HomeMy WebLinkAboutItem 10June 17, 2019 Item No.________
ACKNOWLEDGE RECEIPT OF LAKEVILLE COMPREHENSIVE ANNUAL
FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2018
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, 2018.
Overview
The City of Lakeville Comprehensive Annual Financial Report for the Year Ended December 31,
2018 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,
2018 and the results of operations for the year ended. Mr. Chris Knopik, Partner with CLA, will
present an overview at the June 17 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, 2018
• 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
2018
Year Ended December 31, 2018
City of Lakeville, Minnesota
CITY OF LAKEVILLE, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2018
PREPARED BY THE FINANCE DEPARTMENT
This page intentionally left blank.
CITY OF LAKEVILLE
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2018
INTRODUCTORY SECTION
LETTER OF TRANSMITTAL 1
ELECTED AND APPOINTED OFFICIALS 11
ORGANIZATIONAL CHART 12
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN
FINANCIAL REPORTING 13
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT 14
MANAGEMENT’S DISCUSSION AND ANALYSIS 17
BASIC FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 34
STATEMENT OF ACTIVITIES 35
BALANCE SHEET – GOVERNMENTAL FUNDS 36
RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET
POSITION – GOVERNMENTAL ACTIVITIES 37
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCES – GOVERNMENTAL FUNDS 38
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES
– GOVERNMENTAL ACTIVITIES 39
STATEMENT OF NET POSITION – PROPRIETARY FUNDS 40
STATEMENT OF NET REVENUES. EXPENSES, AND CHANGES IN NET
POSITION – PROPRIETARY FUNDS 41
STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS 42
STATEMENT OF FIDUCIARY NET POSITION – AGENCY FUND 43
NOTES TO BASIC FINANCIAL STATEMENTS 44
REQUIRED SUPPLEMENTARY INFORMATION
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES – BUDGETARY COMPARISON 95
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION 100
PERA – GENERAL EMPLOYEES RETIREMENT FUND 101
PERA – PUBLIC EMPLOYEES POLICE AND FIRE FUND 102
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION – STATE WIDE
PLANS 103
NET PENSION LIABILITY (ASSET) AND RELATED RATIOS – LAKEVILLE FIRE
RELIEF ASSOCIATION 105
SCHEDULE OF CHANGES IN THE CITY’S TOTAL OPEB LIABILITY AND
RELATED RATIOS 106
(i)
CITY OF LAKEVILLE
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2018
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET 109
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES 110
SPECIAL REVENUE FUNDS (NONMAJOR) – COMBINING BALANCE SHEET 111
SPECIAL REVENUE FUNDS (NONMAJOR) – COMBINING STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 112
DEBT SERVICE FUNDS (NONMAJOR) – COMBINING BALANCE SHEET 113
DEBT SERVICE FUNDS (NONMAJOR) – COMBINING STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 114
CAPITAL PROJECTS FUND (NONMAJOR) – COMBINING BALANCE SHEET 115
CAPITAL PROJECTS FUNDS (NONMAJOR) – COMBINING STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 117
COMMUNICATIONS – SPECIAL REVENUE FUND – BUDGETARY
COMPARISON SCHEDULE 119
ECONOMIC DEVELOPMENT – SPECIAL REVENUE FUND – BUDGETARY
COMPARISON SCHEDULE 120
DOWNTOWN SPECIAL SERVICE DISTRICT – SPECIAL REVENUE FUND –
BUDGETARY COMPARISON SCHEDULE 121
AGENCY FUNDS
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES 123
SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN BONDED INDEBTEDNESS 124
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE 125
COMBINED SCHEDULE OF BONDED INDEBTEDNESS 135
STATISTICAL SECTION (UNAUDITED)
NET POSITION BY COMPONENT – GOVERNMENT WIDE 137
CHANGES IN NET POSITION BY COMPONENT – GOVERNMENTAL ACTIVITIES 139
CHANGES IN NET POSITION BY COMPONENT – BUSINESS-TYPE ACTIVITIES 141
CHANGES IN NET POSITION BY COMPONENT – TOTAL GOVERNMENTAL AND
BUSINESS-TYPE ACTIVITIES 143
FUND BALANCES – GOVERNMENTAL FUNDS 145
CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS 147
(ii)
CITY OF LAKEVILLE
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2018
TAX CAPACITY VALUATION AND ASSESSOR’S TAXABLE MARKET VALUE OF
TAXABLE PROPERTY 149
PROPERTY TAX RATES – DIRECT AND OVERLAPPING GOVERNMENTS 151
PRINCIPAL PROPERTY TAXPAYERS 152
PROPERTY TAX LEVY AND COLLECTIONS 153
RATIO OF TOTAL DEBT BY TYPE 154
RATIO OF NET BONDED DEBT OUTSTANDING 155
DIRECT AND OVERLAPPING GOVERNMENTAL DEBT 156
LEGAL DEBT MARGIN 157
PLEDGED REVENUE COVERAGE 158
DEMOGRAPHIC AND ECONOMIC STATISTICS 159
PRINCIPAL EMPLOYERS 160
COMMERCIAL AND INDUSTRIAL BUILDING PERMITS ISSUED 161
EMPLOYEES BY FUNCTION/PROGRAM (FULL-TIME EQUIVALENT) 162
OPERATING INDICATORS BY FUNCTION 163
CAPITAL ASSET STATISTICS BY FUNCTION 164
(iii)
This page intentionally left blank.
INTRODUCTORY SECTION
This page intentionally left blank.
(1)
June 6, 2019
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, 2018. 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, 2018 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.
20195 Holyoke Avenue, Lakeville, MN 55044
952-985-4400 952-985-4499 fax
www.lakevillemn.gov
(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 64,334 in 2018.
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 non-partisan
at-large basis. The Mayor is elected to serve a four-year term, while Council Members serve
four-year staggered terms, with two Council Members elected every two years.
The City provides its residents and businesses with a full range of municipal services consisting
of public safety (police and fire), public works, parks and recreation, and general government
administration. The City also operates two enterprises: utilities (public water, sanitary sewer,
streetlights, 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 eleven percent 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 8,600 new residents or approximately 15.4% since 2009, while the number of City
employees has increased by 16.0%.
The City has a land area of 38 square miles with approximately 30% of its land available for
development. In 2018, final plats were approved for 750 single-family units, 15 detached
townhomes, 60 attached townhomes, 160 apartment units, 8 commercial developments, and
one institutional development.
The trend for building permit activity for single-family homes is steady with building permits for
single family homes/detached townhomes slight decrease from 487 in 2017 to 478 in 2018. The
2019 budget is premised on conservative but assumed steady growth of new single-family
homes in the coming year.
0
100
200
300
400
500
600
700
800
900
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019PERMITS
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 $42.9 million. Commercial
projects constructed in 2018 included:
Freddy’s Frozen Custard and Steakburgers
o A new 3,010 square-foot restaurant
River’s Edge Dental
o A new dentist office in a 10,620-square-foot multi-tenant building
Pilot Knob Dental Care
o The new dentist office opened in Summer 2018 near Hy-Vee and Dunn
Brothers Coffee
Kenrick Liquor Store addition
o A 3,410 square-foot addition was built onto the Kenrick Liquor Store, located
at County Road 46 and Kenrick Avenue. The additional space can
accommodate two retail locations, one of which is equipped with a drive-thru.
O’Reilly Auto Parts
o A new 7,636-square-foot building auto parts store
Advanced Oral Surgery
o A new 3,400 square-foot medical office building
Industrial development in 2018 included:
Schneiderman’s Distribution
o 130,000 square-foot building
o Creating 44 new jobs in the City
HOBO Incorporated
o 23,000 square-foot addition on to the existing 30,000 square-foot facility
o Allows for future growth and expansion
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 contractor
Commercial projects under construction:
Compeer Financial
o A new two-story, 30,000 square-foot agricultural lender business
Hampton Inn & Suites
o A new 16,500 square-foot 117-unit hotel
Valvoline Instant Oil Change
o A new 1,620 square-foot auto services business
HomeGoods
o A new retail location undergoing remodeling in the former OfficeMax space
next to Marshall’s near Target
Wings Financial Credit Union
o A new 3,992 square-foot location with a drive-up service window
Beehive Senior Homes
o A new 20-unit senior assisted living and memory care facility
Spero Senior Living
o A new 55-unit independent senior living community
B-52 Burgers and Brew
o A new restaurant moved into a newly remodeled building
ALDI
o A new 23,000 square-foot building for retail grocery
(5)
New commercial businesses:
The Property Geeks
o A real estate business
The Bonus Room
o A new rental venue for meetings or small parties
Ellie Family Services
o A new therapy and wellness center
Reina’s Boutique
o A new women’s clothing and gift boutique
Alibi Drinkery
o A new bar and restaurant
Genisys Credit Union
o A new credit union and drive-thru
The Hair Studio
o A new salon
Dunn Brothers Coffee
o A new coffee shop and drive-thru
Club Pilates
o A new fitness business
Healthy for Life Meals
o A new meal service business
Board & Brush
o A do-it-yourself sign studio
Cosmopolitan Orthodontics
o The 2nd orthodontics clinic location within the City
Chipotle Mexican Grill
o A new fast-casual restaurant
Bank of America
o A new Bank of America Advanced Center
YMCA Early Childhood Learning Center
o Minnesota’s first free-standing YMCA Early Childhood Learning Center
Cream of the Cakes
o A new bakery
Aria Technology Group
o A new business
Sherwin Williams
o A new business that will be used for warehousing and wholesale and retail
sales
AT&T
o A new electronics retailer
Exuberance Chiropractic
o A new chiropractic clinic
Escape MSP
o A new entertainment option
Wag N’Wash Natural Food & Bakery
o A new pet retail business
According to the Dakota County Assessor’s office, the median value home increased by 8.97%
as of February 2018 (for taxes payable 2019). 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.
(6)
According to the Bureau of Labor Statistics, Lakeville’s unemployment rate is favorable
compared to the State and National rates.
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Unemployment Rate
United States Minnesota Lakeville
Source: https://mn.gov/deed/data
(7)
Major Initiatives
Pressures and issues confronting the City were taken into account with the 2018 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 2018
budget addressed the short-term plan while the Capital Improvement Plan addressed the
anticipated intermediate and long-term needs. The most significant 2018 projects included:
Accelerated pavement management program to improve city-wide pavement
management index
o 2018 Street Reconstruction
o Kenrick Avenue: 173rd St – North City limit
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.
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.
(8)
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 2019.
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 $166 million in transportation, utility,
equipment, facilities and parks over the next five years to achieve program objectives.
As of December 31, 2018, the City of Lakeville had approximately $121.715 million of debt
outstanding. The City will issue approximately $50 million general obligation improvement bonds
in the coming years to finance street reconstruction projects.
(9)
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 non-property-
tax revenue should be actively explored at all times. Where appropriate and not contrary to
accepted public policy or statutes, emphasis will be directed toward full cost recovery
through user fees. User fees and cost allocation formulas will be updated periodically
(annually, if needed). Ongoing, the City will review the full cost of activities supported by
user fees to identify the impact of inflation and other factors. The fees along with the
resulting net property tax costs will be reviewed with the City Council during the budget
process. Sensitivity to market rates will also be considered in setting fees. Intergovernmental
grant requests are subject to fiscal review before the application is submitted. This review is
to ensure that the grants do not create an obligation for unfunded expenditures by the City
relating to the grant’s purpose and to provide an overall budgetary review of grant
proposals.
Debt. The City’s debt policy provides guidance to ensure that long-term debt is utilized
appropriately and in a fiscally prudent manner. Limiting long-term borrowing to capital
improvements or other long-term projects which cannot, and appropriately should not, be
financed from current revenues. Final maturity of bonds and notes should not exceed the
expected useful life of the underlying project for which it is being issued. Where possible, the
City will endeavor to pledge special assessments, State-aid, or other non-tax revenues to
debt service payments.
(10)
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,
2017. This is the thirtieth 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 Financial Analysts David Lang, Tom Nesseth, and
Laura Miller.
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, 2018
(11)
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, 2018 (12)
CITY OF LAKEVILLE
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING
DECEMBER 31, 2018
(13)
This page intentionally left blank.
FINANCIAL SECTION
This page intentionally left blank.
(14)
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, 2018, 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
(15)
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, 2018, and the respective changes in financial position and,
where applicable, cash flows thereof for the year then ended in accordance with accounting principles
generally accepted in the United States of America.
Emphasis of a Matter
During fiscal year ended December 31, 2018, the City adopted GASB Statement No. 75, Accounting
and Financial Reporting for Postemployment Benefits Other than Pensions. As a result of the
implementation of this standard, the City reported a restatement for the change in accounting principle
(see Note 24.) Our auditors’ opinion was not modified with respect to the restatement.
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 changes in the
City’s total OPEB liability and related ratios, 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.
Honorable Mayor and the City Council
City of Lakeville, Minnesota
(16)
The introductory and statistical sections have not been subjected to the auditing procedures applied in
the audit of the basic financial statements and, accordingly, we do not express an opinion or provide
any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 6,
2019, 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 6, 2019
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2018
(17)
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, 2018. 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 $355,598,928 (net position) at the close of the most recent fiscal year.
Of this amount, $29,305,647 (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 $12,306,891 in 2018.
The City’s governmental funds reported combined ending fund balances of $71,290,514. Of this
total amount, $44,628,728 or 62.6% 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 $14,011,567 or 50.3% of total general fund expenditures of $27,855,631.
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, 2018
(18)
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, municipal state-aid (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, 2018
(19)
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,
streetlight, 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, 2018
(20)
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 $355,598,928
at December 31, 2018. By far the largest portion or 79.0% of net position is reflected in its net
investment in capital assets (e.g. land, buildings and improvements, machinery and equipment,
infrastructure, and construction in process) less any related debt used to acquire those assets that is
still outstanding. The City uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the City’s net investment in capital assets is
reported net of related debt, it should be noted that the resources needed to repay this debt must be
provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
2018 2017 2018 2017 2018 2017
Current and other assets 99,733,628$ 95,722,645$ 18,567,819$ 15,323,758$ 118,301,447$ 111,046,403$
Capital assets 255,935,129 250,253,453 149,217,641 145,772,588 405,152,770 396,026,041
Total Assets 355,668,757 345,976,098 167,785,460 161,096,346 523,454,217 507,072,444
Deferred outflows of resources 11,126,536 13,100,824 460,775 664,042 11,587,311 13,764,866
Current and other liabilities 9,813,242 5,753,143 1,532,497 1,159,391 11,345,739 6,912,534
Other liabilities 140,024,833 141,126,300 13,573,208 13,710,725 153,598,041 154,837,025
Total Liabilities 149,838,075 146,879,443 15,105,705 14,870,116 164,943,780 161,749,559
Deferred inflows of resources 13,962,261 14,895,794 536,559 450,933 14,498,820 15,346,727
Net Position:
Net Investment in Capital Assets 142,300,205 144,581,700 138,725,763 135,324,120 281,025,968 279,905,820
Restricted 45,267,313 46,683,603 - 323,875 45,267,313 47,007,478
Unrestricted 15,427,439 6,036,382 13,878,208 10,791,344 29,305,647 16,827,726
Total Net Position 202,994,957$ 197,301,685$ 152,603,971$ 146,439,339$ 355,598,928$ 343,741,024$
Governmental Activities TotalBusiness-Type Activities
The City’s total restricted net position of $45,267,313 comprises 12.7% of total net position at the close
of the fiscal year ending December 31, 2018. These assets are subject to external restrictions on how
they may be used.
The 2018 remaining balance of $29,305,647 (8.3% 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 $9,391,057 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, 2018
(21)
Change in net position. The City’s 2018 total net position during the current fiscal year increased by
$12,306,891 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.
2018 2017 2018 2017 2018 2017
REVENUES
Program Revenues:
Charges for Services $ 15,891,372 $ 14,734,286 $ 28,889,578 $ 27,168,964 $ 44,780,950 41,903,250$
Operating Grants and Contributions 5,498,819 2,567,027 64,456 172,943 5,563,275 2,739,970
Capital Grants and Contributions 9,438,559 13,263,177 4,075,854 4,791,313 13,514,413 18,054,490
General Revenues:
Property Taxes 28,641,302 27,317,169 - - 28,641,302 27,317,169
Unrestricted Investment Earnings 907,138 597,513 160,165 91,472 1,067,303 688,985
Total Revenues 60,377,190 58,479,172 34,791,387 32,224,692 95,168,577 90,703,864
EXPENSES
General Government 7,203,308 4,579,478 - - 7,203,308 4,579,478
Public Safety 14,141,045 14,250,572 - - 14,141,045 14,250,572
Public Works 22,336,416 18,944,454 - - 22,336,416 18,944,454
Parks and Recreation 6,661,852 6,645,057 - - 6,661,852 6,645,057
Interest on Long-Term Debt 3,468,814 3,268,426 - - 3,468,814 3,268,426
Municipal Liquor - - 14,234,337 13,638,043 14,234,337 13,638,043
Utility - - 14,815,914 14,138,885 14,815,914 14,138,885
Total Expenses 53,811,435 47,687,987 29,050,251 27,776,928 82,861,686 75,464,915
CHANGE IN NET POSITION
BEFORE TRANSFERS 6,565,755 10,791,185 5,741,136 4,447,764 12,306,891 15,238,949
Transfers and Contributions (492,418) (2,824,210) 492,418 2,824,210 - -
CHANGE IN NET POSITION 6,073,337 7,966,975 6,233,554 7,271,974 12,306,891 15,238,949
Net Position - Beginning of Year 197,301,685 189,334,710 146,439,339 139,167,365 343,741,024 328,502,075
Prior Period Restatement for Implementation
of GASB Standard (See Note 24) (380,065)-(68,922) - (448,987) -
Beginning of Year, as Restated 196,921,620 189,334,710 146,370,417 139,167,365 343,292,037 328,502,075
NET POSITION - END OF YEAR 202,994,957$ 197,301,685$ 152,603,971$ 146,439,339$ 355,598,928$ 343,741,024$
Change in Net Position
Governmental Activities Business-Type Activities Total
Governmental activities. The governmental activities change in net position before transfers
increased by $6,565,755. The governmental revenue increase in charges for services is directly related
to both an increase in park dedication fees collected, as well as an increase in the engineering
revenues generated on City improvement projects during 2018 and an increase in development activity.
Operating grants increased in 2018 primarily because the City had taken 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 2018 than in 2017.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2018
(22)
Revenues
The City’s 2018 total revenues for governmental activities increased by $1,898,018. Charges for
services increased a total of $1,157,086 primarily due to an increase in economic and community
growth as evidenced by an increase in park dedication fees collected as well as an increase in
engineering revenues generated on City improvement projects during 2018. A summary of the various
increases is shown as follows:
2018 2017
Increase /
(Decrease)
Charges for services
Licenses and building permit fees 3,899,604$ 3,988,189$ (88,585)$
Connection and area charges 5,568,939 5,416,811 152,128
Engineering fees - reconstruction projects 1,463,780 1,065,099 398,681
Park dedication fees 1,602,477 1,154,433 448,044
Other 3,356,572 3,109,754 246,818
Total charges for services 15,891,372$ 14,734,286$ 1,157,086$
Operating grants and contributions experienced an overall increase of $2,931,792. The increase is
primarily composed of state-aid provided for street maintenance and improvement projects. The City
requested a $1 million reimbursement of municipal state funding for costs associated with County Road
50 improvements. A summary of the various operating grants and contributions are shown as follows:
2018 2017
Increase /
(Decrease)
Operating grants and contributions
State-aid for street maintenance 1,312,272$ 120,000$ 1,192,272$
State-aid for street revenue bonds 1,176,682 1,187,082 (10,400)
County grant for joint road improvements 574,554 -574,554
Federal street reconstruction bonds payment 58,743 61,513 (2,770)
Other grants, contributions and donations 2,376,568 1,198,432 1,178,136
Total Operating grants and contributions 5,498,819$ 2,567,027$ 2,931,792$
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2018
(23)
Capital grants and contributions decreased by $3,824,618. Contributed infrastructure from private land
developers decreased by $1,781,733; the infrastructure consists of street, storm water, and park and
trail capital assets. Special assessments decreased by $597,704 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 $933,091 due to multiple road projects that had occurred in 2017.
The summary of capital grants and contributions is shown as follows:
2018 2017
Increase /
(Decrease)
Capital grants and contributions
Contributed infrastructure from developers 5,258,885$ 7,040,618$ (1,781,733)$
Special assessments 3,853,942 4,451,646 (597,704)
County grant for joint road improvements -933,091 (933,091)
Developer escrows for road improvements -266,824 (266,824)
Other grants and contributions 264,539 508,897 (244,358)
PEG fees 61,193 62,101 (908)
Total capital grants and contributions 9,438,559$ 13,263,177$ (3,824,618)$
Property tax revenue increased $1,324,133 or 4.8% primarily due to an increase in the overall tax levy.
Investment income earnings increased by $309,625. The increase is the combination of increased
earnings and changes in investment asset values which are inversely related to the changes in market
rates. The increase is consistent with prevailing market conditions.
General revenues 2018 2017
Increase /
(Decrease)
Property taxes 28,641,302$ 27,317,169$ 1,324,133$
Investment income 907,138 597,513 309,625
Total general revenues 29,548,440$ 27,914,682$ 1,633,758$
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2018
(24)
A summary of 2018 revenues by source for governmental activities is shown as follows:
Charges for Services,
$15,891,372 , 26%
Operating Grants and
Contributions,
$5,498,819 , 9%
Capital Grants and
Contributions,
$9,438,559 , 16%
Property Taxes,
$28,641,302 , 47%
Unrestricted
Investment Earnings,
$907,138 , 2%
Revenues by Source ‐Governmental Activities
Expenses
The City’s 2018 total governmental activities expenses (before depreciation on capital assets and
interest on long-term debt) increased by $5,257,833 or 16.6%. Total governmental activities expenses
increased by $6,123,448 or 12.8%, shown as follows:
2018 2017
Increase /
(Decrease)
Governmental activities expenses
General government 6,846,135$ 4,305,625$ 2,540,510$
Public safety 12,981,627 13,149,699 (168,072)
Public works 12,665,892 9,716,809 2,949,083
Parks and recreation 4,503,165 4,566,853 (63,688)
Total before depreciation and interest 36,996,819 31,738,986 5,257,833
Depreciation on capital assets 13,345,802 12,680,575 665,227
Interest on long-term debt 3,468,814 3,268,426 200,388
Total governmental activities expenses $ 53,811,435 $ 47,687,987 $ 6,123,448
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2018
(25)
Following are explanations of various increases and (decreases) in expenses by governmental function
as shown above.
General government expenses increased by $2,540,510 or 59.0%; which is primarily attributed to
expenses incurred in the prior year (2017) and the elimination of the long-term receivable for the HRA
capital lease with the Galaxie liquor store.
Public safety expenses decreased by $168,072 or 1.3%; 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 increased by $2,949,083 or 30.4%; primarily due to County street
improvements on County Road 50 from 185th street to Dodd Boulevard the majority of the expenses are
not considered a City asset.
Parks and recreation expenses decreased $63,688 or 1.4%; primarily due to the addition of Legacy
Park and King Park lighting phase II, compared to more expenses in the prior year (2017) for park
maintenance and trail improvement expenses on existing trails, which were expensed instead of
capitalized.
Depreciation on capital assets increased by $665,227 or 5.2%; primarily due to an increase in
contributed infrastructure from development.
Interest on long-term debt increased by $200,388 or 6.1%; primarily due to scheduled debt payments.
A summary of 2018 expenses by function for governmental activities is shown as follows:
General
government,
$6,846,135 , 13%
Public safety,
$12,981,627 , 24%
Public works,
$12,665,892 , 24%
Parks and
recreation,
$4,503,165 , 8%
Depreciation on
capital assets,
$13,345,802 , 25%
Interest on long‐
term debt,
$3,468,814 , 6%
Expenses by Function ‐Governmental Activities
(26)
Business-type activities. Business-type activities increased the City’s 2018 total net position
by $6,164,632. Key elements of the increase in net position along with a comparison of
revenues, expenses, and changes in net position during fiscal years 2018 and 2017 are shown as
follows:
2018 2017
Increase /
(Decrease)
Revenues
Charges for services
Liquor 15,276,433$ 14,583,514$ 692,919$
Utility 13,613,145 12,585,450 1,027,695
Operating grants and contributions
Liquor 13,421 6,716 6,705
Utility 51,035 166,227 (115,192)
Capital contributions
Utility 4,075,854 4,791,313 (715,459)
Gain on disposal of capital assets 1,601,334 - 1,601,334
Investment earnings 160,165 91,472 68,693
Total revenues 34,791,387 32,224,692 2,566,695
Expenses
Liquor 14,234,337 13,638,043 596,294
Utility 14,815,914 14,138,885 677,029
Total expenses 29,050,251 27,776,928 1,273,323
Change in net position before transfers 5,741,136 4,447,764 1,293,372
Transfers 492,418 2,824,210 (2,331,792)
Change in net position 6,233,554 7,271,974 (1,038,420)
Net position - beginning 146,439,339 139,167,365 7,271,974
Prior Period Restatement for Implementation
of GASB Standard (See Note 26) (68,922)-(68,922)
Beginning of Year, as Restated 146,370,417 139,167,365 7,203,052
Net position - ending $ 152,603,971 $ 146,439,339 6,164,632$
The City’s 2018 business-type total revenues increased by $2,566,695 or 8.0%; the various revenue
components are discussed in detail in the following paragraphs.
The liquor fund 2018 charges for services increased due to sales volume. The 2018 cost of
goods sold as a percentage of sales were 75.1%, compared to 75.5% in 2017.
The overall utility revenue charges for services increased by $1,027,695. This overall increase
is represented by a water revenue increase of $176,985, sanitary sewer revenue increase of
$586,364, street light revenue increase of $49,359, and environmental resources revenue
increase of $214,987. 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, 2018
(27)
The utility fund experienced a total decrease of $715,459 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 2017). City improvement project infrastructure
assets of $2,313,765 were contributed to the utility fund which is within the net transfer amount
of $492,418 on the Statement of Activities. The total amount of contributed infrastructure assets
received by the utility fund varies yearly.
Investment earnings increased $68,693. 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 2018 business-type total expenses increased by $1,273,323 or 4.6% as follows:
Liquor Fund Utility Fund
Total
Business-type activities expenses
Cost of Goods Sold 460,394$ -$ 460,394$
Personnel services 58,453 (38,241) 20,212
Commodities 7,721 32,426 40,147
Other charges and services 214,606 (80,922)133,684
Sanitary sewage treatment and disposal -508,436 508,436
Depreciation on capital assets (32,521)249,091 216,570
Interest, fiscal charges, bond premium (net)(105,019) 11,676 (93,343)
Loss on Disposal of Capital Assets (7,340) (5,437) (12,777)
Total Business-type Expenses $ 596,294 $ 677,029 $ 1,273,323
Increase (Decrease) from 2017
The liquor fund other charges and services increase of $214,606 is primarily the result of
additional rent payments from the sale and lease back of the Kenrick liquor store.
The utility fund sanitary sewage treatment and disposal expenses increased by $508,436
primarily due to the change in factors used by MCES in their pass thru cost allocation to the
City. The City’s rate per million gallons increased 3.7% and the annual flow increased by 17.5%.
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, 2018
(28)
As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund
balances of $71,290,514. Of this amount, $44,628,728 or 62.6% of this combined ending fund balance
constitutes fund balance that is available for spending at the government’s discretion. Nonspendable
fund balances of $888,024 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 $19,342,941, (b) capital acquisition of $6,257,304, and (c) other restricted purposes
of $173,517.
The general fund is the chief operating fund of the City. At the end of the current fiscal year, the fund
balance was $15,696,442, an increase from the prior year resulting from $656,085 of revenues over
expenditures, net transfers out of $192,794, and a change in supplies inventory of $36,291.
