HomeMy WebLinkAboutItem 08July 18, 2016 Item No.________
ACKNOWLEDGE RECEIPT OF LAKEVILLE COMPREHENSIVE ANNUAL FINANCIAL
REPORT FOR THE YEAR ENDED DECEMBER 31, 2015
Proposed Action
Staff recommends adoption of the following motion: Move to acknowledge receipt of City of
Lakeville Comprehensive Annual Financial Report for the Year Ended December 31, 2015.
Overview
The City of Lakeville Comprehensive Annual Financial Report for the Year Ended December
31, 2015 is attached for City Council review and approval. The certified public accounting firm
of Malloy, Montague, Karnowski, Radosevich & Co., P.A. (MMKR) has audited the financial
report. In their opinion, the financial statements, as presented, represent the financial
position of City of Lakeville as of December 31, 2015 and the results of operations for the year
ended. Mr. William Lauer, Partner with MMKR, will present an overview at the July 18 Council
meeting.
Primary Issues to Consider
• Financial condition of the City of Lakeville. An overview of the financial operations
is provided in the Letter of Transmittal and Management’s Discussion and Analysis.
• MMKR has submitted the attached Management Report regarding their
observations during the course of the audit.
Supporting Information
• City of Lakeville Comprehensive Annual Financial Report for the Year Ended
December 31, 2015
• Management Report
• Special Purpose Audit Reports – Internal Controls and Minnesota Legal
Compliance
Financial Impact: $ Budgeted: Y☐ N☐ Source:
Related Documents: (CIP, ERP, etc.):
Envision Lakeville Community Values: Good Value for Public Services
Report Completed by: Jerilyn Erickson, Finance Director
N/A N/A
ANNNU
COM
UAL F
MPRE
FINA
2
EHE
ANCIA
015
NSIV
AL R
Year
C
VE
REPO
Ended D
City of L
ORT
Decembe
Lakeville,
r 31, 201
Minneso
15
ota
COMPREHENSIVE
ANNUAL FINANCIAL
REPORT
City of
Minnesota
For the Year Ended
December 31, 2015
ISSUED BY THE FINANCE DEPARTMENT
I N T R O D U C T O R Y S E C T I O N
CITY OF LAKEVILLE, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2015
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION
Table of Contents 1-3
Elected and Appointed Officials 4
Organizational Structure 5
Letter of Transmittal 6-14
Certificate of Achievement 15
FINANCIAL SECTION
Independent Auditors' Report 16-18
Management's Discussion and Analysis 19-36
Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position 37
Statement of Activities 38
Fund Financial Statements
Balance Sheet - Governmental Funds 39-40
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position 41
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds 42-43
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 44
Statement of Net Position - Proprietary Funds 45
Statement of Revenues, Expenses and Changes in Net Position -
Proprietary Funds 46
Statement of Cash Flows - Proprietary Funds 47
Statement of Fiduciary Net Position - Agency Fund 48
Notes to Basic Financial Statements 49-92
Required Supplementary Information other than MD &A
General Fund - Schedule of Revenues, Expenditures and Changes in Fund Balances -
Budgetary Comparison 93-99
Notes to Required Supplementary Information 100
PERA - Public Employees General Employees Retirement Fund
Schedule of City's Proportionate Share of Net Pension Liability 101
Schedule of Employer Contributions 101
PERA - Public Employees Police and Fire Fund
Schedule of City's Proportionate Share of Net Pension Liability 102
Schedule of Employer Contributions 102
Lakeville Fire Relief Association
Schedule of Changes in Net Pension Liability (Asset) and Related Ratios 103
Schedule of Employer Contributions 103
Other Post-Employment Benefits Plan - Schedule of Funding Progress 104
1
CITY OF LAKEVILLE, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2015
TABLE OF CONTENTS (CONTINUED)
Page
FINANCIAL SECTION (continued)
Combining and Individual Fund Statements and Schedules
Nonmajor Governmental Funds
Combining Balance Sheet 105
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 106
Combining Governmental Funds
Special Revenue Funds (Nonmajor)
Combining Balance Sheet 107
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 108
Debt Service Funds (Nonmajor)
Combining Balance Sheet 109
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 110
Capital Projects Funds (Nonmajor)
Combining Balance Sheet 111-112
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 113-114
Special Revenue Funds - Budgetary Comparison Schedules
Communications 115
Economic Development 116
Downtown Special Service District 117
Agency Fund - Statement of Changes in Assets and Liabilities 118
Supplemental Information
Schedule of Changes in Bonded Indebtedness 119
Schedule of Bonded Indebtedness and Annual Interest Payable 120-127
Combined Schedule of Bonded Indebtedness 128-129
STATISTICAL SECTION
Financial Trends
Net Position by Component - Government-wide 130-131
Changes in Net Position - Governmental Activities 132-133
Changes in Net Position - Business-type Activities 134-135
Changes in Net Position - Total Governmental and Business-type Activities 136-137
Fund Balances - Governmental Funds 138-139
Changes in Fund Balances - Governmental Funds 140-141
2
CITY OF LAKEVILLE, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2015
TABLE OF CONTENTS (CONTINUED)
Page
STATISTICAL SECTION (continued)
Revenue Capacity
Tax Capacity Valuation and Assessor's Taxable Market Value of Taxable Property 142-143
Property Tax Rates - Direct and Overlapping Governments 144
Principal Property Taxpayers 145
Property Tax Levy and Collections 146
Debt Capacity
Ratio of Outstanding Debt by Type 147
Ratio of Net Bonded Debt Outstanding 148
Direct and Overlapping Governmental Debt 149
Legal Debt Margin 150
Pledged Revenue Coverage 151
Demographic and Economic Information
Demographic and Economic Statistics 152
Principal Employers 153
Commercial and Industrial Building Permits Issued 154
Operating Information
Employees by Function/Program (Full-Time Equivalent)155
Operating Indicators by Function 156
Capital Assets Statistics by Function 157
3
This page intentionally left blank.
CITY OF LAKEVILLE, MINNESOTA
ELECTED AND APPOINTED OFFICIALS
DECEMBER 31, 2015
ELECTED OFFICIALS Term of Office Expires
MAYOR Matt Little December 31, 2016
COUNCIL MEMBERS:Doug Anderson December 31, 2016
Bart Davis December 31, 2018
Colleen Ratzlaff LaBeau December 31, 2018
Kerrin Swecker December 31, 2016
APPOINTED OFFICIALS
City Administrator Justin Miller
Finance Director/Treasurer Jerilyn Erickson
City Clerk Charlene Friedges
4
CI
T
Y
O
F
L
A
K
E
V
I
L
L
E
,
M
I
N
N
E
S
O
T
A
Or
g
a
n
i
z
a
t
i
o
n
a
l
S
t
r
u
c
t
u
r
e
De
c
e
m
b
e
r
3
1
,
2
0
1
5
5
June
The H
2019
Lakev
Hono
The
provi
the y
Minn
This
mana
mana
inform
repre
prote
inform
Becau
intern
that t
we as
in all
The C
Karn
The i
audit
finan
the ch
Mana
audit
finan
conju
30, 2016
Honorable M
5 Holyoke A
ville, Minne
orable Mayo
Comprehens
iding you, th
year ended
nesota Statut
report wa
agement’s r
agement ass
mation pres
sentations, m
ct the City’
mation for t
use the cos
nal controls h
the financial
ssert that to
material res
City of Lak
owski, Rado
independent
ors have gi
ncial stateme
hanges in fin
agement’s d
or’s report a
ncial stateme
unction with
201
Mayor and C
Avenue
esota 55044
r, Members
sive Annual
he reader, wi
December 3
tes and Gene
as prepared
representatio
sumes full
sented in thi
managemen
’s assets fro
the preparati
st of interna
have been d
l statements
the best of o
spects.
keville’s fina
osevich & C
auditors rep
iven this re
nts fairly pr
nancial posit
discussion an
and provides
nts. MD&A
it.
195 Holyoke Av
952-985-440
www.l
ouncil Mem
of the City C
l Financial
ith a thoroug
31, 2015.
erally Accep
d by the C
ons concern
responsibilit
is report. T
t of the Cit
om loss, the
ion of these
al controls
esigned to p
will be free
our knowled
ancial statem
Co., P.A., a p
port is inclu
eport an un
esent the Cit
tion for the y
nd analysis
s a narrative
A complemen
venue, Lakevill
00 952-985-4
lakevillemn.go
mbers
Council and
Report is h
gh overview
The Report
ted Account
City’s Fina
ning the fin
ty for the
o provide a
ty has estab
eft or misus
financial st
should not
provide reaso
e from mate
dge and belie
ments have b
professional
uded in the F
nmodified (“
ty’s financia
year then end
(MD&A) im
introduction
nts this lette
le, MN 55044
4499 fax
ov
Citizens of
hereby prese
of the financ
t was prepa
ting Principl
ance Depar
nances of t
completenes
a reasonable
blished inter
se and to pr
tatements in
outweigh th
onable rather
erial misstate
ef this report
been audite
firm of cert
Financial Se
“clean”) op
al position at
ded.
mmediately
n, overview,
er of transmi
the City of L
ented for th
cial affairs o
ared in acco
les (GAAP).
rtment and
the City. C
ss and relia
e basis for m
rnal controls
rovide suffi
conformity
heir benefit
r than absolu
ements. As
t is complete
d by Malloy
tified public
ection of this
inion, mean
t December
follows the
and analysi
ttal and shou
Lakeville
he purpose o
of the City fo
ordance wit
consists o
Consequently
ability of a
making thes
s designed t
cient reliabl
with GAAP
ts, the City
ute assurance
managemen
e and reliabl
y, Montague
c accountant
s report. Th
ning that th
31, 2015 an
e independen
is of the basi
uld be read i
of
or
th
of
y,
all
se
to
le
P.
’s
e,
nt,
le
e,
ts.
he
he
nd
nt
ic
in
6
Profile of Government
The City of Lakeville is a suburban community located 20 miles south of downtown
Minneapolis in the southeast corner of the Twin Cities metropolitan area within Dakota
County. Lakeville continues to be one of the fastest growing cities in Minnesota with a
population that has grown from 43,128 in 2000 to 59,991 in 2015.
The City of Lakeville operates under the Mayor-Council form of organization. The
governing City Council consists of the Mayor and four other Council members. The City
Council is responsible for, among other things, passing ordinances, adopting the budget,
appointing members to the various committees and commissions and hiring the City
Administrator, heads of various departments and City employees. The City Administrator
is responsible for carrying out the policies, directions and ordinances of the City Council
and for overseeing the day-to-day operations of the City. The City Council is elected on a
non-partisan at-large basis. The Mayor is elected to serve a two-year term, while Council
members serve four-year staggered terms, with two Council Members elected every two
years.
The City provides its residents and businesses with a full range of municipal services
consisting of public safety (police and fire), public works, parks and recreation, and
general government administration. The City also operates two enterprises: utilities
(public water, sanitary sewer, street lights and environmental resources) and off-sale
liquor stores. Sewage treatment and disposal is operated on a regional basis by the
Metropolitan Council Environmental Services (MCES) and refuse collection and disposal
are handled on a private basis through contractual arrangements by City residents with
private haulers. Further information regarding city services can be obtained from the
City’s website at www.lakevillemn.gov
The City is financially accountable for the Housing and Redevelopment Authority
(HRA), which is included in the City’s financial statement. Additional information on the
HRA can be found in Note 1A. – Summary of Significant Accounting Policies of the
Notes to Basic Financial Statements.
The annual budget serves as the foundation for the City of Lakeville’s financial planning
and control. The budgetary process is outlined in the notes within the required
supplementary information section of this report. The City applies budgetary controls to
ensure compliance with legal provisions of the laws of Minnesota. Budgets are adopted
on a basis consistent with GAAP. Annual appropriated budgets are adopted for the
general fund and special revenue funds. The general fund budgetary comparison
schedules are presented within the required supplementary information section and the
special revenue funds budgetary comparison schedules are presented in the nonmajor
governmental funds subsection of this report.
7
Factors Affecting Financial Condition
The City of Lakeville is committed to maintaining a strong financial condition, while
continuing to provide quality public services to its residents and businesses. The City’s
financial position, as reflected in the financial statements presented in this report, is
perhaps best understood when it is considered from the broader perspective of the
environment within which the City operates.
Local Economy
Our community has persevered through the economic struggles of the past six years. The
City responded in 2008 and 2009 to the economic challenges by downsizing its
operations and reducing personnel. The City has grown by an estimated 4,200 new
residents or approximately 7.6% since 2009, while the number of City employees has
increased by 4.1%.
According to the Bureau of Labor Statistics, Lakeville’s unemployment rate is favorable
compared to the State and National rates.
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2008 2009 2010 2011 2012 2013 2014 2015
Unemployment Rate
United States
Minnesota
Lakeville
Source: www.positivelyminnesota.com
The trend for building permit activity for single family homes and newly-platted lots or
applications from developers for new residential lots is on the rise with building permits
for single family homes increasing from 319 in 2014 to 366 in 2015. The 2016 budget is
premised on an assumed steady growth of new single family homes in the coming year.
8
Acco
5.1%
is ex
becom
curre
Majo
As th
of pr
comm
inclu
press
prepa
PE
R
M
I
T
S
ording to the
% as of March
xpected to c
mes more fa
nt low inflat
or Initiativ
he City emer
ressures and
munity. Th
ded legislat
ures, emerg
aring for the
0
100
200
300
400
500
2008
PE
R
M
I
T
S
e Dakota Cou
h 2015 (for t
continue as
avorable. T
tion and inte
ves
rges from the
d issues conf
he themes i
tive changes
ging trends,
future.
2009
Actual Residen
Estimated Resi
Actual Single F
Estimated Sing
unty Assess
taxes payabl
the numbe
The improvin
erest rate env
e Great Rece
fronting the
identified an
s, resumptio
, innovation
2010 201
RESIDEN
ntial Units
dential Units
Family
gle Family
or’s office, t
le 2016). T
er of forecl
ng housing
vironment.
ession and p
City that e
nd addresse
on of growt
n and effici
11 2012
YEAR
NTIAL PERM
the median
The trend of
osures and
market is al
post-recessio
emerged as
ed within th
th, aging in
iencies, ent
2013 2
MITS
To
value home
improving m
regional un
lso strengthe
on era, there
themes whi
he 2015 ado
nfrastructure
trepreneurial
2014 2015
otal Residenti
increased b
market value
nemploymen
ened with th
are a numbe
ich affect th
opted budge
, inflationar
l efforts an
5 2016
ial Units
by
es
nt
he
er
he
et
ry
nd
9
Legislative Changes. Recent Legislative changes regarding (limited) sales tax exemption,
police pension financing and property tax levy limits as well as Federal Environmental
Protection Agency storm water regulations and sequestering are having or will have
financial implications for our City.
Resumption of Growth. New residential housing construction is at pre-recession levels
due in large part to improving economic conditions. The resumption of growth will
result in increased demands for infrastructure enhancements as well as service delivery
such as inspections, code enforcement, police, fire, streets and parks.
Addressing Aging Infrastructure. Our City has more than $300 million of investment in
infrastructure such as roads, water mains, parks, trails, facilities, equipment and other
assets. The assets have maintenance, and in certain situations, replacement requirements.
The 2015 budget addressed the short-term plan while the Capital Improvement Plan
addressed the anticipated intermediate and long term needs. The most significant 2015
projects included:
Accelerated pavement management program to improve city-wide pavement
management index
o 2015 Street Reconstruction – Phase I
o Kensington Boulevard
o Hamburg Avenue
o CSAH 50/60 (185th Street) Roundabout and Expansion
o Ipava Avenue Traffic Signals at 175th and 165th Streets
o Fire Station and City Hall parking lot reclamations
Facility improvements at City Hall and the Lakeville Area Arts Center
Inflationary Pressures. As the economy improves there will be upward pressure on
commodities, services and personnel costs. Although inflation is still relatively benign
compared to the decade preceding the recession, the budget anticipated modest price
increases in the near term.
Emerging Trends. There are trends emerging within our community which are
influenced at least in part by external factors such as technology-related crimes and the
emerald ash borer insects. Currently, there is a defined need for our community to react
to or be prepared to react to the issues; however, there is little or no financial assistance
available from State or federal agencies to react to the trends.
Innovation and Efficiencies. Lakeville has a long-standing history of being fiscally
conservative and prudent. In spite of the fact that the City of Lakeville receives no state
aid for property tax relief, per capita current expenditures for operations are still amongst
the lowest in the twin cities according to the Minnesota State Auditor’s Office. The
adopted budget included several initiatives which continued the focus on a commitment
to cost effectiveness and efficiencies. Effective application of technology is a major
factor in optimizing organizational efficiencies.
10
Entre
econo
new l
Prepa
pro-b
a visi
Long
There
term
land
comm
2008
A Ca
infras
policy
imple
millio
to ach
epreneurial
omic develo
liquor store t
aring for th
business attit
ion for future
g-term Fin
e is an interr
financial pl
use and pub
munity. The
.
apital Improv
structure, de
y makers
ementation a
on in transp
hieve progra
Tran
$7
Efforts. C
opments. Pr
to improve r
he Future. A
tude, Lakevi
e and a comm
nancial Pla
relationship
an. A comp
blic infrastru
e City of La
vement Plan
evelopment o
and the c
and adminis
ortation, util
am objective
nsportation
6,328,857
58%
Equ
$13,
1
Continued m
roperty was
revenues and
As a Commu
lle is “Positi
mitment to p
anning
between a c
rehensive pl
ucture decisi
akeville com
n (CIP) is a
objectives an
community
tration of im
lity, equipm
es.
ipment
,818,464
10%
2016 ‐2
$13
marketing in
acquired in
d sales oppor
unity that em
ioned to Thr
preparing for
community’s
lan provides
ions to prov
mpleted an u
flexible, fiv
nd allocation
with a str
mprovement
ment, facilitie
Faciliti
$2,798,8
2%
2020 PRO
32,559,8
nitiatives ar
n southweste
rtunities.
mbraces a h
rive.” It is an
r it.
s physical d
s the guidan
vide manage
update of its
ve-year plan
n of financi
rategic (doc
projects. T
es and parks
$1es
817
OJECTS
815
re proposed
ern Lakeville
high quality
n objective t
development
nce for curre
ed growth th
s Comprehen
that identifi
ial resources
cumented)
The City wil
s over the ne
Parks
1,049,538
8%
d to promot
e for a futur
of life and
that embrace
and its long
ent and futur
hroughout th
nsive Plan i
fies the City
s. It provide
approach t
ll invest $13
ext five year
Utility
$28,564,139
22%
te
re
a
es
g-
re
he
in
’s
es
to
33
rs
11
As of
debt
Augu
Stree
millio
recon
Rele
The C
affair
budg
O
re
b
an
d
an
al
pr
or
B
su
$
$
$
IN
D
E
B
T
E
D
N
E
S
S
f December
outstanding
ust 2014 to
t Reconstru
on general
nstruction pr
evant Fina
City has a n
rs. The prim
et amendme
Operating B
espect to bal
alance over
nd expendit
efined as re
nd other use
llowed to be
rovide for a
rderly replac
Balanced bu
ufficient rev
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
IN
D
E
B
T
E
D
N
E
S
S
31, 2015, th
g including
refinance th
uction Bonds
obligation i
rojects.
ancial Polic
number of p
mary policie
ent process, r
udgets. Th
lanced opera
a longer-term
tures may n
venues and
s. Other sou
e budgeted f
adequate ma
cement.
dgets for th
venues to sup
93
,
3
7
4
,
7
5
2
COM
he City of L
$12.660 mi
he G.O. Cap
s series 200
improvemen
cies
policies whi
es include, b
revenue, deb
he City’s op
ating budgets
m period, w
not be equal
other sourc
urces can inc
for use per t
aintenance o
he proprieta
pport the ope
90
,
1
1
2
,
0
2
7
A
LAKEVILLE
MPARISON W
Lakeville had
illion of (cr
pital Improve
05 A. The
nt bonds in
ich are utiliz
but are not
bt, investmen
perating bud
s, with an ov
while recogni
l. A balanc
es equal to
clude that po
the City’s fu
of capital fa
ary enterpri
erations of th
87
,
2
9
5
,
0
0
0
22
.
5
M
AS OF DECEM
BOND IND
WITH DEBT
d approxima
ross-over) r
ement Bond
City will i
the coming
zed in the m
limited to,
nt and fund b
dget policy
verriding go
izing that in
ced budget
or exceedin
ortion of Gen
und balance
acilities and
ise funds ar
hose funds,
85
,
9
9
5
,
0
0
0
88
,
0
0
5
,
0
0
0
22
.
5
M
2 5.
4M
BER 31
EBTEDNESS
T/HOUSEHO
Indebte
Crossov
Debt pe
ately $109.9
refunding de
ds series 200
issue approx
g years to f
management
operating b
balance.
sets forth g
oal of achiev
certain perio
for the Gen
ng operating
neral Fund b
policy. Th
equipment
re defined
without sub
88
,
0
0
5
,
0
0
0
97
,
2
9
5
,
0
0
0
25
.
4
M
12.7M
S
OLDS
edness
ver Refunding In
er Household
55 million o
ebt issued i
07 D and th
ximately $6
finance stree
t of its fisca
udget policy
guidance wit
ving structura
ods, revenue
neral Fund
expenditure
balance that
he budget wi
and for the
as providin
sidy from th
$0
$2,000
$4,000
$6,000
$8,000ndebtedness
of
in
he
63
et
al
y,
th
al
es
is
es
is
ill
eir
ng
he
12
General Fund or property taxes. Charges from the Proprietary Internal Service Funds
shall be sufficient to support such activities, with no trend of operating deficits.
The legal level of budgetary control (i.e., the level at which expenditures may not
legally exceed appropriations) is at the department level for the General Fund and
total expenditures level for Special Revenue Funds. The City Administrator has
authorization to expend funds in excess of the appropriation for individual line items.
Budgeted expenditure appropriations lapse at year-end. Supplementary
appropriations can be carried forward to the following year if approved by the City
Council.
Revenue Policies. The City will project its annual revenues by a conservative
objective and thorough analytical process. The City will endeavor to maintain a
diversified and stable revenue system to shelter it from annual fluctuations in any one
revenue source. All existing and potential revenue sources will be reexamined
annually. New sources of non-property-tax revenue should be actively explored at all
times. Where appropriate and not contrary to accepted public policy or statutes,
emphasis will be directed toward full cost recovery through user fees. User fees and
cost allocation formulas will be updated periodically (annually, if needed). Ongoing,
the City will review the full cost of activities supported by user fees to identify the
impact of inflation and other factors. The fees along with the resulting net property
tax costs will be reviewed with the City Council during the budget process.
Sensitivity to market rates will also be considered in setting fees. Intergovernmental
grant requests are subject to fiscal review before the application is submitted. This
review is to ensure that the grants do not create an obligation for unfunded
expenditures by the City relating to the grant’s purpose and to provide an overall
budgetary review of grant proposals.
Debt. The City’s debt policy provides guidance to ensure that long-term debt is
utilized appropriately and in a fiscally prudent manner. Limiting long-term
borrowing to capital improvements or other long-term projects which cannot, and
appropriately should not, be financed from current revenues. Final maturity of bonds
and notes should not exceed the expected useful life of the underlying project for
which it is being issued. Where possible, the City will endeavor to pledge special
assessments, State-aid or other non-tax revenues to debt service payments.
Investments. The City’s policy is to invest all available monies at competitive
interest rates, coordinated with projections of the City’s operating and program cash
flow needs. Interest earnings will be distributed to the funds based on the average
cash balances. Investments will take into consideration safety, liquidity and yield as
well as complying with State regulations.
Fund Balance. Fund balance or net position are terms used to define the difference
between a fund’s assets, deferred outflows of financial resources, liabilities and
deferred inflows of financial resources. Fund balance is used in governmental fund
types and net position is used in proprietary fund types and also the government-wide
financial statements.
13
The G
Certi
Lakev
ended
Lakev
In or
publi
repor
both
A Ce
of on
to co
we ar
The p
effici
like
recog
Lang
We w
comm
Resp
Justin
City A
Government
ficate of A
ville, Minne
d December
ville has rec
der to be aw
ish an easily
rt, and the co
generally ac
ertificate of A
ne year only.
nform to the
re submitting
preparation o
ient and ded
to express
gnition to A
g and Tom N
would also l
mitment and
ectfully subm
n Miller
Administrato
Aw
t Finance Of
Achievement
esota, for its
r 31, 2014. T
eived this pr
warded a Cer
y readable
ontents must
ccepted acco
Achievemen
We believe
e Certificate
g it to the GF
of this report
dicated servic
our apprec
Assistant Fin
Nesseth.
like to expre
progressive
mitted,
or
wards and
fficers Asso
t for Excel
s comprehen
This is the t
restigious aw
rtificate of A
and efficien
t conform to
unting princ
nt for Excell
our current
e of Achieve
FOA to dete
t could not h
ces of the en
ciation to a
ance Direct
ess our sinc
e leadership i
Acknowle
ociation (GF
llence in F
nsive annua
twenty-seven
ward.
Achievemen
ntly organiz
the program
ciples and ap
lence in Fina
comprehens
ement for Ex
ermine its eli
have been ac
ntire staff of
all member
or Julie We
ere gratitud
in the financ
J
F
edgements
OA) of the
inancial Re
al financial r
nth consecut
nt for Excelle
zed compreh
m standards.
pplicable leg
ancial Repor
sive annual f
xcellence pr
igibility for a
ccomplished
f the Finance
s of the d
erner and Se
de to the Cit
cial affairs of
Jerilyn Erick
Finance Dire
s
United Stat
eporting to
report for th
tive year tha
ence, a gove
hensive ann
Such report
gal requireme
rting is valid
financial rep
rogram requi
another certi
d without the
e Departmen
department,
enior Accou
ty Council f
f our commu
kson
ector/Treasu
tes awarded
the City o
he fiscal yea
at the City o
ernment mu
nual financia
s must satisf
ents.
d for a perio
port continue
irements, an
ificate.
professiona
nt. We woul
with specia
untants Davi
for its sincer
unity.
urer
a
of
ar
of
st
al
fy
od
es
nd
al,
ld
al
id
re
14
15
F I N A N C I A L S E C T I O N
16
INDEPENDENT AUDITOR’S REPORT
To the City Council and Management
City of Lakeville, Minnesota
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City of Lakeville, Minnesota (the City)
as of and for the year ended December 31, 2015, and the related notes to the financial statements, which
collectively comprise the City’s basic financial statements as listed in the table of contents.
MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
AUDITOR’S RESPONSIBILITY
Our responsibility is to express opinions on these financial statements based on our audit. We conducted
our audit in accordance with auditing standards generally accepted in the United States of America and
the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the City’s preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
(continued)
17
OPINIONS
In our opinion, the financial statements referred to on the previous page present fairly, in all material
respects, the respective financial position of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City as of December 31, 2015, and the
respective changes in financial position and, where applicable, cash flows thereof for the year then ended,
in accordance with accounting principles generally accepted in the United States of America.
EMPHASIS OF MATTER
As described in Note 1 of the notes to basic financial statements, the City has implemented Governmental
Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for
Pensions—an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition
for Contributions Made Subsequent to the Measurement Date—an amendment of GASB Statement No. 68,
during the year ended December 31, 2015. Our opinion is not modified with respect to this matter.
OTHER MATTERS
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s
Discussion and Analysis and the required supplementary information (RSI), as listed in the table of
contents, be presented to supplement the basic financial statements. Such information, although not a part
of the basic financial statements, is required by the GASB, who considers it to be an essential part of
financial reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the RSI in accordance with auditing
standards generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information for
consistency with management’s responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the basic financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with
sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s basic financial statements. The introductory section, combining and individual fund
statements and schedules, supplemental information, 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 and supplemental information 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 combining and individual fund statements and schedules
and supplemental information are fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
(continued)
18
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 30, 2016
on our consideration of the City’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City’s internal control over financial
reporting and compliance.
Minneapolis, Minnesota
June 30, 2016
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF LAKEVILLE, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Lakeville, (the City), we offer readers of the City’s
financial statements this narrative overview and analysis of the financial activities of the
City for the fiscal year ended December 31, 2015. The discussion and analysis is
intended to be considered in conjunction with the additional information that we have
furnished in our letter of transmittal, located earlier in this report, and the City’s financial
statements contained within this report.
Financial Highlights
The assets and deferred outflows of resources of the City exceeded liabilities and
deferred inflows of resources by $295,832,970 (net position) at the close of the
most recent fiscal year. Of this amount, $3,491,242 (unrestricted net position)
may be used to meet the government’s ongoing obligations to citizens and
creditors.
The City’s total net position increased by $23,100,528 in 2015, excluding the
effect of a change in accounting principle discussed below.
The City recorded a change in accounting principle related to the implementation
of new accounting standards for reporting employee participation in defined
benefit pension plans. The change resulted in reductions to the beginning net
position of the governmental activities ($8,032,670) and business-type activities
($1,873,397) on the City’s government-wide financial statements. Please note the
amounts included in the Management’s Discussion and Analysis for 2014 have
not been restated.
The City’s governmental funds reported combined ending fund balances of
$62,479,726. Of this total amount, $26,372,686 or 42.2% is unrestricted and
available for use within the City’s constraints and policies.
As of the end of the current fiscal year, the City’s unrestricted fund balance for
the General Fund was $11,927,644 or 51.3% of total General Fund expenditures
of $23,267,893.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic
financial statements. The City’s basic financial statements are comprised of three
components: 1) government-wide financial statements, 2) fund financial statements, and
3) notes to basic financial statements. This report also contains other required
supplementary information in addition to the basic financial statements themselves.
19
Government-wide financial statements. The government-wide financial statements are
designed to provide readers with a broad overview of the City’s finances, in a manner
similar to a private-sector business.
The government-wide financial statements include not only the City itself (known as the
primary government), but also a legally separate housing and redevelopment authority
(HRA) for which the City is considered to be financially accountable or for which the
nature and significance of their relationship with the City is such that the exclusion would
cause the City’s financial statements to be misleading or incomplete. Financial
information for this component unit is blended within the financial information presented
for the primary government itself.
The Statement of Net Position presents information on all of the City’s assets, deferred
outflows of resources, liabilities and deferred inflows of resources, with the difference
reported as net position. Over time, increases or decreases in net position may serve as a
useful indicator of whether the financial position of the City is improving or
deteriorating.
The Statement of Net Activities presents information showing how the City’s net position
changed during the most recent fiscal year. All changes in net position are reported as
soon as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in this statement for some
items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes
and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that
are principally supported by taxes and intergovernmental revenues (governmental
activities) from other functions that are intended to recover all or a significant portion of
their costs through user fees and charges (business-type activities). The governmental
activities of the City include general government, public safety, public works, and parks
and recreation. The business-type activities of the City include the enterprise activities of
the liquor operation and utility operation.
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 three categories: governmental funds, proprietary
funds, and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same
functions reported as governmental activities in the government-wide financial
statements. However, unlike the government-wide financial statements, governmental
fund financial statements focus on near-term inflows and outflows of spendable
resources, as well as on balances of spendable resources available at the end of the fiscal
year. Such information may be useful in evaluating a government’s near-term financing
requirements.
20
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 fund
balance sheet and the governmental fund statement of revenues, expenditures, and
changes in fund balances provide a reconciliation to facilitate this comparison between
governmental funds and governmental activities.
The City maintains 23 individual governmental funds. Information is presented
separately in the governmental fund balance sheet and in the governmental fund
statement of revenues, expenditures, and changes in fund balances for the General Fund,
general obligation (debt service) fund, G.O. improvement (debt service) fund, building
(capital projects) fund, water (capital projects) fund, and the improvement construction
(capital projects) fund, all of which are considered to be major funds. Data from the other
governmental funds is combined into a single, aggregated presentation. Individual fund
data for each of these nonmajor governmental funds is provided in the form of combining
statements following the required supplementary information.
The City adopts annual appropriated budgets for its General Fund and special revenue
funds. A budgetary comparison schedule has been provided as required supplementary
information for the General Fund to demonstrate compliance with this budget. Special
revenue funds budgetary comparison schedules can be found in the nonmajor
governmental funds subsection of the report after the capital projects funds.
Proprietary funds. The City maintains two different types of proprietary funds.
Enterprise funds are used to report the same functions presented as business-type
activities in the government-wide financial statements. The internal service fund is an
accounting device used to accumulate and allocate costs internally among the City’s
various functions.
The City uses enterprise funds to account for its off-sale liquor and utility (water, sanitary
sewer, street light, and environmental resources) operations. The City uses internal
service fund to account for its risk management insurance liability program. These
services benefit the governmental and business-type functions; therefore, they have been
included within governmental and business-type 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 funds, all of which are considered to be
major funds of the City. The internal service fund is presented in a single aggregated
presentation in the proprietary fund financial statements.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit
of parties outside the government. Fiduciary funds are not reflected in the government-
wide financial statement because the resources of those funds are not available to support
21
the City’s own programs. The accounting used for fiduciary funds is much like that used
for proprietary funds.
Notes to basic financial statements. The notes provide additional information that is
essential to a full understanding of the data provided in the government-wide and fund
financial statements.
Other information. In addition to the basic financial statements and accompanying
notes, this report also presents certain required supplementary information.
This section includes a budgetary comparison schedule and related notes for the General
Fund, a schedule of funding progress for the other post-employment benefits plan of the
City and schedules related to the City’s participation in defined benefit pension plans
administered by the Minnesota Public Employees Retirement Association (PERA) and
the Lakeville Fire Relief Association. The combining statements referred to earlier in
connection with nonmajor governmental funds are presented immediately following the
required supplementary information.
22
Government-wide Financial Analysis
An analysis of the City’s financial position begins with a review of the Statement of Net
Position and the Statement of Activities. These two statements report the City’s net
position and changes in net position. It should be noted that the financial position can
also be affected by non-financial factors, including economic conditions, population
growth, and new regulations.
As noted earlier, net position may serve over time as a useful indicator of the City’s
financial position. As presented in the following condensed version of the Statement of
Net Position, the City’s assets and deferred outflows or resources exceeded liabilities and
deferred inflows of resources by $295,832,970 at December 31, 2015. By far the largest
portion or 87.3% of net position is reflected in its net investment in capital assets (e.g.
land, buildings and improvements, machinery and equipment, infrastructure, and
construction in process) less any related debt used to acquire those assets that is still
outstanding. The City uses these capital assets to provide services to citizens;
consequently, these assets are not available for future spending. Although the City’s net
investment in capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities.
2015 2014 2015 2014 2015 2014
Current and other assets 85,533,306$ 87,030,427$ 12,990,319$ 14,097,040$ 98,523,625$ 101,127,467$
Capital assets 219,832,705 200,577,423 119,200,767 112,623,635 339,033,472 313,201,058
Total assets 305,366,011$ 287,607,850$ 132,191,086$ 126,720,675$ 437,557,097$ 414,328,525$
Deferred outflows of resources 2,986,645$ -$ 277,882$ -$ 3,264,527$ -$
Current and other liabilities 7,796,827$ 7,627,977$ 1,932,051$ 2,106,658$ 9,728,878$ 9,734,635$
Long-term liabilities 128,013,853 118,518,885 5,294,929 3,436,496 133,308,782 121,955,381
Total liabilities 135,810,680$ 126,146,862$ 7,226,980$ 5,543,154$ 143,037,660$ 131,690,016$
Deferred inflows of resources 1,742,062$ -$ 208,932$ -$ 1,950,994$ -$
Net position:
Net investment in
capital assets 141,868,136 135,673,737 116,288,771 109,535,106 258,156,907 245,208,843
Restricted 33,860,946 19,913,014 323,875 324,125 34,184,821 20,237,139
Unrestricted (4,929,168) 5,874,237 8,420,410 11,318,290 3,491,242 17,192,527
Total net position 170,799,914$ 161,460,988$ 125,033,056$ 121,177,521$ 295,832,970$ 282,638,509$
Governmental Activities Business-type Activities Total
The City’s total restricted net position of $34,184,821 comprises 11.6% of total net
position at the close of the fiscal year ending December 31, 2015. These assets are
subject to external restrictions on how they may be used.
The 2015 remaining balance of $3,491,242 (1.1% of total net position), in unrestricted
net position may be used to meet the government’s ongoing obligations to citizens and
creditors. The change in accounting principle mentioned earlier reduced unrestricted net
position by $9,906,067. This change in accounting principle for pensions significantly
increased deferred outflows of resources, long-term liabilities, and deferred inflows of
resources as presented in the table above. Certain balances within unrestricted net
23
resources as presented in the table above. Certain balances within unrestricted net
position have internally imposed commitments or limitations, which may further limit the
purpose for which such net position may be used.
Change in net position. The City’s 2015 total net position during the current fiscal year
increased by $23,100,528 as shown in the following table. This increase is primarily
attributed to economic conditions and increase in community growth. The decrease in
unrestricted net position was primarily due to the change in accounting principle
previously discussed. Additional details that account for the change in net position are
provided in the following analysis of the governmental and business-type activities.
2015 2014 2015 2014 2015 2014
Revenues
Program revenues
Charges for services 16,666,552$ 11,969,777$ 12,505,583$ 13,101,060$ 29,172,135$ 25,070,837$
Operating grants and contributions 5,319,366 4,562,781 89,516 115,943 5,408,882 4,678,724
Capital grants and contributions 13,783,752 10,090,946 6,009,075 4,252,192 19,792,827 14,343,138
General revenues
Property taxes 25,338,778 24,465,333 - - 25,338,778 24,465,333
Investment income 368,232 552,444 52,461 150,310 420,693 702,754
Total revenues 61,476,680 51,641,281 18,656,635 17,619,505 80,133,315 69,260,786
Expenses
General government 5,893,261 6,051,985 - - 5,893,261 6,051,985
Public safety 12,236,411 11,821,713 - - 12,236,411 11,821,713
Public works 15,365,976 14,766,116 - - 15,365,976 14,766,116
Parks and recreation 5,762,890 5,197,912 - - 5,762,890 5,197,912
Interest on long-term debt 3,296,665 3,665,421 - - 3,296,665 3,665,421
Liquor - - 2,530,806 2,498,103 2,530,806 2,498,103
Utility - - 11,946,778 11,462,552 11,946,778 11,462,552
Total expenses 42,555,203 41,503,147 14,477,584 13,960,655 57,032,787 55,463,802
Change in net position
before transfers 18,921,477 10,138,134 4,179,051 3,658,850 23,100,528 13,796,984
Transfers (1,549,881) 1,565,481 1,549,881 (1,565,481) - -
Change in net position 17,371,596 11,703,615 5,728,932 2,093,369 23,100,528 13,796,984
Net position - beginning 161,460,988 149,757,373 121,177,521 119,084,152 282,638,509 268,841,525
Change in accounting principle (8,032,670) - (1,873,397) - (9,906,067) -
Net position - beginning, as restated 153,428,318 149,757,373 119,304,124 119,084,152 272,732,442 268,841,525
Net position - ending 170,799,914$ 161,460,988$ 125,033,056$ 121,177,521$ 295,832,970$ 282,638,509$
Governmental Activities Business-type Activities Total
Governmental activities. Governmental activities change in net position before transfers
were an increase of $18,921,477. As previously discussed, this increase is primarily due
to community growth. The governmental revenue increase in charges for services are
directly related to the increase in development activity.
24
Revenues – The City’s 2015 total revenues for governmental activities increased by
$9,835,399. Charges for services increased a total of $4,696,775 primarily due to
continued growth in the community as evidenced by an increase in building permit fees,
connection and area charges, and park dedication fees. A summary of the various
increases is shown as follows:
Increase /
Charges for services 2015 2014 (Decrease)
Licenses and building permit fees 3,325,293 $ 2,836,555 $ 488,738$
Connection and area charges 5,963,852 3,723,587 2,240,265
Engineering fees - reconstruction projects 1,892,052 1,147,996 744,056
Park dedication fees 2,516,661 1,642,309 874,352
Other 2,968,694 2,619,330 349,364
Total charges for services 16,666,552$ 11,969,777$ 4,696,775$
Operating grants and contributions experienced an overall increase of $756,585. The
increase is composed of county grant provided for joint road improvement projects. A
summary of the various operating grants and contributions is shown as follows:
Increase /
Operating grants and contributions 2015 2014 (Decrease)
County grant for joint road improvements 1,626,442$ 415,843$ 1,210,599$
Other grants, contributions and donations 1,605,051 2,343,083 (738,032)
State-aid for street revenue bonds 1,181,379 899,325 282,054
Federal street reconstruction bonds payment 841,401 837,342 4,059
State-aid for street maintenance 65,093 67,188 (2,095)
Total operating grants and contributions 5,319,366$ 4,562,781$ 756,585$
25
Capital grants and contributions increased by $3,692,806. Special assessments increased
by $3,969,546 primarily due to a major street reconstruction project that was levied
against the benefiting property owners in 2015. Contributed infrastructure from private
land developers increased by $2,544,724; the infrastructure consists of street, storm
sewer, and park and trail capital assets. In the prior year the City received a payment on
the interest rate reduction loan from Southfork Apartments, the proceeds of which are
limited and subject to the authority of the HRA. The Downtown parking lot replacement
project was substantially completed in 2014. It was primarily funded by Dakota County
CDA grant funds. The summary of capital grants and contributions is shown as follows:
Increase /
Capital grants and contributions 2015 2014 (Decrease)
Special assessments 6,755,060 $ 2,785,514$ 3,969,546$
Contributed infrastructure from developers 6,583,010 4,038,286 2,544,724
Southfork interest reduction loan repayment - 2,230,000 (2,230,000)
Other grants and contributions 442,384 572,524 (130,140)
Downtown parking lot county grant 3,298 464,622 (461,324)
Total capital grants and contributions 13,783,752$ 10,090,946$ 3,692,806$
Property tax revenue increased $873,445 or 3.6% primarily due to an increase in the
overall tax levy and an increase in the collection of the current year’s levy.
Investment income earnings decreased by $184,212. The decrease is the result of
changes in investment asset values which are inversely related to the changes in market
rates. The decrease is consistent with prevailing market conditions.
Increase /
General revenues 2015 2014 (Decrease)
Property taxes 25,338,778$ 24,465,333$ 873,445$
Investment income 368,232 552,444 (184,212)
Total general revenues 25,707,010$ 25,017,777$ 689,233$
26
A summary of 2015 revenues by source for governmental activities is shown as follows:
Property Taxes
$25,338,778
(41.2)
Charges for Services
$16,666,552
(27.1%)
Grants and
Contributions ‐
Restricted
$19,103,118
(31.1%)
Investment Earnings
$368,232
(0.6%)
Revenue by Source ‐Governmental Activities
Total Revenues $61,476,680
Expenses – The City’s 2015 total governmental activities expenses (before depreciation
on capital assets and interest on long-term debt) increased by $1,026,682 or 3.6%. Total
governmental activities expenses increased by $1,052,056 or 2.5%, shown as follows:
Increase /
Governmental activities expenses 2015 2014 (Decrease)
General government 5,626,411$ 5,793,424$ (167,013)$
Public safety 11,118,338 10,734,927 383,411
Public works 8,635,019 8,277,831 357,188
Parks and recreation 3,955,702 3,502,606 453,096
Total before depreciation and interest 29,335,470 28,308,788 1,026,682
Depreciation on capital assets 9,923,068 9,528,938 394,130
Interest on long-term debt 3,296,665 3,665,421 (368,756)
Total governmental activities expenses 42,555,203$ 41,503,147$ 1,052,056$
Following are explanations of various increases and (decreases) in expenses by
governmental function as shown above.
