HomeMy WebLinkAboutItem 07June 15, 2020 Item No.________
ACKNOWLEDGE RECEIPT OF LAKEVILLE COMPREHENSIVE ANNUAL
FINANCIAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2019
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, 2019.
Overview
The City of Lakeville Comprehensive Annual Financial Report for the Year Ended December 31,
2019 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,
2019 and the results of operations for the year ended. Mr. Chris Knopik, Partner with CLA, will
present an overview at the June 15 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, 2019
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
CITY OF LAKEVILLE, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
YEAR ENDED DECEMBER 31, 2019
PREPARED BY THE FINANCE DEPARTMENT
CITY OF LAKEVILLE
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2019
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 – CUSTODIAL FUND 43
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION – CUSTODIAL
FUND 44
NOTES TO BASIC FINANCIAL STATEMENTS 45
REQUIRED SUPPLEMENTARY INFORMATION
GENERAL FUND SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES – BUDGETARY COMPARISON 97
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION 102
PERA – GENERAL EMPLOYEES RETIREMENT FUND 103
PERA – PUBLIC EMPLOYEES POLICE AND FIRE FUND 104
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION – STATE WIDE
PLANS 105
NET PENSION LIABILITY (ASSET) AND RELATED RATIOS – LAKEVILLE FIRE
RELIEF ASSOCIATION 108
SCHEDULE OF CHANGES IN THE CITY’S TOTAL OPEB LIABILITY AND
RELATED RATIOS 109
CITY OF LAKEVILLE
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2019
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET 113
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
IN FUND BALANCES 114
SPECIAL REVENUE FUNDS (NONMAJOR) – COMBINING BALANCE SHEET 115
SPECIAL REVENUE FUNDS (NONMAJOR) – COMBINING STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 116
DEBT SERVICE FUNDS (NONMAJOR) – COMBINING BALANCE SHEET 117
DEBT SERVICE FUNDS (NONMAJOR) – COMBINING STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 118
CAPITAL PROJECTS FUND (NONMAJOR) – COMBINING BALANCE SHEET 119
CAPITAL PROJECTS FUNDS (NONMAJOR) – COMBINING STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES 121
COMMUNICATIONS – SPECIAL REVENUE FUND – BUDGETARY
COMPARISON SCHEDULE 123
ECONOMIC DEVELOPMENT – SPECIAL REVENUE FUND – BUDGETARY
COMPARISON SCHEDULE 124
DOWNTOWN SPECIAL SERVICE DISTRICT – SPECIAL REVENUE FUND –
BUDGETARY COMPARISON SCHEDULE 125
SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN BONDED INDEBTEDNESS 126
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE 127
COMBINED SCHEDULE OF BONDED INDEBTEDNESS 137
STATISTICAL SECTION (UNAUDITED)
NET POSITION BY COMPONENT – GOVERNMENT WIDE 139
CHANGES IN NET POSITION BY COMPONENT – GOVERNMENTAL ACTIVITIES 141
CHANGES IN NET POSITION BY COMPONENT – BUSINESS-TYPE ACTIVITIES 143
CHANGES IN NET POSITION BY COMPONENT – TOTAL GOVERNMENTAL AND
BUSINESS-TYPE ACTIVITIES 145
FUND BALANCES – GOVERNMENTAL FUNDS 147
CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS 149
TAX CAPACITY VALUATION AND ASSESSOR’S TAXABLE MARKET VALUE OF
TAXABLE PROPERTY 151
PROPERTY TAX RATES – DIRECT AND OVERLAPPING GOVERNMENTS 153
PRINCIPAL PROPERTY TAXPAYERS 154
PROPERTY TAX LEVY AND COLLECTIONS 155
CITY OF LAKEVILLE
TABLE OF CONTENTS
YEAR ENDED DECEMBER 31, 2019
RATIO OF TOTAL DEBT BY TYPE 156
RATIO OF NET BONDED DEBT OUTSTANDING 157
DIRECT AND OVERLAPPING GOVERNMENTAL DEBT 158
LEGAL DEBT MARGIN 159
PLEDGED REVENUE COVERAGE 160
DEMOGRAPHIC AND ECONOMIC STATISTICS 161
PRINCIPAL EMPLOYERS 162
COMMERCIAL AND INDUSTRIAL BUILDING PERMITS ISSUED 163
EMPLOYEES BY FUNCTION/PROGRAM (FULL-TIME EQUIVALENT) 164
OPERATING INDICATORS BY FUNCTION 165
CAPITAL ASSET STATISTICS BY FUNCTION 166
INTRODUCTORY SECTION
(1)
June 5, 2020
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, 2019. 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, 2019 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 65,831 in 2019.
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,
street lights and environmental resources) and off-sale liquor stores. Sewage treatment and
disposal is operated on a regional basis by the Metropolitan Council Environmental Services
(MCES) and refuse collection and disposal are handled on a private basis through contractual
arrangements by City residents with private haulers. Further information regarding city services
can be obtained from the City’s website at www.lakevillemn.gov.
The City is financially accountable for the Housing and Redevelopment Authority (HRA), which
is included in the City’s financial statement. Additional information on the HRA can be found in
Note 1A. – Summary of Significant Accounting Policies of the Notes to Basic Financial
Statements.
The annual budget serves as the foundation for the City of Lakeville’s financial planning and
control. The budgetary process is outlined in the notes within the required supplementary
information section of this report. The City applies budgetary controls to ensure compliance with
legal provisions of the laws of Minnesota. Budgets are adopted on a basis consistent with
GAAP. Annual budgets are adopted for the general fund and special revenue funds. The
general fund budgetary comparison schedules are presented within the required supplementary
information section and the special revenue funds budgetary comparison schedules are
presented in the nonmajor governmental funds subsection of this report.
(3)
Factors Affecting Financial Condition
The City of Lakeville is committed to maintaining a strong financial condition, while continuing to
provide quality public services to its residents and businesses. The City’s financial position, as
reflected in the financial statements presented in this report, is perhaps best understood when it
is considered from the broader perspective of the environment within which the City operates.
Local Economy
The City’s tax base is primarily residential and consists of mostly single family homes.
Commercial and industrial properties make up approximately 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 9,900 new residents or approximately 17.7% since 2010, while the number of City
employees has increased by 16.6%.
The City has a land area of 38 square miles with approximately 30% of its land available for
development. In 2019, final plats were approved for 305 single-family units, 164 detached
townhomes, 43 attached townhomes, 260 apartment units, 3 commercial developments, 3
industrial 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 increasing from 478 in 2018 to 556 in 2019. The
2020 budget is premised on conservative but assumed steady growth of new single-family
homes in the coming year.
Actual Residential Units
Estimated Residential Units
Actual Single Famil y
Estimated Single Family
(4)
Commercial and industrial building permit activity was valued at $63.3 million. Commercial
projects constructed in 2019 included:
Compeer Financial
o A new two-story, 30,000 square-foot agricultural lender business
Heritage Library and Lakeville License Center
o The facility was remodeled and expanded by about 2,900 square feet
BeeHive Senior Homes
o A new 20-unit senior assisted living and memory care residence
Spero Senior Living
o A new 55-unit independent senior living community
Motoprimo Motorsports
o A two-level, 30,000 square-foot addition
Industrial development in 2019 included:
QA1 Precision Products
o 100,000 square-foot building
o Retaining 95 jobs and creating 44 new jobs in the City
Polytek Surface Coatings
o 2-story, 17,218 square foot office and warehouse building
o Growth and expansion of existing Lakeville business
Globus Transport Inc.
o 131,307 square foot 3-story climate-controlled self-storage building
o Includes office, retail showroom, and outdoor storage of recreational vehicles
Recycle MN / Dick’s Sanitation
o 21,240 square-foot addition
o New 69-foot tall storage silo
Commercial projects under construction:
Health Partners Park Nicollet Clinic
o A new 2-story, 28,420 square-foot medical office building
Edison at Spirit
o A 160-unit market-rate apartment building and five secondary carriage house
buildings
Kingsley Place
o A new 55-unit, four-story senior independent living apartment building
Springs at Lakeville
o A multi-family development consisting of 260 market-rate rental townhome-
style units
New commercial businesses:
Escape MSP
o An escape room entertainment business
Viverant
o A new physical therapy, performance training, Pilates and nutrition consulting
business
Power Plate Meals
o A new ready-to-eat meal business
Code Hero Academy
o Technology classes for school-age children and community members
HomeGoods
o A new home goods store
(5)
B-52 Burgers and Brew
o A new full-service restaurant
Northern Taphouse
o A new bar and restaurant
Wings Financial Credit Union
o A new credit union
Lakeville Walmart
o Added online grocery pickup service
Waffle Bar
o A new bubble waffle and ice cream parlor
Mi5 Fitness
o A new fitness business
ALDI
o A new grocery business
Kato CBD
o A new boutique style CBD retail store
Remedy Bar
o A CBD retail store
Just for Kix
o A business offering dance classes
Hy-Vee Fast & Fresh
o A new convenience store with groceries, grab-and-go meals, and gas
Salon de Belle
o A new salon
Enlighten Chiropractic
o A new chiropractic business
Dunkin’ Donuts and Baskin Robbins
o A new combined store located adjacent to the Kenrick Liquor store
Spaw 4 Paws
o A luxury dog grooming salon
Puppy Play & Stay
o A new business that offers daycare, boarding and grooming for dogs
Billie’s Choice
o A new business providing in-home senior care
Farm Bureau Wealth Management
o A business providing financial advisory services
(6)
According to the Dakota County Assessor’s office, the median value home increased by 7.12%
as of February 2020 (for taxes payable 2020). The improving housing market is also
strengthened with the current low inflation and interest rate environment.
According to the Bureau of Labor Statistics, Lakeville’s unemployment rate is favorable
compared to the State and National rates.
Source: https://mn.gov/deed/data
(7)
Major Initiatives
Pressures and issues confronting the City were taken into account with the 2019 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 2019
budget addressed the short-term plan while the Capital Improvement Plan addressed the
anticipated intermediate and long-term needs. The most significant 2019 projects included:
Accelerated pavement management program to improve city-wide pavement
management index
o 2019 Street Reconstruction
o Hamburg Avenue Improvements
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 was 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 $183 million in transportation, utility,
equipment, facilities and parks over the next five years to achieve program objectives.
As of December 31, 2019, the City of Lakeville had approximately $120.125 million of debt
outstanding. The City will issue approximately $90 million general obligation improvement bonds
in the coming years to finance street reconstruction projects, facility expansion and development
of community parks.
(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,
2018. This is the thirty-first 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, 2019
(11)
Term Expires
Elected Officials December 31,
Douglas P. Anderson Mayor 2022
Joshua Lee Council Member 2022
Luke Hellier Council Member 2020
Michelle Volk Council Member 2022
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, 2019 (12)
CITY OF LAKEVILLE
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING
DECEMBER 31, 2019
(13)
FINANCIAL SECTION
(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, 2019, 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, 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, 2019,
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, 2019, the City adopted GASB Statement No. 84, Fiduciary
Activities. As a result of the implementation of this standard, the City reported a restatement for the
change in accounting principle (see Note 23). 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 5,
2020, on our consideration of the City of Lakeville’s internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and
other matters. The purpose of that report is solely to describe the scope of our testing of internal control
over financial reporting and compliance and the result of that testing, and not to provide an opinion on
the effectiveness of the City of Lakeville’s internal control over financial reporting or on compliance.