The general obligation (debt service) fund balance decreased by $1,799,040 due to the payment of
refunding debt obligations. The G.O. improvement (debt service) fund balance increased by $626,428.
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 $597,755 for major facility maintenance projects.
Financing was provided by $1,202,333 of revenues from property taxes, investment income, a general
fund transfer, and other revenue sources.
The municipal state-aid construction fund accounts for the City’s municipal state aid financing. The
activity of this fund fluctuates from year to year based on state aid allotments and projects completed.
The fund balance decreased $2,453,556 due to the completion of the County Road 50 street
improvement project from 185th street to Dodd Boulevard.
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
increased by $817,375 due to the completion of the 2017 and 2018 street reconstruction projects.
Preliminary engineering costs associated with the 2019 street reconstruction project and future projects
will be funded by excess bond proceeds transferred from debt service funds that have been closed and
approved by City Council. The 2019 street reconstruction project will be financed with a bond issuance
in 2019.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2018
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2018
(29)
General Fund Budgetary Highlights
With the exception of the fire department, all other general fund departments expended their 2018
budget appropriations at or below the final adopted budget. A schedule of revenues, expenditures and
changes in fund balances – budgetary comparison is disclosed in the required supplemental
information section of this report. A summary of general fund revenues, expenditures, other financing
sources (uses), variance with final budget, and net change in fund balance is as follows:
Budget As
Originally
Adopted Final Budget Actual
Variance with
Final Budget
Revenues
Property taxes 20,055,586$ 20,055,586$ 20,116,949$ 61,363$
Licenses and permits 2,356,882 2,386,882 3,208,278 821,396
Intergovernmental 1,005,921 1,041,887 1,180,338 138,451
Charges for services 2,897,700 3,110,450 3,381,862 271,412
Fines 425,000 425,000 347,203 (77,797)
Interest income 90,071 90,071 264,477 174,406
Change in value of investments - - (89,797) (89,797)
Donations 19,900 29,900 41,729 11,829
Miscellaneous 56,003 56,003 60,677 4,674
Total revenues 26,907,063 27,195,779 28,511,716 1,315,937
Expenditures
Personnel services 20,550,623 20,792,589 20,593,472 (199,117)
Commodities 1,723,195 1,895,295 1,932,193 36,898
Other charges and services 5,440,118 5,660,506 5,289,313 (371,193)
Capital outlay 39,359 39,359 40,653 1,294
Total expenditures 27,753,295 28,387,749 27,855,631 (532,118)
Other financing sources (uses) 104,368 (193,994) (192,794)1,200
Net change in fund balance $ (741,864) $ (1,385,964)
463,291$ 1,849,255$
The 2018 actual general fund revenues exceeded the final budget by $1,315,937 and expenditures
were under final adopted budget by $532,118. Other financing sources (uses) were under the final
budget by $1,200. The general fund actual net change in fund balance surpassed final budget by
$1,849,255.
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 commodities for additional salt purchased for
inventory. 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, 2018
(30)
The following is a brief summary explanation of the various budgets to actual variances for revenues:
Property taxes were more than anticipated by $61,363 due in part to better than anticipated
collection rates and delinquent taxes collections. All delinquent taxes are recorded in the
General Fund and the other funds receive 100 percent of their current levy.
Licenses and permits exceeded estimates by $821,396 due to greater than anticipated building
permit fees. The number of residential building permits budgeted were 350 compared to 446
actual. Permits for townhomes were budgeted at 70 units compared to 81 actual units.
Intergovernmental revenues exceeded estimates by $138,451 due to the timing of federal
grants for public safety initiatives and 2018 was the first full year of the DARTS senior busing
service and senior chores and maintenance program.
Charges for services experienced a variance of $271,412 due to engineering-related services in
connection with developer construction administration.
Fines were below estimates by $77,797 due to police officer vacancies in the traffic control
division.
Interest income and the change in value of investments were above estimates by $84,609 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 $11,829 and $4,674,
respectively.
The following is a brief summary explanation of the various budgets to actual variances for
expenditures:
Personnel costs including benefits were $199,117 below budget estimates due to vacant
positions as a result of retirements, resignations, and delay in filling new positions, net of
$59,738 for election judges.
Commodities were $36,898 above budget due to increase in motor fuels. Additional snow
removal events contributed to the overall increase.
Other charges and services were $371,193 below budget which is attributed to several factors.
The information technology department was able to review current software and reduce
maintenance costs. A new mandate required election judges to be paid through the payroll
system and related costs were included under personnel but were budgeted for under other
charges and services.
Capital outlay was $1,294 over budget due to an unanticipated laptop replacement.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2018
(31)
Capital Asset and Debt Administration
Capital assets. The City’s capital assets for governmental and business-type activities as of
December 31, 2018 are $405 million (net of accumulated depreciation). This amount represents an
increase (including additions, deletions, and depreciation) of approximately $9.1 million from 2017.
The net investment in capital assets including land, historical treasures, buildings, machinery and
equipment, other improvements, infrastructure, and construction in process is shown as follows:
Governmental
Activities
Business-Type
Activities Total
Land 28,889,653$ 3,627,767$ 32,517,420$
Historical treasures 100,000 - 100,000
Construction in process 951,736 13,842 965,578
Buildings and improvements 55,143,526 28,241,679 83,385,205
Machinery and equipment 24,935,626 3,635,521 28,571,147
Other improvements 9,760,538 - 9,760,538
Infrastructure
Streets 176,102,512 - 176,102,512
Storm sewer 83,516,837 - 83,516,837
Parks 29,021,159 - 29,021,159
Water - 109,695,944 109,695,944
Sanitary sewer - 74,220,172 74,220,172
Total Capital Assets 408,421,587 219,434,925 627,856,512
Less: Accumulated Depreciation (152,486,458) (70,217,284) (222,703,742)
Total Capital Assets, Net 255,935,129$ 149,217,641$ 405,152,770$
Capital Assets at Year-End
(Net of Accumulated Depreciation)
The City’s 2019 adopted budget provides funding for $27.6 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, 2018
(32)
Debt administration. At the end of the current fiscal year, the City of Lakeville had total bonded debt
outstanding of $121.715 million, which is a decrease of $1.870 million compared to the prior year. The
decrease is due to one new bond issuance totaling $8.135 million and principal bond maturities, as well
as a current refunding of $3.115 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, 2018 is shown as follows:
Balance
January 1 Issued Redeemed
Balance
December 31
Governmental Activities
General obligation bonds
Capital improvement $ 22,795,000 $- $ 1,125,000 $ 21,670,000
Street reconstruction 16,060,000 3,115,000 6,290,000 12,885,000
G.O. improvement 52,220,000 7,690,000 3,260,000 56,650,000
State-aid street revenue 6,205,000 -970,000 5,235,000
Water revenue 7,940,000 -345,000 7,595,000
Tax increment 1,240,000 -230,000 1,010,000
Arena revenue 335,000 -165,000 170,000
HRA lease revenue 6,795,000 -355,000 6,440,000
Total governmental activities 113,590,000 10,805,000 12,740,000 111,655,000
Business-Type Activities
Water revenue 6,910,000 445,000 325,000 7,030,000
Sewer revenue 495,000 -55,000 440,000
Street light revenue 335,000 --335,000
Capital Lease Payable 2,255,000 --2,255,000
Total business-type activities 9,995,000 445,000 380,000 10,060,000
Total bonds payable 123,585,000$ 11,250,000$ 13,120,000$ 121,715,000$
Bonds and Capital Leases Payable
Outstanding Debt
Credit Rating
The City of Lakeville’s general obligation bond rating as of December 31, 2018 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 balances these strengths against the City’s above average leverage and 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 $32,681,212 of net bonded debt, which is subject to
the $201,067,283 current debt limitation, thereby resulting in a legal debt margin of $168,386,071.
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, 2018
(33)
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 steady, the building permits for single family
homes decreased slightly from 487 in 2017 compared to 478 permits in 2018. 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 2019 budget reflects a continuation of the program and service levels established by the
City Council over the past several years. A new policy initiative (police body worn cameras) was added
to the 2019 budget including equipment and personnel. Several positions were also added to
accommodate specific programs. The 2019 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
This page intentionally left blank.
CITY OF LAKEVILLE
STATEMENT OF NET POSITION
DECEMBER 31, 2018
See accompanying Notes to Basic Financial Statements.
(34)
Governmental
Activities
Business-Type
Activities Total
ASSETS
Cash and investments 75,471,425$ 12,668,002$ 88,139,427$
Receivables 20,457,537 3,542,583 24,000,120
Internal balances (210,622) 210,622 -
Inventories 445,362 2,136,612 2,581,974
Prepaid items 26,851 10,000 36,851
Restricted assets (temporarily)
Investments held by trustee 617,567 -617,567
Net pension asset - fire relief 2,925,508 -2,925,508
Capital assets
Nondepreciable 29,941,389 3,641,609 33,582,998
Depreciable, net 225,993,740 145,576,032 371,569,772
Total capital assets 255,935,129 149,217,641 405,152,770
Total assets 355,668,757 167,785,460 523,454,217
DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding 135,556 -135,556
OPEB related deferments 34,422 6,242 40,664
Pension plan deferments - PERA 10,202,733 454,533 10,657,266
Pension plan deferments - fire relief 753,825 -753,825
Total deferred outflows of resources 11,126,536 460,775 11,587,311
LIABILITIES
Salaries, accounts, contracts, and deposits 7,391,577 1,412,559 8,804,136
Accrued interest 1,692,875 119,938 1,812,813
Unearned revenue 728,790 -728,790
Noncurrent liabilities
Net pension liability - PERA 12,920,193 2,201,626 15,121,819
Total OPEB Liability 901,311 160,481 1,061,792
Other long-term liabilities due within one year 10,491,822 920,377 11,412,199
Other long-term liabilities due in more than one year 115,711,507 10,290,724 126,002,231
Total liabilities 149,838,075 15,105,705 164,943,780
DEFERRED INFLOWS OF RESOURCES
Deferred gain on refunding 106,004 -106,004
Pension plan deferments - PERA 13,559,909 536,559 14,096,468
Pension plan deferments - fire relief 296,348 -296,348
Total deferred inflows of resources 13,962,261 536,559 14,498,820
NET POSITION
Net investment in capital assets 142,300,205 138,725,763 281,025,968
Restricted for:
Special purposes 173,517 -173,517
Debt service 34,833,396 -34,833,396
Capital acquisition 6,877,415 -6,877,415
Fire relief pensions 3,382,985 -3,382,985
Unrestricted 15,427,439 13,878,208 29,305,647
Total Net Position 202,994,957$ 152,603,971$ 355,598,928$
Primary Government
CITY OF LAKEVILLE STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2018 See accompanying Notes to Basic Financial Statements. (35) Functions/ProgramsExpensesCharges for ServicesOperating Grants and ContributionsCapital Grantsand ContributionsGovernmental ActivitiesBusiness-Type ActivitiesTotalPrimary Government:Governmental Activities:General government7,203,308$ 5,584,036$ 23,772$ 61,193$(1,534,307)$ -$ (1,534,307)$ Public safety14,141,045 1,059,236 1,149,691 -(11,932,118) - (11,932,118) Public works22,336,416 6,792,249 4,313,934 9,183,039 (2,047,194) - (2,047,194) Parks and recreation6,661,852 2,455,851 11,422 194,327(4,000,252) - (4,000,252) Interest on long-term debt3,468,814 - - -(3,468,814) - (3,468,814) Total-governmental activities53,811,435 15,891,372 5,498,819 9,438,559 (22,982,685) - (22,982,685) Business-Type Activities:Liquor14,234,337 15,276,43313,421 -- 1,055,517 1,055,517 Utility14,815,914 13,613,14551,035 4,075,854 - 2,924,1202,924,120 Total Business-Type Activities29,050,251 28,889,578 64,456 4,075,854 - 3,979,6373,979,637 Total Primary Government82,861,686$ 44,780,950$ 5,563,275$ 13,514,413$ (22,982,685) 3,979,637 (19,003,048) General Revenues:Property taxes28,641,302 - 28,641,302Investment income907,138 160,165 1,067,303Gain on disposal of capital assets- 1,601,3341,601,334Transfers(492,418) 492,418- Total general revenues and transfers29,056,022 2,253,917 31,309,939 Change in Net Position6,073,337 6,233,554 12,306,891 Net Position - Beginning of Year197,301,685 146,439,339 343,741,024 Prior Period Restatement for Implementation of GASB Standard (See Note 24)(380,065) (68,922) (448,987) Beginning of Year, as Restated196,921,620 146,370,417 343,292,037 Net Position - End of Year202,994,957$ 152,603,971$ 355,598,928$ Program RevenuesPrimary GovernmentNet (Expense) Revenue and Changes in Net Position
CITY OF LAKEVILLE BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2018 See accompanying Notes to Basic Financial Statements. (36) NonmajorTotalGeneralGeneralG.O.Municipal Improvement Governmental GovernmentalASSETSFundObligation Improvement BuildingState-aid ConstructionFunds FundsCash and investments14,819,011$ 3,364,535$ 10,525,332$ 1,318,847$ 4,275,181$ 2,334,438$ 38,220,962$ 74,858,306$ Investments held by trustee- - - - - - 617,567 617,567 Interest receivable78,001 13,053 55,025 6,538 25,719 (1,432) 220,699 397,603 Taxes receivable1,932,835 - - - - - - 1,932,835 Accounts receivable538,685 - - - 272,682 531 666,124 1,478,022 Advances to other funds415,811 - - - - - - 415,811 Special assessments receivable117,596 347,790 15,726,417 - - 166,144 277,920 16,635,867 Leases Receivable- - - - - - 2,255,000 2,255,000 Inventory445,362 - - - - - - 445,362 Prepaid items15,221 - - - - - 11,630 26,851 Total Assets18,362,522$ 3,725,378$ 26,306,774$ 1,325,385$ 4,573,582$ 2,499,681$ 42,269,902$ 99,063,224$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCELIABILITIESSalaries payable767,417$ -$ -$ -$ -$ -$ 16,355$ 783,772$ Accounts payable671,233 - - 7,863 3,828,364 270,133 1,053,493 5,831,086 Advances from other funds- - - - - - 415,811 415,811 Contracts payable- - - - 48,698 308,975 290,011 647,684 Interest payable- - - - - - 225 225 Deposits payable8,257 - - - - - 111,975 120,232 Unearned revenue723,857 - - - - - 4,933 728,790 2,170,764 - - 7,863 3,877,062 579,108 1,892,803 8,527,600 DEFERRED INFLOWS OF RESOURCESUnavailable revenue - taxes377,720 - - - - - - 377,720 Unavailable revenue - special assessments117,596 347,790 15,703,956 - - 165,974 277,074 16,612,390 Unavailable revenue - other- - - - - - 2,255,000 2,255,000 Total Deferred Inflows of Resources495,316 347,790 15,703,956 - - 165,974 2,532,074 19,245,110 FUND BALANCENonspendable876,394 - - - - - 11,630 888,024 Restricted102,981 3,377,588 10,602,818 - 696,520 1,123,414 9,870,441 25,773,762 Committed- - - 1,317,522 - 631,18528,378,531 30,327,238 Assigned705,500 - - - - - - 705,500 Unassigned14,011,567 - - - - - (415,577) 13,595,990 Total Fund Balance15,696,442 3,377,588 10,602,818 1,317,522 696,520 1,754,599 37,845,025 71,290,514 Total Liabilities, Deferred Inflows of Resources, and Fund Balance 18,362,522$ 3,725,378$ 26,306,774$ 1,325,385$ 4,573,582$ 2,499,681$ 42,269,902$ 99,063,224$ Debt ServiceCapital Projects
CITY OF LAKEVILLE
RECONCILIATION OF THE BALANCE SHEET TO THE
STATEMENT OF NET POSITION
GOVERNMENTAL ACTIVITIES
DECEMBER 31, 2018
See accompanying Notes to Basic Financial Statements.
(37)
Total Fund Balances for Governmental Funds 71,290,514$
Governmental capital assets 408,421,587$
Less: Accumulated Depreciation (152,486,458) 255,935,129
2,925,508
Bonds (111,655,000)
Accrued interest (1,692,875)
Loan (1,897,014)
Note Payable (2,000,000)
Unamortized bond premium (7,916,538)
Deferred charge on refunding 135,556
Deferred gain on refunding (106,004)
Compensated absences (2,734,777) (127,866,652)
Net pension liability (12,920,193)
Deferred inflows of resources (13,856,257)
Deferred outflows of resources 10,956,558 (15,819,892)
(901,311)
34,422
16,990,110
407,129
Total Net Position of Governmental Activities 202,994,957$
Total net position reported for governmental activities in the statement of net position is
different because:
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.
OPEB related deferred outflows of resources are recorded only on the statement of net
position.
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.
Total OPEB liabilities are not payable with current financial resources and, therefore, are not
reported in the governmental funds.
CITY OF LAKEVILLE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED DECEMBER 31, 2018 See accompanying Notes to Basic Financial Statements. (38) NonmajorTotalGeneralGeneralG.O. MunicipalImprovementGovernmental GovernmentalFundObligationImprovementBuildingState-aidConstructionFundsTotalsREVENUEProperty taxes20,116,949$ 3,244,731$ 1,932,187$ 400,000$ -$ 50,000$ 2,295,250$ 28,039,117$ Tax increment- - - - - - 573,267 573,267 Licenses and permits3,208,278 - - - - - 691,326 3,899,604 Intergovernmental 1,180,338 58,743 - - 1,792,677 - 2,059,0045,090,762 Charges for services3,381,862 - - - 536,567 - 7,910,12011,828,549 Special assessments- 54,016 2,853,924 - - 192,655 38,5083,139,103 Fines347,203 - - - - - - 347,203 Interest Income264,477 43,129 162,768 21,385 61,688 41,478 786,248 1,381,173 Change in Fair Value of Investments(89,797) (14,583) (60,432) (7,646) (22,055) (3,399) (276,123) (474,035) Donations41,729 - - 63,181 - - 205,060 309,970 Miscellaneous 60,677 - 1 403,189 - - 24,916 488,783 Total Revenue28,511,716 3,386,036 4,888,448 880,109 2,368,877 280,734 14,307,576 54,623,496 EXPENDITURESCurrent:General government6,018,111 - - - - - 638,713 6,656,824 Public safety13,061,572 - - - - - -13,061,572 Public works4,741,200 - - - - - -4,741,200 Parks and recreation3,998,735 - - - - - -3,998,735 Capital Outlay:General government- - - 132,132 - 32 675,467 807,631 Public safety- - - 84,950 - - 952,146 1,037,096 Public works28,752 - - - 7,860,545 7,878,735 4,257,927 20,025,959 Parks and recreation7,261 - - 380,673 - - 2,806,656 3,194,590 Debt Service:Principal bond maturities- 4,095,0003,260,000 - 1,000,000- 2,065,00010,420,000 Interest on debt- 1,409,4011,729,372 - -- 810,226 3,948,999 Fiscal charges- 59,327 26,448 - -- 10,954 96,729 Total Expenditures27,855,631 5,563,728 5,015,820 597,755 8,860,545 7,878,767 12,217,089 67,989,335 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES656,085 (2,177,692) (127,372) 282,354 (6,491,668) (7,598,033) 2,090,487 (13,365,839) OTHER FINANCE SOURCES (USES)Issuance of Bonds and Other Debt- 3,115,000115,645 - 3,000,0007,574,355 - 13,805,000Premium on Issued Debt - 283,652 - - - 721,684 - 1,005,336Payment of Refunded Bonds- (3,320,000) - - - - - (3,320,000) Proceeds from the Sale of Capital Assets- -- 62 - - 530,672 530,734Transfers in from other funds765,232 300,000 638,419 322,162 1,154,030 256,814 2,601,822 6,038,479Transfers out to other funds(958,026) - (264) - (115,918) (137,445) (2,955,479) (4,167,132) Total Other Finance Sources (192,794) 378,652 753,800 322,224 4,038,112 8,415,408 177,015 13,892,417 NET CHANGE IN FUND BALANCES463,291 (1,799,040) 626,428 604,578 (2,453,556) 817,375 2,267,502 526,578 FUND BALANCESBeginning of Year15,269,442 5,176,628 9,976,390 712,944 3,150,076 937,224 35,577,523 70,800,227 Change in Supplies - Inventory(36,291) - - - - - - (36,291) End of Year15,696,442$ 3,377,588$ 10,602,818$ 1,317,522$ 696,520$ 1,754,599$ 37,845,025$ 71,290,514$ Debt ServiceCapital 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, 2018
See accompanying Notes to Basic Financial Statements.
(39)
Net Change in Fund Balances-Total Governmental Funds 526,578$
Amounts reported for governmental activities in the statement of activities are different because:
Capital outlay 14,600,718$
Capital contributed by developer 5,258,885
Depreciation expense (13,345,802) 6,513,801
(832,125)
(36,291)
Deferred inflows of resources - December 31, 2017 (18,755,608)
Deferred inflows of resources - December 31, 2018 19,245,110 489,502
(13,805,000)
13,740,000 (65,000)
Change in accrued interest payable (21,613)
Change in grant applicable towards accrued interest payable (26,903)
Premium on bonds issued in the current year (1,005,336)
Deferred charge on refunding 23,808
Deferred gain on refunding (6,529)
Amortization of deferred charge on refunding (9,289)
Amortization of deferred gain on refunding 8,063
Amortization of debt premiums/discounts 582,474 (455,325)
(85,505)
34,004
(16,302)
Change in Net Position of Governmental Activities 6,073,337$
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.
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).
in the net pension liability(asset) and the related deferred inflows and outflows of
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
Bond proceeds
Bond and loan principal maturities
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
CITY OF LAKEVILLE
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
DECEMBER 31, 2018
See accompanying Notes to Basic Financial Statements.
(40)
Governmental
Activities -
Internal Service
Liquor Utility Totals Funds
ASSETS AND DEFERRED OUTFLOWS
OF RESOURCES
CURRENT ASSETS
Cash and investments 3,582,623$ 9,085,379$ 12,668,002$ 613,119$
Interest receivable 6,987 69,069 76,056 1,097
Accounts receivable 1,376 3,465,151 3,466,527 12,113
Inventory 1,647,961 488,651 2,136,612 -
Prepaid expenses - 10,000 10,000 -
Total current assets 5,238,947 13,118,250 18,357,197 626,329
NONCURRENT ASSETS
Capital assets:
Land 3,087,882 539,885 3,627,767 -
Construction in progress - 13,842 13,842 -
Buildings and improvements 2,043,487 26,198,192 28,241,679 -
Machinery and equipment 462,559 3,172,962 3,635,521 -
Infrastructure - 183,916,116 183,916,116 -
Accumulated depreciation (369,291) (69,847,993) (70,217,284) -
Net Capital Assets 5,224,637 143,993,004 149,217,641 -
Total noncurrent assets 5,224,637 143,993,004 149,217,641 -
Total assets 10,463,584 157,111,254 167,574,838 626,329
DEFERRED OUTFLOWS OF RESOURCES
Pension plan deferments - PERA 189,291 265,242 454,533 -
OPEB related deferments 2,596 3,646 6,242 -
Total deferred outflows of resources 191,887 268,888 460,775 -
Total Assets and Deferred
Outflows of Resources 10,655,471$ 157,380,142$ 168,035,613$ 626,329$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND NET POSITION
CURRENT LIABILITIES
Salaries payable 59,919$ 80,138$ 140,057$ -$
Accounts payable 877,681 343,025 1,220,706 8,578
Contracts payable - 1,465 1,465 -
Accrued interest payable - 119,938 119,938 -
Deposits payable 35,031 15,300 50,331 -
Accrued compensated absences 81,713 143,664 225,377 -
Long-term debt - current 215,000 480,000 695,000 -
Total current liabilities 1,269,344 1,183,530 2,452,874 8,578
NONCURRENT LIABILITIES
Accrued compensated absences 57,591 101,255 158,846 -
Net pension liability - PERA 916,872 1,284,754 2,201,626 -
Total OPEB Liability 61,091 99,390 160,481 -
Long-term debt 2,040,000 8,091,878 10,131,878 -
Total noncurrent liabilities 3,075,554 9,577,277 12,652,831 -
Total liabilities 4,344,898 10,760,807 15,105,705 8,578
DEFERRED INFLOWS OF RESOURCES
Pension plan deferments - PERA 223,451 313,108 536,559 -
NET POSITION
Net investment in capital assets 2,969,637 135,756,126 138,725,763 -
Restricted for debt service - - - -
Unrestricted 3,117,485 10,550,101 13,667,586 617,751
Total Net Position 6,087,122 146,306,227 152,393,349 617,751
Total Liabilities, Deferred Inflows of
Resources, and Net Position 10,655,471$ 157,380,142$ 168,035,613 626,329$
Explanation of difference between Enterprise Funds
Statement of Net Position and government-wide
Statement of Net Position:
The City uses an internal service fund to charge the
cost of its insurance activities to individual funds.
This amount consists of the necessary adjustments
to reflect the consolidation of internal service fund
activities:210,622
Net position of business-type activities 152,603,971$
Enterprise Funds
Business-type Activities -
CITY OF LAKEVILLE
STATEMENT OF NET REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2018
See accompanying Notes to Basic Financial Statements.
(41)
Governmental
Activities -
Internal Service
Liquor Utility Total Funds
SALES AND COST OF SALES
Sales 15,276,433$ -$ 15,276,433$ -$
Cost of sales 11,465,639 - 11,465,639 -
Gross profit 3,810,794 - 3,810,794 -
OPERATING REVENUE
User Charges -13,333,673 13,333,673 554,931
Other -279,472 279,472 17,893
Total operating revenue -13,613,145 13,613,145 572,824
OPERATING EXPENSES
Personnel services 1,598,781 2,199,549 3,798,330 -
Commodities 63,994 391,226 455,220 -
Other charges and services 1,017,821 3,475,061 4,492,882 491,887
Disposal charges -4,018,012 4,018,012 -
Depreciation 102,961 4,544,612 4,647,573 -
Total operating expenses 2,783,557 14,628,460 17,412,017 491,887
OPERATING INCOME (LOSS)1,027,237 (1,015,315) 11,922 80,937
NONOPERATING REVENUE (EXPENSES)
Intergovernmental - grants 13,421 51,035 64,456 -
Interest Income 48,061 193,833 241,894 (490)
Change in Fair Value of Investments (17,183) (64,546) (81,729) 175
Interest, fiscal charges, bond premium (net)(157)(214,411) (214,568) -
Disposal of capital assets 1,601,334 (4,951) 1,596,383 -
Total Nonoperating Revenue (Expenses)1,645,476 (39,040) 1,606,436 (315)
INCOME (LOSS) BEFORE CONTRIBUTIONS
AND TRANSFERS 2,672,713 (1,054,355) 1,618,358 80,622
Contributed capital from developers -4,075,854 4,075,854 -
Contributed capital from governmental activities -2,313,765 2,313,765 -
Transfers from other funds -203,826 203,826 -
Transfers to other funds (923,260) (1,101,913) (2,025,173) (50,000)
Total Contributions and Transfers (923,260) 5,491,532 4,568,272 (50,000)
CHANGE IN NET POSITION 1,749,453 4,437,177 6,186,630 30,622
NET POSITION
Beginning of Year 4,366,329 141,909,312 587,129
Prior Period Restatement for Implementation
of GASB Standard (See Note 24)(28,660) (40,262) -
Beginning of Year, as Restated 4,337,669 141,869,050 587,129
End of Year 6,087,122$ 146,306,227$ 617,751$
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:46,924
Change in net Position of business-type activities 6,233,554$
Enterprise Funds
Business-type Activities -
CITY OF LAKEVILLE
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2018
See accompanying Notes to Basic Financial Statements.