27
General government expenses decreased by $167,013 or 2.9%; which is primarily
attributed to the elections in 2014 and the prior year payment of excess tax increment
related to a decertified tax increment financing district.
Public safety expenses increased by $383,411 or 3.6%; primarily due to the addition of a
DUI and anti-theft grant funded programs and the change in accounting principle for the
defined benefit pension plan.
Public works expenses increased by $357,188 or 4.3%; primarily due to the addition of
the City’s operation and maintenance division that began in 2014 to bring inspections of
the street reconstruction projects in-house. The street department expenses in 2015
decreased due to less snow events at year end and associated decrease in overtime, motor
fuels and road de-icing chemicals.
Parks and recreation expenses increased $453,096 or 12.9%; in part due to an increase in
major maintenance projects.
Depreciation on capital assets increased by $394,130 which is primarily due to an
increase in contributed infrastructure from development.
Interest on long-term debt decreased by $368,756 or 10.1%; which is primarily due to a
new debt issuance and payment of crossover refunded debt.
A summary of 2015 expenses by function for governmental activities is shown as
follows:
Public Safety
$11,118,338
(26.2%)
Depreciation
$9,923,068
(23.3%)
Public Works
$8,635,019
(20.3%)
General
Government
$5,626,411
(13.2%)
Interest on Debt
$3,296,665
(7.7%)Parks and
Recreation
$3,955,702
(9.3%)
Expenses by Function - Governmental Activities
Total Expenses $42,555,203
28
Business-type activities. Business-type activities increased the City’s 2015 total net
position by $3,855,535. Key elements of the increase in net position along with a
comparison of revenues, expenses, and changes in net position during fiscal years 2015
and 2014 are shown as follows:
Increase /
2015 2014 (Decrease)
Revenues
Charges for services
Liquo r 3,289,120$ 3,804,942$ (515,822)$
Utilit y 9,216,463 9,296,118 (79,655)
Operating grants and contributions
Liquo r 3,762 3,762 -
Utilit y 85,754 112,181 (26,427)
Capital contributions
Utilit y 6,009,075 4,252,192 1,756,883
Investment earnings 52,461 150,310 (97,849)
Total revenues 18,656,635 17,619,505 1,037,130
Expenses
Liquo r 2,530,806 2,498,103 32,703
Utility 11,946,778 11,462,552 484,226
Total expenses 14,477,584 13,960,655 516,929
Change in net position before transfers 4,179,051 3,658,850 520,201
Transfers 1,549,881 (1,565,481) 3,115,362
Change in net position 5,728,932 2,093,369 3,635,563
Net position - beginning 121,177,521 119,084,152 2,093,369
Change in accounting principle (1,873,397) - (1,873,397)
Net position - beginning, as restated 119,304,124 119,084,152 219,972
Net position - ending 125,033,056$ 121,177,521$ 3,855,535$
The City’s 2015 business-type total revenues increased by $1,037,130 or 5.9%; the
various revenue components are discussed in detail in the following paragraphs.
○ The liquor fund 2015 charges for services (sales less cost of goods sold) decreased
due to sales volume. The 2015 cost of goods sold as a percentage of sales were
75.8%, compared to 74.4% in 2014.
○ The overall utility revenue charges for services decreased by $79,655. This overall
decrease is represented by a water revenue decrease of $14,595, sanitary sewer
revenue decrease of $111,586, street light revenue increase of $22,451 and
environmental resources revenue increase of $24,075. The water and sanitary
sewer decreases are due to customer consumption as a result of changes in weather
patterns despite rate increases and an increase in customers as a result of
community growth. The street light and environmental resources increases are due
to increase in customers.
29
○ The utility fund experienced a total increase of $1,756,883 in capital contributions.
Majority of the increase is derived from water and sanitary sewer contributed from
developer improvement projects. City improvement project infrastructure assets of
$3,454,797 were contributed to the utility fund which is within the net transfer
amount of $1,549,881 on the Statement of Activities. The total amount of
contributed infrastructure assets received by the utility fund varies yearly.
○ Investment earnings decreased $97,849. The decrease is the result of changes in
investment asset values which are inversely related to the changes in market rates.
The decrease is consistent with prevailing market conditions.
The City’s 2015 business-type total expenses increased by $516,929 or 3.7% as follows:
Liquor Utility
Business-type activities expenses Fund Fund Total
Personnel services (9,614)$ 159,269$ 149,655 $
Commodities 2,494 (28,238) (25,744)
Other charges and services 41,335 223,048 264,383
Sanitary sewage treatment and disposal - (44,496) (44,496)
Depreciation on capital assets 7,019 174,643 181,662
Interest, fiscal charges, bond premium (net)(8,531) - (8,531)
Total increase/(decrease)32,703$ 484,226$ 516,929$
Increase/(Decrease) From 2014
o The liquor fund other charges and services increase of $41,335 is primarily the
result of the advanced replacement of the point-of-sale system in order to be in
compliance with PCI standards.
o The utility fund other charges and services increase is attributed to several major
maintenance projects compared to the previous year on the street light replacement
program.
Financial Analysis of the City’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance
with finance-related legal requirements. Some funds are required statutorily while others
are established internally to assist management in accounting for certain activities.
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,
30
unrestricted fund balance may serve as a useful measure of a government’s net resources
available for spending at the end of the fiscal year.
As of the end of the current fiscal year, the City’s governmental funds reported combined
ending fund balances of $62,479,726. Of this amount, $26,372,686 or 42.2% of this
combined ending fund balance constitutes unrestricted fund balance that is available for
spending at the government’s discretion. Nonspendable fund balances of $447,284 are
amounts that are not in a spendable form, such as prepaid items and inventory. The
remaining fund balance is restricted for (a) debt service of $27,399,321, (b) capital
acquisition of $8,237,774, and (c) other restricted purposes of $22,661.
The General Fund is the chief operating fund of the City. At the end of the current fiscal
year, the fund balance was $12,374,928, an increase of $1,303,159 of revenues over
expenditures.
The G.O. obligation (debt service) fund balance decreased by $13,330,893 due to
payment of refunding debt obligations. The G.O. improvement (debt service) fund
balance increased by $971,203. The City levies the required property taxes and special
assessments levied against benefited property owners to meet the bonded debt service
requirements in the following year. The change in fund balance is subject to principal
and interest requirements of existing debt and that of new debt issuance.
The building (capital projects) fund expended $1,093,701 for major facility maintenance
projects and the replacement of the rooftop HVAC unit at fire station #4. Financing was
provided by $215,753 of revenues from property taxes, investment income, donations and
other revenue sources.
The water (capital projects) fund accounts for construction costs related to water supply
lines, wells and water storage facilities. The activity in this fund may fluctuate from year
to year depending on the demands on the City’s water system. The fund balance
decreased $5,761,904 due to the construction of an additional water tower and expansion
of the City’s water treatment facility. The water tower and water treatment facility
expansion projects will be financed with the bond issuance in 2016.
The improvement construction (capital projects) fund accounts for major infrastructure
reconstruction projects that require debt issuance for financing purposes. The activity in
this fund may fluctuate from year to year depending on the scope of project. Large
projects such as the interstate highway interchange and bridge reconstruction projects
may take several years to complete. The fund balance increased by $1,165,006 due to the
issuance of the 2015 General Obligation Improvement Bonds Series A for $16,545,000 of
which $11,671,918 was allocated to the improvement construction fund. These bonds
were issued to fund the 2015 street reconstruction project, phase I.
31
General Fund Budgetary Highlights
With the exception of the information systems and inspections departments, all other
General Fund departments expended their 2015 budget appropriations at or below the
final adopted budget. A schedule of revenues, expenditures and changes in fund balances
– budgetary comparison is disclosed in the required supplemental information section of
this report. A summary of General Fund revenues, expenditures, other financing sources
(uses), variance with final budget, and net change in fund balance is as follows:
Budget As Variance
Originally Final With Final
Adopted Budget Actual Budget
Revenues
Property taxes 17,811,502$ 17,811,502$ 17,853,892$ 42,390$
Licenses and permits 1,968,416 2,046,781 2,655,873 609,092
Intergovernmental 827,661 1,084,350 982,072 (102,278)
Charges for services 2,932,077 2,949,721 3,375,513 425,792
Fines 288,001 288,001 369,356 81,355
Investment income 40,376 40,376 55,883 15,507
Donations 16,000 25,971 29,242 3,271
Miscellaneous 37,645 37,645 51,286 13,641
Total revenues 23,921,678 24,284,347 25,373,117 1,088,770
Expenditures
Personnel services 16,824,666 17,217,020 16,921,154 (295,866)
Commodities 1,714,057 1,725,627 1,618,334 (107,293)
Other charges and services 4,675,622 4,819,585 4,493,686 (325,899)
Capital outlay 154,256 254,855 234,719 (20,136)
Other 105,000 - - -
Total expenditures 23,473,601 24,017,087 23,267,893 (749,194)
Other financing sources (uses)82,935 (802,065) (802,065) -
Net change in fund balance 531,012$ (534,805)$ 1,303,159$ 1,837,964$
General Fund
The City’s budget was amended in the current year to account for the federal grant award
for the DUI program and to increase transfers to other funds to reduce fund balance
reserves to reduce the overall tax levy burden.
The 2015 actual General Fund revenues exceeded the final budget by $1,088,770 and
expenditures were under final adopted budget by $749,194. Other financing sources
(uses) were at the final budget. The General Fund actual net change in fund balance
surpassed final budget by $1,837,964.
32
The following is a brief summary explanation of the various budgets to actual variances
for revenues:
○ Property taxes were greater than anticipated by $42,390 due to the collection of an
excess tax increment redistribution.
○ Licenses and permits exceeded estimates by $609,092 due to greater than
anticipated building permit fees. The number of residential building permits
budgeted were 300 compared to 366 actual.
○ Intergovernmental revenues were below estimates by $102,278 due to the timing
of federal grants for public safety highway safety initiatives.
○ Charges for services exceeded estimates by $425,792 which is primarily related to
public works engineering fees derived from reconstruction projects.
○ Fines exceeded estimates by $81,355 due to filling prior year police officer
vacancies in the traffic control division.
○ Investment income was above estimates by $15,507 due to prevailing market
conditions. The City’s Management employs prudent investment practices and
cash management techniques to maximize investment income while protecting the
City’s treasury.
○ Donations and miscellaneous revenues experienced variances of $3,271 and
$13,641, respectively.
The following is a brief summary explanation of the various budgets to actual variances
for expenditures:
○ Personnel costs including benefits were $295,866 below budget estimates due to
vacant positions as a result of retirements and resignations.
○ Commodities were $107,293 below budget due to a number of factors the most
significant of which is the number and quantity of snow events which resulted in a
reduction in de-icing chemicals.
○ Other charges and services were $325,899 below budget by which is attributed to
milder weather which resulted in overall lower cost of natural gas and electricity.
○ Capital outlay was $20,136 below the budget.
33
Capital Asset and Debt Administration
Capital assets. The City’s capital assets for governmental and business-type activities as
of December 31, 2015 are $339.0 million (net of accumulated depreciation). This amount
represents an increase (including additions, deletions, and depreciation) of approximately
$25.8 million from 2014.
The net investment in capital assets including land, historical treasures, buildings,
machinery and equipment, other improvements, infrastructure, and construction in
process is shown as follows:
Governmental Business-type
Activities Activities Total
Land 25,253,041$ 3,842,898$ 29,095,939$
Historical treasures 100,000 - 100,000
Buildings and improvements 41,020,110 18,008,050 59,028,160
Machinery and equipment 8,232,094 1,318,924 9,551,018
Other improvements 4,141,152 - 4,141,152
Infrastructure
Streets 60,008,758 - 60,008,758
Storm sewer 46,819,757 - 46,819,757
Parks 10,341,451 - 10,341,451
Water 53,191,937 53,191,937
Sanitary sewer 39,977,936 39,977,936
Construction in process 23,916,342 2,861,022 26,777,364
Total 219,832,705$ 119,200,767$ 339,033,472$
Capital Assets
(net of depreciation)
The City’s 2016 adopted budget provides funding for $32.7 million in infrastructure
capital assets, public buildings improvements and upgrades, and equipment capital assets
such as vehicle replacements for public safety and public works, and technology
equipment. Refer to Note 3. - Capital Assets, of the Notes to Basic Financial Statements
for additional information.
Debt administration. At the end of the current fiscal year, the City of Lakeville had total
bonded debt outstanding of $109.955 million, which is a decrease of $3.475 million
compared to the prior year. The decrease is due to one new bond issuance totaling
$16.545 million and principal bond maturities, including a crossover refunding of
$12.460 million.
34
The City manages its debt structure by utilizing approaches that take full advantage of its
financial position, revenue trends and conditions in municipal bond markets. Refer to
Note 5. – Long-Term Liabilities, of the Notes to Basic Financial Statements for additional
information about the City’s governmental and business-type long-term debt activity.
The City’s outstanding bonded obligation debt as of December 31, 2015 is shown as
follows:
Balance Balance
January 1 Issued Redeemed December 31
Governmental bonds
General obligation bonds
Capital improvement 49,310,000 - 13,290,000 36,020,000
Street reconstruction 19,970,000 - 1,125,000 18,845,000
G.O. Improvement 23,905,000 11,815,000 1,590,000 34,130,000
State-aid street revenue 3,890,000 4,730,000 725,000 7,895,000
Water revenue 1,975,000 - 1,975,000 -
Tax increment 1,890,000 - 210,000 1,680,000
Park 410,000 - 410,000 -
Arena revenue 910,000 - 275,000 635,000
HRA lease revenue 8,100,000 - 245,000 7,855,000
Total governmental 110,360,000 16,545,000 19,845,000 107,060,000
Business-type bonds
Liquor revenue 3,070,000 - 175,000 2,895,000
Total bonds payable 113,430,000$ 16,545,000$ 20,020,000$ 109,955,000$
Outstanding Debt
Governmental Bonds and Business-type Bonds
Credit Rating
Aa1
The City of Lakeville’s general obligation bond rating as of
December 31, 2015 is “Aa1” as rated by Moody’s Investors Service.
Moody’s Investor Service credit report stated the rating was “The
Aa1 underlying rating reflects the city’s history of excellent
financial management and strong reserve levels; wealthy tax base
located just south of the Twin Cities Metropolitan Area, and an
above average debt burden.”
State statutes limit the amount of general obligation debt a Minnesota city may issue to
3% of total assessor’s taxable market valuation. The City has $36,323,318 of net bonded
debt, which is subject to the $166,601,854 current debt limitation, thereby resulting in a
legal debt margin of $130,278,536. Refer to the Statistical Section of this report for a
detailed computation of the City’s legal debt margin.
35
Economic Conditions and Next Year’s Budget
The City of Lakeville remains one of the top growth cities in the Minnesota twin city
metro area. The trend for building permit activity for single family homes is on the rise
although building permits for single family homes increased to 366 in 2015 compared to
319 permits in 2014. In our opinion, the resurgence is due to a number of factors
including but not limited to; near historical low interest rates, low regional
unemployment rate 2.7%, improved personal income levels, reduced number of home
foreclosures and increasing home values. The budget and five year capital improvement
plan are premised on the assumption growth will continue at a subdued level for the
foreseeable future.
The adopted 2016 budget reflects a continuation of the program and service levels
established by the City Council over the past several years. No new programs or services
were included in the adopted budget; however, key staff positions and resources were
added to accommodate community growth. The 2016 budget also focuses on City efforts
achieve strategic priorities established in the Envision Lakeville Community Vision Plan
to prepare for the future, investments in technology to maximize efficiencies, developing
effective partnerships to capitalize on opportunities and multi-agency resources,
infrastructure improvements to promote economic and community development and
service continuity through staffing enhancements to meet the expectations of community
residents and businesses.
Requests for Information
This financial report is designed to provide a general overview of the City of Lakeville’s
finances for all those with an interest in the government’s finances. Questions concerning
any of the information provided in this report or requests for additional financial
information should be directed to the City of Lakeville Finance Department at 20195
Holyoke Avenue, Lakeville, Minnesota 55044, (952) 985-4400, or email request to
jerickson@lakevillemn.gov.
36
B A S I C F I N A N C I A L S T A T E M E N T S
This page intentionally left blank.
CITY OF LAKEVILLE, MINNESOTA
STATEMENT OF NET POSITION
DECEMBER 31, 2015
Governmental Business-type
Activities Activities Total
ASSETS:
Cash and investments 50,838,640$ 8,158,406$ 58,997,046$
Receivables 17,411,492 2,286,255 19,697,747
Internal balances (223,424) 223,424 -
Inventory 403,002 1,969,157 2,372,159
Prepaid items 44,282 29,202 73,484
Restricted assets (temporarily):
Cash and investments - 323,875 323,875
Investments held by trustee 14,409,362 - 14,409,362
Net pension asset - fire relief 2,649,952 - 2,649,952
Capital assets
Non-depreciable 49,269,383 6,703,920 55,973,303
Depreciable, net 170,563,322 112,496,847 283,060,169
Total capital assets 219,832,705 119,200,767 339,033,472
Total assets 305,366,011 132,191,086 437,557,097
DEFERRED OUTFLOWS OF RESOURCES
Pension plan deferments - PERA 2,330,540 277,882 2,608,422
Pension plan deferments - fire relief 656,105 - 656,105
Total deferred outflows of resources 2,986,645 277,882 3,264,527
LIABILITIES:
Salaries, accounts, contracts, interest, and deposits 7,294,302 1,932,051 9,226,353
Unearned revenue 502,525 - 502,525
Non-current liabilities
Due within one year 9,109,094 385,836 9,494,930
Due in more than one year 118,904,759 4,909,093 123,813,852
Total liabilities 135,810,680 7,226,980 143,037,660
DEFERRED INFLOWS OF RESOURCES
Pension plan deferments - PERA 1,742,062 208,932 1,950,994
NET POSITION:
Net investment in capital assets 141,868,136 116,288,771 258,156,907
Restricted for
Special purposes 22,661 - 22,661
Debt service 23,665,372 323,875 23,989,247
Capital acquisition 6,866,856 - 6,866,856
Fire relief pensions 3,306,057 - 3,306,057
Unrestricted (4,929,168) 8,420,410 3,491,242
Total net position 170,799,914$ 125,033,056$ 295,832,970$
See accompanying notes to basic financial statements.
37
CI
T
Y
O
F
L
A
K
E
V
I
L
L
E
,
M
I
N
N
E
S
O
T
A
ST
A
T
E
M
E
N
T
O
F
A
C
T
I
V
I
T
I
E
S
YE
A
R
E
N
D
E
D
D
E
C
E
M
B
E
R
3
1
,
2
0
1
5
Op
e
r
a
t
i
n
g
C
a
p
i
t
a
l
Ch
a
r
g
e
s
f
o
r
G
r
a
n
t
s
a
n
d
G
r
a
n
t
s
an
d
G
o
v
e
r
n
m
e
n
t
a
l
B
u
s
i
n
e
s
s
-
t
y
p
e
Fu
n
c
t
i
o
n
/
P
r
o
g
r
a
m
s
Ex
p
e
n
s
e
s
Se
r
v
i
c
e
s
Co
n
t
r
i
b
u
t
i
o
n
s
Co
n
t
r
i
b
u
t
i
o
n
s
Ac
t
i
v
i
t
i
e
s
Ac
t
i
v
i
t
i
e
s
To
t
a
l
Go
v
e
r
n
m
e
n
t
a
l
a
c
t
i
v
i
t
i
e
s
Ge
n
e
r
a
l
g
o
v
e
r
n
m
e
n
t
5
,
8
9
3
,
2
6
1
$
3
,
7
3
0
,
3
4
2
$
7
,
1
3
2
$
7
7
,
0
0
6
$
(
2
,
0
7
8
,
7
8
1
)
$
(
2
,
0
7
8
,
7
8
1
)
$
Pu
b
l
i
c
s
a
f
e
t
y
1
2
,
2
3
6
,
4
1
1
9
2
6
,
1
6
8
9
8
0
,
3
1
0
-
(
1
0
,
3
2
9
,
9
3
3
)
(1
0
,
3
2
9
,
9
3
3
)
Pu
b
l
i
c
w
o
r
k
s
15
,
3
6
5
,
9
7
6
8,
3
1
1
,
0
1
7
4,
1
4
5
,
8
0
6
12
,
7
0
2
,
2
6
6
9,
7
9
3
,
1
1
3
9,
7
9
3
,
1
1
3
Pa
r
k
s
a
n
d
r
e
c
r
e
a
t
i
o
n
5,
7
6
2
,
8
9
0
3,
6
9
9
,
0
2
5
18
6
,
1
1
8
1,
0
0
4
,
4
8
0
(8
7
3
,
2
6
7
)
(8
7
3
,
2
6
7
)
In
t
e
r
e
s
t
o
n
l
o
n
g
-
t
e
r
m
d
e
b
t
3,
2
9
6
,
6
6
5
-
-
-
(
3
,
2
9
6
,
6
6
5
)
(
3
,
2
9
6
,
6
6
5
)
To
t
a
l
g
o
v
e
r
n
m
e
n
t
a
l
a
c
t
i
v
i
t
i
e
s
42
,
5
5
5
,
2
0
3
1
6
,
6
6
6
,
5
5
2
5
,
3
1
9
,
3
6
6
1
3
,
7
8
3
,
7
5
2
(
6
,
7
8
5
,
5
3
3
)
(
6
,
7
8
5
,
5
3
3
)
Bu
s
i
n
e
s
s
-
t
y
p
e
a
c
t
i
v
i
t
i
e
s
Li
q
u
o
r
2
,
5
3
0
,
8
0
6
3
,
2
8
9
,
1
2
0
3
,
7
6
2
-
7
6
2
,
0
7
6
$
7
6
2
,
0
7
6
Ut
i
l
i
t
y
11
,
9
4
6
,
7
7
8
9
,
2
1
6
,
4
6
3
8
5
,
7
5
4
6
,
0
0
9
,
0
7
5
3
,
3
6
4
,
5
1
4
3
,
3
6
4
,
5
1
4
To
t
a
l
b
u
s
i
n
e
s
s
-
t
y
p
e
a
c
t
i
v
i
t
i
e
s
14
,
4
7
7
,
5
8
4
1
2
,
5
0
5
,
5
8
3
8
9
,
5
1
6
6
,
0
0
9
,
0
7
5
4
,
1
2
6
,
5
9
0
4
,
1
2
6
,
5
9
0
To
t
a
l
p
r
i
m
a
r
y
g
o
v
e
r
n
m
e
n
t
57
,
0
3
2
,
7
8
7
$ 2
9
,
1
7
2
,
1
3
5
$ 5
,
4
0
8
,
8
8
2
$
1
9
,
7
9
2
,
8
2
7
$
(6
,
7
8
5
,
5
3
3
)
4
,
1
2
6
,
5
9
0
(
2
,
6
5
8
,
9
4
3
)
Ge
n
e
r
a
l
r
e
v
e
n
u
e
s
Pr
o
p
e
r
t
y
t
a
x
e
s
2
5
,
3
3
8
,
7
7
8
-
2
5
,
3
3
8
,
7
7
8
In
v
e
s
t
m
e
n
t
i
n
c
o
m
e
3
6
8
,
2
3
2
5
2
,
4
6
1
4
2
0
,
6
9
3
Tr
a
n
s
f
e
r
s
(1
,
5
4
9
,
8
8
1
)
1
,
5
4
9
,
8
8
1
-
To
t
a
l
g
e
n
e
r
a
l
r
e
v
e
n
u
e
s
a
n
d
t
r
a
n
s
f
e
r
s
24
,
1
5
7
,
1
2
9
1
,
6
0
2
,
3
4
2
2
5
,
7
5
9
,
4
7
1
17
,
3
7
1
,
5
9
6
5,
7
2
8
,
9
3
2
23
,
1
0
0
,
5
2
8
Ne
t
p
o
s
i
t
i
o
n
-
b
e
g
i
n
n
i
n
g
,
a
s
p
r
e
v
i
o
u
s
l
y
r
e
p
o
r
t
e
d
16
1
,
4
6
0
,
9
8
8
12
1
,
1
7
7
,
5
2
1
28
2
,
6
3
8
,
5
0
9
Ch
a
n
g
e
i
n
a
c
c
o
u
n
t
i
n
g
p
r
i
n
c
i
p
l
e
(8
,
0
3
2
,
6
7
0
)
(
1
,
8
7
3
,
3
9
7
)
(
9
,
9
0
6
,
0
6
7
)
Ne
t
p
o
s
i
t
i
o
n
-
b
e
g
i
n
n
i
n
g
,
a
s
r
e
s
t
a
t
e
d
15
3
,
4
2
8
,
3
1
8
1
1
9
,
3
0
4
,
1
2
4
2
7
2
,
7
3
2
,
4
4
2
Ne
t
p
o
s
i
t
i
o
n
,
D
e
c
e
m
b
e
r
3
1
17
0
,
7
9
9
,
9
1
4
$
1
2
5
,
0
3
3
,
0
5
6
$
2
9
5
,
8
3
2
,
9
7
0
$
Se
e
a
c
c
o
m
p
a
n
y
i
n
g
n
o
t
e
s
t
o
b
a
s
i
c
f
i
n
a
n
c
i
a
l
s
t
a
t
e
m
e
n
t
s
.
Pr
o
g
r
a
m
R
e
v
e
n
u
e
s
N
e
t
(
E
x
p
e
n
s
e
)
R
e
v
e
n
u
e
a
n
d
Ch
a
n
g
e
s
i
n
N
e
t
P
o
s
i
t
i
o
n
Ch
a
n
g
e
i
n
n
e
t
p
o
s
i
t
i
o
n
38
CITY OF LAKEVILLE, MINNESOTA
BALANCE SHEET - GOVERNMENTAL FUNDS
DECEMBER 31, 2015
General G.O.
General Obligation Improvement
Assets
Cash and investments 12,066,357$ 3,512,930$ 5,151,949$
Investments held by trustee - 13,712,489 -
Interest receivable 29,117 42,412 12,122
Taxes receivable 1,342,791 230,443 116,110
Accounts receivable 634,594 - -
Due from other funds - - -
Special assessments receivable 90 427,196 12,425,651
Inventory 403,002 - -
Prepaid items 44,282 - -
Total assets 14,520,233$ 17,925,470$ 17,705,832$
Liabilities
Salaries payable 537,396$ -$ -$
Accounts payable 797,561 545 819
Due to other funds - - -
Contracts payable - - -
Deposits payable 14,835 - -
Unearned revenue 497,999 - -
Total liabilities 1,847,791 545 819
Deferred inflows of resources
Unavailable revenue - taxes 297,424 47,170 20,917
Unavailable revenue - special assessments 90 427,196 12,409,421
Total deferred inflows of resources 297,514 474,366 12,430,338
Fund balances
Nonspendable 447,284 - -
Restricted - 17,450,559 5,274,675
Committed 45,000 - -
Unassigned 11,882,644 - -
Total fund balances 12,374,928 17,450,559 5,274,675
Total liabilities, deferred inflows of
resources, and fund balances 14,520,233$ 17,925,470$ 17,705,832$
See accompanying notes to basic financial statements.
Debt Service
39
Nonmajor Total
Improvement Governmental Governmental
Building Water Construction Funds Funds
535,119$ 1,031,319$ 3,329,721$ 24,346,884$ 49,974,279$
- - - 696,873 14,409,362
4,406 256 9,894 82,919 181,126
3,163 - 3,101 135,196 1,830,804
6,900 - 1,000 1,505,359 2,147,853
- - - 3,200,000 3,200,000
- 121,563 - 230,571 13,205,071
- - - - 403,002
- - - - 44,282
549,588$ 1,153,138$ 3,343,716$ 30,197,802$ 85,395,779$
-$ -$ -$ 10,225$ 547,621$
47,496 136,349 324,570 2,164,318 3,471,658
- 3,200,000 - - 3,200,000
4,660 788,523 775,986 - 1,569,169
- - - 26,125 40,960
- - - 4,526 502,525
52,156 4,124,872 1,100,556 2,205,194 9,331,933
370 - 363 29,039 395,283
- 121,563 - 230,567 13,188,837
370 121,563 363 259,606 13,584,120
- - - - 447,284
- - 1,748,194 11,186,328 35,659,756
497,062 - 893,695 16,546,674 17,982,431
- (3,093,297) (399,092) - 8,390,255
497,062 (3,093,297) 2,242,797 27,733,002 62,479,726
549,588$ 1,153,138$ 3,343,716$ 30,197,802$ 85,395,779$
Capital Projects
40
This page intentionally left blank.
CITY OF LAKEVILLE, MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
DECEMBER 31, 2015
Fund balance - total governmental funds 62,479,726$
Amounts reported for governmental activities in the statement of net position
are different because:
1. Capital assets used in governmental activities are not current financial
resources and, therefore, are not reported in the governmental funds.
Governmental capital assets 354,903,338$
Less accumulated depreciation (135,070,633) 219,832,705
2. Net pension assets are only recorded in the government-wide financial
statements as they are not current financial resources to governmental funds. 2,649,952
3. Grant receivable that is applicable towards accrued bond interest payable
is susceptible to full accrual on the government-wide statements. 29,229
4. Long-term liabilities are not payable with current financial resources
and, therefore, are not reported in the governmental funds.
Bonds (107,060,000)
Accrued interest (1,617,936)
Loan (1,159,843)
Unamortized bond discount 149
Unamortized bond premium (4,888,965) (114,726,595)
5. Accrued compensated absences, net OPEB obligations, net pension liability
are not payable with current financial resources and, therefore, are not reported
in the governmental funds. (14,905,194)
6. Deferred inflows of resources in governmental funds are susceptible to full
accrual on the government-wide statements. 13,584,120
7. The City uses an internal service fund to charge the cost of insurance
activities to individual funds. A portion of the assets and liabilities of the
municipal reserves fund are included in governmental activities in the
Statement of Net Position. 611,388
8. Governmental funds do not report certain long-term amounts related to pensions
that are included in net position.
Deferred outflows - pension plan deferments 2,986,645
Deferred inflows - pension plan deferments (1,742,062)
Net position of governmental activities 170,799,914$
See accompanying notes to basic financial statements.
41
CITY OF LAKEVILLE, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2015
General G.O.
General Obligation Improvement
Revenues
Property taxes 17,853,892$ 3,270,771$ 1,704,751$
Tax increment - - -
Licenses and permits 2,655,873 - -
Intergovernmental 982,072 65,990 -
Charges for services 3,375,513 - -
Special assessments - 124,969 1,178,650
Fines 369,356 - -
Investment income 55,883 98,727 23,264
Donations 29,242 - -
Miscellaneous 51,286 - -
Total revenues 25,373,117 3,560,457 2,906,665
Expenditures - current
General government 4,751,743
Public safety 10,892,071
Public works 3,856,984
Parks and recreation 3,532,376
Total expenditures - current 23,033,174
Expenditures - capital outlay
General government 53,611
Public safety 67,865
Public works 87,782
Parks and recreation 25,461
Total expenditures - capital outlay 234,719
Expenditures - debt service
Principal bond maturities 2,365,000 1,590,000
Interest on debt 2,459,981 640,813
Fiscal charges 6,369 15,415
Total expenditures - debt service 4,831,350 2,246,228
Total expenditures 23,267,893 4,831,350 2,246,228
Excess (deficiency) of revenues over expenditures 2,105,224 (1,270,893) 660,437
Other financing sources (uses)
Transfers from other funds 809,935 400,000 167,684
Transfers to other funds (1,612,000) - -
Issuance of debt - - 143,082
Payment to refunded bonds escrow agent - (12,460,000) -
Premium on bonds issued - - -
Total other financing sources (uses)(802,065) (12,060,000) 310,766
Net change in fund balance 1,303,159 (13,330,893) 971,203
Fund balance, January 1 11,071,769 30,781,452 4,303,472
Fund balance, December 31 12,374,928$ 17,450,559$ 5,274,675$
See accompanying notes to basic financial statements.
Debt Service
42
Nonmajor Total
Improvement Governmental Governmental
Building Water Construction Funds Funds
50,616$ -$ 49,623$ 1,881,999$ 24,811,652$
- - - 404,082 404,082
- - - 669,420 3,325,293
- - 1,000 4,183,131 5,232,193
- 2,352,123 - 6,715,516 12,443,152
- 20,771 389,040 23,475 1,736,905
- - - - 369,356
8,458 491 18,988 160,744 366,555
24,776 - - 302,428 356,446
131,903 352,900 - 249,628 785,717
215,753 2,726,285 458,651 14,590,423 49,831,351
475,121 5,226,864
- 10,892,071
- 3,856,984
- 3,532,376
475,121 23,508,295
399,435 - 184,677 226,018 863,741
335,134 - - 733,917 1,136,916
100,753 6,471,852 12,042,512 8,053,285 26,756,184
258,379 - - 2,608,766 2,892,606
1,093,701 6,471,852 12,227,189 11,621,986 31,649,447
3,430,000 7,385,000
634,326 3,735,120
11,287 33,071
4,075,613 11,153,191
1,093,701 6,471,852 12,227,189 16,172,720 66,310,933
(877,948) (3,745,567) (11,768,538) (1,582,297) (16,479,582)
- - 527,681 4,978,579 6,883,879
- (2,016,337) - (1,300,614) (4,928,951)
- - 11,671,918 4,730,000 16,545,000
- - - - (12,460,000)
- - 733,945 271,564 1,005,509
- (2,016,337) 12,933,544 8,679,529 7,045,437
(877,948) (5,761,904) 1,165,006 7,097,232 (9,434,145)
1,375,010 2,668,607 1,077,791 20,635,770 71,913,871
497,062$ (3,093,297)$ 2,242,797$ 27,733,002$ 62,479,726$
Capital Projects
43
This page intentionally left blank.
(9,434,145)$
1. Governmental funds report capital outlays as expenditures while the government-wide
statement of activities reports depreciation expense to allocate those expenditures
over the life of the assets. As a result, fund balance decreases by the amount of
financial resources expended, whereas net position decreases by the amount of
depreciation expense charged for the year. This is the amount by which depreciation
expense exceeded capital outlay.
Capital outlay 22,944,948$
Capital contributed by developer 6,583,010
Depreciation expense (9,923,068) 19,604,890
2. In the government-wide Statement of Activities, only the gain or loss on the sale of
capital assets is reported, whereas in the governmental funds, the proceeds from the
sales increase financial resources. Thus, the change in net position differs from the
change in fund balance by the net book value of the capital assets disposed of. (349,608)
3. Net pension assets are included in net position, but are excluded from fund balances
because they do not represent current financial resources. (479,284)
4. Revenues in the government-wide Statement of Activities that do not provide current
financial resources are not reported as revenues in the governmental funds.
Deferred inflows of resources - December 31, 2014 (8,568,468)
Deferred inflows of resources - December 31, 2015 13,584,120 5,015,652
5. Bond proceeds are reported as other financing sources in governmental funds and thus
contribute to the increase in fund balance. Bond and loan principal maturities are reported
as expenditures in governmental funds thus reducing fund balance. In the government-wide
statements, however, issuing debt increases long-term liabilities while debt repayment
reduces long-term liabilities thus affecting the statement of activities.
Bond proceeds (16,545,000)
Bond and loan principal maturities 19,845,000 3,300,000
6. Interest and debt premium/discounts in the government-wide Statement of Activities
differs from the amounts reported in governmental funds because accrued interest was
calculated for long-term debt payable in addition to the amortizations of debt premiums/
discounts which are recognized respectively as expenditures and other financing sources
and uses in the governmental fund statements.
Accrued interest payable 64,816
Grant applicable towards accrued interest payable (897)
Premium on 2015 bonds issued (1,005,509)
Amortization of debt premiums/discounts 406,710 (534,880)
7. Accrued compensated absences, net OPEB obligations and net pension liability are not
payable with current financial resources and, therefore, are not reported in the
governmental funds.
Net compensated absences increase - December 31, 2015 (106,906)
Net OPEB obligation increase - December 31, 2015 (58,689)
Net pension liability increase - December 31, 2015 (263,795) (429,390)
8. Internal service funds are used by management to charge the costs of certain activities,
such as insurance, to individual funds. This amount represents a portion of the change
in net position of the internal service fund, which are reported in with governmental activities.38,651
9. Governmental funds do not report additions or deletions to certain long-term amounts related
to pensions that are included in the change in net position.
Deferred outflows - pension plan deferments 2,381,772
Deferred inflows - pension plan deferments (1,742,062)
Change in net position of governmental activities 17,371,596$
Net change in fund balances - total governmental funds
Amounts reported for governmental activities in the Statement of Activities are
different because:
See accompanying notes to basic financial statements.
CITY OF LAKEVILLE, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2015
44
CITY OF LAKEVILLE, MINNESOTA
STATEMENT OF NET POSITION - PROPRIETARY FUNDS
DECEMBER 31, 2015
Governmental
Enterprise Funds Activities -
Internal Service
Liquor Utility Total Funds
ASSETS
Current assets
Cash and investments 910,465$ 7,247,941$ 8,158,406$ 864,361$
Interest receivable 2,659 24,421 27,080 1,127
Accounts receivable 1,934 2,257,241 2,259,175 16,282
Inventory 1,714,258 254,899 1,969,157 -
Prepaid expenses 19,202 10,000 29,202 -
Total current assets 2,648,518 9,794,502 12,443,020 881,770
Non-current assets
Restricted cash and investments 323,875 323,875
Capital assets
Land 3,314,738 528,160 3,842,898
Buildings and improvements 3,868,167 22,631,261 26,499,428
Machinery and equipment 478,381 2,643,408 3,121,789
Infrastructure - 143,465,308 143,465,308
Construction in process - 2,861,022 2,861,022
Accumulated depreciation (1,439,318) (59,150,360) (60,589,678)
Net capital assets 6,221,968 112,978,799 119,200,767
Total non-current assets 6,545,843 112,978,799 119,524,642
Total assets 9,194,361 122,773,301 131,967,662 881,770
DEFERRED OUTFLOWS OF RESOURCES
Pension plan deferments - PERA 111,153 166,729 277,882
LIABILITIES
Current liabilities
Salaries payable 40,140 67,359 107,499 -
Accounts payable 1,114,830 602,192 1,717,022 46,958
Contracts payable - 26,874 26,874 -
Accrued interest payable 60,313 - 60,313 -
Deposits payable 9,743 10,600 20,343 -
Accrued compensated absences 65,848 139,988 205,836 -
Long-term debt-current 180,000 - 180,000 -
Total current liabilities 1,470,874 847,013 2,317,887 46,958
Non-current liabilities
Accrued compensated absences 64,220 57,672 121,892
Net pension liability 798,108 1,197,162 1,995,270
Net OPEB obligation 20,837 39,098 59,935
Long-term debt 2,731,996 - 2,731,996
Total non-current liabilities 3,615,161 1,293,932 4,909,093
Total liabilities 5,086,035 2,140,945 7,226,980 46,958
DEFERRED INFLOWS OF RESOURCES
Pension plan deferments - PERA 83,573 125,359 208,932
NET POSITION
Net investment in capital assets 3,309,972 112,978,799 116,288,771
Restricted for debt service 323,875 - 323,875
Unrestricted 502,059 7,694,927 8,196,986 834,812
Total net position 4,135,906$ 120,673,726$ 124,809,632 834,812$
Explanation of difference between Proprietary Funds Statement Position
and the government-wide Statement of Net Position:
The City uses an internal service fund to charge the cost of its insurance
activities to individual funds. This amount consists of the necessary
adjustment to reflect the consolidation of internal service fund activities:223,424
Net position of business-type activities 125,033,056$
See accompanying notes to basic financial statements.
Business-type Activities -
45
CITY OF LAKEVILLE, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2015
Governmental
Enterprise Funds Activities -
Internal Service
Liquor Utility Total Funds
Sales and cost of sales
Sales 13,611,294$ 13,611,294$
Cost of sales 10,322,174 10,322,174
Gross profit 3,289,120 3,289,120
Operating revenues
User charges 9,042,640$ 9,042,640 415,327$
Other 173,823 173,823 111,548
Total operating revenues 9,216,463 9,216,463 526,875
Gross profit and total operating revenues 3,289,120 9,216,463 12,505,583 526,875
Operating expenses
Personnel services 1,308,168 2,007,214 3,315,382 -
Commodities 54,970 365,739 420,709 -
Other charges and services 870,108 2,783,516 3,653,624 417,372
Disposal charges - 3,253,486 3,253,486 -
Depreciation 125,003 3,471,498 3,596,501 -
Total operating expenses 2,358,249 11,881,453 14,239,702 417,372
Operating income (loss)930,871 (2,664,990) (1,734,119) 109,503
Non-operating revenue (expense)
Intergovernmental - grants 3,762 85,754 89,516 -
Investment income 5,104 46,872 51,976 2,162
Interest, fiscal charges, bond premium (net)(144,449) - (144,449) -
Disposal of capital assets (33,380) (82,570) (115,950) -
Total non-operating revenue (expense)(168,963) 50,056 (118,907) 2,162
Income (loss) before contributions and transfers 761,908 (2,614,934) (1,853,026) 111,665
Contributed capital from developers - 5,051,505 5,051,505 -
Contributed capital from governmental activities - 3,454,797 3,454,797 -
Contributed capital from other governmental agencies - 957,570 957,570 -
Transfers from other funds - 1,557 1,557 -
Transfers to other funds (1,397,972) (508,501) (1,906,473) (50,012)
Total contributions and transfers (net)(1,397,972) 8,956,928 7,558,956 (50,012)
Change in net position (636,064) 6,341,994 5,705,930 61,653
Net position - beginning, as previously reported 5,521,329 115,455,770 773,159
Change in accounting principle (749,359) (1,124,038) -
Net position - beginning, as restated 4,771,970 114,331,732 773,159
Net position, December 31 4,135,906$ 120,673,726$ 834,812$
Explanation of difference between Proprietary Funds Statement of Revenue,
Expenses, and Changes in Fund Net Position and the Statement of Activities:
The City uses an internal service fund to charge the cost of its insurance activities
to individual funds. This amount represents the income that has been allocated
back to the business-type activities in the government-wide Statement of
Activities that is attributable to the City's business-type activities:23,002
Change in net position of business-type activities 5,728,932$
See accompanying notes to basic financial statements.
Business-type Activities -
46
This page intentionally left blank.