That report is an integral part of an audit performed in accordance with Government Auditing Standards
in considering the City of Lakeville’s internal control over financial reporting and compliance.
CliftonLarsonAllen LLP
Minneapolis, Minnesota
June 5, 2020
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2019
(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, 2019. 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 $393,647,227 (net position) at the close of the most recent fiscal year.
Of this amount, $39,320,393 (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 $33,201,087 in 2019.
The City’s governmental funds reported combined ending fund balances of $89,180,100. Of this
total amount, $51,922,614 or 58.2% 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 $15,429,752 or 53.5% of total general fund expenditures of $28,854,340.
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, 2019
(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 26 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, G.O. improvement (debt service) 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, 2019
(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, 2019
(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 $393,647,227
at December 31, 2019. By far the largest portion or 75.7% of net position is reflected in its net
investment in capital assets (e.g. land, buildings and improvements, machinery and equipment,
infrastructure, and construction in process) less any related debt used to acquire those assets that is
still outstanding. The City uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the City’s net investment in capital assets is
reported net of related debt, it should be noted that the resources needed to repay this debt must be
provided from other sources, since the capital assets themselves cannot be used to liquidate these
liabilities.
2019 2018 2019 2018 2019 2018
Current and other assets 125,919,160$ 99,733,628$ 20,420,753$ 18,567,819$ 146,339,913$ 118,301,447$
Capital assets 267,332,551 255,935,129 154,058,485 149,217,641 421,391,036 405,152,770
Total Assets 393,251,711 355,668,757 174,479,238 167,785,460 567,730,949 523,454,217
Deferred outflows of resources 7,959,018 11,126,536 256,813 460,775 8,215,831 11,587,311
Current and other liabilities 15,945,666 9,813,242 1,919,610 1,532,497 17,865,276 11,345,739
Other liabilities 138,361,225 140,024,833 13,758,197 13,573,208 152,119,422 153,598,041
Total Liabilities 154,306,891 149,838,075 15,677,807 15,105,705 169,984,698 164,943,780
Deferred inflows of resources 11,900,528 13,962,261 414,327 536,559 12,314,855 14,498,820
Net Position:
Net Investment in Capital Assets 154,468,792 142,300,205 143,501,608 138,725,763 297,970,400 281,025,968
Restricted 56,356,434 45,267,313 - - 56,356,434 45,267,313
Unrestricted 24,178,084 15,427,439 15,142,309 13,878,208 39,320,393 29,305,647
Total Net Position 235,003,310$ 202,994,957$ 158,643,917$ 152,603,971$ 393,647,227$ 355,598,928$
Governmental Activities TotalBusiness-Type Activities
The City’s total restricted net position of $56,356,434 comprises 14.3% of total net position at the close
of the fiscal year ending December 31, 2019. These assets are subject to external restrictions on how
they may be used.
The 2019 remaining balance of $39,320,393 (10.0% 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 $8,750,645 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, 2019
(21)
Change in net position. The City’s 2019 total net position during the current fiscal year increased by
$33,201,087 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.
2019 2018 2019 2018 2019 2018
REVENUES
Program Revenues:
Charges for Services $ 20,610,432 $ 15,891,372 $ 30,504,938 $ 28,889,578 $ 51,115,370 44,780,950$
Operating Grants and Contributions 4,613,988 5,498,819 650,372 64,456 5,264,360 5,563,275
Capital Grants and Contributions 21,464,103 9,438,559 7,240,758 4,075,854 28,704,861 13,514,413
General Revenues:
Property Taxes 30,897,445 28,641,302 - - 30,897,445 28,641,302
Unrestricted Investment Earnings 2,769,074 907,138 459,651 160,165 3,228,725 1,067,303
Gain on Sale of Capital Assets - - - 1,601,334 - 1,601,334
Total Revenues 80,355,042 60,377,190 38,855,719 34,791,387 119,210,761 95,168,577
EXPENSES
General Government 7,902,490 7,203,308 - - 7,902,490 7,203,308
Public Safety 14,927,426 14,141,045 - - 14,927,426 14,141,045
Public Works 21,015,480 22,336,416 - - 21,015,480 22,336,416
Parks and Recreation 7,178,164 6,661,852 - - 7,178,164 6,661,852
Interest on Long-Term Debt 3,332,465 3,468,814 - - 3,332,465 3,468,814
Municipal Liquor - - 15,267,133 14,234,337 15,267,133 14,234,337
Utility - - 16,386,516 14,815,914 16,386,516 14,815,914
Total Expenses 54,356,025 53,811,435 31,653,649 29,050,251 86,009,674 82,861,686
CHANGE IN NET POSITION
BEFORE TRANSFERS 25,999,017 6,565,755 7,202,070 5,741,136 33,201,087 12,306,891
Transfers and Contributions 1,162,124 (492,418) (1,162,124) 492,418 - -
CHANGE IN NET POSITION 27,161,141 6,073,337 6,039,946 6,233,554 33,201,087 12,306,891
Net Position - Beginning of Year 202,994,957 197,301,685 152,603,971 146,439,339 355,598,928 343,741,024
Prior Period Restatement for Implementation
of GASB Standard (See Note 23) 4,847,212 (380,065) - (68,922) 4,847,212 (448,987)
Beginning of Year, as Restated 207,842,169 196,921,620 152,603,971 146,370,417 360,446,140 343,292,037
NET POSITION - END OF YEAR 235,003,310$ 202,994,957$ 158,643,917$ 152,603,971$ 393,647,227$ 355,598,928$
Change in Net Position
Governmental Activities Business-Type Activities Total
Governmental activities. The governmental activities change in net position before transfers
increased by $25,999,017. The governmental revenue increase in charges for services is directly
related to both an increase in economic, development and community. Operating grants decreased in
2019 in conjunction with the level of state-aid funded street maintenance and improvement projects
compared to the prior year. Capital grants and contributions increased due a higher number of
developer-installed assets reported during the 2019 than in 2018.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2019
(22)
Revenues
The City’s 2019 total revenues for governmental activities increased by $19,977,852. Charges for
services increased a total of $4,719,060 primarily due to an increase in economic and community
growth as evidenced by an increase in building permits, park dedication fees, and connection and area
charges collected. A summary of the various increases is shown as follows:
2019 2018
Increase /
(Decrease)
Charges for services
Licenses and building permit fees 4,492,109$ 3,899,604$ 592,505$
Connection and area charges 7,087,279 5,568,939 1,518,340
Engineering fees - reconstruction projects 1,635,394 1,463,780 171,614
Park dedication fees 3,154,888 1,602,477 1,552,411
Other 4,240,762 3,356,572 884,190
Total charges for services 20,610,432$ 15,891,372$ 4,719,060$
Operating grants and contributions experienced an overall decrease of $884,831. The level of state-aid
funded street maintenance and improvement projects decreased compared to the prior year. A
summary of the various operating grants and contributions are shown as follows:
2019 2018
Increase /
(Decrease)
Operating grants and contributions
State-aid for street maintenance 1,945,421$ 1,312,272$ 633,149$
State-aid for street revenue bonds 734,358 1,176,682 (442,324)
County grant for joint road improvements 269,335 574,554 (305,219)
Federal street reconstruction bonds payment - 58,743 (58,743)
Other grants, contributions and donations 1,664,874 2,376,568 (711,694)
Total Operating grants and contributions 4,613,988$ 5,498,819$ (884,831)$
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2019
(23)
Capital grants and contributions increase by $12,025,544. Contributed infrastructure from private land
developers increased $7 million; the infrastructure consists of street, storm water, and park & trail
capital assets. Special assessments increased by $793,000 primarily due to two major street projects
that were levied against the benefitting property owners in 2019. Other grants and contributions
increased $4 million due to multiple road projects that occurred in 2019 and involved other government
agencies including Dakota County, City of Burnsville and Vermillion Watershed District. The summary
of capital grants and contributions is shown as follows:
2019 2018
Increase /
(Decrease)
Capital grants and contributions
Contributed infrastructure from developers 12,453,494$ 5,258,885$ 7,194,609$
Special assessments 4,646,937 3,853,942 792,995
Other grants and contributions 4,302,383 264,539 4,037,844
PEG fees 61,289 61,193 96
Total capital grants and contributions 21,464,103$ 9,438,559$ 12,025,544$
Property tax revenue increased $2,256,143 or 7.9% primarily due to an increase in the overall tax levy.
Investment income earnings increased by $1,861,936. The increase is the combination of increased
earnings and changes in investment asset values which are inversely related to the changes in market
rates. The increase is consistent with prevailing market conditions.
General revenues 2019 2018
Increase /
(Decrease)
Property taxes 30,897,445$ 28,641,302$ 2,256,143$
Investment income 2,769,074 907,138 1,861,936
Total general revenues 33,666,519$ 29,548,440$ 4,118,079$
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2019
(24)
A summary of 2019 revenues by source for governmental activities is shown as follows:
Charges for Services,
$20,610,432 , 26%
Operating Grants and
Contributions,
$4,613,988 , 6%
Capital Grants and
Contributions,
$21,464,103 , 27%
Property Taxes,
$30,897,445 , 38%
Unrestricted
Investment Earnings,
$2,769,074 , 3%
Revenues by Source ‐Governmental Activities
Expenses
The City’s 2019 total governmental activities expenses (before depreciation on capital assets and
interest on long-term debt) decreased by $98,609 or 0.3%. Total governmental activities expenses
increased by $544,590 or 1.0%, shown as follows:
2019 2018
Increase /
(Decrease)
Governmental activities expenses
General government 7,489,476$ 6,846,135$ 643,341$
Public safety 13,775,555 12,981,627 793,928
Public works 10,789,986 12,665,892 (1,875,906)
Parks and recreation 4,843,193 4,503,165 340,028
Total before depreciation and interest 36,898,210 36,996,819 (98,609)
Depreciation on capital assets 14,125,350 13,345,802 779,548
Interest on long-term debt 3,332,465 3,468,814 (136,349)
Total governmental activities expenses $ 54,356,025 $ 53,811,435 $ 544,590
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2019
(25)
Following are explanations of various increases and (decreases) in expenses by governmental function
as shown above.
General government expenses increased by $643,341 or 9.4%; which is primarily attributed to
expenses incurred in the prior year (2018) and the elimination of the long-term receivable for the HRA
capital lease with the Galaxie liquor store.
Public safety expenses increased by $793,928 or 6.1%; primarily due to the overall increase in wages
in benefits as well as miscellaneous operating costs.
Public works expenses decreased by $1,875,906 or 14.8%; primarily due to the prior year had a greater
amount of expenditures related to an improvement project which was not considered a City asset.
Parks and recreation expenses increased $340,028 or 7.6%; primarily due to additional park and trail
maintenance on existing trails compared to the prior year.