(42)
Governmental
Activities -
Internal Service
Liquor Utility Total Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers 15,298,474$ 13,347,019$ 28,645,493$ 643,378$
Cash received from general service charges - - - (495,178)
Cash paid to suppliers (12,205,169) (8,150,977) (20,356,146) -
Cash paid to and for employees (1,558,980) (2,177,730) (3,736,710) -
Net Cash Provided (Used) by Operating Activities 1,534,325 3,018,312 4,552,637 148,200
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Intergovernmental - grant 13,421 51,035 64,456 -
Transfers from other funds - 203,826 203,826 -
Transfers to other funds (923,260) (1,101,913) (2,025,173) (50,000)
Net Cash Provided (Used) by Noncapital
Financing Activities (909,839) (847,052) (1,756,891) (50,000)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets - (2,470,772) (2,470,772) -
Proceeds from sale of capital assets 2,350,762 13,386 2,364,148 -
Proceeds from Issuance of Capital Debt - 486,947 486,947
Interest and fiscal charges (157) (272,757) (272,914) -
Principal maturities - (380,000) (380,000) -
Net Cash Provided (Used) by Capital and
Related Financing Activities 2,350,605 (2,623,196) (272,591) -
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 26,635 113,347 139,982 (272)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,001,726 (338,589) 2,663,137 97,928
Cash and Cash Equivalents - Beginning of the Year 580,897 9,423,968 10,004,865 515,191
CASH AND CASH EQUIVALENTS - END OF THE YEAR 3,582,623$ 9,085,379$ 12,668,002$ 613,119$
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income (Loss) 1,027,237$ (1,015,315)$ 11,922$ 80,937$
Adjustments:
Depreciation expense 102,961 4,544,612 4,647,573 -
(Increase) decrease in assets and deferred outflows
Accounts receivable 2,067 (269,026) (266,959) 70,554
Inventory (33,962) (213,079) (247,041) -
Prepaid expenses - 183 183 -
Pension-related deferred outflows 79,380 123,887 203,267 -
Increase (decrease) in liabilities and deferred inflows
Salaries payable 8,533 14,043 22,576 -
Accounts payable 376,247 (53,782) 322,465 (3,291)
Deposits payable 19,974 2,900 22,874 -
Accrued compensated absences 20,388 36,547 56,935 -
Net pension liability and related deferred inflows (73,808) (160,114) (233,922) -
Net OPEB obligation 5,308 7,456 12,764 -
Total adjustments
Net Cash Provided (Used) by Operating Activities 1,534,325$ 3,018,312$ 4,552,637$ 148,200$
Supplemental schedule of noncash financing activities:
The City assumes ownership of utility capital assets from
governmental projects and land developers. Capital assets
assumed were as follows:-$ 6,389,619$ 6,389,619$ -$
Enterprise Funds
Business-type Activities -
CITY OF LAKEVILLE
STATEMENT OF FIDUCIARY NET POSITION
AGENCY FUND
DECEMBER 31, 2018
See accompanying Notes to Basic Financial Statements.
(43)
Escrow
Fund
ASSETS
Cash and investments 11,537,221$
LIABILITIES
Deposits payable 11,537,221$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(44)
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, 2018
(45)
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, 2018. 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, 2018
(46)
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, 2018
(47)
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 Municipal State-aid Fund – This fund accounts for an annual
allotment from the State of Minnesota Municipal State-aid street construction
account.
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, 2018
(48)
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, 2018
(49)
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, 2018
(50)
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, 2018, the special assessment delinquent
receivable was $133,848 in the governmental funds and $26,110 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, 2018
(51)
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, 2018
(52)
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 four 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 the City’s OPEB liability. This deferred outflows results from
contributions made to the plan after the measurement date and will be recognized in the
next fiscal period. The fourth 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, 2018
(53)
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. 75, Accounting and Financial
Reporting 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, 2018
(54)
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, 2018, the unrestricted fund
balance of the General Fund was 50.3% of the subsequent year’s budgeted
expenditures. The City has opted to reduce fund balance with the 2019 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, 2018
(55)
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.
The City has also established specific targets it will use to maintain an adequate level of
net position for the Utility Enterprise Funds. When implementing any rate changes, the
city intends to meet the following financial management targets:
(i)Available cash on hand to cover the following objectives:
1.Three months of operating cash
2.Following year debt service payments
3.Next year planned capital expenditures (not financed with bonds)
(ii)Unassigned cash to account for unexpected costs at the following thresholds:
1.$500,000 for water and sewer operating funds
2.$100,000 for environmental resources and streetlight operating funds.
(iii) Unrestricted Net Assets not less than 50% of projected expenditures.
(iv)Net revenues not less than 125% of annual debt service on existing and planned
debt.
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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(56)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
U. Revenues and Expenditures/Expenses (Continued)
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.
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. Interfund services provided and used are not eliminated in
the process of consolidation into the government-wide statement of activities.
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, 2018
(57)
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 2018 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, 2018 consist of the following:
Cash on hand 12,850$
Deposits 2,024,378
Investments 98,256,987
Total cash and investments 100,294,215$
The City’s cash and investments as of December 31, 2018 are presented in the financial
statements as follows:
Statement of Net Position
Cash and investments 88,139,427$
Temporarily restricted investments held by trustee 617,567
Statement of Fiduciary Net Position
Cash and investments 11,537,221
Total cash and investments 100,294,215$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(58)
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 $2,024,378 while the
balance on the bank records was $2,005,164. At December 31, 2018, all deposits were
fully covered by federal depository insurance, surety bonds, or by collateral held by the
City’s agent in the City’s name.
C.Investments
The City’s investments as of December 31, 2018 are as follows:
Investment Type Rating Agency Total Value Less than 1 1 - 5 6 - 10
Money market funds
Minnesota Municipal (4M)N/R N/A 2,935,088$ -$ -$ -$
Wells Fargo Advantage AAAm S&P 4,401,339 -- -
First American Treasury Obligation AAAm S&P 617,567 -- -
4M Term Series N/R N/A 3,000,000 3,000,000 - -
Certificates of deposit N/R N/A 24,315,535 7,154,745 16,703,327 457,463
U.S. treasury securities N/R N/A 740,535 -740,535 -
U.S. government agencies AA+ S&P 48,109,458 9,957,891 30,928,853 7,222,714
Municipal Bonds Aaa Moody's 597,141 300,000 297,141 -
Municipal Bonds AAA S&P 578,454 -578,454 -
Municipal Bonds Aa1 Moody's 2,576,523 498,775 2,077,748 -
Municipal Bonds AA+ S&P 2,253,147 512,142 1,310,670 430,335
Municipal Bonds Aa2 Moody's 2,547,503 401,044 659,600 1,486,859
Municipal Bonds AA S&P 1,721,001 691,025 1,029,976 -
Municipal Bonds Aa3 Moody's 100,149 100,149 - -
Municipal Bonds AA- S&P 2,344,983 259,633 1,647,172 438,178
Municipal Bonds A1 Moody's 576,804 -576,804 -
Municipal Bonds N/R N/A 841,760 -841,760 -
Total investments 98,256,987$ 22,875,404$ 57,392,040$ 10,035,549$
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, 2018
(59)
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, 2018, the City’s investment portfolio includes the following securities
of single issuers exceeding 5%:
Federal National Mortgage Association 9.84%
Federal Farm Credit Bank 11.25%
Federal Home Loan Bank 5.09%
Federal Home Loan Mortgage 6.46%
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, 2018
(60)
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, 2018
(61)
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 617,567$ -$ -$ 617,567$
U.S. treasury securities 740,535 - - 740,535
U.S. government securities - 48,109,458 - 48,109,458
Certificates of deposit - 24,315,535 - 24,315,535
Municipal bonds - 14,137,465 - 14,137,465
1,358,102$ 86,562,458$ -$ 87,920,560
Investments measured at amortized cost 10,336,427
Total 98,256,987$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(62)
NOTE 3 CAPITAL ASSETS
A summary of changes in governmental capital assets during the year ended December 31,
2018 are as follows:
Beginning Ending
Balance Additions Deletions Transfers Balance
Governmental Activities:
Capital Assets, Not Being Depreciated:
Land 28,147,439$ 742,214$ -$ -$ 28,889,653$
Historical treasures 100,000 - - - 100,000
Construction in progress 3,425,646 699,609 (3,173,519) - 951,736
Total Capital Assets, Not Being Depreciated 31,673,085 1,441,823 (3,173,519) - 29,941,389
Capital Assets, Being Depreciated:
Building and improvements 54,921,360 222,166 - - 55,143,526
Machinery and equipment 24,015,298 2,292,921 (1,395,392) 22,799 24,935,626
Other improvements 8,950,650 809,888 - - 9,760,538
Infrastructure
Streets 169,561,210 10,765,637 (4,224,335) - 176,102,512
Storm Sewer 79,369,672 4,591,266 (444,101) - 83,516,837
Parks 26,111,738 2,909,421 - - 29,021,159
Total Capital Assets, Being Depreciated 362,929,928 21,591,299 (6,063,828) 22,799 378,480,198
Accumulated Depreciation for:
Buildings and improvements (16,144,046) (1,178,651) - - (17,322,697)
Machinery and equipment (13,662,493) (1,952,858) 1,324,725 (22,799) (14,313,425)
Other improvements (3,402,611) (434,536) - - (3,837,147)
Infrastructure
Streets (77,758,798) (6,920,320) 3,708,593 - (80,970,525)
Storm Sewer (19,810,149) (1,844,652) 198,385 - (21,456,416)
Parks (13,571,463) (1,014,785) - - (14,586,248)
Total Accumulated Depreciation (144,349,560) (13,345,802) 5,231,703 (22,799) (152,486,458)
Total Capital Assets, Being Depreciated, Net 218,580,368 8,245,497 (832,125) - 225,993,740
Governmental Activities Capital Assets, Net 250,253,453$ 9,687,320$ (4,005,644)$ -$ 255,935,129$
Depreciation expense was charged to governmental functions as follows:
General government 357,173$
Public safety 1,159,418
Public works 9,670,524
Parks and recreation 2,158,687
Total depreciation expense 13,345,802$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(63)
NOTE 3 CAPITAL ASSETS (CONTINUED)
A summary of changes in business-type capital assets during the year ended December 31,
2018 are as follows:
Beginning Ending
Balance Additions Deletions Transfers Balance
Business-Type Activities:
Capital Assets, Not Being Depreciated:
Land 3,854,623$ -$ (226,856)$ -$ 3,627,767$
Construction in Progress - 13,842 - - 13,842
Total Capital Assets, Not Being Depreciated 3,854,623 13,842 (226,856) - 3,641,609
Capital Assets, Being Depreciated:
Buildings and improvements 29,612,379 - (1,370,700) - 28,241,679
Machinery and equipment 3,664,394 113,274 (119,348) (22,799) 3,635,521
Infrastructure
Water 103,566,523 6,167,633 (38,212) - 109,695,944
Sanitary Sewer 71,654,532 2,565,640 - - 74,220,172
Total Capital Assets, Being Depreciated 208,497,828 8,846,547 (1,528,260) (22,799) 215,793,316
Accumulated Depreciation for:
Buildings and improvements (9,236,566) (619,633) 850,572 - (9,005,627)
Machinery and equipment (1,886,124) (350,916) 116,906 22,799 (2,097,335)
Infrastructure
Water (30,543,059) (2,183,943) 19,875 - (32,707,127)
Sanitary Sewer (24,914,114) (1,493,081) - - (26,407,195)
Total Accumulated Depreciation (66,579,863) (4,647,573) 987,353 22,799 (70,217,284)
Total Capital Assets, Being Depreciated, Net 141,917,965 4,198,974 (540,907) - 145,576,032
Business-Type Activities Capital Assets, Net 145,772,588$ 4,212,816$ (767,763)$ -$ 149,217,641$
Depreciation expense was charged to governmental functions as follows:
Liquor fund 102,961$
Utility fund 4,544,612
Total Depreciation Expense, Business-Type Activities 4,647,573$
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
$1,804,767 has been depreciated to date. These amounts are recorded in the City’s capital
assets. The 2018 lease revenue totaled $88,626.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(64)
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 2018 lease revenue totaled $292,500.
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 2018 lease
expense totaled $141,744. The HRA owns the land and building of the Galaxie store. The
following is a schedule by years of future minimum payments required under the lease as of
December 31, 2018:
Year Amount
2019 70,872$
Operating Lease (Kenrick Liquor Store):
The Kenrick Liquor Store (located off Kenrick Avenue) consists of 9,705 square feet of
space at a monthly lease cost of $15,366 plus a proportionate share of real estate taxes,
property insurance, special assessments, common area maintenance, and management
fees. The lease has an original term of twenty years. The fiscal year 2018 lease expense
totaled $121,803. The following is a schedule by years of future minimum payments
required under the lease as of December 31, 2018:
Year Amount
2019 184,395$
2020 184,395
2021 184,395
2022 184,395
2023 184,395
2024-2028 986,513
2029-2033 1,055,419
2034-2038 1,129,177
Total 4,093,084$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(65)
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.
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 $1,586,159 has been depreciated to date. These amounts are recorded in
the HRA’s capital assets.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(66)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A.Components of Long-Term Debt (Continued)
Revenue Bonds (Continued)
Business-type Activities
Future revenue pledged for the payment of long-term debt is as follows:
Remaining Pledged
Principal and Principal and Revenue
Bond Issue Use of Proceeds Type Term of Pledge Interest Interest Paid Received
Recreation Facility Ice arena Arena Revenues 2018 - 2019 179,180$ 183,090$ 231,126$
Ice Arena Lease Revenue Additional ice arena Lease Revenues 2018 - 2032 7,657,750 627,968 292,500
Utility - Water Revenue Water infrastructure Utility user fees 2018 - 2034 7,152,101 528,838 4,896,342
Utility - Sewer Revenue Sewer infrastructure Utility user fees 2018 - 2025 507,925 74,325 6,298,059
Water Connection Revenue Water infrastructure Connection charges 2018 - 2032 9,548,925 612,075 2,651,426
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 2018, the City made no payments on this loan. As of December 31, 2018,
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 2018. 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.
Dakota County Loan Payable
During 2018, the City entered into a 3-year agreement with Dakota County, where as
Dakota County delayed repayment of $3,000,000 of project costs for the County Road
50 project. This loan requires annual payments of $1,000,000 with no interest, of which
the first installment was made during 2018.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(67)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A.Components of Long-Term Debt (Continued)
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
$562,446 at December 31 2018. 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. This refunding resulted in an aggregate difference in
debt service cash flows between the refunding debt and the refunded debt of $305,074
as well as an economic net present value benefit of $321,727 on the transaction.
General Obligation Improvement Bonds Series 2018A
On July 25, 2018, the City issued $8,135,000 General Obligation Improvement Bonds,
Series 2018A. The proceeds of this issuance will be used to finance various
improvement projects. They carry interests that vary from 2.5% to 5.0% with a final
maturity of February 1, 2029 and a provisional call date of February 1, 2017. Debt
service on these bonds will be made from special assessments made and revenues
from the City’s utility revenues.
General Obligation Refunding Bonds, Series 2018 B
On August 16, 2018, the City issued $3,115,000 in General Obligation Street
Reconstruction Refunding Bonds, Series 2018 B. The proceeds of this issue were used
to retire, in advance of their stated maturities, the 2019 through 2030 maturities of the
Taxable General Obligation Street Reconstruction Bonds, Series 2009A (Build America
Bonds) (refunded principal of $3,320,000). This refunding resulted in an aggregate
difference in debt service cash flows between the refunding debt and the refunded debt
of $189,036 as well as an economic net present value benefit of $167,070 on the
transaction.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(68)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A. Components of Long-Term Debt (Continued)
The City had the following long-term liabilities outstanding at December 31, 2018:
Description Maturities Interest Rates Amount
PRIMARY GOVERNMENT
Governmental Activities:
General Obligation Bonds Payable:
Capital improvement bonds 2018 - 2032 1.75% - 5.00% 21,670,000$
Street reconstruction bonds 2018 - 2030 1.75% - 5.00% 12,885,000
G.O. Improvement bonds 2018 - 2038 1.40% - 5.00% 56,650,000
Tax increment bonds 2022 4.00% - 4.20% 1,010,000
State-aid street revenue bonds 2018 - 2036 1.25% - 5.00% 5,235,000
G.O. water revenue bonds 2034 2.00% - 5.00% 7,595,000
Arena revenue bonds 2019 5.30% - 5.40%170,000
Total General Obligation Bonds 105,215,000
HRA lease revenue bonds 6,440,000
Total Governmental Activities 111,655,000
Business-Type Activities:
Revenue Bonds
Water revenue bonds 2034 1.50% - 5.00% 7,030,000
Sewer revenue bonds 2025 1.50% - 5.00%440,000
Street light revenue bonds 335,000
Total Revenue Bonds 7,805,000
Capital Lease 2027 2.00% - 3.00% 2,255,000
Total Business-Type Activities 10,060,000
Total long-term bonded debt outstanding 121,715,000$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(69)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A.Components of Long-Term Debt (Continued)
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 70), are as follows:
Year Ending
December 31, Principal Interest Principal Interest Total
2019 7,920,000$ 3,877,765$ 480,000$ 275,532$ 12,553,297$
2020 8,715,000 3,564,410 565,000 249,088 13,093,498
2021 8,585,000 3,247,570 595,000 227,788 12,655,358
2022 8,535,000 2,935,739 610,000 212,113 12,292,852
2023 8,555,000 2,604,080 620,000 188,613 11,967,693
2024-2028 39,105,000 8,267,606 2,905,000 521,415 50,799,021
2029-2033 24,470,000 2,720,170 1,780,000 172,265 29,142,435
2034-2038 5,770,000 300,245 250,000 3,906 6,324,151
Total 111,655,000$ 27,517,585$ 7,805,000$ 1,850,720$ 148,828,305$
Governmental Business-Type
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, 2018 is
$2,734,777. 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, 2018 is $384,223. 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(70)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A. Components of Long-Term Debt (Continued)
Unamortized Bond Premium and Discount
Unamortized bond premium and bond discount included within noncurrent liabilities are
as follows:
Governmental
Unamortized bond premium $ 7,916,538
Business-Type
$ 766,878
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
2019 215,000$ 58,650$
2020 230,000 54,200
2021 240,000 49,500
2022 245,000 43,425
2023 250,000 36,000
2024-2027 1,075,000 65,475
Total 2,255,000$ 307,250$
Liquor Capital Lease
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(71)
NOTE 5 LONG-TERM DEBT (CONTINUED)
B. Changes in Long-Term Debt
Long-term liability activity for the year ended December 31, 2018 was as follows:
Beginning End of Due Within
PRIMARY GOVERNMENT of Year Additions Deletions Year One Year
Governmental Activities
G.O. Improvement bonds 38,855,000$ 3,115,000$ (7,415,000)$ 34,555,000$ 2,445,000$
Other bonds 74,735,000 7,690,000 (5,325,000) 77,100,000 5,475,000
Total bonds 113,590,000 10,805,000 (12,740,000) 111,655,000 7,920,000
County note payable - 3,000,000 (1,000,000) 2,000,000 1,000,000
Metropolitan Council loans 1,897,014 - - 1,897,014 -
Total long-term debt 115,487,014 13,805,000 (13,740,000) 115,552,014 8,920,000
Accrued compensated absences 2,685,238 1,621,361 (1,571,822) 2,734,777 1,571,822
Unamortized bond premium/discount 7,493,676 1,005,336 (582,474) 7,916,538 -
Total Governmental Activities 125,665,928 16,431,697 (15,894,296) 126,203,329 10,491,822
Business-Type Activities:
Utility - water revenue bonds 6,910,000 445,000 (325,000) 7,030,000 395,000
Utility - sewer revenue bonds 495,000 - (55,000) 440,000 85,000
Utility - street light revenue bonds 335,000 - - 335,000 -
Liquor - capital leases 2,255,000 - - 2,255,000 215,000
Accrued compensated absences 327,288 282,312 (225,377) 384,223 225,377
Unamortized Bond Premiums 788,468 41,947 (63,537) 766,878 -
Total Business-Type Activities 11,110,756 769,259 (668,914) 11,211,101 920,377
Total Primary Government 136,776,684$ 17,200,956$ (16,563,210)$ 137,414,430$ 11,412,199$
NOTE 6 NET INVESTMENT IN CAPITAL ASSETS
Net investment in capital assets as of December 31, 2018 is calculated as follows:
Governmental Business-type Total
Capital assets, net of depreciation 255,935,129$ 149,217,641$ 405,152,770$
Less applicable:
Bonds payable (99,465,000) (7,470,000) (106,935,000)
Capital lease payable - (2,255,000) (2,255,000)
Loan payable (1,897,014) - (1,897,014)
Note payable (2,000,000) - (2,000,000)
Unamortized bond premium / discount (net)(7,058,260) (766,878) (7,825,138)
Unamortized deferred charge on refunding 112,443 - 112,443
Unamortized deferred gain on refunding (99,902) - (99,902)
Unspent bond proceeds 1,123,414 - 1,123,414
Contracts Payable (4,350,605) - (4,350,605)
Invested in capital assets, net 142,300,205$ 138,725,763$ 281,025,968$
The City has $12,190,000 in bonds and $858,278 in unamortized bond premiums that are
not included in the calculation above as they are not capital in nature.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(72)
NOTE 7 RESTRICTED NET POSITION
The government-wide Statement of Net Position reports restricted amounts in the net
position section. These amounts represent assets and deferred outflows (less any related
liabilities and deferred inflows) that have imposed restrictions placed on them by parties
outside the City government. Net position restricted for debt service represents assets
pledged by bond covenant to the repayment of City bond obligations. The government-wide
restricted net position is as follows:
Governmental Business-type
Activities Activities Total
Restricted Net Position
Cash and investments 24,333,601$ -$ 24,333,601$
Temporarily restricted
Investments held by trustee 617,567 - 617,567
Net pension asset 2,925,508 - 2,925,508
Receivables 18,456,232 - 18,456,232
Deferred outflows - pension plan deferments 753,825 - 753,825
Deferred inflows - pension plan deferment (296,348) - (296,348)
Less related liabilities (1,819,268) - (1,819,268)
Total restricted net position 44,971,117$ -$ 44,971,117$
NOTE 8 CONSTRUCTION COMMITMENTS
The City has outstanding construction and build projects as of December 31, 2018. 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
Jaycee/Dodd Park BB Court Recon 15,400$11,066$
Traffic management signals - 106,549
2018 Street reconstruction projects 7,528,857 343,401
Misc. street and trail repairs 736,934 19,566
Kenyon Ave reconstruction 1,128,039 16,230
CR50 project (185th St to Dodd Blvd)4,526,148 2,000,000
Wetland credits-purchase agreement - 30,200
Glacier Way/Dodd Blvd Intersection improvements - 399,764
Heritage Liquor and Arts Center fiber project - 46,545
Holyoke Water Tower 3,300,661 173,982
Well #21 and #22 1,810,171 44,477
Sanitary Sewer Projects 53,591 55,614
Tree inventory, injections and pruning - 84,058
Total governmental 19,099,801$ 3,331,452$
Projects Remaining
Business-Type Activities Spent-to-Date Commitment
Sanitary Sewer Improvements -$698,060$
Tree inventory, injections and pruning 55,304 39,072
Total business-type 55,304$737,132$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(73)
NOTE 9 FUND BALANCES
A summary of the City’s governmental fund balance classifications at December 31, 2018 is
as follows:
General G.O. Municipal Improvement
General Fund Obligation Improvement Building State-aid Construction Nonmajor Total
Nonspendable
Inventory 445,362$ -$ -$ -$ -$ -$ 11,630$ 456,992$
Prepaid Items 15,221 - - - - - - 15,221
Advances to Other Funds 415,811 - - - - - - 415,811
Total nonspendable 876,394 - - - - - 11,630 888,024
Restricted for:
Forfeitures 102,981 - - - - - - 102,981
Debt Service - 3,377,588 10,602,818 - - - 5,362,535 19,342,941
Public improvements - - - - 696,520 1,123,414 - 1,819,934
Park development - - - - - - 4,409,798 4,409,798
Tax increment - - - - - - 27,572 27,572
Public communications - - - - - - 32,040 32,040
Special Service District - - - - - - 38,496 38,496
Total Restricted 102,981 3,377,588 10,602,818 - 696,520 1,123,414 9,870,441 25,773,762
Committed for:
Public improvements - - - - - 631,185 - 631,185
Public buildings - - - 1,317,522 - - - 1,317,522
Pavement management - - - - - - 1,290,294 1,290,294
Storm water infrastructure - - - - - - 7,717,575 7,717,575
Water trunk system - - - - - - 8,437,578 8,437,578
Sanitary sewer trunk system - - - - - - 7,851,809 7,851,809
Trail improvement - - - - - - 1,062,733 1,062,733
Park improvement - - - - - - 150,146 150,146
Capital acquisitions - - - - - - 960,145 960,145
Public communications - - - - - - 887,121 887,121
Economic development - - - - - - 21,130 21,130
Total Committed - - - 1,317,522 - 631,185 28,378,531 30,327,238
Assigned for:
Subsequent year budget 705,500 - - - - - - 705,500
Unassigned 14,011,567 - - - - - (415,577) 13,595,990
Total 15,696,442$ 3,377,588$ 10,602,818$ 1,317,522$ 696,520$ 1,754,599$ 37,845,025$ 71,290,514$
Debt Service Capital Projects
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(74)
NOTE 10 CONTRIBUTED CAPITAL
The ownership of local streets, storm water, 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 2,534,182$ -$
Storm sewer 1,346,747 -
Parks 1,377,956 -
Water - 1,672,629
Sanitary sewer - 1,956,347
Total 5,258,885$ 3,628,976$
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 2,313,765$
NOTE 11 DEFICIT FUND BALANCES
The capital projects tax abatement fund had a deficit fund balance of ($415,577) as of
December 31, 2018 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, 2018
(75)
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, 2018, the capital
projects fund tax abatement fund had a payable of $415,811 to the general fund to finance a
long-term cash deficit.
NOTE 13 INTERFUND TRANSFERS
The City provides financing for a variety of operations and capital projects utilizing resources
from certain funds; interfund transfers used for these various activities during the current
fiscal year are as follows:
Nonmajor
General G.O Muni Improv. Govntl.
Transfers From Fund G.O Bonds Improvement Bldg. State-aid Constr. Funds Utility Total
General Fund -$ -$-$ 322,162$ -$ 150,000$ 485,864$ -$ 958,026$
G.O. Bonds - - - -- - - - -
G.O. Improvement Bonds - - - -- 264 - - 264
Bldg.- - - -- -- - -
Muni State-aid - - - -- -115,918 -115,918
Improv. Const. (CP)- - - -- -- 137,445 137,445
Nonmajor Govntl. Funds 78,663 -114,000 - 1,136,177 106,550 1,462,183 57,906 2,955,479
Total 78,663 -114,000 322,162 1,136,177 256,814 2,063,965 195,351 4,167,132
Enterprise - Liquor 194,866 300,000 - - - - 426,217 2,177 923,260
Enterprise - Utility 441,703 -524,419 - 17,853 - 111,640 6,298 1,101,913
Internal Service Fund 50,000 --- -- -- 50,000
Total 765,232$ 300,000$ 638,419$ 322,162$ 1,154,030$ 256,814$ 2,601,822$ 203,826$ 6,242,305
(1)(2)(3)(4)(5)(6)(7)(8)(9)
Less: Utility fund -
Total governmental funds 6,242,305$
Debt Service Projects
Capital
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:
(1)
Fund Amount
Communications (SR) 78,663$ Public communications and city hall overhead costs.
Liquor (Ent) 194,866 City hall overhead costs.
Utility (Ent)441,703 City hall overhead costs.
Municipal Reserve (IS)50,000 City hall overhead costs.
Total 765,232$
Description
(2)The total transfer to the debt service general obligation fund was provided by the liquor
fund ($300,000) to be applied towards the debt service of the police station completed in
2008.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(76)
NOTE 13 INTERFUND TRANSFERS (CONTINUED)
(3)The total transfer to the debt service G.O. improvement fund was provided by nonmajor
capital projects fund ($114,000) to reduce the future debt service requirements and
provide adequate cash flow, and the enterprise utility fund ($524,419) 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
($322,162) to finance capital projects.