CITY OF LAKEVILLE, MINNESOTA
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2015
Governmental
Activities -
Internal Service
Liquor Utility Total Funds
Cash flows from operating activities
Cash received from customers 13,610,205$ 9,338,492$ 22,948,697$ -$
Cash received from general service charges - - - 513,500
Cash paid to suppliers (11,136,159) (6,316,462) (17,452,621) (378,879)
Cash paid to and for employees (1,267,255) (1,936,803) (3,204,058) -
Net cash flows from operating activities 1,206,791 1,085,227 2,292,018 134,621
Cash flows from noncapital financing activities
Intergovernmental - grant 3,762 85,754 89,516 -
Transfers from other funds - 1,557 1,557 -
Transfers to other funds (1,397,972) (508,501) (1,906,473) (50,012)
Net cash flows from noncapital financing activities (1,394,210) (421,190) (1,815,400) (50,012)
Cash flows from capital and related financing activities
Acquisition of capital assets (106,083) (732,759) (838,842) -
Proceeds from sale of capital assets 785 5,624 6,409 -
Interest and fiscal charges (149,628) - (149,628) -
Principal maturities (175,000) - (175,000) -
Net cash flows from capital and related financing activities (429,926) (727,135) (1,157,061) -
Cash flows from investing activities
Investment income received 13,145 44,318 57,463 2,073
Net change in cash and cash equivalents (604,200) (18,780) (622,980) 86,682
Cash and cash equivalents, January 1 1,838,540 7,266,721 9,105,261 777,679
Cash and cash equivalents, December 31 1,234,340$ 7,247,941$ 8,482,281$ 864,361$
(including restricted cash account of $323,875)
Reconciliation of operating income (loss) to net cash flows
from operating activities
Operating income (loss)930,871$ (2,664,990)$ (1,734,119)$ 109,503$
Adjustments
Depreciation expense 125,003 3,471,498 3,596,501 -
(Increase) decrease in assets
Accounts receivable (1,089) 122,029 120,940 (13,375)
Inventory 8,813 364,126 372,939 -
Prepaid expenses 3,186 4,191 7,377 -
Increase (decrease) in liabilities
Salaries payable 6,236 12,469 18,705 -
Accounts payable 97,542 (153,174) (55,632) 38,493
Contracts payable - (131,464) (131,464) -
Deposits payable 1,552 2,600 4,152 -
Accrued compensated absences 10,056 19,283 29,339 -
Net Pension liability, including deferred outflows/inflows 21,169 31,754 52,923 -
Net OPEB obligation 3,452 6,905 10,357 -
Total adjustments 275,920 3,750,217 4,026,137 25,118
Net cash flows from operating activities 1,206,791$ 1,085,227$ 2,292,018$ 134,621$
Supplemental schedule of non-cash financing activities:
The City assumes ownership of utility capital assets
from governmental projects and land developers.
Capital assets assumed were as follows:9,463,872$ 9,463,872$
See accompanying notes to basic financial statements.
Business-type Activities -
Enterprise Funds
47
CITY OF LAKEVILLE, MINNESOTA
STATEMENT OF FIDUCIARY NET POSITION -
AGENCY FUND
DECEMBER 31, 2015
Escrow
Fund
Assets
Cash and investments 8,513,252$
Liabilities
Deposits payable 8,513,252$
See accompanying notes to basic financial statements.
48
N O T E S T O B A S I C
F I N A N C I A L S T A T E M E N T S
Note 1 – Summary of Significant Accounting Policies
Note 2 – Cash and Investments
Note 3 – Capital Assets
Note 4 – Operating Leases
Note 5 – Long-Term Liabilities
Note 6 – Net Investment in Capital Assets
Note 7 – Net Position (Restricted)
Note 8 – Construction Commitments
Note 9 – Fund Balances
Note 10 – Contributed Capital Assets from Private Land Developers and City
Government
Note 11 – Excess of Expenditures over Appropriations
Note 12 – Deficit Fund Balances
Note 13 – Interfund Receivables and Payables
Note 14 – Interfund Transfers
Note 15 – Joint Powers Debt Commitment
Note 16 – Other Post-Employment Benefits (OPEB) Plan
Note 17 – Risk Financing and Related Insurance Issues
Note 18 – Defined Benefit Pension Plans - Statewide
Note 19 – Defined Contribution Plan – Statewide
Note 20 – Lakeville Fire Relief Association
Note 21 – Deferred Compensation Plan
Note 22 – Litigation
Note 23– Conduit Debt
Note 24 –Subsequent Events
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies
The City of Lakeville operates under the “Optional Plan A” form of government, according to applicable
State of Minnesota Statutes. The Statutes prescribe a Mayor-Council form of organization. The City
provides the following services: public safety, highways and streets, water and sanitary sewer, public
improvements, planning and zoning, culture-recreation, and general administration.
The basic financial statements of the City of Lakeville have been prepared in conformity with United States
generally accepted accounting principles (GAAP) as applied to government units. The Governmental
Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental
accounting and financial reporting principles. The City’s more significant accounting policies are
described below.
A. Financial Reporting Entity of the City
The City of Lakeville is a municipal corporation governed by an elected mayor and a four-member
council. In accordance with GASB standards, these financial statements represent the City of
Lakeville and its sole component unit. The City includes all funds, organizations, agencies,
departments, and offices that are not legally separate from such. Component units are legally
separate organizations for which the elected officials of the City are financially accountable and are
included within the basic financial statements of the City based on the nature and the significance of
their operational or financial relationships with the City.
Blended Component Unit
The Housing and Redevelopment Authority (HRA) of Lakeville, Minnesota was created by the City
to provide housing and redevelopment assistance to its citizens. The HRA provides this assistance
through the administration of various programs. The HRA is governed by a five-member Board of
Commissioners comprised of the City of Lakeville Council in accordance with Minnesota Statutes
469.003, Subdivision 6. Although it is legally separate from the City, the HRA is reported as if it
were a part of the City (blended) because the City Council is also the HRA governing board. The
Commissioners’ terms of office coincide with those of the City Council member. The City
Administrator serves as the HRA Executive Director. The operational responsibility for the HRA
rests with management of the City.
During fiscal year 2006, the HRA issued $9,230,000 in Ice Arena Lease Revenue Bonds, Series
2006, to finance the construction of the single sheet Hasse ice arena facility. Debt service will be
payable from equal lease payments to be made by the City pursuant to the lease agreement between
the HRA and the City, and in conjunction with the joint powers agreement between the City and
Independent School District No. 194.
These HRA bond obligations are combined and presented separately in the debt service funds as
debt supported by HRA lease revenue.
The HRA has not issued separate financial statements for the period ending December 31, 2015.
Information of a non-financial matter regarding the HRA can be obtained at the City’s Finance
offices, located at 20195 Holyoke Avenue, Lakeville, Minnesota 55044.
49
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies (continued)
B. Government-wide and Fund Financial Statements
The basic financial statements include both government-wide and fund financial statements. The
government-wide financial statements focus on the City as a whole (consolidation of the City,
excluding fiduciary funds) while the fund financial statements focus on the major individual funds
(reported as separate columns within the fund financial statements). Separate financial statements
are provided for governmental funds, proprietary funds, and fiduciary funds.
Both the government-wide and fund financial statements (within the basic financial statements)
categorize primary activities as either governmental or business-type. In the governmental-wide
Statement of Net Position, both the governmental and business-type activities columns (a) are
presented on a consolidated basis by column, and (b) are reflected, on a full accrual, economic
resources measurement focus, which incorporates long-term assets, receivables, deferred inflows and
outflows of resources as well as long-term debt and obligations. The City generally first uses
restricted assets for expenses incurred for which both restricted and unrestricted assets are available.
The City may defer the use of restricted assets based on a review of the specific transaction.
The government-wide Statement of Activities reflects both the gross cost and the net cost per
function category (general government, public safety, public works, and parks and recreation) which
are otherwise being supported by both program and general revenues (charges for services, grants
and contributions, property taxes, etc.). The Statement of Activities reduces gross expenses
(including depreciation) by the related program revenues and operating/capital grants and
contributions.
The program revenues must be directly associated with the function (general government, public
safety, public works, and parks and recreation) or a business-type activity. Program revenues are
derived directly from the program itself or from parties outside the City’s taxpayers or citizenry, as a
whole. The City does not allocate indirect expenses. The operating grants and contributions column
includes operating-specific and discretionary grants while the capital grants and contributions
column includes capital specific grants and contributions.
The governmental fund financial statements are presented using the current financial resources
measurement focus and the modified accrual basis of accounting. This is the manner in which these
funds are normally budgeted. Since the governmental fund statements are presented using a
measurement focus and basis of accounting different from that used in the government-wide
statement’s governmental column, a reconciliation is presented that briefly explains the adjustments
necessary to reconcile ending net position and the change in net position.
Both the City as a whole and the City’s major funds, including both governmental and enterprise
funds, as well as an agency fund, are presented utilizing the focus of the GASB Statement No. 34
reporting model. Each presentation provides valuable information that can be analyzed and
compared (between years and between governments) to enhance the usefulness of the information.
50
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies (continued)
B. Government-wide and Fund Financial Statements (continued)
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, deferred inflows and outflows of resources 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, restrictions,
or limitations.
Major governmental funds – The City reports the following major governmental funds:
General fund – The general fund is the general operating fund of the City. It is used to
account for all financial resources except for those required to be accounted for in another
fund. This fund records revenues such as property taxes, licenses and permits,
intergovernmental revenues, charges for services, fines, and investment income. Most of
the current day-to-day operations of the City are financed from this fund.
Debt service general obligation fund – This fund accounts for those bond issues that
financed debt approved by voter referendum, equipment certificates of indebtedness, and
capital improvement bonds. Revenues are provided primarily from property taxes.
Debt service G.O. Improvement fund – This fund accounts for those bond issues that
financed street, storm sewer, water, and sanitary sewer improvements. The special
assessments levied against benefited property owners are pledged toward the repayment of
the principal and interest on these bonds.
Capital projects building fund – This fund accounts for the accumulation and disbursement
of funds for the construction or improvement of public buildings.
Capital projects water fund – This fund accounts for revenues derived primarily from
connection charges at the time building permits are issued and antenna site leases with
wireless communications companies. Funds are committed towards the construction costs
of water supply lines, wells and water storage facilities, and provide the debt service to
bonds issued to finance the construction of the City’s water treatment facility and other
trunk infrastructure improvements.
Capital projects improvement construction fund – This fund accounts for complex
construction contracts that involve multiple financing resources from the City and other
government entities. Construction projects usually extend over several years before
completion.
Major proprietary funds – The City reports the following major proprietary funds:
Enterprise liquor fund – This fund is used to account for the retail operations of three off-
sale liquor stores.
51
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies (continued)
B. Government-wide and Fund Financial Statements (continued)
Enterprise utility fund – This fund is used to account for water, sanitary sewer service,
street lighting, and environmental resources provided to City customers.
Other funds – The City reports the following other funds:
Internal service fund – The internal service fund accounts for the City’s risk management
program relating to general liability, excess liability, property, and casualty insurance costs
which are charged to other departments of the City.
Agency fund – The agency fund is used to record the receipt and remittance of monies held
by the City as an agent primarily for land developers and builders that will be refunded to
the respective depositors when the conditions are satisfied in accordance with the respective
agreements.
C. Measurement Focus and Basis of Accounting
The accounting and reporting treatment applied to a fund is determined by its measurement focus.
Funds are classified into three categories: Governmental, Proprietary, and Fiduciary. To provide an
accurate cost measurement of individual activities in the fund financial statement consolidation
process, the City’s interfund activity relating to services provided by and used between functions has
been removed from these statements; exceptions are for charges between the government’s liquor
and utility function and other functions of the government.
Governmental Funds:
Measurement focus: Governmental funds are accounted for using a current financial
resources measurement focus. With this measurement focus, only current assets and
current liabilities generally are included on the balance sheet. Reported fund balance is
considered a measure of “available spendable resources.” Governmental fund operating
statements represent increases (i.e., revenues and other financing sources) and decreases
(i.e., expenditures and other financing uses) in net current assets.
Basis of accounting: Governmental funds are accounted for using the modified accrual
basis of accounting. Their revenues are recognized when susceptible to accrual (i.e., when
they become measurable and available). “Measurable” means the amount of the transaction
can be determined and “available” means collectible within the current fiscal year or soon
enough thereafter to be used to pay liabilities of the current fiscal year. For this purpose the
City generally considers revenues to be available if collected within 60 days of year end.
Revenues: Major revenues that are susceptible to accrual include property taxes, excluding
delinquent taxes received over 60 days after current fiscal year-end; special assessments,
intergovernmental revenue, charges for services, investment income, and donations. Major
revenues that are not susceptible to accrual (i.e., license and permit revenues, and
miscellaneous revenues) are recorded when received because they are not measurable until
collected.
52
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies (continued)
C. Measurement Focus and Basis of Accounting (continued)
Expenditures: Expenditures are generally recognized under the modified accrual basis of
accounting when the related fund liability is incurred, except for principal and interest on
long-term debt, other post-employment benefits, pension benefits and compensated
absences which are recognized when due.
Proprietary and Fiduciary Funds:
Measurement focus: Proprietary funds and fiduciary funds (with the exception of agency
funds) are accounted for on a flow of economic resources measurement focus. This means
that all assets, including capital assets, and all liabilities, including long-term liabilities, and
deferred inflows and outflows of resources associated with fund activity are included on the
Statement of Net Position. Proprietary fund types Statement of Revenues, Expenses and
Changes in Net Position present increases (i.e., revenues) and decreases (i.e., expenses) in
net total position.
Basis of accounting: Proprietary funds and fiduciary funds (including agency funds) are
accounted for using the accrual basis of accounting. Revenues are recognized when earned
and expenses are recorded at the time the liabilities are incurred. Unbilled utility service
receivables are recorded at current fiscal year-end.
Operating versus non-operating items: 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 revenue of the
City’s enterprise funds and internal service funds are charges to customers for sales and
services. Operating expenses for enterprise funds and internal service funds include the
cost of sales and services, administrative expenses, and depreciation on capital assets. All
revenues and expenses not meeting this definition are reported as non-operating revenues
and expenses.
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity
1. Cash and investments, and interest receivable
Cash balances from all funds are combined and invested to the extent available in certificates of
deposit, commercial paper, U.S. Government securities, and other securities authorized by State
Statutes. Earnings from such investments are allocated to the respective funds on the basis of
applicable cash balance participation by each fund.
2. Investments held by trustee
Cash and investments held by trustee represent in part the fair value of deposits that are required
to be held in trust for various City obligations. These established escrow accounts will remain in
effect until the terms and conditions of the obligations have been fulfilled. Earnings from such
investments are allocated directly to the respective funds in which the assets are held.
53
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies (continued)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (continued)
3. Taxes receivable
Property tax levies are set by the City Council in December each year and are certified to Dakota
County for collection in the following year. Such taxes become a receivable of the City and
become a lien on the respective property as of January 1. In Minnesota, most counties act as
collection agents for all property taxes. Dakota County spreads the levies over all taxable
property within the City of Lakeville. Real and personal property taxes are payable in equal
installments by property owners to Dakota County on May 15 and October 15 of each year.
Dakota County remits these and delinquent collections to the City twice a year, in January and
July. Unpaid taxes on December 31 are classified in the fund financial statements as delinquent
taxes receivable.
Taxes receivable include the following components:
Unremitted - amounts collected by Dakota County but not yet remitted to the City by December 31.
Delinquent - amounts billed to property owners but not paid.
4. Special assessments receivable
Special assessments are levied against the benefited properties for the assessable costs of special
assessment improvement projects in accordance with State Statutes. The City usually adopts the
assessment rolls when the individual projects are complete or substantially complete. The City is
obligated for the payment of special assessment debt not covered through the collection of
special assessments from property owners. Any obligation by the City would be paid by property
taxes. Special assessments are collectable over a term of years generally consistent with the term
of years of the related bond issue. Collection of annual special assessment installments
(including interest) is administered by Dakota County in the same manner as property taxes.
Property owners are allowed to prepay total future installments without interest or prepayment
penalties. As of December 31, 2015 the special assessment delinquent receivable was $8,408 in
the governmental funds and $20,940 in the proprietary enterprise utility fund. Special
assessments receivable includes the following components:
Unremitted - amounts collected by Dakota County but not yet remitted to the City by December 31.
Delinquent - amounts billed to property owners but not paid.
Deferred - assessment installments that will be billed to property owners in future years.
O t h e r - assessments for which payment has been delayed based on State Statutes or City Council action.
5. Inventory
The inventory in the general fund is stated at FIFO (first-in, first-out) cost and consists of
expendable supplies held for consumption. The cost is recognized as an expenditure at the time
the inventory items are used (consumption method). The inventories of the proprietary funds are
stated at the lower of FIFO cost or replacement market.
6. Prepaid items
Payments made to vendors for services that will benefit periods beyond the current year are
recorded as prepaid items. Prepaid items are also accounted for using the consumption method.
54
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies (continued)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (continued)
7. Unamortized bond premium and bond discount
In the governmental fund financial statements, bond premiums and discounts are recognized as
other financing sources and uses, respectively in the current fiscal year. Bond discounts and
bond premiums for the City’s government-wide financial statements are deferred and amortized
over the term of the bonds using the straight-line method. Unamortized bond premiums and
discounts are included within the non-current liabilities due in more than one year of the City’s
government-wide statement of net position.
The enterprise liquor fund includes a non-current liability for unamortized bond premium
associated with the issuance of the liquor revenue bonds of 2007. The bond premium is
amortized over the term of the bonds using the straight-line method.
8. Restricted assets (temporarily)
The government-wide Statement of Net Position “restricted assets (temporarily)” represents cash
and investments, and investments held by trustee that have imposed restrictions placed on them
by parties outside the government. These restricted amounts are pledged by bond covenants to
the repayment of City indebtedness. The assets are temporarily restricted until the terms and
conditions of the obligations have been fulfilled.
9. Capital assets
Capital assets, which include land, historical treasures, construction in process, buildings and
improvements, machinery and equipment, other improvements, and infrastructure, are reported in
the applicable governmental or business-type activity columns of the government-wide statement
of net position and proprietary funds statement of net position. Such assets are capitalized at
historical cost, or estimated historical cost for assets where actual historical cost is not available.
Donated assets are recorded as capital assets at their estimated fair value on the date of donation.
The City defines capital assets as those with an initial, individual cost of $5,000 or more with an
estimated useful life of not less than three years. The cost of normal maintenance and repairs that
do not add to the value of the asset or materially extend the life of the asset are not capitalized.
Capital outlays are recorded as expenditures in the City’s governmental fund financial
statements, which use the modified accrual basis of accounting. Capital outlays that meet the
City’s capitalization criteria are reported in the government-wide Statement of Net Position and
proprietary funds statement of net position, both of which use the full accrual basis of accounting.
Interest incurred during the construction phase of capital assets for business-type activities is
included as part of the capitalization value of assets constructed.
55
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies (continued)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (continued)
9. Capital assets (continued)
Depreciation on the capital assets is recorded in the government-wide and proprietary fund
financial statements. Land, historical treasures, and construction in process are not depreciated.
Capital assets are depreciated using the straight-line method over their estimated useful lives as
follows:
Buildings and improvements 50-75 years
Machinery and equipment 3-15 years
Other improvements 10-50 years
Infrastructure 20-50 years
10. Deferred outflows/inflows of resources
In addition to assets, the statement of financial position 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 a future period and so will not be recognized as an
outflow of resources (expense/expenditure) until then. The City has one item that qualifies for
reporting in this category. It is the deferred outflows of resources related to pensions reported in
the government-wide and proprietary fund statements of net position. This deferred outflow
results from differences between expected and actual experience, changes of assumptions,
differences between projected and actual earnings on pension plan investments, and contributions
to the plan subsequent to the measurement date and before the end of the reporting period. These
amounts are deferred and amortized as required under pension standards.
In addition to liabilities, statements of financial position or balance sheets will sometimes report a
separate section for deferred inflows of resources. This separate financial statement element
represents an acquisition of net position that applies to future periods and so will not be
recognized as an inflow of resources (revenue) until that time. The City has two items which
qualify for reporting in this category.
The first item, unavailable revenue, is reported only in the governmental funds Balance Sheet.
The governmental funds report unavailable revenue from two sources: property taxes and special
assessments. These amounts are deferred and recognized as an inflow of resources in the period
the amounts become available.
The second item, deferred inflows of resources related to pensions, is reported in the
government-wide and proprietary fund statements of net position. This deferred inflow results
from differences between expected and actual experience, changes of assumptions, and the
difference between projected and actual earnings on pension plan investments. These amounts
are deferred and amortized as required under pension standards.
56
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies (continued)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (continued)
11. Compensated absences
It is the City’s policy to permit employees to accumulate earned but unused leave benefits as
either paid time off (PTO), or vacation and sick leave. Under the City’s personnel policies and
collective bargaining contracts, City employees are granted leave benefits in varying amounts
based on length of services. PTO accruals vary from 18 to 30 days per year, vacation accruals
vary from 10 to 20 days per year and sick leave accrues at a rate of 12 days per year.
As benefits accrue to employees, the accumulated PTO, vacation and vested sick leave is
reported as an expense and liability in the government-wide and proprietary fund financial
statements. Accrued PTO, vacation and a percentage of sick leave is paid to employees upon
termination (severance) only if they have matured and is reported as an expenditure in the
governmental fund that will pay for it. No liability is recorded for non-vesting accumulating
rights to receive sick leave benefits.
12. Net pension liability
For purposes of measuring the net pension liability/asset, deferred outflows/inflows of resources,
and pension expense, information about the fiduciary net position of the applicable pension
additions to/deductions from the pension plan’s fiduciary net position have been determined on
the same basis as they are reported by the plan except that the Public Employees Retirement
Association (PERA) pension plan’s fiscal year end is June 30. For this purpose, plan
contributions are recognized as of employer payroll paid dates and benefit payments and refunds
are recognized when due and payable in accordance with the benefit terms. Investments are
reported at fair value.
13. Net other post-employment benefits (OPEB) obligation
In accordance with the provisions of GASB Statement No. 45, Accounting and financial
Reporting by Employers for Post-employment Benefits Other Than Pensions, an actuarial
valuation is required to be computed and reported for the City’s post-employment health
insurance benefits provided to eligible employees through the City’s Other Post-Employment
Benefits Plan. OPEB is reported as an expense on a pay-as-you-go basis and is accrued as it is
earned. The net OPEB obligation liability and corresponding expense for governmental activities
is reported within the government-wide financial statements. The net OPEB obligation liability
and corresponding expense for enterprise funds are recorded within those funds.
14. Long-term obligations
Long-term obligations are recorded in the City’s government-wide and proprietary fund
statements of net position when they become a liability of the City. Long-term obligations are
recognized as a liability of a governmental fund only when due or when payment is made to the
paying agent.
57
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies (continued)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (continued)
15. Net Position Classifications
In the government-wide and proprietary fund financial statements, net position represents the
difference between assets, deferred outflows of resources, 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 elements of net position that do not meet the
definition of “restricted” or “net investment in capital assets.”
16. Fund balance classifications
In the fund financial statements, governmental fund reports 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 amounts that can be used only for the specific purposes
determined by a formal action of the government’s highest level of decision-making
authority. The City Council is the highest level of decision-making authority for the
government that can, by adoption of a resolution prior to the end of the fiscal year,
commit fund balance. Once adopted, the limitation imposed by the resolution
remains in place until a similar action is taken (the adoption of another resolution) to
remove or revise the limitation.
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. Pursuant to City resolution, the
City Administrator and the 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 the other funds.
The City will endeavor to maintain an unrestricted (committed, assigned and unassigned) fund
balance in the General fund of an amount not less than 40 and not greater than 50 percent of the
next year’s budgeted expenditures of the General fund. This will assist in maintaining an adequate
level of fund balance to provide for cash flow requirements and contingency needs. At December
31, 2015, the unrestricted fund balance of the General Fund was 47.0 percent of the subsequent
year’s budgeted expenditures.
58
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies (continued)
D. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Net Position or Equity (continued)
16. Fund balance classifications (continued)
When both restricted and unrestricted resources are available for use, it is the City’s policy to first
use restricted resources, and 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.
E. Revenue, Expenditures and Expenses
1. In the governmental fund financial statements property tax revenue is recognized when it
becomes measurable and available to finance expenditures of the current fiscal year. All
delinquent taxes receivable are fully offset by deferred inflow of resources in the governmental
fund financial statements. Taxes due from Dakota County on December 31 are included in
revenue since they are remitted to the City within 60 days after December 31. In the
government-wide Statement of Activities property tax revenue is recognized when levied.
2. In the governmental fund financial statements special assessments principal and interest are
recognized as revenue when they become measurable and available to finance expenditures of the
current fiscal year. All delinquent and deferred assessments receivable are fully offset by
deferred inflow of resources in the fund financial statements. Both the principal and interest on
special assessments are payable in installments over a term of years that matches the scheduled
payments for the bond issue which financed the project. In the government-wide Statement of
Activities special assessments revenue is recognized when levied.
3. Investment income is recorded as revenue in the year earned. Elements of investment income
include interest earned on investments and unrealized gains or losses on net increases or
decreases in the fair value of investments.
4. Certain grants and aids received by the City require that eligible expenditures be made in order to
earn the grant. Revenue for these grants is recorded in the period of which eligible expenditures
are made.
5. Enterprise utility fund service charges are recognized when earned with no allowance for
uncollectibles because delinquent accounts deemed uncollectible during the normal billing
process are certified to Dakota County as a property tax lien. Quarterly utility service charges
provided to customers but unbilled are included as receivables as of December 31.
6. Interfund service transactions are accounted for as expenditures or expenses. Service transaction
payments to a fund are recorded as an expenditure or expense in the paying fund and conversely
recorded as a reduction of expenditure or expense in the fund that is receiving payment.
Interfund service transactions within the respective categories of governmental activities and
business-type activities in the government-wide Statement of Activities are eliminated.
59
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 1 – Summary of Significant Accounting Policies (continued)
F. Cash Flows
For purposes of the Statement of Cash Flows, the City considers all highly liquid debt
instruments with an original maturity from the time of purchase of three months or less to be cash
equivalents. The proprietary funds’ equity in the government-wide cash and investments
management pool is considered to be a cash equivalent.
G. Change in Accounting Principle
During the year ended December 31, 2015, the City implemented GASB Statement No. 68, Accounting and
Financial Reporting for Pensions—an amendment of GASB Statement No. 27, and GASB Statement No.
71, Pension Transition for Contributions Made Subsequent to the Measurement Date—an amendment of
GASB Statement No. 68. These statements prescribe major changes in how employers account for pension
benefit expenses and liabilities. In financial statements prepared using the economic resources
measurement focus and accrual basis of accounting (government-wide and proprietary fund financial
statements), an employer is required to recognize a liability for its share of the net pension liability
provided through the pension plan. An employer is also required to recognize pension expense and report
deferred outflows of resources and deferred inflows of resources for its share related to pensions. These
standards required retroactive implementation, which resulted in the restatement of net position as of
December 31, 2014. The details of the restatement are as follows:
Proprietary
Governmental Business-Type Fund Financial
Activities Activities Statements
Change in accounting principle
PERA defined benefit pension plans
Net pension liability (11,766,779)$ (1,952,986)$ (1,952,986)$
Deferred outflows related to pensions 604,873 79,589 79,589
Total - PERA (11,161,906) (1,873,397) (1,873,397)
Association defined benefit pension plan
Net pension asset 3,129,236 – –
Total (8,032,670)$ (1,873,397)$ (1,873,397)$
Government-Wide Financial Statements
Note 2 – Cash and Investments
A. Components of Cash and Investments
The City’s cash surpluses are pooled and invested in accordance with State Statute and City investment
policy. Investment earnings and unrealized gains and losses are allocated to funds on the basis of average
cash balances. Investments are stated at fair value, which is the amount that a financial instrument could be
exchanged for in a current transaction between willing parties. The investments are not identified with
specific funds. Investments held by trustee include balances held in segregated accounts for specific
purposes. Interest earned on these trustee accounts is allocated directly to the responsible fund. The
amounts represent funds held as required by the debt obligation covenants and other agreements.
60
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 2 – Cash and Investments (continued)
A. Components of Cash and Investments (continued)
The City’s cash and investments as of December 31, 2015 consist of the following:
Cash on hand 13,165$
Deposits 580,354
Investments 81,650,016
Total cash and investments 82,243,535$
The City’s cash and investments as of December 31, 2015 are presented in the financial statements as
follows:
Statement of Net Position
Cash and investments 58,997,046$
Temporarily restricted cash and investments 323,875
Temporarily restricted investments held by trustee 14,409,362
Statement of Fiduciary Net Position
Cash and investments 8,513,252
Total cash and investments 82,243,535$ B. Deposits
In accordance with applicable Minnesota Statutes, the City is permitted to maintain deposits at depository
banks authorized by the City Council, including checking accounts, savings accounts, and non-negotiable
certificates of deposits. The City’s deposit policy does not limit depository choices. The following is
considered the most significant risk associated with deposits:
Custodial Credit Risk – In the case of deposits, this is the risk that in the event of a bank failure,
the City’s deposits may be lost.
Minnesota Statutes require that all deposits be protected by federal deposit insurance, corporate
surety bond, or collateral. The market value of collateral pledged must equal 110 percent of the
deposits not covered by federal deposit insurance or corporate surety bonds. Authorized collateral
includes treasury bills, notes, and bonds; issues of U.S. government agencies; general obligations
rated “A” or better; revenue obligations rated “AA” or better; irrevocable standard letters of credit
issued by the Federal Home Loan Bank; and certificates of deposit. Minnesota Statutes require
that securities pledged as collateral be held in safekeeping in a restricted account at the Federal
Reserve Bank or in an account at a trust department of a commercial bank or other financial
institution that is not owned or controlled by the financial institution furnishing the collateral. The
City does not have a formal policy addressing this risk.
At year-end, the carrying amount of the City’s deposits was $580,354 while the balance on the
bank records was $453,796. The City does not have any custodial credit risk for its deposits since
all City deposits held in safekeeping by the City's banks are fully protected by insurance and/or
collateral as required by Minnesota Statutes and authorized by the City Council.
61
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 2 – Cash and Investments (continued)
C. Investments
The City’s investments as of December 31, 2015 are as follows:
Less
Investment Type Rating Agency Fair Value Than 1 1 - 5 6 - 10
Money market funds
Minnesota Municipal (4M) N/R N/A 4,407,083$ -$ -$ -$
Wells Fargo Advantage AAAm S&P 1,286,663 - - -
First American Treasury
Obligation AAAm S&P 696,872 - - -
Certificates of deposit N/R N/A 25,617,575 16,783,000 8,834,575 -
U.S. treasury securities N/R N/A 13,711,487 2,344,341 11,367,146 -
U.S. government agencies AA+ S&P 24,066,484 7,148,747 15,904,712 1,013,025
Municipal Bonds AAA S&P 299,472 - 299,472 -
Municipal Bonds Aa1 Moody's 3,817,963 701,115 2,770,355 346,493
Municipal Bonds AA+ S&P 566,363 - - 566,363
Municipal Bonds Aa2 Moody's 2,227,129 335,000 1,609,462 282,667
Municipal Bonds AA S&P 1,484,448 405,778 977,694 100,976
Municipal Bonds Aa3 Moody's 1,352,145 650,541 596,858 104,746
Municipal Bonds AA- S&P 1,303,980 - 1,303,980 -
Municipal Bonds A1 Moody's 106,023 - - 106,023
Municipal Bonds A+ S&P 267,945 - 267,945 -
Municipal Bonds A2 Moody's 438,384 185,089 253,295 -
Total investments 81,650,016$ 28,553,611$ 44,185,494$ 2,520,293$
N/R - Not rated N/A - Not applicable
Credit Risk
Maturity Duration in Years
Interest Risk -
The 4M Fund is regulated by Minnesota Statutes and the Board of Directors of the League of Minnesota
Cities and is an external investment pool not registered with the Securities and Exchange Commission
(SEC) that follows the same regulatory rules of the SEC under rule 2a7. The City’s investment in the 4M
Fund is measured at the net asset value per share provided by the pool, which is based on an amortized cost
method that approximates fair value. The City’s investment policy does not place any further limitations
beyond the state statute requirements for the risk categories described below. Investments are subject to
various risks, the following of which are considered the most significant;
Custodial Credit Risk – For investments, this is the risk that in the event of a failure of the
counterparty to an investment transaction (typically a broker-dealer) the City would not be able to
recover the value of its investments or collateral securities that are in the possession of an outside
party. The City does not have any custodial credit risk for its investments since all of the City’s
investments held in safekeeping by the City's brokerage firm in the City's name are insured and
registered.
62
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 2 – Cash and Investments (continued)
C. Investments (continued)
Credit Risk – This is the risk that an issuer or other counterparty to an investment will not fulfill
its obligations. State Statutes authorize investments in money market funds, certificates of
deposit, commercial paper, U.S. treasury securities, U.S. government agencies, and other
securities provided they meet the two highest quality ratings of nationally recognized rating
organizations.
Concentration Risk – This is the risk associated with investing a significant portion of the City’s
investments (considered 5 percent or more) in the securities of a single issuer, excluding U.S.
guaranteed investments (such as treasuries), investment pools, and mutual funds.
As of December 31, 2015, the City’s investment portfolio includes the following securities of
single issuers exceeding 5 percent:
F e d e r a l H o m e L o a n B a n k 1 2 . 7 %
Federal National Mortgage Association 8.9%
Federal Home Loan Mortgage Corporation 5.1%
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).
D. Investment Policy
The City’s investment policy limits exposure to interest rate risk by investing in shorter term
securities (maturing in one year or less) to meet current operating cash requirements. Longer term
investments are to be purchased with the intent to match maturity periods with future funding
needs for capital replacement and debt obligations. The City will not purchase investments that, at
the time of investment, cannot be held to maturity. This does not mean that an investment cannot
be sold prior to maturity.
Investment activity will focus upon protection of taxpayer dollars and investment income,
consistent with statutory authorization and financial prudence. The City will conduct its
investment transactions with several legal competing, reputable investment security dealers and
qualifying banks. The City will invest only in the following instruments or those others that may
subsequently be permitted by State Statute.
United States Treasury obligations
Federal Agency Securities
Certificates of Deposit
Commercial Paper
Banker’s Acceptance
Money Market Funds
State and local securities
63
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 3 – Capital Assets
A summary of changes in governmental capital assets during the year ended December 31, 2015 are as
follows:
Balance Balance
Governmental Activities January 1 Additions Deletions December 31
Depreciable
Buildings and improvements 54,601,639$ 354,784$ (36,665)$ 54,919,758$
Machinery and equipment 20,961,927 2,006,444 (1,172,129) 21,796,242
Other improvements 5,473,163 1,414,713 - 6,887,876
Infrastructure
Streets 129,579,624 8,762,003 (2,890,279) 135,451,348
Storm sewer 58,744,107 5,412,062 (79,293) 64,076,876
Parks 19,777,378 3,428,516 (704,039) 22,501,855
Total depreciable at cost 289,137,838 21,378,522 (4,882,405) 305,633,955
Less accumulated depreciation
Buildings and improvements (12,741,494) (1,168,531) 10,377 (13,899,648)
Machinery and equipment (13,147,184) (1,578,797) 1,161,833 (13,564,148)
Other improvements (2,445,795) (300,929) - (2,746,724)
Infrastructure
Streets (73,235,019) (4,804,702) 2,597,131 (75,442,590)
Storm sewer (16,088,178) (1,230,479) 61,538 (17,257,119)
Parks (12,022,692) (839,630) 701,918 (12,160,404)
Total accumulated depreciation (129,680,362) (9,923,068) 4,532,797 (135,070,633)
Total depreciable, net 159,457,476$ 11,455,454$ (349,608)$ 170,563,322$
Non-depreciable
Land 23,501,740$ 1,751,301$ -$ 25,253,041$
Historical treasures 100,000 - - 100,000
Construction in process 17,518,207 18,166,845 (11,768,710) 23,916,342
Total non-depreciable 41,119,947 19,918,146 (11,768,710) 49,269,383
Depreciable, net 159,457,476 11,455,454 (349,608) 170,563,322
Total capital assets, net 200,577,423$ 31,373,600$ (12,118,318)$ 219,832,705$
Depreciation expense was charged to governmental functions as follows:
General government 266,850$
Public safety 1,118,073
Public works 6,730,957
Parks and recreation 1,807,188
Total depreciation expense 9,923,068$
64
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 3 – Capital Assets (continued)
A summary of changes in business-type capital assets during the year ended December 31, 2015 are as
follows:
Balance Balance
Business-type Activities January 1 Additions Deletions December 31
Depreciable
Buildings and improvements 26,141,914$ 386,237$ (28,723)$ 26,499,428$
Machinery and equipment 3,108,569 133,031 (119,811) 3,121,789
Infrastructure
Water 75,810,528 5,676,821 (226,972) 81,260,377
Sanitary sewer 58,303,551 3,901,380 - 62,204,931
Total depreciable at cost 163,364,562 10,097,469 (375,506) 173,086,525
Less accumulated depreciation
Buildings and improvements (7,950,647) (563,147) 22,416 (8,491,378)
Machinery and equipment (1,675,638) (219,180) 91,953 (1,802,865)
Infrastructure -
Water (26,596,560) (1,610,658) 138,778 (28,068,440)
Sanitary sewer (21,023,479) (1,203,516) - (22,226,995)
Total accumulated depreciation (57,246,324) (3,596,501) 253,147 (60,589,678)
Total depreciable, net 106,118,238$ 6,500,968$ (122,359)$ 112,496,847$
Non-depreciable
Land 3,812,073$ 30,825$ -$ 3,842,898$
Construction in process 2,693,324 255,703 (88,005) 2,861,022
Total non-depreciable 6,505,397 286,528 (88,005) 6,703,920
Depreciable, net 106,118,238 6,500,968 (122,359) 112,496,847
Total capital assets, net 112,623,635$ 6,787,496$ (210,364)$ 119,200,767$
Depreciation expense was charged to enterprise funds as follows:
Liquor fund 125,003$
Utility fund 3,471,498
Total depreciation expense 3,596,501$
65
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 4 – Operating Leases
Operating Lease (Ames Arena):
On December 1, 2006, the City (as lessor) entered into a joint powers agreement with the Lakeville Arenas
(a Minnesota Joint Powers entity, as lessee), whereas the Lakeville Arenas is responsible for operations and
maintenance of the Ames Arena. Lakeville Arenas shall pay all debt service requirements due on the Gross
Revenue Recreation Facility Bonds of 1999 less payments received by Lakeville Hockey Association, Inc.
(Boosters) towards debt service payments in accordance with the revised and restated gaming revenue
agreement dated February 16, 1999. The agreement will remain in effect until August 1, 2019. The cost of
the leased space is included in the total Ames ice arena cost of $4,143,826, of which $1,559,610 has been
depreciated to date. These amounts are recorded in the City’s capital assets. The 2015 lease revenue totaled
$88,626.
Operating Sublease (Hasse Arena):
On December 1, 2006, the City (as sublessor) entered into a joint powers agreement with the Lakeville
Arenas (a Minnesota Joint Powers entity, as sublessee), whereas the Lakeville Arenas is responsible for
operations and maintenance of the Hasse Arena. In addition, the joint powers agreement calls for
Independent School District No. 194 to provide for one-half of all future ice arena lease payments to the
City. Lease agreement payments coinciding with the bonded debt service schedule commencing February
1, 2007 will remain in effect until February 1, 2032. The 2015 lease revenue totaled $314,506.
Operating Lease (Heritage Liquor Store):
The Heritage Liquor Store (located in Heritage Shopping Center) consists of 8,859 square feet of space at a
monthly lease cost of $14,600 plus a proportionate share of real estate taxes, property insurance, special
assessments, common area maintenance, and management fees. The lease has a term of fifteen years and
expired on June 30, 2015. The City subsequently renewed the lease for an additional four years expiring
June 30, 2019 at a monthly lease cost of $11,812. The fiscal year 2015 lease expense totaled $146,660.
The City owns the land and buildings of its other two liquor stores.
Note 5 – Long-Term Liabilities
General Obligation Bonds
The City's general obligation bonds are supported primarily from revenues derived from property tax
levies, special assessment levies, tax increment levies, state-aid street revenue, water connection revenue
charges, ice arena operations, and contributions by an organization conducting lawful gaming at approved
locations. These bonds are backed by the full-faith and credit of the City.
66
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 5 – Long-Term Liabilities (continued)
Revenue Bonds
The following revenue bonds are not general obligations of the City and accordingly are not backed by the
full-faith and credit of the City.
Governmental Activities
The Gross Revenue Recreation Facility Bonds, Series 1999, are supported primarily from revenues
derived from ice arena operations and contributions from gaming revenues.
The HRA Ice Arena Lease Revenue Bonds, Series 2006, will be payable from equal lease payments to
be made by the City pursuant to the lease agreement between the HRA of Lakeville, the City, and in
conjunction with the joint powers agreement between the City and Independent School District No.
194. The City’s portion of the lease payments are supported by property tax levies.
The lease, consisting of land, building and equipment of the Hasse Arena located at 8525 215th Street
West, requires the City to provide lease payments sufficient to pay when due, the principal and interest
on the HRA Ice Arena Lease Revenue Bonds, Series 2006 ($9,230,000 original amount issued), of
which the City paid $607,444 in 2015. Title to the arena will transfer to the City upon completing the
prescribed lease payments coinciding with the bonded debt service schedule commencing February 1,
2007 and maturing February 1, 2032. The cost of the leased space is included in the total Hasse ice
arena cost of $7,505,840, of which $1,136,418 has been depreciated to date. These amounts are
recorded in the HRA’s capital assets.
Business-type Activities
The Liquor Revenue Bonds, Series 2007, are payable solely from enterprise liquor fund revenues.
Future revenue pledged for the payment of long-term debt is as follows:
Bond Issue Use of Proceeds Type Term of Pledge
Remaining
Principal and
Interest
Principal and
Interest Paid
Pledged
Revenue
Received
Recreation Facility Ice arena Arena Revenues 2015-2019 722,565$ 176,145$ 183,626$
Ice Arena Lease Revenue Additional ice arena Lease Revenues 2015-2032 11,345,656 607,444 314,506
Liquor Revenue Additional Liquor Store Liquor Sales Revenue 2015-2027 3,848,125 324,125 3,289,120
Current YearRevenue Pledged
Metropolitan Council Loan Agreement 2006
On February 21, 2006, the City entered into a loan agreement with the Metropolitan Council for the
purpose of acquiring property for a commuter vehicle park and pool lot located within a proposed state
trunk highway right-of-way. The Metropolitan Council provided a loan to the City in the amount of
$1,466,300 to finance the acquisition of the property. In 2015, the City made no payments on this loan. As
of December 31, 2015 the balance of the loan is $1,159,843. The loan (free of interest charge) will be
discharged by the Metropolitan Council upon the conveyance of the property to the highway authority at an
undetermined future date.
67
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 5 – Long-Term Liabilities (continued)
General Obligation Refunding Bonds, Series 2012 B
On August 15, 2012, the City issued $22,450,000 in General Obligation Refunding Bonds, Series 2012 B.
The proceeds of this issue were used to retire, in advance of their stated maturities, the 2015 through 2026
maturities of the Street Reconstruction Bonds, Series 2003 A (refunded principal of $10,035,000) on their
February 1, 2014 call date; and the 2016 through 2030 maturities of the Capital Improvement Plan Bonds,
Series 2004 A (refunded principal $12,460,000) on their February 1, 2015 call date.
The refunding transaction yielded a net savings to the City of $2,768,474 with a present value economic
gain of $2,235,119.
General Obligation Refunding Bonds, Series 2014 B
On August 20, 2014, the City issued $12,660,000 in General Obligation Refunding Bonds, Series 2014 B.
The proceeds of this issue will be used to retire, in advance of their stated maturities, the 2018 through
2032 maturities of the Capital Improvement Plan Bonds, Series 2007 D (refunded principal of $11,185,000)
on their February 1, 2017 call date; and the 2017 through 2026 maturities of the Street Reconstruction
Bonds, Series 2005 A (refunded principal $1,950,000) on their February 1, 2016 call date.
The proceeds of the new bonds were placed in an escrow account (established by the City) whereby Open
Market Securities were purchased by the trustee in adequate amounts sufficient to be responsible for the
payment of the total called principal amount ($13,135,000) in addition to the series 2014 B accrued interest
payments of $228,452 due February 1, 2015, $255,413 due August 1, 2015, $255,413 due February 1,
2016, $221,931 due August 1, 2016 and $221,931 due on the crossover refunding date of February 1, 2017.
The refunding transaction yielded a net savings to the City of $1,628,573 with a present value economic
gain of $1,057,711.