Depreciation on capital assets increased by $779,548 or 5.8%; primarily due to an increase in
contributed infrastructure from development.
Interest on long-term debt decreased by $136,349 or 3.9%; primarily due to scheduled debt payments.
A summary of 2019 expenses by function for governmental activities is shown as follows:
General
government,
$7,489,476 , 14%
Public safety,
$13,775,555 , 25%
Public works,
$10,789,986 , 20%
Parks and
recreation,
$4,843,193 , 9%
Depreciation on
capital assets,
$14,125,350 , 26%
Interest on long‐
term debt,
$3,332,465 , 6%
Expenses by Function ‐Governmental Activities
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2019
(26)
Business-type activities. Business-type activities increased the City’s 2019 total net position by
$6,039,946. Key elements of the increase in net position along with a comparison of revenues,
expenses, and changes in net position during fiscal years 2019 and 2018 are shown as follows:
2019 2018
Increase /
(Decrease)
Revenues
Charges for services
Liquor 16,288,986$ 15,276,433$ 1,012,553$
Utility 14,215,952 13,613,145 602,807
Operating grants and contributions
Liquor 6,453 13,421 (6,968)
Utility 643,919 51,035 592,884
Capital contributions
Utility 7,240,758 4,075,854 3,164,904
Gain on disposal of capital assets - 1,601,334 (1,601,334)
Investment earnings 459,651 160,165 299,486
Total revenues 38,855,719 34,791,387 4,064,332
Expenses
Liquor 15,267,133 14,234,337 1,032,796
Utility 16,386,516 14,815,914 1,570,602
Total expenses 31,653,649 29,050,251 2,603,398
Change in net position before transfers 7,202,070 5,741,136 1,460,934
Transfers (1,162,124) 492,418 (1,654,542)
Change in net position 6,039,946 6,233,554 (193,608)
Net position - beginning 152,603,971 146,439,339 6,164,632
Prior Period Restatement for Implementation
of GASB Standard - (68,922) 68,922
Beginning of Year, as Restated 152,603,971 146,370,417 6,233,554
Net position - ending $ 158,643,917 $ 152,603,971 6,039,946$
The City’s 2019 business-type total revenues increased by $4,064,332 or 11.7%; the various revenue
components are discussed in detail in the following paragraphs.
The liquor fund 2019 charges for services increased due to sales volume. The 2019 cost of
goods sold as a percentage of sales were 75.1%, compared to 75.1% in 2018.
The overall utility revenue charges for services increased by $602,807. This overall increase is
represented by a water revenue decrease of $403,956, sanitary sewer revenue increase of
$497,777, street light revenue increase of $60,116, and environmental resources revenue
increase of $448,870. The decrease in water and increase in sanitary sewer 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, 2019
(27)
The utility fund experienced a total increase of $3,164,904 in capital contributions. The majority
of the increase is derived from water and sanitary sewer contributed from developer
improvement projects (greater number of contributions during 2019). City improvement project
infrastructure assets of $927,970 were contributed to the utility fund which is within the net
transfer amount of $162,124 on the Statement of Activities. The total amount of contributed
infrastructure assets received by the utility fund varies yearly.
Investment earnings increased $299,486. 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 2019 business-type total expenses increased by $1,002,064 or 3.5% as follows:
Liquor Fund Utility Fund
Total
Business-type activities expenses
Cost of Goods Sold 763,923$ -$ 763,923$
Personnel services 51,706 287,704 339,410
Commodities 11,096 53,642 64,738
Other charges and services 221,728 844,363 1,066,091
Sanitary sewage treatment and disposal - 156,420 156,420
Depreciation on capital assets (15,518) 237,674 222,156
Interest, fiscal charges, bond premium (net) 157 (4,702) (4,545)
Loss on Disposal of Capital Assets (1,601,334) (4,795) (1,606,129)
Total Business-type Expenses $ (568,242) $ 1,570,306 $ 1,002,064
Increase (Decrease) from 2018
The liquor fund other charges and services increase of $221,728 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 $156,420
primarily due to the change in factors used by MCES in their pass through cost allocation to the
City. The City’s rate per million gallons increased 3.89% and the annual flow increased by
14.5%.
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, 2019
(28)
As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund
balances of $89,180,100. Of this amount, $51,922,614 or 58.2% of this combined ending fund balance
constitutes fund balance that is available for spending at the government’s discretion. Nonspendable
fund balances of $748,231 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 $21,651,076, (b) capital acquisition of $14,474,362, and (c) other restricted purposes
of $383,817.
The general fund is the chief operating fund of the City. At the end of the current fiscal year, the fund
balance was $17,203,248, an increase from the prior year resulting from $2,091,979 of revenues over
expenditures, net transfers out of $452,216, and a change in supplies inventory of $132,957.
The general obligation improvement (debt service) fund balance increased by $2,054,045 due to higher
property tax levies and prepaid assessment revenue. 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 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 increased $1,345,668 due to receiving additional intergovernmental revenues for
construction projects.
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 $113,163 due to the completion of the 2018 and 2019 street reconstruction projects.
Preliminary engineering costs associated with the 2020 street reconstruction project and future projects
will be funded in part, by residual balances and transfers from debt services funds.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2019
(29)
General Fund Budgetary Highlights
With the exception of the general government facilities, information technology, street maintenance,
recreation, and arts center, all other general fund departments expended their 2019 budget
appropriations at or below the final adopted budget. A schedule of revenues, expenditures and changes
in fund balances – budgetary comparison is disclosed in the required supplemental information section
of this report. A summary of general fund revenues, expenditures, other financing sources (uses),
variance with final budget, and net change in fund balance is as follows:
Budget As
Originally
Adopted Final Budget Actual
Variance with
Final Budget
Revenues
Property taxes 21,327,427$ 21,327,427$ 21,493,905$ 166,478$
Licenses and permits 2,390,498 2,448,498 3,808,132 1,359,634
Intergovernmental 989,590 1,032,137 1,219,201 187,064
Charges for services 2,710,833 2,742,233 3,420,724 678,491
Special assessments - - 2,755 2,755
Fines 346,000 346,000 354,292 8,292
Interest income 120,000 120,000 283,583 163,583
Change in value of investments - - 194,734 194,734
Donations 17,705 54,824 104,459 49,635
Miscellaneous 52,874 52,874 64,244 11,370
Total revenues 27,954,927 28,123,993 30,946,029 2,822,036
Expenditures
Personnel services 21,422,872 21,467,669 21,445,846 (21,823)
Commodities 1,749,479 1,736,746 1,729,737 (7,009)
Other charges and services 5,545,092 5,806,238 5,641,893 (164,345)
Capital outlay - 41,179 36,574 (4,605)
Other 79,466 79,466 - (79,466)
Total expenditures 28,796,909 29,131,298 28,854,050 (277,248)
Other financing sources (uses) 136,482 (458,518) (452,216)6,302
Net change in fund balance $ (705,500) $ (1,465,823)1,639,763$ 3,105,586$
The 2019 actual general fund revenues exceeded the final budget by $2,822,036 and expenditures
were under final adopted budget by $277,248. Other financing sources (uses) were under the final
budget by $6,302. The general fund actual net change in fund balance surpassed final budget by
$1,639,763.
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, 2019
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The following is a brief summary explanation of the various budgets to actual variances for revenues:
Property taxes were more than anticipated by $166,478 due in part to better than anticipated
collection rates and delinquent tax 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 $1,359,634 due to greater than anticipated
building permit fees. The number of residential building permits budgeted were 350 compared to
521 actual. Permits for townhomes were budgeted at 50 units compared to 99 actual units.
Intergovernmental revenues exceeded estimates by $187,064 due to the timing of federal
grants for public safety initiatives. CDBG grants for the DARTS senior busing and senior
chores/maintenance program exceeded budget estimates.
Charges for services experienced a variance of $678,491 due to engineering-related services in
connection with developer construction administration.
Fines were above estimates by $8,292.
Interest income and the change in value of investments were above estimates by $358,317 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 $49,635 and $11,370,
respectively.
The following is a brief summary explanation of the various budgets to actual variances for
expenditures:
Personnel costs including benefits were $21,823 below budget estimates due to vacant
positions as a result of retirements, resignations, and delay in filling new positions.
Commodities were $7,009 below budget due to lower natural gas consumption.
Other charges and services were $164,345 below budget which is attributed to several factors.
The police department had multiple projects that resulted in $70,000 in savings. The streets
department had a larger salt supply at the beginning of 2019 resulting in a lower cost in 2019.
The parks department had multiple major maintenance projects come in at a lower cost due to
city staff completing the work versus hiring outside contractors.
Capital outlay was $4,605 below budget. Savings from a delay in purchasing an inspection
department vehicle were offset by an unanticipated purchase of a GPS receiver unit and related
equipment by the engineering department.
CITY OF LAKEVILLE
MANAGEMENT’S DISCUSSION AND ANALYSIS
YEAR ENDED DECEMBER 31, 2019
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Capital Asset and Debt Administration
Capital assets. The City’s capital assets for governmental and business-type activities as of
December 31, 2019 are $421 million (net of accumulated depreciation). This amount represents an
increase (including additions, deletions, and depreciation) of approximately $16.0 million from 2018.
The net investment in capital assets including land, historical treasures, buildings, machinery and
equipment, other improvements, infrastructure, and construction in process is shown as follows:
Governmental
Activities
Business-Type
Activities Total
Land 30,128,217$ 3,627,767$ 33,755,984$
Historical treasures 100,000 - 100,000
Construction in process 1,912,755 30,203 1,942,958
Buildings and improvements 55,051,059 28,341,160 83,392,219
Machinery and equipment 25,767,614 3,675,948 29,443,562
Other improvements 10,144,883 - 10,144,883
Infrastructure
Streets 185,733,608 - 185,733,608
Storm sewer 91,213,117 - 91,213,117
Parks 30,330,869 - 30,330,869
Environmental resources - 63,142 63,142
Water - 115,458,217 115,458,217
Sanitary sewer - 77,899,055 77,899,055
Total Capital Assets 430,382,122 229,095,492 659,477,614
Less: Accumulated Depreciation (163,049,571) (75,037,007) (238,086,578)
Total Capital Assets, Net 267,332,551$ 154,058,485$ 421,391,036$
Capital Assets at Year-End
(Net of Accumulated Depreciation)
The City’s 2020 adopted budget provides funding for $40.1 million in infrastructure capital assets, public
building improvements and upgrades, 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, 2019
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Debt administration. At the end of the current fiscal year, the City of Lakeville had total bonded debt
outstanding of $120.125 million, which is a decrease of $1.590 million compared to the prior year. The
decrease is due to one new bond issuance totaling $7.025 million and principal bond maturities.