(5)The total transfers to the capital projects municipal state-aid fund were provided to
finance various road construction projects and were provided by the nonmajor capital
project storm water infrastructure fund ($1,019,166), nonmajor capital project pavement
management fund ($117,011), and enterprise utility fund ($17,853).
(6)The total transfer to the capital projects fund improvement construction of ($256,814)
was provided by the following governmental funds to finance various road construction
projects:
(6)
From: Amount
General 150,000$
Communications (SR) 106,550
G.O. Improvement Bonds (DS) 264
Total improv. const. 256,814$
(7)The total transfer to nonmajor governmental funds ($2,063,95) was provided by the
following governmental funds:
(7)
From: Amount
General fund 260,864$ Communications Fund (SR) for city fibr internet connections
General fund 100,000 Trail Improvement (CP) for future trail improvements identified in CIP
General fund 125,000 Park Improvement (CP) for future park improvements identified in CIP
Municipal state aid (CP)115,918 Municipal State Aid (CP) for debt service requirements
Park Ded (CP)764,500 Trail Improvement (CP) for trail improvement projects
Water (CP)612,683 Water revenue (DS) for debt service requirements
Pavement mgmt (CP)85,000 Equipment (CP) for future equipment acquisitions
Total other govt.2,063,965$
Description
(8)The total transfer to the nonmajor governmental funds was provided by the enterprise
liquor fund ($426,217) and the enterprise utility fund ($111,640) to finance various
equipment purchases.
(9)The total transfer to the enterprise utility fund was provided by the storm water capital
projects fund ($57,906) and the enterprise liquor fund ($2,177) for customer service
billing overhead costs. The capital projects improvement fund also provided a transfer to
the enterprise utility fund ($137,445) for the reallocation of bond proceeds.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(77)
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.
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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(78)
NOTE 15 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
A. Plan Description (Continued)
At December 31, 2018, the City adopted Governmental Accounting Standards Board
(GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment
Benefits Other than Pensions.
Employees covered by benefit terms. At December 31, 2018, the following employees
were covered by the benefit terms:
Inactive Plan Members or Beneficiaries Currently
Receiving Benefit Payments 6
Inactive Plan Members Entitled to but not yet
Receiving Benefit Payments -
Active Plan Members 195
Total 201
B. Contributions and 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. The City
contributes a portion of the cost of current year premiums for eligible retired plan
members and their spouses as well as the implicit rate subsidy described above. For
fiscal year 2018, the City contributed $12,157 in subsidized payments and implicit
payments of $28,508 to the plan. As of December 31, 2018, there were 6 retirees
receiving health benefits from the City’s health plans.
C. Total OPEB Liability
The City's Total OPEB liability was measured as of January 1, 2018 and was determined
by an actuarial valuation as of January 1, 2017.
Actuarial Assumptions
The total OPEB liability in the January 1, 2017 actuarial valuation was determined using
the following actuarial assumptions, applied to all periods included in the measurement,
unless otherwise specified:
Valuation date:
Measurement date:
Methods and assumptions used to determine the contribution rates:
Actuarial cost method Entry age
Amortization method Level percentage of payroll, closed
Amortization period Average of expected remaining service on a closed
basis for differences between expected and actual
experience and assumption changes.
Inflation 2.50%
Healthcare cost trend rate 6.25% for 2018, decreasing to 5.00% over 5 years
Salary increases 3.00%
Discount rate 3.30% (20-year municipal bond yield)
Mortality RP-2014 White Collar Mortality Tables with MP-2016
Generational Improvement Scale (with Blue Collar
adjustment for Police and Fire Personnel)
January 1, 2017
January 1, 2018
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(79)
NOTE 15 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
C. Total OPEB Liability (Continued)
Discount Rate
The City’s OPEB plan is not funded by a trust, and therefore, the City’s uses the 20-year
municipal bond index rate to develop its long-term rate of return and discount rate. This
rate was 3.30% in the current actuarial valuation, which was updated from the 3.50%
used in the prior actuarial valuation.
D.Changes in the Total OPEB Liability
The details of the changes in the City’s total OPEB Liability were as follows for 2018:
Increase
(Decrease)
Total OPEB
Liability (a)
1,020,952$ Balances at 12/31/17
Changes for the Year:
48,551
34,601
-
-
-
(42,312)
Service Cost
Interest
Differences Between Expected and
Actual Experience
Contributions - Employer
Net Investment Income
Benefit Payments
Changes in Assumptions -
40,840Net Changes Balances at
12/31/18 1,061,792$
The following changes in assumptions occurred between the current and prior actuarial
valuations:
The discount rate used is the 20-year municipal bond index, as the plan is not
funded. This assumed rate decreased from 3.50% to 3.30%.
The actuarial cost method was updated along with the implementation of GASB
Statement No. 75 from the projected unit credit method to the entry age method.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(80)
NOTE 15 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
E.Sensitivity of Total OPEB Liability
Sensitivity of the total OPEB liability to changes in the discount rate and healthcare cost
trend rates. The following presents the total OPEB liability of the City, as well as what
the City's net OPEB liability would be if it were calculated using a discount rate that is
1-percentage-point lower (2.30%) or 1-percentage-point higher (4.30%) than the current
discount rate:
1% Decrease Discount Rate 1% Increase
(2.30)%(3.30)%(4.30)%
Total OPEB Liability (Asset) 1,149,530$ 1,061,792$ 980,553$
Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The
following presents the net OPEB liability of the City, as well as what the City's net OPEB
liability would be if it were calculated using healthcare cost trend rates that are
1-percentage-point lower (5.25% decreasing to 4.00%) or 1-percentage-point higher
(7.25% decreasing to 6.00%) than the current healthcare cost trend rates:
Healthcare Cost
1% Decrease Trend Rates 1% Increase
(5.25% (6.25% (7.25%
Decreasing Decreasing Decreasing
to 4.00%) to 5.00%) to 6.00%)
Total OPEB liability (asset) 945,683$ 1,061,792$ 1,198,224$
F.OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to OPEB
For the year ended December 31, 2018, the City recognized OPEB expense of $42,488.
At December 31, 2018, the City reported deferred outflows of resources and deferred
inflows of resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Contributions After Measurement Date and Before
the Reporting Date 40,664$ -$
A total of $40,664 reported as deferred outflows of resources related to OPEB resulting
from City contributions subsequent to the measurement date will be recognized as a
reduction of the total OPEB liability in the year ended December 31, 2019. There were
no other deferred outflows of resources or deferred inflows of resources as of
December 31, 2018.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(81)
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.
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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(82)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
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. Vested,
terminated employees who are entitled to benefits, but are not receiving them yet, are
bound by the provisions in effect at the time they last terminated their public service.
1.GERF Benefits
General Employees Plan 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 Plan members. Members hired prior to July 1, 1989, receive the higher
of Method 1 or Method 2 formulas. Only Method 2 is used for members hired after
June 30, 1989. Under Method 1, the accrual rate for Coordinated members is 1.2%
of average salary for each of the first 10 years of service and 1.7% of average salary
for each additional year. Under Method 2, the accrual rate for Coordinated members
is 1.7% of average salary for all years 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.
Benefit increases are provided to benefit recipients each January. Increases are
related to the funding ratio of the plan. If the General Employees Plan is at least 90%
funded for two consecutive years, benefit recipients are given a 2.5% increase. If the
plan has not exceeded 90% funded, or have fallen below 80%, benefit recipients are
given a 1% increase. A benefit recipient who has been receiving a benefit for at least
12 full months as of June 30, will receive a full increase. Members receiving benefits
for at least one month but less than 12 full months as of June 30, will receive a pro
rata increase.
2.PEPFF Benefits
Benefits for Police and Fire Plan 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 ten
years of credited service. Benefits for Police and Fire Plan members first hired after
June 30, 2014, vest on a prorated basis from 50% after ten years up to 100% after
twenty years of credited service. The annuity accrual rate is 3% of average salary for
each year of service. A full, unreduced pension is earned when members are age 55
and vested, or for members who were first hired prior to July 1, 1989, when age plus
years of service equal at least 90.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(83)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
B.Benefits Provided (Continued)
2.PEPFF Benefits (Continued)
Benefit increases are provided to benefit recipients each January. Police and Fire
Plan benefit recipients receive a future annual 1.0% increase. An annual adjustment
will equal 2.5% any time the plan exceeds a 90% funded ratio for two consecutive
years. If the adjustment is increased to 2.5% and the funded ratio falls below 80% for
one year or 85% for two consecutive years, the postretirement benefit increase will
be lowered to 1%. A benefit recipient who has been receiving a benefit for at least 12
full months as of June 30 will receive a full increase. Members receiving benefits for
at least one month but less than 12 full months as of June 30 will receive a pro rata
increase. For retirements after May 31, 2014, the first increase will be delayed
two years.
C.Contributions
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions.
Contribution rates can only be modified by the state legislature.
1.GERF Contributions
Coordinated Plan members were required to contribute 6.50% of their annual
covered salary in calendar year 2018 and the City was required to contribute 7.50%
for Coordinated Plan members. The City contributions to the GERF for the year
ended December 31, 2018 were $847,485, 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 $999,032. The City contributions were equal to the
required contributions as set by state statute.
D.Pension Costs
1.GERF Pension Costs
At December 31, 2018, the City reported a liability of $9,053,667 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 $16 million to the fund
during PERA’s fiscal year ended June 30, 2018. The state of Minnesota’s
proportionate share of the net pension liability associated with the City totaled
$297,057. The net pension liability was measured as of June 30, 2018, and the total
pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of that date. The City’s proportion of the net pension liability
was based on its respective contributions received by PERA during the
measurement period for employer payroll paid dates from July 1, 2017, through
June 30, 2018, relative to the total employer contributions received from all of
PERA’s participating employers.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(84)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
D.Pension Costs (Continued)
1.GERF Pension Costs (Continued)
At June 30, 2018, the City’s combined proportion was .1632%, an increase of
.0047% from the June 30, 2018 measurement date.
City's Proportionate Share of the Net Pension Liability 9,053,667$
State of Minnesota's Proportionate Share of the Net
Pension Liability Associated with the City 297,059
Total 9,350,726$
For the year ended December 31, 2018, the City recognized pension expense of
$976,931 for its proportionate share of the GERF’s pension expense. In addition, the
City recognized an additional $69,274 as pension expenses (and grant revenue) for
its proportionate share of the state of Minnesota’s contribution of $16 million to the
General Employees Fund.
At December 31, 2018, the City reported its proportionate share of the GERF’s
deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Deferred Outflows Deferred Inflows
Description of Resources of Resources
Differences Between Expected and
Actual Economic Experience 239,636$ 264,056$
Changes in Actuarial Assumptions 864,855 1,017,276
Net Difference Between Projected and Actual
Earnings on Pension Plan Investments - 925,141
Changes in Proportion and Differences Between City
Contributions and Proportionate Share of Contributions 336,581 -
City Contributions Subsequent to the Measurement Date 428,089 -
Total 1,869,161$ 2,206,473$
A total of $428,089 reported as deferred outflows of resources related to pensions
resulting from City contributions subsequent to the measurement date will be
recognized as a reduction of the net pension liability in the year ended December 31,
2019. Other amounts reported as deferred outflows and inflows of resources related
to pensions will be recognized in pension expense as follows:
Pension Expense
Year Ending December 31,Amount
2019 446,082$
2020 (359,837)
2021 (662,682)
2022 (188,964)
2023 -
Thereafter -
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(85)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
D.Pension Costs (Continued)
2.PEPFF Pension Costs
At December 31, 2018, the City reported a liability of $6,068,152 for its proportionate
share of the PEPFF’s net pension liability. The net pension liability was measured as
of June 30, 2018, 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,
2017 through June 30, 2018, relative to the total employer contributions received
from all of PERA’s participating employers. At June 30, 2018, the City’s proportion
was .5693%, an increase of .0203% from the June 30, 2017 measurement date. The
City also recognized $51,237 for the year ended December 31, 2018, as revenue
and an offsetting reduction of net pension liability 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.
For the year ended December 31, 2018, the City recognized pension expense of
$738,079 for its proportionate share of the PEPFF pension expense.
At December 31, 2018, the City reported its proportionate share of the PEPFF’s
deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Deferred Outflows Deferred Inflows
Description of Resources of Resources
Differences Between Expected and
Actual Economic Experience 244,579$ 1,488,671$
Changes in Actuarial Assumptions 7,544,221 8,933,113
Net Difference Between Projected and Actual
Earnings on Pension Plan Investments - 1,270,992
Changes in Proportion and Differences Between City
Contributions and Proportionate Share of Contributions 474,802 197,219
City Contributions Subsequent to the Measurement Date 524,503 -
Total 8,788,105$ 11,889,995$
A total of $524,503 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,
2019. 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, 2018
(86)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
D.Pension Costs (Continued)
2.PEPFF Pension Costs (Continued)
Pension Expense
Amount
$ (92,638)
(374,398)
(797,931)
(2,402,701)
41,275
Year Ending December 31,
2019
2020
2021
2022
2023
Thereafter -
For year ended December 31, 2018, the City recognized total pension expenses of
$1,715,010 for all of the plans in which it participates.
E. Actuarial Assumptions
The total pension liability in the June 30, 2018, 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 1.25% per year for GERF and
1.00% per year for PEPFF.
Actuarial assumptions used in the June 30, 2018 valuation were based on the results of
actuarial experience studies. The most recent six-year experience study in the General
Employees Plan was completed in 2015. The most recent four-year experience study for
Police and Fire Plan was completed in 2016. Economic assumptions were updated in
2017 based on a review of inflation and investment return assumptions.
The following changes in actuarial assumptions occurred in 2018:
General Employees Fund
The morality projection scale was changed from MP-2015 to MP-2017.
The assumed postretirement benefit increase was changed from 1.0% per year
through 2044 and 2.50% per year thereafter to 1.25% per year.
Police and Fire Fund
The morality projection scale was changed from MP-2016 to MP-2017.
As set by statute, the assumed postretirement benefit increase was changed
from 1.0% per year through 2064 and 2.5% per year, thereafter, to 1.0% for all
years, with no trigger.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(87)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
E.Actuarial Assumptions (Continued)
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 36 % 5.10%
International Equity 17 5.30%
Bonds 20 0.75%
Alternative Assets 25 5.90%
Cash 20.00%
Totals 100 %
F.Discount Rate
The discount rate used to measure the total pension liability in 2018 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 14,713,368$ 9,053,667$ 4,381,745$
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 13,010,498$ 6,068,152$ 327,120$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(88)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
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.
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
Year Ended, for Employees
December 31, Employee Employer Employee Employer and Employers
2018 2,256$ 2,256$ 5%5%5%
2017 2,261 2,261 5%5%5%
2016 1,759 1,759 5%5%5%
Contribution Amount Percentage of Covered Payroll
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(89)
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,
Chapters 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, 2018, the plan covered 85 active firefighters
and 17 vested terminated firefighters whose pension benefits are deferred.
The Association maintains a separate Special Fund to accumulate assets to fund the
retirement benefits earned by the Department’s membership. Funding for the
Association is derived from an insurance premium tax in accordance with the Volunteer
Firefighter’s Relief Association Financing Guidelines Act of 1971 (Chapter 261 as
amended by Chapter 509 of Minnesota Statutes 1980). Funds are also derived from
investment income.
B.Benefits Provided
A firefighter who completes at least 20 years as an active member of the Department is
entitled, after age 50, to a full service pension upon retirement.
The bylaws of the Association also provide for an early vested service pension for a
retiring member who has completed fewer than 20 years of service. The reduced
pension, available to members with 7 years of service, shall be equal to 48% 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 7 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(90)
NOTE 19 DEFINED BENEFIT PENSION PLANS – FIRE RELIEF ASSOCIATION (CONTINUED)
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 $367,701 in fire state aid to the plan on behalf of the
Department for the year ended December 31, 2018, 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,
2018 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, 2018, the City reported a net pension liability (asset) of ($2,925,508)
for the plan. The net pension liability (asset) was measured as of December 31, 2018.
The total pension liability used to calculate the net pension liability (asset) in accordance
with GASB Statement No. 68 was determined by Van Iwaarden Associates, applying an
actuarial formula to specific census data certified by the Department as of December 31,
2018.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(91)
NOTE 19 DEFINED BENEFIT PENSION PLANS – FIRE RELIEF ASSOCIATION (CONTINUED)
D.Pension Costs (Continued)
The following table presents the changes in the net pension liability (asset) during the
year:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability (Asset)
(a) (b) (a-b)
Beginning balance - January 1, 2018 5,171,382$ 9,060,977$ (3,889,595)$
Changes for the year:
Service cost 255,975 - 255,975
Interest on pension liability (asset)358,835 - 358,835
Difference between expected and actual economic
experience (57,139) - (57,139)
Changes of assumptions 94,736 - 94,736
Changes of benefit terms 352,464 - 352,464
Contributions (employer)- - -
Contributions (state)- 367,701 (367,701)
Net investment income - (314,875)314,875
Benefit payments (602,296) (602,296)-
Administrative costs - (12,042)12,042
Total net changes 402,575 (561,512) 964,087
Ending balance - December 31, 2018 5,573,957$ 8,499,465$ (2,925,508)$
For the year ended December 31, 2018, the City recognized pension expense of
$125,724.
At December 31, 2018, the City reported deferred outflows of resources, including its
contributions subsequent to the measurement date, related to pension from the following
sources:
Deferred Outflows Deferred Inflows
Description of Resources of Resources
Changes in Actuarial Assumptions 329,622$ 109,019$
Difference between expected and actual experience -187,329
Net Difference Between Projected and Actual
Earnings on Pension Plan Investments 424,203 -
City Contributions Subsequent to the Measurement Date - -
Total 753,825$ 296,348$
Deferred outflows of resources totaling $-0- related to pensions resulting from the City’s
contributions to the plan subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the year ended December 31, 2019. Other
amounts reported as deferred outflows and inflows of resources related to the plan will
be recognized in pension expense as follows:
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2018
(92)
NOTE 19 DEFINED BENEFIT PENSION PLANS – FIRE RELIEF ASSOCIATION (CONTINUED)
E. Actuarial Assumptions (Continued)
Pension Expense
Year Ending December 31,Amount
2019 132,478$
2020 48,109
2021 67,864
2022 190,281
2023 3,633
Thereafter 15,112
The total pension liability at December 31, 2018 was determined using the entry age
normal actuarial cost method and the following actuarial assumptions:
Inflation 2.50% per year
Active Member Payroll Growth 2.50% per year
Investment Rate of Return 6.50%
20-Year Municipal Bond Yield 3.71%
Retirement eligibility at 100% service pension at age 50 with 20 years of service, early vested
retirement at age 50 with 7 years of service vested at 48% and increased by 4%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 Nominal
Asset Class Date Rate of Return Rate of Return
Domestic Equity 63.63 % 4.95% 7.45%
International Equity 5.15 5.24% 7.74%
Fixed Income 2.37 1.99% 4.49%
Real Estate and Alternatives - 4.19% 6.69%
Cash and Equivalents 28.85 0.58% 3.08%
Totals 100.00 % 6.50%
F. Discount Rate
The discount rate used to measure the total pension liability was 6.5%. 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, 2018
(93)
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 (5.50%) Rate (6.50%) (7.50%)
Defined Benefit Plan (2,734,207)$ (2,925,508)$ (3,110,193)$
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, 2018
(94)
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.
The note was refinanced on March 28, 2018, and the debt is no longer conduit debt of the
City as of December 31, 2018.
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, 2018, the City paid excess tax increment in the amount of $139,948. No other
commitments were made by the City as part of these agreements.
NOTE 24 NEW STANDARDS
During the year ended December 31, 2018, the City implemented the GASB Statement
No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than
Pension. The implementation of this statement resulted in beginning net position in
governmental activities and business type activities being reduced by $380,065 and
$68,922, respectively. The City also early implemented GASB Statement No 89, Accounting
for Interest Cost Incurred before the End of a Construction Period. The adoption of this
standard did not result in a restatement.
This page intentionally left blank.
REQUIRED SUPPLEMENTARY INFORMATION
This page intentionally left blank.
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2018
(95)
Over (Under)
Original Final Actual Final Budget
REVENUE
Property Taxes
General property taxes:
Current 17,001,286$ 17,001,286$ 17,082,608$ 81,322$
Delinquent 126,156 126,156 127,741 1,585
Fiscal Disparities 2,877,909 2,877,909 2,851,529 (26,380)
Mobile Home Tax 47,825 47,825 48,080 255
Gravel Tax 2,410 2,410 6,991 4,581
Total property taxes 20,055,586 20,055,586 20,116,949 61,363
Licenses and permits 2,356,882 2,386,882 3,208,278 821,396
Intergovernmental
Market value homestead credit - - 2,929 2,929
State-aid police 450,820 450,820 464,005 13,185
State-aid fire 347,676 361,742 371,701 9,959
State-aid PERA 21,303 21,303 92,306 71,003
State police and fire grants 112,932 134,832 94,677 (40,155)
State other grants 200 200 200 -
Federal other grants 72,990 72,990 154,520 81,530
Total intergovernmental 1,005,921 1,041,887 1,180,338 138,451
Charges for services
General government 272,430 272,430 373,354 100,924
Public safety 545,952 740,952 712,033 (28,919)
Public works 1,300,379 1,300,379 1,463,780 163,401
Parks and recreation 778,939 796,689 832,695 36,006
Total charges for services 2,897,700 3,110,450 3,381,862 271,412
Fines 425,000 425,000 347,203 (77,797)
Investment Income
Interest Income 90,071 90,071 264,477 174,406
Increase (Decrease in Fair Market Value)- - (89,797) (89,797)
90,071 90,071 174,680 84,609
Donations 19,900 29,900 41,729 11,829
Miscellaneous 56,003 56,003 60,677 4,674
Total revenues 26,907,063 27,195,779 28,511,716 1,315,937
Budgeted Amounts
(continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2018
(96)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
EXPENDITURES
General government
Mayor and council
Personnel services 49,041$ 49,041$ 48,119$ (922)$
Commodities 50 50 90 40
Other charges and services 58,139 58,139 48,561 (9,578)
Total mayor and council 107,230 107,230 96,770 (10,460)
Committees/commissions
Personnel services 71,902 71,902 71,274 (628)
Commodities 1,630 1,630 2,247 617
Other charges and services 14,068 24,068 22,740 (1,328)
Total committees/commissions 87,600 97,600 96,261 (1,339)
City administration
Personnel services 423,716 423,716 424,730 1,014
Commodities 1,200 1,200 1,031 (169)
Other charges and services 52,154 52,154 50,198 (1,956)
Capital Outlay 1,500 1,500 1,670 170
Total city administration 478,570 478,570 477,629 (941)
City clerk
Personnel services 115,980 115,980 172,808 56,828
Commodities 1,000 4,100 4,544 444
Other charges and services 84,177 95,077 27,813 (67,264)
Total city clerk 201,157 215,157 205,165 (9,992)
Legal counsel
Other charges and services 80,000 80,000 71,584 (8,416)
Planning
Personnel services 518,211 518,211 515,660 (2,551)
Commodities 2,291 2,291 1,645 (646)
Other charges and services 65,266 65,266 29,919 (35,347)
Total planning 585,768 585,768 547,224 (38,544)
Community and economic development
Personnel services 294,620 294,620 294,556 (64)
Commodities 250 250 278 28
Other charges and services 71,352 93,252 83,805 (9,447)
Total community and economic development 366,222 388,122 378,639 (9,483)
Inspections
Personnel services 973,050 973,050 953,734 (19,316)
Commodities 13,792 13,792 10,321 (3,471)
Other charges and services 239,111 269,111 267,498 (1,613)
Total inspections 1,225,953 1,255,953 1,231,553 (24,400)
(continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2018
(97)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
EXPENDITURES (CONTINUED)
General government (continued)
General government facilities
Personnel services 353,190$ 365,090$ 365,109$ 19$
Commodities 26,243 26,243 23,582 (2,661)
Other charges and services 178,529 178,529 175,768 (2,761)
Total general government facilities 557,962 569,862 564,459 (5,403)
Finance
Personnel services 696,628 696,628 683,183 (13,445)
Commodities 3,500 3,500 1,790 (1,710)
Other charges and services 81,406 81,406 82,544 1,138
Capital Outlay - - 2,970 2,970
Total finance 781,534 781,534 770,487 (11,047)
Information technology
Personnel services 430,046 430,046 415,459 (14,587)
Commodities 2,995 2,995 7,123 4,128
Other charges and services 240,195 240,195 225,477 (14,718)
Total information systems 673,236 673,236 648,059 (25,177)
Human resources
Personnel services 387,122 387,122 390,679 3,557
Commodities 2,913 2,913 1,821 (1,092)
Other charges and services 121,650 133,650 112,781 (20,869)
Total human resources 511,685 523,685 505,281 (18,404)
Insurance coverage
Other charges and services 285,000 425,000 425,000 -
Total general government 5,941,917 6,181,717 6,018,111 (163,606)
Public safety
Police
Personnel services 8,800,126 8,995,126 8,796,961 (198,165)
Commodities 396,022 396,022 403,432 7,410
Other charges and services 2,020,136 1,997,974 1,969,565 (28,409)
Total police 11,216,284 11,389,122 11,169,958 (219,164)
Fire Protection
Personnel services 1,431,803 1,466,869 1,491,735 24,866
Commodities 151,407 151,407 131,060 (20,347)
Other charges and services 271,917 271,917 268,819 (3,098)
Total fire protection 1,855,127 1,890,193 1,891,614 1,421
Total public safety 13,071,411 13,279,315 13,061,572 (217,743)
(continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2018
(98)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
EXPENDITURES (CONTINUED)
Public Works
Engineering
Personnel services 745,625$ 745,625$ 729,391$ (16,234)$
Commodities 8,476 8,476 7,789 (687)
Other charges and services 220,487 220,487 138,123 (82,364)
Total engineering 974,588 974,588 875,303 (99,285)
Operations and maintenance
Personnel services 538,730 538,730 444,234 (94,496)
Commodities 8,515 8,515 7,887 (628)
Other charges and services 11,348 11,348 8,315 (3,033)
Capital Outlay 28,559 28,559 28,752 193
Total operations and maintenance 587,152 587,152 489,188 (97,964)
Street maintenance
Personnel services 2,120,785 2,120,785 2,159,259 38,474
Commodities 722,838 891,838 948,359 56,521
Other charges and services 350,675 350,675 297,843 (52,832)
Total street maintenance 3,194,298 3,363,298 3,405,461 42,163
Total public works 4,756,038 4,925,038 4,769,952 (155,086)
Parks and recreation
Park maintenance
Personnel services 1,854,298 1,854,298 1,886,012 31,714
Commodities 291,804 291,804 295,558 3,754
Other charges and services 492,080 492,080 435,075 (57,005)
Capital Outlay 5,800 5,800 3,327 (2,473)
Total park maintenance 2,643,982 2,643,982 2,619,972 (24,010)
Recreation
Personnel services 399,504 399,504 401,685 2,181
Commodities 35,971 35,971 31,623 (4,348)
Other charges and services 264,553 274,303 282,297 7,994
Total recreation 700,028 709,778 715,605 5,827
Heritage center
Personnel services 64,261 64,261 59,716 (4,545)
Commodities 12,578 12,578 7,145 (5,433)
Other charges and services 52,710 52,710 52,736 26
Total heritage center 129,549 129,549 119,597 (9,952)
Arts center
Personnel services 281,985 281,985 289,168 7,183
Commodities 39,720 39,720 44,868 5,148
Other charges and services 185,165 193,165 212,852 19,687
Capital Outlay 3,500 3,500 3,934 434
Total arts center 510,370 518,370 550,822 32,452
Total parks and recreation 3,983,929 4,001,679 4,005,996 4,317
Total expenditures 27,753,295 28,387,749 27,855,631 (532,118)
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES (846,232) (1,191,970) 656,085 1,848,055
(continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2018
(99)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
OTHER FINANCE SOURCES (USES)
Transfers In From:
Special Revenue - Communications Fund 78,663$ 78,663$ 78,663$ -$
Enterprise - Liquor Fund 194,866 194,866 194,866 -
Enterprise - Utility Fund 441,703 441,703 441,703 -
Internal Service - Municipal Reserves Fund 50,000 50,000 50,000 -
Transfers Out To:
Special Revenue - Communications Fund (260,864) (260,864) (260,864) -
Capital Projects - Building Fund (300,000) (322,162) (322,162) -
Capital Projects - Trail Improvement Fund (100,000) (100,000) (100,000) -
Capital Projects - Park Improvement Fund - (125,000) (125,000) -
Capital Projects - Improvement Construction Fund - (151,200) (150,000) 1,200
Total Other Finance Sources (Uses)104,368 (193,994) (192,794) 1,200
NET CHANGE IN FUND BALANCES (741,864)$ (1,385,964)$ 463,291 1,849,255$
FUND BALANCES
Beginning of Year 15,269,442
Change in Supplies - Inventory (36,291)
End of Year 15,696,442$
CITY OF LAKEVILLE
GENERAL FUND
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2018
(100)
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 fund 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, 2018 (101) GERF Schedule of the City’s Proportionate Share of the Net Pension LiabilityLast Four Fiscal Years*6/30/2018 6/30/2017 6/30/2016 6/30/2015City’s Proportion of the Net Pension Liability0.1632% 0.1585% 0.1544% 0.1540%City’s Proportionate Share of the Net Pension Liability 9,053,667$ 10,118,535$ 12,536,514$ 7,981,079$ State's Proportionate Share of the Net Pension Liability Associated with the City297,059 127,203 - - Total9,350,726$ 10,245,738$ 12,536,514$ 7,981,079$ City’s Covered Payroll10,971,998$ 10,213,446$ 9,572,229$ 9,046,858$ City’s Proportionate Share of the Net Pension Liability as a Percentage of Its Covered Payroll82.52%99.07%130.97%88.22%Plan Fiduciary Net Position as a Percentage of the Total Pension Liability79.53%75.90%68.90%78.20%*The Amounts Presented for Each Fiscal Year were Determined as of 6/30.Measurement DateGERF Schedule of City ContributionsLast Four Fiscal Years*2018 2017 2016 2015Statutorily Required Contribution847,485$ 791,612$ 741,919$ 705,189$ Contributions in Relation to the Statutorily Required Contribution(847,485) (791,612) (741,919) (705,189) Contribution Deficiency (Excess)-$ -$ -$ -$ City’s Covered Payroll11,299,800$ 10,554,827$ 9,892,253$ 9,402,520$ Contributions as a Percentage of Covered Payroll7.50%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, 2018 (102) PEPFF Schedule of the City’s Proportionate Share of the Net Pension LiabilityLast Four Fiscal Years*6/30/2018 6/30/2017 6/30/2016 6/30/2015City’s Proportion of the Net Pension Liability 0.5693% 0.5490% 0.5620% 0.5320%City’s Proportionate Share of the Net Pension Liability 6,068,152$ 7,412,153$ 22,554,038$ 6,044,765$ City’s Covered Payroll6,004,172$ 5,635,205$ 5,423,663$ 4,870,941$ City’s Proportionate Share of the Net Pension Liability as a Percentage of Its Covered Payroll 101.07% 131.53% 415.85% 124.10%Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 88.84% 85.40% 63.90% 86.60%* The Amounts Presented for Each Fiscal Year were Determined as of 6/30.Measurement DatePEPFF Schedule of City ContributionsLast Four Fiscal Years*2018 2017 2016 2015Statutorily Required Contribution999,032$ 942,349$ 904,571$ 845,144$ Contributions in Relation to the Statutorily Required Contribution(999,032) (942,349) (904,571) (845,144) Contribution Deficiency (Excess)-$ -$ -$ -$ City’s Covered Payroll6,166,864$ 5,816,969$ 5,583,772$ 5,216,938$ Contributions as a Percentage of Covered Payroll16.20%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
NOTES TO THE REQUIRED SUPPLEMENTARY
INFORMATION – STATE WIDE PLANS
DECEMBER 31, 2018
(103)
General Employees Fund
2018 Changes
Changes in Actuarial Assumptions:
The morality projection scale was changed from MP-2015 to MP-2017.
