HomeMy WebLinkAboutItem 08June 18, 2018 Item No.________
ACKNOWLEDGE RECEIPT OF LAKEVILLE COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2017
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, 2017.
Overview
The City of Lakeville Comprehensive Annual Financial Report for the Year Ended December
31, 2017 is attached for City Council review and approval. The certified public accounting firm
of CliftonLarsonAllen, LLP (CLA) 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, 2017 and the results of operations for the year ended. Mr. Chris Knopik, Partner with CLA,
will present an overview at the June 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.
Supporting Information
• City of Lakeville Comprehensive Annual Financial Report for the Year Ended
December 31, 2017
• Executive Audit Summary
• Auditor Communications:
o Governance Communication
o Internal Controls
o 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
COMPREHENSIVE
ANNUAL FINANCIAL
REPORT
2017
Year Ended December 31, 2017
City of Lakeville, Minnesota
CITY OF LAKEVILLE, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2017
PREPARED BY THE FINANCE DEPARTMENT
CITY OF LAKEVILLE
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2017
INTRODUCTORY SECTION
LETTER OF TRANSMITTAL 1
ELECTED AND APPOINTED OFFICIALS 10
ORGANIZATIONAL CHART 11
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN
FINANCIAL REPORTING 12
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT 13
MANAGEMENT’S DISCUSSION AND ANALYSIS 16
BASIC FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 33
STATEMENT OF ACTIVITIES 34
BALANCE SHEET – GOVERNMENTAL FUNDS 35
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET
POSITION – GOVERNMENTAL ACTIVITIES 36
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES – GOVERNMENTAL FUNDS 37
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
– GOVERNMENTAL ACTIVITIES 38
STATEMENT OF NET POSITION – PROPRIETARY FUNDS 39
STATEMENT OF NET REVENUES. EXPENSES, AND CHANGES IN NET
POSITION – PROPRIETARY FUNDS 40
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS 41
STATEMENT OF FIDUCIARY NET POSITION – AGENCY FUND 42
NOTES TO BASIC FINANCIAL STATEMENTS 43
REQUIRED SUPPLEMENTARY INFORMATION
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES – BUDGETARY COMPARISON 90
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION 95
PERA – GENERAL EMPLOYEES RETIREMENT FUND 96
PERA – PUBLIC EMPLOYEES POLICE AND FIRE FUND 97
NET PENSION LIABILITY (ASSET) AND RELATED RATIOS – LAKEVILLE FIRE
RELIEF ASSOCIATION 98
OTHER POSTEMPLOYMENT BENEFIT PLAN – SCHEDULE OF FUNDING
PROGRESS 99
CITY OF LAKEVILLE
TABLE OF CONTENTS (CONTINUED)
YEAR ENDED DECEMBER 31, 2017
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET 102
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES 103
SPECIAL REVENUE FUNDS (NONMAJOR) – COMBINING BALANCE SHEET 104
SPECIAL REVENUE FUNDS (NONMAJOR) – COMBINING STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 105
DEBT SERVICE FUNDS (NONMAJOR) – COMBINING BALANCE SHEET 106
DEBT SERVICE FUNDS (NONMAJOR) – COMBINING STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 107
CAPITAL PROJECTS FUND (NONMAJOR) – COMBINING BALANCE SHEET 108
CAPITAL PROJECTS FUNDS (NONMAJOR) – COMBINING STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 110
COMMUNICATIONS – SPECIAL REVENUE FUND – BUDGETARY
COMPARISON SCHEDULE 112
ECONOMIC DEVELOPMENT – SPECIAL REVENUE FUND – BUDGETARY
COMPARISON SCHEDULE 113
DOWNTOWN SPECIAL SERVICE DISTRICT – SPECIAL REVENUE FUND –
BUDGETARY COMPARISON SCHEDULE 114
AGENCY FUNDS
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES 116
SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN BONDED INDEBTEDNESS 117
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST
PAYABLE 118
COMBINED SCHEDULE OF BONDED INDEBTEDNESS 128
STATISTICAL SECTION (UNAUDITED)
NET POSITION BY COMPONENT – GOVERNMENT WIDE 131
CHANGES IN NET POSITION BY COMPONENT – GOVERNMENTAL
ACTIVITIES 133
CHANGES IN NET POSITION BY COMPONENT – BUSINESS-TYPE
ACTIVITIES 135
CHANGES IN NET POSITION BY COMPONENT – TOTAL GOVERNMENTAL
AND BUSINESS-TYPE ACTIVITIES 137
FUND BALANCES – GOVERNMENTAL FUNDS 139
CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS 141
CITY OF LAKEVILLE
TABLE OF CONTENTS (CONTINUED)
YEAR ENDED DECEMBER 31, 2017
TAX CAPACITY VALUATION AND ASSESSOR’S TAXABLE MARKET VALUE
OF TAXABLE PROPERTY 143
PROPERTY TAX RATES – DIRECT AND OVERLAPPING GOVERNMENTS 145
PRINCIPAL PROPERTY TAXPAYERS 146
PROPERTY TAX LEVY AND COLLECTIONS 147
RATIO OF NET BONDED DEBT BY TYPE 148
RATIO OF NET BONDED DEBT OUTSTANDING 149
DIRECT AND OVERLAPPING GOVERNMENTAL DEBT 150
LEGAL DEBT MARGIN 151
PLEDGED REVENUE COVERAGE 152
DEMOGRAPHIC AND ECONOMIC STATISTICS 153
PRINCIPAL EMPLOYERS 154
COMMERCIAL AND INDUSTRIAL BUILDING PERMITS ISSUED 155
EMPLOYEES BY FUNCTION/PROGRAM (FULL-TIME EQUIVALENT) 156
OPERATING INDICATORS BY FUNCTION 157
CAPITAL ASSET STATISTICS BY FUNCTION 158
INTRODUCTORY SECTION
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June 5, 2018
The Honorable Mayor and Council Members
20195 Holyoke Avenue Lakeville, Minnesota 55044
Honorable Mayor, Members of the City Council and Citizens of the City of Lakeville:
The Comprehensive Annual Financial Report is hereby presented for the purpose of providing
you, the reader, with a thorough overview of the financial affairs of the City for the year ended
December 31, 2017. The Report was prepared in accordance with Minnesota Statutes and
Generally Accepted Accounting Principles (GAAP).
This report was prepared by the City’s Finance Department and consists of management’s
representations concerning the finances of the City. Consequently, management assumes full
responsibility for the completeness and reliability of all information presented in this report. To
provide a reasonable basis for making these representations, management of the City has
established internal controls designed to protect the City’s assets from loss, theft or misuse and
to provide sufficient reliable information for the preparation of these financial statements in
conformity with GAAP. Because the cost of internal controls should not outweigh their benefits,
the City’s internal controls have been designed to provide reasonable rather than absolute
assurance that the financial statements will be free from material misstatements. As
management, we assert that to the best of our knowledge and belief this report is complete and
reliable in all material respects.
The City of Lakeville’s financial statements have been audited by CliftonLarsonAllen LLP, a
professional firm of certified public accountants. The independent auditor’s report is included in
the Financial Section of this report. The auditors have given this report an unmodified (“clean”)
opinion, meaning that the financial statements fairly present the City’s financial position at
December 31, 2017 and the changes in financial position for the year then ended.
Management’s discussion and analysis (MD&A) immediately follows the independent auditors’
report and provides a narrative introduction, overview, and analysis of the basic financial
statements. MD&A complements this letter of transmittal and should be read in conjunction with
it.
(2)
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
enjoys an excellent location, with convenient access to the Minneapolis-Saint Paul metropolitan
area via interstate highway I-35. The City is also just 25 minutes from the Minneapolis-Saint
Paul International Airport. Lakeville continues to be one of the fastest growing cities in
Minnesota with a population that has grown from 43,128 in 2000 to 62,402 in 2017.
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. 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 nonpartisan
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. Effective
following the 2018 election the mayoral term will change to a four-year term.
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 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.
(3)
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
The City’s tax base is primarily residential and consists of mostly single family homes.
Commercial and industrial properties make up approximately 11% of the tax base. The City’s
valuation declined from its peak in 2009 to a low point in 2013. Since 2013, valuations have
steadily grown due to a mix of new construction and appreciating values. The City’s valuation is
now at a new peak and continues to grow. The City has grown by an estimated 6,600 new
residents or approximately 11.9% since 2009, while the number of City employees has
increased by 13.0%.
The City has a land area of 38 square miles with approximately 30% of its land available for
development. In 2017, final plats were approved for 176 single-family units, 63 detached
townhomes, 44 attached townhomes, 336 apartment units, 11 commercial developments and
one institutional development.
The trend for building permit activity for single-family homes is on the rise with building permits
for single family homes/detached townhomes increasing from 403 in 2016 to 487 in 2017. The
2018 budget is premised on conservative but assumed steady growth of new single-family
homes in the coming year.
0
200
400
600
800
1000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018PERMITS
YEAR
RESIDENTIAL PERMITS
Total Residential Units Single Family Actual Residential Units
Estimated Residential Units
Actual Single Family
Estimated Single Family
(4)
Commercial and industrial building permit activity was valued at $30.4 million. Commercial
projects constructed in 2017 included:
Caribou Coffee & Einstein Bros. Bagels
o A new 2,700 square-foot restaurant
Christian Brothers Automotive
o A new 5,000 square-foot auto services business
Christian Heritage Academy
o A new 28,444 square-foot private elementary and middle school
Lakeview Bank
o Added 2,105 square feet to existing building
McDonald Eye Care Associates
o A new 6,772 square-foot building
PetSmart
o A new 18,000 square-foot retail store
Rainbow Child Care Center
o A new 10,000 square-foot child care facility
Schneiderman’s
o A new 112,000 square-foot furniture showroom
Taco Bell
o A new 2,800 square-foot restaurant
The Moments
o A new 20,000 square-foot health-care facility
Industrial development in 2017 included:
Launch Park I
o 286,000 square-foot, multi-tenant building
o Menasha Packaging occupies 150,000 square-feet
Interstate PowerSystems
o 82,000 square-foot new truck maintenance facility
o Created 100 new jobs
Globus Transport Inc.
o 48,000 square-foot warehouse facility
o General freight transportation company
Agape Mechanical
o 20,000 square-foot building
o Midwest HVAC, plumbing and electrical company
Dakota Truck
o 13,000 square-foot new truck and trailer maintenance facility
o Specializes in medium and heavy-duty truck repair
Bass Flexible Packaging
o 7,058 square-foot addition to existing building
o Specializes in printed and plain polypropylene bags and PVC shrinkable
materials
Commercial projects under construction:
Dunn Brothers Coffee
o A new 9,360 square-foot multi-tenant building
Freddy’s Frozen Custard and Steakburgers
o A new 3,010 square-foot restaurant
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New commercial businesses:
Align Chiropractic o A new chiropractic clinic
Bowlero Lakeville o A newly remodeled bowling alley, arcade and entertainment destination
Emagine Lakeville
o A newly remodeled movie theatre (formerly Muller Family Theatre)
EXIT Realty Leaders o A newly remodeled full-service real estate franchise
Gander Outdoors o A newly remodeled outdoor outfitter (formerly Gander Mountain)
Hypointe Childcare o A new child care center moved into a newly remodeled building
Invigorate Chiropractic o A new chiropractic clinic
Lakeville Advanced Dental Care o A new dentist office
Lakeville Family Pet Clinic
o A new pet clinic
MedExpress Urgent Care o A new urgent care clinic
Mowers to Blowers o A new automotive shop
WaterWerks Car Wash o A newly remodeled full-service car wash and detailing center
Zika Chiropractic o A new chiropractic clinic
According to the Dakota County Assessor’s office, the median value home increased by 6.64%
as of February 2017 (for taxes payable 2018). The trend of improving market values is expected
to continue as the number of foreclosures and regional unemployment becomes more
favorable. The improving housing market is also strengthened with the current low inflation and
interest rate environment.
According to the Bureau of Labor Statistics, Lakeville’s unemployment rate is favorable
compared to the State and National rates.
Source: https://mn.gov/deed/data
(6)
Major Initiatives
Pressures and issues confronting the City were taken into account with the 2017 adopted
budget including community growth, aging infrastructure, inflationary pressures, emerging
trends, innovation and efficiencies, entrepreneurial efforts and preparing for the future.
Community Growth. New residential housing construction continues to rise due in large part to
improved 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 2017
budget addressed the short-term plan while the Capital Improvement Plan addressed the
anticipated intermediate and long-term needs. The most significant 2017 projects included:
Accelerated pavement management program to improve city-wide pavement
management index
o 2017 Street Reconstruction
o Holyoke Avenue: 215th – Heritage Drive
o Holyoke Avenue/210th Street Intersection
o Kenwood Trail Reconstruction: Dodd Boulevard to 185th Street
o 162nd Street and Buck Hill Road/Kenyon Avenue Intersection
Utility infrastructure
o Well #21 & #22
Inflationary Pressures. As the economy improves there will be upward pressure on
commodities, services and personnel costs. Although inflation is still relatively benign, 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. 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.
Entrepreneurial Efforts. Continued marketing initiatives are proposed to promote economic
developments. Several years ago, property was acquired in southwestern Lakeville for a future
new liquor store to improve revenues and sales opportunities.
(7)
Preparing for the Future. As a Community that embraces a high quality of life and a pro-
business attitude, Lakeville is “Positioned to Thrive.” It is an objective that embraces a vision for
the future and a commitment to preparing for it.
Long-term Financial Planning
There is an interrelationship between a community’s physical development and its long-term
financial plan. A comprehensive plan provides the guidance for current and future land use and
public infrastructure decisions to provide managed growth throughout the community. The City
of Lakeville completes an update of its Comprehensive Plan every ten years. The scheduled
Plan update started in 2017 and will be completed in 2018.
A Capital Improvement Plan (CIP) is a flexible, five-year plan that identifies the City’s
infrastructure, development objectives and allocation of financial resources. It provides policy
makers and the community with a strategic (documented) approach to implementation and
administration of improvement projects. The City will invest $148 million in transportation, utility,
equipment, facilities and parks over the next five years to achieve program objectives.
As of December 31, 2017, the City of Lakeville had approximately $123.585 million of debt
outstanding including $1.530 million of refunding debt issued in September 2017 to refinance
the 2007H Street Reconstruction Bonds. The City will issue approximately $48 million general
obligation improvement bonds in the coming years to finance street reconstruction projects.
(8)
Relevant Financial Policies
The City has a number of policies which are utilized in the management of its fiscal affairs. The
primary policies include, but are not limited to, operating budget policy, budget amendment
process, revenue, debt, investment, and fund balance.
Operating Budgets. The City’s operating budget policy sets forth guidance with respect to
balanced operating budgets, with an overriding goal of achieving structural balance over a
longer-term period, while recognizing that in certain periods, revenues and expenditures
may not be equal. A balanced budget for the General Fund is defined as revenues and other
sources equal to or exceeding operating expenditures and other uses. Other sources can
include that portion of General Fund balance that is allowed to be budgeted for use per the
City’s fund balance policy. The budget will provide for adequate maintenance of capital
facilities and equipment and for their orderly replacement.
Balanced budgets for the proprietary enterprise funds are defined as providing sufficient
revenues to support the operations of those funds, without subsidy from the 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 fund level for the General Fund and Special Revenue
Funds. The City Administrator has authorization to expend funds in excess of the
appropriation for each department. 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 nonproperty-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 nontax revenues to
debt service payments.
(9)
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.
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) of the United States awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Lakeville,
Minnesota, for its comprehensive annual financial report for the fiscal year ended December 31,
2016. This is the twenty-ninth consecutive year that the City of Lakeville has received this
prestigious award.
In order to be awarded a Certificate of Achievement for Excellence, a government must publish
an easily readable and efficiently organized comprehensive annual financial report, and the
contents must conform to the program standards. Such reports must satisfy both generally
accepted accounting principles and applicable legal requirements.
A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one
year only. We believe our current comprehensive annual financial report continues to conform to
the Certificate of Achievement for Excellence program requirements, and we are submitting it to
the GFOA to determine its eligibility for another certificate.
The preparation of this report could not have been accomplished without the professional,
efficient and dedicated services of the entire staff of the Finance Department. We would like to
express our appreciation to all members of the department, with special recognition to Assistant
Finance Director Julie Werner and Senior Accountants David Lang, Laura Miller and Tom
Nesseth.
We would also like to express our sincere gratitude to the City Council for its sincere
commitment and progressive leadership in the financial affairs of our community.
Respectfully submitted,
Justin Miller Jerilyn Erickson
City Administrator Finance Director/Treasurer
CITY OF LAKEVILLE
ELECTED AND APPOINTED OFFICIALS
YEAR ENDED DECEMBER 31, 2017
(10)
Term Expires
Elected Officials December 31,
Douglas P. Anderson Mayor 2018
Bart Davis Council Member 2018
Luke Hellier Council Member 2020
Colleen Ratzlaff LaBeau Council Member 2018
Brian Wheeler Council Member 2020
APPOINTED PERSONNEL
Justin Miller City Administrator
Jerilyn Erickson Finance Director/Treasurer
Charlene Friedges City Clerk
CITY OF LAKEVILLE ORGANIZATIONAL CHART YEAR ENDED DECEMBER 31, 2017 (11)
CITY OF LAKEVILLE
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING
DECEMBER 31, 2017
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FINANCIAL SECTION
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CliftonLarsonAllen LLP
CLAconnect.com
INDEPENDENT AUDITORS’ REPORT
Honorable Mayor and the City Council
City of Lakeville, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-
type activities, each major fund, and the aggregate remaining fund information of the City of Lakeville,
as of and for the year ended December 31, 2017, and the related notes to the financial statements,
which collectively comprise the City of Lakeville’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.
Auditors’ 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 auditors’ 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 entity’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 entity’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.
Honorable Mayor and the City Council
City of Lakeville, Minnesota
(14)
Opinions
In our opinion, based on our audit and the report of the other auditors, the financial statements referred
to above present fairly, in all material respects, the respective financial position of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information
of the City of Lakeville as of December 31, 2017, 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.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, budgetary comparison information, schedule of funding
progress for other postemployment benefits, schedule of the City’s proportionate share of net pension
liability, schedule of the City’s pension contributions, and the schedule of changes in net pension
liability and related ratios, as listed in the table of contents, be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is required
by the Governmental Accounting Standards Board who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or historical
context. We have applied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America, which
consisted of inquiries of management about the methods of preparing the information and comparing
the information for consistency with management’s responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We do
not express an opinion or provide any assurance on the information because the limited procedures do
not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Lakeville’s basic financial statements. The introductory section,
combining and individual fund statements and schedules, and statistical sections are presented for
purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual fund statements and schedules are the responsibility of management and
were derived from and relate directly to the underlying accounting and other records used to prepare
the basic financial statements. Such information has been subjected to the auditing procedures applied
in the audit of the basic financial statements and certain additional procedures, including comparing
and reconciling such information directly to the underlying accounting and other records used to
prepare the basic financial statements or to the basic financial statements themselves, and other
additional procedures in accordance with auditing standards generally accepted in the United States of
America. In our opinion, the combining and individual statements and schedules are fairly stated, in all
material respects, in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements and, accordingly, we do not express an opinion or provide
any assurance on them.
Honorable Mayor and the City Council
City of Lakeville, Minnesota
(15)
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 5,
2018, on our consideration of the City of Lakeville’s internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
other matters. The purpose of that report is solely to describe the scope of our testing of internal control
over financial reporting and compliance and the result of that testing, and not to provide an opinion on
the effectiveness of the City of Lakeville’s 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 of Lakeville’s internal control over financial reporting and compliance.
CliftonLarsonAllen LLP
Minneapolis, Minnesota
June 5, 2018
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(16)
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, 2017. 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 $343,741,024 (net position) at the close of the most recent fiscal year.
Of this amount, $16,827,726 (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 $15,238,949 in 2017.
The City’s governmental funds reported combined ending fund balances of $70,800,227. Of this
total amount, $39,998,032 or 56.5% is not restricted or nonspendable and is available for use
within the City’s constraints and policies.
As of the end of the current fiscal year, the City’s total unassigned fund balance for the general
fund was $13,613,203 or 53.2% of total general fund expenditures of $25,607,540.
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.
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.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(17)
The Statement of Activities presents information showing how the City’s net position changed during
the most recent fiscal year. All changes in net position are reported as soon as the underlying event
giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and
expenses are reported in this statement for some items that will only result in cash flows in future fiscal
periods (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.
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 24 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, 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.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(18)
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 an 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 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 postemployment 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
.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(19)
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 nonfinancial 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 of resources exceeded liabilities and deferred inflows of resources by $343,741,024
at December 31, 2017. By far the largest portion or 81.4% of net position is reflected in its net
investment in capital assets (e.g. land, buildings and improvements, machinery and equipment,
infrastructure, and construction in process) less any related debt used to acquire those assets that is
still outstanding. The City uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the City’s net investment in capital assets is
reported net of related debt, it should be noted that the resources needed to repay this debt must be
provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
2017 2016 2017 2016 2017 2016
Current and other assets 95,722,645$ 99,772,074$ 15,323,758$ 14,651,404$ 111,046,403$ 114,423,478$
Capital assets 250,253,453 247,536,952 145,772,588 139,038,667 396,026,041 386,575,619
Total Assets 345,976,098 347,309,026 161,096,346 153,690,071 507,072,444 500,999,097
Deferred outflows of resources 13,100,824 21,087,868 664,042 1,304,959 13,764,866 22,392,827
Current and other liabilities 5,753,143 41,610,507 1,159,391 5,175,349 6,912,534 46,785,856
Other liabilities 141,126,300 133,451,920 13,710,725 10,326,033 154,837,025 143,777,953
Total Liabilities 146,879,443 175,062,427 14,870,116 15,501,382 161,749,559 190,563,809
Deferred inflows of resources 14,895,794 3,999,757 450,933 326,283 15,346,727 4,326,040
Net Position:
Net Investment in Capital Assets 144,581,700 148,684,068 135,324,120 129,086,090 279,905,820 277,770,158
Restricted 46,683,603 38,516,463 323,875 323,875 47,007,478 38,840,338
Unrestricted 6,036,382 2,134,179 10,791,344 9,757,400 16,827,726 11,891,579
Total Net Position 197,301,685$ 189,334,710$ 146,439,339$ 139,167,365$ 343,741,024$ 328,502,075$
Governmental Activities TotalBusiness-Type Activities
The City’s total restricted net position of $47,007,478 comprises 13.7% of total net position at the close
of the fiscal year ending December 31, 2017. These assets are subject to external restrictions on how
they may be used.
The 2017 remaining balance of $16,827,726 (4.9% of total net position), in unrestricted net position
may be used to meet the government’s ongoing obligations to citizens and creditors. The unrestricted
net position in the governmental activities increased a total of $3,902,203 primarily due to higher than
budgeted revenues and lower than budgeted expenditures during the year. 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.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(20)
Change in net position. The City’s 2017 total net position during the current fiscal year increased by
$15,238,949 as shown in the following table. This increase is primarily attributed to economic
conditions and increase in community growth. Additional details that account for the change in net
position are provided in the following analysis of the governmental and business-type activities.
2017 2016 2017 2016 2017 2016
REVENUES
Program Revenues:
Charges for Services $ 14,734,286 $ 17,135,407 $ 27,168,964 $ 14,156,328 $ 41,903,250 31,291,735$
Operating Grants and Contributions 2,567,027 6,797,043 172,943 115,334 2,739,970 6,912,377
Capital Grants and Contributions 13,263,177 26,684,224 4,791,313 8,973,280 18,054,490 35,657,504
General Revenues:
Property Taxes 27,317,169 26,173,822 - - 27,317,169 26,173,822
Unrestricted Investment Earnings 597,513 388,672 91,472 71,109 688,985 459,781
Total Revenues 58,479,172 77,179,168 32,224,692 23,316,051 90,703,864 100,495,219
EXPENSES
General Government 4,579,478 8,028,316 - - 4,579,478 8,028,316
Public Safety 14,250,572 16,369,670 - - 14,250,572 16,369,670
Public Works 18,944,454 17,711,240 - - 18,944,454 17,711,240
Parks and Recreation 6,645,057 5,626,149 - - 6,645,057 5,626,149
Interest on Long-Term Debt 3,268,426 3,930,168 - - 3,268,426 3,930,168
Municipal Liquor - - 13,638,043 2,601,732 13,638,043 2,601,732
Utility - - 14,138,885 13,558,839 14,138,885 13,558,839
Total Expenses 47,687,987 51,665,543 27,776,928 16,160,571 75,464,915 67,826,114
CHANGE IN NET POSITION
BEFORE TRANSFERS 10,791,185 25,513,625 4,447,764 7,155,480 15,238,949 32,669,105
Transfers and Contributions (2,824,210) (6,978,829) 2,824,210 6,978,829 - -
CHANGE IN NET POSITION 7,966,975 18,534,796 7,271,974 14,134,309 15,238,949 32,669,105
Net Position - Beginning of Year 189,334,710 170,799,914 139,167,365 125,033,056 328,502,075 295,832,970
NET POSITION - END OF YEAR 197,301,685$ 189,334,710$ 146,439,339$ 139,167,365$ 343,741,024$ 328,502,075$
Change in Net Position
Governmental Activities Business-Type Activities Total
Governmental activities. The governmental activities change in net position before transfers
decreased by $14,722,440. This decrease is primarily due to a decrease in capital contributions in 2017
as compared to 2016. The governmental revenue decrease in charges for services is directly related to
both a decrease in park dedication fees collected, as well as a decrease in the engineering revenues
generated on City improvement projects during 2017, partially offset by an increase in development
activity. Operating grants decreased in 2017 primarily because the City took an advance Municipal
State Aid funding during 2016 to fund large City improvement projects, thus limiting 2017 Municipal
State Aid. Capital grants and contributions decreased due to a fewer number of developer-installed
assets reported during 2017 than in 2016.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(21)
Revenues
The City’s 2017 total revenues for governmental activities decreased by $18,699,996. Charges for
services decreased a total of $2,401,121 primarily due to a decrease in park dedication fees collected,
as well as a decrease in engineering revenues generated on City improvement projects during 2017,
partially offset by continued growth in the community as evidenced by an increase in building permit
fees. A summary of the various increases is shown as follows:
2017 2016
Increase /
(Decrease)
Charges for services
Licenses and building permit fees 3,988,189$ 3,706,567$ 281,622$
Connection and area charges 5,416,811 5,702,940 (286,129)
Engineering fees - reconstruction projects 1,065,099 1,994,074 (928,975)
Park dedication fees 1,154,433 2,458,083 (1,303,650)
Other 3,109,754 3,273,743 (163,989)
Total charges for services 14,734,286$ 17,135,407$ (2,401,121)$
Operating grants and contributions experienced an overall decrease of $4,230,016. The decrease is
primarily composed of state-aid provided for street maintenance and improvement projects. The City
received an advance on their annual allotment of state-aid in the amount of $2.140 million in 2016, in
addition to the normal 2016 allotment of $3.5 million. A summary of the various operating grants and
contributions is shown as follows:
2017 2016
Increase /
(Decrease)
Operating grants and contributions
State-aid for street maintenance 120,000$ 3,519,294$ (3,399,294)$
State-aid for street revenue bonds 1,187,082 1,260,456 (73,374)
County grant for joint road improvements -86,970 (86,970)
Federal street reconstruction bonds payment 61,513 64,181 (2,668)
State grant for economic development -750,000 (750,000)
Other grants, contributions and donations 1,198,432 1,116,142 82,290
Total Operating grants and contributions 2,567,027$ 6,797,043$ (4,230,016)$
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(22)
Capital grants and contributions decreased by $13,421,047. Contributed infrastructure from private land
developers decreased by $12,314,113; the infrastructure consists of street, storm sewer, and park and
trail capital assets. Special assessments increased by $1,032,483 primarily due to two major street
projects that were levied against the benefitting property owners in 2017. The County grant provided for
joint road improvements decreased $1,196,451 due to multiple road projects that had occurred in 2016.
The summary of capital grants and contributions is shown as follows:
2017 2016
Increase /
(Decrease)
Capital grants and contributions
Contributed infrastructure from developers 7,040,618$ 19,354,731$ (12,314,113)$
Special assessments 4,451,646 3,419,163 1,032,483
County grant for joint road improvements 933,091 2,129,542 (1,196,451)
Developer escrows for road improvements 266,824 898,239 (631,415)
Playground donations - 288,256 (288,256)
Other grants and contributions 508,897 238,587 270,310
Property acquisition federal CDBG grant - 229,220 (229,220)
PEG fees 62,101 126,486 (64,385)
Total capital grants and contributions 13,263,177$ 26,684,224$ (13,421,047)$
Property tax revenue increased $1,143,347 or 4.4% primarily due to an increase in the overall tax levy.
Investment income earnings increased by $208,841. The increase is the combination of increased
earnings and changes in investment asset values which are inversely related to the changes in market
rates. The increase is consistent with prevailing market conditions.
General revenues 2017 2016
Increase /
(Decrease)
Property taxes 27,317,169$ 26,173,822$ 1,143,347$
Investment income 597,513 388,672 208,841
Total general revenues 27,914,682$ 26,562,494$ 1,352,188$
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(23)
A summary of 2017 revenues by source for governmental activities is shown as follows:
Charges for Services,
$14,734,286 , 25%
Operating Grants and
Contributions,
$2,567,027 , 4%
Capital Grants and
Contributions,
$13,263,177 , 23%
Property Taxes,
$27,317,169 , 47%
Unrestricted
Investment Earnings,
$597,513 , 1%
Revenues by Source ‐Governmental Activities
Expenses
The City’s 2017 total governmental activities expenses (before depreciation on capital assets and
interest on long-term debt) decreased by $4,648,180 or 12.8%. Total governmental activities expenses
decreased by $3,977,556 or 7.7%, shown as follows:
2017 2016
Increase /
(Decrease)
Governmental activities expenses
General government 4,305,625$ 7,729,880$ (3,424,255)$
Public safety 13,149,699 15,148,411 (1,998,712)
Public works 9,716,809 9,804,006 (87,197)
Parks and recreation 4,566,853 3,704,869 861,984
Total before depreciation and interest 31,738,986 36,387,166 (4,648,180)
Depreciation on capital assets 12,680,575 11,348,209 1,332,366
Interest on long-term debt 3,268,426 3,930,168 (661,742)
Total governmental activities expenses $ 47,687,987 $ 51,665,543 $ (3,977,556)
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(24)
Following are explanations of various increases and (decreases) in expenses by governmental function
as shown above.
General government expenses decreased by $3,424,255 or 44.3%; which is primarily attributed to
expenses incurred in the prior year (2016) to promote economic development within the City.
Public safety expenses decreased by $1,998,712 or 13.2%; primarily due to the overall decrease in the
plan’s net pension liability and related defined benefit pension plan expense due to changes in
assumptions.
Public works expenses decreased by $87,197 or 0.9%; primarily due to improved soil conditions in our
2017 street reconstruction areas as compared to 2015 and 2016.
Parks and recreation expenses increased $861,984 or 23.3%; primarily due to increases in park
maintenance and trail improvement expenses on existing trails, compared to more expenses in the
prior year (2016) for new trails, which were capitalized instead of expensed.
Depreciation on capital assets increased by $1,332,366 or 11.7%; primarily due to an increase in
contributed infrastructure from development.
Interest on long-term debt decreased by $661,742 or 17.1%; primarily due to the reduction in debt.
A summary of 2017 expenses by function for governmental activities is shown as follows:
General government,
4,305,625 , 9%
Public safety,
13,149,699 , 27%
Public works,
9,716,809 , 20%
Parks and recreation,
4,566,853 , 10%
Depreciation on
capital assets,
12,680,575 , 27%
Interest on long‐term
debt, 3,268,426 , 7%
Expenses by Function ‐Governmental Activities
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(25)
Business-type activities. Business-type activities increased the City’s 2017 total net position by
$7,271,974. Key elements of the increase in net position along with a comparison of revenues,
expenses, and changes in net position during fiscal years 2017 and 2016 are shown as follows:
2017 2016
Increase /
(Decrease)
Revenues
Charges for services
Liquor 14,583,514$ 14,130,830$ 452,684$
Utility 12,585,450 10,692,185 1,893,265
Operating grants and contributions
Liquor 6,716 3,762 2,954
Utility 166,227 111,572 54,655
Capital contributions
Utility 4,791,313 8,973,280 (4,181,967)
Investment earnings 91,472 71,109 20,363
Total revenues 32,224,692 33,982,738 (1,758,046)
Expenses
Liquor 13,638,043 13,268,419 369,624
Utility 14,138,885 13,558,839 580,046
Total expenses 27,776,928 26,827,258 949,670
Change in net position before transfers 4,447,764 7,155,480 (2,707,716)
Transfers 2,824,210 6,978,829 (4,154,619)
Change in net position 7,271,974 14,134,309 (6,862,335)
Net position - beginning 139,167,365 125,033,056 14,134,309
Net position - ending $ 146,439,339 $ 139,167,365 7,271,974$
The City’s 2017 business-type total revenues decreased by $1,758,046 or 5.2%; the various revenue
components are discussed in detail in the following paragraphs.
