2016 Monticello Annual Comprehensive Financial ReportCITY OF MONTICELLO, MINNESOTA
Comprehensive Annual Financial Report
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2016
City of Monticello
Wright County, Minnesota
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2016
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, 2016
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 and Non-Employer Proportionate Share of Net Pension Liability 57
Schedules of Employer's Pension Contibutions 58
Schedule of Changes in the Fire Relief Association's Net Pension Liability (Asset) and Related Ratios 59
Schedule of Funding Progress 60
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund 62
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Community Center Fund 64
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Economic Development Authority Fund 65
Notes to the Required Supplementry Information 66
Combining and Individual Fund Statements and Schedules
Nonmajor Governmental Funds
Combining Balance Sheet 67
Combining Statement of Revenues, Expenditures and Changes in Fund Balance 68
(continued)
I
CITY OF MONTICELLO
Comprehensive Annual Financial Report
Table of Contents
December 31, 2016 (continued)
Internal Service Funds Page
Combining Statement of Net Position 69
Combining Statement of Revenues, Expenses and Changes in Net Position 70
Combining Statement of Cash Flows 71
Other Supplementry Schedules
Schedule of Revenues (Sources) and Expenditures (Uses) - General Fund 73
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Minnesota Investment Fund 77
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - Cemetery Fund 78
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - CDBG-Revitalization Fund 79
Schedule of Assets, Liabilities, and Fund Balances - Economic Development Authority 80
Schedule of Revenues, Expenditures and Other Financing Sources (Uses) - Economic Development Authority 82
Schedule of Assets, Liabilities, Deferred Inflows of Resources, and Fund Balances - Debt Service Activities 84
Schedule of Revenues, Expenditures and Other Financing Sources (Uses) - Debt Service Activities 85
STATISTICAL SECTION
Financial trends
Net Position by Component - Last Ten Fiscal Years 87
Changes in Net Position - Last Ten Fiscal years 88
Fund Balances of Governmental Funds - Last Ten Fiscal Years 90
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 91
Governmental Funds Tax Revenues by Source - Last Ten Fiscal Years (modified accrual basis of accounting)92
General Governmental Tax Revenues by Source - Last Ten Fiscal Years (accrual basis of accounting)93
Revenue capacity
Tax Capacity Value and Estimated Market Value of Taxable Property - Last Ten Fiscal Years 94
Property Tax Rates - All Direct and Overlapping Governments - Last Ten Fiscal Years 95
Property Tax Levies and Collections - Last Ten Fiscal Years 96
Principal Property Taxpayers - Current Year and Nine Years Ago 97
Water Sold by Customer Type (gallons) - Last Ten Fiscal Years 98
Water and Sewage Utility Rates - Last Ten Fiscal Years 99
Debt capacity
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 100
Ratios of Net General Obligation Bonded Debt Outstanding - Last Ten Fiscal Years 101
Legal Debt Margin Information - Last Ten Fiscal Years 102
Computation of Direct and Overlapping Debt 103
Schedule of General Obligation Revenue Bond Coverage - Last Four Fiscal Years 104
Economic and demographic information
Demographic and Economic Statistics - Last Ten Fiscal Years 105
Principal Employers - Current Year and Nine Years Ago 106
Operating information
City Government Employees by Function/Program - Last Ten Fiscal Years 107
Operating Indicators by Function - Last Ten Fiscal Years 108
Capital Assets Statistics by Function - Last Ten Fiscal Years 110
II
INTRODUCTORY SECTION
Letter of Transmittal CITY OF MONTICELLO
Finance Department
June 20,2017
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 31,2016.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 31,2016 are free of material misstatements.The independent audit
involved examining,on a test basis,evidence supporting the amounts and
disclosures in the financial statements,assessing the accounting principles
used and significant estimates made by management,and evaluating the
overall financial statement presentation.The independent auditor concluded,
based upon the audit,that there was a reasonable basis for rendering an
unmodified opinion that the city’s financial statements for the fiscal year ended
December 31,2016,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 freestanding urban fringe community encompassing
approximately 5,000 acres and a population of 13,299.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 has 501(a)status and 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
1
Letter of Transmittal CITY OF MONTICELLO
city. Council members serve four-year terms, with two members elected every
two years. The mayor is elected for a two-year term. The mayor and members
of the city council are elected at large.
The city provides a full range of services: the construction and maintenance
of streets and other infrastructure; snow removal; park and cemetery
maintenance; recreational and cultural activities; water, sewer, surface water,
residential garbage, and recycling systems; community development, building
inspection, planning, police, fire, and liquor store operations; a city-run fiber
optic system and community center; and general government operations,
including administration, finance/accounting, information systems, community
information, and general government buildings.
The city council is required to adopt a final budget by late December for the
subsequent year. The budget is prepared by fund, function (e.g. public works),
and department (e.g. streets and alleys). Transfers of appropriations between
funds require the approval of the city council. The legal level of budgetary
control is the department level in the General Fund and fund level in all other
funds. Budget amendments require city council approval.
FINANCIAL PLANNING AND THE LOCAL ECONOMY
The city is recovering slowly from recent economic woes that have affected
other communities in Wright County and throughout the state of Minnesota.
The nuclear power plant provides the city with a relatively stable tax and
employment base. During the economic downturn, new commercial
development came to virtual standstill and today growth remains anemic.
However, the city lost very few of its local businesses, although some reduced
their workforce and scaled back operations. The rapid residential growth
starting nearly a decade ago has slowed significantly but the city was not hit
with a large number of foreclosed homes.
In the past, the state of Minnesota has reduced local government aid (LGA)
and the market value homestead credit (MVHC) to cities and counties as a
way to balance its own budget. Since the city does not receive LGA, the city’s
finances are relatively insulated from the state’s budget problems. In 2012,
the state eliminated the MVHC and replaced it with a Market Value Exclusion
program, which the city incorporated into its 2016 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 2016, the city issued 802 permits with a total valuation of
$59,426,683. 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 2016. 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 closed on the
last 245 acres of this originally plan park area. This 1,258 acre site includes
four pristine lakes and woodlands, which when developed will become a
regional park. Wright County and the city obtained matching grants from the
state to purchase much of acreage in the park.
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, 2015. 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 2016 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 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 Sarah K. Rathlisberger
Finance Director Finance Manager
3
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, 2015. 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, 2015
ExecutiveDirector/CEO
4
Organization Chart CITY OF MONTICELLO
Citizens of
Monticello
City Commissions
Council &Boards
City
Administrator
Human Finance Community City Public Community Deputy Fire Contracted
Resource Director Development Engineer Works Center City Chief Services
Director Director Director Director Clerk
Finance Economic Construction Streets Community Elections Fire City
Department Development Inspectors Department Center Department Attorney
Data Building Consulting Parks Sheriffs
Processing Inspections Engineer Department Department
Audit Receptionist Utilities Animal
Department Control
Department Consulting Refuse County
of Motor Planner Collection Assessor
Vehicles
Liquor FiberNet
Operations Operation
5
Directory of Officials CITY OF MONTICELLO
MAYOR & CITY COUNCIL
Position Name Term Expires
Mayor .....................................................................................Brian Stumpf 12/31/2018
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 ....................................................Ann Mosack
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
3ULQFLSDOV7KRPDV$.DUQRZVNL&3$3DXO$5DGRVHYLFK&3$:LOOLDP-/DXHU&3$-DPHV+(LFKWHQ&3$$DURQ-1LHOVHQ&3$9LFWRULD/+ROLQND&3$,1'(3(1'(17$8',725¶65(32577RWKH&LW\&RXQFLODQG0DQDJHPHQW&LW\RI0RQWLFHOOR0LQQHVRWD5(3257217+(),1$1&,$/67$7(0(176:H KDYH DXGLWHG WKH DFFRPSDQ\LQJ ILQDQFLDO VWDWHPHQWV RI WKHJRYHUQPHQWDODFWLYLWLHVWKHEXVLQHVVW\SHDFWLYLWLHVHDFKPDMRUIXQGDQGWKH DJJUHJDWH UHPDLQLQJ IXQG LQIRUPDWLRQ RI WKH &LW\ RI 0RQWLFHOOR0LQQHVRWD WKH&LW\ DVRIDQGIRUWKH\HDUHQGHG'HFHPEHUDQGWKHUHODWHGQRWHVWRWKHILQDQFLDOVWDWHPHQWVZKLFKFROOHFWLYHO\FRPSULVHWKH&LW\¶VEDVLFILQDQFLDOVWDWHPHQWVDVOLVWHGLQWKHWDEOHRIFRQWHQWV0$1$*(0(17¶65(63216,%,/,7<)257+(),1$1&,$/67$7(0(1760DQDJHPHQWLVUHVSRQVLEOHIRUWKHSUHSDUDWLRQDQGIDLUSUHVHQWDWLRQRIWKHVH ILQDQFLDO VWDWHPHQWV LQ DFFRUGDQFH ZLWK DFFRXQWLQJ SULQFLSOHVJHQHUDOO\DFFHSWHGLQWKH8QLWHG6WDWHVRI$PHULFD WKLVLQFOXGHVWKHGHVLJQLPSOHPHQWDWLRQDQGPDLQWHQDQFHRILQWHUQDOFRQWUROUHOHYDQWWRWKHSUHSDUDWLRQDQGIDLUSUHVHQWDWLRQRIILQDQFLDOVWDWHPHQWVWKDWDUHIUHHIURPPDWHULDOPLVVWDWHPHQWZKHWKHUGXHWRIUDXGRUHUURU$8',725¶65(63216,%,/,7<2XUUHVSRQVLELOLW\LVWRH[SUHVVRSLQLRQVRQWKHVHILQDQFLDOVWDWHPHQWVEDVHGRQRXUDXGLW:HFRQGXFWHGRXUDXGLWLQDFFRUGDQFHZLWKDXGLWLQJVWDQGDUGVJHQHUDOO\DFFHSWHGLQWKH8QLWHG6WDWHVRI$PHULFDDQGWKHVWDQGDUGVDSSOLFDEOHWRILQDQFLDODXGLWVFRQWDLQHGLQGovernment Auditing StandardsLVVXHGE\WKH&RPSWUROOHU*HQHUDORIWKH8QLWHG6WDWHV7KRVHVWDQGDUGVUHTXLUHWKDWZHSODQDQGSHUIRUPWKHDXGLWWRREWDLQUHDVRQDEOHDVVXUDQFHDERXWZKHWKHUWKHILQDQFLDOVWDWHPHQWVDUHIUHHIURPPDWHULDOPLVVWDWHPHQW$QDXGLWLQYROYHVSHUIRUPLQJSURFHGXUHVWRREWDLQDXGLWHYLGHQFHDERXWWKHDPRXQWVDQGGLVFORVXUHVLQWKHILQDQFLDOVWDWHPHQWV7KHSURFHGXUHVVHOHFWHGGHSHQGRQWKHDXGLWRU¶VMXGJPHQWLQFOXGLQJWKHDVVHVVPHQWRIWKHULVNVRIPDWHULDOPLVVWDWHPHQWRIWKHILQDQFLDOVWDWHPHQWVZKHWKHUGXHWRIUDXGRUHUURU,QPDNLQJWKRVHULVNDVVHVVPHQWVWKHDXGLWRUFRQVLGHUVLQWHUQDOFRQWUROUHOHYDQWWRWKH&LW\¶VSUHSDUDWLRQDQGIDLUSUHVHQWDWLRQRIWKH ILQDQFLDO VWDWHPHQWV LQ RUGHU WR GHVLJQ DXGLW SURFHGXUHV WKDW DUHDSSURSULDWHLQWKHFLUFXPVWDQFHVEXWQRWIRUWKHSXUSRVHRIH[SUHVVLQJDQRSLQLRQRQWKHHIIHFWLYHQHVVRIWKH&LW\¶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
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. 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 Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the 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 and individual fund financial statements and 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 and individual fund statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the 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 20, 2017 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 20, 2017 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, 2016. 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 32-55 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, nonmajor Special Revenue, 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 57.
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 $122,538,258 (net position).
Of this amount, $29,876,760 (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 $30,275,002, an increase of $1,298,752, or
4.5 percent. Nonspendable, restricted, and assigned uses of fund balance
totaled $24,132,527, leaving an unassigned fund balance of $6,142,475. The
2016 year-end unassigned fund balance is $1,268,981 or 26 percent, higher
than the 2015 ending balance.
At the end of the current fiscal year, unassigned fund balance for the General
Fund was $6,142,475, or 87.8 percent, of total General Fund expenditures for
2016. 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 2016, government-wide capital assets increased by $3,271,997 due to
disposals and depreciation on existing assets lagged acquisitions. All
governmental activities land acquisitions occurred at Bertram Chain of Lakes
park. The $1,017,795 increase included the portion of land the city is
responsible for maintaining and excluded the portion Wright County is
responsible for maintaining. Wright County is a 50/50 partner and will maintain
the lakes and trails section of the park. The city will maintain the athletic facilities
section. Other acquisitions include improvements at the intersection of TH25
and County Hwy 75 as well as the 2016 Street Reconstruction project and a
retaining wall along Hillside Cemetery on 7th Street to prepare for intersection
improvements at TH25 and 7th Street to be completed in 2017. Internal service
funds acquisitions include two new vehicles, a pavement cutter, and a 10-foot
mower.
The city’s total long-term bonded indebtedness decreased by $54,418, or 0.2
percent, in 2016. Principal payments made on outstanding debt totaled
$6,367,483. The city issued $4,900,000 in general obligations bonds to finance
capital project costs and $1,413,065 of PFA loan for wastewater treatment plant
improvements in 2016. The 2016A 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
2016 2015 2016 2015 2016 2015
Current and other assets 37,757,171$36,074,680$10,607,848$9,984,124$48,365,019$46,058,804$
Capital assets 60,637,933 58,497,221 45,429,326 44,298,041 106,067,259 102,795,262
Total assets 98,395,104 94,571,901 56,037,174 54,282,165 154,432,278 148,854,066
Deferred outflows of resources 1,522,334 270,113 524,942 129,955 2,047,276 400,068
Long-term liabilities 24,958,930 24,186,732 5,748,887 4,762,207 30,707,817 28,948,939
Other liabilities 1,723,032 1,399,698 543,065 541,740 2,266,097 1,941,438
Total liabilities 26,681,962 25,586,430 6,291,952 5,303,947 32,973,914 30,890,377
Deferred inflows of resources 763,930 378,179 203,452 222,104 967,382 600,283
Net position
Net investment in capital assets 41,077,683 38,099,568 41,014,122 40,722,087 82,091,805 78,821,655
Restricted 10,569,693 12,633,770 --10,569,693 12,633,770
Unrestricted 20,824,170 18,144,067 9,052,590 8,163,982 29,876,760 26,308,049
Total net position 72,471,546$68,877,405$50,066,712$48,886,069$122,538,258$117,763,474$
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 (9%) represents resources that are
subject to external restrictions on how they can be used. The remaining
unrestricted net position of $29,876,760 may be used to meet the ongoing
obligations to citizens and creditors. Of the unrestricted net position, $9,052,590
(30%) is attributable to business-type activities.
The unrestricted governmental activities net position increased $2,680,103
(15%), while business-type activities unrestricted net position increased
$888,608 (11%). The government-wide total unrestricted net position increased
$3,568,711 (14%), reflecting revenues exceeding conservative budgeted
estimates.
The $2,140,712 (4%) increase in governmental activities capital assets is
reflective of capital asset purchases and reinvestment exceeding depreciation
and disposals. Business-type capital assets increased $1,131,285 (3%) also
due to reinvestment exceeding depreciation.
Net investment in capital assets, which is capital assets less related debt,
increased with Bertram Chain of Lakes land acquisitions and improvements at
the wastewater treatment plant. The land was not acquired with debt. A grant
along with debt financed the treatment plant improvements.
12
Management’s Discussion and Analysis CITY OF MONTICELLO
CHANGE IN NET POSITION
2016 2015 2016 2015 2016 2015
Revenues
Program revenues
Charges for services 3,524,892$2,663,578$7,107,373$6,912,512$10,632,265$9,576,090$
Operating grants and contributions 389,005 355,041 --389,005 355,041
Capital grants and contributions 3,297,265 2,667,710 2,000,456 1,454,980 5,297,721 4,122,690
General revenues
Property taxes 9,270,592 8,683,585 --9,270,592 8,683,585
Tax increments 668,352 727,617 --668,352 727,617
Franchise taxes 412,217 333,484 --412,217 333,484
Unrestricted investment earnings 375,614 278,465 128,080 108,191 503,694 386,656
Gain on sale of assets 11,180 30,473 5,218 88,157 16,398 118,630
Total revenues 17,949,117 15,739,953 9,241,127 8,563,840 27,190,244 24,303,793
Expenses
General government 1,694,111 1,447,725 --1,694,111 1,447,725
Public safety 2,187,363 1,960,009 --2,187,363 1,960,009
Public works 5,480,074 5,312,612 --5,480,074 5,312,612
Sanitation 600,300 563,477 --600,300 563,477
Transit 41,250 40,000 --41,250 40,000
Recreation and culture 3,998,945 3,524,979 --3,998,945 3,524,979
Economic development 756,620 1,547,875 --756,620 1,547,875
Interest and fiscal charges 565,774 735,753 --565,774 735,753
Water utility --1,168,473 1,102,610 1,168,473 1,102,610
Sewage utility --2,618,887 2,661,990 2,618,887 2,661,990
Liquor --831,809 798,631 831,809 798,631
Fiber optics --2,483,262 2,536,461 2,483,262 2,536,461
Deputy registrar --345,492 313,968 345,492 313,968
Total expenses 15,324,437 15,132,430 7,447,923 7,413,660 22,772,360 22,546,090
Increase in net position
before transfers and special items 2,624,680 607,523 1,793,204 1,150,180 4,417,884 1,757,703
Transfers 969,461 2,301,045 (969,461)(2,301,045)--
Special item: contribution of land to county -(5,511,547)---(5,511,547)
Special item: transfer of operations --356,900 -356,900 -
Change in net position 3,594,141 (2,602,979)1,180,643 (1,150,865)4,774,784 (3,753,844)
Net position, January 1 68,877,405 71,480,384 48,886,069 50,036,934 117,763,474 121,517,318
Net position, December 31 72,471,546$68,877,405$50,066,712$48,886,069$122,538,258$117,763,474$
Governmental Activities Business-Type Activities Total
13
Management’s Discussion and Analysis CITY OF MONTICELLO
Investment
earnings
2%
Charges for
services
20%
Operating grants &
contributions
2%
Capital grants &
contributions
18%
Franchise taxes
2%
Tax increment
4%
Property taxes
52%
Revenues by Source -
Governmental Activities
$-
$1
$2
$3
$4
$5
$6
MillionsProgram Expenses and Revenues -
Governmental Activities
Program Expenses Program Revenues
Governmental Activities.The most significant revenue source for
governmental activities is property taxes at 52% of total revenues. Property
taxes support the General Fund, Community Center Fund, Capital Project Fund,
and Debt Service Fund. Charges for services accounts for 20% 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 fair 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 (36%), followed by
recreation and culture (26%), public safety (14%), general government (11%),
economic development (5%), sanitation (4%), and others (4%). Included in
these amounts is depreciation expense, which is 27% of the total expenses for
governmental activities.