The assumed benefit increase was changed from 1.00% per year through 2044 and 2.50% per year
thereafter to 1.25% per year.
2017 Changes
Changes in Plan Provisions:
The State’s special funding contribution increased from $6 million to $16 million.
Changes in Actuarial Assumptions:
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, 15.00% for vested deferred member liability, and 3.00% for nonvested deferred
member liability.
The assumed postretirement benefit increase rate was changed from 1.00% per year for all years to
1.00% per year through 2044 and 2.50% per year thereafter.
2016 Changes
Changes in Actuarial Assumptions:
The assumed postretirement benefit increase rate was changed from 1.00% per year through 2035
and 2.50% per year thereafter to 1.00% per year for all years.
The assumed investment return was changed from 7.90% to 7.50%. The single discount rate was
changed from 7.90% to 7.50%.
Other assumptions were changed pursuant to the experience study dated June 30, 2015. The
assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25%
for payroll growth and 2.50% for inflation.
2015 Changes
Changes in Plan Provisions:
On January 1, 2015, the Minneapolis Employees Retirement Fund was merged into the General
Employees Fund, which increased the total pension liability by $1.1 billion and increased the
fiduciary plan net position by $892 million. Upon consolidation, state and employer contributions
were revised; the State’s contribution of $6 million, which meets the special funding situation
definition, is due September 2015.
Changes in Actuarial Assumptions:
The assumed postretirement benefit increase rate was changed from 1.00% per year through 2030
and 2.50% per year thereafter to 1.00% per year through 2035 and 2.50% per year thereafter.
Police and Fire Fund
2018 Changes
Changes in Actuarial Assumptions:
The morality projection scale was changed from MP-2016 to MP-2017.
CITY OF LAKEVILLE
NOTES TO THE REQUIRED SUPPLEMENTARY
INFORMATION – STATE WIDE PLANS
DECEMBER 31, 2018
(104)
Police and Fire Fund (Continued)
2017 Changes
Changes in Actuarial Assumptions:
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 postretirement benefit increase rate was changed from 1.00% for all years to 1.00%
per year through 2064 and 2.50% thereafter.
The Single Discount Rate was changed from 5.60% per annum to 7.50% per annum.
2016 Changes
Changes in Actuarial Assumptions:
The assumed postretirement benefit increase rate was changed from 1.00% per year through 2037
and 2.50% thereafter to 1.00% per year for all future years.
The assumed investment return was changed from 7.90% to 7.50%. The single discount rate
changed from 7.90% to 5.60%.
The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to
3.25% for payroll growth and 2.50% for inflation.
2015 Changes
Changes in Plan Provisions:
The postretirement benefit increase to be paid after attainment of the 90% funding threshold was
changed, from inflation up to 2.50%, to a fixed rate of 2.50%.
Changes in Actuarial Assumptions:
The assumed postretirement benefit increase rate was changed from 1.00% per year through 2030
and 2.50% per year thereafter to 1.00% per year through 2037 and 2.50% per year thereafter.
CITY OF LAKEVILLE
NET PENSION LIABILITY (ASSET) AND RELATED RATIOS
LAKEVILLE FIRE RELIEF ASSOCIATION
DECEMBER 31, 2018
(105)
2018 2017 2016 2015
Total Pension Liability (TPL)
Service Cost 255,975$ 231,712$ 270,846$ 223,785$
Interest 358,835 345,935 301,640 269,493
Differences Between Expected and Actual Experience (57,139) - (201,242) -
Changes of Assumptions 94,736 38,230 (161,264)353,037
Changes of Benefit Terms 352,464 154,012 186,369 -
Benefit Payments, Including Member Contribution Refunds (602,296) (276,622) (547,241) (210,816)
Net Change in Total Pension Liability 402,575 493,267 (150,892) 635,499
Total Pension Liability - Beginning 5,171,382 4,678,115 4,829,007 4,193,508
Total Pension Liability - Ending (a)5,573,957 5,171,382 4,678,115 4,829,007
Plan Fiduciary Net Position
Municipal Contributions - - - -
State Contributions 367,701 351,635 348,276 338,889
Net Investment Income (314,875) 1,175,892 551,474 39,474
Benefit Payments, including refunds of member contributions (602,296) (276,622) (547,241) (210,816)
Administrative Expenses (12,042) (11,579) (9,817) (11,292)
Other - - - (40)
Net Change in Fiduciary Net Position (561,512) 1,239,326 342,692 156,215
Fiduciary Net Position - Beginning 9,060,977 7,821,651 7,478,959 7,322,744
Fiduciary Net Position - Ending (b)8,499,465 9,060,977 7,821,651 7,478,959
Ending Net Pension Liability (Asset) (a-b)(2,925,508)$ (3,889,595)$ (3,143,536)$ (2,649,952)$
Plan Fiduciary Net Position as a Percentage of
Total Pension Liability (b/a)152.49%175.21%167.20%154.88%
Covered Payroll N/A N/A N/A N/A
Net Pension Liability (Asset) as a Percentage of Covered Payroll N/A N/A N/A N/A
*Ten Years of Data Will Eventually Be Presented When Available
Schedule of Employer Contributions
2018 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
SCHEDULE OF CHANGES IN THE CITY’S TOTAL OPEB LIABILITY AND RELATED RATIOS
DECEMBER 31, 2018
(106)
2018
Total OPEB Liability
Service Cost 48,551$
Interest 34,601
Changes of Benefit Terms -
Difference Between Expected and Actual Experience -
Changes of Assumptions -
Benefit Payments (42,312)
Net Change in Total OPEB Liability 40,840
Total OPEB Liability - Beginning 1,020,952
Total OPEB Liability - Ending 1,061,792$
Total OPEB Liability 1,061,792$
Plan Fiduciary Net Position as a Percentage
of the Total OPEB Liability 0.00%
Covered Employee Payroll 15,084,789$
City's Total OPEB Liability as a Percentage of the
Covered Employee Payroll 7.04%
Note: The City implemented GASB Statement No. 75 in fiscal 2018. The schedule is provided
prospectively beginning with the City’s fiscal year ended December 31, 2018 and is intended to show a
ten-year trend. Additional years will be reported as they become available.
Valuation date:January 1, 2017
Measurement date:January 1, 2018
Methods and assumptions used to determine the contribution rates:
Actuarial cost method Entry age
Amortization method Level percentage of payroll, closed
Amortization period Average of expected remaining service on a closed
basis for differences between expected and actual
experience and assumption changes.
Inflation 2.50%
Healthcare cost trend rate 6.25% for 2018, decreasing to 5.00% over 5 years
Salary increases 3.00%
Discount rate 3.30% (20-year municipal bond yield)
Mortality RP-2014 White Collar Mortality Tables with MP-2016
Generational Improvement Scale (with Blue Collar
adjustment for Police and Fire Personnel)
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
This page intentionally left blank.
(107)
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)
(108)
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).
Pavement Management Fund
This fund accounts for pavement management activities relating to crack sealing, patching, seal
coating and overlays. These major maintenance projects are financed with property taxes.
Storm Water Infrastructure Fund
This fund accounts for fees and area charges to land developers for construction of storm water
infrastructure.
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, 2018
(109)
Special Debt Capital
Revenue Service Projects Totals
ASSETS
Cash and investments 809,273$ 4,716,220$ 32,695,469$ 38,220,962$
Investments held by trustee - 617,567 - 617,567
Receivables:
Interest receivable 2,434 28,973 189,292 220,699
Special assessments
Unremitted 123 - 723 846
Delinquent - - 909 909
Deferred - - 132,314 132,314
Other - - 143,851 143,851
Accounts receivable 191,944 - 474,180 666,124
Leases receivable - 2,255,000 - 2,255,000
Prepaid Items 11,630 - - 11,630
Total Assets 1,015,404$ 7,617,760$ 33,636,738$ 42,269,902$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCE
LIABILITIES
Salaries payable 16,355$ -$ -$ 16,355$
Accounts payable 8,632 - 1,044,861 1,053,493
Advances from other funds - - 415,811 415,811
Contracts payable - - 290,011 290,011
Interest payable - 225 - 225
Deposits payable - - 111,975 111,975
Unearned revenue - - 4,933 4,933
Total Liabilities 24,987 225 1,867,591 1,892,803
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - special assessments - - 277,074 277,074
Unavailable revenue - other - 2,255,000 - 2,255,000
Total Deferred Inflows of Resources - 2,255,000 277,074 2,532,074
FUND BALANCE
Nonspendable 11,630 - - 11,630
Restricted 70,536 5,362,535 4,437,370 9,870,441
Committed 908,251 - 27,470,280 28,378,531
Unassigned - - (415,577) (415,577)
Total Fund Balance 990,417 5,362,535 31,492,073 37,845,025
Total Liabilities, Deferred Inflows of
Resources, and Fund Balance 1,015,404$ 7,617,760$ 33,636,738$ 42,269,902$
CITY OF LAKEVILLE
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2018
(110)
Special Debt Capital
Revenue Service Projects Totals
REVENUE
Property taxes:
Current and delinquent -$ 292,500$ 2,002,750$ 2,295,250$
Licenses and permits 691,326 - - 691,326
Special assessments - - 38,508 38,508
Tax increment - 425,421 147,846 573,267
Intergovernmental revenue:
State-aid PERA 516 - - 516
Municipal state-aid - 1,176,682 119,999 1,296,681
County and local grants - - 761,807 761,807
Charges for services 74,378 381,126 7,454,616 7,910,120
Interest income 12,728 86,947 686,573 786,248
Change in fair value of investments (4,550) (28,003) (243,570) (276,123)
Donations - 142,500 62,560 205,060
Miscellaneous - -24,916 24,916
Total Revenue 774,398 2,477,173 11,056,005 14,307,576
EXPENDITURES
Current:
General government 638,713 - - 638,713
Capital Outlay:
General government 57,655 - 617,812 675,467
Public safety - - 952,146 952,146
Public works - - 4,257,927 4,257,927
Culture and recreation - - 2,806,656 2,806,656
Debt Service:
Principal retirement - 2,065,000 - 2,065,000
Interest on debt - 810,226 - 810,226
Fiscal charges 10,954 - 10,954
Total Expenditures 696,368 2,886,180 8,634,541 12,217,089
EXCESS (DEFICIENCY) OF REVENUE
OVER (UNDER) EXPENDITURES 78,030 (409,007) 2,421,464 2,090,487
OTHER FINANCE SOURCES (USES)
Proceeds from the sale of capital assets - 266,436 264,236 530,672
Transfers in from other funds 428,437 774,769 1,398,616 2,601,822
Transfers out to other funds (185,213) -(2,770,266) (2,955,479)
Total Other Finance Sources (Uses)243,224 1,041,205 (1,107,414) 177,015
NET CHANGE IN FUND BALANCES 321,254 632,198 1,314,050 2,267,502
FUND BALANCES
Beginning of Year 669,163 4,730,337 30,178,023 35,577,523
End of Year 990,417$ 5,362,535$ 31,492,073$ 37,845,025$
CITY OF LAKEVILLE
SPECIAL REVENUE FUNDS (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2018
(111)
Downtown
Economic Special
Communications Development Service District Totals
ASSETS
Cash and investments 750,056$ 20,844$ 38,373$ 809,273$
Interest receivable 2,148 286 - 2,434
Accounts receivable 191,944 - - 191,944
Special assessments
Unremitted - - 123 123
Prepaid Items 11,630 - - 11,630
Total Assets 955,778$ 21,130$ 38,496$ 1,015,404$
LIABILITIES AND
FUND BALANCE
LIABILITIES
Salaries payable 16,355$ -$ -$ 16,355$
Accounts payable 8,632 - - 8,632
Total Liabilities 24,987 - - 24,987
FUND BALANCE
Nonspendable 11,630 - - 11,630
Restricted 32,040 - 38,496 70,536
Committed 887,121 21,130 - 908,251
Total Fund Balance 930,791 21,130 38,496 990,417
Total Liabilities and Fund Balance 955,778$ 21,130$ 38,496$ 1,015,404$
CITY OF LAKEVILLE
SPECIAL REVENUE FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2018
(112)
Downtown
Economic Special
Communications Development Service District Totals
REVENUE
Licenses and permits 691,326$ -$ -$691,326$
Intergovernmental
State-aid PERA 516 - -516
Charges for services 61,193 (600)13,785 74,378
Interest income 12,187 541 - 12,728
Change in fair value of investments (4,357) (193) -(4,550)
Total revenue 760,865 (252)13,785 774,398
EXPENDITURES
Current:
General government 618,818 9,900 9,995 638,713
Capital outlay
General government 57,655 - - 57,655
Total expenditures 676,473 9,900 9,995 696,368
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES 84,392 (10,152) 3,790 78,030
OTHER FINANCE SOURCES (USES)
Transfers In 428,437 - - 428,437
Transfers Out (185,213) - -(185,213)
Total other finance sources (uses)243,224 - - 243,224
NET CHANGE IN FUND BALANCES 327,616 (10,152) 3,790 321,254
FUND BALANCES
Beginning of Year 603,175 31,282 34,706 669,163
End of Year 930,791$ 21,130$ 38,496$ 990,417$
CITY OF LAKEVILLE
DEBT SERVICE FUNDS (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2018
(113)
Tax State-aid Water Arena HRA
Increment Revenue Revenue Revenue Revenue Total
ASSETS
Cash and Investments 3,198,377$ 856,068$ -$ 184,842$ 476,933$ 4,716,220$
Investments held by trustee - - - -617,567 617,567
Interest receivable 21,615 5,787 - 941 630 28,973
Leases Receivable - - - -2,255,000 2,255,000
Total Assets 3,219,992$ 861,855$ -$ 185,783$ 3,350,130$ 7,617,760$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCE
LIABILITIES
Interest payable 225$ -$ -$ -$-$225$
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - leases - - - - 2,255,000 2,255,000
FUND BALANCE
Restricted for debt service 3,219,767 861,855 - 185,783 1,095,130 5,362,535
Total Liabilities, Deferred Inflows of
Resources, and Fund Balance 3,219,992$ 861,855$ -$ 185,783$ 3,350,130$ 7,617,760$
Bonds
This page intentionally left blank.
CITY OF LAKEVILLE
DEBT SERVICE FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2018
(114)
Tax State-aid Water Arena HRA
Increment Revenue Revenue Revenue Revenue Total
REVENUE
Property taxes
Current and delinquent -$ -$ -$ -$ 292,500$ 292,500$
Tax increment 425,421 - - - - 425,421
Intergovernmental - State-aid - 1,176,682 - - - 1,176,682
Charges for services - - - 88,626 292,500 381,126
Interest Income 57,594 14,197 - 3,772 11,384 86,947
Change in Fair Value of Investments (20,591) (5,075) - (1,349) (988) (28,003)
Donations - - - 142,500 - 142,500
Total revenues 462,424 1,185,804 - 233,549 595,396 2,477,173
EXPENDITURES
Debt Service:
Principal bond maturities 230,000 970,000 345,000 165,000 355,000 2,065,000
Interest on debt 46,161 205,932 267,075 18,090 272,968 810,226
Fiscal charges 3,109 3,871 608 158 3,208 10,954
Total expenditures 279,270 1,179,803 612,683 183,248 631,176 2,886,180
DEFICIENCY OF REVENUE
UNDER EXPENDITURES 183,154 6,001 (612,683) 50,301 (35,780) (409,007)
OTHER FINANCE SOURCES
Proceeds from sale of property 266,436 - - - - 266,436
Transfers from (to):
Capital Projects - Municipal State-Aid - 115,918 - - - 115,918
Capital Projects - Water Fund - - 612,683 - - 612,683
Enterprise - Liquor Fund - - - - 46,168 46,168
Total other finance sources (uses) 266,436 115,918 612,683 - 46,168 1,041,205
NET CHANGE IN FUND BALANCES 449,590 121,919 - 50,301 10,388 632,198
FUND BALANCES
Beginning of Year 2,770,177 739,936 - 135,482 1,084,742 4,730,337
End of Year 3,219,767$ 861,855$ -$ 185,783$ 1,095,130$ 5,362,535$
Bonds
CITY OF LAKEVILLE
CAPITAL PROJECTS FUND (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2018
(115)
Pavement Storm Water Sanitary
Management Infrastructure Water Sewer
ASSETS
Cash and investments 1,427,820$ 7,693,510$ 8,956,144$ 7,920,708$
Interest receivable 8,143 46,175 40,510 43,176
Accounts receivable 466,751 -- -
Special assessments
Unremitted -108 372 243
Delinquent 445 -284 180
Deferred -1,038 85,546 45,730
Other -62,732 21,511 59,608
Total Assets 1,903,159$ 7,803,563$ 9,104,367$ 8,069,645$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCE
LIABILITIES
Accounts payable 575,574$ 22,218$ 337,397$ 343$
Advances from other funds --- -
Contracts payable 36,847 -222,051 -
Deposits payable --- 111,975
Unearned revenue --- -
Total liabilities 612,421 22,218 559,448 112,318
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - special assessments 445 63,770 107,341 105,518
FUND BALANCE
Restricted --- -
Committed 1,290,293 7,717,575 8,437,578 7,851,809
Unassigned --- -
Total fund balance 1,290,293 7,717,575 8,437,578 7,851,809
Total liabilities, deferred inflows of
resources, and fund balance 1,903,159$ 7,803,563$ 9,104,367$ 8,069,645$
(116)
Park Trail Park Tax Tax
Dedication Improvement Improvement Increment Abatement Equipment Totals
4,436,345$ 1,058,593$ 149,504$ 97,219$ -$955,626$ 32,695,469$
29,647 4,414 642 327 234 16,024 189,292
---- -7,429 474,180
---- -- 723
---- -- 909
---- -- 132,314
---- -- 143,851
4,465,992$ 1,063,007$ 150,146$ 97,546$ 234$ 979,079$ 33,636,738$
39,081$ 274$ -$69,974$ -$-$1,044,861$
---- 415,811 -415,811
12,180 --- -18,933 290,011
---- -- 111,975
4,933 --- --4,933
56,194 274 - 69,974 415,811 18,933 1,867,591
---- -- 277,074
4,409,798 -- 27,572 -- 4,437,370
-1,062,733 150,146 - - 960,146 27,470,280
---- (415,577) -(415,577)
4,409,798 1,062,733 150,146 27,572 (415,577) 960,146 31,492,073
4,465,992$ 1,063,007$ 150,146$ 97,546$ 234$ 979,079$ 33,636,738$
CITY OF LAKEVILLE
CAPITAL PROJECTS FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2018
(117)
Pavement Storm Water Sanitary
Management Infrastructure Water Sewer
REVENUE
Property taxes
Current 1,191,550$ -$-$-$
Tax increment ----
Intergovernmental
Municipal state-aid 119,999 ---
County and local grants 574,554 182,253 --
Charges for services -2,047,709 2,651,426 869,804
Special assessments 3,311 212 13,764 21,170
Interest income 22,431 168,388 184,078 159,959
Change in fair value of investments (8,020) (60,203) (63,916) (57,190)
Donations ----
Miscellaneous ----
Total revenues 1,903,825 2,338,359 2,785,352 993,743
EXPENDITURES
Capital Outlay:
General government ----
Public safety ----
Public works 1,351,377 712,583 1,598,936 26,854
Parks and recreation ----
Total expenditures 1,351,377 712,583 1,598,936 26,854
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES 552,448 1,625,776 1,186,416 966,889
OTHER FINANCE SOURCES (USES)
Proceeds from the Sale of Capital Assets ----
Transfers from (to):
General Fund ----
Debt Service - Special Assessment Supported --(114,000) -
Debt Service - Water Revenue Bonds --(612,683) -
Capital Projects - State Aid Construction (117,011) (1,019,166) --
Capital Projects - Pavement Management Fund ----
Capital Projects - Park Dedication Fund ----
Capital Projects - Trail Improvement Fund ----
Capital Projects - Equipment Fund (85,000) ---
Enterprise - Liquor Fund ----
Enterprise - Utility Fund -(57,906)--
Total other finance sources (uses)(202,011) (1,077,072) (726,683) -
NET CHANGE IN FUND BALANCE 350,437 548,704 459,733 966,889
FUND BALANCES
Beginning of Year 939,856 7,168,871 7,977,845 6,884,920
End of Year 1,290,293$ 7,717,575$ 8,437,578$ 7,851,809$
(118)
Park Trail Park Tax Tax
Dedication Improvement Improvement Increment Abatement Equipment Totals
-$111,200$ 175,000$ -$-$525,000$ 2,002,750$
---147,846 --147,846
------ 119,999
5,000 -----761,807
1,873,677 -- 12,000 -- 7,454,616
51 -----38,508
101,596 14,374 160 604 - 34,983 686,573
(36,323) (5,139) (57)(215)- (12,507)(243,570)
51,827 ---- 10,733 62,560
-- 24,916 --- 24,916
1,995,828 120,435 200,019 160,235 -558,209 11,056,005
---151,557 13,126 453,129 617,812
-----952,146 952,146
-----568,177 4,257,927
2,085,837 271,840 183,715 --265,264 2,806,656
2,085,837 271,840 183,715 151,557 13,126 2,238,716 8,634,541
(90,009) (151,405) 16,304 8,678 (13,126) (1,680,507) 2,421,464
-----264,236 264,236
-100,000 125,000 --- 225,000
------ (114,000)
------ (612,683)
------ (1,136,177)
----- 85,000 85,000
-764,500 ----764,500
(764,500) -----(764,500)
------ (85,000)
-----250,000 250,000
----- 74,116 16,210
(764,500) 864,500 125,000 --673,352 (1,107,414)
(854,509) 713,095 141,304 8,678 (13,126) (1,007,155) 1,314,050
5,264,307 349,638 8,842 18,894 (402,451) 1,967,301 30,178,023
4,409,798$ 1,062,733$ 150,146$ 27,572$ (415,577)$ 960,146$ 31,492,073$
CITY OF LAKEVILLE
COMMUNICATIONS – SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2018
(119)
Over (Under)
Original Final Actual Final Budget
REVENUES
Licenses and permits 688,473$ 688,473$ 691,326$ 2,853$
Intergovernmental
State-aid PERA 516 516 516 -
Charges for services 60,858 82,865 61,193 (21,672)
Interest income 3,155 3,155 12,187 9,032
Change in fair value of investments - - (4,357) (4,357)
Total revenues 753,002 775,009 760,865 (14,144)
EXPENDITURES - GENERAL GOVERNMENT
Current:
Personnel 446,728 446,728 430,519 (16,209)
Commodities 9,279 9,279 8,308 (971)
Other charges and services 488,930 583,503 179,991 (403,512)
Capital outlay 51,350 51,350 57,655 6,305
Total expenditures - general government 996,287 1,090,860 676,473 (414,387)
EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES (243,285) (315,851) 84,392 400,243
OTHER FINANCING SOURCES (USES)
Transfers in from:
General Fund 260,864 260,864 260,864 -
Liquor Funds 100,661 136,396 130,049 (6,347)
Utility Funds 68,460 68,460 37,524 (30,936)
Transfers out to:
General Fund (78,663) (78,663) (78,663) -
Capital Projects Funds (175,000) (175,000) (106,550) 68,450
Total other finance sources (uses) 176,322 212,057 243,224 31,167
NET CHANGE IN FUND BALANCE (66,963)$ (103,794)$ 327,616 431,410$
FUND BALANCES
Beginning of year 603,175
End of year 930,791$
Budgeted Amounts
CITY OF LAKEVILLE
ECONOMIC DEVELOPMENT – SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2018
(120)
Over (Under)
Original Final Actual Final Budget
REVENUES
Charges for services 2,500$ 2,500$ (600)$ (3,100)$
Interest income 265 265 541 276
Change in fair value of investments - - (193) (193)
Total revenues 2,765 2,765 (252) (3,017)
EXPENDITURES - GENERAL GOVERNMENT
Current:
Other charges and services 13,000 13,000 9,900 (3,100)
NET CHANGE IN FUND BALANCE (10,235)$ (10,235)$ (10,152) 83$
FUND BALANCE
Beginning of year 31,282
End of year 21,130$
Budgeted Amounts
CITY OF LAKEVILLE
DOWNTOWN SPECIAL SERVICE DISTRICT – SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2018
(121)
Over (Under)
Original Final Actual Final Budget
REVENUES
Charges for services 13,750$ 13,750$ 13,785$ 35$
EXPENDITURES - GENERAL GOVERNMENT
Current:
Personnel 10,000 10,000 173 (9,827)
Other charges and services 22,680 22,680 9,822 (12,858)
Total expenditures - general government 32,680 32,680 9,995 (22,685)
NET CHANGE IN FUND BALANCE (18,930)$ (18,930)$ 3,790 22,720$
FUND BALANCE
Beginning of year 34,706
End of year 38,496$
Budgeted Amounts
(122)
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.