The liquor fund 2017 charges for services increased due to sales volume. The 2017 cost of
goods sold as a percentage of sales were 75.5%, compared to 75.5% in 2016.
The overall utility revenue charges for services increased by $1,893,265. This overall increase
is represented by a water revenue increase of $1,258,430, sanitary sewer revenue increase of
$532,648, street light revenue increase of $35,198, and environmental resources revenue
increase of $66,989. The water and sanitary sewer increases are due to customer consumption
as a result of changes in weather patterns, rate increases, and an increase in customers as a
result of community growth. The street light and environmental resources increases are due to
an increase in customers and rate increases.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(26)
The utility fund experienced a total decrease of $4,181,967 in capital contributions. The majority
of the decrease is derived from water and sanitary sewer contributed from developer
improvement projects (greater number of contributions during 2016). City improvement project
infrastructure assets of $4,464,787 were contributed to the utility fund which is within the net
transfer amount of $2,824,210 on the Statement of Activities. The total amount of contributed
infrastructure assets received by the utility fund varies yearly.
Investment earnings increased $20,363. The increase is the combination of increased earnings
and changes in investment asset values which are inversely related to the changes in market
rates. The increase is consistent with prevailing market conditions.
The City’s 2017 business-type total expenses increased by $949,670 or 3.5% as follows:
Liquor Fund Utility Fund
Total
Business-type activities expenses
Cost of Goods Sold 338,558$ -$ 338,558$
Personnel services 26,940 46,113 73,053
Commodities 377 (17,762) (17,385)
Other charges and services 18,650 581,938 600,588
Sanitary sewage treatment and disposal - 246,046 246,046
Depreciation on capital assets 9,198 448,136 457,334
Interest, fiscal charges, bond premium (net) (30,207) 117,906 87,699
Loss on Disposal of Capital Assets 6,108 (842,331) (836,223)
Total Business-type Expenses $ 369,624 $ 580,046 $ 949,670
Increase(Decrease) from 2016
The liquor fund personnel services increase of $26,940 is primarily the result of the cost of living
increase as well as adjustments to the existing pay structure for the Assistant Store Managers.
The utility fund other charges and services increase is attributed to two large improvement
projects during 2017 including new streetlights on Holyoke Ave (downtown), and the 205th St.
Channel project.
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, 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.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(27)
As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund
balances of $70,800,227. Of this amount, $39,998,032 or 56.5% of this combined ending fund balance
constitutes fund balance that is available for spending at the government’s discretion. Nonspendable
fund balances of $914,375 are amounts that are not in a spendable form, such as prepaid items,
inventory, and advances to other funds (general fund). The remaining fund balance is restricted for (a)
debt service of $19,883,355, (b) capital acquisition of $9,901,859, and (c) other restricted purposes of
$102,606.
The general fund is the chief operating fund of the City. At the end of the current fiscal year, the fund
balance was $15,269,442, an increase from the prior year resulting from $1,128,499 of revenues over
expenditures, net transfers out of $1,076,076, and a change in supplies inventory of $140,519.
The general obligation (debt service) fund balance decreased by $9,726,910 due to the payment of
refunding debt obligations. The G.O. improvement (debt service) fund balance increased by
$2,939,075. 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 $458,978 for major facility maintenance projects.
Financing was provided by $363,497 of revenues from property taxes, investment income, sale of land,
a general fund transfer, and other revenue sources.
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 the project. Large projects such as the interstate highway
interchange and bridge reconstruction projects may take several years to complete. The fund balance
decreased by $513,264 due to the completion of the 2016 street reconstruction project and preliminary
engineering costs associated with the 2018 street reconstruction project. The 2018 street
reconstruction project will be financed with a bond issuance in 2018.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(28)
General Fund Budgetary Highlights
With the exception of the fire department, all other general fund departments expended their 2017
budget appropriations at or below the final adopted budget. A schedule of revenues, expenditures and
changes in fund balances – budgetary comparison is disclosed in the required supplemental
information section of this report. A summary of general fund revenues, expenditures, other financing
sources (uses), variance with final budget, and net change in fund balance is as follows:
Budget As
Originally
Adopted Final Budget Actual
Variance with
Final Budget
Revenues
Property taxes 18,833,557$ 18,833,557$ 18,967,562$ 134,005$
Licenses and permits 2,202,952 2,341,308 3,306,525 965,217
Intergovernmental 1,021,685 1,038,920 1,143,174 104,254
Charges for services 2,644,748 2,708,505 2,710,628 2,123
Fines 466,000 466,000 392,514 (73,486)
Interest income 90,071 90,071 180,064 89,993
Change in value of investments - - (63,378) (63,378)
Donations 8,750 30,291 52,209 21,918
Miscellaneous 51,060 51,060 46,741 (4,319)
Total revenues 25,318,823 25,559,712 26,736,039 1,176,327
Expenditures
Personnel services 19,412,029 19,467,136 18,963,508 503,628
Commodities 1,909,947 1,931,768 1,760,028 171,740
Other charges and services 5,072,888 5,337,669 4,815,714 521,955
Capital outlay 40,135 65,135 68,290 (3,155)
Total expenditures 26,434,999 26,801,708 25,607,540 1,194,168
Other financing sources (uses) (362,346) (1,076,076) (1,076,076)-
Net change in fund balance $ (1,478,522) $ (2,318,072)52,423$ 2,370,495$
The 2017 actual general fund revenues exceeded the final budget by $1,176,327 and expenditures
were under final adopted budget by $1,194,168. Other financing sources (uses) were at the final
budget. The general fund actual net change in fund balance surpassed final budget by $2,370,495.
The general fund budget was amended to reflect the increase in revenues from higher than forecasted
building permits, additional contracted security services, and grants that were not originally anticipated.
Expenditures were modified to reflect the change in personnel services due to the addition of a building
inspector mid-year and additional contracted security services. Transfers to other funds were modified
to provide additional funding for equipment replacement and a fiber infrastructure project.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(29)
The following is a brief summary explanation of the various budgets to actual variances for revenues:
Property taxes were more than anticipated by $134,005 due to the collection of delinquent
taxes. Starting in 2016 all delinquencies are carried by the general fund rather than allocated to
other funds.
Licenses and permits exceeded estimates by $965,217 due to greater than anticipated building
permit fees. The number of residential building permits budgeted were 350 compared to 531
actual. Permits for apartment complexes were budgeted at 195 units compared to 315 actual
units.
Intergovernmental revenues exceeded estimates by $104,254 due to the timing of federal
grants for public safety initiatives.
Charges for services experienced a variance of $2,123.
Fines were below estimates by $73,486 due to police officer vacancies in the traffic control
division.
Interest income and the change in value of investments were above estimates by $26,615 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 $21,918 and ($4,319),
respectively.
The following is a brief summary explanation of the various budgets to actual variances for
expenditures:
Personnel costs including benefits were $503,628 below budget estimates due to vacant
positions as a result of retirements, resignations and a delay in filling new positions, mild fall
weather conditions, and fewer contracted security hours which reduced overtime.
Commodities were $171,740 below budget due to savings from the fuel contract.
Other charges and services were $521,955 below budget which is attributed to milder weather
which resulted in overall lower cost of natural gas and electricity.
Capital outlay was $3,155 over the budget due to slightly higher costs for new inspection and
construction services vehicles.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(30)
Capital Asset and Debt Administration
Capital assets. The City’s capital assets for governmental and business-type activities as of
December 31, 2017 are $396 million (net of accumulated depreciation). This amount represents an
increase (including additions, deletions, and depreciation) of approximately $9.4 million from 2016.
The net investment in capital assets including land, historical treasures, buildings, machinery and
equipment, other improvements, infrastructure, and construction in process is shown as follows:
Governmental
Activities
Business-Type
Activities Total
Land 28,147,439$ 3,854,623$ 32,002,062$
Historical treasures 100,000 - 100,000
Construction in process 3,425,646 - 3,425,646
Buildings and improvements 54,921,360 29,612,379 84,533,739
Machinery and equipment 24,015,298 3,664,394 27,679,692
Other improvements 8,950,650 - 8,950,650
Infrastructure
Streets 169,561,210 - 169,561,210
Storm sewer 79,369,672 - 79,369,672
Parks 26,111,738 - 26,111,738
Water - 103,566,523 103,566,523
Sanitary sewer - 71,654,532 71,654,532
Total Capital Assets 394,603,013 212,352,451 606,955,464
Less: Accumulated Depreciation (144,349,560) (66,579,863) (210,929,423)
Total Capital Assets, Net 250,253,453$ 145,772,588$ 396,026,041$
Capital Assets at Year-End
(Net of Accumulated Depreciation)
The City’s 2018 adopted budget provides funding for $26.2 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.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(31)
Debt administration. At the end of the current fiscal year, the City of Lakeville had total bonded debt
outstanding of $123.585 million, which is a decrease of $8.365 million compared to the prior year. The
decrease is due to one new bond issuance totaling $10.165 million and principal bond maturities, as
well as an advance refunding of $2.255 million.
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, 2017 is shown as follows:
Balance January
1 Issued Redeemed
Balance
December 31
Governmental Activities
General obligation bonds
Capital improvement $ 35,025,000 $ - $ 12,230,000 $ 22,795,000
Street reconstruction 15,680,000 1,530,000 1,150,000 16,060,000
G.O. improvement 47,470,000 7,465,000 2,715,000 52,220,000
State-aid street revenue 7,145,000 - 940,000 6,205,000
Water revenue 8,280,000 - 340,000 7,940,000
Tax increment 1,460,000 - 220,000 1,240,000
Arena revenue 490,000 - 155,000 335,000
HRA lease revenue 7,115,000 - 320,000 6,795,000
Total governmental activities 122,665,000 8,995,000 18,070,000 113,590,000
Business-Type Activities
Liquor revenue 2,715,000 - 2,715,000 -
Water revenue 6,075,000 835,000 - 6,910,000
Sewer revenue 495,000 - - 495,000
Street light revenue - 335,000 - 335,000
Capital Lease Payable - 2,255,000 - 2,255,000
Total business-type activities 9,285,000 3,425,000 2,715,000 9,995,000
Total bonds payable 131,950,000$ 12,420,000$ 20,785,000$ 123,585,000$
Outstanding Debt
Bonds and Capital Leases Payable
Credit Rating
The City of Lakeville’s general obligation bond rating as of December 31, 2017 is “Aa1”
as rated by Moody’s Investors Service. Moody’s Investor Service credit report stated the
rating was “The Aa1 GOULT rating reflects the city’s large and growing tax base located
in the Twin Cities metropolitan area, above average resident income indices, and
healthy financial profile. The rating further considers a growing pension burden and a
somewhat elevated debt burden, both of which contribute to high fixed costs.”
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 $32,593,536 of net bonded debt, which is subject to
the $186,036,656 current debt limitation, thereby resulting in a legal debt margin of $153,443,120.
Refer to the Statistical Section of this report for a detailed computation of the City’s legal debt margin.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2017
(32)
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, the building permits for single
family homes increased to 487 in 2017 compared to 403 permits in 2016. In our opinion, the
resurgence is due to several factors including, but not limited to, near historical low interest rates, low
regional unemployment rate of 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 2018 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 2018 budget also focuses on City efforts to 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.
BASIC FINANCIAL STATEMENTS
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CITY OF LAKEVILLE
STATEMENT OF NET POSITION
DECEMBER 31, 2017
See accompanying Notes to Basic Financial Statements.
(33)
Governmental
Activities
Business-Type
Activities Total
ASSETS
Cash and investments 69,056,503$ 9,680,990$ 78,737,493$
Receivables 20,081,802 3,255,441 23,337,243
Internal balances (163,698) 163,698 -
Inventories 483,145 1,889,571 2,372,716
Prepaid items 28,544 10,183 38,727
Restricted assets (temporarily)
Cash and investments -323,875 323,875
Investments held by trustee 2,346,754 -2,346,754
Net pension asset - fire relief 3,889,595 -3,889,595
Capital assets
Nondepreciable 31,673,085 3,854,623 35,527,708
Depreciable, net 218,580,368 141,917,965 360,498,333
Total capital assets 250,253,453 145,772,588 396,026,041
Total assets 345,976,098 161,096,346 507,072,444
DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding 121,037 -121,037
Pension plan deferments - PERA 12,696,266 664,042 13,360,308
Pension plan deferments - fire relief 283,521 -283,521
Total deferred outflows of resources 13,100,824 664,042 13,764,866
LIABILITIES
Salaries, accounts, contracts, and deposits 3,292,340 1,044,644 4,336,984
Accrued interest 1,671,262 114,747 1,786,009
Unearned revenue 789,541 -789,541
Noncurrent liabilities
Net pension liability - PERA 15,009,514 2,521,174 17,530,688
Net OPEB obligation 450,858 78,795 529,653
Other long-term liabilities due within one year 10,735,109 631,639 11,366,748
Other long-term liabilities due in more than one year 114,930,819 10,479,117 125,409,936
Total liabilities 146,879,443 14,870,116 161,749,559
DEFERRED INFLOWS OF RESOURCES
Deferred gain on refunding 107,538 -107,538
Pension plan deferments - PERA 14,123,849 450,933 14,574,782
Pension plan deferments - fire relief 664,407 -664,407
Total deferred inflows of resources 14,895,794 450,933 15,346,727
NET POSITION
Net investment in capital assets 144,581,700 135,324,120 279,905,820
Restricted for:
Special purposes 102,606 -102,606
Debt service 34,293,639 323,875 34,617,514
Capital acquisition 8,778,649 -8,778,649
Fire relief pensions 3,508,709 -3,508,709
Unrestricted 6,036,382 10,791,344 16,827,726
Total Net Position 197,301,685$ 146,439,339$ 343,741,024$
Primary Government
CITY OF LAKEVILLE STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2017 See accompanying Notes to Basic Financial Statements. (34) Functions/Programs ExpensesCharges for ServicesOperating Grants and ContributionsCapital Grantsand ContributionsGovernmental ActivitiesBusiness-Type ActivitiesTotalPrimary Government:Governmental Activities:General government 4,579,478$ 4,348,910$ 68,095$ 62,101$ (100,372)$ -$ (100,372)$ Public safety 14,250,572 934,444 1,061,252 - (12,254,876) - (12,254,876) Public works 18,944,454 7,081,317 1,382,380 13,018,689 2,537,932 - 2,537,932 Parks and recreation 6,645,057 2,369,615 55,300 182,387 (4,037,755) - (4,037,755) Interest on long-term debt 3,268,426 - - - (3,268,426) - (3,268,426) Total-governmental activities47,687,987 14,734,286 2,567,027 13,263,177 (17,123,497) - (17,123,497) Business-Type Activities:Liquor 13,638,043 14,583,514 6,716 - - 952,187 952,187 Utility 14,138,885 12,585,450 166,227 4,791,313 - 3,404,105 3,404,105 Total Business-Type Activities 27,776,928 27,168,964 172,943 4,791,313 - 4,356,292 4,356,292 Total Primary Government 75,464,915$ 41,903,250$ 2,739,970$ 18,054,490$ (17,123,497) 4,356,292 (12,767,205) General Revenues:Property taxes 27,317,169 - 27,317,169 Investment income 597,513 91,472 688,985 Transfers (2,824,210) 2,824,210 - Total general revenues and transfers 25,090,472 2,915,682 28,006,154 Change in Net Position 7,966,975 7,271,974 15,238,949 Net Position - Beginning of Year 189,334,710 139,167,365 328,502,075 Net Position - End of Year 197,301,685$ 146,439,339$ 343,741,024$ Program RevenuesPrimary GovernmentNet (Expense) Revenue and Changes in Net Position
CITY OF LAKEVILLE BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2017 See accompanying Notes to Basic Financial Statements. (35) NonmajorTotalGeneralGeneralG.O.Improvement Governmental GovernmentalASSETSFundObligationImprovementBuildingConstructionFundsFundsCash and investments14,072,773$ 3,429,134$ 9,721,867$ 711,860$ 1,536,336$ 39,069,342$ 68,541,312$ Investments held by trustee- 1,738,173- - - 608,581 2,346,754 Interest receivable55,295 9,450 46,353 4,650 (2,279) 172,873 286,342 Taxes receivable2,047,946 - - - - - 2,047,946 Accounts receivable598,817 - - - 13,186 783,939 1,395,942 Advances to other funds402,686 - - - - - 402,686 Special assessments receivable114,755 369,949 15,310,840 - 180,859 264,459 16,240,862 Leases Receivable- - - - - 2,255,000 2,255,000 Inventory483,145 - - - - - 483,145 Prepaid items28,544 - - - - - 28,544 Total Assets17,803,961$ 5,546,706$ 25,079,060$ 716,510$ 1,728,102$ 43,154,194$ 94,028,533$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCELIABILITIESSalaries payable688,726$ -$ -$ -$ -$ 14,081$ 702,807$ Accounts payable704,366 626 5,650 3,566 265,043 884,148 1,863,399 Advances from other funds- - - - - 402,686 402,686 Contracts payable- - - - 345,371 260,894 606,265 Interest payable- - - - - 2,200 2,200 Deposits payable7,610 - - - - 98,190 105,800 Unearned revenue785,015 - - - - 4,526 789,541 2,185,717 626 5,650 3,566 610,414 1,666,725 4,472,698 DEFERRED INFLOWS OF RESOURCESUnavailable revenue - taxes348,802 - - - - - 348,802 Unavailable revenue - special assessments- 369,452 15,097,020 - 180,464 264,400 15,911,336 Unavailable revenue - other- - - - - 2,495,470 2,495,470 Total Deferred Inflows of Resources348,802 369,452 15,097,020 - 180,464 2,759,870 18,755,608 FUND BALANCENonspendable914,375 - - - - - 914,375 Restricted- 5,176,6289,976,390 - 842,797 13,892,005 29,887,820 Committed- - - 712,944 328,100 25,478,515 26,519,559 Assigned741,864 - - - - - 741,864 Unassigned13,613,203 - - - (233,673) (642,921) 12,736,609 Total Fund Balance15,269,442 5,176,628 9,976,390 712,944 937,224 38,727,599 70,800,227 Total Liabilities, Deferred Inflows of Resources, and Fund Balance17,803,961$ 5,546,706$ 25,079,060$ 716,510$ 1,728,102$ 43,154,194$ 94,028,533$ Debt ServiceCapital Projects
CITY OF LAKEVILLE
RECONCILIATION OF THE BALANCE SHEET TO THE
STATEMENT OF NET POSITION
GOVERNMENTAL ACTIVITIES
DECEMBER 31, 2017
See accompanying Notes to Basic Financial Statements.
(36)
Total Fund Balances for Governmental Funds 70,800,227$
Governmental capital assets 394,603,013$
Less: Accumulated Depreciation (144,349,560) 250,253,453
3,889,595
26,903
Bonds (113,590,000)
Accrued interest (1,671,262)
Loan (1,897,014)
Unamortized bond premium (7,493,676)
Deferred charge on refunding 121,037
Deferred gain on refunding (107,538)
Compensated absences (2,685,238) (127,323,691)
Net pension liability (15,009,514)
Deferred inflows of resources (14,788,256)
Deferred outflows of resources 12,979,787 (16,817,983)
(450,858)
16,500,608
423,431
Total Net Position of Governmental Activities 197,301,685$
The City's net pension liability and related and deferred inflows and deferred outflows are
recorded only on the statement of net position. Balances at year end are:
Deferred inflows of resources related to unavailable revenue in governmental funds are
susceptible to full accrual on the government-wide statements.
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.
Accrued net OPEB obligations are not payable with current financial resources and,
therefore, are not reported in the governmental funds.
Total net position reported for governmental activities in the statement of net position is
different because:
Grant receivable that is applicable towards accrued bond interest payable is susceptible to
full accrual on the government-wide statements.
Capital assets used in governmental funds are not financial resources and, therefore, are not
reported in the funds. Those assets consist of:
Long-term liabilities are not payable with current financial resources and therefore, are not
reported in the governmental funds.
Net pension assets are only recorded in the government-wide financial statements as they
are not current financial resources to governmental funds.
CITY OF LAKEVILLE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED DECEMBER 31, 2017 See accompanying Notes to Basic Financial Statements. (37) Nonmajor TotalGeneral General G.O. Improvement Governmental GovernmentalFund Obligation Improvement Building Construction Funds TotalsREVENUEProperty taxes18,967,562$ 3,218,208$ 2,298,106$ 150,000$ 50,000$ 2,144,967$ 26,828,843$ Tax increment- - - - - 572,352 572,352 Licenses and permits3,306,525 - - - - 681,664 3,988,189 Intergovernmental 1,143,174 61,513 - - 335,460 2,231,739 3,771,886 Charges for services2,710,628 - - - - 7,305,389 10,016,017 Special assessments- 16,999 2,720,378 - - 75,210 2,812,587 Fines392,514 - - - - - 392,514 Interest Income180,064 32,380 121,029 13,574 20,462 553,590 921,099 Change in Fair Value of Investments(63,378) (5,034) (43,863) (5,177) (236) (205,898) (323,586) Donations52,209 - - - - 186,174 238,383 Miscellaneous 46,741 - - 5,100 - 401,680 453,521 Total Revenue26,736,039 3,324,066 5,095,650 163,497 405,686 13,946,867 49,671,805 EXPENDITURES Current:General government5,315,189 - - - - 1,109,071 6,424,260 Public safety12,215,659 - - - - 560,148 12,775,807 Public works4,240,756 - - - - 5,545,565 9,786,321 Parks and recreation3,767,646 - - - - 1,454,857 5,222,503 Capital Outlay:General government26,536 - - 97,973 - 2,367,828 2,492,337 Public safety- - - 67,344 - - 67,344 Public works29,886 - - 94,103 9,100,353 - 9,224,342 Parks and recreation11,868 - - 199,558 - - 211,426 Debt Service:Principal bond maturities- 2,195,000 2,715,000 - - 1,975,000 6,885,000 Interest on debt- 1,534,184 1,538,734 - - 808,261 3,881,179 Fiscal charges- 22,052 23,549 - - 83,557 129,158 Total Expenditures25,607,540 3,751,236 4,277,283 458,978 9,100,353 13,904,287 57,099,677 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES1,128,499 (427,170) 818,367 (295,481) (8,694,667) 42,580 (7,427,872) OTHER FINANCE SOURCES (USES)- Issuance of Bonds and Other Debt- 1,530,000 - - 8,202,171 2,255,000 11,987,171 Premium on Issued Debt - 231,329 - - 982,020 96,558 1,309,907 Payment of Refunded Bonds- (11,368,146) - - - - (11,368,146) Capital Lease Proceeds- - - - - - - Proceeds from the Sale of Capital Assets- - - - 516,380 516,380 Transfers in from other funds782,654 346,360 2,168,936 200,000 641,354 4,216,170 8,355,474 Transfers out to other funds(1,858,730) (39,283) (48,228) - (1,644,142) (3,071,457) (6,661,840) Total Other Finance Sources (1,076,076) (9,299,740) 2,120,708 200,000 8,181,403 4,012,651 4,138,946 NET CHANGE IN FUND BALANCES52,423 (9,726,910) 2,939,075 (95,481) (513,264) 4,055,231 (3,288,926) FUND BALANCES Beginning of Year15,076,500 14,903,538 7,037,315 808,425 1,450,488 34,672,368 73,948,634 Change in Supplies - Inventory140,519 - - - - - 140,519 End of Year15,269,442$ 5,176,628$ 9,976,390$ 712,944$ 937,224$ 38,727,599$ 70,800,227$ Debt Service Capital Projects
CITY OF LAKEVILLE
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES TO THE STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2017
See accompanying Notes to Basic Financial Statements.
(38)
Net Change in Fund Balances-Total Governmental Funds (3,288,926)$
Amounts reported for governmental activities in the statement of activities are different because:
Capital outlay 9,444,729$
Capital contributed by developer 7,040,618
Depreciation expense (12,680,575) 3,804,772
(1,088,271)
140,519
Deferred inflows of resources - December 31, 2016 (14,732,605)
Deferred inflows of resources - December 31, 2017 18,755,608 4,023,003
Bond proceeds (11,987,171)
Bond and loan principal maturities 18,253,146 6,265,975
Change in accrued interest payable 149,843
Change in grant applicable towards accrued interest payable (1,254)
Premium on bonds issued in the current year (1,213,349)
Deferred gain on refunding -
Amortization of deferred charge on refunding (8,594)
Amortization of deferred gain on refunding 7,000
Amortization of debt premiums/discounts 497,104 (569,250)
(180,532)
(1,068,786)
(71,529)
Change in Net Position of Governmental Activities 7,966,975$
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 the governmental activities.
Revenues in the government-wide statement of activities that do not provide current financial
resources are not reported as revenues in the governmental funds.
Governmental funds report inventory related to snow removing chemicals as an expenditure at the
time of purchase rather than when it is consumed. The change in supplies is shown as a direct
adjustment to fund balance. On the government-wide statement of activities, inventories are shown
as an expenditure when consumed. As a result, the change in net position must be adjusted by the
change in supplies.
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.
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 increases 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.
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.
Governmental funds report the effect of premiums, discounts and similar items when debt is first
issued, whereas material amounts are deferred and amortized in the statement of activities.
Pension expenditures in the governmental funds are measured by current year employer
contributions. Pension expenses on the statement of activities are measured by the change in the
net pension liability(asset) and the related deferred inflows and outflows of resources.
In the statement of activities, certain operating expenses, severance benefits and compensated
absences - are measured by amounts earned during the year. In the governmental funds, however,
expenditures for these items are measured by the amount of financial resources used (and amounts
actually paid).
CITY OF LAKEVILLE
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2017
See accompanying Notes to Basic Financial Statements.
(39)
Governmental
Activities -
Internal Service
Liquor Utility Totals Funds
ASSETS AND DEFERRED OUTFLOWS
OF RESOURCES
CURRENT ASSETS
Cash and investments 257,022$ 9,423,968$ 9,680,990$ 515,191$
Interest receivable 2,744 53,129 55,873 1,140
Accounts receivable 3,443 3,196,125 3,199,568 82,667
Inventory 1,613,999 275,572 1,889,571 -
Prepaid expenses - 10,183 10,183 -
Total current assets 1,877,208 12,958,977 14,836,185 598,998
NONCURRENT ASSETS
Restricted cash and investments 323,875 - 323,875 -
Capital assets:
Land 3,314,738 539,885 3,854,623 -
Buildings and improvements 3,414,187 26,198,192 29,612,379 -
Machinery and equipment 507,237 3,157,157 3,664,394 -
Infrastructure - 175,221,055 175,221,055 -
Accumulated depreciation (1,159,136) (65,420,727) (66,579,863) -
Net Capital Assets 6,077,026 139,695,562 145,772,588 -
Total noncurrent assets 6,400,901 139,695,562 146,096,463 -
Total assets 8,278,109 152,654,539 160,932,648 598,998
DEFERRED OUTFLOWS OF RESOURCES
Pension plan deferments - PERA 271,267 392,775 664,042 -
Total Assets and Deferred
Outflows of Resources 8,549,376$ 153,047,314$ 161,596,690$ 598,998$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND NET POSITION
CURRENT LIABILITIES
Salaries payable 51,386$ 66,095$ 117,481$ -$
Accounts payable 501,434 386,693 888,127 11,869
Contracts payable - 11,579 11,579 -
Accrued interest payable - 114,747 114,747 -
Deposits payable 15,057 12,400 27,457 -
Accrued compensated absences 86,312 165,327 251,639 -
Long-term debt - current - 380,000 380,000 -
Total current liabilities 654,189 1,136,841 1,791,030 11,869
NONCURRENT LIABILITIES
Accrued compensated absences 32,604 43,045 75,649 -
Net pension liability - PERA 1,029,921 1,491,253 2,521,174 -
Net OPEB obligation 27,123 51,672 78,795 -
Long-term debt 2,255,000 8,148,468 10,403,468 -
Total noncurrent liabilities 3,344,648 9,734,438 13,079,086 -
Total liabilities 3,998,837 10,871,279 14,870,116 11,869
DEFERRED INFLOWS OF RESOURCES
Pension plan deferments - PERA 184,210 266,723 450,933 -
NET POSITION
Net investment in capital assets 3,822,026 131,502,094 135,324,120 -
Restricted for debt service 323,875 - 323,875 -
Unrestricted 220,428 10,407,218 10,627,646 587,129
Total Net Position 4,366,329 141,909,312 146,275,641 587,129
Total Liabilities, Deferred Inflows of
Resources, and Net Position 8,549,376$ 153,047,314$ 161,596,690 598,998$
163,698
Net position of business-type activities 146,439,339$
The City uses an internal service fund to charge the cost of
its insurance activities to individual funds. This amount
consists of the necessary adjustments to reflect the
consolidation of internal service fund activities:
Enterprise Funds
Business-type Activities -
Explanation of difference between Enterprise Funds
Statement of Net Position and government-wide Statement of
Net Position:
CITY OF LAKEVILLE
STATEMENT OF NET REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2017
See accompanying Notes to Basic Financial Statements.
(40)
Governmental
Activities -
Internal Service
Liquor Utility Total Funds
SALES AND COST OF SALES
Sales 14,583,514$ -$ 14,583,514$ -$
Cost of sales 11,005,245 - 11,005,245 -
Gross profit 3,578,269 - 3,578,269 -
OPERATING REVENUE
User Charges - 12,369,308 12,369,308 400,618
Other - 216,142 216,142 38,867
Total operating revenue - 12,585,450 12,585,450 439,485
OPERATING EXPENSES
Personnel services 1,540,328 2,237,790 3,778,118 -
Commodities 56,273 358,800 415,073 -
Other charges and services 786,194 3,517,314 4,303,508 466,510
Disposal charges - 3,509,576 3,509,576 -
Depreciation 135,482 4,295,521 4,431,003 -
Total operating expenses 2,518,277 13,919,001 16,437,278 466,510
OPERATING INCOME (LOSS)1,059,992 (1,333,551) (273,559) (27,025)
NONOPERATING REVENUE (EXPENSES)
Intergovernmental - grants 6,716 166,227 172,943 -
Interest Income 9,595 134,095 143,690 (345)
Change in Fair Value of Investments (3,660) (48,558) (52,218) 132
Interest, fiscal charges, bond premium (net) (105,176) (202,735) (307,911) -
Disposal of capital assets (7,340) (10,388) (17,728) -
Total Nonoperating Revenue (Expenses) (99,865) 38,641 (61,224) (213)
INCOME (LOSS) BEFORE CONTRIBUTIONS
AND TRANSFERS 960,127 (1,294,910) (334,783) (27,238)
Contributed capital from developers - 4,791,313 4,791,313 -
Contributed capital from governmental activities - 4,464,787 4,464,787 -
Transfers from other funds 809,069 23,341 832,410 -
Transfers to other funds (1,345,322) (1,127,665) (2,472,987) (53,057)
Total Contributions and Transfers (536,253) 8,151,776 7,615,523 (53,057)
CHANGE IN NET POSITION 423,874 6,856,866 7,280,740 (80,295)
NET POSITION
Beginning of Year 3,942,455 135,052,446 667,424
End of Year 4,366,329$ 141,909,312$ 587,129$
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: (8,766)
Change in net Postion of business-type activites 7,271,974$
Enterprise Funds
Business-type Activities -
CITY OF LAKEVILLE
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2017
See accompanying Notes to Basic Financial Statements.
