2015 Monticello Annual Comprehensive Financial ReportCITY OF MONTICELLO, MINNESOTA
Comprehensive Annual Financial Report
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015
City of Monticello
Wright County, Minnesota
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2015
Prepared by
THE “FINANCE TEAM”
Julie Cheney, Finance Assistant
RaeLynn Cook, Payroll-Finance Clerk
Debbie Davidson, Finance Clerk
Pat Kovich, Utility Billing Specialist
Sarah Rathlisberger, Finance Manager
Wayne W. Oberg, Finance Director
CITY OF MONTICELLO
Comprehensive Annual Financial Report
Table of Contents
December 31, 2015
INTRODUCTORY SECTION Page
Letter of Transmittal 1
GFOA Certificate of Achievement for Excellence in Financial Reporting 4
Organization Chart 5
Directory of Officials 6
FINANCIAL SECTION
Independent Auditor's Report 7
Management's Discussion and Analysis 9
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 19
Statement of Activities 21
Fund Financial Statements
Balance Sheet - Governmental Funds 22
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 23
Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds 24
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to
the Statement of Activities 25
Statement of Net Position - Proprietary Funds 26
Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 29
Statement of Cash Flows - Proprietary Funds 30
Notes to the Financial Statements 32
Required Supplementary Information
Schedules of Employer's Share of Net Pension Liability 55
Schedules of Employer's Pension Contibutions 56
Schedule of Changes in the Fire Relief Association's Net Pension Liability (Asset) and Related Ratios 57
Schedule of Funding Progress 58
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 60
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Community Center Fund 62
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Economic Development Authority Fund 63
Notes to the Required Supplementry Information 64
Combining Individual Fund Statements
Nonmajor Governmental Funds
Combining Balance Sheet 65
Combining Statement of Revenues, Expenditures and Changes in Fund Balance 66
(continued)
I
CITY OF MONTICELLO
Comprehensive Annual Financial Report
Table of Contents
December 31, 2015 (continued)
Internal Service Funds Page
Combining Statement of Net Position 67
Combining Statement of Revenues, Expenses and Changes in Net Position 68
Combining Statement of Cash Flows 69
Other Supplementry Schedules
Schedule of Revenues (Sources) and Expenditures (Uses) - General Fund 71
Schedule of Assets, Liabilities, and Fund Balances - Economic Development Authority 76
Schedule of Revenues, Expenditures and Other Financing Sources (Uses) - Economic Development Authority 78
Schedule of Assets, Liabilities, Deferred Inflows of Resources, and Fund Balances - Debt Service Activities 80
Schedule of Revenues, Expenditures and Other Financing Sources (Uses) - Debt Service Activities 81
STATISTICAL SECTION
Financial trends
Net Position by Component - Last Ten Fiscal Years 83
Changes in Net Position - Last Ten Fiscal years 84
Fund Balances of Governmental Funds - Last Ten Fiscal Years 86
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 87
Governmental Funds Tax Revenues by Source - Last Ten Fiscal Years (modified accrual basis)88
General Governmental Tax Revenues by Source - Last Ten Fiscal Years (accrual basis)89
Revenue capacity
Tax Capacity Value and Estimated Market Value of Taxable Property - Last Ten Fiscal Years 90
Property Tax Rates - All Direct and Overlapping Governments - Last Ten Fiscal Years 91
Property Tax Levies and Collections - Last Ten Fiscal Years 92
Principal Property Taxpayers - Current Year and Nine Years Ago 93
Water Sold by Customer Type - Last Ten Fiscal Years 94
Water and Sewage Utility Rates - Last Ten Fiscal Years 95
Debt capacity
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 96
Ratios of Net General Obligation Bonded Debt Outstanding - Last Ten Fiscal Years 97
Legal Debt Margin Information - Last Ten Fiscal Years 98
Computation of Direct and Overlapping Debt 99
Schedule of General Obligation Revenue Bond Coverage - Last Two Fiscal Years 100
Economic and demographic information
Demographic & Economic Statistics - Last Ten Fiscal Years 101
Principal Employers - Current Year and Eight Years Ago 102
Operating information
City Government Employees by Function/Program - Last Ten Fiscal Years 103
Operating Indicators by Function - Last Ten Fiscal Years 104
Capital Assets Statistics by Function - Last Ten Fiscal Years 106
II
INTRODUCTORY SECTION
Letter of Transmittal CITY OF MONTICELLO
Finance Department
June 27, 2016
To the Honorable Mayor, Members of the City Council, and the Citizens of the
City of Monticello:
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, 2015. 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, 2015 are free ofmaterial 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, 2015, 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.
PROFILE OF THE CITY
The city is situated in a prime location on Interstate 94 between the cities of
Minneapolis/St. Paul and St. Cloud. The city has experienced remarkable
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 of 13,125. 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.
Incorporated 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
1
Letter of Transmittal CITY OF MONTICELLO
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 2015 budget. The new program
shifted more of the tax burden to nonresidential property taxpayers.
The economy and housing market has also affected city revenues for building
permits. The city issued 1,323 building permits in 2006 with a total valuation
of $45,572,690. In 2015, the city issued 768 permits with a total valuation of
$36,242,742. New residential infrastructure construction will need to occur to
support the same level of residential building permits in the future.
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. Further, staff continues to refine the chart of
accounts with the goal of providing better information to decision makers.
MAJOR INITIATIVES
The city has three major ongoing initiatives in 2015. The first ongoing initiative
is the revitalization of its historic downtown. The downtown is the oldest part
of the city and many buildings are in need of maintenance or demolition. 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
2
Letter of Transmittal CITY OF MONTICELLO
forward will be the implementation of the plan and creating development
opportunities within the downtown area for new and existing businesses.
The second ongoing initiative is the joint purchase with Wright County of
Bertram Chain of Lakes properties. The city and Wright County have already
acquired 758 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 obtained matching grant funds from the state
to purchase additional acreage in 2016.
Stabilizing the operations of the city fiber optics operations is the last initiative.
After a succession of general managers and settlement of the bondholder
claims, the city is positioned to move forward with a leaner, less expensive
telecommunications utility.
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.
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, 2014. This was the fifth 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 2015 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 Finance Manager Sarah
Rathlisberger, 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 and city council 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
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Certificate of Achievement CITY OF MONTICELLO
The Government Finance Officers Association of the United States
and Canada (GFOA) awarded a Certificate for Excellence in
Financial Reporting to the City of Monticello, Minnesota for its
Comprehensive Annual Financial Report for the fiscal year ended
December 31, 2014. The Certificate of Achievement is a prestigious
national award recognizing conformance with the highest standards
for preparation of state and local government reports.
In order to be awarded a Certificate of Achievement, a governmental
unit must publish an easily readable and efficiently organized
Comprehensive Annual Financial Report, whose contents conform
to program standards. Such reports must satisfy both generally
accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only.
We believe our current report continues to conform to Certificate of
Achievement program requirements, and we are submitting it to the
GFOA.
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Monticello
Minnesota
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
December 31, 2014
ExecutiveDirector/CEO
4
Organization Chart CITY OF MONTICELLO
Citizens of
Monticello
City Commissions &
Council Advisory Boards
City
Administrator
Human Finance Community City Public Community City Fire FiberNet Contracted
Resource Director Development Engineer Works Center Clerk Chief Operation Services
Manager Director Director Director
Finance Economic Construction Streets Community Elections Fire FiberNet City
Department Development Inspectors Department Center Department Sales Attorney
Data Building Consulting Parks FiberNet Sheriffs
Processing Inspections Engineer Department Office Department
Audit Receptionist Utilities FiberNet Animal
Department Plant Control
Operations
Department Consulting Refuse County
of Motor Planner Collection Assessor
Vehicles
Liquor
Operations
5
Directory of Officials CITY OF MONTICELLO
MAYOR & CITY COUNCIL
Position Name Term Expires
Mayor .....................................................................................Brian Stumpf 12/31/2016
Council.................................................................................. Glen Posusta 12/31/2016
Council...................................................................................Tom Perrault 12/31/2016
Council....................................................................................Lloyd Hilgart 12/31/2018
Council..............................................................................Charlotte Gabler 12/31/2018
CITY STAFF
City Administrator.......................................................................Jeff O’Neill
Finance Director....................................................................Wayne Oberg
Community Development Director.................................Angela Schumann
Public Works Director ...........................................................Wayne Oberg
Economic Development Director ...............................................Jeff O’Neill
City Clerk........................................................................Jennifer Schreiber
Human Resource Manager..................................................... Tracy Ergen
Liquor Store Manager ......................................................Randall Johnsen
DMV Manager.................................................................. Carolyn Granger
Finance Manager........................................................Sarah Rathlisberger
Utility Superintendent.............................................................Matt Theisen
Street Superintendent.............................................................Tom Moores
Parks Superintendent .............................................................Tom Pawelk
Community Center Director ...............................................Kathleen Baltos
Chief Building Official.................................................................John Rued
Fire Chief...................................................................................Daryl Gilles
Communications Coordinator ............................................Rachel Leonard
PROFESSIONAL SERVICES
City Attorney..........................................................Campbell Knutson, P.A.
City Engineer.................................................................WSB & Associates
Law Enforcement....................................... Wright County Sherriff’s Office
Financial Advisor.................................................Northland Securities, Inc.
6
FINANCIAL SECTION
Principals Thomas M. Montague, CPA Thomas A. Karnowski, CPA Paul A. Radosevich, CPA William J. Lauer, CPA James H. Eichten, CPA Aaron J. Nielsen, CPA Victoria L. Holinka, CPA INDEPENDENT AUDITOR’S REPORT To the City Council and Management City of Monticello, Minnesota REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Monticello, Minnesota (the City) as of and for the year ended December 31, 2015, 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. OPINIONS In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of December 31, 2015, and the (continued) 7
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. EMPHASIS OF MATTER As described in Note 1 of the notes to basic financial statements, the City has implemented Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date—an amendment of GASB Statement No. 68, during the year ended December 31, 2015. 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 and the required supplementary information (RSI), 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 RSI 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, combining individual fund statements and other supplementary schedules, and 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 combining individual fund statements and other supplementary schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. 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 information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. 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, 2016 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, 2016 8
MANAGEMENT’S DISCUSSION AND ANALYSIS SECTION
Management’s Discussion and Analysis CITY OF MONTICELLO
Management’s Discussion and Analysis
As management of the City of Monticello, Minnesota (the city), we offer readers
of the city’s financial statements this narrative overview and analysis of the
financial activities of the city for the fiscal year ended December 31, 2015. We
encourage readers to consider the information presented here in conjunction
with additional information that we have furnished in our letter of transmittal,
which can be found on pages 1-3 of this report.
Overview of the Basic Financial Statements
The discussion and analysis are intended to serve as an introduction to the city’s
basic financial statements. The city’s basic financial statements comprise three
components: 1) government-wide financial statements, 2) fund financial
statements, and 3) notes to the financial statements. This report also contains
other supplementary information in addition to the basic financial statements
themselves.
Government-Wide Financial Statements – The government-wide financial
statements are designed to provide readers with a broad overview of the city’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 deferred outflows of resources, and liabilities and deferred inflows of
resources, with the difference between them 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, transit, recreation and
culture, and economic development. Business-type activities include water,
sewage, liquor, fiber optics, and deputy registrar 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.
The government-wide financial statements can be found on pages 19-21 of this
report.
Fund Financial Statements – A fund is a grouping of related accounts that is
used to maintain control over resources that have been segregated for specific
activities or objectives. The city, like other state and local 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.
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
COMPONENTS OF
THE ANNUAL FINANICAL 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
9
Management’s Discussion and Analysis CITY OF MONTICELLO
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, 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 within the
required supplementary information for the General Fund and major special
revenue funds to demonstrate compliance with the adopted budgets.
The governmental fund financial statements can be found on pages 22-25 of
this report.
ProprietaryFunds – 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,
fiber optics, and deputy registrar operations. Internal service funds are an
accounting device used to accumulate and allocate costs internally among the
city’s various functions. The city uses internal service funds to account for
benefits accruals, 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.
The proprietary fund financial statements can be found on pages 26-31 of 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.
The notes to the basic financial statements can be found on pages 32-54 of this
report.
Other Information – In addition to the basic financial statements and
accompanying notes, this report presents required supplementary information
on activity related to the defined benefit pension plans and the other post-
employment benefits (OPEB) plan as well as budgetary comparison
information. Combining statements for nonmajor governmental funds, internal
service funds, and other supplementary schedules including activities of the
General, Economic Development Authority, and Debt Service funds, can also
be found in the combining individual fund statements section of this report.
Required supplementary information and combining individual fund statements
can be found starting on page 55.
10
Management’s Discussion and Analysis CITY OF MONTICELLO
Financial Highlights
The assets and deferred outflows of resources of the city exceeded its liabilities
and deferred inflows of resources at year-end by $117,763,474 (net position).
Of this amount, $26,308,049 (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 $28,976,250, an increase of $5,054,912, or
21.1 percent. Nonspendable, restricted, and assigned uses of fund balance
totaled $24,102,756, leaving an unassigned fund balance of $4,873,494. The
2015 year-end unassigned fund balance is $668,763, or 15.9 percent, higher
than the 2014 ending balance.
At the end of the current fiscal year, unassigned fund balance for the General
Fund was $4,873,494, or 72.6 percent, of total General Fund expenditures for
2015. 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).
In 2015, government-wide capital assets declined by $8,862,103 because
disposals and depreciation on existing assets exceeded acquisitions. Through
its governmental activities, the city acquired land for Bertram Chain of Lakes
park development at a cost of $241,761. This acquisition included a $100,000
DNR grant and $70,880 contribution from the County. However, the City
contributed other pieces of land at Bertram Chain of Lakes to the County for
$5,511,547 in 2015.
The city’s total long-term liabilities increased by $868,109, or 3.1 percent, in
2015. Principal payments made on outstanding debt totaled $5,364,000. The
city issued $2,605,000 in general obligations bonds to finance capital project
costs and $615,268 of PFA loan for wastewater treatment plant improvements
in 2015. The 2015B general obligation bonds are accounted for in the Debt
Service Fund and will be paid from special assessments and property taxes.
The PFA loan is accounted for in the Sewage Fund and utility customer charges
will generate the cash needed for repayment of this debt.
11
Management’s Discussion and Analysis CITY OF MONTICELLO
GOVERNMENT-WIDE FINANCIAL ANALYSIS
NET POSITION
2015 2014 2015 2014 2015 2014
Current and other assets 36,074,680$33,296,323$9,984,124$10,138,195$46,058,804$43,434,518$
Capital assets 58,497,221 66,301,813 44,298,041 45,355,552 102,795,262 111,657,365
Total assets 94,571,901 99,598,136 54,282,165 55,493,747 148,854,066 155,091,883
Deferred outflows of resources 270,113 -129,955 -400,068 -
Long-term liabilities 24,186,732 24,734,406 4,762,207 3,346,424 28,948,939 28,080,830
Other liabilities 1,399,698 1,363,950 541,740 908,107 1,941,438 2,272,057
Total liabilities 25,586,430 26,098,356 5,303,947 4,254,531 30,890,377 30,352,887
Deferred inflows of resources 378,179 -222,104 -600,283 -
Net position
Net investment in capital assets 38,099,568 48,253,810 40,722,087 42,117,264 78,821,655 90,371,074
Restricted 12,633,770 10,453,449 --12,633,770 10,453,449
Unrestricted 18,144,067 14,792,521 8,163,982 9,121,952 26,308,049 23,914,473
Total net position 68,877,405$73,499,780$48,886,069$51,239,216$117,763,474$124,738,996$
Governmental Activities Business-Type Activities Total
By the far the largest portion of the city’s net position (67%) reflects investment
in capital assets (e.g. land, buildings, structures, systems, machinery,
equipment, infrastructure, and intangible assets), net of any related debt used
to acquire those assets that is still outstanding. The city uses assets to provide
services to citizens; consequently, these assets are not available for future
spending. Although the city’s investment in capital assets is reported net of
related debt, it should be noted that resources needed to repay this debt must
be provided from other sources, since capital assets themselves cannot be used
to liquidate these liabilities.
A small portion of the city’s net position (11%) represents resources that are
subject to external restrictions on how they can be used. The remaining
unrestricted net position of $26,308,049 may be used to meet the ongoing
obligations to citizens and creditors. Of the unrestricted net position,
$8,163,982 (31%) is attributable to business-type activities.
The unrestricted governmental activities net position increased $3,351,546
(23%), while business-type activities unrestricted net position decreased
$957,970 (11%). The government-wide total unrestricted net position increased
$2,393,576 (10%), reflecting revenues exceeding conservative budgeted
estimates.
The $7,804,592 (12%) decrease in governmental activities capital assets is
reflective of the contribution of land to the county and depreciation exceeding
reinvestment. Business-type capital assets decreased $1,057,511 (2%) also
due to depreciation exceeding reinvestment.
Net investment in capital assets, which is capital assets less related debt,
declined when the city contributed land at Bertram Chain of Lakes to Wright
County. This land was not purchased with debt.
12
Management’s Discussion and Analysis CITY OF MONTICELLO
CHANGE IN NET POSITION
2015 2014 2015 2014 2015 2014
Revenues
Program revenues
Charges for services 2,663,578$2,096,398$6,912,512$6,748,031$9,576,090$8,844,429$
Operating grants and contributions 355,041 295,828 --355,041 295,828
Capital grants and contributions 2,667,710 1,774,628 1,454,980 488,628 4,122,690 2,263,256
General revenues
Property taxes 8,683,585 8,393,374 --8,683,585 8,393,374
Tax increments 727,617 826,363 --727,617 826,363
Franchise taxes 333,484 357,409 --333,484 357,409
Unrestricted grants and aids -27,502 ---27,502
Unrestricted investment earnings 278,465 784,347 108,191 399,757 386,656 1,184,104
Gain on sale of assets 30,473 -88,157 -118,630 -
Other -217,643 ---217,643
Total revenues 15,739,953 14,773,492 8,563,840 7,636,416 24,303,793 22,409,908
Expenses
General government 1,447,725 1,488,243 --1,447,725 1,488,243
Public safety 1,960,009 1,880,193 --1,960,009 1,880,193
Public works 5,312,612 5,223,345 --5,312,612 5,223,345
Sanitation 563,477 517,956 --563,477 517,956
Transit 40,000 10,000 --40,000 10,000
Recreation and culture 3,524,979 2,882,127 --3,524,979 2,882,127
Economic development 1,547,875 1,084,620 --1,547,875 1,084,620
Interest and fiscal charges 735,753 649,854 --735,753 649,854
Water --1,102,610 1,084,882 1,102,610 1,084,882
Sewage --2,661,990 2,762,357 2,661,990 2,762,357
Liquor --798,631 692,976 798,631 692,976
Fiber optics --2,536,461 2,919,170 2,536,461 2,919,170
Deputy registrar --313,968 300,236 313,968 300,236
Total expenses 15,132,430 13,736,338 7,413,660 7,759,621 22,546,090 21,495,959
Increase in net position
before transfers and special items 607,523 1,037,154 1,150,180 (123,205)1,757,703 913,949
Transfers 2,301,045 (3,411,500)(2,301,045)3,411,500 --
Special item: gain on extinguishment of debt ---20,990,451 -20,990,451
Special item: contribution of land to county (5,511,547)---(5,511,547)-
Change in net position (2,602,979)(2,374,346)(1,150,865)24,278,746 (3,753,844)21,904,400
Net position, as restated, January 1*71,480,384 75,874,126 50,036,934 26,960,470 121,517,318 102,834,596
Net position, December 31 68,877,405$73,499,780$48,886,069$51,239,216$117,763,474$124,738,996$
* GASB Statement No. 68 was implemented for the year ended December 31, 2015 and required a $3,221,678 restatement of beginning net position. Prior year
amounts were not restated causing a variance in ending net position at December 31, 2014 and beginning net position on January 1, 2015. See Note 14.
Governmental Activities Business-Type Activities Total
13
Management’s Discussion and Analysis CITY OF MONTICELLO
Governmental Activities.The most significant revenue source for
governmental activities is property taxes at 55% of total revenues. Property
taxes support the General Fund, Community Center Fund, Capital Project Fund,
and Debt Service Fund. Charges for services accounts for 17% of revenues,
most of which is generated by the Community Center. Capital grants and
contributions include special assessments and revenues from other sources
restricted to capital asset acquisition. Investment earnings include both interest
received and the increase (decrease) in the investment market values. Tax
increments are property taxes collected in tax increment financing districts and
are restricted for development purposes.
Public works (engineering, streets, ice and snow removal, shop and garage,
street lighting, etc.) expenses are the most significant (35%), followed by
recreation and culture (23%), public safety (13%), general government (10%),
economic development (10%), and others (9%). Included in these amounts is
depreciation expense, which is 27% of the total expenses for governmental
activities.
Governmental activities revenues increased $966,461 (6.5%) in the current
year, with the most significant portions of the increase attributable to charges
for services and capital grants & contributions. In 2015, the negative change in
investment market values decreased the interest earnings by 65%.
Governmental activities investment earnings for 2015 totaled $278,465.
Property taxes collections increased by 3.5 percent with a 4.7 percent higher
tax levy. Capital grants and contributions were affected by assessment
collections and a grant for land acquisition.
Governmental activities expenses increased $1,396,092 (10%) in the current
year. The most significant changes in program expenses were as follows:
•Recreation and culture increased $642,852 (22%) with larger operational
and development planning expenditures and recognition of additional
accrued employee benefits.
•Economic development expenses increased $463,255 (43%), which was
primarily the downward adjustment of land held for resale values.
•Other large percentage changes but relatively low dollar impacts included:
Sanitation expenses increased $45,521 (9%) from higher charges in the
newcontract with a private waste hauler; Transit increased $30,000 (300%)
with 2015 as the first full year with a newservice provider; Interest and fiscal
charges increased $85,899 (13%) due to the amortization of bond discount
on the 2008A bond paid off in 2015.
14
Management’s Discussion and Analysis CITY OF MONTICELLO
Charges for
services
81%
Capital grants &
contributions
18%
Investment
earnings
1%
Revenues by Source -
Business-Type Activities
$-
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
Water Utility Sewage Utility Liquor Fiber Optics Deputy RegistrarMillionsProgram Revenues and Expenses -
Business-Type Activities
Revenues Expenses
Business-type Activities.Business-type activities decreased the city’s net
position by $1,150,865, which is $25,429,611 less than the prior fiscal year
increase of $24,278,746.
Key elements of the change are as follows:
The Fiber Optics Fund recorded a special item gain on extinguishment of debt
for $20,990,451 in 2014. The gain reflected the extinguishment of $26,445,000
in revenue bonds minus cash from a transfer in and the payment of restricted
cash held by a trustee. Transfers out in 2015 caused the decrease in net
position while there was a net transfer into the business-type activities in 2014.
Business-type activities investment earnings for 2015 totaled $108,191. This is
a $291,566 decrease from the prior year’s investment earnings of $399,757. As
noted earlier in the governmental activities section, swings in market value have
a significant impact on net investment earnings.
Capital grants and contributions for water and sewer trunk charges are now
accounted for in each respective enterprise fund. The city also recorded capital
contributions from a PFA grant. Capital contributions for 2015 totaled
$1,454,980.
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
Governmental funds.The focus of the city’s governmental funds is to provide
information on near-term inflows, outflows, and balances of spendable
resources. Such information is useful in assessing the city’s financing
requirements. In particular, spendable fund balances may serve as a useful
measure of a government’s net resources available for expenditure at the end
of the fiscal year.
At December 31, 2015, the city’s governmental funds reported total ending fund
balances of $28,976,250, an increase of $5,054,912 (21%) when compared with
the prior year. Nearly 30% or $8,619,905 of the total ending fund balances
constituted restricted fund balances, which are considered unavailable for
appropriation for general operations. The $4,373,045 nonspendable fund
balance accounted for 15% of total governmental fund balances and is
comprised of land held for resale and prepaid items.
At the end of the fiscal year, the General Fund reported a fund balance of
$4,986,796, increasing $655,738 (15%) from the prior year. General fund
revenues were $518,644 (7%) more than the prior fiscal year and expenditures
increased by $305,862 (5%). Transfers out increased by $4,012 to $297,012: a
15
Management’s Discussion and Analysis CITY OF MONTICELLO
$94,900 annual transfer to the EDA Fund and a one-time $202,112 to the
Benefit Accrual Fund, an internal service fund initiated to accumulate resources
for employee liabilities.
General government expenditures increased $14,528 (1%) with most of the
increase related to employee costs. Ice & removal and engineering were largely
responsible for the $83,807 (5%) decline in public works expenditures.