General Obligation Improvement Bonds, Series 2015 A
On August 20, 2015, the City issued $16,545,000 in General Obligation Improvement Bonds, Series 2015
A to finance various improvement projects in the City. The bonds mature February 1, 2036, with a
provisional call date of February 1, 2026, bearing interest rates ranging from 1.8% to 5.0%. Debt service
will be payable from municipal state-aid, water operating funds, property taxes and special assessments
levied to benefiting properties.
68
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 5 – Long-Term Liabilities (continued)
The total long-term bonded debt outstanding as of December 31, 2015 (including amounts to be called
2/1/2016 of $1,950,000, and 2/1/2017 of $11,185,000) is summarized as follows:
Maturities Interest Rates Amount
Governmental Activity Bonds
General obligation bonds
Capital improvement bonds 2030-2032 1.75%-5.00% 36,020,000$
Street reconstruction bonds 2016-2030 1.75%-5.95% 18,845,000
G.O. Improvement bonds 2016-2036 0.95%-5.00% 34,130,000
Tax increment bonds 2022 4.00%-4.20% 1,680,000
State-aid street revenue bonds 2018-2036 0.75% - 5.00% 7,895,000
Arena revenue bonds 2016-2019 3.25%-5.40%635,000
Total general obligation bonds 99,205,000
HRA lease revenue bonds 2032 4.25%-4.625%7,855,000
Total governmental activity bonds 107,060,000
Business-Type Bonds
Liquor revenue bonds 2027 5.00%2,895,000
Total long-term bonded debt outstanding 109,955,000$
The City is in compliance with all significant bond covenants. The annual requirements to amortize all
outstanding bonded debt as of December 31, including interest payments of $29,712,329 are as follows:
Year Ending
December 31,Principal Interest Principal Interest Total
2016 7,885,000$ 3,840,269$ 180,000$ 140,250 $ 23,904,243$
2017 17,725,000 3,377,350 190,000 131,000 11,453,814
2018 6,785,000 2,881,027 200,000 121,250 20,184,430
2019 6,525,000 2,649,016 210,000 111,000 8,750,608
2020 6,275,000 2,424,644 220,000 100,250 8,255,840
2021-2025 29,285,000 8,802,384 1,290,000 318,750 35,419,585
2026-2030 22,070,000 3,895,717 605,000 30,625 23,277,421
2031-2035 9,460,000 867,797 - - 8,470,855
2036 1,050,000 21,000 - - 117,012
Total 107,060,000$ 28,759,204$ 2,895,000$ 953,125$ 139,833,808$
Business-typeGovernmental
69
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 5 – Long-Term Liabilities (continued)
Accrued Compensated Absences
Governmental Activities
The governmental funds accumulated liability for accrued PTO, vacation and vested sick pay
(including applicable salary-related payments) as of December 31, 2015 is $2,530,614. This amount is
included in the non-current liabilities of the government-wide Statement of Net Position.
In the event of employee separation from the City, the general fund and the responsible special revenue
fund will pay the accumulated vacation portion.
Business-type Activities
The accumulated liability for accrued PTO, vacation and vested sick pay for proprietary enterprise
funds (including applicable salary-related payments) as of December 31, 2015 is $327,728. In the
event of employee separation from the City, the responsible enterprise fund will pay the accumulated
severance portion. These amounts are recorded as a liability and as an expense when earned in the
responsible funds.
Unamortized Bond Premium and Discount
Unamortized bond premium and bond discount included within non-current liabilities are as follows:
Governmental Business-type
Unamortized bond premium 4,888,965$ 16,996$
Unamortized bond discount (149) -
Total unamortized (net)4,888,816$ 16,996$
Net Pension Liability – PERA
The general fund for governmental activities and the liquor fund and utility fund for the business-type
activities will be used to liquidate the net pension liability.
Net Other Post-Employment Benefit (OPEB) Obligation
Other post-employment benefit obligations in prior years have been liquidated primarily by the general
fund for governmental activities and by the liquor fund and utility fund for business-type activities.
70
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 5 – Long-Term Liabilities (continued)
During the year ended December 31, 2015 the following changes occurred in non-current liabilities:
Balance Balance Due Within
January 1 Additions Deletions December 31 One Year
Governmental Activities
G.O. Improvement bonds 69,690,000$ -$ (14,825,000)$ 54,865,000$ 4,160,000$
Other bonds 40,670,000 16,545,000 (5,020,000) 52,195,000 3,725,000
Total bonds 110,360,000 16,545,000 (19,845,000) 107,060,000 7,885,000
Metropolitan Council loan 1,159,843 - - 1,159,843 -
Total long-term debt 111,519,843 16,545,000 (19,845,000) 108,219,843 7,885,000
Accrued compensated absences 2,423,708 1,331,000 (1,224,094) 2,530,614 1,224,094
Unamortized bond premium/discount 4,290,017 1,005,509 (406,710) 4,888,816 -
Net pension liability - PERA (1)- 15,522,826 (3,492,252) 12,030,574 -
Net OPEB obligation 285,317 76,418 (17,729) 344,006 -
Total governmental activities 118,518,885 34,480,753 (24,985,785) 128,013,853 9,109,094
Business-type Activities
Liquor revenue bonds 3,070,000 - (175,000) 2,895,000 180,000
Accrued compensated absences 298,389 235,175 (205,836) 327,728 205,836
Unamortized bond premium 18,529 - (1,533) 16,996 -
Net pension liability - PERA (1)- 2,441,365 (446,095) 1,995,270 -
Net OPEB obligation 49,578 13,486 (3,129) 59,935 -
Total business-type activities 3,436,496 2,690,026 (831,593) 5,294,929 385,836
Total governmental and
business-type activities 121,955,381$ 37,170,779$ (25,817,378)$ 133,308,782$ 9,494,930$
(1) Additions to the net pension liability – PERA includes the change in accounting principle described in Note 1.
Note 6 – Net Investment in Capital Assets
Net investment in capital assets as of December 31, 2015 is calculated as follows:
Governmental Business-type Total
Capital assets, net of depreciation 219,832,705$ 119,200,767$ 339,033,472$
Less applicable:
Bonds payable (76,120,000) (2,895,000) (79,015,000)
Loan payable (1,159,843) - (1,159,843)
Unamortized bond premium/
discount (net)(2,432,920) (16,996) (2,449,916)
Unspent bond proceeds 1,748,194 - 1,748,194
Invested in capital assets, net 141,868,136$ 116,288,771$ 258,156,907$
The City has $30,940,000 in bonds and $2,455,896 in bond premium/discount (net) that are unrelated in the
calculation above.
71
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 7 – Net Position (Restricted)
The government-wide Statement of Net Position reports restricted amounts in the net position section.
These amounts represent assets (less any related liabilities) that have imposed restrictions placed on them
by parties outside the City government. Net position restricted for debt service represents assets pledged by
bond covenant to the repayment of City bond obligations. The government-wide restricted net position is
as follows:
Governmental Business-type
Activities Activities Total
Restricted Net Position
Cash and investments 21,616,859$ -$ 21,616,859$
Temporarily restricted
Cash and investments - 323,875 323,875
Investments held by trustee 14,409,362 - 14,409,362
Net pension asset 2,649,952 2,649,952
Receivables 14,845,413 - 14,845,413
Deferred outflows - pension plan deferments 656,105 656,105
Less related liabilities (20,316,745) - (20,316,745)
Total restricted net position 33,860,946$ 323,875$ 34,184,821$
Note 8 – Construction Commitments
The City has outstanding construction and build projects as of December 31, 2015. These projects include
street reconstruction projects, equipment purchases, land purchases and other water and sanitary sewer
projects. The City’s commitments with contractors and other governmental entities are shown as follows:
Remaining
Projects Spent-to-Date Commitment
Governmental Activities
Improvement Project 15-02 Phase I 8,191,368$ 645,291$
Improvement Project 15-02 Phase II - 9,434,848
Holyoke Avenue water tower 1,399,634 1,666,357
Fire Trucks - 1,103,672
Antlers park land acquisition 50,000 625,000
Well #20 299,278 204,741
Water Treatment Facility expansion 2,910,970 97,300
City of Lakeville/City of Apple Valley
sanitary sewer interceptor 53,591 55,614
Total governmental 12,904,841$ 13,832,823$
72
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 9 – Fund Balances
At December 31, 2015, a summary of the governmental fund balance classification are as follows:
Genera l G.O.Wate r Improvement
General Fund Obligation Improvement Building Fund Construction Nonmajor Total
Nonspendable
Inventory 403,002$ –$ –$ – $ –$ –$ –$ 403,002$
Prepaid items 44,282 – – – – – – 44,282
Total nonspendable 447,284 – – – – – – 447,284
Restricted
Debt Service – 17,450,559 5,274,675 – – – 4,674,087 27,399,321
Public improvements – – – – – 1,748,194 – 1,748,194
Street construction – – – – – – 3,405,118 3,405,118
Park development – – – – – – 2,885,136 2,885,136
Tax increment – – – – – – 199,326 199,326
Public communications – – – – – – 3,254 3,254
Special Service District – – – – – – 19,407 19,407
Total restricted – 17,450,559 5,274,675 – – 1,748,194 11,186,328 35,659,756
Committed
Emerald Ash Borer 45,000 – – – – – – 45,000
Public improvements – – – – – 893,695 – 893,695
Public buildings – – – 497,062 – – – 497,062
Pavement management – – – – – – 1,336,005 1,336,005
Storm sewer trunk system – – – – – – 5,009,218 5,009,218
Sanitary sewer trunk system – – – – – – 5,014,924 5,014,924
Trail improvement – – – – – – 629,555 629,555
Park improvement – – – – – – 67,791 67,791
Capital acquisitions – – – – – – 3,930,113 3,930,113
Public communications – – – – – – 508,342 508,342
Economic development – – – – – – 50,726 50,726
Total committed 45,000 – – 497,062 – 893,695 16,546,674 17,982,431
Unassigned 11,882,644 – – – (3,093,297) (399,092) – 8,390,255
Total 12,374,928$ 17,450,559$ 5,274,675$ 497,062 $ (3,093,297)$ 2,242,797$ 27,733,002$ 62,479,726$
Debt Service Capital Projects
73
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 10 – Contributed Capital Assets from Private Land Developers and City Government
The ownership of local streets, storm sewer, parks, water and sanitary sewer infrastructure capital assets
that are constructed and completed during the year by private land developers becomes contributed
property of the City. Storm sewer, water and sanitary sewer infrastructure assets constructed within Dakota
County and State of Minnesota right-of-way boundaries also become City capital assets since they are
serviced and maintained by the City. Roads and highways constructed within Dakota County and State of
Minnesota right-of-way boundaries are excluded from City capital assets. The City assumed ownership of
the following governmental and business-type capital assets contributed through private land developers
during the current fiscal year as follows:
Enterprise
From Private Land Developers Governmental Utility Fund
Infrastructure
Streets 2,295,833$ -$
Storm sewer 3,580,179 -
Parks 706,998 -
Water - 2,517,816
Sanitary sewer - 2,533,689
Total 6,583,010$ 5,051,505$
The ownership of water and sanitary sewer infrastructure assets that are constructed and completed during
the year by City governmental activities (through various funding sources at cost) becomes contributed
property of the City’s enterprise utility fund. The City’s enterprise utility fund assumed ownership of the
following capital assets contributed during the current fiscal year as follows:
Enterprise
From governmental activities Utility Fund
Infrastructure
Water 3,159,007$
Sanitary sewer 295,790
Total 3,454,797$
From other governmental agencies
Sanitary sewer 957,570$
Note 11 – Excess of Expenditures over Appropriations
For the year ended December 31, 2015, total expenditures (the legal level of budgetary control) in the
special revenue downtown special service district fund exceeded appropriations. The expenditures
exceeding budget of ($2,761) were funded by available fund balance.
The special revenue economic development fund expenditures also exceeded appropriations. The
expenditures exceeding budget of ($330) were funded by available fund balance.
74
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 12 – Deficit Fund Balances
The capital projects water fund had a deficit fund balance of ($3,093,297) as of December 31, 2015 as a
result of construction of the water tower and water treatment facility expansion project. It is anticipated
that the deficit will be financed by future debt issuance.
Note 13 – Interfund Receivables and Payables
Activity between funds representative of lending or borrowing arrangements is reported in the fund
financial statements as “due from/to other funds” (current portion) or “advances to/from other funds.” Such
amounts are eliminated in the government-wide financial statements, with any residual balances
outstanding between the governmental and business-type activities reported as “internal balances.” At
December 31, 2015 the capital projects water fund had a payable of $3.2 million to the nonmajor
governmental funds to finance a temporary cash deficit.
Note 14 – Interfund Transfers
The City provides financing for a variety of operations and capital projects utilizing resources from certain
funds; interfund transfers used for these various activities during the current fiscal year are as follows:
Capital
Nonmajor Enterprise
General G.O. Improv. Govntl.
Transfers From Fund G.O.Improve.Const.Funds Utility Total
General Fund -$ - $ -$ 500,000$ 1,112,000$ -$ 1,612,000$
Water Fund (CP)- - - - 2,016,337 - 2,016,337
Nonmajor govntl. funds 152,933 - 101,000 27,681 1,019,000 - 1,300,614
Total 152,933 - 101,000 527,681 4,147,337 - 4,928,951
Enterprise - Liquor 165,173 400,000 - - 831,242 1,557 1,397,972
Enterprise - Utility 441,817 - 66,684 - - - 508,501
Internal service fund 50,012 - - - - - 50,012
Total 809,935$ 400,000$ 167,684$ 527,681$ 4,978,579$ 1,557$ 6,885,436
(1) (2) (3) (4) (5)(6) (7)
Less: Utility fund (1,557)
Total governmental funds 6,883,879$
Transfers To:
Debt Service Projects
The following are explanations to interfund transfers sub-notes 1 through 7.
Abbreviation key:
(SR) special revenue fund, (DS) debt service fund, (CP) capital projects fund,
(E) enterprise fund, (IS) internal service fund.
75
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 14 – Interfund Transfers (continued)
(1) The transfers to general fund were provided mainly as overhead and maintenance costs from the
following funds:
Fund Amount Description
Communications (SR) 152,933$ Public communications and city hall overhead costs.
Liquor (E) 165,173 Patrol, chemical awareness, and city hall overhead costs.
Utility (E) 441,817 City hall overhead costs.
Municipal reserves (IS)50,012 City hall overhead costs.
Total 809,935$
(2) The total transfer to the debt service general obligation fund was provided by the liquor fund
($400,000) to be applied towards the debt service of the new police station completed in 2008.
(3) The total transfer to the debt service G.O. improvement fund was provided by the capital projects
storm sewer fund ($101,000) and enterprise utility fund ($66,684) related to City Improvement
projects whereby user fees are pledged towards the improvement bonds debt service requirements.
(4) The total transfer to the capital projects improvement construction fund was provided by the general
fund ($500,000) and by capital projects tax increment fund ($27,681) to finance various future road
construction projects.
(5) The total transfer to nonmajor governmental funds ($4,147,337) was provided by the following
governmental funds:
From:Amount To:
General Fund 877,000$ Equipment (CP) for future equipment acquisitions
General Fund 235,000 Park improvement (CP) for future playground replacements
Water (CP)2,016,337 Water revenue (DS) for debt service requirements
Communications (SR) 495,000 Equipment (CP) for future equipment acquisitions
Pavement mgmt (CP)524,000 Equipment (CP) for future equipment acquisitions
Total other govntl. 4,147,337$
(6) The total transfer to the nonmajor governmental funds was provided by the enterprise liquor fund
($831,242) to fund various equipment purchases and playground replacements.
(7) The total transfer to the enterprise utility fund was provided by the enterprise liquor fund ($1,557)
for customer service billing overhead costs.
Included within the transfers to governmental activities from business-type activities of $1,549,881 on the
Statement of Activities is the City’s contributed capital from governmental activities to enterprise utility
fund capital assets of ($3,454,797).
76
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 15 – Joint Powers Debt Commitment
On August 25, 2005 the City of Lakeville entered into a joint powers agreement with the Cities of Apple
Valley, Burnsville, Eagan, Farmington, Hastings, Inver Grove Heights, Mendota Heights, Rosemount,
South St. Paul, West St. Paul, Minnesota, and Dakota County Minnesota, to establish the Dakota
Communications Center (DCC), a Minnesota nonprofit corporation. The purpose of the DCC is to engage
in the operation and maintenance of a countywide public safety answering point and communications
center for law enforcement, fire, emergency medical services, and other public safety services for the
mutual benefit of residents residing in the above mentioned cities and county (members). Pursuant to the
joint powers agreement, members are required to provide the DCC their pro rata share of cost of operations
and maintenance, and capital projects. Information regarding the Dakota Communications Center can be
obtained at the website www.mn-dcc.org/stats.asp or by contacting Jerilyn Erickson at the City of
Lakeville, 20195 Holyoke Avenue, Lakeville, Minnesota 55044. Telephone 952-985-4481 or email address
jerickson@lakevillemn.gov.
Note 16 – Other Post-Employment Benefits (OPEB) Plan
A. Plan Description
The City provides post-employment insurance benefits to certain eligible employees through the
City’s Other Post-Employment Benefits Plan, a single-employer defined benefit plan administered
by the City. All post-employment benefits are based on contractual agreements with employee
groups. 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.
77
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 16 – Other Post-Employment Benefits (OPEB) Plan (continued)
C. Annual OPEB Cost and Net OPEB Obligation
The City’s annual OPEB cost (expense) is calculated based on annual required contributions (ARC) of the
City, an amount determined on an actuarially determined basis in accordance with the parameters of GASB
Statement No. 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:
Annual required contribution 96,418$
Interest on net OPEB obligation 13,396
Adjustment to annual required contribution (19,910)
Annual OPEB cost (expense) 89,904
Contributions made (20,858)
Increase in net OPEB obligation 69,046
Net OPEB obligation - beginning of year 334,895
Net OPEB obligation - end of year 403,941$
The City’s annual OPEB cost; the percentage of annual OPEB cost contributed to the plan; and the net
OPEB obligation for the year are as follows:
Fiscal Annual Employer Annual OPEB Net OPEB
Year Ended OPEB Cost Contribution Cost Contributed Obligation
December 31, 2013 71,043$ 21,690$ 30.5% 264,027$
December 31, 2014 91,390$ 20,522$ 22.5% 334,895$
December 31, 2015 89,904$ 20,858$ 23.2% 403,941$
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 $728,270, and the actuarial value of assets was $0, resulting in
an unfunded actuarial accrued liability (UAAL) of $728,270.
The covered payroll (annual payroll of active employees covered by the plan) was $12,363,168, and the
ratio of the UAAL to the covered payroll was 5.9 percent.
78
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 16 – Other Post-Employment Benefits (OPEB) Plan (continued)
D. Funded Status and Funding Progress (continued)
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 ARCs 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 the basic financial statements presents multi-year trend
information about whether the actuarial value of plan assets is increasing or decreasing over time relative to
the actuarial accrued liabilities for benefits.
E. Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and the plan members) and include the types of benefits provided at the time of
each valuation and the historical pattern of sharing of benefit costs between the employer and plan
members to that point. The actuarial methods and assumptions used include techniques that are designed to
reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets,
consistent with the long-term perspective of the calculations.
In the January 1, 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; a 2014 annual healthcare cost trend rate of 7.5 percent, and reduced
by decrements of .25 percent to an ultimate rate of 5.0 percent after ten years for medical insurance. Both
rates included a 2.5% inflation assumption. The UAAL is being amortized on a level dollar basis over a
closed period. The remaining amortization periods at January 1, 2014 for the various amortization layers
ranged from 24 to 30 years.
Note 17 – Risk Financing and Related Insurance Issues
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. The City purchased the following
insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT), a public entity risk
pool currently operating as a common risk management and insurance program for Minnesota cities:
general liability, excess liability, workers compensation, property, automobile, marine, crime, employee
dishonesty, boiler, petro fund, and open meeting law.
The City pays an annual premium to the LMCIT for its insurance coverage. The LMCIT is self-sustaining
through member premiums and will reinsure through commercial companies for claims in excess of
reserved amounts for each insured event. The LMCIT allows for the pool to make additional assessments
to make the pool self-sustaining. Current state statutes (Minnesota Statutes Subd. 466.04) provide limits of
liability for the City.
79
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 17 – Risk Financing and Related Insurance Issues (continued)
These limits are that the combination of defense expense and indemnification expense shall not exceed
$1,500,000 for any number of claims arising out of a single occurrence. The Minnesota statutory limit on
claims is $1,500,000 per occurrence. The City self-insures the risk of any potential judicial ruling in excess
of the statutory maximum. The City has never had a claim in excess of the statutory maximum.
There have been no significant reductions in insurance coverage from the prior year and insurance
settlements have not exceeded coverage in the past three years.
Workers’ compensation premiums for 2015 and 2014 were $527,125 and $448,455, respectively. The City
is enrolled in the LMCIT workers compensation “regular” program. The LMCIT regular program provides
a fixed premium based on payroll and provides no claim risk to the City as a result of high claims
experience. The City’s workers’ compensation premiums are accounted for directly in the responsible
funds.
Note 18– Defined Benefit Pension Plans - Statewide
A. Plan Description
The City participates in the following cost-sharing multiple-employer defined benefit pension plans
administered by the 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.
1. 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.
2. Public Employees Police and Fire Fund (PEPFF)
The PEPFF, originally established for police officers and firefighters not covered by a local relief
association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999,
the PEPFF also covers police officers and firefighters belonging to local relief associations that
elected to merge with and transfer assets and administration to the PERA.
B. Benefits Provided
The 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 percent funded for two consecutive years are given
2.5 percent increases. Members in plans that have not exceeded 90 percent funded, or have fallen below
80 percent, are given 1 percent increases.
80
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 18– Defined Benefit Pension Plans – Statewide (continued)
The benefit provisions stated in the following paragraphs of this section are current provisions and apply to
active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving
them yet are bound by the provisions in effect at the time they last terminated their public service.
1. 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 the PERA’s Coordinated and Basic Plan members. The retiring member
receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula
(Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of
average salary for each of the first 10 years of service and 2.7 percent for each remaining year.
The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each
of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual
rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for Coordinated Plan
members for each year of service. For 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.
2. PEPFF Benefits
Benefits for PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a
prorated basis from 50 percent after five years up to 100 percent after 10 years of credited service.
Benefits for PEPFF members first hired after June 30, 2014, vest on a prorated basis from
50 percent after 10 years up to 100 percent after 20 years of credited service. The annuity accrual
rate is 3 percent of average salary for each year of service. For PEPFF members who were first
hired prior to July 1, 1989, a full annuity is available when age plus years of service equal at least
90.
C. Contributions
Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. Contribution rates
can only be modified by the State Legislature.
1. GERF Contributions
Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary
in calendar year 2015. The City was required to contribute 7.50 percent for Coordinated Plan
members in calendar year 2015. The City’s contributions to the GERF for the year ended
December 31, 2015 were $705,189. The City’s contributions were equal to the required
contributions as set by state statute.
81
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 18– Defined Benefit Pension Plans – Statewide (continued)
C. Contributions (continued)
2. PEPFF Contributions
Plan members were required to contribute 10.8 percent of their annual covered salary in calendar
year 2015. The City was required to contribute 16.20 percent of pay for PEPFF members in
calendar year 2015. The City’s regular contributions to the PEPFF for the year ended
December 31, 2015 were $845,144. The City’s contributions were equal to the required
contributions as set by state statute.
D. Pension Costs
1. GERF Pension Costs
At December 31, 2015, the City reported a liability of $7,981,079 for its proportionate share of the
GERF’s net pension liability. The net pension liability was measured as of June 30, 2015, and the
total pension liability used to calculate the net pension liability was determined by an actuarial
valuation as of that date. The City’s proportion of the net pension liability was based on the City’s
contributions received by the PERA during the measurement period for employer payroll paid
dates from July 1, 2014 through June 30, 2015, relative to the total employer contributions
received from all of the PERA’s participating employers. At June 30, 2015, the City’s
proportionate share was 0.1540 percent, which was a decrease of 0.0123 percent from its
proportion measured as of June 30, 2014.
For the year ended December 31, 2015, the City recognized pension expense of $916,880 for its
proportionate share of the GERF’s pension expense.
At December 31, 2015, the City reported its proportionate share of the GERF’s deferred outflows
of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and actual economic experience –$ 402,382$
Differences between projected and actual investment earnings 755,532 –
Changes in proportion – 433,344
Contributions paid to the PERA subsequent to the measurement
date 355,996 –
Total 1,111,528$ 835,726$
82
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 18– Defined Benefit Pension Plans – Statewide (continued)
D. Pension Costs (continued)
1. GERF Pension Costs (continued)
Deferred outflows of resources reported $355,996 related to pensions resulting from city
contributions subsequent to the measurement date will be recognized as a reduction of the net
pension liability in the year ended December 31, 2016. Other amounts reported as deferred
outflows and inflows of resources related to pensions will be recognized in pension expense as
follows:
Year Ended Expense
December 31, Amount
2016 (89,692)$
2017 (89,692)$
2018 (89,692)$
2019 188,882$
2. PEPFF Pension Costs
At December 31, 2015, the City reported a liability of $6,044,765 for its proportionate share of the
PEPFF’s net pension liability. The net pension liability was measured as of June 30, 2015, and the
total pension liability used to calculate the net pension liability was determined by an actuarial
valuation as of that date. The City’s proportion of the net pension liability was based on the City’s
contributions received by the PERA during the measurement period for employer payroll paid
dates from July 1, 2014 through June 30, 2015, relative to the total employer contributions
received from all of the PERA’s participating employers. At June 30, 2015, the City’s proportion
was 0.532 percent, which was a decrease of 0.015 percent from its proportion measured as of June
30, 2014.
For the year ended December 31, 2015, the City recognized pension expense of $1,014,446 for its
proportionate share of the PEPFF’s pension expense. The City also recognized $47,880 for the
year ended December 31, 2015, as revenue for its proportionate share of the state of Minnesota’s
on-behalf contributions to the PEPFF. Legislation passed in 2013 required the state of Minnesota
to begin contributing $9 million to the PEPFF each year, starting in fiscal year 2014.
83
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 18– Defined Benefit Pension Plans – Statewide (continued)
D. Pension Costs (continued)
At December 31, 2015, the City reported its proportionate share of the PEPFF’s deferred outflows
of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and actual economic experience –$ 980,263$
Differences between projected and actual investment earnings 1,053,200 –
Changes in proportion – 135,005
Contributions paid to the PERA subsequent to the measurement
date 443,694 –
Total 1,496,894$ 1,115,268$
Deferred outflows of resources reported $443,694 related to pensions resulting from the City’s
contributions subsequent to the measurement date will be recognized as a reduction of the net
pension liability in the year ended December 31, 2016. Other amounts reported as deferred
outflows and inflows of resources related to pensions will be recognized in pension expense as
follows:
Pension
Year Ended Expense
December 31, Amount
2016 40,246$
2017 40,246$
2018 40,246$
2019 40,246$
2020 (223,052)$
E. Actuarial Assumptions
The total pension liability in the June 30, 2015 actuarial valuation was determined using the
following actuarial assumptions:
Inflation 2.75% per year
Active member payroll growth 3.50% per year
Investment rate of return 7.90%
Salary increases were based on a service-related table. Mortality rates for active members, retirees,
survivors, and disabilitants were based on RP-2000 tables for males or females, as appropriate,
with slight adjustments. Cost of living benefit increases for retirees are assumed to be: 1 percent
effective every January 1st until 2034, then 2.5 percent for GERF and PEPFF.
84
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 18– Defined Benefit Pension Plans – Statewide (continued)
E. Actuarial Assumptions (continued)
Actuarial assumptions used in the June 30, 2015, valuation were based on the results of actuarial
experience studies. The experience study in the GERF was for the period July 1, 2004 through
June 30, 2008, with an update of economic assumptions in 2014. The experience study for the
PEPFF was for the period July 1, 2004 through June 30, 2009.
There were no changes in actuarial assumptions in 2015.
The long-term expected rate of return on pension plan investments is 7.9 percent. The State Board
of Investment, which manages the investments of the PERA, prepares an analysis of the
reasonableness of the long-term expected rate of return on a regular basis using a building-block
method in which best-estimate ranges of expected future rates of return are developed for each
major asset class. These ranges are combined to produce an expected long-term rate of return by
weighting the expected future rates of return by the target asset allocation percentages. The target
allocation and best estimates of arithmetic real rates of return for each major asset class are
summarized in the following table:
Asset Class
Target
Allocation
Long-Term Expected
Real 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%
F. Discount Rate
The discount rate used to measure the total pension liability was 7.9 percent. The projection of cash
flows used to determine the discount rate assumed that employee and employer contributions will be
made at the rate specified in statute. Based on that assumption, each of the pension plan’s fiduciary
net position was projected to be available to make all projected future benefit payments of current
active and inactive employees. Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total pension
liability.
85
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 18– Defined Benefit Pension Plans – Statewide (continued)
G. Pension Liability Sensitivity
The following presents the City’s proportionate share of the net pension liability for all plans it
participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as
what the City’s proportionate share of the net pension liability would be if it were calculated using a
discount rate 1 percentage point lower or 1 percentage point higher than the current discount rate:
1% Decrease in 1% Increase in
Discount Rate Discount Rate Discount Rate
(6.9%)(7.9%)(8.9%)
The City’s proportionate share of the
GERF net pension liability 12,549,093$ 7,981,079$ 4,208,601$
The City’s proportionate share of the
PEPFF net pension liability 11,781,310$ 6,044,765$ 1,305,379$
H. Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in a separately-
issued PERA financial report that includes financial statements and required supplementary
information. That report may be obtained on the PERA website at www.mnpera.org.
86
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 19 – Defined Contribution Plan – Statewide
Council members of the City are covered by the Public Employees Defined Contribution Plan (PEDCP), a
multiple-employer deferred compensation plan administered by the 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 percent of salary which is matched by the elected
official’s employer. For ambulance service personnel, employer contributions are determined by the
employer, and for salaried employee contributions must be a fixed percentage of salary. Employer
contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees
who are paid for their services may elect to make member contributions in an amount not to exceed the
employer share. 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,
the PERA receives 2 percent 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 for the last three fiscal years were:
For the Required Rate
Year Ended for Employees
December 31, Employee Employer Employee Employer and Employers
2015 1,760$ 1,760$ 5%5%5%
2014 1,756$ 1,756$ 5%5%5%
2013 1,670$ 1,670$ 5%5%5%
Contribution Amount Percentage of Covered Payroll
87
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 20 – Lakeville Fire Relief Association
A. Plan Description
Volunteer firefighters of the City of Lakeville Fire Department (the Department) are members of the Lakeville Fire
Relief Association (the Association), which administers a single-employer defined benefit plan established to
provide benefits for its members. The plan is established and administered in accordance with Minnesota Statute,
Chapter 69. The Association is governed by a board of six members elected by the members of the Association for
three year terms. One City Council member, Finance Director and Fire Chief are ex officio, nonvoting members of
the Board of Trustees. As of December 31, 2015, the plan covered 77 active firefighters and 23 vested terminated
firefighters whose pension benefits are deferred.
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 an insurance premium tax in accordance
with the Volunteer Firefighter’s Relief Association Financing Guidelines Act of 1971 (Chapter 261 as amended by
Chapter 509 of Minnesota Statutes 1980). Funds are also derived from investment income.
B. Benefits Provided
A firefighter who completes at least 20 years as an active member of the Department is entitled, after age 50, to a
full service pension upon retirement.
The bylaws of the Association also provide for an early vested service pension for a retiring member who has
completed fewer than 20 years of service. The reduced pension, available to members with 10 years of service, shall
be equal to 60 percent of the pension as described by the bylaws. This percentage increases 4 percent per year so
that at 20 years of service, the full amount prescribed is paid. 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 the applicable non-forfeitable percentage of pension.
C. Contributions
Minnesota Statutes, Chapters 424 and 424A authorize pension benefits for volunteer fire relief associations. 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 firefighters have no obligation to contribute
to the plan. Nonemployer pension contributions include state aid from the state of Minnesota and municipal
contributions from the City. On-behalf of the state payments from the state of Minnesota are received initially by
the City and subsequently remitted to the Association. These on-behalf of the state aid payments in addition to the
City’s municipal contribution payments to the Association plan are recognized as revenues and expenditures in the
City’s General Fund during the period received.
The state of Minnesota contributed $338,889 in fire state aid to the plan on behalf of the Department for the year
ended December 31, 2015, which was recorded as revenue. Required employer contributions are calculated annually
based on statutory provisions. The City’s statutorily-required contributions to the plan for the year ended December
31, 2015 were $0. The City’s contributions were equal to the required contributions as set by state statute. The City
made no voluntary contributions to the plan.
D. Pension Costs
At December 31, 2015, the City reported a net pension liability (asset) of ($2,649,952) for the plan. The net pension
liability (asset) was measured as of December 31, 2015. The total pension liability used to calculate the net pension
liability (asset) in accordance with GASB Statement No. 68 was determined by Van Iwaarden Associates, applying
an actuarial formula to specific census data certified by the Department as of December 31, 2015.
88
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 20 – Lakeville Fire Relief Association (continued)
D. Pension Costs (continued)
The following table presents the changes in net pension liability (asset) during the year:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability (Asset)
(a)(b)(a-b)
Beginning balance – January 1, 2015 4,193,508$ 7,322,744$ (3,129,236)$
Changes for the year
Service cost 223,785 – 223,785
Interest on pension liability (asset)269,493 – 269,493
Changes of assumptions 353,037 – 353,037
Contributions (employer)– – –
Contributions (state)– 338,889 (338,889)
Net investment income 39,474 (39,474)
Benefit payments (210,816) (210,816) –
Administrative costs – (11,332) 11,332
Total net changes 635,499 156,215 479,284
Ending balance – December 31, 2015 4,829,007$ 7,478,959$ (2,649,952)$
For the year ended December 31, 2015, the City recognized pension expense of $162,058.
At December 31, 2015, the City reported related to pension from the following sources:
Deferred
Outflows
of Resources
Net difference between projected and actual earnings on
plan investments 337,477$
Change of assumptions 318,628
Total 656,105$
Deferred outflows of resources related to the plan will be recognized in pension expense as follows:
2016 118,778$
2017 118,778$
2018 118,778$
2019 118,779$
2020 34,409$
Thereafter 146,583$
89
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 20 – Lakeville Fire Relief Association (continued)
E. Actuarial Assumptions
The total pension liability at December 31, 2015 was determined using the entry age normal actuarial cost method
and the following actuarial assumptions:
Retirement eligibility at 100 percent service pension at age 50 with 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 with 20 years of service
Inflation rate 2.75% per year
Investment rate of return 6.25%
20 year municipal bond yield 3.50%
The retirement assumption was updated from the July 1, 2014 Minnesota PERA Police and Fire Plan to 50 percent
at the later of age 50 and 20 years of service, then 50 percent at each subsequent year until 100 percent at the earlier
of age 65 or 30 years of service. This change was made to reflect updated expectations regarding future experience.
The 6.25 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:
Asset Class
Domestic equity 59.35 % 5.25 % 8.00 %
International equity 5.22 5.25 % 8.00 %
Fixed income 9.40 1.75 % 4.50 %
Real estate and alternatives – 3.75 % 6.50 %
Cash and equivalents 26.03 0.25 % 3.00 %
Total 100.00 %6.25 %
Allocation
Target
Rate of Return
Expected Real
Long-Term Long-Term
Expected Nominal
Rate of Return
F. Discount Rate
The discount rate used to measure the total pension liability was 6.25 percent. The projection of cash flows used to
determine the discount rate assumed that contributions to the 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.
90
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 20 – Lakeville Fire Relief Association (continued)
G. Pension Liability (Asset) Sensitivity
The following presents the City’s net pension liability (asset) for the 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:
Decrease (5.25%) Current (6.25%) Increase (7.25%)
Net pension liability (asset) (2,498,012)$ (2,649,952)$ (2,796,475)$
H. Pension Plan Fiduciary Net Position
The Association issues a publicly available financial report. This report may be obtained by writing to the
Lakeville Volunteer Firefighters’ Relief Association, 20195 Holyoke Avenue, Lakeville, Minnesota, 55044
or by calling (952) 985-4480.
Note 21 – Deferred Compensation Plan
The City offers its employees an optional deferred compensation plan created in accordance with Internal
Revenue Service Code Section 457. The plan is available to all City employees, which permits them to tax
defer a portion of their salary until future years. The deferred compensation is not available to employees
until termination, retirement, death or unforeseeable emergency. Under provisions of Section 72(p) of the
Internal Revenue Code, a plan may permit participant loans once 457 plan assets are held in a trust. As of
the current fiscal year, the City’s plan does not have a loan provision for its participants. All amounts of
compensation deferred under the plan must be held in trust for the exclusive benefit of plan participants
and/or beneficiaries. Investments are managed by the plan's trustee under various investment options or a
combination thereof. The choice of investment options is made by the participant.
Note 22 – Litigation
There are several lawsuits pending in which the City is involved. The City Attorney has indicated that
existing and pending lawsuit claims and other actions in which the City is a defendant are either covered by
insurance, fully reserved for by the City, or the cases are in the early stages of discovery, and accordingly,
the ultimate outcome cannot presently be determined. It is the opinion of City management that in each
case the possibility of material loss, net of amounts reserved is remote.
91
CITY OF LAKEVILLE, MINNESOTA
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2015
Note 23 – Conduit Debt
On April 7, 2008, the Housing and Redevelopment Authority (HRA) of Lakeville approved the issuance of
the Housing and Redevelopment Authority of Lakeville, Minnesota Education Facilities Revenue Note (All
Saints School Project), Series 2008. The HRA acted as the conduit for a bank qualified tax-exempt
refinancing of existing debt for All Saints School (the School) under the responsibility of All Saints Church
(the Church), a religious corporation organized as a nonprofit corporation under the laws of the State of
Minnesota. The note funds provided funding for the non-religious portions of the renovation and equipping
of, and construction of additions to the School (serving kindergarten through 8th grade), owned and
operated by the Church, and located at 19795 Holyoke Avenue in Lakeville.
The HRA authorized the $2,000,000 revenue note to provide needed financial assistance to a private-sector
entity deemed to be in the public interest. Neither the HRA nor the City is obligated in any circumstance
for repayment of this note, and accordingly the note is not reported as a liability in the accompanying
financial statements. As of December 31, 2015, $2,000,000 remains outstanding on this note.
Note 24 – Subsequent Events
In February 2016 the City issued $8,280,000 in General Obligation Water Utility Bonds, Series 2016 A to
finance various improvement projects in the City. The bonds mature February 1, 2034, with a provisional
call date of February 1, 2025, bearing interest rates ranging from 2.0% to 5.0%. Debt service will be
payable from connection charges.
In July 2016 the City issued $22,250,000 in General Obligation Bonds, Series 2016 B to finance various
improvement projects in the City. The bonds mature February 1, 2037, with a provisional call date of
February 1, 2026, bearing interest rates ranging from 1.5% to 5.0%. Debt service will be payable from
property taxes, special assessments levied to benefitting properties and user fees.