(41)
Governmental
Activities -
Internal Service
Liquor Utility Total Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers 14,580,525$ 12,065,015$ 26,645,540$ 364,652$
Cash received from general service charges - - - (470,357)
Cash paid to suppliers (12,460,096) (7,606,430) (20,066,526) -
Cash paid to and for employees (1,492,183) (2,176,897) (3,669,080) -
Net Cash Provided (Used) by Operating Activities 628,246 2,281,688 2,909,934 (105,705)
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Intergovernmental - grant 6,716 166,227 172,943 -
Transfers from other funds 333,606 23,341 356,947 -
Transfers to other funds (1,345,322) (1,127,665) (2,472,987) (53,057)
Net Cash Provided (Used) by Noncapital
Financing Activities (1,005,000) (938,097) (1,943,097) (53,057)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets (56,272) (1,904,091) (1,960,363) -
Proceeds from sale of capital assets - 33,811 33,811 -
Proceeds from Issuance of Capital Debt - 1,355,451 1,355,451
Interest and fiscal charges (161,739) (239,413) (401,152) -
Net Cash Provided (Used) by Capital and
Related Financing Activities (218,011) (754,242) (972,253) -
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 5,207 75,878 81,085 (186)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (589,558) 665,227 75,669 (158,948)
Cash and Cash Equivalents - Beginning of the Year 1,170,455 8,758,741 9,929,196 674,139
CASH AND CASH EQUIVALENTS - END OF THE YEAR 580,897$ 9,423,968$ 10,004,865$ 515,191$
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income (Loss) 1,059,992$ (1,333,551)$ (273,559)$ (27,025)$
Adjustments
Depreciation expense 135,482 4,295,521 4,431,003 -
(Increase) decrease in assets and deferred outflows
Accounts receivable (1,587) (518,435) (520,022) (74,833)
Inventory (38,367) (36,492) (74,859) -
Prepaid expenses - (183) (183) -
Pension-related deferred outflows 260,450 380,467 640,917 -
Increase (decrease) in liabilities and deferred inflows
Salaries payable 3,803 (4,875) (1,072) -
Accounts payable (574,017) (184,065) (758,082) (3,847)
Deposits payable (1,402) (2,000) (3,402) -
Accrued compensated absences (25,161) (30,878) (56,039) -
Net pension liability and related deferred inflows (193,727) (289,383) (483,110) -
Net OPEB obligation 2,780 5,562 8,342 -
Total adjustments
Net Cash Provided (Used) by Operating Activities 628,246$ 2,281,688$ 2,909,934$ (105,705)$
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:-$ 9,280,817$ 9,280,817$ -$
Enterprise Funds
Business-type Activities -
CITY OF LAKEVILLE
STATEMENT OF FIDUCIARY NET POSITION
AGENCY FUND
YEAR ENDED DECEMBER 31, 2017
See accompanying Notes to Basic Financial Statements.
(42)
Escrow
Fund
ASSETS
Cash and investments 9,764,702$
LIABILITIES
Deposits payable 9,764,702$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(43)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization
The City of Lakeville, Minnesota (the City) operates under the “Optional Plan A” form of government as defined in 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.
B. Reporting Entity
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.
The City has considered all potential units for which it is financially accountable, and other organizations for which the nature and significance of their relationship with the City are such that exclusion would cause the City’s financial statements to be misleading or incomplete. The Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a voting majority of an organization’s governing body, and (1) the ability of the primary government to impose its will on that organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on the primary government. Based upon the application of these criteria, the City has the following component units:
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. .
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(44)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
B. Reporting Entity (Continued)
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. The Ice Arena Lease Revenue Bonds, Series 2006 were subsequently refunded
in 2016. 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.
In 2017, the HRA issued $2,255,000 in Lease Revenue Liquor Enterprise Refunding
Bonds, Series 2017A, to refund the existing liquor revenue bonds through a purchase
(and subsequent lease-back) of the liquor store land and building. Debt service will be
payable from lease payments made by the City’s liquor enterprise fund.
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, 2017. Information of a nonfinancial matter regarding the HRA can be
obtained at the City’s Finance offices, located at 20195 Holyoke Avenue, Lakeville,
Minnesota 55044.
C.Government-Wide 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
government-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 other 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(45)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. Government-Wide Financial Statements (Continued)
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.
D. Fund Financial Statement Presentation
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.
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 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(46)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D. Fund Financial Statement Presentation (Continued)
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 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 enterprise 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.
Enterprise utility fund – This fund is used to account for water, sanitary sewer, street
lighting, and environmental resources services 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.
E. 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(47)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E.Measurement Focus and Basis of Accounting (Continued)
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 or if intergovernmental revenues
related to a joint project venture with the county are considered to be available if
collected within 181 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, excluding intergovernmental
revenues related to a joint project venture with the county are considered revenue if
collected within 181 days of after current fiscal year-end; 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.
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 postemployment 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(48)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E.Measurement Focus and Basis of Accounting (Continued)
Proprietary and Fiduciary Funds (Continued):
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 nonoperating items: Proprietary funds distinguish operating
revenues and expenses from nonoperating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in
connection with a proprietary fund’s principal ongoing operations. The principal
operating 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 nonoperating revenues and
expenses.
F. Cash and Investments
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.
Cash and investments held by trustee represent in part the 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.
G. 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(49)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
H. 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 construction contracts will be
awarded for the individual projects. 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, 2017, the special assessment delinquent
receivable was $13,692 in the governmental funds and $25,777 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.
Other - assessments for which payment has been delayed based on State Statutes
or City Council action.
I. Inventory
Inventories are valued on a first-in, first-out method. The cost of inventories is recorded
as expenses/expenditures when consumed rather than purchased except for, general
fund inventory related to snow removing chemicals. These materials are recorded as
expenditure at the time of purchase rather than when it is consumed.
J. 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(50)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
K. 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 noncurrent liabilities
due in more than one year of the City’s government-wide statement of net position.
The enterprise utility fund includes a noncurrent liability for unamortized bond premium
associated with the issuance of the water and sewer bonds of 2016. The bond premium
is amortized over the term of the bonds using the straight-line method.
L. Restricted Assets
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.
M. 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 acquisition 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(51)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
M.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 3-20 years
Other improvements 10-50 years
Infrastructure 20-50 years
N.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 three items that qualifies for reporting in this category. The first two items
are 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. The third item is a deferred outflow related to a current refunding that resulted
in a defeasance of debt reported by the governmental activities. This deferred outflow
results from the difference between the reacquisition price and the net carrying amount
of the old debt. This amount is deferred and amortized over the remaining life of the
debt.
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 three sources: property taxes,
special assessments, and other, primarily long-term capital leases receivable. 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(52)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
O. 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 service. 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 vested and is reported as an
expenditure in the governmental fund that will pay for it. No liability is recorded for
nonvesting accumulating rights to receive sick leave benefits.
P. Pensions
For purposes of measuring the net pension asset/liability, deferred outflows/inflows of
resources, and pension expense, information about the fiduciary net position of the
Public Employees Retirement Association (PERA) and the Lakeville Fire Relief
Association and 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 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.
Q. Other Postemployment 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.
R. 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(53)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
S. Fund Balance
In the fund financial statements, governmental funds report fund balance classification
that disclose constraints for which amounts in those funds can be spent. These
classifications are as follows:
Nonspendable – consists of amounts that cannot be spent because they are not in
spendable form, such as prepaid items and inventory.
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 are constrained for specific purposes that are
internally imposed by formal action (resolution) of the City Council. Those committed
amounts cannot be used for any other purpose unless City Council removes or
changes the specified use by taking the same type of action it employed to
previously commit those amounts.
Assigned – consists of 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 balances.
Unassigned – is the residual classification for the General fund and also reflects
negative residual amounts in 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% 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, 2017, the unrestricted fund
balance of the General Fund was 53.2% of the subsequent year’s budgeted
expenditures. The City has opted to reduce fund balance with the 2018 budget.
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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(54)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
T. Net Position
In the government-wide and proprietary fund financial statements, net position
represents the difference between assets and deferred outflows of resources and
liabilities and deferred inflows of resources. Net position is displayed in three
components:
Net investment in capital assets - Consists of capital assets, net of accumulated
depreciation reduced by any outstanding debt attributable to acquire capital assets.
Restricted net position - Consists of net position balances restricted when there are
limitations imposed on their use through external restrictions imposed by creditors,
grantors, laws or regulations of other governments.
Unrestricted net position - All other net position balances that does not meet the
definition of “restricted” or “net investment in capital assets”.
When both restricted and unrestricted resources are available for use, it is the City’s
policy to use restricted resources first, then unrestricted resources as they are needed.
U. Revenues and Expenditures/Expenses
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.
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.
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.
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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(55)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
U.Revenues and Expenditures/Expenses (Continued)
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.
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.
V. 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(56)
NOTE 2 DEPOSITS 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 with the exception for bond proceeds related to bond series 2016 A and
2017 A. 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.
The City’s cash and investments as of December 31, 2017 consist of the following:
Cash on hand 12,875$
Deposits 1,768,443
Investments 89,391,506
Total cash and investments 91,172,824$
The City’s cash and investments as of December 31, 2017 are presented in the financial
statements as follows:
Statement of Net Position
Cash and investments 78,737,493$
Temporarily restricted cash and investments 323,875
Temporarily restricted investments held by trustee 2,346,754
Statement of Fiduciary Net Position
Cash and investments 9,764,702
Total cash and investments 91,172,824$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(57)
NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED)
B. Deposits
In accordance with applicable Minnesota Statutes, the City maintains deposits at
depository banks authorized by the City Council, including checking accounts and
certificates of deposit. The following is considered the most significant risk associated
with deposits:
Custodial Credit Risk – In the case of deposits, this is the risk that in the event of a bank
failure, the City’s deposits may be lost. Minnesota Statutes require that all deposits be
protected by federal deposit insurance, corporate surety bond, or collateral. The value of
collateral pledged must equal 110% 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 $1,768,443 while the
balance on the bank records was $3,114,058. At December 31, 2017, all deposits were
fully covered by federal depository insurance, surety bonds, or by collateral held by the
City’s agent in the City’s name.
C. Investments
The City’s investments as of December 31, 2017 are as follows:
Investment Type Rating Agency Total Value Less than 1 1 - 5 6 - 10
Money market funds
Minnesota Municipal (4M) N/R N/A 8,893,904$ -$ -$ -$
Wells Fargo Advantage AAAm S&P 1,587,216 - - -
First American Treasury Obligation AAAm S&P 608,581 - - -
Certificates of deposit N/R N/A 24,928,988 8,289,354 15,439,934 1,199,700
U.S. treasury securities N/R N/A 3,737,109 3,737,109 - -
U.S. government agencies AA+ S&P 36,055,910 9,978,354 23,258,302 2,819,254
Municipal Bonds Aaa Moody's 596,784 298,092 298,692 -
Municipal Bonds Aa1 Moody's 4,610,682 750,685 3,859,997 -
Municipal Bonds AA+ S&P 988,836 - 566,221 422,615
Municipal Bonds Aa2 Moody's 1,550,828 189,124 1,361,704 -
Municipal Bonds AA S&P 1,289,286 534,404 754,882 -
Municipal Bonds Aa3 Moody's 102,539 - 102,539 -
Municipal Bonds AA- S&P 2,164,200 299,982 1,420,486 443,732.00
Municipal Bonds A1 Moody's 585,267 - 585,267 -
Municipal Bonds A+ S&P - - - -
Municipal Bonds AA- S&P 1,255,419 404,838 850,581 -
Total investments 89,391,506$ 24,917,899$ 48,498,605$ 4,885,301$
N/R - Note rated N/A - Not applicable
Credit Risk
Interest Risk -
Maturity Duration in Years
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(58)
NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED)
C. Investments (Continued)
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 guidance under GASB
Statement No. 79. The City’s investment in the 4M Fund is measured at 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.
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% 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, 2017, the City’s investment portfolio includes the following
securities of single issuers exceeding 5%:
Federal National Mortgage Association 10.81%
Federal Farm Credit Bank 12.37%
Federal Home Loan Bank 5.59%
Federal Home Loan Mortgage 7.10%
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).
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(59)
NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED)
D. Investments 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
E. Fair Value Measurements
The City uses fair value measurements to record fair value adjustments to certain asset
and liabilities and to determine fair value disclosures.
The City follows an accounting standard which defines fair value, establishes framework
for measuring fair value, establishes a fair value hierarchy based on the quality of inputs
used to measure fair value, and requires expanded disclosures about fair value
measurements. In accordance with this standard, the City has categorized its
investments, based on the priority of inputs to the valuation technique, into a three-level
fair value hierarchy. The fair value hierarchy gives the highest priority to quotes and
prices in active markets for identical assets or liabilities (Level 1) and the lowest priority
to unobservable inputs (Level 3). If inputs used to measure the financial instruments fall
within different levels of the hierarchy, the categorization is based on the lowest level
input that is significant to the fair value measurement of the instrument.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(60)
NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED)
E.Fair Value Measurements (Continued)
Financial assets and liabilities recorded on the combined statements of financial position
are categorized based on the inputs to the valuation techniques as follows:
Level 1 – Financial assets and liabilities are valued using inputs that are unadjusted
quoted prices in active markets accessible at the measurement date of identical
financial assets and liabilities.
Level 2 – Financial assets and liabilities are valued based on quoted prices for
similar assets or inputs that are observable, either directly or indirectly, for
substantially the full term through corroboration with observable market data.
Level 3 – Financial assets and liabilities are valued using pricing inputs which are
unobservable for the asset, inputs that reflect the reporting entity’s own assumptions
about the assumptions market participants would use in pricing the asset.
Investment Type Level 1 Level 2 Level 3 Total
First American Treasury Obligation 608,581$ -$ -$ 608,581$
U.S. treasury securities 3,737,109 - - 3,737,109
U.S. government securities 36,055,910 - - 36,055,910
Certificates of deposit - 24,928,988 - 24,928,988
Municipal bonds - 13,579,798 - 13,579,798
40,401,600$ 38,508,786$ -$ 78,910,386$
Investments measured at amortized cost 10,481,120
Total 89,391,506$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(61)
NOTE 3 CAPITAL ASSETS
A summary of changes in governmental capital assets during the year ended December 31,
2017 are as follows:
Beginning Ending
Balance Additions Deletions Transfers Balance
Governmental Activities:
Capital Assets, Not Being Depreciated:
Land 26,676,857$ 1,874,459$ (403,877)$ -$ 28,147,439$
Historical treasures 100,000 - - - 100,000
Construction in progress 4,322,863 3,345,673 (4,242,890) - 3,425,646
Total Capital Assets, Not Being Depreciated 31,099,720 5,220,132 (4,646,767) - 31,673,085
Capital Assets, Being Depreciated:
Building and improvements 54,986,625 150,153 (215,418) - 54,921,360
Machinery and equipment 23,494,222 1,669,719 (1,123,926) (24,717) 24,015,298
Other improvements 8,507,138 533,132 (89,620) - 8,950,650
Infrastructure
Streets 165,239,374 8,192,702 (3,870,866) - 169,561,210
Storm Sewer 75,664,090 3,930,437 (224,855) - 79,369,672
Parks 25,079,776 1,031,962 - - 26,111,738
Total Capital Assets, Being Depreciated 352,971,225 15,508,105 (5,524,685) (24,717) 362,929,928
Accumulated Depreciation for:
Buildings and improvements (15,080,108) (1,176,904) 112,966 - (16,144,046)
Machinery and equipment (13,117,250) (1,666,497) 1,096,537 24,717 (13,662,493)
Other improvements (3,075,150) (417,081) 89,620 - (3,402,611)
Infrastructure
Streets (74,462,999) (6,700,631) 3,404,832 - (77,758,798)
Storm Sewer (18,209,806) (1,736,679) 136,336 - (19,810,149)
Parks (12,588,680) (982,783) - - (13,571,463)
Total Accumulated Depreciation (136,533,993) (12,680,575) 4,840,291 24,717 (144,349,560)
Total Capital Assets, Being Depreciated, Net 216,437,232 2,827,530 (684,394) - 218,580,368
Governmental Activities Capital Assets, Net 247,536,952$ 8,047,662$ (5,331,161)$ -$ 250,253,453$
Depreciation expense was charged to governmental functions as follows:
General government 273,853$
Public safety 1,100,873
Public works 9,227,645
Parks and recreation 2,078,204
Total depreciation expense 12,680,575$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(62)
NOTE 3 CAPITAL ASSETS (CONTINUED)
A summary of changes in business-type capital assets during the year ended December 31,
2017 are as follows:
Beginning Ending
PRIMARY GOVERNMENT Balance Additions Deletions Transfers Balance
Business-Type Activities:
Capital Assets, Not Being Depreciated:
Land 3,854,623$ -$ -$ -$ 3,854,623$
Capital Assets, Being Depreciated:
Buildings and improvements 30,071,536 70,813 (529,970) - 29,612,379
Machinery and equipment 3,256,461 452,176 (52,074) 7,831 3,664,394
Infrastructure
Water 95,830,029 7,847,084 (110,590) - 103,566,523
Sanitary Sewer 68,791,254 2,863,278 - - 71,654,532
Total Capital Assets, Being Depreciated 197,949,280 11,233,351 (692,634) 7,831 208,497,828
Accumulated Depreciation for:
Buildings and improvements (9,108,432) (650,762) 522,628 - (9,236,566)
Machinery and equipment (1,649,283) (276,496) 47,486 (7,831) (1,886,124)
Infrastructure
Water (28,534,514) (2,062,638) 54,093 - (30,543,059)
Sanitary Sewer (23,473,007) (1,441,107) - - (24,914,114)
Total Accumulated Depreciation (62,765,236) (4,431,003) 624,207 (7,831) (66,579,863)
Total Capital Assets, Being Depreciated, Net 135,184,044 6,802,348 (68,427) - 141,917,965
Business-Type Activities Capital Assets, Net 139,038,667$ 6,802,348$ (68,427)$ -$ 145,772,588$
Depreciation expense was charged to governmental functions as follows:
Liquor fund 135,482$
Utility fund 4,295,521
Total Depreciation Expense, Business-Type Activities 4,431,003$
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
$1,723,122 has been depreciated to date. These amounts are recorded in the City’s capital
assets. The 2017 lease revenue totaled $88,626.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(63)
NOTE 4 OPERATING LEASES (CONTINUED)
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 2017 lease revenue totaled $286,594.
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 $11,812 plus a proportionate share of real estate
taxes, property insurance, special assessments, common area maintenance, and
management fees. The lease had an original term of fifteen years and was subsequently
renewed for an additional four years expiring June 30, 2019. The fiscal year 2017 lease
expense totaled $141,744. The City owns the land and buildings of its other two liquor
stores. The following is a schedule by years of future minimum payments required under the
lease as of December 31, 2017:
Year Amount
2018 141,744$
2019 70,872
Total 212,616$
NOTE 5 LONG-TERM DEBT
A. Components of Long-Term Debt
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.
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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(64)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A. Components of Long-Term Debt (Continued)
Revenue Bonds (Continued)
Governmental Activities (Continued)
The HRA Ice Arena Lease Revenue Refunding Bonds, Series 2016, 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 Refunding Bonds, Series 2016 ($7,115,000 original amount issued), of
which the first principal and interest payment was due in 2017. 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, 2017
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 $1,436,382 has been
depreciated to date. These amounts are recorded in the HRA’s capital assets.
Business-type Activities
Future revenue pledged for the payment of long-term debt is as follows:
Remaining Pledged
Principal and Principal and Revenue
Bond Issue Use of Proceeds Type Term of Pledge Interest Interest Paid Received
Recreation Facility Ice arena Arena Revenues 2016 - 2019 362,270$ 181,305$ 183,626$
Ice Arena Lease Revenue Additional ice arena Lease Revenues 2016 - 2032 8,848,201 521,512 286,594
Utility - Water Revenue Water infrastructure Utility user fees 2016 - 2034 7,680,939 217,850 4,782,686
Utility - Sewer Revenue Sewer infrastructure Utility user fees 2016 - 2025 582,250 21,275 5,711,696
Water Connection Revenue Water infrastructure Connection charges 2016 - 2032 10,161,000 624,200 3,143,470
Revenue Pledged Current Year
Metropolitan Council Loan Agreements
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 2017, the City made no payments on this loan. As of December 31, 2017 the
balance of the loan is $1,159,843. On January 3, 2017, the City entered into another
loan agreement with the Metropolitan Council for the purpose of acquiring property
within a proposed state trunk highway right-of-way. The amount of the loan was
$737,171 and the City made no payments on the loan in 2017. The loans (both free of
interest charge) will be discharged by the Metropolitan Council upon the conveyance of
the properties to the highway authority at an undetermined future date.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(65)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A. Components of Long-Term Debt (Continued)
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 were 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.
General Obligation Water Utility Bonds, Series 2016 A
On February 25, 2016, the City issued $8,280,000 in General Obligation Water Utility
Bonds, Series 2016 A to finance various improvement projects. 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.
General Obligation Bonds, Series 2016 B
On July 21, 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.
HRA Lease Refunding Bonds (Ice Arena Project), Series 2016 A
On September 22, 2016, the City issued $7,115,000 in HRA Lease Revenue Refunding
Bonds (Ice Arena Project), Series 2016 A. The proceeds of this issue were used to
purchase U.S. Government and State and Local Government Series securities that were
placed in an irrevocable trust for generating resources for all future debt service
payments on $7,585,000 of refunded debt (HRA Lease Revenue Bonds, Series 2006).
As a result, the refunded bonds are considered defeased and the liability has been
removed from the governmental activities column of the statement of net position.
Lease Revenue Liquor Enterprise Refunding Bonds, Series 2017A
On October 25, 2017, the City issued $2,255,000 in HRA Lease Revenue Liquor
Enterprise Refunding Bonds, Series 2017A. The proceeds of this issue were deposited
with the Trustee in order to call and prepay the outstanding liquor revenue bonds of
2007. In exchange for the refunding of the existing liquor revenue bonds, the liquor fund
conveyed related capital assets consisting of land and building to the HRA fund. The
HRA then leased the building back to the liquor fund under a capital lease agreement,
resulting in the capital assets being reported back in the liquor fund and the long-term
debt being shown in the liquor fund as a capital lease. The lease terms include interest
of between 2.0%-3.0% with payments totaling $2,255,000 through 2027. The capital
assets being leased had a total cost of $2,522,470 and accumulated depreciation of
$512,115 at December 31 2017. Per governmental accounting standards the related
long-term debt is not shown in both the governmental and business-type activities,
therefore the long-term liability is included in business-type activities as a capital lease,
as is noted in the table on page 68.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(66)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A. Components of Long-Term Debt (Continued)
The City had the following long-term liabilities outstanding at December 31, 2017:
Description Maturities Interest Rates Amount
PRIMARY GOVERNMENT
Governmental Activities:
General Obligation Bonds Payable:
Capital improvement bonds 2017 - 2032 1.75% - 5.00% 22,795,000$
Street reconstruction bonds 2016 - 2030 1.75% - 5.95% 16,060,000
G.O. Improvement bonds 2018 - 2037 1.40% - 5.00% 52,220,000
Tax increment bonds 2022 4.00% - 4.20% 1,240,000
State-aid street revenue bonds 2018 - 2036 1.25% - 5.00% 6,205,000
G.O. water revenue bonds 2034 2.00% - 5.00% 7,940,000
Arena revenue bonds 2019 5.30% - 5.40% 335,000
Total General Obligation Bonds 106,795,000
HRA lease revenue bonds 6,795,000
Total Governmental Activities 113,590,000
Business-Type Activities:
Revenue Bonds
Water revenue bonds 2034 1.50% - 5.00% 6,910,000
Sewer revenue bonds 2025 1.50% - 5.00% 495,000
Street light revenue bonds 335,000
Total Revenue Bonds 7,740,000
Capital Lease 07/19/05 2.00% - 3.00% 2,255,000
Total Business-Type Activities 9,995,000
Total long-term bonded debt outstanding 123,585,000$
The City is in compliance with all significant bond covenants. Annual bond debt service
requirements to maturity for long-term obligations, excluding the Lease Revenue Liquor
Enterprise Refunding Bonds of 2017 (see page 67), are as follows:
Year Ending
December 31, Principal Interest Principal Interest Total
2018 9,420,000$ 3,880,779$ 380,000$ 272,123$ 13,952,902$
2019 7,925,000 3,599,796 480,000 256,063 12,260,859
2020 8,040,000 3,300,311 530,000 230,813 12,101,124
2021 7,900,000 3,013,689 555,000 211,388 11,680,077
2022 7,840,000 2,732,189 570,000 197,713 11,339,902
2023-2027 36,670,000 9,151,126 2,830,000 598,965 49,250,091
2028-2032 27,010,000 3,562,641 1,780,000 222,440 32,575,081
2033-2037 8,700,000 545,362 615,000 17,194 9,877,556
2038 85,000 1,328 - - 86,328
Total 113,590,000$ 29,787,221$ 7,740,000$ 2,006,699$ 153,123,920$
Governmental Business-Type
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(67)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A. Components of Long-Term Debt (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, 2017 is $2,685,238. This amount is included in the noncurrent
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, 2017 is $327,288. In the event of employee separation from the
City, the responsible enterprise fund will pay the accumulated severance portion.
These amounts are recorded as a liability and as an expense when earned in the
responsible funds.
Unamortized Bond Premium and Discount
Unamortized bond premium and bond discount included within noncurrent liabilities are
as follows:
Governmental Business-Type
Unamortized bond premium 7,493,676$ 788,468$
Liquor Capital Lease
The capital lease reported in business-type activities on page 68 has the following
annual debt service requirements:
Year Ending
December 31, Principal Interest
2018 -$ 44,418$
2019 215,000 58,650
2020 230,000 54,200
2021 240,000 49,500
2022 245,000 43,425
2023-2027 1,325,000 101,475
Total 2,255,000$ 351,668$
Liquor Capital Lease
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(68)
NOTE 5 LONG-TERM DEBT (CONTINUED)
B. Changes in Long-Term Debt
Long-term liability activity for the year ended December 31, 2017 was as follows:
Beginning End of Due Within
PRIMARY GOVERNMENT of Year Additions Deletions Year One Year
Governmental Activities
G.O. Improvement bonds 50,705,000$ 1,530,000$ (13,380,000)$ 38,855,000$ 4,095,000$
Other bonds 71,960,000 7,465,000 (4,690,000) 74,735,000 5,325,000
Total bonds 122,665,000 8,995,000 (18,070,000) 113,590,000 9,420,000
Metropolitan Council loans 1,159,843 737,171 - 1,897,014 -
Total long-term debt 123,824,843 9,732,171 (18,070,000) 115,487,014 9,420,000
Accrued compensated absences 2,551,962 1,448,385 (1,315,109) 2,685,238 1,315,109
Unamortized bond premium/discount 7,075,115 1,213,349 (794,788) 7,493,676 -
Total Governmental Activities 133,451,920 12,393,905 (20,179,897) 125,665,928 10,735,109
Business-Type Activities:
Liquor revenue bonds 2,715,000 -(2,715,000) - -
Utility - water revenue bonds 6,075,000 835,000 - 6,910,000 325,000
Utility - sewer revenue bonds 495,000 - - 495,000 55,000
Utility - street light revenue bonds - 335,000 - 335,000 -
Liquor - capital leases - 2,255,000 - 2,255,000 -
Accrued compensated absences 373,456 205,471 (251,639) 327,288 251,639
Unamortized Bond Premiums 667,577 185,451 (64,560) 788,468 -
Total Business-Type Activities 10,326,033 3,815,922 (3,031,199) 11,110,756 631,639
Total Primary Government 143,777,953$ 16,209,827$ (23,211,096)$ 136,776,684$ 11,366,748$
NOTE 6 NET INVESTMENT IN CAPITAL ASSETS
Net investment in capital assets as of December 31, 2017 is calculated as follows:
Governmental Business-type Total
Capital assets, net of depreciation 250,253,453$ 145,772,588$ 396,026,041$
Less applicable:
Bonds payable (97,775,000) (9,660,000) (107,435,000)
Capital lease payable - (2,255,000) (2,255,000)
Loan payable (1,897,014) -(1,897,014)
Unamortized bond premium / discount (net)(6,594,603) (788,468) (7,383,071)
Unamortized deferred charge on refunding 121,037 - 121,037
Unamortized deferred gain on refunding (107,538) - (107,538)
Unspent bond proceeds 1,468,582 - 1,468,582
Contracts Payable (887,217) - (887,217)
Invested in capital assets, net 144,581,700$ 133,069,120$ 277,650,820$
The City has $17,354,000 in bonds and $771,705 in unamortized bond premiums that are
not included in the calculation above as they are not capital in nature.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(69)
NOTE 7 RESTRICTED NET POSITION
The government-wide Statement of Net Position reports restricted amounts in the net
position section. These amounts represent assets and deferred outflows (less any related
liabilities and deferred inflows) that have imposed restrictions placed on them by parties
outside the City government. Net position restricted for debt service represents assets
pledged by bond covenant to the repayment of City bond obligations. The government-wide
restricted net position is as follows:
Governmental Business-type
Activities Activities Total
Restricted Net Position
Cash and investments 27,448,349$ -$ 27,448,349$
Temporarily restricted
Cash and investments - 323,875 323,875
Investments held by trustee 2,346,754 - 2,346,754
Net pension asset 3,889,595 - 3,889,595
Receivables 18,416,150 - 18,416,150
Deferred outflows - pension plan deferments 283,521 - 283,521
Deferred inflows - pension plan deferment (664,407) - (664,407)
Less related liabilities (2,273,175) - (2,273,175)
Total restricted net position 49,446,787$ 323,875$ 49,770,662$
NOTE 8 CONSTRUCTION COMMITMENTS
The City has outstanding construction and build projects as of December 31, 2017. 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:
Projects Remaining
Governmental Activities Spent-to-Date Commitment
Holyoke Avenue water tower 3,300,661$ 173,982$
City of Lakeville / City of Apple Valley
sanitary sewer interceptor 53,591 55,614
Landscaping/mowing services (2018)- 132,599
King Park baseball complex lighting - 568,670
West Lake Marion Park bike course 92,186 6,250
Well #21 and #22 574,658 1,188,315
Holyoke Avenue improvements 1,744,702 207,375
Total governmental 5,765,798$ 2,332,805$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(70)
NOTE 9 FUND BALANCES
A summary of the City’s governmental fund balance classifications at December 31, 2017 is
as follows:
General G.O. Improvement
General Fund Obligation Improvement Building Construction Nonmajor Total
Nonspendable
Inventory 483,145$ -$ -$ -$ -$ -$ 483,145$
Prepaid Items 28,544 - - - - - 28,544
Advances to Other Funds 402,686 - - - - - 402,686
Total nonspendable 914,375 - - - - - 914,375
Restricted for:
Debt Service - 5,176,628 9,976,390 - - 4,730,337 19,883,355
Public improvements - - - - 842,797 - 842,797
Street construction - - - - - 3,150,076 3,150,076
Water trunk system - - - - - 625,785 625,785
Park development - - - - - 5,264,307 5,264,307
Tax increment - - - - - 18,894 18,894
Public communications - - - - - 67,900 67,900
Special Service District - - - - - 34,706 34,706
Total Restricted - 5,176,628 9,976,390 - 842,797 13,892,005 29,887,820
Committed for:
Public improvements - - - - 328,100 - 328,100
Public buildings - - - 712,944 - - 712,944
Pavement management - - - - 939,856 939,856
Storm sewer trunk system - - - - 7,409,341 7,409,341
Water trunk system - - - - 7,352,060 7,352,060
Sanitary sewer trunk system - - - - 6,884,920 6,884,920
Trail improvement - - - - 349,638 349,638
Park improvement - - - - - 8,842 8,842
Capital acquisitions - - - - - 1,967,301 1,967,301
Public communications - - - - - 535,275 535,275
Economic development - - - - - 31,282 31,282
Total Committed - - - 712,944 328,100 25,478,515 26,519,559
Assigned for:
Subsequent year budget 741,864 - - - - - 741,864
Unassigned 13,613,203 - - - (233,673) (642,921) 12,736,609
Total 15,269,442$ 5,176,628$ 9,976,390$ 712,944$ 937,224$ 38,727,599$ 70,800,227$
Debt Service Capital Projects
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(71)
NOTE 10 CONTRIBUTED CAPITAL
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 from private land
developers during the current fiscal year as follows:
Enterprise
From Private Land Developers Governmental Utility Fund
Infrastructure
Streets 3,033,333$ -$
Storm sewer 3,040,058 -
Parks 967,227 -
Water - 2,521,450
Sanitary sewer - 2,269,863
Total 7,040,618$ 4,791,313$
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 4,142,303$
Sanitary sewer 322,484
Total 4,464,787$
NOTE 11 DEFICIT FUND BALANCES
The capital projects tax abatement fund had a deficit fund balance of ($402,451) as of
December 31, 2017 as a result of providing tax abatement assistance to retain the
headquarters of a manufacturing facility within the City. It is anticipated that the deficit will be
financed by future tax abatements collected after an existing Tax Increment Financing
District in which the property is currently located will be decertified.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(72)
NOTE 12 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, 2017, the capital
projects fund tax abatement fund had a payable of $402,686 to the general fund to finance a
long-term cash deficit.
NOTE 13 INTERFUND TRANSFERS
The City provides financing for a variety of operations and capital projects utilizing resources
from certain funds; interfund transfers used for these various activities during the current
fiscal year are as follows:
Nonmajor
General G.O Improv. Govntl.
Transfers From Fund G.O Bonds Improvement Bldg. Constr. Funds Utility Liquor Total
General Fund -$ -$ -$ 200,000$ 1,179$ 1,657,551$ -$ -$ 1,858,730$
G.O. Bonds - - - - - 39,283 - - 39,283
G.O. Improvement Bonds - - - - 48,228 - - - 48,228
Improv. Const. (CP)- - 1,644,142 - - - - - 1,644,142
Nonmajor Govntl. Funds 75,429 - - - 591,947 1,574,153 20,859 809,069 3,071,457
Total 75,429 - 1,644,142 200,000 641,354 3,270,987 20,859 809,069 6,661,840
Enterprise - Liquor 198,819 346,360 - - - 797,661 2,482 1,345,322
Enterprise - Utility 455,349 - 524,794 - - 147,522 - 1,127,665
Internal Service Fund 53,057 - - - - - - 53,057
Total 782,654$ 346,360$ 2,168,936$ 200,000$ 641,354$ 4,216,170$ 23,341$ 809,069$ 9,187,884
(1) (2) (3) (4) (5) (6)(7) (8) (9)
Less: Utility fund -
Total governmental funds 9,187,884$
Debt Service Projects
Capital
Transfers To:
Enterprise
The following are explanations to interfund transfers sub-notes 1 through 9.
