Improvements other
than buildings5,692,145 5,698,145 20,160,525 20,160,525 25,852,670 25,858,670
Machinery, equipment,
furniture, and vehicles4,707,040 4,682,016 2,241,362 2,227,501 6,948,402 6,909,517
Infrastructure68,659,431 67,866,415 50,178,186 49,888,186 118,837,617 117,754,601
Less accumulated
depreciation(41,246,364) (37,353,900) (36,100,864) (34,017,136) (77,347,228) (71,371,036)
Net total66,933,820$ 69,058,542$ 46,906,128$ 46,357,019$ 113,839,948$ 115,415,561$
Governmental ActivitiesBusiness-Type ActivitiesTotal
Additional information on the City’s capital assets is located in Note 3 of the notes to basic financial
statements.
Long-Term Debt – At the end of 2013, the City has total bonds outstanding in the amount of
$52,861,000, of which $13,010,000 are special assessment bonds outstanding. The City has pledged
revenue streams from general property taxes; the community center; water and sewer utilities; fiber optics
revenues; and sewer, water, and storm sewer access funds for the principal and interest payments due on
these bonds.
City of Monticello’s Outstanding Bonds
201320122013201220132012
General obligation bonds7,506,653$ 8,877,403$ 3,479,347$ 568,597$ 10,986,000$ 9,446,000$
Certificate of indebtedness445,000 – – – 445,000 –
Special assessment bonds13,010,000 26,625,000 – – 13,010,000 26,625,000
Revenue bonds1,975,000 2,970,000 26,445,000 26,445,000 28,420,000 29,415,000
Total22,936,653$ 38,472,403$ 29,924,347$ 27,013,597$ 52,861,000$ 65,486,000$
Total
Governmental
Activities
Business-Type
Activities
The City’s total outstanding bonds decreased by $12,625,000 during 2013.
State statutes limit the amount of general obligation bonds a government entity may issue to 3 percent of
its taxable market value. The current debt limit is $29,471,296, which is significantly in excess of the
City’s outstanding net general obligation bonds of $6,200,000, which is subject to the limitation.
Additional information on the City’s debt is located in Note 4 of the notes to basic financial statements.
-14-
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The City considered many factors when setting the fiscal year 2013 budget, rates, and fees. The City
Council decided to set the tax levy at a level that would maintain current services at prior year levels.
Utility rates and fees were set at a level to cover operating expenses, ongoing capital costs, and current
and future debt service. Further, the changes to the levy and service charges also maintain the City’s
competitive advantage with surrounding cities and a vast majority of the other cities throughout the state.
The 2013 $7.9 million levy is $50,000, or 0.6 percent, more than the 2012 levy. The 2014 $8.15 million
levy is $250,000, or 3.2 percent, greater than the 2013 levy. Both levies are consistent with the City
Council’s conservative approach to using tax dollars for operations. The 2014 levy included only $12,000
more for operating expenses and the remainder is dedicated for debt service.
Budgeted 2013 revenues for building permits and other related charges were surpassed by a modest
uptick in construction. For 2014, the upward trend is expected to continue but budgeted permit revenue
was estimated to be slightly above the 2012 actual amount. In 2013, water and sewage rates were
budgeted to increase by 10 percent. However, weather-related changes in consumption reduced the
impact on overall revenues. No utility revenue increases were budgeted for 2014.
REQUESTS FOR INFORMATION
The City’s CAFR is designed to provide our citizens, customers, and creditors with a general overview of
the City’s finances and to show the City’s accountability for the money it receives. If you have questions
about this CAFR or need additional financial information, contact the City of Monticello, Finance
Department at 505 Walnut Street, Suite No. 1, Monticello, Minnesota 55362.
(This page left blank intentionally)
GOVERNMENT-WIDE FINANCIAL STATEMENTS
GovernmentalBusiness-Type
ActivitiesActivitiesTotals
Assets
Cash and investments 19,080,644$ 9,327,607$ 28,408,251$
Receivables
Current taxes 29,663 – 29,663
Delinquent taxes56,933 – 56,933
Current special assessments1,048,165 154,040 1,202,205
Deferred special assessments5,326,988 – 5,326,988
Delinquent special assessments1,386,481 30,001 1,416,482
Accounts 366,704 934,013 1,300,717
Interest 127,003 – 127,003
Due from other governmental units474 – 474
Internal balances(1,953) 1,953 –
Notes receivable1,117,544 – 1,117,544
Land held for resale5,027,044 – 5,027,044
Inventory – 508,918 508,918
Prepaid items 137,614 81,790 219,404
Restricted assets
Cash and investments held for fiber optics activity– 2,288,643 2,288,643
Capital assets
Land and construction in progress15,411,915 3,605,940 19,017,855
Depreciable assets, net of accumulated depreciation51,521,905 43,300,188 94,822,093
Total capital assets, net of depreciation66,933,820 46,906,128 113,839,948
Total assets 100,637,124$ 60,233,093$ 160,870,217$
Liabilities
Current liabilities
Accounts and contracts payable495,101$ 669,941$ 1,165,042$
Accrued interest payable251,292 2,806,245 3,057,537
Other accrued liabilities208,202 1,184 209,386
Due to other governmental units12,408 125,171 137,579
Unearned revenue78,379 – 78,379
Escrow deposits141,676 – 141,676
Long-term liabilities
Due within one year5,558,836 630,273 6,189,109
Due in more than one year18,017,104 29,039,809 47,056,913
Total long-term liabilities23,575,940 29,670,082 53,246,022
Total liabilities24,762,998 33,272,623 58,035,621
Net position
Net investment in capital assets44,268,757 20,496,832 64,765,589
Restricted for debt service9,660,316 – 9,660,316
Restricted for economic development7,114,435 – 7,114,435
Restricted for perpetual care14,033 – 14,033
Restricted for tax increment1,329,286 – 1,329,286
Unrestricted13,487,299 6,463,638 19,950,937
Total net position75,874,126 26,960,470 102,834,596
Total liabilities and net position 100,637,124$ 60,233,093$ 160,870,217$
See notes to basic financial statements
CITY OF MONTICELLO
Statement of Net Position
as of December 31, 2013
-15-
Program Revenues
OperatingCapital
Charges forGrants andGrants andGovernmentalBusiness-Type
Functions/ProgramsExpensesServicesContributionsContributionsActivitiesActivitiesTotals
Governmental activities
General government1,623,727$ 147,244$ –$ –$ (1,476,483)$ –$ (1,476,483)$
Public safety1,884,981 163,366 186,537 – (1,535,078) – (1,535,078)
Public works5,163,461 544,404 107,173 1,079,738 (3,432,146) – (3,432,146)
Sanitation487,268 16,653 – – (470,615) – (470,615)
Culture and recreation2,875,260 1,307,149 – – (1,568,111) – (1,568,111)
Economic development1,005,813 – – – (1,005,813) – (1,005,813)
Interest and fiscal charges235,265 – – – (235,265) – (235,265)
Total governmental
activities13,275,775 2,178,816 293,710 1,079,738 (9,723,511) – (9,723,511)
Business-type activities
Water1,009,600 1,214,570 – – – 204,970 204,970
Sewage2,466,660 1,981,491 – – – (485,169) (485,169)
Liquor689,559 1,318,276 – – – 628,717 628,717
Deputy registrar293,531 456,285 – – – 162,754 162,754
Fiber optics5,240,871 1,606,720 – – – (3,634,151) (3,634,151)
Total business-type
activities9,700,221 6,577,342 – – – (3,122,879) (3,122,879)
Total governmental
and business-type
activities22,975,996$ 8,756,158$ 293,710$ 1,079,738$ (9,723,511) (3,122,879) (12,846,390)
General revenues
Property taxes8,927,164 – 8,927,164
Franchise taxes320,640 – 320,640
General aids and grants – unrestricted65,228 – 65,228
Investment earnings (net of market value
adjustment)(189,128) (117,175) (306,303)
Other general revenues489,782 65,468 555,250
Gain on sale of assets3,885 – 3,885
Transfers278,500 (278,500) –
Total general revenues and transfers9,896,071 (330,207) 9,565,864
Change in net position172,560 (3,453,086) (3,280,526)
Net position –
Beginning of year, as previously reported78,983,807 30,413,556 109,397,363
Prior period adjustment(3,282,241) – (3,282,241)
Beginning of year, as restated75,701,566 30,413,556 106,115,122
Net position – end of year 75,874,126$26,960,470$ 102,834,596$
See notes to basic financial statements
CITY OF MONTICELLO
Statement of Activities
Year Ended December 31, 2013
Changes in Net Position
Net (Expense) Revenue and
-16-
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FUND FINANCIAL STATEMENTS
Economic
CommunityDevelopment
GeneralCenterAuthorityDebt Service
Assets
Cash and investments4,020,940$ 296,580$ 3,866,627$ 2,522,387$
Receivables
Current taxes21,365 4,140 – 3,992
Delinquent taxes 39,080 8,254 1,204 8,395
Current special assessments20,696 – – 813,625
Deferred special assessments– – – 4,550,894
Delinquent special assessments114 – – 1,188,105
Accounts65,915 – – 223,700
Accrued interest127,003 – – –
Due from other governmental units474 – – –
Notes receivable141,124 – 98,776 600,000
Land held for resale– – 3,224,756 –
Prepaid items116,976 16,886 2,074 –
Total assets4,553,687$ 325,860$ 7,193,437$ 9,911,098$
Liabilities
Accounts and contracts payable233,667$ 32,827$ 66,928$ –$
Other accrued liabilities208,202 – – –
Due to other governmental units5,689 6,719 – –
Unearned revenue– 6,856– –
Escrow deposits131,676 – 10,000 –
Total liabilities579,234 46,402 76,928 –
Deferred inflows of resources
Unavailable revenue – property taxes39,0808,2541,2048,395
Unavailable revenue – special assessments20,810– – 6,552,624
Unavailable revenue – notes receivable– – – 600,000
Total deferred inflows of resources59,890 8,254 1,204 7,161,019
Fund balances
Nonspendable258,10016,8862,074 –
Restricted– – 7,113,231 2,750,079
Assigned– 254,318 – –
Unassigned3,656,463 – – –
Total fund balances3,914,563 271,204 7,115,305 2,750,079
Total liabilities, deferred inflows of
resources, and fund balances4,553,687$ 325,860$ 7,193,437$ 9,911,098$
See notes to basic financial statements
as of December 31, 2013
CITY OF MONTICELLO
Balance Sheet
Governmental Funds
Special Revenue Funds
-17-
Capital Outlay Sanitary
RevolvingSewer AccessCapital ProjectsNonmajor FundsTotals
–$ –$ 1,894,052$ 5,546,412$ 18,146,998$
– – – 166 29,663
– – – – 56,933
– – 213,844 – 1,048,165
– – 776,094 – 5,326,988
– – 198,262 – 1,386,481
– – – 77,089 366,704
– – – – 127,003
– – – – 474
– – – 277,644 1,117,544
– – 1,802,288 – 5,027,044
– – – 1,678 137,614
–$ –$ 4,884,540$ 5,902,989$ 32,771,611$
–$ –$ 145,123$ 3,989$ 482,534$
– – – – 208,202
– – – – 12,408
– – 71,523 – 78,379
– – – – 141,676
– – 216,646 3,989 923,199
– – – – 56,933
– – 1,188,200 – 7,761,634
– – – 277,644 877,644
– – 1,188,200 277,644 8,696,211
– – 1,802,2881,678 2,081,026
– – – 1,065,675 10,928,985
– – 1,677,406 4,554,003 6,485,727
– – – – 3,656,463
– – 3,479,694 5,621,356 23,152,201
–$ –$ 4,884,540$ 5,902,989$ 32,771,611$
Capital Projects Funds
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Total fund balances – governmental funds 23,152,201$
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capitalassetsusedingovernmentalactivitiesarenotfinancialresourcesand,therefore,are
not reported as assets in governmental funds. These assets consist of:
Cost of capital assets108,068,171
Accumulated depreciation(41,234,657)
66,833,514
SomeoftheCity’spropertytaxes,specialassessments,andnotesreceivablewillbe
collectedafteryear-end,butarenotavailablesoonenoughtopayforthecurrentperiod’s
expendituresand,therefore,arereportedasdeferredinflowsofresourcesinthe
governmental funds.8,696,211
Interestonlong-termdebtisnotaccruedingovernmentalfunds,butratherisrecognizedas
anexpenditurewhendue.Accruedinterestforgeneralobligationbondsisincludedinthe
Statement of Net Position.(250,782)
Netotherpost-employmentbenefitobligationspayablereportedintheStatementofNet
Positiondonotrequiretheuseofcurrentfinancialresourcesandarenotreportedas
liabilities in governmental funds until actually due.(255,604)
Long-termliabilitiesthatpertaintogovernmentalfunds,includingbondspayable,arenot
dueandpayableinthecurrentperiodand,therefore,arenotreportedasfundliabilities.All
liabilities, both current and long-term, are reported in the Statement of Net Position:
Bonds payable (22,491,653)
Unamortized bond discounts 214,092
Unamortized bond premiums (287,196)
Compensated absences (310,579)
(22,875,336)
Internalservicefundsareusedbymanagementtochargethecostsofinformation
technologyandvehiclemaintenancetoindividualfunds.Theassetsandliabilitiesofthe
internalservicefundsareincludedingovernmentalactivitiesintheStatementofNet
Internal service net position included in governmental activities 575,875
Add internal service net position allocated to business-type activities (1,953)
573,922
Total net position – governmental activities 75,874,126$
See notes to basic financial statements
CITY OF MONTICELLO
Reconciliation of the Balance Sheet to the
Statement of Net Position
Governmental Funds
as of December 31, 2013
-19-
Economic
CommunityDevelopment
GeneralCenterAuthorityDebt Service
Revenue
Property taxes5,605,102$ 1,181,335$ –$ 1,196,912$
Tax increments– – 965,935 –
Special assessments22,351 – – 1,016,420
Franchise taxes216,500 – – –
Licenses and permits331,711 – – –
Intergovernmental372,631 – – –
Charges for services245,675 1,292,608 25,404 –
Fines1,725 – – –
Investment earnings (net of market value
adjustment)(52,136) (5,287) (3,964) 5,956
Miscellaneous205,387 16,743 278,642 200,000
Total revenue6,948,946 2,485,399 1,266,017 2,419,288
Expenditures
Current
General government1,555,532 – – 4,879
Public safety1,805,434 – – –
Public works1,700,146 – – –
Sanitation505,996 – – –
Culture and recreation853,782 1,616,230 – –
Economic development– – 924,462 –
Capital outlay
Public works– – – –
Culture and recreation– 77,465 – –
Debt service
Principal– – – 5,290,750
Interest and fiscal charges– – – 927,957
Total expenditures6,420,890 1,693,695 924,462 6,223,586
Excess (deficiency) of revenues
over expenditures528,056 791,704 341,555 (3,804,298)
Other financing sources (uses)
Transfers in– 175,000 92,000 4,291,481
Transfers (out)(92,000) (875,000) (779,804) –
Payment on refunded debt– – – (10,690,000)
Proceeds from sale of assets– – – –
Total other financing sources (uses)(92,000) (700,000) (687,804) (6,398,519)
Net change in fund balances436,056 91,704 (346,249) (10,202,817)
Fund balances
Beginning of year3,478,507 179,500 7,461,554 12,952,896
End of year 3,914,563$ 271,204$ 7,115,305$ 2,750,079$
See notes to basic financial statements
Special Revenue Funds
CITY OF MONTICELLO
Statement of Revenue, Expenditures, and Changes in Fund Balances
Governmental Funds
Year Ended December 31, 2013
-20-
Capital OutlaySanitary
RevolvingSewer AccessCapital ProjectsNonmajor FundsTotals
–$ –$ –$ 2,346$ 7,985,695$
– – – – 965,935
– – 1,027,173 – 2,065,944
18,137 – – 86,003 320,640
– – – – 331,711
– – 892,150 – 1,264,781
– 221,584 – 61,648 1,846,919
– – – – 1,725
(10,210) (16,411) (25,202) (75,988) (183,242)
– – – 4 700,776
7,927 205,173 1,894,121 74,013 15,300,884
– – – 16,242 1,576,653
– – – – 1,805,434
– – – 7,430 1,707,576
– – – – 505,996
– – – 2,975 2,472,987
87,499 – – – 1,011,961
– – 1,074,319 – 1,074,319
– – – 205,470 282,935
– – – – 5,290,750
– – – 3,025 930,982
87,499 – 1,074,319 235,142 16,659,593
(79,572) 205,173 819,802 (161,129) (1,358,709)
– – 1,598,289 750,000 6,906,770
(1,878,551) (2,072,049) (850,000) (611,529) (7,158,933)
– – – – (10,690,000)
12,428 – – – 12,428
(1,866,123) (2,072,049) 748,289 138,471 (10,929,735)
(1,945,695) (1,866,876) 1,568,091 (22,658) (12,288,444)
1,945,695 1,866,876 1,911,603 5,644,014 35,440,645
–$ –$ 3,479,694$ 5,621,356$ 23,152,201$
Capital Projects Funds
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Total net change in fund balances – governmental funds(12,288,444)$
Capitaloutlaysarereportedingovernmentalfundsasexpenditures.However,inthe
StatementofActivities,thecostofthoseassetsisallocatedovertheestimateduseful
lives as depreciation expense. This is the amount by which capital assets changed:
Capital outlays1,753,767
Depreciation expense(3,970,252)
(2,216,485)
Againorlossonthedisposalofcapitalassets,includingthedifferencebetweenthe
carryingvalueandanyrelatedsaleproceeds,isincludedinthechangeinnetposition.
However, only the sale proceeds are included in the change in fund balance. (8,543)
Thegovernmentalfundsreportbondproceedsasfinancingsources,whilerepayment
ofbondprincipalisreportedasanexpenditure.IntheStatementofNetPosition,
however,issuingdebtincreaseslong-termliabilitiesanddoesnotaffecttheStatement
of Activities:
Repayment of bond principal15,980,750
Change in accrued interest payable263,596
Amortization of bond premium (discounts)440,985
Change in compensated absences12,435
16,697,766
Netotherpost-employmentbenefitobligationspayablereportedintheStatementof
Activitiesdonotrequiretheuseofcurrentfinancialresourcesandarenotreportedas
expenditures in governmental funds until actually due.(39,941)
Certainrevenues(includingdelinquenttaxesandspecialassessments)areincludedin
thechangeinnetposition,butareexcludedfromthechangeinfundbalancesuntil
they are available to liquidate liabilities of the current period.
Deferred inflows of resources (2,545,715)
Internalservicefundsareused by management tochargethecostsof information
technologyandvehiclemaintenancetoindividualfunds.Thenetrevenue/expenseof
certainactivitiesofinternalservicefundsisreportedwithgovernmentalactivitiesin
the government-wide financial statements.