Recreation and culture expenditures increased by $171,707 (22%) primarily
caused by additional internal service fund equipment leasing and pathway
maintenance now accounted for in the General Fund. Public safety
expenditures increased $127,913 (7%) with inflation to the Wright County law
enforcement contract and increased activity in building inspection. The city also
made a one-time payout of accumulated sick leave benefits when it switched to
a paid-time-off (PTO) benefit system. The PTO caused payout of $157,122
was spread over the all the affected budget units.
The fund balance in the Community Center Fund increased $188,618 (43%) to
$629,442. Reflecting higher membership fees, charges for services increased
$77,614 (6%) to $1,401,024 in 2015. The transfer for debt service decreased
from $1,040,000 in 2014 to $1,005,000 in 2015. The community center debt is
fully amortized at the end of 2015.
The fund balance in Economic Development Authority (EDA) Fund decreased
$348,809 (5%) to $6,562,865. The assigned fund balance, which is available for
general EDA activity, equaled $2,003,498 at year end. Land held for resale
declined $745,800 (22%) to $2,682,957. Land held for resale receives the same
accounting treatment, lower of cost or market, as inventory. No land held for
resale was sold in 2015. At year end, the restricted $2,084,541 portion of the
fund balance is attributable to tax increment districts and loan programs.
The fund balance in the Debt Service Fund increased $1,463,144 (37%) to
$5,382,214. The planned fund balance increase marks the city’s effort to have
February debt service payments removed from the fund balances of supporting
funds in the year prior to payment. Special assessment revenue increased
$744,127 (50%) to $2,233,403. One property owner’s payment of future
assessments contributed significantly to the increase.
The Capital Projects Fund provides the accounting for acquisition of general
government capital assets. Accordingly, the fund accumulates resources from
various sources and expenditures may or may not occur in the same year of
accumulation. Consequently, the fund balance in the Capital Projects Fund
increased $2,496,594 (86%) to $5,392,213. The $1,764,189 nonspendable
portion of the fund balance is land held for resale. Proceeds from a 2015
$2,605,000 general obligation bond issue are accounted for in this fund. Various
assessment and street reconstruction projects were financed by this issue. The
$855,000 transfer to the Park and Pathway Dedication Fund will go toward land
acquisition and park development at Bertram Chain of Lakes.
Proprietary funds.The proprietary funds provide the same type of information
found in the government-wide financial statements, but in more detail.
Water Fund expenses increased $19,224 (2%) with installation of new and
replacement radio read devices. The Water Fund transferred $790,958 to Debt
Service Fund for improvements related to the water system. The fund’s net
position declined $442,569 (3%) to $14,328,760. Depreciation expense for the
fund totaled $513,814.
Sewage Fund expenses decreased $94,175 (4%), largely attributable to
operational changes at the wastewater treatment plant. The Sewage Fund
transferred $1,510,087, which was partially offset by capital contributions from
impact fees, to the Debt Service Fund for improvements related to the sewage
system. The fund’s net position declined $785,113 (4%) to $19,813,546.
Depreciation expense for the fund totaled $1,103,397.
The Liquor Fund’s net position increased $275,808 (44%) to $905,806. The
fund’s sales increased $323,693 (6%) to $5,489,430. Gross profit increased
$230,803 (18%) to $1,519,843. Less aggressive sale promotions contributed to
the increase. The Liquor Fund transferred $450,000 to the Fiber Optics Fund in
2015. Operating expenses increased $106,978 (15%) to $801,545 in 2015.
Depreciation expense for the fund totaled $46,923.
The Fiber Optics Fund’s net position decreased $440,981 to $13,400,141. The
fund’s sales decreased $45,833 (3%) to $1,619,218 in 2015. Excluding
depreciation, the operating loss is $367,607. Depreciation for the fund totaled
$419,782. The 2014 settlement with bondholders improved financial stability in
2015.
The Deputy Registrar Fund net position increased $223,923 (120%) to
$409,834. Charges for services increased $33,699 (7%) to $531,408 and
operating expenses increased $15,977 (5%) to $318,686. Depreciation for the
fund totaled $3,185.
Other factors of the changes in income from operations have previously been
discussed in the government-wide financial analysis of business-type activities.
16
Management’s Discussion and Analysis CITY OF MONTICELLO
GENERAL FUND BUDGETARY HIGHLIGHTS
General Fund revenues totaled $7,637,646 and exceeded budget by 391,646
(5%). Licenses and permits and other revenues were $139,869 (44%) and
$146,239 (153%) higher than budget, respectively. Licenses and permits were
impacted by the increase in building permits. Other revenues include an
insurance dividend, which varies from year-to-year and is never budgeted.
General Fund expenditures totaled $6,715,369 and were $366,561 (5%) less
than budget. A $202,112 transfer to the Benefit Accrual Fund pushed other
financing uses past budget. In fiscal year 2015, one function exceeded budget
(public safety) and two departments (planning & zoning and fire & rescue)
exceeded budget. Some reporting units within a department may have
exceeded budget but were offset by positive variances in other divisions in the
same department. Nine of thirty-six reporting units exceeded budget.
The General Fund year end fund balances since 2011 are as follows:
Year Amount
2011 4,410,637$
2012 3,478,507
2013 3,914,563
2014 4,331,058
2015 4,986,796
CAPITAL ASSETS AND DEBT ADMINISTRATION
CAPITAL ASSETS
2015 2014 2015 2014 2015 2014
Land 8,555,369$13,825,156$1,197,945$1,197,945$9,753,314$15,023,101$
Construction in progress 1,264,456 1,742,073 1,491,882 2,507,712 2,756,338 4,249,785
Buildings and systems 92,636,026 90,748,030 79,100,343 77,274,052 171,736,369 168,022,082
Machinery and equipment 5,425,323 5,328,537 2,543,832 2,549,969 7,969,155 7,878,506
Less: Accumulated depreciation (49,383,953)(45,341,983)(40,035,961)(38,174,126)(89,419,914)(83,516,109)
Net total 58,497,221$66,301,813$44,298,041$45,355,552$102,795,262$111,657,365$
Governmental Activities Business-Type Activities Total
Capital assets.The city’s investment in capital assets for its governmental and
business-type activities at December 31, 2015 totaled $102,795,262 (net of
accumulated depreciation). This investment in capital assets included land,
construction in progress, structures, systems, machinery and equipment,
intangible assets, and infrastructure.
Major governmental activities capital assets changes: a $5,511,547 land
contribution to Wright County for Bertram Chain of Lakes; purchase of equipment
in the internal service Central Equipment Fund of $166,128. Business-type capital
assets acquisitions included two wastewater treatment plant improvements
projects—one started in 2013 (transferred from construction in progress to
buildings and systems) and one started 2015. The total decrease from the prior
fiscal year is approximately 8%; governmental activities decreased nearly 12%
and business-type activities decreased 2%.
Additional information on the city’s capital assets can be found in the notes to the
financial statements on pages 41-42.
17
Management’s Discussion and Analysis CITY OF MONTICELLO
OUTSTANDING INDEBTEDNESS
2015 2014 2015 2014 2015 2014
General obligation bonds 9,563,000$12,680,653$2,930,347$3,206,347$12,493,347$15,887,000$
Certificate of indebtedness 325,000 385,000 --325,000 385,000
Special assessment bonds 11,689,653 10,010,000 --11,689,653 10,010,000
Public Facilities Authority Loan --615,268 615,268 -
Revenue bonds -985,000 ---985,000
Total 21,577,653$24,060,653$3,545,615$3,206,347$25,123,268$27,267,000$
Governmental Business-Type
Activities Activities Total
Long-term Debt.The city’s outstanding long-term debt--including general
obligation bonds, special assessment bonds, revenue bonds and certificates of
indebtedness—totaled $25,123,268 at December 31, 2015. Business-type
long-term debt increased with the addition of debt (Public Facilities Authority
Loan) related to the wastewater plant improvements. Meanwhile, the city issued
$2,605,000 in general obligation bonds to finance 2015 and 2016 street
projects. All other changes are the result of normal amortization.
Additional information on the city’s long-term liabilities can be found in the notes
to the financial statements on pages 42-45 of this report.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
•The unemployment rate for the Wright County, Minnesota area for
December 31, 2015 was 3.8%, which is above the state average (3.6%)
and below the national average (5.4%).
•The state and local economy are improving. New commercial and
residential development grew at a sustainable pace in 2015.
•The occupancy rate of the city’s business district has remained constant
over the last three years and new commercial construction is growing.
•Inflationary trends in the region compare favorably to national indices and
housing prices have risen the last two years.
•The city expects residential and commercial growth to eventually return to
pre-recession levels, accompanied by the increase in affordable housing.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the city’s
finances for all those interested in governmental finance. Questions concerning
any information in the report or requests for additional information should be
addressed to City of Monticello, Finance Department, 505 Walnut Street, Suite
1, Monticello, MN 55362.
18
BASIC STATEMENTS
CITY OF MONTICELLO
Statement of Net Position
December 31, 2015
Governmental Business-type
Activities Activities Total
ASSETS
Cash and investments 26,197,898$8,218,328$34,416,226$
Receivables
Unremitted taxes 26,701 -26,701
Deliquent taxes 87,864 -87,864
Unremitted special assessments 4,378 29 4,407
Deliquent special assessments 306,234 27,238 333,472
Deferred special assessments 3,972,358 184,853 4,157,211
Accrued interest 123,380 -123,380
Accounts, net uncollectibles allowance 253,397 905,873 1,159,270
Due from other governmental units 182,929 -182,929
Internal balances (27,982)27,982 -
Inventory -552,355 552,355
Prepaid items 161,773 67,466 229,239
Notes receivable 329,279 -329,279
Land held for resale 4,447,146 -4,447,146
Pension asset 9,325 -9,325
Capital assets:
Nondepreciable 9,819,825 2,689,827 12,509,652
Depreciable, net 48,677,396 41,608,214 90,285,610
TOTAL ASSETS 94,571,901 54,282,165 148,854,066
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension resources 270,113 129,955 400,068
TOTAL DEFERRED OUTFLOWS OF RESOURCES 270,113 129,955 400,068
LIABILITIES
Accounts and contracts payable 534,332 377,397 911,729
Accrued interest payable 155,178 12,067 167,245
Other accrued liabilities 179,092 9,154 188,246
Due to other governmental units 9,072 136,722 145,794
Unearned revenue 19,290 6,400 25,690
Escrow deposits 502,734 -502,734
Long-term liabilities:
Due within one year 4,808,115 415,038 5,223,153
Due in more than one year 19,378,617 4,347,169 23,725,786
TOTAL LIABILITIES 25,586,430 5,303,947 30,890,377
DEFERRED INFLOWS OF RESOURCES
Deferred pension resources 378,179 222,104 600,283
TOTAL DEFERRED INFLOWS OF RESOURCES 378,179 222,104 600,283
NET POSITION
Net investment in capital assets 38,099,568 40,722,087 78,821,655
Restricted for
Debt service 9,266,800 -9,266,800
Economic development 2,592,395 -2,592,395
Perpetual care 32,388 -32,388
Tax increment 742,187 -742,187
Unrestricted 18,144,067 8,163,982 26,308,049
TOTAL NET POSITION 68,877,405$48,886,069$117,763,474$
The notes to the financial statements are an integral part of this statement.
19
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20
CITY OF MONTICELLO
Statement of Activities
For the Year Ended December 31, 2015
Operating Capital
Charges for Grants and Grants and Governmental Business-type
Expenses Services Contributions Contributions Activities Activities Total
Governmental activities
General government 1,447,725$214,087$-$-$(1,233,638)$-$(1,233,638)$
Public safety 1,960,009 320,158 355,041 -(1,284,810)-(1,284,810)
Public works 5,312,612 626,483 -2,229,595 (2,456,534)-(2,456,534)
Sanitation 563,477 ---(563,477)-(563,477)
Transit 40,000 ---(40,000)-(40,000)
Recreation and culture 3,524,979 1,488,197 -391,217 (1,645,565)-(1,645,565)
Economic development 1,547,875 14,653 --(1,533,222)-(1,533,222)
Interest and fiscal charges 735,753 --46,898 (688,855)-(688,855)
Total governmental activities 15,132,430 2,663,578 355,041 2,667,710 (9,446,101)-(9,446,101)
Business-type activities
Water Utility 1,102,610 1,126,718 -268,329 -292,437 292,437
Sewage Utility 2,661,990 2,083,122 -1,186,651 -607,783 607,783
Liquor 798,631 1,524,338 ---725,707 725,707
Fiber Optics 2,536,461 1,642,403 ---(894,058)(894,058)
Deputy Registrar 313,968 535,931 ---221,963 221,963
Total business-type activities 7,413,660 6,912,512 -1,454,980 -953,832 953,832
Total primary government 22,546,090$9,576,090$355,041$4,122,690$(9,446,101)953,832 (8,492,269)
General Revenues:
Property taxes 8,683,585 -8,683,585
Tax increments 727,617 -727,617
Franchise taxes 333,484 -333,484
Unrestricted investment earnings 278,465 108,191 386,656
Gain on sale of capital assets 30,473 88,157 118,630
Special item: contribution of land to county (5,511,547)-(5,511,547)
Transfers 2,301,045 (2,301,045)-
Total general revenues, special items, and tranfers 6,843,122 (2,104,697)4,738,425
Change in Net Position (2,602,979)(1,150,865)(3,753,844)
Net Position, January 1, as restated (Note 14)71,480,384 50,036,934 121,517,318
Net Position, December 31 68,877,405$48,886,069$117,763,474$
Net (Expense) Revenue and Changes in Net PositionProgram Revenues
The notes to the financial statements are an integral part of this statement.
Functions/Programs
21
CITY OF MONTICELLO
Balance Sheet
Governmental Funds
101 226 213 Linked 300 Linked
Economic 400 Total Total
Community Development Debt Capital Nonmajor Governmental
General Center Authority Service Projects Funds Funds
ASSETS
Cash and investments 5,649,254$649,256$3,875,238$5,174,958$3,799,585$5,866,121$25,014,412$
Receivables
Unremitted taxes 21,587 -710 -4,404 -26,701
Delinquent taxes 87,864 -----87,864
Unremitted special assessments ---481 3,897 -4,378
Delinquent special assessments 320 --159,721 146,193 -306,234
Deferred special assessments 1,941 --3,369,687 600,730 -3,972,358
Accrued interest 123,380 -----123,380
Accounts 41,290 27 -207,900 -4,180 253,397
Due from other governmental units 3,194 -11,875 --167,860 182,929
Prepaid items 113,302 19,469 869 --1,259 134,899
Notes receivable ---200,000 -129,279 329,279
Land held for resale --2,682,957 -1,764,189 -4,447,146
TOTAL ASSETS 6,042,132$668,752$6,571,649$9,112,747$6,318,998$6,168,699$34,882,977$
LIABILITIES
Accounts and contracts payable 279,245$20,509$8,784$1,125$174,441$16,700$500,804$
Other accrued liabilities 179,092 -----179,092
Due to other governmental units 2,208 6,864 ----9,072
Unearned revenue 1,932 11,937 --5,421 -19,290
Escrow deposits 502,734 -----502,734
Total liabilities 965,211 39,310 8,784 1,125 179,862 16,700 1,210,992
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - property taxes 87,864 -----87,864
Unavailable revenue - special assessments 2,261 --3,529,408 746,923 -4,278,592
Unavailable revenue - notes receivable ---200,000 -129,279 329,279
Total Deferred Inflows of Resources 90,125 --3,729,408 746,923 129,279 4,695,735
FUND BALANCES
Nonspendable 113,302 19,469 2,474,826 -1,764,189 1,259 4,373,045
Restricted --2,084,541 5,382,214 -1,153,150 8,619,905
Assigned -609,973 2,003,498 -3,628,024 4,868,311 11,109,806
Unassigned 4,873,494 -----4,873,494
Total fund balance 4,986,796 629,442 6,562,865 5,382,214 5,392,213 6,022,720 28,976,250
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES 6,042,132$668,752$6,571,649$9,112,747$6,318,998$6,168,699$34,882,977$
The notes to the financial statements are an integral part of this statement.
December 31, 2015
22
CITY OF MONTICELLO
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
December 31, 2015
Amounts reported for governmental activities in the statement of net position are different because:
Total fund balances - governmental funds 28,976,250$
Long-term assets from pensions reported in governmental activities are not financial resources and, therefore, are not
reported as assets in the funds.9,325
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.
Land 8,555,369$
Construction in progress 1,264,456
Buildings and systems 92,636,026
Machinery and equipment 4,585,691
Accumulated depreciation (49,280,780)57,760,762
Governmental funds do not report long-term amounts related to pensions.
Deferred outflows of resources 270,113$
Deferred inflows of resources (378,179)(108,066)
Long-term liabilties that pertain to governmental funds, including bonds payable, are not due and payable in the current
period and, therefore, are not reported as fund liabilities. All liabilities, both current and long-term, are reported in
the Statement of Net Position.
Bonds payable (20,737,653)$
Unamortized bond discounts 25,735
Unamortized bond premiums (215,931)
Other post-employment benefits obligations (305,563)
Net pension liability (1,887,162)(23,120,574)
Internal service funds are used by management to charge the costs of central equipment, information technology, and
benefit accrual services to individual funds. The assets and liabilities of the internal service funds are included in
governmental activities in the Statement of Net Position.
Internal service fund net position included in the governmental activities 846,236$
Less internal services net position allocated to to business-type activities (27,982)818,254
Some of the city's property taxes, special assessments, and notes receivable will be collected after year-end, but are not
available soon enough to pay for currrent period expenditures and, therefore, are reported as deferred inflows
of resources in the governmental funds.4,695,735
Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an expenditure when due.
Accrued interest for general obligation bonds is included in the Statement of Net Position.(154,281)
NET POSITION OF GOVERNMENTAL ACTIVITIES 68,877,405$
The notes to the financial statements are an integral part of this statement.
23
CITY OF MONTICELLO
Statement of Revenues, Expenditures and Changes in Fund Balance
Governmental Funds
For the Year Ended December 31, 2015
101 226 213 Linked 300 Linked
Economic 400 Total Total
Community Development Debt Capital Nonmajor Governmental
General Center Authority Service Projects Funds Funds
Revenues
Property taxes 5,906,255$1,363,000$-$1,290,000$79,146$-$8,638,401$
Tax increments --727,617 ---727,617
Franchise taxes 216,500 ---36,865 80,119 333,484
Special assessments 1,330 --2,233,403 971,760 112,408 3,318,901
Licenses and permits 461,049 -----461,049
Intergovernmental 354,679 -11,875 -945,756 207,929 1,520,239
Charges for services 349,601 1,401,024 1,250 --311,645 2,063,520
Fines and forfeitures 42,474 -----42,474
Investment earnings 64,037 (1,544)52,034 38,321 25,110 83,898 261,856
Other revenues 241,721 32,827 622 200,000 --475,170
Total revenues 7,637,646 2,795,307 793,398 3,761,724 2,058,637 795,999 17,842,711
Expenditures:
Current
General government 1,465,458 -----1,465,458
Public safety 1,972,986 -----1,972,986
Public works 1,709,063 ---25,177 322 1,734,562
Sanitation 563,477 -----563,477
Transit 40,000 -----40,000
Recreation and culture 964,385 1,577,643 ---80,963 2,622,991
Economic development --1,237,107 ---1,237,107
Capital outlay
Public works ----1,268,278 333,559 1,601,837
Recreation and culture -----636,528 636,528
Debt service
Principal ---5,028,000 --5,028,000
Interest and fiscal charges ---570,753 --570,753
Bond issuance costs ----71,358 -71,358
Total expenditures 6,715,369 1,577,643 1,237,107 5,598,753 1,364,813 1,051,372 17,545,057
Excess (deficiency) of revenues over expenditures 922,277 1,217,664 (443,709)(1,837,029)693,824 (255,373)297,654
Other financing sources (uses)
Long-term debt issued ----2,605,000 -2,605,000
Premium on long-term debt issued ----46,898 -46,898
Sale of capital assets 30,473 -----30,473
Transfers in --94,900 3,306,045 5,872 855,000 4,261,817
Transfers out (297,012)(1,029,046)-(5,872)(855,000)-(2,186,930)
Total other financing sources (uses)(266,539)(1,029,046)94,900 3,300,173 1,802,770 855,000 4,757,258
Net change in fund balances 655,738 188,618 (348,809)1,463,144 2,496,594 599,627 5,054,912
Fund balance at beginning of year 4,331,058 440,824 6,911,674 3,919,070 2,895,619 5,423,093 23,921,338
Fund balance at end of year 4,986,796$629,442$6,562,865$5,382,214$5,392,213$6,022,720$28,976,250$
The notes to the financial statements are an integral part of this statement.
24
CITY OF MONTICELLO
Reconciliation of the Statement of Revenues, Expenditures and Changes
in Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended December 31, 2015
Amounts reported for governmental activities in the Statement of Activities are different because:
Net change in fund balances--governmental funds 5,054,912$
Governmental funds reported capital outlays as expenditures. However, in the statement of activities the cost
of those assets is allocated over their estimated useful lives and reported as depreciation expense.
This is the amount by which capital outlays exceeded depreciation in the current period.
Capital outlays 1,581,258$
Capital contributions 70,880
Capital contributions to county (5,511,547)
Depreciation (4,047,743)(7,907,152)
Proceeds from long-term debt provide financial resources to governmental funds, but the issuing of debt
increases long-term liabilities in the Statement of Net Position.(2,605,000)
Repayment of long-term debt principal is an expenditure in the governmental funds, but the repayment reduces
long-term liabilities in the Statement of Net Position.5,028,000
Some expenses reported in the Statement of Activities do not require the use of current financial resources
and, therefore, are not reported as expenditures in the governmental funds.
Amortization of bond discounts (158,410)$
Amortization of bond premiums 35,564
Change in compensated absences 322,843
Change in OPEB obligation (22,002)
Change accrued interest payable 45,397 223,392
Long-term pension activity is not reported in governmental funds
Pension revenue from state contributions (23,594)
Pension expense 57,087
Deferred inflows of resources are revenues included in the change in net position, but are excluded from the change
in fund balances until they are available to liquidate liabilities of the current period.
Taxes 45,184$
Special assessments (2,289,208)
Notes receivable (310,865)(2,554,889)
Internal service funds are used by management to charge the costs of certain activities to individual funds
The net revenue of the internal service funds is reported with governmental activities.
Internal service fund activity included in governmental activities 142,332$
Subtract internal service fund activity allocated to business-type activities (18,067)124,265
Change in net position of governmental activities (2,602,979)$
The notes to the financial statements are an integral part of this statement.
25
CITY OF MONTICELLO
Statement of Net Position
Proprietary Funds
Governmental
Activities -
265 262 609 656 217 Linked
601 602 Deputy Internal
Water Sewage Liquor Fiber Optics Registrar Totals Service Funds
ASSETS
Current assets
Cash and investments 4,406,268$2,200,605$671,717$341,721$598,017$8,218,328$1,183,486$
Receivables
Unremitted special assessmentsUnremitted special assessmentsUnremitted special assessments 29 ----29 -
Deliquent special assessmentsDeliquent special assessmentsDeliquent special assessments 27,238 ----27,238 -
Deferred special assessmentsDeferred special assessmentsDeferred special assessments 177,910 6,943 ---184,853 -
Account receivableAccount receivableAccounts 226,321 607,600 -31,344 40,608 905,873 -
Inventory --552,355 --552,355 -
Prepaid items 11,251 24,368 14,085 16,560 1,202 67,466 26,874
Total current assets 4,849,017 2,839,516 1,238,157 389,625 639,827 9,956,142 1,210,360
Noncurrent assets
Capital assets:
Land 208,143 984,202 5,600 --1,197,945 -
Buildings and systems 19,832,724 43,467,040 840,217 14,896,665 63,697 79,100,343 -
Machinery and equipment 262,198 1,748,694 134,528 384,147 14,265 2,543,832 839,632
Construction in progress -1,491,882 ---1,491,882 -
Total capital assetsTotal capital assets 20,303,065 47,691,818 980,345 15,280,812 77,962 84,334,002 839,632
Less accumulated depreciation (10,640,304)(26,794,096)(762,478)(1,805,700)(33,383)(40,035,961)(103,173)
Total capital assets (net)9,662,761 20,897,722 217,867 13,475,112 44,579 44,298,041 736,459
TOTAL ASSETS 14,511,778 23,737,238 1,456,024 13,864,737 684,406 54,254,183 1,946,819
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension resources 14,049 17,561 38,635 38,636 21,074 129,955 -
(continued)
Business-Type Activities – Enterprise Funds
December 31, 2015
26
CITY OF MONTICELLO
Statement of Net Position
Proprietary Funds
December 31, 2015 (Continued)
Governmental
Activities -
Deputy Internal
Water Sewage Liquor Fiber Optics Registrar Totals Service Funds
LIABILITIES
Current liabilities
Accounts and contracts payable 29,426$157,983$113,038$76,419$531$377,397$33,528$
Accrued interest payable -12,067 ---12,067 897
Other accrued liabilities --2,878 6,276 -9,154 -
Due to other governmental units 1,950 -52,660 12,491 69,621 136,722 -
Unearned revenue 6,400 ----6,400 -
Bonds and loans payable - current -380,233 ---380,233 115,000
Compensated absences due within one year 5,506 5,506 13,222 5,834 4,737 34,805 86,865
Total current liabilities 43,282 555,789 181,798 101,020 74,889 956,778 236,290
Noncurrent liabilities
Bonds and loans payable - net current portion -3,195,721 ---3,195,721 725,000
Compensated absences payable 9,954 9,954 11,520 6,676 5,010 43,114 139,293
Net pension liability 119,820 149,775 329,504 329,505 179,730 1,108,334 -
Total noncurrent liabilities 129,774 3,355,450 341,024 336,181 184,740 4,347,169 864,293
TOTAL LIABILITIES 173,056 3,911,239 522,822 437,201 259,629 5,303,947 1,100,583
DEFERRED INFLOWS OF RESOURCES
Deferred pension resources 24,011 30,014 66,031 66,031 36,017 222,104 -
NET POSITION
Net investment in capital assets 9,662,761 17,321,768 217,867 13,475,112 44,579 40,722,087 (103,541)
Unrestricted 4,665,999 2,491,778 687,939 (74,971)365,255 8,136,000 949,777
TOTAL NET POSITION 14,328,760$19,813,546$905,806$13,400,141$409,834$48,858,087 846,236$
Adjustment to reflect the cumulative internal balance for the net effect of the activity
between the internal service funds and the enterprise funds over time 27,982
Net position of business-type activities (page 19)48,886,069$
The notes to the financial statements are an integral part of this statement.