Abbreviation key:
(SR) special revenue fund, (DS) debt service fund, (CP) capital projects fund,
(E) enterprise fund, (IS) internal service fund.
(1) The transfers to the general fund were provided mainly as overhead and maintenance
costs from the following funds:
Fund Amount
Communications (SR) 75,429$ Public communications and city hall overhead costs.
Liquor (Ent) 198,819 City hall overhead costs.
Utility (Ent) 455,349 City hall overhead costs.
Municipal Reserve (IS) 53,057 City hall overhead costs.
Total 782,654$
Description
(2) The total transfer to the debt service general obligation fund was provided by the liquor
fund ($346,360) to be applied towards the debt service of the police station completed in
2008.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(73)
NOTE 13 INTERFUND TRANSFERS (CONTINUED)
(3)The total transfer to the debt service G.O. improvement fund was provided by the capital
projects improvement construction fund ($1,644,142) to reduce the future special
assessment fee requirements and provide adequate cash flow, and the enterprise utility
fund ($524,794) related to the City improvements projects whereby user fees are
pledged towards the improvement bonds debt service requirements.
(4)The total transfer to the capital projects building fund was provided by the general fund
($200,000) to finance capital projects.
(5)The total transfer to the capital projects fund improvement construction of ($641,354)
was provided by the following governmental funds to finance various road construction
projects:
From:Amount
General 1,179$
G.O. Improvement Bonds (DS) 48,228
Tax Increment (DS)146,707
Municipal state aid (CP)35,505
Pavement management (CP) 244,142
Storm sewer (CP)7,447
Tax Increment (CP)158,146
Total improv. const.641,354$
(6)The total transfer to nonmajor governmental funds ($3,270,987) was provided by the
following governmental funds:
From:Amount
General fund 181,957$ Communications Fund (SR) for city fibr internet connections
General fund 24,495 Municipal State Aid (CP) for city fiber internet connections
General fund 6,099 TIF (CP) for administrative expenditures
General fund 1,445,000 Equipment (CP) for future equipment acquisitions
Economic development (SR)9,784 TIF (CP) for administrative expenditures
G.O. Bonds (DS)39,283 State aid revenue (DS) for debt service requirements
Municipal state aid (CP)420,679 Municipal State Aid (CP) for debt service requirements
Storm Sewer (CP)336,101 Municipal State Aid (CP) for road construction projects
Water (CP)83,389 Municipal State Aid (CP) for road construction projects
Water (CP)624,200 Water revenue (DS) for debt service requirements
Pavement mgmt (CP)100,000 Equipment (CP) for future equipment acquisitions
Total other govntl.3,270,987$
(7)The total transfer to the nonmajor governmental funds was provided by the enterprise
liquor fund ($797,661) and the enterprise utility fund ($147,522) to finance various
equipment purchases.
(8)The total transfer to the enterprise utility fund was provided by the storm sewer capital
projects fund ($20,859) and the enterprise liquor fund ($2,482) for customer service
billing overhead costs.
(9)The HRA transferred $809,069 to the liquor fund as part of the refunding of the liquor
revenue bonds and purchase of the building and land.
Included within transfers on the Statement of Activities is the City’s contributed capital from
governmental activities to the enterprise utility fund capital assets of $4,464,787.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(74)
NOTE 14 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 15 OTHER POSTEMPLOYMENT BENEFITS (OPEB)
A. Plan Description
The City provides postemployment 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 postemployment 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:
Postemployment 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(75)
NOTE 15 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (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 106,653$
Interest on Net OPEB Obligation 16,592
Adjustment to Annual Required Contribution (25,335)
Annual OPEB Cost (Expense)97,910
Contributions Made (42,312)
Increase in Net OPEB Obligation 55,598
Net OPEB Obligation - Beginning of Year 474,055
Net OPEB Obligation - End of Year 529,653$
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:
Percentage
Annual of Annual Net
OPEB OPEB Cost OPEB
Cost Contributed Obligation
December 31, 2017 97,910$ 43.2%529,653$
December 31, 2016 88,359 20.6%474,055
December 31, 2015 89,904 23.2%403,941
Fiscal Year Ended
D. Funded Status and Funding Progress
As of January 1, 2017, the most recent actuarial valuation date, the plan was zero
percent funded. The actuarial accrued liability for benefits was $529,653, and the
actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability
(UAAL) of $529,653.
The covered payroll (annual payroll of active employees covered by the plan) was
$14,645,426, and the ratio of the UAAL to the covered payroll was 3.62%.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(76)
NOTE 15 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (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, 2017 actuarial valuation, the projected unit credit actuarial cost method
was used. The actuarial assumptions included: a 3.5% investment rate of return (net of
administrative expenses) based on the City’s own investments; a 2017 annual
healthcare cost trend rate of 6.5%, and reduced by decrements to an ultimate rate of
5.0% over 6 years. 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, 2017 for the various amortization layers ranged from 24 to 30
years.
NOTE 16 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(77)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE
A. Plan Description
The City of Lakeville participates in the following cost-sharing multiple-employer defined
benefit pension plans administered by the Public Employees Retirement Association of
Minnesota (PERA). PERA’s defined-benefit pension plans are established and
administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA’s
defined-benefit pension plans are tax qualified plans under Section 401(a) of the Internal
Revenue Code.
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 a local relief association that elected to merge with and transfer assets
and administration to PERA.
B. Benefits Provided
PERA provides retirement, disability, and death benefits. Benefit provisions are
established by state statute and can only be modified by the state legislature.
Benefit increases are provided to benefit recipients each January. Increases are related
to the funding ratio of the plan. Members in plans that are at least 90% funded for two
consecutive years are given 2.5% increases. Members in plans that have not exceeded
90% funded, or have fallen below 80%, are given 1% increases.
The benefit provisions stated in the following 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(78)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
B. Benefits Provided (Continued)
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 PERA’s Coordinated and Basic Plan
members. The retiring member receives the higher of a step-rate benefit accrual
formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the
annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of
the first 10 years of service and 2.7% for each remaining year. The annuity accrual
rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10
years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is
2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan
members for each year of service. For members hired prior to July 1, 1989, a full
annuity is available when age plus years of service equal 90 and normal retirement
age is 65. For members hired on or after July 1, 1989, normal retirement age is the
age for unreduced Social Security benefits capped at 66. Disability benefits are
available for vested members and are based upon years of service and average
high-five salary.
2. PEPFF Benefits
Benefits for the PEPFF members first hired after June 30, 2010, but before July 1,
2014, vest on a prorated basis from 50% after five years up to 100% after 10 years
of credited service. Benefits for PEPFF members first hired after June 30, 2014, vest
on a prorated basis from 50% after 10 years up to 100% after 20 years of credited
service. The annuity accrual rate is 3% of average salary for each year of service.
For PEPFF 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
Basic Plan members and Coordinated Plan members were required to contribute
9.1% and 6.50%, respectively, of their annual covered salary in calendar year 2017.
The City was required to contribute 11.78% of pay for Basic Plan members and
7.50% for Coordinated Plan members in calendar year 2017. The City contributions
to the GERF for the year ended December 31, 2017 were $791,612, which was
equal to the required contribution as set by state statute.
2. PEPFF Contributions
Plan members were required to contribute 10.8% of their annual covered salary in
calendar year 2017. The City was required to contribute 16.20% of pay for PEPFF
members in calendar year 2017. The City contributions to the PEPFF for the year
ended December 31, 2017 were $942,349. The City contributions were equal to the
required contributions as set by state statute.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(79)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
D. Pension Costs
1. GERF Pension Costs
At December 31, 2017, the City reported a liability of $10,118,535 for its
proportionate share of the GERF’s net pension liability. The city’s net pension liability
reflected a reduction due to the State of Minnesota’s contribution of $6 million to the
fund during PERA’s fiscal year ending June 30, 2017. The State of Minnesota’s
proportionate share of the net pension liability associated with the City totaled
$127,203. The net pension liability was measured as of June 30, 2017, 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 its respective contributions received by PERA during the
measurement period for employer payroll paid dates from July 1, 2016, through
June 30, 2017, relative to the total employer contributions received from all of
PERA’s participating employers. At June 30, 2017, the City’s combined proportion
was .1585%, an increase of .0041% from the June 30, 2016 measurement date.
For the year ended December 31, 2017, the City recognized pension expense of
$1,438,159 for its proportionate share of the GERF’s pension expense.
At December 31, 2017, the City reported its proportionate share of the GERF’s
deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Deferred Outflows Deferred Inflows
Description of Resources of Resources
Differences Between Expected and
Actual Economic Experience 333,476$ 650,950$
Changes in Actuarial Assumptions 1,679,896 1,014,384
Net Difference Between Projected and Actual
Earnings on Pension Plan Investments 65,352 -
Changes in Proportion and Differences Between City
Contributions and Proportionate Share of Contributions 183,588 144,448
City Contributions Subsequent to the Measurement Date 402,769 -
Total 2,665,081$ 1,809,782$
A total of $402,769 reported as deferred outflows of resources related to pensions
resulting from City contributions subsequent to the measurement date will be
recognized as a reduction of the net pension liability in the year ended December 31,
2018. Other amounts reported as deferred outflows and inflows of resources related
to pensions will be recognized in pension expense as follows:
Pension Expense
Year Ending December 31,Amount
2017 366,634$
2018 649,129
2019 (133,722)
2020 (429,511)
2021 -
Thereafter -
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(80)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
D. Pension Costs (Continued)
2. PEPFF Pension Costs
At December 31, 2017, the City reported a liability of $7,412,153 for its proportionate
share of the PEPFF’s net pension liability. The net pension liability was measured as
of June 30, 2017, and the total pension liability used to calculate the net pension
liability was determined by an actuarial valuation as of that date. The City’s
proportion of the net pension liability was based on the City’s contributions received
by PERA during the measurement period for employer payroll paid dates from July 1,
2016 through June 30, 2017, relative to the total employer contributions received
from all of PERA’s participating employers. At June 30, 2017, the City’s proportion
was .549%, a decrease of .013% from the June 30, 2016 measurement date.
For the year ended December 31, 2017, the City recognized pension expense of
$1,828,096 for its proportionate share of the PEPFF’s pension expense. The City
also recognized $49,410 for the year ended December 31, 2017, as pension
expense (and grant 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 $9 million to the PEPFF each year, starting in
fiscal year 2014.
At December 31, 2017, the City reported its proportionate share of the PEPFF’s
deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Deferred Outflows Deferred Inflows
Description of Resources of Resources
Differences Between Expected and
Actual Economic Experience 170,611$ 1,981,557$
Changes in Actuarial Assumptions 9,700,281 10,523,419
Net Difference Between Projected and Actual
Earnings on Pension Plan Investments 101,799 -
Changes in Proportion and Differences Between City
Contributions and Proportionate Share of Contributions 224,505 260,024
City Contributions Subsequent to the Measurement Date 498,031 -
Total 10,695,227$ 12,765,000$
A total of $498,031 reported as deferred outflows of resources related to pensions
resulting from City contributions subsequent to the measurement date will be
recognized as a reduction of the net pension liability in the year ended December 31,
2018. Other amounts reported as deferred outflows and inflows of resources related
to pensions will be recognized in pension expense as follows:
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(81)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
D. Pension Costs (Continued)
2.PEPFF Pension Costs
Pension Expense
Year Ending December 31,Amount
2017 122,364$
2018 122,364
2019 (149,349)
2020 (556,817)
2021 (2,106,366)
Thereafter -
For year ended December 31, 2017, the City recognized total pension expenses of
$3,266,255 for all of the plans in which it participates.
E. Actuarial Assumptions
The total pension liability in the June 30, 2017, actuarial valuation was determined using
the following actuarial assumptions:
Inflation 2.50% per year
Active Member Payroll Growth 3.25% per year
Investment Rate of Return 7.50%
Salary increases were based on a service-related table. Mortality rates for active
members, retirees, survivors, and disabilitants were based on RP-2014 tables for males
or females, as appropriate, with slight adjustments to fit PERA’s experience. Cost of
living benefit increases for retirees are assumed to be 1% per year for GERF through
2044 and PEPFF through 2064 and then 2.5% thereafter for both plans.
Actuarial assumptions used in the June 30, 2017, valuation were based on the results of
actuarial experience studies. The most recent four-year experience study in the General
Employees Plan was completed in 2015. The most recent five-year experience study for
the Police and Fire plan was completed in 2016.
The following changes in actuarial assumptions occurred in 2017 for the General
Employees Fund:
The Combined Service Annuity (CSA) loads were changed from 0.8% for
active members and 60% for vested and nonvested deferred members. The
revised CSA loads are now 0.0% for active member liability, 15.0% for vested
deferred member liability, and 3.0% for nonvested deferred member liability.
The assumed post-retirement benefit increase rate was changed from 1.0%
per year for all years to 1.0% per year through 2044 and 2.5% per year
thereafter.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(82)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
E. Actuarial Assumptions (Continued)
The following changes in actuarial assumptions occurred in 2017 for PEPFF:
Assumed salary increases were changed as recommended in the June 30,
2016 experience study. The net effect is proposed rates that average 0.34%
lower than the previous rates.
Assumed rates of retirement were changed, resulting in fewer retirements.
The Combined Service Annuity (CSA) load was 30% for vested and
nonvested deferred members. The CSA has been changed to 33% for vested
members and 2% for nonvested members.
The base mortality table for healthy annuitants was changed from the RP-
2000 fully generational table to the RP-2014 fully generational table (with a
base year of 2006), with male rates adjusted by a factor of 0.96. The mortality
improvement scale was changed from Scale AA to Scale MP-2016. The base
mortality table for disabled annuitants was changed from the RP-2000
disabled mortality table to the mortality tables assumed for healthy retirees.
Assumed termination rates were decreased to 3.0% for the first three years of
service. Rates beyond the select period of three years were adjusted,
resulting in more expected terminations overall.
Assumed percentage of married female members was decreased from 65%
to 60%.
Assumed age difference was changed from separate assumptions for male
members (wives assumed to be three years younger) and female members
(husbands assumed to be four years older) to the assumption that males are
two years older than females.
The assumed percentage of female members electing Joint and Survivor
annuities was increased.
The assumed post-retirement benefit increase rate was changed from 1.00%
for all years to 1.00% per year through 2064 and 2.50% thereafter.
The State Board of Investment, which manages the investments of PERA, prepares an
analysis of the reasonableness of the long-term expected rate of return on a regular as
is 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 geometric real rates of return for each major asset class are summarized
below:
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
Domestic Equity 39 % 5.10%
International Equity 19 5.30%
Bonds 19 0.75%
Alternative Assets 20 5.90%
Cash 2 0.00%
Totals 99 %
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(83)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
F. Discount Rate
The discount rate used to measure the total pension liability was 7.5%. The projection of
cash flows used to determine the discount rate assumed that employee and employer
contributions will be made at the rate specified in statute. Based on that assumption,
each of the pension plan’s fiduciary net position was projected to be available to make
all projected future benefit payments of current active and inactive employees.
Therefore, the long-term expected rate of return on pension plan investments was
applied to all periods of projected benefit payments to determine the total pension
liability.
G. Pension Liability Sensitivity
The following presents the City’s proportionate share of the net pension liability for all
plans it participates in, calculated using the discount rate disclosed in the preceding
paragraph, as well as what the City’s proportionate share of the net pension liability
would be if it were calculated using a discount rate 1 percentage point lower or 1
percentage point higher than the current discount rate:
GERF PENSION LIABILITY 1% Decrease in 1% Increase in
Discount Rate Current Discount Discount Rate
Description (6.50%) Rate (7.50%) (8.50%)
City’s Proportionate Share of the GERF
Net Pension Liability 15,694,600$ 10,118,535$ 5,553,513$
PEPFF PENSION LIABILITY 1% Decrease in 1% Increase in
Discount Rate Current Discount Discount Rate
Description (6.50%) Rate (7.50%) (8.50%)
City’s Proportionate Share of the PEPFF
Net Pension Liability 13,959,247$ 7,412,153$ 2,007,166$
H. Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in a
separately-issued PERA financial report that includes financial statements and required
supplementary information. That report may be obtained on the Internet at
www.mnpera.org; by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota,
55103-2088; or by calling 651-296-7460 or 1-800-652-9026.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(84)
NOTE 18 DEFINED CONTRIBUTION PLAN
Council members of the City are covered by the Public Employees Defined Contribution
Plan (PEDCP), a multiple-employer deferred compensation plan administered by the Public
Employees Retirement Association of Minnesota (PERA). The PEDCP is a tax qualified plan
under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of
employees are tax deferred until time of withdrawal.
Plan benefits depend solely on amounts contributed to the plan plus investment earnings,
less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies plan
provisions, including the employee and employer contribution rates for those qualified
personnel who elect to participate. An eligible elected official who decides to participate
contributes 5% of salary which is matched by the elected official’s employer.
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, PERA receives 2%
of employer contributions and twenty-five hundredths of 1% of the assets in each member’s
account annually.
Total contributions made by the City for the last three fiscal years were:
Required Rate
For the Year Ended, for Employees
December 31, Employee Employer Employee Employer and Employers
2017 2,261$ 2,261$ 5%5%5%
2016 1,759 1,759 5%5%5%
2015 1,760 1,760 5%5%5%
Contribution Amount Percentage of Covered Payroll
NOTE 19 DEFINED BENEFIT PENSION PLANS – 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 and 424, as amended. 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, 2016, the plan covered 77 active firefighters and 20
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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(85)
NOTE 19 DEFINED BENEFIT PENSION PLANS – FIRE RELIEF ASSOCIATION (CONTINUED)
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% of the
pension as described by the bylaws. This percentage increases 4% 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 nonforfeitable 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 $351,635 in fire state aid to the plan on behalf of the
Department for the year ended December 31, 2017, 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,
2017 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, 2017, the City reported a net pension liability (asset) of ($3,889,595)
for the plan. The net pension liability (asset) was measured as of December 31, 2017.
The total pension liability used to calculate the net pension liability (asset) in accordance
with GASB Statement No. 68 was determined by Van Iwaarden Associates, applying an
actuarial formula to specific census data certified by the Department as of December 31,
2017.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(86)
NOTE 19 DEFINED BENEFIT PENSION PLANS – FIRE RELIEF ASSOCIATION (CONTINUED)
D. Pension Costs (Continued)
The following table presents the changes in the net pension liability (asset) during the
year:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability (Asset)
(a) (b) (a-b)
Beginning balance - January 1, 2017 4,678,115$ 7,821,651$ (3,143,536)$
Changes for the year:
Service cost 231,712 - 231,712
Interest on pension liability (asset) 345,935 - 345,935
Difference between expected and actual economic
experience - - -
Changes of assumptions 38,230 - 38,230
Changes of benefit terms 154,012 - 154,012
Contributions (employer) - - -
Contributions (state) - 351,635 (351,635)
Net investment income - 1,175,892 (1,175,892)
Benefit payments (276,622) (276,622) -
Administrative costs - (11,579) 11,579
Total net changes 493,267 1,239,326 (746,059)
Ending balance - December 31, 2017 5,171,382$ 9,060,977$ (3,889,595)$
For the year ended December 31, 2017, the City recognized pension expense of
$121,411.
At December 31, 2017, the City reported deferred outflows of resources, including its
contributions subsequent to the measurement date, related to pension from the following
sources:
Deferred Outflows Deferred Inflows
Description of Resources of Resources
Changes in Actuarial Assumptions 283,521$ 126,434$
Difference between expected and actual experience - 157,777
Net Difference Between Projected and Actual
Earnings on Pension Plan Investments - 380,196
City Contributions Subsequent to the Measurement Date - -
Total 283,521$ 664,407$
Deferred outflows of resources totaling $-0- related to pensions resulting from the City’s
contributions to the plan subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the year ended December 31, 2018. Other
amounts reported as deferred outflows and inflows of resources related to the plan will
be recognized in pension expense as follows:
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(87)
NOTE 19 DEFINED BENEFIT PENSION PLANS – FIRE RELIEF ASSOCIATION (CONTINUED)
E. Actuarial Assumptions (Continued)
Pension Expense
Year Ending December 31,Amount
2017 (58,023)$
2018 (58,023)
2019 (142,392)
2020 (122,637)
2021 (220)
Thereafter 409
The total pension liability at December 31, 2017 was determined using the entry age
normal actuarial cost method and the following actuarial assumptions:
Inflation 2.75% per year
Active Member Payroll Growth 2.75% per year
Investment Rate of Return 7.00%
20-Year Municipal Bond Yield 3.31%
Retirement eligibility at 100 percent service pension at age 50 with 20 years of service, early
vested retirement at age 50 with 7 years of service vested at 52 percent and increased by 4
percent for each additional year of service up to 20 and eligibility for deferred service pension
payable at age 50 and based on the lump sum pension formula and service at date of termination
reduced for less than 20 years of service.
The target allocation and best estimates of arithmetic real rates of return for each major
asset class are summarized in the following table:
Allocation at Long-Term Long-Term
Measurement Expected Real Expected Nomina
Asset Class Date Rate of Return Rate of Return
Domestic Equity 62.73 % 5.39% 8.14%
International Equity 5.66 5.20% 7.95%
Fixed Income 5.03 1.98% 4.73%
Real Estate and Alternatives - 4.25% 7.00%
Cash and Equivalents 26.58 0.79% 3.54%
Totals 100.00 % 7.00%
F. Discount Rate
The discount rate used to measure the total pension liability was 7.0%. 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(88)
NOTE 19 DEFINED BENEFIT PENSION PLANS – FIRE RELIEF ASSOCIATION (CONTINUED)
G. Pension Liability 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% lower
or 1% higher than the current discount rate:
1% Decrease in 1% Increase in
Discount Rate Current Discount Discount Rate
Description (6.00%) Rate (7.00%) (8.00%)
Defined Benefit Plan (3,726,011)$ (3,889,595)$ (4,047,214)$
H.Pension Plan Fiduciary Net Position
The Association issues a publicly available financial report. This report may be obtained
by writing to the Lakeville Firefighters’ Relief Association, 20195 Holyoke Avenue,
Lakeville, Minnesota, 55044 or by calling (952) 985-4480.
NOTE 20 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 21 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2017
(89)
NOTE 22 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 nonreligious 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, 2017,
$2,000,000 remains outstanding on this note.
NOTE 23 TAX ABATEMENT
The City has two pay-as-you go tax increment financing districts with local businesses to
promote economic development within the City. The City agrees pursuant to the authority
granted in the TIF Act to abate real estate taxes based on the increased property value from
improvements on the owned property. The agreements call for 95% of the property tax
increments collected to be returned to the developers. The City will retain 5% for
administrative fees for the periods of time specified in each agreement. For the year ended
December 31, 2017, the City paid excess tax increment in the amount of $142,011. No other
commitments were made by the City as part of these agreements.
NOTE 24 COMMITMENT
On November 2, 2015 and subsequently amended on March 6, 2017 the City entered into
an agreement with Dakota County for the engineering, right-of-way acquisition and
construction of Kenwood Trail. As part of this agreement, Dakota County will be
administering the contract and be acting as the paying agent. Dakota County will be
advancing the City up to $3,000,000 of the City’s share of this construction project. The
City’s advance of up to $3,000,000 will be due back to Dakota County in three equal
installments once Dakota County has provided invoices to the City to support construction
costs of this amount. As of December 31, 2017, Dakota County had not invoiced or
provided the City a status update and therefore no liability is recorded.
NOTE 25 SUBSEQUENT EVENTS
Subsequent to year-end, the City entered into an agreement for the sale of real property to a
third party and subsequent lease and improvement agreement in the amount of $2,370,000.
In addition, subsequent to year-end the City entered into a three-year lease for various
communications equipment with total future lease payments of around $450,000.
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REQUIRED SUPPLEMENTARY INFORMATION
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CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2017
(90)
Over (Under)
Original Final Actual Final Budget
REVENUE
Property Taxes
General property taxes:
Current 15,892,620$ 15,892,620$ 15,969,830$ 77,210$
Delinquent 126,156 126,156 224,460 98,304
Fiscal Disparities 2,760,956 2,760,956 2,725,862 (35,094)
Mobile Home Tax 47,825 47,825 45,000 (2,825)
Gravel Tax 6,000 6,000 2,410 (3,590)
Total property taxes 18,833,557 18,833,557 18,967,562 134,005
Licenses and permits 2,202,952 2,341,308 3,306,525 965,217
Intergovernmental
Market value homestead credit - - 2,565 2,565
State-aid police 459,200 459,200 450,655 (8,545)
State-aid fire 340,899 340,899 347,635 6,736
State-aid PERA 21,303 21,303 89,750 68,447
State police and fire grants 68,310 68,310 93,517 25,207
State other grants 35,200 52,435 52,435 -
Federal other grants 96,773 96,773 106,617 9,844
Total intergovernmental 1,021,685 1,038,920 1,143,174 104,254
Charges for services
General government 237,718 255,218 318,439 63,221
Public safety 507,018 507,018 541,930 34,912
Public works 1,188,412 1,188,412 1,065,099 (123,313)
Parks and recreation 711,600 757,857 785,160 27,303
Total charges for services 2,644,748 2,708,505 2,710,628 2,123
Fines 466,000 466,000 392,514 (73,486)
Investment Income
Interest Income 90,071 90,071 180,064 89,993
Increase (Decrease in Fair Market Value) - - (63,378) (63,378)
90,071 90,071 116,686 26,615
Donations 8,750 30,291 52,209 21,918
Miscellaneous 51,060 51,060 46,741 (4,319)
Total revenues 25,318,823 25,559,712 26,736,039 1,176,327
Budgeted Amounts
(continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2017
(91)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
EXPENDITURES
General government
Mayor and council
Personnel services 49,151$ 49,151$ 49,305$ 154$
Commodities 50 50 - (50)
Other charges and services 51,889 51,889 48,331 (3,558)
Total mayor and council 101,090 101,090 97,636 (3,454)
Committees/commissions
Personnel services 61,412 66,888 69,868 2,980
Commodities 1,530 1,530 2,550 1,020
Other charges and services 12,718 24,742 20,738 (4,004)
Total committees/commissions 75,660 93,160 93,156 (4)
City administration
Personnel services 404,834 404,834 391,691 (13,143)
Commodities 800 800 811 11
Other charges and services 17,513 17,513 15,443 (2,070)
Total city administration 423,147 423,147 407,945 (15,202)
City clerk
Personnel services 110,468 110,468 110,217 (251)
Commodities 200 200 215 15
Other charges and services 29,106 29,106 26,108 (2,998)
Total city clerk 139,774 139,774 136,540 (3,234)
Legal counsel
Other charges and services 57,000 80,000 77,936 (2,064)
Planning
Personnel services 505,012 505,012 477,105 (27,907)
Commodities 2,731 2,731 1,079 (1,652)
Other charges and services 56,519 56,519 34,833 (21,686)
Total planning 564,262 564,262 513,017 (51,245)
Community and economic development
Personnel services 284,506 284,506 273,881 (10,625)
Commodities 250 250 242 (8)
Other charges and services 73,516 73,516 36,362 (37,154)
Total community and economic development 358,272 358,272 310,485 (47,787)
Inspections
Personnel services 830,402 871,402 873,780 2,378
Commodities 12,627 12,627 13,708 1,081
Other charges and services 218,555 290,911 252,948 (37,963)
Capital Outlay - 25,000 26,536 1,536
Total inspections 1,061,584 1,199,940 1,166,972 (32,968)
(continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2017
(92)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
EXPENDITURES (CONTINUED)
General government (continued)
General government facilities
Personnel services 332,817$ 332,817$ 325,674$ (7,143)$
Commodities 24,907 24,907 22,268 (2,639)
Other charges and services 171,887 171,887 164,912 (6,975)
Total general government facilities 529,611 529,611 512,854 (16,757)
Finance
Personnel services 670,563 670,563 659,046 (11,517)
Commodities 4,229 4,229 2,426 (1,803)
Other charges and services 84,823 84,823 77,000 (7,823)
Total finance 759,615 759,615 738,472 (21,143)
Information systems
Personnel services 391,170 391,170 371,062 (20,108)
Commodities 6,276 6,276 4,617 (1,659)
Other charges and services 223,296 223,296 165,531 (57,765)
Total information systems 620,742 620,742 541,210 (79,532)
Human resources
Personnel services 389,063 389,063 364,391 (24,672)
Commodities 1,340 1,340 1,853 513
Other charges and services 130,223 130,223 94,258 (35,965)
Total human resources 520,626 520,626 460,502 (60,124)
Insurance coverage
Other charges and services 182,180 285,000 285,000 -
Total general government 5,393,563 5,675,239 5,341,725 (333,514)
Public safety
Police
Personnel services 8,220,190 8,220,190 8,198,697 (21,493)
Commodities 411,866 411,866 379,387 (32,479)
Other charges and services 1,861,188 1,861,188 1,820,055 (41,133)
Total police 10,493,244 10,493,244 10,398,139 (95,105)
Fire Protection
Personnel services 1,348,421 1,348,421 1,378,273 29,852
Commodities 155,422 176,963 156,257 (20,706)
Other charges and services 284,927 284,927 282,990 (1,937)
Total fire protection 1,788,770 1,810,311 1,817,520 7,209
Total public safety 12,282,014 12,303,555 12,215,659 (87,896)
(continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2017
(93)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
EXPENDITURES (CONTINUED)
Public Works
Engineering
Personnel services 704,482$ 704,482$ 679,094$ (25,388)$
Commodities 8,766 8,766 6,911 (1,855)
Other charges and services 292,149 292,149 116,189 (175,960)
Total engineering 1,005,397 1,005,397 802,194 (203,203)
Operations and maintenance
Personnel services 614,951 614,951 423,947 (191,004)
Commodities 7,723 7,723 7,293 (430)
Other charges and services 14,318 14,318 12,354 (1,964)
Capital Outlay 27,485 27,485 29,886 2,401
Total operations and maintenance 664,477 664,477 473,480 (190,997)
Street maintenance
Personnel services 2,011,988 2,011,988 1,876,234 (135,754)
Commodities 912,051 912,051 819,315 (92,736)
Other charges and services 352,444 352,444 299,419 (53,025)
Total street maintenance 3,276,483 3,276,483 2,994,968 (281,515)
Total public works 4,946,357 4,946,357 4,270,642 (675,715)
Parks and recreation
Park maintenance
Personnel services 1,785,414 1,785,414 1,742,703 (42,711)
Commodities 277,283 277,283 269,936 (7,347)
Other charges and services 475,478 475,478 455,845 (19,633)
Capital Outlay 3,750 3,750 2,725 (1,025)
Total park maintenance 2,541,925 2,541,925 2,471,209 (70,716)
Recreation
Personnel services 393,149 375,129 369,112 (6,017)
Commodities 35,483 35,483 31,498 (3,985)
Other charges and services 244,349 244,349 252,833 8,484
Total recreation 672,981 654,961 653,443 (1,518)
Heritage center
Personnel services 34,274 60,925 57,499 (3,426)
Commodities 12,663 12,663 8,589 (4,074)
Other charges and services 48,885 50,885 48,895 (1,990)
Total heritage center 95,822 124,473 114,983 (9,490)
Arts center
Personnel services 269,762 269,762 271,929 2,167
Commodities 33,750 34,030 31,073 (2,957)
Other charges and services 189,925 242,506 227,734 (14,772)
Capital Outlay 8,900 8,900 9,143 243
Total arts center 502,337 555,198 539,879 (15,319)
Total parks and recreation 3,813,065 3,876,557 3,779,514 (97,043)
Total expenditures 26,434,999 26,801,708 25,607,540 (1,194,168)
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES (1,116,176) (1,241,996) 1,128,499 2,370,495
(continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2017
(94)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
OTHER FINANCE SOURCES (USES)
Transfers In From:
Special Revenue - Communications Fund 75,429$ 75,429$ 75,429$ -$
Enterprise - Liquor Fund 198,819 198,819 198,819 -
Enterprise - Utility Fund 455,349 455,349 455,349 -
Internal Service - Municipal Reserves Fund 53,057 53,057 53,057 -
Transfers Out To:
Special Revenue - Communications Fund - (181,957) (181,957) -
Capital Projects - Building Fund - (200,000) (200,000) -
Capital Projects - Improvement Construction - (1,179) (1,179) -
Capital Projects - Equipment Fund (1,145,000) (1,475,594) (1,475,594) -
Total Other Finance Sources (Uses) (362,346) (1,076,076) (1,076,076) -
NET CHANGE IN FUND BALANCES (1,478,522)$ (2,318,072)$ 52,423 2,370,495$
FUND BALANCES
Beginning of Year 15,076,500
Change in Supplies - Inventory 140,519
End of Year 15,269,442$
CITY OF LAKEVILLE
GENERAL FUND
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2017
(95)
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.