Governmental activities revenues increased $2,209,164 (14%) in the current
year, with the most significant portions of the increase attributable to charges
for services and capital grants & contributions. In 2016, the negative change in
investment fair values decreased the interest earnings by 2%. Governmental
activities investment earnings for 2016 totaled $375,614. Property taxes
increased by 6.8 percent, bolstered by the addition of new HRA levy of
$280,000. Capital grants and contributions were affected by new assessments
and federal/state aid for road construction.
Governmental activities expenses increased $192,007 (1%) in the current year.
The most significant changes in program expenses were as follows:
•Recreation and culture increased $473,966 (13%) with larger operational
and development planning expenditures and recognition of additional
employee pension benefits.
•Recognition of additional pension benefits had major impacts on public
safety (+12% or $227,354), public works (+3% or $167,462), and general
government (+17% or $246,386)
•Economic development expenses decreased $791,255 (51%) with a much
smaller downward value adjustment of land held for resale and less activity
in the tax increment financing districts.
•Interest and fiscal charges declined 23% with amortization and redemption
of higher interest debt and the addition of lower interest debt.
14
Management’s Discussion and Analysis CITY OF MONTICELLO
Charges for
services
77%
Capital grants &
contributions
22%
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
$4.5
Water Utility Sewage Utility Liquor Fiber Optics Deputy RegistrarMillionsProgram Revenues and Expenses -
Business-TypeActivities
Revenues Expenses
Business-type Activities.Business-type activities increased the city’s net
position by $1,180,643, which is $2,331,508 more than the prior fiscal year
decrease of $1,150,865.
Key elements of the change are as follows:
A grant (capital contribution) for wastewater treatment plant improvements and
lower transfers to the Debt Service Fund are primarily responsible for the
increase in net position. The enterprise funds started supporting debt service
when water and sewage impact fees declined.
Business-type activities investment earnings for 2016 totaled $128,080. This is
a $19,889 increase over the prior year’s investment earnings of $108,191.
Swings in investment fair values did not have a significant impact on net
investment earnings in 2016.
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 MPFA grant. Capital contributions for 2016 totaled
$2,000,456, an increase of $545,476 (37%) over the prior year.
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, 2016, the city’s governmental funds reported total ending fund
balances of $30,275,002, an increase of $1,298,752 (4%) when compared with
the prior year. Nearly 23% or $6,987,234 of the total ending fund balances
constituted restricted fund balances, which are considered unavailable for
appropriation for general operations. The $3,824,575 nonspendable fund
balance accounted for 13% 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
$6,276,720, increasing $1,289,924 (26%) from the prior year. General fund
revenues were $633,910 (8%) more than the prior fiscal year and expenditures
increased by $277,443 (4%). Transfers out decreased by $297,012 to zero.
15
Management’s Discussion and Analysis CITY OF MONTICELLO
General government expenditures increased $24,434 (2%) with most of the
increase related to employee costs. Streets & alleys and public works
inspections were largely responsible for the $93,821 (5%) increase in public
works expenditures. Recreation and culture expenditures increased by $57,324
(6%) primarily caused by additional internal service fund equipment leasing and
rises in employee costs. Public safety expenditures increased $63,729 (3%)
with inflation to the Wright County law enforcement contract and increased
activity in building inspection.
The fund balance in the Community Center Fund increased $132,387 (21%) to
$761,829. Charges for services decreased $5,451 (less than 1%) to $1,395,573
in 2016. Expenditures increased $76,802 (5%) to $1,654,445. The community
center debt was fully amortized at the end of 2015.
The fund balance in Economic Development Authority (EDA) Fund increased
$579,465 (9%) to $7,142,330. The assigned fund balance, which is available for
general EDA activity, equaled $2,835,268 at year end. Land held for resale
declined $489,000 (18%) to $2,193,957. Land held for resale receives the same
accounting treatment, lower of cost or fair value, as inventory. The EDA
recorded a $288,402 gain on the 2016 sale of one parcel with a book value of
$418,900. The EDA received $279,422 in property tax revenue in 2016. At year
end, the restricted $2,274,667 portion of the fund balance is attributable to tax
increment districts and loan programs.
The fund balance in the Debt Service Fund decreased $1,838,663 (34%) to
$3,543,551. This planned fund balance decrease reflects prior year
accumulation of resources to make the February debt service payment, which
in one case is the last large payment due on an issue. Additionally, the city
redeemed early a total of $1,061,000 in debt principal on two issues. Special
assessment revenue decreased $1,420,856 (64%) to $812,547. One property
owner’s payment of future assessments contributed significantly to the 2015
total. In governmental funds, assessments are recorded as a revenue when
collectible, whether it is in the current period or soon thereafter.
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 $1,492,016 (28%) to $6,884,229. The $1,631,789 nonspendable
portion of the fund balance is land held for resale. Proceeds from a 2016
$4,900,000 general obligation bond issue are accounted for in this fund. Various
assessment and street reconstruction projects were financed by this issue. The
$753,500 transfer to the Park and Pathway Dedication Fund went toward
Bertram land acquisition or will finance various 2017 park projects.
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 $67,006 (6%) with higher personal services
costs. Utility employee personal service costs are divided between the Water
Fund and Sewage Fund based on activity. The Water Fund transferred
$199,327 to Debt Service Fund for improvements related to the water system.
The fund’s net position increased $61,726 (less than 1%) to $14,390,486.
Depreciation expense for the fund totaled $502,447.
Sewage Fund expenses decreased $28,244 (1%). The Sewage Fund
transferred out $770,134 to the Debt Service Fund for improvements related to
the sewage system. The 2016 capital contributions of $1,812,602 included a
$726,157 grant for wastewater treatment plant improvements. The fund’s net
position increased $675,582 (3%) to $20,489,128. Depreciation expense for the
fund totaled $1,142,479.
The Liquor Fund’s net position increased $236,021 (26%) to $1,141,827. The
fund’s sales decreased $40,846 (1%) to $5,448,584. A road construction project
contributed to the decline. Gross profit decreased $112,483 (7%) to $1,407,360.
The Liquor Fund transferred $350,000 to the Fiber Optics Fund in 2016.
Operating expenses increased $34,503 (4%) to $836,048 in 2016. Depreciation
expense for the fund totaled $40,512.
The Fiber Optics Fund’s net position decreased $38,671 to $13,361,470. The
fund’s 2016 sales increased $28,536 (2%) to $1,692,935. Excluding
depreciation, the operating loss decreased from $367,607 to $331,799 in 2016.
Depreciation for the fund totaled $419,555. The city contracted for FiberNet
management an operations starting July 1, 2016.
The Deputy Registrar Fund (DMV) net position increased $220,047 (54%) to
$629,881. Charges for services increased $30,367 (6%) to $561,775 and
operating expenses increased $33,431 (9%) to $352,117. Depreciation for the
fund totaled $3,185. In 2016, the DMV processed 75,891 transactions, a 5%
increase over the prior year.
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 and other financing sources totaled $8,282,736 and
exceeded budget by 686,736 (9%). Licenses and permits and other revenues
were $329,702 (97%) and $178,824 (210%) 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 $6,992,812 and were $603,188 (8%) less
than budget. With position vacancies, low fuel costs, and mild winter, public
works was $443,118 (20%) less than budget. One function exceeded budget
(transit). Within the functions, eight of thirty-five reporting units exceeded
budget.
The General Fund year end fund balances since 2011 are as follows:
Year Amount
2011 4,410,637$
2012 3,478,507
2013 3,914,563
2014 4,331,058
2015 4,986,796
2016 6,276,720
CAPITAL ASSETS AND DEBT ADMINISTRATION
CAPITAL ASSETS
2016 2015 2016 2015 2016 2015
Land 9,573,164$8,555,369$1,197,945$1,197,945$10,771,109$9,753,314$
Construction in progress 3,276,184 1,264,456 3,683,078 1,491,882 6,959,262 2,756,338
Buildings and systems 95,713,651 92,636,026 80,099,747 79,100,343 175,813,398 171,736,369
Machinery and equipment 5,518,993 5,425,323 2,480,276 2,543,832 7,999,269 7,969,155
Less: Accumulated depreciation (53,444,059)(49,383,953)(42,031,720)(40,035,961)(95,475,779)(89,419,914)
Net total 60,637,933$58,497,221$45,429,326$44,298,041$106,067,259$102,795,262$
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, 2016 totaled $106,067,259 (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 $1,017,795 acquisition of
Bertram Chain of Lakes park land; purchase of equipment in the internal service
Central Equipment Fund of $138,236. Business-type capital assets acquisitions
included wastewater treatment plant improvements—two digester covers and
building and equipment for phosphorous reduction. The total increase from the
prior fiscal year is approximately 3%; governmental activities increased nearly 4%
and business-type activities increased 3%.
Additional information on the city’s capital assets can be found in the notes to the
financial statements on pages 42-43.
17
Management’s Discussion and Analysis CITY OF MONTICELLO
OUTSTANDING INDEBTEDNESS
2016 2015 2016 2015 2016 2015
General obligation bonds 7,686,000$9,563,000$2,460,000$2,930,347$10,146,000$12,493,347$
Certificate of indebtedness 265,000 325,000 --265,000 325,000
Special assessment bonds 12,730,000 11,689,653 --12,730,000 11,689,653
Public facilities authority loan --1,927,850 615,268 1,927,850 615,268
Total 20,681,000$21,577,653$4,387,850$3,545,615$25,068,850$25,123,268$
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 $25,068,850 at December 31, 2016. 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
$4,900,000 in general obligation bonds to finance 2016 and 2017 street
projects. In 2016, the city redeemed $1,266,000 in bonds due in 2017 and 2018.
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 43-46 of this report.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGETS AND RATES
•The unemployment rate for the Wright County, Minnesota area for
December 31, 2016 was 4.3%, which is above the state average (4.1%)
and below the national average (4.5%).
•The state and local economy are improving. New commercial and
residential development grew at a sustainable pace in 2016.
•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 prospects for continued residential and commercial growth in 2017
look promising.
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, 2016
Governmental Business-type
Activities Activities Total
ASSETS
Cash and investments 28,924,233$8,789,589$37,713,822$
Receivables
Unremitted taxes 31,401 -31,401
Deliquent taxes 62,473 -62,473
Unremitted special assessments 10,307 162 10,469
Deliquent special assessments 146,904 14,960 161,864
Deferred special assessments 4,035,675 188,465 4,224,140
Accrued interest 129,564 -129,564
Accounts, net uncollectibles allowance 74,511 938,279 1,012,790
Due from other governmental units 268,289 81,277 349,566
Internal balances (53,920)53,920 -
Inventory -480,648 480,648
Prepaid items 162,029 60,548 222,577
Notes receivable 116,779 -116,779
Land held for resale 3,825,746 -3,825,746
Pension asset 23,180 -23,180
Capital assets
Nondepreciable 12,849,348 4,881,023 17,730,371
Depreciable, net 47,788,585 40,548,303 88,336,888
TOTAL ASSETS 98,395,104 56,037,174 154,432,278
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension resources 1,522,334 524,942 2,047,276
TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,522,334 524,942 2,047,276
LIABILITIES
Accounts and contracts payable 685,493 378,354 1,063,847
Accrued interest payable 99,455 5,283 104,738
Other accrued liabilities 47,080 3,336 50,416
Due to other governmental units 35,337 152,142 187,479
Unearned revenue 14,620 3,950 18,570
Escrow deposits 841,047 -841,047
Long-term liabilities:
Due within one year 4,141,613 331,183 4,472,796
Due in more than one year 20,817,317 5,417,704 26,235,021
TOTAL LIABILITIES 26,681,962 6,291,952 32,973,914
DEFERRED INFLOWS OF RESOURCES
Deferred pension resources 628,126 203,452 831,578
Unavailable revenue - MSA state aid 135,804 -135,804
TOTAL DEFERRED INFLOWS OF RESOURCES 763,930 203,452 967,382
NET POSITION
Net investment in capital assets 41,077,683 41,014,122 82,091,805
Restricted for
Debt service 7,009,231 -7,009,231
Economic development 2,669,216 -2,669,216
Perpetual care 30,489 -30,489
Tax increment 860,757 -860,757
Unrestricted 20,824,170 9,052,590 29,876,760
TOTAL NET POSITION 72,471,546$50,066,712$122,538,258$
The notes to the financial statements are an integral part of this statement.
19
(This page left blank intentionally)
20
CITY OF MONTICELLO
Statement of Activities
For the Year Ended December 31, 2016
Operating Capital
Charges for Grants and Grants and Governmental Business-type
Expenses Services Contributions Contributions Activities Activities Total
Governmental activities
General government 1,694,111$274,309$-$-$(1,419,802)$-$(1,419,802)$
Public safety 2,187,363 894,311 194,586 -(1,098,466)-(1,098,466)
Public works 5,480,074 527,425 194,419 2,690,864 (2,067,366)-(2,067,366)
Sanitation 600,300 89,956 --(510,344)-(510,344)
Transit 41,250 ---(41,250)-(41,250)
Recreation and culture 3,998,945 1,437,659 -508,898 (2,052,388)-(2,052,388)
Economic development 756,620 301,232 --(455,388)-(455,388)
Interest and fiscal charges 565,774 --97,503 (468,271)-(468,271)
Total governmental activities 15,324,437 3,524,892 389,005 3,297,265 (8,113,275)-(8,113,275)
Business-type activities
Water Utility 1,168,473 1,172,258 -187,854 -191,639 191,639
Sewage Utility 2,618,887 2,223,252 -1,812,602 -1,416,967 1,416,967
Liquor 831,809 1,409,406 ---577,597 577,597
Fiber Optics 2,483,262 1,739,566 ---(743,696)(743,696)
Deputy Registrar 345,492 562,891 ---217,399 217,399
Total business-type activities 7,447,923 7,107,373 -2,000,456 -1,659,906 1,659,906
Total primary government 22,772,360$10,632,265$389,005$5,297,721$(8,113,275)1,659,906 (6,453,369)
General Revenues:
Property taxes 9,270,592 -9,270,592
Tax increments 668,352 -668,352
Franchise taxes 412,217 -412,217
Unrestricted investment earnings 375,614 128,080 503,694
Gain on sale of capital assets 11,180 5,218 16,398
Special item - transfer of operations -356,900 356,900
Transfers 969,461 (969,461)-
Total general revenues, special item, and tranfers 11,707,416 (479,263)11,228,153
Change in Net Position 3,594,141 1,180,643 4,774,784
Net Position, January 1 68,877,405 48,886,069 117,763,474
Net Position, December 31 72,471,546$50,066,712$122,538,258$
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 7,091,381$788,331$4,951,330$3,534,824$5,726,923$5,589,167$27,681,956$
Receivables
Unremitted taxes 29,500 -1,901 ---31,401
Delinquent taxes 61,733 -740 ---62,473
Unremitted special assessments ---9,975 332 -10,307
Delinquent special assessments 325 --9,279 137,300 -146,904
Deferred special assessments 1,760 --3,356,946 676,969 -4,035,675
Accrued interest 129,564 -----129,564
Accounts 63,233 11,178 100 ---74,511
Due from other governmental units 30,398 ---150,127 87,764 268,289
Prepaid items 134,245 24,907 1,638 --1,239 162,029
Notes receivable -----116,779 116,779
Land held for resale --2,193,957 -1,631,789 -3,825,746
TOTAL ASSETS 7,542,139$824,416$7,149,666$6,911,024$8,323,440$5,794,949$36,545,634$
LIABILITIES
Accounts and contracts payable 291,777$37,435$6,596$1,248$335,901$11,827$684,784$
Other accrued liabilities 47,080 -----47,080
Due to other governmental units 21,697 10,532 --3,108 -35,337
Unearned revenue -14,620 ----14,620
Escrow deposits 841,047 -----841,047
Total liabilities 1,201,601 62,587 6,596 1,248 339,009 11,827 1,622,868
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - property taxes 61,733 -740 ---62,473
Unavailable revenue - special assessments 2,085 --3,366,225 814,271 -4,182,581
Unavailable revenue - notes receivable -----116,779 116,779
Unavailable revenue - grants receivable ----150,127 -150,127
Unavailable revenue - MSA state aid ----135,804 -135,804
Total Deferred Inflows of Resources 63,818 -740 3,366,225 1,100,202 116,779 4,647,764
FUND BALANCES
Nonspendable 134,245 24,907 2,032,395 -1,631,789 1,239 3,824,575
Restricted --2,274,667 3,543,551 -1,169,016 6,987,234
Assigned -736,922 2,835,268 -5,252,440 4,496,088 13,320,718
Unassigned 6,142,475 -----6,142,475
Total fund balance 6,276,720 761,829 7,142,330 3,543,551 6,884,229 5,666,343 30,275,002
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCES 7,542,139$824,416$7,149,666$6,911,024$8,323,440$5,794,949$36,545,634$
The notes to the financial statements are an integral part of this statement.
December 31, 2016
22
CITY OF MONTICELLO
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position
December 31, 2016
Amounts reported for governmental activities in the statement of net position are different because:
Total fund balances - governmental funds 30,275,002$
Long-term assets from pensions reported in governmental activities are not financial resources and, therefore, are not
reported as assets in the funds.23,180
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.
Land 9,573,164$
Construction in progress 3,276,184
Buildings and systems 95,713,651
Machinery and equipment 4,541,125
Accumulated depreciation (53,256,979)59,847,145
Governmental funds do not report long-term amounts related to pensions.