Business-Type Activities – Enterprise Funds
27
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28
CITY OF MONTICELLO
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Year Ended December 31, 2015
Governmental
Activities -
265 262 609 656 217 Linked
601 602 Deputy Internal
Water Sewage Liquor Fiber Optics Registrar Totals Service Funds
Sales and cost of sales
Net sales 5,489,430$5,489,430$
Cost of sales (3,969,587)(3,969,587)
Gross profit 1,519,843 1,519,843
Operating revenues
Charges for services 1,093,846$2,041,166$-1,619,218$531,408$5,285,638 420,901$
Other 32,872 41,956 4,495 23,185 4,523 107,031 -
Total operating revenues 1,126,718 2,083,122 4,495 1,642,403 535,931 5,392,669 420,901
Operating expenses
Personal services 181,617 280,558 505,508 567,786 277,943 1,813,412 226,158
Materials and supplies 152,258 15,597 46,842 104,165 4,294 323,156 18,582
Other services and charges 257,541 1,183,002 202,272 436,547 33,264 2,112,626 196,834
Content and access charges ---901,512 -901,512 -
Depreciation 513,814 1,103,397 46,923 419,782 3,185 2,087,101 63,569
Total operating expenses 1,105,230 2,582,554 801,545 2,429,792 318,686 7,237,807 505,143
Operating income (loss)21,488 (499,432)722,793 (787,389)217,245 (325,295)(84,242)
Nonoperating revenues (expenses)
Investment earnings 58,572 31,671 3,015 8,255 6,678 108,191 16,609
Interest expense -(82,073)---(82,073)(16,193)
Gain on sale of capital asset -88,157 ---88,157 -
Loss on sale of capital asset ---(111,847)-(111,847)-
Total Nonoperating revenes (expenses)58,572 37,755 3,015 (103,592)6,678 2,428 416
Income (loss) before transfers and capital
contributions 80,060 (461,677)725,808 (890,981)223,923 (322,867)(83,826)
Capital contributions 268,329 1,186,651 ---1,454,980 -
Transfers in ---450,000 -450,000 226,158
Transfers out (790,958)(1,510,087)(450,000)--(2,751,045)-
Change in net position (442,569)(785,113)275,808 (440,981)223,923 (1,168,932)142,332
Net Position, January 1, as restated (Note 14)14,771,329 20,598,659 629,998 13,841,122 185,911 703,904
Net Position, December 31 14,328,760$19,813,546$905,806$13,400,141$409,834$846,236$
Adjustment to reflect the consolidation of internal service fund related to enterprise funds 18,067
Change in net position of business-type activities (page 21)(1,150,865)$
Business-Type Activities – Enterprise Funds
The notes to the financial statements are an integral part of this statement.
29
CITY OF MONTICELLO
Statement of Cash Flows
Proprietary Funds
For the Year Ended December 31, 2015
Governmental
Activities -
265/601 262/602 609 656 217 Linked
602 Deputy Internal
Water Sewage Liquor Fiber Optics Registrar Totals Service Funds
Cash flows from operating activities
Cash received from customers and users 1,139,579$2,018,932$5,495,307$1,733,236$530,970$10,918,024$-$
Cash from interfund services provided ------420,901
Cash paid to suppliers for goods and services (398,142)(1,396,614)(4,401,688)(1,332,231)(767)(7,529,442)(253,458)
Cash paid to employees (209,197)(265,341)(525,024)(565,657)(280,209)(1,845,428)-
Cash paid to other funds for services provided (12,292)(12,370)(13,672)(24,291)(22,134)(84,759)-
Net cash provided (used) by operating activities 519,948 344,607 554,923 (188,943)227,860 1,458,395 167,443
Cash flows from noncapital financing activities
Transfers from other funds ---450,000 -450,000 226,158
Transfers to other funds (790,958)(1,510,087)(450,000)--(2,751,045)-
Net cash provided (used) by noncapital financing activities (790,958)(1,510,087)(450,000)450,000 -(2,301,045)226,158
Cash flows from capital and related financing activities
Capital contributions 268,329 1,186,651 ---1,454,980 -
Sale of capital assets -88,157 -29,850 -118,007 -
Acquisition of capital assets (26,683)(1,177,902)---(1,204,585)(218,658)
Long-term debt issued -615,268 ---615,268 -
Principal paid on long-term debt -(276,000)---(276,000)(60,000)
Interest and fiscal charges paid on long-term debt -(84,158)---(84,158)(16,678)
Net cash provided (used) by capital and related
financing activities 241,646 352,016 -29,850 -623,512 (295,336)
Cash flows from investing activities
Interest on investments 58,572 31,671 3,015 8,255 6,678 108,191 16,609
Net increase (decrease) in cash and cash equivalents 29,208 (781,793)107,938 299,162 234,538 (110,947)114,874
Cash and cash equivalents, January 1 4,377,060 2,982,398 563,779 42,559 363,479 8,329,275 1,068,612
Cash and cash equivalents, December 31 4,406,268$2,200,605$671,717$341,721$598,017$8,218,328$1,183,486$
Business-Type Activities – Enterprise Funds
(continued)
30
CITY OF MONTICELLO
Statement of Cash Flows
Proprietary Funds
For the Year Ended December 31, 2015 (Continued)
Governmental
Activities -
Deputy Internal
Water Sewage Liquor Fiber Optics Registrar Totals Service Funds
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities
Operating income (loss)21,488$(499,432)$722,793$(787,389)$217,245$(325,295)$(84,242)$
Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities
Depreciation and amortization 513,814 1,103,397 46,923 419,782 3,185 2,087,101 63,569
(Increase) decrease in assets
Special assessments receivable 9,982 (6,943)---3,039 -
Accounts receivable, net (3,521)(57,247)-84,557 (4,961)18,828 -
Inventory --(32,335)--(32,335)-
Prepaid items (897)(591)1,299 69,757 2,091 71,659 (26,780)
(Increase) decrease in deferred outflows
Deferred pension resources (188)(235)(518)(519)(283)(1,743)-
Increase (decrease) in liabilities
Accounts and contracts payable 270 (209,794)(167,338)9,517 (75)(367,420)(11,189)
Other liabilities --1,382 6,276 -7,658 -
Due to other governmental units (8)-1,715 6,428 12,641 20,776 (73)
Unearned revenue 6,400 ----6,400 -
Compensated absences (27,386)15,460 (18,981)2,664 (1,974)(30,217)226,158
Net pension liability 7,613 9,515 20,934 20,935 11,419 70,416 -
Increase (decrease) in deferred inflows
Deferred pension resources (7,619)(9,523)(20,951)(20,951)(11,428)(70,472)-
Net cash provided (used) by operating activities 519,948$344,607$554,923$(188,943)$227,860$1,458,395$167,443$
Schedule of noncash investing, capital and
financing activities:
Increase (decrease) in fair value of investments (58,702)$(62,513)$(4,052)$61,329$2,275$(61,663)$(17,718)$
Net amortization of bond premium (discount)-$1,602$-$-$-$1,602$-$
Disposal of capital assets -$225,266$-$141,697$-$366,963$-$
The notes to the financial statements are an integral part of this statement.
Business-Type Activities – Enterprise Funds
31
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Monticello, Minnesota (the city)
have been prepared in conformity with accounting principles (GAAP) generally
accepted in the United States of America as applied to governmental units, as
applied by the Governmental Accounting Standards Board (GASB). 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:
A. Reporting entity
The city of Monticello was incorporated 1856 and is under Minnesota Statutes
with a mayor-council form of government. The five-member mayor-council is
elected on staggered, even-numbered years. Councilors are elected at-large to
four-year terms while the mayor is elected to a two-year term. The governing
body appoints an administrator to implement policies and oversee daily
operations.
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 and other
members appointed by the city council. The city is able to impose its will on the
EDA by significantly influencing the programs, projects, activities, or level of
services performed or provided by the EDA. There is a potential for the EDA to
provide specific financial benefits to, or impose specific burdens on, the city.
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. Therefore,
the EDA does not issue separate financial statements.
The mayor and council are responsible for appointing some members of other
organizations. However, the city’s accountability for these organizations does
not extend beyond making appointments.
B. Government-wide and fund financial statements
The government-wide financial statements (i.e., the statement of net position
and the statement of activities) report information on all of the activities of the
primary government and its component unit. For the most part, the effect of
inter-fund activity has been removed from these statements. Governmental
activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business-type activities, which rely to a
significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct
expenses of a given function or segment is offset by program revenues. Direct
expenses are those that are clearly identifiable with a specific function. Program
revenues include 1) charges to customers or applicants who purchase, use, or
directly benefit from goods, services, or privileges provided by a given function
or segment and 2) grants and contributions that are restricted to meeting the
operation or capital requirements of a particular function or segment. Taxes and
other items not properly included among program revenues are reported instead
as general revenues.
Separate financial statements are provided for governmental funds and
proprietary funds. Major individual governmental funds and major individual
enterprise funds are reported as separate columns in the fund financial
statements.
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 expense of each function. Interest on long-term debt is
considered an indirect expense and is reported separately on the Statement of
Activities.
Aggregated information for the remaining nonmajor funds are reported in single
columns in the respective fund financial statements.
32
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
C. Measurement focus, basis of accounting, and financial statement
presentation
The government-wide financial statements are reported using the economic
resources measurement focus and the accrual basis of accounting, as are the
proprietary fund financial statements. Revenues are recorded when earned and
expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Property taxes and special assessments, if levied, are
recognized as revenues in the year for which they are levied. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed
by the provider have been met.
Governmental fund financial statements are reported using the current financial
resources measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available.
Revenues are considered available when they are collectible with the current
period or soon enough thereafter to pay liabilities of the current period. For this
purpose, the city considers revenue to be available if they are collected within
60 days of the end of the current fiscal period. Expenditures generally are
recorded when a liability is incurred, as under accrual accounting. However,
debt service expenditures, as well as expenditures related to claims and
judgments, net pension liabilities, 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 from long-term debt are reported as other financing sources.
Property taxes, franchise taxes, licenses, and investment interest associated
with the current fiscal period are all considered to be susceptible to accrual and
have been recognized as revenues of the current fiscal period. All other revenue
items are considered to be measurable and available only when cash is received
by the city.
Since governmental fund statements are presented using a measurement focus
and basis of accounting different from that used in the government-wide
statements’ governmental column, a reconciliation is presented that briefly
explains the adjustments necessary to reconcile ending net position and the
change in net position.
In the fund financial statements, financial transactions and accounts of the city
are organized on the basis of funds. The operation of each fund is considered
to be an independent fiscal and separate accounting entity, with a self-balancing
set of accounts recording cash and/or other financial resources together with all
related liabilities and residual equities or balances, and changes therein, which
are segregated for the purpose of carrying on specific activities or attaining
certain objectives in accordance with special regulations, restriction, or
limitations.
Major Governmental Funds – The major governmental funds reported by the
city are as follows:
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 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.
Economic Development Authority (EDA) 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 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).
Major Proprietary Funds – The city reports the following major proprietary funds:
Water 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 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 Fund – The Liquor (enterprise) Fund is used to account for the
operations of the city’s liquor store.
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Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
Fiber Optics 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 Fund – The Deputy Registrar (enterprise) Fund is used to
account for the operation of city’s department of motor vehicles.
Additionally, the city reports the following fund type:
Internal Service Funds – These funds account for the city’s information
technology, benefit accrual and central equipment services. Internal service
funds operate in a manner similar to enterprise funds; however, they
provide services primarily to other city departments.
As a general rule, the effect of inter-fund activity has been eliminated from the
government-wide financial statements. Exceptions to this general rule are
charges between the city’s enterprise funds and various other functions of the
city. Elimination of these charges would distort the direct costs and program
revenues of the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or
applicants for goods, services, or privileges provided, 2) operating grants and
contributions, and 3) capital grants and contributions, including special
assessments. Internally dedicated resources are reported as general revenues
rather than as program revenues. Likewise, general revenues include all taxes
the city has the authority to impose.
Proprietary funds distinguish operating revenues and expenses from non-
operating 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 and internal service funds are charges to
customers for sales and services. Operating expenses for enterprise and
internal service funds include cost of sales and services, administrative
expenses, and depreciation on capital assets. All revenue and expenses not
meeting this definition are reported as non-operating 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.
D. 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.
E. 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 are susceptible to full accrual on the government-wide
financial statements.
F. Special Assessments
Special assessments are levied against the benefited properties for the
assessable costs of special assessment improvement projects in accordance
with Minnesota Statutes. The city usually adopts assessment rolls when
individual public improvement projects are complete or substantially complete.
The assessments are collectible over a term of years generally consistent with
the term of years of the related bond issue.
34
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
Collection of annual installments (including interest) is handled by the county in
the same manner as property taxes. Property owners are allowed to prepay
total future installments without interest or prepayment penalties.
Once a special assessment roll is adopted, the amount attributed to each parcel
is a lien upon that property until full payment is made or the amount is
determined to be excessive by the city council or court action. If special
assessments are allowed to go delinquent, the property is subject to tax forfeited
sale and the first proceeds of that sale (after costs, penalties, and expenses of
sale) are remitted to the city in payment of delinquent special assessments.
Generally, the city will collect the full amount of its special assessments not
adjusted by city council or court action. Pursuant to state statutes, a property
shall be subject to tax forfeit sale after three years of delinquency except for
homesteaded, agricultural or seasonal recreational property, which is subject to
sale after five years.
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.
Unremitted special assessment amounts collected by Wright County are
recorded in due from other government units.
G. 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 proprietary Fiber Optics Fund. Account (trade) receivables are carried
at original billing amount less an estimate made for doubtful receivables based
on a review of all outstanding amounts on a regular basis. Management
determines the allowance for doubtful accounts by identifying troubled accounts
and by using historical experience applied to an aging of accounts. With
approval from council, trade receivables are written off when deemed
uncollectible. Recoveries of trade receivables previously written off are
recorded when received.
A receivable is considered past due if any portion of the receivable balance is
outstanding for more than 30 days. Interest is charged on receivables that are
outstanding for more than 30 days. Accrual of interest is not suspended until a
receivable is determined to be uncollectible. Provisions for bad debts would be
insignificant and none has been made for 2015.
Interest receivable is recorded as revenue in the year the interest is earned and
is available to pay liabilities of the current period. The interest receivable
balance is reported as one amount in the General Fund while all other funds
receive interest revenue distributions in cash.
H. 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
city-owned Hi-Way Liquors store.
I. 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.
J. 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 $400,000 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.
K. 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 balances are nonspendable or 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.
L. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure
assets (roads, bridges, sidewalks, and similar items) are reported in the
35
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
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 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.
M. Deferred Outflows of Resources
In addition to assets, the statement of net position and/or balance sheet will
sometimes report a separate section for deferred outflows of resources. This
separate financial statement element represents a consumption of net position
that applies to future periods and so will not be recognized as an outflow of
resources (expense/expenditure) until that time. The city has only one type of
item, which arises under a full accrual basis of accounting, that qualifies for
reporting in this category. Accordingly, the item, deferred pension resources, is
reported only in the statement of net position. This item results from actuarial
calculations and current year pension contributions made subsequent to the
measurement date.
N. Pensions
For purposes of measuring the net pension liability, deferred outflows/inflows of
resources, and pension expense, information about the fiduciary net position of
the Public Employees Retirement Association (PERA) and additions
to/deductions from PERA’s fiduciary net position have been determined on the
same basis as they are reported by PERA except that PERA’s fiscal year end
in June 30. For this purpose, plan contributions are recognized as of employer
payroll paid dates and benefit payments and refunds are recognized when due
and payable in accordance with the benefit terms. Investments are reported at
fair value.
For purposes of measuring the net pension liability (asset), deferred
outflows/inflows of resources related to pensions, and pension expense,
information about the fiduciary net position of the defined benefit plan
administered by the Monticello Fire Relief Association and additions to and
deductions from the plan’s fiduciary net position have been determined on the
same basis as they are reported by the plan. Investments are reported at fair
value.
O. Compensated Absences Payable
City employees earn vacation or paid-time-off (PTO) based upon the number of
completed years of service. The city compensates employees for unused
vacation/PTO upon termination of employment. Some non-PTO 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.
36
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
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. The liability for governmental funds is
recorded in the internal service Benefit Accrual Fund. Resignations and
retirements of employees reduce the liability in the Benefit Accrual Fund or the
applicable enterprise fund.
P. 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.
Q. Deferred Inflows of Resources
In addition to liabilities, the statement of net position and/or balance sheet 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 two types of items that qualify
for reporting in this category. First, unavailable revenue, which arises under a
modified accrual basis of accounting, 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. These
amounts are deferred and recognized as an inflow of resources in the period
the amounts become available. Second, deferred pension resources, which
arises under a full accrual basis of accounting, is reported only in the statement
of net position. These amounts are the result of actuarial calculations involving
net differences between projected and actuarial earnings on plan investments
and changes in proportion, and are deferred and recognized as an inflow of
resources in accordance with actuarial calculations.
R. Net Position
In the government-wide and proprietary fund financial statements, net position
represents the difference between assets and deferred outflows of resources,
and liabilities and deferred inflows of resources. Net position is displayed in
three components:
•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.”
S. 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.
•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 by the city council, which is the city’s highest
level of decision-making authority. Those committed amounts cannot
be used for any other purpose unless the city council modifies or
rescinds the commitment by resolution.
•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
37
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
an official to which the governing body delegates the authority.
Pursuant to city council resolution, the council, city 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.
T. 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 $641,853. The tax increment portion of the EDA Fund functions like a capital
projects fund with expenditures based on the life cycle of the tax increment
district.
U. 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.
V. Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses/expenditures during the reporting period. Actual results could differ
from those estimates.
W. Future Change in Accounting Standards
In February 2015 GASB issued Statement No. 72,Fair Value Measurement and
Application.This Statement provides guidance for determining fair value
measurement for financial reporting purposes and for applying fair value to
certain investments, and requires disclosures to be made about fair value
measurements, the level of fair value hierarchy, and valuation techniques.
Governments should organize these disclosures by type of asset or liability
reported at fair value. It also requires additional disclosures regarding
investments in certain entities that calculate net asset value per share (or its
equivalent). The requirements of this Statement are effective for the city’s fiscal
year ending December 31, 2016.
In June 2015 GASB issued Statement No. 74,Financial Reporting for
Postemployment Benefits Plans other than Pension Plans, and Statement No.
75,Accounting and Financial Reporting for Postemployment Benefits other than
Pensions. Both statements replace the requirements of GASB Statements
related to postemployment benefits other than pensions (OPEB). Statement No.
74 is intended to make the OPEB accounting and financial reporting consistent
with the pension standards outlined in Statement No. 67. It applies to OPEB
plans, and parallels Statement No. 67 and replaces Statement No. 43. This
statement is effective for the city’s fiscal year ending December 31, 2017.
Statement No. 75 is intended to make OPEB accounting and financial reporting
consistent with the pension standards outlined in Statement No. 68. This will
include recognizing a net OPEB liability in accrual basis financial statements. It
applies to government employers who provide OPEB plans to their employees.
It parallels Statement No. 68 and replaces Statement No. 45. This statement is
effective for the city’s fiscal year ending December 31, 2018.
GASB issued Statement No. 76,The Hierarchy of Generally Accepted
Accounting Principles for State and Local Governments, which supersedes
Statement No. 55. This statement is effective for the city’s fiscal year ending
December 31, 2016.
In August 2015, GASBissuedStatement No. 77,Tax Abatement Disclosures. The
Statement defines tax abatement agreement and requires certain disclosures
regarding the tax abatement in its financial statements. This statement is effective
for the city’s fiscal year ending December 31, 2017.
38
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
NOTE 2. CASH, CASH EQUIVALENTS, AND INVESTMENTS
A. Components of Cash and Investments
Cash and investments at year-end consist of the following:
Deposits 14,130,114$
Investments 20,278,572
Cash on hand 7,540
Total cash and investments – Statement of Net Position 34,416,226$
Cash and investments are reflected on the Statement of Net Position as follows:
Cash and investments – Statement of Net Position 34,416,226$
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 $14,130,114
while the balance on bank records was $14,259,649. All deposits were
covered by federal depository insurance, surety bonds, or by collateral held
by the city’s agent in the city’s name.
C. Cash on hand
Cash on hand consists of cash in the possession of the city, including petty cash
and change funds.
D. Investments
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.
39
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
Concentration Risk – This is the risk associated with investing a significant
portion of the city’s investment (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 Bexar County; Federal Home Loan Bank; and
Kane, Cook, and DuPage counties. These investments are 5.3 percent,
10.3 percent, and 5.5 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 regulated by Minnesota statutes and the Board of
Directors of the League of Minnesota Cities. The 4M Fund is not registered with
the Securities Exchange Commission (SEC), but it 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.