Internal service fund activity included in governmental activities 575,875
Add back internal service fund activity allocated to business-type activities (1,953)
573,922
Change in net position – governmental activities 172,560$
See notes to basic financial statements
AmountsreportedforgovernmentalactivitiesintheStatementofActivitiesaredifferent
because:
CITY OF MONTICELLO
Year Ended December 31, 2013
Reconciliation of the Statement of
Revenue, Expenditures, and Changes in Fund Balances
to the Statement of Activities
Governmental Activities
-22-
Governmental
Activities
WaterSewageLiquorFiber Optics
Deputy
RegistrarTotalsInternal Service
Assets
Current assets
Cash and investments – unrestricted4,267,193$ 4,328,991$ 306,768$ 202,976$ 221,679$ 9,327,607$ 933,646$
Receivables
Current special assessments154,040 – – – – 154,040 –
Delinquent special assessments30,001 – – – – 30,001 –
Accounts228,473 538,901 – 137,327 32,140 936,841 –
Allowance for uncollectibles– – – (2,828) – (2,828) –
Inventory– – 508,918 – – 508,918 –
Prepaids9,087 20,303 14,438 34,776 3,186 81,790 –
Total current assets4,688,794 4,888,195 830,124 372,251 257,005 11,036,369 933,646
Noncurrent assets
Cash and investments – restricted– – – 2,288,643 – 2,288,643 –
Capital assets
Land 208,143 984,202 5,600 – – 1,197,945 –
Buildings 848,445 4,033,879 770,867 1,167,788 – 6,820,979 –
Furniture and equipment15,695 62,882 70,277 38,155 – 187,009 17,013
Vehicles53,553 531,086 – 78,421 14,264 677,324 –
Machinery and equipment166,267 1,024,572 64,251 121,939 – 1,377,029 95,000
Improvements other than buildings2,392,268 17,635,210 69,350 – 63,697 20,160,525 –
Infrastructure16,477,649 19,924,948 – 13,775,589 – 50,178,186 –
Construction in progress102,706 2,099,078 – 206,211 – 2,407,995 –
20,264,726 46,295,857 980,345 15,388,103 77,961 83,006,992 112,013
Less accumulated depreciation(9,611,780) (24,850,451) (668,633) (942,988) (27,012) (36,100,864) (11,707)
Capital assets, net of depreciation10,652,946 21,445,406 311,712 14,445,115 50,949 46,906,128 100,306
Total noncurrent assets10,652,946 21,445,406 311,712 16,733,758 50,949 49,194,771 100,306
Total assets15,341,740$ 26,333,601$ 1,141,836$ 17,106,009$ 307,954$ 60,231,140$ 1,033,952$
Liabilities
Current liabilities
Accounts and contracts payable73,191$ 240,263$ 75,449$ 280,555$ 483$ 669,941$ 12,567$
Accrued interest payable– 14,350 – 2,791,895 – 2,806,245 510
Other accrued liabilities– – 1,184 – – 1,184 –
Due to other governmental units2,043 – 48,059 7,000 68,069 125,171 –
Bonds payable due within one year– 273,000 – 325,000 – 598,000 60,000
Compensated absences due within one year11,111 – 11,845 5,457 3,860 32,273 –
Total current liabilities86,345 527,613 136,537 3,409,907 72,412 4,232,814 73,077
Long-term liabilities
Bonds payable, net– 3,241,710– 25,724,426 – 28,966,136 385,000
Compensated absences payable34,951 – 26,049 2,182 10,491 73,673 –
Total long-term liabilities34,951 3,241,710 26,049 25,726,608 10,491 29,039,809 385,000
Total liabilities121,296 3,769,323 162,586 29,136,515 82,903 33,272,623 458,077
Net position (deficit)
Net investment in capital assets10,652,946 18,796,893 311,712 (9,315,668) 50,949 20,496,832 5,306
Unrestricted4,567,498 3,767,385 667,538 (2,714,838) 174,102 6,461,685 570,569
Total net position (deficit)15,220,444 22,564,278 979,250 (12,030,506) 225,051 26,958,517 575,875
Total liabilities and net position15,341,740$ 26,333,601$ 1,141,836$ 17,106,009$ 307,954$ 60,231,140$ 1,033,952$
Total net position – enterprise funds26,958,517$
Adjustment to reflect the consolidation of internal
service fund activity related to enterprise funds.1,953
Net position – business-type activities 26,960,470$
See notes to basic financial statements
Business-Type Activities – Enterprise Funds
CITY OF MONTICELLO
Statement of Net Position
Proprietary Funds
as of December 31, 2013
-23-
Governmental
Activities
WaterSewageLiquorFiber Optics
Deputy
Registrar TotalsInternal Service
Sales and cost of sales
Net sales–$ –$ 5,085,924$ –$ –$ 5,085,924$ –$
Cost of sales– – (3,767,648) – – (3,767,648) –
Gross profit– – 1,318,276 – – 1,318,276 –
Operating revenue
Charges for services1,214,570 1,981,491 – 1,606,720 456,285 5,259,066 187,535
Other revenue24,513 25,227 687 14,94299 65,468 23
Total operating revenue1,239,083 2,006,718 687 1,621,662 456,384 5,324,534 187,558
Total gross profit and
operating revenue1,239,083 2,006,718 1,318,963 1,621,662 456,384 6,642,810 187,558
Operating expenses
Personal services212,409 263,020 441,639 445,407 256,835 1,619,310 –
Utilities107,448 30,513 26,973 28,486 3,139 196,559 38,334
Supplies and maintenance83,629 16,056 20,249 167,753 8,600 296,287 7,473
Repairs and maintenance8,399 1 27,259 3,328 744 39,731 280
Depreciation520,014 1,107,508 47,141 410,818 4,842 2,090,323 11,707
Insurance14,062 30,129 17,158 14,676 2,450 78,475 –
Bond settlement charges– – – 642,620 – 642,620 –
Content and access charges– – – 852,645 – 852,645 –
Other services and charges11,618 907,506 12,302 535,578 3,993 1,470,997 39,661
Miscellaneous52,297 29,191 97,228 203,119 13,535 395,370 34,707
Total operating expenses1,009,876 2,383,924 689,949 3,304,430 294,138 7,682,317 132,162
Operating income (loss)229,207 (377,206) 629,014 (1,682,768) 162,246 (1,039,507) 55,396
Nonoperating revenues (expenses)
Investment earnings (net of market value
adjustment)(58,209) (47,797) (8,283) (698) (2,188) (117,175) (5,886)
Interest expense– (83,009) – (1,936,848) – (2,019,857) (4,298)
Total nonoperating revenues
(expenses)(58,209) (130,806) (8,283) (1,937,546) (2,188) (2,137,032) (10,184)
Income (loss) before transfers170,998 (508,012) 620,731 (3,620,314) 160,058 (3,176,539) 45,212
Transfers
Transfer in– – – 860,000– 860,000 530,663
Transfers (out)(413,500) – (650,000) – (75,000) (1,138,500) –
Total transfers(413,500) – (650,000) 860,000 (75,000) (278,500) 530,663
Change in net position(242,502) (508,012) (29,269) (2,760,314) 85,058 (3,455,039) 575,875
Net position (deficit)
Beginning of year, as restated15,462,946 23,072,290 1,008,519 (9,270,192) 139,993 30,413,556 –
End of year 15,220,444$ 22,564,278$ 979,250$ (12,030,506)$225,051$ 26,958,517$ 575,875$
Change in net position – enterprise funds(3,455,039)$
Adjustment to reflect the consolidation of internal
service fund activity related to enterprise funds.1,953
Change in net position – business-type activities (3,453,086)$
See notes to basic financial statements
CITY OF MONTICELLO
Statement of Revenue, Expenses, and Changes in Fund Net Position
Proprietary Funds
Year Ended December 31, 2013
Business-Type Activities – Enterprise Funds
-24-
Governmental
Activities
WaterSewageLiquorFiber Optics
Deputy
RegistrarTotalsInternal Service
Cash flows from operating activities
Cash received from customers1,224,293$ 1,924,836$ 5,086,611$ 1,724,617$ 451,353$ 10,411,710$ –$
Receipts from interfund services provided– – – – – – 187,558
Cash payments to suppliers(245,566) (806,768) (4,014,249) (2,257,626) (26,894) (7,351,103) (107,888)
Cash payments to employees(208,594) (263,020) (430,157) (451,036) (269,046) (1,621,853) –
Net cash flows from operating activities770,133 855,048 642,205 (984,045) 155,413 1,438,754 79,670
Cash flows from noncapital financing activities
Transfers in– – – 860,000 – 860,000 530,663
Transfers (out)(413,500) – (650,000) – (75,000) (1,138,500) –
Net cash flows from noncapital
financing activities(413,500) – (650,000) 860,000 (75,000) (278,500) 530,663
Cash flows from capital and related financing activities
Acquisition and construction of capital assets(318,706) (2,094,059) 1 (226,667) – (2,639,431) (112,013)
Proceeds from issuance of long-term debt– 3,029,783 – – – 3,029,783 500,000
Principal paid on long-term debt– (89,250) – – – (89,250) (55,000)
Interest paid on long-term debt – (79,854) – (150,759) – (230,613) (3,788)
Net cash flows from capital and
related financing activities (318,706) 766,620 1 (377,426) – 70,489 329,199
Cash flows from investing activities
Interest on investments(58,209) (47,797) (8,283) (698) (2,188) (117,175) (5,886)
Net increase (decrease) in cash and cash
equivalents(20,282) 1,573,871 (16,077) (502,169) 78,225 1,113,568 933,646
Cash and cash equivalents
Beginning of year4,287,475 2,755,120 322,845 2,993,788 143,454 10,502,682 –
End of year 4,267,193$ 4,328,991$ 306,768$ 2,491,619$ 221,679$ 11,616,250$ 933,646$
Cash and cash equivalents comprised of
Unrestricted4,267,193$ 4,328,991$ 306,768$ 202,976$ 221,679$ 9,327,607$ 933,646$
Restricted– – – 2,288,643 – 2,288,643 –
Total 4,267,193$ 4,328,991$ 306,768$ 2,491,619$ 221,679$ 11,616,250$ 933,646$
Reconciliation of operating income (loss) to
net cash provided (used) by operating activities
Operating income (loss)229,207$ (377,206)$ 629,014$ (1,682,768)$ 162,246$ (1,039,507)$ 55,396$
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities
Depreciation520,014 1,107,508 47,141 410,818 4,842 2,090,323 11,707
Changes in assets and liabilities
(Increase) decrease in accounts receivable, net(9,636) (81,882) – 102,955 (5,031) 6,406 –
(Increase) in special assessments receivable(4,154) – – – – (4,154) –
Decrease in inventory– – 1,827 – – 1,827 –
(Increase) decrease in prepaid expenses4,244 (5,639) (1,888) 63,708 (1,440) 58,985 –
Increase (decrease) in accounts and contracts
payable28,456 212,290 (44,517) 129,760 (549) 325,440 12,567
Increase in accrued expenses– – 107 – – 107 –
Increase (decrease) in due to other governments(813) (23) (854) (2,889) 7,556 2,977 –
(Decrease) in escrow deposits(1,000) – – – – (1,000) –
Increase (decrease) in compensated absences3,815 – 11,375 (5,629) (12,211) (2,650) –
Net cash flows from operating activities 770,133$ 855,048$ 642,205$ (984,045)$ 155,413$ 1,438,754$ 79,670$
Disclosure of noncash transactions
(Negative) market value adjustment (174,043)$ (121,255)$ (17,028)$ 5,328$ (7,293)$ (314,291)$ (14,923)$
See notes to basic financial statements
Statement of Cash Flows
CITY OF MONTICELLO
Proprietary Funds
Year Ended December 31, 2013
Business-Type Activities – Enterprise Funds
-25-
CITY OF MONTICELLO
Notes to Basic Financial Statements
December 31, 2013
-26-
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization
The financial statements of the City of Monticello, Minnesota (the City) have been prepared in
conformity with accounting principles generally accepted in the United States of America as applied to
governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard
setting body for establishing governmental accounting and financial reporting principles. The significant
accounting policies of the City are described as follows:
B. Reporting Entity
The accompanying financial statements include all funds, departments, agencies, boards, commissions,
and other organizations that comprise the City, along with any component units.
Component units are legally separate entities for which the City (primary government) is financially
accountable, or for which the exclusion of the component unit would render the financial statements of
the primary government misleading. The criteria used to determine if the primary government is
financially accountable for a component unit includes whether or not the primary government appoints
the voting majority of the potential component unit’s governing body, is able to impose its will on the
potential component unit, is in a relationship of financial benefit or burden with the potential component
unit, or is fiscally depended upon by the potential component unit.
The Monticello Economic Development Authority (EDA) is fiscally dependent upon the City, and its
governing body consists of City Council members. Therefore, the EDA is included as a component unit
of the City. The EDA’s financial data has been blended with that of the City (i.e. reported as though its
funds were funds of the City) and reported as a special revenue fund.
C. Government-Wide Financial Statement Presentation
The government-wide financial statements (Statement of Net Position and Statement of Activities)
display information about the reporting government as a whole. These statements include all of the
financial activities of the City. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely to a
significant extent on fees and charges for support.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or
segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a
specific function or segment. Program revenues include: 1) charges to customers or applicants who
purchase, use, or directly benefit from goods, services, or privileges provided by a given function or
segment; 2) operating grants and contributions; and 3) capital grants and contributions, including special
assessments that are restricted to meeting the operational or capital requirements of a particular function
or segment. Taxes and other internally directed revenues are reported as general revenues.
The government-wide financial statements are reported using the economic resources measurement focus
and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when
a liability is incurred, regardless of the timing of related cash flows. Property taxes and special
assessments are recognized as revenues in the fiscal year for which they are levied. Grants and similar
items are recognized as revenue when all eligibility requirements imposed by the provider have been met.
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Generally, the effect of interfund activity has been removed from the government-wide financial
statements. However, charges between functions for certain interfund services provided are not
eliminated, as that would distort the direct costs and program revenues reported in those functions. The
City applies restricted resources first when an expense is incurred for which both restricted and
unrestricted resources are available. Depreciation expense is included in the direct expenses of each
function. Interest on long-term debt is considered an indirect expense and is reported separately on the
Statement of Activities.
D. Fund Financial Statement Presentation
Separate fund financial statements are provided for governmental and proprietary funds. Major individual
governmental and enterprise funds are reported as separate columns in the fund financial statements.
Aggregated information for the remaining nonmajor funds are reported in single columns in the respective
fund financial statements.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods in
connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of
the City’s enterprise funds are charges to customers for sales and services. The operating expenses for the
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.
Governmental fund financial statements are reported using the current financial resources measurement
focus and the modified accrual basis of accounting. Under this basis of accounting transactions are
recorded in the following manner:
1. Revenue Recognition – Revenue is recognized when it becomes measurable and available.
“Measurable” means the amount of the transaction can be determined and “available” means
collectible within the current period or soon enough thereafter to be used 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 year. Grants and similar items are recognized when
all eligibility requirements imposed by the provider have been met.
Major revenue that is susceptible to accrual includes property taxes, intergovernmental revenue,
charges for services, and interest earned on investments. 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. Major revenue that is not susceptible to accrual includes licenses
and permits, fees, and miscellaneous revenue. Such revenue is recorded only when received
because it is not measurable until collected.
2. Recording of Expenditures – Expenditures are generally recorded when a liability is incurred,
except for principal and interest on long-term debt and compensated absences, which are
recognized as expenditures to the extent they have matured. Capital asset acquisitions are
reported as capital outlay expenditures in the governmental funds. Proceeds of long-term debt are
reported as other financing sources.
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Proprietary fund financial statements are reported using the economic resources measurement focus and
accrual basis of accounting, similar to the government-wide financial statements. Proprietary funds
distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a
proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise
funds and internal service funds are charges to customers for sales and services. The operating expenses
for the enterprise funds and internal service funds include the cost of sales and services, administrative
expenses, and depreciation on capital assets. All revenues and expenses that do not meet this definition
are reported as nonoperating revenues and expenses.
Aggregated information for the internal service funds is reported in a single column in the proprietary
fund financial statements. Because the principal user of the internal services is the City’s governmental
activities, the financial statements of the internal service funds are consolidated into the governmental
column when presented in the government-wide financial statements. The cost of these services is
reported in the appropriate functional activity.
Description of Funds
Each fund is accounted for as an independent entity. A description of the funds included in this report is
as follows:
Major Governmental Funds
General Fund – The General Fund is used to account for all financial resources except those required
to be accounted for in another fund.
Community Center Special Revenue Fund – The Community Center Special Revenue Fund
accounts for the revenues and expenditures related to the community center. In addition to a property
tax allocation, the community center generates significant revenue from charges for memberships,
program activities, and space rentals.
EDA Special Revenue Fund – The EDA Special Revenue Fund is used to account for revenues and
expenditures related to the blended component unit. Tax increments, generated mainly by economic
and redevelopment districts, are the EDA’s primary revenue source.
Debt Service Fund – The Debt Service Fund is used to account for the accumulation of resources for
and the payment of long-term debt principal, interest, and related costs.
Capital Outlay Revolving Capital Projects Fund – The Capital Outlay Revolving Capital Projects
Fund is used to account for the revenues and expenditures related to capital outlay.
Sanitary Sewer Access Capital Projects Fund – The Sanitary Sewer Access Capital Projects Fund
is used to account for revenues and expenditures related to sanitary sewer connections.
Capital Projects Fund – The Capital Projects Fund is used to account for financial resources to be
used for the acquisition or construction of major capital facilities (other than those financed by
proprietary funds).
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Major Proprietary Funds
Water Enterprise Fund – The Water Enterprise Fund is used to account for all activities necessary
to provide water services to the residents and businesses of the City.
Sewage Enterprise Fund – The Sewage Enterprise Fund is used to account for all activities
necessary to provide sewage services to the residents and businesses of the City.
Liquor Enterprise Fund – The Liquor Enterprise Fund is used to account for the operations of the
City’s liquor store.
Fiber Optics Enterprise Fund – The Fiber Optics Enterprise Fund is used to account for all
activities necessary to provide fiber optic services to the residents and businesses of the City.
Deputy Registrar Enterprise Fund – The Deputy Registrar Enterprise Fund is used to account for
the operation of City’s department of motor vehicles.
Internal Service Funds – These funds account for the City’s central information technology and central
equipment services. Internal service funds operate in a manner similar to enterprise funds; however, they
provide services primarily to other departments within the City.
E. Cash and Investments
Cash and investments include balances from all funds that are combined and invested to the extent
available in savings accounts, certificates of deposit, U.S. government obligations, and other securities
authorized by state statutes. Earnings from investments are allocated to the respective funds on the basis
of applicable participation by each fund. Investments are generally stated at fair value, except for
investments in 2a7-like external investment pools, which are stated at amortized cost. Short-term highly
liquid debt instruments (including commercial paper, banker’s acceptances, and U.S. treasury and agency
obligations) purchased with a remaining maturity of one year or less are reported at amortized cost.
Investment income is accrued at the Balance Sheet date.
Restricted – Certain proceeds of governmental and enterprise fund debt issues as well as certain
resources set aside for their repayment, are classified as restricted assets in the basic financial statements
because their use is limited by applicable bond covenants.
Cash and investments which are restricted include a Fiber Optics Project bond issue escrow account.
Assets limited to use include assets restricted for debt redemption.
F. Receivables
Utility and miscellaneous accounts receivable are reported at gross. Since the City is generally able to
certify delinquent amounts to the county for collection as special assessments, no allowance for
uncollectible accounts has been provided on current receivables.
The City utilizes an allowance for uncollectible accounts to value its receivables only in the Fiber Optics
Proprietary Fund.
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
G. Notes Receivable
Notes receivable consist primarily of loans made by the City to area businesses for development or
redevelopment purposes. The terms and interest rates of the individual loans vary. Some notes receivable
are offset by deferred inflows of resources in the governmental funds.
The City has one note receivable totaling $600,000 with another local government. This note has an
interest rate of 3.95 percent and will mature at various dates through January 2016. This note receivable is
offset by deferred inflows of resources.
H. Property Taxes
Property tax levies are set by the City Council each year, and are certified to Wright County for collection
in the following year. In Minnesota, counties act as collection agents for all property taxes.
Wright County spreads all levies over taxable property. Such taxes become a lien on January 1 and are
recorded as receivables by the City on that date. Property taxes may be paid by taxpayers in two equal
installments on May 15 and October 15. Wright County provides tax settlements to cities and other taxing
districts several times throughout the year. Taxes which remain unpaid at December 31 are classified as
delinquent taxes receivable and are offset by deferred inflows of resources in the governmental funds
financial statements.
Within the governmental fund financial statements, the City recognizes property tax revenue when it
becomes both measurable and available to finance expenditures of the current period. The portion of
delinquent taxes not collected by the City in January is fully offset by deferred inflows of resources
because it is not available to finance current expenditures. Deferred inflows of resources in governmental
activities is susceptible to full accrual on the government-wide financial statements.
I. Special Assessments
Special assessments represent the financing for public improvements paid for by benefiting property
owners. These assessments are recorded as delinquent (levied, but unremitted) and deferred (certified, but
not yet levied) special assessments receivable, and are offset by deferred inflows of resources in the
governmental fund financial statements.
J. Inventories
The inventories of the proprietary funds are stated at cost on the first-in, first-out basis. Enterprise fund
inventory consists of merchandise held for resale at the Hi-Way Liquor Store.
K. Prepaid Items
Payments to vendors for services that will benefit future accounting periods are recorded as prepaid.
Prepaid items are accounted for using the consumption method. Fund balance in an amount equal to the
prepaid balance in the related funds is not available for appropriation.