Deferred outflows of resources 1,522,334$
Deferred inflows of resources (628,126)894,208
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 (19,956,000)$
Unamortized bond discounts 21,032
Unamortized bond premiums (180,298)
Other post-employment benefits obligations (326,044)
Net pension liability (3,532,958)(23,974,268)
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 1,046,875$
Less internal services net position allocated to to business-type activities (53,920)992,955
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.4,511,960
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.(98,636)
NET POSITION OF GOVERNMENTAL ACTIVITIES 72,471,546$
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, 2016
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 6,204,429$364,000$279,422$2,084,000$364,132$-$9,295,983$
Tax increments --668,352 ---668,352
Franchise taxes 263,900 ---70,527 77,790 412,217
Special assessments 242 --812,547 171,601 -984,390
Licenses and permits 668,602 -----668,602
Intergovernmental 389,005 ---1,652,357 -2,041,362
Charges for services 351,702 1,395,573 ---475,200 2,222,475
Fines and forfeitures 30,656 -----30,656
Investment earnings 99,237 14,986 60,528 36,423 54,783 91,155 357,112
Other revenues 263,783 12,273 290,409 -5,000 17,929 589,394
Total revenues 8,271,556 1,786,832 1,298,711 2,932,970 2,318,400 662,074 17,270,543
Expenditures
Current
General government 1,489,892 -----1,489,892
Public safety 2,036,777 -----2,036,777
Public works 1,802,884 ---120,326 18,540 1,941,750
Sanitation 600,300 -----600,300
Transit 41,250 -----41,250
Recreation and culture 1,021,709 1,654,445 ---80,218 2,756,372
Economic development --530,746 ---530,746
Capital outlay
Public works ----4,843,011 49,460 4,892,471
Recreation and culture -----1,342,558 1,342,558
Debt service
Principal ---5,681,653 --5,681,653
Interest and fiscal charges ---529,116 --529,116
Bond issuance costs ----107,050 -107,050
Total expenditures 6,992,812 1,654,445 530,746 6,210,769 5,070,387 1,490,776 21,949,935
Excess (deficiency) of revenues over expenditures 1,278,744 132,387 767,965 (3,277,799)(2,751,987)(828,702)(4,679,392)
Other financing sources (uses)
Long-term debt issued ----4,900,000 -4,900,000
Premium on long-term debt issued ----97,503 -97,503
Sale of capital assets 11,180 -----11,180
Transfers in ---1,439,136 -753,500 2,192,636
Transfers out --(188,500)-(753,500)(281,175)(1,223,175)
Total other financing sources (uses)11,180 -(188,500)1,439,136 4,244,003 472,325 5,978,144
Net change in fund balances 1,289,924 132,387 579,465 (1,838,663)1,492,016 (356,377)1,298,752
Fund balance at beginning of year 4,986,796 629,442 6,562,865 5,382,214 5,392,213 6,022,720 28,976,250
Fund balance at end of year 6,276,720$761,829$7,142,330$3,543,551$6,884,229$5,666,343$30,275,002$
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, 2016
Amounts reported for governmental activities in the Statement of Activities are different because:
Net change in fund balances--governmental funds 1,298,752$
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 5,605,108$
Capital contributions 508,898
Disposals (6,858)
Depreciation (4,020,765)2,086,383
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.(4,900,000)
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.5,681,653
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 (4,703)$
Amortization of bond premiums 35,633
Change in OPEB obligation (20,481)
Change accrued interest payable 55,644 66,093
Long-term pension activity is not reported in governmental funds
Pension revenue from state contributions 13,765
Pension expense (643,432)
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 (25,391)$
Special assessments (96,010)
Notes receivable (212,500)
Grants receivable 150,127 (183,774)
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 200,639$
Subtract internal service fund activity allocated to business-type activities (25,938)174,701
Change in net position of governmental activities 3,594,141$
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 4,035,865$2,596,530$1,037,180$303,008$817,006$8,789,589$1,242,277$
Receivables
Unremitted special assessmentsUnremitted special assessmentsUnremitted special assessments 162 ----162 -
Deliquent special assessmentsDeliquent special assessmentsDeliquent special assessments 14,960 ----14,960 -
Deferred special assessmentsDeferred special assessmentsDeferred special assessments 176,102 12,363 ---188,465 -
Account receivableAccount receivableAccounts 217,192 568,485 1,000 151,602 -938,279 -
Account receivableAccount receivableDue from other governmental units -36,447 --44,830 81,277 -
Inventory --480,648 --480,648 -
Prepaid items 12,984 25,515 16,283 3,541 2,225 60,548 -
Total current assets 4,457,265 3,239,340 1,535,111 458,151 864,061 10,553,928 1,242,277
Noncurrent assets
Capital assets:
Land 208,143 984,202 5,600 --1,197,945 -
Buildings and systems 20,807,724 43,467,040 840,217 14,896,665 88,101 80,099,747 -
Machinery and equipment 262,198 1,763,559 134,528 305,726 14,265 2,480,276 977,868
Construction in progress -3,683,078 ---3,683,078 -
Total capital assetsTotal capital assets 21,278,065 49,897,879 980,345 15,202,391 102,366 87,461,046 977,868
Less accumulated depreciation (11,142,752)(27,902,574)(802,991)(2,146,835)(36,568)(42,031,720)(187,080)
Total capital assets (net)10,135,313 21,995,305 177,354 13,055,556 65,798 45,429,326 790,788
TOTAL ASSETS 14,592,578 25,234,645 1,712,465 13,513,707 929,859 55,983,254 2,033,065
DEFERRED OUTFLOWS OF RESOURCES
Deferred pension resources 80,760 100,950 222,091 -121,141 524,942 -
(continued)
Business-Type Activities – Enterprise Funds
December 31, 2016
26
CITY OF MONTICELLO
Statement of Net Position
Proprietary Funds
December 31, 2016 (Continued)
Governmental
Activities -
Deputy Internal
Water Sewage Liquor Fiber Optics Registrar Totals Service Funds
LIABILITIES
Current liabilities
Accounts and contracts payable 17,279$122,633$88,093$149,496$853$378,354$709$
Accrued interest payable -5,283 ---5,283 819
Other accrued liabilities --3,336 --3,336 -
Due to other governmental units 16,405 2,561 56,240 2,741 74,195 152,142 -
Unearned revenue 3,950 ----3,950 -
Bonds and loans payable - current -289,000 ---289,000 120,000
Compensated absences due within one year 9,118 9,118 16,766 -7,181 42,183 100,613
Total current liabilities 46,752 428,595 164,435 152,237 82,229 874,248 222,141
Noncurrent liabilities
Bonds and loans payable - net current portion -4,126,204 ---4,126,204 605,000
Compensated absences payable 13,829 13,829 17,049 -5,483 50,190 159,049
Net pension liability 190,971 238,714 525,169 -286,456 1,241,310 -
Total noncurrent liabilities 204,800 4,378,747 542,218 -291,939 5,417,704 764,049
TOTAL LIABILITIES 251,552 4,807,342 706,653 152,237 374,168 6,291,952 986,190
DEFERRED INFLOWS OF RESOURCES
Deferred pension resources 31,300 39,125 86,076 -46,951 203,452 -
NET POSITION
Net investment in capital assets 10,135,313 17,580,101 177,354 13,055,556 65,798 41,014,122 65,788
Unrestricted 4,255,173 2,909,027 964,473 305,914 564,083 8,998,670 981,087
TOTAL NET POSITION 14,390,486$20,489,128$1,141,827$13,361,470$629,881$50,012,792 1,046,875$
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 53,920
Net position of business-type activities (page 19)50,066,712$
The notes to the financial statements are an integral part of this statement.
Business-Type Activities – Enterprise Funds
27
(This page left blank intentionally)
28
CITY OF MONTICELLO
Statement of Revenues, Expenses, and Changes in Net Position
Proprietary Funds
For the Year Ended December 31, 2016
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 5,448,584$5,448,584$
Cost of sales (4,041,224)(4,041,224)
Gross profit 1,407,360 1,407,360
Operating revenues
Charges for services 1,130,260$2,195,310$-1,692,935$561,775$5,580,280 526,285$
Other 41,998 27,942 2,046 46,631 1,116 119,733 -
Total operating revenues 1,172,258 2,223,252 2,046 1,739,566 562,891 5,700,013 526,285
Operating expenses
Personal services 258,066 347,717 571,520 310,161 309,701 1,797,165 33,504
Materials and supplies 181,393 17,828 26,445 160,835 4,342 390,843 41,101
Other services and charges 230,330 1,046,286 197,571 1,210,958 34,889 2,720,034 169,454
Content and access charges ---389,411 -389,411 -
Depreciation 502,447 1,142,479 40,512 419,555 3,185 2,108,178 83,907
Total operating expenses 1,172,236 2,554,310 836,048 2,490,920 352,117 7,405,631 327,966
Operating income (loss)22 (331,058)573,358 (751,354)210,774 (298,258)198,319
Nonoperating revenues (expenses)
Investment earnings 67,959 32,402 12,663 5,783 9,273 128,080 18,502
Interest expense -(68,230)---(68,230)(16,182)
Gain on sale of capital asset 5,218 ----5,218 -
Total Nonoperating revenes (expenses)73,177 (35,828)12,663 5,783 9,273 65,068 2,320
Income (loss) before capital contributions,
special items, and transfers 73,199 (366,886)586,021 (745,571)220,047 (233,190)200,639
Capital contributions 187,854 1,812,602 ---2,000,456 -
Special item - transfer of operations ---356,900 -356,900 -
Transfers in ---350,000 -350,000 -
Transfers out (199,327)(770,134)(350,000)--(1,319,461)-
Change in net position 61,726 675,582 236,021 (38,671)220,047 1,154,705 200,639
Net Position, January 1 14,328,760 19,813,546 905,806 13,400,141 409,834 846,236
Net Position, December 31 14,390,486$20,489,128$1,141,827$13,361,470$629,881$1,046,875$
Adjustment to reflect the consolidation of internal service fund related to enterprise funds 25,938
Change in net position of business-type activities (page 21)1,180,643$
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, 2016
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 1,198,109$2,256,947$5,450,088$1,613,032$558,669$11,076,845$-$
Cash from interfund services provided ------526,285
Cash paid to suppliers for goods and services (397,914)(1,054,939)(4,202,188)(1,657,929)(12,063)(7,325,033)(195,696)
Cash paid to employees (238,850)(325,569)(530,193)(322,670)(289,191)(1,706,473)-
Cash paid to other funds for services provided (13,234)(12,845)(14,907)(26,929)(23,295)(91,210)-
Net cash provided (used) by operating activities 548,111 863,594 702,800 (394,496)234,120 1,954,129 330,589
Cash flows from noncapital financing activities
Transfers from other funds ---350,000 -350,000 -
Transfers to other funds (199,327)(770,134)(350,000)--(1,319,461)-
Net cash provided (used) by noncapital financing activities (199,327)(770,134)(350,000)350,000 -(969,461)-
Cash flows from capital and related financing activities
Capital contributions 187,854 1,776,155 ---1,964,009 -
Acquisition of capital assets (975,000)(2,270,325)--(24,404)(3,269,729)(159,041)
Long-term debt issued -1,413,065 ---1,413,065 -
Principal paid on long-term debt -(570,830)---(570,830)(115,000)
Interest and fiscal charges paid on long-term debt -(78,002)---(78,002)(16,259)
Net cash provided (used) by capital and related
financing activities (787,146)270,063 --(24,404)(541,487)(290,300)
Cash flows from investing activities
Interest on investments 67,959 32,402 12,663 5,783 9,273 128,080 18,502
Net increase (decrease) in cash and cash equivalents (370,403)395,925 365,463 (38,713)218,989 571,261 58,791
Cash and cash equivalents, January 1 4,406,268 2,200,605 671,717 341,721 598,017 8,218,328 1,183,486
Cash and cash equivalents, December 31 4,035,865$2,596,530$1,037,180$303,008$817,006$8,789,589$1,242,277$
Business-Type Activities – Enterprise Funds
(continued)
30
CITY OF MONTICELLO
Statement of Cash Flows
Proprietary Funds
For the Year Ended December 31, 2016 (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)22$(331,058)$573,358$(751,354)$210,774$(298,258)$198,319$
Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities
Depreciation and amortization 502,447 1,142,479 40,512 419,555 3,185 2,108,178 83,907
(Increase) decrease in assets
Special assessments receivable 13,953 (5,420)---8,533 -
Accounts receivable, net 14,348 39,115 (1,000)(120,258)40,608 (27,187)-
Due from other governmental units ----(44,830)(44,830)-
Inventory --71,708 --71,708 -
Prepaid items (1,733)(1,147)(2,198)13,019 (1,023)6,918 26,873
(Increase) decrease in deferred outflows
Deferred pension resources (66,711)(83,389)(183,456)-(100,067)(433,623)-
Increase (decrease) in liabilities
Accounts and contracts payable (12,147)(5,084)(24,945)73,077 322 31,223 (12,014)
Other liabilities --458 (6,276)-(5,818)-
Due to other governmental units 14,455 2,561 3,580 (9,750)4,574 15,420 -
Unearned revenue (2,450)----(2,450)-
Compensated absences 7,487 7,487 9,073 (12,509)2,917 14,455 33,504
Net pension liability 71,151 88,939 195,665 -106,726 462,481 -
Increase (decrease) in deferred inflows
Deferred pension resources 7,289 9,111 20,045 -10,934 47,379 -
Net cash provided (used) by operating activities 548,111$863,594$702,800$(394,496)$234,120$1,954,129$330,589$
Schedule of noncash investing, capital and
financing activities:
Net amortization of bond premium (discount)-$(2,985)$-$-$-$(2,985)$-$
Disposal of capital assets 34,000$-$-$78,419$-$112,419$-$
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, 2016 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 city falls under section 501(a) of
the Internal Revenue Code. 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.
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
32
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
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.
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.
33
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
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.
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.
Investments are generally stated at fair value, except for investments in 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.
The city categorizes its fair value measurements within the fair value hierarchy
established by accounting principles generally accepted in the United States of
America. The hierarchy is based on the valuation inputs used to measure the
fair value of the asset as follows:
•Level 1 inputs are quoted prices in active markets for identical assets
•Level 2 inputs are significant other observable inputs
•Level 3 inputs are significant unobservable inputs.
Debt securities classified in Level 2 of the fair value hierarchy are valued using
a matrix pricing technique. Matrix pricing is used to value securities based on
the securities’ relationship to benchmark quoted prices. See Note 2 for the city’s
recurring fair value measurements as of December 31, 2016.
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
34
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
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.
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 as unremitted special assessments.
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 2016.
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 of loans made by the city to area businesses for
development or redevelopment purposes. The terms and interest rates of the
individual loans vary. Notes receivable are offset by deferred inflows of
resources in the governmental funds.
35
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
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
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 acquisition
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. 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.
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:
36
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
For union employees, one-fourth of the unused sick leave times the hourly rate
at the time of giving notice is paid. After five years of non-union employment,
one-fourth of the unused sick leave times the hourly rate at the time of giving
notice is paid.
After 10 years of employment, all employees accrue one-half of the unused sick
leave, times the hourly rate at the time of giving notice.
All compensated absences are accrued when incurred in the government-wide
and proprietary fund financial statements. 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. 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.
The PERA has a special funding situation created by a direct aid contribution
made by the state of Minnesota. The direct aid is a result of the merger of the
Minneapolis Employees Retirement Fund into the PERA on January 1, 2015.
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 three types of items that qualify
for reporting in this category. First, unavailable revenue, which arises under both
the full- and modified- accrual bases of accounting, is reported in the statement
of net position and the governmental funds balance sheet. Governmental
activities report unavailable revenue from MSA state aid, and the governmental
funds report unavailable revenue from five sources: property taxes, special
assessments, notes receivable, grants receivable, and MSA state aid. 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.
37
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
•Assigned – Consists of internally imposed constraints. These
constraints consist of amounts intended to be used by the city for
specific purposes but do not meet the criteria to be classified as
restricted or committed. In governmental funds, assigned amounts
represent intended uses established by the governing body itself or by
an official to which the governing body delegates the authority.
Pursuant to city council resolution, the 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.
U. 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.
V. Future Change in Accounting Standards
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.
In January 2016 GASB issued Statement No. 80,Blending Requirements for
Certain Component Units – An Amendment of GASB Statement No. 14. The
objective of this Statement is to improve financial reporting by clarifying the
financial statement presentation requirements for certain component units. This
Statement amends the blending requirements established in paragraph 53 of
Statement No. 14,The Financial Reporting Entity, as amended and the blending
requirements for the financial statement presentation of component units of all
state and local governments. The additional criterion requires blending of a
component unit incorporated as a not-for-profit corporation in which the primary
government is the sole corporate member. The additional criterion does not
apply to component units included in the financial reporting entity pursuant to
the provisions of Statement No. 39,Determining Whether Certain Organizations
Are Component Units. The requirements of this Statement are effective for
reporting periods beginning after June 15, 2016.
In March 2016 GASB issued Statement No. 81,Irrevocable Split-Interest
Agreements. The objective of this Statement is to improve accounting and
financial reporting for irrevocable split-interest agreements by providing
recognition and measurement guidance for situations in which a government is
a beneficiary of the agreement. Split-interest agreements are a type of giving
agreement used by donors to provide resources to two or more beneficiaries,
including governments. Split-interest agreements can be created through
trusts—or other legally enforceable agreements with characteristics that are
equivalent to split-interest agreements—in which a donor transfers resources to
an intermediary to hold and administer for the benefit of a government and at
least one other beneficiary. Examples of these types of agreements include
38
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
charitable lead trusts, charitable remainder trusts, and life-interests in real
estate. This Statement requires that a government that receives resources
pursuant to an irrevocable split-interest agreement recognize assets, liabilities,
and deferred inflows of resources at the inception of the agreement.
Furthermore, this Statement requires that a government recognize assets
representing its beneficial interests in irrevocable split-interest agreements that
are administered by a third party, if the government controls the present service
capacity of the beneficial interests. This Statement requires that a government
recognize revenue when the resources become applicable to the reporting
period. The requirements of this Statement are effective for financial statements
for periods beginning after December 15, 2016.
In March 2016 GASB issued Statement No. 82,Pension Issues – An
Amendment of GASB Statements No.67, No. 68, and No. 73.The objective of
this Statement is to address certain issues that have been raised with respect
to Statements No. 67,Financial Reporting for Pension Plans,No. 68,
Accounting and Financial Reporting for Pensions,and No. 73, Accounting and
Financial Reporting for Pensions and Related Assets That Are Not within the
Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB
Statements 67 and 68.Specifically, this Statement addresses issues regarding
(1) the presentation of payroll-related measures in required supplementary
information, (2) the selection of assumptions and the treatment of deviations
from the guidance in an Actuarial Standard of Practice for financial reporting
purposes, and (3) the classification of payments made by employers to satisfy
employee (plan member) contribution requirements.
In November 2016 GASB issued Statement No. 83,Certain Asset Retirement
Obligations.This Statement addresses accounting and financial reporting for
certain asset retirement obligations (AROs). An ARO is a legally enforceable
liability associated with the retirement of a tangible capital asset. A government
that has legal obligations to perform future asset retirement activities related to
its tangible capital assets should recognize a liability based on the guidance in
this Statement. This Statement establishes criteria for determining the timing
and pattern of recognition of a liability and a corresponding deferred outflow of
resources for AROs. This Statement requires that recognition occur when the
liability is both incurred and reasonably estimable. The determination of when
the liability is incurred should be based on the occurrence of external laws,
regulations, contracts, or court judgments, together with the occurrence of an
internal event that obligates a government to perform asset retirement activities.