The following schedule provides information on credit and interest rate risks by
investment type for the city’s investments:
No Less More Percent of
Rating Agency Maturity Than 1 1 to 5 5 to 10 Than 10 Total Holdings
U.S. agency securities
Federal Farm Credit Bank AA+S&P -$-$-$474,912$-$474,912$2.3%
Federal Agriculture Mortgage
Corporation AA+S&P ----723,407 723,407 3.6%
Federal Home Loan Bank AA+S&P ---1,241,875 843,553 2,085,428 10.3%
Federal Home Loan Mortgage
Corporation AA+S&P ---375,379 -375,379 1.9%
Federal National Mortgage
Association AA+S&P ---248,737 507,660 756,397 3.7%
Negotiable certificates of deposit N/R N/A -3,213,499 5,072,366 1,438,302 -9,724,167 48.0%
Local government securities AAA S&P ----1,664,730 1,664,730 8.2%
Local government securities AA+S&P ----440,916 440,916 2.2%
Local government securities AA S&P ---297,633 -297,633 1.5%
Local government securities Aaa Moody’s ----2,419,399 2,419,399 11.9%
Local government securities Aa1 Moody’s ----554,030 554,030 2.7%
Local government securities Aa2 Moody’s ---100,266 -100,266 0.5%
Money market funds AAAm S&P 609,570 ----609,570 3.0%
4M Fund N/R N/A 52,338 ----52,338 0.3%
Total investments 661,908$3,213,499$5,072,366$4,177,104$7,153,695$20,278,572$100.0%
N/A – Not Applicable
N/R – Not Rated
Credit Risk Interest Risk – Maturity Duration in Years
Investment Type
40
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
NOTE 3. CAPITAL ASSETS
Capital asset activities for the year end December 31, 2015 are as follows:
January 1,Transfers and December 31,
Beginning Completed Ending Internal Service Governmental Internal Service Governmental
Balance Additions Deletions Construction Balance Fund Assets Funds Total Fund Additions Fund Additions
Governmental activities
Nondepreciable capital assets:
Land 13,825,156$241,761$(5,511,548)$-$8,555,369$-$8,555,369$-$241,761$
Construction in progress 1,742,073 1,412,386 (2,007)(1,887,996)1,264,456 -1,264,456 -1,412,386
Total capital assets, not depreciated 15,567,229 1,654,147 (5,513,555)(1,887,996)9,819,825 -9,819,825 -1,654,147
Depreciable capital assets:
Buildings and systems 90,748,030 --1,887,996 92,636,026 -92,636,026 --
Machinery and equipment 5,328,537 166,128 (69,342)-5,425,323 839,632 4,585,691 166,128 -
Total capital assets, depreciated 96,076,567 166,128 (69,342)1,887,996 98,061,349 839,632 97,221,717 166,128 -
Less accumulated depreciation for:
Buildings and systems (41,629,356)(3,872,879)--(45,502,235)-(45,502,235)-(3,872,879)
Machinery and equipment (3,712,627)(238,433)69,342 -(3,881,718)(103,173)(3,778,545)(63,569)(174,864)
Total accumulated depreciation (45,341,983)(4,111,312)69,342 -(49,383,953)(103,173)(49,280,780)(63,569)(4,047,743)
Net capital assets, depreciated 50,734,584 (3,945,184)-1,887,996 48,677,396 736,459 47,940,937 102,559 (4,047,743)
Total governmental activities 66,301,813$(2,291,037)$(5,513,555)$-$58,497,221$736,459$57,760,762$102,559$(2,393,596)$
Business-type activities
Nondepreciable capital assets:
Land 1,197,945$-$-$-$1,197,945$
Construction in progress 2,507,712 1,144,604 -(2,160,434)1,491,882
Total capital assets, not depreciated 3,705,657 1,144,604 -(2,160,434)2,689,827
Depreciable capital assets:
Buildings and systems 77,274,052 -(46,712)1,873,003 79,100,343
Machinery and equipment 2,549,969 26,683 (320,251)287,431 2,543,832
Total capital assets, depreciated 79,824,021 26,683 (366,963)2,160,434 81,644,175
Less accumulated depreciation for:
Buildings and systems (36,440,026)(1,978,304)--(38,418,330)
Machinery and equipment (1,734,100)(108,797)225,266 -(1,617,631)
Total accumulated depreciation (38,174,126)(2,087,101)225,266 -(40,035,961)
Net capital assets, depreciated 41,649,895 (2,060,418)(141,697)2,160,434 41,608,214
Total business-type activities 45,355,552$(915,814)$(141,697)$-$44,298,041$
41
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
Depreciation for the year ended December 31, 2015 was charged to
function/programs as follows:
Governmental activities
General government 40,127$
Public safety 71,306
Public works 3,423,313
Recreation and culture 512,997
Capital assets held by the City’s internal service funds –
charged to the various functions based on usage of assets 63,569
Total depreciation expense – governmental activities 4,111,312$
Business-type activities
Water 513,814$
Sewer 1,103,397
Liquor 46,923
FiberNet 419,782
Deputy registrar 3,185
Total depreciation expense – business-type activities 2,087,101$
NOTE 4. COMMITMENTS
During fiscal 2015, the city awarded contracts for various construction and
remodeling projects. The city’s commitments for uncompleted work on these
contracts at December 31, 2015 are approximately as follows:
Sewage Fund
Treatment plant upgrades $ 2,086,043
Capital Projects Fund
Street construction – School Blvd Overlay $ 169,141
NOTE 5. LONG-TERM LIABILITIES
A. Description
The city has the following types of long-term liabilities outstanding at December
31, 2015: general obligation (G.O.) bonds and certificates of indebtedness, special
assessment improvement bonds, Public Facilities Authority (PFA) loans,
compensated absences, net other post-employment benefits (OPEB) obligation,
and net pension liability.
•General Obligation Bonds – Three of the four outstanding general
obligation bond issues financed street improvement projects and
construction at the wastewater treatment plant. The fourth issue
financed a settlement with telecommunication revenue bondholders
and capital equipment purchases in the Central Equipment Fund.
•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.
•General Obligation Revenue Bonds – The two outstanding general
obligation revenue bond issues financed improvements to the city’s
sewer system. They will be repaid from revenues pledged and are
backed by the taxing power of the city. Net operating revenues were
$2,083,122 and principal and interest payments were $360,158 for a
percentage of revenues of 17.29%.
•PFA Loan – This loan was issued for improvements to the wastewater
treatment plant and is payable primarily from user fees which benefit
from the improvements.
•Compensated Absences – The city provides vacation and sick leave
benefits to certain eligible employees. The liability will be repaid by the
Benefit Accrual fund or respective enterprise fund for which each
employee is employed.
•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.
•Net Pension Liability – The city contributes to the Minnesota PERA
defined benefit retirement fund per Minnesota state statute. The liability
is a reflection of the City’s portion of the total net pension liability of the
PERA plan based on a percentage of contributions into the plan.
42
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
Long-term liabilities at year-end are summarized as follows:
Final
Interest Maturity Balance –
Original Issue Rate %Issue Date Date End of Year
Governmental activities
General obligation bonds
2008B Sewer revenue
refunding bond 9,270,000$3.00%04/17/2008 08/01/2018 2,968,000$
2014A General obligation bonds:
judgment portion 6,080,000 1.00 - 3.50 12/18/2014 12/15/2030 6,080,000
equipment portion 515,000 1.00 - 3.05 12/18/2014 12/15/2024 515,000
Other general obligation debt
2013A Certificate of indebtedness 500,000 0.35 - 2.10 04/26/2013 12/01/2020 325,000
Special assessments bonds
2007 Improvement bonds 5,137,903 4.00 12/27/2007 02/01/2018 1,649,653
2010A General obligation refunding
and improvement bonds 3,255,000 0.40 - 2.70 09/14/2010 02/01/2021 1,690,000
2011A General obligation refunding 10,735,000 2.00 - 3.00 10/19/2011 02/01/2023 5,745,000
2015B General obligation bonds 2,605,000 1.50 - 3.00 11/05/2015 12/15/2030 2,605,000
Net premiums (discounts) on bonds 190,196
Compensated absences payable 226,158
Net OPEB obligation 305,563
Net pension liability 1,887,162
Total governmental activities 24,186,732$
Business-type activities
General obligation revenue bonds
2007 Improvement bonds 907,097$4.00 12/27/2007 02/01/2018 290,347$
2013B Wastewater treatment bonds 3,000,000 2.00 - 3.35 12/05/2013 12/01/2028 2,640,000
Public Facility Authority loan (2015A) 2,391,483 1.06 09/23/2015 08/20/2025 615,268
Net premiums (discounts) on bonds 30,339
Compensated absences payable 77,919
Net pension liability 1,108,334
Total business-type activities 4,762,207$
B. Changes in Long-Term Liabilities
January 1,December 31, Due Within
2015 Additions Retirements 2015 One Year
Governmental activities
General obligation bonds 10,487,000$-$(924,000)$9,563,000$1,361,000$
Certificate of indebtedness 385,000 -(60,000)325,000 60,000
Special assessment bonds 12,203,653 2,605,000 (3,119,000)11,689,653 3,300,250
Revenue bonds 985,000 -(985,000)--
Add premiums on bonds 251,495 46,898 (82,462)215,931 -
Less discounts on bonds (184,145)-158,410 (25,735)-
Compensated absences 322,842 238,055 (334,739)226,158 86,865
Net OPEB obligation 283,561 35,817 (13,815)305,563 -
Net pension liability
GERF -1,887,162 *-1,887,162 -
Total governmental activities 24,734,406$4,812,932$(5,360,606)$24,186,732$4,808,115$
Business-type activities
General obligation revenue bonds 3,206,347$-$(276,000)$2,930,347$279,750$
PFA loans -615,268 -615,268 100,483
Add premiums on bonds 35,071 -(3,858)31,213 -
Less discounts on bonds (3,130)-2,256 (874)-
Compensated absences 108,136 95,385 (125,602)77,919 34,805
Net pension liability
GERF -1,108,334 *-1,108,334 -
Total business-type activities 3,346,424$1,818,987$(403,204)$4,762,207$415,038$
* Includes January 1, 2015 pension liability balance related to GASB Statement No. 68 implementation. See Notes 6
and 15 for further details.
43
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
C. Minimum Debt Payments
Minimum annual principal and interest payments to maturity for bonds payable
are as follows:
Year Ending
December 31,Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest
2016 1,361,000$268,725$60,000$5,250$3,300,250$259,624$279,750$76,643$100,483$6,830$
2017 1,394,000 231,899 65,000 4,590 1,666,250 193,493 273,750 69,173 109,000 24,353
2018 1,433,000 192,922 65,000 3,713 1,708,153 149,974 281,847 61,748 111,000 23,195
2019 415,000 160,609 65,000 2,673 820,000 119,555 185,000 56,098 112,000 22,015
2020 420,000 152,931 70,000 1,470 840,000 102,753 190,000 52,398 113,000 20,824
2021 - 2025 2,220,000 597,671 --2,380,000 264,200 1,025,000 195,683 69,785 10,277
2026 - 2030 2,320,000 246,699 --975,000 88,775 695,000 45,587 --
9,563,000$1,851,456$325,000$17,696$11,689,653$1,178,374$2,930,347$557,330$615,268$107,494$
Business-Type Activities
PFA Loan
Governmental Activities
General Obligation Bonds
General Obligation Special
General Obligation Bonds Certificate of Indebtedness Assessment Bonds
D. 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, 2015, 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, 2015 is undetermined.
E. 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 canceled 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, 2015 is $1,858,476. 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.
F. 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, 2015,
there are no amounts of arbitrage rebates.
44
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
G. Revenue Pledged
Future revenue pledged for the payment of long-term debt is as follows:
2008A Public 2013B G.O.
Project Revenue Wastewater
Refunding Bonds Treatment Bonds PFA Loan
Use of proceeds Community Center Sewage Fund Sewage Fund
Revenue pledged
Type User fees Utility charges Utility charges
Percent of total 100%81%19%
debt service
Term of pledge 2008-2015 2013-2028 2013-2025
Remaining principal
and interest -$3,179,960$722,762$
Current year
Principal and interest paid 1,000,760$250,598$-$
Pledged revenue received 1,401,024$1,663,154$378,012$
Description
NOTE 6. DEFINED BENEFIT PENSION PLANS – STATE-WIDE
A. Plan Description
The city participates in the General Employees Retirement Fund (GERF) cost-
sharing multiple-employer defined benefit pension plan administered by the Public
Employees Retirement Association of Minnesota (PERA). PERA’s defined benefit
pension plans are established and administered in accordance with Minnesota
Statutes, Chapters 353 and 356. PERA’s defined benefit pension plans are tax
qualified plans under Section 401 (a) of the Internal Revenue Code.
General Employees Retirement Fund (GERF)
All full-time and certain part-time employees of the city are covered by the General
Employees Retirement Fund (GERF). 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. The Basic Plan was closed to
newmembers in 1967. All new members must participate in the Coordinated Plan.
B. Benefits Provided
PERA provides retirement, disability, and death benefits. Benefit provisions are
established by state statute and can only be modified by the state legislature.
Benefit increases are provided to benefit recipients each January. Increases
are related to the funding ratio of the plan. Members in plans that are at least
90% funded for two consecutive years are given 2.5% increases. Members in
plans that have not exceeded 90% funded, or have fallen below 80%, are given
1% increases.
The benefit provisions stated in the following paragraph 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.
GERF Benefits
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% of
average salary for each of the first ten years of service and 2.7% for each
remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2%
of average salary for each of the first ten years and 1.7% for each remaining
year. Under Method 2, the annuity accrual rate is 2.7% of average salary for
Basic Plan members and 1.7% for Coordinated Plan members for each year of
service. For members hired prior to July 1, 1989, a full annuity is available when
age plus years of service equal 90 and normal retirement age is 65. For
members hired on or after July 1, 1989, normal retirement age is the age for
unreduced Social Security benefits capped at 66.
C. Contributions
Minnesota Statutes Chapter 353 sets the rates for employer and employee
contributions. Contribution rates can only be modified by the state legislature.
GERF Contributions
Basic Plan members and Coordinated Plan members were required to
contribute 9.1% and 6.50%, respectively, of their annual covered salary in
calendar year 2015. The citywas required to contribute 11.78% of pay for Basic
Plan members and 7.50% for Coordinated Plan members in calendar year 2015.
The city’s contributions to the GERF for the year ended December 31, 2015,
were $266,042. The city’s contributions were equal to the required contributions
as set by state statute.
45
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
D. Pension Costs
GERF Pension Costs
At December 31, 2015, the city reported a liability of $2,995,496 for its
proportionate share of the GERF’s net pension liability. The net pension liability
was measured as of June 30, 2015, and the total pension liability used to calculate
the net pension liability was determined by an actuarial valuation as of that date.
The city’s proportion of the net pension liability was based on the city’s
contributions received by PERA during the measurement period for employer
payroll paid dates from July 1, 2014, through June 30, 2015, relative to the total
employer contributions received from all of PERA’s participating employers. At
June 30, 2015, the [entity’s] proportion share was 0.0578% which was a decrease
of 0.0045 % from its proportion measured as of June 30, 2014.
For the year ended December 31, 2015, the city recognized pension expense of
$252,783 for its proportionate share of the GERF’s pension expense.
At December 31, 2015, the city reported its proportionate share of the GERF’s
deferred outflows of resources and deferred inflows of resources related to
pensions from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and
actual economic experience 29,942$151,024$
Changes in actuarial assumptions 184,386 -
Difference between projected and
actual investment earnings -266,654
Changes in proportion -182,605
Contributions paid to PERAsubsequent
to the measurement date 136,901 -
Total 351,229$600,283$
The $136,901 reported as deferred outflows of resources related to pensions
resulting from city contributions subsequent to the measurement date will be
recognized as a reduction of the net pension liability in the year ended December
31, 2016. Other amounts reported as deferred outflows and inflows of resources
related to pensions will be recognized in pension expense as follows:
Pension
Year ended Expense
December 31,Amount
2016 (116,561)$
2017 (116,561)
2018 (223,725)
2019 70,892
(385,955)$
E. Actuarial Assumptions
The total pension liability in the June 30, 2015, actuarial valuation was
determined using the following actuarial assumptions:
Inflation 2.75% per year
Active Member Payroll Growth 3.50% per year
Investment Rate of Return 7.90%
Salary increases were based on a service-related table. Mortality rates for
active members, retirees, survivors and disabilitants were based on RP-2000
tables for males or females, as appropriate, with slight adjustments. Cost of
living benefit increases for retirees are assumed to be: 1% effective every
January 1st until 2034, then 2.5% for GERF.
Actuarial assumptions used in the June 30, 2015, valuation were based on the
results of actuarial experience studies. The experience study in the GERF was
for the period July 1, 2004, through June 30, 2008, with an update of economic
assumptions in 2014. There were no changes in actuarial assumptions in 2015.
The long-term expected rate of return on pension plan investments is 7.9%. The
State Board of Investment, which manages the investments of PERA, prepares
an analysis of the reasonableness of the long-term expected rate of return on a
regular basis using a building-block method in which best-estimate ranges of
expected future rates of return are developed for each major asset class. These
ranges are combined to produce an expected long-term rate of return by
weighting the expected future rates of return by the target asset allocation
percentages.
46
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
The target allocation and best estimates of arithmetic real rates of return for each
major asset class are summarized in the following table:
Long-Term
Target Expected Real
Allocation Rate of Return
Domestic Stocks 45%5.50%
International Stocks 15%6.00%
Bonds 18%1.45%
Alternative Assets 20%6.40%
Cash 2%0.50%
Total 100%
Asset Class
F. Discount Rate
The discount rate used to measure the total pension liability was 7.9%. The
projection of cash flows used to determine the discount rate assumed that
employee and employer contributions will be made at the rate specified in statute.
Based on that assumption, each of the pension plan’s fiduciary net position was
projected to be available to make all projected future benefit payments of current
active and inactive employees. Therefore, the long-term expected rate of return
on pension plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
G. Pension Liability Sensitivity
The following presents the city’s proportionate share of the net pension liability for
all plans it participates in, calculated using the discount rate disclosed in the
preceding paragraph, as well as what the city’s proportionate share of the net
pension liability would be if it were calculated using a discount rate 1 percentage
point lower or 1 percentage point higher than the current discount rate:
1% Decrease 1% Increase
In Discount Discount In Discount
Rate (6.9%)Rate (7.9%)Rate (8.9%)
City's proportionate
share of the GERF
net pension liability 4,709,984$2,995,496$1,579,592$
H. Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available
in a separately-issued PERA financial report that includes financial statements
and required supplementary information. That report may be obtained on the
Internet at www.mnpera.org.
NOTE 7. DEFINED CONTRIBUTION PENSION PLANS – STATE-
WIDE
Three Council members of the city are covered by the Public Employees
Defined Contribution Plan (PEDCP), a multiple-employer deferred
compensation plan administered by PERA. The PEDCP is a tax qualified plan
under Section 401(a) of the Internal Revenue Code and all contributions by or
on behalf of employees are tax deferred until time of withdrawal.
Plan benefits depend solely on amounts contributed to the plan plus investment
earnings, less administrative expenses. Minnesota Statutes, Chapter 353D.03,
specifies plan provisions, including the employee and employer contribution
rates for those qualified personnel who elect to participate. An eligible elected
official who decides to participate contributes 5% of salary which is matched by
the elected official's employer. Employer and employee contributions are
combined and used to purchase shares in one or more of the seven accounts
of the Minnesota Supplemental Investment Fund. For administering the plan,
PERA receives 2% of employer contributions and twenty-five hundredths of 1%
(.0025) of the assets in each member's account annually.
Total contributions made by the city during fiscal year 2015 were:
Required
Employee Employer Employee Employer Rate
1,140$1,140$5.00%5.00%5.00%
Contribution Amount % of Covered Payroll
NOTE 8. DEFINED BENEFIT PENSION PLAN - MONTICELLO FIRE
RELIEF ASSOCIATION
A. Plan Description
All members of the Monticello Fire Department (the Department) are covered
by a defined benefit contribution plan administered by the Monticello Fire Relief
Association (the Association). As of December 31, 2015, the plan covered 29
47
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
active firefighters and 3 retirees and beneficiaries. The plan is a single-employer
retirement plan that is established and administered in accordance with Minnesota
Laws 1965, chapter 446, as amended and Minnesota statute, chapters 69 and
424A.
The Association maintains a separate Special fund to accumulate assets to fund
the retirement benefits earned by the Department’s membership. Funding for the
Association is derived from contributions from the city and 2% fire aid from the
State of Minnesota. Funds are also derived from investment income.
B. Benefits Provided
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 $3,300 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 $3,300 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.
C. Contributions
Minnesota statutes, chapters 424 and 424A authorize pension benefits for
volunteer fire relief associations.Contributions by the city are determined 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 plan is funded by fire state aid, investment earnings and, if necessary,
employer contributions as specified in Minnesota statutes and voluntary City
contributions (if applicable). The State of Minnesota contributed $108,186 in fire
state aid to the plan on behalf of the City Fire Department for the year ended
December 31, 2015, which was recorded as a revenue. Required employer
contributions are calculated annually based on statutory provisions. The City’s
statutorily-required contributions to the plan for the year ended December 31,
2015 were $108,186. The City’s contributions were equal to the required
contributions as set by state statute. The City made no voluntary contributions
to the plan. Furthermore, the firefighter has no obligation to contribute to the
plan.
D. Pension Costs
At December 31, 2015, the city reported a net pension asset of $9,325 for the
FRA plan. The total pension liability used to calculate the net pension asset in
accordance with GASB 68 was determined by Robinson Associates LLC
applying an actuarial formula to specific census data certified by the fire
department as of December 31, 2015.
For the year ended December 31, 2015, the Fire Department recognized
pension expense of $66,003.
At December 31, 2015, the fire department reported deferred outflows/inflows
of resources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Net difference between projected
and actual investment earnings 48,839$-$
48
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
Amounts reported as deferred outflows and inflows of resources related to
pensions will be recognized in pension expense as follows:
Pension
Year ended Expense
December 31,Amount
2016 12,210$
2017 12,210
2018 12,210
2019 12,209
48,839$
E. Actuarial Assumptions
The total pension liability at December 31, 2015, was determined using the entry
age normal actuarial cost method and the following assumptions:
Retirement eligibility at 100 percent service pension at age 50 and 20 years of
service, early vested retirement at age 50 with 10 years of service vested at 60
percent and increased by 4 percent for each additional year of service up to 20
and eligibility for deferred service pension payable at age 50 and 20 years of
service.
SalaryIncreases 2.00% per year
Cost of living increases 2.00% per year
Investment rate of return 4.19%
20 year municipal bond yield 3.57%
There were no changes in actuarial assumptions in 2015.
The 4.19 percent long-term expected rate of return on pension plan investments
was determined using a building-block method in which best estimates for
expected future real rates of return (expected returns, net of inflation) were
developed for each asset class using the plan’s target investment allocation
along with long-term return expectations by asset class. Inflation expectations
were applied to derive the nominal rate of return for the portfolio.
The target allocation and best estimates of arithmetic real rates of return for
each major asset class are summarized in the following table:
Long-term
Target Expected Real
Allocation Rate of Return
Cash 6.5%-0.7%
Mutual funds 93.5%3.8%
100.0%
Asset Class
F. Discount Rate
The discount rate used to measure the total pension liability was 4.19 percent.
The projection of cash flows used to determine the discount rate assumed that
contributions to the FRA plan will be made as specified in statute. Based on that
assumption and considering the funding ratio of the plan, the fiduciary net
position was projected to be available to make all projected future benefit
payments of current active and inactive members. Therefore, the long-term
expected rate of return on pension plan investments was applied to all periods
of projected benefit payments to determine the total pension liability.
G. Changes in the Net Pension Liability
Total Plan Net Pension
Pension Fiduciary Liability
Liability Net Position (Asset)
(a)(b)(a-b)
Beginning balance 12/31/14 1,026,005$1,053,739$(27,734)$
Changes for the year
Service cost 77,343 -77,343
Interest on total pension liability 41,888 -41,888
Contributions from employer -120,027 (120,027)
Supplemental benefits reimbursed -2,000 (2,000)
Net investment income -(17,673)17,673
Benefit payments (128,101)(128,101)-
Administrative expenses -(3,532)3,532
Ending balance 12/31/15 1,017,135$1,026,460$(9,325)$
49
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
H. Pension Asset Sensitivity
The following presents the city’s net pension (liability) asset for the FRA plan,
calculated using the discount rate disclosed in the preceding paragraph, as well
as what the city’s net pension (liability) asset would be if it were calculated using
a discount rate 1 percent lower or 1 percent higher than the current discount rate:
1% Decrease 1% Increase
In Discount Discount In Discount
Rate (3.19%)Rate (4.19%)Rate (5.19%)
Net Pension
Asset (Liability)(19,611)$9,325$37,068$
I. Pension Plan Fiduciary Net Position
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.
NOTE 9. 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:
ARC 40,874$
Interest on net OPEB obligation 11,342
Adjustment to ARC (16,399)
Annual OPEB cost (expense)35,817
Less contribution made 13,815
Increase in net OPEB obligation 22,002
Net OPEB obligation – beginning of year 283,561
Net OPEB obligation – end of year 305,563$
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:
Percentage
Fiscal Year Beginning Annual of Annual
Beginning OPEB OPEB Employer OPEB Cost Net OPEB
January 1, Obligation Cost Contribution Contributed Obligation
2013 215,663$57,761$17,820$30.9%255,604$
2014 255,604$34,718$6,761$19.5%283,561$
2015 283,561$35,817$13,815$38.6%305,563$
50
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
D. Funded Status and Funding Progress
As of January 1, 2014, the most recent actuarial valuation date, the plan was zero
percent funded. The actuarial accrued liability for benefits was $265,486 and the
actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability
(UAAL) of $265,486. The covered payroll (annual payroll of active employees
covered by the plan) was $3,914,601, and the ratio of the UAAL to the covered
payroll was 6.78 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.
The city’s net OPEB obligation is typically liquidated using the General fund.
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, 2014 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
city has chosen to amortize the entire UAAL as a level dollar amount over a 30
year open period. This method will re-amortize the UAAL each year over 30 years.
Absent actuarial gains, the UAAL will never be fully recognized under this method.
NOTE 10. RISK MANAGEMENT AND LITIGATION
The city is exposed to various risks of losses related to torts; theft of, damage
to, and destruction of assets; errors and omissions; injuries to employees; and
natural disasters. For the past several years, the city has obtained insurance
coverage from various trusts administered by the League of Minnesota Cities.
Additionally, the city has effectively managed risk through various employee
education and prevention programs.
All risk management activities are accounted for in the appropriate fund.
Expenditures and claims are recognized when it is probable that a loss has
occurred, the amount of the loss can be reasonably estimated, and the loss
amount exceeds insurance coverage. In determining claims, events that might
create claims, but for which none have been reported, are considered.