L. Land Held for Resale
Land held for resale is recorded in the governmental fund which purchased it at the lower of cost or
market. Fund balance restricted in an amount equal to the land’s carrying value is reported in the
governmental funds as these assets are not available for appropriation.
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
M. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (roads, bridges,
sidewalks, and similar items) are reported in the applicable governmental or business-type activities
columns in the government-wide financial statements. Such assets are capitalized at historical cost, or
estimated historical cost for assets where actual historical cost is not available. Donated assets are
recorded as capital assets at their estimated fair market value at the date of donation. The City restructured
the capitalization policy which had a single threshold level of $5,000 or more for capitalizing capital
assets. The restructured policy divides each asset into a class with a related threshold as follows:
Class of Asset Threshold Level
Land $1
Land improvements $50,000
Building/building improvements $20,000
Primary infrastructure and utility $75,000
Secondary infrastructure $25,000
Equipment $10,000
Software and non-tangible $10,000
The cost of normal maintenance and repairs that does not add to the value of the asset or materially
extend asset lives is not capitalized. The City has elected to fully capitalize the infrastructure capital
assets of its governmental activities regardless of their acquisition date or amount.
Capital assets are recorded in the government-wide and proprietary fund financial statements, but are not
reported in the governmental funds financial statements. Interest incurred during the construction phase of
capital assets for business-type activities is included as part of the capitalized value of the assets
constructed.
Capital assets are depreciated using the straight-line method over their estimated useful lives. Since
surplus assets are generally sold for an immaterial amount when declared as no longer needed for city
purposes, no salvage value is taken into consideration for depreciation purposes. Useful lives vary from
10 to 40 years for infrastructure; 5 to 20 years for vehicles, machinery, and furniture and equipment; 12 to
40 years for buildings; and 10 to 20 years for improvements other than buildings. Capital assets not being
depreciated include land and construction in progress.
N. Deferred Inflows of Resources
In addition to liabilities, statements of financial position or balance sheets will sometimes report a
separate section for deferred inflows of resources. This separate financial statement element represents an
acquisition of net position that applies to future periods and so will not be recognized as an inflow of
resources (revenue) until that time. The City has only one type of item, which arises under a modified
accrual basis of accounting, which qualifies for reporting in this category. Accordingly, the item,
unavailable revenue, is reported only in the governmental funds Balance Sheet. The governmental funds
report unavailable revenue from three sources: property taxes, special assessments, and notes receivables
not collected within 60 days of year-end. These amounts are deferred and recognized as an inflow of
resources in the period the amounts become available.
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
O. Long-Term Liabilities
In the government-wide and proprietary fund financial statements, long-term debt and other long-term
obligations are reported as liabilities. Bond premiums and discounts, if material, are deferred and
amortized over the life of the bonds using the straight-line method.
In the fund financial statements, governmental fund types recognize bond premiums and discounts during
the current period. The face amount of debt issued is reported as other financing sources. Premiums
received on debt issuances are reported as other financing sources while discounts on debt issuances are
reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds
received, are reported as debt service expenditures.
P. Compensated Absences Payable
City employees earn vacation days based upon the number of completed years of service. The City
compensates employees for unused vacation upon termination of employment. Employees are entitled to
paid sick leave at various rates for each month of full-time service. Full-time employees who resign or
leave city employment voluntarily and in good standing, after giving proper notice, shall be compensated
for up to 50 days of unused sick leave under the following guidelines:
For union employees, one-fourth of the unused sick leave times the hourly rate at the time of giving
notice is paid. After five years of non-union employment, one-fourth of the unused sick leave times the
hourly rate at the time of giving notice is paid.
After 10 years of employment, all employees accrue one-half of the unused sick leave, times the hourly
rate at the time of giving notice.
All compensated absences are accrued when incurred in the government-wide and proprietary fund
financial statements. A liability for these amounts is reported in governmental funds only if they have
matured, for example, as a result of employee resignations and retirements.
Q. Budget
Budgets for the General Fund and major special revenue funds are adopted on a basis consistent with
accounting principles generally accepted in the United States of America. Reported budget amounts are as
originally adopted or as amended by City Council-approved supplemental appropriations and budget
transfers. No supplemental budget amendments were adopted during the year. Budget appropriations
lapse at year-end. The legal level of budgetary control is at the department level in the General Fund and
at the fund level in the major special revenue funds. Expenditures exceeded budgeted amounts in the
EDA Special Revenue Fund by $467,389.
R. Risk Management
The City is exposed to various risks of loss related to torts: theft of, damage to, or destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The City manages these various risks
of loss as follows:
The City participates in the League of Minnesota Cities Insurance Trust (LMCIT) property and liability
insurance program, a joint self-insurance plan designed and administered by American Business Risk
Services and structured to operate through local insurance agents. Approximately 140 cities currently
participate in the program.
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The City has the following coverage with LMCIT: a basic package of property, inland marine, automotive
physical damage and liability; comprehensive general and liquor liability; public officials’ errors and
omissions; umbrella liability; boiler and machinery; and workers’ compensation.
The City pays an annual premium to LMCIT, which in turn pays the local agent’s commission and pays
an administrative fee to American Business Risk Services. The remaining premium is split between
LMCIT and its reinsurers. The reinsurers in turn reimburse LMCIT for a corresponding share of each
loss.
A profit sharing agreement also provides for a return to LMCIT of a share of the reinsurers’ portion of the
premium if the loss experience is favorable.
To protect against the possibility that LMCIT’s share of the losses will exceed its share of the premium,
LMCIT also purchases aggregate reinsurance. The loss experience has been favorable the last three years
and the City has received a return of part of the premiums paid.
Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the
past three calendar years. There were no reductions in coverage from the prior year.
The City also purchases excess liability insurance coverage for claims that are not constrained by
statutory tort limits.
S. Statement of Cash Flows
For purposes of the Statement of Cash Flows, the City considers all highly liquid debt instruments with an
original maturity from the time of purchase by the City of three months or less to be cash equivalents. The
proprietary fund’s equity in the government-wide cash and investment management pool is considered to
be cash equivalent.
T. Net Position
In the government-wide and proprietary fund financial statements, net position represents the difference
between assets and deferred outflows of resources (if any), liabilities, and deferred inflows of resources.
Net position is displayed in three components:
Net Investment in Capital Assets – Consists of capital assets, net of accumulated depreciation,
reduced by any outstanding debt attributable to acquire capital assets.
Restricted Net Position – Consists of net position restricted when there are limitations imposed
on their use through external restrictions imposed by creditors, grantors, or laws or regulations of
other governments.
Unrestricted Net Position – All other net position that does not meet the definition of
“restricted” or “net investment in capital assets.”
U. Fund Balance Classifications
In the fund financial statements, governmental funds report fund balance in classifications that disclose
constraints for which amounts in those funds can be spent. These classifications are as follows:
Nonspendable – Consists of amounts that are not in spendable form, such as prepaid items,
inventory, and other long-term assets.
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Restricted – Consists of amounts related to externally imposed constraints established by
creditors, grantors, or contributors; or constraints imposed by state statutory provisions.
Committed – Consists of internally imposed constraints that are established by resolution of the
City Council. Those committed amounts cannot be used for any other purpose unless the City
Council removes or changes the specified use by taking the same type of action it employed to
previously commit those amounts.
Assigned – Consists of internally imposed constraints. These constraints consist of amounts
intended to be used by the City for specific purposes but do not meet the criteria to be classified
as restricted or committed. In governmental funds, assigned amounts represent intended uses
established by the governing body itself or by an official to which the governing body delegates
the authority. Pursuant to City Council resolution, the City’s Council, Administrator, or Finance
Director are authorized to establish assignments of fund balance.
Unassigned – The residual classification for the General Fund which also reflects negative
residual amounts in other funds.
When both restricted and unrestricted resources are available for use, it is the City’s policy to first use
restricted resources, then use unrestricted resources as they are needed.
When committed, assigned, or unassigned resources are available for use, it is the City’s policy to use
resources in the following order: 1) committed, 2) assigned, and 3) unassigned.
V. Prior Period Adjustment
During the year ended December 31, 2013, the City recorded a prior period adjustment to the government
activities to adjust special assessment receivable due to the recording of duplicate special assessments in
prior years and special assessments recorded as a receivable in prior years for projects that were never
assessed to the property owners by the City. The net effect on the beginning net position as of January 1,
2013, was $3,282,241.
W. Change in Fund Structure and Change in Accounting Principle
The following change in accounting principle and change in fund structure resulted in the following
restatement of net position as of December 31, 2012:
GovernmentalBusiness-TypeGovernmentalProprietary
ActivitiesActivitiesFundsFunds
Net position/fund balance as of December 31, 2012
As previously reported78,705,160$ 31,359,487$ 35,532,056$ 31,359,487$
Change in accounting principle
Write-off of unamortized deferred charges(204,107) (463,177) – (463,177)
Change in fund structure
Reclass net position/fund balance482,754 (482,754) (91,411) 91,411
Reclass capital assets– – – (574,165)
As restated78,983,807$ 30,413,556$ 35,440,645$ 30,413,556$
Government-WideFund
Financial StatementsFinancial Statements
For the fiscal year ended December 31, 2013, the City elected to move the Deputy Registrar Fund to an
enterprise fund and the Cemetery Fund to a governmental fund. Prior year financial data has been
reclassified to reflect the change in fund classification.
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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
For the fiscal year ended December 31, 2013, the City implemented GASB Statement No. 65, Items
Previously Reported as Assets and Liabilities. GASB Statement No. 65 identified specific items
previously reported as assets that will now be classified as either deferred outflows of resources or
outflows (expenditures/expenses), and items previously reported as liabilities that will now be reported as
either deferred inflows of resources or inflows (revenues). This standard requires retroactive
implementation, which resulted in the restatement of net position as of December 31, 2012.
NOTE 2 – CASH AND INVESTMENTS
A. Components of Cash and Investments
Cash and investments at year-end consist of the following:
Deposits 9,641,869$
Investments 21,045,255
Cash on hand 9,770
Total cash and investments – Statement of Net Position 30,696,894$
Cash and investments are reflected on the Statement of Net Position as follows:
Cash and investments – Statement of Net Position28,408,251$
Cash and investments – restricted – held for fiber optics activity2,288,643
Total 30,696,894$
B. Deposits
In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks
authorized by the City Council, including checking accounts and non-negotiable certificates of deposit.
The following is considered the most significant risk associated with deposits:
Custodial Credit Risk – In the case of deposits, this is the risk that in the event of a bank failure, the
City’s deposits may be lost.
Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate surety
bond, or collateral. The market value of collateral pledged must equal 110 percent of the deposits not
covered by federal deposit insurance or corporate surety bonds. Authorized collateral includes
treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations rated “A” or
better; revenue obligations rated “AA” or better; irrevocable standard letters of credit issued by the
Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require that securities
pledged as collateral be held in safekeeping in a restricted account at the 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 City’s investment policy does
not provide further requirements regarding custodial credit risk.
At year-end, the carrying amount of the City’s deposits was $9,641,869 while the balance on the bank
records was $9,855,783. At December 31, 2013, all deposits were covered by federal depository
insurance, surety bonds, or by collateral held by the City’s agent in the City’s name.
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NOTE 2 – CASH AND INVESTMENTS (CONTINUED)
C. Investments
The City has the following investments at year-end:
NoLessMore
Investment TypeRatingAgencyMaturityThan 11 to 55 to 10Than 10Total
U.S. agency securities
Federal Farm Credit BankAA+S&P–$ –$ –$ –$ 443,392$ 443,392$
Federal Agriculture Mortgage
CorporationAA+S&P– – – – 638,682 638,682
Federal Home Loan BankAA+S&P– 188,506 – 1,316,970 759,654 2,265,130
Federal National Mortgage
AssociationAA+S&P– – – – 1,579,000 1,579,000
Negotiable certificates of depositN/RN/A– 1,723,742 3,703,605 459,185 – 5,886,532
U.S. treasury securitiesN/AN/A– 1,479,985 – – – 1,479,985
Local government securitiesAAAS&P– – – – 1,611,990 1,611,990
Local government securitiesAA+S&P– – – – 1,446,601 1,446,601
Local government securitiesAaaMoody’s– – – – 1,302,379 1,302,379
Local government securitiesAa1Moody’s– – – – 523,180 523,180
Local government securitiesAMoody’s– – – 313,221 – 313,221
Money market fundsAAAmS&P3,502,854 – – – – 3,502,854
4M FundN/RN/A52,309 – – – – 52,309
Total investments3,555,163$ 3,392,233$ 3,703,605$ 2,089,376$ 8,304,878$ 21,045,255$
N/A – Not Applicable
N/R – Not Rated
Credit RiskInterest Risk – Maturity Duration in Years
Investments are subject to various risks, the following of which are considered the most significant:
Custodial Credit Risk – For investments, this is the risk that in the event of a failure of the
counterparty to an investment transaction (typically a broker-dealer) the City would not be able to
recover the value of its investments or collateral securities that are in the possession of an outside
party. The City’s investment policy does not provide additional requirements beyond state statutes,
but the City typically limits its exposure by purchasing insured or registered investments, or by the
control of who holds the securities.
Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill its
obligations. Minnesota Statutes limit the City’s investments to direct obligations or obligations
guaranteed by the United States or its agencies; shares of investment companies registered under the
Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the
two highest rating categories by a statistical rating agency, and all of the investments have a final
maturity of 13 months or less; general obligations rated “A” or better; revenue obligations rated “AA”
or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’
acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial
paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality
category by at least two nationally recognized rating agencies, and maturing in 270 days or less;
Guaranteed Investment Contracts guaranteed by a United States commercial bank, domestic branch of
a foreign bank, or a United States insurance company, and with a credit quality in one of the top two
highest categories; repurchase or reverse purchase agreements and securities lending agreements with
financial institutions qualified as a “depository” by the government entity, with banks that are
members of the Federal Reserve System with capitalization exceeding $10,000,000; that are a
primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; or
certain Minnesota securities broker-dealers. The City’s investment policy does not further address
credit risk.
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NOTE 2 – CASH AND INVESTMENTS (CONTINUED)
Concentration Risk – This is the risk associated with investing a significant portion of the City’s
investment (considered 5 percent or more) in the securities of a single issuer, excluding U.S.
guaranteed investments (such as treasuries), investment pools, and mutual funds. The City’s
investment policy requires that no more than 5 percent of the overall portfolio may be invested in the
securities of a single issuer, except for the securities of the U.S. government and in agencies or an
external investment pool. More than 5 percent of the City’s investments are in Federal National
Mortgage Association; Federal Home Loan Bank; and Kane, Cook, and DuPage counties. These
investments are 8 percent, 11 percent, and 5 percent, respectively, of the City’s total investments.
Interest Rate Risk – This is the risk of potential variability in the fair value of fixed rate investments
resulting from changes in interest rates (the longer the period for which an interest rate is fixed, the
greater the risk). The City’s investment policy does not further address the duration of investments.
The Minnesota Municipal Money Market Fund (4M Fund) is a common law trust organized in
accordance with the Minnesota Joint Powers Act, which invests only in investment instruments allowable
under Minnesota Statutes. It is an external investment pool not registered with the Securities Exchange
Commission (SEC) that follows the same regulatory rules of the SEC under rule 2a7. The City’s
investment in the 4M Fund is measured at the net asset value per share provided by the pool, which is
based on an amortized cost method that approximates fair value.
NOTE 3 – CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2013 was as follows:
A. Changes in Capital Assets Used in Governmental Activities
Balance –Transfers and
Beginning ofCompletedBalance –
Year, as RestatedAdditionsDeletionsConstructionEnd of Year
Capital assets, not depreciated
Land 11,298,862$ 620,669$ –$ –$ 11,919,531$
Construction in progress3,157,351 1,128,049 – (793,016) 3,492,384
Total capital assets, not depreciated14,456,213 1,748,718 – (793,016) 15,411,915
Capital assets, depreciated
Buildings13,709,653 – – – 13,709,653
Furniture and equipment516,177 17,013 (5,523) – 527,667
Vehicles2,726,541 – – – 2,726,541
Machinery and equipment1,439,298 100,049 (86,515) – 1,452,832
Improvements other than buildings5,698,145 – (6,000) – 5,692,145
Infrastructure67,866,415 – – 793,016 68,659,431
Total capital assets, depreciated91,956,229 117,062 (98,038) 793,016 92,768,269
Less accumulated depreciation on
Buildings(4,917,074) (351,396) – – (5,268,470)
Furniture and equipment(411,584) (33,418) 5,523 – (439,479)
Vehicles(1,809,378) (109,247) – – (1,918,625)
Machinery and equipment(1,118,496) (94,193) 77,972 – (1,134,717)
Improvements other than buildings(2,911,979) (204,055) 6,000 – (3,110,034)
Infrastructure(26,185,389) (3,189,650) – – (29,375,039)
Total accumulated depreciation(37,353,900) (3,981,959) 89,495 – (41,246,364)
Net capital assets, depreciated54,602,329 (3,864,897) (8,543) 793,016 51,521,905
Net capital assets69,058,542$ (2,116,179)$ (8,543)$ –$ 66,933,820$
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NOTE 3 – CAPITAL ASSETS (CONTINUED)
Internal ServiceGovernmentalTotalInternal ServiceGovernmentalTotal
Fund AdditionsFund AdditionsAdditionsFund AssetsFunds TotalCapital Assets
Capital assets, not depreciated
Land –$ 620,669$ 620,669$ –$ 11,919,531$ 11,919,531$
Construction in progress– 1,128,049 1,128,049 – 3,492,384 3,492,384
Total capital assets, not depreciated– 1,748,718 1,748,718 – 15,411,915 15,411,915
Capital assets, depreciated
Buildings– – – – 13,709,653 13,709,653
Furniture and equipment17,013 – 17,013 17,013 510,654 527,667
Vehicles– – – – 2,726,541 2,726,541
Machinery and equipment95,000 5,049 100,049 95,000 1,357,832 1,452,832
Improvements other than buildings– – – – 5,692,145 5,692,145
Infrastructure– – – – 68,659,431 68,659,431
Total capital assets, depreciated112,013 5,049 117,062 112,013 92,656,256 92,768,269
Less accumulated depreciation on
Buildings– (351,396) (351,396) – (5,268,470) (5,268,470)
Furniture and equipment(1,631) (31,787) (33,418) (1,631) (437,848) (439,479)
Vehicles– (109,247) (109,247) – (1,918,625) (1,918,625)
Machinery and equipment(10,076) (84,117) (94,193) (10,076) (1,124,641) (1,134,717)
Improvements other than buildings– (204,055) (204,055) – (3,110,034) (3,110,034)
Infrastructure– (3,189,650) (3,189,650) – (29,375,039) (29,375,039)
Total accumulated depreciation(11,707) (3,970,252) (3,981,959) (11,707) (41,234,657) (41,246,364)
Net capital assets, depreciated100,306 (3,965,203) (3,864,897) 100,306 51,421,599 51,521,905
Net capital assets100,306$ (2,216,485)$ (2,116,179)$ 100,306$ 66,833,514$ 66,933,820$
B. Changes in Capital Assets Used in Business-Type Activities
Balance –Transferred
Beginning ofCompletedBalance –
Year, as RestatedAdditionsDeletionsConstructionEnd of Year
1,197,945$ –$ –$ –$ 1,197,945$
Construction in progress79,019 2,639,432 – (310,456) 2,407,995
Total capital assets, not depreciated1,276,964 2,639,432 – (310,456) 3,605,940
Buildings6,820,979 – – – 6,820,979
Furniture and equipment173,148 – (6,595) 20,456 187,009
Vehicles677,324 – – – 677,324
Machinery and equipment1,377,029 – – – 1,377,029
20,160,525 – – – 20,160,525
Infrastructure49,888,186 – – 290,000 50,178,186
79,097,191 – (6,595) 310,456 79,401,052
Buildings(3,191,442) (197,313) – – (3,388,755)
Vehicles(621,845) (23,775) – – (645,620)
Machinery and equipment(799,210) (58,874) – – (858,084)
Furniture and equipment(134,242) (13,725) 6,595 – (141,372)
Infrastructure(17,005,252) (1,316,221) – – (18,321,473)
(12,265,145) (480,415) – – (12,745,560)
(34,017,136) (2,090,323) 6,595 – (36,100,864)
Net capital assets, depreciated45,080,055 (2,090,323) – 310,456 43,300,188
46,357,019$ 549,109$ –$ –$ 46,906,128$
Capital assets, not depreciated
Land
Capital assets, depreciated
Improvements other than buildings
Total accumulated depreciation
Net capital assets
Less accumulated depreciation on
Improvements other than buildings
Total capital assets, depreciated
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NOTE 3 – CAPITAL ASSETS (CONTINUED)
C. Depreciation Expenses by Function
Depreciation expense for the year ended December 31, 2013 was charged to the following functions:
Governmental activities
General government38,092$
Public safety83,375
Public works3,453,272
Culture and recreation395,513
Capital assets held by the City’s internal service funds –
charged to the various functions based on usage of assets11,707
Total depreciation expense – governmental activities3,981,959$
Business-type activities
Water520,014$
Sewer1,107,508
Liquor47,141
FiberNet410,818
Deputy registrar4,842
Total depreciation expense – business-type activities2,090,323$
NOTE 4 – LONG-TERM LIABILITIES
A. Description
The City has the following types of long-term liabilities outstanding at December 31, 2013: general
obligation (G.O.) bonds, special assessment improvement bonds with governmental commitment, revenue
bonds, compensated absences, and net other post-employment benefits (OPEB) obligation.