Laws and regulations may require governments to take specific actions to retire
certain tangible capital assets at the end of the useful lives of those capital
assets, such as decommissioning nuclear reactors and dismantling and
removing sewage treatment plants. Other obligations to retire tangible capital
assets may arise from contracts or court judgments. Internal obligating events
include the occurrence of contamination, placing into operation a tangible capital
asset that is required to be retired, abandoning a tangible capital asset before it
is placed into operation, or acquiring a tangible capital asset that has an existing
ARO. The requirements of this Statement are effective for reporting periods
beginning after June 15, 2018.
NOTE 2. CASH, CASH EQUIVALENTS, AND INVESTMENTS
A. Components of Cash and Investments
Cash and investments at year-end consist of the following:
Deposits 12,531,994$
Investments 25,174,288
Cash on hand 7,540
Total cash and investments – Statement of Net Position 37,713,822$
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 fair 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.
39
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
At year-end, the carrying amount of the city’s deposits was $12,531,994
while the balance on bank records was $12,919,690. 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.
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 invested with the Federal Home Loan Bank. These
investments are 7.5 percent 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. 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.
40
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
The following schedule provides information on credit and interest rate risks by investment type for the city’s investments:
Fair Value
Measurements No Less More Percent of
Rating Agency Using Maturity Than 1 1 to 5 5 to 10 Than 10 Total Holdings
U.S. agency securities
Federal Farm Credit Bank AA+S&P Level 1 -$-$-$456,696$-$456,696$1.8%
Federal Agriculture Mortgage
Corporation AA+S&P Level 1 ----734,667 734,667 2.9%
Federal Home Loan Bank AA+S&P Level 1 --250,143 807,392 840,397 1,897,932 7.5%
Federal National Mortgage
Association AA+S&P Level 1 --198,614 195,594 -394,208 1.6%
Negotiable certificates of deposit N/R N/A Level 1 -4,667,699 4,750,977 937,780 -10,356,456 41.1%
Local government securities AAA S&P Level 1 ----2,169,285 2,169,285 8.6%
Local government securities AA+S&P Level 1 --568,502 -423,472 991,974 3.9%
Local government securities AA S&P Level 1 -357,396 ---357,396 1.4%
Local government securities Aaa Moody’s Level 1 ----1,299,582 1,299,582 5.2%
Local government securities Aa1 Moody’s Level 1 ---140,920 1,108,125 1,249,045 5.0%
Local government securities A2 Moody’s Level 1 ---299,712 -299,712 1.2%
4M Fund N/R N/A Level 1 4,967,335 ----4,967,335 19.7%
Total investments 4,967,335$5,025,095$5,768,236$2,838,094$6,575,528$25,174,288$100.0%
N/A – Not Applicable
N/R – Not Rated
Credit Risk Interest Risk – Maturity Duration in Years
Investment Type
41
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
NOTE 3. CAPITAL ASSETS
Capital asset activities for the year end December 31, 2016 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 8,555,369$1,017,795$-$-$9,573,164$-$9,573,164$-$1,017,795$
Construction in progress 1,264,456 5,096,211 (6,858)(3,077,625)3,276,184 -3,276,184 -5,096,211
Total capital assets, not depreciated 9,819,825 6,114,006 (6,858)(3,077,625)12,849,348 -12,849,348 -6,114,006
Depreciable capital assets:
Buildings and systems 92,636,026 --3,077,625 95,713,651 -95,713,651 --
Machinery and equipment 5,425,323 138,236 (44,566)-5,518,993 977,868 4,541,125 138,236 -
Total capital assets, depreciated 98,061,349 138,236 (44,566)3,077,625 101,232,644 977,868 100,254,776 138,236 -
Less accumulated depreciation for:
Buildings and systems (45,502,235)(3,871,298)--(49,373,533)-(49,373,533)-(3,871,298)
Machinery and equipment (3,881,718)(233,374)44,566 -(4,070,526)(187,080)(3,883,446)(83,907)(149,467)
Total accumulated depreciation (49,383,953)(4,104,672)44,566 -(53,444,059)(187,080)(53,256,979)(83,907)(4,020,765)
Net capital assets, depreciated 48,677,396 (3,966,436)-3,077,625 47,788,585 790,788 46,997,797 54,329 (4,020,765)
Total governmental activities 58,497,221$2,147,570$(6,858)$-$60,637,933$790,788$59,847,145$54,329$2,093,241$
Business-type activities
Nondepreciable capital assets:
Land 1,197,945$-$-$-$1,197,945$
Construction in progress 1,491,882 2,191,196 --3,683,078
Total capital assets, not depreciated 2,689,827 2,191,196 --4,881,023
Depreciable capital assets:
Buildings and systems 79,100,343 999,404 --80,099,747
Machinery and equipment 2,543,832 48,863 (112,419)-2,480,276
Total capital assets, depreciated 81,644,175 1,048,267 (112,419)-82,580,023
Less accumulated depreciation for:
Buildings and systems (38,418,330)(1,989,182)--(40,407,512)
Machinery and equipment (1,617,631)(118,996)112,419 -(1,624,208)
Total accumulated depreciation (40,035,961)(2,108,178)112,419 -(42,031,720)
Net capital assets, depreciated 41,608,214 (1,059,911)--40,548,303
Total business-type activities 44,298,041$1,131,285$-$-$45,429,326$
42
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
Depreciation for the year ended December 31, 2016 was charged to
function/programs as follows:
NOTE 4. COMMITMENTS
During fiscal 2016, the city awarded contracts for various construction and
remodeling projects. The city’s commitments for uncompleted work on these
contracts at December 31, 2016 are approximately as follows:
NOTE 5. LONG-TERM LIABILITIES
A. Description
The city has the following types of long-term liabilities outstanding at December
31, 2016: 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.
•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 outstanding general
obligation revenue bonds both 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
$2,223,252 and principal and interest payments were $547,921 for a
percentage of revenues of 24.65%.
•PFA Loan – This loan was issued for improvements to the wastewater
treatment plant and is payable primarily from user fees which benefit
from the improvements.
•Compensated Absences – The city provides vacation and sick leave
benefits to certain eligible employees. The liability will be repaid by the
Benefit Accrual fund or respective enterprise fund for which each
employee is employed.
•Net OPEB Obligation – The city provides post-employment benefits
to certain eligible employees through the city’s OPEB Plan. The liability
will be repaid based on a pay-as-you-go financing requirement as well
as any additional amounts determined annually by the city. The liability
will be repaid by the General Fund.
•Net Pension Liability – The city contributes to the Minnesota PERA
defined benefit retirement fund per Minnesota state statute. The liability
is a reflection of the City’s portion of the total net pension liability of the
PERA plan based on a percentage of contributions into the plan.
Governmental activities
General government 39,365$
Public safety 71,520
Public works 3,394,372
Recreation and culture 515,508
Capital assets held by the City’s internal service funds –
charged to the various functions based on usage of assets 83,907
Total depreciation expense – governmental activities 4,104,672$
Business-type activities
Water 502,447$
Sewer 1,142,479
Liquor 40,512
Fiber Optics 419,555
Deput y registrar 3,185
Total deprec iation expens e –business-type ac tivities 2,108,178$
Amount
Contract Paid Remaining
Project Description Amount To-Date 12/31/2016
Sewage WWTP Dewater Improvements 141,975$99,383$42,593$
Sewage WWTF Phosphorus Reduction/Digester 2,723,671 2,662,634 61,037
Capital projects 2016 Street Reconstruction 3,890,673 3,204,535 686,138
Capital projects TH 25/7th St Intersection Improvments 1,200,588 -1,200,588
Nonmajor
governmental BCOL Interim Park Improvements 220,507 200,430 20,078
8,177,414$6,166,982$2,010,433$
Fund
43
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
Long-term liabilities at year-end are summarized as follows:B. Changes in Long-Term Liabilities
Final
Original Interest Maturity Balance –
Issue Rate %Issue Date Date End of Year
Governmental activities
General obligation bonds
2008B Sewer revenue
refunding bonds 9,270,000$3.00%04/17/2008 08/01/2018 1,496,000$
2014A General
obligation bonds:
judgment portion 6,080,000 1.00 - 3.50 12/18/2014 12/15/2030 5,730,000
equipment portion 515,000 1.00 - 3.05 12/18/2014 12/15/2024 460,000
Other general obligation debt
2013A Certificate
of indebtedness 500,000 0.35 - 2.10 04/26/2013 12/01/2020 265,000
Special assessments bonds
2007 Improvement bonds 5,137,903 4.00 12/27/2007 02/01/2018 525,000
2010A General obligation
refunding and
improvement bonds 3,255,000 0.40 - 2.70 09/14/2010 02/01/2021 1,420,000
2011A General obligation
refunding bonds 10,735,000 2.00 - 3.00 10/19/2011 02/01/2023 3,425,000
2015B General
obligation bonds 2,605,000 1.50 - 3.00 11/05/2015 12/15/2030 2,460,000
2016A General
obligation bonds 4,900,000 2.00 - 3.00 11/21/2016 12/15/2030 4,900,000
Net premiums
(discounts) on bonds 159,266
Compensated absences payable 259,662
Net OPEB obligation 326,044
Net pension liability 3,532,958
Total governmental activities 24,958,930$
Business-type activities
General obligation revenue bonds
2013B Wastewater
treatment bonds 3,000,000 2.00 - 3.35 12/05/2013 12/01/2028 2,460,000$
Public Facility Authority
loan (2015A)2,391,483 1.06 09/23/2015 08/20/2035 1,927,850
Net premiums
(discounts)on bonds 27,354
Compensated absences pay able 92,373
Net pension liability 1,241,310
Total business-type activities 5,748,887$
January 1,December 31, Due Within
2016 Additions Retirements 2016 One Year
Governmental activities
General obligation bonds 9,563,000$-$(1,877,000)$7,686,000$1,901,000$
Certificate of indebtedness 325,000 -(60,000)265,000 65,000
Special assessment bonds 11,689,653 4,900,000 (3,859,653)12,730,000 2,075,000
Add premiums on bonds 215,931 -(35,633)180,298 -
Less discounts on bonds (25,735)-4,703 (21,032)-
Compensated absences 226,158 233,598 (200,094)259,662 100,613
Net OPEB obligation 305,563 36,672 (16,191)326,044 -
Net pension liability
GERF 1,887,162 2,130,162 (484,366)3,532,958 -
Total governmental activities 24,186,732$7,300,432$(6,528,234)$24,958,930$4,141,613$
Business-type activities
General obligation
revenue bonds 2,930,347$-$(470,347)$2,460,000$180,000$
PFA loans 615,268 1,413,065 (100,483)1,927,850 109,000
Add premiums on bonds 31,213 -(3,859)27,354 -
Less discounts on bonds (874)-874 --
Compensated absences 77,919 86,771 (72,317)92,373 42,183
Net pension liability
GERF 1,108,334 632,663 (499,687)1,241,310 -
Total business-type activities 4,762,207$2,132,499$(1,145,819)$5,748,887$331,183$
44
Notes to the Financial Statements
December 31, 2016 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
2017 1,901,000$197,253$65,000$4,590$2,075,000$280,088$180,000$63,398$109,000$12,177$
2018 410,000 166,759 65,000 3,713 1,590,000 231,074 185,000 59,798 111,000 23,195
2019 415,000 160,609 65,000 2,673 1,265,000 203,005 185,000 56,098 112,000 22,015
2020 420,000 152,931 70,000 1,470 1,290,000 177,303 190,000 52,398 113,000 20,824
2021 435,000 143,691 --1,320,000 148,475 195,000 48,598 114,000 19,623
2022 - 2026 2,220,000 533,741 --3,460,000 349,475 1,055,000 169,235 589,000 79,661
2027 - 2031 1,885,000 166,938 --1,730,000 124,925 470,000 23,440 622,000 47,665
2032 - 2035 --------157,850 13,915
7,686,000$1,521,922$265,000$12,446$12,730,000$1,514,345$2,460,000$472,963$1,927,850$239,074$
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, 2016, 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, 2016 is undetermined.
E. Pay-As-You-Go Tax Increment Note
The City, in order to spur economic development and redevelopment has entered
into private development and redevelopment agreements to encourage
developers to construct, expand, or improve new or existing properties and
buildings or clean-up and redevelop blighted areas. These agreements may in
substance be a tax abatement but will depend on their individual circumstances.
F. Abatements
The City currently has four agreements that would be considered tax
abatements under GASB Statement 77:
Name Purpose
1-20
Prairie
West
22 twinhome and 8 fourplex
Townhouse housing units
1-22
Downtown
District
Redevelopment activities in
1997 Downtown and 2010
Embracing Downtown plans
1-29 Front
Porch
Assoc
27 townhouse housing units;
owner-occupied 16,969$164,650$12/31/2029
48,751$684,816$12/31/2024
1-24 St.
Benedicts
60 unit elderly (senior
citizen) housing facility 20,520$-$12/31/2026
Amount of
taxes
abated
during the
fiscal year
Outstanding
principal
balance at
year end
Date of
required
decertification
6,333$77,890$12/31/2024
45
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
The City is authorized to create a tax increment financing plan under Minnesota
Statute 469.175. The criteria that must be met under the statute are that, in the
opinion of the municipality:
•the proposed development or redevelopment would not reasonably be
expected to occur solely through private investment within the
reasonably foreseeable future; and
•the increased market value of the site that could reasonably be expected
to occur without the use of tax increment financing would be less than
the increase in the market value estimated to result from the proposed
development after subtracting the present value of the projected tax
increments for the maximum duration of the district permitted by the plan.
The requirements of this item do not apply if the district is a housing
district;
•that the tax increment financing plan conforms to the general plan for the
development or redevelopment of the municipality as a whole; and
•that the tax increment financing plan will afford maximum opportunity,
consistent with the sound needs of the municipality as a whole, for the
development or redevelopment of the project by private enterprise.
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.
These 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 balances as of December 31, 2016 are listed in the
previous table. 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 is not actual debt in substance.
G. 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, 2016, there are no
amounts of arbitrage rebates.
H. Revenue Pledged
Future revenue pledged for the payment of long-term debt is as follows:
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 new members in 1967. All new members must participate in the
Coordinated Plan.
2013B G.O.
Wastewater
Treatment Bonds PFALoan
Use of proceeds Sewage Fund Sewage Fund
Revenue pledged
Type Utilitycharges Utilitycharges
Percent of total debt service 57%43%
Term of pledge 2013-2028 2013-2025
Remaining principal & interest 2,932,963$2,166,924$
Current yea r
Principal and interes t paid 246,998$100,483$
Pledged reven u e rece ive d 1,260,306$935,004$
Des cripti o n
46
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
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 and Coordinated Plan members were required to contribute 9.1% and
6.50%, respectively, of their annual covered salary in calendar year 2016. The
city was required to contribute 11.78% of pay for Basic Plan members and 7.50%
for Coordinated Plan members in calendar year 2016. The city’s contributions to
the GERF for the year ended December 31, 2016, were $267,516. The city’s
contributions were equal to the required contributions as set by state statute.
D. Pension Costs
GERF Pension Costs
At December 31, 2016, the city reported a liability of $4,774,268 for its
proportionate share of the GERF’s net pension liability. The city’s net pension
liability reflected a reduction due to the State of Minnesota’s contribution of $6
million to the fund in 2016. The State of Minnesota is considered a non-
employer contributing entity and the state’s contribution meets the definition of
a special funding situation. The State of Minnesota’s proportionate share of the
net pension liability associated with the city totaled $62,387. The net pension
liability was measured as of June 30, 2016, 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, 2015, through June 30, 2016, relative
to the total employer contributions received from all of PERA’s participating
employers. At June 30, 2016, the city’s proportion share was 0.0588% which
was an increase of 0.0010% from its proportion measured as of June 30, 2015.
For the year ended December 31, 2016, the city recognized pension expense
of $293,219 for its proportionate share of the GERF’s pension expense. In
addition, the city recognized an additional $18,602 as pension expense (and
grant revenue) for its proportionate share of the State of Minnesota’s
contribution of $6 million to the General Employees Fund.
At December 31, 2016, 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 Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual economic experience -$386,097$
Changes in actuarial assumptions 1,035,342 -
Difference between projected and
actual investment earnings 814,208 290,719
Changes in proportion 38,869 105,694
Contributions paid to PERAsubsequent
to the measurement date 130,590 -
Total 2,019,009$782,510$
47
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
$130,590 reported as deferred outflows of resources related to pensions resulting
from contributions paid to PERA subsequent to the measurement date will be
recognized as a reduction of the net pension liability in the year ended December
31, 2017. Other amounts reported as deferred outflows and inflows of resources
related to pensions will be recognized in pension expense as follows:
E. Actuarial Assumptions
The total pension liability in the June 30, 2016, actuarial valuation was determined
using the following actuarial assumptions:
Salary increases were based on a service-related table. Mortality rates for active
members, retirees, survivors and disabilitants were based on RP 2014 tables for
males or females, as appropriate, with slight adjustments. Cost of living benefit
increases for retirees are assumed to be 1% per year for all future years.
Actuarial assumptions used in the June 30, 2016, valuation were based on the
results of actuarial experience studies. The most recent four-year experience
study in the GERF was completed in 2015.
The following changes in actuarial assumptions occurred in 2016:
•The assumed post-retirement benefit increase rate was changed from
1.0% per year through 2035 and 2.5% per year thereafter to 1.0% per
year for all future years.
•The assumed investment return was changed from 7.9% to 7.5%. The
single discount rate was changed from 7.9% to 7.5%.
•Other assumptions were changed pursuant to the experience study
dated June 30, 2015. The assumed future salary increases, payroll
growth, and inflation were decreased by 0.25% to 3.25% for payroll
growth and 2.50% for inflation.
The State Board of Investment, which manages the investments of PERA,
prepares an analysis of the reasonableness on a regular basis of the long-term
expected rate of return 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. The target allocation and best estimates of
arithmetic real rates of return for each major asset class are summarized in the
following table:
F. Discount Rate
The discount rate used to measure the total pension liability was 7.5%, a
reduction from the 7.9% used in 2015. The projection of cash flows used to
determine the discount rate assumed that employee and employer contributions
will be made at the rates set in Minnesota statute. Based on these assumptions,
the fiduciary net position of the GERF was projected to be available to make all
projected future benefit payments of current plan members. Therefore, the long-
term expected rate of return on pension plan investments was applied to all
periods of projected benefit payments to determine the total pension liability.