The city attorney estimates that the amount of actual or potential claims against
the city as of December 31, 2015 will not materially affect the financial condition
of the city.
Workers compensation coverage is provided through the League of Minnesota
Cities Insurance Trust (LMCIT). This is a group self-insured workers’
compensation plan. Nearly every municipality in Minnesota participates in the
plan. The city has never had to contribute any additional funds beyond the
annual standard premium and deductibles, which is $2,500 per occurrence. The
city’s annual premium reflects a base rate multiplied by an experience
modification of 69%.
The city provides health benefit coverage to all full-time employees and certain
part-time employees who meet personnel policy set criteria. The city pays a
portion of the premium, which is set annually by council action, and is not
obligated to make any other payments.
The city also purchases property, vehicle, liability and various other insurance
coverages from the LMCIT. The standard deductible for most claims is $1,000.
State statute sets tort limits for most liability claims at $500,000 per individual
and $1,500,000 for all claimants for one incident. Annually, the council can
waive the tort limits, but has chosen not to without exception. The city
periodically receives a dividend from LMCIT and has never had to contribute
additional funds beyond premiums and deductibles.
There were no significant reductions in insurance coverages from the previous
year and there were no settlements in excess of insurance coverage in each of
the past three years.
51
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
NOTE 11. FUND BALANCES
Classifications
At December 31, 2015, a summary of the city’s governmental fund balance classifications are as follows:
Economic Debt
General Community Development Service Capital Nonmajor
Fund Center Authority Fund Projects Funds Total
Nonspendable
Prepaid items 113,302$19,469$869$-$-$1,259$134,899$
Land held for resale --2,473,957 -1,764,189 -4,238,146
Total nonspendable 113,302 19,469 2,474,826 -1,764,189 1,259 4,373,045
Restricted
Debt service ---5,382,214 --5,382,214
Economic development --1,342,354 --1,120,762 2,463,116
Perpetual care -----32,388 32,388
Tax increment --742,187 ---742,187
Total restricted --2,084,541 5,382,214 -1,153,150 8,619,905
Assigned
Capital improvements ----3,628,024 4,868,311 8,496,335
Economic development --2,003,498 ---2,003,498
Community center operations -609,973 ----609,973
Total assigned -609,973 2,003,498 -3,628,024 4,868,311 11,109,806
Unassigned 4,873,494 -----4,873,494
Total 4,986,796$629,442$6,562,865$5,382,214$5,392,213$6,022,720$28,976,250$
Special Revenue Funds
52
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
NOTE 12. CONCENTRATION OF REVENUES
Cargill Kitchen solutions is the largest customer of water and sewage services.
The company’s water purchases account for $69,127, or 6.1 percent, of Water
Fund operating revenue; and the company’s sewage charges account for
$315,472, or 15.1 percent, of Sewage Fund operating revenue. Additionally,
Northern States Power Company’s (Xcel Energy) net tax capacity for property
taxes payable in 2015 is $14,453,109, or 58.6 percent, of the total net capacity of
$24,646,698. Accordingly, Xcel Energy’s share of the $8.535 million city property
tax levy is $5.16 million. The tax capacity on January 1, 2015, is based on market
values certified to the state on January 1, 2014. In both 2013 and 2014, Xcel
Energy uprated energy producing assets at its Monticello nuclear plant, increasing
the company’s net tax capacity to $15,913,229, or 61.5 percent, of the
$25,891,898 total tax capacity for taxes payable in 2016.
NOTE 13. CLAIMS AND JUDGMENTS
The city participates in a number of federal and state programs that are fully or
partially funded by grants received from other governmental units. Expenditures
financed by grants are subject to audit by the appropriate grantor government. If
expenditures are disallowed due to noncompliance with grant program
regulations, the city may be required to reimburse the grantor government.
As of December 31, 2015, significant amounts of grant expenditures have not
been audited by the granting agency, but the city believes that disallowed
expenditures discovered in subsequent audits, if any, will not have a material
effect on any of the individual funds or the overall financial position of the city.
NOTE 14. CHANGE IN ACCOUNTING STANDARDS
The city implemented several new accounting pronouncements issued by the
Governmental Accounting Standards Board (GASB), including State No. 68,
Accounting and Financial Reporting for Pension – an Amendment of GASB
Statement No. 27 and Statement No. 71,Pension Transition for Contributions
Made Subsequent to the Measurement Date – an Amendment of GASB
Statement No. 68, for the year ended December 31, 2015. These standards
required a retroactive implementation which resulted in the restatement of
beginning balances in the December 31, 2014 financial statements. Changes
related to these standards are reflected in the financial statements and schedules
and related disclosures are included in Notes 6 and 8.
As a result of the restatement of beginning balances, the following schedule
reconciles the previously reported December 31, 2014 balances to the
December 31, 2015 financial statements:
Net Position
December 31,Net Position
2014 January 1,
as Previously 2015
Reported (1) Restatement as Restated
Governmental activities 73,499,780$(2,019,396)$71,480,384$
Proprietary funds
Water 14,901,305$(129,976)$14,771,329$
Sewage 20,761,130 (162,471)20,598,659
Liquor 987,433 (357,435)629,998
Fiber Optics 14,198,557 (357,435)13,841,122
Deputy Registrar 380,876 (194,965)185,911
Internal service funds
proprietary portion 9,915 -9,915
Total business-type activities 51,239,216$(1,202,282)$50,036,934$
(1) To record the beginning net pension liability and deferred outflows/inflows of
resources at December 31, 2014.
Activities/Fund
In January 2014 GASB issued Statement No. 69,Government Combinations
and Disposals of Government Operations.It establishes accounting related to
government combinations and disposals of government operations.
Government combinations include mergers, acquisitions, and transfers of
operations. Statement No. 69 also establishes the required financial statement
disclosure for government combinations and disposals of government
operations. The implementation of this Statement did not have a significant
impact on the city’s financial statements.
NOTE 15. SPECIAL ITEM: CONTRIBUTION OF LAND TO COUNTY
The city and Wright County have been jointly acquiring parcels of land located
around the Bertram Chain of Lakes since 2008. In 2015, the city and county
made an agreement regarding which parcels of land each entity would be in
charge of maintaining. Because the county would be maintaining parcels that
the city and county owed jointly but were recorded on the city’s financial
statements, the city contributed those parcels to the county in the amount of
$5,511,547.
53
Notes to the Financial Statements
December 31, 2015 CITY OF MONTICELLO
NOTE 16. INTERFUND TRANSFERS
Interfund transfers for the year ended December 31, 2015 consisted of the
following:
Transfers In Transfers Out
Governmental funds:
General Fund -$297,012$
Community Center -1,029,046
Economic Development Authority 94,900 -
Debt Service 3,306,045 5,872
Capital Projects 5,872 855,000
Nonmajor governmental 855,000 -
Internal service 226,158 -
Total governmental funds 4,487,975 2,186,930
Enterprise funds:
Water -790,958
Sewage -1,510,087
Liquor -450,000
Fiber Optics 450,000 -
Total enterprise funds 450,000 2,751,045
Total 4,937,975$4,937,975$
The following schedule reflects each fund transfer:
Transfers Out Amount
Economic Development Authority General 94,900 (1)
Debt Service Community Center 1,005,000 (2)
Water 790,958 (2)
Sewage 1,510,087 (2)
Capital Projects Debt Service 5,872 (3)
Nonmajor governmental Capital Projects 855,000 (4)
Fiber Optics Liquor 450,000 (5)
Internal service General 202,112 (6)
Community Center 24,046 (6)
Total 4,937,975$
(1) Annual transfer to subsidize fund operations.
(2) Transfer for principal and interest payments on various debt issues.
(3) Transfer to close out portion of debt service fund attributable to the
2008A bond, which was paid off in 2015.
(4) Transfer for land acquisition and park development.
(5) Transfer to subsidize fund operating and capital expenditures.
(6) Transfer to set up internal service fund for benefit accruals.
Transfers In
54
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF MONTICELLO
Required Supplementary Information
Schedules of Employer's Share of Net Pension Liability
Last Ten Fiscal Years
Fiscal Year Ending
June 30,
Employer's
Proportion
(Percentage) of the
Net Pension Liability
Employer's Proportionate
Share (Amount) of the Net
Pension Liability
(a)
Employer's
Covered Payroll
(b)
Employer's Proportionate
Share of the Net Pension
Liability as a Percentage of its
Covered Payroll
(a/b)
Plan Fiduciary Net Position as
a Percentage of the Total
Pension Liability
2015 0.0578%$2,995,496 $3,395,756 88.21%78.2%
Fiscal Year Ending
December 31,
Employer's
Proportion
(Percentage) of the
Net Pension Liability
Employer's Proportionate
Share (Amount) of the Net
Pension Liability (Asset)
(a)
Employer's
Covered Payroll*
(b)
Employer's Proportionate
Share of the Net Pension
Liability as a Percentage of its
Covered Payroll
(a/b)
Plan Fiduciary Net Position as
a Percentage of the Total
Pension Liability
2015 100.0%($9,325)N/A N/A 100.9%
* The Monticello Volunteer Firemen's Relief Association is comprised of volunteers; therefore there are no payroll expenditures (i.e. there are no covered payroll percentage
calculations).
* This schedule is provided prospectively beginning with the fiscal year ended December 31, 2015.
**For purposes of this schedule, covered payroll is defined as "pensionable wages."
Public Employees Retirement Association - General Employees Retirement Fund
Monticello Fire Department Relief Association
55
CITY OF MONTICELLO
Required Supplementary Information
Schedules of Employer's Pension Contributions
Last Ten Fiscal Years
Fiscal Year Ending
December 31,
Statutorily Required
Contributions
(a)
Contributions in
Relation to the
Statutorily Required
Contributions
(b)
Contribution Deficiency
(Excess)
(a-b)
Employer's Covered
Payroll**
(c)
Contributions as a
Percentage of Covered
Payroll
(b/c)
2015 266,042$266,042$-$3,547,217$7.5%
Fiscal Year Ending
December 31,
Statutorily Determined
Contributions
(a)
Actual Contributions
Paid
(b)
Contribution
Deficiency (Excess)
(a-b)
2014 120,027$120,027$-$
2015 108,186 108,186 -
* This schedule is presented prospectively beginning with the fiscal year ended December 31, 2015.
**For purposes of this schedule, covered payroll is defined as "pensionable wages."
Public Employees Retirement Association - General Employees Retirement Fund
Monticello Fire Department Relief Association
56
CITY OF MONTICELLO
Required Supplementary Information
Schedule of Changes in the Fire Relief Association's Net Pension
Liability (Asset) and Related Ratios
2015
Total pension liability
Service cost 77,343$
Interest 41,888
Benefit payments, including refund of member contributions (128,101)
Net change in total pension liability (8,870)
Total pension liability - beginning 1,026,005
Total pension liability - ending (A)1,017,135
Plan fiduciary net position
Contributions - State 122,027$
Contributions - Municipal -
Net investment income (17,673)
Benefit payments, including refund of member contributions (128,101)
Administrative expenses (3,532)
Net change in plan fiduciary net position (27,279)
Plan fiduciary net position - beginning 1,053,739
Plan fiduciary net position - ending (B)1,026,460
Net pension liability (asset) - ending (A)-(B)(9,325)
Plan fiduciary net position as a percentage of the total pension liability 100.92%
Covered payroll*N/A
Net pension liability as a percentage of covered payroll*N/A
Notes to Schedule:
This schedule is built prospectively until it contains ten years of data.
*The Association is comprised of volunteers, therefore, there are no payroll expenditures (i.e., there are no covered payroll percentage calculations)
57
CITY OF MONTICELLO
Required Supplementary Information
Schedule of Funding Progress
Unfunded Unfunded
Actuarial Actuarial Actuarial Actuarial Liability as a
Valuation Date Accrued Value of Accrued Funded Covered Percentage
January 1,Liability Plan Assets Liability Ratio Payroll of Payroll
2008 302,787$-$302,787$-- %3,080,457$9.83%
2011 362,290 -362,290 -- %3,108,685 11.65%
2014 265,486 -265,486 -- %3,914,601 6.78%
City of Monticello Other Post-Employment Benefits Plan
58
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59
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - General Fund
For the Year Ended December 31, 2015
101
Orginal and Final Variance with
Budget Actual Final Budget
Revenues
Property taxes 5,901,500$5,906,255$4,755$
Franchise taxes 217,000 216,500 (500)
Special assessments 300 1,330 1,030
Licenses and permits 321,180 461,049 139,869
Intergovernmental 299,177 354,679 55,502
Charges for services 267,761 349,601 81,840
Fines and forfeitures 42,100 42,474 374
Investment earnings 101,500 64,037 (37,463)
Other revenues 95,482 241,721 146,239
Total revenues 7,246,000 7,637,646 391,646
Expenditures:
Current
General government
Mayor and council 53,925 52,572 (1,353)
City administration 305,153 312,491 7,338
Elections 3,093 2,979 (114)
Finance 405,558 377,867 (27,691)
Audit 43,000 37,798 (5,202)
City assessing 52,115 50,466 (1,649)
Legal 37,000 36,946 (54)
Human resources 116,631 117,249 618
Planning and zoning 203,320 244,976 41,656
Information technology services 46,829 19,872 (26,957)
City hall 208,078 198,915 (9,163)
Prairie center building 19,080 13,327 (5,753)
Public safety
Law enforcement 1,175,815 1,174,439 (1,376)
Fire and rescue 266,011 309,970 43,959
Fire relief 80,000 120,027 40,027
Building inspections 304,452 304,858 406
Civil defense 3,856 1,500 (2,356)
Animal control 50,724 48,754 (1,970)
National Guard 17,050 13,438 (3,612)
(continued)
60
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - General Fund
For the Year Ended December 31, 2015 (Continued)
Orginal and Final Variance with
Budget Actual Final Budget
Expenditures (continued)
Public works
Public works administration 123,580$124,504$924$
Engineering 169,508 110,555 (58,953)
Public works inspecitons 96,952 32,084 (64,868)
Streets and alleys 876,407 737,836 (138,571)
Ice and snow removal 250,684 263,020 12,336
Shop and garage 194,810 185,837 (8,973)
Stormwater 73,168 26,712 (46,456)
Parking lots 9,403 2,030 (7,373)
Street lighting 229,500 226,485 (3,015)
Sanitation
Refuse and recycling collection 588,291 563,477 (24,814)
Transit
Bus service 40,000 40,000 -
Recreation and culture
Community celebrations 3,300 2,199 (1,101)
Senior center 99,922 97,115 (2,807)
Park operations 803,325 706,934 (96,391)
Park ballfields 32,800 16,971 (15,829)
Shade tree 58,628 104,990 46,362
Library 39,962 36,176 (3,786)
Total expenditures 7,081,930 6,715,369 (366,561)
Excess (deficiency) of revenues over expenditures 164,070 922,277 758,207
Other financing sources (uses)
Sale of capital assets -30,473 30,473
Transfers out (164,070)(297,012)(132,942)
Total other financing sources (uses)(164,070)(266,539)(102,469)
Net change in fund balance -655,738 655,738
Fund balance at beginning of year 4,331,058 4,331,058 -
Fund balance at end of year 4,331,058$4,986,796$655,738$
61
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - Community Center Fund
For the Year Ended December 31, 2015
226
Orginal and Final Variance with
Budget Actual Final Budget
Revenues
Property taxes 1,363,000$1,363,000$-$
Charges for services 1,405,550 1,401,024 (4,526)
Investment earnings 2,500 (1,544)(4,044)
Other revenues 37,000 32,827 (4,173)
Total revenues 2,808,050 2,795,307 (12,743)
Expenditures
Current
Recreation and culture
Community center operations 1,626,247 1,472,593 (153,654)
Community center programming 151,821 97,463 (54,358)
Ballfields 24,982 7,587 (17,395)
Total expenditures 1,803,050 1,577,643 (225,407)
Excess (deficiency) of revenues over expenditures 1,005,000 1,217,664 212,664
Other financing sources (uses)
Transfers out (1,005,000)(1,029,046)(24,046)
Total other financing sources (uses)(1,005,000)(1,029,046)(24,046)
Net change in fund balance -188,618 188,618
Fund balance at beginning of year 440,824 440,824 -
Fund balance at end of year 440,824$629,442$188,618$
62
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - Economic Development Authority Fund
For the Year Ended December 31, 2015
213
Orginal and Final Variance with
Budget Actual Final Budget
Revenues
Tax increments 641,437$727,617$86,180$
Intergovernmental -11,875 11,875
Charges for services -1,250 1,250
Investment earnings 65,000 52,034 (12,966)
Other revenues 1,750 622 (1,128)
Total revenues 708,187 793,398 85,211
Expenditures
Current
Economic development
General operations 116,150 135,487 19,337
Land held for resale adjustment -745,800 745,800
Developmental activities 479,104 355,820 (123,284)
Total expenditures 595,254 1,237,107 641,853
Excess (deficiency) of revenues over expenditures 112,933 (443,709)(556,642)
Other financing sources
Transfers in 94,900 94,900 -
Net change in fund balance 207,833 (348,809)(556,642)
Fund balance at beginning of year 6,911,674 6,911,674 -
Fund balance at end of year 7,119,507$6,562,865$(556,642)$
63
Notes to the Required Supplementary Information
December 31, 2015 CITY OF MONTICELLO
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
Monticello Community Center.
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.
64
NONMAJOR GOVERNMENTAL FUNDS
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS are used to account for revenue derived from specific taxes or other earmarked revenue sources (other than for
major capital projects) that are restricted by law or administrative action to expenditures for specified purposes.
Minnesota Investment Fund - Established to account for the administration of loans to local businesses while following state and federal
guidelines.
Cemetery Fund – Established to account for the activities of cemetery operations. The city maintains two cemeteries: Riverside and Hillside.
CDBG Revitalization Fund – Established to account for funding and activities for the CDBG Revitalization Grant.
CAPITAL PROJECTS FUNDS are used to account for resources used for the acquisition and construction of capital assets by the city, except for
those financed by proprietary funds.
Storm Sewer Access Fund – This fund was established to account for fees collected from building permits for new construction and lot
development. The fees will finance major improvements to the city’s storm sewer system.
City Street Reconstruction Fund – This fund was established to account for annual improvements to the city’s infrastructure based on a
reconstruction schedule.
Street Lighting Improvement Fund – This fund was established to account for activities incorporating street lighting into designated areas
throughout the city. A portion of the city’s electric franchise fee is the main revenue source for this fund.
Park and Pathway Dedication Fund – This fund was established to account for restricted fees collected from developers for park land acquisition
and for park and pathway improvements. The fund also accumulates resources from other sources used for the same purposes.
CITY OF MONTICELLO
Combining Balance Sheet
Nonmajor Governmental Funds
220 651 214 263 212 245 229
221 City Street Street Park &
Minnesota CDBG -Storm Sewer Recon-Lighting Pathway
Investment Cemetery Revitalization Access struction Improvement Dedication Total
ASSETS
Cash and investments 1,120,404$32,888$358$1,174,049$1,775,943$610,649$1,151,830$5,866,121$
Receivables
Accounts receivable -----4,180 -4,180
Due from other governmental units -----67,860 100,000 167,860
Notes receivable --129,279 ----129,279
Prepaid items -1,259 -----1,259
Total assets 1,120,404$34,147$129,637$1,174,049$1,775,943$682,689$1,251,830$6,168,699$
LIABILITIES
Accounts and contracts payable -$500$-$-$-$1,029$15,171$16,700$
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - notes receivable --129,279 ----129,279
FUND BALANCES
Nonspendable -1,259 -----1,259
Restricted for economic development 1,120,404 -358 ----1,120,762
Restricted for perpetual care -32,388 -----32,388
Assigned for capital improvements ---1,174,049 1,775,943 681,660 1,236,659 4,868,311
Total fund balances 1,120,404 33,647 358 1,174,049 1,775,943 681,660 1,236,659 6,022,720
Total liabilities, deferred inflows of
resources, and fund balances 1,120,404$34,147$129,637$1,174,049$1,775,943$682,689$1,251,830$6,168,699$
Special Revenue Funds Capital Project Funds
December 31, 2015
65
CITY OF MONTICELLO
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
Nonmajor Governmental Funds
For the Year Ended December 31, 2015
220 651 214 263 212 245 229
221 City Street Street Park &
Minnesota CDBG -Storm Sewer Recon-Lighting Pathway
Investment Cemetery Revitalization Access struction Improvement Dedication Total
Revenues:
Franchise taxes -$-$-$-$-$80,119$-$80,119$
Special assessments ------112,408 112,408
Intergovernmental ------207,929 207,929
Charges for services -26,394 -285,251 ---311,645
Investment earnings 15,715 460 (30)15,399 24,910 12,220 15,224 83,898
Total revenues 15,715 26,854 (30)300,650 24,910 92,339 335,561 795,999
Expenditures:
Current
Public works ---322 ---322
Recreation and culture -25,256 ----55,707 80,963
Capital outlay
Public works -----333,559 -333,559
Recreation and culture ------636,528 636,528
Total expenditures -25,256 -322 -333,559 692,235 1,051,372
Excess (deficiency) of
revenues over expenditures 15,715 1,598 (30)300,328 24,910 (241,220)(356,674)(255,373)
Other financing sources
Transfers in ------855,000 855,000
Net change in fund balance 15,715 1,598 (30)300,328 24,910 (241,220)498,326 599,627
Fund balance at begining of year 1,104,689 32,049 388 873,721 1,751,033 922,880 738,333 5,423,093
Fund balance at end of year 1,120,404$33,647$358$1,174,049$1,775,943$681,660$1,236,659$6,022,720$
Special Revenue Funds Capital Project Funds
66
INTERNAL SERVICE FUNDS
INTERNAL SERVICE FUNDS
INTERNAL SERVICE FUNDS are used to account for the financing of centralized services to city departments on a cost-reimbursement basis
(including depreciation).
Benefit Accrual Fund – This fund was established to account for resources accumulated to satisfy paid-time-off (PTO) and sick leave liabilities of
governmental employees.
Central Equipment Fund – This fund was established to account for equipment purchase and rental to various governmental fund departments.
Information Technology (IT) Services Fund – This fund was established to account for the accumulation and distribution of various IT related
costs, including communications, software support, capital and non-capital equipment, and software purchases.