This page intentionally left blank.
CITY OF LAKEVILLE
AGENCY FUND
STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
YEAR ENDED DECEMBER 31, 2018
(123)
Beginning Ending
Balance Increases Decreases Balance
ASSETS
Cash and Investments 9,764,702$ 4,674,848$ 2,902,329$ 11,537,221$
LIABILITIES
Deposits Payable 9,762,740$ 4,674,672$ 2,900,367$ 11,537,045$
Accounts Payable 1,962 176 1,962 176
Total Liabilities 9,764,702$ 4,674,848$ 2,902,329$ 11,537,221$
Escrow
This page intentionally left blank.
SUPPLEMENTARY INFORMATION
This page intentionally left blank.
CITY OF LAKEVILLE
SCHEDULE OF CHANGES IN BONDED INDEBTEDNESS
YEAR ENDED DECEMBER 31, 2018
(124)
Outstanding Outstanding
January 1 Issued Redeemed December 31
Governmental Activities:
General obligation bonds 38,855,000$ 3,115,000$ 7,415,000$ 34,555,000$
G.O. improvement bonds 52,220,000 7,690,000 3,260,000 56,650,000
Tax increment bonds 1,240,000 -230,000 1,010,000
State-aid street revenue bonds 6,205,000 -970,000 5,235,000
G.O. water revenue bonds 7,940,000 -345,000 7,595,000
Arena revenue bonds 335,000 -165,000 170,000
HRA lease revenue bonds 6,795,000 -355,000 6,440,000
Total governmental activity bonds 113,590,000 10,805,000 12,740,000 111,655,000
Business-type Activities:
Liquor revenue bonds 2,255,000 - -2,255,000
Water revenue bonds 6,910,000 445,000 325,000 7,030,000
Sewer revenue bonds 495,000 - -495,000
Street light revenue bonds 335,000 55,000 -390,000
Total business-type activity bonds 9,995,000 500,000 325,000 10,170,000
Total bonded indebtedness 123,585,000$ 11,305,000$ 13,065,000$ 121,825,000$
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2018
(125)
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 2/1/19 635,000$ 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 11,160,000 2,294,425
Capital Improvement Refunding Bonds of 2014 B 8/20/14
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 10,510,000 3,010,459
Street Reconstruction Refunding Bonds of 2012 B 8/15/12
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 6,910,000 897,175
Principal Maturity
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2018
(126)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
Street Reconstruction Refunding Bonds of 2014 B 8/20/14
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 1,330,000 243,432
Street Reconstruction Bonds of 2017 A 9/8/2017
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 1,530,000 352,200
Street Reconstruction Refunding Bonds of 2018 B 8/16/18
Principal and interest 3.00 2/1/19 225,000 110,379
Principal and interest 3.00 2/1/20 220,000 108,650
Principal and interest 3.00 2/1/21 230,000 101,900
Principal and interest 3.00 2/1/22 230,000 95,000
Principal and interest 3.00 2/1/23 240,000 87,950
Principal and interest 3.00 2/1/24 250,000 80,600
Principal and interest 5.00 2/1/25 255,000 70,475
Principal and interest 5.00 2/1/26 270,000 57,350
Principal and Interest (call provision date)5.00 2/1/27 280,000 43,600
Principal and interest 4.00 2/1/28 295,000 30,700
Principal and interest 4.00 2/1/29 305,000 18,700
Principal and interest 4.00 2/1/30 315,000 6,300
Total 3,115,000 811,604
Total General Obligation Bonds 34,555,000$ 7,609,295$
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2018
(127)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
G.O. Improvement Bonds:
Improvement Bonds of 2008 A 10/1/08
Principal and interest 3.75 2/1/19 30,000$ 563$
Total 30,000 563
Improvement Refunding Bonds of 2009 B 12/30/09
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 515,000 12,375
Improvement Bonds of 2011 A 12/1/11
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 1,085,000 156,554
Improvement Bonds of 2012 A 8/15/12
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 4,095,000 630,688
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2018
(128)
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 2/1/19 370,000$ 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 3,305,000 609,037
Improvement Bonds of 2014 A 8/20/14
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 6,465,000 1,209,765
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2018
(129)
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 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 10,855,000 3,808,276
Improvement Bonds of 2016 B 7/21/16
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 15,145,000 4,085,549
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2018
(130)
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 2/1/19 435,000$ 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 1,914,243
Improvement Bonds of 2018 A 7/25/18
Principal and interest 5.00 2/1/19 - 337,330
Principal and interest 5.00 2/1/20 690,000 314,550
Principal and interest 5.00 2/1/21 700,000 279,800
Principal and interest 5.00 2/1/22 715,000 244,425
Principal and interest 5.00 2/1/23 740,000 217,300
Principal and interest 5.00 2/1/24 745,000 189,425
Principal and interest 5.00 2/1/25 770,000 151,550
Principal and interest 5.00 2/1/26 795,000 112,425
Principal and interest (call provision date)3.00 2/1/27 825,000 71,925
Principal and interest 3.00 2/1/28 855,000 38,475
Principal and interest 3.00 2/1/29 855,000 12,825
Total 7,690,000 1,970,030
Total G.O. Improvement Bonds 56,650,000$ 14,397,080$
State-aid Street Revenue Bonds:
State-aid Street Refunding Bonds of 2010 A 1/1/10
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 605,000 23,175
State-aid Street Refunding Bonds of 2011 B 12/1/11
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 230,000 7,375
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2018
(131)
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 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 4,400,000 1,607,182
Total State-aid Street Revenue Bonds 5,235,000$ 1,637,732$
Arena Revenue Bonds:
Gross Revenue Recreation Facility Bonds of 1999 4/1/99
(Ames Ice Arena)
Principal and interest 5.40 8/1/19 170,000$ 9,180$
Total 170,000 9,180
Total Arena Revenue Bonds 170,000$ 9,180$
HRA Lease Revenue Bonds:
HRA Ice Arena Lease Revenue Refunding Bonds of 2016 9/22/16
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 6,440,000 1,824,650
Total HRA Lease Revenue Bonds 6,440,000$ 1,824,650$
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2018
(132)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
G.O. Water Revenue Bonds:
G.O. Water Revenue Bonds of 2016 A 2/25/16
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 7,595,000 1,953,925
Total Water Revenue Bonds 7,595,000$ 1,953,925$
Tax Increment Refunding
Bonds of 2007 A
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 1,010,000 85,727
Total Governmental Activity Bonds 111,655,000$ 27,517,589$
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2018
(133)
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 2/1/19 340,000$ 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 5,750,000 1,402,101
Sewer Revenue Bonds of 2016 B 7/21/16
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 440,000 67,925
Business-Type Activity Bonds (continued):
Lease Revenue Liquor Enterprise Refunding
Bonds of 2017 (Galaxie Store)
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 2,255,000 307,250
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2018
(134)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
Water Improvement Bonds of 2017 A 9/7/2017
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 835,000 191,675
Street Lights Improvement Bonds of 2017 A
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 72,875
Improvement Bonds of 2018 A (Water)7/25/18
Principal and interest 5.00 2/1/19 - 19,469
Principal and interest 5.00 2/1/20 35,000 18,275
Principal and interest 5.00 2/1/21 40,000 16,400
Principal and interest 5.00 2/1/22 40,000 14,400
Principal and interest 5.00 2/1/23 40,000 12,900
Principal and interest 5.00 2/1/24 45,000 11,275
Principal and interest 5.00 2/1/25 45,000 9,025
Principal and interest 5.00 2/1/26 45,000 6,775
Principal and interest (call provision date)5.00 2/1/27 50,000 4,400
Principal and interest 3.00 2/1/28 50,000 2,400
Principal and interest 3.00 2/1/29 55,000 825
445,000 116,144
Total Business-Type Bonds 10,060,000$ 2,157,970$
Total Bonded Indebtedness and Annual Interest Payable 121,715,000$ 29,675,559$
CITY OF LAKEVILLE
COMBINED SCHEDULE OF BONDED INDEBTEDNESS
DECEMBER 31, 2018
(135)
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 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
Street Reconstruction Refunding Bonds of 2018 B 3.00 - 5.00 8/16/18 2/1/27 2/1/30
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/A2/1/20
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
Improvement Bonds of 2018 A 3.00 - 5.00 7/25/18 2/1/27 2/1/29
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:
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
Water Revenue Bonds of 2018 A 2.50 - 5.00 7/25/18 2/1/27 2/1/29
Total Business-type Activity Bonds
Total Bonded Indebtedness
(136)
Authorized Issued Retired Outstanding Principal Interest
12,765,000$ 12,765,000$ 1,605,000$ 11,160,000$ 635,000$ 342,650$
11,065,000 11,065,000 555,000 10,510,000 580,000 401,613
9,685,000 9,685,000 2,775,000 6,910,000 765,000 216,050
1,595,000 1,595,000 265,000 1,330,000 140,000 54,113
2,810,000 2,810,000 2,810,000 - - -
4,945,000 4,945,000 4,945,000 - - -
1,530,000 1,530,000 - 1,530,000 100,000 66,500
3,115,000 3,115,000 - 3,115,000 225,000 110,379
47,510,000 47,510,000 12,955,000 34,555,000 2,445,000 1,191,305
1,310,000 1,310,000 1,310,000 - - -
620,000 620,000 590,000 30,000 30,000 563
4,250,000 4,250,000 3,735,000 515,000 360,000 10,050
2,385,000 2,385,000 1,300,000 1,085,000 190,000 25,963
6,805,000 6,805,000 2,710,000 4,095,000 550,000 121,825
4,685,000 4,685,000 1,380,000 3,305,000 370,000 89,250
8,520,000 8,520,000 2,055,000 6,465,000 705,000 215,975
11,815,000 11,815,000 960,000 10,855,000 510,000 394,350
15,680,000 15,680,000 535,000 15,145,000 640,000 482,594
7,465,000 7,465,000 - 7,465,000 435,000 312,806
7,690,000 7,690,000 - 7,690,000 - 337,330
71,225,000 71,225,000 14,575,000 56,650,000 3,790,000 1,990,706
2,265,000 2,265,000 1,255,000 1,010,000 240,000 36,761
2,265,000 2,265,000 1,255,000 1,010,000 240,000 36,761
3,675,000 3,675,000 3,675,000 - - -
2,680,000 2,680,000 2,075,000 605,000 300,000 17,075
665,000 665,000 435,000 230,000 75,000 3,989
4,730,000 4,730,000 330,000 4,400,000 175,000 159,825
11,750,000 11,750,000 6,515,000 5,235,000 550,000 180,889
8,280,000 8,280,000 685,000 7,595,000 365,000 249,325
8,280,000 8,280,000 685,000 7,595,000 365,000 249,325
1,250,000 1,250,000 1,080,000 170,000 170,000 9,180
1,250,000 1,250,000 1,080,000 170,000 170,000 9,180
7,115,000 7,115,000 675,000 6,440,000 360,000 219,600
7,115,000 7,115,000 675,000 6,440,000 360,000 219,600
149,395,000 149,395,000 37,740,000 111,655,000 7,920,000 3,877,766
2,255,000 2,255,000 - 2,255,000 215,000 58,650
6,075,000 6,075,000 325,000 5,750,000 340,000 187,213
495,000 495,000 55,000 440,000 55,000 19,325
835,000 835,000 - 835,000 55,000 33,885
335,000 335,000 - 335,000 30,000 15,075
445,000 445,000 - 445,000 - 19,469
10,440,000 10,440,000 380,000 10,060,000 695,000 333,617
159,835,000$ 159,835,000$ 38,120,000$ 121,715,000$ 8,615,000$ 4,211,383$
Bonds Due in 2019
This page intentionally left blank.
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 137
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 149
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 155
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 Total Debt by Type
Ratio of Net Bonded Debt Outstanding
Direct and overlapping Governmental Debt
Legal Debt Margin
Pledged Revenue Coverage
Demographic and Economic Information 159
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 162
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)
(137)
2009 2010 2011 2012
Governmental Activities:
Net Investment in Capital Assets 119,699,102$ 119,249,751$ 120,485,858$ 125,051,058$
Restricted 10,542,926 10,027,737 16,474,815 17,403,167
Unrestricted 1,210,922 2,324,315 (5,970,712) (1,923,495)
Total Governmental Activities Net Position 131,452,950$ 131,601,803$ 130,989,961$ 140,530,730$
Business-Type Activities:
Net Investment in Capital Assets 103,150,022$ 101,893,442$ 100,390,175$ 102,009,893$
Restricted 295,133 295,133 325,750 325,750
Unrestricted 15,828,861 16,363,211 16,666,856 15,658,140
Total Business-Type Activities Net Position 119,274,016$ 118,551,786$ 117,382,781$ 117,993,783$
Primary Government:
Net Investment in Capital Assets 222,849,124$ 221,143,193$ 220,876,033$ 227,060,951$
Restricted 10,838,059 10,322,870 16,800,565 17,728,917
Unrestricted 17,039,783 18,687,526 10,696,144 13,734,645
Total Primary Government Net Position 250,726,966$ 250,153,589$ 248,372,742$ 258,524,513$
(1) (2)
Notes:
(1) Includes a restatement of $186,003 in Business-type activities.
(2) The City implemented GASB Statement No. 65 in 2012. Net position for 2011 was restated for the effects of
implementing this standard.
(3) The City implemented GASB Statement No. 68 in 2015, recording a change in accounting principle that
decreased unrestricted net position. Prior year balances were not restated.
(4) The City implemented GASB Statement No. 75 in 2018, recording a change in accounting principle that
decreased unrestricted net position. Prior year balances were not restated.
(138)
2013 2014 2015 2016 2017 2018
129,599,494$ 135,673,737$ 141,868,136$ 149,196,480$ 144,581,700$ 142,300,205$
17,645,944 19,913,014 33,860,946 35,860,604 46,683,603 45,267,313
2,511,935 5,874,237 (4,929,168) 4,277,626 6,036,382 15,427,439
149,757,373$ 161,460,988$ 170,799,914$ 189,334,710$ 197,301,685$ 202,994,957$
105,055,746$ 109,535,106$ 116,288,771$ 129,086,090$ 135,324,120$ 138,725,763$
324,125 324,125 323,875 323,875 323,875 –
13,704,281 11,318,290 8,420,410 9,757,400 10,791,344 13,878,208
119,084,152$ 121,177,521$ 125,033,056$ 139,167,365$ 146,439,339$ 152,603,971$
234,655,240$ 245,208,843$ 258,156,907$ 278,282,570$ 279,905,820$ 281,025,968$
17,970,069 20,237,139 34,184,821 36,184,479 47,007,478 45,267,313
16,216,216 17,192,527 3,491,242 14,035,026 16,827,726 29,305,647
268,841,525$ 282,638,509$ 295,832,970$ 328,502,075$ 343,741,024$ 355,598,928$
(3) (4)
CITY OF LAKEVILLE
CHANGES IN NET POSITION BY COMPONENT – GOVERNMENTAL ACTIVITIES
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(139)
2009 2010 2011 2012
Expenses:
General government 5,916,590$ 5,248,677$ 5,134,169$ 5,258,319$
Public safety 9,726,394 10,858,447 11,068,287 11,202,018
Public works 12,866,216 12,197,868 13,778,800 10,849,213
Parks and recreation 4,774,745 4,775,015 4,796,035 4,780,666
Interest on long-term debt 3,994,790 3,740,076 4,383,684 3,496,878
Total expenses 37,278,735 36,820,083 39,160,975 35,587,094
Program Revenues:
Charges for Services:
General government 1,940,423 1,834,856 2,108,396 2,736,653
Public safety 643,174 654,226 746,207 714,587
Public works 2,817,604 1,967,309 2,313,334 3,588,062
Parks and recreation 984,206 1,555,560 1,299,364 2,087,640
Operating Grants and Contributions
General government 44,648 42,661 37,970 40,359
Public safety 1,048,160 846,553 649,253 698,949
Public works 1,142,494 1,399,661 1,451,359 1,396,560
Parks and recreation 20,294 30,144 160,852 100,315
Capital Grants and Contributions
General government - - - 91,735
Public safety - 21,576 26,325 19,530
Public works 2,783,528 3,025,905 2,906,106 5,569,732
Parks and recreation 187,699 267,360 297,245 370,237
Total program revenues 11,612,230 11,645,811 11,996,411 17,414,359
Net Revenue (Expense):
General government (3,931,519) (3,371,160) (2,987,803) (2,389,572)
Public safety (8,035,060) (9,336,092) (9,646,502) (9,768,952)
Public works (6,122,590) (5,804,993) (7,108,001) (294,859)
Parks and recreation (3,582,546) (2,921,951) (3,038,574) (2,222,474)
Interest on long-term debt (3,994,790) (3,740,076) (4,383,684) (3,496,878)
Total net (expense) revenue (25,666,505) (25,174,272) (27,164,564) (18,172,735)
General Revenues and Other Changes in Net Position:
Property taxes 23,912,318 24,369,009 24,207,406 24,221,741
Investment earnings (charges)463,092 340,336 280,364 176,409
Gain on sale of capital assets - - - 214,004
Transfers in (out)(347,807) 613,780 2,692,671 3,101,350
Total general revenues and other (net)24,027,603 25,323,125 27,180,441 27,713,504
Change in Net Position:
Governmental Activities (1,638,902)$ 148,853$ 15,877$ 9,540,769$
(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.
(2) 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.
(3) The City implemented GASB Statement No. 75 in 2018, recording a change in accounting principle that
decreased unrestricted net position. Prior year balances were not restated.
(140)
2013 2014 2015 2016 2017 2018
5,363,354$ 6,051,985$ 5,893,261$ 8,028,316$ 4,579,478$ 7,203,308$
11,784,109 11,807,183 12,236,411 16,369,670 14,250,572 14,141,045
11,241,434 14,776,390 15,365,976 17,711,240 18,944,454 22,336,416
5,154,919 5,202,168 5,762,890 5,626,149 6,645,057 6,661,852
3,864,333 3,665,421 3,296,665 3,930,168 3,268,426 3,468,814
37,408,149 41,503,147 42,555,203 51,665,543 47,687,987 53,811,435
3,061,568 3,219,644 3,730,342 4,094,298 4,348,910 5,584,036
686,130 660,910 926,168 954,395 934,444 1,059,236
4,481,445 5,280,338 8,311,017 8,401,512 7,081,317 6,792,249
2,231,757 2,808,885 3,699,025 3,685,202 2,369,615 2,455,851
60,076 5,399 7,132 772,998 68,095 23,772
902,783 825,434 980,310 989,342 1,061,252 1,149,691
1,295,018 3,665,373 4,145,806 4,942,834 1,382,380 4,313,934
59,653 66,575 186,118 91,869 55,300 11,422
195,693 2,762,609 77,006 138,593 62,101 61,193
- - - 8,500 - -
6,350,827 6,892,230 12,702,266 23,604,519 13,018,689 9,183,039
1,296,764 436,107 1,004,480 2,932,612 182,387 194,327
20,621,714 26,623,504 35,769,670 50,616,674 30,564,490 30,828,750
(2,046,017) (64,333) (2,078,781) (3,022,427) (100,372) (1,534,307)
(10,195,196) (10,320,839) (10,329,933) (14,417,433) (12,254,876) (11,932,118)
885,856 1,061,551 9,793,113 19,237,625 2,537,932 (2,047,194)
(1,566,745) (1,890,601) (873,267) 1,083,534 (4,037,755) (4,000,252)
(3,864,333) (3,665,421) (3,296,665) (3,930,168) (3,268,426) (3,468,814)
(16,786,435) (14,879,643) (6,785,533) (1,048,869) (17,123,497) (22,982,685)
23,947,968 24,465,333 25,338,778 26,173,822 27,317,169 28,641,302
(28,949) 552,444 368,232 388,672 597,513 907,138
- - - - - -
2,094,059 1,565,481 (1,549,881) (6,978,829) (2,824,210) (492,418)
26,013,078 26,583,258 24,157,129 19,583,665 25,090,472 29,056,022
9,226,643$ 11,703,615$ 17,371,596$ 18,534,796$ 7,966,975$ 6,073,337$
(2) (3)
CITY OF LAKEVILLE
CHANGES IN NET POSITION BY COMPONENT – BUSINESS-TYPE ACTIVITIES
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(141)
2009 2010 2011 2012
Expenses:
Liquor 13,244,355$ 13,575,521$ 13,265,645$ 13,773,286$
Utility 9,086,172 9,903,296 10,401,650 10,365,651
Total expenses 22,330,527 23,478,817 23,667,295 24,138,937
Program Revenues:
Charges for Services:
Liquor 14,418,478 14,763,552 14,373,261 15,220,064
Utility 7,491,674 7,432,391 8,866,345 9,542,284
Operating Grants and Contributions
Liquor 3,762 3,762 3,762 3,762
Utility 3,264 3,264 59,707 103,525
Capital Grants and Contributions
Liquor - 17,050 - -
Utility 158,252 999,716 1,129,764 2,903,043
Total program revenues 22,075,430 23,219,735 24,432,839 27,772,678
Net Revenue (Expense):
Liquor 1,177,885 1,208,843 1,111,378 1,450,540
Utility (1,432,982) (1,467,925) (345,834) 2,183,201
Total net (expense) revenue (255,097) (259,082) 765,544 3,633,741
General Revenues and Other Changes in Net Position:
Investment income (charges)227,055 150,632 130,403 78,611
Disposal of capital assets - - - -
Transfers in (out)347,807 (613,780) (2,692,671) (3,101,350)
Total general revenues and other (net)574,862 (463,148) (2,562,268) (3,022,739)
Change in Net Position:
Business-type Activities 319,765$ (722,230)$ (1,796,724)$ 611,002$
(1) (2)
Notes:
(1) Includes a restatement of $186,003.
(2) The City implemented GASB Statement No. 65 in 2012. Net position for 2011 was restated for the effects of
implementing this standard.
(3) The City implemented GASB Statement No. 68 in 2015, recording a change in accounting principle that
decreased unrestricted net position. Prior year balances were not restated.
(4) The City implemented GASB Statement No. 75 in 2018, recording a change in accounting principle that
decreased unrestricted net position. Prior year balances were not restated.
(142)
2013 2014 2015 2016 2017 2018
13,906,263$ 13,577,019$ 12,852,980$ 13,268,419$ 13,638,043$ 14,234,337$
10,863,625 11,462,552 11,946,778 13,558,839 14,138,885 14,815,914
24,769,888 25,039,571 24,799,758 26,827,258 27,776,928 29,050,251
15,381,124 14,883,858 13,611,294 14,130,830 14,583,514 15,276,433
9,126,838 9,296,118 9,216,463 10,692,185 12,585,450 13,613,145
3,762 3,762 3,762 3,762 6,716 13,421
69,968 112,181 85,754 111,572 166,227 51,035
- - - - - -
3,414,738 4,252,192 6,009,075 8,973,280 4,791,313 4,075,854
27,996,430 28,548,111 28,926,348 33,911,629 32,133,220 33,029,888
1,478,623 1,310,601 762,076 866,173 952,187 1,055,517
1,747,919 2,197,939 3,364,514 6,218,198 3,404,105 2,924,120
3,226,542 3,508,540 4,126,590 7,084,371 4,356,292 3,979,637
(42,114) 150,310 52,461 71,109 91,472 160,165
- - - - - 1,601,334
(2,094,059) (1,565,481) 1,549,881 6,978,829 2,824,210 492,418
(2,136,173) (1,415,171) 1,602,342 7,049,938 2,915,682 2,253,917
1,090,369$ 2,093,369$ 5,728,932$ 14,134,309$ 7,271,974$ 6,233,554$
(3) (4)
CITY OF LAKEVILLE
CHANGES IN NET POSITION BY COMPONENT – TOTAL GOVERNMENTAL
AND BUSINES-TYPE ACTIVITIES
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(143)
2009 2010 2011 2012
Expenses:
Governmental activities 37,278,735$ 36,820,083$ 39,160,975$ 35,587,094$
Business-type activities 22,330,527 23,478,817 23,667,295 24,138,937
Total expenses 59,609,262 60,298,900 62,828,270 59,726,031
Program Revenues:
Governmental activities 11,612,230 11,645,811 11,996,411 17,414,359
Business-type activities 22,075,430 23,219,735 24,432,839 27,772,678
Total program revenues 33,687,660 34,865,546 36,429,250 45,187,037
Net Revenue (Expense):
Governmental activities (25,666,505) (25,174,272) (27,164,564) (18,172,735)
Business-type activities (255,097) (259,082) 765,544 3,633,741
Total net (expense) revenue (25,921,602) (25,433,354) (26,399,020) (14,538,994)
General Revenues and Other Changes in Net Position:
Governmental activities 24,027,603 25,323,125 27,180,441 27,713,504
Business-type activities 574,862 (463,148) (2,562,268) (3,022,739)
Total general revenues and other (net)24,602,465 24,859,977 24,618,173 24,690,765
Change in Net Position:
Governmental activities (1,638,902) 148,853 15,877 9,540,769
Business-type activities 319,765 (722,230) (1,796,724) 611,002
Total change in net position (1,319,137)$ (573,377)$ (1,780,847)$ 10,151,771$
(1)(2)
Note:
(1) Includes a restatement of $186,003.
(2) The City implemented GASB Statement NO. 65 in 2012. Net position for 2011 was restated for the effects of
implementing this standard.
(3) The City implemented GASB Statement No. 68 in 2015, recording a change in accounting principle that
decreased unrestricted net position. Prior year balances were not restated.
(4) The City implemented GASB Statement No. 75 in 2018, recording a change in accounting principle that
decreased unrestricted net position. Prior year balances were not restated.