G. Pension Liability Sensitivity
The following presents the city’s proportionate share of the net pension liability
calculated using the discount rate disclosed in the preceding paragraph, as well
Pension
Year ended Expense
December 31,Amount
2017 288,092$
2018 172,585
2019 472,768
2020 172,464
1,105,909$
Inflation 2.50% per year
Active Member Payroll Growth 3.25% per year
Investment Rate of Return 7.50%
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
48
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
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:
H. Pension Plan Fiduciary Net Position
Detailed information about the GERF 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 percent
(0.0025) of the assets in each member's account annually.
Total contributions made by the city during fiscal year 2016 were:
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, 2016, the plan covered 29
active firefighters and 3 retirees and beneficiaries. The plan is a single-employer
retirement plan that is established and administered in accordance with
Minnesota statute, chapter 69.
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 ofTrustees, lump sum retirementbenefits 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 $3,600 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 $3,600 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.
1% Decrease 1% Increase
In Discount Discount In Discount
Rate (6.50%)Rate (7.50%)Rate (8.50%)
City's proportionate
share of the GERF
net pension liability 6,780,876$4,774,268$3,121,370$
Required
Employee Employer Employee Employer Rate
1,140$1,140$5.00%5.00%5.00%
Contribution Amount % of Covered Payroll
49
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
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 $123,656 in fire
state aid to the plan on behalf of the City Fire Department for the year ended
December 31, 2016, 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,
2016 were $123,656. 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, 2016, the city reported a net pension asset of $23,180 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, 2016.
For the year ended December 31, 2016, the Fire Department recognized pension
expense of $179,441.
At December 31, 2016, the fire department reported deferred outflows/inflows
of resources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and
actual economic experience -$49,068$
Net difference between projected
and actual investment earnings 28,267$-$
28,267$49,068$
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
2017 6,029$
2018 6,029
2019 6,033
2020 (6,180)
2021 (4,089)
Thereafter (28,623)
(20,801)$
E. Actuarial Assumptions
The total pension liability at December 31, 2016, 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.
50
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
There were no changes in actuarial assumptions in 2016.
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:
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
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:
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.
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%
Long-term
Target Expected Real
Allocation Rate of Return
Cash 6.5%-0.7%
Mutual funds 93.5%3.8%
100.0%
Asset Class
Total Plan Net Pension
Pension Fiduciary Liability
Liability (TPL) Net Position (Asset)
(a)(b)(a-b)
Beginning balance 12/31/15 1,017,135$1,026,460$(9,325)$
Changes for the year
Service cost 79,730 -79,730
Interest on total pension liability 44,225 -44,225
Change in TPL due to changes in
benefit terms 90,761 -90,761
Differences between actual and expected
experience in measurement of TPL (53,157)-(53,157)
Contributions from employer -123,656 (123,656)
Supplemental benefits reimbursed ---
Net investment income -55,902 (55,902)
Benefit payments (1,168)(1,168)-
Administrative expenses -(4,144)4,144
Ending balance 12/31/16 1,177,526$1,200,706$(23,180)$
1% Decrease 1% Increase
In Discount Discount In Discount
Rate (3.19%)Rate (4.19%)Rate (5.19%)
Net Pension
Asset (Liability)(10,355)$23,180$55,183$
51
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
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:
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:
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 $3,914,601, and the ratio of the
UAAL to the covered payroll was 6.78 percent.
Actuarial valuations of an ongoing plan involve estimates of the value of reported
amounts and assumptions about the probability occurrence of events far into
the future. Examples include assumptions about future employment, mortality,
and the healthcare cost trend.
Amounts determined regarding the funded status of the plan and ARC of the
employer are subject to continual revision as actual results are compared with
past expectations and new estimates are made about the future. The Schedule
of Funding Progress immediately following the notes to basic financial
statements presents multi-year trend information about whether the actuarial
value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liabilities for benefits. The city’s net OPEB obligation is typically
liquidated using the General fund.
ARC 42,120$
Interest on net OPEB obligation 12,223
Adjustment to ARC (17,671)
Annual OPEB cost (expense)36,672
Less contribution made 16,191
Increase in net OPEB obligation 20,481
Net OPEB obligation – beginning of year 305,563
Net OPEB obligation – end of year 326,044$
Fiscal Year Beginning Annual Percentage
Beginning OPEB OPEB Employer of Annual OPEB Net OPEB
January1,Obligation Cost Contribution Cost Contributed Obligation
2014 255,604$34,718$6,761$19.5%283,561$
2015 283,561 35,817 13,815 38.6%305,563
2016 305,563 36,672 16,191 44.2%326,044
52
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
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, 2016 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.
NOTE 11. 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, 2016, 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 12. SPECIAL ITEM – TRANSFER OF OPERATIONS
During 2016, the city contracted management of FiberNet Monticello to Arvig
Enterprises. As part of this transfer, employees of FiberNet Monticello became
employees of Arvig Enterprises. The positive impact of this transfer of
operations on the city’s long-term liabilities has been reported as a special
item in the city’s Statement of Activities and the proprietary funds’ Statement of
Revenues, Expenses, and Changes in Net Position.
53
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
NOTE 13. FUND BALANCES
Classifications
At December 31, 2016, 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 134,245$24,907$1,638$-$-$1,239$162,029$
Land held for resale --2,030,757 -1,631,789 -3,662,546
Total nonspendable 134,245 24,907 2,032,395 -1,631,789 1,239 3,824,575
Restricted
Debt service ---3,543,551 --3,543,551
Economic development --1,413,910 --1,138,527 2,552,437
Perpetual care -----30,489 30,489
Taxincrement --860,757 ---860,757
Total restricted --2,274,667 3,543,551 -1,169,016 6,987,234
Assigned
Capital improvements ----5,252,440 4,496,088 9,748,528
Economic development --2,835,268 ---2,835,268
Communitycenter operations -736,922 ----736,922
Total assigned -736,922 2,835,268 -5,252,440 4,496,088 13,320,718
Unassigned 6,142,475 -----6,142,475
Total 6,276,720$761,829$7,142,330$3,543,551$6,884,229$5,666,343$30,275,002$
Special Revenue Funds
54
Notes to the Financial Statements
December 31, 2016 CITY OF MONTICELLO
NOTE 14. INTERFUND TRANSFERS
Interfund transfers for the year ended December 31, 2016 consisted of the
following:
The following schedule reflects each fund transfer:
NOTE 15. CONCENTRATION OF REVENUES
Cargill Kitchen solutions is the largest customer of water and sewage services.
The company’s water purchases account for $78,763, or 6.7 percent, of Water
Fund operating revenue; and the company’s sewage charges account for
$410,130, or 18.4 percent, of Sewage Fund operating revenue. Additionally,
Northern States Power Company’s (Xcel Energy) net tax capacity for property
taxes payable in 2016 is $15,913,229, or 59.9 percent, of the total net capacity
of $26,581,226. Accordingly, Xcel Energy’s share of the $9.205 million city
property tax levy is $5.65 million. The tax capacity on January 1, 2017, is based
on market values certified to the state on January 1, 2016. In both 2013 and
2014, Xcel Energy uprated energy producing assets at its Monticello nuclear
plant, increasing the company’s net tax capacity to $16,970,092, or 60 percent,
of the $28,307,628 total tax capacity for taxes payable in 2017.
NOTE 16. SUBSEQUENT EVENTS
In 2016, the city council approved the early pay off of the remaining $1,006,000
2008B Sewer Revenue Refunding Bonds on February 1, 2017. These bonds
had original maturity dates of August 1, 2017 and February 1, 2018. Existing
reserves in the debt service fund were used to prepay the bonds.
On February 14, 2017, the city purchased 5.701 acres of land from St. Henry’s
Catholic Church for $969,941 to be used as part of the Fallon Overpass Bridge
project. The construction phase of the project is estimated for 2018.
Transfers In Transfers Out
Governmental funds:
Economic Development Authority -$188,500$
Debt Service 1,439,136 -
Capital Projects -753,500
Nonmajor governmental 753,500 281,175
Total governmental funds 2,192,636 1,223,175
Enterprise funds:
Water -199,327
Sewage -770,134
Liquor -350,000
Fiber Optics 350,000 -
Total enterprise funds 350,000 1,319,461
Total 2,542,636$2,542,636$
Transfers Out Amount
Debt Service Economic Development Authority 188,500 (1)
Water 199,327 (1)
Sewage 770,134 (1)
Nonmajor governmental 281,175 (1)
Nonmajor governmental Capital Projects 753,500 (2)
Fiber Optics Liquor 350,000 (3)
Total 2,542,636$
(1) Transfer for principal and interest payments on various debt issues.
(2) Transfer for land acquisition and park development.
(3) Transfer to subsidize fund operating and capital expenditures.
Transfers In
55
(This page left blank intentionally)
56
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF MONTICELLO
Required Supplementary Information
Schedules of Employer's Share and Non-Employer Proportionate Share
of Net Pension Liability
Last Ten Fiscal Years
(1)
PERA Fiscal
Year Ending
June 30,
Employer's
Proportion
(Percentage) of
the Net Pension
Liability
Employer's
Proportionate Share
(Amount) of the Net
Pension Liability
(2)
Employer's Proportionate
Share of the State of
Minnesota's
Proportionate Share of
the Net Pension Liability
Employer's Covered
Payroll
Employer's Proportionate
Share of the Net Pension
Liability as a Percentage of
its Covered Payroll
Plan Fiduciary Net
Position as a
Percentage of the
Total Pension
Liability
2015 0.0578%$2,995,496 $0 $3,395,756 88.21%78.2%
2016 0.0588%4,774,268 62,387 3,651,024 130.77%68.9%
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%
2016 100.0%(23,180)N/A N/A 102.0%
Note 1: Changes in Plan Provisions. On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the GERF, which increased the total pension
liability by $1.1 billsion and increased the fiduciary plan net position by $892 million. Upon consolidation, state and employer contributions were revised.
Note 2: Changes in Actuarial Assumptions. (1) 2015 Changes - The assumed post-retirement benefit increse rate was changed from 1.00 percent per year through 2030 and
2.50 percent per year thereafter to 1.00 percent per year through 2035 and 2.50 percent per year thereafter. (2) 2016 Changes - The assumed post-retirement
benefit increase rate was changed from 1.00 percent per year through 2035 and 2.5 percent per year thereafter to 1.00 percent per year for all future years. The
assumed investment return and the single discount rate were both changed from 7.90 percent to 7.50 percent. Other assumptions were changed pursuant to the
experience study dated June 30, 2015. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25 percent to 3.25 percent for
payroll growth and 2.50 percent for inflation.
Note 3: The city implemented GASB Statement No. 68 in fiscal 2015 (using a June 30, 2015 measurement date). This schedule is intended to present 10-year trend
information. Additional years will be added as they become available.
Note 4: For purposes of this schedule, covered payroll is defined as "pensionable wages."
Note 5: 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).
Public Employees Retirement Association - General Employees Retirement Fund
Monticello Fire Department Relief Association
57
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%
2016 267,516 267,516 -3,566,884 7.5%
Fiscal Year Ending
December 31,
Statutorily Determined
Contributions
(a)
Actual Contributions
Paid
(b)
Contribution
Deficiency (Excess)
(a-b)
2014 108,186$108,186$-$
2015 120,027 120,027 -
2016 123,656 123,656 -
Note 1:For purposes of this schedule,covered payroll is defined as "pensionable wages."
Note 2: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).
Public Employees Retirement Association - General Employees Retirement Fund
Monticello Fire Department Relief Association
58
CITY OF MONTICELLO
Required Supplementary Information
Schedule of Changes in the Fire Relief Association's Net Pension
Liability (Asset) and Related Ratios
2015 2016
Total pension liability
Service cost 77,343$79,730$
Interest 41,888 44,224
Changes in benefit terms 90,761
Experience gain/(loss)(53,156)
Benefit payments, including refund of member contributions (128,101)(1,168)
Net change in total pension liability (8,870)160,391
Total pension liability - beginning 1,026,005 1,017,135
Total pension liability - ending (A)1,017,135 1,177,526
Plan fiduciary net position
Contributions - State 122,027$123,656$
Contributions - Municipal --
Net investment income (17,673)55,902
Benefit payments, including refund of member contributions (128,101)(1,168)
Administrative expenses (3,532)(4,144)
Net change in plan fiduciary net position (27,279)174,246
Plan fiduciary net position - beginning 1,053,739 1,026,460
Plan fiduciary net position - ending (B)1,026,460 1,200,706
Net pension liability (asset) - ending (A)-(B)(9,325)(23,180)
Plan fiduciary net position as a percentage of the total pension liability 100.9%102.0%
Covered payroll*N/A N/A
Net pension liability as a percentage of covered payroll*N/A 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)
59
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
60
(This page left blank intentionally)
61
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - General Fund
For the Year Ended December 31, 2016
101
Orginal and Final Variance with
Budget Actual Final Budget
Revenues
Property taxes 6,196,500$6,204,429$7,929$
Franchise taxes 264,400 263,900 (500)
Special assessments 300 242 (58)
Licenses and permits 338,900 668,602 329,702
Intergovernmental 300,477 389,005 88,528
Charges for services 268,364 351,702 83,338
Fines and forfeitures 42,100 30,656 (11,444)
Investment earnings 100,000 99,237 (763)
Other revenues 84,959 263,783 178,824
Total revenues 7,596,000 8,271,556 675,556
Expenditures:
Current
General government
Mayor and council 53,925 57,507 3,582
City administration 320,099 320,450 351
City clerk 42,864 66,031 23,167
Finance 428,980 393,754 (35,226)
Audit 45,000 39,273 (5,727)
City assessing 52,115 50,415 (1,700)
Legal 37,000 29,152 (7,848)
Human resources 118,688 116,522 (2,166)
Planning and zoning 218,023 210,173 (7,850)
Information technology services 11,540 692 (10,848)
City hall 215,244 197,006 (18,238)
Prairie center building 14,120 8,917 (5,203)
Public safety
Law enforcement 1,222,627 1,212,080 (10,547)
Fire and rescue 333,823 289,010 (44,813)
Fire relief 80,000 123,656 43,656
Building inspections 369,663 350,304 (19,359)
Civil defense 3,930 1,234 (2,696)
Animal control 51,348 46,943 (4,405)
National Guard 16,050 13,550 (2,500)
(continued)
62
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - General Fund
For the Year Ended December 31, 2016 (Continued)
Orginal and Final Variance with
Budget Actual Final Budget
Expenditures (continued)
Public works
Public works administration 194,771$126,327$(68,444)$
Engineering 160,058 111,795 (48,263)
Public works inspecitons 88,809 62,100 (26,709)
Streets and alleys 976,962 806,098 (170,864)
Ice and snow removal 284,280 264,232 (20,048)
Shop and garage 204,101 171,079 (33,022)
Stormwater 73,121 29,277 (43,844)
Street lighting 263,900 231,976 (31,924)
Sanitation
Refuse and recycling collection 614,437 600,300 (14,137)
Transit
Bus service 40,000 41,250 1,250
Recreation and culture
Community celebrations 2,500 5,684 3,184
Senior center 101,672 99,124 (2,548)
Park operations 824,997 775,738 (49,259)
Park ballfields 27,300 20,538 (6,762)
Shade tree 63,527 75,802 12,275
Library 40,526 44,823 4,297
Total expenditures 7,596,000 6,992,812 (603,188)
Excess (deficiency) of revenues over expenditures -1,278,744 1,278,744
Other financing sources
Sale of capital assets -11,180 11,180
Net change in fund balance -1,289,924 1,289,924
Fund balance at beginning of year 4,986,796 4,986,796 -
Fund balance at end of year 4,986,796$6,276,720$1,289,924$
63
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - Community Center Fund
For the Year Ended December 31, 2016
226
Orginal and Final Variance with
Budget Actual Final Budget
Revenues
Property taxes 364,000$364,000$-$
Charges for services 1,391,110 1,395,573 4,463
Investment earnings -14,986 14,986
Other revenues 24,216 12,273 (11,943)
Total revenues 1,779,326 1,786,832 7,506
Expenditures
Current
Recreation and culture
Community center operations 1,647,026 1,447,512 (199,514)
Community center programming 132,300 206,933 74,633
Total expenditures 1,779,326 1,654,445 (124,881)
Net change in fund balance -132,387 132,387
Fund balance at beginning of year 629,442 629,442 -
Fund balance at end of year 629,442$761,829$132,387$
64
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, 2016
213
Orginal and Final Variance with
Budget Actual Final Budget
Revenues
Property taxes 280,000$279,422$(578)$
Tax increments 675,994 668,352 (7,642)
Investment earnings 65,000 60,528 (4,472)
Other revenues 1,750 290,409 288,659
Total revenues 1,022,744 1,298,711 275,967
Expenditures
Current
Economic development
General operations 305,050 171,171 (133,879)
Land held for resale adjustment -96,100 96,100
Developmental activities 358,893 263,475 (95,418)
Total expenditures 663,943 530,746 (133,197)
Excess (deficiency) of revenues over expenditures 358,801 767,965 409,164
Other financing uses
Transfers out (200,000)(188,500)11,500
Net change in fund balance 158,801 579,465 420,664
Fund balance at beginning of year 6,562,865 6,562,865 -
Fund balance at end of year 6,721,666$7,142,330$420,664$
65
Notes to the Required Supplementary Information
December 31, 2016 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 all 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.