CITY OF MONTICELLO
Combining Statement of Net Position
Internal Service Funds
December 31, 2015
704 703 702
Benefit Central IT
Accrual Equipment Services Total
ASSETS
Current assets
Cash and investments 226,158$848,728$108,600$1,183,486$
Prepaid items --26,874 26,874
Total current assets 226,158 848,728 135,474 1,210,360
Noncurrent assets
Capital assets
Machinery and equipment -822,619 17,013 839,632
Less accumulated depreciation -(94,736)(8,437)(103,173)
Total noncurrent assets -727,883 8,576 736,459
TOTAL ASSETS 226,158 1,576,611 144,050 1,946,819
LIABILITIES
Current liabilities
Accounts payable -20,805 12,723 33,528
Accrued interest payable -897 -897
Bonds payable due within one year -115,000 -115,000
Compensated absences due within one year 86,865 --86,865
Total current liabilities 86,865 136,702 12,723 236,290
Noncurrent liabilities
Bonds payable, net current portion -725,000 -725,000
Compensated absences payable 139,293 --139,293
Total noncurrent liabilities 139,293 725,000 -864,293
TOTAL LIABILITIES 226,158 861,702 12,723 1,100,583
NET POSITION
Net investment in capital assets -(112,117)8,576 (103,541)
Unrestricted -827,026 122,751 949,777
TOTAL NET POSITION -$714,909$131,327$846,236$
67
CITY OF MONTICELLO
Combining Statement of Revenues, Expenses and Changes in Net Position
Internal Service Funds
For the Year Ended December 31, 2015
704 703 702
Benefit Central IT
Accrual Equipment Services Total
Operating revenues
Charges to other funds -$142,800$278,101$420,901$
Operating expenses
Personal services 226,158 --226,158
Materials and supplies --18,582 18,582
Other services and charges --196,834 196,834
Depreciation -60,166 3,403 63,569
Total operating expenses 226,158 60,166 218,819 505,143
Operating income (loss)(226,158)82,634 59,282 (84,242)
Nonoperating revenues (expenses)
Investment earnings -15,357 1,252 16,609
Interest expense -(16,193)-(16,193)
Total nonoperating revenues (expenses)-(836)1,252 416
Income (loss) before transfers (226,158)81,798 60,534 (83,826)
Transfers in 226,158 --226,158
Change in net position -81,798 60,534 142,332
Net position at beginning of year -633,111 70,793 703,904
Net position at end of year -$714,909$131,327$846,236$
68
CITY OF MONTICELLO
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended December 31, 2015
704 703 702
Benefit Central IT
Accrual Equipment Services Total
Cash flow from operating activities
Cash received from internal customers -$142,800$278,101$420,901$
Cash paid to suppliers for goods and services --(253,458)(253,458)
Net cash provided by operating activities -142,800 24,643 167,443
Cash flows from noncapital financing activities
Transfers from other funds 226,158 --226,158
Net cash provided (used) by noncapital financing activities 226,158 --226,158
Cash flows from capital and related financing activities
Acquisition of capital assets -(218,658)-(218,658)
Principal payments on long-term debt -(60,000)-(60,000)
Interest and fiscal charges paid on long-term debt -(16,678)-(16,678)
Net cash (used) by capital and related financing activities -(295,336)-(295,336)
Cash flows from investing activities
Interest on investments -15,357 1,252 16,609
Net cash provided by investing activities -15,357 1,252 16,609
Increase (decrease) in cash and cash equivalents 226,158 (137,179)25,895 114,874
Cash and cash equivalents - January 1 -985,907 82,705 1,068,612
Cash and cash equivalents - December 31 226,158$848,728$108,600$1,183,486$
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)(226,158)$82,634$59,282$(84,242)$
Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided by Operating Activities:
Depreciation -60,166 3,403 63,569
Changes in assets and liabilities:
Increase in prepaid items --(26,780)(26,780)
Increase in accounts and contracts payable --(11,189)(11,189)
Increase in due to other government units --(73)(73)
Increase (decrease) in compensated absences 226,158 --226,158
Net cash provided by operating activities -$142,800$24,643$167,443$
Noncash investing, capital, and financing activities
Increase (decrease) in fair value of investments -$(17,961)$243$(17,718)$
69
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70
OTHER SUPPLEMENTARY SCHEDULES
CITY OF MONTICELLO
Schedule of Revenues (Sources) and Expenditures (Uses)
General Fund
For the Year Ended December 31, 2015
2015 Variance with
2012 2013 2014 Final 2015 Final
Actual Actual Actual Budget Actual Budget
Revenue and other sources - summary:
Property taxes 5,711,491$5,605,101$5,527,958$5,901,500$5,906,255$4,755$
Franchise taxes 195,500 217,000 216,500 217,000 216,500 (500)
Special assessments 10,349 22,351 22,808 300 1,330 1,030
Licenses and permits 275,198 331,136 378,810 321,180 461,049 139,869
Intergovernmental 301,895 372,632 320,691 299,177 354,679 55,502
Charges for services 312,807 281,138 319,477 267,761 349,601 81,840
Fines and forfeitures 63,106 41,124 1,900 42,100 42,474 374
Investment earnings 85,603 (52,134)150,754 101,500 64,037 (37,463)
Other 406,167 169,997 180,104 95,482 241,721 146,239
Sales of capital assets ----30,473 30,473
Interfund transfers 1,729 -----
Total Revenues & Other Sources 7,363,845 6,988,345 7,119,002 7,246,000 7,668,119 422,119
Revenue and other sources - detail:
Taxes
Property tax - current 5,420,093 5,505,158 5,483,145 5,882,000 5,840,880 (41,120)
Property tax - delinquent 249,876 75,279 24,140 -46,786 46,786
Mobile home tax 12,790 13,362 17,575 14,500 15,077 577
Penalties and interest - taxes 28,732 11,302 3,098 5,000 3,512 (1,488)
Franchise taxes
Franchise tax - electric 195,000 216,500 216,500 216,500 216,500 -
Franchise tax - other 500 500 -500 -(500)
Special assessments
Assessment for services/projects 10,349 22,351 22,808 300 1,330 1,030
Licenses & Permits
Liquor license 50,290 50,320 44,612 50,280 45,640 (4,640)
Beer license 913 912 964 900 1,013 113
Other business licenses & permits 4,673 3,476 3,707 3,500 2,545 (955)
Building permits 207,574 260,981 315,466 260,000 395,024 135,024
Fire sprinkler permits ----215 215
Variance/conditional use permits 2,800 2,550 2,600 1,100 2,100 1,000
Driveway permits 75 50 25 150 75 (75)
Grading permits ---200 -(200)
Mobile home permits 380 475 95 200 325 125
Excavation permits 1,250 3,050 3,850 -6,125 6,125
Right-of-way permits 3,551 3,092 3,158 -2,677 2,677
Sign/banner permits 3,320 5,790 4,025 4,500 4,135 (365)
Animal licenses 372 440 308 350 1,175 825
(continued)
71
CITY OF MONTICELLO
Schedule of Revenues (Sources) and Expenditures (Uses)
General Fund
For the Year Ended December 31, 2015 (Continued)
2015 Variance with
2012 2013 2014 Final 2015 Final
Actual Actual Actual Budget Actual Budget
Intergovernmental Revenue
Pera increase aid 6,741$6,741$6,741$6,740$6,741$1$
State highway aid - operating 109,379 107,173 111,280 101,737 125,258 23,521
Fire department aid - operating 74,221 109,594 108,186 80,000 120,027 40,027
Police department aid - operating 59,062 65,767 63,205 60,700 66,814 6,114
County operating grant - street/highway 41,370 38,579 -19,000 19,642 642
County operating grant - civil defense 11,122 11,678 13,157 12,000 2,221 (9,779)
County operating grant - recycling -33,100 18,122 19,000 13,976 (5,024)
Charges for Services
Zoning/subdivision fees 2,500 850 1,200 500 1,050 550
Sale of maps and publications 38 15 -25 -(25)
Assessment searches 2,850 7,125 8,174 1,850 11,100 9,250
Blight notice fee 350 2,200 (1,650)-350 350
Final plat fee 100 50 250 -150 150
Planning administration fee 30,007 450 550 600 900 300
NSF fee --90 -30 30
Inspection/construction fees 451 861 983 -826 826
Inspection fees - buildings ------
Contractor licensing fee 550 1,300 1,825 100 1,075 975
Fire protections fees - townships 133,773 124,227 124,227 124,226 126,439 2,213
Fire emergency response fee 7,000 4,250 4,883 3,500 11,250 7,750
Fire - other fees 6,024 3,091 2,050 600 2,165 1,565
Blight mowing fees 682 1,865 (559)1,000 625 (375)
Rental housing fees 36,415 43,355 55,030 45,000 45,210 210
Animal control fees 28,755 29,539 34,462 30,000 36,869 6,869
Miscellaneous pubic works 186 -8,981 ---
Tree and brush removal charge --2,200 1,000 6,755 5,755
Recycling bin fee 485 --300 260 (40)
Garbage fee - taxable 44,069 44,199 44,992 43,800 90,310 46,510
Garbage miscellaneous fee 660 786 17,488 ---
Garbage surcharge - not taxable 7,863 7,887 2,340 7,760 240 (7,520)
Field/Tourney fees 3,250 3,906 4,019 2,500 4,544 2,044
Park rental fees 4,524 4,982 5,099 5,000 6,305 1,305
Memorial program revenue ----1,404 1,404
Developer cost reimbursement 138 200 2,843 -1,744 1,744
General charges for services 2,137 -----
Fines & Forfeitures
Court fines 48,768 39,399 -42,000 41,761 (239)
Animal impound fines 145 225 400 100 713 613
Liquor license violation 1,500 1,500 1,500 ---
Administration offense fines 12,693 -----
(continued)
72
CITY OF MONTICELLO
Schedule of Revenues (Sources) and Expenditures (Uses)
General Fund
For the Year Ended December 31, 2015 (Continued)
2015 Variance with
2012 2013 2014 Final 2015 Final
Actual Actual Actual Budget Actual Budget
Investment Earnings
Investment earnings 73,623$(62,833)$145,211$100,000$64,037$(35,963)$
Interest - loans 11,980 10,699 5,543 1,500 -(1,500)
Miscellaneous Revenue
City property rental 1,600 1,600 1,600 1,600 1,600 -
Billboard land rental 32,023 19,888 20,146 12,400 2,150 (10,250)
Lease - Prairie Center 37,933 38,476 37,511 36,600 22,500 (14,100)
Lease - communication tower --8,000 24,000 22,180 (1,820)
Contributions 6,277 23,250 4,000 2,500 5,958 3,458
Sale of city property 3,021 374 1,994 500 1,831 1,331
Sale of lock boxes 684 1,015 855 700 1,368 668
Tree Sales --5,600 -6,026 6,026
Copies 381 -21 70 49 (21)
Refunds & reimbursables 76,892 44,100 55,030 -75,416 75,416
Assessment fee reimbursement 29,850 24,525 24,675 -23,026 23,026
Fire contributions --11,400 -13,268 13,268
Insurance claims/dividends 195,830 9,433 --29,926 29,926
Other miscellaneous 21,676 7,336 9,272 17,112 36,423 19,311
Other Financing Sources
Sales of capital assets ----30,473 30,473
Transfers from other funds 1,729 -----
Total revenues and other sources 7,363,845$6,988,345$7,119,002$7,246,000$7,668,119$422,119$
Expenditures and other uses - summary
General government 1,412,578$1,389,599$1,438,346$1,486,453$1,457,376$(29,077)$
Public safety 1,784,357 1,844,833 1,845,073 1,897,908 1,972,986 75,078
Public works 1,702,395 1,700,161 1,792,870 2,024,012 1,709,063 (314,949)
Sanitation 500,037 505,996 517,956 588,291 563,477 (24,814)
Transit --10,000 40,000 40,000 -
Recreation and culture 814,260 853,777 792,678 1,037,937 964,385 (73,552)
General unallocated 279,302 165,923 12,584 7,329 8,082 753
Transfers out and other uses 2,393,502 92,000 293,000 164,070 297,012 132,942
Total expenditures and other uses 8,886,431$6,552,289$6,702,507$7,246,000$7,012,381$(233,619)$
Expenditures and other uses - divisions
General government
Mayor and council 51,988$53,696$52,181$53,925$52,572$(1,353)$
City administration 228,738 260,322 273,993 305,153 312,491 7,338
Elections 38,933 2,425 41,835 3,093 2,979 (114)
Finance 337,348 326,510 385,662 405,558 377,867 (27,691)
Audit 39,227 47,823 53,541 43,000 37,798 (5,202)
City assessing 49,600 49,664 49,832 52,115 50,466 (1,649)
Legal 40,275 46,905 29,303 37,000 36,946 (54)
(continued)
73
CITY OF MONTICELLO
Schedule of Revenues (Sources) and Expenditures (Uses)
General Fund
For the Year Ended December 31, 2015 (Continued)
2015 Variance with
2012 2013 2014 Final 2015 Final
Actual Actual Actual Budget Actual Budget
General government (continued)
Human resources 84,041$93,067$90,565$116,631$117,249$618$
Planning and zoning 163,629 182,753 220,080 203,320 244,976 41,656
Information technology services 130,102 95,572 33,759 46,829 19,872 (26,957)
City hall 233,602 215,507 193,186 200,749 190,833 (9,916)
Prairie center building 15,095 15,355 14,409 19,080 13,327 (5,753)
Public safety
Law Enforcement 1,187,382 1,190,441 1,098,403 1,175,815 1,174,439 (1,376)
Fire and rescue 207,778 222,141 306,780 266,011 309,970 43,959
Fire relief 74,221 109,594 108,186 80,000 120,027 40,027
Building inspections 248,376 251,007 266,544 304,452 304,858 406
Civil defense 2,719 9,707 1,660 3,856 1,500 (2,356)
Animal control 49,594 47,426 49,439 50,724 48,754 (1,970)
National Guard 14,287 14,517 14,061 17,050 13,438 (3,612)
Public works
Public works administration 176,457 113,882 122,151 123,580 124,504 924
Engineering 200,287 224,028 195,841 169,508 110,555 (58,953)
Public works inspecitons 64,827 54,878 36,867 96,952 32,084 (64,868)
Streets and alleys 655,170 689,046 735,629 876,407 737,836 (138,571)
Ice and snow 133,193 210,552 308,387 250,684 263,020 12,336
Shop and garage 219,646 186,741 177,644 194,810 185,837 (8,973)
Stormwater 51,468 12,064 16,842 73,168 26,712 (46,456)
Parking lots 4,568 2,965 3,814 9,403 2,030 (7,373)
Street lighting 196,779 206,005 195,695 229,500 226,485 (3,015)
Sanitation
Refuse and recycling collection 500,037 505,996 517,956 588,291 563,477 (24,814)
Transit
Bus service --10,000 40,000 40,000 -
Recreation and culture
Community celebrations 5,165 1,186 688 3,300 2,199 (1,101)
Senior center 88,441 90,219 97,547 99,922 97,115 (2,807)
Ice arena 75,000 75,000 ----
Park operations 533,537 572,985 570,639 803,325 706,934 (96,391)
Park ballfields 29,419 25,517 18,149 32,800 16,971 (15,829)
Shade tree 52,983 53,475 68,891 58,628 104,990 46,362
Library 29,715 35,395 36,764 39,962 36,176 (3,786)
General unallocated
Insurances and other 279,302 165,923 12,584 7,329 8,082 753
Transfers out and other uses
Transfers out 2,393,502 92,000 293,000 164,070 297,012 132,942
Total expenditures & other uses 8,886,431$6,552,289$6,702,507$7,246,000$7,012,381$(233,619)$
Revenue over/(under) expenditures (1,522,586)$436,056$416,495$-$655,738$655,738
74
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75
CITY OF MONTICELLO
Schedule of Assets, Liabilities, and Fund Balances
Economic Development Authority
December 31, 2015
EDA TIF TIF TIF TIF TIF TIF TIF
General GMEF Future 6 (d)19 20 22 24 29
ASSETS
Cash and investments 1,028,625$1,133,354$-$693,728$150,351$127,785$489,704$54,664$94,892$
Receivables
Unremitted taxes ------710 --
Due from other governmental units 11,875 --------
Intrafund receivable 1,016,279 --------
Prepaid items 869 --------
Land held for resale 2,473,957 -----209,000 --
TOTAL ASSETS 4,531,605$1,133,354$-$693,728$150,351$127,785$699,414$54,664$94,892$
LIABILITIES
Accounts and contracts payable 8,784$-$-$-$-$-$-$-$-$
Intrafund payable --44,497 ---386,574 --
Unearned revenue ------209,000 --
Total liabilities 8,784 -44,497 ---595,574 --
FUND BALANCES
Nonspendable 2,474,826 --------
Restricted -1,133,354 -693,728 150,351 127,785 103,840 54,664 94,892
Assigned 2,047,995 -(44,497)------
Total fund balance 4,522,821 1,133,354 (44,497)693,728 150,351 127,785 103,840 54,664 94,892
TOTAL LIABILITIES,
AND FUND BALANCES 4,531,605$1,133,354$-$693,728$150,351$127,785$699,414$54,664$94,892$
(d) = decertified
(Continued)
76
CITY OF MONTICELLO
Schedule of Assets, Liabilities, and Fund Balances
Economic Development Authority
December 31, 2015 (Continued)
TIF TIF TIF TIF TIF TIF GAAP Total
30 34 35 36 (d)38 39 Reconciliation EDA
ASSETS
Cash and investments 97,956$12$4,111$-$-$56$-$3,875,238$
Receivables
Unremitted taxes -------710
Due from other governmental units -------11,875
Intrafund receivable ------(1,016,279)-
Prepaid items -------869
Land held for resale -------2,682,957
TOTAL ASSETS 97,956$12$4,111$-$-$56$(1,016,279)$6,571,649$
LIABILITIES
Accounts and contracts payable -$-$-$-$-$-$-$8,784$
Intrafund payable 139,705 19,715 --121,822 303,966 (1,016,279)-
Unearned revenue ------(209,000)-
Total liabilities 139,705 19,715 --121,822 303,966 (1,225,279)8,784
FUND BALANCES
Nonspendable -------2,474,826
Restricted (41,749)(19,703)4,111 -(121,822)(303,910)209,000 2,084,541
Assigned -------2,003,498
Total fund balance (41,749)(19,703)4,111 -(121,822)(303,910)209,000 6,562,865
TOTAL LIABILITIES,
AND FUND BALANCES 97,956$12$4,111$-$-$56$(1,016,279)$6,571,649$
(d) = decertified
77
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Other Financing Sources (Uses)
Economic Development Authority
For the Year Ended December 31, 2015
EDA TIF TIF TIF TIF TIF TIF TIF
General GMEF Future 6 (d)19 20 22 24 29
Revenues
Tax increments -$-$-$-$21,222$17,173$289,299$39,494$20,480$
Intergovernmental 11,875 --------
Charges for services 1,250 --------
Investment earnings 18,489 14,625 -9,684 1,543 1,533 2,873 664 1,227
Interest on intrafund loans 28,921 --------
Other revenues 622 --------
Total revenues 61,157 14,625 -9,684 22,765 18,706 292,172 40,158 21,707
Expenditures:
Current
Salary and wages 7,536 --------
Benefits 3,009 --------
Supplies 66 --------
Professional services - legal 9,130 -------463
Professional services - market matching 45,818 --------
Professional services - enviromental --44,497 ------
Professional services - other 7,701 --------
LPV Insurance 1,937 --------
Legal and general publications 5,360 ---26 26 26 26 26
Property taxes 1,356 --------
Marketing 5,650 --------
Dues and membership 4,696 --------
Utilities ------327 --
IT services 1,416 --------
Land acquisition costs ------36,764 --
Land adjustment to market 732,900 -----12,900 --
Other expenses 50,507 --------
Excess increments ------195,267 --
Interest on intrafund loans ---------
PAYG payments to third parties -----6,182 50,685 35,545 16,861
Total expenditures 877,082 -44,497 -26 6,208 295,969 35,571 17,350
Excess (deficiency) of revenues over
expenditures (815,925)14,625 (44,497)9,684 22,739 12,498 (3,797)4,587 4,357
Other financing sources (uses)
Transfers in 94,900 --------
Net change in fund balances (721,025)14,625 (44,497)9,684 22,739 12,498 (3,797)4,587 4,357
Fund balance at beginning of year 5,243,846 1,118,729 -684,044 127,612 115,287 107,637 50,077 90,535
Fund balance at end of year 4,522,821$1,133,354$(44,497)$693,728$150,351$127,785$103,840$54,664$94,892$
(Continued)
78
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Other Financing Sources (Uses)
Economic Development Authority
For the Year Ended December 31, 2015 (Continued)
TIF TIF TIF TIF TIF TIF GAAP Total
30 34 35 36 (d)38 39 Reconciliation EDA
Revenues
Tax increments 8,801$214,364$-$58,241$11,757$46,786$-$727,617$
Intergovernmental -------11,875
Charges for services -------1,250
Investment earnings 1,318 12 65 --1 -52,034
Interest on intrafund loans ------(28,921)-
Other revenues ---40,292 --(40,292)622
Total revenues 10,119 214,376 65 98,533 11,757 46,787 (69,213)793,398
Expenditures:
Current
Salary and wages -------7,536
Benefits -------3,009
Supplies -------66
Professional services - legal --592 ----10,185
Professional services - market matching -------45,818
Professional services - enviromental -------44,497
Professional services - other -------7,701
LPV Insurance -------1,937
Legal and general publications 26 26 26 -26 --5,594
Property taxes -------1,356
Marketing -------5,650
Dues and membership -------4,696
Utilities -------327
IT services -------1,416
Land acquisition costs -------36,764
Land adjustment to market -------745,800
Other expenses ------(40,292)10,215
Excess increments -------195,267
Interest on intrafund loans 3,601 --6,694 5,136 13,490 (28,921)-
PAYG payments to third parties -------109,273
Total expenditures 3,627 26 618 6,694 5,162 13,490 (69,213)1,237,107
Excess (deficiency) of revenues over
expenditures 6,492 214,350 (553)91,839 6,595 33,297 -(443,709)
Other financing sources (uses)
Transfers in -------94,900
Net change in fund balances 6,492 214,350 (553)91,839 6,595 33,297 -(348,809)
Fund balance at beginning of year (48,241)(234,053)4,664 (91,839)(128,417)(337,207)209,000 6,911,674
Fund balance at end of year (41,749)$(19,703)$4,111$-$(121,822)$(303,910)$209,000$6,562,865$
79
CITY OF MONTICELLO
Schedule of Assets, Liabilities, Deferred Inflows of Resources, and Fund Balances
Debt Service Activities
December 31, 2015
Revenue
Bonds
313 315 317 312 318 319 314
2007A 2008B 2010A 2011A 2014A 2015B 2008
Improvement Sewer Improvement Refunding Bonds Bonds Public Project Total
ASSETS
Cash and cash equivalents 470,432$1,429,228$646,404$2,620,654$7,575$665$-$5,174,958$
Receivables
Unremitted special assessments 408 -73 ----481
Deliquent special assessments 2,409 -8,082 149,230 ---159,721
Deferred special assessments 395,867 -216,508 2,386,963 -370,349 -3,369,687
Accounts ---207,900 ---207,900
Notes ---200,000 ---200,000
Total assets 869,116$1,429,228$871,067$5,564,747$7,575$371,014$-$9,112,747$
LIABILITIES
Accounts and contracts payable 225$225$225$225$225$-$-$1,125$
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - special assessments 398,276 -224,590 2,536,193 -370,349 -3,529,408
Unavailable revenue - notes receivable ---200,000 ---200,000
Total deferred inflows of resources 398,276 -224,590 2,736,193 -370,349 -3,729,408
FUND BALANCES
Restricted for debt service 470,615 1,429,003 646,252 2,828,329 7,350 665 -5,382,214
Total liabilities, deferred inflows
of resources, and fund balances 869,116$1,429,228$871,067$5,564,747$7,575$371,014$-$9,112,747$
General Obligation Bonds
80
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Other Financing Sources (Uses)
Debt Service Activities
For the Year Ended December 31, 2015
Revenue
Bonds
313 315 317 312 318 319 314
2007A 2008B 2010A 2011A 2014A 2015B 2008
Improvement Sewer Improvement Refunding Bonds Bonds Public Project Total
Revenues
Property taxes 420,000$500,000$40,000$330,000$-$-$-$1,290,000$
Special assessments 120,816 -70,257 2,042,330 ---2,233,403
Investment earnings 1,883 7,708 5,775 20,213 2,077 665 -38,321
Other revenue ---200,000 ---200,000
Total revenues 542,699 507,708 116,032 2,592,543 2,077 665 -3,761,724
Expenditures
Debt service
Principal 544,000 924,000 265,000 2,310,000 --985,000 5,028,000
Interest and fiscal charges 77,065 124,767 38,074 151,375 163,712 -15,760 570,753
Total expenditures 621,065 1,048,767 303,074 2,461,375 163,712 -1,000,760 5,598,753
Excess (deficiency) of
revenues over expenditures (78,366)(541,059)(187,042)131,168 (161,635)665 (1,000,760)(1,837,029)
Other financing sources (uses)
Transfers in -1,089,754 246,783 964,508 --1,005,000 3,306,045
Transfers out ------(5,872)(5,872)
Total other financing sources (uses)-1,089,754 246,783 964,508 --999,128 3,300,173
Net change in fund balance (78,366)548,695 59,741 1,095,676 (161,635)665 (1,632)1,463,144
Fund balance at begining of year 548,981 880,308 586,511 1,732,653 168,985 -1,632 3,919,070
Fund balance at end of year 470,615$1,429,003$646,252$2,828,329$7,350$665$-$5,382,214$
General Obligation Bonds
81
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82
STATISTICAL SECTION
STATISTICAL SECTION
The Statistical Section is included to provide detailed data on the physical, economic, social and political characteristics of the reporting
government. It is intended to provide the user with a broader and more complete understanding of the government and its financial affairs than is
possible from the basic financial statements and supplementary information included in the Financial Section.