CITY OF LAKEVILLE PERA – GENERAL EMPLOYEES RETIREMENT FUND DECEMBER 31, 2017 (96) GERF Schedule of the City’s Proportionate Share of the Net Pension LiabilityLast Three Fiscal Years*6/30/2017 6/30/2016 6/30/2015City’s Proportion of the Net Pension Liability0.1585% 0.1544% 0.1540%City’s Proportionate Share of the Net Pension Liability 10,118,535$ 12,536,514$ 7,981,079$ State's Proportionate Share of the Net Pension Liability Associated with the City 127,203 - - Total10,245,738$ 12,536,514$ 7,981,079$ City’s Covered Payroll10,213,446$ 9,572,229$ 9,046,858$ City’s Proportionate Share of the Net Pension Liability as a Percentage of Its Covered Payroll 99.07% 130.97% 88.22%Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 75.90% 68.90% 78.20%* The Amounts Presented for Each Fiscal Year were Determined as of 6/30.Measurement Date GERF Schedule of City ContributionsLast Three Fiscal Years*2017 2016 2015Statutorily Required Contribution791,612$ 741,919$ 705,189$ Contributions in Relation to the Statutorily Required Contribution(791,612) (741,919) (705,189) Contribution Deficiency (Excess)-$ -$ -$ City’s Covered Payroll10,554,827$ 9,892,253$ 9,402,520$ Contributions as a Percentage of Covered Payroll 7.50% 7.50% 7.50%* The Amounts Presented for Each Fiscal Year were Determined as of 12/31.Fiscal Year Ended December 31, Note: The City implemented GASB Statement No. 68 in fiscal 2015 (using a June 30, 2015 measurement date). The schedule is provided prospectively beginning with the City’s fiscal year ended December 31, 2015 and is intended to show a ten-year trend. Additional years will be reported as they become available.
CITY OF LAKEVILLE PERA – PUBLIC EMPLOYEES POLICE AND FIRE FUND DECEMBER 31, 2017 (97) PEPFF Schedule of the City’s Proportionate Share of the Net Pension LiabilityLast Three Fiscal Years*6/30/2017 6/30/2016 6/30/2015City’s Proportion of the Net Pension Liability 0.5490% 0.5620% 0.5320%City’s Proportionate Share of the Net Pension Liability 7,412,153$ 22,554,038$ 6,044,765$ City’s Covered Payroll5,635,205$ 5,423,663$ 4,870,941$ City’s Proportionate Share of the Net Pension Liability as a Percentage of Its Covered Payroll 131.53% 415.85% 124.10%Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 85.40% 63.90% 86.60%* The Amounts Presented for Each Fiscal Year were Determined as of 6/30.Measurement Date PEPFF Schedule of City ContributionsLast Three Fiscal Years*2017 2016 2015Statutorily Required Contribution942,349$ 904,571$ 845,144$ Contributions in Relation to the Statutorily Required Contribution(942,349) (904,571) (845,144) Contribution Deficiency (Excess)-$ -$ -$ City’s Covered Payroll5,816,969$ 5,583,772$ 5,216,938$ Contributions as a Percentage of Covered Payroll 16.20% 16.20% 16.20%* The Amounts Presented for Each Fiscal Year were Determined as of 12/31.Fiscal Year Ended December 31, Note: The City implemented GASB Statement No. 68 in fiscal 2015 (using a June 30, 2015 measurement date). The schedule is provided prospectively beginning with the City’s fiscal year ended December 31, 2015 and is intended to show a ten-year trend. Additional years will be reported as they become available.
CITY OF LAKEVILLE
NET PENSION LIABILITY (ASSET) AND RELATED RATIOS
LAKEVILLE FIRE RELIEF ASSOCIATION
DECEMBER 31, 2017
(98)
2017 2016 2015
Total Pension Liability (TPL)
Service Cost 231,712$ 270,846$ 223,785$
Interest 345,935 301,640 269,493
Differences Between Expected and Actual Experience - (201,242) -
Changes of Assumptions 38,230 (161,264) 353,037
Changes of Benefit Terms 154,012 186,369 -
Benefit Payments, Including Member Contribution Refunds (276,622) (547,241) (210,816)
Net Change in Total Pension Liability 493,267 (150,892) 635,499
Total Pension Liability - Beginning 4,678,115 4,829,007 4,193,508
Total Pension Liability - Ending (a)5,171,382 4,678,115 4,829,007
Plan Fiduciary Net Position
Municipal Contributions - - -
State Contributions 351,635 348,276 338,889
Net Investment Income 1,175,892 551,474 39,474
Benefit Payments, including refunds of member contributions (276,622) (547,241) (210,816)
Administrative Expenses (11,579) (9,817) (11,292)
Other - - (40)
Net Change in Fiduciary Net Position 1,239,326 342,692 156,215
Fiduciary Net Position - Beginning 7,821,651 7,478,959 7,322,744
Fiduciary Net Position - Ending (b)9,060,977 7,821,651 7,478,959
Ending Net Pension Liability (Asset) (a-b)(3,889,595)$ (3,143,536)$ (2,649,952)$
Plan Fiduciary Net Position as a Percentage of
Total Pension Liability (b/a)175.21%167.20%154.88%
Covered Payroll N/A N/A N/A
Net Pension Liability (Asset) as a Percentage of Covered Payroll N/A N/A N/A
*Ten Years of Data Will Eventually Be Presented When Available
Schedule of Employer Contributions
2017 2016 2015
Statutorily Required Contribution -$ -$ -$
Contributions in Relation to the Statutorily Required Contribution - - -
Contribution Deficiency (Excess)-$ -$ -$
*Ten Years of Data Will Eventually Be Presented When Available
Note: The City implemented GASB Statement No. 68 in fiscal 2015 (using a June 30, 2015
measurement date). The schedule is provided prospectively beginning with the City’s fiscal year ended
December 31, 2015 and is intended to show a ten-year trend. Additional years will be reported as they
become available.
CITY OF LAKEVILLE OTHER POSTEMPLOYMENT BENEFIT PLAN – SCHEDULE OF FUNDING PROGRESS DECEMBER 31, 2017 (99) ActuarialActuarial UnfundedUnfunded LiabilityAccruedValue of ActuarialFunded Covered as a PercentageLiability Plan Assets Accrued Liability RatioPayrollof Payroll529,653$ -$529,653$ -14,645,426$ 3.62%728,720 -728,720 -12,363,1685.89%588,458 -588,458 -11,683,1965.04%January 1, 2011Valuation DateActuarialJanuary 1, 2017January 1, 2014
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
(100)
NONMAJOR GOVERNMENTAL FUNDS
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)
(101)
NONMAJOR GOVERNMENTAL FUNDS
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.
Water Fund
This fund accounts for revenues derived primarily from connection charges collected at the time
building permits are issued and antenna site leases with wireless communications companies.
Funds are appropriated towards 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.
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.
Tax Abatement Fund
This fund accounts for economic development assistance provided to local businesses. The
expenditures are for current and future economic development incentives.
Equipment Fund
This fund accounts for the purchase of equipment for general government, public safety, public
works, and park maintenance.
CITY OF LAKEVILLE
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
DECEMBER 31, 2017
(102)
Special Debt Capital
Revenue Service Projects Totals
ASSETS
Cash and investments 532,853$ 4,054,414$ 34,482,075$ 39,069,342$
Investments held by trustee - 608,581 - 608,581
Receivables:
Interest receivable 1,310 22,042 149,521 172,873
Special assessments
Unremitted - - 59 59
Delinquent - - 355 355
Deferred - - 120,379 120,379
Other - - 143,666 143,666
Accounts receivable 181,452 47,500 554,987 783,939
Leases receivable - 2,255,000 - 2,255,000
Total Assets 715,615$ 6,987,537$ 35,451,042$ 43,154,194$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCE
LIABILITIES
Salaries payable 14,081$ -$ -$ 14,081$
Accounts payable 32,371 - 851,777 884,148
Advances from other funds - - 402,686 402,686
Contracts payable - - 260,894 260,894
Interest payable - 2,200 - 2,200
Deposits payable - - 98,190 98,190
Unearned revenue - -4,526 4,526
Total Liabilities 46,452 2,200 1,618,073 1,666,725
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - special assessments - - 264,400 264,400
Unavailable revenue - other - 2,255,000 240,470 2,495,470
Total Deferred Inflows of Resources - 2,255,000 504,870 2,759,870
FUND BALANCE
Restricted 102,606 4,730,337 9,059,062 13,892,005
Committed 566,557 - 24,911,958 25,478,515
Unassigned - - (642,921) (642,921)
Total Fund Balance 669,163 4,730,337 33,328,099 38,727,599
Total Liabilities, Deferred Inflows of
Resources, and Fund Balance 715,615$ 6,987,537$ 35,451,042$ 43,154,194$
CITY OF LAKEVILLE
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2017
(103)
Special Debt Capital
Revenue Service Projects Totals
REVENUE
Property taxes
Current and delinquent -$ 293,550$ 1,851,417$ 2,144,967$
Licenses and permits 681,664 - - 681,664
Special assessments - - 75,210 75,210
Tax increment - 411,366 160,986 572,352
Intergovernmental revenue
State-aid PERA 516 1,187,082 - 1,187,598
Municipal state-aid - - 120,000 120,000
County and local grants - - 924,141 924,141
Charges for services 92,101 375,220 6,838,068 7,305,389
Interest income 4,562 52,106 496,922 553,590
Change in fair value of investments (1,740) (19,308) (184,850) (205,898)
Donations - 95,000 91,174 186,174
Miscellaneous revenue - - 401,680 401,680
Total Revenue 777,103 2,395,016 10,774,748 13,946,867
EXPENDITURES
Current:
General government 538,240 - 570,831 1,109,071
Public safety - - 560,148 560,148
Public works - - 5,545,565 5,545,565
Parks and recreation - - 1,454,857 1,454,857
Capital Outlay:
General government 112,828 2,255,000 - 2,367,828
Debt Service:
Principal retirement - 1,975,000 - 1,975,000
Interest on debt - 808,261 - 808,261
Fiscal charges 83,557 - 83,557
Total Expenditures 651,068 5,121,818 8,131,401 13,904,287
EXCESS (DEFICIENCY) OF REVENUE
OVER (UNDER) EXPENDITURES 126,035 (2,726,802) 2,643,347 42,580
OTHER FINANCE SOURCES (USES)
Issuance of bonds and other debt - 2,255,000 - 2,255,000
Premium on debt Issued - 96,558 - 96,558
Proceeds from the sale of capital assets - - 516,380 516,380
Transfers in from other funds 238,912 1,871,371 2,105,887 4,216,170
Transfers out to other funds (85,213) (955,776) (2,030,468) (3,071,457)
Total Other Finance Sources (Uses)153,699 3,267,153 591,799 4,012,651
NET CHANGE IN FUND BALANCES 279,734 540,351 3,235,146 4,055,231
FUND BALANCES
Beginning of Year 389,429 4,189,986 30,092,953 34,672,368
End of Year 669,163$ 4,730,337$ 33,328,099$ 38,727,599$
CITY OF LAKEVILLE
SPECIAL REVENUE FUNDS (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2017
(104)
Downtown
Economic Special
Communications Development Service District Totals
ASSETS
Cash and investments 467,103$ 31,044$ 34,706$ 532,853$
Interest receivable 1,072 238 - 1,310
Accounts receivable 181,452 - - 181,452
Total Assets 649,627$ 31,282$ 34,706$ 715,615$
LIABILITIES AND
FUND BALANCE
LIABILITIES
Salaries payable 14,081$ -$ -$ 14,081$
Accounts payable 32,371 - - 32,371
Total Liabilities 46,452 - - 46,452
FUND BALANCE
Restricted 67,900 - 34,706 102,606
Committed 535,275 31,282 - 566,557
Total Fund Balance 603,175 31,282 34,706 669,163
Total Liabilities and Fund Balance 649,627$ 31,282$ 34,706$ 715,615$
CITY OF LAKEVILLE
SPECIAL REVENUE FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2017
(105)
Downtown
Economic Special
Communications Development Service District Totals
REVENUE
Licenses and permits 681,664$ -$ -$ 681,664$
Intergovernmental
State-aid PERA 516 - - 516
Charges for services 62,101 2,500 27,500 92,101
Interest income 4,046 516 - 4,562
Change in fair value of investments (1,543) (197) - (1,740)
Total revenue 746,784 2,819 27,500 777,103
EXPENDITURES
Current:
General government 512,960 7,766 17,514 538,240
Capital outlay
General government 112,828 - - 112,828
Total expenditures 625,788 7,766 17,514 651,068
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES 120,996 (4,947) 9,986 126,035
OTHER FINANCE SOURCES (USES)
Transfers In 238,912 - - 238,912
Transfers Out (75,429) (9,784) - (85,213)
Total other finance sources (uses) 163,483 (9,784) - 153,699
NET CHANGE IN FUND BALANCES 284,479 (14,731) 9,986 279,734
FUND BALANCES
Beginning of Year 318,696 46,013 24,720 389,429
End of Year 603,175$ 31,282$ 34,706$ 669,163$
CITY OF LAKEVILLE
DEBT SERVICE FUNDS (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2017
(106)
Tax State-aid Water Arena HRA
Increment Revenue Revenue Revenue Revenue Total
ASSETS
Cash and Investments 2,755,198$ 736,067$ -$ 87,374$ 475,775$ 4,054,414$
Investments held by trustee - - 608,581 608,581
Interest receivable 16,529 4,519 - 608 386 22,042
Accounts receivable - - - 47,500 - 47,500
Leases Receivable - - - - 2,255,000 2,255,000
Total Assets 2,771,727$ 740,586$ -$ 135,482$ 3,339,742$ 6,987,537$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCE
LIABILITIES
Interest payable 1,550$ 650$ -$ -$ -$ 2,200$
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - leases - - - - 2,255,000 2,255,000
FUND BALANCE
Restricted for debt service 2,770,177 739,936 - 135,482 1,084,742 4,730,337
Total Liabilities, Deferred Inflows of
Resources, and Fund Balance 2,771,727$ 740,586$ -$ 135,482$ 3,339,742$ 6,987,537$
Bonds
CITY OF LAKEVILLE
DEBT SERVICE FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2017
(107)
Tax State-aid Water Arena HRA
Increment Revenue Revenue Revenue Revenue Total
REVENUE
Property taxes
Current and delinquent -$ -$-$ -$ 293,550$ 293,550$
Tax increment 411,366 -- --411,366
Intergovernmental - State-aid -1,187,082 - - - 1,187,082
Charges for services - - - 88,626 286,594 375,220
Interest Income 39,575 7,414 (188)1,800 3,505 52,106
Change in Fair Value of Investments (15,095) (2,828) -(687)(698) (19,308)
Donations - - - 95,000 -95,000
Total revenues 435,846 1,191,668 (188)184,739 582,951 2,395,016
EXPENDITURES
Capital Outlay:
General Government - - - - 2,255,000 2,255,000
Debt Service:
Principal bond maturities 220,000 940,000 340,000 155,000 320,000 1,975,000
Interest on debt 55,160 241,084 284,200 26,305 201,512 808,261
Fiscal charges 4,331 2,040 546 96 76,544 83,557
Total expenditures 279,491 1,183,124 624,746 181,401 2,853,056 5,121,818
DEFICIENCY OF REVENUE
UNDER EXPENDITURES 156,355 8,544 (624,934) 3,338 (2,270,105) (2,726,802)
OTHER FINANCE SOURCES
Issuance of refunding bonds - - - - 2,255,000 2,255,000
Premium on bonds issued - - - - 96,558 96,558
Transfers from (to):
Debt Service - General Obligation Bonds -39,283 - - - 39,283
Capital Projects - Improvement Construction (146,707) - - - (146,707)
Capital Projects - Municipal State-Aid -420,679 - - - 420,679
Capital Projects - Water Fund --624,200 - - 624,200
Enterprise - Liquor Fund --- - 787,209 787,209
Enterprise - Liquor Fund --- - (809,069) (809,069)
Total other finance sources (uses)(146,707) 459,962 624,200 -2,329,698 3,267,153
NET CHANGE IN FUND BALANCES 9,648 468,506 (734)3,338 59,593 540,351
FUND BALANCES
Beginning of Year 2,760,529 271,430 734 132,144 1,025,149 4,189,986
End of Year 2,770,177$ 739,936$ -$ 135,482$ 1,084,742$ 4,730,337$
Bonds
CITY OF LAKEVILLE
CAPITAL PROJECTS FUND (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2017
(108)
Municipal Pavement Storm
State-aid Management Sewer Water
ASSETS
Cash and investments 3,387,906$ 1,059,843$ 7,139,975$ 8,258,756$
Interest receivable 20,286 6,163 31,308 24,820
Accounts receivable 310,733 - 240,470 -
Special assessments
Unremitted - - - -
Delinquent - 355 - -
Deferred - 3,350 1,153 65,806
Other - - 62,092 22,009
Total Assets 3,718,925$ 1,069,711$ 7,474,998$ 8,371,391$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCE
LIABILITIES
Accounts payable 568,849$ 67,708$ 2,412$ 103,279$
Advances from other funds - - - -
Contracts payable - 58,442 - 202,452
Deposits payable - - - -
Unearned revenue - - - -
Total liabilities 568,849 126,150 2,412 305,731
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - special assessments - 3,705 63,245 87,815
Unavailable revenue - other - - 240,470 -
Total deferred inflows of resources - 3,705 303,715 87,815
FUND BALANCE
Restricted 3,150,076 - - 625,785
Committed - 939,856 7,409,341 7,352,060
Unassigned - - (240,470) -
Total fund balance 3,150,076 939,856 7,168,871 7,977,845
Total liabilities, deferred inflows of
resources, and fund balance 3,718,925$ 1,069,711$ 7,474,998$ 8,371,391$
(109)
Sanitary Park Trail Park Tax Tax
Sewer Dedication Improvement Improvement Increment Abatement Equipment Totals
6,977,249$ 5,265,023$ 346,493$ 8,284$ 18,817$ -$ 2,019,729$ 34,482,075$
29,052 20,676 3,145 628 273 235 12,935 149,521
- 3,000 - - - - 784 554,987
59 - - - - - - 59
- - - - - - - 355
50,022 48 - - - - - 120,379
59,565 - - - - - - 143,666
7,115,947$ 5,288,747$ 349,638$ 8,912$ 19,090$ 235$ 2,033,448$ 35,451,042$
23,250$ 19,866$ -$ 70$ 196$ -$ 66,147$ 851,777$
- - -- -402,686 - 402,686
- - -- --- 260,894
98,190 - - - - - - 98,190
- 4,526 - - - - - 4,526
121,440 24,392 -70 196 402,686 66,147 1,149,240
109,587 48 - - - - - 264,400
- - - - - - - 240,470
109,587 48 - - - - - 504,870
- 5,264,307 - - 18,894 - - 9,059,062
6,884,920 -349,638 8,842 - - 1,967,301 24,911,958
- - - - -(402,451)- (642,921)
6,884,920 5,264,307 349,638 8,842 18,894 (402,451) 1,967,301 33,328,099
7,115,947$ 5,288,747$ 349,638$ 8,912$ 19,090$ 235$ 2,033,448$ 35,451,042$
CITY OF LAKEVILLE
CAPITAL PROJECTS FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2017
(110)
Municipal Pavement Storm
State-aid Management Sewer Water
REVENUE
Property taxes
Current -$ 1,191,550$ -$ -$
Tax increment - - - -
Intergovernmental
Municipal state-aid - 120,000 - -
County and local grants 919,905 - 4,236 -
Charges for services 262,535 - 1,255,985 3,143,470
Special assessments - 5,025 217 25,709
Interest income 61,005 16,000 106,044 101,509
Change in fair value of investments (22,159) (6,103) (40,448) (35,159)
Donations - - - -
Miscellaneous - - - 358,937
Total revenues 1,221,286 1,326,472 1,326,034 3,594,466
EXPENDITURES - CAPITAL OUTLAY
General government - - - -
Public safety - - - -
Public works 2,295,266 1,193,191 356,058 836,001
Parks and recreation - - - -
Total expenditures 2,295,266 1,193,191 356,058 836,001
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES (1,073,980) 133,281 969,976 2,758,465
OTHER FINANCE SOURCES (USES)
Proceeds from the Sale of Capital Assets 240,635 - - -
Transfers from (to):
General Fund 24,495 - - -
Special Revenue - Economic Development Fund - - - -
Debt Service - State Aid Street Bonds (420,679) - - -
Debt Service - Water Revenue Bonds - - - (624,200)
Capital Projects - State Aid Construction - - (336,101) (83,389)
Capital Projects - Pavement Management Fund - - - -
Capital Projects - Storm Sewer 336,101 - - -
Capital Projects - Water Trunk Fund 83,389 - -
Capital Projects - Improvement Construction (35,505) (244,142) (7,447) -
Capital Projects - Equipment Fund - (100,000) - -
Enterprise - Liquor Fund 1,289 - - -
Enterprise - Utility Fund 6,446 - (20,859) -
Total other finance sources (uses) 236,171 (344,142) (364,407) (707,589)
NET CHANGE IN FUND BALANCE (837,809) (210,861) 605,569 2,050,876
FUND BALANCES
Beginning of Year 3,987,885 1,150,717 6,563,302 5,926,969
End of Year 3,150,076$ 939,856$ 7,168,871$ 7,977,845$
(111)
Sanitary Park Trail Park Tax Tax
Sewer Dedication Improvement Improvement Increment Abatement Equipment Totals
-$ -$129,304$ 175,000$ -$ -$355,563$ 1,851,417$
-- - - 160,986 --160,986
- - - - - - - 120,000
- - - - - - - 924,141
1,017,356 1,154,433 - - 4,289 - - 6,838,068
44,204 55 - - - - -75,210
97,020 75,858 7,857 670 591 - 30,368 496,922
(37,006) (28,934) (2,997) (256)(205) - (11,583)(184,850)
-87,387 - - - - 3,787 91,174
-42,743 - - - - -401,680
1,121,574 1,331,542 134,164 175,414 165,661 - 378,135 10,774,748
- - - - 167,441 13,124 390,266 570,831
- - - - - - 560,148 560,148
36,327 - - - - - 828,722 5,545,565
-649,355 330,243 232,817 - - 242,442 1,454,857
36,327 649,355 330,243 232,817 167,441 13,124 2,021,578 8,131,401
1,085,247 682,187 (196,079) (57,403) (1,780) (13,124) (1,643,443) 2,643,347
- - - - - - 275,745 516,380
- - - - 6,099 - 1,445,000 1,475,594
- - - - 9,784 --9,784
- - - - - - - (420,679)
- - - - - - - (624,200)
- - - - - - - (419,490)
- - - - - - 100,000 100,000
- - - - - - - 336,101
- - - - - - - 83,389
- - - - (158,146) - - (445,240)
- - - - - - - (100,000)
- - - - - - - 1,289
- - - - - - 93,284 78,871
- - - - (142,263) - 1,914,029 591,799
1,085,247 682,187 (196,079) (57,403) (144,043) (13,124) 270,586 3,235,146
5,799,673 4,582,120 545,717 66,245 162,937 (389,327) 1,696,715 30,092,953
6,884,920$ 5,264,307$ 349,638$ 8,842$ 18,894$ (402,451)$ 1,967,301$ 33,328,099$
CITY OF LAKEVILLE
COMMUNICATIONS – SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2017
(112)
Over (Under)
Original Final Actual Final Budget
Revenues
Licenses and permits 676,131$ 676,131$ 681,664$ 5,533$
Intergovernmental
State-aid PERA 516 516 516 -
Charges for services 61,296 61,296 62,101 805
Interest income 3,497 3,497 4,046 549
Change in fair value of investments - - (1,543) (1,543)
Total revenues 741,440 741,440 746,784 5,344
Expenditures - General Government
Current:
Personnel 358,759 358,759 368,636 9,877
Commodities 6,260 6,260 8,749 2,489
Other charges and services 156,544 441,534 135,575 (305,959)
Capital outlay 107,579 107,579 112,828 5,249
Total expenditures - general government 629,142 914,132 625,788 (288,344)
Excess (deficiency) of revenue over
(under) expenditures 112,298 (172,692) 120,996 293,688
Other financing sources
Transfers in from:
General Fund - 181,957 181,957 -
Liquor Funds - 9,163 9,163 -
Utility Funds - 47,752 47,792 40
Transfers out to:
General Fund (75,429) (75,429) (75,429) -
Capital Projects Funds (40,000) (40,000) - 40,000
Total other finance sources (uses)(115,429) 123,443 163,483 40,040
Net change in fund balance (3,131)$ (49,249)$ 284,479 333,728$
Fund balance
Beginning of year 318,696
End of year 603,175$
Budgeted Amounts
CITY OF LAKEVILLE
ECONOMIC DEVELOPMENT – SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2017
(113)
Over (Under)
Original Final Actual Final Budget
Revenues
Charges for services 2,500$ 2,500$ 2,500$ -$
Interest income 205 205 516 311
Change in fair value of investments - - (197) (197)
Total revenues 2,705 2,705 2,819 114
Expenditures - General Government
Current:
Other charges and services 12,500 12,500 7,766 (4,734)
Other financing uses
Transfers to:
Capital Projects - Construction Fund - (9,784) (9,784) -
Net change in fund balance (9,795)$ (9,795)$ (14,731) (4,936)$
Fund balance
Beginning of year 46,013
End of year 31,282$
Budgeted Amounts
CITY OF LAKEVILLE
DOWNTOWN SPECIAL SERVICE DISTRICT – SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2017
(114)
Over (Under)
Original Final Actual Final Budget
Revenues
Charges for services 13,750$ 13,750$ 27,500$ 13,750$
Expenditures - General Government
Current:
Personnel - - 9,697 9,697
Commodities - - 42 42
Other charges and services 32,680 32,680 7,775 (24,905)
Total expenditures - general government 32,680 32,680 17,514 (15,166)
Net change in fund balance (18,930)$ (18,930)$ 9,986 28,916$
Fund balance
Beginning of year 24,720
End of year 34,706$
Budgeted Amounts
(115)
AGENCY FUNDS
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
AGENCY FUND
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
YEAR ENDED DECEMBER 31, 2017
(116)
Beginning Ending
Balance Increases Decreases Balance
ASSETS
Cash and Investments 8,689,382$ 2,902,253$ 1,826,933$ 9,764,702$
LIABILITIES
Deposits Payable 8,688,842$ 2,902,793$ 1,828,895$ 9,762,740$
Accounts Payable 540 1,962 540 1,962
Total Liabilities 8,689,382$ 2,904,755$ 1,829,435$ 9,764,702$
Escrow
SUPPLEMENTARY INFORMATION
This page intentionally left blank.