General Obligation Bonds – The City has three outstanding issues of general obligation bonds,
issued to finance street improvement projects and construct the wastewater treatment plant.
General Obligation Certificates of Indebtedness – The City issues general obligation
certificates of indebtedness to provide financing for capital equipment. Debt service is covered by
general property taxes.
General obligation certificates of indebtedness are direct obligations that pledge the full faith and
credit of the City. These certificates generally are issued as five-year notes with fluctuating debt
service payments each year.
Special Assessment Bonds – These bonds are payable primarily from special assessments levied
on the properties benefiting from the improvements funded by these issues. Any deficiencies in
revenue to fund these issues will be provided from general property taxes.
Revenue Bonds – These bonds were issued for improvements or projects that directly benefit a
city enterprise activity. The debt issued will be repaid from user fees which benefit from the
improvements or projects.
Compensated Absences – The City provides vacation and sick leave benefits to certain eligible
employees. The liability will be repaid by the General Fund, Community Center Special Revenue
Fund, Water Fund, Liquor Fund, or Fiber Optics Fund for which each employee is employed.
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NOTE 4 – LONG-TERM LIABILITIES (CONTINUED)
Net OPEB Obligation – The City provides post-employment benefits to certain eligible
employees through the City’s OPEB Plan. The liability will be repaid based on a pay-as-you-go
financing requirement as well as any additional amounts determined annually by the City. The
liability will be repaid by the General Fund.
B. Refunding Bonds
In 2011, the City issued $10,735,000 of General Obligation Refunding Bonds, Series 2011A. The
proceeds of this issue totaling $10,735,000 was used to retire, in advance of their stated maturities, the
2014 through 2023 maturities of the City’s Improvement Bonds, Series 2005, on the February 1, 2013 call
date of the refunded issue. Until the February 1, 2013 call date, the City made all debt service payments
on the 2005 issue, and all debt service on the 2011A issue was paid from the refunding escrow account.
On February 1, 2013, the escrow account was used to call the remaining principal of the 2005 issue, and
the City assumed all future principal and interest payments on the 2011A issue. The “crossover
refunding” reduced the City’s total future debt service payments by $667,071 and resulted in a present
value savings of $615,953.
Long-term liabilities at year-end are summarized as follows:
Final
InterestMaturityBalance –
Original IssueRateIssue DateDateEnd of Year
Governmental activities
General obligation bonds
2007 Improvement Bonds5,137,903$ 4.00%12/27/200702/01/20182,720,653$
2008B Sewer Revenue Refunding Bond9,270,000$ 3.40%04/17/200808/01/20184,786,000
General obligation certificate of indebtedness
2013A Certificate of indebtedness500,000$ 0.35–2.10%04/26/201312/01/2020445,000
Special assessments bonds
2010A General Obligation Improvement and
Refunding Bonds3,255,000$ 0.40–2.70%09/14/201002/01/20212,275,000
2011A General Obligation Refunding Bonds10,735,000$ 2.00–3.00%10/19/201102/01/202310,735,000
Revenue bonds
2008A Public Project Revenue Refunding Bonds 6,180,000$ 3.20%02/20/200802/01/20151,975,000
Net premiums (discounts) on bonds 73,104
Compensated absences payable 310,579
Net OPEB obligation 255,604
Total governmental activity long-term liabilities23,575,940$
Business-type activities
General obligation bonds
2007 Improvement Bonds907,097$ 4.00%12/27/200702/01/2018479,347$
2013B Wastewater Treatment Bonds3,000,000$ 2.00–3.35%12/05/201312/01/20283,000,000
Revenue bonds
2008 Telecommunications Revenue Bonds26,445,000$ 6.50–6.75%06/05/200806/01/203126,445,000
Net premiums (discounts) on bonds (360,211)
Compensated absences payable 105,946
Total business-type activity long-term liabilities29,670,082$
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NOTE 4 – LONG-TERM LIABILITIES (CONTINUED)
C. Minimum Debt Payments
Minimum annual principal and interest payments to maturity for bonds payable are as follows:
Year Ending
December 31,PrincipalInterestPrincipalInterestPrincipalInterest
20141,421,000$ 253,453$ 60,000$ 6,120$ 3,000,000$ 240,300$
20151,468,000 201,382 60,000 5,760 2,575,000 187,649
20161,521,250 147,509 60,000 5,250 2,590,000 138,000
20171,520,250 92,803 65,000 4,590 985,000 103,267
20181,576,153 37,213 65,000 3,713 995,000 83,674
2019–2023– – 135,000 4,143 2,865,000 178,932
7,506,653$ 732,360$ 445,000$ 29,576$ 13,010,000$ 931,822$
Governmental Activities
Special
General Obligation BondsCertificate of IndebtednessAssessment Bonds
General Obligation
Year Ending
December 31,PrincipalInterestPrincipalInterestPrincipalInterest
2014990,000$ 47,360$ 273,000$ 91,538$ 325,000$ 1,759,813$
2015985,000 15,760 276,000 84,158 395,000 1,744,214
2016– – 279,750 76,643 460,000 1,718,538
2017– – 273,750 69,173 625,000 1,688,637
2018– – 281,847 61,748 670,000 1,648,012
2019–2023– – 975,000 241,203 5,405,000 7,410,013
2024–2028– – 1,120,000 108,565 9,225,000 5,143,162
2029–2031– – – – 9,340,000 1,371,600
1,975,000$ 63,120$ 3,479,347$ 733,028$ 26,445,000$ 22,483,989$
General Obligation BondsRevenue Bonds
Business-Type Activities
Revenue Bonds
Governmental Activities
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NOTE 4 – LONG-TERM LIABILITIES (CONTINUED)
D. Changes in Long-Term Liabilities
December 31,December 31,Due Within
2012AdditionsRetirements2013One Year
Governmental activities
General obligation bonds 8,877,403$ –$ 1,370,750$ 7,506,653$ 1,421,000$
Certificate of indebtedness– 500,000 55,000 445,000 60,000
Special assessment bonds26,625,000 – 13,615,000 13,010,000 3,000,000
Revenue bonds2,970,000 – 995,000 1,975,000 990,000
Add
Premiums on bonds770,502 – 483,306 287,196 –
Less
Discounts on bonds(256,413) – 42,321 (214,092) –
Compensated absences323,014 275,503 287,938 310,579 87,836
Net OPEB obligation215,663 57,761 17,820 255,604 –
Total39,525,169$ 833,264$ 16,867,135$ 23,575,940$ 5,558,836$
Business-type activities
General obligation bonds568,597$ 3,000,000$ 89,250$ 3,479,347$ 273,000$
Revenue bonds26,445,000 – – 26,445,000 325,000
Add
Premiums on bonds9,364 29,783 2,038 37,109 –
Less
Discounts on bonds(421,730) – 24,410 (397,320) –
Compensated absences108,596 96,284 98,934 105,946 32,273
Total26,709,827$ 3,126,067$ 214,632$ 29,670,082$ 630,273$
E. Conduit Debt
The City has issued Senior Housing Refunding Revenue Bonds to provide financial assistance to private
sector entities for the acquisition and construction of senior housing facilities deemed to be in the public
interest. The bonds are secured by the property financed and are payable solely from payments received
on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities
transfers to the private sector entity served by the bond issuance. The City is not obligated in any manner
for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying
financial statements. As of December 31, 2013, there was one series of Senior Housing Refunding
Revenue Bonds outstanding. The original issue amounts totaled $3,000,000 with an interest rate of
4.75 percent. This balance has been reduced through annual payments and partial call prepayments. The
outstanding balance as of December 31, 2013 is undetermined.
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NOTE 4 – LONG-TERM LIABILITIES (CONTINUED)
F. Pay-As-You-Go Tax Increment Note
The City has development agreements with private developers for a property in the City’s Tax Increment
Districts. As part of the agreements, the City has agreed to reimburse the developers for certain costs
through pay-as-you-go tax increment notes. The notes provide for the payment of principal equal to the
developers’ costs, plus interest at rates ranging from 5.0 percent to 8.5 percent (interest accrual
commencing upon the developer completing the project). Payments of the notes will be made at the lesser
of the scheduled note payments or the actual net tax increment received during the period specified in the
agreement. The note will be cancelled at the end of the agreement term, whether it has been fully repaid
or not. The outstanding principal balance of these notes as of December 31, 2013 is $1,312,543. These
notes are not included in the City’s long-term debt, because repayment is required only to the extent
sufficient tax increments are received. The City’s position is that this is an obligation to assign future and
uncertain revenue sources and, as such, is not actual debt in substance.
G. Revenue Pledged
Future revenue pledged for the payment of long-term debt is as follows:
Percent
of TotalRemainingPrincipalPledged
Use ofDebtTerm ofPrincipaland InterestRevenue
Bond IssueProceedsTypeServicePledgeand InterestPaidReceived
Revenue bonds
2008A Public Project Revenue Community
Refunding Bonds CenterUser fees100%2008–20152,038,120$ 1,074,120$ 1,304,064$
2008 TelecommunicationsUtility
Revenue BondsFiber optics charges100%2008–203151,720,884$ –$ 1,621,662$
2013B G.O. Wastewater Utility
Treatment BondsSewage Fund charges100%2013–20283,684,755$ –$ 2,006,718$
Revenue PledgedCurrent Year
H. Arbitrage Rebate
In accordance with the provisions of Section 148(f) of the Internal Revenue Code of 1986, as amended,
bonds must satisfy certain arbitrage rebate requirements. Positive arbitrage is the excess of (1) the amount
earned on investments purchased with bond proceeds over (2) the amount that such investments would
have earned had such investments been invested at a rate equal to the yield on the bond issue. In order to
comply with the arbitrage rebates requirements, positive arbitrage must be paid to the U.S. treasury at the
end of each five-year anniversary date of the bond issue. As of December 31, 2013, there are no amounts
of arbitrage rebates.
NOTE 5 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE
A. Plan Description
All full-time and certain part-time employees of the City are covered by defined benefit plans
administered by the Public Employees’ Retirement Association (PERA) of Minnesota. PERA administers
the General Employees’ Retirement Fund (GERF) and the Public Employees Police and Fire Fund
(PEPFF), which are cost-sharing, multiple-employer retirement plans. These plans are established and
administered in accordance with Minnesota Statutes, Chapters 353 and 356.
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NOTE 5 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are
covered by Social Security and Basic Plan members are not. All new members must participate in the
Coordinated Plan. All police officers, firefighters, and peace officers who qualify for membership by
statute are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors
upon death of eligible members. Benefits are established by state statutes, and vest after five years of
credited service. The defined retirement benefits are based on a member’s highest average salary for any
five successive years of allowable service, age, and years of credit at termination of service.
Two methods are used to compute benefits for PERA’s Coordinated and Basic Plan members. The
retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual
formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of
average salary for each of the first 10 years of service and 2.7 percent for each remaining year. The
annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first
10 years of service and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is
2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for
each year of service. For PEPFF members, the annuity accrual rate is 3.0 percent for each year of service.
For all PEPFF members and GERF members hired prior to July 1, 1989 whose annuity is calculated using
Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 55
for PEPFF members and 65 for Basic and Coordinated Plan members hired prior to July 1, 1989. Normal
retirement age is the age for unreduced Social Security benefits capped at 66 for Coordinated Plan
members hired on or after July 1, 1989. A reduced retirement annuity is also available to eligible
members seeking early retirement.
There are different types of annuities available to members upon retirement. A single-life annuity is a
lifetime annuity that ceases upon the death of the retiree—no survivor annuity is payable. There are also
various types of joint and survivor annuity options available which will be payable over joint lives.
Members may also leave their contributions in the fund upon termination of public service in order to
qualify for a deferred annuity at retirement age. Refunds of contributions are available at any time to
members who leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to
active plan participants. Vested, terminated employees who are entitled to benefits, but are not receiving
them yet are bound by the provisions in effect at the time they last terminated their public service.
PERA issues a publicly available financial report that includes financial statements and required
supplementary information for GERF and PEPFF. That report may be obtained at mnpera.org; by writing
to PERA at 60 Empire Drive, Suite 200, St. Paul, Minnesota 55103-2088; or by calling (651) 296–7460
or (800) 652–9026.
B. Funding Policy
Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. These statutes
are established and amended by the State Legislature. The City makes annual contributions to the pension
plans equal to the amount required by state statutes. GERF Basic Plan members and Coordinated Plan
members were required to contribute 9.1 percent and 6.25 percent, respectively, of their annual covered
salary in 2013. PEPFF members were required to contribute 9.6 percent of their annual covered salary in
2013. In 2013, the City was required to contribute the following percentages of annual covered payroll:
11.78 percent for Basic Plan members, 7.25 percent for Coordinated Plan members, and 14.4 percent for
PEPFF members.
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NOTE 5 – DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
The City’s contributions for the past three years ending December 31, 2013, 2012, and 2011 were
$241,157, $256,660, and $248,890, respectively. The City’s contributions were equal to the contractually
required contributions for each year as set by state statutes.
NOTE 6 – CITY OF MONTICELLO FIRE RELIEF ASSOCIATION
A. Plan Description
The City contributes to the City of Monticello Fire Relief Association (the Association), a single
employer retirement system that acts as a common investment manager and administrator for the City’s
firefighters. All active members of the fire department are members of the Association. The Association
issues a publicly available financial report that includes financial statements and required supplementary
information. A copy of the report may be obtained at Monticello City Hall.
Upon approval by the Board of Trustees, lump sum retirement benefits are either paid or deferred as
follows:
Each member who is at least 50 years of age, has retired from the fire department, has served at least
10 years of active service with such department before retirement and has been a member of the
Association in good standing at least 10 years prior to such retirement, shall be entitled to a lump sum
service pension in the amount of $2,850 for each year of service but not exceeding the maximum
amount per year of service allowed by law for the minimum average amount of available financing
per firefighter as prescribed by laws. A year of service may be prorated to twelve monthly slices, if a
full year of active service is not reached.
If a member of the Association shall become permanently or totally disabled, the Association shall
pay the sum of $2,850 for each year the member was an active member of the Association. If a
member who received a disability pension subsequently recovers and returns to active duty, the
disability pension is deducted from the service pension as approved by the Board of Trustees.
According to the bylaws of the Association and pursuant to Minnesota Statutes, members who retire
with less than 20 years of service and have reached the age of 50 years and have completed at least
10 years of active membership are entitled to a reduced service pension not to exceed the amount
calculated by multiplying the member’s service pension for the completed years of service times an
applicable nonforfeitable percentage.
During the time a member is on deferred vested pension (not yet reached age 50), they will earn
interest on the deferred benefit amount at a rate equal to the actual time weighted total rate of return
as reported by the Minnesota State Auditor’s Office, up to five percent, compounded annually. A
deferred vested member will not be eligible for disability benefits.
B. Funding Policy
Minnesota Statutes § 69.772 sets the minimum contribution requirement for the City on an annual basis,
including state aid passed through the City. These statutes are established and amended by the State
Legislature. The Association is comprised of volunteers, and no member contribution is required.
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NOTE 6 – CITY OF MONTICELLO FIRE RELIEF ASSOCIATION (CONTINUED)
C. Contributions
Contributions by the City are determined in accordance with Minnesota Statutes as follows:
Normal cost for next year (increase in pension benefit obligation)
Plus estimated expenses for next year and 10 percent of any deficits
Less anticipated income next year and 10 percent of any surplus
The state of Minnesota contributes amortization aid, or 2 percent fire aid, in accordance with state statute
requirements. Plan members are not required to contribute to the Plan. The State Legislature may amend
contribution requirements of the City and state. Municipal contributions are determined by the preparation
of state mandated Schedules I and II, which must be certified to the City by August 1 of the preceding
calendar year.
Three-year trend information for the pension plan is as follows:
Three-Year Trend Information201320122011
Statutory required contribution (SRC)109,594$ 74,221$ 72,647$
Contribution made
City– – –
State aid – pass-through aid 109,594 74,221 72,647
Net pension obligation– – –
Percentage contributed100% 100% 100%
D. Funding Status
Additional information regarding statutory assumptions and valuation methods are outlined below:
SRC Form valuation dateAugust 1, 2013
Statutory assumptions
Administration expense increase3.5%
Investment rate of return5.0%
2012 state aid contribution100.0%
Amortization of pension benefit surplus (deficit)10.0%
The funding status of the plan for the last three years are as follows:
Statutory
Valuation Date –Statutory ValueAccruedFundedFunded
December 31,of AssetsLiability (SAL)(Unfunded) SALRatio
20131,114,949$ 965,425$ 149,524$ 115.5%
20121,046,960$ 1,031,472$ 15,488$ 101.5%
20111,127,049$ 1,220,861$ (93,812)$ 92.3%
The Schedule of Funding Progress immediately following the notes to basic financial statements presents
multi-year trend information about whether the statutory value of plan assets is increasing or decreasing
over time relative to the statutory accrued liabilities for benefits.
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NOTE 7 – OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN
A. Plan Description
The City provides post-employment insurance benefits to certain eligible employees through the City’s
OPEB Plan, a single-employer defined benefit plan administered by the City. All post-employment
benefits are based on contractual agreements with employee groups. The Retiree Health Plan does not
issue a publicly available financial report. These contractual agreements do not include any specific
contribution or funding requirements. These benefits are summarized as follows:
Post-Employment Insurance Benefits – All retirees of the City have the option under state law to
continue their medical insurance coverage through the City from the time of retirement until the
employee reaches the age of eligibility for Medicare. For members of all employee groups, the retiree
must pay the full premium to continue coverage for medical and dental insurance.
The City is legally required to include any retirees for whom it provides health insurance coverage in
the same insurance pool as its active employees, whether the premiums are paid by the City or the
retiree. Consequently, participating retirees are considered to receive a secondary benefit known as an
“implicit rate subsidy.” This benefit relates to the assumption that the retiree is receiving a more
favorable premium rate than they would otherwise be able to obtain if purchasing insurance on their
own, due to being included in the same pool with the City’s younger and statistically healthier active
employees.
B. Funding Policy
The required contribution is based on projected pay-as-you-go financing requirements, with additional
amounts to pre-fund benefits as determined annually by the City.