92
R E Q U I R E D S U P P L E M E N T A R Y I N F O R M A T I O N
CITY OF LAKEVILLE, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2015
Budget As Variance
Originally Final With Final
Adopted Budget Actual Budget
Revenues
Property taxes
General property taxes
Current 15,720,707$ 15,720,707$ 15,904,598$ 183,891$
Delinquent 135,106 135,106 71,645 (63,461)
Fiscal disparities 1,904,664 1,904,664 1,824,735 (79,929)
Mobile home tax 47,825 47,825 45,968 (1,857)
Gravel tax 3,200 3,200 6,946 3,746
Total property taxes 17,811,502 17,811,502 17,853,892 42,390
Licenses and permits 1,968,416 2,046,781 2,655,873 609,092
Intergovernmental
Market value homestead credit - - 3,476 3,476
State-aid police 386,105 386,105 388,811 2,706
State-aid fire 314,365 342,889 342,889 -
State-aid PERA 21,303 21,303 21,303 -
State police and fire grants 20,226 63,820 51,907 (11,913)
State other grants 662 42,662 41,961 (701)
Federal other grants - 142,571 131,675 (10,896)
County and other grants 85,000 85,000 50 (84,950)
Total intergovernmental 827,661 1,084,350 982,072 (102,278)
Charges for services
General government 217,206 234,850 296,587 61,737
Public safety 498,828 498,828 502,099 3,271
Public works 1,582,281 1,582,281 1,892,052 309,771
Parks and recreation 633,762 633,762 684,775 51,013
Total charges for services 2,932,077 2,949,721 3,375,513 425,792
Fines 288,001 288,001 369,356 81,355
Investment income 40,376 40,376 55,883 15,507
(continued)
93
CITY OF LAKEVILLE, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2015
Budget As Variance
Originally Final With Final
Adopted Budget Actual Budget
Revenues (continued)
Donations 16,000$ 25,971$ 29,242$ 3,271$
Miscellaneous 37,645 37,645 51,286 13,641
Total revenues 23,921,678 24,284,347 25,373,117 1,088,770
Expenditures
General government
Mayor and Council
Personnel services 49,776 49,776 48,549 1,227
Commodities 50 50 - 50
Other charges and services 47,585 48,878 47,416 1,462
Total Mayor and Council 97,411 98,704 95,965 2,739
Committees/Commissions
Personnel services 57,336 57,336 59,171 (1,835)
Commodities 1,530 1,530 2,372 (842)
Other charges and services 12,230 16,709 11,632 5,077
Total committees/commissions 71,096 75,575 73,175 2,400
City administration
Personnel services 395,760 398,890 372,108 26,782
Commodities 734 734 245 489
Other charges and services 17,791 17,791 17,568 223
Capital outlay - - 3,989 (3,989)
Total city administration 414,285 417,415 393,910 23,505
(continued)
94
CITY OF LAKEVILLE, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2015
Budget As Variance
Originally Final With Final
Adopted Budget Actual Budget
Expenditures (continued)
General government (continued)
City Clerk
Personnel services 104,429$ 106,010$ 106,963$ (953)$
Commodities 282 282 90 192
Other charges and services 22,690 40,334 32,726 7,608
Total City Clerk 127,401 146,626 139,779 6,847
Legal counsel
Other charges and services 82,351 82,351 68,990 13,361
Planning
Personnel services 406,215 390,099 389,260 839
Commodities 2,248 2,248 1,491 757
Other charges and services 21,346 43,346 36,237 7,109
Capital outlay - - 416 (416)
Total planning 429,809 435,693 427,404 8,289
Community and economic development
Personnel services 266,506 270,478 267,623 2,855
Commodities 192 192 190 2
Other charges and services 33,248 33,248 19,104 14,144
Capital outlay 580 580 1,803 (1,223)
Total community and economic development 300,526 304,498 288,720 15,778
Inspections
Personnel services 674,114 742,741 735,608 7,133
Commodities 10,255 10,255 11,427 (1,172)
Other charges and services 169,303 189,303 194,215 (4,912)
Capital outlay 1,250 1,250 2,487 (1,237)
Total inspections 854,922 943,549 943,737 (188)
(continued)
95
CITY OF LAKEVILLE, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2015
Budget As Variance
Originally Final With Final
Adopted Budget Actual Budget
Expenditures (continued)
General government (continued)
General government facilities
Personnel services 204,108$ 206,928$ 205,164$ 1,764$
Commodities 22,084 22,084 15,975 6,109
Other charges and services 206,931 206,931 175,574 31,357
Total general government facilities 433,123 435,943 396,713 39,230
Finance
Personnel services 568,092 609,350 600,882 8,468
Commodities 5,034 5,034 3,997 1,037
Other charges and services 74,004 74,004 75,341 (1,337)
Capital outlay 18,168 18,168 4,166 14,002
Total finance 665,298 706,556 684,386 22,170
Information systems
Personnel services 311,448 315,835 319,691 (3,856)
Commodities 5,847 5,847 3,819 2,028
Other charges and services 213,636 213,636 179,163 34,473
Capital outlay - - 34,508 (34,508)
Total information systems 530,931 535,318 537,181 (1,863)
Human resources
Personnel services 294,193 314,764 323,058 (8,294)
Commodities 2,577 2,577 2,390 187
Other charges and services 81,122 116,122 101,604 14,518
Capital outlay 580 580 6,242 (5,662)
Total human resources 378,472 434,043 433,294 749
Insurance coverage
Other charges and services 322,100 322,100 322,100 -
Total general government 4,707,725 4,938,371 4,805,354 133,017
(continued)
96
CITY OF LAKEVILLE, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2015
Budget As Variance
Originally Final With Final
Adopted Budget Actual Budget
Expenditures (continued)
Public safety
Police
Personnel services 7,156,691$ 7,325,704$ 7,249,042$ 76,662$
Commodities 342,976 351,096 356,368 (5,272)
Other charges and services 1,711,642 1,718,147 1,637,401 80,746
Capital outlay - 100,599 67,865 32,734
Total police 9,211,309 9,495,546 9,310,676 184,870
Fire protection
Personnel services 1,201,560 1,234,695 1,231,805 2,890
Commodities 150,568 150,568 145,298 5,270
Other charges and services 287,019 287,019 272,157 14,862
Total fire protection 1,639,147 1,672,282 1,649,260 23,022
Total public safety 10,850,456 11,167,828 10,959,936 207,892
Public works
Engineering
Personnel services 604,526 613,934 581,091 32,843
Commodities 9,274 9,274 5,360 3,914
Other charges and services 86,891 86,891 53,060 33,831
Capital outlay 11,582 11,582 19,921 (8,339)
Total engineering 712,273 721,681 659,432 62,249
Operations and Maintenance
Personnel services 437,398 443,972 445,936 (1,964)
Commodities 4,870 4,870 5,761 (891)
Other charges and services 15,828 15,828 13,509 2,319
Capital outlay 95,700 95,700 66,548 29,152
Total operations and maintenance 553,796 560,370 531,754 28,616
Street maintenance
Personnel services 1,840,324 1,844,622 1,726,034 118,588
Commodities 830,911 830,911 732,065 98,846
Other charges and services 322,974 322,974 294,168 28,806
Capital outlay - - 1,313 (1,313)
Total street maintenance 2,994,209 2,998,507 2,753,580 244,927
Total public works 4,260,278 4,280,558 3,944,766 335,792
(continued)
97
CITY OF LAKEVILLE, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2015
Budget As Variance
Originally Final With Final
Adopted Budget Actual Budget
Expenditures (continued)
Parks and recreation
Park maintenance
Personnel services 1,616,595$ 1,623,976$ 1,611,926$ 12,050$
Commodities 271,081 271,081 280,096 (9,015)
Other charges and services 500,969 500,969 470,544 30,425
Total park maintenance 2,388,645 2,396,026 2,362,566 33,460
Recreation
Personnel services 348,735 372,424 369,548 2,876
Commodities 25,146 25,446 22,329 3,117
Other charges and services 215,096 220,288 226,989 (6,701)
Capital outlay 19,499 19,499 16,623 2,876
Total recreation 608,476 637,657 635,489 2,168
Heritage Center
Personnel services 32,779 33,417 35,243 (1,826)
Commodities 12,388 12,388 5,437 6,951
Other charges and services 56,892 56,892 44,836 12,056
Capital outlay 2,457 2,457 - 2,457
Total heritage center 104,516 105,154 85,516 19,638
Arts Center
Personnel services 254,081 262,069 242,452 19,617
Commodities 16,010 19,160 23,624 (4,464)
Other charges and services 173,974 205,824 199,352 6,472
Capital outlay 4,440 4,440 8,838 (4,398)
Total arts center 448,505 491,493 474,266 17,227
Total parks and recreation 3,550,142 3,630,330 3,557,837 72,493
Other 105,000 - - -
Total expenditures 23,473,601 24,017,087 23,267,893 749,194
Excess of revenues over expenditures 448,077 267,260 2,105,224 1,837,964
(continued)
98
CITY OF LAKEVILLE, MINNESOTA
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -
BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2015
Budget As Variance
Originally Final With Final
Adopted Budget Actual Budget
(continued)
Other financing sources (uses)
Transfers from
Special Revenue - Communications Fund 152,933$ 152,933$ 152,933$ -$
Enterprise - Liquor Fund 165,173 165,173 165,173 -
Enterprise - Utility Fund 441,817 441,817 441,817 -
Internal Service - Municipal Reserves Fund 50,012 50,012 50,012 -
Transfers to
Capital Projects - Improvement Construction Fund - (500,000) (500,000) -
Capital Projects - Equipment Fund (727,000) (877,000) (877,000) -
Capital Projects - Park Improvement Fund - (235,000) (235,000) -
Total other financing sources (uses)82,935 (802,065) (802,065) -
Net change in fund balance 531,012$ (534,805)$ 1,303,159 1,837,964$
Fund balance, January 1 11,071,769
Fund balance, December 31 12,374,928$
99
CITY OF LAKEVILLE, MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2015
A. Budgetary Information
Budgets are adopted on a basis consistent with U.S. generally accepted accounting principles. Annual
appropriated budgets are adopted for the General Fund and Special Revenue Funds. Budgeted amounts are
as originally adopted or as amended by the City Council. The City follows these procedures in establishing
the budgetary data reflected in the financial statements:
1. The City Administrator submits a proposed operating budget to the City Council.
2. Public hearings are conducted to obtain taxpayer comments.
3. Upon Council approval the budget is legally adopted and employs formal budgetary
integration during the year.
4. Expenditures may legally exceed budgeted appropriations at the fund level through
City Council action.
5. The legal level of budgetary control (i.e., the level at which expenditures may not
legally exceed appropriations) is at the department level for the General Fund and
total expenditures for the Special Revenue Funds. The City Administrator has
authorization to expend funds in excess of the appropriation for individual line items.
6. Budget appropriations of all funds lapse at year-end to the extent they were not
encumbered. Encumbrances are re-appropriated in the following year's budget.
100
CITY OF LAKEVILLE, MINNESOTA
City Fiscal
Year-End
Date
PERA Fiscal
Year-End Date
(Measurement
Date)
City's Proportion
of
the Net Pension
Liability
City's Proportionate
Share of the Net
Pension
Liability (a)
City's Covered
Payroll (b)
City's
Proportionate
Share of the Net
Pension Liability
as a Percentage
of Covered
Payroll (a/b)
Plan Fiduciary
Net Position as a
Percentage of the
Total Pension
Liability
12/31/2015 6/30/2015 0.154% 7,981,079$ 9,046,858$ 88.22% 78.20%
City Fiscal
Year-End
Date
PERA Fiscal
Year-End Date
(Measurement
Date)
Statutorily
Required
Contributions
(a)
Contributions in
Relation to the
Statutorily Required
Contributions (b)
Contribution
Deficiency
(Excess) (a-b)
Covered Payroll
(d)
Contributions as
a Percentage of
Covered Payroll
(b/d)
12/31/2015 6/30/2015 705,189$ 705,189$ -$ 9,402,506$ 7.50%
Note: The City implemented GASB Statement No. 68 in fiscal 2015 (using a June 30, 2015 measurement date).
This information is not available for previous fiscal years.
Schedule of Employer Contributions
PERA – Public Employees General Employees Retirement Fund
Schedule of City’s Proportionate Share of Net Pension Liability
PERA – Public Employees General Employees Retirement Fund
101
CITY OF LAKEVILLE, MINNESOTA
City Fiscal
Year-End
Date
PERA Fiscal
Year-End Date
(Measurement
Date)
City's
Proportion of
the Net Pension
Liability
City's Proportionate
Share of the Net
Pension
Liability (a)
City's Covered
Payroll (b)
City's
Proportionate
Share of the Net
Pension Liability
as a Percentage
of Covered
Payroll (a/b)
Plan Fiduciary
Net Position as a
Percentage of
the Total
Pension
Liability
12/31/2015 6/30/2015 0.532% 6,044,765$ 4,870,941$ 124.10% 86.60%
City Fiscal
Year-End
Date
PERA Fiscal
Year-End Date
(Measurement
Date)
Statutorily
Required
Contributions
(a)
Contributions in
Relation to the
Statutorily
Required
Contributions (b)
Contribution
Deficiency
(Excess) (a-b)
Covered Payroll
(d)
Contributions as
a Percentage of
Covered Payroll
(b/d)
12/31/2015 6/30/2015 845,144$ 845,144$ -$ 5,216,935$ 16.20%
Note: The City implemented GASB Statement No. 68 in fiscal 2015 (using a June 30, 2015 measurement date).
This information is not available for previous fiscal years.
Schedule of City’s Proportionate Share of Net Pension Liability
PERA – Public Employees Police and Fire Fund
Schedule of Employer Contributions
PERA – Public Employees Police and Fire Fund
102
CITY OF LAKEVILLE, MINNESOTA
12/31/2015
Total Pension Liability (TPL)
Service cost 223,785 $
Interest 269,493
Changes of assuptions 353,037
Benefit payments, including refunds of
member contributions (210,816)
Net change in total pension liability 635,499
Total Pension Liability - beginning of year 4,193,508
Total Pension Liability - end of year 4,829,007 $
Plan Fiduciary Net Position (FNP, assets)
Contributions - state 338,889 $
Net investment income 39,474
Benefit payments, including refunds of
member contributions (210,816)
Administrative expense (11,292)
Other (40)
Net change in plan fiduciary net position 156,215
Plan Fiduciary Net Position - beginning of year 7,322,744
Plan Fiduciary Net Position - end of year 7,478,959 $
Net Pension Liability (Asset) (NPL)(2,649,952)$
FNP as a percentage of the TPL 154.88%
City Fiscal
Year-End
Date
Statutorily Required
Contributions (a)
Contributions in
Relation to the
Statutorily
Required
Contributions (b)
Contribution
Deficiency
(Excess) (a-b)
Covered
Payroll (d)
12/31/2015 -$ -$ -$ - $
Note: The City implemented GASB Statement No. 68 in fiscal 2015 (using a December
31, 2015 measurement date).
Schedule of Employer Contributions
Lakeville Fire Relief Asssociation
Schedule of Changes in
Net Pension Liability (Asset) and Related Ratios
Lakeville Fire Relief Association
103
CITY OF LAKEVILLE, MINNESOTA
OTHER POST-EMPLOYMENT BENEFITS PLAN - SCHEDULE OF FUNDING PROGRESS
DECEMBER 31, 2015
Unfunded Unfunded
Actuarial Actuarial Actuarial Actuarial Liability as a
Valuation Accrued Value of Accrued Funded Covered Percentage
Date Liability Plan Assets Liability Ratio Payroll of Payroll
January 1, 2008 290,424$ -$ 290,424$ - 11,365,890$ 2.6%
January 1, 2011 588,458$ -$ 588,458$ - 11,683,196$ 5.0%
January 1, 2014 728,720$ -$ 728,720$ - 12,363,168$ 5.9%
104
N O N M A J O R G O V E R N M E N T A L F U N D S
Special Revenue Funds - These funds are used to account for revenues and expenditures that
have a legally restricted or committed use for a specific purpose.
Communications Fund
This fund accounts for franchise fees from cable TV provider operations.
Expenditures and other financing uses are used to finance the City’s cable TV
channels and public communications, including long-term replacement of
equipment.
Economic Development Fund
This fund accounts for a $125,000 Economic Recovery Grant received from the
State of Minnesota Department of Trade and Economic Development in 1995.
The grant purpose is to provide loans to businesses expanding in or locating to
Lakeville. The fund also accounts for administrative fees received from the
issuance of conduit debt.
Downtown Special Service District Fund
The Downtown Special Service District was created in 1998 pursuant to
Minnesota Statute 428A. A service charge, payable with property taxes, is levied
against the commercial properties in the Downtown Business District for the
purpose of financing budgeted programs and activities within the District.
Debt Service Funds – These funds account for the accumulation of resources that are restricted
to the payment of long-term debt principal and interest, but excluding debt issued for and serviced
by an enterprise fund.
Tax Increment Fund
Debt issued to finance construction of public improvements in accordance with
approved tax increment plans. Property tax increments received from designated
tax increment financing districts are pledged to the payment of the bonds.
State-aid Revenue Fund
Debt issued to finance construction of State-aid street projects within the City.
The primary revenue source is municipal state aid allotments from the State of
Minnesota Department of Transportation.
Water Revenue Fund
Debt issued to finance the construction of wells, pump houses, towers, water
main systems, and the City’s water treatment facility. Water connection fees are
pledged toward the repayment of the principal and interest on these bonds.
Arena Revenue Fund
Debt issued for the construction of the Lakeville Ames Ice Arena first and second
sheet of ice, spectator seating and locker rooms. Revenue sources include
donations from net operating ice arena revenues and other sources pledged to
the payment of the bonds. The Ice Center Refunding Bonds, Series 2008 A and
the 2005 Capital Dehumidification Lease-Purchase agreement are general
obligations that are backed by the full-faith and credit of the City. The Gross
Revenue Recreation Facility Bonds of 1999 are not general obligations and
accordingly are not backed by the full-faith and credit of the City.
(continued)
N O N M A J O R G O V E R N M E N T A L F U N D S
Debt Service Funds (continued)
HRA Revenue Fund
The HRA also issued the HRA Ice Arena Lease Revenue Bonds, Series 2006 for
the Hasse single sheet ice arena facility. Debt service will be payable from
property taxes and lease payments to be made to the City pursuant to the lease
agreement between the Authority and Independent School District 194. These
HRA bonds are not general obligations and accordingly are not backed by the
full-faith and credit of the City.
Capital Projects Funds – These funds account for financial resources used in the acquisition of
capital facilities, equipment, and infrastructure (except those financed by enterprise funds).
Municipal State-aid Fund
This fund accounts for an annual allotment from the State of Minnesota Municipal
State-aid street construction account.
Pavement Management Fund
This fund accounts for pavement management activities relating to cracksealing,
patching, seal coating and overlays. These major maintenance projects are
financed with property taxes.
Storm Sewer Fund
This fund accounts for fees and area charges to land developers for construction
of storm sewer systems.
Sanitary Sewer Fund
This fund accounts for sewer connection and area fees charged to land
developers for connecting to the City’s sanitary sewer system, appropriations are
applied to the construction of sanitary sewer trunk systems.
Park Dedication Fund
This fund accounts for park dedication fees received from land developers. The
expenditures consist of acquiring and developing City parks and trails.
Trail Improvement Fund
This fund accounts for the long term maintenance, repairs and replacement of
City trails.
Park Improvement Fund
This fund accounts for the long term maintenance, repairs and replacement of
City parks.
Tax Increment Fund
This fund accounts for revenue received from tax increment property districts that
does not require debt financing. The expenditures are for current and future
development of tax increment property.
Equipment Fund
This fund accounts for the purchase of equipment for general government, public
safety, public works, and park maintenance.
This page intentionally left blank.
CITY OF LAKEVILLE, MINNESOTA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
DECEMBER 31, 2015
Total
Special Debt Capital Nonmajor
Revenue Service Projects Governmental
Funds Funds Funds Funds
Assets
Cash and investments 421,379$ 3,900,396$ 20,025,109$ 24,346,884$
Investments held by trustee - 696,873 - 696,873
Interest receivable 1,668 11,950 69,301 82,919
Taxes receivable
Unremitted - 17,913 88,244 106,157
Delinquent - 4,626 24,413 29,039
Accounts receivable 177,633 47,500 1,280,226 1,505,359
Due from other funds - - 3,200,000 3,200,000
Special assessments
Unremitted - - 4 4
Delinquent - - 243 243
Deferred - - 86,544 86,544
Other - - 143,780 143,780
Total assets 600,680$ 4,679,258$ 24,917,864$ 30,197,802$
Liabilities
Salaries payable 10,225$ -$ -$ 10,225$
Accounts payable 8,726 545 2,155,047 2,164,318
Deposits payable - - 26,125 26,125
Unearned revenue - - 4,526 4,526
Total liabilities 18,951 545 2,185,698 2,205,194
Deferred inflows of resources
Unavailable revenue - taxes - 4,626 24,413 29,039
Unavailable revenue - special assessments - - 230,567 230,567
Total deferred inflows of resources - 4,626 254,980 259,606
Fund balance
Restricted 22,661 4,674,087 6,489,580 11,186,328
Committed 559,068 - 15,987,606 16,546,674
Total fund balance 581,729 4,674,087 22,477,186 27,733,002
Total liabilities, deferred inflows of
resources, and fund balances 600,680$ 4,679,258$ 24,917,864$ 30,197,802$
105
CITY OF LAKEVILLE, MINNESOTA
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2015
Total
Special Debt Capital Nonmajor
Revenue Service Projects Governmental
Funds Funds Funds Funds
Revenues
Property taxes -$ 314,011$ 1,567,988$ 1,881,999$
Tax increment - 404,082 - 404,082
Licenses and permits 669,420 - - 669,420
Intergovernmental 3,814 841,401 3,337,916 4,183,131
Charges for services 97,587 403,132 6,214,797 6,715,516
Special assessments - - 23,475 23,475
Investment income 3,192 24,543 133,009 160,744
Donations 1,250 95,000 206,178 302,428
Miscellaneous 2,126 - 247,502 249,628
Total revenues 777,389 2,082,169 11,730,865 14,590,423
Expenditures - current
General government 475,121 475,121
Expenditures - capital outlay
General government 85,208 140,810 226,018
Public safety - 733,917 733,917
Public works - 8,053,285 8,053,285
Parks and recreation - 2,608,766 2,608,766
Total expenditures - capital outlay 85,208 11,536,778 11,621,986
Expenditures - debt service
Principal bond maturities 3,430,000 3,430,000
Interest on debt 634,326 634,326
Fiscal charges 11,287 11,287
Total expenditures - debt service 4,075,613 4,075,613
Total expenditures 560,329 4,075,613 11,536,778 16,172,720
Excess (deficiency) of revenues over expenditures 217,060 (1,993,444) 194,087 (1,582,297)
Other financing sources (uses)
Transfers from other funds - 2,016,337 2,962,242 4,978,579
Transfers to other funds (647,933) - (652,681) (1,300,614)
Issuance of debt - 1,316 4,728,684 4,730,000
Premium on bonds issued - - 271,564 271,564
Total other financing sources (uses)(647,933) 2,017,653 7,309,809 8,679,529
Net change in fund balance (430,873) 24,209 7,503,896 7,097,232
Fund balance, January 1 1,012,602 4,649,878 14,973,290 20,635,770
Fund balance, December 31 581,729$ 4,674,087$ 22,477,186$ 27,733,002$
106
CITY OF LAKEVILLE, MINNESOTA
SPECIAL REVENUE FUNDS (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2015
Downtown
Economic Special
Communications Development Service District Total
Assets
Cash and investments 351,449$ 50,528$ 19,402$ 421,379$
Interest receivable 1,465 198 5 1,668
Accounts receivable 177,633 - - 177,633
Total assets 530,547$ 50,726$ 19,407$ 600,680$
Liabilities
Salaries payable 10,225$ -$ -$ 10,225$
Accounts payable 8,726 - - 8,726
Total liabilities 18,951 - - 18,951
Fund balance
Restricted 3,254 - 19,407 22,661
Committed 508,342 50,726 - 559,068
Total fund balance 511,596 50,726 19,407 581,729
Total liabilities and fund balances 530,547$ 50,726$ 19,407$ 600,680$
107
CITY OF LAKEVILLE, MINNESOTA
SPECIAL REVENUE FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2015
Downtown
Economic Special
Communications Development Service District Total
Revenues
Licenses and permits 669,420$ -$ -$ 669,420$
Intergovernmental
State-aid PERA 516 - - 516
County and local grants - 3,298 - 3,298
Charges for services 61,708 2,500 33,379 97,587
Investment income 2,812 380 - 3,192
Donations - - 1,250 1,250
Miscellaneous 2,126 - - 2,126
Total revenues 736,582 6,178 34,629 777,389
Expenditures
Current
General government 437,030 7,830 30,261 475,121
Capital outlay
General government 85,208 - - 85,208
Total expenditures 522,238 7,830 30,261 560,329
Excess (deficiency) of revenues over expenditures 214,344 (1,652) 4,368 217,060
Other financing uses
Transfer to
General Fund (152,933) - - (152,933)
Capital Projects - Building Fund (495,000) - - (495,000)
Total other financing uses (647,933) - - (647,933)
Net change in fund balance (433,589) (1,652) 4,368 (430,873)
Fund balance, January 1 945,185 52,378 15,039 1,012,602
Fund balance, December 31 511,596$ 50,726$ 19,407$ 581,729$
108
CITY OF LAKEVILLE, MINNESOTA
DEBT SERVICE FUNDS (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2015
Tax State-aid Water Arena HRA
Increment Revenue Revenue Revenue Revenue Total
Assets
Cash and investments 3,420,885$ 23,862$ -$ 79,097$ 376,552$ 3,900,396$
Investments held by trustee - - - - 696,873 696,873
Interest receivable 11,309 73 - 413 155 11,950
Taxes receivable
Unremitted 279 - - - 17,634 17,913
Delinquent - - - - 4,626 4,626
Accounts receivable - - - 47,500 - 47,500
Total assets 3,432,473$ 23,935$ -$ 127,010$ 1,095,840$ 4,679,258$
Liabilities
Accounts payable 90$ 273$ -$ 91$ 91$ 545$
Deferred inflows of resources
Unavailable revenue - taxes - - - - 4,626 4,626
Fund balance
Restricted for debt service 3,432,383 23,662 - 126,919 1,091,123 4,674,087
Total liabilities, deferred inflows of
resources, and fund balances 3,432,473$ 23,935$ -$ 127,010$ 1,095,840$ 4,679,258$
Bonds
109
CITY OF LAKEVILLE, MINNESOTA
DEBT SERVICE FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2015
Tax State-aid Water Arena HRA
Increment Revenue Revenue Revenue Revenue Total
Revenues
Property taxes
Current and delinquent 59$ - $ - $ -$ 281,635$ 281,694$
Fiscal disparities 4 - - - 32,313 32,317
Total property taxes 63 - - - 313,948 314,011
Tax increment 404,082 - - - - 404,082
Intergovernmental - State-aid - 841,401 - - - 841,401
Charges for services - - - 88,626 314,506 403,132
Investment income 21,705 138 - 792 1,908 24,543
Donations - - - 95,000 - 95,000
Total revenues 425,850 841,539 - 184,418 630,362 2,082,169
Expenditures - debt service
Principal bond maturities 210,000 725,000 1,975,000 275,000 245,000 3,430,000
Interest on debt 72,561 116,401 39,500 43,420 362,444 634,326
Fiscal charges 5,299 1,509 1,837 264 2,378 11,287
Total expenditures - debt service 287,860 842,910 2,016,337 318,684 609,822 4,075,613
Total expenditures 287,860 842,910 2,016,337 318,684 609,822 4,075,613
Excess (deficiency) of revenues
over expenditures 137,990 (1,371) (2,016,337) (134,266) 20,540 (1,993,444)
Other financing sources
Transfer from
Capital Projects - Water Fund - - 2,016,337 - - 2,016,337
Issuance of debt - 1,316 - - - 1,316
Total other financing sources - 1,316 2,016,337 - - 2,017,653
Net change in fund balance 137,990 (55) - (134,266) 20,540 24,209
Fund balance, January 1 3,294,393 23,717 - 261,185 1,070,583 4,649,878
Fund balance, December 31 3,432,383$ 23,662$ -$ 126,919$ 1,091,123$ 4,674,087$
Bonds
110
CITY OF LAKEVILLE, MINNESOTA
CAPITAL PROJECTS FUNDS (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2015
Municipal Pavement Storm Sanitary
State-aid Management Sewer Sewer
Assets
Cash and investments 4,220,777$ 1,307,549$ 3,394,977$ 3,424,010$
Interest receivable 7,637 3,985 14,241 17,035
Taxes receivable
Unremitted - 66,909 - -
Delinquent - 18,104 - -
Accounts receivable 1,239,841 - - -
Due from other fund - - 1,600,000 1,600,000
Special assessments
Unremitted - - - 4
Delinquent - - - 243
Deferred - 1,270 6,829 78,301
Other - - 60,811 82,969
Total assets 5,468,255$ 1,397,817$ 5,076,858$ 5,202,562$
Liabilities
Accounts payable 2,063,137$ 42,438$ -$ -$
Deposits payable - - - 26,125
Unearned revenue - - - -
Total liabilities 2,063,137 42,438 - 26,125
Deferred inflows of resources
Unavailable revenue - taxes - 18,104 - -
Unavailable revenue - special assessments - 1,270 67,640 161,513
Total deferred inflows of resources - 19,374 67,640 161,513
Fund balance
Restricted 3,405,118 - - -
Committed - 1,336,005 5,009,218 5,014,924
Total fund balance 3,405,118 1,336,005 5,009,218 5,014,924
Total liabilities, deferred inflows of
resources, and fund balances 5,468,255$ 1,397,817$ 5,076,858$ 5,202,562$
111
Park Trail Park Tax
Dedication Improvement Improvement Increment Equipment Total
2,855,777$ 622,431$ 67,376$ 204,180$ 3,928,032$ 20,025,109$
7,579 2,810 415 854 14,745 69,301
- 4,314 - - 17,021 88,244
- 746 - - 5,563 24,413
40,385 - - - - 1,280,226
- - - - - 3,200,000
- - - - - 4
- - - - - 243
144 - - - - 86,544
- - - - - 143,780
2,903,885$ 630,301$ 67,791$ 205,034$ 3,965,361$ 24,917,864$
14,079$ -$ -$ 5,708$ 29,685$ 2,155,047$
- - - - - 26,125
4,526 - - - - 4,526
18,605 - - 5,708 29,685 2,185,698
- 746 - - 5,563 24,413
144 - - - - 230,567
144 746 - - 5,563 254,980
2,885,136 - - 199,326 - 6,489,580
- 629,555 67,791 - 3,930,113 15,987,606
2,885,136 629,555 67,791 199,326 3,930,113 22,477,186
2,903,885$ 630,301$ 67,791$ 205,034$ 3,965,361$ 24,917,864$
112
CITY OF LAKEVILLE, MINNESOTA
CAPITAL PROJECTS FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2015
Municipal Pavement Storm Sanitary
State-aid Management Sewer Sewer
Revenues
Property taxes
Current -$ 1,067,462$ -$ -$
Fiscal disparities - 122,421 - -
Total property taxes - 1,189,883 - -
Intergovernmental
Municipal state-aid 1,485,051 120,000 - -
County and local grants 1,626,442 - - -
Charges for services - 75,407 2,671,526 940,203
Special assessments - 2,998 235 20,182
Investment income 14,657 7,649 27,332 32,695
Donations - - - -
Miscellaneous - - - -
Total revenues 3,126,150 1,395,937 2,699,093 993,080
Expenditures - capital outlay
General government - - - -
Public safety - - - -
Public works 5,652,973 1,042,207 412,667 392,368
Parks and recreation 477,991 124,116 - -
Total expenditures - capital outlay 6,130,964 1,166,323 412,667 392,368
Excess (deficiency) of revenues
over expenditures (3,004,814) 229,614 2,286,426 600,712
Other financing sources (uses)
Transfer from/(to)
General Fund - - - -
Special Revenue - Communications - - - -
Debt Service - G.O. Improvement Fund - - (101,000) -
Capital Projects - Improvement Const. Fund - - - -
Capital Projects - Pavement Management Fund - - - -
Capital Projects - Equipment Fund - (524,000) - -
Enterprise - Liquor Fund - - - -
Issuance of debt 4,728,684 - - -
Premium on bonds issued 271,564 - - -
Total other financing sources (uses)5,000,248 (524,000) (101,000) -
Net change in fund balance 1,995,434 (294,386) 2,185,426 600,712
Fund balance, January 1 1,409,684 1,630,391 2,823,792 4,414,212
Fund balance, December 31 3,405,118$ 1,336,005$ 5,009,218$ 5,014,924$
113
Park Trail Park Tax
Dedication Improvement Improvement Increment Equipment Total
-$ 69,714$ -$ -$ 269,535$ 1,406,711$
- 8,034 - - 30,822 161,277
- 77,748 - - 300,357 1,567,988
- - - - - 1,605,051
106,423 - - - - 1,732,865
2,516,661 - - 11,000 - 6,214,797
60 - - - - 23,475
14,545 5,394 797 1,640 28,300 133,009
151,596 - 52,482 - 2,100 206,178
22,802 - - - 224,700 247,502
2,812,087 83,142 53,279 12,640 555,457 11,730,865
- - - 27,862 112,948 140,810
- - - - 733,917 733,917
- - - - 553,070 8,053,285
1,214,216 196,057 225,918 - 370,468 2,608,766
1,214,216 196,057 225,918 27,862 1,770,403 11,536,778
1,597,871 (112,915) (172,639) (15,222) (1,214,946) 194,087
- - 235,000 - 877,000 1,112,000
- - - - 495,000 495,000
- - - - - (101,000)
- - - (27,681) - (27,681)
- - - - 524,000 524,000
- - - - - (524,000)
- - 5,430 - 825,812 831,242
- - - - - 4,728,684
- - - - - 271,564
- - 240,430 (27,681) 2,721,812 7,309,809
1,597,871 (112,915) 67,791 (42,903) 1,506,866 7,503,896
1,287,265 742,470 - 242,229 2,423,247 14,973,290
2,885,136$ 629,555$ 67,791$ 199,326$ 3,930,113$ 22,477,186$
114
CITY OF LAKEVILLE, MINNESOTA
COMMUNICATIONS - SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2015
Budget Variance With
As Originally Final Final
Adopted Budget Actual Budget
Revenues
Licenses and permits 652,413$ 652,413$ 669,420$ 17,007$
Intergovernmental
State-aid PERA 516 516 516 -
Charges for services 66,175 66,175 61,708 (4,467)
Investment income 2,530 2,530 2,812 282
Miscellaneous - - 2,126 2,126
Total revenues 721,634 721,634 736,582 14,948
Expenditures - general government
Current
Personnel 337,013 337,013 344,285 (7,272)
Commodities 3,352 3,352 2,762 590
Other charges and services 249,402 249,402 89,983 159,419
Capital outlay 78,451 78,451 85,208 (6,757)
Total expenditures - general government 668,218 668,218 522,238 145,980
Excess of revenues over expenditures 53,416 53,416 214,344 160,928
Other financing uses
Transfer to
General Fund (152,933) (152,933) (152,933) -
Capital Projects - Equipment Fund (495,000) (495,000) (495,000) -
Total other financing uses (647,933) (647,933) (647,933) -
Net change in fund balance (594,517)$ (594,517)$ (433,589) 160,928$
Fund balance, January 1 945,185
Fund balance, December 31 511,596$
115
CITY OF LAKEVILLE, MINNESOTA
ECONOMIC DEVELOPMENT - SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2015
Budget Variance With
As Originally Final Final
Adopted Budget Actual Budget
Revenues
Intergovernmental
County and local grants -$ -$ 3,298$ 3,298$
Charges for services 2,500 2,500 2,500 -
Investment income 276 276 380 104
Total revenues 2,776 2,776 6,178 3,402
Expenditures - General government
Current
Other charges and services 7,500 7,500 7,830 (330)
Net change in fund balance (4,724)$ (4,724)$ (1,652) 3,072$
Fund balance, January 1 52,378
Fund balance, December 31 50,726$
116
CITY OF LAKEVILLE, MINNESOTA
DOWNTOWN SPECIAL SERVICE DISTRICT - SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2015
Budget Variance With
As Originally Final Final
Adopted Budget Actual Budget
Revenues
Charges for services 27,500$ 27,500$ 33,379$ 5,879$
Donations - - 1,250 1,250
Total revenues 27,500 27,500 34,629 7,129
Expenditures - general government
Current
Personnel 11,250 11,250 12,153 (903)
Commodities 350 350 91 259
Other charges and services 15,900 15,900 18,017 (2,117)
Total expenditures - general government 27,500 27,500 30,261 (2,761)
Net change in fund balance -$ -$ 4,368 4,368$
Fund balance, January 1 15,039
Fund balance, December 31 19,407$
117
A G E N C Y F U N D
Agency Fund – The Agency Fund is used to account for assets held by the City as an agent for
other City funds, governments, and individuals.
Escrow Fund
This fund accounts for deposits paid by land developers, builders, and other
individuals for future disbursements. The disbursements relating to these events
will be made when specific terms and conditions have been satisfied.
CITY OF LAKEVILLE, MINNESOTA
AGENCY FUND
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
YEAR ENDED DECEMBER 31, 2015
Balance Balance
Escrow Fund January 1 Increases Decreases December 31
Assets
Cash and investments 7,227,588$ 3,251,698$ 1,966,034$ 8,513,252$
Liabilities
Deposits payable 7,227,588$ 3,251,698$ 1,966,034$ 8,513,252$
118
This page intentionally left blank.