66
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 1,138,164$31,039$363$1,397,396$1,758,513$631,554$632,138$5,589,167$
Receivables
Due from other governmental units -----87,764 -87,764
Prepaid items -1,239 -----1,239
Notes receivable --116,779 ----116,779
Total assets 1,138,164$32,278$117,142$1,397,396$1,758,513$719,318$632,138$5,794,949$
LIABILITIES
Accounts and contracts payable -$550$-$-$-$-$11,277$11,827$
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - notes receivable --116,779 ----116,779
FUND BALANCES
Nonspendable -1,239 -----1,239
Restricted for economic development 1,138,164 -363 ----1,138,527
Restricted for perpetual care -30,489 -----30,489
Assigned for capital improvements ---1,397,396 1,758,513 719,318 620,861 4,496,088
Total fund balances 1,138,164 31,728 363 1,397,396 1,758,513 719,318 620,861 5,666,343
Total liabilities, deferred inflows of
resources, and fund balances 1,138,164$32,278$117,142$1,397,396$1,758,513$719,318$632,138$5,794,949$
Special Revenue Funds Capital Project Funds
December 31, 2016
67
CITY OF MONTICELLO
Combining Statement of Revenues, Expenditures and Changes in Fund Balance
Nonmajor Governmental Funds
For the Year Ended December 31, 2016
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 -$-$-$-$-$77,790$-$77,790$
Charges for services -14,517 -460,683 ---475,200
Investment earnings 17,760 601 5 16,771 28,178 9,328 18,512 91,155
Other revenues ------17,929 17,929
Total revenues 17,760 15,118 5 477,454 28,178 87,118 36,441 662,074
Expenditures:
Current
Public works ---18,540 ---18,540
Recreation and culture -17,037 ----63,181 80,218
Capital outlay
Public works -----49,460 -49,460
Recreation and culture ------1,342,558 1,342,558
Total expenditures -17,037 -18,540 -49,460 1,405,739 1,490,776
Excess (deficiency) of
revenues over expenditures 17,760 (1,919)5 458,914 28,178 37,658 (1,369,298)(828,702)
Other financing sources (uses)
Transfers in ------753,500 753,500
Transfers out ---(235,567)(45,608)--(281,175)
Total other financing sources (uses)---(235,567)(45,608)-753,500 472,325
Net change in fund balance 17,760 (1,919)5 223,347 (17,430)37,658 (615,798)(356,377)
Fund balance at begining of year 1,120,404 33,647 358 1,174,049 1,775,943 681,660 1,236,659 6,022,720
Fund balance at end of year 1,138,164$31,728$363$1,397,396$1,758,513$719,318$620,861$5,666,343$
Special Revenue Funds Capital Project Funds
68
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, 2016
704 703 702
Benefit Central IT
Accrual Equipment Services Total
ASSETS
Current assets
Cash and investments 264,219$764,353$213,705$1,242,277$
Noncurrent assets
Capital assets
Machinery and equipment -960,855 17,013 977,868
Less accumulated depreciation -(175,241)(11,839)(187,080)
Total noncurrent assets -785,614 5,174 790,788
TOTAL ASSETS 264,219 1,549,967 218,879 2,033,065
LIABILITIES
Current liabilities
Accounts payable --709 709
Accrued interest payable -819 -819
Bonds payable due within one year -120,000 -120,000
Compensated absences due within one year 100,613 --100,613
Total current liabilities 100,613 120,819 709 222,141
Noncurrent liabilities
Bonds payable, net current portion -605,000 -605,000
Compensated absences payable 159,049 --159,049
Total noncurrent liabilities 159,049 605,000 -764,049
TOTAL LIABILITIES 259,662 725,819 709 986,190
NET POSITION
Net investment in capital assets -60,614 5,174 65,788
Unrestricted 4,557 763,534 212,996 981,087
TOTAL NET POSITION 4,557$824,148$218,170$1,046,875$
69
CITY OF MONTICELLO
Combining Statement of Revenues, Expenses and Changes in Net Position
Internal Service Funds
For the Year Ended December 31, 2016
704 703 702
Benefit Central IT
Accrual Equipment Services Total
Operating revenues
Charges to other funds 33,504$193,800$298,981$526,285$
Operating expenses
Personal services 33,504 --33,504
Materials and supplies --41,101 41,101
Other services and charges --169,454 169,454
Depreciation -80,504 3,403 83,907
Total operating expenses 33,504 80,504 213,958 327,966
Operating income -113,296 85,023 198,319
Nonoperating revenues (expenses)
Investment earnings 4,557 12,125 1,820 18,502
Interest expense -(16,182)-(16,182)
Total nonoperating revenues (expenses)4,557 (4,057)1,820 2,320
Change in net position 4,557 109,239 86,843 200,639
Net position at beginning of year -714,909 131,327 846,236
Net position at end of year 4,557$824,148$218,170$1,046,875$
70
CITY OF MONTICELLO
Combining Statement of Cash Flows
Internal Service Funds
For the Year Ended December 31, 2016
704 703 702
Benefit Central IT
Accrual Equipment Services Total
Cash flow from operating activities
Cash received from internal customers 33,504$193,800$298,981$526,285$
Cash paid to suppliers for goods and services --(195,696)(195,696)
Net cash provided by operating activities 33,504 193,800 103,285 330,589
Cash flows from capital and related financing activities
Acquisition of capital assets -(159,041)-(159,041)
Principal payments on long-term debt -(115,000)-(115,000)
Interest and fiscal charges paid on long-term debt -(16,259)-(16,259)
Net cash (used) by capital and related financing activities -(290,300)-(290,300)
Cash flows from investing activities
Interest on investments 4,557 12,125 1,820 18,502
Increase (decrease) in cash and cash equivalents 38,061 (84,375)105,105 58,791
Cash and cash equivalents - January 1 226,158 848,728 108,600 1,183,486
Cash and cash equivalents - December 31 264,219$764,353$213,705$1,242,277$
Reconciliation of operating income (loss) to net cash
provided by operating activities:
Operating income (loss)-$113,296$85,023$198,319$
Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided by Operating Activities:
Depreciation -80,504 3,403 83,907
Changes in assets and liabilities:
(Increase) decrease in prepaid items --26,873 26,873
Increase (decrease) in accounts and contracts payable --(12,014)(12,014)
Increase (decrease) in compensated absences 33,504 --33,504
Net cash provided by operating activities 33,504$193,800$103,285$330,589$
71
(This page left blank intentionally)
72
OTHER SUPPLEMENTARY SCHEDULES
CITY OF MONTICELLO
Schedule of Revenues (Sources) and Expenditures (Uses)
General Fund
For the Year Ended December 31, 2016
2016 Variance with
2012 2013 2014 2015 Final 2016 Final
Actual Actual Actual Actual Budget Actual Budget
Revenue and other sources - summary:
Property taxes 5,711,491$5,605,101$5,527,958$5,906,255$6,196,500$6,204,429$7,929$
Franchise taxes 195,500 217,000 216,500 216,500 264,400 263,900 (500)
Special assessments 10,349 22,351 22,808 1,330 300 242 (58)
Licenses and permits 275,198 331,136 378,810 461,049 338,900 668,602 329,702
Intergovernmental 301,895 372,632 320,691 354,679 300,477 389,005 88,528
Charges for services 312,807 281,138 319,477 349,601 268,364 351,702 83,338
Fines and forfeitures 63,106 41,124 1,900 42,474 42,100 30,656 (11,444)
Investment earnings 85,603 (52,134)150,754 64,037 100,000 99,237 (763)
Other 406,167 169,997 180,104 241,721 84,959 263,783 178,824
Sales of capital assets ---30,473 -11,180 11,180
Interfund transfers 1,729 ------
Total Revenues & Other Sources 7,363,845 6,988,345 7,119,002 7,668,119 7,596,000 8,282,736 686,736
Revenue and other sources - detail:
Taxes
Property tax - current 5,420,093 5,505,158 5,483,145 5,840,880 6,177,000 6,152,157 (24,843)
Property tax - delinquent 249,876 75,279 24,140 46,786 -31,704 31,704
Mobile home tax 12,790 13,362 17,575 15,077 14,500 16,324 1,824
Penalties and interest - taxes 28,732 11,302 3,098 3,512 5,000 4,244 (756)
Franchise taxes
Franchise taxes - electric 195,000 216,500 216,500 216,500 263,900 263,900 -
Franchise taxes - other 500 500 --500 -(500)
Special assessments
Assessment for services/projects 10,349 22,351 22,808 1,330 300 242 (58)
Licenses & Permits
Liquor license 50,290 50,320 44,612 45,640 48,000 45,895 (2,105)
Beer license 913 912 964 1,013 900 1,013 113
Other business licenses & permits 4,673 3,476 3,707 2,545 3,500 5,295 1,795
Building permits 207,574 260,981 315,466 395,024 280,000 598,983 318,983
Fire sprinkler permits ---215 ---
Variance/conditional use permits 2,800 2,550 2,600 2,100 1,100 -(1,100)
Driveway permits 75 50 25 75 150 30 (120)
Grading permits ----200 -(200)
Mobile home permits 380 475 95 325 200 180 (20)
Excavation permits 1,250 3,050 3,850 6,125 -7,125 7,125
Right-of-way permits 3,551 3,092 3,158 2,677 -3,144 3,144
Sign/banner permits 3,320 5,790 4,025 4,135 4,500 5,694 1,194
Animal licenses 372 440 308 1,175 350 1,243 893
(continued)
73
CITY OF MONTICELLO
Schedule of Revenues (Sources) and Expenditures (Uses)
General Fund
For the Year Ended December 31, 2016 (Continued)
2016 Variance with
2012 2013 2014 2015 Final 2016 Final
Actual Actual Actual Actual Budget Actual Budget
Intergovernmental Revenue
Pera increase aid 6,741$6,741$6,741$6,741$6,740$6,741$1$
State highway aid - operating 109,379 107,173 111,280 125,258 101,737 131,898 30,161
Fire department aid - operating 74,221 109,594 108,186 120,027 80,000 123,656 43,656
Police department aid - operating 59,062 65,767 63,205 66,814 63,000 68,710 5,710
County operating grant - street/highway 41,370 38,579 -19,642 19,000 55,780 36,780
County operating grant - civil defense 11,122 11,678 13,157 2,221 12,000 2,220 (9,780)
County operating grant - recycling -33,100 18,122 13,976 18,000 -(18,000)
Charges for Services
Zoning/subdivision fees 2,500 850 1,200 1,050 700 -(700)
Sale of maps and publications 38 15 --25 -(25)
Assessment searches 2,850 7,125 8,174 11,100 2,500 12,760 10,260
Blight notice fee 350 2,200 (1,650)350 -320 320
Final plat fee 100 50 250 150 ---
Planning administration fee 30,007 450 550 900 600 5,950 5,350
NSF fee --90 30 -30 30
Inspection/construction fees 451 861 983 826 -965 965
Inspection fees - buildings -------
Contractor licensing fee 550 1,300 1,825 1,075 100 825 725
Fire protections fees - townships 133,773 124,227 124,227 126,439 126,439 131,717 5,278
Fire emergency response fee 7,000 4,250 4,883 11,250 4,000 4,900 900
Fire - other fees 6,024 3,091 2,050 2,165 1,000 3,814 2,814
Blight mowing fees 682 1,865 (559)625 1,000 450 (550)
Rental housing fees 36,415 43,355 55,030 45,210 45,000 49,020 4,020
Animal control fees 28,755 29,539 34,462 36,869 31,000 36,089 5,089
Miscellaneous pubic works 186 -8,981 ----
Tree and brush removal charge --2,200 6,755 1,000 3,290 2,290
Recycling bin fee 485 --260 ---
Garbage fee - taxable 44,069 44,199 44,992 90,310 44,000 89,656 45,656
Garbage miscellaneous fee 660 786 17,488 ----
Garbage surcharge - not taxable 7,863 7,887 2,340 240 2,500 300 (2,200)
Field/Tourney fees 3,250 3,906 4,019 4,544 3,500 5,679 2,179
Park rental fees 4,524 4,982 5,099 6,305 5,000 4,962 (38)
Memorial program revenue ---1,404 ---
Developer cost reimbursement 138 200 2,843 1,744 -750 750
General charges for services 2,137 ----225 225
Fines & Forfeitures
Court fines 48,768 39,399 -41,761 42,000 30,150 (11,850)
Animal impound fines 145 225 400 713 100 506 406
Liquor license violation 1,500 1,500 1,500 ----
Administration offense fines 12,693 ------
(continued)
74
CITY OF MONTICELLO
Schedule of Revenues (Sources) and Expenditures (Uses)
General Fund
For the Year Ended December 31, 2016 (Continued)
2016 Variance with
2012 2013 2014 2015 Final 2016 Final
Actual Actual Actual Actual Budget Actual Budget
Investment Earnings
Investment earnings 73,623$(62,833)$145,211$64,037$100,000$99,237$(763)$
Interest - loans 11,980 10,699 5,543 ----
Miscellaneous Revenue
City property rental 1,600 1,600 1,600 1,600 1,600 1,600 -
Billboard land rental 32,023 19,888 20,146 2,150 20,000 21,149 1,149
Lease - Prairie Center 37,933 38,476 37,511 22,500 21,000 24,006 3,006
Lease - communication tower --8,000 22,180 24,000 24,905 905
Contributions 6,277 23,250 4,000 5,958 2,500 5,315 2,815
Sale of city property 3,021 374 1,994 1,831 500 10,650 10,150
Sale of lock boxes 684 1,015 855 1,368 700 1,710 1,010
Tree Sales --5,600 6,026 -7,533 7,533
Copies 381 -21 49 70 19 (51)
Refunds & reimbursables 76,892 44,100 55,030 75,416 -88,860 88,860
Assessment fee reimbursement 29,850 24,525 24,675 23,026 -24,150 24,150
Fire contributions --11,400 13,268 -7,852 7,852
Insurance claims 195,830 9,433 -29,926 ---
Other miscellaneous 21,676 7,336 9,272 36,423 14,589 46,034 31,445
Other Financing Sources
Sales of capital assets ---30,473 -11,180 11,180
Transfers from other funds 1,729 ------
Total revenues and other sources 7,363,845$6,988,345$7,119,002$7,668,119$7,596,000$8,282,736$686,736$
Expenditures and other uses - summary
General government 1,412,578$1,389,599$1,438,346$1,457,376$1,549,577$1,482,666$(66,911)$
Public safety 1,784,357 1,844,833 1,845,073 1,972,986 2,077,441 2,036,777 (40,664)
Public works 1,702,395 1,700,161 1,792,870 1,709,063 2,246,002 1,802,884 (443,118)
Sanitation 500,037 505,996 517,956 563,477 614,437 600,300 (14,137)
Transit --10,000 40,000 40,000 41,250 1,250
Recreation and culture 814,260 853,777 792,678 964,385 1,060,522 1,021,709 (38,813)
General unallocated 279,302 165,923 12,584 8,082 8,021 7,226 (795)
Transfers out and other uses 2,393,502 92,000 293,000 297,012 ---
Total expenditures and other uses 8,886,431$6,552,289$6,702,507$7,012,381$7,596,000$6,992,812$(603,188)$
Expenditures and other uses - divisions
General government
Mayor and council 51,988$53,696$52,181$52,572$53,925$57,507$3,582$
City administration 228,738 260,322 273,993 312,491 320,099 320,450 351
City clerk 38,933 2,425 41,835 2,979 42,864 66,031 23,167
Finance 337,348 326,510 385,662 377,867 428,980 393,754 (35,226)
Audit 39,227 47,823 53,541 37,798 45,000 39,273 (5,727)
City assessing 49,600 49,664 49,832 50,466 52,115 50,415 (1,700)
Legal 40,275 46,905 29,303 36,946 37,000 29,152 (7,848)
(continued)
75
CITY OF MONTICELLO
Schedule of Revenues (Sources) and Expenditures (Uses)
General Fund
For the Year Ended December 31, 2016 (Continued)
2016 Variance with
2012 2013 2014 2015 Final 2016 Final
Actual Actual Actual Actual Budget Actual Budget
General government (continued)
Human resources 84,041$93,067$90,565$117,249$118,688$116,522$(2,166)$
Planning and zoning 163,629 182,753 220,080 244,976 218,023 210,173 (7,850)
Information technology services 130,102 95,572 33,759 19,872 11,540 692 (10,848)
City hall 233,602 215,507 193,186 190,833 207,223 189,780 (17,443)
Prairie center building 15,095 15,355 14,409 13,327 14,120 8,917 (5,203)
Public safety
Law Enforcement 1,187,382 1,190,441 1,098,403 1,174,439 1,222,627 1,212,080 (10,547)
Fire and rescue 207,778 222,141 306,780 309,970 333,823 289,010 (44,813)
Fire relief 74,221 109,594 108,186 120,027 80,000 123,656 43,656
Building inspections 248,376 251,007 266,544 304,858 369,663 350,304 (19,359)
Civil defense 2,719 9,707 1,660 1,500 3,930 1,234 (2,696)
Animal control 49,594 47,426 49,439 48,754 51,348 46,943 (4,405)
National Guard 14,287 14,517 14,061 13,438 16,050 13,550 (2,500)
Public works
Public works administration 176,457 113,882 122,151 124,504 194,771 126,327 (68,444)
Engineering 200,287 224,028 195,841 110,555 160,058 111,795 (48,263)
Public works inspecitons 64,827 54,878 36,867 32,084 88,809 62,100 (26,709)
Streets and alleys 655,170 689,046 735,629 737,836 976,962 806,098 (170,864)
Ice and snow 133,193 210,552 308,387 263,020 284,280 264,232 (20,048)
Shop and garage 219,646 186,741 177,644 185,837 204,101 171,079 (33,022)
Stormwater 51,468 12,064 16,842 26,712 73,121 29,277 (43,844)
Parking lots 4,568 2,965 3,814 2,030 ---
Street lighting 196,779 206,005 195,695 226,485 263,900 231,976 (31,924)
Sanitation
Refuse and recycling collection 500,037 505,996 517,956 563,477 614,437 600,300 (14,137)
Transit
Bus service --10,000 40,000 40,000 41,250 1,250
Recreation and culture
Community celebrations 5,165 1,186 688 2,199 2,500 5,684 3,184
Senior center 88,441 90,219 97,547 97,115 101,672 99,124 (2,548)
Ice arena 75,000 75,000 -----
Park operations 533,537 572,985 570,639 706,934 824,997 775,738 (49,259)
Park ballfields 29,419 25,517 18,149 16,971 27,300 20,538 (6,762)
Shade tree 52,983 53,475 68,891 104,990 63,527 75,802 12,275
Library 29,715 35,395 36,764 36,176 40,526 44,823 4,297
General unallocated
Insurances and other 279,302 165,923 12,584 8,082 8,021 7,226 (795)
Transfers out and other uses
Transfers out 2,393,502 92,000 293,000 297,012 ---
Total expenditures & other uses 8,886,431$6,552,289$6,702,507$7,012,381$7,596,000$6,992,812$(603,188)$
Revenue over/(under) expenditures (1,522,586)$436,056$416,495$655,738$-$1,289,924$1,289,924
76
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - Minnesota Investment Fund
For the Year Ended December 31, 2016
220
Orginal and Final 221 Variance with
Budget Actual Final Budget
Revenues
Investment earnings 25,000$17,760$(7,240)$
Fund balance at beginning of year 1,120,404 1,120,404 -
Fund balance at end of year 1,145,404$1,138,164$(7,240)$
77
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - Cemetery Fund
For the Year Ended December 31, 2016
651
Orginal and Final Variance with
Budget Actual Final Budget
Revenues
Charges for services 26,000$14,517$(11,483)$
Investment earnings 1,000 601 (399)
Total revenues 27,000 15,118 (11,882)
Expenditures
Current
Recreation and culture
Cemetery operations 27,000 17,037 (9,963)
Net change in fund balance -(1,919)(1,919)
Fund balance at beginning of year 33,647 33,647 -
Fund balance at end of year 33,647$31,728$(1,919)$
78
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - CDBG-Reviatlization Fund
For the Year Ended December 31, 2016
214
Orginal and Final Variance with
Budget Actual Final Budget
Revenues
Investment earnings -$5$5$
Fund balance at beginning of year 358 358 -
Fund balance at end of year 358$363$5$
79
CITY OF MONTICELLO
Schedule of Assets, Liabilities, and Fund Balances
Economic Development Authority
December 31, 2016
EDA TIF TIF TIF TIF TIF TIF
General GMEF Future 6 (d)19 20 22 24
ASSETS
Cash and investments 1,913,983$1,148,898$-$703,243$183,566$140,843$561,455$76,641$
Receivables