CITY OF LAKEVILLE
SCHEDULE OF CHANGES IN BONDED INDEBTEDNESS
YEAR ENDED DECEMBER 31, 2017
(117)
Outstanding Outstanding
January 1 Issued Redeemed December 31
Governmental Activities:
General obligation bonds 50,705,000$ 1,530,000$ 13,380,000$ 38,855,000$
G.O. improvement bonds 47,470,000 7,465,000 2,715,000 52,220,000
Tax increment bonds 1,460,000 -220,000 1,240,000
State-aid street revenue bonds 7,145,000 -940,000 6,205,000
G.O. water revenue bonds 8,280,000 -340,000 7,940,000
Arena revenue bonds 490,000 -155,000 335,000
HRA lease revenue bonds 7,115,000 -320,000 6,795,000
Total governmental activity bonds 122,665,000 8,995,000 18,070,000 113,590,000
Business-type Activities:
Liquor revenue bonds 2,715,000 2,255,000 2,715,000 2,255,000
Water revenue bonds 6,075,000 835,000 -6,910,000
Sewer revenue bonds 495,000 - -495,000
Street light revenue bonds - 335,000 -335,000
Total business-type activity bonds 9,285,000 3,425,000 2,715,000 9,995,000
Total bonded indebtedness 131,950,000$ 12,420,000$ 20,785,000$ 123,585,000$
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2017
(118)
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 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 11,730,000 2,661,175
Capital Improvement Refunding Bonds of 2014 B 8/20/14
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 3,440,447
Street Reconstruction Refunding Bonds of 2012 B 8/15/12
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 7,640,000 1,143,125
Principal Maturity
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2017
(119)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
General Obligation Bonds (continued):
Street Reconstruction Refunding Bonds of 2014 B 8/20/14
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 1,465,000 304,420
Street Reconstruction Refunding Bonds of 2007 H 12/15/07
Principal and interest (call provision date) 4.00 2/1/18 1,880,000 40,123
Total 1,880,000 40,123
Taxable Street Reconstruction Bonds of 2009 A 12/30/09
(Build America Bonds)
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 3,545,000 1,350,187
Street Reconstruction Bonds of 2017 A 9/8/2017
Principal and interest 5.00 2/1/18 - 62,100
Principal and interest 5.00 2/1/19 100,000 66,500
Principal and interest 5.00 2/1/20 130,000 60,750
Principal and interest 5.00 2/1/21 135,000 54,125
Principal and interest 5.00 2/1/22 140,000 47,250
Principal and interest 5.00 2/1/23 150,000 40,000
Principal and interest 5.00 2/1/24 155,000 32,375
Principal and interest 5.00 2/1/25 170,000 24,250
Principal and interest (call provision date) 5.00 2/1/26 175,000 15,625
Principal and interest 3.00 2/1/27 185,000 8,475
Principal and interest 3.00 2/1/28
190,000 2,850
Total 1,530,000 414,300
Total General Obligation Bonds 38,855,000$ 9,353,777$
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2017
(120)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
G.O. Improvement Bonds:
Improvement Bonds of 2007 F 8/1/07
Principal and interest 4.125 2/1/18 50,000$ 1,031$
Total 50,000 1,031
Improvement Bonds of 2008 A 10/1/08
Principal and interest 3.75 2/1/18 30,000 1,688
Principal and interest 3.75 2/1/19 30,000 563
Total 60,000 2,251
Improvement Refunding Bonds of 2009 B 12/30/09
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 870,000 33,150
Improvement Bonds of 2011 A 12/1/11
Principal and interest 1.70 2/1/18 190,000 29,383
Principal and interest 1.90 2/1/19 190,000 25,963
Principal and interest 2.10 2/1/20 190,000 22,163
Principal and interest (call provision date)2.25 2/1/21 195,000 17,974
Principal and interest 2.60 2/1/22 50,000 15,130
Principal and interest 2.60 2/1/23 50,000 13,830
Principal and interest 3.10 2/1/24 50,000 12,530
Principal and interest 3.10 2/1/25 45,000 11,183
Principal and interest 3.10 2/1/26 45,000 9,788
Principal and interest 3.10 2/1/27 45,000 8,393
Principal and interest 3.50 2/1/28 45,000 6,998
Principal and interest 3.50 2/1/29 45,000 5,513
Principal and interest 3.50 2/1/30 45,000 3,938
Principal and interest 3.50 2/1/31 45,000 2,363
Principal and interest 3.50 2/1/32 45,000 788
Total 1,275,000 185,937
Improvement Bonds of 2012 A 8/15/12
Principal and interest 2.00 2/1/18 550,000 135,575
Principal and interest 3.00 2/1/19 550,000 121,825
Principal and interest 3.00 2/1/20 555,000 105,250
Principal and interest 3.00 2/1/21 565,000 88,450
Principal and interest (call provision date)3.00 2/1/22 565,000 71,500
Principal and interest 4.00 2/1/23 575,000 51,525
Principal and interest 4.00 2/1/24 135,000 37,325
Principal and interest 3.00 2/1/25 130,000 32,675
Principal and interest 3.00 2/1/26 130,000 28,775
Principal and interest 3.00 2/1/27 130,000 24,875
Principal and interest 3.00 2/1/28 130,000 20,975
Principal and interest 3.00 2/1/29 130,000 17,075
Principal and interest 3.00 2/1/30 125,000 13,250
Principal and interest 3.00 2/1/31 125,000 9,500
Principal and interest 3.00 2/1/32 125,000 5,750
Principal and interest 3.10 2/1/33 125,000 1,938
Total 4,645,000 766,263
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2017
(121)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
G.O. Improvement Bonds (continued):
Improvement Bonds of 2013 A 8/15/13
Principal and interest 2.00 2/1/18 365,000 96,600
Principal and interest 2.00 2/1/19 370,000 89,250
Principal and interest 2.00 2/1/20 375,000 81,800
Principal and interest 2.25 2/1/21 380,000 73,775
Principal and interest 2.50 2/1/22 380,000 64,750
Principal and interest (call provision date)2.75 2/1/23 385,000 54,706
Principal and interest 2.75 2/1/24 395,000 43,981
Principal and interest 3.50 2/1/25 100,000 36,800
Principal and interest 3.50 2/1/26 100,000 33,300
Principal and interest 3.50 2/1/27 100,000 29,800
Principal and interest 3.75 2/1/28 100,000 26,175
Principal and interest 3.75 2/1/29 100,000 22,425
Principal and interest 3.75 2/1/30 100,000 18,675
Principal and interest 4.00 2/1/31 105,000 14,700
Principal and interest 4.00 2/1/32 105,000 10,500
Principal and interest 4.00 2/1/33 105,000 6,300
Principal and interest 4.00 2/1/34 105,000 2,100
Total 3,670,000 705,637
Improvement Bonds of 2014 A 8/20/14
Principal and interest 2.00 2/1/18 695,000 229,975
Principal and interest 2.00 2/1/19 705,000 215,975
Principal and interest 3.00 2/1/20 710,000 198,275
Principal and interest 3.00 2/1/21 730,000 176,675
Principal and interest 4.00 2/1/22 745,000 150,825
Principal and interest 4.00 2/1/23 775,000 120,425
Principal and interest (call provision date)4.00 2/1/24 800,000 88,925
Principal and interest 4.00 2/1/25 825,000 56,425
Principal and interest 3.00 2/1/26 120,000 38,125
Principal and interest 3.00 2/1/27 120,000 34,525
Principal and interest 3.50 2/1/28 120,000 30,625
Principal and interest 3.50 2/1/29 120,000 26,425
Principal and interest 3.50 2/1/30 120,000 22,225
Principal and interest 3.50 2/1/31 115,000 18,113
Principal and interest 3.50 2/1/32 115,000 14,088
Principal and interest 3.50 2/1/33 115,000 10,063
Principal and interest 3.50 2/1/34 115,000 6,038
Principal and interest 3.50 2/1/35 115,000 2,013
Total 7,160,000 1,439,740
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2017
(122)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
G.O. Improvement Bonds (continued):
Improvement Bonds of 2015 A 8/20/15
Principal and interest 5.00 2/1/18 490,000 411,063
Principal and interest 1.75 2/1/19 510,000 394,350
Principal and interest 1.75 2/1/20 505,000 385,469
Principal and interest 5.00 2/1/21 510,000 368,300
Principal and interest 5.00 2/1/22 530,000 342,300
Principal and interest 5.00 2/1/23 545,000 315,425
Principal and interest 2.50 2/1/24 570,000 294,675
Principal and interest (call provision date) 5.00 2/1/25 580,000 273,050
Principal and interest 5.00 2/1/26 605,000 243,425
Principal and interest 4.00 2/1/27 580,000 216,700
Principal and interest 4.00 2/1/28 590,000 193,300
Principal and interest 3.00 2/1/29 610,000 172,350
Principal and interest 3.13 2/1/30 630,000 153,356
Principal and interest 3.25 2/1/31 640,000 133,113
Principal and interest 3.38 2/1/32 655,000 111,659
Principal and interest 3.38 2/1/33 675,000 89,216
Principal and interest 3.50 2/1/34 690,000 65,750
Principal and interest 3.50 2/1/35 705,000 41,338
Principal and interest 4.00 2/1/36 725,000 14,500
Total 11,345,000 4,219,339
Improvement Bonds of 2016 B 7/21/16
Principal and interest 5.00 2/1/18 535,000 511,969
Principal and interest 5.00 2/1/19 640,000 482,594
Principal and interest 5.00 2/1/20 825,000 445,969
Principal and interest 1.50 2/1/21 855,000 418,931
Principal and interest 2.00 2/1/22 855,000 403,969
Principal and interest 5.00 2/1/23 860,000 373,919
Principal and interest 5.00 2/1/24 890,000 330,169
Principal and interest (call provision date) 5.00 2/1/25 920,000 284,919
Principal and interest 3.00 2/1/26 950,000 247,669
Principal and interest 2.00 2/1/27 970,000 223,719
Principal and interest 2.00 2/1/28 970,000 204,319
Principal and interest 3.00 2/1/29 980,000 179,919
Principal and interest 3.00 2/1/30 995,000 150,294
Principal and interest 3.00 2/1/31 1,010,000 120,219
Principal and interest 3.00 2/1/32 1,035,000 89,544
Principal and interest 3.00 2/1/33 1,045,000 58,344
Principal and interest 3.13 2/1/34 570,000 33,762
Principal and interest 3.13 2/1/35 265,000 20,715
Principal and interest 3.25 2/1/36 255,000 12,431
Principal and interest 3.25 2/1/37 255,000 4,144
Total 15,680,000 4,597,518
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2017
(123)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
G.O. Improvement Bonds (continued):
Improvement Bonds of 2017 A 9/7/17
Principal and interest 5.00 2/1/18 - 291,313
Principal and interest 5.00 2/1/19 435,000 312,806
Principal and interest 5.00 2/1/20 580,000 287,431
Principal and interest 5.00 2/1/21 600,000 257,931
Principal and interest 5.00 2/1/22 625,000 227,306
Principal and interest 5.00 2/1/23 645,000 195,556
Principal and interest 5.00 2/1/24 670,000 162,681
Principal and interest 5.00 2/1/25 695,000 128,556
Principal and interest (call provision date)5.00 2/1/26 720,000 93,181
Principal and interest 3.00 2/1/27 745,000 64,006
Principal and interest 3.00 2/1/28 765,000 41,356
Principal and interest 3.00 2/1/29 110,000 28,231
Principal and interest 3.00 2/1/30 110,000 24,931
Principal and interest 3.00 2/1/31 105,000 21,706
Principal and interest 3.00 2/1/32 105,000 18,556
Principal and interest 3.00 2/1/33 100,000 15,481
Principal and interest 3.00 2/1/34 95,000 12,556
Principal and interest 3.00 2/1/35 95,000 9,706
Principal and interest 3.125 2/1/36 90,000 6,875
Principal and interest 3.125 2/1/37 90,000 4,063
Total 3.125 2/1/38
85,000 1,328
7,465,000 2,205,556
Total G.O. Improvement Bonds 52,220,000$ 14,156,422$
State-aid Street Revenue Bonds:
State-aid Street Bonds of 2007 G 12/15/07
Principal and interest 4.00 4/1/18 440,000$ 8,800$
Total 440,000 8,800
State-aid Street Refunding Bonds of 2010 A 1/1/10
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 890,000 49,400
State-aid Street Refunding Bonds of 2011 B 12/1/11
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 305,000 12,676
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2017
(124)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
State-aid Street Revenue Bonds (continued):
State-aid Street Bonds of 2015 A 8/20/15
Principal and interest 5.00 4/1/18 170,000 165,606
Principal and interest 1.75 4/1/19 175,000 159,825
Principal and interest 1.75 4/1/20 180,000 156,719
Principal and interest 5.00 4/1/21 185,000 150,519
Principal and interest 5.00 4/1/22 190,000 141,144
Principal and interest 5.00 4/1/23 200,000 131,394
Principal and interest 2.50 4/1/24 210,000 123,769
Principal and interest (call provision date)5.00 4/1/25 215,000 115,769
Principal and interest 5.00 4/1/26 230,000 104,644
Principal and interest 4.00 4/1/27 240,000 94,094
Principal and interest 4.00 4/1/28 250,000 84,294
Principal and interest 3.00 4/1/29 260,000 75,394
Principal and interest 3.13 4/1/30 265,000 67,353
Principal and interest 3.25 4/1/31 275,000 58,744
Principal and interest 3.38 4/1/32 285,000 49,466
Principal and interest 3.38 4/1/33 295,000 39,678
Principal and interest 3.50 4/1/34 305,000 29,363
Principal and interest 3.50 4/1/35 315,000 18,513
Principal and interest 4.00 4/1/36 325,000 6,500
Total 4,570,000 1,772,788
Total State-aid Street Revenue Bonds 6,205,000$ 1,843,664$
Arena Revenue Bonds:
Gross Revenue Recreation Facility Bonds of 1999 4/1/99
(Ames Ice Arena)
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 335,000 27,270
Total Arena Revenue Bonds 335,000$ 27,270$
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2017
(125)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
HRA Lease Revenue Bonds:
HRA Ice Arena Lease Revenue Refunding Bonds of 2016 9/22/16
Principal and interest 2.00 2/1/18 355,000$ 228,550$
Principal and interest 3.00 2/1/19 360,000 219,600
Principal and interest 3.00 2/1/20 370,000 208,650
Principal and interest 3.00 2/1/21 385,000 197,325
Principal and interest 3.00 2/1/22 405,000 185,475
Principal and interest 3.00 2/1/23 420,000 173,100
Principal and interest 3.00 2/1/24 425,000 160,425
Principal and interest 3.00 2/1/25 440,000 147,450
Principal and interest (call provision date) 3.00 2/1/26 455,000 134,025
Principal and interest 4.00 2/1/27 475,000 117,700
Principal and interest 4.00 2/1/28 490,000 98,400
Principal and interest 4.00 2/1/29 515,000 78,300
Principal and interest 4.00 2/1/30 540,000 57,200
Principal and interest 4.00 2/1/31 565,000 35,100
Principal and interest 4.00 2/1/32 595,000 11,900
Total 6,795,000 2,053,200
Total HRA Lease Revenue Bonds 6,795,000$ 2,053,200$
G.O. Water Revenue Bonds:
G.O. Water Revenue Bonds of 2016 A 2/25/16
Principal and interest 5.00 2/1/18 345,000$ 267,075$
Principal and interest 5.00 2/1/19 365,000 249,325
Principal and interest 5.00 2/1/20 380,000 230,700
Principal and interest 5.00 2/1/21 400,000 211,200
Principal and interest 5.00 2/1/22 420,000 190,700
Principal and interest 5.00 2/1/23 440,000 169,200
Principal and interest (call provision date) 5.00 2/1/24 465,000 146,575
Principal and interest 5.00 2/1/25 490,000 130,050
Principal and interest 2.00 2/1/26 495,000 120,200
Principal and interest 2.00 2/1/27 475,000 110,500
Principal and interest 2.125 2/1/28 480,000 100,650
Principal and interest 3.00 2/1/29 495,000 88,125
Principal and interest 3.00 2/1/30 505,000 73,125
Principal and interest 3.00 2/1/31 520,000 57,750
Principal and interest 3.00 2/1/32 540,000 41,850
Principal and interest 3.00 2/1/33 555,000 25,425
Principal and interest 3.00 2/1/34 570,000 8,550
Total 7,940,000 2,221,000
Total Water Revenue Bonds 7,940,000$ 2,221,000$
Tax Increment Refunding
Bonds of 2007 A
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 Tax Increment Bonds 1,240,000 131,888
Total Governmental Activity Bonds 113,590,000$ 29,787,221$
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2017
(126)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
Business-Type Activity Bonds:
Water Revenue Bonds of 2016 B 7/21/16
Principal and interest 5.00 2/1/18 325,000$ 203,838$
Principal and interest 5.00 2/1/19 340,000 187,213
Principal and interest 5.00 2/1/20 365,000 169,588
Principal and interest 5.00 2/1/21 380,000 157,613
Principal and interest 5.00 2/1/22 385,000 150,913
Principal and interest 5.00 2/1/23 390,000 137,313
Principal and interest 5.00 2/1/24 410,000 117,313
Principal and interest (call provision date)5.00 2/1/25 430,000 96,313
Principal and interest 5.00 2/1/26 450,000 78,813
Principal and interest 5.00 2/1/27 310,000 68,963
Principal and interest 5.00 2/1/28 315,000 62,713
Principal and interest 5.00 2/1/29 325,000 54,688
Principal and interest 5.00 2/1/30 335,000 44,788
Principal and interest 5.00 2/1/31 345,000 34,588
Principal and interest 5.00 2/1/32 355,000 24,088
Principal and interest 5.00 2/1/33 365,000 13,288
Principal and interest 5.00 2/1/34 250,000 3,906
Total 6,075,000 1,605,939
Sewer Revenue Bonds of 2016 B 7/21/16
Principal and interest 5.00 2/1/18 55,000 19,325
Principal and interest 5.00 2/1/19 55,000 16,575
Principal and interest 5.00 2/1/20 60,000 13,700
Principal and interest 5.00 2/1/21 60,000 11,750
Principal and interest 5.00 2/1/22 65,000 10,650
Principal and interest 5.00 2/1/23 65,000 8,375
Principal and interest 5.00 2/1/24 65,000 5,125
Principal and interest (call provision date)5.00 2/1/25 70,000 1,750
Total 495,000 87,250
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2017
(127)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
Business-Type Activity Bonds (continued):
Lease Revenue Liquor Enterprise Refunding
Bonds of 2017 (Galaxie Store)
Principal and interest 2.00 2/1/18 - 44,418
Principal and interest 2.00 2/1/19 215,000 58,650
Principal and interest 2.00 2/1/20 230,000 54,200
Principal and interest 2.00 2/1/21 240,000 49,500
Principal and interest 3.00 2/1/22 245,000 43,425
Principal and interest 3.00 2/1/23 250,000 36,000
Principal and interest 3.00 2/1/24 260,000 28,350
Principal and Interest (call provision date) 3.00 2/1/25 265,000 20,475
Principal and interest 3.00 2/1/26 270,000 12,450
Principal and interest 3.00 2/1/27
280,000 4,200
Total 2,255,000 351,668
Water Improvement Bonds of 2017 A 9/7/2017
Principal and interest 5.00 2/1/18 - 33,885
Principal and interest 5.00 2/1/19 55,000 36,275
Principal and interest 5.00 2/1/20 70,000 33,150
Principal and interest 5.00 2/1/21 75,000 29,525
Principal and interest 5.00 2/1/22 80,000 25,650
Principal and interest 5.00 2/1/23 80,000 21,650
Principal and interest 5.00 2/1/24 85,000 17,525
Principal and interest 5.00 2/1/25 90,000 13,150
Principal and interest (call provision date)5.00 2/1/26 95,000 8,525
Principal and interest 3.00 2/1/27 100,000 4,650
Principal and interest 3.00 2/1/28 105,000 1,575
Total 835,000 225,560
Street Lights Improvement Bonds of 2017 A
Principal and interest 5.00 2/1/18 - 15,075
Principal and interest 5.00 2/1/19 30,000 16,000
Principal and interest 5.00 2/1/20 35,000 14,375
Principal and interest 5.00 2/1/21 40,000 12,500
Principal and interest 5.00 2/1/22 40,000 10,500
Principal and interest 5.00 2/1/23 45,000 8,375
Principal and interest 5.00 2/1/24 45,000 6,125
Principal and interest 5.00 2/1/25 50,000 3,750
Principal and interest (call provision date) 5.00 2/1/26
50,000 1,250
Total 335,000 87,950
Total Business-Type Bonds 9,995,000$ 2,358,367$
Total Bonded Indebtedness and Annual Interest Payable 123,585,000$ 32,145,588$
CITY OF LAKEVILLE
COMBINED SCHEDULE OF BONDED INDEBTEDNESS
DECEMBER 31, 2017
(128)
Interest Issue Call Maturity
Rates % Date Date Date
Governmental Activities:
General Obligation Bonds:
Capital Improvement Refunding Bonds of 2012 B 2.00 - 4.00 8/15/12 2/1/22 2/1/30
Capital Improvement Bonds of 2007 D 4.625 - 5.00 8/1/07 2/1/17 2/1/32
Capital Improvement Refunding Bonds of 2014 B 1.75 - 5.00 8/20/14 2/1/24 2/1/32
Street Reconstruction Refunding Bonds of 2012 B 2.00 - 4.00 8/15/12 2/1/22 2/1/26
Street Reconstruction Refunding Bonds of 2014 B 1.75 - 5.00 8/20/14 2/1/24 2/1/26
Street Reconstruction Bonds of 2007 H 3.50 - 4.50 12/15/07 2/1/18 2/1/28
Street Reconstruction Bonds of 2009 A (Taxable) 1.55 - 5.95 12/30/09 2/1/20 2/1/30
Street Reconstruction Refunding Bonds of 2017 A 3.00-5.00 9/7/17 2/1/26 2/1/28
Total General Obligation Bonds
G.O. Improvement Bonds:
Improvement Bonds of 2007 F 4.00 - 4.125 8/1/07 2/1/14 2/1/18
Improvement Bonds of 2008 A 2.70 - 3.75 10/1/08 N/A 2/1/19
Improvement Refunding Bonds of 2009 B 2.00 - 3.00 12/30/09 N/A 2/1/20
Improvement Bonds of 2011 A 0.50 - 3.50 12/1/11 2/1/21 2/1/32
Improvement Bonds of 2012 A 2.00 - 4.00 8/15/12 2/1/22 2/1/33
Improvement Bonds of 2013 A 2.00 - 4.00 8/15/13 2/1/23 2/1/34
Improvement Bonds of 2014 A 2.00 - 3.50 8/20/14 2/1/24 2/1/35
Improvement Bonds of 2015 A 1.75 - 5.00 8/20/15 2/1/25 2/1/36
Improvement Bonds of 2016 B 1.50 - 5.00 7/21/16 2/1/25 2/1/37
Improvement Bonds of 2017 A 3.00-5.00 7/17/07 2/1/26 2/1/38
Total G.O. Improvement Bonds
Tax Increment Bonds:
Tax-Increment Refunding Bonds of 2007 A 4.00 - 4.20 2/1/07 2/1/16 2/1/22
Total Tax-Increment Bonds
State-aid Street Revenue Bonds:
State-aid Street Bonds of 2007 G 4.00 12/15/07 4/1/16 4/1/18
State-aid Street Refunding Bonds of 2010 A 2.00 - 4.00 1/1/10 N/A 4/1/20
State-aid Street Refunding Bonds of 2011 B 0.50 - 2.15 12/1/11 N/A 4/1/21
State-aid Street Bonds of 2015 A 1.75 - 5.00 8/20/15 2/1/25 2/1/36
Total State-aid Street Revenue Bonds
Water Revenue Bonds:
G.O. Water Revenue Bonds of 2016 A 2.00 - 5.00 2/25/16 2/1/24 2/1/34
Total Water Revenue Bonds
Arena Revenue Bonds:
Gross Revenue Recreation Facility Bonds of 1999 5.30 - 5.40 4/1/99 N/A 8/1/19
Total Arena Revenue Bonds
HRA Lease Revenue Bonds:
HRA Ice Arena Lease Revenue Bonds of 2016 2.00 - 4.00 9/22/16 2/1/26 2/1/32
Total HRA Lease Revenue Bonds
Total Governmental Activity Bonds
Business-type Activity:
Liquor Revenue Bonds of 2007 5.00 5/1/07 2/1/17 2/1/27
Lease Revenue Liquor Bonds of 2017 2.00 - 3.00 11/8/17 2/1/25 2/1/27
Water Revenue Bonds of 2016 B 1.50 - 5.00 7/21/16 2/1/25 2/1/34
Sewer Revenue Bonds of 2016 B 1.50 - 5.00 7/21/16 2/1/25 2/1/25
Water Revenue Bonds of 2017 A 3.00-5.00 9/7/17 2/1/26 2/1/28
Street Lights Revenue Bonds of 2017 A 5.00 9/7/17 n/a 2/1/26
Total Business-type Activity Bonds
Total Bonded Indebtedness
(129)
Authorized Issued Retired Outstanding Principal Interest
12,765,000$ 12,765,000$ 1,035,000$ 11,730,000$ 570,000$ 366,750$
15,115,000 15,115,000 15,115,000 - - -
11,065,000 11,065,000 -11,065,000 555,000 429,988
9,685,000 9,685,000 2,045,000 7,640,000 730,000 245,950
1,595,000 1,595,000 130,000 1,465,000 135,000 60,988
2,810,000 2,810,000 930,000 1,880,000 1,880,000 40,123
4,945,000 4,945,000 1,400,000 3,545,000 225,000 179,696
1,530,000 1,530,000 -1,530,000 -62,100
59,510,000 59,510,000 20,655,000 38,855,000 4,095,000 1,385,595
1,310,000 1,310,000 1,260,000 50,000 50,000 1,031
620,000 620,000 560,000 60,000 30,000 1,688
4,250,000 4,250,000 3,380,000 870,000 355,000 20,775
2,385,000 2,385,000 1,110,000 1,275,000 190,000 29,383
6,805,000 6,805,000 2,160,000 4,645,000 550,000 135,575
4,685,000 4,685,000 1,015,000 3,670,000 365,000 96,600
8,520,000 8,520,000 1,360,000 7,160,000 695,000 229,978
11,815,000 11,815,000 470,000 11,345,000 490,000 411,063
15,680,000 15,680,000 -15,680,000 535,000 511,969
7,465,000 7,465,000 -7,465,000 -291,313
63,535,000 63,535,000 11,315,000 52,220,000 3,260,000 1,729,375
2,265,000 2,265,000 1,025,000 1,240,000 230,000 46,161
2,265,000 2,265,000 1,025,000 1,240,000 230,000 46,161
3,675,000 3,675,000 3,235,000 440,000 440,000 8,800
2,680,000 2,680,000 1,790,000 890,000 285,000 26,225
665,000 665,000 360,000 305,000 75,000 5,301
4,730,000 4,730,000 160,000 4,570,000 170,000 165,606
11,750,000 11,750,000 5,545,000 6,205,000 970,000 205,932
8,280,000 8,280,000 340,000 7,940,000 345,000 267,075
8,280,000 8,280,000 340,000 7,940,000 345,000 267,075
1,250,000 1,250,000 915,000 335,000 165,000 18,090
1,250,000 1,250,000 915,000 335,000 165,000 18,090
7,115,000 7,115,000 320,000 6,795,000 355,000 228,550
7,115,000 7,115,000 320,000 6,795,000 355,000 228,550
153,705,000 153,705,000 40,115,000 113,590,000 9,420,000 3,880,778
3,955,000 3,955,000 3,955,000 - - -
2,255,000 2,255,000 -2,255,000 -44,418
6,075,000 6,075,000 -6,075,000 325,000 203,838
495,000 495,000 -495,000 55,000 19,325
835,000 835,000 -835,000 -33,885
335,000 335,000 -335,000 -15,075
13,950,000 13,950,000 3,955,000 9,995,000 380,000 316,541
167,655,000$ 167,655,000$ 44,070,000$ 123,585,000$ 9,800,000$ 4,197,319$
Bonds Due in 2018
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(130)
Statistical Section
This part of the City of Lakeville’s comprehensive annual financial report presents detailed information as a
context for understanding what the information in the financial statements, note disclosures, and required
supplementary information says about the government’s overall financial health.
Financial Trends 110
These schedules contain trend information to help the reader understand how the City’s financial
performance and well-being have changed over time.
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
Revenue Capacity 115
These schedules contain information to help the reader assess the City’s most significant local revenue
sources; electric sales and property taxes.
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
Debt Capacity 122
These schedules present information to help the reader assess 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 130
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the City’s financial activities take place.
Demographic and Economic Statistics
Principal Employers
Commercial and Industrial Building Permits Issued
Operating Information 132
These schedules contain service and infrastructure data to help the reader understand how the
information in the City’s financial report 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
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual
financial reports for the relevant year.
CITY OF LAKEVILLE
NET POSITION BY COMPONENT – GOVERNMENT WIDE
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(131)
2008 2009 2010 2011
Governmental Activities:
Net Investment in Capital Assets 120,954,521$ 119,699,102$ 119,249,751$ 120,485,858$
Restricted 9,037,087 10,542,926 10,027,737 16,474,815
Unrestricted 3,100,244 1,210,922 2,324,315 (5,970,712)
Total Governmental Activities Net Position 133,091,852$ 131,452,950$ 131,601,803$ 130,989,961$
Business-Type Activities:
Net Investment in Capital Assets 104,535,771$ 103,150,022$ 101,893,442$ 100,390,175$
Restricted 311,133 295,133 295,133 325,750
Unrestricted 14,107,347 15,828,861 16,363,211 16,666,856
Total Business-Type Activities Net Position 118,954,251$ 119,274,016$ 118,551,786$ 117,382,781$
Primary Government:
Net Investment in Capital Assets 225,490,292$ 222,849,124$ 221,143,193$ 220,876,033$
Restricted 9,348,220 10,838,059 10,322,870 16,800,565
Unrestricted 17,207,591 17,039,783 18,687,526 10,696,144
Total Primary Government Net Position 252,046,103$ 250,726,966$ 250,153,589$ 248,372,742$
(1)(2)
Notes:
(1) Includes a restatement of $186,003 in Business-type activities.
(2) The City implemented GASB Statement No. 65 in 2012. Net position for 2011 was restated for the effects of
implementing this standard. Net position for previous years has not been restated.
(3) The City implemented GASB Statement No. 68 in 2015, recording a change in accounting principle that
decreased unrestricted net position. Prior year balances were not restated.
(132)
2012 2013 2014 2015 2016 2017
125,051,058$ 129,599,494$ 135,673,737$ 141,868,136$ 149,196,480$ 144,581,700$
17,403,167 17,645,944 19,913,014 33,860,946 35,860,604 46,683,603
(1,923,495) 2,511,935 5,874,237 (4,929,168) 4,277,626 6,036,382
140,530,730$ 149,757,373$ 161,460,988$ 170,799,914$ 189,334,710$ 197,301,685$
102,009,893$ 105,055,746$ 109,535,106$ 116,288,771$ 129,086,090$ 135,324,120$
325,750 324,125 324,125 323,875 323,875 323,875
15,658,140 13,704,281 11,318,290 8,420,410 9,757,400 10,791,344
117,993,783$ 119,084,152$ 121,177,521$ 125,033,056$ 139,167,365$ 146,439,339$
227,060,951$ 234,655,240$ 245,208,843$ 258,156,907$ 278,282,570$ 279,905,820$
17,728,917 17,970,069 20,237,139 34,184,821 36,184,479 47,007,478
13,734,645 16,216,216 17,192,527 3,491,242 14,035,026 16,827,726
258,524,513$ 268,841,525$ 282,638,509$ 295,832,970$ 328,502,075$ 343,741,024$
(3)
CITY OF LAKEVILLE
CHANGES IN NET POSITION BY COMPONENT – GOVERNMENTAL ACTIVITIES
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(133)
2008 2009 2010 2011
Expenses:
General government 6,169,957$ 5,916,590$ 5,248,677$ 5,134,169$
Public safety 10,019,681 9,726,394 10,858,447 11,068,287
Public works 15,706,515 12,866,216 12,197,868 13,778,800
Parks and recreation 4,900,341 4,774,745 4,775,015 4,796,035
Interest on long-term debt 4,218,695 3,994,790 3,740,076 4,383,684
Total expenses 41,015,189 37,278,735 36,820,083 39,160,975
Program Revenues:
Charges for Services:
General government 2,238,739 1,940,423 1,834,856 2,108,396
Public safety 581,930 643,174 654,226 746,207
Public works 4,239,190 2,817,604 1,967,309 2,313,334
Parks and recreation 1,937,523 984,206 1,555,560 1,299,364
Operating Grants and Contributions
General government 25,083 44,648 42,661 37,970
Public safety 639,173 1,048,160 846,553 649,253
Public works 783,843 1,142,494 1,399,661 1,451,359
Parks and recreation 46,058 20,294 30,144 160,852
Capital Grants and Contributions
General government - - - -
Public safety 50,000 - 21,576 26,325
Public works 1,420,813 2,783,528 3,025,905 2,906,106
Parks and recreation 871,266 187,699 267,360 297,245
Total program revenues 12,833,618 11,612,230 11,645,811 11,996,411
Net Revenue (Expense):
General government (3,906,135) (3,931,519) (3,371,160) (2,987,803)
Public safety (8,748,578) (8,035,060) (9,336,092) (9,646,502)
Public works (9,262,669) (6,122,590) (5,804,993) (7,108,001)
Parks and recreation (2,045,494) (3,582,546) (2,921,951) (3,038,574)
Interest on long-term debt (4,218,695) (3,994,790) (3,740,076) (4,383,684)
Total net (expense) revenue (28,181,571) (25,666,505) (25,174,272) (27,164,564)
General Revenues and Other Changes in Net Position:
Property taxes 23,391,055 23,912,318 24,369,009 24,207,406
Investment earnings (charges)1,383,236 463,092 340,336 280,364
Gain on sale of capital assets - - - -
Transfers in (out)(2,029,933) (347,807) 613,780 2,692,671
Total general revenues and other (net)22,744,358 24,027,603 25,323,125 27,180,441
Change in Net Position:
Governmental Activities (5,437,213)$ (1,638,902)$ 148,853$ 15,877$
(1)
Notes:
(1) 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.
(2) The City implemented GASB Statement No. 68 in 2015, recording a change in accounting principle that
decrease unrestricted net position. Prior year balances were not restated.
(134)
2012 2013 2014 2015 2016 2017
5,258,319$ 5,363,354$ 6,051,985$ 5,893,261$ 8,028,316$ 4,579,478$
11,202,018 11,784,109 11,807,183 12,236,411 16,369,670 14,250,572
10,849,213 11,241,434 14,776,390 15,365,976 17,711,240 18,944,454
4,780,666 5,154,919 5,202,168 5,762,890 5,626,149 6,645,057
3,496,878 3,864,333 3,665,421 3,296,665 3,930,168 3,268,426
35,587,094 37,408,149 41,503,147 42,555,203 51,665,543 47,687,987
2,736,653 3,061,568 3,219,644 3,730,342 4,094,298 4,348,910
714,587 686,130 660,910 926,168 954,395 934,444
3,588,062 4,481,445 5,280,338 8,311,017 8,401,512 7,081,317
2,087,640 2,231,757 2,808,885 3,699,025 3,685,202 2,369,615
40,359 60,076 5,399 7,132 772,998 68,095
698,949 902,783 825,434 980,310 989,342 1,061,252
1,396,560 1,295,018 3,665,373 4,145,806 4,942,834 1,382,380
100,315 59,653 66,575 186,118 91,869 55,300
91,735 195,693 2,762,609 77,006 138,593 62,101
19,530 - - - 8,500 -
5,569,732 6,350,827 6,892,230 12,702,266 23,604,519 13,018,689
370,237 1,296,764 436,107 1,004,480 2,932,612 182,387
17,414,359 20,621,714 26,623,504 35,769,670 50,616,674 30,564,490
(2,389,572) (2,046,017) (64,333) (2,078,781) (3,022,427) (100,372)
(9,768,952) (10,195,196) (10,320,839) (10,329,933) (14,417,433) (12,254,876)
(294,859) 885,856 1,061,551 9,793,113 19,237,625 2,537,932
(2,222,474) (1,566,745) (1,890,601) (873,267) 1,083,534 (4,037,755)
(3,496,878) (3,864,333) (3,665,421) (3,296,665) (3,930,168) (3,268,426)
(18,172,735) (16,786,435) (14,879,643) (6,785,533) (1,048,869) (17,123,497)
24,221,741 23,947,968 24,465,333 25,338,778 26,173,822 27,317,169
176,409 (28,949) 552,444 368,232 388,672 597,513
214,004 - - - - -
3,101,350 2,094,059 1,565,481 (1,549,881) (6,978,829) (2,824,210)
27,713,504 26,013,078 26,583,258 24,157,129 19,583,665 25,090,472
9,540,769$ 9,226,643$ 11,703,615$ 17,371,596$ 18,534,796$ 7,966,975$
(2)
CITY OF LAKEVILLE
CHANGES IN NET POSITION BY COMPONENT – BUSINESS-TYPE ACTIVITIES
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(135)
2008 2009 2010 2011
Expenses:
Liquor 13,247,829$ 13,244,355$ 13,575,521$ 13,265,645$
Utility 8,319,303 9,086,172 9,903,296 10,401,650
Total expenses 21,567,132 22,330,527 23,478,817 23,667,295
Program Revenues:
Charges for Services:
Liquor 14,443,355 14,418,478 14,763,552 14,373,261
Utility 7,355,207 7,491,674 7,432,391 8,866,345
Operating Grants and Contributions
Liquor 3,762 3,762 3,762 3,762
Utility 3,264 3,264 3,264 59,707
Capital Grants and Contributions
Liquor - - 17,050 -
Utility 975,410 158,252 999,716 1,129,764
Total program revenues 22,780,998 22,075,430 23,219,735 24,432,839
Net Revenue (Expense):
Liquor 1,199,288 1,177,885 1,208,843 1,111,378
Utility 14,578 (1,432,982) (1,467,925) (345,834)
Total net (expense) revenue 1,213,866 (255,097) (259,082) 765,544
General Revenues and Other Changes in Net Position:
Investment income (charges)457,466 227,055 150,632 130,403
Disposal of capital assets - - - -
Transfers in (out)2,029,933 347,807 (613,780) (2,692,671)
Total general revenues and other (net)2,487,399 574,862 (463,148) (2,562,268)
Change in Net Position:
Business-type Activities 3,701,265$ 319,765$ (722,230)$ (1,796,724)$
(1) (2)
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 $186,003.