Page
Financial trends
Net Position by Component - Last Ten Fiscal Years 83
Changes in Net Position - Last Ten Fiscal years 84
Fund Balances of Governmental Funds - Last Ten Fiscal Years 86
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 87
Governmental Funds Tax Revenues by Source - Last Ten Fiscal Years (modified accrual basis)88
General Governmental Tax Revenues by Source - Last Ten Fiscal Years (accrual basis)89
Revenue capacity
Tax Capacity Value and Estimated Market Value of Taxable Property - Last Ten Fiscal Years 90
Property Tax Rates - All Direct and Overlapping Governments - Last Ten Fiscal Years 91
Property Tax Levies and Collections - Last Ten Fiscal Years 92
Principal Property Taxpayers - Current Year and Nine Years Ago 93
Water Sold by Customer Type - Last Ten Fiscal Years 94
Water and Sewage Utility Rates - Last Ten Fiscal Years 95
Debt capacity
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 96
Ratios of Net General Obligation Bonded Debt Outstanding - Last Ten Fiscal Years 97
Legal Debt Margin Information - Last Ten Fiscal Years 98
Computation of Direct and Overlapping Debt 99
Schedule of General Obligation Revenue Bond Coverage - Last Two Fiscal Years 100
Economic and demographic information
Demographic & Economic Statistics - Last Ten Fiscal Years 101
Principal Employers - Current Year and Eight Years Ago 102
Operating information
City Government Employees by Function/Program - Last Ten Fiscal Years 103
Operating Indicators by Function - Last Ten Fiscal Years 104
Capital Assets Statistics by Function - Last Ten Fiscal Years 106
CITY OF MONTICELLO
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Governmental activities
Net investment in
capital assets 7,009,622$12,476,536$27,584,763$33,712,370$31,901,676$38,242,040$40,525,009$44,268,757$48,253,810$38,099,568$
Restricted -31,517,792 22,074,427 17,688,193 18,337,866 16,894,936 13,061,044 18,118,070 10,453,449 12,633,770
Unrestricted 56,949,749 24,543,501 28,445,230 28,183,161 26,876,421 24,758,269 25,119,107 13,487,299 14,792,521 18,144,067
Total governmental
net position 63,959,371$68,537,829$78,104,420$79,583,724$77,115,963$79,895,245$78,705,160$75,874,126$73,499,780$68,877,405$
Business-type activities
Net investment in
capital assets 35,749,380$33,971,151$31,375,890$29,910,696$28,556,355$25,031,043$23,698,091$20,496,832$42,117,264$40,722,087$
Restricted --19,350 19,350 19,350 19,350 19,350 ---
Unrestricted 5,437,867 6,441,470 4,529,830 2,846,018 6,363,148 6,901,353 7,642,046 6,463,638 9,121,952 8,163,982
Total business-type
net position 41,187,247$40,412,621$35,925,070$32,776,064$34,938,853$31,951,746$31,359,487$26,960,470$51,239,216$48,886,069$
Primary government
Net investment in
capital assets 42,759,002$46,447,687$58,960,653$63,623,066$60,458,031$63,273,083$64,223,100$64,765,589$90,371,074$78,821,655$
Restricted -31,517,792 22,093,777 17,707,543 18,357,216 16,914,286 13,080,394 18,118,070 10,453,449 12,633,770
Unrestricted 62,387,616 30,984,971 32,975,060 31,029,179 33,239,569 31,659,622 32,761,153 19,950,937 23,914,473 26,308,049
Total primary government
net position 105,146,618$108,950,450$114,029,490$112,359,788$112,054,816$111,846,991$110,064,647$102,834,596$124,738,996$117,763,474$
Note 1: In fiscal years 2013 and 2012, the city had a change in accounting principle, a change in fund structure, and prior period adjustments. Prior years were not adjusted to reflect these changes.
Note 2: The city implemented GASB Statement No. 68 and GASB Statement No. 71 in fiscal year 2015. Years prior to 2015 have not been restated.
$-
$20
$40
$60
$80
$100
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015MillionsPrimary Government Net Position
Net investment in
capital assets
Restricted net
position
Unrestricted net
position
83
CITY OF MONTICELLO
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Expenses 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Governmental activities
General government 3,639,497$1,844,320$1,572,389$1,780,972$2,065,463$2,111,710$2,103,737$1,623,727$1,488,243$1,447,725$
Public safety 2,856,573 1,693,116 1,792,351 2,849,272 1,766,712 1,788,595 1,819,378 1,884,981 1,880,193 1,960,009
Public works 5,318,865 4,559,460 4,634,167 3,827,501 3,579,291 4,838,544 5,045,729 5,163,461 5,223,345 5,312,612
Sanitation 474,045 509,208 514,208 547,160 534,903 495,693 500,037 487,268 517,956 563,477
Transit 10,000 40,000
Recreation and culture 2,766,014 2,703,227 2,729,950 2,855,682 2,636,088 1,753,197 2,719,730 2,875,260 2,882,127 3,524,979
Economic development 2,061,331 769,584 510,126 842,819 2,647,687 1,199,936 803,594 1,005,813 1,084,620 1,547,875
Interest and fiscal charges 2,378,871 2,193,840 2,136,872 1,673,431 1,464,012 1,248,716 1,298,869 235,265 649,854 735,753
Total governmental activities expenses 19,495,196 14,272,755 13,890,063 14,376,837 14,694,156 13,436,391 14,291,074 13,275,775 13,736,338 15,132,430
Business-type activities
Water utility 913,638 973,375 975,846 1,018,098 936,718 1,167,572 1,118,789 1,009,600 1,084,882 1,102,610
Sewage utility 2,095,124 2,000,610 2,085,485 2,074,447 2,495,976 2,340,555 2,480,657 2,466,660 2,762,357 2,661,990
Liquor 3,285,082 644,857 620,743 669,940 637,574 658,999 662,002 689,559 692,976 798,631
Fiber optics -84,594 1,590,237 2,792,813 3,815,377 5,702,480 5,228,428 5,240,871 2,919,170 2,536,461
Deputy registrar -------293,531 300,236 313,968
Total business-type activities expenses 6,293,844 3,703,436 5,272,311 6,555,298 7,885,645 9,869,606 9,489,876 9,700,221 7,759,621 7,413,660
Total primary government expenses 25,789,040$17,976,191$19,162,374$20,932,135$22,579,801$23,305,997$23,780,950$22,975,996$21,495,959$22,546,090$
Program Revenues
Governmental activities
Charges for services
General government 974,186$695,117$523,228$443,976$491,304$521,182$619,992$147,244$180,145$214,087$
Public safety 1,030,842 93,138 99,812 155,036 96,293 202,237 179,540 163,366 164,616 320,158
Public works 1,186,670 1,994,067 1,544,140 744,241 1,556,098 508,077 383,066 544,404 371,671 626,483
Sanitation 129,057 --167,119 165,387 52,304 53,077 16,653 48,385 -
Transit ----------
Recreation and culture 1,048,551 1,044,699 1,084,622 1,139,199 1,153,113 1,240,970 1,150,273 1,307,149 1,331,581 1,488,197
Economic development 115,616 6,768 15,875 155,769 -----14,653
Operating grants and contributions 281,531 160,147 159,192 269,492 424,845 253,127 252,784 293,710 295,828 355,041
Capital grants and contributions 12,153,185 3,616,870 948,340 2,067,509 4,124,271 2,083,511 1,841,915 1,079,738 1,774,628 2,667,710
Total governmental activities
program revenues 16,919,638 7,610,806 4,375,209 5,142,341 8,011,311 4,861,408 4,480,647 3,552,264 4,166,854 5,686,329
Business-type activities
Charges for services
Water utility 742,146 867,873 973,776 1,019,390 828,635 1,078,133 1,304,923 1,214,570 1,117,226 1,126,718
Sewage utility 1,043,208 1,196,983 1,307,064 1,371,776 1,470,537 1,712,058 1,850,919 1,981,491 2,081,660 2,083,122
Liquor 3,619,236 1,002,933 1,059,479 1,043,256 1,174,767 1,151,171 1,214,745 1,318,276 1,289,369 1,524,338
Fiber optics ----456,820 1,610,258 1,747,587 1,606,720 1,761,978 1,642,403
Deputy registrar -------456,285 497,798 535,931
Operating grants and contributions ----------
Capital grants and contributions 2,188,675 482,412 106,787 -----488,628 1,454,980
Total business-type activities
program revenues 7,593,265 3,550,201 3,447,106 3,434,422 3,930,759 5,551,620 6,118,174 6,577,342 7,236,659 8,367,492
Total primary government
program revenues 24,512,903$11,161,007$7,822,315$8,576,763$11,942,070$10,413,028$10,598,821$10,129,606$11,403,513$14,053,821$
(continued)
84
CITY OF MONTICELLO
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Net (expense)/revenue
Governmental activities (2,575,558)$(6,661,949)$(9,514,854)$(9,234,496)$(6,682,845)$(8,574,983)$(9,810,427)$(9,723,511)$(9,569,484)$(9,446,101)$
Business-type activities 1,299,421 (153,235)(1,825,205)(3,120,876)(3,954,886)(4,317,986)(3,371,702)(3,122,879)(522,962)953,832
Total primary government net expense (1,276,137)$(6,815,184)$(11,340,059)$(12,355,372)$(10,637,731)$(12,892,969)$(13,182,129)$(12,846,390)$(10,092,446)$(8,492,269)$
General Revenues and Other Changes in Net Position
Governmental activities
Taxes
Property taxes 6,461,748$6,418,124$7,278,152$7,628,547$7,105,319$7,406,358$7,722,214$7,961,229$8,393,374$8,683,585$
Tax increment 791,812 824,714 1,172,447 1,193,021 1,155,386 1,044,791 1,024,134 965,935 826,363 727,617
Franchise taxes ---48,517 371,258 341,362 339,518 320,640 357,409 333,484
Unrestricted grants and contributions 130,000 288,940 158,340 406,735 37,665 19,359 38,618 65,228 27,502 -
Investment earnings 2,093,877 2,170,025 1,461,658 770,178 859,583 1,467,780 767,722 (189,128)784,347 278,465
Other ---41,173 --11,575 3,885 217,643 30,473
Gain on sale of capital assets 4,619,629 528,193 233,326 366,961 442,091 354,501 540,272 489,782 --
Transfers 250,000 997,929 371,245 251,133 (5,774,257)713,655 (2,420,489)278,500 (3,411,500)2,301,045
Total governmental activities 14,347,066 11,227,925 10,675,168 10,706,265 4,197,045 11,347,806 8,023,564 9,896,071 7,195,138 12,354,669
Business-type activities
Investment earnings 334,623 326,356 547,703 188,178 236,131 495,484 264,589 (117,175)399,757 108,191
Miscellaneous 27,100 62,664 136,356 42,360 125,326 1,555,509 100,687 65,468 -88,157
Gain on extinguishment of debt --------20,990,451 -
Contribution of land to County ---------(5,511,547)
Transfers (250,000)(997,929)(371,245)(251,133)5,774,257 (713,655)2,420,489 (278,500)3,411,500 (2,301,045)
Total business-type activities 111,723 (608,909)312,814 (20,595)6,135,714 1,337,338 2,785,765 (330,207)24,801,708 (7,616,244)
Total primary government 14,458,789$10,619,016$10,987,982$10,685,670$10,332,759$12,685,144$10,809,329$9,565,864$31,996,846$4,738,425$
Changes in Net Position
Governmental activities 11,771,508$4,565,976$1,160,314$1,471,769$(2,485,800)$2,772,823$(1,786,863)$172,560$(2,374,346)$2,908,568$
Business-type activities 1,411,144 (762,144)(1,512,391)(3,141,471)2,180,828 (2,980,648)(585,937)(3,453,086)24,278,746 (6,662,412)
Total primary government 13,182,652$3,803,832$(352,077)$(1,669,702)$(304,972)$(207,825)$(2,372,800)$(3,280,526)$21,904,400$(3,753,844)$
Note 1: The city made a fund structure change in fiscal year 2013. Prior year data has not been updated to reflect this change.
Note 2: The city implemented GASB Statement No. 54 in fiscal year 2011. Prior year data has not been restated as a result of this change.
85
CITY OF MONTICELLO
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
General Fund
Reserved 405,819$430,294$359,303$392,541$336,286$-$-$-$-$-$
Unreserved 5,014,094 5,131,193 5,819,249 4,705,092 4,644,748 -----
Nonspendable -----386,616 342,380 258,100 126,327 113,302
Restricted ----------
Committed -----3,374,200 ----
Assigned ----------
Unassigned -----649,821 3,136,127 3,656,463 4,204,731 4,873,494
Total general fund 5,419,913$5,561,487$6,178,552$5,097,633$4,981,034$4,410,637$3,478,507$3,914,563$4,331,058$4,986,796$
All other governmental funds
Reserved 17,912,418$27,072,957$16,663,801$10,280,326$7,884,431$-$-$-$-$-$
Unreserved
Special revenue funds 14,946,443 7,554,334 14,191,473 18,451,828 18,324,689 -----
Capital projects funds (1,805,372)(630,214)(1,839,478)(2,124,391)(1,532,220)-----
Nonspendable -----1,299,057 197,123 1,822,926 1,815,087 4,259,743
Restricted -----22,140,662 21,480,938 10,928,985 10,453,449 8,619,905
Committed -----2,662,124 ----
Assigned -----9,138,626 8,655,488 6,485,727 7,321,744 11,109,806
Unassigned
Special revenue funds -----(141,890)----
Capital projects funds -----(1,435,666)----
Total all other
governmental funds 31,053,489$33,997,077$29,015,796$26,607,763$24,676,900$33,662,913$30,333,549$19,237,638$19,590,280$23,989,454$
Note 1: The City made a fund structure change for the period ending December 31, 2013. Prior year data has not been restated as a result of this change.
Note 2: The city implemented GASB 54 for the financial reporting period ending December 31, 2011. Prior years have not been restated as a result of this change.
86
CITY OF MONTICELLO
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Revenues
Property taxes 6,461,748$6,190,599$7,233,582$7,502,844$7,319,154$7,294,635$8,234,086$7,985,695$8,407,627$8,638,401$
Tax increments 791,812 824,714 1,172,447 1,193,021 1,155,386 1,044,791 1,024,134 965,935 826,363 727,617
Franchise taxes ---48,517 371,258 341,362 339,518 320,640 357,409 333,484
Special assessments 2,006,519 3,112,374 2,566,932 2,462,673 1,465,264 1,856,134 1,902,871 2,065,944 1,912,932 3,318,901
Licenses and permits 758,718 627,751 917,539 266,797 217,184 249,999 275,699 331,711 378,810 461,049
Intergovernmental 937,076 1,764,633 550,283 1,688,895 1,620,771 1,434,420 540,475 1,264,781 732,366 1,520,239
Charges for services 2,796,871 2,888,981 2,290,091 2,518,548 2,890,006 2,239,584 2,076,834 1,846,919 1,722,974 2,063,520
Fines and forfeitures 1,750 5,027 2,216 1,220 205 85 14,338 1,725 1,900 42,474
Investment earnings 2,093,877 2,170,025 1,461,658 770,178 859,583 1,467,780 767,722 (183,242)738,956 261,856
Other revenues 4,564,660 372,502 197,988 435,186 643,873 603,019 753,832 700,776 413,113 475,170
Total revenues 20,413,031 17,956,606 16,392,736 16,887,879 16,542,684 16,531,809 15,929,509 15,300,884 15,492,450 17,842,711
Expenditures
General government 1,743,716 1,899,097 1,579,164 1,634,395 1,997,458 2,039,270 2,023,674 1,576,653 1,450,930 1,465,458
Public safety 2,760,090 1,603,331 1,736,962 2,738,768 1,684,296 1,728,409 1,735,579 1,805,434 1,845,073 1,972,986
Public works 3,594,844 1,951,712 2,380,993 2,074,811 1,562,155 1,675,222 1,703,849 1,707,576 1,793,162 1,734,562
Sanitation 474,045 509,208 514,208 547,160 534,903 495,693 500,037 505,996 517,956 563,477
Transit 10,000 40,000
Culture and recreation 2,271,216 2,214,108 2,220,368 2,355,669 2,164,534 2,419,369 2,272,595 2,472,987 2,386,832 2,622,991
Economic development 2,056,055 772,852 525,783 842,819 2,647,687 1,198,449 800,540 1,011,961 1,084,620 1,237,107
Capital outlay 13,074,965 6,430,421 3,522,196 1,946,153 4,138,459 4,067,251 2,829,049 1,357,254 2,220,883 2,238,365
Debt service
Principal 3,407,655 3,388,382 5,037,028 6,749,293 5,001,000 4,860,000 5,174,500 5,290,750 5,411,000 5,028,000
Interest and fiscal charges 2,373,438 2,256,311 2,192,063 1,801,392 1,553,661 1,383,095 1,290,430 930,982 658,983 570,753
Bond issuance costs ---------71,358
Total expenditures 31,756,024 21,025,422 19,708,765 20,690,460 21,284,153 19,866,758 18,330,253 16,659,593 17,379,439 17,545,057
Excess of revenues
over (under) expenditures (11,342,993)(3,068,816)(3,316,029)(3,802,581)(4,741,469)(3,334,949)(2,400,744)(1,358,709)(1,886,989)297,654
Other financing sources (uses)
Transfers in 8,181,372 5,202,051 16,818,090 10,172,878 4,687,126 5,710,819 9,990,120 6,906,770 4,914,385 4,261,817
Transfers out (7,931,372)(4,204,122)(16,446,845)(9,921,745)(4,431,158)(4,997,164)(10,732,901)(7,158,933)(8,325,885)(2,186,930)
Debt issued -5,137,903 15,450,000 -3,255,000 10,735,000 --6,080,000 2,605,000
Premium (discount) on debt issued -83,710 --(19,530)301,910 --(12,374)46,898
Refunded bonds redeemed --(15,908,564)-(865,000)--(10,690,000)--
Refunding deferred amortized (loss)--(384,432)-------
Sale of land held for resale -(103,084)74,650 -------
Sale of capital assets -37,520 2,575 62,496 67,569 -11,575 12,428 -30,473
Total other financing sources (uses)250,000 6,153,978 (394,526)313,629 2,694,007 11,750,565 (731,206)(10,929,735)2,656,126 4,757,258
Net change in fund balances (11,092,993)$3,085,162$(3,710,555)$(3,488,952)$(2,047,462)$8,415,616$(3,131,950)$(12,288,444)$769,137$5,054,912$
Debt service as percentage
of noncapital expenditures 30.9%38.7%44.7%45.6%38.2%39.5%41.7%40.7%40.0%36.6%
Note: The city made a fund structure change for the period ending December 31, 2013. Prior year data has not been modified to reflect this change.
87
CITY OF MONTICELLO
Governmental Funds Tax Revenues by Source
Last Ten Fiscal Years
(modified accrual basis of accounting)
Property Tax Franchise
Year Tax Increment Tax Total
2006 6,461,748$791,812$-$7,253,560$
2007 6,190,599 824,714 -7,015,313
2008 7,233,582 1,172,447 -8,406,029
2009 7,502,844 1,193,021 48,517 8,744,382
2010 7,319,154 1,155,386 371,258 8,845,798
2011 7,294,635 1,044,791 341,362 8,680,788
2012 8,234,086 1,024,134 339,518 9,597,738
2013 7,985,695 965,935 320,640 9,272,270
2014 8,407,627 826,363 357,409 9,591,399
2015 8,638,401 727,617 333,484 9,699,502
Change
2006-2015 33.7%-8.1%100.0%33.7%
Source: Finance Department
$-
$2
$4
$6
$8
$10
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015MillionsTax Revenues by Source
Property Tax
Tax Increment
Franchise Tax
88
CITY OF MONTICELLO
General Governmental Tax Revenues by Source
Last Ten Fiscal Years
(accrual basis of accounting)
Property Tax Franchise
Year Tax Increment Tax Total
2006 6,461,748$791,812$-$7,253,560$
2007 6,418,124 824,714 -7,242,838
2008 7,278,152 1,172,447 -8,450,599
2009 7,628,547 1,193,021 48,517 8,870,085
2010 7,105,319 1,155,386 371,258 8,631,963
2011 7,406,358 1,044,791 341,362 8,792,511
2012 7,722,214 1,024,134 339,518 9,085,866
2013 7,961,229 965,935 320,640 9,247,804
2014 8,393,374 826,363 357,409 9,577,146
2015 8,683,585 727,617 333,484 9,744,686
Change
2006-2015 34.4%-8.1%100.0%34.3%
Source: Finance Department
$-
$2
$4
$6
$8
$10
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015MillionsTax Revenues by Source
Property Tax
Tax Increment
Franchise Tax
89
CITY OF MONTICELLO
Tax Capacity Value and Estimated Market Value of Taxable Property
Last Ten Fiscal Years
Total Net Tax
Taxable Net Capacity as a
Residential % of Commercial % of Personal % of Ag/Misc % of Tax Capacity % of Total Direct Total Percentage of
Year Property Total Property Total Property Total Property Total Value *Total Tax Rate Market Value Market Value
2006 5,824,238$41.8%7,871,132$56.5%170,446$1.2%69,626$0.5%13,935,442$100.0%58.651 993,647,300$1.4%
2007 6,929,517 42.8%8,913,821 55.0%177,822 1.1%183,695 1.1%16,204,855 100.0%42.458 1,243,461,100 1.3%
2008 7,443,331 43.0%9,455,666 54.6%176,289 1.0%236,789 1.4%17,312,075 100.0%46.942 1,282,400,700 1.3%
2009 7,506,973 41.8%9,966,873 55.5%174,223 1.0%299,191 1.7%17,947,260 100.0%46.191 1,245,407,600 1.4%
2010 6,165,704 35.4%10,793,836 62.0%189,563 1.1%251,177 1.4%17,400,280 100.0%45.822 1,188,222,100 1.5%
2011 5,307,260 31.9%10,897,898 65.5%194,825 1.2%229,016 1.4%16,628,999 100.0%46.729 1,106,541,400 1.5%
2012 4,611,403 23.6%14,538,165 74.3%235,633 1.2%194,492 1.0%19,579,693 100.0%49.773 1,219,719,700 1.6%
2013 4,824,117 25.4%13,793,916 72.5%239,129 1.3%164,609 0.9%19,021,771 100.0%42.262 1,201,075,800 1.6%
2014 5,408,138 21.9%18,818,097 76.4%235,713 1.0%184,750 0.7%24,646,698 100.0%44.709 1,513,570,400 1.6%
2015 5,861,759 22.1%20,316,219 76.4%238,732 0.9%164,516 0.6%26,581,226 100.0%44.709 1,712,125,200 1.6%
Note 1: The fiscal year is for the values in the year levied for taxes collectible in the following year.
Note 2: *Tax exempt property values and tax increment values are not included in total net tax capacity value.
Source: Wright County Certificate of Taxes and Taxable Properties.
Real Property
$-
$5
$10
$15
$20
$25
$30
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015MillionsTotal Taxable Net Tax Capacity Value
(Excludes Personal and Ag/Misc Property)
Residential
Commercial
90
CITY OF MONTICELLO
Property Tax Rates - All Direct and Overlapping Governments
Last Ten Fiscal Years
Monticello Total (1)
City Wright School Special Direct and
Year of Monticello County District #882 Districts Overlapping
2006 51.03 32.57 24.37 2.33 110.30
2007 42.46 30.71 23.15 2.95 99.27
2008 46.94 31.65 25.25 2.52 106.36
2009 46.19 32.57 26.08 2.07 106.91
2010 45.82 35.82 24.95 1.75 108.34
2011 46.73 39.31 27.03 1.50 114.57
2012 49.77 43.45 28.26 1.24 122.72
2013 42.26 44.29 26.23 0.61 113.39
2014 44.71 43.45 28.27 -116.43
2015 35.74 40.59 22.88 -99.21
Note 1:
Source: Wright County
Overlapping Taxing Districts
Information reflects total tax rates levied by each entity. Tax rates are expressed in terms of “net tax capacity.” A
property’s tax capacity is determined by multiplying its taxable market value by a state determined class rate. Class
rates vary by property type and change periodically based on state legislation. Components of the direct rate are not
readily available.