Unremitted taxes 523 -------
Delinquent taxes 740 -------
Accounts receivable 100 -------
Intrafund receivable 971,755 -------
Prepaid items 1,638 -------
Land held for resale 2,030,757 -----163,200 -
TOTAL ASSETS 4,919,496$1,148,898$-$703,243$183,566$140,843$724,655$76,641$
LIABILITIES
Accounts and contracts payable 6,596$-$-$-$-$-$-$-$
Intrafund payable --44,497 ---386,574 -
Unearned revenue ------163,200 -
Total liabilities 6,596 -44,497 ---549,774 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - property taxes 740 -------
FUND BALANCES
Nonspendable 2,032,395 -------
Restricted -1,148,898 -703,243 183,566 140,843 174,881 76,641
Assigned 2,879,765 -(44,497)-----
Total fund balance 4,912,160 1,148,898 (44,497)703,243 183,566 140,843 174,881 76,641
TOTAL LIABILITIES,
AND FUND BALANCES 4,919,496$1,148,898$-$703,243$183,566$140,843$724,655$76,641$
(d) = decertified
(Continued)
80
CITY OF MONTICELLO
Schedule of Assets, Liabilities, and Fund Balances
Economic Development Authority
December 31, 2016 (Continued)
TIF TIF TIF TIF TIF TIF GAAP Total
29 30 34 35 38 39 Reconciliation EDA
ASSETS
Cash and investments 100,434$100,186$19,859$2,166$-$56$-$4,951,330$
Receivables
Unremitted taxes 1,378 ------1,901
Delinquent taxes -------740
Accounts -------100
Intrafund receivable ------(971,755)-
Prepaid items -------1,638
Land held for resale -------2,193,957
TOTAL ASSETS 101,812$100,186$19,859$2,166$-$56$(971,755)$7,149,666$
LIABILITIES
Accounts and contracts payable -$-$-$-$-$-$-$6,596$
Intrafund payable -134,989 19,715 -115,305 270,675 (971,755)-
Unearned revenue ------(163,200)-
Total liabilities -134,989 19,715 -115,305 270,675 (1,134,955)6,596
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - property taxes -------740
FUND BALANCES
Nonspendable -------2,032,395
Restricted 101,812 (34,803)144 2,166 (115,305)(270,619)163,200 2,274,667
Assigned -------2,835,268
Total fund balance 101,812 (34,803)144 2,166 (115,305)(270,619)163,200 7,142,330
TOTAL LIABILITIES,
AND FUND BALANCES 101,812$100,186$19,859$2,166$-$56$(971,755)$7,149,666$
(d) = decertified
81
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Other Financing Sources (Uses)
Economic Development Authority
For the Year Ended December 31, 2016
EDA TIF TIF TIF TIF TIF TIF
General GMEF Future 6 (d)19 20 22 24
Revenues
Property taxes 279,422$-$-$-$-$-$-$-$
Tax increments ----30,972 17,592 281,330 41,634
Investment earnings 20,454 15,544 -9,515 2,274 1,830 7,159 894
Interest on intrafund loans 20,525 -------
Other revenues 290,409 -------
Total revenues 610,810 15,544 -9,515 33,246 19,422 288,489 42,528
Expenditures:
Current
Salary and wages 50,910 -------
Benefits 18,048 -------
Supplies 81 -------
Professional services - legal 25,322 -----1,023 -
Professional services - other 59,679 -------
LPV Insurance 1,867 -------
Legal and general publications 312 ---31 31 31 31
Property taxes 1,318 -------
Marketing 2,500 -------
Dues and membership 4,846 -------
Utilities 585 -----228 -
IT services 1,409 -------
Travel and conferences 709 -------
Land adjustment to market 50,300 -------
Other expenses 3,585 -----1,126 -
Excess increments ------166,289 -
Interest on intrafund loans --------
PAYG payments to third parties -----6,333 48,751 20,520
Total expenditures 221,471 ---31 6,364 217,448 20,551
Excess (deficiency) of revenues over
expenditures 389,339 15,544 -9,515 33,215 13,058 71,041 21,977
Other financing uses
Transfers out --------
Net change in fund balances 389,339 15,544 -9,515 33,215 13,058 71,041 21,977
Fund balance at beginning of year 4,522,821 1,133,354 (44,497)693,728 150,351 127,785 103,840 54,664
Fund balance at end of year 4,912,160$1,148,898$(44,497)$703,243$183,566$140,843$174,881$76,641$
(Continued)
82
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Other Financing Sources (Uses)
Economic Development Authority
For the Year Ended December 31, 2016 (Continued)
TIF TIF TIF TIF TIF TIF GAAP Total
29 30 34 35 38 39 Reconciliation EDA
Revenues
Property taxes -$-$-$-$-$-$-$279,422$
Tax increments 22,590 9,120 208,243 -11,421 45,450 -668,352
Investment earnings 1,330 1,350 135 43 ---60,528
Interest on intrafund loans ------(20,525)-
Other revenues -------290,409
Total revenues 23,920 10,470 208,378 43 11,421 45,450 (20,525)1,298,711
Expenditures:
Current
Salary and wages -------50,910
Benefits -------18,048
Supplies -------81
Professional services - legal ---1,957 ---28,302
Professional services - other -------59,679
LPV Insurance -------1,867
Legal and general publications 31 31 31 31 31 --591
Property taxes -------1,318
Marketing -------2,500
Dues and membership -------4,846
Utilities -------813
IT services -------1,409
Travel and conferences -------709
Land adjustment to market ------45,800 96,100
Other expenses -------4,711
Excess increments -------166,289
Interest on intrafund loans -3,493 --4,873 12,159 (20,525)-
PAYG payments to third parties 16,969 ------92,573
Total expenditures 17,000 3,524 31 1,988 4,904 12,159 25,275 530,746
Excess (deficiency) of revenues over
expenditures 6,920 6,946 208,347 (1,945)6,517 33,291 (45,800)767,965
Other financing uses
Transfers out --(188,500)----(188,500)
Net change in fund balances 6,920 6,946 19,847 (1,945)6,517 33,291 (45,800)579,465
Fund balance at beginning of year 94,892 (41,749)(19,703)4,111 (121,822)(303,910)209,000 6,562,865
Fund balance at end of year 101,812$(34,803)$144$2,166$(115,305)$(270,619)$163,200$7,142,330$
83
CITY OF MONTICELLO
Schedule of Assets, Liabilities, Deferred Inflows of Resources, and Fund Balances
Debt Service Activities
December 31, 2016
313 315 317 312 318 319 320
2007A 2008B 2010A 2011A 2014A 2015B 2016A
Improvement Sewer Improvement Refunding Bonds Bonds Bonds Total
ASSETS
Cash and cash equivalents (182,448)$1,067,997$1,020,505$1,261,783$36,728$66,621$263,638$3,534,824$
Receivables
Unremitted special assessments 6,810 -3,165 ----9,975
Deliquent special assessments 2,555 -6,607 117 ---9,279
Deferred special assessments 297,254 -159,154 1,927,740 -154,754 818,044 3,356,946
Total assets 124,171$1,067,997$1,189,431$3,189,640$36,728$221,375$1,081,682$6,911,024$
LIABILITIES
Accounts and contracts payable 208$208$208$208$208$208$-$1,248$
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - special assessments 299,809 -165,762 1,927,856 -154,754 818,044 3,366,225
FUND BALANCES
Restricted for debt service (175,846)1,067,789 1,023,461 1,261,576 36,520 66,413 263,638 3,543,551
Total liabilities, deferred inflows
of resources, and fund balances 124,171$1,067,997$1,189,431$3,189,640$36,728$221,375$1,081,682$6,911,024$
General Obligation Bonds
84
CITY OF MONTICELLO
Schedule of Revenues, Expenditures and Other Financing Sources (Uses)
Debt Service Activities
For the Year Ended December 31, 2016
313 315 317 312 318 319 320
2007A 2008B 2010A 2011A 2014A 2015B 2016A
Improvement Sewer Improvement Refunding Bonds Bonds Bonds Total
Revenues
Property taxes 420,000$500,000$40,000$330,000$544,000$250,000$-$2,084,000$
Special assessments 116,066 -68,483 336,961 -27,855 263,182 812,547
Investment earnings 674 21,492 7,798 4,794 689 520 456 36,423
Total revenues 536,740 521,492 116,281 671,755 544,689 278,375 263,638 2,932,970
Expenditures
Debt service
Principal 1,124,653 1,472,000 270,000 2,320,000 350,000 145,000 -5,681,653
Interest and fiscal charges 58,548 95,706 34,708 107,008 165,519 67,627 -529,116
Total expenditures 1,183,201 1,567,706 304,708 2,427,008 515,519 212,627 -6,210,769
Excess (deficiency) of
revenues over expenditures (646,461)(1,046,214)(188,427)(1,755,253)29,170 65,748 263,638 (3,277,799)
Other financing sources
Transfers in -685,000 565,636 188,500 ---1,439,136
Net change in fund balance (646,461)(361,214)377,209 (1,566,753)29,170 65,748 263,638 (1,838,663)
Fund balance at begining of year 470,615 1,429,003 646,252 2,828,329 7,350 665 -5,382,214
Fund balance at end of year (175,846)$1,067,789$1,023,461$1,261,576$36,520$66,413$263,638$3,543,551$
General Obligation Bonds
85
(This page left blank intentionally)
86
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 87
Changes in Net Position - Last Ten Fiscal years 88
Fund Balances of Governmental Funds - Last Ten Fiscal Years 90
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years 91
Governmental Funds Tax Revenues by Source - Last Ten Fiscal Years (modified accrual basis of accounting)92
General Governmental Tax Revenues by Source - Last Ten Fiscal Years (accrual basis of accounting)93
Revenue capacity
Tax Capacity Value and Estimated Market Value of Taxable Property - Last Ten Fiscal Years 94
Property Tax Rates - All Direct and Overlapping Governments - Last Ten Fiscal Years 95
Property Tax Levies and Collections - Last Ten Fiscal Years 96
Principal Property Taxpayers - Current Year and Nine Years Ago 97
Water Sold by Customer Type (gallons) - Last Ten Fiscal Years 98
Water and Sewage Utility Rates - Last Ten Fiscal Years 99
Debt capacity
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years 100
Ratios of Net General Obligation Bonded Debt Outstanding - Last Ten Fiscal Years 101
Legal Debt Margin Information - Last Ten Fiscal Years 102
Computation of Direct and Overlapping Debt 103
Schedule of General Obligation Revenue Bond Coverage - Last Four Fiscal Years 104
Economic and demographic information
Demographic and Economic Statistics - Last Ten Fiscal Years 105
Principal Employers - Current Year and Nine Years Ago 106
Operating information
City Government Employees by Function/Program - Last Ten Fiscal Years 107
Operating Indicators by Function - Last Ten Fiscal Years 108
Capital Assets Statistics by Function - Last Ten Fiscal Years 110
CITY OF MONTICELLO
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Governmental activities
Net investment in
capital assets 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$41,077,683$
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 10,569,693
Unrestricted 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 20,824,170
Total governmental
net position 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$72,471,546$
Business-type activities
Net investment in
capital assets 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$41,014,122$
Restricted -19,350 19,350 19,350 19,350 19,350 ----
Unrestricted 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 9,052,590
Total business-type
net position 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$50,066,712$
Primary government
Net investment in
capital assets 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$82,091,805$
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 10,569,693
Unrestricted 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 29,876,760
Total primary government
net position 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$122,538,258$
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
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016MillionsPrimary Government Net Position
Net investment in
capital assets
Restricted net
position
Unrestricted net
position
87
CITY OF MONTICELLO
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Expenses 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Governmental activities
General government 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$1,694,111$
Public safety 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 2,187,363
Public works 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 5,480,074
Sanitation 509,208 514,208 547,160 534,903 495,693 500,037 487,268 517,956 563,477 600,300
Transit -------10,000 40,000 41,250
Recreation and culture 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 3,998,945
Economic development 769,584 510,126 842,819 2,647,687 1,199,936 803,594 1,005,813 1,084,620 1,547,875 756,620
Interest and fiscal charges 2,193,840 2,136,872 1,673,431 1,464,012 1,248,716 1,298,869 235,265 649,854 735,753 565,774
Total governmental activities expenses 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 15,324,437
Business-type activities
Water utility 973,375 975,846 1,018,098 936,718 1,167,572 1,118,789 1,009,600 1,084,882 1,102,610 1,168,473
Sewage utility 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 2,618,887
Liquor 644,857 620,743 669,940 637,574 658,999 662,002 689,559 692,976 798,631 831,809
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 2,483,262
Deputy registrar ------293,531 300,236 313,968 345,492
Total business-type activities expenses 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 7,447,923
Total primary government expenses 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$22,772,360$
Program Revenues
Governmental activities
Charges for services
General government 695,117$523,228$443,976$491,304$521,182$619,992$147,244$180,145$214,087$274,309$
Public safety 93,138 99,812 155,036 96,293 202,237 179,540 163,366 164,616 320,158 894,311
Public works 1,994,067 1,544,140 744,241 1,556,098 508,077 383,066 544,404 371,671 521,697 527,425
Sanitation --167,119 165,387 52,304 53,077 16,653 48,385 104,786 89,956
Recreation and culture 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 1,437,659
Economic development 6,768 15,875 155,769 -----14,653 301,232
Operating grants and contributions 160,147 159,192 269,492 424,845 253,127 252,784 293,710 295,828 355,041 389,005
Capital grants and contributions 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 3,297,265
Total governmental activities
program revenues 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 7,211,162
Business-type activities
Charges for services
Water utility 867,873 973,776 1,019,390 828,635 1,078,133 1,304,923 1,214,570 1,117,226 1,126,718 1,172,258
Sewage utility 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 2,223,252
Liquor 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 1,409,406
Fiber optics ---456,820 1,610,258 1,747,587 1,606,720 1,761,978 1,642,403 1,739,566
Deputy registrar ------456,285 497,798 535,931 562,891
Capital grants and contributions 482,412 106,787 -----488,628 1,454,980 2,000,456
Total business-type activities
program revenues 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 9,107,829
Total primary government
program revenues 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$16,318,991$
88
CITY OF MONTICELLO
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Net (expense)/revenue
Governmental activities (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)$(8,113,275)$
Business-type activities (153,235)(1,825,205)(3,120,876)(3,954,886)(4,317,986)(3,371,702)(3,122,879)(522,962)953,832 1,659,906
Total primary government net expense (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)$(6,453,369)$
General Revenues and Other Changes in Net Position
Governmental activities
Taxes
Property taxes 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$9,270,592$
Tax increment 824,714 1,172,447 1,193,021 1,155,386 1,044,791 1,024,134 965,935 826,363 727,617 668,352
Franchise taxes --48,517 371,258 341,362 339,518 320,640 357,409 333,484 412,217
Unrestricted grants and contributions 288,940 158,340 406,735 37,665 19,359 38,618 65,228 27,502 --
Investment earnings 2,170,025 1,461,658 770,178 859,583 1,467,780 767,722 (189,128)784,347 278,465 375,614
Other --41,173 --11,575 3,885 217,643 30,473 11,180
Gain on sale of capital assets 528,193 233,326 366,961 442,091 354,501 540,272 489,782 ---
Transfers 997,929 371,245 251,133 (5,774,257)713,655 (2,420,489)278,500 (3,411,500)2,301,045 969,461
Total governmental activities 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 11,707,416
Business-type activities
Investment earnings 326,356 547,703 188,178 236,131 495,484 264,589 (117,175)399,757 108,191 128,080
Miscellaneous 62,664 136,356 42,360 125,326 1,555,509 100,687 65,468 -88,157 5,218
Gain on extinguishment of debt -------20,990,451 --
Contribution of land to County --------(5,511,547)-
Transfer of operations ---------356,900
Transfers (997,929)(371,245)(251,133)5,774,257 (713,655)2,420,489 (278,500)3,411,500 (2,301,045)(969,461)
Total business-type activities (608,909)312,814 (20,595)6,135,714 1,337,338 2,785,765 (330,207)24,801,708 (7,616,244)(479,263)
Total primary government 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$11,228,153$
Changes in Net Position
Governmental activities 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$3,594,141$
Business-type activities (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)1,180,643
Total primary government 3,803,832$(352,077)$(1,669,702)$(304,972)$(207,825)$(2,372,800)$(3,280,526)$21,904,400$(3,753,844)$4,774,784$
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 Statement No. 68 and GASB Statement No. 71 in fiscal year 2015. Years prior to 2015 have not been restated.
(continued)
89
CITY OF MONTICELLO
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
General Fund
Reserved 430,294$359,303$392,541$336,286$-$-$-$-$-$-$
Unreserved 5,131,193 5,819,249 4,705,092 4,644,748 ------
Nonspendable ----386,616 342,380 258,100 126,327 113,302 134,245
Restricted ----------
Committed ----3,374,200 -----
Assigned ----------
Unassigned ----649,821 3,136,127 3,656,463 4,204,731 4,873,494 6,142,475
Total general fund 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$6,276,720$
All other governmental funds
Reserved 27,072,957$16,663,801$10,280,326$7,884,431$-$-$-$-$-$-$
Unreserved
Special revenue 7,554,334 14,191,473 18,451,828 18,324,689 ------
Capital projects (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 3,690,330
Restricted ----22,140,662 21,480,938 10,928,985 10,453,449 8,619,905 6,987,234
Committed ----2,662,124 -----
Assigned ----9,138,626 8,655,488 6,485,727 7,321,744 11,109,806 13,320,718
Unassigned
Special revenue ----(141,890)-----
Capital projects ----(1,435,666)-----
Total all other
governmental funds 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$23,998,282$
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.