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, 2019 is shown as follows:
Balance
January 1 Issued Redeemed
Balance
December 31
Governmental Activities
General obligation bonds
Capital improvement $ 21,670,000 $ - $ 1,215,000 $ 20,455,000
Street reconstruction 12,885,000 - 1,230,000 11,655,000
G.O. improvement 56,650,000 6,295,000 3,790,000 59,155,000
State-aid street revenue 5,235,000 - 550,000 4,685,000
Water revenue 7,595,000 - 365,000 7,230,000
Tax increment 1,010,000 - 240,000 770,000
Arena revenue 170,000 - 170,000 -
HRA lease revenue 6,440,000 - 360,000 6,080,000
Total governmental activities 111,655,000 6,295,000 7,920,000 110,030,000
Business-Type Activities
Water revenue 7,030,000 730,000 395,000 7,365,000
Sewer revenue 440,000 - 55,000 385,000
Street light revenue 335,000 - 30,000 305,000
Capital Lease Payable 2,255,000 - 215,000 2,040,000
Total business-type activities 10,060,000 730,000 695,000 10,095,000
Total bonds payable 121,715,000$ 7,025,000$ 8,615,000$ 120,125,000$
Bonds and Capital Leases Payable
Outstanding Debt
Credit Rating
The City of Lakeville’s general obligation bond rating as of December 31, 2019 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 $30,120,459 of net bonded debt, which is subject to
the $221,221,020 current debt limitation, thereby resulting in a legal debt margin of $191,100,561.
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, 2019
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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 increased from 478 in 2018 compared to 556 permits in 2019. 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 2.9%, 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 2020 budget reflects a continuation of the program and service levels established by the
City Council over the past several years. Several positions were also added to accommodate specific
programs. The 2020 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
CITY OF LAKEVILLE
STATEMENT OF NET POSITION
DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
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Governmental
Activities
Business-Type
Activities Total
ASSETS
Cash and investments 99,103,436$ 13,607,357$ 112,710,793$
Receivables 22,024,346 4,246,812 26,271,158
Internal balances (257,109) 257,109 -
Inventories 312,695 2,299,475 2,612,170
Prepaid items 6,600 10,000 16,600
Restricted assets (temporarily)
Investments held by trustee 616,405 - 616,405
Net pension asset - fire relief 4,112,787 - 4,112,787
Capital assets
Nondepreciable 32,140,972 3,657,970 35,798,942
Depreciable, net 235,191,579 150,400,515 385,592,094
Total capital assets 267,332,551 154,058,485 421,391,036
Total assets 393,251,711 174,479,238 567,730,949
DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding 103,849 - 103,849
OPEB related deferments 190,963 35,111 226,074
Pension plan deferments - PERA 7,383,218 221,702 7,604,920
Pension plan deferments - fire relief 280,988 - 280,988
Total deferred outflows of resources 7,959,018 256,813 8,215,831
LIABILITIES
Salaries, accounts, contracts, and deposits 14,078,932 1,794,896 15,873,828
Accrued interest 1,706,029 124,714 1,830,743
Unearned revenue 160,705 - 160,705
Noncurrent liabilities
Net pension liability - PERA 13,105,350 2,204,287 15,309,637
Total OPEB Liability due within one year 43,162 7,935 51,097
Total OPEB Liability due in more than one year 1,001,347 184,108 1,185,455
Other long-term liabilities due within one year 11,166,789 1,020,377 12,187,166
Other long-term liabilities due in more than one year 113,044,577 10,341,490 123,386,067
Total liabilities 154,306,891 15,677,807 169,984,698
DEFERRED INFLOWS OF RESOURCES
Deferred gain on refunding 92,266 - 92,266
OPEB related deferments 95,932 17,638 113,570
Pension plan deferments - PERA 10,678,586 396,689 11,075,275
Pension plan deferments - fire relief 1,033,744 - 1,033,744
Total deferred inflows of resources 11,900,528 414,327 12,314,855
NET POSITION
Net investment in capital assets 154,468,792 143,501,608 297,970,400
Restricted for:
Special purposes 130,278 - 130,278
Debt service 36,929,438 - 36,929,438
Capital acquisition 14,987,775 - 14,987,775
Public Safety 196,156 - 196,156
Fire relief pensions 4,112,787 - 4,112,787
Unrestricted 24,178,084 15,142,309 39,320,393
Total Net Position 235,003,310$ 158,643,917$ 393,647,227$
Primary Government
CITY OF LAKEVILLE STATEMENT OF ACTIVITIES YEAR ENDED DECEMBER 31, 2019 See accompanying Notes to Basic Financial Statements. (35) Functions/Programs ExpensesCharges for ServicesOperating Grants and ContributionsCapital Grantsand ContributionsGovernmental ActivitiesBusiness-Type ActivitiesTotalPrimary Government:Governmental Activities:General government 7,902,490$ 6,506,302$ 97,964 116,750$ (1,181,474)$ -$ (1,181,474)$ Public safety 14,927,426 838,664 1,168,857 - (12,919,905) - (12,919,905) Public works 21,015,480 9,166,886 3,142,430 21,234,628 12,528,464 - 12,528,464 Parks and recreation 7,178,164 4,098,580 204,737 112,725 (2,762,122) - (2,762,122) Interest on long-term debt 3,332,465 - - - (3,332,465) - (3,332,465) Total-governmental activities54,356,025 20,610,432 4,613,988 21,464,103 (7,667,502) - (7,667,502) Business-Type Activities:Liquor 15,267,133 16,288,986 6,453 - - 1,028,306 1,028,306 Utility 16,386,516 14,215,952 643,919 7,240,758 - 5,714,113 5,714,113 Total Business-Type Activities 31,653,649 30,504,938 650,372 7,240,758 - 6,742,419 6,742,419 Total Primary Government 86,009,674$ 51,115,370$ 5,264,360$ 28,704,861$ (7,667,502) 6,742,419 (925,083) General Revenues:Property taxes 30,897,445 - 30,897,445 Investment income 2,769,074 459,651 3,228,725 Transfers 1,162,124 (1,162,124) - Total general revenues and transfers 34,828,643 (702,473) 34,126,170 Change in Net Position 27,161,141 6,039,946 33,201,087 Net Position - Beginning of Year 202,994,957 152,603,971 355,598,928 Prior Period Restatement for Implementation of GASB Standard (See Note 23) 4,847,212 - 4,847,212 Beginning of Year, as Restated 207,842,169 152,603,971 360,446,140 Net Position - End of Year 235,003,310$ 158,643,917$ 393,647,227$ Program RevenuesPrimary GovernmentNet (Expense) Revenue and Changes in Net Position
CITY OF LAKEVILLE BALANCE SHEET GOVERNMENTAL FUNDS DECEMBER 31, 2019 See accompanying Notes to Basic Financial Statements. (36) NonmajorTotalGeneral G.O. Municipal Improvement Governmental GovernmentalASSETSFund Improvement State-aid Construction Funds FundsCash and investments 23,171,764$ 12,544,872$ 4,116,062$ 7,499,585$ 51,119,460$ 98,451,743$ Investments held by trustee - - - - 616,405 616,405 Interest receivable 89,723 63,100 29,668 194 286,088 468,773 Taxes receivable 1,917,117 - - - - 1,917,117 Accounts receivable 569,956 - 1,612,650 - 466,347 2,648,953 Advances to other funds 428,936 - - - - 428,936 Special assessments receivable 120,528 16,121,740 - 95,805 646,641 16,984,714 Leases Receivable - - - - 2,040,000 2,040,000 Inventory 312,695 - - - - 312,695 Prepaid items 6,600 - - - - 6,600 Total Assets 26,617,319$ 28,729,712$ 5,758,380$ 7,595,584$ 55,174,941$ 123,875,936$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCELIABILITIESSalaries payable 884,026$ -$ -$ -$ 19,124$ 903,150$ Accounts payable 555,547 - 3,716,192 271,559 1,139,361 5,682,659 Advances from other funds - - - - 428,936 428,936 Contracts payable - - - 513,413 227,285 740,698 Deposits payable 6,632,410 - - - 111,975 6,744,385 Unearned revenue 160,659 - - - 43 160,702 8,232,642 - 3,716,192 784,972 1,926,724 14,660,530 DEFERRED INFLOWS OF RESOURCESUnavailable revenue - taxes 419,333 - - - - 419,333 Unavailable revenue - special assessments 762,096 16,072,849 - 95,638 645,390 17,575,973 Unavailable revenue - other- - - - 2,040,000 2,040,000 Total Deferred Inflows of Resources 1,181,429 16,072,849 - 95,638 2,685,390 20,035,306 FUND BALANCENonspendable 748,231 - - - - 748,231 Restricted 175,590 12,656,863 2,042,188 6,337,742 15,296,872 36,509,255 Committed 100,000 - - 377,232 35,694,657 36,171,889 Assigned 749,675 - - - - 749,675 Unassigned 15,429,752 - - - (428,702) 15,001,050 Total Fund Balance 17,203,248 12,656,863 2,042,188 6,714,974 50,562,827 89,180,100 Total Liabilities, Deferred Inflows of Resources, and Fund Balance 26,617,319$ 28,729,712$ 5,758,380$ 7,595,584$ 55,174,941$ 123,875,936$ Debt Service Capital Projects
CITY OF LAKEVILLE
RECONCILIATION OF THE BALANCE SHEET TO THE
STATEMENT OF NET POSITION
GOVERNMENTAL ACTIVITIES
DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
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Total Fund Balances for Governmental Funds 89,180,100$
Governmental capital assets 430,382,122$
Less: Accumulated Depreciation (163,049,571) 267,332,551
4,112,787
Bonds (110,030,000)
Accrued interest (1,706,029)
Loan (1,897,014)
Note Payable (1,000,000)
Unamortized bond premium (8,302,665)
Deferred charge on refunding 103,849
Deferred gain on refunding (92,266)
Compensated absences (2,981,687) (125,905,812)
Net pension liability (13,105,350)
Deferred inflows of resources (11,712,330)
Deferred outflows of resources 7,664,206 (17,153,474)
(1,044,509)
190,963
(95,932)
17,995,306
391,328
Total Net Position of Governmental Activities 235,003,310$
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.
OPEB related deferred inflows of resources are recorded only on the statement of net
position.