S U P P L E M E N T A L I N F O R M A T I O N
CITY OF LAKEVILLE, MINNESOTA
SCHEDULE OF CHANGES IN BONDED INDEBTEDNESS
YEAR ENDED DECEMBER 31, 2015
Outstanding Outstanding
January 1 Issued Redeemed December 31
Governmental Activities:
General obligation bonds 69,690,000$ -$ 14,825,000$ 54,865,000$
G.O. Improvement bonds 23,905,000 11,815,000 1,590,000 34,130,000
Tax increment bonds 1,890,000 - 210,000 1,680,000
State-aid street revenue bonds 3,890,000 4,730,000 725,000 7,895,000
Water connection revenue bonds 1,975,000 - 1,975,000 -
Arena revenue bonds 910,000 - 275,000 635,000
HRA lease revenue bonds 8,100,000 - 245,000 7,855,000
Total governmental activity bonds 110,360,000 16,545,000 19,845,000 107,060,000
Business-type Activities:
Liquor revenue bonds 3,070,000 - 175,000 2,895,000
Total bonded indebtedness 113,430,000$ 16,545,000$ 20,020,000$ 109,955,000$
119
CITY OF LAKEVILLE, MINNESOTA
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2015
Issue Interest Annual
Date Rate Date Amount Interest
General Obligation Bonds:
Capital Improvement Refunding Bonds of 2012 B 8/15/12
(Central Maintenance Facility)
Principal and interest 2.00 2/1/16 505,000$ 393,800$
Principal and interest 2.00 2/1/17 530,000 383,450
Principal and interest 4.00 2/1/18 570,000 366,750
Principal and interest 4.00 2/1/19 635,000 342,650
Principal and interest 4.00 2/1/20 670,000 316,550
Principal and interest 4.00 2/1/21 750,000 288,150
Principal and interest (call provision date) 3.00 2/1/22 770,000 261,600
Principal and interest 3.00 2/1/23 810,000 237,900
Principal and interest 3.00 2/1/24 865,000 212,775
Principal and interest 3.00 2/1/25 930,000 185,850
Principal and interest 3.00 2/1/26 1,040,000 156,300
Principal and interest 3.00 2/1/27 1,070,000 124,650
Principal and interest 3.00 2/1/28 1,125,000 91,725
Principal and interest 3.00 2/1/29 1,200,000 56,850
Principal and interest 3.00 2/1/30 1,295,000 19,425
Total 12,765,000 3,438,425
Capital Improvement Bonds of 2007 D 8/1/07
(Police Station)
Principal and interest 5.00 2/1/16 490,000 583,113
Principal and Interest (call provision date) 5.00 2/1/17 11,700,000 285,431
Total 12,190,000 868,544
Capital Improvement Refunding Bonds of 2014 B 8/20/14
Interest 2.00 2/1/16 -$ 443,863$
Interest 2.00 2/1/17 - 443,863
Principal and interest 5.00 2/1/18 555,000 429,988
Principal and interest 5.00 2/1/19 580,000 401,613
Principal and interest 5.00 2/1/20 605,000 371,988
Principal and interest 1.75 2/1/21 635,000 351,306
Principal and interest 5.00 2/1/22 640,000 329,750
Principal and interest 5.00 2/1/23 670,000 297,000
Principal and interest (call provision date) 5.00 2/1/24 700,000 262,750
Principal and interest 4.00 2/1/25 735,000 230,550
Principal and interest 4.00 2/1/26 765,000 200,550
Principal and interest 4.00 2/1/27 790,000 169,450
Principal and interest 4.00 2/1/28 815,000 139,388
Principal and interest 3.50 2/1/29 845,000 110,338
Principal and interest 3.50 2/1/30 875,000 80,238
Principal and interest 3.50 2/1/31 910,000 49,000
Principal and interest 3.50 2/1/32 945,000 16,538
Total 11,065,000 4,328,169
(continued)
Principal Maturity
120
CITY OF LAKEVILLE, MINNESOTA
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2015
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
General Obligation Bonds: (continued)
Street Reconstruction Refunding Bonds of 2012 B 8/15/12
Principal and interest 2.00 2/1/16 725,000$ 281,300$
Principal and interest 2.00 2/1/17 675,000 267,300
Principal and interest 4.00 2/1/18 730,000 245,950
Principal and interest 4.00 2/1/19 765,000 216,050
Principal and interest 4.00 2/1/20 805,000 184,650
Principal and interest 4.00 2/1/21 835,000 151,850
Principal and interest (call provision date) 3.00 2/1/22 850,000 122,400
Principal and interest 3.00 2/1/23 880,000 96,450
Principal and interest 3.00 2/1/24 905,000 69,675
Principal and interest 3.00 2/1/25 935,000 42,075
Principal and interest 3.00 2/1/26 935,000 14,025
Total 9,040,000 1,691,725
Street Reconstruction Bonds of 2005 A 12/1/05
Principal and interest 3.75 2/1/16 155,000 39,245
Principal (Call 2/1/2016) 3.75 2/1/16 1,950,000 -
Total 2,105,000 39,245
Street Reconstruction Refunding Bonds of 2014 B 8/20/14
Interest 2.00 2/1/16 - 66,963
Principal and interest 2.00 2/1/17 130,000 65,663
Principal and interest 5.00 2/1/18 135,000 60,988
Principal and interest 5.00 2/1/19 140,000 54,113
Principal and interest 5.00 2/1/20 145,000 46,988
Principal and interest 1.75 2/1/21 155,000 42,006
Principal and interest 5.00 2/1/22 160,000 36,650
Principal and interest 5.00 2/1/23 170,000 28,400
Principal and interest (call provision date) 5.00 2/1/24 175,000 19,775
Principal and interest 4.00 2/1/25 190,000 11,600
Principal and interest 4.00 2/1/26 195,000 3,900
Total 1,595,000 437,044
Street Reconstruction Bonds of 2007 H 12/15/07
Principal and interest 4.00 2/1/16 125,000 87,945
Principal and interest 4.00 2/1/17 130,000 82,845
Principal and Interest (call provision date) 4.00 2/1/18 140,000 77,445
Principal and interest 4.00 2/1/19 145,000 71,745
Principal and interest 4.00 2/1/20 150,000 65,845
Principal and interest 4.10 2/1/21 155,000 59,668
Principal and interest 4.125 2/1/22 160,000 53,190
Principal and interest 4.20 2/1/23 170,000 46,320
Principal and interest 4.375 2/1/24 175,000 38,922
Principal and interest 4.375 2/1/25 185,000 31,047
Principal and interest 4.50 2/1/26 190,000 22,725
Principal and interest 4.50 2/1/27 200,000 13,950
Principal and interest 4.50 2/1/28 210,000 4,725
Total 2,135,000 656,372
(continued)
121
CITY OF LAKEVILLE, MINNESOTA
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2015
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
General Obligation Bonds: (continued)
Taxable Street Reconstruction Bonds of 2009 A
(Build America Bonds)12/30/09
Principal and interest 3.50 2/1/16 210,000$ 196,753$
Principal and interest 4.00 2/1/17 215,000 188,778
Principal and interest 4.25 2/1/18 225,000 179,696
Principal and interest 4.50 2/1/19 230,000 169,740
Principal and Interest (call provision date) 4.65 2/1/20 235,000 159,101
Principal and interest 4.75 2/1/21 245,000 147,819
Principal and interest 4.90 2/1/22 250,000 135,875
Principal and interest 5.00 2/1/23 260,000 123,250
Principal and interest 5.20 2/1/24 270,000 109,730
Principal and interest 5.30 2/1/25 280,000 95,290
Principal and interest 5.40 2/1/26 290,000 80,040
Principal and interest 5.50 2/1/27 300,000 63,960
Principal and interest 5.65 2/1/28 310,000 46,953
Principal and interest 5.80 2/1/29 320,000 28,915
Principal and interest 5.95 2/1/30 330,000 9,818
Total 3,970,000 1,735,718
Total General Obligation Bonds 54,865,000$ 13,195,242$
G.O. Improvement Bonds:
Improvement Refunding Bonds of 2007 B 2/1/07
Principal and interest 3.875 2/1/16 95,000 1,841
Total 95,000 1,841
Improvement Bonds of 2007 F 8/1/07
Principal and interest 4.00 2/1/16 50,000 5,113
Principal and interest 4.00 2/1/17 50,000 3,088
Principal and interest 4.125 2/1/18 50,000 1,031
Total 150,000 9,232
Improvement Bonds of 2008 A 10/1/08
Principal and interest 3.75 2/1/16 30,000 3,938
Principal and interest 3.75 2/1/17 30,000 2,813
Principal and interest 3.75 2/1/18 30,000 1,688
Principal and interest 3.75 2/1/19 30,000 563
Total 120,000 9,002
Improvement Refunding Bonds of 2009 B 12/30/09
Principal and interest 2.50 2/1/16 390,000 41,288
Principal and interest 2.75 2/1/17 375,000 31,256
Principal and interest 3.00 2/1/18 355,000 20,775
Principal and interest 3.00 2/1/19 360,000 10,050
Principal and interest 3.00 2/1/20 155,000 2,325
Total 1,635,000 105,694
(continued)
122
CITY OF LAKEVILLE, MINNESOTA
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2015
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
G.O. Improvement Bonds: (continued)
Improvement Bonds of 2011 A 12/1/11
Principal and interest 1.200 2/1/16 190,000$ 34,798$
Principal and interest 1.400 2/1/17 190,000 32,328
Principal and interest 1.700 2/1/18 190,000 29,383
Principal and interest 1.900 2/1/19 190,000 25,963
Principal and interest 2.100 2/1/20 190,000 22,163
Principal and interest 2.250 2/1/21 195,000 17,974
Principal and interest 2.600 2/1/22 50,000 15,130
Principal and interest 2.600 2/1/23 50,000 13,830
Principal and interest 3.100 2/1/24 50,000 12,530
Principal and interest 3.100 2/1/25 45,000 11,183
Principal and interest 3.100 2/1/26 45,000 9,788
Principal and interest 3.100 2/1/27 45,000 8,393
Principal and interest 3.500 2/1/28 45,000 6,998
Principal and interest 3.500 2/1/29 45,000 5,513
Principal and interest 3.500 2/1/30 45,000 3,938
Principal and interest 3.500 2/1/31 45,000 2,363
Principal and interest 3.500 2/1/32 45,000 788
Total 1,655,000 253,063
Improvement Bonds of 2012 A 8/15/12
Principal and interest 2.000 2/1/16 550,000 157,675
Principal and interest 2.000 2/1/17 555,000 146,625
Principal and interest 2.000 2/1/18 550,000 135,575
Principal and interest 3.000 2/1/19 550,000 121,825
Principal and interest 3.000 2/1/20 555,000 105,250
Principal and interest 3.000 2/1/21 565,000 88,450
Principal and interest (call provision date) 3.000 2/1/22 565,000 71,500
Principal and interest 4.000 2/1/23 575,000 51,525
Principal and interest 4.000 2/1/24 135,000 37,325
Principal and interest 3.000 2/1/25 130,000 32,675
Principal and interest 3.000 2/1/26 130,000 28,775
Principal and interest 3.000 2/1/27 130,000 24,875
Principal and interest 3.000 2/1/28 130,000 20,975
Principal and interest 3.000 2/1/29 130,000 17,075
Principal and interest 3.000 2/1/30 125,000 13,250
Principal and interest 3.000 2/1/31 125,000 9,500
Principal and interest 3.000 2/1/32 125,000 5,750
3.100 2/1/33 125,000 1,938
Total 5,750,000 1,070,563
Improvement Bonds of 2013 A 8/15/13
Principal and interest 2.000 2/1/16 360,000 111,050
Principal and interest 2.000 2/1/17 360,000 103,850
Principal and interest 2.000 2/1/18 365,000 96,600
Principal and interest 2.000 2/1/19 370,000 89,250
Principal and interest 2.000 2/1/20 375,000 81,800
Principal and interest 2.250 2/1/21 380,000 73,775
Principal and interest 2.500 2/1/22 380,000 64,750
(continued)
123
CITY OF LAKEVILLE, MINNESOTA
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2015
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
G.O. Improvement Bonds: (continued)
Improvement Bonds of 2013 A (continued)
Principal and interest (call provision date) 2.750 2/1/23 385,000$ 54,706$
Principal and interest 2.750 2/1/24 395,000 43,981
Principal and interest 3.500 2/1/25 100,000 36,800
Principal and interest 3.500 2/1/26 100,000 33,300
Principal and interest 3.500 2/1/27 100,000 29,800
Principal and interest 3.750 2/1/28 100,000 26,175
Principal and interest 3.750 2/1/29 100,000 22,425
Principal and interest 3.750 2/1/30 100,000 18,675
Principal and interest 4.000 2/1/31 105,000 14,700
Principal and interest 4.000 2/1/32 105,000 10,500
Principal and interest 4.000 2/1/33 105,000 6,300
Principal and interest 4.000 2/1/34 105,000 2,100
Total 4,390,000 920,537
Improvement Bonds of 2014 A 8/20/14
Principal and interest 2.000 2/1/16 675,000.00 257,375
Principal and interest 2.000 2/1/17 685,000.00 243,775
Principal and interest 2.000 2/1/18 695,000.00 229,975
Principal and interest 2.000 2/1/19 705,000.00 215,975
Principal and interest 3.000 2/1/20 710,000.00 198,275
Principal and interest 3.000 2/1/21 730,000.00 176,675
Principal and interest 4.000 2/1/22 745,000.00 150,825
Principal and interest 4.000 2/1/23 775,000.00 120,425
Principal and interest (call provision date) 4.000 2/1/24 800,000.00 88,925
Principal and interest 4.000 2/1/25 825,000.00 56,425
Principal and interest 3.000 2/1/26 120,000.00 38,125
Principal and interest 3.000 2/1/27 120,000.00 34,525
Principal and interest 3.500 2/1/28 120,000.00 30,625
Principal and interest 3.500 2/1/29 120,000.00 26,425
Principal and interest 3.500 2/1/30 120,000.00 22,225
Principal and interest 3.500 2/1/31 115,000.00 18,113
Principal and interest 3.500 2/1/32 115,000.00 14,088
Principal and interest 3.500 2/1/33 115,000.00 10,063
Principal and interest 3.500 2/1/34 115,000.00 6,038
Principal and interest 3.500 2/1/35 115,000.00 2,013
Total 8,520,000 1,940,890
Improvement Bonds of 2015 A 8/20/14
Principal and interest 5.00 2/1/16 - 423,231
Principal and interest 5.00 2/1/17 470,000.00 435,063
Principal and interest 5.00 2/1/18 490,000.00 411,063
Principal and interest 1.75 2/1/19 510,000.00 394,350
Principal and interest 1.75 2/1/20 505,000.00 385,469
Principal and interest 5.00 2/1/21 510,000.00 368,300
Principal and interest 5.00 2/1/22 530,000.00 342,300
Principal and interest 5.00 2/1/23 545,000.00 315,425
Principal and interest 2.50 2/1/24 570,000.00 294,675
Principal and interest (call provision date) 5.00 2/1/25 580,000.00 273,050
Principal and interest 5.00 2/1/26 605,000.00 243,425
Principal and interest 4.00 2/1/27 580,000.00 216,700
(continued)
124
CITY OF LAKEVILLE, MINNESOTA
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2015
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
G.O. Improvement Bonds: (continued)
Improvement Bonds of 2015 A (continued)
Principal and interest 4.00 2/1/28 590,000$ 193,300$
Principal and interest 3.00 2/1/29 610,000.00 172,350
Principal and interest 3.13 2/1/30 630,000.00 153,356
Principal and interest 3.25 2/1/31 640,000.00 133,113
Principal and interest 3.38 2/1/32 655,000.00 111,659
Principal and interest 3.38 2/1/33 675,000.00 89,216
Principal and interest 3.50 2/1/34 690,000.00 65,750
Principal and interest 3.50 2/1/35 705,000.00 41,338
Principal and interest 4.00 2/1/36 725,000.00 14,500
Total 11,815,000 5,077,633
Total G.O. Improvement Bonds 34,130,000$ 9,388,455$
Tax Increment Bonds:
Tax Increment Refunding 2/1/07
Bonds of 2007 A
Principal and Interest (call provision date)4.00 2/1/16 220,000$ 63,962$
Principal and interest 4.00 2/1/17 220,000 55,161
Principal and interest 4.00 2/1/18 230,000 46,161
Principal and interest 4.00 2/1/19 240,000 36,761
Principal and interest 4.125 2/1/20 245,000 26,908
Principal and interest 4.125 2/1/21 260,000 16,493
Principal and interest 4.20 2/1/22 265,000 5,565
Total 1,680,000 251,011
Total Tax Increment Bonds 1,680,000$ 251,011$
State-aid Street Revenue Bonds:
State-aid Street Bonds of 2007 G 12/15/07
Principal and Interest (call provision date)4.00 4/1/16 405,000$ 42,700$
Principal and interest 4.00 4/1/17 425,000 26,100
Principal and interest 4.00 4/1/18 440,000 8,800
Total 1,270,000 77,600
State-aid Street Refunding 1/1/10
Bonds of 2010 A
Principal and interest 3.00 4/1/16 275,000 43,025
Principal and interest 3.00 4/1/17 280,000 34,700
Principal and interest 3.00 4/1/18 285,000 26,225
Principal and interest 3.25 4/1/19 300,000 17,075
Principal and interest 4.00 4/1/20 305,000 6,100
Total 1,445,000 127,125
State-aid Street Refunding 12/1/11
Bonds of 2011 B
Principal and interest 1.25 4/1/16 70,000 7,333
Principal and interest 1.25 4/1/17 75,000 6,426
(continued)
125
CITY OF LAKEVILLE, MINNESOTA
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2015
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
State-aid Street Revenue Bonds:
State-aid Street Refunding
Bonds of 2011 B (continued)
Principal and interest 1.75 4/1/18 75,000$ 5,301$
Principal and interest 1.75 4/1/19 75,000 3,989
Principal and interest 2.15 4/1/20 75,000 2,526
Principal and interest 2.15 4/1/21 80,000 860
Total 450,000 26,435
State-aid Street 12/1/11
Bonds of 2015 A
Principal and interest 5.00 2/1/16 - 168,469
Principal and interest 5.00 2/1/17 160,000 173,856
Principal and interest 5.00 2/1/18 170,000 165,606
Principal and interest 1.75 2/1/19 175,000 159,825
Principal and interest 1.75 2/1/20 180,000 156,719
Principal and interest 5.00 2/1/21 185,000 150,519
Principal and interest 5.00 2/1/22 190,000 141,144
Principal and interest 5.00 2/1/23 200,000 131,394
Principal and interest 2.50 2/1/24 210,000 123,769
Principal and interest 5.00 2/1/25 215,000 115,769
Principal and interest 5.00 2/1/26 230,000 104,644
Principal and interest 4.00 2/1/27 240,000 94,094
Principal and interest 4.00 2/1/28 250,000 84,294
Principal and interest 3.00 2/1/29 260,000 75,394
Principal and interest 3.13 2/1/30 265,000 67,353
Principal and interest 3.25 2/1/31 275,000 58,744
Principal and interest 3.38 2/1/32 285,000 49,466
Principal and interest 3.38 2/1/33 295,000 39,678
Principal and interest 3.50 2/1/34 305,000 29,363
Principal and interest 3.50 2/1/35 315,000 18,513
Principal and interest 4.00 2/1/36 325,000 6,500
Total 4,730,000 2,115,113
Total State-aid Street Revenue Bonds 7,895,000$ 2,346,273$
Arena Revenue Bonds:
Gross Revenue Recreation Facility 4/1/99
Bonds of 1999 (Ames Ice Arena)
Principal and interest 5.30 8/1/16 145,000$ 33,990$
Principal and interest 5.30 8/1/17 155,000 26,305
Principal and interest 5.40 8/1/18 165,000 18,090
Principal and interest 5.40 8/1/19 170,000 9,180
Total Arena Revenue Bonds 635,000$ 87,565$
126
CITY OF LAKEVILLE, MINNESOTA
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2015
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
HRA Lease Revenue Bonds:
HRA Ice Arena Lease Revenue 12/01/06
Bonds of 2006 (Hasse Ice Arena)
Principal and interest 4.25 2/1/16 270,000$ 351,500$
Principal and Interest (call provision date) 4.50 2/1/17 315,000 338,675
Principal and interest 4.50 2/1/18 340,000 323,938
Principal and interest 4.50 2/1/19 355,000 308,300
Principal and interest 4.50 2/1/20 370,000 291,988
Principal and interest 4.50 2/1/21 390,000 274,888
Principal and interest 4.50 2/1/22 415,000 256,775
Principal and interest 4.50 2/1/23 435,000 237,650
Principal and interest 4.50 2/1/24 450,000 217,738
Principal and interest 4.50 2/1/25 470,000 197,038
Principal and interest 4.50 2/1/26 495,000 175,325
Principal and interest 4.625 2/1/27 520,000 152,163
Principal and interest 4.625 2/1/28 545,000 127,534
Principal and interest 4.625 2/1/29 575,000 101,634
Principal and interest 4.625 2/1/30 605,000 74,347
Principal and interest 4.625 2/1/31 635,000 45,672
Principal and interest 4.625 2/1/32 670,000 15,494
Total HRA Lease Revenue Bonds 7,855,000$ 3,490,659$
Total Governmental Activity Bonds 107,060,000$ 28,759,204$
Liquor Revenue Bonds:
Liquor Revenue Bonds of 2007 5/1/07
Principal and interest 5.00 2/1/16 180,000$ 140,250$
Principal and Interest (call provision date) 5.00 2/1/17 190,000 131,000
Principal and interest 5.00 2/1/18 200,000 121,250
Principal and interest 5.00 2/1/19 210,000 111,000
Principal and interest 5.00 2/1/20 220,000 100,250
Principal and interest 5.00 2/1/21 235,000 88,875
Principal and interest 5.00 2/1/22 245,000 76,875
Principal and interest 5.00 2/1/23 255,000 64,375
Principal and interest 5.00 2/1/24 270,000 51,250
Principal and interest 5.00 2/1/25 285,000 37,375
Principal and interest 5.00 2/1/26 295,000 22,875
Principal and interest 5.00 2/1/27 310,000 7,750
Total Business-type Activity Bonds 2,895,000$ 953,125$
Total Bonded Indebtedness and Annual Interest Payable 109,955,000$ 29,712,329$
127
CITY OF LAKEVILLE, MINNESOTA
COMBINED SCHEDULE OF BONDED INDEBTEDNESS
DECEMBER 31, 2015
Interest Issue Call Maturity
Rates %Date Date Date
Governmental Activities:
General Obligation Bonds:
Park Refunding Bonds of 2011 B 0.50-0.75 Dec-01-11 n/a Apr-01-15
Capital Improvement Bonds of 2004 A 3.50-4.75 Nov-01-04 Feb-01-15 Feb-01-30
Capital Improvement Refunding Bonds of 2012 B 2.00-4.00 Aug-15-12 Feb-01-22 Feb-01-30
Capital Improvement Bonds of 2007 D 4.625-5.00 Aug-01-07 Feb-01-17 Feb-01-32
Capital Improvement Refunding Bonds of 2014 B 1.75-5.00 Aug-20-14 Feb-01-24 Feb-01-32
Street Reconstruction Refunding Bonds of 2012 B 2.00-4.00 Aug-15-12 Feb-01-22 Feb-01-26
Street Reconstruction Bonds of 2005 A 3.85-4.20 Dec-01-05 Feb-01-16 Feb-01-26
Street Reconstruction Refunding Bonds of 2014 B 1.75-5.00 Aug-20-14 Feb-01-24 Feb-01-26
Street Reconstruction Bonds of 2007 H 3.50-4.50 Dec-15-07 Feb-01-18 Feb-01-28
Street Reconstruction Bonds of 2009 A (Taxable) 1.55-5.95 Dec-30-09 Feb-01-20 Feb-01-30
Total General Obligation Bonds
G.O. Improvement Bonds:
Improvement Refunding Bonds of 2007 B 3.875 Feb-01-07 n/a Feb-01-16
Improvement Bonds of 2007 F 4.00-4.125 Aug-01-07 Feb-01-14 Feb-01-18
Improvement Bonds of 2008 A 2.70-3.75 Oct-01-08 n/a Feb-01-19
Improvement Refunding Bonds of 2009 B 2.00-3.00 Dec-30-09 n/a Feb-01-20
Improvement Bonds of 2011 A 0.50-3.50 Dec-01-11 Feb-01-21 Feb-01-32
Improvement Bonds of 2012 A 2.00-4.00 Aug-15-12 Feb-01-22 Feb-01-33
Improvement Bonds of 2013 A 2.00-4.00 Aug-15-13 Feb-01-23 Feb-01-34
Improvement Bonds of 2014 A 2.00-3.50 Aug-20-14 Feb-01-24 Feb-01-35
Improvement Bonds of 2015 A 1.75-5.00 Aug-20-15 Feb-01-25 Feb-01-36
Total G.O. Improvement Bonds
Tax Increment Bonds:
Tax Increment Refunding Bonds of 2007 A 4.00-4.20 Feb-01-07 Feb-01-16 Feb-01-22
State-aid Street Revenue Bonds:
State-aid Street Bonds of 2007 G 4.00 Dec-15-07 Apr-01-16 Apr-01-18
State-aid Street Refunding Bonds of 2010 A 2.00-4.00 Jan-01-10 n/a Apr-01-20
State-aid Street Refunding Bonds of 2011 B 0.50-2.15 Dec-01-11 n/a Apr-01-21
State-aid Street Bonds of 2015 A 1.75-5.00 Aug-20-15 Feb-01-25 Feb-01-36
Total State-aid Street Revenue Bonds
Water Connection Revenue Refunding Bonds of 2004 B 4.00 Nov-01-04 Feb-01-14 Feb-01-15
Arena Revenue Bonds:
Ice Center Refunding Bonds of 2008 A 2.70-3.25 Oct-01-08 n/a Feb-01-15
Gross Revenue Recreation Facility Bonds of 1999 5.30-5.40 Apr-01-99 n/a Aug-01-19
Total Arena Revenue Bonds
HRA Lease Revenue Bonds:
HRA Ice Arena Lease Revenue Bonds of 2006 4.25-4.625 Dec-01-06 Feb-01-17 Feb-01-32
Total Governmental Activity Bonds
Business-type Activity;
Liquor Revenue Bonds of 2007 5.00 May-01-07 Feb-01-17 Feb-01-27
Total Bonded Indebtedness
128
Bonds Due in 2016
Authorized Issued Retired Outstanding Principal Interest
1,215,000 1,215,000 1,215,000 - - -
14,445,000 14,445,000 14,445,000 - - -
12,765,000 12,765,000 - 12,765,000 505,000 393,800
15,115,000 15,115,000 2,925,000 12,190,000 490,000 583,113
11,065,000 11,065,000 - 11,065,000 - 443,863
9,685,000 9,685,000 645,000 9,040,000 725,000 281,300
5,430,000 5,430,000 3,325,000 2,105,000 2,105,000 39,245
1,595,000 1,595,000 - 1,595,000 - 66,963
2,810,000 2,810,000 675,000 2,135,000 125,000 87,945
4,945,000 4,945,000 975,000 3,970,000 210,000 196,753
79,070,000 79,070,000 24,205,000 54,865,000 4,160,000 2,092,982
3,165,000 3,165,000 3,070,000 95,000 95,000 1,841
1,310,000 1,310,000 1,160,000 150,000 50,000 5,113
620,000 620,000 500,000 120,000 30,000 3,938
4,250,000 4,250,000 2,615,000 1,635,000 390,000 41,288
2,385,000 2,385,000 730,000 1,655,000 190,000 34,798
6,805,000 6,805,000 1,055,000 5,750,000 550,000 157,675
4,685,000 4,685,000 295,000 4,390,000 360,000 111,050
8,520,000 8,520,000 - 8,520,000 675,000 257,375
11,815,000 11,815,000 - 11,815,000 - 423,231
43,555,000 43,555,000 9,425,000 34,130,000 2,340,000 1,036,309
2,265,000 2,265,000 585,000 1,680,000 220,000 63,961
3,675,000 3,675,000 2,405,000 1,270,000 405,000 42,700
2,680,000 2,680,000 1,235,000 1,445,000 275,000 43,025
665,000 665,000 215,000 450,000 70,000 7,333
4,730,000 4,730,000 - 4,730,000 - 168,469
11,750,000 11,750,000 3,855,000 7,895,000 750,000 261,527
9,735,000 9,735,000 9,735,000 - - -
775,000 775,000 775,000 - - -
1,250,000 1,250,000 615,000 635,000 145,000 33,990
2,025,000 2,025,000 1,390,000 635,000 145,000 33,990
9,230,000 9,230,000 1,375,000 7,855,000 270,000 351,500
157,630,000 157,630,000 50,570,000 107,060,000 7,885,000 3,840,269
3,955,000 3,955,000 1,060,000 2,895,000 180,000 140,250
161,585,000$ 161,585,000$ 51,630,000$ 109,955,000$ 8,065,000$ 3,980,519$
129
This page intentionally left blank.
S T A T I S T I C A L S E C T I O N
This part of the City of Lakeville’s Comprehensive Annual Financial Report presents detailed
information as a context for understanding the current year’s financial statements, note disclosures,
and required supplementary information about the government’s overall financial health. This
information has not been audited by the independent auditor.
Financial Trends
These schedules present trend information that may assist the reader in assessing the City’s
financial performance from a historical perspective.
Net Position by Component - Government-wide
Changes in Net Position - Governmental Activities
Changes in Net Position - Business-type Activities
Changes in Net Position - Total Governmental and Business-type Activities
Fund Balances - Governmental Funds
Changes in Fund Balances - Governmental Funds
Revenue Capacity
These schedules contain information that may assist the reader in assessing the City’s most
significant revenue source, the property tax.
Tax Capacity Valuation and Assessor's Taxable Market Value of Taxable Property
Property Tax Rates - Direct and Overlapping Governments
Principal Property Taxpayers
Property Tax Levy and Collections
D e bt C a p a c i t y
These schedules provide information that may assist the reader in evaluating the affordability of the
City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future.
Ratio of Outstanding Debt by Type
Ratio of Net Bonded Debt Outstanding
Direct and Overlapping Governmental Debt
Legal Debt Margin
Pledged Revenue Coverage
Demographic and Economic Information
These schedules present demographic and economic indicators that are commonly used for
financial analysis in understanding the City’s ongoing and future financial status.
Demographic and Economic Statistics
Principal Employers
Commercial and Industrial Building Permits Issued
Operating Information
These schedules contain service and infrastructure indicators that may assist the reader in
understanding the information in the City’s financial report as it relates to the services the City
provides and the activities it performs.
Employees by Function/Program (Full-Time Equivalent)
Operating Indicators by Function
Capital Assets Statistics by Function
Source:
Unless otherwise noted, the information contained within these schedules is derived from
comprehensive annual financial reports for the relevant year.
This page intentionally left blank.
CITY OF LAKEVILLE, MINNESOTA
Net Position by Component - Government-wide
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year 2006 2007 2008 2009
Governmental Activities
Net investment in capital assets (1) 47,013,052$ 125,574,976$ 120,954,521$ 119,699,102$
Restricted 7,200,932 9,727,357 9,037,087 10,542,926
Unrestricted 2,727,757 2,225,861 3,100,244 1,210,922
Total governmental activities 56,941,741 137,528,194 133,091,852 131,452,950
Business-type Activities
Net investment in capital assets 105,571,786 103,156,352 104,535,771 103,150,022
Restricted 45,500 326,133 311,133 295,133
Unrestricted 7,423,725 11,770,501 14,107,347 15,828,861
Total business-type activities 113,041,011 115,252,986 118,954,251 119,274,016
Total Government-wide
Net investment in capital assets 152,584,838 228,731,328 225,490,292 222,849,124
Restricted 7,246,432 10,053,490 9,348,220 10,838,059
Unrestricted 10,151,482 13,996,362 17,207,591 17,039,783
Total government-wide 169,982,752$ 252,781,180$ 252,046,103$ 250,726,966$
(2)
Notes:
(1) The net investment in capital assets amount for fiscal year 2006 excludes infrastructure assets that
were acquired prior to January 1, 2004. 2007 includes the addition of these infrastructure assets
acquired (net of depreciation) for $76,014,220.
(2) Includes a restatement of $186,003 in Business-type activities.
(3) The City implemented GASB Statement No. 65 in 2012. Net position for 2011 was restated for the effects of
implementing this standard. Net position for previous years has not been restated.
(4) The City implemented GASB Statement No. 68 in 2015, recording a change in accounting principle that
decreased unrestricted net position. Prior year balances were not restated.
130
2010 2011 2012 2013 2014 2015
119,249,751$ 120,485,858$ 125,051,058$ 129,599,494$ 135,673,737$ 141,868,136$
10,027,737 16,474,815 17,403,167 17,645,944 19,913,014 33,860,946
2,324,315 (5,970,712) (1,923,495) 2,511,935 5,874,237 (4,929,168)
131,601,803 130,989,961 140,530,730 149,757,373 161,460,988 170,799,914
101,893,442 100,390,175 102,009,893 105,055,746 109,535,106 116,288,771
295,133 325,750 325,750 324,125 324,125 323,875
16,363,211 16,666,856 15,658,140 13,704,281 11,318,290 8,420,410
118,551,786 117,382,781 117,993,783 119,084,152 121,177,521 125,033,056
221,143,193 220,876,033 227,060,951 234,655,240 245,208,843 258,156,907
10,322,870 16,800,565 17,728,917 17,970,069 20,237,139 34,184,821
18,687,526 10,696,144 13,734,645 16,216,216 17,192,527 3,491,242
250,153,589$ 248,372,742$ 258,524,513$ 268,841,525$ 282,638,509$ 295,832,970$
(3)
131
CITY OF LAKEVILLE, MINNESOTA
Changes in Net Position - Governmental Activities
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year 2006 2007 2008 2009
Expenses
General government 4,452,707$ 4,712,995$ 6,169,957$ 5,916,590$
Public safety 10,057,597 10,308,296 10,019,681 9,726,394
Public works 7,507,095 15,844,963 15,706,515 12,866,216
Parks and recreation 3,819,806 4,556,759 4,900,341 4,774,745
Interest on long-term debt 3,278,091 3,867,395 4,218,695 3,994,790
Total expenses 29,115,296 39,290,408 41,015,189 37,278,735
Program Revenues
Charges for services
General government 2,960,761 2,495,649 2,238,739 1,940,423
Public safety 850,033 659,989 581,930 643,174
Public works 6,064,174 4,985,965 4,239,190 2,817,604
Parks and recreation 1,556,284 1,437,308 1,937,523 984,206
Operating grants and contributions
General government 114,152 43,839 25,083 44,648
Public safety 741,342 698,926 639,173 1,048,160
Public works 106,871 6,604,149 783,843 1,142,494
Parks and recreation 33,575 13,456 46,058 20,294
Capital grants and contributions
General government 171,400 - - -
Public safety 326,143 5,000 50,000 -
Public works 6,169,357 3,384,857 1,420,813 2,783,528
Parks and recreation 2,272,358 550,757 871,266 187,699
Total program revenues 21,366,450 20,879,895 12,833,618 11,612,230
Net (Expense) Revenue
General government (1,206,394) (2,173,507) (3,906,135) (3,931,519)
Public safety (8,140,079) (8,944,381) (8,748,578) (8,035,060)
Public works 4,833,307 (869,992) (9,262,669) (6,122,590)
Parks and recreation 42,411 (2,555,238) (2,045,494) (3,582,546)
Interest on long-term debt (3,278,091) (3,867,395) (4,218,695) (3,994,790)
Total net (expense) revenue (7,748,846) (18,410,513) (28,181,571) (25,666,505)
General Revenues and Other
Property taxes 18,009,237 20,873,431 23,391,055 23,912,318
Investment earnings (charges) 1,505,062 1,977,519 1,383,236 463,092
Gain on sale of capital assets 1,434,692 - - -
Transfers in (out)(450,960) 131,796 (2,029,933) (347,807)
Total general revenues and other (net)20,498,031 22,982,746 22,744,358 24,027,603
Change in net position 12,749,185$ 4,572,233$ (5,437,213)$ (1,638,902)$
Note: The City implemented GASB Statement No. 65 in 2012. Change in net position for 2011
was restated for the effect of implementing this standard. Change in net position for
previous years has not been restated.
132
2010 2011 2012 2013 2014 2015
5,248,677$ 5,134,169$ 5,258,319$ 5,363,354$ 6,051,985$ 5,893,261$
10,858,447 11,068,287 11,202,018 11,784,109 11,807,183 12,236,411
12,197,868 13,778,800 10,849,213 11,241,434 14,776,390 15,365,976
4,775,015 4,796,035 4,780,666 5,154,919 5,202,168 5,762,890
3,740,076 4,383,684 3,496,878 3,864,333 3,665,421 3,296,665
36,820,083 39,160,975 35,587,094 37,408,149 41,503,147 42,555,203
1,834,856 2,108,396 2,736,653 3,061,568 3,219,644 3,730,342
654,226 746,207 714,587 686,130 660,910 926,168
1,967,309 2,313,334 3,588,062 4,481,445 5,280,338 8,311,017
1,555,560 1,299,364 2,087,640 2,231,757 2,808,885 3,699,025
42,661 37,970 40,359 60,076 5,399 7,132
846,553 649,253 698,949 902,783 825,434 980,310
1,399,661 1,451,359 1,396,560 1,295,018 3,665,373 4,145,806
30,144 160,852 100,315 59,653 66,575 186,118
- - 91,735 195,693 2,762,609 77,006
21,576 26,325 19,530 - - -
3,025,905 2,906,106 5,569,732 6,350,827 6,892,230 12,702,266
267,360 297,245 370,237 1,296,764 436,107 1,004,480
11,645,811 11,996,411 17,414,359 20,621,714 26,623,504 35,769,670
(3,371,160) (2,987,803) (2,389,572) (2,046,017) (64,333) (2,078,781)
(9,336,092) (9,646,502) (9,768,952) (10,195,196) (10,320,839) (10,329,933)
(5,804,993) (7,108,001) (294,859) 885,856 1,061,551 9,793,113
(2,921,951) (3,038,574) (2,222,474) (1,566,745) (1,890,601) (873,267)
(3,740,076) (4,383,684) (3,496,878) (3,864,333) (3,665,421) (3,296,665)
(25,174,272) (27,164,564) (18,172,735) (16,786,435) (14,879,643) (6,785,533)
24,369,009 24,207,406 24,221,741 23,947,968 24,465,333 25,338,778
340,336 280,364 176,409 (28,949) 552,444 368,232
- - 214,004 - - -
613,780 2,692,671 3,101,350 2,094,059 1,565,481 (1,549,881)
25,323,125 27,180,441 27,713,504 26,013,078 26,583,258 24,157,129
148,853$ 15,877$ 9,540,769$ 9,226,643$ 11,703,615$ 17,371,596$
133
CITY OF LAKEVILLE, MINNESOTA
Changes in Net Position - Business-type Activities
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year 2006 2007 2008 2009
Expenses
Liquor 1,940,626$ 2,164,440$ 2,407,714$ 2,437,654$
Utility 7,925,809 8,029,064 8,319,303 9,086,172
Total expenses 9,866,435 10,193,504 10,727,017 11,523,826
Program Revenues
Charges for services
Liquor 3,080,692 3,314,721 3,603,240 3,611,777
Utility 5,855,346 6,553,811 7,355,207 7,491,674
Operating grants and contributions
Liquor 3,762 3,762 3,762 3,762
Utility 3,264 3,264 3,264 3,264
Capital grants and contributions
Liquor - - - -
Utility 3,239,467 1,394,810 975,410 158,252
Total program revenues 12,182,531 11,270,368 11,940,883 11,268,729
Net (Expense) Revenue
Liquor 1,143,828 1,154,043 1,199,288 1,177,885
Utility 1,172,268 (77,179) 14,578 (1,432,982)
Total net (expense) revenue 2,316,096 1,076,864 1,213,866 (255,097)
General Revenues and Other
Investment income (charges) 315,007 468,478 457,466 227,055
Disposal of capital assets - 798,429 - -
Transfers in (out)450,960 (131,796) 2,029,933 347,807
Total general revenues and other (net)765,967 1,135,111 2,487,399 574,862
Change in net position 3,082,063$ 2,211,975$ 3,701,265$ 319,765$
(1)
Note: The City implemented GASB Statement No. 65 in 2012. Change in net position for 2011 was
restated for the effect of implementing this standard. Change in net position for previous
years has not been restated.
(1) Includes a restatement of $186,003.
134
2010 2011 2012 2013 2014 2015
2,424,290$ 2,439,261$ 2,392,945$ 2,473,738$ 2,498,103$ 2,530,806$
9,903,296 10,401,650 10,365,651 10,863,625 11,462,552 11,946,778
12,327,586 12,840,911 12,758,596 13,337,363 13,960,655 14,477,584
3,612,321 3,546,877 3,839,723 3,948,599 3,804,942 3,289,120
7,432,391 8,866,345 9,542,284 9,126,838 9,296,118 9,216,463
3,762 3,762 3,762 3,762 3,762 3,762
3,264 59,707 103,525 69,968 112,181 85,754
17,050 - - - - -
999,716 1,129,764 2,903,043 3,414,738 4,252,192 6,009,075
12,068,504 13,606,455 16,392,337 16,563,905 17,469,195 18,604,174
1,208,843 1,111,378 1,450,540 1,478,623 1,310,601 762,076
(1,467,925) (345,834) 2,183,201 1,747,919 2,197,939 3,364,514
(259,082) 765,544 3,633,741 3,226,542 3,508,540 4,126,590
150,632 130,403 78,611 (42,114) 150,310 52,461
- - - - - -
(613,780) (2,692,671) (3,101,350) (2,094,059) (1,565,481) 1,549,881
(463,148) (2,562,268) (3,022,739) (2,136,173) (1,415,171) 1,602,342
(722,230)$ (1,796,724)$ 611,002$ 1,090,369$ 2,093,369$ 5,728,932$
135
CITY OF LAKEVILLE, MINNESOTA
Changes in Net Position - Total Governmental and Business-type Activities
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year 2006 2007 2008 2009
Expenses
Governmental activities 29,115,296$ 39,290,408$ 41,015,189$ 37,278,735$
Business-type activities 9,866,435 10,193,504 10,727,017 11,523,826
Total expenses 38,981,731 49,483,912 51,742,206 48,802,561
Program Revenues
Governmental activities 21,366,450 20,879,895 12,833,618 11,612,230
Business-type activities 12,182,531 11,270,368 11,940,883 11,268,729
Total program revenues 33,548,981 32,150,263 24,774,501 22,880,959
Net (Expense) Revenue
Governmental activities (7,748,846) (18,410,513) (28,181,571) (25,666,505)
Business-type activities 2,316,096 1,076,864 1,213,866 (255,097)
Total net (expense) revenue (5,432,750) (17,333,649) (26,967,705) (25,921,602)
General Revenues and Other
Governmental activities 20,498,031 22,982,746 22,744,358 24,027,603
Business-type activities 765,967 1,135,111 2,487,399 574,862
Total general revenues and other (net)21,263,998 24,117,857 25,231,757 24,602,465
Change in Net Position
Governmental activities 12,749,185 4,572,233 (5,437,213) (1,638,902)
Business-type activities 3,082,063 2,211,975 3,701,265 319,765
Total change in net position 15,831,248$ 6,784,208$ (1,735,948)$ (1,319,137)$
(1)
Note: The City implemented GASB Statement No. 65 in 2012. Change in net position for 2011 was
restated for the effects of implementing this standard. Change in net position for previous years
has not been restated.
(1) Includes a restatement of $186,003.
136
2010 2011 2012 2013 2014 2015
36,820,083$ 39,160,975$ 35,587,094$ 37,408,149$ 41,503,147$ 42,555,203$
12,327,586 12,840,911 12,758,596 13,337,363 13,960,655 14,477,584
49,147,669 52,001,886 48,345,690 50,745,512 55,463,802 57,032,787
11,645,811 11,996,411 17,414,359 20,621,714 26,623,504 35,769,670
12,068,504 13,606,455 16,392,337 16,563,905 17,469,195 18,604,174
23,714,315 25,602,866 33,806,696 37,185,619 44,092,699 54,373,844
(25,174,272) (27,164,564) (18,172,735) (16,786,435) (14,879,643) (6,785,533)
(259,082) 765,544 3,633,741 3,226,542 3,508,540 4,126,590
(25,433,354) (26,399,020) (14,538,994) (13,559,893) (11,371,103) (2,658,943)
25,323,125 27,180,441 27,713,504 26,013,078 26,583,258 24,157,129
(463,148) (2,562,268) (3,022,739) (2,136,173) (1,415,171) 1,602,342
24,859,977 24,618,173 24,690,765 23,876,905 25,168,087 25,759,471
148,853 15,877 9,540,769 9,226,643 11,703,615 17,371,596
(722,230) (1,796,724) 611,002 1,090,369 2,093,369 5,728,932
(573,377)$ (1,780,847)$ 10,151,771$ 10,317,012$ 13,796,984$ 23,100,528$
137
CITY OF LAKEVILLE, MINNESOTA
Fund Balances - Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year 2006 2007 2008 2009
General Fund
Reserved 8,238$ 8,483$ 7,420$ 9,899$
Unreserved 11,010,426 11,698,291 11,238,093 11,196,826
Nonspendable - - - -
Committed - - - -
Assigned - - - -
Unassigned - - - -
Total general fund 11,018,664 11,706,774 11,245,513 11,206,725
All Other Governmental Funds
Reserved 15,314,937 16,217,023 10,464,632 16,713,410
Unreserved
Special revenue 937,978 1,083,601 1,107,202 1,325,731
Capital projects 9,839,833 17,115,258 11,074,322 12,549,905
Nonspendable - - - -
Restricted - - - -
Committed - - - -
Unassigned - - - -
Total all other governmental funds 26,092,748 34,415,882 22,646,156 30,589,046
Total Governmental Funds
Reserved 15,323,175 16,225,506 10,472,052 16,723,309
Unreserved 21,788,237 29,897,150 23,419,617 25,072,462
Nonspendable - - - -
Restricted - - - -
Committed - - - -
Assigned - - - -
Unassigned - - - -
Total governmental funds 37,111,412$ 46,122,656$ 33,891,669$ 41,795,771$
All governmental funds
percentage change -14.6%24.3%-26.5%23.3%
Note: The implementation of Governmental Accounting Standards Board Statement No. 54,
Fund Balance Reporting and Governmental Type Definitions, in fiscal year 2011
resulted in significant change in the City's fund balance classifications. Information
prior to 2011 has not been restated.
138
2010 2011 2012 2013 2014 2015
10,726$ -$ -$ -$ -$ -$
9,385,202 - - - - -
- 384,329 256,476 126,014 221,704 447,284
- - - 45,000 45,000 45,000
- 519,146 620,725 - - -
- 9,644,863 10,614,574 9,495,546 10,805,065 11,882,644
9,395,928 10,548,338 11,491,775 9,666,560 11,071,769 12,374,928
11,060,144 - - - - -
1,444,846 - - - - -
15,384,343 - - - - -
- 75 - - 169 -
- 14,744,057 38,587,037 38,716,666 44,319,872 35,659,756
- 9,989,221 11,861,800 16,620,820 17,154,096 17,937,431
- (112,102) (233,910) (221,630) (632,035) (3,492,389)
27,889,333 24,621,251 50,214,927 55,115,856 60,842,102 50,104,798
11,070,870 - - - - -
26,214,391 - - - - -
- 384,404 256,476 126,014 221,873 447,284
- 14,744,057 38,587,037 38,716,666 44,319,872 35,659,756
- 9,989,221 11,861,800 16,665,820 17,199,096 17,982,431
- 519,146 620,725 - - -
- 9,532,761 10,380,664 9,273,916 10,173,030 8,390,255
37,285,261$ 35,169,589$ 61,706,702$ 64,782,416$ 71,913,871$ 62,479,726$
-10.8%-5.7%75.5%5.0%11.0%-13.1%
139
CITY OF LAKEVILLE, MINNESOTA
Changes in Fund Balances - Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year 2006 2007 2008 2009
Revenues
Property taxes and tax increment 17,882,708$ 20,171,031$ 22,901,637$ 23,785,468$
Licenses and permits 2,651,382 2,182,252 1,936,532 1,603,909
Intergovernmental 2,400,581 8,420,985 2,250,332 3,158,128
Charges for services 8,207,104 7,105,600 6,713,370 4,145,717
Special assessments 709,126 826,453 777,153 769,624
Investment income (charges)1,496,836 1,970,411 1,379,315 459,967
Donations 896,414 475,676 1,008,326 305,146
Miscellaneous 371,033 326,059 366,680 635,781
Total revenues 34,615,184 41,478,467 37,333,345 34,863,740
Expenditures
General government 3,582,410 3,939,573 5,172,645 4,850,726
Public safety 8,865,167 9,346,490 8,911,017 8,835,563
Public works 3,551,118 3,970,680 4,535,118 3,906,485
Parks and recreation 2,706,898 2,968,924 3,233,422 2,881,402
Capital outlay 15,745,297 29,913,271 18,133,199 7,140,715
Debt service
Principal retirement 4,097,026 7,021,291 5,301,622 6,436,971
Interest on debt 3,597,771 3,449,720 4,367,257 4,157,176
Fiscal charges 24,707 123,438 46,136 126,570
Total expenditures 42,170,394 60,733,387 49,700,416 38,335,608
Excess (deficiency) of revenues
over (under) expenditures (7,555,210) (19,254,920) (12,367,071) (3,471,868)
Other financing sources (uses)
Transfers in 5,634,822 4,327,025 7,688,315 5,156,485
Transfers out (4,997,410) (3,600,158) (6,857,231) (4,386,727)
Bond, note, loan and lease proceeds 12,281,300 30,850,000 2,280,000 10,125,000
Payment on refunded bonds called (12,825,000) (3,945,000) (2,975,000) -
Premium on bonds issued 68,479 610,404 - 116,016
Discount on bonds issued - (3,242) - -
Sale of capital assets 1,045,440 27,135 - 365,196
Total other financing sources (uses)1,207,631 28,266,164 136,084 11,375,970
Net change in fund balances (6,347,579)$ 9,011,244$ (12,230,987)$ 7,904,102$
Debt service as a % of noncapital
expenditures (excl. fiscal charges) 30.7%29.2%24.4%30.7%
Note: The City has no taxes other than property taxes and tax increment.
140
2010 2011 2012 2013 2014 2015
24,435,538$ 24,057,622$ 24,453,849$ 23,981,375$ 24,524,709$ 25,215,734$
1,565,028 1,820,408 2,429,951 2,727,494 2,836,555 3,325,293
4,242,195 2,622,487 2,291,376 3,534,512 4,979,156 5,232,193
4,002,246 3,938,204 5,833,776 6,925,867 8,405,492 12,443,152
573,301 622,799 1,132,126 1,143,349 1,636,267 1,736,905
337,788 270,378 174,358 (28,008) 548,842 366,555
155,477 269,762 207,391 265,953 242,627 356,446
732,816 731,763 871,798 885,323 3,411,579 1,155,073
36,044,389 34,333,423 37,394,625 39,435,865 46,585,227 49,831,351
4,687,662 4,493,368 4,572,777 4,774,775 5,690,230 5,226,864
9,337,884 9,755,251 9,844,232 10,113,958 10,305,450 10,892,071
3,593,862 3,019,293 3,245,103 3,766,665 3,805,470 3,856,984
3,038,433 3,047,906 3,050,782 3,206,004 3,330,488 3,532,376
4,611,659 10,345,908 12,413,360 12,523,103 21,420,875 31,649,447
7,337,338 7,689,182 7,642,027 5,825,000 5,995,000 7,385,000
3,945,265 3,633,285 3,358,324 3,948,740 3,700,590 3,735,120
61,222 78,143 173,072 26,351 176,789 33,071
36,613,325 42,062,336 44,299,677 44,184,596 54,424,892 66,310,933
(568,936) (7,728,913) (6,905,052) (4,748,731) (7,839,665) (16,479,582)
5,740,982 5,324,043 6,699,447 7,094,079 3,489,225 6,883,879
(5,046,945) (2,524,276) (2,839,332) (4,857,921) (1,644,624) (4,928,951)
2,680,000 4,265,000 29,255,000 4,685,000 21,180,000 16,545,000
(7,955,000) - (1,830,000) - (10,035,000) (12,460,000)
99,322 - 1,957,050 78,287 1,981,519 1,005,509
- - - - - -
540,067 - 200,000 825,000 - -
(3,941,574) 7,064,767 33,442,165 7,824,445 14,971,120 7,045,437
(4,510,510)$ (664,146)$ 26,537,113$ 3,075,714$ 7,131,455$ (9,434,145)$
32.9%31.6%32.2%28.6%25.3%25.6%
141
CITY OF LAKEVILLE, MINNESOTA
Tax Capacity Valuation and Assessor's Taxable Market Value of Taxable Property
Last Ten Fiscal Years
Fiscal Year 2006 2007 2008 2009
Taxable Net Tax Capacity Valuation of Taxable Property
Tax capacity value 55,521,140$ 62,477,351$ 66,208,936$ 67,887,456$
Less:
Captured tax increment tax capacity (1,935,093) (2,129,445) (2,173,426) (2,127,819)
Contributions to fiscal disparities pool (3,429,966) (3,848,084) (4,416,898) (4,888,029)
Plus:
Distribution from fiscal disparities pool 4,707,601 5,329,560 5,967,401 7,115,384
Total taxable net tax capacity 54,863,682$ 61,829,382$ 65,586,013$ 67,986,992$
Taxable Net Tax Capacity Valuation by Class of Property
Homestead residential 44,087,330$ 49,458,056$ 52,038,379$ 51,916,328$
Commercial/industrial, public utility,
and personal property 9,178,530 10,660,273 11,801,273 14,325,341
Non-homestead residential/apartments 939,412 1,008,576 1,000,649 1,082,546
Agriculture and seasonal/recreational 658,410 702,477 745,712 662,777
Total taxable net tax capacity 54,863,682$ 61,829,382$ 65,586,013$ 67,986,992$
Assessor’s taxable market valuation 5,034,819,600$ 5,642,591,100$ 5,951,319,600$ 6,024,665,500$
Taxable net tax capacity as a percentage of
assessor's taxable market value 1.090%1.096%1.102%1.128%
Direct tax capacity rate 31.610%31.583%34.195%33.973%
Notes:
Taxes are determined by multiplying the taxable net tax capacity by the direct tax capacity rate as expressed
as a percentage.