0
20
40
60
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Rate%Property Tax Rates
For the threehighest taxing authorities
Wright
District
#882
City
91
CITY OF MONTICELLO
Property Tax Levies and Collections
Last Ten Fiscal Years
PROPERTY TAXES
Total Tax Collections in Abatements
Fiscal Levy for Tax Net % of Subsequent % of and % of
Year Fiscal Year Credits Levy Amount Net Levy Years Amount Net Levy Adjustments Amount Net Levy
2006 6,750,132$283,978$6,466,154$6,349,118$98.2%107,522$6,456,640$99.9%(8,603)$911$0.0%
2007 6,499,914 261,362 6,238,552 6,044,463 96.9%170,697 6,215,160 99.6%(22,051)1,341 0.0%
2008 7,600,189 267,056 7,333,133 7,118,136 97.1%173,289 7,291,425 99.4%(39,224)2,484 0.0%
2009 7,750,119 263,587 7,486,532 7,237,730 96.7%211,623 7,449,353 99.5%(32,099)5,080 0.1%
2010 7,648,269 278,930 7,369,339 7,155,141 97.1%181,589 7,336,730 99.6%(25,704)6,905 0.1%
2011 7,677,351 293,075 7,384,276 7,178,807 97.2%178,326 7,357,133 99.6%(19,074)8,069 0.1%
2012 7,850,042 -7,850,042 7,759,174 98.8%26,849 7,786,023 99.2%(53,367)10,652 0.1%
2013 7,900,724 -7,900,724 7,827,356 99.1%33,139 7,860,495 99.5%(27,410)12,819 0.2%
2014 8,151,086 -8,151,086 8,109,373 99.5%31,063 8,140,436 99.9%(1,576)9,074 0.1%
2015 8,535,565 -8,535,565 8,498,746 99.6%-8,498,746 99.6%(6,290)30,529 0.4%
TAX INCREMENTS
Total Tax Collections in Abatements
Fiscal Levy for Tax Net % of Subsequent % of and % of
Year Fiscal Year Credits Levy Amount Net Levy Years Amount Net Levy Adjustments Amount Net Levy
2006 779,400$-$779,400$777,297$99.7%443$777,740$99.8%(1,660)$-$0.0%
2007 889,262 -889,262 836,397 94.1%1,222 837,619 94.2%(51,643)-0.0%
2008 1,191,177 -1,191,177 1,184,402 99.4%4,874 1,189,276 99.8%(1,901)-0.0%
2009 1,247,605 -1,247,605 1,205,582 96.6%39,200 1,244,782 99.8%(2,823)-0.0%
2010 1,193,383 -1,193,383 1,144,243 95.9%36,309 1,180,552 98.9%(12,831)-0.0%
2011 1,071,686 -1,071,686 1,044,309 97.4%25,742 1,070,051 99.8%(1,635)-0.0%
2012 955,039 -955,039 953,400 99.8%-953,400 99.8%(1,639)-0.0%
2013 971,745 -971,745 970,071 99.8%-970,071 99.8%(1,674)-0.0%
2014 869,425 -869,425 869,339 100.0%60 869,399 100.0%(26)-0.0%
2015 729,130 -729,130 727,558 99.8%-727,558 99.8%(1,572)-0.0%
Source:
Year of the Net Levy to Date Total Uncollected
Wright County
Collected within the Total Collections
Year of the Net Levy to Date Total Uncollected
Collected within the Total Collections
92
CITY OF MONTICELLO
Principal Property Taxpayers
Current Year and Nine Years Ago
Percentage of Percentage of
Taxable Net Tax Total Net Tax Market Taxable Net Tax Total Net Tax
Taxpayer Market Value (1) Capacity Value Rank Capacity Value Value Capacity Value Rank Capacity Value
Xcel Energy (Northern States)722,993,700$14,453,109$1 58.6%240,261,700$4,791,134 1 38.3%
Walmart Real Estate Bus Trust 10,720,000 213,650 2 0.9%
Target Corporation 10,120,400 201,658 3 0.8%
New River Medical Center 7,544,100 150,882 4 0.6%
Home Depot USA, Inc.6,835,400 135,958 5 0.6%
Muller Family Theatres 5,511,400 109,097 6 0.4%5,381,200 106,781 4 0.9%
AX TC Retail, LP 5,154,900 101,598 7 0.4%
Ryan Companies 4,781,700 92,634 8 0.4%
RCE Property LLC 4,000,000 79,250 9 0.3%
Tapper’s Holdings, LLC 3,956,800 77,636 10 0.3%3,806,000 74,620 8 0.6%
Ocello LLC 11,593,300 140,293 2 1.1%
Jacob Holdings of Monticello, LLC 6,147,100 122,192 3 1.0%
Peterson Holdings, LLC 5,085,200 100,954 5 0.8%
Monticello Washington Assn 4,564,600 90,542 6 0.7%
Gould Brothers Chev, LLP 4,410,100 86,702 7 0.7%
BBF Properties, Inc.3,712,900 73,508 9 0.6%
Tomann, Terrance & Mary Family LTD 3,503,800 69,326 10 0.6%
781,618,400$15,615,472$63.4%288,465,900$5,656,052$45.3%
Note 1: The market value and taxable net tax capacity value is for taxes levied in 2014, which are payable in 2015.
Source: Wright County Certificate of Taxes and Taxable Properties
2015 2006
93
CITY OF MONTICELLO
Water Sold by Customer Type (gallons)
Last Ten Fiscal Years
Total
% of % of % of % of Water % of
Year Residential Total Commercial Total Industrial Total Government Total Sold Total
2006 419,892,135$69.5%82,989,503$13.7%52,305,000$8.7%48,622,223$8.1%603,808,861$100.0%
2007 467,672,488 71.3%91,517,828 14.0%49,035,750 7.5%47,703,225 7.3%655,929,291 100.0%
2008 409,879,658 69.0%84,234,653 14.2%47,790,000 8.0%52,154,498 8.8%594,058,809 100.0%
2009 430,263,791 75.0%69,825,753 12.2%38,713,057 6.8%34,601,796 6.0%573,404,397 100.0%
2010 376,687,840 67.1%90,001,208 16.0%47,225,176 8.4%47,227,405 8.4%561,141,629 100.0%
2011 348,580,072 66.0%84,194,027 15.9%50,971,196 9.7%44,219,755 8.4%527,965,050 100.0%
2012 426,358,402 69.0%97,281,410 15.7%46,654,712 7.5%47,866,428 7.7%618,160,952 100.0%
2013 383,079,041 68.8%85,819,687 15.4%45,954,136 8.2%42,206,803 7.6%557,059,667 100.0%
2014 328,835,772 68.2%79,370,922 16.5%38,308,124 7.9%35,566,000 7.4%482,080,818 100.0%
2015 325,188,041 68.1%76,283,322 16.0%38,897,216 8.1%37,005,919 7.8%477,374,498 100.0%
Source: City of Monticello utility billing department
$0
$100
$200
$300
$400
$500
$600
$700
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015MillionsWater Sold by Customer Type (gallons)
Government
Industrial
Commercial
Residential
94
CITY OF MONTICELLO
Water and Sewage Utility Rates
Last Ten Fiscal Years
Rate Tier 1 Rate Tier 2 Rate Tier 3 Rate Tier 4 Rate Tier 1 Rate Tier 2 Rate Tier 3 Rate Tier 4 Rate Tier 1 Rate Tier 1
Base Rate 501–4,000 4,001–13,369 Over 13,369 Base Rate 501–4,000 4,001–13,369 Over 13,369 Base Rate Over 500
Fiscal First 500 per 100 per 100 per 100 First 500 per 100 per 100 per 100 First 500 per 100
Year Cubic Feet Cubic Feet Cubic Feet Cubic Feet Cubic Feet Cubic Feet Cubic Feet Cubic Feet Cubic Feet Cubic Feet
2006 8.92$0.54$0.54$N/A 8.92$0.54$N/A N/A 10.40$1.87$
2007 10.26 0.62 0.71 N/A 10.26 0.62 N/A N/A 11.96 2.15
2008 11.91 0.74 0.84 N/A 11.91 0.74 N/A N/A 13.75 2.47
2009 12.40 0.78 0.88 N/A 12.40 0.78 N/A N/A 14.45 2.60
2010 13.00 0.85 0.95 N/A 14.75 0.95 N/A N/A 15.15 2.75
2011 14.30 0.95 1.10 1.20 14.30 0.95 1.10 1.20 16.75 3.00
2012 15.44 1.03 1.19 1.30 15.44 1.03 1.19 1.30 18.76 3.36
2013 17.00 1.13 1.31 1.43 17.00 1.13 1.31 1.43 20.65 3.70
2014 17.00 1.13 1.31 1.43 17.00 1.13 1.31 1.43 20.65 3.70
2015 17.85 1.19 1.38 1.50 17.85 1.19 1.38 1.50 21.69 3.89
N/A – Not Available
Source: City of Monticello utility billing department
Water Sewage
Residential Commercial
95
CITY OF MONTICELLO
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Governmental activities
General obligation bonds
Special assessment 30,255,000$28,415,000$24,075,000$21,535,000$21,320,000$29,490,000$26,625,000$13,010,000$12,203,653$11,689,653$
Other 2,210,000 7,132,903 15,737,903 12,822,903 11,531,903 10,196,903 8,877,403 7,506,653 10,487,000 9,563,000
Tax increment 810,000 680,000 575,000 470,000 ------
Net premium (discount)639,119 691,438 651,542 631,516 572,079 818,803 744,748 265,320 67,350 190,196
Total GO bonds 33,914,119 36,919,341 41,039,445 35,459,419 33,423,982 40,505,706 36,247,151 20,781,973 22,758,003 21,442,849
Notes 10,188,973 9,515,592 --------
Certificates of indebtedness -------445,000 385,000 325,000
Total general obligation debt 44,103,092 46,434,933 41,039,445 35,459,419 33,423,982 40,505,706 36,247,151 21,226,973 23,143,003 21,767,849
Non-general obligation bonds
Revenue 6,579,419 6,157,974 5,742,098 5,209,011 4,612,454 3,690,898 2,739,341 1,782,784 985,000 -
Contract for deed 764,293 664,293 564,293 -------
Total governmental activites 51,446,804$53,257,200$47,345,836$40,668,430$38,036,436$44,196,604$38,986,492$23,009,757$24,128,003$21,767,849$
Business-type activities
General obligation
revenue bonds -$907,097$907,097$837,097$747,097$654,097$568,597$3,479,347$3,206,347$2,930,347$
Non-general obligation
Revenue bonds --26,445,000 26,445,000 26,445,000 26,445,000 26,445,000 26,445,000 --
PFA loans ---------615,268
Net premium (discount)-14,364 (502,517)(479,980)(457,441)(434,904)(412,366)(360,211)31,941 30,339
Total business-type activities -$921,461$26,849,580$26,802,117$26,734,656$26,664,193$26,601,231$29,564,136$3,238,288$3,575,954$
Total primary government 51,446,804$54,178,661$74,195,416$67,470,547$64,771,092$70,860,797$65,587,723$52,573,893$27,366,291$25,343,803$
% of personal income (1)14.3%14.3%18.9%17.6%15.8%16.8%13.7%10.5%5.2%4.6%
Per capita debt (1)4,620$4,815$6,528$5,879$5,632$5,554$5,071$4,055$2,106$1,931$
(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.
96
CITY OF MONTICELLO
Ratios of Net General Obligation Bonded Debt Outstanding
Last Ten Fiscal Years
Percentage of
Less Amounts Estimated
General Available Actual Market
Obligation in Debt Value of
Year Bonds (1)Service Fund Total Property (2)Per Capita (3)
2006 33,914,119$9,170,798$24,743,321$2.49%2,222$
2007 37,826,438 18,520,552 19,305,886 1.55%1,716
2008 41,946,542 9,936,332 32,010,210 2.50%2,816
2009 36,296,516 2,346,286 33,950,230 2.73%2,958
2010 34,171,079 2,363,382 31,807,697 2.68%2,766
2011 41,159,803 12,727,140 28,432,663 2.57%2,228
2012 36,815,748 12,952,896 23,862,852 1.96%1,845
2013 24,706,320 2,750,079 21,956,241 1.83%1,694
2014 26,349,350 3,919,070 22,430,280 1.48%1,726
2015 24,728,535 5,382,214 19,346,321 1.13%1,474
Note 1:
Note 2:
Note 3:See the Schedule of Demographic and Economic Statistics.
Source:Details regarding the city’s outstanding debt can be found in the notes to basic financial statements.
Does not include revenue bonds.
See the Schedule of Taxable Net Tax Capacity Value and Estimated Market Value of Taxable Property for the
estimated actual market value.
97
CITY OF MONTICELLO
Legal Debt Margin Information
Last Ten Fiscal Years
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
19,872,946$23,203,682$37,303,833$38,074,842$35,646,663$33,196,242$36,591,591$35,671,296$45,407,112$51,363,756$
Total net debt
applicable to
debt limit 6,650,000 6,100,000 6,180,000 5,585,000 4,985,000 4,365,000 3,795,000 6,200,000 10,872,000 9,888,000
Legal debt margin 13,222,946$17,103,682$31,123,833$32,489,842$30,661,663$28,831,242$32,796,591$29,471,296$34,535,112$41,475,756$
Total net debt
applicable to
debt limit as a
percentage
of debt limit 33.5%26.3%16.6%14.7%14.0%13.1%10.4%17.4%23.9%19.3%
Market value 1,712,125,200$
Debt limit (3% of market value)51,363,756$
Debt applicable to limit
General obligation bonds 24,508,000
Less amounts for general obligation bonds
not subject to debt limit (14,620,000)
Total net debt applicable to limit 9,888,000
Legal debt margin 41,475,756$
Note: All Minnesota municipalities (counties, cities, towns, and school districts) are subject to statutory “net debt” limitations under the provisions of Minnesota Statutes,
§ 475.53. Under this provision, beginning with issues having a settlement date after June 30, 2008, the state of Minnesota increased the legal debt limit from 2 percent
to 3 percent of the city’s taxable market value.
Source: Details regarding the city’s outstanding debt can be found in the notes to basic financial statements. Market value data provided in Wright County Certificate of
Taxes and Taxable Properties.
Legal Debt Margin Calculation for Fiscal Year 2015
Fiscal Year
Legal debt limit
98
CITY OF MONTICELLO
Computation of Direct and Overlapping Debt
As of December 31, 2015
Estimated
Net percentage Amount
bonded debt applicable applicable to
Jurisdiction outstanding (1)to city (2)city
DIRECT DEBT:
City of Monticello 21,767,849$100.0%21,767,849$
OVERLAPPING DEBT:
I.S.D. 882 2,270,000 75.8%1,720,660
Wright County 46,210,000 18.7%8,641,270
Total Overlapping Debt 10,361,930
Total direct and overlapping debt 32,129,779$
(1)
(2)
Note:
Source: The Wright County auditor provided the debt outstanding and estimated applicable percentages for the school district and county.
Gross bonded debt outstanding.
The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the
portion of the government’s taxable assessed value that is within the City’s boundaries and dividing it by the government’s total taxable assessed value.
Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding
debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the government’s
ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply
that every taxpayer is a resident and, therefore, responsible for repaying the debt of each overlapping government.
99
CITY OF MONTICELLO
Schedule of General Obligation Revenue Bond Coverage
Last Three Fiscal Years
Sewage Fund:
Net Revenue
Gross Operating Available for
Year Revenues (1)Expenses(2)Debt Service Principal Interest Total Coverage
2013 2,006,718$1,476,418$530,300$-$-$-$-
2014 2,081,660 1,570,197 511,463 273,000 91,963 364,963 140.1%
2015 2,083,122 1,479,157 603,965 276,000 84,158 360,158 167.7%
Notes: (1) Total revenues does not include investment earnings.
(2) Total operating expenses excluding depreciation.
(3) The first year of bond payments is 2014. Schedule excludes telecommunications bonds. No other revenue bonds existed before 2013.
Source: Finance Department
Debt Service Requirements (3)
100
CITY OF MONTICELLO
Demographic and Economic Statistics
Last Ten Fiscal Years
Per
Estimated Capita
Unemployment School Personal Personal
Year Population (1)rate (2)Enrollment (3)Income (4)Income (5)
2006 11,136 4.4%3,962 358,590,336$32,794$
2007 11,253 4.8%3,910 379,102,317 34,067
2008 11,366 5.7%3,921 391,740,556 35,779
2009 11,476 7.9%3,928 384,446,000 37,011
2010 11,501 8.8%3,932 410,252,171 35,156
2011 12,759 7.5%4,011 422,820,501 35,739
2012 12,935 6.2%4,044 477,596,640 38,069
2013 12,964 4.6%4,016 502,964,308 39,312
2014 12,993 3.8%4,089 521,759,901 40,157
2015 13,125 3.7%4,100 547,010,625 41,677
Notes/sources:
(1)
(2)
(3)
(4)
(5)
2010 U.S. Bureau of Census; 2006–2009 and 2011–2015 Minnesota State Demographic Center population estimates.
Annual average unemployment provided by the Minnesota Department of Employment & Economic Development.
ISD No. 882 enrollment information was obtained from the district audit report. The enrollment information is based on the
resident ADMs (average daily membership) served.
This estimated personal income number is calculated by taking the per capita personal income and multiplying it by the city’s
population. Also see note (5) regarding the per capita personal income figures.
Per capita personal income data is provided by the Bureau of Economic Analysis. Monticello's estimates are based on Wright
County information. Wright County, where Monticello is located, is the smallest, relevant statistical tracking area.
101
CITY OF MONTICELLO
Principal Employers
Current Year and Eight Years Ago
Percentage of Percentage of
Total City Total City
Employer Employees Rank Employment Employees Rank Employment
Xcel Energy (Northern States) (1)700 1 9.9%422 3 6.8%
ISD No. 882 (Monticello)544 2 7.7%455 2 7.4%
CentraCare Medical Center (New River)500 3 7.1%515 1 8.3%
Cargill Kitchen Solutions (Sunny Fresh)450 4 6.4%396 4 6.4%
Wal-Mart Supercenter 325 5 4.6%325 5 5.3%
Cub Foods 180 6 2.6%122 9 2.0%
Ultra Machine Corporation 173 7 2.5%130 8 2.1%
Home Depot 160 8 2.3%
City of Monticello 150 9 2.1%151 6 2.4%
WSI Industries, Inc.100 10 1.4%
Denny Hecker Monticello 150 7 2.4%
Monticello Clinic 98 10 1.6%
3,282 46.5%2,764 44.8%
Source: City of Monticello 2015 Bond Statement and 2007 Bond Statement
*2006 information was not available. Therefore, the next year was used. The city estimates its workforce by using the city's percentage of total county population
and multiplying that number by the county's total workforce.
2015 2007*
102
CITY OF MONTICELLO
City Government Employees by Function/Program
Last Ten Fiscal Years
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Employees by function
General Fund
General government 8.60 8.60 9.60 9.60 11.00 11.00 11.00 11.00 12.50 12.50
Public Safety
Building Official 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 4.00
Public works
Engineering 3.00 3.00 3.00 3.00 3.00 3.00 3.00 1.00 1.00 1.00
Maintenance(1)21.50 21.50 21.50 19.50 19.50 19.00 19.00 19.00 18.50 18.50
Culture and recreation
Parks 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
Community development 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00
Special Revenue Funds
Culture and recreation
Community center-FT 8.00 8.00 8.00 8.00 8.00 8.00 8.00 8.00 7.50 7.50
Community center-PT(2)36.50 36.50 36.50 36.50 36.50 36.50 36.50 36.50 36.50 36.50
Enterprise Funds
Sewer/water 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 4.00 5.00
Deputy registrar(3)5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00
Liquor store 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 11.50 11.50
FiberNet ---6.00 11.00 11.50 11.50 8.50 8.50 8.50
Total 106.60 106.60 107.60 111.60 118.00 118.00 118.00 113.00 115.00 117.00
Employees by fund type
General Fund 43.10 43.10 44.10 42.10 43.50 43.00 43.00 41.00 42.00 43.00
Special Revenue Funds 44.50 44.50 44.50 44.50 44.50 44.50 44.50 44.50 44.00 44.00
Enterprise Funds 19.00 19.00 19.00 25.00 30.00 30.50 30.50 27.50 29.00 30.00
106.60 106.60 107.60 111.60 118.00 118.00 118.00 113.00 115.00 117.00
Source: City of Monticello human resources department
FT = Full-time PT = Part-time
Notes:
(1) Includes seasonal public works
(2) Years 2006-2013 were estimated 2014 levels as data was not previously tracked.
(3) Prior to 2013, the deputy registrar function was included with general government. Prior years were restated.
Fiscal Year
103
CITY OF MONTICELLO
Operating Indicators by Function
Last Ten Fiscal Years
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Function
Fire
Calls for service 266 317 395 375 282 284 203 235 264 251
Public works
Salt (tons)164 274 474 475 521 445 300 475 385 534
Sand (tons)319 347 611 615 710 547 335 325 600 285
Crack sealant (pounds)11,115 14,200 18,150 15,000 23,580 11,384 1,492 25,739 23,282 29,580
Asphalt repairs (tons of asphalt)300 330 200 200 200 253 220 225 190 293
Culture and recreation
Shade trees planted –384 410 425 150 140 220 275 270 257
Diseased trees removed n/a n/a 868 200 180 113 205 71 46 208
Trails maintained (miles)n/a n/a 17 17 17 17 17 17 18 18
Community center users 145,700 168,923 186,429 186,279 183,527 190,014 175,272 211,234 204,134 199,228
Program sales 67,021 88,412 129,339 149,829 167,723 168,159 162,227 192,708 184,125 213,924
Rental revenue 148,533 139,096 136,547 127,612 184,913 154,962 149,733 163,329 150,964 154,938
Economic development
Permits issued 1,323 962 3,681 879 495 372 632 659 721 768
Permit valuation 45,572,690$45,917,000$45,950,000$11,630,000$9,033,078$5,333,124$12,285,873$15,821,223$19,714,895$36,242,742$
Water
Meters replaced 109 94 111 280 145 215 418 235 598 694
Curb box repairs (water valves)50 50 75 200 200 200 100 100 100 100
Hydrant repair 175 175 175 175 175 430 300 300 203 430
Residential water gallons used 419,892,135 467,673,488 409,879,658 430,263,791 376,687,840 348,580,072 426,358,402 383,079,041 328,835,772 325,188,041
Avg. daily consumption (MG)1.817 1.921 1.749 1.806 1.625 1.557 1.798 1.621 1.400 1.308
Max. daily gallons pumped (MG)5.271 5.150 4.728 4.496 3.565 4.116 4.590 4.269 4.031 3.203
Sewer
Sewage flow (MG)414 423 408 390 398 431 408 392 435 417
Miles jetted 20 20 20 20 25 27 12 20 16 28
Blocks rodded 3 3 3 3 25 10 20 10 20 10
Miles inspected 20 20 20 20 30 30 12 20 20 30
Library
Items checked out 188,704 209,174 216,599 219,694 248,327 228,886 237,938 263,220 199,182 195,235
Programs offered 232 145 155 170 164 153 149 173 169 167
Program participants 4,196 3,537 3,869 4,100 3,604 3,807 3,761 3,773 3,788 3,919
Fiscal Year
(continued)
104
CITY OF MONTICELLO
Operating Indicators by Function
Last Ten Fiscal Years (continued)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Fiber optics
Customers n/a n/a n/a n/a n/a n/a n/a n/a 1,539 1,574
Service subscriptions n/a n/a n/a n/a n/a n/a n/a n/a 2,755 2,656
TV customers n/a n/a n/a n/a n/a n/a n/a n/a 813 714
Phone customers n/a n/a n/a n/a n/a n/a n/a n/a 582 518
Internet customers n/a n/a n/a n/a n/a n/a n/a n/a 1,360 1,424
Liquor store
Transactions n/a n/a n/a n/a n/a n/a n/a n/a 229,236 237,535
Average liquor sale transaction n/a n/a n/a n/a n/a n/a n/a n/a 21.90$22.42$
Beer sales n/a n/a 2,066,537$2,187,948$2,289,801$2,328,735$2,483,194$2,539,168$2,604,942$2,763,478$
Liquor sales n/a n/a 1,129,351$1,214,817$1,251,448$1,343,109$1,396,521$1,506,776$1,546,118$1,634,198$
Wine sales n/a n/a 492,183$575,521$657,562$748,908$812,832$860,817$868,779$927,732$
Gross profit margin % - beer n/a n/a 20.7%15.7%20.4%19.1%20.3%22.5%21.4%25.6%
Gross profit margin % - liquor n/a n/a 23.9%26.8%29.6%28.0%29.3%27.7%30.3%29.8%
Gross profit margin % - wine n/a n/a 17.0%20.2%26.8%28.5%31.4%29.7%30.7%31.5%
Deputy registrar (DMV)
Motor vehicle transactions 45,225 40,950 45,595 48,000 51,250 54,814 56,211 55,261 60,051 64,927
DNR transactions 5,307 5,580 5,913 5,646 5,982 5,616 5,465 5,727 5,949 5,914
Game/fish transactions n/a 167 235 250 156 325 509 445 433 387
Drivers licenses transactions n/a n/a n/a 450 605 579 814 951 1,462 1,294
Total transactions 50,532 46,697 51,743 54,346 57,993 61,334 62,999 62,384 67,895 72,522
Dealerships serviced 18 14 21 25 30 34 38 21 23 25
Net revenue per transaction n/a n/a n/a n/a n/a 1.71$2.75$2.68$2.91$3.02$
N/A = Not Available
MG = Millions of Gallons
Note: Indicators are not available for the general government function.
Sources: Various city departments
Fiscal Year
105
CITY OF MONTICELLO
Capital Assets Statistics by Function
Last Ten Fiscal Years
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Function
Public safety
Fire
Fire stations in service 1 1 1 1 1 1 1 1 1 1
Number of volunteers 30 30 30 30 30 30 30 30 30 30
Public works
Streets (miles)65.7 67.6 67.6 68.0 68.0 68.0 68.0 68.0 68.0 68.0
Recreation and culture
Parks acreage --120 180 509 635 635 696 860 952
Parks 19 19 20 20 28 28 28 28 30 30
Park buildings 9 9 10 11 15 15 15 15 15 15
Community center (sq. ft.)81,000 81,000 81,000 81,000 81,000 81,000 81,000 82,000 82,000 82,000
Water
Fire hydrants 700 700 700 700 700 700 700 700 700 700
Note: No capital asset indicators are available for the general government and economic development functions.
Source: Various city departments
106
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