(144)
2013 2014 2015 2016 2017 2018
37,408,149$ 41,503,147$ 42,555,203$ 51,665,543$ 47,687,987$ 53,811,435$
24,769,888 25,039,571 24,799,758 26,827,258 27,776,928 29,050,251
62,178,037 66,542,718 67,354,961 78,492,801 75,464,915 82,861,686
20,621,714 26,623,504 35,769,670 50,616,674 30,564,490 30,828,750
27,996,430 28,548,111 28,926,348 33,911,629 32,133,220 33,029,888
48,618,144 55,171,615 64,696,018 84,528,303 62,697,710 63,858,638
(16,786,435) (14,879,643) (6,785,533) (1,048,869) (17,123,497) (22,982,685)
3,226,542 3,508,540 4,126,590 7,084,371 4,356,292 3,979,637
(13,559,893) (11,371,103) (2,658,943) 6,035,502 (12,767,205) (19,003,048)
26,013,078 26,583,258 24,157,129 19,583,665 25,090,472 29,056,022
(2,136,173) (1,415,171) 1,602,342 7,049,938 2,915,682 2,253,917
23,876,905 25,168,087 25,759,471 26,633,603 28,006,154 31,309,939
9,226,643 11,703,615 17,371,596 18,534,796 7,966,975 6,073,337
1,090,369 2,093,369 5,728,932 14,134,309 7,271,974 6,233,554
10,317,012$ 13,796,984$ 23,100,528$ 32,669,105$ 15,238,949$ 12,306,891$
(3)(4)
CITY OF LAKEVILLE
FUND BALANCES – GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(145)
2009 2010 2011 2012
General Fund:
Reserved 9,899$ 10,726$ -$-$
Unreserved 11,196,826 9,385,202 --
Nonspendable --384,329 256,476
Committed --- -
Assigned --519,146 620,725
Unassigned --9,644,863 10,614,574
Total general fund 11,206,725 9,395,928 10,548,338 11,491,775
All Other Governmental Funds:
Reserved 16,713,410 11,060,144 - -
Unreserved, Reported in:
Special Revenue Funds 1,325,731 1,444,846 - -
Capital Project Funds 12,549,905 15,384,343 - -
Nonspendable --75 -
Restricted --14,744,057 38,587,037
Committed --9,989,221 11,861,800
Unassigned --(112,102) (233,910)
Total all other governmental funds 30,589,046 27,889,333 24,621,251 50,214,927
Total Governmental Funds:
Reserved 16,723,309 11,070,870 - -
Unreserved, Reported in:25,072,462 26,214,391 - -
Nonspendable --384,404 256,476
Restricted --14,744,057 38,587,037
Committed --9,989,221 11,861,800
Assigned --519,146 620,725
Unassigned --9,532,761 10,380,664
Total governmental funds 41,795,771$ 37,285,261$ 35,169,589$ 61,706,702$
All governmental funds percentage change 23.3%-10.8%-5.7%75.5%
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.
(146)
2013 2014 2015 2016 2017 2018
-$-$-$-$-$-$
------
126,014 221,704 447,284 695,830 914,375 876,394
45,000 45,000 45,000 ---
--- 1,478,522 741,864 705,500
9,495,546 10,805,065 11,882,644 12,902,148 13,613,203 14,011,567
9,666,560 11,071,769 12,374,928 15,076,500 15,269,442 15,593,461
------
------
------
-169 ---11,630
38,716,666 44,319,872 35,659,756 37,947,697 29,887,820 25,773,762
16,620,820 17,154,096 17,937,431 21,651,118 26,519,559 30,327,238
(221,630) (632,035) (3,492,389) (726,681) (876,594) (415,577)
55,115,856 60,842,102 50,104,798 58,872,134 55,530,785 55,697,053
------
------
126,014 221,873 447,284 695,830 914,375 888,024
38,716,666 44,319,872 35,659,756 37,947,697 29,887,820 25,773,762
16,665,820 17,199,096 17,982,431 21,651,118 26,519,559 30,327,238
--- 1,478,522 741,864 705,500
9,273,916 10,173,030 8,390,255 12,175,467 12,736,609 13,595,990
64,782,416$ 71,913,871$ 62,479,726$ 73,948,634$ 70,800,227$ 71,290,514$
5.0%11.0%-13.1%18.4%-4.3%0.7%
CITY OF LAKEVILLE
CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(147)
2009 2010 2011 2012
Revenues:
Property taxes and tax increment 23,785,468$ 24,435,538$ 24,057,622$ 24,453,849$
Licenses and permits 1,603,909 1,565,028 1,820,408 2,429,951
Intergovernmental 3,158,128 4,242,195 2,622,487 2,291,376
Charges for services 4,145,717 4,002,246 3,938,204 5,833,776
Special assessments 769,624 573,301 622,799 1,132,126
Investment income (charges)459,967 337,788 270,378 174,358
Donations 305,146 155,477 269,762 207,391
Miscellaneous 635,781 732,816 731,763 871,798
Total Revenues 34,863,740 36,044,389 34,333,423 37,394,625
Expenditures:
General government 4,850,726 4,687,662 4,493,368 4,572,777
Public safety 8,835,563 9,337,884 9,755,251 9,844,232
Public works 3,906,485 3,593,862 3,019,293 3,245,103
Parks and recreation 2,881,402 3,038,433 3,047,906 3,050,782
Capital outlay 7,140,715 4,611,659 10,345,908 12,413,360
Debt Service:
Principal retirement 6,436,971 7,337,338 7,689,182 7,642,027
Interest on debt 4,157,176 3,945,265 3,633,285 3,358,324
Fiscal charges 126,570 61,222 78,143 173,072
Total Expenditures 38,335,608 36,613,325 42,062,336 44,299,677
Excess (Deficiency) of Revenues
Over (Under) Expenditures (3,471,868) (568,936) (7,728,913) (6,905,052)
Other Financing Sources (Uses):
Transfers in 5,156,485 5,740,982 5,324,043 6,699,447
Transfers out (4,386,727) (5,046,945) (2,524,276) (2,839,332)
Bond, note, loan and lease proceeds 10,125,000 2,680,000 4,265,000 29,255,000
Payment on refunded bonds called - (7,955,000) - (1,830,000)
Premium on bonds issued 116,016 99,322 - 1,957,050
Sale of capital assets 365,196 540,067 - 200,000
Total Other Financing Sources (Uses)11,375,970 (3,941,574) 7,064,767 33,442,165
Net Change in Fund Balances 7,904,102$ (4,510,510)$ (664,146)$ 26,537,113$
Debt Service as a Percentage of
Noncapital Expenditures 30.7%32.9%31.6%32.2%
Note: The City has no taxes other than property taxes and tax increment.
(148)
2013 2014 2015 2016 2017 2018
23,981,375$ 24,524,709$ 25,215,734$ 26,131,569$ 27,401,195$ 28,612,384$
2,727,494 2,836,555 3,325,293 3,706,567 3,988,189 3,899,604
3,534,512 4,979,156 5,232,193 9,043,356 3,771,886 5,090,762
6,925,867 8,405,492 12,443,152 13,289,708 10,016,017 11,828,549
1,143,349 1,636,267 1,736,905 2,308,223 2,812,587 3,139,103
(28,008) 548,842 366,555 387,604 597,513 907,138
265,953 242,627 356,446 550,255 238,383 309,970
885,323 3,411,579 1,155,073 2,828,177 846,035 835,986
39,435,865 46,585,227 49,831,351 58,245,459 49,671,805 54,623,496
4,774,775 5,690,230 5,226,864 5,783,013 6,424,260 6,656,824
10,113,958 10,305,450 10,892,071 11,513,170 12,775,807 13,061,572
3,766,665 3,805,470 3,856,984 4,245,072 9,786,321 4,741,200
3,206,004 3,330,488 3,532,376 3,497,041 5,222,503 3,998,735
12,523,103 21,420,875 31,649,447 37,938,823 11,995,449 25,065,276
5,825,000 5,995,000 7,385,000 5,935,000 6,885,000 10,420,000
3,948,740 3,700,590 3,735,120 3,970,010 3,881,179 3,948,999
26,351 176,789 33,071 327,052 129,158 96,729
44,184,596 54,424,892 66,310,933 73,209,181 57,099,677 67,989,335
(4,748,731) (7,839,665) (16,479,582) (14,963,722) (7,427,872) (13,365,839)
7,094,079 3,489,225 6,883,879 5,179,668 8,355,474 6,038,479
(4,857,921) (1,644,624) (4,928,951) (3,222,237) (6,661,840) (4,167,132)
4,685,000 21,180,000 16,545,000 31,075,000 11,987,171 13,805,000
- (10,035,000) (12,460,000) (9,535,000) (11,368,146) (3,320,000)
78,287 1,981,519 1,005,509 2,626,731 1,309,907 1,005,336
825,000 - - - 516,380 530,734
7,824,445 14,971,120 7,045,437 26,124,162 4,138,946 13,892,417
3,075,714$ 7,131,455$ (9,434,145)$ 11,160,440$ (3,288,926)$ 526,578$
28.6%25.3%25.6%19.6%22.6%26.9%
CITY OF LAKEVILLE
TAX CAPACITY VALUATION AND ASSESSOR’S TAXABLE MARKET VALUE OF TAXABLE
PROPERTY
LAST TEN FISCAL YEARS
(149)
Fiscal Year 2009 2010 2011 2012
Taxable Net Tax Capacity Valuation of Taxable Property
Tax capacity value 67,887,456$ 65,235,789$ 61,005,594$ 57,583,990$
Less:
Captured tax increment tax capacity (2,127,819) (1,998,923) (904,389) (862,243)
Contributions to fiscal disparities pool (4,888,029) (5,623,626) (5,845,456) (5,591,597)
Plus:
Distribution from fiscal disparities pool 7,115,384 7,429,875 7,807,412 7,194,884
Total taxable net tax capacity 67,986,992$ 65,043,115$ 62,063,161$ 58,325,034$
Taxable Net Tax Capacity Valuation by Class of Property
Homestead residential 51,916,328$ 48,558,421$ 44,951,025$ 41,780,807$
Commercial/industrial, public utility,
and personal property 14,325,341 14,626,593 15,226,802 14,711,893
Non-homestead residential/apartments 1,082,546 1,127,962 1,271,776 1,265,526
Agriculture and seasonal/recreational 662,777 730,139 613,558 566,808
Total taxable net tax capacity 67,986,992$ 65,043,115$ 62,063,161$ 58,325,034$
Assessor’s taxable market valuation 6,024,665,500$ 5,736,602,200$ 5,356,855,900$ 5,030,003,164$
Taxable net tax capacity as a percentage of
assessor's taxable market value 1.128%1.134%1.159%1.160%
Direct tax capacity rate 33.973%36.624%38.250%39.051%
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.
(150)
2013 2014 2015 2016 2017 2018
54,853,225$ 57,174,306$ 62,811,855$ 65,634,896$ 69,887,094$ 75,422,344$
(863,946) (861,019) (446,760) (497,171) (596,348) (609,048)
(5,494,207) (5,439,491) (5,481,001) (5,411,614) (5,524,685) (5,828,030)
6,825,229 6,316,073 6,323,361 6,635,572 7,139,972 7,672,379
55,320,301$ 57,189,869$ 63,207,455$ 66,361,683$ 70,906,033$ 76,657,645$
38,983,401$ 41,029,548$ 46,374,248$ 49,048,168$ 52,427,026$ 57,017,144$
14,351,101 13,833,973 14,223,709 14,754,095 15,842,447 16,870,980
1,311,388 1,468,225 1,629,527 1,656,581 1,736,856 1,938,329
674,411 858,123 979,971 902,839 899,704 831,192
55,320,301$ 57,189,869$ 63,207,455$ 66,361,683$ 70,906,033$ 76,657,645$
4,767,475,321$ 4,995,818,217$ 5,553,395,148$ 5,825,279,418$ 6,201,221,856$ 6,702,242,762$
1.160%1.145%1.138%1.139%1.143%1.144%
41.234%40.696%38.948%38.669%37.510%36.419%
CITY OF LAKEVILLE
PROPERTY TAX RATES – DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
(151)
Operating Debt Service Total Debt Service
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%
2018 29.305%7.114% 36.419%
-26.580%- 192 52.825% 0.18495%4.307%120.131% 0.18495%
194 32.992% 0.26835%100.298% 0.26835%
196 21.352% 0.26715%88.658% 0.26715%
Notes:
Taxes are determined by multiplying the taxable net tax capacity by the tax capacity rate and market valued based rate expressed as
a percentage. The foregoing tax capacity rates do not reflect reductions for state property tax credits.
Special Districts include: Metropolitan Mosquito Control, Metropolitan Council, Metropolitan Transit District, Dakota County
Community Development Agency, Light Rail Authority, and Vermillion River Watershed District.
Source: Dakota County Auditor and Treasurer’s Office.
Fiscal
Year
Referendum
Levy (Market
Value-based)
General Levy
(Tax Capacity-
based)
Referendum
Levy (Market
Value-based)
General Levy
(Tax Capacity-
based)
Referendum
Levy (Market
Value-based)
Ind.
School
District
Overlapping RatesCity of Lakeville Total Direct andDirect 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, 2018 AND DECEMBER 31, 2009
(152)
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
Minnegasco, Inc.Utility 424,836$ 1 0.6%
Southfork Apartments LLC Apartments 419,687 2 0.6% 210,395$ 7 0.3%
Dakota Electric Association Utility 378,216 3 0.5% 321,276 2 0.5%
Lakeville 2004, LLC Commercial 316,194 4 0.4% 375,562 1 0.6%
Inland Argonne Village, LLC Retail 310,276 5 0.4% 291,237 5 0.4%
Heritage Commons, LLC Retail 283,674 6 0.4% 315,278 3 0.5%
Fulford Group, LLC Agriculture 283,244 7 0.4%
Hy-Vee Inc.Commercial 280,504 8 0.4%
Walker Highview Hills, LLC Apartments 261,781 9 0.3%
Target Corporation Retail 255,408 10 0.3% 297,592 4 0.4%
CRW Lakeville, LLC Retail 204,742 8 0.3%
Muller Family Theaters of Lakeville Commercial 202,582 10 0.3%
Cobblestone Lake LLC Industrial 204,292 9 0.3%
LFT Real Estate Company Inc. Real Estate 268,582 6 0.4%
Total principal taxpayers 3,213,820 4.3% 2,691,538 4.0%
All other taxpayers 72,208,524 95.7%65,195,918 96.0%
Total City of Lakeville taxpayers 75,422,344$ 100.0%67,887,456$ 100.0%
Source: Dakota County Auditor and Treasurer’s Office.
2018 2009
CITY OF LAKEVILLE
PROPERTY TAX LEVY AND COLLECTIONS
LAST TEN FISCAL YEARS
(153)
Percentage
of Total
Total Tax Collection Collections
Fiscal Levy for of Prior Total To Tax Levy
Year Fiscal Year (2)Amount (3)Percent Year Levy (4)Collections Certified
2009 (1)
23,527,163$ 22,473,650$ 95.52%409,738$ 22,883,388$ 97.26%
2010 (1)
24,041,653 22,982,110 95.59%261,764 23,243,874 96.68%
2011 (1)
24,036,652 22,837,484 95.01%346,739 23,184,223 96.45%
2012 23,126,960 23,050,840 99.67%(5,927) 23,044,913 99.65%
2013 23,079,185 22,848,820 99.00%230,365 23,079,185 100.00%
2014 23,657,996 23,541,510 99.51%116,486 23,657,996 100.00%
2015 24,728,549 24,568,028 99.35%157,745 24,725,773 99.99%
2016 25,679,619 25,566,236 99.56%112,877 25,679,113 100.00%
2017 26,679,614 26,534,636 99.46%144,978 26,679,614 100.00%
2018 28,001,550 27,857,045 99.48%- 27,857,045 99.48%
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
2009 630,561$ 2.62%
2010 731,494$ 3.04%
2011 835,005$ 3.61%
2012 -$ -
2013 -$ -
2014 -$ -
2015 -$ -
2016 -$ -
2017 -$ -
2018 -$ -
(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 TOTAL DEBT BY TYPE
LAST TEN FISCAL YEARS
(154)
Business-typeTotal
General Metropolitan Activity Total Outstanding
Fiscal Obligation Other Capital Council Revenue Outstanding Population Debt
Year Bonds Bonds Leases Loan Bond Debt (1)Per Capita
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 9,672,448 - 1,897,014 8,258,468 133,494,158 61,993 3.7 2,153
2018 112,553,287 9,273,251 - 1,897,014 8,571,877 132,295,429 64,334 N/A 2,056
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
(155)
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
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 123,338,676 67,940,000 6,261,464 49,137,212 70,906,033 69.30% 61,993 793
2018 121,826,538 70,660,000 4,128,788 47,037,750 76,657,645 61.36% 64,334 731
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, 2018
(156)
Debt Applicable to Taxable
Debt Net Tax Capacity in the City
Governmental Unit Outstanding (2)Percentage (2)Amount
Overlapping Debt (1)
Independent School District #194 119,515,000$ 76.70% 91,668,005$
Independent School District #192 185,175,000 19.40% 35,923,950
Independent School District #196 157,230,000 7.10% 11,163,330
Special District
Metropolitan Council 190,750,000 2.40%4,536,200
143,291,485
Direct Debt
City of Lakeville bonded debt 121,826,538 100.00%121,826,538
265,118,023$
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
(157)
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
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%
2018 6,702,242,762 201,067,283 32,681,212 168,386,071 16.25%
Legal Debt Margin Calculation:Fiscal Year 2018
Assessor’s taxable market valuation 6,702,242,762$
Legal debt limit:
3% of Assessor’s taxable market valuation 201,067,283$
Amount of debt applicable to legal debt limit:
Gross bonded debt 121,715,000$
Less debt payable from sources other than taxes:
G.O. Improvement bonds 56,650,000$
Tax increment bonds 1,010,000
State-aid street revenue bonds 5,235,000
Water connection revenue bonds 7,595,000
HRA lease revenue 6,440,000
Arena revenue bonds 170,000
Water revenue bonds 7,030,000
Street Light revenue bonds 335,000
Sewer revenue bonds 440,000 (84,905,000)
Debt payable from taxes 36,810,000
Less debt service monies available to pay
principal and interest (4,128,788)
Net bonded debt applicable to debt limit 32,681,212 32,681,212
Legal debt margin 168,386,071$
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 three percent of the taxable market value of
taxable property in the municipality for years 2008 and beyond.
Source: Dakota County Auditor and Treasurer’s Office.
CITY OF LAKEVILLE
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
(158)
Net Revenue
Available
Fiscal Gross (1)Operating For Debt Times
Year Revenues Expenses Service Principal Interest Total Coverage
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 12,234,365 5,193,095 7,041,270 1,005,000 690,010 1,695,010 4.15
2018 8,361,880 3,099,485 5,262,395 865,000 513,715 1,378,715 3.82
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
(159)
Percentage Personal Per Capita
(1)Increase from Income (2)Personal Housing units
Year Population Previous Year (in thousands)Income Single Multiple Total Valuation
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 8 130 39,251,000
2012 57,048 0.91%2,843,672 49,847 280 12 292 87,495,000
2013 57,789 1.30%2,929,151 50,687 374 24 398 126,096,000
2014 59,361 2.72%3,097,279 52,177 319 29 348 115,496,000
2015 59,991 1.06%3,222,117 53,710 366 54 420 125,929,000
2016 60,965 1.62%3,351,551 54,975 403 62 465 139,008,000
2017 61,993 1.69%3,573,153 57,638 487 44 531 160,520,000
2018 64,334 3.78%N/A N/A 478 49 527 159,251,000
Annual percentage
increase average last
ten fiscal years 1.62%
Labor Unemployment Labor Unemployment State of United
Year Force Rate Force Rate Minnesota States
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%
*2018 35,758 2.4%240,195 2.7%3.2% 3.7%
Source:
(1)Metropolitan Council as of April 1 (except for 2010 Federal Census).
(2)U.S. Department of Commerce Bureau of Economic Analysis as of December 31, 2018.
* 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, 2018 AND DECEMBER 31, 2009
(160)
Principal Employer (1)Product/Service Employees Rank %Employees Rank %
Independent School District #194 Elementary and secondary schools 1,373 1 3.8% 1,420 1 4.6%
Hearthside Food Solutions Food service contractors 620 2 1.7%636 2 2.1%
Schmitty & Sons School and charter bus service 550 3 1.5%
Treehouse Brands Breakfast cereal products 540 4 1.5%489 3 1.6%
Post Consumer Brands Cereal production 450 5 1.3%
Menasha Corporation Corrugated and solid fiber box mfg.406 6 1.1%191 7 0.6%
BTD Manufacturing Metal manufacturing 327 7 0.9%
Imperial Plastics, Inc.Plastics material and resin mfg.260 8 0.7%225 4 0.7%
Super Target Retail 259 9 0.7%
City of Lakeville (2)City government 233 10 0.7%201 6 0.7%
Despatch Industries, Inc.Industrial furnace and oven mfg.215 5 0.4%
Jeff Belzer’s Chevy-Dodge-KIA New and used auto dealership 110 8 0.3%
National Polymers, Inc.Plastics material and resin mfg.100 9 0.3%
Hearth & Home Technologies, Inc. Fireplaces/metal work 80 10 0.3%
Total principal employers 5,018 14.0% 3,667 11.9%
All other employers 30,740 86.0% 27,060 88.1%
Total City of Lakeville civilian labor force (3)35,758 100.0% 30,727 100.0%
Source:
(1)Telephone survey of individual employers, 2018
(2)As of December 31, 2018 (full-time equivalent).
(3) MN Department of Employment and Economic Development (DEED) as of December 31, 2018.
2018 2009
CITY OF LAKEVILLE
COMMERCIAL AND INDUSTRIAL BUILDING PERMITS ISSUED
YEARS 2018 AND 2017
(161)
BUSINESS PRODUCT/SERVICE VALUATION (1)
Launch Park I Industrial business park 9,650,000$
Hampton Inn & Suites Hotel 7,000,000
Schneiderman's Furniture Retail furniture store 5,100,000
Compeer Financial Financial services 4,700,000
Lee Lake Storage Storage Facility 4,203,000
Globus Transport Distribution/trucking 3,036,000
Wings Financial Credit Union Financial services 2,700,000
Agape Mechanical Commercial H-VAC 2,400,000
Aldi Grocery Store 2,100,000
Rivers Edge Dental Dental 2,100,000
Spirit Pointe Multi-tenant retail 1,750,000
McDonald Eye Care Eye clinic 1,242,000
O'Reillys Auto Parts Retail 932,000
Caribou Coffee/Einstein Bagels Restaurant 884,000
Freddy's Frozen Custard Restaurant 857,000
Advanced Oral Surgery Medical 850,000
Taco Bell Restaurant 845,000
Valvoline Oil Change Automotive 800,000
Christian Brothers Automotive Retail auto repair 600,000
SBF Development Residential 503,000
Target Retail 500,000
BUSINESS PRODUCT/SERVICE VALUATION (1)
HomeGoods Retail 1,373,000$
HOBO Carwash chemical manufacture 1,205,000
Ridgecrest Lakeville Multi-tenant retail 900,000
YMCA Daycare & preschool 800,000
Northland Collision Auto repair 775,000
Emagine Lakeville Theater Movie theater 750,000
SBF Commercial Holdings Event space 661,000
Miller Hartwig Insurance Insurance 644,000
Lakeville Liquor Commercial additions 570,000
Harry's Cafe Restaurant 550,000
Super Target Retail 500,000
Notes:
(1)Valuation excludes land and personal property.
Source: City of Lakeville Inspections Department.
NEW BUILDING PERMITS 2018 AND 2017 (in excess of $500,000)
EXPANSION OR REMODEL BUILDING PERMITS 2018 AND 2017 (in excess of $500,000)
CITY OF LAKEVILLE
EMPLOYEES BY FUNCTION/PROGRAM (FULL-TIME EQUIVALENT)
LAST TEN FISCAL YEARS
(162)
Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
General government
City administration 2.8 2.5 2.5 2.5 2.4 2.8 3.0 3.0 3.0 3.0
Communications 3.9 4.0 4.0 4.0 4.0 4.0 4.0 3.9 4.5 5.2
City clerk 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Finance 6.5 6.4 6.0 7.0 7.0 7.0 6.6 6.7 7.0 7.0
Information systems 3.3 3.0 3.0 3.0 2.9 3.0 3.0 3.1 3.8 4.0
Human resources 2.8 2.8 2.8 2.8 2.8 2.8 3.2 4.0 4.0 4.0
Planning 3.8 3.0 3.0 3.0 2.8 3.5 3.5 3.5 4.2 4.5
Community and economic development 2.5 2.5 2.5 2.5 2.5 2.4 2.5 2.5 2.4 2.5
Protective inspection 8.7 8.0 8.0 7.0 7.0 7.0 7.6 8.0 8.4 9.0
General government buildings 3.0 3.0 3.0 3.0 3.0 3.0 3.0 4.6 5.5 6.0
Total general government 38.3 36.2 35.8 35.8 35.4 36.5 37.4 40.2 43.8 46.2
Public safety
Police officers (sworn)51.0 51.5 51.9 53.0 50.2 54.0 52.8 54.7 54.6 57.0
Police administration 11.1 10.8 11.3 12.2 11.5 11.8 12.5 13.4 14.8 13.1
Fire (excluding volunteer firefighters)4.6 4.6 4.6 4.6 4.6 4.6 5.3 5.5 5.4 5.6
Total public safety 66.7 66.9 67.8 69.8 66.3 70.4 70.6 73.6 74.8 75.7
Public works
Engineering 9.3 9.0 6.8 7.0 6.0 6.0 6.4 6.6 7.6 7.3
Construction Services - - - - - 2.0 3.9 3.7 3.3 4.0
Street maintenance 19.4 19.0 19.0 19.3 19.3 21.0 20.4 21.6 21.7 21.9
Total public works 28.7 28.0 25.8 26.3 25.3 29.0 30.7 31.9 32.6 33.2
Parks and recreation
Park maintenance 14.5 15.0 15.0 15.0 15.0 15.0 14.8 14.0 15.1 16.4
Recreation 4.9 4.7 4.7 4.7 5.6 5.6 5.5 5.8 6.5 6.4
Arts center 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 4.6 4.7
Total parks and recreation 23.1 23.4 23.4 23.4 24.3 24.3 24.0 23.5 26.2 27.5
Total governmental activities 156.8 154.5 152.8 155.3 151.3 160.2 162.7 169.2 177.4 182.6
Liquor 25.7 25.7 25.8 25.7 24.9 26.3 24.4 25.3 26.1 26.0
Utility 18.0 18.0 20.0 20.0 20.0 21.0 21.6 21.3 23.1 24.3
Total business-type activities 43.7 43.7 45.8 45.7 44.9 47.3 46.0 46.6 49.2 50.3
Total employees 200.5 198.2 198.6 201.0 196.2 207.5 208.7 215.8 226.6 232.9
Source: City of Lakeville Human Resources Department.
Note: Includes full time equivalent for both full and part time employees and accounts for overtime. Seasonal employees are not
included for purposes of this report.