CITY OF LAKEVILLE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED DECEMBER 31, 2019 See accompanying Notes to Basic Financial Statements. (38) Nonmajor TotalGeneral G.O. Municipal Improvement Governmental GovernmentalFund Improvement State-aid Construction Funds TotalsREVENUEProperty taxes21,493,905$ 3,546,841$ -$ -$ 5,057,979$ 30,098,725$ Tax increment- - - - 757,107 757,107 Licenses and permits3,808,132 - - - 683,977 4,492,109 Intergovernmental 1,219,201 - 4,177,180 1,821,228 1,683,886 8,901,495 Charges for services3,420,724 - 702,880 321,117 10,601,456 15,046,177 Special assessments2,755 3,414,396 - 125,750 140,453 3,683,354 Fines354,292 - - - - 354,292 Interest Income283,583 185,725 86,603 64,849 1,014,824 1,635,584 Change in Fair Value of Investments194,734 133,731 62,356 19,480 723,189 1,133,490 Donations104,459 - - - 107,510 211,969 Miscellaneous 64,244 - - - 443,264 507,508 Total Revenue 30,946,029 7,280,693 5,029,019 2,352,424 21,213,645 66,821,810 EXPENDITURES Current:General government6,340,198 - - - 688,428 7,028,626 Public safety13,496,719 - - - - 13,496,719 Public works4,802,149 - - - - 4,802,149 Parks and recreation4,178,410 - - - - 4,178,410 Capital Outlay:General government- - - 19 438,338 438,357 Public safety- - - - 669,739 669,739 Public works16,329 - 2,921,891 10,335,698 3,832,328 17,106,246 Parks and recreation20,245 - - - 2,672,158 2,692,403 Debt Service:Principal bond maturities- 3,790,000 1,000,000 - 4,130,000 8,920,000 Interest on debt- 1,990,706 - - 1,887,058 3,877,764 Fiscal charges- 26,264 - - 18,165 44,429 Total Expenditures28,854,050 5,806,970 3,921,891 10,335,717 14,336,214 63,254,842 EXCESS (DEFICIENCY) OF REVENUE OVER (UNDER) EXPENDITURES2,091,979 1,473,723 1,107,128 (7,983,293) 6,877,431 3,566,968 OTHER FINANCE SOURCES (USES) Issuance of Bonds and Other Debt- 77,860 - 6,217,140- 6,295,000 Premium on Issued Debt - - - 1,065,624 - 1,065,624 Proceeds from the Sale of Capital Assets- - - - 107,645 107,645 Transfers in from other funds772,784 525,813 238,540 813,692 2,769,870 5,120,699 Transfers out to other funds(1,225,000) (23,351) - - (1,732,254) (2,980,605) Total Other Finance Sources (452,216) 580,322 238,540 8,096,456 1,145,261 9,608,363 NET CHANGE IN FUND BALANCES1,639,763 2,054,045 1,345,668 113,163 8,022,692 13,175,331 FUND BALANCES Beginning of Year, as previously reported15,696,442 10,602,818 696,520 1,754,599 42,540,135 71,290,514 Change in Supplies - Inventory(132,957) - - - - (132,957) Restatement - change in accounting principle (see Note 23)- - - 4,847,212 - 4,847,212 Beginning of Year, as restated15,563,485 10,602,818 696,520 6,601,811 42,540,135 76,004,769 End of Year17,203,248$ 12,656,863$ 2,042,188$ 6,714,974$ 50,562,827$ 89,180,100$ Debt Service Capital Projects
CITY OF LAKEVILLE
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES TO THE STATEMENT OF ACTIVITIES
YEAR ENDED DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
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Net Change in Fund Balances-Total Governmental Funds 13,175,331$
Amounts reported for governmental activities in the statement of activities are different because:
Capital outlay 13,471,659$
Capital contributed by developer 12,453,494
Depreciation expense (14,125,351) 11,799,802
(423,177)
(132,957)
Deferred inflows of resources - December 31, 2018 (16,990,110)
Deferred inflows of resources - December 31, 2019 17,995,306 1,005,196
(6,295,000)
8,920,000 2,625,000
Change in accrued interest payable (13,154)
Premium on bonds issued in the current year (1,065,624)
Amortization of deferred charge on refunding (31,707)
Amortization of deferred gain on refunding 13,738
Amortization of debt premiums/discounts 679,497 (417,250)
(329,499)
(125,506)
(15,799)
Change in Net Position of Governmental Activities 27,161,141$
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, 2019
See accompanying Notes to Basic Financial Statements.
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Governmental
Activities -
Internal Service
Liquor Utility Totals Funds
ASSETS AND DEFERRED OUTFLOWS
OF RESOURCES
CURRENT ASSETS
Cash and investments 3,216,349$ 10,391,008$ 13,607,357$ 651,693$
Interest receivable 9,866 78,280 88,146 1,136
Accounts receivable 4,005 4,154,661 4,158,666 3,649
Inventory 1,743,526 555,949 2,299,475 -
Prepaid expenses - 10,000 10,000 -
Total current assets 4,973,746 15,189,898 20,163,644 656,478
NONCURRENT ASSETS
Capital assets:
Land 3,087,882 539,885 3,627,767 -
Construction in progress - 30,203 30,203 -
Buildings and improvements 2,106,318 26,234,842 28,341,160 -
Machinery and equipment 462,559 3,213,389 3,675,948 -
Infrastructure - 193,420,414 193,420,414 -
Accumulated depreciation (456,735) (74,580,272) (75,037,007) -
Net Capital Assets 5,200,024 148,858,461 154,058,485 -
Total noncurrent assets 5,200,024 148,858,461 154,058,485 -
Total assets 10,173,770 164,048,359 174,222,129 656,478
DEFERRED OUTFLOWS OF RESOURCES
Pension plan deferments - PERA 88,845 132,857 221,702 -
OPEB related deferments 14,264 20,847 35,111 -
Total deferred outflows of resources 103,109 153,704 256,813 -
Total Assets and Deferred
Outflows of Resources 10,276,879$ 164,202,063$ 174,478,942$ 656,478$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND NET POSITION
CURRENT LIABILITIES
Salaries payable 66,789$ 90,144$ 156,933$ -$
Accounts payable 713,015 877,798 1,590,813 8,040
Contracts payable - 15,219 15,219 -
Accrued interest payable - 124,714 124,714 -
Deposits payable 19,732 12,200 31,932 -
Accrued compensated absences 81,713 143,664 225,377 -
Total OPEB Liability due within one year 4,711 3,224 7,935
Long-term debt - current 230,000 565,000 795,000 -
Total current liabilities 1,115,960 1,831,963 2,947,923 8,040
NONCURRENT LIABILITIES
Accrued compensated absences 84,039 135,885 219,924 -
Net pension liability - PERA 883,349 1,320,938 2,204,287 -
Total OPEB Liability 73,306 110,802 184,108 -
Long-term debt 1,810,000 8,311,566 10,121,566 -
Total noncurrent liabilities 2,850,694 9,879,191 12,729,885 -
Total liabilities 3,966,654 11,711,154 15,677,808 8,040
DEFERRED INFLOWS OF RESOURCES
Pension plan deferments - PERA 158,970 237,719 396,689 -
OPEB related deferments 7,165 10,473 17,638 -
Total deferred inflows of resources 166,135 248,192 414,327 -
NET POSITION
Net investment in capital assets 3,160,024 140,341,584 143,501,608 -
Unrestricted 2,984,066 11,901,133 14,885,199 648,438
Total Net Position 6,144,090 152,242,717 158,386,807 648,438
Total Liabilities, Deferred Inflows of
Resources, and Net Position 10,276,879$ 164,202,063$ 174,478,942 656,478$
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:257,110
Net position of business-type activities 158,643,917$
Enterprise Funds
Business-type Activities -
CITY OF LAKEVILLE
STATEMENT OF NET REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
(41)
Governmental
Activities -
Internal Service
Liquor Utility Total Funds
SALES AND COST OF SALES
Sales 16,288,986$ -$ 16,288,986$ -$
Cost of sales 12,229,562 - 12,229,562 -
Gross profit 4,059,424 - 4,059,424 -
OPERATING REVENUE
User Charges - 13,943,364 13,943,364 553,142
Other - 272,588 272,588 17,169
Total operating revenue - 14,215,952 14,215,952 570,311
OPERATING EXPENSES
Personnel services 1,650,487 2,487,253 4,137,740 -
Commodities 75,090 444,868 519,958 -
Other charges and services 1,239,427 4,319,424 5,558,851 491,083
Disposal charges - 4,174,432 4,174,432 -
Depreciation 87,443 4,782,286 4,869,729 -
Total operating expenses 3,052,447 16,208,263 19,260,710 491,083
OPERATING INCOME (LOSS)1,006,977 (1,992,311) (985,334) 79,228
NONOPERATING REVENUE (EXPENSES)
Intergovernmental - grants 6,453 643,919 650,372 -
Interest Income 63,138 205,623 268,761 848
Change in Fair Value of Investments 45,462 145,428 190,890 611
Interest, fiscal charges, bond premium (net) - (209,709) (209,709) -
Disposal of capital assets - (156) (156) -
Total Nonoperating Revenue (Expenses) 115,053 785,105 900,158 1,459
INCOME (LOSS) BEFORE CONTRIBUTIONS
AND TRANSFERS 1,122,030 (1,207,206) (85,176) 80,687
Contributed capital from developers - 7,240,758 7,240,758 -
Contributed capital from governmental activities - 927,970 927,970 -
Transfers from other funds - 8,824 8,824 -
Transfers to other funds (1,065,062) (1,033,856) (2,098,918) (50,000)
Total Contributions and Transfers (1,065,062) 7,143,696 6,078,634 (50,000)
CHANGE IN NET POSITION 56,968 5,936,490 5,993,458 30,687
NET POSITION
Beginning of Year 6,087,122 146,306,227 617,751
Prior Period Restatement for Implementation
of GASB Standard (See Note 24) - - -
Beginning of Year, as Restated 6,087,122 146,306,227 617,751
End of Year 6,144,090$ 152,242,717$ 648,438$
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: 46,488
Change in net Position of business-type activities 6,039,946$
Enterprise Funds
Business-type Activities -
CITY OF LAKEVILLE
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
YEAR ENDED DECEMBER 31, 2019
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 16,271,058$ 13,523,342$ 29,794,400$ 578,775$
Cash received from general service charges - - - (491,621)
Cash paid to suppliers (13,804,310) (8,457,495) (22,261,805) -
Cash paid to and for employees (1,602,304) (2,341,529) (3,943,833) -
Net Cash Provided (Used) by Operating Activities 864,444 2,724,318 3,588,762 87,154
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Intergovernmental - grant 6,453 643,919 650,372 -
Transfers from other funds - 8,824 8,824 -
Transfers to other funds (1,065,062) (1,033,856) (2,098,918) (50,000)
Net Cash Provided (Used) by Noncapital
Financing Activities (1,058,609) (381,113) (1,439,722) (50,000)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition and construction of capital assets (62,830) (1,479,015) (1,541,845) -
Proceeds from sale of capital assets - (156) (156) -
Proceeds from Issuance of Capital Debt - 855,543 855,543
Interest and fiscal charges - (275,788) (275,788) -
Principal maturities (215,000) (480,000) (695,000) -
Net Cash Provided (Used) by Capital and
Related Financing Activities (277,830) (1,379,416) (1,657,246) -
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income received 105,721 341,840 447,561 1,420
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (366,274) 1,305,629 939,355 38,574
Cash and Cash Equivalents - Beginning of the Year 3,582,623 9,085,379 12,668,002 613,119
CASH AND CASH EQUIVALENTS - END OF THE YEAR 3,216,349$ 10,391,008$ 13,607,357$ 651,693$
RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED (USED) BY OPERATING ACTIVITIES
Operating Income (Loss) 1,006,977$ (1,992,311)$ (985,334)$ 79,228$
Adjustments:
Depreciation expense 87,443 4,782,286 4,869,729 -
(Increase) decrease in assets and deferred outflows
Accounts receivable (2,629) (689,510) (692,139) 8,464
Inventory (95,565) (67,298) (162,863) -
Pension-related deferred outflows 88,778 115,184 203,962 -
Increase (decrease) in liabilities and deferred inflows
Salaries payable 6,870 10,006 16,876 -
Accounts payable (164,666) 548,527 383,861 (538)
Deposits payable (15,299) (3,100) (18,399) -
Accrued compensated absences 26,448 34,630 61,078 -
Net pension liability and related deferred inflows (90,839) (28,732) (119,571) -
Net OPEB obligation 16,926 14,636 31,562 -
Total adjustments
Net Cash Provided (Used) by Operating Activities 864,444$ 2,724,318$ 3,588,762$ 87,154$
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: -$ 8,168,728$ 8,168,728$ -$
Enterprise Funds
Business-type Activities -
CITY OF LAKEVILLE
STATEMENT OF FIDUCIARY NET POSITION
CUSTODIAL FUND
DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
(43)
Custodial
Fund
ASSETS
Cash and investments 97,237$
Accounts receivable 768
Total assets 98,005
LIABILITIES
Accounts payable 60,130
NET POSITION
Restricted for:
Individuals, organizations, and other governments 37,891$
CITY OF LAKEVILLE
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
CUSTODIAL FUND
DECEMBER 31, 2019
See accompanying Notes to Basic Financial Statements.