C. Annual OPEB Cost and Net OPEB Obligation
The City’s annual OPEB cost (expense) is calculated based on the ARC of the City, an amount
determined on an actuarially determined basis in accordance with the parameters of GASB Statement
Nos. 43 and 45. The ARC represents a level funding that, if paid on an ongoing basis, is projected to
cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a
period not to exceed 30 years. The following table shows the components of the City’s annual OPEB cost
for the year, the amount actually contributed to the plan, and the changes in the City’s net OPEB
obligation to the plan:
ARC61,606$
Interest on net OPEB obligation8,627
Adjustment to ARC(12,472)
Annual OPEB cost (expense)57,761
Less contribution made17,820
Increase in net OPEB obligation39,941
Net OPEB obligation – beginning of year215,663
Net OPEB obligation – end of year 255,604$
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NOTE 7 – OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN (CONTINUED)
The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
OPEB obligation for the last three years are as follows:
Beginning
FiscalOPEBAnnualEmployerNet OPEB
Year EndedObligationOPEB CostContributionObligation
January 1, 2011143,939$ 55,337$ 16,769$ 30.3%182,507$
January 1, 2012182,507$ 56,654$ 23,498$ 41.5%215,663$
January 1, 2013215,663$ 57,761$ 17,820$ 30.9%255,604$
Percentage of
Annual OPEB
Cost Contributed
D. Funded Status and Funding Progress
As of January 1, 2011, the most recent actuarial valuation date, the plan was zero percent funded. The
actuarial accrued liability for benefits was $362,290 and the actuarial value of assets was $0, resulting in
an unfunded actuarial accrued liability (UAAL) of $362,290. The covered payroll (annual payroll of
active employees covered by the plan) was $3,108,685, and the ratio of the UAAL to the covered payroll
was 11.65 percent.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability occurrence of events far into the future. Examples include assumptions
about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the
funded status of the plan and ARC of the employer are subject to continual revision as actual results are
compared with past expectations and new estimates are made about the future. The Schedule of Funding
Progress immediately following the notes to basic financial statements presents multi-year trend
information about whether the actuarial value of plan assets is increasing or decreasing over time relative
to the actuarial accrued liabilities for benefits.
E. Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the time
of each valuation and the historical pattern of sharing of benefit costs between the employer and plan
members to that point. The actuarial methods and assumptions used include techniques that are designed
to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of
assets, consistent with the long-term perspective of the calculations.
In the January 1, 2011 actuarial valuation, the projected unit credit actuarial cost method was used. The
actuarial assumptions included: a 4.0 percent investment rate of return (net of administrative expenses)
based on the City’s own investments; an annual healthcare cost trend rate of 10.0 percent initially,
reduced by decrements to an ultimate rate of 5.0 percent after 10 years for medical insurance. The
assumptions used did not include OPEB inflation increases. The UAAL is being amortized on a level
dollar basis over a closed period. The remaining amortization period at January 1, 2011 for the various
amortization layers ranged from 25 to 30 years.
-49-
NOTE 8 – FUND BALANCES
Classifications
At December 31, 2013, a summary of the City’s governmental fund balance classifications are as follows:
EconomicDebt
GeneralCommunityDevelopmentServiceCapitalNonmajor
FundCenterAuthorityFundProjectsFundsTotal
Nonspendable
Prepaid items116,976$ 16,886$ 2,074$ –$ –$ 1,678$ 137,614$
Notes receivable141,124 – – – – – 141,124
Land held for resale– – – – 1,802,288 – 1,802,288
Total nonspendable258,100 16,886 2,074 – 1,802,288 1,678 2,081,026
Restricted
Debt service– – – 2,750,079 – – 2,750,079
Economic development– – – – – 1,051,642 1,051,642
Perpetual care– – – – – 14,033 14,033
Tax increment– – 7,113,231 – – – 7,113,231
Total restricted– – 7,113,231 2,750,079 – 1,065,675 10,928,985
Assigned
Capital improvements– – – – 1,677,406 3,580,570 5,257,976
Community center
operations– 254,318 – – – – 254,318
Park improvements– – – – – 973,433 973,433
Total assigned– 254,318 – – 1,677,406 4,554,003 6,485,727
Unassigned3,656,463 – – – – – 3,656,463
Total3,914,563$ 271,204$ 7,115,305$ 2,750,079$ 3,479,694$ 5,621,356$ 23,152,201$
Special Revenue Funds
NOTE 9 – INTERFUND TRANSFERS
Interfund transfers for the year ended December 31, 2013 consisted of the following:
Economic
CommunityDevelopmentDebtCapitalNonmajorInternal
Transfers OutCenterAuthorityServiceProjectsGovernmentalFiber OpticsServiceTotal
General–$ 92,000$ –$ –$ –$ –$ –$ 92,000$
Community center– – 875,000 – – – – 875,000
Economic Development
Authority– – 319,403 460,401 – – – 779,804
Capital Outlay Revolving – – – 1,137,888 – 210,000 530,663 1,878,551
Sanitary Sewer Access– – 2,072,049 – – – – 2,072,049
Capital Projects100,000 – – – 750,000 – – 850,000
Nonmajor governmental – – 611,529 – – – – 611,529
Water– – 413,500 – – – – 413,500
Liquor– – – – – 650,000 – 650,000
Deputy Registrar75,000 – – – – – – 75,000
175,000$ 92,000$ 4,291,481$ 1,598,289$ 750,000$ 860,000$ 530,663$ 8,297,433$
Transfers In
These transfers were made to finance general operations, capital projects, and debt service payments.
-50-
NOTE 10 – CONCENTRATION OF REVENUES
Cargill Kitchen solutions is the largest customer of water and sewage services. The company’s water
purchases account for $81,961, or 6.6 percent, of Water Fund operating revenue; and the company’s
sewage charges account for $346,477, or 17.3 percent, of Sewage Fund operating revenue. Additionally,
Northern States Power Company’s (Xcel Energy) net tax capacity for property taxes payable in 2013 is
$9,901,516, or 50.6 percent, of the total net capacity of $19,579,693. Accordingly, Xcel Energy’s share of
the $7.9 million city property tax levy is $4.0 million. The tax capacity on January 1, 2013, is based on
market values certified to the state on January 1, 2012. Consequently, in 2012, Xcel Energy retired some
assets at its Monticello nuclear plant, decreasing the company’s net tax capacity to $9,285,841, or
48.8 percent, of the $19,021,771 total tax capacity for taxes payable in 2014.
NOTE 11 – COMMITMENTS
A. Construction Contracts
During fiscal 2013, the City awarded contracts for various construction and remodeling projects. The
City’s commitment for uncompleted work on these contracts at December 31, 2013 is approximately
$917,750.
B. Legal Claims
The City has the usual and customary type of miscellaneous legal claims pending at year-end. Although
the lawsuits are not presently determinable, the City’s management believes that the City will not incur
any material monetary loss resulting from these claims. No loss has been recorded on the City’s financial
statements relating to these claims.
NOTE 12 – DEFAULT ON BONDS
On June 6, 2012, the City notified the trustee for the $26,445,000 Monticello Telecommunications
Revenue Bonds, Series 2008 that it would no longer make monthly sinking fund payments from
supplemental sources. A technical default occurred on July 1, 2012, when the City failed to make the
sinking fund payment. On December 1, 2012, the first payment default occurred, as the trustee opted not
to tap the $2.3 million in the bond reserve funds in order to make an $882,669 interest payment due on
that date. A second non-payment default occurred on June 1, 2013, when an $882,669 interest and
$85,000 principal payment was not made. A third non-payment default occurred on December 1, 2013,
when an $879,906 interest payment was not made.
Under the threat of litigation from bondholders, the City entered into a tolling agreement with the trustee
on April 1, 2013 in order to permit time for good faith negotiations toward a settlement agreement. On
October 2, 2013, the City and trustee, on behalf of bondholders, entered into a settlement agreement
whereby the City would pay a $5.75 million settlement (21.7 percent of original par) in exchange for
release from all future debt service requirements on the bonds, release from any future claims from
bondholders, and the ability to continue to own and operate the telecommunications enterprise. The
settlement agreement is awaiting approval by state and federal courts. While bondholders have the option
to opt out of the settlement agreement and pursue damages independently, that scenario is unlikely given
that the largest investors have stated their support of the agreement and smaller investors would have
limited net gains given they would be responsible for their litigation costs. The City will also be required
to pay any funds remaining in the trust accounts held under the bond’s indenture to bondholders under the
terms of this settlement.
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NOTE 13 – GASB STANDARDS ISSUED BUT NOT YET IMPLEMENTED
GASB Statement No. 68 replaces the requirements of GASB Statement No. 27, Accounting for Pensions
by State and Local Governmental Employers, and Statement No. 50, Pension Disclosures, as they relate
to governments that provide pensions through pension plans administered as trusts or similar
arrangements that meet certain criteria. GASB Statement No. 68 requires governments providing defined
benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first
time, and to more comprehensively and comparably measure the annual costs of pension benefits.
NOTE 14 – SUBSEQUENT EVENT
During the year ended December 31, 2012, the City technically defaulted on the outstanding Monticello
Telecommunications Revenue Bonds, Series 2008 due to lack of payment of a regularly scheduled interest
payment on this issue.
On June 13, 2013, the City Council approved a term sheet for settlement of claims that the trustee and
bondholders may have related to the Monticello Telecommunication Revenue Bonds, Series 2008. The
settlement needs approval of the bondholders of at least 90 percent of the aggregate principal amount of
outstanding bonds and 90 percent of all bondholders who have held bonds at any time since the bond issuance.
The Minnesota Fourth Judicial District Court approved the settlement on January 28, 2014, and the
settlement needs to be approved by the United States District Court for the District of Minnesota before it will
be finalized. The potential settlement agreement will require the City to pay no more than $5,750,000 of the
total $26,445,000 outstanding payable on these bonds at December 31, 2013. The City will also release any
funds remaining in the trust accounts held under the bond’s indenture to bondholders under the terms of
this settlement.
REQUIRED SUPPLEMENTARY INFORMATION
StatutoryStatutoryUnfunded
Value ofAccrued(Funded)
Plan AssetsLiability (SAL)SAL
740,263$ 1,346,363$ (606,100)$
1,010,161 1,153,913 (143,752)
1,136,892 1,190,292 (53,400)
1,127,049 1,220,891 (93,842)
1,046,960 1,031,472 15,488
1,114,949 965,425 149,524
N/A – Not Available
UnfundedUnfunded
ActuarialActuarialActuarialLiability as a
AccruedValue ofAccruedCoveredPercentage of
LiabilityPlan AssetsLiabilityPayrollPayroll
302,787$ –$ 302,787$ – %3,080,457$ 9.83%
362,290 – 362,290 – %3,108,685 11.65%
Note:
92.3%
101.5%
Schedule of Funding Progress
2013115.5%
January 1, 2011
Ratio
CITY OF MONTICELLO
Required Supplementary Information
Monticello Fire Department Relief Association
Schedule of Funding Progress
City of Monticello Other Post-Employment Benefits Plan
Ratio
2010
Date
2008
2009
Actuarial
2011
2012
Funded
55.0%
87.5%
95.5%
TheMonticelloVolunteerFiremen’sReliefAssociationiscomprisedofvolunteers;therefore,therearenopayroll
expenditures (i.e. there are no covered payroll percentage calculations).
Valuation
Date
Funded
January 1, 2008
Valuation
-52-
BUDGETARY COMPARISON SCHEDULES
Original andOver (Under)
Final BudgetActualBudget
Revenue
Property taxes5,559,500$ 5,605,102$ 45,602$
Special assessments300 22,351 22,051
Franchise taxes216,500 216,500 –
Licenses and permits271,480 331,711 60,231
Intergovernmental revenue
Fire department aid70,000 110,092 40,092
State police aid60,700 65,767 5,067
State highway aid101,669 107,173 5,504
County/regional grants45,000 82,858 37,858
Other grants and aids6,740 6,741 1
Total intergovernmental revenue284,109 372,631 88,522
Charges for services
Animal impound fees30,000 29,024 (976)
Garbage charge51,860 16,653 (35,207)
Development cost reimbursement– 487 487
Inspection fees600 636 36
Other189,475 198,875 9,400
Total charges for services271,935 245,675 (26,260)
Fines100 1,725 1,625
Investment earnings (net of market value adjustment)110,800 (52,136) (162,936)
Miscellaneous revenue
Rents14,000 21,668 7,668
Other58,245183,719125,474
Total miscellaneous revenue72,245 205,387 133,142
Total revenue6,786,969 6,948,946 161,977
Expenditures
General government
Mayor and City Council
Personal services40,500 39,685 (815)
Other services and charges13,425 14,011 586
Total Mayor and City Council53,925 53,696 (229)
(continued)
CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual
Year Ended December 31, 2013
-53-
Original andOver (Under)
Final BudgetActualBudget
Expenditures (continued)
General government (continued)
Administrative
Personal services219,192 214,818 (4,374)
Supplies300 298 (2)
Other services and charges20,800 45,611 24,811
Total administrative240,292 260,727 20,435
Elections
Personal services222 – (222)
Other services and charges2,920 2,425 (495)
Total elections3,142 2,425 (717)
Finance
Personal services305,325 282,224 (23,101)
Supplies1,850 2,540 690
Other services and charges31,350 41,749 10,399
Total finance338,525 326,513 (12,012)
Audit40,000 47,823 7,823
Assessing51,215 49,664 (1,551)
Legal51,200 46,905 (4,295)
Human resources
Personal services77,990 78,362 372
Other services and charges14,250 14,705 455
Total human resources92,240 93,067 827
Planning and zoning
Personal services106,328 108,269 1,941
Professional services56,500 90,144 33,644
Other services and charges5,300 22,553 17,253
Total planning and zoning168,128 220,966 52,838
Data processing
Personal services34,704 36,004 1,300
Supplies25,90013,958(11,942)
Professional services57,850 17,960 (39,890)
Other services and charges40,055 27,652 (12,403)
Total data processing158,509 95,574 (62,935)
(continued)
CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual (continued)
Year Ended December 31, 2013
-54-
Original andOver (Under)
Final BudgetActualBudget
Expenditures (continued)
General government (continued)
City hall
Personal services63,506 111,633 48,127
Supplies20,000 12,218 (7,782)
Professional services73,500 38,535 (34,965)
Other services and charges77,355 53,120 (24,235)
Total city hall234,361 215,506 (18,855)
Office facility
Supplies1,000 452 (548)
Other services and charges18,200 14,903 (3,297)
Total office facility19,200 15,355 (3,845)
Insurance
Personal services25,000 54,671 29,671
Other services and charges72,260 73,043 783
Total insurance97,260 127,714 30,454
Orderly annexation
Other services and charges830 (403) (1,233)
Total general government1,548,827 1,555,532 6,705
Public safety
Law enforcement1,150,290 1,151,042 752
Fire relief association70,000 109,592 39,592
Fire
Personal services117,732 118,073 341
Supplies35,650 42,317 6,667
Other services and charges74,889 61,754 (13,135)
Total fire228,271 222,144 (6,127)
Building inspections
Personal services234,746 229,818 (4,928)
Supplies6,750 4,659 (2,091)
Other services and charges22,140 16,530 (5,610)
Total building inspections263,636 251,007 (12,629)
Civil defense
Personal services– 1,221 1,221
Other services and charges1,925 8,486 6,561
Total civil defense1,925 9,707 7,782
(continued)
CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual (continued)
Year Ended December 31, 2013
-55-
Original andOver (Under)
Final BudgetActualBudget
Expenditures (continued)
Public safety (continued)
Animal control46,335 47,425 1,090
National Guard22,250 14,517 (7,733)
Total public safety1,782,707 1,805,434 22,727
Public works
Administration
Personal services178,845 97,647 (81,198)
Other services and charges46,125 16,235 (29,890)
Total administration224,970 113,882 (111,088)
Engineering
Personal services152,361 112,149 (40,212)
Professional services51,500 96,039 44,539
Other services and charges9,575 15,842 6,267
Total engineering213,436 224,030 10,594
Inspections
Personal services105,202 43,329 (61,873)
Other services and charges20,090 11,551 (8,539)
Total inspections125,292 54,880 (70,412)
Streets
Personal services421,439 371,891 (49,548)
Supplies147,975 167,790 19,815
Other services and charges156,185 149,345 (6,840)
Total streets 725,599 689,026 (36,573)
Ice and snow
Personal services132,215 128,679 (3,536)
Supplies85,000 79,182 (5,818)
Other services and charges2,300 2,691 391
Total ice and snow219,515 210,552 (8,963)
Shop and garage
Personal services88,919 98,443 9,524
Supplies39,000 44,182 5,182
Other services and charges55,850 44,116 (11,734)
Total shop and garage183,769 186,741 2,972
(continued)
CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual (continued)
Year Ended December 31, 2013
-56-
Original andOver (Under)
Final BudgetActualBudget
Expenditures (continued)
Public works (continued)
Stormwater maintenance
Personal services21,558 9,331 (12,227)
Other services and charges9,650 2,733 (6,917)
Total stormwater maintenance31,208 12,064 (19,144)
Parking lots
Personal services1,701 1,002 (699)
Other services and charges7,600 1,964 (5,636)
Total parking lots9,301 2,966 (6,335)
Street lighting
Personal services– 2,795 2,795
Other services and charges216,500 203,210 (13,290)
Total street lighting216,500 206,005 (10,495)
Total public works1,949,590 1,700,146 (249,444)
Sanitation
Personal services1,034 – (1,034)
Other services and charges516,526 505,996 (10,530)
Total sanitation517,560 505,996 (11,564)
Culture and recreation
Community celebrations3,300 1,187 (2,113)
Museum– 371 371
Senior center
Personal services545 797 252
Other services and charges90,47589,423(1,052)
Total senior center91,020 90,220 (800)
Transit – River Rider3,000 – (3,000)
Ice arena75,000 75,000 –
Parks
Personal services398,271 361,157 (37,114)
Supplies111,775 105,515 (6,260)
Other services and charges95,730 100,894 5,164
Total parks605,776 567,566 (38,210)
(continued)
CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual (continued)
Year Ended December 31, 2013
-57-
Original andOver (Under)
Final BudgetActualBudget
Expenditures (continued)
Culture and recreation (continued)
NSP ball fields42,300 25,517 (16,783)
Shade tree
Personal services32,542 41,621 9,079
Supplies2,450 9,260 6,810
Other services and charges12,800 2,595 (10,205)
Total shade tree47,792 53,476 5,684
Library
Personal services9,692 8,260 (1,432)
Supplies1,900 2,001 101
Other services and charges28,505 25,135 (3,370)
Total library40,097 35,396 (4,701)
Capital outlay– 5,049 5,049
Total culture and recreation908,285 853,782 (54,503)
Total expenditures6,706,969 6,420,890 (286,079)
Excess of revenues over expenditures80,000 528,056 448,056
Other financing sources (uses)
Transfers (out)(80,000) (92,000) (12,000)
Net change in fund balances–$ 436,056 436,056$
Fund balances
Beginning of year 3,478,507
End of year 3,914,563$
CITY OF MONTICELLO
General Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual (continued)
Year Ended December 31, 2013
-58-
Original andOver (Under)
Final BudgetActualBudget
Revenue
Property taxes1,170,000$ 1,181,335$ 11,335$
Charges for services
Membership dues and fees1,305,200 1,292,608 (12,592)
Interest earnings9,000 (5,287) (14,287)
Miscellaneous14,000 16,7432,743
Total revenue2,498,200 2,485,399 (12,801)
Expenditures
Current
Culture and recreation
Personal services976,660 969,867 (6,793)
Supplies246,700 278,300 31,600
Professional services61,500 54,637 (6,863)
Advertising12,000 3,940 (8,060)
Repairs and maintenance40,000 34,780 (5,220)
Insurance45,765 28,003 (17,762)
Utilities175,500 189,298 13,798
Telephone15,800 4,238 (11,562)
Equipment and other rental4,100 3,324 (776)
Other35,175 49,843 14,668
Capital outlay110,000 77,465 (32,535)
Total expenditures1,723,200 1,693,695 (29,505)
Excess of revenues over expenditures775,000 791,704 16,704
Other financing sources (uses)
Transfers in100,000 175,00075,000
Transfers (out)(875,000) (875,000) –
Total other financing sources (uses)(775,000) (700,000) 75,000
Net change in fund balances–$ 91,704 91,704$
Fund balance
Beginning of year179,500
End of year 271,204$
CITY OF MONTICELLO
Community Center Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual
Year Ended December 31, 2013
-59-
Original andOver (Under)
Final BudgetActualBudget
Revenue
Tax increments681,240$ 965,935$ 284,695$
Charges for services
Initiation/application fees– 25,404 25,404
Interest earnings77,700 (3,964) (81,664)
Miscellaneous9,900 278,642 268,742
Total revenue768,840 1,266,017 497,177
Expenditures
Current
Economic development
Personal services110,407 3,116 (107,291)
Professional services23,973 63,669 39,696
Developer payments288,465 442,839 154,374
Land held for resale market value adjustment– 55,800 55,800
Other34,228 359,038 324,810
Total expenditures457,073 924,462 467,389
Excess of revenues over expenditures311,767 341,555 29,788
Other financing (uses)
Transfers in80,00092,00012,000
Transfers (out)(319,403) (779,804) (460,401)
Total other financing sources (uses)(239,403) (687,804) (448,401)
Net change in fund balances72,364$ (346,249) (418,613)$
Fund balance
Beginning of year7,461,554
End of year 7,115,305$
CITY OF MONTICELLO
Economic Development Authority Special Revenue Fund
Schedule of Revenue, Expenditures, and Changes in Fund Balances
Budget and Actual
Year Ended December 31, 2013
-60-
CITY OF MONTICELLO
Notes to the Required Supplementary Information
December 31, 2013
-61-
Budgetary Information
The City follows these procedures in establishing the budgetary data reflected in the basic financial
statements:
A. Prior to September 1, the City Administrator submits to the City Council a proposed operating
budget for the fiscal year commencing the following January 1. The operating budget includes
proposed expenditures and the means of financing them. The City Council adopts the proposed
budget as amended and adjusted by the City Council and certifies the proposed property tax levy
to the county auditor according to Minnesota Statutes.