90
CITY OF MONTICELLO
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Revenues
Property taxes 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$9,295,983$
Tax increments 824,714 1,172,447 1,193,021 1,155,386 1,044,791 1,024,134 965,935 826,363 727,617 668,352
Franchise taxes --48,517 371,258 341,362 339,518 320,640 357,409 333,484 412,217
Special assessments 3,112,374 2,566,932 2,462,673 1,465,264 1,856,134 1,902,871 2,065,944 1,912,932 3,318,901 984,390
Licenses and permits 627,751 917,539 266,797 217,184 249,999 275,699 331,711 378,810 461,049 668,602
Intergovernmental 1,764,633 550,283 1,688,895 1,620,771 1,434,420 540,475 1,264,781 732,366 1,520,239 2,041,362
Charges for services 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 2,222,475
Fines and forfeitures 5,027 2,216 1,220 205 85 14,338 1,725 1,900 42,474 30,656
Investment earnings 2,170,025 1,461,658 770,178 859,583 1,467,780 767,722 (183,242)738,956 261,856 357,112
Other revenues 372,502 197,988 435,186 643,873 603,019 753,832 700,776 413,113 475,170 589,394
Total revenues 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 17,270,543
Expenditures
General government 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 1,489,892
Public safety 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 2,036,777
Public works 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 1,941,750
Sanitation 509,208 514,208 547,160 534,903 495,693 500,037 505,996 517,956 563,477 600,300
Transit -------10,000 40,000 41,250
Culture and recreation 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 2,756,372
Economic development 772,852 525,783 842,819 2,647,687 1,198,449 800,540 1,011,961 1,084,620 1,237,107 530,746
Capital outlay 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 6,235,029
Debt service
Principal 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 5,681,653
Interest and fiscal charges 2,256,311 2,192,063 1,801,392 1,553,661 1,383,095 1,290,430 930,982 658,983 570,753 529,116
Bond issuance costs --------71,358 107,050
Total expenditures 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 21,949,935
Excess of revenues
over (under) expenditures (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 (4,679,392)
Other financing sources (uses)
Long-term debt issued 5,137,903 15,450,000 -3,255,000 10,735,000 --6,080,000 2,605,000 4,900,000
Premium (discount) on debt issued 83,710 --(19,530)301,910 --(12,374)46,898 97,503
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 11,180
Transfers in 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 2,192,636
Transfers out (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)(1,223,175)
Total other financing sources (uses)6,153,978 (394,526)313,629 2,694,007 11,750,565 (731,206)(10,929,735)2,656,126 4,757,258 5,978,144
Net change in fund balances 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$1,298,752$
Debt service as percentage
of noncapital expenditures 36.9%43.7%45.6%38.2%42.6%41.4%41.7%40.0%35.1%38.0%
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.
91
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
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
2016 9,295,983 668,352 412,217 10,376,552
Change
2007-2016 50.2%-19.0%100.0%47.9%
Source: Finance Department
$-
$2
$4
$6
$8
$10
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016MillionsTax Revenues by Source
Property Tax
Tax Increment
Franchise Tax
92
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
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
2016 9,270,592 668,352 412,217 10,351,161
Change
2007-2016 44.4%-19.0%100.0%42.9%
Source: Finance Department
$-
$2
$4
$6
$8
$10
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016MillionsTax Revenues by Source
Property Tax
Tax Increment
Franchise Tax
93
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
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%42.234 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%35.737 1,712,125,200 1.6%
2016 6,505,649 23.0%21,386,874 75.6%248,668 0.9%166,437 0.6%28,307,628 100.0%34.471 1,828,437,600 1.5%
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 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
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016MillionsTotal Taxable Net Tax Capacity Value
(Excludes Personal and Ag/Misc Property)
Residential
Commercial
94
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
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 42.23 44.29 26.23 0.61 113.36
2014 44.71 43.45 28.27 -116.43
2015 35.74 40.59 22.88 -99.21
2016 34.47 39.97 20.86 1.08 96.38
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
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Rate%Property Tax Rates
For the threehighest taxing authorities
Wright
District
#882
City
95
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
2007 6,499,914$261,362$6,238,552$6,044,463$96.9%170,880$6,215,343$99.6%(21,679)$1,530$0.0%
2008 7,600,189 267,056 7,333,133 7,118,136 97.1%173,727 7,291,863 99.4%(39,184)2,086 0.0%
2009 7,750,119 263,587 7,486,532 7,237,730 96.7%212,481 7,450,211 99.5%(32,806)3,515 0.0%
2010 7,648,269 278,930 7,369,339 7,155,141 97.1%183,034 7,338,175 99.6%(26,695)4,469 0.1%
2011 7,677,351 293,075 7,384,276 7,178,807 97.2%178,326 7,357,133 99.6%(19,706)7,437 0.1%
2012 7,850,042 -7,850,042 7,759,174 98.8%28,205 7,787,379 99.2%(57,415)5,248 0.1%
2013 7,900,724 -7,900,724 7,827,356 99.1%36,950 7,864,306 99.5%(33,113)3,305 0.0%
2014 8,151,086 -8,151,086 8,109,373 99.5%31,225 8,140,598 99.9%(7,012)3,476 0.0%
2015 8,535,565 -8,535,565 8,498,745 99.6%18,906 8,517,651 99.8%(12,524)5,390 0.1%
2016 9,205,700 -9,205,700 9,177,787 99.7%-9,177,787 99.7%(3,572)24,341 0.3%
TAX INCREMENTS
Total Tax Collections in Abatements
Fiscal Levy for Tax Net % of Subsequent % of and % of
Year Fiscal Year Credits Levy Amount Net Levy Years Amount Net Levy Adjustments Amount Net Levy
2007 889,262$-$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%
2016 668,351 -668,351 668,351 100.0%-668,351 100.0%--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
96
CITY OF MONTICELLO
Principal Property Taxpayers
Current Year and Nine Years Ago
Percentage of Percentage of
(1)Taxable Net Tax Total Net Tax Taxable Net Tax Total Net Tax
Taxpayer Market Value Capacity Value Rank Capacity Value Market Value Capacity Value Rank Capacity Value
Xcel Energy (Northern States)795,999,400$15,913,229$1 59.9%255,253,800$5,097,197 1 36.6%
Walmart Real Estate Bus Trust 10,520,000 209,650 2 0.8%12,381,800 246,886 2 1.8%
Target Corporation 10,120,400 201,658 3 0.8%
CentraCare Medical Center (New River)7,444,000 148,880 4 0.6%
Home Depot USA, Inc.6,720,700 133,664 5 0.5%
Muller Family Theatres 5,401,300 106,895 6 0.4%5,692,600 113,102 5 0.8%
AX TC Retail, LP 5,154,900 101,598 7 0.4%
Tapper’s Holdings, LLC 3,956,800 77,636 8 0.3%
WSI Industries Inc.3,900,100 77,252 9 0.3%
Minnegasco Inc.3,860,100 77,202 10 0.3%
Ocello LLC 15,438,200 157,844 3 1.1%
Individual 7,142,000 140,102 4 1.0%
Individuals 5,291,000 105,070 6 0.8%
Gould Brothers Chev, LLP 5,096,200 101,174 7 0.7%
Individual 5,012,100 98,762 8 0.7%
Monticello Washington Assoc 4,592,300 91,096 9 0.7%
Palf Co.4,715,400 82,758 10 0.6%
853,077,700$17,047,664$64.1%320,615,400$6,233,991$44.7%
(1) The market value and taxable net tax capacity value is for taxes levied in 2015, which are payable in 2016
Source: Wright County Certificate of Taxes and Taxable Properties
2016 2007
97
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
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%
2016 329,068,876 67.7%77,795,226 16.0%42,407,860 8.7%36,647,583 7.5%485,919,545 100.0%
Source: City of Monticello utility billing department
$0
$100
$200
$300
$400
$500
$600
$700
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016MillionsWater Sold by Customer Type (gallons)
Government
Industrial
Commercial
Residential
98
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
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
2016 18.85 1.22 1.41 1.50 18.85 1.22 1.41 1.50 22.69 3.97
N/A – Not Available
Source: City of Monticello utility billing department
Water Sewage
Residential Commercial
99
CITY OF MONTICELLO
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Governmental activities
General obligation bonds
Special assessment 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$12,730,000$
Other 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 7,686,000
Tax increment 680,000 575,000 470,000 -------
Net premium (discount)691,438 651,542 631,516 572,079 818,803 744,748 265,320 67,350 190,196 159,266
Total GO bonds 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 20,575,266
Notes 9,515,592 ---------
Certificates of indebtedness ------445,000 385,000 325,000 265,000
Total general obligation debt 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 20,840,266
Non-general obligation bonds
Revenue 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 664,293 564,293 --------
Total governmental activites 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$20,840,266$
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$2,460,000$
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 1,927,850
Net premium (discount)14,364 (502,517)(479,980)(457,441)(434,904)(412,366)(360,211)31,941 30,339 27,354
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$4,415,204$
Total primary government 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$25,255,470$
% of personal income (1)14.3%18.9%17.6%15.8%16.8%13.7%10.5%5.1%4.5%4.3%
Per capita debt (1)4,815$6,528$5,879$5,632$5,554$5,071$4,055$2,106$1,931$1,899$
(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.
100
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)
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
2016 23,327,620 3,543,551 19,784,069 1.08%1,488
(1) Does not include revenue bonds.
(2) See the Schedule of Taxable Net Tax Capacity Value and Estimated Market Value of Taxable Property for the estimated actual market value.
(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.
101
CITY OF MONTICELLO
Legal Debt Margin Information
Last Ten Fiscal Years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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$54,853,128$
Total net debt
applicable to
debt limit 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 7,951,000
Legal debt margin 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$46,902,128$
Total net debt
applicable to
debt limit as a
percentage
of debt limit 26.3%16.6%14.7%14.0%13.1%10.4%17.4%23.9%19.3%14.5%
Market value 1,828,437,600$
Debt limit (3% of market value)54,853,128$
Debt applicable to limit
General obligation bonds 23,141,000
Less amounts for general obligation bonds
not subject to debt limit (15,190,000)
Total net debt applicable to limit 7,951,000
Legal debt margin 46,902,128$
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.
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.
Legal Debt Margin Calculation for Fiscal Year 2016
Fiscal Year
Legal debt limit
102
CITY OF MONTICELLO
Computation of Direct and Overlapping Debt
As of December 31, 2016
Estimated
Net percentage Amount
bonded debt applicable applicable to
Jurisdiction outstanding (1)to city (2)city
DIRECT DEBT:
City of Monticello 20,840,266$100.0%20,840,266$
OVERLAPPING DEBT:
I.S.D. 882 45,215,000 76.3%34,499,045
Wright County 59,935,000 18.8%11,267,780
Total Overlapping Debt 45,766,825
Total direct and overlapping debt 66,607,091$
(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.
103
CITY OF MONTICELLO
Schedule of General Obligation Revenue Bond Coverage
Last Four 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%
2016 2,223,252 1,411,831 811,421 570,830 78,002 648,832 125.1%
(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)
104
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)
2007 11,253 4.8%3,910 379,102,317$34,374$
2008 11,366 5.7%3,921 391,740,556 36,162
2009 11,476 7.9%3,928 384,446,000 37,550
2010 11,501 8.8%3,932 410,252,171 35,715
2011 12,759 7.5%4,011 422,820,501 36,212
2012 12,935 6.2%4,044 477,596,640 38,517
2013 12,964 4.6%4,016 502,964,308 40,127
2014 12,993 3.8%4,089 531,634,581 40,917
2015 13,125 3.7%4,100 557,116,875 42,447
2016 13,299 4.3%4,027 586,525,797 44,103
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. Data is subject o annual revisions by the Bureau of Economic Analysis.
105
CITY OF MONTICELLO
Principal Employers
Current Year and Nine Years Ago
Percentage of Percentage of
Total City Total City
Employer Employees Rank Employment (1)Employees Rank Employment (1)
Xcel Energy (Northern States)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 2016A Bond Statement and 2007 Bond Statement
(1) 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.
2016 2007
106
CITY OF MONTICELLO
City Government Employees by Function/Program
Last Ten Fiscal Years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Employees by function
General Fund
General government 8.60 9.60 9.60 11.00 11.00 11.00 11.00 12.50 12.50 13.50
Public Safety
Building Official 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 4.00 4.00
Public works
Engineering 3.00 3.00 3.00 3.00 3.00 3.00 1.00 1.00 1.00 1.00
Maintenance(1)21.50 21.50 19.50 19.50 19.00 19.00 19.00 18.50 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 7.50 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 5.00 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 11.50 11.50 11.50
FiberNet(4)--6.00 11.00 11.50 11.50 8.50 8.50 8.50 -
Total 106.60 107.60 111.60 118.00 118.00 118.00 113.00 115.00 117.00 109.50
Employees by fund type
General Fund 43.10 44.10 42.10 43.50 43.00 43.00 41.00 42.00 43.00 44.00
Special Revenue Funds 44.50 44.50 44.50 44.50 44.50 44.50 44.50 44.00 44.00 44.00
Enterprise Funds 19.00 19.00 25.00 30.00 30.50 30.50 27.50 29.00 30.00 21.50
106.60 107.60 111.60 118.00 118.00 118.00 113.00 115.00 117.00 109.50
Source: City of Monticello human resources department
FT = Full-time PT = Part-time
(1) Includes seasonal public works
(2) Years 2007-2013 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.
(4) Management and operations were contracted beginning July 1, 2016.
Fiscal Year
107
CITY OF MONTICELLO
Operating Indicators by Function
Last Ten Fiscal Years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Function
Fire
Calls for service 317 395 375 282 284 203 235 264 251 262
Public works
Salt (tons)274 474 475 521 445 300 475 385 534 370
Sand (tons)347 611 615 710 547 335 325 600 285 202
Crack sealant (pounds)14,200 18,150 15,000 23,580 11,384 1,492 25,739 23,282 29,580 49,039
Asphalt repairs (tons of asphalt)330 200 200 200 253 220 225 190 293 220
Culture and recreation
Shade trees planted 384 410 425 150 140 220 275 270 257 280
Diseased trees removed n/a 868 200 180 113 205 71 46 208 60
Trails maintained (miles)n/a 17 17 17 17 17 17 18 18 20
Community center users 168,923 186,429 186,279 183,527 190,014 175,272 211,234 204,134 199,228 197,523
Program sales 88,412$129,339$149,829$167,723$168,159$162,227$192,708$184,125$213,924$193,628$
Rental revenue 139,096$136,547$127,612$184,913$154,962$149,733$163,329$150,964$154,938$168,353$
Economic development
Permits issued 962 3,681 879 495 372 632 659 721 768 802
Permit valuation 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$59,426,683$
New single-family dwellings 43 20 9 2 2 22 52 72 44 61
Water
Meters/remotes replaced 94 111 280 145 215 418 235 598 694 991
Curb box repairs (water valves)50 75 200 200 200 100 100 100 100 100
Hydrant repair 175 175 175 175 430 300 300 203 430 250
Residential water gallons used 467,673,488 409,879,658 430,263,791 376,687,840 348,580,072 426,358,402 383,079,041 328,835,772 325,188,041 329,068,876
Avg. daily consumption (MG)1.921 1.749 1.806 1.625 1.557 1.798 1.621 1.400 1.308 1.419
Max. daily gallons pumped (MG)5.150 4.728 4.496 3.565 4.116 4.590 4.269 4.031 3.203 3.450
Sewer
Sewage flow (MG)423 408 390 398 431 408 392 435 417 432
Thickened sludge (wet tons)n/a n/a n/a n/a n/a n/a n/a 1,924 1,549 1,449
Thickened sludge (dry tons)n/a n/a n/a n/a n/a n/a n/a 264 236 216
Dry tons as % of wet tons n/a n/a n/a n/a n/a n/a n/a 13.7%15.2%14.9%
Library
Items checked out 209,174 216,599 219,694 248,327 228,886 237,938 263,220 199,182 195,235 190,433
Programs offered 145 155 170 164 153 149 173 169 167 212
Program participants 3,537 3,869 4,100 3,604 3,807 3,761 3,773 3,788 3,919 4,306
Fiscal Year
(continued)
108
CITY OF MONTICELLO
Operating Indicators by Function
Last Ten Fiscal Years (continued)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Fiber optics
Customers n/a n/a n/a n/a n/a n/a n/a 1,539 1,574 1,630
Service subscriptions n/a n/a n/a n/a n/a n/a n/a 2,755 2,656 2,589
TV customers n/a n/a n/a n/a n/a n/a n/a 813 714 641
Phone customers n/a n/a n/a n/a n/a n/a n/a 582 518 461
Internet customers n/a n/a n/a n/a n/a n/a n/a 1,360 1,424 1,487
Liquor store
Transactions n/a n/a n/a n/a n/a n/a n/a 229,236 237,535 235,901
Average liquor sale transaction n/a n/a n/a n/a n/a n/a n/a 21.90$22.42$22.39$
Beer sales 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$2,768,394$
Liquor sales 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$1,624,908$
Wine sales n/a 492,183$575,521$657,562$748,908$812,832$860,817$868,779$927,732$889,082$
Gross profit margin % - beer n/a 20.7%15.7%20.4%19.1%20.3%22.5%21.4%25.6%21.1%
Gross profit margin % - liquor n/a 23.9%26.8%29.6%28.0%29.3%27.7%30.3%29.8%29.0%
Gross profit margin % - wine n/a 17.0%20.2%26.8%28.5%31.4%29.7%30.7%31.5%32.5%
Deputy registrar (DMV)
Motor vehicle transactions 40,950 45,595 48,000 51,250 54,814 56,211 55,261 60,051 64,927 67,508
DNR transactions 5,580 5,913 5,646 5,982 5,616 5,465 5,727 5,949 5,914 6,318
Game/fish transactions 167 235 250 156 325 509 445 433 387 600
Drivers licenses transactions n/a n/a 450 605 579 814 951 1,462 1,294 1,465
Total transactions 46,697 51,743 54,346 57,993 61,334 62,999 62,384 67,895 72,522 75,891
Dealerships serviced n/a n/a n/a n/a n/a n/a 19 19 19 21
Net revenue per transaction n/a n/a n/a n/a 1.71$2.75$2.68$2.91$3.02$3.05$
N/A = Not Available
MG = Millions of Gallons
Note: Indicators are not available for the general government function.
Sources: Various city departments
Fiscal Year
109
CITY OF MONTICELLO
Capital Assets Statistics by Function
Last Ten Fiscal Years
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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)67.6 67.6 68.0 68.0 68.0 68.0 68.0 68.0 68.0 68.0
Recreation and culture
Parks acreage -120 180 509 635 635 696 860 326 367
Parks 19 20 20 28 28 28 28 30 30 30
Park buildings 9 10 11 15 15 15 15 15 15 15
Community center (sq. ft.)81,000 81,000 81,000 81,000 81,000 81,000 82,000 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.
Note: The city contributed jointly-owned land at the Bertram Chain of Lakes to Wright County in 2015.
Source: Various city departments
110
Back Cover