(44)
Custodial
Fund
ADDITIONS
Contributions 32,609$
DEDUCTIONS
Payments to vendors 15,700
NET INCREASE (DECREASE) IN FIDUCIARY NET POSITION 16,909
Fiduciary net position - beginning of year 20,982
FIDUCIARY NET POSITION - END OF YEAR 37,891$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(45)
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, 2019
(46)
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, 2019. 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, 2019
(47)
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 a custodial 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(48)
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.
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, workers
compensation, and casualty insurance costs which are charged to other departments
of the City.
Custodial fund – The custodial fund is used to record the receipt and remittance of
monies held by the City on behalf of other legally separate entities.
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, 2019
(49)
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 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
custodial 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, 2019
(50)
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 custodial 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 July and December. 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, 2019
(51)
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, 2019, the special assessment delinquent
receivable was $137,056 in the governmental funds and $27,123 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 an
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, 2019
(52)
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, sewer and street light bonds of 2016-2019.
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, 2019
(53)
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 three 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 and OPEB, 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. The third item relates to deferred gains and losses on bond refundings that are
amortized over the life of the related bonds.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(54)
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, 2019
(55)
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, 2019, the unrestricted fund
balance of the General Fund was 50.2% of the subsequent year’s budgeted
expenditures. The City has opted to reduce fund balance with the 2020 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, 2019
(56)
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 Position 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, 2019
(57)
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, 2019
(58)
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, 2019 consist of the following:
Cash on hand 13,650$
Deposits (751,752)
Investments 114,162,537
Total cash and investments 113,424,435$
The City’s cash and investments as of December 31, 2019 are presented in the financial
statements as follows:
Statement of Net Position
Cash and investments 112,710,793$
Temporarily restricted investments held by trustee 616,405
Statement of Fiduciary Net Position
Cash and investments 97,237
Total cash and investments 113,424,435$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(59)
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 ($751,752) while the balance
on the bank records was $-0-. At December 31, 2019, all deposits were fully covered by
federal depository insurance, surety bonds, or by collateral held by the City’s agent in
the City’s name.
C. Investments
The City’s investments as of December 31, 2019 are as follows:
Investment Type Rating Agency Total Value Less than 1 1 - 5 6 - 10
Money market funds
Minnesota Municipal (4M)N/R N/A 15,087,081$ -$ -$ -$
First American Treasury Obligation AAAm S&P 616,406 - - -
Certificates of deposit N/R N/A 31,337,051 9,108,375 22,228,676 -
U.S. treasury securities Aaa N/A 749,925 - 749,925 -
U.S. government agencies AA+ S&P 53,755,470 8,747,923 42,172,952 2,834,595
Municipal Bonds Aaa Moody's 300,060 300,060 - -
Municipal Bonds AAA S&P 590,300 - 590,300 -
Municipal Bonds Aa1 Moody's 3,726,013 2,103,516 859,504 762,993
Municipal Bonds AA+ S&P 1,033,050 - 1,033,050 -
Municipal Bonds Aa2 Moody's 3,517,990 507,115 3,010,875 -
Municipal Bonds AA S&P 250,033 250,033 - -
Municipal Bonds Aa3 Moody's 500,550 500,550 - -
Municipal Bonds AA- S&P 1,620,353 357,294 1,263,059 -
Municipal Bonds A1 Moody's 575,125 465,000 110,125 -
Total investments 114,162,537$ 22,842,996$ 72,018,466$ 3,597,588$
N/R - Not rated N/A - Not applicable
Credit Risk
Interest Risk -
Maturity Duration in Years
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(60)
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, 2019, the City’s investment portfolio includes the following securities
of single issuers exceeding 5%:
Federal Farm Credit Bank 20.95%
Federal Home Loan Bank 6.20%
Federal Home Loan Mortgage 11.44%
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, 2019
(61)
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, 2019
(62)
NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED)
E. Fair Value Measurements (Continued)
Financial assets and liabilities recorded on the statement of net 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 616,406$ -$ -$ 616,406$
U.S. treasury securities 749,925 - - 749,925
U.S. government securities - 53,755,470 - 53,755,470
Certificates of deposit - 31,337,051 - 31,337,051
Municipal bonds - 12,616,604 - 12,616,604
1,366,331$ 97,709,125$ -$ 99,075,456
Investments measured at amortized cost 15,087,081
Total 114,162,537$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(63)
NOTE 3 CAPITAL ASSETS
A summary of changes in governmental capital assets during the year ended December 31,
2019 are as follows:
Beginning Ending
Balance Additions Deletions Balance
Governmental Activities:
Capital Assets, Not Being Depreciated:
Land 28,889,653$ 1,238,564$ -$ 30,128,217$
Historical treasures 100,000 - - 100,000
Construction in progress 951,736 1,446,365 (485,346) 1,912,755
Total Capital Assets, Not Being Depreciated 29,941,389 2,684,929 (485,346) 32,140,972
Capital Assets, Being Depreciated:
Building and improvements 55,143,526 - (92,467) 55,051,059
Machinery and equipment 24,935,626 1,321,937 (489,949) 25,767,614
Other improvements 9,760,538 467,930 (83,585) 10,144,883
Infrastructure
Streets 176,102,512 12,846,336 (3,215,240) 185,733,608
Storm Sewer 83,516,837 7,800,454 (104,174) 91,213,117
Parks 29,021,159 1,309,710 - 30,330,869
Total Capital Assets, Being Depreciated 378,480,198 23,746,367 (3,985,415) 398,241,150
Accumulated Depreciation for:
Buildings and improvements (17,322,697) (1,180,989) 22,621 (18,481,065)
Machinery and equipment (14,313,425) (2,035,345) 425,562 (15,923,208)
Other improvements (3,837,147) (484,493) 83,585 (4,238,055)
Infrastructure
Streets (80,970,525) (7,263,199) 2,957,278 (85,276,446)
Storm Sewer (21,456,416) (2,055,241) 73,192 (23,438,465)
Parks (14,586,248) (1,106,084) - (15,692,332)
Total Accumulated Depreciation (152,486,458) (14,125,351) 3,562,238 (163,049,571)
Total Capital Assets, Being Depreciated, Net 225,993,740 9,621,016 (423,177) 235,191,579
Governmental Activities Capital Assets, Net 255,935,129$ 12,305,945$ (908,523)$ 267,332,551$
Depreciation expense was charged to governmental functions as follows:
Governmental Activities:
General government 413,014$
Public safety 1,151,871
Public works 10,225,494
Parks and recreation 2,334,971
Total depreciation expense 14,125,350$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(64)
NOTE 3 CAPITAL ASSETS (CONTINUED)
A summary of changes in business-type capital assets during the year ended December 31,
2019 are as follows:
Beginning Ending
Balance Additions Deletions Balance
Business-Type Activities:
Capital Assets, Not Being Depreciated:
Land 3,627,767$ -$ -$ 3,627,767$
Construction in Progress 13,842 30,203 (13,842) 30,203
Total Capital Assets, Not Being Depreciated 3,641,609 30,203 (13,842) 3,657,970
Capital Assets, Being Depreciated:
Buildings and improvements 28,241,679 99,481 - 28,341,160
Machinery and equipment 3,635,521 50,604 (10,177) 3,675,948
Infrastructure
Environmental Resources - 63,142 - 63,142
Water 109,695,944 5,798,671 (36,398) 115,458,217
Sanitary Sewer 74,220,172 3,683,222 (4,339) 77,899,055
Total Capital Assets, Being Depreciated 215,793,316 9,695,120 (50,914) 225,437,522
Accumulated Depreciation for:
Buildings and improvements (9,005,627) (604,928) - (9,610,555)
Machinery and equipment (2,097,335) (354,214) 10,177 (2,441,372)
Infrastructure
Environmental Resources - (1,233) - (1,233)
Water (32,707,127) (2,353,203) 35,490 (35,024,840)
Sanitary Sewer (26,407,195) (1,556,151) 4,339 (27,959,007)
Total Accumulated Depreciation (70,217,284) (4,869,729) 50,006 (75,037,007)
Total Capital Assets, Being Depreciated, Net 145,576,032 4,825,391 (908) 150,400,515
Business-Type Activities Capital Assets, Net 149,217,641$ 4,855,594$ (14,750)$ 154,058,485$
Depreciation expense was charged to governmental functions as follows:
Business-Type Activities:
Liquor fund 87,443$
Utility fund 4,782,286
Total Depreciation Expense, Business-Type Activities 4,869,729$
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
$1,886,411 has been depreciated to date. These amounts are recorded in the City’s capital
assets. The final payment related to this agreement was made during 2018 and no further
payments were made during 2019.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(65)
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 2019 lease revenue totaled $292,100.
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 for January through June and then $12,550
per month thereafter, 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 and was subsequently renewed for three additional years expiring
June 30, 2022. The fiscal year 2019 lease expense totaled $146,174. The HRA owns the
land and building of the Galaxie store.
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 ending April 30, 2039. The fiscal year
2019 lease expense totaled $184,395. The following is a schedule by years of future
minimum payments required under the lease as of December 31, 2019:
Year Amount
2020 184,395$
2021 184,395
2022 184,395
2023 184,395
2024 197,303
2025-2029 1,000,294
2030-2034 1,070,170
2035-2039 1,144,996
Total 4,150,343$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(66)
NOTE 4 OPERATING LEASES (CONTINUED)
Operating Lease – Office Equipment
The City leased office equipment on March 18, 2019 at a monthly lease cost of $3,558 for
60 months. The fiscal year 2019 lease expenditures totaled $28,464. The following is a
schedule of future minimum payments required under the lease as of December 31, 2019:
Year Amount
2020 42,696$
2021 42,696
2022 42,696
2023 42,696
2024 14,232
Total 185,016$
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 final debt payment was made on August 1, 2019
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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(67)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A. Components of Long-Term Debt (Continued)
Revenue Bonds (Continued)
Governmental Activities (Continued)
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 $1,735,936 has been depreciated to date. These amounts are recorded in
the HRA’s capital assets.