B. Public hearings are conducted at the City Council’s chambers in the Municipal Building.
C. On or before December 28, the final budget is legally enacted by City Council resolution and the
final property tax levy is certified to the county auditor.
D. Management is authorized to transfer budgeted amounts between departments within a fund;
however, any revisions that alter the total expenditures of any fund must be approved by the City
Council.
E. The City has legally adopted budgets for the General Fund and major special revenue funds.
Expenditures may not legally exceed budgeted appropriations at the total fund level. Monitoring
of budgets is maintained at the department level. All amounts over budget have been approved by
the City Council through the disbursement process. The City is not legally required to adopt an
annual budget for the nonmajor special revenue funds, the Debt Service Fund, and the Capital
Projects Funds. Project-length financial plans are adopted for the Debt Service and Capital
Projects Funds.
F. Budgets are adopted on a basis consistent with accounting principles generally accepted in the
United States of America. Budgeted amounts are as originally adopted or amended by the City
Council. All annual appropriations lapse at year-end.
SUPPLEMENTAL INFORMATION
(This page left blank intentionally)
-62-
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Minnesota Investment – used to account for the administration of loans to local business while
following state and federal guidelines.
Cemetery – used to account for the activities of the cemetery operations.
CDBG Revitalization – used to account for the funding and activities of the CDBG Revitalization Grant.
CAPITAL PROJECTS FUNDS
Park Pathway Dedication – used to account for the updating and maintaining of the City’s pathway
system, as well as the assignment of funds for future parks and pathways within the City.
Water Access – used to account for fees collected on building permits for new construction and lot
development for major improvements of the City’s water system.
Storm Sewer Access – used to account for fees collected on building permits for new construction and
lot development for the major improvement of the City’s storm sewer.
City Street Reconstruction – used to account for the annual improvements made to the City’s
infrastructure based on an annual reconstruction schedule.
Street Lighting Improvement – used to account for the activities of incorporating street lighting into
designated areas of the City, as pre-determined by the county.
MinnesotaCDBG –
InvestmentCemeteryRevitalization
Assets
Cash and investments1,051,218$ 17,882$ 424$
Receivables
Current taxes– – –
Accounts – – –
Notes receivable– – 277,644
Prepaid items– 1,678 –
Total assets1,051,218$ 19,560$ 278,068$
Liabilities
Accounts and contracts payable
–$ 3,849$ –$
Deferred inflows of resources
Unavailable revenue – notes receivable– – 277,644
Fund balances
Special revenue funds
Nonspendable– 1,678 –
Restricted for economic development1,051,218 – 424
Restricted for perpetual care– 14,033 –
Capital projects funds
Assigned for park improvements– – –
Assigned for capital improvements– – –
Total fund balances 1,051,218 15,711 424
Total liabilities, deferred inflows of resources,
and fund balances1,051,218$ 19,560$ 278,068$
Special Revenue Funds
as of December 31, 2013
CITY OF MONTICELLO
Nonmajor Governmental Funds
Combining Balance Sheet
-63-
ParkStreet
PathwayStorm SewerCity StreetLighting
DedicationWater AccessAccessReconstructionImprovementTotals
973,573$ –$ 1,122,181$ 1,665,939$ 715,195$ 5,546,412$
– – – 166 – 166
– – – – 77,089 77,089
– – – – – 277,644
– – – – – 1,678
973,573$ –$ 1,122,181$ 1,666,105$ 792,284$ 5,902,989$
140$ –$ –$ –$ –$ 3,989$
– – – – – 277,644
– – – – – 1,678
– – – – – 1,051,642
– – – – – 14,033
973,433 – – – – 973,433
– – 1,122,181 1,666,105 792,284 3,580,570
973,433 – 1,122,181 1,666,105 792,284 5,621,356
973,573$ –$ 1,122,181$ 1,666,105$ 792,284$ 5,902,989$
Capital Projects Funds
-64-
MinnesotaCDBG –
InvestmentCemeteryRevitalization
Revenue
Property taxes–$ –$ –$
Franchise taxes– – –
Charges for services– 12,913 –
Other
Investment earnings (net of market value adjustment)(14,840) (317) (6)
Miscellaneous– 4 –
Total revenue(14,840) 12,600 (6)
Expenditures
Current
General government– 16,242 –
Public works– – –
Culture and recreation– – –
Capital outlay
Culture and recreation– – –
Debt service
Interest and fiscal charges– – –
Total expenditures– 16,242 –
Excess (deficiency) of revenue
over expenditures(14,840) (3,642) (6)
Other financing sources (uses)
Transfers in– – –
Transfers (out)– – –
Total other financing sources (uses)– – –
Change in fund balances(14,840) (3,642) (6)
Fund balances
Beginning of year1,066,058 19,353 430
End of year 1,051,218$ 15,711$ 424$
Special Revenue Funds
CITY OF MONTICELLO
Nonmajor Governmental Funds
Combining Statement of Revenue, Expenditures, and Changes in Fund Balances
Year Ended December 31, 2013
-65-
ParkStreet
PathwayStorm SewerCity StreetLighting
DedicationWater AccessAccessReconstructionImprovementTotals
–$ –$ –$ 2,346$ –$ 2,346$
– – – – 86,003 86,003
– 48,735 – – – 61,648
(7,851) (650) (17,598) (24,620) (10,106) (75,988)
– – – – – 4
(7,851) 48,085 (17,598) (22,274) 75,897 74,013
– – – – – 16,242
– 266 7,164 – – 7,430
2,975 – – – – 2,975
205,470 – – – – 205,470
3,025 – – – – 3,025
211,470 266 7,164 – – 235,142
(219,321) 47,819 (24,762) (22,274) 75,897 (161,129)
750,000 – – – – 750,000
– (70,729) (321,800) (219,000) – (611,529)
750,000 (70,729) (321,800) (219,000) – 138,471
530,679 (22,910) (346,562) (241,274) 75,897 (22,658)
442,754 22,910 1,468,743 1,907,379 716,387 5,644,014
973,433$ –$ 1,122,181$ 1,666,105$ 792,284$ 5,621,356$
Capital Projects Funds
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-67-
INTERNAL SERVICE FUNDS
Information Technology – used to account for the financing of the City’s information technology of all
departments and related costs.
Central Equipment – used to account for the financing and purchase of equipment of all departments
and related costs.
InformationCentral
TechnologyEquipmentTotals
Assets
Current assets
Cash and investments – unrestricted34,528$ 899,118$ 933,646$
Capital assets
Furniture and equipment17,013 – 17,013
Machinery and equipment– 95,000 95,000
Less accumulated depreciation(1,631) (10,076) (11,707)
Total capital assets15,382 84,924 100,306
Total assets49,910$ 984,042$ 1,033,952$
Liabilities and Net Position
Current liabilities
Accounts payable12,567$ –$ 12,567$
Accrued interest payable– 510 510
Bonds payable due within one year– 60,000 60,000
Total current liabilities12,567 60,510 73,077
Long-term liabilities
Bonds payable– 385,000 385,000
Total liabilities12,567 445,510 458,077
Net position (deficit)
Net investment in capital assets15,382 (10,076) 5,306
Unrestricted21,961 548,608 570,569
Total net position37,343 538,532 575,875
Total liabilities and net position49,910$ 984,042$ 1,033,952$
CITY OF MONTICELLO
Internal Service Funds
Combining Statement of Net Position
December 31, 2013
-68-
InformationCentral
TechnologyEquipmentTotals
Operating revenue
Charges to other funds125,000$ 62,535$ 187,535$
Other revenue23 – 23
Total operating revenue125,023 62,535 187,558
Operating expenses
Utilities38,334 – 38,334
Supplies and maintenance7,473 – 7,473
Repairs and maintenance280 – 280
Depreciation1,631 10,076 11,707
Professional fees35,095 4,566 39,661
Miscellaneous34,707 – 34,707
Total operating expenses117,520 14,642 132,162
Operating income7,503 47,893 55,396
Nonoperating revenue (expense)
Investment earnings (net of market value adjustment)(160) (5,726) (5,886)
Interest expense– (4,298) (4,298)
Total nonoperating revenue (expense)(160) (10,024) (10,184)
Income before transfers7,343 37,869 45,212
Transfers
Transfers in30,000 500,663 530,663
Change in net position37,343 538,532 575,875
Net position
Beginning of year– – –
End of year37,343$ 538,532$ 575,875$
CITY OF MONTICELLO
Internal Service Funds
Combining Statement of Revenue, Expenses, and Changes in Net Position
Year Ended December 31, 2013
-69-
InformationCentral
TechnologyEquipmentTotals
Cash flows from operating activities
Receipts from interfund services provided125,023$ 62,535$ 187,558$
Cash payments to suppliers(103,322) (4,566) (107,888)
Net cash flows from operating activities21,701 57,969 79,670
Cash flows from noncapital financing activities
Transfers in30,000 500,663 530,663
Cash flows from capital and related financing activities
Acquisition and construction of capital assets(17,013) (95,000) (112,013)
Proceeds from issuance of long-term debt– 500,000 500,000
Principal paid on long-term debt– (55,000) (55,000)
Interest paid on long-term debt– (3,788) (3,788)
Net cash flows from capital and related
financing activities(17,013) 346,212 329,199
Cash flows from investing activities
Interest on investments(160) (5,726) (5,886)
Net increase (decrease) in cash and
cash equivalents34,528 899,118 933,646
Cash and cash equivalents
Beginning of year– – –
End of year34,528$ 899,118$ 933,646$
Reconciliation of operating income to net cash flows
from operating activities
Operating income7,503$ 47,893$ 55,396$
Adjustments to reconcile operating income to net
cash flows from operating activities
Depreciation1,631 10,076 11,707
Change in assets and liabilities
Increase in accounts payable12,567 – 12,567
Net cash flows from operating activities21,701$ 57,969$ 79,670$
CITY OF MONTICELLO
Internal Service Funds
Combining Statement of Cash Flows
Year Ended December 31, 2013
-70-
STATISTICAL SECTION
Page
Contents:
Financial Trends 72
Revenue Capacity 84
Debt Capacity 94
Demographic and Economic Information101
Operating Indicators 103
Theseschedulescontainserviceandinfrastructuredatatohelpthereaderunderstandhowthe
informationintheCity’sfinancialreportrelatestotheservicestheCityprovides,andtheactivitiesit
performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the CAFR for the relevant year.
STATISTICAL SECTION
ThispartoftheCityofMonticello,Minnesota’s(theCity)comprehensiveannualfinancialreport(CAFR)presentsdetailed
informationasacontextforunderstandingwhattheinformationinthefinancialstatements,notedisclosures,andrequired
supplementary information says about the City’s overall financial health.
TheseschedulescontaintrendinformationtohelpthereaderunderstandhowtheCity’sfinancial
performance and well-being have changed over time.
TheseschedulescontaininformationtohelpthereaderassesstheCity’smostsignificantrevenue
source, including the property tax and utility revenue.
TheseschedulespresentinformationtohelpthereaderassesstheaffordabilityoftheCity’scurrent
levels of outstanding debt and the City’s ability to issue additional debt in the future.
Theseschedulesofferdemographicandeconomicindicatorstohelpthereaderunderstandthe
environment within which the City’s financial activities take place.
-71-
2004200520062007
Governmental activities
Net investment in capital assets 8,972,497$ 7,009,622$ 7,009,622$ 12,476,536$
Restricted– – – 31,517,792
Unrestricted36,413,286 45,136,460 56,949,749 24,543,501
Total governmental activities net position 45,385,783$ 52,146,082$ 63,959,371$ 68,537,829$
Business-type activities
Net investment in capital assets 32,355,086$ 35,077,391$ 35,749,380$ 33,971,151$
Restricted– – – –
Unrestricted4,256,846 4,740,491 5,437,867 6,441,470
Total business-type activities net position 36,611,932$ 39,817,882$ 41,187,247$ 40,412,621$
Primary government
Net investment in capital assets 41,327,583$ 42,087,013$ 42,759,002$ 46,447,687$
Restricted– – – 31,517,792
Unrestricted40,670,132 49,876,951 62,387,616 30,984,971
Total primary government net position 81,997,715$ 91,963,964$ 105,146,618$ 108,950,450$
Note:
CITY OF MONTICELLO
Fiscal Year
(Accrual Basis of Accounting)
Last Ten Fiscal Years
Net Position by Component
Infiscal2013and2012,theCityhadachangeinaccountingprinciple,achangeinfundstructure,andpriorperiod
adjustments. Prior years were not adjusted to reflect these changes.
-72-
200820092010201120122013
27,584,763$ 33,712,370$ 31,901,676$ 38,242,040$ 40,525,009$ 44,268,757$
22,074,427 17,688,193 18,337,866 16,894,936 13,061,044 18,118,070
28,445,230 28,183,161 26,876,421 24,758,269 25,119,107 13,487,299
78,104,420$ 79,583,724$ 77,115,963$ 79,895,245$ 78,705,160$ 75,874,126$
31,375,890$ 29,910,696$ 28,556,355$ 25,031,043$ 23,698,091$ 20,496,832$
19,350 19,350 19,350 19,350 19,350 –
4,529,830 2,846,018 6,363,148 6,901,353 7,642,046 6,463,638
35,925,070$ 32,776,064$ 34,938,853$ 31,951,746$ 31,359,487$ 26,960,470$
58,960,653$ 63,623,066$ 60,458,031$ 63,273,083$ 64,233,100$ 64,765,589$
22,093,777 17,707,543 18,357,216 16,914,286 13,080,394 18,118,070
32,975,060 31,029,179 33,239,569 31,659,622 32,761,153 19,950,937
114,029,490$ 112,359,788$ 112,054,816$ 111,846,991$ 110,074,647$ 102,834,596$
-73-
2004200520062007
Expenses
Governmental activities
General government 1,528,281$ 1,907,352$ 3,639,497$ 1,844,320$
Public safety1,649,090 1,551,098 2,856,573 1,693,116
Public works438,413 5,990,719 5,318,865 4,559,460
Sanitation2,798,883 492,446 474,045 509,208
Culture and recreation410,768 2,210,729 2,694,970 2,661,915
Economic development969,229 657,258 2,061,331 769,584
Interest and fiscal charges1,414,737 1,733,933 2,378,871 2,193,840
Total governmental activities expenses9,209,401 14,543,535 19,424,152 14,231,443
Business-type activities
Water 865,379 939,449 913,638 973,375
Sewage2,083,841 2,017,993 2,095,124 2,000,610
Liquor 3,083,062 3,172,741 3,285,082 644,857
Cemetery 32,275 33,717 71,044 41,312
Fiber optics– – – 84,594
Deputy registrar – – – –
Total business-type activities expenses6,064,557 6,163,900 6,364,888 3,744,748
Total primary government expenses 15,273,958$ 20,707,435$ 25,789,040$ 17,976,191$
Program revenues
Government activities
Charges for services
General government 629,942$ 683,599$ 974,186$ 695,117$
Public safety889,041 912,300 1,030,842 93,138
Public works2,085,478 2,692,336 1,186,670 1,994,067
Sanitation98,602 863,857 129,057 –
Culture and recreation756,359 126,418 1,019,286 1,015,869
Economic development– 146,715 115,616 6,768
Operating grants and contributions337,688 381,420 281,531 160,147
Capital grants and contributions4,059,034 2,135,687 12,153,185 3,616,870
Total governmental activities program revenues8,856,144 7,942,332 16,890,373 7,581,976
Business-type activities
Charges for services
Water 585,699 701,346 742,146 867,873
Sewage918,309 969,996 1,043,208 1,196,983
Liquor 3,412,809 3,540,572 3,619,236 1,002,933
Cemetery 32,141 32,834 29,265 28,830
Fiber optics– – – –
Deputy registrar – – – –
Capital grants and contributions1,303,527 4,310,691 2,188,675 482,412
Total business-type activities program revenues6,252,485 9,555,439 7,622,530 3,579,031
Total primary government program revenues 15,108,629$ 17,497,771$ 24,512,903$ 11,161,007$
CITY OF MONTICELLO
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Fiscal Year
-74-
200820092010201120122013
1,572,389$ 1,780,972$ 2,065,463$ 2,111,710$ 2,103,737$ 1,623,727$
1,792,351 2,849,272 1,766,712 1,788,595 1,819,378 1,884,981
4,634,167 3,827,501 3,579,291 4,838,544 5,045,729 5,163,461
514,208 547,160 534,903 495,693 500,037 487,268
2,700,683 2,828,152 2,609,429 1,724,348 2,693,598 2,875,260
510,126 842,819 2,647,687 1,199,936 803,594 1,005,813
2,136,872 1,673,431 1,464,012 1,248,716 1,298,869 235,265
13,860,796 14,349,307 14,667,497 13,407,542 14,264,942 13,275,775
975,846 1,018,098 936,718 1,167,572 1,118,789 1,009,600
2,085,485 2,074,447 2,495,976 2,340,555 2,480,657 2,466,660
620,743 669,940 637,574 658,999 662,002 689,559
29,267 27,530 26,659 28,849 26,132 –
1,590,237 2,792,813 3,815,377 5,702,480 5,228,428 5,240,871
– – – – – 293,531
5,301,578 6,582,828 7,912,304 9,898,455 9,516,008 9,700,221
19,162,374$ 20,932,135$ 22,579,801$ 23,305,997$ 23,780,950$ 22,975,996$
523,228$ 443,976$ 491,304$ 521,182$ 619,992$ 147,244$
99,812 155,036 96,293 202,237 179,540 163,366
1,544,140 744,241 1,556,098 508,077 383,066 544,404
– 167,119 165,387 52,304 53,077 16,653
1,060,147 1,119,204 1,144,493 1,218,580 1,130,463 1,307,149
15,875 155,769 – – – –
159,192 269,492 424,845 253,127 252,784 293,710
948,340 2,067,509 4,124,271 2,083,511 1,841,915 1,079,738
4,350,734 5,122,346 8,002,691 4,839,018 4,460,837 3,552,264
973,776 1,019,390 828,635 1,078,133 1,304,923 1,214,570
1,307,064 1,371,776 1,470,537 1,712,058 1,850,919 1,981,491
1,059,479 1,043,256 1,174,767 1,151,171 1,214,745 1,318,276
24,475 19,995 8,620 22,390 19,810 –
– – 456,820 1,610,258 1,747,587 1,606,720
– – – – – 456,285
106,787 – – – – –
3,471,581 3,454,417 3,939,379 5,574,010 6,137,984 6,577,342
7,822,315$ 8,576,763$ 11,942,070$ 10,413,028$ 10,598,821$ 10,129,606$
(continued)
-75-
2004200520062007
Net (expense) revenue
Governmental activities (353,257)$ (6,601,203)$ (2,533,779)$ (6,649,467)$
Business-type activities187,928 3,391,539 1,257,642 (165,717)
Total primary government net expense (165,329)$ (3,209,664)$ (1,276,137)$ (6,815,184)$
General revenues and other changes in
net position
Governmental activities
Property taxes 7,670,666$ 7,476,106$ 7,253,560$ 7,242,838$
Franchise taxes– – – –
Unrestricted grants and contributions99,667 200,000 130,000 288,940
Investment earnings (net of market value adjustment)728,274 985,497 2,093,877 2,170,025
Gain on sale of assets– – – –
Other general revenues2,860,728 2,799,703 4,619,629 528,193
Transfers(1,326,569) 250,000 250,000 997,929
Total governmental activities10,032,766 11,711,306 14,347,066 11,227,925
Business-type activities
Investment earnings125,245 89,987 334,623 326,356
Miscellaneous23,770 (25,576) 27,100 62,664
Transfers1,326,569 (250,000) (250,000) (997,929)
Total business-type activities1,475,584 (185,589) 111,723 (608,909)
Total primary government 11,508,350$ 11,525,717$ 14,458,789$ 10,619,016$
Change in net position
Governmental activities 9,679,509$ 5,110,103$ 11,813,287$ 4,578,458$
Business-type activities1,663,512 3,205,950 1,369,365 (774,626)
Total primary government 11,343,021$ 8,316,053$ 13,182,652$ 3,803,832$
Note:
CITY OF MONTICELLO
Changes in Net Position
Last Ten Fiscal Years (continued)
(Accrual Basis of Accounting)
Fiscal Year
Infiscal2013and2012,theCityhadachangeinaccountingprinciple,achangeinfundstructure,andhadpriorperiod
adjustments. Prior years were not adjusted to reflect these changes.