The foregoing direct tax capacity rates do not reflect reductions for state property tax credits.
Source: Dakota County Auditor and Treasurer’s Office.
142
2010 2011 2012 2013 2014 2015
65,235,789$ 61,005,594$ 57,583,990$ 54,853,225$ 57,174,306$ 62,811,855$
(1,998,923) (904,389) (862,243) (863,946) (861,019) (446,760)
(5,623,626) (5,845,456) (5,591,597) (5,494,207) (5,439,491) (5,481,001)
7,429,875 7,807,412 7,194,884 6,825,229 6,316,073 6,323,361
65,043,115$ 62,063,161$ 58,325,034$ 55,320,301$ 57,189,869$ 63,207,455$
48,558,421$ 44,951,025$ 41,780,807$ 38,983,401$ 41,029,548$ 46,374,248$
14,626,593 15,226,802 14,711,893 14,351,101 13,833,973 14,223,709
1,127,962 1,271,776 1,265,526 1,311,388 1,468,225 1,629,527
730,139 613,558 566,808 674,411 858,123 979,971
65,043,115$ 62,063,161$ 58,325,034$ 55,320,301$ 57,189,869$ 63,207,455$
5,736,602,200$ 5,356,855,900$ 5,030,003,164$ 4,767,475,321$ 4,995,818,217$ 5,553,395,148$
1.134%1.159%1.160%1.160%1.145%1.138%
36.624%38.250%39.051%41.234%40.696%38.948%
143
CITY OF LAKEVILLE, MINNESOTA
Property Tax Rates - Direct and Overlapping Governments
Last Ten Fiscal Years
Operating Debt Service Total Debt Service
2006 25.043% 6.567% 31.610% 0.00830% 26.318% 0.00592% 192 43.708% 0.05599% 3.780% 105.416% 0.07021%
194 25.670% 0.17079%87.378% 0.18501%
196 27.554% 0.22437%89.262% 0.23859%
2007 23.319% 8.264% 31.583% 0.00743% 25.127% 0.00516% 192 44.190% 0.05679% 3.771% 104.671% 0.06938%
194 25.252% 0.16868%85.733% 0.18127%
196 23.607% 0.20824%84.088% 0.22083%
2008 25.616% 8.579% 34.195% 0.00714% 25.184% 0.00471% 192 45.831% 0.13781% 3.749% 108.959% 0.14966%
194 26.272% 0.17167%89.400% 0.18352%
196 21.136% 0.21274%84.264% 0.22459%
2009 25.450% 8.523% 33.973% 0.00696% 25.821% 0.00471% 192 49.238% 0.13660% 4.301% 113.333% 0.14827%
194 27.062% 0.17413%91.157% 0.18580%
196 21.109% 0.21032%85.204% 0.22199%
2010 28.066% 8.558% 36.624% 0.00738% 27.269% 0.00501% 192 53.452% 0.14742% 4.987% 122.332% 0.15981%
194 27.714% 0.18363%96.594% 0.19602%
196 25.391% 0.22268%94.271% 0.23507%
2011 30.904% 7.346% 38.250% 0.00803% 29.149% 0.00537% 192 52.157% 0.14558% 5.199% 124.755% 0.15898%
194 32.138% 0.19241%104.736% 0.20581%
196 26.959% 0.22601%99.557% 0.23941%
2012 31.122% 7.929% 39.051% 0.00784% 31.426% 0.00551% 192 55.308% 0.14005% 5.562% 131.347% 0.15340%
194 32.061% 0.18932%108.100% 0.20267%
196 28.440% 0.22131%104.479% 0.23466%
2013 32.206% 9.028% 41.234% 0.00843% 33.421%- 192 57.226% 0.15065% 5.884% 137.765% 0.15908%
194 33.535% 0.19955%114.074% 0.20798%
196 27.956% 0.23542%108.495% 0.24385%
2014 32.045% 8.651% 40.696% 0.00678% 31.827%- 192 56.326% 0.11117% 5.538% 134.387% 0.11795%
194 33.048% 0.25954%111.109% 0.26632%
196 27.606% 0.25809%105.667% 0.26487%
2015 30.605% 8.343% 38.948%- 29.633%- 192 53.474% 0.11550% 5.033% 127.088% 0.11550%
194 31.459% 0.24871%105.073% 0.24871%
196 23.271% 0.25484%96.885% 0.25484%
Notes:
Taxes are determined by multiplying the taxable net tax capacity by the tax capacity rate and market valued based rate expressed as
a percentage. The foregoing tax capacity rates do not reflect reductions for state property tax credits.
Special Districts include: Metropolitan Mosquito Control, Metropolitan Council, Metropolitan Transit District, Dakota County
Community Development Agency, Light Rail Authority, and Vermillion River Watershed District.
Source: Dakota County Auditor and Treasurer’s Office.
Fiscal
Year
Referendum
Levy (Market
Value-based)
General Levy
(Tax Capacity-
based)
Referendum
Levy (Market
Value-based)
General
Levy (Tax
Capacity-
based)
Referendum
Levy (Market
Value-
based)
Ind.
School
District
Overlapping Rates
City of Lakeville Total Direct and
Direct Rates Dakota County School District Overlapping RatesSpecial
Districts
Levy
(Tax
Capacity-
based)
Tax
Capacity -
based
Market
Value-
based
General Levy (Tax Capacity-based)
144
CITY OF LAKEVILLE, MINNESOTA
Principal Property Taxpayers
Fiscal Years Ended December 31, 2015 and December 31, 2006
Percentage Percentage
Taxable of Taxable Taxable of Taxable
Tax Tax Tax Tax
Capacity Capacity Capacity Capacity
Principal Property Taxpayer Type of Business Value Rank Value Value Rank Value
Lakeville 2004, LLC Commercial 331,278$ 1 0.5% 316,998$ 1 0.6%
Heritage Commons, LLC Retail 323,038 2 0.5%
Southfork Apts. Ltd. Partnership Apartments 308,528 3 0.5% 204,882 5 0.4%
Argonne Investments, LLC Retail 285,031 4 0.5%
Dakota Electric Association Utility 268,928 5 0.4% 273,688 3 0.5%
Minnegasco, Inc. Utility 265,484 6 0.4% 166,075 7 0.3%
Walker Highview Hills, LLC Senior Housing 259,216 7 0.4%
Target Corporation Retail 256,414 8 0.4% 281,800 2 0.5%
LTF Real Estate Company, Inc. Real estate 238,810 9 0.4%
FR/CAL Interstate South, LLC Industrial 229,776 10 0.4%
CRW Lakeville, LLC Retail 221,226 4 0.4%
Avalon-Timbercrest 1 LLC Retail 196,162 6 0.4%
Wausau Supply Company Lumber supply distributor 159,330 8 0.3%
Xcel Energy Utility 158,342 9 0.3%
Performance Office Papers Inc. Office paper products - - 158,136 10 0.3%
Total principal taxpayers 2,766,503 4.4% 2,136,639 3.8%
All other taxpayers 60,045,352 95.6%53,384,501 96.2%
Total City of Lakeville taxpayers 62,811,855$ 100.0%55,521,140$ 100.0%
Source: Dakota County Auditor and Treasurer’s Office.
2015 2006
145
CITY OF LAKEVILLE, MINNESOTA
Property Tax Levy and Collections
Last Ten Fiscal Years
Percentage
of Total
Total Tax Collection Collections
Fiscal Levy for of Prior Total To Tax Levy
Year Fiscal Year (2)Amount (3)Percent Year Levy (4)Collections Certified
2006 (1) 17,741,065 16,943,054 95.50% 162,281 17,105,335 96.42%
2007 19,943,578 19,652,615 98.54% 290,963 19,943,578 100.00%
2008 (1) 22,690,614 22,023,558 97.06% 408,068 22,431,626 98.86%
2009 (1) 23,527,163 22,473,650 95.52% 409,738 22,883,388 97.26%
2010 (1) 24,041,653 22,982,110 95.59% 261,179 23,243,289 96.68%
2011 (1) 24,036,652 22,837,484 95.01% 358,782 23,196,266 96.50%
2012 23,126,960 23,050,840 99.67% 6,237 23,057,077 99.70%
2013 23,079,185 22,848,820 99.00% 230,365 23,079,185 100.00%
2014 23,657,996 23,541,510 99.51% 116,486 23,657,996 100.00%
2015 24,728,549 24,568,028 99.35%- 24,568,028 99.35%
Notes (1) The State of Minnesota unalloted state aid for property tax relief -
Market Value Homestead Credit (MVHC) in the fiscal years as follows:
As a
MVHC Percentage
Loss of Tax Levy
Fiscal Year Amount Certified
2006 632,238$ 3.56%
2007 -$ -
2008 305,479$ 1.35%
2009 630,561$ 2.68%
2010 731,494$ 3.04%
2011 835,005$ 3.47%
2012 -$ -
2013 -$ -
2014 -$ -
2015 -$ -
(2) Total levy is net of current year cancellations and abatements.
(3) Total tax levy and current tax collections include state paid credits.
(4) Includes county adjustments for prior year over collections, cancellations, and abatements.
Collection of Current
Year's Levy
146
CITY OF LAKEVILLE, MINNESOTA
Ratio of Outstanding Debt by Type
Last Ten Fiscal years
Business-type Total
General Metropolitan Activity Total Outstanding
Fiscal Obligation Other Capital Council Revenue Outstanding Population Debt
Year Bonds Bonds Leases Loan Bond Debt (1)Per Capita
2006 72,557,465 12,493,799 183,697 1,466,300 590,000 87,291,261 52,323 3.8 1,668
2007 93,176,053 12,346,854 152,037 1,466,300 4,439,260 111,580,504 53,829 4.5 2,073
2008 87,305,937 12,144,909 119,061 1,466,300 4,292,727 105,328,934 54,828 4.1 1,921
2009 91,331,837 11,847,964 112,090 1,466,300 4,011,194 108,769,385 55,772 4.4 1,950
2010 79,746,332 10,821,019 104,752 1,466,300 3,714,661 95,853,064 55,954 3.8 1,713
2011 76,815,712 10,539,074 97,027 1,159,843 3,568,128 92,179,784 56,534 3.5 1,631
2012 100,480,497 8,572,129 - 1,159,843 3,416,595 113,629,064 57,048 4.0 1,992
2013 99,408,395 8,360,184 - 1,159,843 3,255,062 112,183,484 57,789 3.8 1,941
2014 106,516,778 8,133,239 - 1,159,843 3,088,529 118,898,389 59,361 3.8 2,003
2015 104,062,522 7,886,294 - 1,159,843 2,911,996 116,020,655 59,991 N/A 1,934
Source:
(1) Metropolitan Council as of April 1 (except for 2010 Federal Census).
(2) See Demographic and Economic Statistics page.
N/A - Not available.
Governmental Activities
Income (2)
Personal
% of
147
CITY OF LAKEVILLE, MINNESOTA
Ratio of Net Bonded Debt Outstanding
Last Ten Fiscal Years
Percentage Net
Gross Debt Payable Debt Service Net Taxable of Net Bonded Bonded
Fiscal Bonded From Other Monies Bonded Net Tax Debt to Taxable (3)Debt
Year Debt Sources (1)Available (2)Debt Capacity Net Tax Capacity Population Per Capita
2006 72,557,465 34,855,000 4,894,911 32,807,554 54,863,682 59.80% 52,323 627
2007 93,176,053 42,870,000 5,171,284 45,134,769 61,829,382 73.00% 53,829 838
2008 87,305,937 38,030,000 5,925,387 43,350,550 65,586,013 66.10% 54,828 791
2009 91,331,837 39,015,000 6,941,902 45,374,935 67,986,667 66.74% 55,772 814
2010 79,746,332 29,460,000 6,527,316 43,759,016 65,043,115 67.28% 55,954 782
2011 76,815,712 28,305,000 5,663,237 42,847,475 62,063,161 69.04% 56,534 758
2012 100,480,497 29,550,000 29,084,558 41,845,939 58,325,034 71.75% 57,048 734
2013 99,408,395 30,710,000 28,416,302 40,282,093 55,320,301 72.82% 57,789 697
2014 106,516,778 35,640,000 31,852,035 39,024,743 57,189,869 68.24% 59,361 657
2015 104,062,522 44,340,000 18,541,682 41,180,840 63,207,455 65.15% 59,991 686
Source:
(1) G.O. Improvement bonds, tax increment bonds, State-aid street revenue bonds, water connection revenue bonds,
and arena revenue bonds.
(2) Debt service monies available include amounts restricted in the debt service funds repaying the related debt. We believe
this is the most accurate and consistent representation of the resources restricted for debt service when crossover
refunding bonds are being held in escrow, as those resources are not included in the governmental activities net position
restricted for debt service due to conversion for full accrual accounting.
(3) Metropolitan Council as of April 1, except for 2010 (Federal Census).
148
CITY OF LAKEVILLE, MINNESOTA
Direct and Overlapping Governmental Debt
As of December 31, 2015
Debt Applicable to Taxable
Debt Net Tax Capacity in the City
Governmental Unit Outstanding (2)Percentage (2)Amount
Overlapping Debt (1)
Independent School District #194 145,930,000$ 71.50% 104,339,950$
Independent School District #192 182,755,000 18.50% 33,809,675
Independent School District #196 82,720,000 5.90% 4,880,480
Dakota County 23,420,000 14.60% 3,419,320
Special District
Metropolitan Council 312,715,000 2.37%7,406,760
153,856,185
Direct Debt
City of Lakeville bonded debt 104,062,522 100.00%104,062,522
257,918,707$
Source: Debt figures and applicable percentages for other than the City of Lakeville are provided by the
City’s fiscal consultant Springsted.
Notes:
(1) Overlapping governments are those that coincide, at least in part, with the geographical
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.
(2) The percentage of overlapping debt applicable is estimated using taxable property market
values. Applicable percentages were estimated by determining the portion of the county’s
taxable market value that is within the City’s boundaries and dividing it by the county’s total
taxable market value.
Total overlapping debt
Total direct and overlapping debt
149
CITY OF LAKEVILLE, MINNESOTA
Legal Debt Margin
Last Ten Fiscal Years
Net Bonded
Assessor’s Net Bonded Debt Applicable
Taxable Debt Legal to Debt Limit as
Fiscal Market Legal Applicable to Debt a Percentage of
Year Valuation Debt Limit Debt Limit Margin Legal Debt Limit
2006 5,034,819,600 100,696,392 45,395,089 55,301,303 45.08%
2007 5,642,591,100 112,851,822 60,848,716 52,003,106 53.92%
2008 5,951,319,600 178,539,588 58,799,613 119,739,975 32.93%
2009 6,024,665,500 180,739,965 60,213,098 120,526,867 33.31%
2010 5,736,602,200 172,098,066 57,282,684 114,815,382 33.28%
2011 5,356,855,900 160,705,677 45,546,763 115,158,914 28.34%
2012 5,030,003,164 150,900,095 42,575,442 108,324,653 28.21%
2013 4,767,475,321 143,024,260 40,993,698 102,030,562 28.66%
2014 4,995,818,217 149,874,547 37,837,965 112,036,582 25.25%
2015 5,553,395,148 166,601,854 36,323,318 130,278,536 21.80%
Legal Debt Margin Calculation:Fiscal Year 2015
Assessor’s taxable market valuation 5,553,395,148$
Legal debt limit:
3% of Assessor’s taxable market valuation 166,601,854$
Amount of debt applicable to legal debt limit:
Gross bonded debt 102,100,000$
Less debt payable from sources other than taxes:
G.O. Improvement bonds 34,130,000$
Tax increment bonds 1,680,000
State-aid street revenue bonds 7,895,000
Arena revenue bonds 635,000
Liquor revenue bonds 2,895,000 (47,235,000)
Debt payable from taxes 54,865,000
Less debt service monies available to pay
principal and interest (18,541,682)
Net bonded debt applicable to debt limit 36,323,318 36,323,318
Legal debt margin 130,278,536$
Note: Minnesota Statutes § 475.53, Subdivision 1, No municipality, except a school district or a city of the first
class, shall incur or be subject to a net debt in excess of two percent of the taxable market value of
taxable property in the municipality for years 2007 and prior; three percent for years beginning in 2008.
Source: Dakota County Auditor and Treasurer’s Office.
150
CITY OF LAKEVILLE, MINNESOTA
Pledged Revenue Coverage
Last Ten Fiscal Years
Net Revenue
Available
Fiscal Gross (1)Operating For Debt Times
Year Revenues Expenses Service Principal Interest Total Coverage
2006 8,094,630 4,113,336 3,981,294 1,150,000 920,015 2,070,015 1.92
2007 8,731,414 3,945,627 4,785,787 1,335,000 1,011,204 2,346,204 2.04
2008 9,615,243 4,094,080 5,521,163 1,400,000 1,161,886 2,561,886 2.16
2009 8,507,945 4,485,946 4,021,999 1,575,000 1,066,238 2,641,238 1.52
2010 7,380,163 4,749,304 2,630,859 1,685,000 998,751 2,683,751 0.98
2011 8,146,497 4,307,467 3,839,030 1,635,000 937,952 2,572,952 1.49
2012 9,608,620 4,296,022 5,312,598 3,115,000 832,499 3,947,499 1.35
2013 9,425,862 4,549,736 4,876,126 1,395,000 731,755 2,126,755 2.29
2014 9,181,527 4,942,276 4,239,251 1,415,000 674,644 2,089,644 2.03
2015 9,283,053 4,948,633 4,334,420 2,670,000 594,489 3,264,489 1.33
Notes:
(1) The primary revenue source for debt service includes water system connection charges,
water system user fees, ice arena net operating revenue and contributions from one
organization conducting lawful gambling at approved locations, and liquor fund gross profits.
(2) Revenue bonds include water connection revenue, arena revenue, and liquor revenue.
Requirements (2)
151
CITY OF LAKEVILLE, MINNESOTA
Demographic and Economic Statistics
Last Ten Fiscal Years
Percentage Personal Per Capita
(1)Increase from Income (2)Personal Housing units
Year Population Previous Year (in thousands)Income Single Multiple Total Valuation
2006 52,323 1.65%2,287,875 43,726 221 223 444 101,474,955
2007 53,829 2.88%2,456,163 45,629 183 195 378 72,128,000
2008 54,828 1.86%2,541,333 46,351 137 279 416 71,062,000
2009 55,772 1.72%2,474,827 44,374 127 54 181 41,010,000
2010 55,954 0.33%2,519,161 45,022 138 2 140 38,718,000
2011 56,534 1.04%2,617,468 46,299 122 2 124 37,621,000
2012 57,048 0.91%2,843,672 49,847 280 2 282 84,444,000
2013 57,789 1.30%2,929,151 50,687 374 - 374 120,393,000
2014 59,361 2.72%3,097,279 52,177 319 - 319 108,181,000
2015 59,991 1.06%N/A N/A 366 - 366 114,765,000
Annual percentage
increase average last
ten fiscal years 1.55%
Labor Unemployment Labor Unemployment State of United
Year Force Rate Force Rate Minnesota States
2006 29,677 3.9%230,427 4.1%4.9% 4.5%
2007 30,492 4.3%232,670 4.6%4.7% 5.1%
2008 30,471 5.6%229,716 6.1%6.8% 7.1%
2009 30,727 6.4%231,391 6.9%7.4% 10.0%
2010 30,782 6.0%230,247 6.6%6.9% 9.4%
2011 31,237 4.8%232,257 5.2%5.7% 8.5%
*2012 31,221 4.5%231,902 4.9%5.4% 7.6%
*2013 32,879 3.6%230,160 4.0%4.6% 6.5%
*2014 33,493 2.9%231,538 3.2%3.6% 5.4%
*2015 33,876 2.7%234,299 3.1%3.7% 4.8%
Source:
(1) Metropolitan Council as of April 1 (except for 2010 Federal Census).
(2) U.S. Department of Commerce Bureau of Economic Analysis as of December 31, 2015.
* Not seasonally adjusted, information is not available.
(3) City of Lakeville Inspections Department.
N/A - Not available.
Building Permits Issued
Family Dwellings (3)
Labor Force and Unemployment Rate (seasonally adjusted) (2)
City of Lakeville Dakota County Rates
152
CITY OF LAKEVILLE, MINNESOTA
Principal Employers
Fiscal Years Ended December 31, 2015 and December 31, 2006
Principal Employer (1)Product/Service Employees Rank %Employees Rank %
Independent School District #194 Elementary & secondary schools 1,370 1 4.0% 1,120 1 3.8%
Hearthside Food Solutions Food service contractors 715 2 2.1%500 3 1.7%
ConAgra Store Brands Breakfast cereal products 515 3 1.5%552 2 1.9%
Schmitty & Sons Bus Company Transportation 400 4 1.2%
MOM Brands Cereal production 250 5 0.7%
Menasha Corporation Corrugated & solid fiber box mfg.237 6 0.7%224 4 0.8%
Despatch Industries, Inc.Industrial furnace & oven mfg.230 7 0.7%145 9 0.5%
BTD Manufacturing Metal manufacturing 210 8 0.6%
City of Lakeville (2)City government 209 9 0.6%217 5 0.7%
Jeff Belzer’s Chevy-Dodge-KIA New & used auto dealership 200 10 0.6%150 7 0.5%
Hearth & Home Technologies, Inc. Fireplaces/metal work 175 6 0.6%
Carquest Distribution Center General warehousing & storage 147 8 0.5%
National Polymers, Inc.Plastics material & resin mfg.136 10 0.5%
Total principal employers 4,336 12.8% 3,366 11.3%
All other employers 29,540 87.2% 26,311 88.7%
Total City of Lakeville civilian labor force (3)33,876 100.0% 29,677 100.0%
Source:
(1) Telephone survey of individual employers, December 2015.
(2) As of December 31, 2015 (full-time equivalent).
(3) U.S. Department of Commerce Bureau of Economic Analysis as of December 31, 2015.
2015 2006
153
CITY OF LAKEVILLE, MINNESOTA
Commercial and Industrial Building Permits Issued
Years 2015 and 2014
BUSINESS PRODUCT/SERVICE VALUATION (1)
Hy-Vee Grocery store 8,400,000$
Fed-Ex Freight Distribution 8,161,000
Candlewood Suites Hotel 4,500,000
Allina Clinic Medical 2,055,000
NPL Office/warehouse 1,560,000
Lakeville Medical Medical 1,250,000
Goddard School Preschool 1,220,000
Super America - Orchard Trail Gas/convenience with car wash 1,140,000
Hy-Vee Convenience Store Gas/convenience with car wash 998,000
Super America - Keokuk Ave Gas/convenience 995,000
Sonnet Montessori Preschool/daycare 500,000
BUSINESS PRODUCT/SERVICE VALUATION (1)
BTD Manufacturing Manufacturing 10,109,000$
Menasha Corporation Manufacturing warehouse & office 4,900,000
Applied Power Products Manufacturing 1,765,000
Mendell Medical device manufacturer 1,100,000
Fresenius Medical Center Medical 848,000
Verified Credentials Office 625,000
Jeff Belzer's Chevy-Dodge-KIA New & used auto dealership 614,000
Toppers Pizza Pizza restaurant 569,000
Dick's Sanitation Recycling/waste hauler 438,000
Progressive Rail Railroad 428,000
Center for Diagnostic Imaging Medical 410,000
Park Dental Medical 312,000
Carquest Auto Parts Auto parts distribution 300,000
Charter Communications Telecommunications 295,000
Starbucks Coffee Coffee shop 268,000
Express Employment Office 265,000
Holiday Station - Kenrick Avenue Convenience store 260,000
Unimed Midwest Medical supplies 260,000
Notes:
(1) Valuation excludes land and personal property.
Source: City of Lakeville Inspections Department.
NEW BUILDING PERMITS 2015 AND 2014 (in excess of $250,000)
EXPANSION OR REMODEL BUILDING PERMITS 2015 AND 2014 (in excess of $250,000)
154
CITY OF LAKEVILLE, MINNESOTA
Employees by Function/Program (Full-Time Equivalent)
Last Ten Fiscal Years
Function/Program 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
General government
City administration 3.0 3.0 3.0 2.8 2.5 2.5 2.5 2.4 2.8 3.0
Communications 4.7 4.8 4.1 3.9 4.0 4.0 4.0 4.0 4.0 4.0
City clerk 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Finance 5.6 6.6 6.6 6.5 6.4 6.0 7.0 7.0 7.0 6.6
Information systems 3.9 4.0 4.0 3.3 3.0 3.0 3.0 2.9 3.0 3.0
Human resources 2.9 3.0 3.0 2.8 2.8 2.8 2.8 2.8 2.8 3.2
Planning 5.5 5.5 4.5 3.8 3.0 3.0 3.0 2.8 3.5 3.5
Community and economic development 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.4 2.5
Protective inspection 12.0 12.0 12.4 8.7 8.0 8.0 7.0 7.0 7.0 7.6
General government buildings 2.5 3.1 3.1 3.0 3.0 3.0 3.0 3.0 3.0 3.0
Total general government 43.6 45.5 44.2 38.3 36.2 35.8 35.8 35.4 36.5 37.4
Public safety
Police officers (sworn) 49.5 51.2 52.8 51.0 51.5 51.9 53.0 50.2 54.0 52.8
Police dispatchers 10.0 - - - - - - - - -
Police administration 11.4 12.9 12.4 11.1 10.8 11.3 12.2 11.5 11.8 12.5
Fire (excluding volunteer firefighters)4.5 4.6 4.6 4.6 4.6 4.6 4.6 4.6 4.6 5.3
Total public safety 75.4 68.7 69.8 66.7 66.9 67.8 69.8 66.3 70.4 70.6
Public works
Engineering 14.0 14.0 12.3 9.3 9.0 6.8 7.0 6.0 6.0 6.4
Operations and maintenance - - - - - - - - 2.0 3.9
Street maintenance 18.5 19.8 20.0 19.4 19.0 19.0 19.3 19.3 21.0 20.4
Total public works 32.5 33.8 32.3 28.7 28.0 25.8 26.3 25.3 29.0 30.7
Parks and recreation
Park maintenance 15.0 15.0 15.0 14.5 15.0 15.0 15.0 15.0 15.0 14.8
Recreation 4.7 5.3 5.3 4.9 4.7 4.7 4.7 5.6 5.6 5.5
Arts center 3.0 3.2 3.6 3.7 3.7 3.7 3.7 3.7 3.7 3.7
Total parks and recreation 22.7 23.5 23.9 23.1 23.4 23.4 23.4 24.3 24.3 24.0
Total governmental activities 174.2 171.5 170.2 156.8 154.5 152.8 155.3 151.3 160.2 162.7
Liquor 25.9 26.4 25.9 25.7 25.7 25.8 25.7 24.9 26.3 24.4
Utility 16.5 17.5 18.0 18.0 18.0 20.0 20.0 20.0 21.0 21.6
Total business-type activities 42.4 43.9 43.9 43.7 43.7 45.8 45.7 44.9 47.3 46.0
Total employees 216.6 215.4 214.1 200.5 198.2 198.6 201.0 196.2 207.5 208.7
Source: City of Lakeville Human Resources Department.
155
CITY OF LAKEVILLE, MINNESOTA
Operating Indicators by Function
Last Ten Fiscal Years
Function 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
General government
Number of registered voters 30,072 N/A 31,024 N/A 32,617 N/A 32,200 N/A 36,571 N/A
Number of final plats approved 21 18 10 8 10 12 14 15 16 23
Number of building permits issued 3,970 3,487 1,878 1,428 1,421 1,467 2,349 1,647 3,852 2,030
Valuation of building permits
issued (in millions)165 $ 126 $ 111 $ 62 $ 49 $ 77 $ 119 $ 142 $ 139 $ 183 $
Public safety
Crimes against person reported 141 155 158 151 151 142 133 141 166 161
Crimes against property reported 1,165 1,477 1,424 1,245 1,259 1,161 1,186 1,057 1,187 955
Traffic citations issued 6,348 6,773 6,229 6,499 5,497 5,241 4,400 3,370 3,803 8,865
Number of volunteer firefighters 80 80 90 78 74 83 77 79 80 83
Number of annual fire calls 1,078 1,149 1,230 1,343 1,189 1,262 1,208 1,062 1,103 1,192
Public works
City street miles added 27.6 7.2 2.5 1.0 0.4 1.0 1.4 2.6 2.8 4.5
Parks and recreation
Park acres mowed 421 421 427 427 427 429 429 430 430 430
Park facility reservations taken 400 432 479 559 661 655 717 888 958 1,024
Program activity registrations taken 6,749 6,836 7,994 8,201 8,369 9,051 9,850 9,310 9,627 9,231
Liquor
Annual sales (in millions)12.1$ 13.0 $ 14.4 $ 14.6 $ 14.7 $ 14.4 $ 15.2 $ 15.4 $ 14.9 $ 13.6$
Utility (in millions of gallons)
Water (average daily consumption) 6.0 6.5 6.3 6.1 4.8 5.7 6.7 5.9 5.5 5.2
Sanitary sewer (1)3.9 3.9 4.0 3.3 3.3 3.3 3.4 3.4 3.4 3.2
(average daily treatment)
Notes:
(1) Sewage is treated by the Metropolitan Council Environmental Services.
N/A Indicates information is not available for this period at the printing of this report.
Source: Various City of Lakeville Departments.
156
CITY OF LAKEVILLE, MINNESOTA
Capital Assets Statistics by Function
Last Ten Fiscal Years
Function (1)2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Public safety
Police stations 1 1 1 1 1 1 1 1 1 1
Fire stations 4 4 4 4 4 4 4 4 4 4
Public works
City streets (miles)247.9 255.1 257.6 258.6 259.0 260.0 261.4 264.0 266.8 271.3
Parks and recreation
Acres of parks, conservation areas,
and greenways 1,610 1,610 1,623 1,636 1,663 1,671 1,712 1,776 1,776 1,776
Parks 53 55 56 59 59 59 59 59 59 59
Conservation areas 18 18 18 18 18 18 20 20 20 20
Trails and sidewalks - paved (miles)86 88 91 91 91 100 100 103 103 105
Ice rinks - outdoor (fully boarded)12 12 12 12 12 12 12 12 12 12
Ice rinks - indoor 2333333333
Fields (softball, soccer, baseball,
football, Lacrosse)125 135 136 136 136 150 150 150 150 150
Courts (basketball, volleyball, tennis) 27 36 39 39 39 38 38 38 38 38
Playgrounds 38 38 39 39 40 40 40 40 40 40
Swimming beaches 3333333333
Liquor
Number of on-sale stores owned 2222222222
Number of on-sale stores leased 1111111111
Utility
Water
Water mains (miles)297 304 310 311 311 313 313 321 321 321
Fire hydrants 3,128 3,313 3,374 3,386 3,386 3,434 3,434 3,572 3,572 3,572
Wells 15 16 16 17 17 17 17 17 17 17
Water Towers 5 5 5 5 5 5 5 5 5 5
Sanitary sewer
Sanitary sewer mains (miles)238 253 255 256 259 261 261 261 261 261
Sanitary sewer lift stations 20 20 20 20 19 19 19 20 20 20
Notes:
(1) Indicators for general government functions are not available.
Source: Various City of Lakeville Departments.
157
This page intentionally left blank.
Management Report
for
City of Lakeville, Minnesota
December 31, 2015
THIS PAGE INTENTIONALLY LEFT BLANK
To the City Council and Management
City of Lakeville, Minnesota
We have prepared this management report in conjunction with our audit of the City of Lakeville,
Minnesota’s (the City) financial statements for the year ended December 31, 2015. The purpose of this
report is to provide comments resulting from our audit process and to communicate information relevant
to city finances in Minnesota. We have organized this report into the following sections:
Audit Summary
Governmental Funds Overview
Enterprise Funds Overview
Government-Wide Financial Statements
Legislative Updates
Accounting and Auditing Updates
We would be pleased to further discuss any of the information contained in this report or any other
concerns that you would like us to address. We would also like to express our thanks for the courtesy and
assistance extended to us during the course of our audit.
The purpose of this report is solely to provide those charged with governance of the City, management,
and those who have responsibility for oversight of the financial reporting process comments resulting
from our audit process and information relevant to city finances in Minnesota. Accordingly, this report is
not suitable for any other purpose.
Minneapolis, Minnesota
June 30, 2016
THIS PAGE INTENTIONALLY LEFT BLANK
-1-
AUDIT SUMMARY
The following is a summary of our audit work, key conclusions, and other information that we consider
important or that is required to be communicated to the City Council, administration, or those charged
with governance of the City.
OUR RESPONSIBILITY UNDER AUDITING STANDARDS GENERALLY ACCEPTED IN THE UNITED
STATES OF AMERICA AND GOVERNMENT AUDITING STANDARDS
We have audited the financial statements of the governmental activities, the business-type activities, each
major fund, and the aggregate remaining fund information of the City as of and for the year ended
December 31, 2015, and the related notes to the financial statements. Professional standards require that
we provide you with information about our responsibilities under auditing standards generally accepted in
the United States of America and Government Auditing Standards, as well as certain information related
to the planned scope and timing of our audit. We have communicated such information to you verbally
and in our audit engagement letter. Professional standards also require that we communicate the following
information related to our audit.
PLANNED SCOPE AND TIMING OF THE AUDIT
We performed the audit according to the planned scope and timing previously discussed and coordinated
in order to obtain sufficient audit evidence and complete an effective audit.
AUDIT OPINION AND FINDINGS
Based on our audit of the City’s financial statements for the year ended December 31, 2015:
We issued an unmodified opinion on the City’s basic financial statements. Our report included a
paragraph emphasizing that the City implemented Governmental Accounting Standards Board
(GASB) Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment of
GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions
Made Subsequent to the Measurement Date—an amendment of GASB Statement No. 68, during
the year ended December 31, 2015. Our opinion was not modified with respect to this matter.
We reported no deficiencies in the City’s internal control over financial reporting that we
considered to be material weaknesses.
The results of our testing disclosed no instances of noncompliance required to be reported under
Government Auditing Standards.
We reported no findings based on our testing of the City’s compliance with Minnesota laws and
regulations.
Overall, we found the City’s financial records to be in excellent condition. This not only provides for an
efficient year-end audit, but should also provide confidence in the interim financial data used to manage
the City throughout the year.
-2-
SIGNIFICANT ACCOUNTING POLICIES
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in Note 1 of the notes to basic financial statements.
The City implemented GASB Statement Nos. 68 and 71 during the year ended December 31, 2015. These
statements provide new guidance on accounting and financial reporting for pensions accounted for in the
financial statements of plan employers. Implementation of these standards resulted in an adjustment to the
beginning equity reported in the City’s government-wide and proprietary fund financial statements, as
described in Note 1 of the notes to basic financial statements. The application of remaining policies was
not changed during the year ended December 31, 2015.
We noted no transactions entered into by the City during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in the
proper period.
ACCOUNTING ESTIMATES AND MANAGEMENT JUDGMENTS
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management’s knowledge and experience about past and current events and assumptions about
future events. Certain accounting estimates are particularly sensitive because of their significance to the
financial statements and because of the possibility that future events affecting them may differ
significantly from those expected. The most sensitive estimates affecting the financial statements were:
Depreciation – Management’s estimates of depreciation expense are based on the estimated
useful lives of the assets.
Net Other Post-Employment Benefit (OPEB) Liabilities and Pension Benefits – The City has
recorded liabilities and activity for other post-employment benefits (OPEB) and pension benefits.
These obligations are calculated using actuarial methodologies described in GASB Statement
Nos. 45 and 68. These actuarial calculations include significant assumptions, including projected
changes, healthcare insurance costs, investment returns, retirement ages, proportionate share, and
employee turnover.
Compensated Absences – Management’s estimate is based on current rates of pay and sick leave
balances estimated to be paid out as future severance pay.
We evaluated the key factors and assumptions used to develop these accounting estimates in determining
that they are reasonable in relation to the financial statements taken as a whole.
The financial statement disclosures are neutral, consistent, and clear.
CORRECTED AND UNCORRECTED MISSTATEMENTS
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of management.
Where applicable, management has corrected all such misstatements. In addition, none of the
misstatements detected as a result of audit procedures and corrected by management, when applicable,
were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as
a whole.
DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
-3-
DISAGREEMENTS WITH MANAGEMENT
For purposes of this report, professional standards define a disagreement with management as a financial
accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be
significant to the financial statements or the auditor’s report. We are pleased to report that no such
disagreements arose during the course of our audit.
MANAGEMENT CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves
application of an accounting principle to the City’s financial statements or a determination of the type of
auditor’s opinion that may be expressed on those statements, our professional standards require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our
knowledge, there were no such consultations with other accountants.
MANAGEMENT REPRESENTATIONS
We have requested certain representations from management that are included in the management
representation letter dated June 30, 2016.
OTHER AUDIT FINDINGS OR ISSUES
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City’s auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a
condition to our retention.
OTHER MATTERS
We applied certain limited procedures to Management’s Discussion and Analysis, the budgetary
comparison schedule for the General Fund, and the other pension and OPEB-related required
supplementary information (RSI) that supplements the basic financial statements. Our procedures
consisted of inquiries of management regarding the methods of preparing the information and comparing
the information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We did
not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the combining and individual fund statements and schedules, and the
supplemental information accompanying the financial statements which are not RSI. With respect to the
combining and individual fund statements and schedules, and supplemental information, we made certain
inquiries of management and evaluated the form, content, and methods of preparing the information to
determine that the information complies with accounting principles generally accepted in the United
States of America, the method of preparing it has not changed from the prior period, and the information
is appropriate and complete in relation to our audit of the financial statements. We compared and
reconciled the combining and individual fund statements and schedules, and the supplemental information
to the underlying accounting records used to prepare the financial statements or to the financial statements
themselves.
We were not engaged to report on the introductory and statistical sections which accompany the financial
statements but are not RSI. We did not audit or perform other procedures on this other information and
we do not express an opinion or provide any assurance on it.
-4-
GOVERNMENTAL FUNDS OVERVIEW
This section of the report provides you with an overview of the financial trends and activities of the City’s
governmental funds, which include the General, special revenue, debt service, and capital project funds.
These funds are used to account for the basic services the City provides to all of its citizens, which are
financed primarily with property taxes. The governmental fund information in the City’s financial
statements focuses on budgetary compliance, and the sufficiency of each governmental fund’s current
assets to finance its current liabilities.
PROPERTY TAXES
Minnesota cities rely heavily on local property tax levies to support their governmental fund activities.
For the 2014 fiscal year, local ad valorem property tax levies provided 39.0 percent of the total
governmental fund revenues for cities over 2,500 in population, and 35.5 percent for cities under 2,500 in
population. Property tax levies certified by Minnesota cities for 2015 increased about 4.0 percent over
2014, compared to an increase of 1.6 percent the prior year. A one-year levy limit imposed on cities over
2,500 in population for the 2014 levy year was lifted for the 2015 levy year.
The total market value of property in Minnesota cities increased about 8.5 percent for the 2015 levy year,
following a modest increase of 1.1 percent for levy year 2014 and a four-year trend of declining market
values for levy years 2010 through 2013. Market values showed increases across all property categories
for 2015, with gains in the market values of residential homestead properties (10.0 percent) and
non-homestead residential properties (9.7 percent) outpacing the market value gain of
commercial/industrial properties (2.2 percent). Because the assessed valuation used for levying property
taxes is based on values from the previous fiscal year (e.g., the market value for taxes payable in 2015 is
based on estimated values as of January 1, 2014), market value improvement has lagged behind recent
upturns in the housing market and the economy in general.
The City’s taxable market value increased 4.8 percent for taxes payable in 2014 and 11.2 percent for taxes
payable in 2015. The following graph shows the City’s changes in taxable market value over the past 10
years:
$–
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
$5,000,000,000
$6,000,000,000
$7,000,000,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Taxable Market Value
-5-
Tax capacity is considered the actual base available for taxation. It is calculated by applying the state’s
property classification system to each property’s market value. Each property classification, such as
commercial or residential, has a different calculation and uses different rates. Consequently, a city’s total
tax capacity will change at a different rate than its total market value, as tax capacity is affected by the
proportion of the City’s tax base that is in each property classification from year-to-year, as well as
legislative changes to tax rates and exemptions. The City’s tax capacity increased 4.2 percent and
9.9 percent for taxes payable in 2014 and 2015, respectively.
The following graph shows the City’s change in tax capacities over the past 10 years:
$–
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Local Net Tax Capacity
The improvement in property tax capacities contributed to decreases to the overall state-wide and metro
area tax rates for 2015. The following table presents the average tax rates applied to city residents for
each of the last two levy years, along with comparative state-wide and metro area rates:
Rates expressed as a percentage of net tax capacity
2014 2015 2014 2015 2014 2015
Average tax rate
City 48.8 46.9 46.0 43.4 40.7 39.0
County 47.6 44.7 46.6 42.9 31.8 29.6
School 28.9 27.1 30.9 28.3 34.3 32.2
Special taxing 7.3 6.9 9.5 8.8 5.4 4.9
Total 132.6 125.6 133.0 123.4 112.3 105.7
Lakeville
City of
Metro Area
Seven-CountyAll Cities
State-Wide
Both the total tax rate applied to Lakeville taxpayers and the City’s tax rate have been well below both the
state-wide and metro averages in recent years. The City’s tax rate for 2015 was lower than the previous
year, despite a 4.5 percent increase in the City’s certified tax levy, due to the improvement in tax capacity
as discussed above.
The school tax rate for the City represents an average of Independent School District (ISD) No. 192,
Farmington; ISD No. 194, Lakeville; and ISD No. 196, Rosemount – Apple Valley – Eagan.
-6-
GOVERNMENTAL FUND BALANCES
The following table summarizes the changes in the fund balances of the City’s governmental funds during
the year ended December 31, 2015, presented both by fund balance classification and by fund:
Increase
2015 2014 (Decrease)
Fund balances of governmental funds
Total by classification
Nonspendable 447,284$ 221,873$ 225,411$
Restricted 35,659,756 44,319,872 (8,660,116)
Committed 17,982,431 17,199,096 783,335
Unassigned 8,390,255 10,173,030 (1,782,775)
Total governmental funds 62,479,726$ 71,913,871$ (9,434,145)$
Total by fund
General 12,374,928$ 11,071,769$ 1,303,159$
General Obligation Debt Service 17,450,559 30,781,452 (13,330,893)
G.O. Improvement Debt Service 5,274,675 4,303,472 971,203
Building Capital Projects 497,062 1,375,010 (877,948)
Water Capital Projects (3,093,297) 2,668,607 (5,761,904)
Improvement Construction Capital Projects 2,242,797 1,077,791 1,165,006
Nonmajor funds 27,733,002 20,635,770 7,097,232
Total governmental funds 62,479,726$ 71,913,871$ (9,434,145)$
Governmental Funds Change in Fund Balance
Fund Balance
as of December 31,
In total, the fund balances of the City’s governmental funds decreased $9,434,145 during the year ended
December 31, 2015.