(2) The City implemented GASB Statement NO. 65 in 2012. Net position for 2011 was restated for the effects of
implementing this standard. Net position for previous years has not been restated.
(3) The City implemented GASB Statement No. 68 in 2015, recording a change in accounting principle that
decreased unrestricted net position. Prior year balances were not restated.
(136)
2012 2013 2014 2015 2016 2017
13,773,286$ 13,906,263$ 13,577,019$ 12,852,980$ 13,268,419$ 13,638,043$
10,365,651 10,863,625 11,462,552 11,946,778 13,558,839 14,138,885
24,138,937 24,769,888 25,039,571 24,799,758 26,827,258 27,776,928
15,220,064 15,381,124 14,883,858 13,611,294 14,130,830 14,583,514
9,542,284 9,126,838 9,296,118 9,216,463 10,692,185 12,585,450
3,762 3,762 3,762 3,762 3,762 6,716
103,525 69,968 112,181 85,754 111,572 166,227
- - - - - -
2,903,043 3,414,738 4,252,192 6,009,075 8,973,280 4,791,313
27,772,678 27,996,430 28,548,111 28,926,348 33,911,629 32,133,220
1,450,540 1,478,623 1,310,601 762,076 866,173 952,187
2,183,201 1,747,919 2,197,939 3,364,514 6,218,198 3,404,105
3,633,741 3,226,542 3,508,540 4,126,590 7,084,371 4,356,292
78,611 (42,114) 150,310 52,461 71,109 91,472
- - - - - -
(3,101,350) (2,094,059) (1,565,481) 1,549,881 6,978,829 2,824,210
(3,022,739) (2,136,173) (1,415,171) 1,602,342 7,049,938 2,915,682
611,002$ 1,090,369$ 2,093,369$ 5,728,932$ 14,134,309$ 7,271,974$
(3)
-
CITY OF LAKEVILLE
CHANGES IN NET POSITION BY COMPONENT – TOTAL GOVERNMENTAL
AND BUSINES-TYPE ACTIVITIES
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(137)
2008 2009 2010 2011
Expenses:
Governmental activities 41,015,189$ 37,278,735$ 36,820,083$ 39,160,975$
Business-type activities 21,567,132 22,330,527 23,478,817 23,667,295
Total expenses 62,582,321 59,609,262 60,298,900 62,828,270
Program Revenues:
Governmental activities 12,833,618 11,612,230 11,645,811 11,996,411
Business-type activities 22,780,998 22,075,430 23,219,735 24,432,839
Total program revenues 35,614,616 33,687,660 34,865,546 36,429,250
Net Revenue (Expense):
Governmental activities (28,181,571) (25,666,505) (25,174,272) (27,164,564)
Business-type activities 1,213,866 (255,097) (259,082) 765,544
Total net (expense) revenue (26,967,705) (25,921,602) (25,433,354) (26,399,020)
General Revenues and Other Changes in Net Position:
Governmental activities 22,744,358 24,027,603 25,323,125 27,180,441
Business-type activities 2,487,399 574,862 (463,148) (2,562,268)
Total general revenues and other (net) 25,231,757 24,602,465 24,859,977 24,618,173
Change in Net Position:
Governmental activities (5,437,213) (1,638,902) 148,853 15,877
Business-type activities 3,701,265 319,765 (722,230) (1,796,724)
Total change in net position (1,735,948)$ (1,319,137)$ (573,377)$ (1,780,847)$
(1) (2)
Note:
(1) Includes a restatement of $186,003.
(2) The City implemented GASB Statement NO. 65 in 2012. Net position for 2011 was restated for the effects of
implementing this standard. Net position for previous years has not been restated.
(3) The City implemented GASB Statement No. 68 in 2015, recording a change in accounting principle that
decreased unrestricted net position. Prior year balances were not restated.
(138)
2012 2013 2014 2015 2016 2017
35,587,094$ 37,408,149$ 41,503,147$ 42,555,203$ 51,665,543$ 47,687,987$
24,138,937 24,769,888 25,039,571 24,799,758 26,827,258 27,776,928
59,726,031 62,178,037 66,542,718 67,354,961 78,492,801 75,464,915
17,414,359 20,621,714 26,623,504 35,769,670 50,616,674 30,564,490
27,772,678 27,996,430 28,548,111 28,926,348 33,911,629 32,133,220
45,187,037 48,618,144 55,171,615 64,696,018 84,528,303 62,697,710
(18,172,735) (16,786,435) (14,879,643) (6,785,533) (1,048,869) (17,123,497)
3,633,741 3,226,542 3,508,540 4,126,590 7,084,371 4,356,292
(14,538,994) (13,559,893) (11,371,103) (2,658,943) 6,035,502 (12,767,205)
27,713,504 26,013,078 26,583,258 24,157,129 19,583,665 25,090,472
(3,022,739) (2,136,173) (1,415,171) 1,602,342 7,049,938 2,915,682
24,690,765 23,876,905 25,168,087 25,759,471 26,633,603 28,006,154
9,540,769 9,226,643 11,703,615 17,371,596 18,534,796 7,966,975
611,002 1,090,369 2,093,369 5,728,932 14,134,309 7,271,974
10,151,771$ 10,317,012$ 13,796,984$ 23,100,528$ 32,669,105$ 15,238,949$
(3)
CITY OF LAKEVILLE
FUND BALANCES – GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(139)
2008 2009 2010 2011
General Fund:
Reserved 7,420$ 9,899$ 10,726$ -$
Unreserved 11,238,093 11,196,826 9,385,202 -
Nonspendable - - - 384,329
Committed - - - -
Assigned - - - 519,146
Unassigned - - - 9,644,863
Total general fund 11,245,513 11,206,725 9,395,928 10,548,338
All Other Governmental Funds:
Reserved 10,464,632 16,713,410 11,060,144 -
Unreserved, Reported in:
Special Revenue Funds 1,107,202 1,325,731 1,444,846 -
Capital Project Funds 11,074,322 12,549,905 15,384,343 -
Nonspendable - - - 75
Restricted - - - 14,744,057
Committed - - - 9,989,221
Unassigned - - - (112,102)
Total all other governmental funds 22,646,156 30,589,046 27,889,333 24,621,251
Total Governmental Funds:
Reserved 10,472,052 16,723,309 11,070,870 -
Unreserved, Reported in:23,419,617 25,072,462 26,214,391 -
Nonspendable - - - 384,404
Restricted - - - 14,744,057
Committed - - - 9,989,221
Assigned - - - 519,146
Unassigned - - - 9,532,761
Total governmental funds 33,891,669$ 41,795,771$ 37,285,261$ 35,169,589$
All governmental funds percentage change -26.5% 23.3% -10.8% -5.7%
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.
(140)
2012 2013 2014 2015 2016 2017
-$-$-$-$-$-$
------
256,476 126,014 221,704 447,284 695,830 914,375
-45,000 45,000 45,000 --
620,725 --- 1,478,522 741,864
10,614,574 9,495,546 10,805,065 11,882,644 12,902,148 13,613,203
11,491,775 9,666,560 11,071,769 12,374,928 15,076,500 15,269,442
------
------
------
--169 ---
38,587,037 38,716,666 44,319,872 35,659,756 37,947,697 29,887,820
11,861,800 16,620,820 17,154,096 17,937,431 21,651,118 26,519,559
(233,910) (221,630) (632,035) (3,492,389) (726,681) (876,594)
50,214,927 55,115,856 60,842,102 50,104,798 58,872,134 55,530,785
------
------
256,476 126,014 221,873 447,284 695,830 914,375
38,587,037 38,716,666 44,319,872 35,659,756 37,947,697 29,887,820
11,861,800 16,665,820 17,199,096 17,982,431 21,651,118 26,519,559
620,725 --- 1,478,522 741,864
10,380,664 9,273,916 10,173,030 8,390,255 12,175,467 12,736,609
61,706,702$ 64,782,416$ 71,913,871$ 62,479,726$ 73,948,634$ 70,800,227$
75.5%5.0%11.0%-13.1%18.4%-4.3%
CITY OF LAKEVILLE
CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(141)
2008 2009 2010 2011
Revenues:
Property taxes and tax increment 22,901,637$ 23,785,468$ 24,435,538$ 24,057,622$
Licenses and permits 1,936,532 1,603,909 1,565,028 1,820,408
Intergovernmental 2,250,332 3,158,128 4,242,195 2,622,487
Charges for services 6,713,370 4,145,717 4,002,246 3,938,204
Special assessments 777,153 769,624 573,301 622,799
Investment income (charges) 1,379,315 459,967 337,788 270,378
Donations 1,008,326 305,146 155,477 269,762
Miscellaneous 366,680 635,781 732,816 731,763
Total Revenues 37,333,345 34,863,740 36,044,389 34,333,423
Expenditures:
General government 5,172,645 4,850,726 4,687,662 4,493,368
Public safety 8,911,017 8,835,563 9,337,884 9,755,251
Public works 4,535,118 3,906,485 3,593,862 3,019,293
Parks and recreation 3,233,422 2,881,402 3,038,433 3,047,906
Capital outlay 18,133,199 7,140,715 4,611,659 10,345,908
Debt Service:
Principal retirement 5,301,622 6,436,971 7,337,338 7,689,182
Interest on debt 4,367,257 4,157,176 3,945,265 3,633,285
Fiscal charges 46,136 126,570 61,222 78,143
Total Expenditures 49,700,416 38,335,608 36,613,325 42,062,336
Excess (Deficiency) of Revenues
Over (Under) Expenditures (12,367,071) (3,471,868) (568,936) (7,728,913)
Other Financing Sources (Uses):
Transfers in 7,688,315 5,156,485 5,740,982 5,324,043
Transfers out (6,857,231) (4,386,727) (5,046,945) (2,524,276)
Bond, note, loan and lease proceeds 2,280,000 10,125,000 2,680,000 4,265,000
Payment on refunded bonds called (2,975,000) - (7,955,000) -
Premium on bonds issued - 116,016 99,322 -
Sale of capital assets - 365,196 540,067 -
Total Other Financing Sources (Uses) 136,084 11,375,970 (3,941,574) 7,064,767
Net Change in Fund Balances (12,230,987)$ 7,904,102$ (4,510,510)$ (664,146)$
Debt Service as a Percentage of
Noncapital Expenditures 24.4% 30.7% 32.9% 31.6%
Note: The City has no taxes other than property taxes and tax increment.
(142)
2012 2013 2014 2015 2016 2017
24,453,849$ 23,981,375$ 24,524,709$ 25,215,734$ 26,131,569$ 27,401,195$
2,429,951 2,727,494 2,836,555 3,325,293 3,706,567 3,988,189
2,291,376 3,534,512 4,979,156 5,232,193 9,043,356 3,771,886
5,833,776 6,925,867 8,405,492 12,443,152 13,289,708 10,016,017
1,132,126 1,143,349 1,636,267 1,736,905 2,308,223 2,812,587
174,358 (28,008) 548,842 366,555 387,604 597,513
207,391 265,953 242,627 356,446 550,255 238,383
871,798 885,323 3,411,579 1,155,073 2,828,177 846,035
37,394,625 39,435,865 46,585,227 49,831,351 58,245,459 49,671,805
4,572,777 4,774,775 5,690,230 5,226,864 5,783,013 6,424,260
9,844,232 10,113,958 10,305,450 10,892,071 11,513,170 12,775,807
3,245,103 3,766,665 3,805,470 3,856,984 4,245,072 9,786,321
3,050,782 3,206,004 3,330,488 3,532,376 3,497,041 5,222,503
12,413,360 12,523,103 21,420,875 31,649,447 37,938,823 11,995,449
7,642,027 5,825,000 5,995,000 7,385,000 5,935,000 6,885,000
3,358,324 3,948,740 3,700,590 3,735,120 3,970,010 3,881,179
173,072 26,351 176,789 33,071 327,052 129,158
44,299,677 44,184,596 54,424,892 66,310,933 73,209,181 57,099,677
(6,905,052) (4,748,731) (7,839,665) (16,479,582) (14,963,722) (7,427,872)
6,699,447 7,094,079 3,489,225 6,883,879 5,179,668 8,355,474
(2,839,332) (4,857,921) (1,644,624) (4,928,951) (3,222,237) (6,661,840)
29,255,000 4,685,000 21,180,000 16,545,000 31,075,000 11,987,171
(1,830,000) - (10,035,000) (12,460,000) (9,535,000) (11,368,146)
1,957,050 78,287 1,981,519 1,005,509 2,626,731 1,309,907
200,000 825,000 - - - 516,380
33,442,165 7,824,445 14,971,120 7,045,437 26,124,162 4,138,946
26,537,113$ 3,075,714$ 7,131,455$ (9,434,145)$ 11,160,440$ (3,288,926)$
32.2%28.6%25.3%25.6%19.6%22.6%
CITY OF LAKEVILLE
TAX CAPACITY VALUATION AND ASSESSOR’S TAXABLE MARKET VALUE OF TAXABLE
PROPERTY
LAST TEN FISCAL YEARS
(143)
Fiscal Year 2008 2009 2010 2011
Taxable Net Tax Capacity Valuation of Taxable Property
Tax capacity value 66,208,936$ 67,887,456$ 65,235,789$ 61,005,594$
Less:
Captured tax increment tax capacity (2,173,426) (2,127,819) (1,998,923) (904,389)
Contributions to fiscal disparities pool (4,416,898) (4,888,029) (5,623,626) (5,845,456)
Plus:
Distribution from fiscal disparities pool 5,967,401 7,115,384 7,429,875 7,807,412
Total taxable net tax capacity 65,586,013$ 67,986,992$ 65,043,115$ 62,063,161$
Taxable Net Tax Capacity Valuation by Class of Property
Homestead residential 52,038,379$ 51,916,328$ 48,558,421$ 44,951,025$
Commercial/industrial, public utility,
and personal property 11,801,273 14,325,341 14,626,593 15,226,802
Non-homestead residential/apartments 1,000,649 1,082,546 1,127,962 1,271,776
Agriculture and seasonal/recreational 745,712 662,777 730,139 613,558
Total taxable net tax capacity 65,586,013$ 67,986,992$ 65,043,115$ 62,063,161$
Assessor’s taxable market valuation 5,951,319,600$ 6,024,665,500$ 5,736,602,200$ 5,356,855,900$
Taxable net tax capacity as a percentage of
assessor's taxable market value 1.102%1.128%1.134%1.159%
Direct tax capacity rate 34.195%33.973%36.624%38.250%
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.
(144)
2012 2013 2014 2015 2016 2017
57,583,990$ 54,853,225$ 57,174,306$ 62,811,855$ 65,634,896$ 69,887,094$
(862,243) (863,946) (861,019) (446,760) (497,171) (596,348)
(5,591,597) (5,494,207) (5,439,491) (5,481,001) (5,411,614) (5,524,685)
7,194,884 6,825,229 6,316,073 6,323,361 6,635,572 7,139,972
58,325,034$ 55,320,301$ 57,189,869$ 63,207,455$ 66,361,683$ 70,906,033$
41,780,807$ 38,983,401$ 41,029,548$ 46,374,248$ 49,048,168$ 52,427,026$
14,711,893 14,351,101 13,833,973 14,223,709 14,754,095 15,842,447
1,265,526 1,311,388 1,468,225 1,629,527 1,656,581 1,736,856
566,808 674,411 858,123 979,971 902,839 899,704
58,325,034$ 55,320,301$ 57,189,869$ 63,207,455$ 66,361,683$ 70,906,033$
5,030,003,164$ 4,767,475,321$ 4,995,818,217$ 5,553,395,148$ 5,825,279,418$ 6,201,221,856$
1.160%1.160%1.145%1.138%1.139%1.143%
39.051%41.234%40.696%38.948%38.669%37.510%
CITY OF LAKEVILLE
PROPERTY TAX RATES – DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
(145)
Operating Debt Service Total Debt Service
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%
2016 30.455% 8.214% 38.669%- 28.570%-192 57.584% 0.19065% 5.063% 129.886% 0.19065%
194 35.319% 0.27898%107.621% 0.27898%
196 24.317% 0.26999%96.619% 0.26999%
2017 29.342% 8.168% 37.510%- 28.004%-192 54.269% 0.18481% 4.907% 124.690% 0.18481%
194 32.914% 0.25441%103.335% 0.25441%
196 23.336% 0.27380%93.757% 0.27380%
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.
Per Dakota County - Final Tax Rates Pay 2017 table
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)
CITY OF LAKEVILLE
PRINCIPAL PROPERTY TAXPAYERS
FISCAL YEARS ENDED DECEMBER 31, 2017 AND DECEMBER 31, 2008
(146)
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
Dakota Electric Association Utility 363,424$ 1 0.5% 306,868$ 3 0.5%
Southfork Apartments LLC Apartments 357,216 2 0.5% 210,395 6 0.3%
Minnegasco, Inc. Utility 336,184 3 0.5%
Lakeville 2004, LLC Commercial 303,944 4 0.4% 354,010 2 0.5%
Heritage Commons, LLC Retail 302,182 5 0.4% 182,280 9 0.3%Fulford Group, LLC Agriculture 294,966 6 0.4%Argonne Investments, LLC Retail 279,356 7 0.4% 389,099 1 0.6%
Walker Highview Hills, LLC Apartments 263,577 8 0.4%
Target Corporation Retail 255,408 9 0.4% 297,592 4 0.5%
AGNL Exercise LLC Commercial 240,225 10 0.3%CRW Lakeville, LLC Retail 246,320 5 0.4%Muller Family Theaters of Lakeville Commercial 196,328 7 0.3%Cobblestone Lake LLC Industrial 186,056 8 0.3%Mills Property Incorporated Commercial 179,876 10 0.3%
Total principal taxpayers 2,996,482 4.3% 2,548,824 3.9%
All other taxpayers 66,890,612 95.7%63,234,850 96.1%
Total City of Lakeville taxpayers 69,887,094$ 100.0%65,783,674$ 100.0%
Source: Dakota County Auditor and Treasurer’s Office.
2017 2008
CITY OF LAKEVILLE
PROPERTY TAX LEVY AND COLLECTIONS
LAST TEN FISCAL YEARS
(147)
Percentage
Prior Yr. of Total
Total Tax Collection Current/ Collections
Fiscal Levy for of Prior Delinq Total To Tax Levy
Year Fiscal Year (2)Amount (3)Percent Year Levy (4)Adjustments Collections Certified
2008 (1) 22,690,614$ 22,023,558$ 97.06% 408,068$ (6,077) 22,431,626$ 98.86%
2009 (1) 23,527,163 22,473,650 95.52% 409,738 10,943 22,883,388 97.26%
2010 (1) 24,041,653 22,982,110 95.59% 261,764 21,171 23,243,874 96.68%
2011 (1) 24,036,652 22,837,484 95.01% 346,739 (44,486) 23,184,223 96.45%
2012 23,126,960 23,050,840 99.67% 4,672 134,203 23,055,512 99.69%
2013 23,079,185 22,848,820 99.00% 230,365 (85,236) 23,079,185 100.00%
2014 23,657,996 23,541,510 99.51% 116,486 (77,762) 23,657,996 100.00%
2015 24,728,549 24,568,028 99.35% 160,521 (32,923) 24,728,549 100.00%
2016 25,679,619 25,566,236 99.56% 113,383 (18,634) 25,679,619 100.00%
2017 26,679,614 26,534,636 99.46% - (39,235) 26,534,636 99.46%
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
2008 305,479$ 1.35%
2009 630,561$ 2.62%
2010 731,494$ 3.04%
2011 835,005$ 3.61%
2012 -$ -
2013 -$ -
2014 -$ -
2015 -$ -
2016 -$ -
2017 -$ -
(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
CITY OF LAKEVILLE
RATIO OF NET BONDED DEBT BY TYPE
LAST TEN FISCAL YEARS
(148)
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
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 3.6 1,934
2016 121,958,354 7,781,645 - 1,159,843 9,952,577 140,852,419 60,965 4.2 2,310
2017 113,666,228 7,417,448 - 1,897,014 10,783,468 133,764,158 61,993 N/A 2,158
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
CITY OF LAKEVILLE
RATIO OF NET BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
(149)
PercentageNet
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
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
2016 121,958,354 64,845,000 15,928,687 41,184,667 66,361,683 62.06% 60,965 676
2017 121,083,676 67,940,000 6,261,464 46,882,212 70,906,033 66.12% 61,993 756
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).
CITY OF LAKEVILLE
DIRECT AND OVERLAPPING GOVERNMENTAL DEBT
AS OF DECEMBER 31, 2017
(150)
Debt Applicable to Taxable
Debt Net Tax Capacity in the City
Governmental Unit Outstanding (2)Percentage (2)Amount
Overlapping Debt (1)
Independent School District #194 121,250,000$ 71.80% 87,057,500$
Independent School District #192 197,225,000 18.20% 35,894,950
Independent School District #196 170,005,000 6.40% 10,880,320
Special District
Metropolitan Council 192,365,000 2.40%4,562,210
138,394,980
Direct Debt
City of Lakeville bonded debt 122,980,690 100.00%122,980,690
261,375,670$
Source: Debt figures and applicable percentages for other than the City of Lakeville are provided by the
City’s fiscal consultant Springsted.
Notes:
(1)
(2)
Total overlapping debt
Total direct and overlapping debt
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.
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.
CITY OF LAKEVILLE
LEGAL DEBT MARGIN
LAST TEN FISCAL YEARS
(151)
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
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%
2016 5,825,279,418 174,758,383 34,776,313 139,982,070 19.90%
2017 6,201,221,856 186,036,656 32,593,536 153,443,120 17.52%
Legal Debt Margin Calculation:Fiscal Year 2017
Assessor’s taxable market valuation 6,201,221,856$
Legal debt limit:
3% of Assessor’s taxable market valuation 186,036,656$
Amount of debt applicable to legal debt limit:
Gross bonded debt 123,585,000$
Less debt payable from sources other than taxes:
G.O. Improvement bonds 52,220,000$
Tax increment bonds 1,240,000
State-aid street revenue bonds 6,205,000
Water connection revenue bonds 7,940,000
HRA lease revenue 9,050,000
Arena revenue bonds 335,000
Water revenue bonds 6,910,000
Street Light revenue bonds 335,000
Sewer revenue bonds 495,000 (84,730,000)
Debt payable from taxes 38,855,000
Less debt service monies available to pay
principal and interest (6,261,464)
Net bonded debt applicable to debt limit 32,593,536 32,593,536
Legal debt margin 153,443,120$
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.
CITY OF LAKEVILLE
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
(152)
Net Revenue
Available
Fiscal Gross (1)Operating For Debt Times
Year Revenues Expenses Service Principal Interest Total Coverage
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
2016 10,530,436 5,389,869 5,140,567 595,000 652,577 1,247,577 4.12
2017 12,238,291 5,390,818 6,847,473 1,005,000 690,010 1,695,010 4.04
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)
CITY OF LAKEVILLE
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
(153)
Percentage Personal Per Capita
(1)Increase from Income (2)Personal Housing units
Year Population Previous Year (in thousands)Income Single Multiple Total Valuation
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% 3,222,117 53,710 366 - 366 114,765,000
2016 60,965 1.62% 3,351,551 54,975 403 62 465 139,008,000
2017 61,993 1.69% N/A N/A 487 44 531 160,520,000
Annual percentage
increase average last
ten fiscal years 1.42%
Labor Unemployment Labor Unemployment State of United
Year Force Rate Force Rate Minnesota States
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%
*2016 33,793 3.0% 232,091 3.4% 4.1% 4.5%
*2017 34,911 2.5% 239,356 2.7% 3.3% 4.1%
Source:
(1) Metropolitan Council as of April 1 (except for 2010 Federal Census and 2016 estimate based on prior year ).
(2) U.S. Department of Commerce Bureau of Economic Analysis as of December 31, 2017.
* 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
CITY OF LAKEVILLE
PRINCIPAL EMPLOYERS
FISCAL YEARS ENDED DECEMBER 31, 2017 AND DECEMBER 31, 2008
(154)
Principal Employer (1)Product/Service Employees Rank %Employees Rank %
Independent School District #194 Elementary & secondary schools 1,370 1 3.9% 1,400 1 4.6%
Hearthside Food Solutions Food service contractors 630 2 1.8% 600 2 2.0%
Treehouse Brands Breakfast cereal products 515 3 1.5% 500 3 1.6%
Imperial Plastics, Inc Plastics material & resin mfg.450 4 1.3% 200 6 0.7%
Post Holdings Cereal production 327 5 0.9%
Menasha Corporation Corrugated & solid fiber box mfg.237 6 0.7% 185 8 0.6%
Despatch Industries, Inc. Industrial furnace & oven mfg.230 7 0.7% 250 4 0.8%
City of Lakeville (2)City government 227 8 0.7% 214 5 0.7%
BTD Manufacturing Metal manufacturing 210 9 0.6%
Jeff Belzer’s Chevy-Dodge-KIA New & used auto dealership 200 10 0.6% 150 10 0.5%
Hearth & Home Technologies, Inc. Fireplaces/metal work 192 7 0.6%
Carquest Distribution Center General warehousing & storage 162 9 0.5%
Total principal employers 4,396 12.6% 3,853 12.6%
All other employers 30,392 87.4% 26,618 87.4%
Total City of Lakeville civilian labor force (3) 34,788 100.0% 30,471 100.0%
Source:
(1) Telephone survey of individual employers, 2017
(2) As of December 31, 2017 (full-time equivalent).
(3) MN Department of Employment and Economic Development (DEED) as of December 31, 2017.
2017 2008
CITY OF LAKEVILLE
COMMERCIAL AND INDUSTRIAL BUILDING PERMITS ISSUED
YEARS 2017 AND 2016
(155)
BUSINESS PRODUCT/SERVICE VALUATION (1)
Launch Park I Industrial business park 9,650,000$
Schneiderman's Furniture Retail furniture store 9,130,000
Interstate Companies Truck service and maintenance 8,200,000
Globus Transport Trucking company 3,036,000
Lakeville Memory Care Livewell Memory care facility 3,000,000
Agape Mechanical HVAC, plumbing and electrical contractor 2,400,000
PetSmart Retail pet store 2,300,000
Rivers Edge Dental Dental 2,100,000
Dunn Brothers Coffee Restaurant 1,750,000
Rainbow Childcare Preschool/daycare 1,400,000
Dakota Truck Trucking facility 1,275,000
McDonald Eye Care Eye care 1,242,000
Caribou Coffee/Einstein Bagels Restaurant 884,000
Freddy's Frozen Custard Restaurant 857,000
Avonlea Development Development clubhouse 850,000
Taco Bell Restaurant 845,000
Christian Brothers Automotive Automotive 600,000
SBF Development Development clubhouse 503,000
Target Retail 500,000
BUSINESS PRODUCT/SERVICE VALUATION (1)
Simply Self StorageSelf storage facility 3,500,000
DaVita Dialysis Clinic Medical 900,000
Children's Dental Medical 822,000
Safety Signs Sign manufacturer 800,000
Emagine Lakeville Theater Theater 750,000
Dakota Curling Club Curling facility 700,000
Treehouse Brands Store brand/private label food products 645,000
Designed Cabinets Custom cabinets 615,000
Harry's Café Restaurant 550,000
Bass Flexible Packaging Packaging product supplier 490,000
Edina Realty Home Services Real estate office 432,000
Total Hockey Hockey training facility 400,000
Med Express/Walgreens Retail/Medical 400,000
Consulting Engineers Group Engineering services 390,000
Lakeview Bank Financial services 389,000
Hearthside Foods Food contract manufacturer 350,000
Plaza Dental Medical 324,000
Pizza Hut Pizza restaurant 300,000
Lakeville Advanced Dental Care Dental 275,000
Exit Realty Real estate office 265,000
Notes:
(1)Valuation excludes land and personal property.
Source: City of Lakeville Inspections Department.
NEW BUILDING PERMITS 2017 AND 2016 (in excess of $250,000)
EXPANSION OR REMODEL BUILDING PERMITS 2017 AND 2016 (in excess of $250,000)
CITY OF LAKEVILLE
EMPLOYES BY FUNCTION/PROGRAM (FULL-TIME EQUIVALENT)
LAST TEN FISCAL YEARS
(156)
Function/Program 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
General government
City administration 3.0 2.8 2.5 2.5 2.5 2.4 2.8 3.0 3.0 3.0
Communications 4.1 3.9 4.0 4.0 4.0 4.0 4.0 4.0 3.9 4.5
City clerk 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Finance 6.6 6.5 6.4 6.0 7.0 7.0 7.0 6.6 6.7 7.0
Information systems 4.0 3.3 3.0 3.0 3.0 2.9 3.0 3.0 3.1 3.8
Human resources 3.0 2.8 2.8 2.8 2.8 2.8 2.8 3.2 4.0 4.0
Planning 4.5 3.8 3.0 3.0 3.0 2.8 3.5 3.5 3.5 4.2
Community and economic development 2.5 2.5 2.5 2.5 2.5 2.5 2.4 2.5 2.5 2.4
Protective inspection 12.4 8.7 8.0 8.0 7.0 7.0 7.0 7.6 8.0 8.4
General government buildings 3.1 3.0 3.0 3.0 3.0 3.0 3.0 3.0 4.6 5.5
Total general government 44.2 38.3 36.2 35.8 35.8 35.4 36.5 37.4 40.2 43.8
Public safety
Police officers (sworn)52.8 51.0 51.5 51.9 53.0 50.2 54.0 52.8 54.7 54.6
Police administration 12.4 11.1 10.8 11.3 12.2 11.5 11.8 12.5 13.4 14.8
Fire (excluding volunteer firefighters)4.6 4.6 4.6 4.6 4.6 4.6 4.6 5.3 5.5 5.4
Total public safety 69.8 66.7 66.9 67.8 69.8 66.3 70.4 70.6 73.6 74.8
Public works
Engineering 12.3 9.3 9.0 6.8 7.0 6.0 6.0 6.4 6.6 7.6
Construction Services - - - - - - 2.0 3.9 3.7 3.3
Street maintenance 20.0 19.4 19.0 19.0 19.3 19.3 21.0 20.4 21.6 21.7
Total public works 32.3 28.7 28.0 25.8 26.3 25.3 29.0 30.7 31.9 32.6
Parks and recreation
Park maintenance 15.0 14.5 15.0 15.0 15.0 15.0 15.0 14.8 14.0 15.1
Recreation 5.3 4.9 4.7 4.7 4.7 5.6 5.6 5.5 5.8 6.5
Arts center 3.6 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 4.6
Total parks and recreation 23.9 23.1 23.4 23.4 23.4 24.3 24.3 24.0 23.5 26.2
Total governmental activities 170.2 156.8 154.5 152.8 155.3 151.3 160.2 162.7 169.2 177.4
Liquor 25.9 25.7 25.7 25.8 25.7 24.9 26.3 24.4 25.3 26.1
Utility 18.0 18.0 18.0 20.0 20.0 20.0 21.0 21.6 21.3 23.1
Total business-type activities 43.9 43.7 43.7 45.8 45.7 44.9 47.3 46.0 46.6 49.2
Total employees 214.1 200.5 198.2 198.6 201.0 196.2 207.5 208.7 215.8 226.6
(1.3) (13.6) (2.3) 0.4 2.4 (4.8) 11.3 1.2 7.1 10.9
Source: City of Lakeville Human Resources Department.
CITY OF LAKEVILLE
OPERATING INDICATORS BY FUNCTION
LAST TEN FISCAL YEARS
(157)
Function 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
General government
Number of registered voters 31,024 N/A 32,617 N/A 32,200 N/A 36,571 N/A 41,124 N/A
Number of final plats approved 10 8 10 12 14 15 16 23 19 20
Number of building permits issued 1,878 1,428 1,421 1,467 2,349 1,647 3,852 2,030 1,889 1,829
Valuation of building permits
issued (in millions)111$ 62$ 49$ 77$ 119$ 142$ 139$ 183$ 218$ 248$
Public safety
Total calls for service 42,515 40,972 38,723 33,883 38,895 33,328 35,980 47,072 47,724 38,036
Traffic stops 12,424 13,370 12,310 9,210 11,426 8,251 10,531 17,681 18,239 15,680
Non-traffic related calls 30,091 27,602 26,413 24,673 27,469 25,077 25,449 29,391 29,485 22,356
Number of volunteer firefighters 90 78 74 83 77 79 80 83 85 86
Number of annual fire calls 1,230 1,343 1,189 1,262 1,208 1,062 1,103 1,192 1,347 1,477
Public works
City street miles added 1.0 0.4 1.0 1.4 2.6 2.8 4.5 4.5 17.0 3.1
Parks and recreation
Park acres mowed 427 427 427 429 429 430 430 430 430 430
Park facility reservations taken 479 559 661 655 717 888 958 1,024 742 551
Program activity registrations taken 7,994 8,201 8,369 9,051 9,850 9,310 9,627 9,231 8,141 6,294
Liquor
Annual sales (in millions)14.4$ 14.6$ 14.7$ 14.4$ 15.2$ 15.4$ 14.9$ 13.6$ 14.1$ 14.6$
Utility (in millions of gallons)
Water (average daily consumption)6.3 6.1 4.8 5.7 6.7 5.9 5.5 5.2 5.5 5.8
Sanitary sewer (1)4.0 3.3 3.3 3.3 3.4 3.4 3.4 3.2 3.4 3.4
(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.