Business-type Activities
Future revenue pledged for the payment of long-term debt is as follows:
Remaining Pledged
Principal and Principal and Revenue
Bond Issue Use of Proceeds Type Term of Pledge Interest Interest Paid Received
Recreation Facility Ice arena Arena Revenues 2019 -$ 179,180$ -$
Ice Arena Lease Revenue Additional ice arena Lease Revenues 2019 - 2032 7,685,050 579,600 292,100
Utility - Water Revenue Water infrastructure Utility user fees 2019 - 2034 9,048,358 637,956 4,496,539
Utility - Sewer Revenue Sewer infrastructure Utility user fees 2019 - 2025 436,350 71,575 6,795,837
Water Connection Revenue Water infrastructure Connection charges 2019 - 2034 8,934,587 614,325 3,517,166
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 2019, the City made no payments on this loan. As of December 31, 2019,
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 2019. 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 and final payment is due in 2020.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(68)
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
$612,777 at December 31 2019. 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 69. 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 Bonds, Series 2019 A
On July 24, 2019, the City issued $6,295,000 in General Obligation Street
Reconstruction and Improvement Bonds, Series 2019 A. The proceeds of this issue will
be used for street reconstruction and improvement projects. They carry interest that will
vary from 4.0% to 5.0% with a final maturity of February 1, 2030. The debt service of
these bonds will be made from special assessments and property tax levies. They carry
a call provision on February 1, 2028.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(69)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A. Components of Long-Term Debt (Continued)
The City had the following long-term liabilities outstanding at December 31, 2019:
Description Maturities Interest Rates Amount
PRIMARY GOVERNMENT
Governmental Activities:
General Obligation Bonds Payable:
Capital improvement bonds 2019 - 2032 1.75% - 5.00% 20,455,000$
Street reconstruction bonds 2019 - 2030 1.75% - 5.00% 11,655,000
G.O. Improvement bonds 2019 - 2038 1.40% - 5.00% 59,155,000
Tax increment bonds 2022 4.00% - 4.20% 770,000
State-aid street revenue bonds 2019 - 2036 1.25% - 5.00% 4,685,000
G.O. water revenue bonds 2034 2.00% - 5.00% 7,230,000
Total General Obligation Bonds 103,950,000
HRA lease revenue bonds 6,080,000
Total Governmental Activities 110,030,000
Business-Type Activities:
Revenue Bonds
Water revenue bonds 2034 1.50% - 5.00% 7,365,000
Sewer revenue bonds 2025 1.50% - 5.00% 385,000
Street light revenue bonds 305,000
Total Revenue Bonds 8,055,000
Capital Lease 2027 2.00% - 3.00% 2,040,000
Total Business-Type Activities 10,095,000
Total long-term bonded debt outstanding 120,125,000$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(70)
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 71), are as follows:
Year Ending
December 31, Principal Interest Principal Interest Total
2020 8,715,000$ 3,871,091$ 565,000$ 284,513$ 13,435,604$
2021 9,160,000 3,534,045 655,000 261,038 13,610,083
2022 9,110,000 3,193,464 670,000 242,362 13,215,826
2023 9,140,000 2,832,805 685,000 215,738 12,873,543
2024 9,005,000 2,467,530 715,000 181,237 12,368,767
2025-2029 40,530,000 7,417,091 3,025,000 484,238 51,456,329
2030-2034 21,050,000 1,999,816 1,740,000 122,456 24,912,272
2035-2039 3,320,000 142,125 - - 3,462,125
Total 110,030,000$ 25,457,967$ 8,055,000$ 1,791,582$ 145,334,549$
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, 2019 is
$2,981,687. 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 severance 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, 2019 is $445,301. In the event of employee separation from the City,
the responsible enterprise fund will pay the accumulated severance portion. These
amounts are recorded as a liability and as an expense when earned in the
responsible funds.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(71)
NOTE 5 LONG-TERM DEBT (CONTINUED)
A. Components of Long-Term Debt (Continued)
Unamortized Bond Premium and Discount
Unamortized bond premium and bond discount included within noncurrent liabilities are
as follows:
Governmental Business-Type
Unamortized bond premium 8,302,665$ 821,566$
Liquor Capital Lease
The capital lease reported in business-type activities on page 69 has the following
annual debt service requirements:
Year Ending
December 31, Principal Interest
2020 230,000$ 54,200$
2021 240,000 49,500
2022 245,000 43,425
2023 250,000 36,000
2024 260,000 28,350
2025-2027 815,000 37,125
Total 2,040,000$ 248,600$
Liquor Capital Lease
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(72)
NOTE 5 LONG-TERM DEBT (CONTINUED)
B. Changes in Long-Term Debt
Long-term liability activity for the year ended December 31, 2019 was as follows:
Beginning End of Due Within
PRIMARY GOVERNMENT of Year Additions Deletions Year One Year
Governmental Activities
G.O. Improvement bonds 34,555,000$ -$ (2,445,000)$ 32,110,000$ 2,575,000$
Other bonds 77,100,000 6,295,000 (5,475,000) 77,920,000 6,140,000
Total bonds 111,655,000 6,295,000 (7,920,000) 110,030,000 8,715,000
County note payable 2,000,000 - (1,000,000) 1,000,000 1,000,000
Metropolitan Council loans 1,897,014 - - 1,897,014 -
Total long-term debt 115,552,014 6,295,000 (8,920,000) 112,927,014 9,715,000
Accrued compensated absences 2,734,777 1,698,699 (1,451,789) 2,981,687 1,451,789
Unamortized bond premium/discount 7,916,538 1,065,624 (679,497) 8,302,665 -
Total Governmental Activities 126,203,329 9,059,323 (11,051,286) 124,211,366 11,166,789
Business-Type Activities:
Utility - water revenue bonds 7,030,000 730,000 (395,000) 7,365,000 470,000
Utility - sewer revenue bonds 440,000 - (55,000) 385,000 60,000
Utility - street light revenue bonds 335,000 - (30,000) 305,000 35,000
Liquor - capital leases 2,255,000 - (215,000) 2,040,000 230,000
Accrued compensated absences 384,223 282,883 (221,805) 445,301 225,377
Unamortized Bond Premiums 766,878 125,543 (70,855) 821,566 -
Total Business-Type Activities 11,211,101 1,138,426 (987,660) 11,361,867 1,020,377
Total Primary Government 137,414,430$ 10,197,749$ (12,038,946)$ 135,573,233$ 12,187,166$
NOTE 6 NET INVESTMENT IN CAPITAL ASSETS
Net investment in capital assets as of December 31, 2019 is calculated as follows:
Governmental Business-type Total
Capital assets, net of depreciation 267,332,551$ 154,058,485$ 421,391,036$
Less applicable:
Bonds payable (99,345,000) (7,750,000) (107,095,000)
Capital lease payable - (2,040,000) (2,040,000)
Loan payable (1,897,014) - (1,897,014)
Note payable (1,000,000) - (1,000,000)
Unamortized bond premium / discount (net)(7,559,496) (766,877) (8,326,373)
Unamortized deferred charge on refunding 103,849 - 103,849
Unamortized deferred gain on refunding (92,266) - (92,266)
Unspent bond proceeds 1,490,530 - 1,490,530
Contracts Payable (4,564,362) - (4,564,362)
Net Investment in capital assets 154,468,792$ 143,501,608$ 297,970,400$
The City has $10,990,000 in bonds and $797,858 in unamortized bond premiums that are
not included in the calculation above as they are not capital in nature.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(73)
NOTE 7 RESTRICTED NET POSITION
The government-wide Statement of Net Position reports restricted amounts in the net
position section. These amounts represent assets and deferred outflows (less any related
liabilities and deferred inflows) that have imposed restrictions placed on them by parties
outside the City government. Net position restricted for debt service represents assets
pledged by bond covenant to the repayment of City bond obligations. The government-wide
restricted net position is as follows:
Governmental Business-type
Activities Activities Total
Restricted Net Position
Cash and investments 35,116,374$ -$ 35,116,374$
Temporarily restricted
Investments held by trustee 616,405 - 616,405
Net pension asset 4,112,787 - 4,112,787
Receivables 18,308,160 - 18,308,160
Less related liabilities (1,797,292) - (1,797,292)
Total restricted net position 56,356,434$ -$ 56,356,434$
NOTE 8 CONSTRUCTION COMMITMENTS
The City has outstanding construction and build projects as of December 31, 2019. 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
VonBank Lawn Care 52,549$ 56,126$
Law Services 80,049 85,046
Police Department - cameras 134,272 537,088
Misc. street and trail repairs 1,030,612 55,477
Storm Sewer projects - 48,342
CR50 project (185th St to Dodd Blvd)4,526,148 5,225,625
2018 street reconstruction 239,378 322,557
2019 street reconstruction 8,981,047 161,558
Holyoke Water Tower 3,300,661 173,982
Sanitary Sewer Projects - 55,614
Total governmental 20,154,887$ 6,721,415$
Projects Remaining
Business-Type Activities Spent-to-Date Commitment
Right of way - tree and stump removal -$ 22,828$
Well rehabilitation - 149,750
Total business-type -$ 172,578$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(74)
NOTE 9 FUND BALANCES
A summary of the City’s governmental fund balance classifications at December 31, 2019 is
as follows:
G.O. Municipal Improvement
General Fund Improvement State-aid Construction Nonmajor Total
Nonspendable
Inventory 312,695$ -$ -$ -$ -$ 312,695$
Prepaid Items 6,600 - - - - 6,600
Advances to Other Funds 428,936 - - - - 428,936
Total nonspendable 748,231 - - - - 748,231
Restricted for:
Forfeitures 175,590 - - - - 175,590
Debt Service - 12,656,863 - - 8,994,213 21,651,076
Public improvements - - 2,042,188 6,337,742 - 8,379,930
Public safety equipment - - - - 20,566 20,566
Park development - - - - 6,094,432 6,094,432
Tax increment - - - - 57,383 57,383
Public communications - - - - 87,659 87,659
Arenas Reserve - - - - 10,090 10,090
Special Service District - - - - 32,529 32,529
Total Restricted 175,590 12,656,863 2,042,188 6,337,742 15,296,872 36,509,255
Committed for:
Compensated leave 100,000 - - - - 100,000
Public improvements - - - 377,232 - 377,232
Public buildings - - - - 1,233,811 1,233,811
Pavement management - - - - 1,786,069 1,786,069
Storm water infrastructure - - - - 8,982,575 8,982,575
Water trunk system - - - - 10,597,425 10,597,425
Sanitary sewer trunk system - - - - 9,320,341 9,320,341
Trail improvement - - - - 704,620 704,620
Park improvement - - - - 328,176 328,176
Capital acquisitions - - - - 1,605,375 1,605,375
Technology equipment - - - - 156,867 156,867
Public communications - - - - 966,003 966,003
Economic development - - - - 13,395 13,395
Total Committed 100,000 - - 377,232 35,694,657 36,171,889
Assigned for:
Subsequent year budget 749,675 - - - - 749,675
Unassigned 15,429,752 - - - (428,702) 15,001,050
Total 17,203,248$ 12,656,863$ 2,042,188$ 6,714,974$ 50,562,827$ 89,180,100$
Debt Service Capital Projects
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(75)
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 5,298,413$ -$
Storm sewer 6,175,985 -
Parks 979,096 -
Water - 3,979,617
Sanitary sewer - 3,261,141
Total 12,453,494$ 7,240,758$
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 914,056$
Sanitary sewer 13,914
Total 927,970$
NOTE 11 DEFICIT FUND BALANCES
The capital projects tax abatement fund had a deficit fund balance of ($428,702) as of
December 31, 2019 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, 2019
(76)
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, 2019, the capital
projects fund tax abatement fund had a payable of $428,936 to the general fund to finance a
long-term cash deficit.