The majority of the decrease was in restricted fund balances, which were $8.7 million lower than at the
prior year-end, mainly due to a $12.5 million crossover debt refunding paid from an escrow accounted for
in the General Obligation Debt Service Fund. This was partially offset by increases in fund balances
restricted for street construction ($2.0 million) and park development ($1.6 million) in the nonmajor
capital projects funds.
The increase in committed fund balances is primarily from utility connection charges in the nonmajor
utility (sanitary sewer and storm sewer) capital projects funds.
The decrease in unassigned fund balances is primarily due to the deficit fund balance accumulated in the
Water Capital Projects Fund from infrastructure improvement costs incurred in advance of future bond
financing.
-7-
GOVERNMENTAL FUNDS REVENUE AND EXPENDITURES
The following table presents the per capita revenue of the City’s governmental funds for the past three
years, along with state-wide averages.
We have included the most recent comparative state-wide averages available from the Office of the State
Auditor to provide a benchmark for interpreting the City’s data. The amounts received from the typical
major sources of governmental fund revenue will naturally vary between cities based on factors such as
the City’s stage of development, location, size and density of its population, property values, services it
provides, and other attributes. It will also differ from year-to-year due to the effect of inflation and
changes in the City’s operation. Also, certain data on these tables may be classified differently than how
they appear on the City’s financial statements in order to be more comparable to the state-wide
information, particularly in separating capital expenditures from current expenditures.
We have designed this section of our management report using per capita data in order to better identify
unique or unusual trends and activities of your city. We intend for this type of comparative and trend
information to complement, rather than duplicate, information in the Management’s Discussion and
Analysis. An inherent difficulty in presenting per capita information is the accuracy of the population
count, which for most years is based on estimates.
Year 2013 2014 2015
Population 20,000–100,000 57,789 59,361 59,991
Property taxes 427$ 400$ 399$ 414$
Tax increments 46 15 14 7
Franchise and other taxes 37 11 11 11
Special assessments 64 20 28 29
Licenses and permits 41 36 36 55
Intergovernmental revenues 166 61 84 87
Charges for services 90 120 142 196
Other 65 19 71 31
Total revenue 936$ 682$ 785$ 830$
December 31, 2014
City of LakevilleState-Wide
Governmental Funds Revenue per Capita
With State-Wide Averages by Population Class
The City’s governmental funds have typically generated less revenue per capita in total than other
Minnesota cities in its population class.
Total governmental funds revenues were $49.8 million in 2015, about $3.2 million (7.0 percent) more
than the prior year. On a per capita basis, governmental fund revenue for 2015 was $45 higher than the
prior year. Property tax revenue was $15 per capita higher than the previous year due to a levy increase
and excess tax increment distribution. Licenses and permits revenue was $19 per capita higher than last
year due to increased development activity. Charges for services were also $54 per capita higher than last
year due to increased development activity, resulting in additional connection and area charges, park
dedication fees, and engineering charges. Revenue in the “other” category shown above decreased
$40 per capita, mainly due to a non-recurring $2.23 million interest rate reduction loan repayment
received in 2014, and market value adjustments on the City’s investment portfolio included in investment
income.
-8-
The expenditures of governmental funds will also vary from state-wide averages and from year-to-year,
based on the City’s circumstances. Expenditures are classified into three types as follows:
Current – These are typically the general operating type expenditures occurring on an annual
basis, and are primarily funded by general sources such as taxes and intergovernmental revenues.
Capital Outlay and Construction – These expenditures do not occur on a consistent basis, more
typically fluctuating significantly from year-to-year. Many of these expenditures are
project-oriented, and are often funded by specific sources that have benefited from the
expenditure, such as special assessment improvement projects.
Debt Service – Although the expenditures for debt service may be relatively consistent over the
term of the respective debt, the funding source is the important factor. Some debt may be repaid
through specific sources such as special assessments or redevelopment funding, while other debt
may be repaid with general property taxes.
The City’s expenditures per capita of its governmental funds for the past three years, together with
state-wide averages, are presented in the following table:
Year 2013 2014 2015
Population 20,000–100,000 57,789 59,361 59,991
Current
87$ 83$ 96$ 87$
254 175 174 182
114 65 64 64
92 55 56 59
98 – – –
645 378 390 392
Capital outlay
and construction 276 217 361 528
Debt service
115 101 101 123
34 69 65 63
149 170 166 186
Total expenditures 1,070$ 765$ 917$ 1,106$
General government
Governmental Funds Expenditures per Capita
With State-Wide Averages by Population Class
December 31, 2014
City of LakevilleState-Wide
Interest and fiscal
Public safety
Public works
Parks and recreation
All other
Principal
Total expenditures in the City’s governmental funds for 2015 were $66.3 million, an increase of
$11.9 million (21.8 percent) from the previous year, or $189 per capita.
The increase was mainly in capital outlay, which was $167 per capita higher than the previous year,
primarily due to several large street and utility improvement projects. Scheduled debt service principal
and interest costs were also $20 higher per capita than the prior year.
-9-
GENERAL FUND
The City’s General Fund accounts for the financial activity of the basic services provided to the
community. The primary services included within this fund are the administration of the municipal
operation, police and fire protection, building inspection, streets and highway maintenance, and parks and
recreation. The graph below illustrates the change in the General Fund financial position over the last five
years. We have also included a line representing annual expenditures to reflect the change in the size of
the General Fund operation over the same period.
$–
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
$22,000,000
$24,000,000
2011 2012 2013 2014 2015
General Fund Financial Position
Year Ended December 31,
Fund Balance Cash Balance (Net)Expenditures
The City’s General Fund cash and investments balance at December 31, 2015 was $12,066,357, an
increase of $905,449. Total fund balance at December 31, 2015 was $12,374,928, which is an increase of
$1,303,159 from the prior year, and $1,837,964 higher than projected in the City’s final budget.
As the graph illustrates, the City has generally been able to maintain healthy cash and fund balance levels
as the volume of financial activity has grown. This is an important factor because a government, like any
organization, requires a certain amount of equity to operate. A healthy financial position allows the City
to avoid volatility in tax rates; helps minimize the impact of state funding changes; allows for the
adequate and consistent funding of services, repairs, and unexpected costs; and is a factor in determining
the City’s bond rating and resulting interest costs. Maintaining an adequate fund balance has become
increasingly important given the fluctuations in state funding for cities in recent years.
A trend that is typical to Minnesota local governments, especially the General Fund of cities, is the
unusual cash flow experienced throughout the year. The City’s General Fund cash disbursements are
made fairly evenly during the year other than the impact of seasonal services such as snowplowing, street
maintenance, and park activities. Cash receipts of the General Fund are quite a different story. Taxes
comprise about 70 percent of the fund’s total annual revenue. Approximately half of these revenues are
received by the City in July and the rest in December. Consequently, the City needs to have adequate cash
reserves to finance its everyday operations between these payments.
The City’s General Fund balance at the end of the 2015 fiscal year represents approximately 53.2 percent
of annual expenditures based on 2015 levels, compared to 50.2 percent at the end of the previous year.
-10-
The following graph reflects the City’s General Fund revenue sources for 2015 compared to budget:
$– $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18
Taxes
Intergovernmental
Charges for Services
Licenses and Permits
All Other
Millions
General Fund Revenue
Budget and Actual
Budget Actual
General Fund revenue for 2015 was $25,373,117, which was $1,088,770 (4.5 percent) more than budget.
Charges for services were $425,792 over budget, mostly due to engineering fees charged to construction
projects. Licenses and permits revenue was over budget by $609,092, primarily due to the number of
residential building and construction related permits issued.
The following graph presents the City’s General Fund revenues by source for the last five years. The
graph reflects the City’s reliance on property taxes and other local sources of revenue.
$–
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
Taxes Intergovernmental Charges for
Services
Licenses and
Permits
All Other
Mi
l
l
i
o
n
s
General Fund Revenue by Source
Year Ended December 31,
2011 2012 2013 2014 2015
Overall, General Fund revenues increased $2,666,429 (11.7 percent) from the previous year. Property tax
revenue was $1,011,922 more than last year due to a 5.7 percent increase in the General Fund levy.
Intergovernmental revenue increased $170,363 due to federal traffic safety and county grants received.
Revenue from charges for services (up $886,236) and licenses and permits (up $496,584) were both
higher than last year due to increased development activity. Finally, revenue in the “all other” category as
shown above was $101,324 higher than last year, mainly due to an increase in revenue from fines and
forfeitures.
-11-
The following graph illustrates the components of General Fund spending for 2015 compared to budget:
$– $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12
General Government
Public Safety
Public Works
Parks and Recreation
Millions
General Fund Expenditures
Budget and Actual
Budget Actual
Total General Fund expenditures for 2015 were $23,267,893, which was $749,194 (3.1 percent) under the
final budget. General Fund expenditures were under budget in every functional area, as shown in the
graph above. General government expenditures were $133,017 under budget, with the largest savings in
administration, legal counsel, general government facilities, and finance. Public safety expenditures were
$207,892 under budget, primarily in police personnel and purchased service costs. Public works
expenditures were $335,792 under budget, mainly in engineering and street maintenance personnel and
commodities costs. Parks and recreation costs were under budget by $72,493, mainly in park maintenance
charges and services.
The following graph presents the City’s General Fund expenditures by function for the last five years:
$–
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
$11
$12
General Government Public Safety Public Works Parks and Recreation
Mi
l
l
i
o
n
s
General Fund Expenditures by Function
Year Ended December 31,
2011 2012 2013 2014 2015
Total General Fund expenditures for 2015 were $1,206,600 (5.5 percent) higher than the previous year,
with the increase spread across all program areas. The majority of the increase was in personnel costs,
which were $1,075,773 higher than last year due to contractual wage increases, inflationary benefit cost
increases, and the addition of about four full-time employees compared to the prior year.
-12-
ENTERPRISE FUNDS OVERVIEW
The City maintains two enterprise funds to account for services the City provides that are financed
primarily through fees charged to those utilizing the service. This section of the report provides you with
an overview of the financial trends and activities of the City’s enterprise funds, which include the (water,
sewer, street light, and environmental resources) Utility Fund and Liquor Fund.
ENTERPRISE FUNDS FINANCIAL POSITION
The following table summarizes the changes in the financial position of the City’s enterprise funds during
the years ended December 31, 2015 and 2014, presented both by classification and by fund:
Increase
2015 2014 Restated (Decrease)
Net position of enterprise funds
Total by classification
Net investment in capital assets 116,288,771$ 109,535,106$ 6,753,665$
Restricted for debt service 323,875 324,125 (250)
Unrestricted 8,196,986 9,244,471 (1,047,485)
Total enterprise funds 124,809,632$ 119,103,702$ 5,705,930$
Total by fund
Liquor 4,135,906$ 4,771,970$ (636,064)$
Utility 120,673,726 114,331,732 6,341,994
Total enterprise funds 124,809,632$ 119,103,702$ 5,705,930$
Enterprise Funds Change in Financial Position
Net Position
as of December 31,
The unrestricted net position of the City’s enterprise funds as of the end of 2014 have been restated in the
table above to reflect a $1,873,397 decrease in beginning net position due to the change in accounting
principle for GASB Statement No. 68, discussed elsewhere in this report.
In total, the net position of the City’s enterprise funds increased by $5,705,930 during the year ended
December 31, 2015. The Liquor Fund net position decreased by $636,064, due mostly to transfers of
almost $1.4 million to governmental funds to provide funding for debt service requirements, various
capital projects, and general overhead costs. The increases in both the net investment in capital assets and
the net position of the Utility Enterprise Fund were primarily due to capital infrastructure contributions of
$9.5 million received from developers, other government agencies, and the City’s governmental funds.
-13-
LIQUOR FUND
The following graphs present five years of operating results for the Liquor Fund:
$–
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
2011 2012 2013 2014 2015
Liquor Fund – Revenues, Expenses, and Income
Year Ended December 31,
Sales Cost of Sales Operating Expenses Operating Income
The Liquor Fund ended 2015 with a net position of $4,135,906, a decrease of $636,064 from current year
operations. Of this, $3,309,972 represents net investment in capital assets and $323,875 is restricted in
accordance with revenue bond covenants, leaving $502,059 of unrestricted net position.
Gross liquor sales for 2015 were $13,611,294, a $1,272,564 (8.5 percent) decrease from last year. The
Liquor Fund generated a gross profit of $3,289,120 in 2015, or about 24.2 percent, of gross sales.
Operating expenses for 2015 were $2,358,249, an increase of $11,170 (0.5 percent) from last year. Net
operating income for 2015 was $930,871, or about 6.8 percent, of gross sales. The decrease in gross sales
and the resulting decline in the two operating ratios shown below were primarily attributable to increased
competition. The Liquor Fund also made transfers out of $1,397,972 to support the General Fund, for
debt service, and for various capital needs.
24.7% 25.2% 25.7% 25.6% 24.2%
9.4% 10.7% 10.8% 9.8%
6.8%
–
5%
10%
15%
20%
25%
30%
2011 2012 2013 2014 2015
Liquor Fund – Operating Ratios
Year Ended December 31,
Gross Profit as a Percentage of Sales
Operating Income as a Percentage of Sales
-14-
UTILITY FUND
The following graph presents five years of comparative operating results for the City’s (water, sewer,
street light, and environmental resources) Utility Fund:
$–
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
$11,000,000
$12,000,000
2011 2012 2013 2014 2015
Utility Fund
Year Ended December 31,
Operating Expense Depreciation
Operating Revenue Income Before Depreciation
The Utility Fund ended 2015 with net position of $120,673,726, an increase of $6,341,994 from current
year operations. Of the net position balance, $112,978,799 represents the City’s net investment in utility
capital assets, leaving $7,694,927 of unrestricted net position.
Utility Fund operating revenue was $9,216,463 for 2015, a decrease of $79,655 (0.9 percent), mainly due
to small decreases in water and sewer charges.
Operating expenses (including depreciation of $3,471,498) were $11,881,453, which represents an
increase of $378,835 (3.3 percent). The increase was primarily attributable to increases in personnel costs
and purchased services related to maintenance and depreciation.
The Utility Fund also received capital contributions of $9,463,872 in 2015 from developers, other
governmental agencies, and the City’s governmental funds.
-15-
GOVERNMENT-WIDE FINANCIAL STATEMENTS
In addition to fund-based information, the current reporting model for governmental entities also requires
the inclusion of two government-wide financial statements designed to present a clear picture of the City
as a single, unified entity. These government-wide financial statements provide information on the total
cost of delivering services, including capital assets and long-term liabilities.
STATEMENT OF NET POSITION
The Statement of Net Position essentially tells you what your city owns and owes at a given point in time,
the last day of the fiscal year. Theoretically, net position represents the resources the City has leftover to
use for providing services after its debts are settled. However, those resources are not always in spendable
form, or there may be restrictions on how some of those resources can be used. Therefore, net position is
divided into three components: net investment in capital assets, restricted, and unrestricted.
The following table presents the components of City’s net position as of December 31, 2015 and 2014,
for governmental activities and business-type activities:
Increase
2015 2014 Restated (Decrease)
Net position
Governmental activities
Net investment in capital assets 141,868,136$ 135,673,737$ 6,194,399$
Restricted 33,860,946 23,042,250 10,818,696
Unrestricted (4,929,168) (5,287,669) 358,501
Total governmental activities 170,799,914 153,428,318 17,371,596
Business-type activities
Net investment in capital assets 116,288,771 109,535,106 6,753,665
Restricted 323,875 324,125 (250)
Unrestricted 8,420,410 9,444,893 (1,024,483)
Total business-type activities 125,033,056 119,304,124 5,728,932
Total net position 295,832,970$ 272,732,442$ 23,100,528$
As of December 31,
The City’s government-wide unrestricted net position as of the end of 2014 has been restated in the table
above to reflect a $9,906,067 decrease caused by the implementation of GASB Statement No. 68, which
reduced governmental activities net position by $8,032,670, and business-type activities net position by
$1,873,397.
The total net position of the City increased $23.1 million during the 2015 fiscal year. Of the increase,
$17.4 million came from governmental activities and $5.7 million from business-type activities. One of
the primary reasons for the increases in both the governmental and business-type activities was the
amount of infrastructure contributed by developers and others during 2015, which totaled about
$12.7 million.
The increase in governmental activities restricted net position was the result of several factors, including
an increase in special assessments restricted for future debt service; increases in park dedication fees and
other resources restricted for future capital improvements; and the recognition of a net pension asset
restricted for fire relief pensions due to the adoption of GASB Statement No. 68.
-16-
STATEMENT OF ACTIVITIES
The Statement of Activities tracks the City’s yearly revenues and expenses, as well as any other
transactions that increase or reduce total net position. These amounts represent the full cost of providing
services. The Statement of Activities provides a more comprehensive measure than just the amount of
cash that changed hands, as reflected in the fund-based financial statements. This statement includes the
cost of supplies used, depreciation of long-lived capital assets, and other accrual-based expenses.
The following table presents the change in the net position of the City for the years ended December 31,
2015 and 2014:
2014
Program
Expenses Revenues Net Change Net Change
Governmental activities
General government 5,893,261$ 3,814,480$ (2,078,781)$ (64,333)$
Public safety 12,236,411 1,906,478 (10,329,933) (10,320,839)
Public works 15,365,976 25,159,089 9,793,113 1,061,551
Parks and recreation 5,762,890 4,889,623 (873,267) (1,890,601)
Interest on long-term debt 3,296,665 – (3,296,665) (3,665,421)
Business-type activities
Liquor 2,530,806 3,292,882 762,076 1,310,601
Utility 11,946,778 15,311,292 3,364,514 2,197,939
Total net (expense) revenue 57,032,787$ 54,373,844$ (2,658,943) (11,371,103)
General revenues
Property taxes and tax increments 25,338,778 24,465,333
Investment earnings 420,693 702,754
Total general revenues 25,759,471 25,168,087
Change in net position 23,100,528 13,796,984
Net position – beginning, as previously reported 282,638,509 268,841,525
Change in accounting principle (9,906,067) –
Net position – beginning, as restated 272,732,442 268,841,525
Net position – ending 295,832,970$ 282,638,509$
Net (expense) revenue
2015
One of the goals of this statement is to provide a side-by-side comparison to illustrate the difference in the
way the City’s governmental and business-type operations are financed. The table clearly illustrates the
dependence of the City’s governmental operations on general revenues such as property taxes and
unrestricted grants, while its business-type activities are financed predominately through program
revenues.
The difference in the general government net change is primarily due to the $2.23 million interest rate
reduction loan repayment received in 2014. The difference in public works is mainly the result of
increased revenue from capital contributions, utility connection charges, and special assessments in 2015.
-17-
LEGISLATIVE UPDATES
Despite the 2015 legislative session beginning with a projected budget excess of $1.87 billion for the
2016–2017 biennium, the most favorable budget forecast in over a decade, little was accomplished during
the regular legislative session due to partisan disagreement. The regular session adjourned without the
Legislature bringing forth a number of significant funding bills, including the Omnibus Legacy Bill
(funding for outdoor heritage, clean water, parks and trails, arts, and cultural heritage) and a bonding bill
for capital projects. The Governor subsequently vetoed a number of other funding bills, including the
Omnibus E–12 Education Bill due to the Legislature not addressing his demand for a universal preschool
provision. Eventually, a one-day special session produced funding bills for E–12 education, jobs and
energy, Legacy programs, environment and agriculture, and capital investment.
The following is a summary of recent legislation affecting Minnesota cities in 2015 and into the future:
Local Government Aid (LGA) – The Legislature completely overhauled the LGA formula for fiscal
year 2014 and thereafter, creating a three-tiered formula that includes separate “need factor”
calculations for cities with populations under 2,500, between 2,500 and 10,000, or over 10,000. The
new formula simplified the LGA calculation, and reduced the volatility of the LGA distribution by
limiting the amount it may decline in a given year. Beginning in 2015, any reduction to a city’s
calculated LGA distribution will be limited to the lesser of $10 per capita, or 5 percent of their
previous year net tax levy. For cities that gain under the new formula, the increases will be distributed
proportionate to their unmet need, as determined by the new “need factor” calculations. The
state-wide LGA appropriation was $516.9 million for fiscal 2015, and is $519.4 million for fiscal
2016 and thereafter.
Sales Tax Exemption – Cities (both home-rule and statutory) were exempted from paying sales tax
on qualifying purchases, effective for purchases made on or after January 1, 2014. Purchases of goods
or services by an exempt local government for a publicly-provided liquor store, gas or electric utility,
golf course, marina, campground, café, laundromat, solid waste hauling or recycling operation, or
landfill will remain taxable.
The 2014 Legislature extended the definition of tax exempt local government to include all special
district; city, county, or township instrumentalities; economic development authorities; housing and
redevelopment authorities; and all joint power boards or organizations. However, the effective date of
this expanded exemption list was delayed until January 1, 2017 by the 2015 Legislature.
Omnibus Bonding Bill – The Legislature approved a scaled-down Omnibus Bonding Bill during the
special session, authorizing approximately $370 million in capital improvements. Included in the
funding approved was $172.5 million for transportation infrastructure, $23.5 million for flood hazard
mitigation, $10 million for Public Financing Agency (PFA) grants to municipalities for wastewater
infrastructure, and $1.5 million to the Metropolitan Council for inflow and infiltration improvement
grants to metro area cities.
Legacy Funding – The Legacy bill included $9.25 million annually to finance grants for city water
infrastructure improvements through the PFA. It also included $17.25 million annually to fund
“SCORE” block grants to counties for recycling and waste reduction (a portion of which is passed
through to cities) and $1 million of annual funding for a new grant program to establish or improve
recycling programs in non-metro area cities.
Broadband Initiative – The Omnibus Jobs and Energy Bill passed in the special session included
$10.6 million to finance the Border-to-Border Broadband Grant Program, a one-time appropriation
available until June 30, 2017.
-18-
Municipal State-Aid Streets – Included in the Omnibus Transportation Bill were annual funding
allocations for municipal state-aid streets of $107.7 million for fiscal 2016 and $178.1 million for
fiscal 2017, which represents an increase of approximately $41 million over the previous biennium.
Small Cities Assistance Account – A one-time appropriation of $12.5 million was provided to create
a new Small Cities Assistance Account to assist with construction and maintenance of roads located
within eligible cities, defined as a statutory or home-rule charter city that does not receive municipal
state aid street financing (generally those with a population under 5,000). The aid will be distributed
to eligible cities biannually in each year funds are available based on the following formula: 5 percent
equally to all eligible cities; 35 percent allocated proportionately on each city’s share of lane miles to
the total for all eligible cities; 35 percent allocated proportionately on each city’s population to the
total for all eligible cities; and 25 percent allocated proportionately on each city’s state-aid adjustment
factor to the total for all eligible cities.
Workforce Housing Grant Program – The Omnibus Jobs and Energy Bill included annual funding
of $2 million for fiscal 2016 and 2017 for a new Workforce Housing Grant Program. Eligible cities
can use the grants to develop “market rate residential rental property” to serve employees of
businesses located in the eligible project areas. The maximum grant award may not exceed 25 percent
of the rental housing development project cost; and awards must be matched by a local unit of
government, business, or nonprofit organization with $1 for each $2 of grant funding.
Automated License Plate Reader (ALPR) Policy – Law enforcement agencies that utilize ALPRs
are required to establish policies governing their use that are consistent with statutory guidelines. The
Legislature placed limitations on the type of data that can be collected using ALPRs, and clarified the
circumstances under which that data is considered public or private. A limitation of 60 days was
established for the retention of data collected by ALPR not related to an active criminal investigation.
Standards were established for the sharing of ALPR data between law enforcement agencies.
Elections – The Elections Omnibus Bill made numerous changes to elections administration laws,
including requirements for filing fees for statutory cities, ballot formatting and marking, absentee
ballots, and election recounts.
Energy Conservation Measures – The Uniform Municipal Contracting Law was amended to add
water metering devices that increase efficiency to the definition of energy conservation measures,
enabling municipalities to enter into guaranteed energy savings contracts for the use of water
metering devices.
Responsible Contractor Requirement – The “responsible contractor” law enacted by the 2014
Legislature became effective on January 1, 2015. Contractors who bid on public contracts in excess of
$50,000 are now required to certify that they are a “responsible bidder” in order to be awarded a
contract as the lowest responsible bidder or best value alternative. The 2015 Legislature made several
clarifications and modifications to the law, including: exempting design professionals and materials
suppliers from the requirements; making motor carriers subject to the requirements and establishing a
separate verification standard for them; excluding tax increment financing revenue from the value of
a construction contract under the law; and allowing general contractors to submit bids without
obtaining verification from all subcontractors that bid on the project (the successful prime contractor
must submit a supplemental verification under oath prior to the execution of the contract).
Appraisal Requirements for Eminent Domain – Effective July 1, 2015, the appraisal requirements
for the acquisition of property by eminent domain are changed to require the acquiring entity to
obtain at least one appraisal for the property proposed to be acquired only if the acquisition value is
greater than $25,000. For acquisitions less than $25,000, the acquiring entity may obtain a minimum
damage acquisition report in lieu of an appraisal.
-19-
Firefighter Employment Provisions and Volunteer Benefits – The Omnibus Public Safety Finance
and Policy Bill made a number of changes related to firefighters, including: allowing relief
association dues as a voluntarily payroll deduction, allowing volunteer firefighters to be paid less
frequently than every 31 days, requiring the licensure of all full-time firefighters by the State Board of
Firefighter Training and Education, and expanding “continued employer health insurance benefits” to
include dependents of volunteer firefighters killed in the line of duty.
Police and Firefighter Retirement Supplemental State Aid – The volunteer firefighter portion of
the Police and Firefighter Retirement Supplemental State Aid Program was made permanent. The
minimum obligation of municipalities to an associated relief association special fund is now reduced
by the amount of both fire state aid and police and firefighter retirement supplemental state aid. Police
and firefighter retirement supplemental state aid is also added to the calculation of the exception to
municipal ratification requirement for lump-sum plans.
Pensions – A number of changes to the pension plans administered by the Public Employees
Retirement Association (PERA) were adopted, effective June 30, 2015, including:
The future interest rate actuarial assumption for the PERA General Plan and PERA Police
and Fire Plan are changed from 8.5 percent to 8.0 percent for actuarial valuations prepared
after June 30, 2015.
The refund repayment interest rate and prior service credit purchase payment determination
rate for the PERA General Plan and PERA Police and Fire Plan are also changed from 8.5
percent to 8.0 percent.
The CPI-based post-retirement adjustment mechanism for the PERA Police and Fire Plan is
replaced with a flat 2.5 percent increase when the plan reaches a 90 percent funding level.
The contribution stabilizer mechanisms applicable to the PERA General Plan are revised,
broadening the factors the plan’s Board of Trustees may consider before recommending an
increase in the plan contribution rates.
Definitions of salary, termination of service, allowable service, retirement, and volunteer
firefighter were revised for all applicable PERA plans.
Changes in eligibility, service pension levels, ancillary benefits, and service time calculations
were made to the PERA Statewide Volunteer Firefighter Plan, lump sum retirement division.
A change was also made to create a “monthly benefit retirement division” within this plan to
facilitate the transfer of individual volunteer firefighter association monthly benefit plans to
the statewide plan.
A number of administrative language changes were made to complete the merger of the
Minneapolis Employees Retirement Fund into the PERA General Plan, which was effective
January 1, 2015.
-20-
ACCOUNTING AND AUDITING UPDATES
GASB STATEMENT NO. 72, FAIR VALUE MEASURE AND APPLICATION
The primary objective of this statement is to address accounting and financial reporting issues related to
fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. This statement
provides guidance for determining a fair value measurement for financial reporting purposes. It also
provides guidance for applying fair value to certain investments and disclosures related to all fair value
measurements.
This statement generally requires investments to be measured at fair value. An investment is defined as a
security or other asset that (a) a government holds primarily for the purpose of income or profit and
(b) has a present service capacity based solely on its ability to generate cash or to be sold to generate cash.
This statement is effective for financial statements for fiscal years beginning after June 15, 2015. Earlier
application is encouraged.
GASB STATEMENT 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
The objective of this statement is to improve the usefulness of information about pensions included in
financial statements of state and local governments for making decisions and assessing accountability.
This statement also clarifies the application of certain provisions of GASB Statement Nos. 67 and 68
regarding 10-year schedules of required supplementary information (RSI) and other recognition issues
pertaining to employers and nonemployer contributing entities. These changes will improve financial
reporting by establishing a single framework for the presentation of information about pensions,
enhancing comparability for similar information reported by employers and nonemployer contributing
entities.
The requirements of this statement that address accounting and financial reporting by employers and
governmental nonemployer contributing entities for pensions not within the scope of GASB Statement
No. 68 are effective for financial statements for fiscal years beginning after June 15, 2016, and the
requirements of this statement that address financial reporting for assets accumulated for purposes of
providing those pensions are effective for fiscal years beginning after June 15, 2015. The requirements of
this statement for pension plans that are within the scope of GASB Statement No. 67 or for pensions that
are within the scope of GASB Statement No. 68 are effective for fiscal years beginning after June 15,
2015. Earlier application is encouraged.
GASB STATEMENT NO. 74, FINANCIAL REPORTING FOR POSTEMPLOYMENT BENEFIT PLANS OTHER
THAN PENSION PLANS
The objective of this statement is to improve the usefulness of information about post-employment
benefits other than pensions (other post-employment benefits [OPEB]). This statement replaces GASB
Statement Nos. 43 and 57. It also includes requirements for defined contribution OPEB plans that replace
the requirements for those OPEB plans in GASB Statement Nos. 25, 43, and 50. GASB Statement No. 75,
Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, establishes new
accounting and financial reporting requirements for governments whose employees are provided with
OPEB, as well as for certain nonemployer governments that have a legal obligation to provide financial
support for OPEB provided to the employees of other entities.
-21-
This statement will improve financial reporting primarily through enhanced note disclosures and
schedules of RSI that will be presented by OPEB plans administered through trusts meeting the specified
criteria. The new information will enhance the decision-usefulness of the financial reports of those OPEB
plans, their value for assessing accountability, and their transparency by providing information about
measures of net OPEB liabilities and explanations of how and why those liabilities changed from
year-to-year. The net OPEB liability information, including ratios, will offer an up-to-date indication of
the extent to which the total OPEB liability is covered by the fiduciary net position of the OPEB plan.
The comparability of the reported information for similar types of OPEB plans will be improved by the
changes related to the attribution method used to determine the total OPEB liability. The contribution
schedule will provide measures to evaluate decisions related to the assessment of contribution rates in
comparison with actuarially determined rates, if such rates are determined. In addition, new information
about rates of return on OPEB plan investments will inform financial report users about the effects of
market conditions on the OPEB plan’s assets over time and provide information for users to assess the
relative success of the OPEB plan’s investment strategy and the relative contribution that investment
earnings provide to the OPEB plan’s ability to pay benefits to plan members when they come due.
This statement is effective for financial statements for fiscal years beginning after June 15, 2016. Earlier
application is encouraged.
GASB STATEMENT NO. 75, ACCOUNTING AND FINANCIAL REPORTING FOR POSTEMPLOYMENT
BENEFITS OTHER THAN PENSIONS
The primary objective of this statement is to improve accounting and financial reporting by state and local
governments for post-employment benefits other than pensions (OPEB). It also improves information
provided by state and local governmental employers about financial support for OPEB that is provided by
other entities. This statement replaces the requirements of GASB Statement Nos. 45 and 57. GASB
Statement No. 74 establishes new accounting and financial reporting requirements for OPEB plans.
This statement establishes standards for recognizing and measuring liabilities, deferred outflows of
resources, deferred inflows of resources, and expense/expenditures. For defined benefit OPEB, this
statement identifies the methods and assumptions that are required to be used to project benefit payments,
discount projected benefit payments to their actuarial present value, and attribute that present value to
periods of employee service. Note disclosure and RSI requirements about defined benefit OPEB also are
addressed. This statement is effective for fiscal years beginning after June 15, 2017. Earlier application is
encouraged.
Similar to changes implemented for pensions, this statement requires the liability of employers and
nonemployer contributing entities to employees for defined benefit OPEB (net OPEB liability) to be
measured as the portion of the present value of projected benefit payments to be provided to current
active and inactive employees that is attributed to those employees’ past periods of service (total OPEB
liability), less the amount of the OPEB plan’s fiduciary net position.
GASB STATEMENT NO. 77, TAX ABATEMENT DISCLOSURES
This statement requires disclosure of tax abatement information about (1) a reporting government’s own
tax abatement agreements, and (2) those that are entered into by other governments and that reduce the
reporting government’s tax revenues. Tax abatements are widely used by state and local governments,
particularly to encourage economic development. For financial reporting purposes, this statement defines
a tax abatement as resulting from an agreement between a government and an individual or entity in
which the government promises to forgo tax revenues and the individual or entity promises to
subsequently take a specific action that contributes to economic development or otherwise benefits the
government or its citizens.
-22-
The requirements of this statement improve financial reporting by giving users of financial statements
essential information that is not consistently or comprehensively reported to the public at present.
Disclosure of information about the nature and magnitude of tax abatements will make these transactions
more transparent to financial statement users. As a result, users will be better equipped to understand
(1) how tax abatements affect a government’s future ability to raise resources and meet its financial
obligations, and (2) the impact those abatements have on a government’s financial position and economic
condition. The requirements of this statement are effective for financial statements for periods beginning
after December 15, 2015. Earlier application is encouraged.
GASB STATEMENT NO. 78, PENSIONS PROVIDED THROUGH CERTAIN MULTIPLE-EMPLOYER DEFINED
BENEFIT PENSION PLANS
The objective of this statement is to address a practice issue regarding the scope and applicability of
GASB Statement No. 68, Accounting and Financial Reporting for Pensions—an amendment of GASB
Statement No. 27. This issue is associated with pensions provided through certain multiple-employer
defined benefit pension plans and to state or local governmental employers whose employees are
provided with such pensions. Prior to the issuance of this statement, the requirements of GASB Statement
No. 68 applied to the financial statements of all state and local governmental employers whose employees
are provided with pensions through pension plans that are administered through trusts that meet the
criteria in paragraph 4 of GASB Statement No. 68.
This statement amends the scope and applicability of GASB Statement No. 68 to exclude pensions
provided to employees of state or local governmental employers through a cost-sharing,
multiple-employer defined benefit pension plan that (1) is not a state or local governmental pension plan,
(2) is used to provide defined benefit pensions both to employees of state or local governmental
employers and to employees of employers that are not state or local governmental employers, and (3) has
no predominant state or local governmental employer (either individually or collectively with other state
or local governmental employers that provide pensions through the pension plan). This statement
establishes requirements for recognition and measurement of pension expense, expenditures, and
liabilities; note disclosures; and RSI for pensions that have the characteristics described above. The
requirements of this statement are effective for reporting periods beginning after December 15, 2015.
Early application is encouraged.
GASB STATEMENT NO. 79, CERTAIN EXTERNAL INVESTMENT POOLS AND POOL PARTICIPANTS
This statement establishes criteria for an external investment pool to qualify for making the election to
measure all of its investments at amortized cost for financial reporting purposes. An external investment
pool qualifies for that reporting if it meets all of the applicable criteria established in this statement. The
specific criteria address (1) how the external investment pool transacts with participants; (2) requirements
for portfolio maturity, quality, diversification, and liquidity; and (3) calculation and requirements of a
shadow price. Significant noncompliance prevents the external investment pool from measuring all of its
investments at amortized cost for financial reporting purposes. If an external investment pool meets the
criteria in this statement and measures all of its investments at amortized cost, the pool’s participants also
should measure their investments in that external investment pool at amortized cost for financial reporting
purposes. If an external investment pool does not meet the criteria in this statement, the pool’s
participants should measure their investments in that pool at fair value.
This statement establishes additional note disclosure requirements for qualifying external investment
pools that measure all of their investments at amortized cost for financial reporting purposes and for
governments that participate in those pools. Those disclosures for both the qualifying external investment
pools and their participants include information about any limitations or restrictions on participant
withdrawals. The requirements of this statement are effective for reporting periods beginning after
June 15, 2015, except for certain provisions on portfolio quality, custodial credit risk, and shadow pricing.
Those provisions are effective for reporting periods beginning after December 15, 2015. Earlier
application is encouraged.
-23-
GASB STATEMENT NO. 80, BLENDING REQUIREMENTS FOR CERTAIN COMPONENT UNITS—AN
AMENDMENT OF GASB STATEMENT NO. 14
The objective of this statement is to clarify the financial statement presentation requirements for certain
component units. This statement amends 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 GASB Statement No. 39,
Determining Whether Certain Organizations Are Component Units—an amendment of GASB Statement
No. 14. The requirements of this statement are effective for reporting periods beginning after June 15,
2016. Earlier application is encouraged.
CHANGES TO REQUIREMENTS FOR FEDERAL GRANTS
In December 2013, the U.S. Office of Management and Budget (OMB) Circular released final guidance
on administrative requirements, cost principles, and audit requirements for federal awards. The final
guidance, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards (“Uniform Guidance”), supersedes and streamlines eight existing OMB Circulars into one
document that includes OMB Circulars A-21, A-87, A-89, A-102, A-110, A-122, A-133, and the
guidance in OMB Circular A-50 on Single Audit Act follow-up.
The Uniform Guidance, which is located in Title 2 of the Code of Federal Regulations (CFR),
consolidates previous guidance into a streamlined format that aims to improve both its clarity and
accessibility, lessen administrative burdens for federal award recipients, and reduce the risk of waste,
fraud, and abuse.
The Following is a Summary of Significant Changes for Grant Recipients:
Changes time and effort documentation requirements by providing possibilities for alternative
methods of accounting for salaries and wages based on achievement of performance outcomes.
Non-federal entities must have a financial management system that includes, but is not limited to:
a comparison of expenditures with budget amounts for each federal award, written procedures to
implement the requirements of cash management, and written procedures for determining the
allowability of costs in accordance with Subpart E – Cost Principles.
Governments must comply with the new general procurement standards which include, but are
not limited to: written standards covering conflicts of interest of employees engaged in the
selection, award, and administration of contracts and documented procurement procedures that
include an analysis of lease versus purchase alternatives when appropriate.
Governments will now be required to follow the five procurement methods which include, at
times, more restrictive compliance requirements than Minnesota Statutes. For example: small
purchases (over $3,000 prior to October 1, 2015 and over $3,500 after October 1, 2015) will
require quotes.
There are new requirements for governments with subrecipients (or those making subawards),
which include, but are not limited to: a required written risk assessment of each subrecipient,
which may require you to provide training and on-site reviews of their program operations.
For governments with subrecipients or those that operate as a fiscal host of a federal grant award
and thus provide subawards, payments must be made in advance to the subrecipients, unless
certain requirements are not met, then the reimbursement method can be used.
-24-
Among Other Matters Specifically Applicable to Auditors, Changes to the Uniform Guidance Include:
Raising both the threshold that triggers a Single Audit and the threshold for Type A/B program
determination to $750,000.
Changing the high-risk program criteria for Type A programs.
Reducing the number of high-risk Type B programs that must be tested as major programs.
Revising the Type B small program floor.
Reducing the percentage of coverage requirement to 40 percent for normal auditees and
20 percent for low-risk auditees.
Revising the criteria for low-risk auditee status.
Increasing the threshold for reporting findings to $25,000 in questioned costs and requiring more
detailed information to be reported.
Effective Dates:
Year beginning January 1, 2015 –
All administrative requirements and cost principles will apply to new awards made after
December 26, 2014.
Governmental entities are required to comply with the Uniform Guidance once the new
regulations are in effect at the Federal government level (December 26, 2014).
Any funding drawdowns made after January 1, 2015 must comply with the Uniform Guidance.
Must document whether the entity is in compliance with the old or new procurement standards
listed in Subpart D, Sections 200.317–200.326. The federal government has provided a two-year
grace period for implementing the new procurement standards.
Year beginning January 1, 2016 –
All administrative requirements and cost principles will apply to new awards made after
December 26, 2014.
Subpart F – Audit Requirements are applicable.
Year beginning January 1, 2017 –
Must have implemented the new procurement standards of the Uniform Guidance, if the
government initially elected the two-year grace beginning January 1, 2015.
At this point, all of the new Uniform Guidance at Title 2 CFR 200 is applicable.
Recommended Action Items:
We recommend that award recipients familiarize themselves with the new requirements contained in the
Uniform Guidance and develop a plan to become compliant with the new regulations.
Consider the following –
Attend training on the new uniform administrative requirements.
Identify needed policy and procedure changes, especially in the areas of:
o Financial management
o Payment
o Procurement
o Compensation
o Travel costs
Identify internal controls that might need to be established or modified.
Determine who within your organization is responsible for each action item.
Determine the timing of each action item.
Determine when you will implement the new procurement standards and document in writing.
CITY OF LAKEVILLE
DAKOTA COUNTY, MINNESOTA
Special Purpose Audit Reports
Year Ended
December 31, 2015
THIS PAGE INTENTIONALLY LEFT BLANK
Page
Independent Auditor’s Report on Internal Control Over Financial Reporting and
on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards 1–2
Independent Auditor’s Report on Minnesota Legal Compliance 3
Table of Contents
CITY OF LAKEVILLE
Year Ended December 31, 2015
DAKOTA COUNTY, MINNESOTA
THIS PAGE INTENTIONALLY LEFT BLANK
-1-
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the City Council and Management
City of Lakeville, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
the City of Lakeville, Minnesota (the City) as of and for the year ended December 31, 2015, and the
related notes to the financial statements, which collectively comprise the City’s basic financial statements,
and have issued our report thereon dated June 30, 2016.
INTERNAL CONTROL OVER FINANCIAL REPORTING
In planning and performing our audit of the financial statements, we considered the City’s internal control
over financial reporting (internal control) to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do
not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any
deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses
may exist that have not been identified.
(continued)
-2-
COMPLIANCE AND OTHER MATTERS
As part of obtaining reasonable assurance about whether the City’s financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
PURPOSE OF THIS REPORT
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the City’s internal control and compliance. Accordingly,
this report is not suitable for any other purpose.
Minneapolis, Minnesota
June 30, 2016
-3-
INDEPENDENT AUDITOR’S REPORT
ON MINNESOTA LEGAL COMPLIANCE
To the City Council and Management
City of Lakeville, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America, and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information of
the City of Lakeville, Minnesota (the City) as of and for the year ended December 31, 2015, and the
related notes to the financial statements, which collectively comprise the City’s basic financial statements,
and have issued our report thereon dated June 30, 2016.
MINNESOTA LEGAL COMPLIANCE
The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the Office of the State Auditor
pursuant to Minnesota Statute § 6.65, contains seven categories of compliance to be tested: contracting
and bidding, deposits and investments, conflicts of interest, public indebtedness, claims and
disbursements, miscellaneous provisions, and tax increment financing. Our audit considered all of the
listed categories.
In connection with our audit, nothing came to our attention that caused us to believe that the City failed to
comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities. However, our
audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had
we performed additional procedures, other matters may have come to our attention regarding the City’s
noncompliance with the above referenced provisions.
PURPOSE OF THIS REPORT
The purpose of this report is solely to describe the scope of our testing of compliance and the results of
that testing, and not to provide an opinion on compliance. Accordingly, this report is not suitable for any
other purpose.
Minneapolis, Minnesota
June 30, 2016
THIS PAGE INTENTIONALLY LEFT BLANK