-76-
200820092010201120122013
(9,510,062)$ (9,226,961)$ (6,664,806)$ (8,568,524)$ (9,804,105)$ (9,723,511)$
(1,829,997) (3,128,411) (3,972,925) (4,324,445) (3,378,024) (3,122,879)
(11,340,059)$ (12,355,372)$ (10,637,731)$ (12,892,969)$ (13,182,129)$ (12,846,390)$
8,450,599$ 8,821,568$ 8,260,705$ 8,451,149$ 8,746,348$ 8,927,164$
– 48,517 371,258 341,362 339,518 320,640
158,340 406,735 37,665 19,359 38,618 65,228
1,461,658 770,178 859,583 1,467,780 767,722 (189,128)
– 41,173 – – 11,575 3,885
233,326 366,961 442,091 354,501 540,272 489,782
371,245 251,133 (5,774,257) 713,655 (2,420,489) 278,500
10,675,168 10,706,265 4,197,045 11,347,806 8,023,564 9,896,071
547,703 188,178 236,131 495,484 264,589 (117,175)
136,356 42,360 125,326 1,555,509 100,687 65,468
(371,245) (251,133) 5,774,257 (713,655) 2,420,489 (278,500)
312,814 (20,595) 6,135,714 1,337,338 2,785,765 (330,207)
10,987,982$ 10,685,670$ 10,332,759$ 12,685,144$ 10,809,329$ 9,565,864$
1,165,106$ 1,479,304$ (2,467,761)$ 2,779,282$ (1,780,541)$ 172,560$
(1,517,183) (3,149,006) 2,162,789 (2,987,107) (592,259) (3,453,086)
(352,077)$ (1,669,702)$ (304,972)$ (207,825)$ (2,372,800)$ (3,280,526)$
-77-
2004200520062007
General Fund
Reserved 194,172$ 388,527$ 405,819$ 430,294$
Unreserved4,576,072 4,735,864 5,014,094 5,131,193
Nonspendable– – – –
Restricted– – – –
Committed – – – –
Assigned – – – –
Unassigned – – – –
Total General Fund4,770,244$ 5,124,391$ 5,419,913$ 5,561,487$
All other governmental funds
Reserved 14,144,908$ 14,754,923$ 17,912,418$ 27,072,957$
Unreserved, reported in
Special revenue funds9,080,687 18,425,893 14,946,443 7,554,334
Capital projects funds(94,945) 9,261,188 (1,805,372) (630,214)
Nonspendable– – – –
Restricted– – – –
Committed – – – –
Assigned – – – –
Unassigned
Special revenue funds– – – –
Capital projects funds– – – –
Total all other governmental funds23,130,650$ 42,442,004$ 31,053,489$ 33,997,077$
Note 1:
Note 2:
(Modified Accrual Basis of Accounting)
Fiscal Year
CITY OF MONTICELLO
Fund Balances of Governmental Funds
Last Ten Fiscal Years
The City made a fund structure change in fiscal 2013. Prior year data has not been changed to reflect this change.
TheCityimplementedGASBStatementNo.54infiscal2011.Prioryeardatahasnotbeenrestatedasaresultof
this change.
-78-
200820092010201120122013
359,303$ 392,541$ 336,286$ –$ –$ –$
5,819,249 4,705,092 4,644,748 – – –
– – – 386,616 342,380 258,100
– – – – – –
– – – 3,374,200 – –
– – – – – –
– – – 649,821 3,136,127 3,656,463
6,178,552$ 5,097,633$ 4,981,034$ 4,410,637$ 3,478,507$ 3,914,563$
16,663,801$ 10,280,326$ 7,884,431$ –$ –$ –$
14,191,473 18,451,828 18,324,689 – – –
(1,839,478) (2,124,391) (1,532,220) – – –
– – – 1,299,057 197,123 1,822,926
– – – 22,140,662 21,480,938 10,928,985
– – – 2,662,124 – –
– – – 9,138,626 8,655,488 6,485,727
– – – (141,890) – –
– – – (1,435,666) – –
29,015,796$ 26,607,763$ 24,676,900$ 33,662,913$ 30,333,549$ 19,237,638$
-79-
2004200520062007
Revenues
Taxes
General property taxes 6,734,814$ 6,722,393$ 6,461,748$ 6,190,599$
Tax increments935,852 753,713 791,812 824,714
Special assessments2,098,499 3,341,537 2,006,519 3,112,374
Franchise taxes– – – –
Licenses and permits797,458 956,300 758,718 627,751
Intergovernmental689,891 373,929 937,076 1,764,633
Charges for services3,223,012 4,014,956 2,796,871 2,888,981
Fines and forfeits– 4,000 1,750 5,027
Earnings on investments728,274 985,497 2,093,877 2,170,025
Miscellaneous1,979,075 3,165,372 4,564,660 372,502
Total revenues17,186,875 20,317,697 20,413,031 17,956,606
Expenditures
General government1,656,207 1,544,446 1,743,716 1,899,097
Public safety1,608,652 1,666,869 2,760,090 1,603,331
Public works2,332,202 4,635,519 3,594,844 1,951,712
Sanitation410,768 492,446 474,045 509,208
Culture and recreation2,395,015 2,361,302 2,271,216 2,214,108
Economic development969,229 637,777 2,056,055 772,852
Capital outlay2,649,316 12,137,740 13,074,965 6,430,421
Debt service
Principal4,096,539 1,911,126 3,407,655 3,388,382
Interest and paying agent fees1,460,183 1,426,367 2,373,438 2,256,311
Total expenditures17,578,111 26,813,592 31,756,024 21,025,422
Excess of revenues over (under) expenditures(391,236) (6,495,895) (11,342,993) (3,068,816)
Other financing sources (uses)
Transfers in5,859,535 4,128,010 8,181,372 5,202,051
Transfers out(5,609,535) (3,878,010) (7,931,372) (4,204,122)
Debt issued3,130,222 25,150,000 – 5,137,903
Premium on debt issued– 761,396 – 83,710
(Discount) on debt issued– – – –
Refunded bonds redeemed– – – –
Deferred amortized gain (loss) on refunding– – – –
Sale of land held for resale– – – (103,084)
Sale of capital assets– – – 37,520
Total other financing sources (uses)3,380,222 26,161,396 250,000 6,153,978
Net change in fund balances 2,988,986$ 19,665,501$ (11,092,993)$ 3,085,162$
Debt service as a percentage of noncapital expenditures 37.2%22.7%30.9%38.7%
Fiscal Year
CITY OF MONTICELLO
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
Note: The City made a fund structure change in fiscal 2013. Prior year data has not been changed to reflect this change.
-80-
200820092010201120122013
7,233,582$ 7,502,844$ 7,319,154$ 7,294,635$ 8,234,086$ 7,985,695$
1,172,447 1,193,021 1,155,386 1,044,791 1,024,134 965,935
2,566,932 2,462,673 1,465,264 1,856,134 1,902,871 2,065,944
– 48,517 371,258 341,362 339,518 320,640
917,539 266,797 217,184 249,999 275,699 331,711
550,283 1,688,895 1,620,771 1,434,420 540,475 1,264,781
2,290,091 2,518,548 2,890,006 2,239,584 2,076,834 1,846,919
2,216 1,220 205 85 14,338 1,725
1,461,658 770,178 859,583 1,467,780 767,722 (183,242)
197,988 435,186 643,873 603,019 753,832 700,776
16,392,736 16,887,879 16,542,684 16,531,809 15,929,509 15,300,884
1,579,164 1,634,395 1,997,458 2,039,270 2,023,674 1,576,653
1,736,962 2,738,768 1,684,296 1,728,409 1,735,579 1,805,434
2,380,993 2,074,811 1,562,155 1,675,222 1,703,849 1,707,576
514,208 547,160 534,903 495,693 500,037 505,996
2,220,368 2,355,669 2,164,534 2,419,369 2,272,595 2,472,987
525,783 842,819 2,647,687 1,198,449 800,540 1,011,961
3,522,196 1,946,153 4,138,459 4,067,251 2,829,049 1,357,254
5,037,028 6,749,293 5,001,000 4,860,000 5,174,500 5,290,750
2,192,063 1,801,392 1,553,661 1,383,095 1,290,430 930,982
19,708,765 20,690,460 21,284,153 19,866,758 18,330,253 16,659,593
(3,316,029) (3,802,581) (4,741,469) (3,334,949) (2,400,744) (1,358,709)
16,818,090 10,172,878 4,687,126 5,710,819 9,990,120 6,906,770
(16,446,845) (9,921,745) (4,431,158) (4,997,164) (10,732,901) (7,158,933)
15,450,000 – 3,255,000 10,735,000 – –
– – – 301,910 – –
– – (19,530) – – –
(15,908,564) – (865,000) – – (10,690,000)
(384,432) – – – – –
74,650 – – – – –
2,575 62,496 67,569 – 11,575 12,428
(394,526) 313,629 2,694,007 11,750,565 (731,206) (10,929,735)
(3,710,555)$ (3,488,952)$ (2,047,462)$ 8,415,616$ (3,131,950)$ (12,288,444)$
44.7%45.6%38.2%39.5%41.4%42.1%
-81-
Fiscal YearProperty TaxFranchise TaxTotal
2004 7,670,666$ –$ 7,670,666$
2005 7,476,106 – 7,476,106
2006 7,253,560 – 7,253,560
2007 7,242,838 – 7,242,838
2008 8,450,599 – 8,450,599
20098,821,568 48,517 8,870,085
2010 8,260,705 371,258 8,631,963
2011 8,451,149 341,362 8,792,511
2012 8,746,348 339,518 9,085,866
2013 8,927,164 320,640 9,247,804
CITY OF MONTICELLO
General Governmental Tax Revenues by Source
Last Ten Fiscal Years
(Accrual Basis of Accounting)
-82-
GeneralTax
Fiscal YearProperty TaxIncrementsFranchise TaxTotal
20046,734,814$ 935,852$ –$ 7,670,666$
20056,722,393 753,713 – 7,476,106
20066,461,748 791,812 – 7,253,560
20076,190,599 824,714 – 7,015,313
20087,233,582 1,172,447 – 8,406,029
20097,502,844 1,193,021 48,517 8,744,382
20107,319,154 1,155,386 371,258 8,845,798
20117,294,635 1,044,791 341,362 8,680,788
20128,234,086 1,024,134 339,518 9,597,738
20137,985,695 965,935 320,640 9,272,270
CITY OF MONTICELLO
Governmental Funds Tax Revenues by Source
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
-83-
Percentage of Total Net Tax Capacity Value
38.9 %59.3 %1.2 %0.6 %
41.5 56.7 1.3 0.6
41.8 56.5 1.2 0.5
42.8 55.0 1.1 1.1
43.0 54.6 1.0 1.4
41.8 55.5 1.0 1.7
35.4 62.0 1.1 1.4
31.9 65.5 1.2 1.4
23.6 74.3 1.2 1.0
25.4 72.5 1.3 0.9
*Tax capacity value does not include tax increment.
Note 1:
Note 2:
Source:
20134,824,117 13,793,916 239,129 164,609
CITY OF MONTICELLO
Tax Capacity Value and Estimated Market Value of Taxable Property
Last Ten Fiscal Years
Residential
Real Property
and
Agricultural
Fiscal Year
Property
70,132$
70,843
69,626
160,594
170,446 7,871,132
143,452$ 6,948,707$
2009
2005
229,016
2010
183,695
236,789 176,289
299,191
251,177 10,793,836
8,913,821 177,822
10,897,898
Property
PersonalCommercial
Property
7,085,105
2011
5,182,370
5,824,238
6,929,517
4,552,380$
174,223
189,563
9,455,666
9,966,873
2008
Wright County Certificate of Taxes and Taxable Properties
2005
2004
2007
2006
2009
2012
2013
Tax exempt property values are not included in total net capacity value.
2011
2004
2010
2012
194,825
7,443,331
7,506,973
6,165,704
5,307,260
Levied
The fiscal year is for the values in the year levied for taxes collectible the following year.
235,633
2008
4,611,403 14,538,165 194,492
2007
2006
Miscellaneous
-84-
Total
Market Value
62.452 %812,855,300$ 1.4 %
58.760 882,038,300 1.4
51.040 993,647,300 1.4
42.601 1,243,461,100 1.3
46.942 1,282,400,700 1.3
46.191 1,245,407,600 1.4
45.822 1,188,222,100 1.5
46.729 1,106,541,400 1.5
49.773 1,219,719,700 1.6
42.262 1,189,043,200 1.6
100.0 %
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
19,021,771
Taxable Net
Total
17,312,075
17,947,260
17,400,280
11,714,671$
13,935,442
12,498,912
16,628,999
16,204,855
Capacity as a
Net Tax
Percentage of
Market Value
Total Direct
Tax RateValue *
Tax Capacity
19,579,693
-85-
(This page left blank intentionally)
City of Wright SpecialTotal Direct and
MonticelloCounty ISD No. 882DistrictsOverlapping
62.42 35.63 28.94 3.04 130.03
58.65 34.41 26.38 2.67 122.11
51.03 32.57 24.37 2.33 110.30
42.46 30.71 23.15 2.95 99.27
46.94 31.65 25.25 2.52 106.36
46.19 32.57 26.08 2.07 106.91
45.82 35.82 24.95 1.75 108.34
46.73 39.31 27.03 1.50 114.57
49.77 43.45 28.26 1.24 122.72
42.26 44.29 26.23 0.61 113.39
(1)
Source:
2013
Wright County
Year
Informationreflectstotaltaxratesleviedbyeachentity.Taxratesareexpressedintermsof“nettaxcapacity.”A
property’staxcapacityisdeterminedbymultiplyingitstaxablemarketvaluebyastatedeterminedclassrate.Class
ratesvarybypropertytypeandchangeperiodicallybasedonstatelegislation.Componentsofthedirectratearenot
readily available.
2007
2011
2006
2010
2009
2008
2012
CITY OF MONTICELLO
Property Tax Rates
Direct and Overlapping Governments (1)
Last Ten Fiscal Years
2005
2004
Overlapping Rates
-86-
Taxable Net Tax
Market ValueCapacity ValueRank
Xcel Energy (Northern States)495,349,400$ 9,901,516$ 1 52.05 %
Walmart Real Estate Bus Trust12,804,100 255,332 2 1.34
Target Corporation11,819,200 235,634 3 1.24
New River Medical Center 7,544,100 150,882 4 0.79
Home Depot USA, Inc.7,225,200 143,754 5 0.76
Muller Family Theatres5,536,400 109,597 6 0.58
AX TC Retail, LP5,156,900 101,638 7 0.53
RCE Property, LLC4,788,600 95,022 8 0.50
BBF Properties, Inc.3,977,400 79,798 9 0.42
Minnegasco, Inc.3,983,100 79,662 10 0.42
Peterson Holdings, LLC– – – –
Jacob Holdings of Monticello, LLC– – – –
Tapper’s Holdings, LLC– – – –
Gould Brothers Chev, LLP– – – –
Monticello Washington Assn – – – –
Tomann, Terrance & Mary Family LTD– – – –
Wright County Products– – – –
Total558,184,400$ 11,152,835$ 58.63 %
Source:
Taxpayer
Wright County Certificate of Taxes and Taxable Properties
Capacity Value
CITY OF MONTICELLO
Principal Property Taxpayers
Current Year and Nine Years Ago
2013
Total Net Tax
Percentage of
-87-
MarketTaxable Net Tax
ValueCapacity ValueRank
247,670,500$ 4,946,284$ 1 42.22 %
– – – –
– – – –
– – – –
– – – –
6,239,500 123,290 2 1.05
– – – –
– – – –
4,008,100 76,997 3 0.66
3,870,800 76,666 4 0.65
3,408,500 67,420 5 0.58
3,379,400 66,838 6 0.57
2,998,500 59,220 7 0.51
2,613,000 51,510 8 0.44
2,852,800 46,156 9 0.39
2,205,400 44,108 10 0.38
– – – –
279,246,500$ 5,558,489$ 47.45 %
2004
Capacity Value
Total Net Tax
Percentage of
-88-
Total TaxCollections in
Levy for Tax NetSubsequent
Fiscal YearCreditsLevy Amount Years
Property taxes
6,957,897$ –$ 6,957,897$ 6,877,210$ 98.84 %77,849$
6,957,776 293,845 6,663,931 6,577,121 98.70 87,039
6,750,132 283,978 6,466,154 6,349,118 98.19 107,001
6,499,914 261,362 6,238,552 6,044,463 96.89 170,027
7,600,189 267,056 7,333,133 7,118,136 97.07 171,883
7,750,119 263,587 7,486,532 7,237,730 96.68 208,613
7,648,269 278,930 7,369,339 7,155,141 97.09 176,922
7,677,351 293,075 7,384,276 7,178,807 97.22 167,561
7,850,042 – 7,850,042 7,759,174 98.84 34,023
7,900,724 – 7,900,724 7,827,356 99.07 –
Tax increments
656,639$ –$ 656,639$ 653,012$ 99.45 %3,511$
736,301 – 736,301 732,534 99.49 3,767
779,400 – 779,400 777,297 99.73 443
889,262 – 889,262 836,397 94.06 1,222
1,191,177 – 1,191,177 1,184,402 99.43 4,874
1,247,605 – 1,247,605 1,205,582 96.63 39,200
1,193,383 – 1,193,383 1,144,243 95.88 36,309
1,071,686 – 1,071,686 1,044,309 97.45 25,742
955,039 – 955,039 953,400 99.83 –
971,745 – 971,745 970,071 99.83 –
Source:
2009
2010
2013
Collected Within the
Fiscal Year of the Net Levy
of Net Levy
Percentage
2008
2009
2008
Wright County
December 31,
2005
2012
2011
2007
2007
2010
2006
2005
CITY OF MONTICELLO
2012
Fiscal Year
Property Tax Levies and Collections
Last Ten Fiscal Years
2004
2006
2004
2011
Ended
2013
-89-
Abatements
and
Amount AdjustmentsAmount
6,955,059$ 99.96 %(2,838)$ –$ – %
6,664,160 95.78 1,055 826 0.01
6,456,119 95.64 (8,603) 1,432 0.02
6,214,490 95.61 (22,051) 2,011 0.03
7,290,019 95.92 (39,224) 3,890 0.05
7,446,343 96.08 (32,099) 8,090 0.10
7,332,063 95.87 (25,704) 11,572 0.15
7,346,368 95.69 (19,074) 18,834 0.25
7,793,197 99.28 (33,327) 23,518 0.30
7,827,356 99.07 (17,639) 55,729 0.71
125,902$
656,523$ 99.98 %(116)$ –$ – %
736,301 100.00 – – –
777,740 99.79 (1,660) – –
837,619 94.19 (51,643) – –
1,189,276 99.84 (1,901) – –
1,244,782 99.77 (887) 1,936 0.16
1,180,552 98.92 (11,059) 1,772 0.15
1,070,051 99.85 – 1,635 0.15
953,400 99.83 – 1,639 0.17
970,071 99.83 (470) 1,204 0.12
8,186$
Total Collections
to Date
of Levy
Percentage
Total Uncollected
of Levy
Percentage
-90-
(This page left blank intentionally)
67.6 %13.0 %12.3 %7.1 %100.0 %
64.7 14.1 10.9 10.3 100.0
69.5 13.7 8.7 8.1 100.0
71.3 14.0 7.5 7.3 100.0
69.0 14.2 8.0 8.8 100.0
75.0 12.2 6.8 6.0 100.0
67.1 16.0 8.4 8.4 100.0
66.0 15.9 9.7 8.4 100.0
69.0 15.7 7.5 7.7 100.0
68.8 15.4 8.2 7.6 100.0
Source: City of Monticello utility billing department
557,059,66742,206,803
480,916,628
531,690,121
603,808,861
655,929,291
594,058,809
573,404,397
561,141,629
527,965,050
618,160,952
45,954,136
34,346,550
54,964,838
48,622,223
47,703,225
52,154,498
34,601,796
47,227,405
44,219,755
47,866,428
85,819,687
59,011,500
57,739,095
52,305,000
49,035,750
47,790,000
38,713,057
47,225,176
50,971,196
46,654,712
383,079,041
62,690,535
74,789,130
82,989,503
91,517,828
84,234,653
69,825,753
90,001,208
84,194,027
97,281,410
467,672,488
409,879,658
430,263,791
376,687,840
348,580,072
426,358,402
(in millions of gallons)
Last Ten Fiscal Years
Water Sold by Type of Customer
CITY OF MONTICELLO
Residential
Total
CommercialIndustrialGovernmentWater Sold
Total
Fiscal Year
2004
2005
2006
324,868,043
344,197,058
419,892,135
2007
2008
2009
2010
2011
2012
2013
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Percentage of Total Water Sold
-91-
Base RateRate 501–4,000Rate 4,001–13,369Rate Over 13,369Base Rate
First 500 per 100 per 100 per 100First 500
Cubic Feet Cubic Feet Cubic Feet Cubic Feet Cubic Feet
8.25$ 0.50$ 0.50$ N/A 8.25$
8.58 0.52 0.52 N/A 8.58
8.92 0.54 0.54 N/A 8.92
10.26 0.62 0.71 N/A 10.26
11.91 0.74 0.84 N/A 11.91
12.40 0.78 0.88 N/A 12.40
13.00 0.85 0.95 N/A 14.75
14.30 0.95 1.10 1.20 14.30
15.44 1.03 1.19 1.30 15.44
15.44 1.03 1.19 1.30 15.44
N/A – Not Available
Source:City of Monticello utility billing department
2010
Fiscal Year
2004
2012
2007
2006
2005
2013
Water
Residential
CITY OF MONTICELLO
2011
2009
2008
Utility Rates per Year
Last Ten Fiscal Years
-92-
Rate 501–4,000Rate 4,001–13,369Rate Over 13,369Base RateRate Over 500
per 100 per 100 per 100First 500 per 100
Cubic Feet Cubic Feet Cubic Feet Cubic Feet Cubic Feet
0.50$ N/A N/A 10.00$ 1.73
0.52 N/A N/A 10.00 1.80
0.54 N/A N/A 10.40 1.87
0.62 N/A N/A 11.96 2.15
0.74 N/A N/A 13.75 2.47
0.78 N/A N/A 14.45 2.60
0.95 N/A N/A 15.15 2.75
0.95 1.10 1.20 16.75 3.00
1.03 1.19 1.30 18.76 3.36
1.03 1.19 1.30 18.76 3.36
Sewage
Commercial
-93-
General
SpecialNet General Obligation
Assessment Other Tax Increment Premiums Obligation Certificate of
BondsBondsBonds(Discounts)TotalNotesIndebtedness
6,715,000$ 2,420,000$ 1,100,000$ –$ 10,235,000$11,456,825$ –$
31,065,000 2,420,000 970,000 668,448 35,123,448 10,835,699 –
30,255,000 2,210,000 810,000 639,119 33,914,119 10,188,973 –
28,415,000 7,132,903 680,000 691,438 36,919,341 9,515,592 –
24,075,000 15,737,903 575,000 651,542 41,039,445 – –
21,535,000 12,822,903 470,000 631,516 35,459,419 – –
21,320,000 11,531,903 – 572,079 33,423,982 – –
29,490,000 10,196,903 – 818,803 40,505,706 – –
26,625,000 8,877,403 – 744,748 36,247,151 – –
13,010,000 7,506,653 – 265,320 20,781,973 – 445,000
(1)See the Schedule of Demographic and Economic Statistics.