CITY OF LAKEVILLE
CAPITAL ASSET STATISTICS BY FUNCTION
LAST TEN FISCAL YEARS
(158)
Function (1)2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
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)257.6 258.6 259.0 260.0 261.4 264.0 266.8 271.3 288.3 291.4
Parks and recreation
Acres of parks, conservation areas,
and greenways 1,569 1,579 1,579 1,586 1,590 1,590 1,590 1,590 1,600 1,600
Parks 57585859595959596060
Conservation areas 18181818202020202020
Trails and sidewalks - paved (miles)95 96 97 98 99 103 107 109 110 111
Ice rinks - outdoor (fully boarded)11 11 11 11 11 11 11 11 11 11
Ice rinks - indoor 3333333333
Fields (softball, soccer, baseball,
football, Lacrosse)93 93 96 97 97 97 97 96 96 96
Courts (basketball, volleyball, tennis,
pickleball)39 39 39 38 38 38 38 38 38 43
Playgrounds 40 40 41 42 42 42 43 43 44 44
Swimming beaches 3333333333
Liquor
Number of on-sale stores owned 2 2 2 2 2 2 2 2 2 2
Number of on-sale stores leased 1 1 1 1 1 1 1 1 1 1
Utility
Water
Water mains (miles)310 311 311 313 313 321 321 321 321 346
Fire hydrants 3,374 3,386 3,386 3,434 3,434 3,572 3,572 3,572 3,572 3,818
Wells 16 17 17 17 17 17 17 17 18 18
Water Towers 5 5 5 5 5 5 5 5 5 6
Sanitary sewer
Sanitary sewer mains (miles)255 256 259 261 261 261 261 261 261 261
Sanitary sewer lift stations 20 20 19 19 19 20 20 20 20 20
Notes:
(1)Indicators for general government functions are not available.
Source: Various City of Lakeville Departments.
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CITY OF LAKEVILLE, MINNESOTA
EXECUTIVE AUDIT SUMMARY
YEAR ENDED DECEMBER 31, 2017
(1)
CliftonLarsonAllen LLP
CLAconnect.com
June 5, 2018
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, 2017. 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.
CliftonLarsonAllen LLP
Minneapolis, Minnesota
June 5, 2018
(2)
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, 2017, 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, in our Governance Communication Letter, 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, 2017:
We issued an unmodified opinion on the City's basic financial statements.
We reported no deficiencies in the City's internal control over financial reporting that we
considered to be material weaknesses or significant deficiencies.
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.
(3)
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 2016 fiscal year, local ad valorem property tax levies provided 39.8 percent of the total
governmental fund revenues for cities over 2,500 in population, and 36.4 percent for cities under 2,500
in population. Property tax levies certified by Minnesota cities for 2017 increased about 5.5 percent
over 2016, compared to an increase of 5.5 percent the prior year. Levy limits were not in place for 2016
or 2017.
The total market value of property in Minnesota cities increased about 5.6 percent for the 2017 levy
year, following an increase of 5.7 percent for levy year 2016, an increase of 8.5 percent for 2015, a
slight increase of 1.1% for 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 2017, with gains in
the market values of residential homestead properties (6.9 percent) and non-homestead residential
properties (4.8 percent), which were all outpaced by the market value gain of commercial/industrial
properties (7.4 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 2017 is based on
estimated values as of January 1, 2016), market value improvement has lagged behind recent upturns
in the housing market and the economy in general.
The City’s taxable market value increased 4.9 percent for taxes payable in 2016 and 6.5 percent for
taxes payable in 2017. The following graph shows the City’s changes in taxable market value over the
past 10 years plus 2018:
$‐
$1
$2
$3
$4
$5
$6
$7
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018BillionsTaxable Market Value
Taxable Market Value
(4)
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 6.5 percent and 4.5
percent for taxes payable in 2017 and 2016, respectively.
The following graph shows the City’s change in tax capacities over the past 10 years:
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
$‐
$10
$20
$30
$40
$50
$60
$70
$80
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017MillionsTax Capacity vs. Tax Rate
(City Only)
Local Net Tax Capacity Tax Rate
The prior year report included a comparison of property tax capacity rates between the City, seven-
county metro area, and all cities state-wide average. The 2017 comparison data was not available for
the seven-county metro area nor all cities state-wide; therefore, the chart is not included this year.
The following chart provides a comparison of how the City’s property taxes compare to other
comparable cities:
This chart is based on the City of Lakeville’s median home value of $266,500 and estimated taxable
market value of $252,155. The City of Lakeville when compared to other local cities is right in the
middle. This chart is an estimate of only the City’s portion of taxes and excludes other taxing
jurisdictions (i.e. schools, county, special districts).
(5)
GOVERNMENTAL FUND BALANCES
The following table summarizes the changes in the fund balances of the City’s governmental funds
during the year ended December 31, 2017, presented both by fund balance classification and by fund:
Increase
2017 2016 (Decrease)
Fund Balances of Governmental Funds
Total by Classification
Nonspendable 914,375$ 695,830$ 218,545$
Restricted 29,887,820 37,947,697 (8,059,877)
Committed 26,519,559 21,651,118 4,868,441
Assigned 741,864 1,478,522 (736,658)
Unassigned 12,736,609 12,175,467 561,142
Total governmental funds 70,800,227$ 73,948,634$ (3,148,407)$
Total by Fund
General 15,269,442$ 15,076,500$ 192,942$
General Obligation Debt Service 5,176,628 14,903,538 (9,726,910)
G.O. Improvement Debt Service 9,976,390 7,037,315 2,939,075
Building Capital Projects 712,944 808,425 (95,481)
Improvement Construction Capital Projects 937,224 1,450,488 (513,264)
Nonmajor Funds 38,727,599 34,672,368 4,055,231
Total governmental funds. 70,800,227$ 73,948,634$ (3,148,407)$
Fund Balance
As of December 31,
In total, the fund balances of the City’s governmental funds decreased $3,148,407 during the year
ended December 31, 2017.
The majority of the decrease was due to the use of restricted fund balances of $9.7 million which offset
an increase in the committed fund balances of $2.9 million and unassigned fund balances of $561
thousand, from the prior year. The decrease in restricted fund balances was due to the refunding of the
City’s Capital Improvement Bonds Series 2007D. The increase in the committed balance was primarily
related to the collection of water and sanitary sewer trunk fees in the capital projects funds.
The increase in unassigned fund balance was also primarily due to the City generating $1.6 million
more than budgeted for revenues as well as $1.1 million under budget on expenditures.
(6)
GOVERNMENTAL FUNDS REVENUE AND EXPENDITURES
The following table presents the per capita revenue of the City’s governmental funds for the past three
years, along with state-wide averages.
We have included the most recent comparative state-wide averages available from the Office of the
State Auditor to provide a benchmark for interpreting the City’s data. The amounts received from the
typical major sources of governmental fund revenue will naturally vary between cities based on factors
such as the City’s stage of development, location, size and density of its population, property values,
services it provides, and other attributes. It will also differ from year-to-year due to the effect of inflation
and changes in the City’s operation. Also, certain data on these tables may be classified differently than
how they appear on the City’s financial statements in order to be more comparable to the state-wide
information, particularly in separating capital expenditures from current expenditures.
We have designed this section of our management report using per capita data in order to better
identify unique or unusual trends and activities of your city. We intend for this type of comparative and
trend information to complement, rather than duplicate, information in the Management’s Discussion
and Analysis. An inherent difficulty in presenting per capita information is the accuracy of the population
count, which for most years is based on estimates.
State ‐Wide
Year December 31, 2016 2015 2016 2017
Population 20,000 ‐ 100,000 59,991 60,965 61,993
Property taxes 455$ 414$ 421$ 433$
Tax increments 42 7 7 9
Franchise and other taxes 45 11 7 6
Special assessments 59 29 38 45
Licenses and permits 42 55 61 64
Intergovernmental revenues 152 87 148 61
Charges for services 103 196 218 162
Other 54 31 29 21
Total Revenue 951 830 929 801
City of Lakeville
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 $49.7 million in 2017, about $7.0 million (12.3 percent) less
than the prior year. On a per capita basis, governmental fund revenue for 2017 was $128 less than the
prior year. Property tax revenue was $12 per capita higher than the previous year due to a levy
increase. Licenses and permits revenue was $3 per capita higher than last year due to increased
development activity. Intergovernmental revenues were $87 per capita less than last year due to a
decrease in municipal state-aid revenue as there were several large capital projects in 2016. Charges
for services were $56 per capita less than last year due to decreased in collections of fees during 2017.
Revenue in the “other” category shown above decreased $8 per capita.
(7)
Below is a table of the City of Lakeville’s 2017 governmental funds revenue per capita as compared to
the average per capita revenues for the governmental funds of several comparable cities for the year
2016. The comparable cities included in the average below (and in any other instances of a comparable
city average included in this report) are Apple Valley, Blaine, Bloomington, Chanhassen, Eagan, Eden
Prairie, Inver Grove Heights, Maple Grove, Plymouth, Prior Lake, Savage, Shakopee, and Woodbury.
The expenditures of governmental funds will also vary from state-wide averages and from year-to-year,
based on the City’s circumstances. Expenditures are classified into three types as follows:
Current – These are typically the general operating type expenditures occurring on an annual
basis, and are primarily funded by general sources such as taxes and intergovernmental
revenues.
Capital Outlay – These expenditures do not occur on a consistent basis, more typically
fluctuating significantly from year-to-year. Many of these expenditures are project-oriented, and
are often funded by specific sources that have benefited from the expenditure, such as special
assessment improvement projects.
Debt Service – Although the expenditures for debt service may be relatively consistent over the
term of the respective debt, the funding source is the important factor. Some debt may be repaid
through specific sources such as special assessments or redevelopment funding, while other
debt may be repaid with general property taxes.
(8)
The City’s expenditures per capita of its governmental funds for the past three years, together with
state-wide averages, are presented in the following table:
State‐Wide
Year December 31, 2016 2015 2016 2017
Population 20,000 ‐ 100,000 59,991 60,965 61,993
Current
General Government 97$ 87$ 95$ 104$
Public Safety 273 182 189 206
Public Works 95 64 70 158
Parks and recreation 91 59 57 84
557 392 411 552
Capital Outlay
And construction 301 528 622 193
Debt Service
Principal 115 123 97 111
Interest and fiscal 34 63 70 65
149 186 168 176
Total Expenditures 1,007 1,106 1,201 921
City of Lakeville
Governmental Fund Expenditures per Capita
With State‐Wide Averages by Population Class
Total expenditures in the City’s governmental funds for 2017 were $57.10 million, a decrease of $16.1
million (22.0 percent) from the previous year, or $285 per capita. The decrease was primarily due to
capital outlay, which was $429 per capita less than the previous year, primarily due to several large
street and utility improvement projects during 2016. The decrease in capital outlay was offset with
increases in public works and parks and recreation spending per capita of $88 and $27, respectively.
Scheduled debt service principal and interest costs were also $8 higher per capita than the prior year.
Below is a table of the City of Lakeville’s 2017 governmental funds expenditures per capita as
compared to the average per capita revenues for the governmental funds of several comparable cities
for the year 2016.
(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.
The City’s General Fund cash and investments balance at December 31, 2017 was $14,072,773, a
decrease of $538,098. Total fund balance at December 31, 2017 was $15,269,442, which is an
increase of $192,942 from the prior year, and $2,370,495 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 69 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’s unrestricted fund balance at the end of the 2017 fiscal year represents
approximately 56.1 percent of annual expenditures based on 2017 levels, compared to 58.8 percent at
the end of the previous year.
(10)
The following graph reflects the City’s General Fund revenue sources for 2017 compared to budget:
General Fund revenue for 2017 was $26,736,039, which was $1,176,327 (4.6 percent) more than
budget.
Licenses and permits revenue was over budget by $965,217, 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.
(11)
Overall, General Fund revenues increased $103,858 (0.4 percent) from the previous year. Property tax
revenue was $492,910 more than last year due to a 4.95 percent increase in the property tax levy.
Intergovernmental revenue increased $119,169 due to additional grants being received. Revenue from
charges for services decreased $836,817 due primarily to a decrease in public works fees. Licenses
and permits increased $298,475 due primarily to additional building permits during 2017. Finally,
revenue in the “all other” category as shown above was $30,121 higher than last year, primarily due to
an increase in investment returns.
The following graph illustrates the components of General Fund spending for 2017 compared to
budget:
Total General Fund expenditures for 2017 were $25,607,540, which was $1,194,168 (4.5 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 $333,514 under budget, with the
largest savings in planning, community and economic development, inspections, information systems,
and human resources. Public safety expenditures were $87,896 under budget, primarily in police other
charges and services and commodities. Public works expenditures were $675,715 under budget,
mainly in engineering other charges and services, operations and maintenance personnel costs, and
street maintenance personnel costs. Parks and recreation costs were under budget by $97,043, mainly
in park maintenance personnel and other charges and services.
(12)
The following graph presents the City’s General Fund expenditures by function for the last five years:
$‐
$2
$4
$6
$8
$10
$12
$14
General Government Public Safety Public Works Parks and RecreationMillionsGeneral Fund Expenditures by Function
Year Ended December 31,
2013 2014 2015 2016 2017
Total General Fund expenditures for 2017 were $1,156,950 (4.7 percent) higher than the previous year,
with the increase spread across all program areas. The majority of the increase was in personnel costs,
which were due to contractual wage increases, inflationary benefit cost increases, and the addition of
about seven full-time employees compared to the prior year.
(13)
ENTERPRISE FUNDS OVERVIEW
The City maintains two enterprise funds to account for services the City provides that are financed
primarily through fees charged to those utilizing the service. This section of the report provides you with
an overview of the financial trends and activities of the City’s enterprise funds, which include the (water,
sewer, street light, and environmental resources) Utility Fund and Liquor Fund.
ENTERPRISE FUNDS FINANCIAL POSITION
The following table summarizes the changes in the financial position of the City’s enterprise funds
during the years ended December 31, 2017 and 2016, presented both by classification and by fund:
Increase
2017 2016 (Decrease)
Net Position of enterprise funds
Total by classification
Net Investment in capital assets 135,324,120$ 129,086,090$ 6,238,030$
Restricted for Debt Service 323,875 323,875 ‐
Unrestricted 10,627,646 9,584,936 1,042,710
Total Enterprise Funds 146,275,641$ 138,994,901$ 7,280,740$
Total by Fund
Liquor 4,366,329$ 3,942,455$ 423,874$
Utility 141,909,312 135,052,446 6,856,866
Total Enterprise Funds 146,275,641$ 138,994,901$ 7,280,740$
Net Position
As of December 31,
Enterprise Funds Change in Financial Position
In total, the net position of the City’s enterprise funds increased by $7,280,740 during the year ended
December 31, 2017. The Liquor Fund net position increased by $423,874, due primarily to net transfers
in and out being less than the prior year. Transfers in were $810 thousand, while transfers out were
$1.3 million. 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 $9.2 million received from
developers, other government agencies, and the City’s governmental funds.
(14)
LIQUOR FUND
The following graphs present five years of operating results for the Liquor Fund:
The Liquor Fund ended 2017 with a net position of $4,366,329, an increase of $423,874 from current
year operations. Of this, $3,822,026 represents net investment in capital assets leaving an unrestricted
net position of $220,428.
(15)
Gross liquor sales for 2017 were $14,583,514, an increase of $452,684 (3.2 percent) from 2016. The
Liquor Fund generated a gross profit of $3,578,269 in 2017, or about 24.5 percent, of gross sales.
Operating expenses for 2017 were $2,518,277, an increase of $64,949 (2.6 percent) from the prior
year. Net operating income for 2017 was $1,059,992, or about 7.3 percent, of gross sales. The
increase in gross sales and the resulting increase in the two operating ratios shown below were
primarily attributable to stabilization during 2017 as the City has faced significant increases to
competition in previous years. The Liquor Fund also made transfers out of $1,345,322 to support the
General Fund, for debt service, and for various capital needs, which was offset by transfers in of
$809,069 due to the transfer of the debt obligation for the Galaxie Liquor Store.
(16)
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:
The Utility Fund ended 2017 with net position of $141,909,312, an increase of $6,856,866 from current
year operations. Of the net position balance, $131,502,094 represents the City’s net investment in utility
capital assets, leaving $10,407,218 of unrestricted net position.
Utility Fund operating revenue was $12,585,450 for 2017, an increase of $1,893,265 (17.7 percent),
mainly due to increase in water usage and sewer discharge coupled with an increase in rates.
Operating expenses (including depreciation of $4,295,521) were $13,919,001, which represents an
increase of $1,337,495 (10.6 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 $9,256,100 in 2017 from developers, other
governmental agencies, and the City’s governmental funds.
(17)
GOVERNMENT-WIDE FINANCIAL STATEMENTS
In addition to fund-based information, the current reporting model for governmental entities also
requires the inclusion of two government-wide financial statements designed to present a clear picture
of the City as a single, unified entity. These government-wide financial statements provide information
on the total cost of delivering services, including capital assets and long-term liabilities.
STATEMENT OF NET POSITION
The Statement of Net Position essentially tells you what your city owns and owes at a given point in
time, the last day of the fiscal year. Theoretically, net position represents the resources the City has
leftover to use for providing services after its debts are settled. However, those resources are not
always in spendable form, or there may be restrictions on how some of those resources can be used.
Therefore, net position is divided into three components: net investment in capital assets, restricted,
and unrestricted.
The following table presents the components of City’s net position as of December 31, 2017 and 2016,
for governmental activities and business-type activities:
Increase
2017 2016 (Decrease)
Net Position
Governmental Activiies
Net Investment in capital assets 144,581,700$ 148,684,068$ (4,102,368)$
Restricted 46,683,603 38,516,463 8,167,140
Unrestricted 6,036,382 2,134,179 3,902,203
Total governmental activities 197,301,685$ 189,334,710$ 7,966,975$
Business‐type activities
Net Investment in capital assets 135,324,120$ 129,086,090$ 6,238,030$
Restricted 323,875 323,875 ‐
Unrestricted 10,791,344 9,757,400 1,033,944
Total business‐type activities 146,439,339 139,167,365 7,271,974
Total net position 343,741,024$ 328,502,075$ 15,238,949$
As of December 31,
The total net position of the City increased $15.2 million during the 2017 fiscal year. Of the increase,
$7.9 million came from governmental activities and $7.3 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 governmental activities during 2017, which
totaled about $16.3 million.
The increase in governmental activities restricted net position was the result of several factors,
including an increase in special assessments restricted for future debt service; capital grants
(contributions); increases in charges for services and other resources restricted for future capital
improvements.
(18)
STATEMENT OF ACTIVITIES
The Statement of Activities tracks the City’s yearly revenues and expenses, as well as any other
transactions that increase or reduce total net position. These amounts represent the full cost of
providing services. The Statement of Activities provides a more comprehensive measure than just the
amount of cash that changed hands, as reflected in the fund-based financial statements. This
statement includes the cost of supplies used, depreciation of long-lived capital assets, and other
accrual-based expenses.
The following table presents the change in the net position of the City for the years ended December
31, 2017 and 2016:
2016
Program
Expenses Revenues Net Change Net Change
Net (expense) revenue
Governmental activities
General government 4,579,478$ 4,479,106$ (100,372)$ (3,022,427)$
Public safety 14,250,572 1,995,696 (12,254,876) (14,417,433)
Public works 18,944,454 21,482,386 2,537,932 19,237,625
Parks and recreation 6,645,057 2,607,302 (4,037,755) 1,083,534
Interest on long‐term debt 3,268,426 ‐ (3,268,426) (3,930,168)
Business‐type activities
Liquor 13,638,043 14,590,230 952,187 866,173
Utility 14,138,885 17,542,990 3,404,105 6,218,198
Total net (expense) revenue 75,464,915$ 62,697,710$ (12,767,205) 6,035,502
General Revenues
Property taxes and tax increments 27,317,169 26,173,822
Investment earnings 688,985 459,781
Total general revenues 28,006,154 26,633,603
Change in net position 15,238,949 32,669,105
Net position , beginning 328,502,075 295,832,970
Net position ‐ ending 343,741,024$ 328,502,075$
2017
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 public works is mainly the result of decreased capital contributions, utility connection
charges and special assessments of $16.7 million during 2017.
(19)
LEGISLATIVE UPDATES
Despite the 2018 legislative session ending with a projected budget excess of $329 million for the
2018–2019 biennium the most recent legislative session made some progress on pensions, bonding,
and a few other areas, it resulted in numerous bills being voted and the Governor and Legislators being
further apart on their respective views for Minnesota.
The following is a summary of recent legislation affecting Minnesota cities in 2017/2018 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 2016 and
2017, and is $534.4 million for fiscal 2018 and thereafter. The $15 million increase in LGA for
fiscal year 2018 is a permanent increase which was approved by the omnibus tax bill signed by
Governor Dayton. The omnibus tax bills vetoed by Governor Dayton would not have affected
LGA in total.
Competitive Bidding – Effective August 1, 2018, the competitive bidding threshold will
increase from $100,000 to $175,000. This is the first change since 2008 and was made with the
support of the League of Minnesota Cities, the Association of Minnesota Counties, the
Minnesota Association of Townships, and the Minnesota School Boards Association.
Replacement of Freon Systems – The 2017 Omnibus Tax Bill created a new option for home
rule and statutory cities to finance the replacement of Freon-based refrigerant (R-22) in their
hockey arenas by issuing capital notes or certificates of indebtedness with up to a 20-year term
without voter approval, but are subject to reverse referendum process. The previous limit was
10-years. Chemical producers will no longer be allowed to produce R-22 after January 1, 2020.
Pensions – Governor Dayton signed the Omnibus Pension bill providing additional resources to
the PERA – Police and Fire Plan and the State MSRS Plan. It also provides several changes to
assumptions for PERA to incorporate which includes rate of return, cost of living adjustments,
target funding date, plus several other. It also increased the employee and employer
contribution rates effective on January 1, 2019 and another increase set for January 1, 2020.
The General Employees Plan’s contribution rates were not adjusted.
Bonding Bill – Governor Dayton signed the $825 million general obligation bonding bill. The
bonding bill provides $400 million in highway bonds for Corridors of Commerce program, $35
million in local road improvements, $39 million in infrastructure funding for drinking water
programs, $80 million in housing infrastructure bonds, and numerous other city-specific projects.
Investment Options – Minnesota Statute Section 118A was amended to allow for additional
types of equity investments if a municipality has a AAA bond rating or had a population that
exceeded 100,000. The additional investment options include; indexed mutual funds and long-
term equity accounts with the State Board of Investment.
(20)
Water Tank Service Contracts – Governor Dayton signed into a law a bill which allows for
municipalities to enter into multiyear professional services contract for engineering, repair, and
maintenance of a water storage tank and appurtenant facility owned, controlled, or operated by
the municipality.
Vetoed Bills – Governor Dayton vetoed several bills in the most recent legislative session,
these include bills related to tax conformity with the Federal Government, omnibus school and
tax bill, the omnibus supplemental budget bill, agriculture policy bill, MNLARS funding, plus
several other bills. The majority of these bills were vetoed because Governor Dayton did not
view them as addressing enough of his priorities or they did not provide enough funding to
where he would support them.
(21)
ACCOUNTING AND AUDITING UPDATES
GASB Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefits
Other Than Pensions” – the objective of this statement is to improve accounting and financial
reporting by state and local governments for postemployment benefits other than pensions (other
postemployment benefits or OPEB). The provisions of Statement No. 75 are effective for fiscal periods
beginning after June 15, 2017.
GASB Statement No. 83, “Certain Asset Retirement Obligations” – the objective of this Statement
is to provide financial statement users with information about asset retirement obligation not previously
address in GASB standards, by establishing uniform accounting and financial reporting requirements
for these obligations. An example of these assets would be decommissioning a nuclear power plant,
wind turbines, sewage treatment facilities, or an x-ray machine. This Statement is effective for periods
beginning after June 15, 2018.
GASB Statement No. 84, “Fiduciary Activities” – this Statement establishes criteria for identifying
fiduciary activities of all state and local governments. This Statement is effective for periods beginning
after December 15, 2018.
GASB Statement No. 86 “Certain Debt Extinguishment Issues” – the primary objective of this
Statement is to improve consistency in accounting and financial reporting for in-substance defeasance
of debt by providing guidance for transactions in which cash and other monetary assets acquired with
only existing resources—resources other than the proceeds of refunding debt—are placed in an
irrevocable trust for the sole purpose of extinguishing debt. This Statement also improves accounting
and financial reporting for prepaid insurance on debt that is extinguished and notes to financial
statements for debt that is defeased in substance. This Statement is effective for periods beginning
after June 15, 2017.
GASB Statement No. 87 “Leases” – the primary objective of this Statement is to better meet the
information needs of financial statement users by improving accounting and financial reporting for
leases by governments. It will require recognition of certain lease assets and liabilities for leases that
previously were classified as operating leases and recognized as inflows of resources based on the
payment provision of the contract. It also establishes a single model for lease accounting based on the
foundational principle that leases are financings of the right to use an underlying asset. This Statement
is effective for periods beginning after December 15, 2019.
CliftonLarsonAllen LLP
CLAconnect.com
Honorable Mayor and
Members of the City Council
City of Lakeville
Lakeville, Minnesota
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 as of and for the
year ended December 31, 2017, and have issued our report thereon dated June 5, 2018. We have
previously communicated to you 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. Professional standards also
require that we communicate to you the following information related to our audit.
Significant audit findings
Qualitative aspects of accounting practices
Accounting policies
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by City of Lakeville are described in Note 1 to the financial statements.
No new accounting policies were adopted and the application of existing policies was not changed
during 2017.
We noted no transactions entered into by the entity 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
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:
Management’s estimate of the valuation of investments is based on published market values as
of December 31, 2017. We evaluated the key factors and assumptions used to develop the
value of investments in determining that it is reasonable in relation to the financial statements
taken as a whole.
Management’s estimate of the depreciation expense on capital assets is based on
management’s estimated useful lives of those assets. We evaluated the key factors and
assumptions used to develop the allowance in determining that it is reasonable in relation to the
financial statements taken as a whole.
Honorable Mayor and
Members of the City Council
City of Lakeville
Page 2
Management’s estimate of City’s liability for other postemployment benefits is based on an
actuarial determined liability which is based on various assumptions, including investment rates
of return, health care trend rates, mortality rates, etc. We evaluated the key factors and
assumptions used to develop the liability in determining that it is reasonable in relation to the
financial statements taken as a whole.
Management’s estimate of the City’s liability for compensated absences is based on employee
wage information and the City’s policies of earning vacation and sick pay. We evaluated the key
factors and assumptions used to develop the liability in determining that it is reasonable in
relation to the financial statements taken as a whole.
Management’s estimate of the City’s proportionate share of PERA’s GERF and PEPFF net
pension liabilities as well as the related deferred inflows and outflows is based on guidance from
GASB Statement No. 68, GASB Statement No. 71, and the plans’ allocation tables. The plans’
allocation tables allocate a portion of the plans’ net pension liabilities based on the City’s
contributions during the plans’ fiscal years as a percentage of total contributions received for the
related fiscal year by the plans. We evaluated the key factors and assumptions used to develop
the liability in determining that it is reasonable in relation to the financial statements taken as a
whole.
Management’s estimate of the City’s net pension asset and related deferred inflows and
outflows related to the City’s Fire Relief Association are based on an actuarially determined
liability. This liability is based on various assumptions including the investments rate of return,
projected salary increases, and mortality rates. We evaluated the key factors and assumptions
used to develop the liability in determining that it is reasonable in relation to the financial
statements taken as a whole.
Financial statement disclosures
Certain financial statement disclosures are particularly sensitive because of their significance to
financial statement users. There were no particularly sensitive financial statement disclosures.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties encountered in performing the audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Uncorrected misstatements
Professional standards require us to accumulate all misstatements identified during the audit, other
than those that are clearly trivial, and communicate them to the appropriate level of management.
Management did not identify and we did not notify them of any uncorrected financial statement
misstatements.
Honorable Mayor and
Members of the City Council
City of Lakeville
Page 3
Corrected misstatements
Management did not identify and we did not notify them of any financial statement misstatements
detected as a result of audit procedures.
Disagreements with management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditors’ report. No such disagreements arose during our audit.
Management representations
We have requested certain representations from management that are included in the management
representation letter dated June 5, 2018.
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 entity’s financial statements or a determination of
the type of auditors’ 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.
Significant issues discussed with management prior to engagement
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to engagement as the entity’s auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses
were not a condition to our engagement.
Other audit findings or issues
We have provided a separate letter to you dated June 5, 2018, communicating internal control related
matters identified during the audit.
Other information in documents containing audited financial statements
With respect to the required supplementary information (RSI) accompanying the financial statements,
we made certain inquiries of management about the methods of preparing the RSI, including whether
the RSI has been measured and presented in accordance with prescribed guidelines, whether the
methods of measurement and preparation have been changed from the prior period and the reasons
for any such changes, and whether there were any significant assumptions or interpretations underlying
the measurement or presentation of the RSI. We compared the RSI for consistency with management’s
responses to the foregoing inquiries, the basic financial statements, and other knowledge obtained
during the audit of the basic financial statements. Because these limited procedures do not provide
sufficient evidence, we did not express an opinion or provide any assurance on the RSI.
Honorable Mayor and
Members of the City Council
City of Lakeville
Page 4
With respect to the combining and individual fund financial statements and additional debt schedules
(collectively, the supplementary information) accompanying the financial statements, on which we were
engaged to report in relation to the financial statements as a whole, 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 or the reasons for such
changes, and the information is appropriate and complete in relation to our audit of the financial
statements. We compared and reconciled the supplementary information to the underlying accounting
records used to prepare the financial statements or to the financial statements themselves. We have
issued our report thereon dated June 5, 2018.
The introductory and statistical sections accompanying the financial statements, which is the
responsibility of management, was prepared for purposes of additional analysis and is not a required
part of the financial statements. Such information was not subjected to the auditing procedures applied
in the audit of the financial statements, and, accordingly, we did not express an opinion or provide any
assurance on it.
Other information is being included in documents containing the audited financial statements and the
auditors’ report thereon. Our responsibility for such other information does not extend beyond the
financial information identified in our auditors’ report. We have no responsibility for determining whether
such other information is properly stated and do not have an obligation to perform any procedures to
corroborate other information contained in such documents. As required by professional standards, we
read the introductory and statistical sections (the other information) in order to identify material
inconsistencies between the audited financial statements and the other information. We did not identify
any material inconsistencies between the other information and the audited financial statements.
Our auditors’ opinion, the audited financial statements, and the notes to financial statements should
only be used in their entirety. Inclusion of the audited financial statements in a document you prepare,
such as an annual report, should be done only with our prior approval and review of the document.
* * * * *
This communication is intended solely for the information and use of the City Council and management
of City of Lakeville and is not intended to be, and should not be, used by anyone other than these
specified parties.
CliftonLarsonAllen LLP
Minneapolis, Minnesota
June 5, 2018
CliftonLarsonAllen LLP
CLAconnect.com
(1)
INDEPENDENT AUDITORS’ 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
Honorable Mayor and City Council
City of Lakeville
Lakeville, Minnesota
We have audited, in accordance with the 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 City of Lakeville, as of and for the year ended December 31, 2017, and the related notes to the
financial statements, which collectively comprise the City of Lakeville’s basic financial statements, and
have issued our report thereon dated June 5, 2018.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City of Lakeville’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 of
Lakeville’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City
of Lakeville’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 a
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity’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.
Honorable Mayor and City Council
City of Lakeville
(2)
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Lakeville’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 result of that testing, and not to provide an opinion on the effectiveness of the
entity’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 entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
CliftonLarsonAllen LLP
Minneapolis, Minnesota
June 5, 2018
CliftonLarsonAllen LLP
CLAconnect.com
INDEPENDENT AUDITORS’ REPORT ON MINNESOTA LEGAL COMPLIANCE
Honorable Mayor and
Members of the City Council
City of Lakeville
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 as of and for the year then ended December 31, 2017, 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 5, 2018.
The Minnesota Legal Compliance Audit Guide for Cities promulgated by 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 of
Lakeville, Minnesota 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 of Lakeville, Minnesota’s noncompliance with the above-referenced
provisions.
The purpose of this report is solely to describe the scope of our testing of compliance relating to the
provisions of the Minnesota Legal Compliance Audit Guide for Cities and the results of that testing, and
not to provide an opinion on compliance. Accordingly, this communication is not suitable for any other
purpose.
CliftonLarsonAllen LLP
Minneapolis, Minnesota
June 5, 2018