CITY OF LAKEVILLE
OPERATING INDICATORS BY FUNCTION
LAST TEN FISCAL YEARS
(163)
Function 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
General government
Number of registered voters N/A 32,617 N/A 32,200 N/A 36,571 N/A 41,124 N/A 41,693
Number of final plats approved 8 10 12 14 15 16 23 19 20 24
Number of building permits issued 1,428 1,421 1,467 2,349 1,647 3,852 2,030 1,889 1,829 1,875
Valuation of building permits
issued (in millions)62$ 49$ 77$ 119$ 142$ 139$ 183$ 218$ 248$ 234$
Public safety
Total calls for service 40,972 38,723 33,883 38,895 33,328 35,980 47,072 47,724 38,036 43,268
Traffic stops 13,370 12,310 9,210 11,426 8,251 10,531 17,681 18,239 15,680 18,412
Non-traffic related calls 27,602 26,413 24,673 27,469 25,077 25,449 29,391 29,485 22,356 24,856
Number of volunteer firefighters 78 74 83 77 79 80 83 85 86 82
Number of annual fire calls 1,343 1,189 1,262 1,208 1,062 1,103 1,192 1,347 1,477 1,500
Public works
City street miles added 0.4 1.0 1.4 2.6 2.8 4.5 4.5 17.0 3.1 3.6
Parks and recreation
Park acres mowed 427 427 429 429 430 430 430 430 430 430
Park facility reservations taken 559 661 655 717 888 958 1,024 742 551 562
Program activity registrations taken 8,201 8,369 9,051 9,850 9,310 9,627 9,231 8,141 6,294 6,490
Liquor
Annual sales (in millions)14.6$ 14.7$ 14.4$ 15.2$ 15.4$ 14.9$ 13.6$ 14.1$ 14.6$ 16.9$
Utility (in millions of gallons)
Water (average daily consumption)6.1 4.8 5.7 6.7 5.9 5.5 5.2 5.5 5.8 5.8
Sanitary sewer (1)3.3 3.3 3.3 3.4 3.4 3.4 3.2 3.4 3.4 3.5
(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
(164)
Function (1)2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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)258.6 259.0 260.0 261.4 264.0 266.8 271.3 288.3 291.4 295.0
Parks and recreation
Acres of parks, conservation areas,
and greenways 1,579 1,579 1,586 1,590 1,590 1,590 1,590 1,600 1,600 1,600
Parks 5858 5959595959606061
Conservation areas 18 18 18 20 20 20 20 20 20 20
Trails and sidewalks - paved (miles)96 97 98 99 103 107 109 110 111 117
Ice rinks - outdoor (fully boarded)11 11 11 11 11 11 11 11 11 11
Ice rinks - indoor 33 33333333
Fields (softball, soccer, baseball,
football, Lacrosse)93 96 97 97 97 97 96 96 96 97
Courts (basketball, volleyball, tennis,
pickleball)39 39 38 38 38 38 38 38 43 43
Playgrounds 40 41 42 42 42 43 43 44 44 46
Swimming beaches 33 33333333
Liquor
Number of on-sale stores owned 22 22222221
Number of on-sale stores leased 11 11111112
Utility
Water
Water mains (miles)311 311 313 313 321 321 321 321 346 350
Fire hydrants 3,386 3,386 3,434 3,434 3,572 3,572 3,572 3,572 3,818 3,885
Wells 17 17 17 17 17 17 17 18 18 19
Water Towers 5 5 5 5 5 5 5 5 6 6
Sanitary sewer
Sanitary sewer mains (miles)256 259 261 261 261 261 261 261 261 264
Sanitary sewer lift stations 20 19 19 19 20 20 20 20 20 20
Notes:
(1)Indicators for general government functions are not available.
Source: Various City of Lakeville Departments.
CITY OF LAKEVILLE, MINNESOTA
EXECUTIVE AUDIT SUMMARY
YEAR ENDED DECEMBER 31, 2018
(1)
CliftonLarsonAllen LLP
CLAconnect.com
June 6, 2019
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, 2018. 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 6, 2019
(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, 2018, 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, 2018:
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 one finding 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 2017 fiscal year, local ad valorem property tax levies provided 41.1 percent of the total
governmental fund revenues for cities over 2,500 in population, and 37.4 percent for cities under 2,500
in population. Property tax levies certified by Minnesota cities for 2018 increased about 5.6 percent
over 2017, compared to an increase of 5.5 percent the prior year. Levy limits were not in place for 2017
or 2018.
The total market value of property in Minnesota cities increased about 5.3 percent for the 2018 levy
year, following an increase of 5.6 percent for levy year 2017, an increase of 5.7 percent for 2016, an
increase of 8.5 percent for 2015, a slight increase of 1.1 percent 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 2018 except for agricultural/rural vacant land, with gains in the market values of
residential homestead properties (6.4 percent) and non-homestead residential properties (6.8 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 2018 is based on estimated values as of January
1, 2017), market value improvement has lagged behind recent upturns in the housing market and the
economy in general.
The City’s taxable market value increased 6.5 percent for taxes payable in 2017 and 8.1 percent for
taxes payable in 2018. The following graph shows the City’s changes in taxable market value over the
past 10 years plus 2019:
$‐
$1
$2
$3
$4
$5
$6
$7
$8
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019BillionsTaxable 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 7.9 percent and 6.5
percent for taxes payable in 2018 and 2017, 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
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018MillionsTax Capacity vs. Tax Rate
(City Only)
Local Net Tax Capacity Tax Rate
Past reports included a comparison of property tax capacity rates between the City, seven-county
metro area, and all cities state-wide average. The 2017 and 2018 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:
21.105
25.920
31.521 33.020 33.177 34.746 34.943 35.952 36.378 36.419
40.045 42.475 44.474 51.112
0.000
10.000
20.000
30.000
40.000
50.000
60.000
$‐
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
$1,100
$1,200
$1,300
$1,400
Estimated City Property Taxes
This chart is based on the City of Lakeville’s median home value of $304,600 and estimated taxable
market value of $293,684. The City of Lakeville when compared to other local cities is right in the
middle. This chart is an estimate of only the City’s portion of taxes and excludes other taxing
jurisdictions (i.e. schools, county, special districts). This chart also includes the respective city tax rates.
(5)
GOVERNMENTAL FUND BALANCES
The following table summarizes the changes in the fund balances of the City’s governmental funds
during the year ended December 31, 2018, presented both by fund balance classification and by fund:
Increase
2018 2017 (Decrease)
Fund Balances of Governmental Funds
Total by Classification
Nonspendable 888,024$ 914,375$ (26,351)$
Restricted 25,773,762 29,887,820 (4,114,058)
Committed 30,327,238 26,519,559 3,807,679
Assigned 705,500 741,864 (36,364)
Unassigned 13,595,990 12,736,609 859,381
Total governmental funds 71,290,514$ 70,800,227$ 490,287$
Total by Fund
General 15,696,442$ 15,269,442$ 427,000$
General Obligation Debt Service 3,377,588 5,176,628 (1,799,040)
G.O. Improvement Debt Service 10,602,818 9,976,390 626,428
Building Capital Projects 1,317,522 712,944 604,578
Improvement Construction Capital Projects 1,754,599 937,224 817,375
Municipal State Aid Capital Projects 696,520 3,150,076 (2,453,556)
Nonmajor Funds 37,845,025 35,577,523 2,267,502
Total governmental funds. 71,290,514$ 70,800,227$ 490,287$
Fund Balance
As of December 31,
In total, the fund balances of the City’s governmental funds increased $490,287 during the year ended
December 31, 2018.
The majority of the increase was due to the use of restricted fund balances of $4.1 million which offset
an increase in the committed fund balances of $3.8 million and unassigned fund balances of $859
thousand, from the prior year. The decrease in restricted fund balances was due to the refunding of the
City’s Capital Improvement Bonds Series 2009A – Build America Bonds. 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 $1.3 million
more than budgeted for revenues as well as $.5 million under budget on expenditures.
(6)
GOVERNMENTAL FUNDS REVENUE AND EXPENDITURES
The following table presents the per capita revenue of the City’s governmental funds for the past three
years, along with state-wide averages.
We have included the most recent comparative state-wide averages available from the Office of the
State Auditor to provide a benchmark for interpreting the City’s data. The amounts received from the
typical major sources of governmental fund revenue will naturally vary between cities based on factors
such as the City’s stage of development, location, size and density of its population, property values,
services it provides, and other attributes. It will also differ from year-to-year due to the effect of inflation
and changes in the City’s operation. Also, certain data on these tables may be classified differently than
how they appear on the City’s financial statements in order to be more comparable to the state-wide
information, particularly in separating capital expenditures from current expenditures.
We have designed this section of our management report using per capita data in order to better
identify unique or unusual trends and activities of your city. We intend for this type of comparative and
trend information to complement, rather than duplicate, information in the Management’s Discussion
and Analysis. An inherent difficulty in presenting per capita information is the accuracy of the population
count, which for most years is based on estimates.
State‐Wide
Year December 31, 2017 2016 2017 2018
Population 20,000 ‐ 100,000 60,965 61,993 64,334
Property taxes 475$ 421$ 433$ 436$
Tax increments 38 7 9 9
Franchise and other taxes 48 7 6 5
Special assessments 59 38 45 49
Licenses and permits 49 61 64 61
Intergovernmental revenues 147 148 61 79
Charges for services 103 218 162 184
Other 48 29 21 27
Total Revenue 967 929 801 849
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 $54.6 million in 2018, about $4.9 million (10.0 percent) more
than the prior year. On a per capita basis, governmental fund revenue for 2018 was $48 more than the
prior year. Property tax revenue was $3 per capita higher than the previous year due to a levy increase.
Intergovernmental revenues were $18 per capita more than last year due to an increase in municipal
state-aid revenue as there were several large capital projects in 2018. Charges for services were $22
per capita more than last year due to increased in collections of fees during 2018. Revenue in the
“other” category shown above increased $6 per capita.
(7)
Below is a table of the City of Lakeville’s 2018 governmental funds revenue per capita as compared to
the average per capita revenues for the governmental funds of several comparable cities for the year
2017. 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.
$‐
$100
$200
$300
$400
$500
$600
Revenues Per Capita
Lakeville Comparable Average
The expenditures of governmental funds will also vary from state-wide averages and from year-to-year,
based on the City’s circumstances. Expenditures are classified into three types as follows:
Current – These are typically the general operating type expenditures occurring on an annual
basis, and are primarily funded by general sources such as taxes and intergovernmental
revenues.
Capital Outlay – These expenditures do not occur on a consistent basis, more typically
fluctuating significantly from year-to-year. Many of these expenditures are project-oriented, and
are often funded by specific sources that have benefited from the expenditure, such as special
assessment improvement projects.
Debt Service – Although the expenditures for debt service may be relatively consistent over the
term of the respective debt, the funding source is the important factor. Some debt may be repaid
through specific sources such as special assessments or redevelopment funding, while other
debt may be repaid with general property taxes.
(8)
The City’s expenditures per capita of its governmental funds for the past three years, together with
state-wide averages, are presented in the following table:
State‐Wide
Year December 31, 2017 2016 2017 2018
Population 20,000 ‐ 100,000 60,965 61,993 64,334
Current
General Government 101$ 95$ 104$ 103$
Public Safety 287 189 206 203
Public Works 103 70 158 74
Parks and recreation 95 57 84 62
586 411 552 442
Capital Outlay
And construction 222 622 193 390
Debt Service
Principal 121 97 111 162
Interest and fiscal 32 70 65 63
154 167 176 225
Total Expenditures 961 1,200 921 1,057
City of Lakeville
Governmental Fund Expenditures per Capita
With State‐Wide Averages by Population Class
Total expenditures in the City’s governmental funds for 2018 were $67.99 million, an increase of $10.89
million (19.1 percent) from the previous year, or $169 per capita. The increase was primarily due to
capital outlay, which was $204 per capita more than the previous year, primarily due to several large
street and utility improvement projects during 2018. The increase in capital outlay was offset with
decreases in public works and parks and recreation spending per capita of $78 and $19, respectively.
Scheduled debt service principal and interest costs were also $56 higher per capita than the prior year.
Below is a table of the City of Lakeville’s 2018 governmental funds expenditures per capita as
compared to the average per capita expenditures for the governmental funds of several comparable
cities for the year 2017.
(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, 2018 was $14,819,011, an
increase of $746,238. Total fund balance at December 31, 2018 was $15,696,442, which is an increase
of $463,291 from the prior year, and $1,849,255 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 71 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 2018 fiscal year represents
approximately 52.8 percent of annual expenditures based on 2018 levels, compared to 56.1 percent at
the end of the previous year.
(10)
The following graph reflects the City’s General Fund revenue sources for 2018 compared to budget:
General Fund revenue for 2018 was $28,511,716, which was $1,315,937 (4.8 percent) more than
budget.
Licenses and permits revenue was over budget by $821,396, 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 $1,775,677 (6.6 percent) from the previous year. Property
tax revenue was $1,149,387 more than last year due to a 4.95 percent increase in the property tax levy.
Intergovernmental revenue increased $37,164 due to additional grants being received. Revenue from
charges for services increased $671,234 due primarily to an increase in public works fees. Licenses
and permits decreased $98,247 due primarily to a reduction in building permits during 2018. Finally,
revenue in the “all other” category as shown above was $16,139 higher than last year, primarily due to
an increase in investment returns.
The following graph illustrates the components of General Fund spending for 2018 compared to
budget:
Total General Fund expenditures for 2018 were $27,855,631, which was $532,118 (1.9 percent) under
the final budget. General Fund expenditures were under budget in every functional area except parks
and recreation, as shown in the graph above. General government expenditures were $163,606 under
budget, with the largest savings in planning, inspections, information technology, and human resources.
Public safety expenditures were $217,743 under budget, primarily in police personnel charges. Public
works expenditures were $155,086 under budget, mainly in engineering other charges and services
and operations and maintenance personnel costs. Parks and recreation costs were over budget by
$4,317, primarily due to the arts center other charges and services.
(12)
The following graph presents the City’s General Fund expenditures by function for the last five years:
Total General Fund expenditures for 2018 were $2,248,091 (8.8 percent) higher than the previous year,
with the increase spread across all program areas. The majority of the increase was in personnel costs,
which were due to contractual wage increases, inflationary benefit cost increases, and the addition of
about four full-time employees compared to the prior year.
(13)
ENTERPRISE FUNDS OVERVIEW
The City maintains two enterprise funds to account for services the City provides that are financed
primarily through fees charged to those utilizing the service. This section of the report provides you with
an overview of the financial trends and activities of the City’s enterprise funds, which include the (water,
sewer, street light, and environmental resources) Utility Fund and Liquor Fund.
ENTERPRISE FUNDS FINANCIAL POSITION
The following table summarizes the changes in the financial position of the City’s enterprise funds
during the years ended December 31, 2018 and 2017, presented both by classification and by fund:
Increase
2018 2017 (Decrease) *
Net Position of enterprise funds
Total by classification
Net Investment in capital assets 138,725,763$ 135,324,120$ 3,401,643$
Restricted for Debt Service ‐ 323,875 (323,875)
Unrestricted 13,667,586 10,627,646 3,039,940
Total Enterprise Funds 152,393,349$ 146,275,641$ 6,117,708$
Total by Fund
Liquor 6,087,122$ 4,366,329$ 1,720,793$
Utility 146,306,227 141,909,312 4,396,915
Total Enterprise Funds 152,393,349$ 146,275,641$ 6,117,708$
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 $6,117,708 during the year ended
December 31, 2018. The Liquor Fund net position increased by $1,720,793, due primarily an 4.8
percent increase in sales as well as the sale of the Kenrick location. Transfers out were $923
thousand. 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 $6.4 million received from
developers, other government agencies, and the City’s governmental funds.
* The increase (decrease) column above includes the City’s restatement related to the adoption of
Governmental Accounting Standards Board Statement No. 75 related to accounting for other
postemployment benefits. The effects of this adoption resulted in a decrease during the year of
$28,660 and $40,262 for the Utility and Liquor funds, respectively.
(14)
LIQUOR FUND
The following graphs present five years of operating results for the Liquor Fund:
The Liquor Fund ended 2018 with a net position of $6,087,122, an increase of $1,720,793 from current
year operations. Of this, $2,969,637 represents net investment in capital assets leaving an unrestricted
net position of $3,117,485.
(15)
Gross liquor sales for 2018 were $15,276,433, an increase of $692,919 (4.8 percent) from 2017. The
Liquor Fund generated a gross profit of $3,810,794 in 2018, or about 24.9 percent, of gross sales.
Operating expenses for 2018 were $2,783,557, an increase of $265,280 (10.5 percent) from the prior
year as it includes seven months of operating lease costs for the Kenrick location. Net operating
income for 2018 was $1,027,237, or about 6.7 percent, of gross sales. The increase in gross sales and
the resulting increase in the two operating ratios shown below were primarily attributable to continued
stabilization during 2018 as the City has faced significant increases to competition in previous years.
The Liquor Fund also made transfers out of $923,260 to support the General Fund, for debt service,
and for various capital needs.
(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 2018 with net position of $146,306,227, an increase of $4,396,915 (including
the restatement of $40,262 related to the adoption of GASB Statement No. 75) from current year
operations. Of the net position balance, $135,756,126 represents the City’s net investment in utility
capital assets, leaving $10,550,101 of unrestricted net position.
Utility Fund operating revenue was $13,613,145 for 2018, an increase of $1,027,695 (8.2 percent),
mainly due to increase in water usage and sewer discharge coupled with an increase in rates.
Operating expenses (including depreciation of $4,544,612) were $14,628,460, which represents an
increase of $709,459 (5.1 percent). The increase was primarily attributable to increases in the Met
Council disposal charges and depreciation.
The Utility Fund also received capital contributions of $6,389,619 in 2018 from developers, other
governmental agencies, and the City’s governmental funds.
(17)
GOVERNMENT-WIDE FINANCIAL STATEMENTS
In addition to fund-based information, the current reporting model for governmental entities also
requires the inclusion of two government-wide financial statements designed to present a clear picture
of the City as a single, unified entity. These government-wide financial statements provide information
on the total cost of delivering services, including capital assets and long-term liabilities.
STATEMENT OF NET POSITION
The Statement of Net Position essentially tells you what your city owns and owes at a given point in
time, the last day of the fiscal year. Theoretically, net position represents the resources the City has
leftover to use for providing services after its debts are settled. However, those resources are not
always in spendable form, or there may be restrictions on how some of those resources can be used.
Therefore, net position is divided into three components: net investment in capital assets, restricted,
and unrestricted.
The following table presents the components of City’s net position as of December 31, 2018 and 2017,
for governmental activities and business-type activities:
Increase
2018 2017 (Decrease)
Net Position
Governmental Activities
Net Investment in capital assets 142,300,205$ 144,581,700$ (2,281,495)$
Restricted 45,267,313 46,683,603 (1,416,290)
Unrestricted 15,427,439 6,036,382 9,391,057
Total governmental activities 202,994,957$ 197,301,685$ 5,693,272$
Business‐type activities
Net Investment in capital assets 138,725,763$ 135,324,120$ 3,401,643$
Restricted ‐ 323,875 (323,875)
Unrestricted 13,878,208 10,791,344 3,086,864
Total business‐type activities 152,603,971 146,439,339 6,164,632
Total net position 355,598,928$ 343,741,024$ 11,857,904$
As of December 31,
The total net position of the City increased $11.9 million during the 2018 fiscal year. Of the increase,
$5.7 million came from governmental activities and $6.2 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 2018, which
totaled about $6.4 million.
The decrease in governmental activities restricted net position was the result of several factors,
including a decrease in special assessments restricted for future debt service; capital grants
(contributions); decreases in charges for services and other resources restricted for future capital
improvements.
Other items affecting net position between 2017 and 2018 include the City having a $2.0 million note
payable to Dakota County for County Road 50 improvements and the sale of Kenrick liquor store to a
private party resulting in a gain on sale of $1.6 million. The Refunding of the City’s 2007H and 2009A
bonds.
(18)
STATEMENT OF ACTIVITIES
The Statement of Activities tracks the City’s yearly revenues and expenses, as well as any other
transactions that increase or reduce total net position. These amounts represent the full cost of
providing services. The Statement of Activities provides a more comprehensive measure than just the
amount of cash that changed hands, as reflected in the fund-based financial statements. This
statement includes the cost of supplies used, depreciation of long-lived capital assets, and other
accrual-based expenses.
The following table presents the change in the net position of the City for the years ended December
31, 2018 and 2017:
2017
Program
Expenses Revenues Net Change Net Change
Net (expense) revenue
Governmental activities
General government 7,203,308$ 5,669,001$ (1,534,307)$ (100,372)$
Public safety 14,141,045 2,208,927 (11,932,118) (12,254,876)
Public works 22,336,416 20,289,222 (2,047,194) 2,537,932
Parks and recreation 6,661,852 2,661,600 (4,000,252) (4,037,755)
Interest on long‐term debt 3,468,814 ‐ (3,468,814) (3,268,426)
Business‐type activities
Liquor 14,234,337 15,289,854 1,055,517 952,187
Utility 14,815,914 17,740,034 2,924,120 3,404,105
Total net (expense) revenue 82,861,686$ 63,858,638$ (19,003,048) (12,767,205)
General Revenues
Property taxes and tax increments 28,641,302 27,317,169
Investment earnings 1,067,303 688,985
Other ‐ gain on disposal of assets 1,601,334 ‐
Total general revenues 31,309,939 28,006,154
Change in net position 12,306,891 15,238,949
Net position , beginning 343,741,024 328,502,075
Change in Accounting Principles (448,987) ‐
Net position ‐ ending 355,598,928$ 343,741,024$
2018
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 $4.6 million during 2018.
(19)
LEGISLATIVE UPDATES
Despite the 2018 legislative session ending with a projected budget excess of $1 billion million for the
2020–2021 biennium the most recent legislative session made some progress on pensions, local
options sales taxes, and bonding.
The following is a summary of recent legislation affecting Minnesota cities in 2018/2019 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, was $534.4 million for fiscal 2018 and thereafter. LGA was increased to $560.4 million for
fiscal 2020 and increased to $564.4 for fiscal year 2021.
Local Option Sales Tax Process – Cities seeking local sales tax authority in the future will
have a different process. Cities must secure legislative authorization before conducting a local
referendum (this is a return to the procedure in place before 2011). The use of sales tax
revenues is explicitly limited to construction and rehabilitation of capital projects where a clear
“regional benefit” can be demonstrated.
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 Walz signed the Omnibus Pension bill which approved an extension to
the phased-retirement option which was initially established in 2009 and set to expire in 2019, it
was extended until June 30, 2024. The 2018 Omnibus Pension bill did not change the
contribution rates for the General Employees Plan. The Bill did change the PERA Public
Employees Police and Fire Fund plan as follows:
Post-retirement COLAs were permanently set at 1.00 percent;
Employer contribution rates increase from 16.20 percent of covered salaries to 16.95
percent beginning January 1, 2019, and 17.70 percent beginning January 1, 2020;
Employee contribution rates increase from the current 10.80 percent of covered salaries
to 11.30 percent beginning January 1, 2019, and 11.80 percent beginning January 1,
2020;
To reduce the need for additional contribution increase, the State will contribute an
additional $4.5 million to the plan annually for fiscal years 2019 and 2020, increasing to
$9.0 million annual thereafter through 2048, or until the plan is fully funded; and
The rate of interest paid on refunds of employee contributions to former public
employees was reduced from an annual rate of 4.00 percent to 3.00 percent.
(20)
There were also reforms made which impact volunteer firefighter relief association plans as
follows:
Add a requirement that the fire chief annually certify each firefighter’s service credit to
the relief association and the related municipality effective January 1, 2019.
Elections – The Special Session Omnibus bill approved by Governor Walz approved the use of
$6.6 million in elections cybersecurity funding and now allows the Office of the Secretary of
State to access $6.6 million in federal funding made available more than a year ago and is part
of the Help America Vote Act. Additionally the bill makes changes to the state presidential
nomination primary law and will now limit the distribution of participants’ party of choice to the
major political parties (prior to this change the Office of the Secretary of State information could
have been requested by any registered voter).
Municipal Liquor Operation Continuation Statute – The Omnibus Liquor Bill failed to reach
the House floor before adjournment of the regular legislative session. This bill included
provisions to modify the liquor store continuation statute to exclude long-term pension liability
changes when calculating profitability of operations. The bill also included specific liquor license
provisions for certain municipalities. This bill is expected to be revisited during the 2020
legislative session.
Bonding Bill – Governor Walz signed legislation approving bonding of $59 million for city water
infrastructure funding which was legally challenged after the original passage as part of the
2018 bonding bill.
Transportation Bill – The bill approved $93.5 million in funding for various transportation items
including metro mobility, deputy registrar reimbursements, MnLARS replacement and setting up
a disaster contingency account.
Topics not making it to the Governor – Various bills were introduced during the most recent
legislative session however they never made it to the Governor’s desk for his review. These
bills included items such as the public officials compensation cap, cities setting their own
employment standards, paid leave for family and medical reasons, a definition of sexual
harassment, and any changes which would significantly increase revenues for transportation
funding.
(21)
ACCOUNTING AND AUDITING UPDATES
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. 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.
GASB Statement No. 90 “Majority Equity Interests” – the primary objectives of this Statement is to
improve the consistency and comparability of reporting of a government’s majority equity interest in a
legally separate organization and to improve the relevance of financial information for certain
component units. This Statement is effective for periods beginning after December 15, 2018.
GASB Statement No 91 “Conduit Debt” – the primary objectives of this Statement is to provide a
single method of reporting conduit debt obligations by issuers and eliminate diversity in practice
associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt
obligations, and (3) related note disclosures. This Statement is effective for periods beginning after
December 15, 2020.
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 City of Lakeville (the City) as of and
for the year ended December 31, 2018, and have issued our report thereon dated June 6, 2019. 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 the City are described in Note 1 to basic financial statements.
As described in Note 1, the City adopted Statement of Governmental Accounting Standards (GASB)
Statement No. 75, Accounting and Financial Reporting of Postemployment Benefits Other Than
Pension, in 2018. The City restated beginning net position as a result of implementing this statement. In
addition, the City also implemented (GASB) Statement No. 89, Accounting for Interest Cost Incurred
before the End of a Construction Period, in 2018. There were no significant effects on the financial
statements as a result of implementing this statement.
We noted no transactions entered into by the City during the year for which there is a lack of
authoritative guidance or consensus. All significant transactions have been recognized in the financial
statements in the proper period.
Accounting estimates
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, 2018. 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.
Honorable Mayor and
Members of the City Council
City of Lakeville
Page 2
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.
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 other postemployment benefits payable is based on an actuarial
study performed by an independent third party and the City’s historical activity. We evaluated
the key factors and assumptions used to develop the other postemployment benefits payable 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 hole.
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 6, 2019.
Management consultations with other independent accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation
involves application of an accounting principle to the City’s financial statements or a determination of
the type of 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 City’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 6, 2019, 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 6, 2019.
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 basic 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 6, 2019
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 (the City), as of and for the year ended December 31, 2018, and the related notes to
basic financial statements, which collectively comprise the City’s basic financial statements, and have
issued our report thereon dated June 6, 2019.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal
control over financial reporting (internal control) to determine the audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we
do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or 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
Page 2
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit and, accordingly, we do not express
such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that
are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
City’s internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
CliftonLarsonAllen LLP
Minneapolis, Minnesota
June 6, 2019
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 (the City) as of and for the year then ended December 31, 2018, 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 6, 2019.
The Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor pursuant to
Minn. Stat. § 6.65, contains seven categories of compliance to be tested: contracting and bidding,
deposits and investments, conflicts of interest, public indebtedness, claims and disbursements,
miscellaneous provisions, and tax increment financing. Our audit considered all of the listed categories.
In connection with our audit, nothing came to our attention that caused us to believe that the City failed
to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities, except as
described in the Schedule of Findings and Recommendations as item 2018-001. However, our audit
was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we
performed additional procedures, other matters may have come to our attention regarding the City's
noncompliance with the above-referenced provisions, insofar as they relate to accounting matters.
The City’s written response to the legal compliance finding identified in our audit is described in the
Schedule of Findings and Recommendations. The City’s response was not subjected to the auditing
procedures applied in the audit of the financial statements and, accordingly, we express no opinion
on it.
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 report is not suitable for any other purpose.
CliftonLarsonAllen LLP
Minneapolis, Minnesota
June 6, 2019
CITY OF LAKEVILLE, MINNESOTA
SCHEDULE OF FINDINGS AND RECOMMENDATIONS
YEAR ENDED DECEMBER 31, 2018
Minnesota Legal Compliance
2018-001 Unclaimed Property
Criteria: Minnesota Statutes 345.41 and 345.43 require that every City that is holding funds
or other property that is presumed to be abandoned under sections 345.31 through 345.60
to report such property to the State Commissioner of Commerce annually. Such unclaimed
property would include unclaimed or uncashed checks or other intangible property held for
more than three years, or one year for unpaid compensation.
Condition/Context: During the audit it was noted that the City had one check from October
of 2014 in their outstanding check listing, and it had not been reported to the State
Commissioner of Commerce.
Cause: The check was missed during the City’s annual reporting process.
Effect: The City of Lakeville was not in compliance with Minnesota Statutes 345.41 and
345.43.
Recommendation: We recommend the City review all outstanding checks and other
unclaimed property near the required reporting dates annually and ensure all unclaimed
property is reported timely to the State Commissioner of Commerce.
Management Response: The City will review all outstanding checks and other unclaimed
property near the required reporting dates annually and ensure all unclaimed property is
reported timely to the State Commissioner of Commerce.