Note:Details regarding the City’s outstanding debt can be found in the notes to basic financial statements
General Obligation Bonds
2008
2007
2010
2009
Governmental Activities
2004
2013
Fiscal Year
2012
2011
CITY OF MONTICELLO
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
2005
2006
-94-
General
Obligation
Revenue Contract Improvement Revenue Net Premiums Total Primary
Bondsfor Deed BondsBonds(Discounts)Government Per Capita (1)
7,170,000$ 2,185,222$ –$ –$ –$ 31,047,047$9.96 %3,041$
6,830,864 2,085,222 – – – 54,875,233 16.51 5,147
6,579,419 764,293 – – – 51,446,804 14.35 4,620
6,157,974 664,293 907,097 – 14,364 54,178,661 14.29 4,815
5,742,098 564,293 907,097 26,445,000 (502,517) 74,195,416 18.94 6,528
5,209,011 – 837,097 26,445,000 (479,980) 67,470,547 17.55 5,879
4,612,454 – 747,097 26,445,000 (457,441) 64,771,092 15.79 5,632
3,690,898 – 654,097 26,445,000 (434,904) 70,860,797 16.76 5,554
2,739,341 – 568,597 26,445,000 (412,366) 65,587,723 13.73 5,071
1,782,784 – 3,479,347 26,445,000 (360,211) 52,573,893 10.45 4,055
Income (1)
of Personal
Percentage
Business-Type Activities
-95-
Less Amounts
GeneralAvailable
Obligationin Debt
Bonds (1)Service Fund TotalPer Capita (3)
10,235,000$ 8,355,235$ 1,879,765$ 0.23 %184
35,123,448 9,162,548 25,960,900 2.94 2,435
33,914,119 9,170,798 24,743,321 2.49 2,222
36,919,341 18,520,552 18,398,789 1.48 1,635
41,039,445 9,936,332 31,103,113 2.43 2,737
35,459,419 2,346,286 33,113,133 2.66 2,885
33,423,982 2,363,382 31,060,600 2.61 2,701
40,505,706 12,727,140 27,778,566 2.51 2,177
36,247,151 12,952,896 23,294,255 1.91 1,801
23,996,000 2,750,079 21,245,921 1.79 1,639
(1)
(2)
(3)See the Schedule of Demographic and Economic Statistics.
Note:Details regarding the City’s outstanding debt can be found in the notes to basic financial statements.
Property (2)Fiscal Year
2004
2005
Estimated
Actual Market
Doesnotincluderevenuebonds.Taxincrementandtaxabatementbondsareincludedbecausepropertytaxeswill
be levied to pay the debt service on these issues should the primary sources fail to provide adequate revenue.
Value of
2010
2009
SeetheScheduleofTaxableNetTaxCapacityValueandEstimatedMarketValueofTaxablePropertyforthe
estimated actual market value.
2008
2011
2012
2013
CITY OF MONTICELLO
Ratios of Net General Bonded Debt Outstanding
Last Ten Fiscal Years
Percentage of
2006
2007
-96-
Estimated
Net DebtShare of
Outstanding (1)Overlapping Debt
51,040,000$ 15.68 %8,003,072$
11,455,000 71.62 8,204,071
62,495,000 16,207,143
20,961,653 100.00 20,961,653
83,456,653$ 37,168,796$
(1)
(2)
Note:
Sources:
ISD No. 882 (Monticello)
Thepercentageofoverlappingdebtapplicableisestimatedusingtaxableassessedpropertyvalues.Applicable
percentageswereestimatedbydeterminingtheportionofthecounty’staxableassessedvaluethatiswithinthe
government’s boundaries and dividing it by the county’s total taxable assessed value.
Overlappinggovernmentsarethosethatcoincide,atleastinpart,withthegeographicboundariesoftheCity.This
scheduleestimatestheportionoftheoutstandingdebtofthoseoverlappinggovernmentsthatisbornebythe
residentsandbusinessesoftheCity.Thisprocessrecognizesthat,whenconsideringthegovernment’sabilityto
issueandrepaylong-termdebt,theentiredebtburdenbornebytheresidentsandbusinessesshouldbetakeninto
account.However,thisdoesnotimplythateverytaxpayerisaresidentand,therefore,responsibleforrepayingthe
debt of each overlapping government.
AssessedvaluedatausedtoestimateapplicablepercentagesprovidedbytheCountyBoardofEqualizationand
Assessment. Debt outstanding data provided by the county.
Governmental Unit
Total direct and overlapping debt
as of December 31, 2013
Overlapping debt
Total overlapping debt
City of Monticello direct debt
Direct and Overlapping Governmental Activities Debt
CITY OF MONTICELLO
Applicable (2)
Estimated
Percentage
Wright County
Gross bonded debt outstanding (excluding business-type activity debt).
-97-
2004200520062007
16,257,106$ 17,640,766$ 19,872,946$ 23,203,682$
7,170,000 6,910,000 6,650,000 6,100,000
9,087,106$ 10,730,766$ 13,222,946$ 17,103,682$
Total net debt applicable to the limit
44.10%39.17%33.46%26.29%
Note:
Fiscal Year
CITY OF MONTICELLO
Legal Debt Margin Information
Last Ten Fiscal Years
AllMinnesotamunicipalities(counties,cities,towns,andschooldistricts)aresubjecttostatutory“netdebt”
limitationsundertheprovisionsofMinnesotaStatutes,§475.53.Underthisprovision,beginningwithissueshaving
asettlementdateafterJune30,2008,thestateofMinnesotaincreasedthelegaldebtlimitfrom2percentto3
percent of the City’s taxable market value.
Debt limit
as a percentage of debt limit
Total net debt applicable to limit
Legal debt margin
-98-
200820092010201120122013
37,303,833$ 38,074,842$ 35,646,663$ 33,196,242$ 36,591,591$ 35,671,296$
6,180,000 5,585,000 4,985,000 4,365,000 3,795,000 6,200,000
31,123,833$ 32,489,842$ 30,661,663$ 28,831,242$ 32,796,591$ 29,471,296$
16.57%14.67%13.98%13.15%10.37%17.38%
Market value1,189,043,200$
Debt limit (3% of market value)35,671,296
Debt applicable to limit
Other general obligation bonds10,986,000
Less amounts for general obligation bonds
not subject to limit(4,786,000)
Total net debt applicable to limit6,200,000
Legal debt margin 29,471,296$
Legal Debt Margin Calculation for Fiscal Year 2013
-99-
Less Net
OperatingOperatingAvailableTimes
RevenueExpensesRevenuePrincipalInterestCoverage
Telecommunication Revenue Bonds and Wastewater Treatment Bonds
N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A
81,258$ 783,848$ (702,590)$ –$ –$ –
5,178 877,421 (872,243) – 1,714,896 (0.51)
532,619 1,975,399 (1,442,780) – 1,814,707 (0.80)
3,128,730 3,792,801 (664,071) – 1,818,869 (0.37)
1,794,144 2,964,200 (1,170,056) – 1,848,137 (0.63)
3,628,380 4,170,028 (541,648) – 2,019,857 (0.27)
N/A – Not Available
Note:DetailsregardingtheCity’soutstandingdebtcanbefoundinthenotestobasicfinancialstatements.Grossrevenue
does not include investment earnings. Operating expenses do not include depreciation or interest.
2013
Debt Service
CITY OF MONTICELLO
Pledged Revenue Coverage
Last Ten Fiscal Years
Fiscal
Year
2011
2005
2012
2010
2004
2009
2008
2007
2006
-100-
Estimated
Personal Income
(Amounts Per CapitaSchool
Expressed in PersonalEnrollment
Population (1)Whole Dollars) (2)Income (3)ISD No. 882 (4)
10,211 311,762,252$ 30,532$ 4,010 4.9 %
10,662 332,313,216 31,168 4,076 4.4
11,136 358,590,336 32,201 3,962 4.4
11,253 379,102,317 33,689 3,910 5.1
11,366 391,740,556 34,466 3,921 6.2
11,476 384,446,000 33,500 3,928 9.2
11,501 410,252,171 35,671 3,932 7.8
12,759 422,820,501 33,139 4,011 6.9
12,935 477,596,640 37,196 4,044 6.2
12,964 502,964,308 38,797 4,016 5.2
Notes/sources:
(1)
(2)
(3)
(4)
(5)
PercapitapersonalincomedataisprovidedbytheBureauofEconomicAnalysis.InformationforWrightCounty,in
whichtheCityresides,thesmallestregionapplicabletotheCitythatthisinformationisavailablefor2009data,is
an estimate based on Wright County information and prior years.
2008
2009
2006
2012
2013
Thisestimatedpersonalincomenumberiscalculatedbytakingthepercapitapersonalincomeandmultiplyingitby
the City’s population. Also see note (3) regarding the per capita personal income figures.
CITY OF MONTICELLO
Demographic and Economic Statistics
Last Ten Fiscal Years
2004
Rate (5)
Unemployment
Year
2007
2010U.S.BureauofCensus;2004–2009and2011–2013MinnesotaStateDemographicCenterpopulation
estimates.
Annual average unemployment provided by the Minnesota Department of Employment & Economic Development.
Fiscal
2005
2010
2011
ISDNo.882enrollmentinformationwasobtainedfromthedistrictauditreport.Theenrollmentinformationisbased
on the resident ADMs (average daily membership) served.
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EmployeesRankEmployeesRank
2,000 1 20.25 %411 2 6.78 %
544 2 5.51 438 1 7.22
500 3 5.06 410 3 6.76
350 4 3.54 346 4 5.71
325 5 3.29 – – –
Cub Foods180 6 1.82 123 5 2.03
173 7 1.75 – – –
Home Depot160 8 1.62 – – –
127 9 1.29 122 6 2.01
Hoglund Bus/Hoglund Truck88 10 0.89 – – –
– – – 122 7 2.01
Monticello Ford Mercury, Inc.– – – – – –
Maus Foods– – – 116 8 1.91
K-Mart– – – 100 9 1.65
Monticello Ford Mercury, Inc.– – – 95 10 1.57
Total4,447 45.02 %2,283 37.65 %
(1)Temporary increase is due to uprate. Typical employment is approximately 420 employees.
Source:
CITY OF MONTICELLO
of Total City
Principal Employers
Percentage
Employment
Current Year and Nine Years Ago
City of Monticello 2013 Budget and the City of Monticello 2013 Bond Statement
Xcel Energy (Northern States) (1)
EmployerEmployment
Perkins Family Restaurant
City of Monticello
Ultra Machine Corporation
Cargill Kitchen Sol. (Sunny Fresh)
2004
Percentage
Centracare Medical Center (New River)
Wal-Mart Supercenter
of Total City
2013
ISD No. 882 (Monticello)
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2004200520062007
Function
N/A 16.60 16.60 16.60
N/A 3.00 3.00 3.00
N/A 21.50 21.50 21.50
Culture and recreation
N/A5.00 5.00 5.00
N/A 8.00 8.00 8.00
Community development N/A 2.00 2.00 2.00
N/A 4.00 4.00 4.00
N/A 10.00 10.00 10.00
FiberNet N/A – – –
Total N/A 70.10 70.10 70.10
N/A – Not Available
Source:City Finance Department
Public works
Engineering
Sewer/water
Parks
Maintenance
Liquor store
Community center
General government
CITY OF MONTICELLO
Full-Time Equivalent City Government Employees by Function
Last Ten Fiscal Years
Fiscal Year
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200820092010201120122013
17.60 17.60 19.00 19.00 19.00 19.00
3.00 3.00 3.00 3.00 3.00 1.00
21.50 19.50 19.50 19.00 19.00 19.00
5.00 5.00 5.00 5.00 5.00 5.00
8.00 8.00 8.00 8.00 8.00 8.00
2.00 2.00 2.00 2.00 2.00 2.00
4.00 4.00 4.00 4.00 4.00 4.00
10.00 10.00 10.00 10.00 10.00 10.00
– 6.00 11.00 11.50 11.50 8.50
71.10 75.10 81.50 81.50 81.50 76.50
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2004200520062007
Function
Fire
278 325 266 317
Salt (tons)N/A114 164 274
Sand (tons)N/A320 319 347
Crack sealant (pounds)N/A N/A11,115 14,200
Asphalt repairs (tons of asphalt)N/A N/A300 330
Culture and recreation
Shade trees planted– – – 384
Diseased trees removed N/A N/A N/A N/A
Trails maintained (miles)N/A N/A N/A N/A
Community center users N/A N/A145,700 168,923
Program sales N/A N/A67,021 88,412
Rental revenue N/A N/A148,533 139,096
Economic development
Permits issued 1,199 1,412 1,323 962
Permit valuation 62,300,360$ 68,069,444$ 45,572,690$ 45,917,000$
Water
Meters replaced 64 81 109 94
Curb box repairs (water valves)50 50 50 50
Hydrant repair 175 175 175 175
Annual residential water use324,868,043 344,197,058 419,892,135 467,673,488
Average daily consumption (MG)1.497 1.569 1.817 1.921
Maximum daily gallons pumped (MG)4.209 4.889 5.271 5.150
Sewer
Sewage flow (MG)404 434 414 423
Miles jetted 20 20 20 20
Blocks rodded3 3 3 3
Miles inspected 20 20 20 20
Library
Items checked out N/A N/A188,704 209,174
Programs offeredN/AN/A232 145
Program participants N/A N/A4,196 3,537
Deputy registrar (DMV)
Motor vehicle transactions44,684 46,492 45,225 40,950
DNR transactions N/A N/A5,307 5,580
Game/fish transactions N/A N/A N/A167
Dealerships serviced N/A N/A18 14
Drivers licenses transactions N/A N/A N/A N/A
N/A – Not Available
MG – Millions of Gallons
Note:Indicators are not available for the general government city functions.
Sources:Various city departments
CITY OF MONTICELLO
Operating Indicators by Function
Last Ten Fiscal Years
Public works
Calls for service
Fiscal Year
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`
200820092010201120122013
395 375 282 284 203 235
474 475 521 445 300 475
611 615 710 547 335 325
18,150 15,000 23,580 11,384 1,492 25,739
200 200 200 253 220 225
410 425 150 140 220 275
868 200 180 113 205 71
17 17 17 17 17 18
186,429 186,279 183,527 190,014 175,272 211,234
129,339 149,829 167,723 168,159 162,227 192,708
136,547 127,612 184,913 154,962 149,733 163,329
3,681 879 495 372 632 659
45,950,000$ 11,630,000$ 9,033,078$ 5,333,124$ 12,285,873$ 15,821,223$
111 280 145 215 418 235
75 200 200 200 100 100
175 175 175 430 300 300
409,879,658 430,263,791 376,687,840 348,580,072 426,358,402 383,079,041
1.749 1.806 1.625 1.557 1.798 1.621
4.728 4.496 3.565 4.116 4.590 4.269
408 390 398 431 408 392
20 20 25 27 12 20
3 3 25 10 20 10
20 20 30 30 12 20
216,599 219,694 248,327 228,886 237,938 263,220
155 170 164 153 149 173
3,869 4,100 3,604 3,807 3,761 3,773
45,595 48,000 51,250 54,814 56,211 55,261
5,913 5,646 5,982 5,616 5,465 5,727
235 250 156 325 509 445
21 25 30 34 38 21
N/A450 605 579 814 951
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2004200520062007
Function
Public safety
Fire
Fire stations in service1 1 1 1
Number of volunteers– 30 30 30
Public works
Streets (miles)– 52.4 65.7 67.6
Culture and recreation
Parks acreage– – – –
Parks18 18 19 19
Park buildings9 9 9 9
Community center (square footage)81,000 81,000 81,000 81,000
Water
Fire hydrants700 700 700 700
Note:
Sources:Various city departments
No capital asset indicators are available for the general government and economic development functions.
Fiscal Year
CITY OF MONTICELLO
Capital Asset Statistics by Function
Last Ten Fiscal Years
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200820092010201120122013
1 1 1 1 1 1
30 30 30 30 30 30
67.6 68.0 68.0 68.0 68.0 68.0
120 180 509 635 635 696
20 20 28 28 28 28
10 11 15 15 15 15
81,000 81,000 81,000 81,000 81,000 81,000
700 700 700 700 700 700
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