NOTE 13 INTERFUND TRANSFERS
The City provides financing for a variety of operations and capital projects utilizing resources
from certain funds; interfund transfers used for these various activities during the current
fiscal year are as follows:
n
Debt Service Nonmajor
General G.O Muni Improv. Govntl.
Transfers From Fund Improvement State-aid Constr. Funds Utility Total
General Fund -$ -$ -$ -$ 1,225,000$ -$ 1,225,000$
G.O. Improvement Bonds - - - 23,351 - - 23,351
Nonmajor Govntl. Funds 80,866 - 238,540 790,341 617,108 5,399 1,732,254
Total 80,866 - 238,540 813,692 1,842,108 5,399 2,980,605
Enterprise - Liquor 164,875 - - - 896,762 3,425 1,065,062
Enterprise - Utility 477,043 525,813 - - 31,000 - 1,033,856
Internal Service Fund 50,000 - - - - - 50,000
Total 772,784$ 525,813$ 238,540$ 813,692$ 2,769,870$ 8,824$ 5,129,523
(1) (2) (3) (4) (5)(6) (7)
Less: Utility fund (8,824)
Total governmental funds 5,120,699$
Enterprise
Capital
Projects
The following are explanations to interfund transfers sub-notes 1 through 9.
Abbreviation key:
(SR) special revenue fund, (DS) debt service fund, (CP) capital projects fund,
(E) enterprise fund, (IS) internal service fund.
(1) The transfers to the general fund were provided mainly as overhead and maintenance
costs from the following funds:
Fund Amount
Communications (SR) 80,866$ Public communications and budgeted transfers
Liquor (Ent) 164,875 Budgeted transfers
Utility (Ent) 477,043 Budgeted transfers
Municipal Reserve (IS) 50,000 Budgeted transfers
Total 772,784$
Description
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(77)
NOTE 13 INTERFUND TRANSFERS (CONTINUED)
(2) The total transfer to the debt service G.O. improvement fund was provided by the
enterprise utility fund ($525,813) related to the City improvements projects whereby user
fees are pledged towards the improvement bonds debt service requirements.
(3) 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 ($238,540).
(4) The total transfer to the capital projects fund improvement construction of ($813,692)
was provided by the following governmental funds to finance various road construction
projects:
From: Amount
G.O. Improvement Bonds (DS) 23,351$
Park Dedication (CP) 108,426
Storm Water Infrastructure (CP) 553,102
Water (CP) 128,813
Total improv. const. 813,692$
(5) The total transfer to nonmajor governmental funds ($1,842,108) was provided by the
following governmental funds:
From: Amount
General fund 155,000$ Technology (CP) for future improvements
General fund 150,000 Park Improvement (CP) for future park improvements identified in CIP
General fund 920,000 Equipment (CP) for future equipment acquisitions
Water (CP) 617,108 Water revenue (DS) for debt service requirements
Total other govt. 1,842,108$
Description
(6) The total transfer to the nonmajor governmental funds was provided by the enterprise
liquor fund ($896,762) and the enterprise utility fund ($31,000) to finance various
equipment purchases.
(7) The total transfer to the enterprise utility fund was provided by the storm water
infrastructure capital projects fund ($5,399) and the enterprise liquor fund ($3,425) for
customer service billing overhead costs.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(78)
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, 2019
(79)
NOTE 15 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
A. Plan Description (Continued)
Employees covered by benefit terms. At December 31, 2019, the following employees
were covered by the benefit terms:
Inactive Plan Members or Beneficiaries Currently
Receiving Benefit Payments 7
Inactive Plan Members Entitled to but not yet
Receiving Benefit Payments -
Active Plan Members 184
Total 191
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 2019, the City contributed $13,009 in subsidized payments and implicit
payments of $37,860 to the plan. As of December 31, 2019, there were 7 retirees
receiving health benefits from the City’s health plans.
C. Total OPEB Liability
The City’s Total OPEB liability was measured as of January 1, 2019 and was determined
by an actuarial valuation as of January 1, 2019.
Actuarial Assumptions
The total OPEB liability in the January 1, 2019 actuarial valuation was determined using
the following actuarial assumptions, applied to all periods included in the measurement,
unless otherwise specified:
Valuation date:
Measurement date:
Methods and assumptions used to determine the contribution rates:
Actuarial cost method Entry age
Amortization method Level percentage of payroll, closed
Amortization period Average of expected remaining service on a closed
basis for differences between expected and actual
experience and assumption changes.
Inflation 3.00%
Healthcare cost trend rate 6.25% for 2018, decreasing to 5.00% over 5 years
Salary increases 3.00%
Discount rate 3.60% (20-year municipal bond yield)
Mortality RP-2014 White Collar Mortality Tables with MP-2019
Generational Improvement Scale (with Blue Collar
adjustment for Police and Fire Personnel)
January 1, 2019
January 1, 2019
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(80)
NOTE 15 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
C. Total OPEB Liability (Continued)
Discount Rate
The City’s OPEB plan is not funded by a trust, and therefore, the City’s uses the 20-year
municipal bond index rate to develop its long-term rate of return and discount rate. This
rate was 3.60% in the current actuarial valuation, which was updated from the 3.30%
used in the prior actuarial valuation.
D. Changes in the Total OPEB Liability
The details of the changes in the City’s total OPEB Liability were as follows for 2019:
Increase
(Decrease)
Total OPEB
Liability (a)
Balances at 12/31/18 1,061,792$
Changes for the Year:
Service Cost 89,732
Interest 48,182
Differences Between Expected and
Actual Experience 87,715
Contributions - Employer -
Net Investment Income -
Benefit Payments (50,869)
Changes in Assumptions -
Net Changes 174,760
Balances at 12/31/19 1,236,552$
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 increased from 3.30% to 3.60%.
The inflation rate used was increased from 2.50% to 3.00%
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(81)
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 (2.60%) or 1-percentage-point higher (4.60%) than the current
discount rate:
1% Decrease Discount Rate 1% Increase
(2.60)% (3.60)% (4.60)%
Total OPEB Liability (Asset) 1,329,274$ 1,236,552$ 1,147,955$
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) 1,083,633$ 1,236,552$ 1,416,362$
F. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to OPEB
For the year ended December 31, 2019, the City recognized OPEB expense of
$102,921. At December 31, 2019, the City reported deferred outflows of resources and
deferred inflows of resources related to OPEB from the following sources:
Deferred Deferred
Outflows of Inflows of
Resources Resources
Differences Between Expected and Actual Experience 174,977$ 113,570$
Contributions After Measurement Date and Before
the Reporting Date 51,097 -
Total 226,074$ 113,570$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(82)
NOTE 15 OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)
F. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of
Resources Related to OPEB (Continued)
A total of $51,097 reported as deferred outflows of resources related to OPEB resulting
from City contributions subsequent to the measurement date will be recognized as a
reduction of the total OPEB liability in the year ended December 31, 2020. Other
amounts reported as deferred outflows and inflows of resources related to
postemployment benefits will be recognized in OPEB expense as follows:
Year Ending December 31,Amount
2020 7,694$
2021 7,694
2022 7,694
2023 7,694
2024 7,694
Thereafter 22,937
NOTE 16 RISK FINANCING AND RELATED INSURANCE ISSUES
The City is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters.
The City purchased the following insurance coverage through the League of Minnesota
Cities Insurance Trust (LMCIT), a public entity risk pool currently operating as a common
risk management and insurance program for Minnesota cities: general liability, excess
liability, workers compensation, property, automobile, marine, crime, employee dishonesty,
boiler, petro fund, and open meeting law.
The City pays an annual premium to the LMCIT for its insurance coverage. The LMCIT is
self-sustaining through member premiums and will reinsure through commercial companies
for claims in excess of reserved amounts for each insured event. The LMCIT allows for the
pool to make additional assessments to make the pool self-sustaining. Current state statutes
(Minnesota Statutes Subd. 466.04) provide limits of liability for the City.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(83)
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 Plan. General Employees Plan members belong to the Coordinated Plan.
Coordinated Plan members are covered by Social Security.
2. Public Employees Police and Fire Fund (PEPFF)
The PEPFF, originally established for police officers and firefighters not covered by a
local relief association, now covers all police officers and firefighters hired since
1980. Effective July 1, 1999, the PEPFF also covers police officers and firefighters
belonging to a local relief association that elected to merge with and transfer assets
and administration to PERA.
B. Benefits Provided
PERA provides retirement, disability, and death benefits. Benefit provisions are
established by state statute and can only be modified by the state Legislature. 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
percent of average salary for each of the first 10 years of service and 1.7 percent of
average salary for each additional year. Under Method 2, the accrual rate for
Coordinated members is 1.7 percent 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.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(84)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
B. Benefits Provided (Continued)
1. GERF Benefits (Continued)
Annuities, disability benefits, and survivor benefits are increased effective every
January 1. Beginning January 1, 2019, the postretirement increase will be equal to
50 percent of the cost-of-living adjustment (COLA) announced by the SSA, with a
minimum increase of at least 1 percent and a maximum of 1.5 percent. Recipients
that have been receiving the annuity or benefit for at least a full year as of the June
30 before the effective date of the increase will receive the full increase. For
recipients receiving the annuity or benefit for at least one month but less than a full
year as of the June 30 before the effective date of the increase will receive a reduced
prorated increase. For members retiring on January 1, 2024, or later, the increase
will be delayed until normal retirement age (age 65 if hired prior to July 1, 1989, or
age 66 for individuals hired on or after July 1, 1989). Members retiring under Rule of
90 are exempt from the delay to normal retirement.
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.
Annuities, disability benefits, and survivor benefits are increased effective every
January 1. Beginning January 1, 2019, the postretirement increase will be fixed at 1
percent. Recipients that have been receiving the annuity or benefit for at least 36
months as of the June 30 before the effective date of the increase will receive the full
increase. For recipients receiving the annuity or benefit for at least 25 months but
less than 36 months as of the June 30 before the effective date of the increase will
receive a reduced prorated increase.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(85)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
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, 2019 were $896,894, which was equal to the required
contribution as set by state statute.
2. PEPFF Contributions
Police and Fire member’s contribution rates increased from 10.8 percent of pay to
11.3 percent and employer rates increased from 16.2 percent to 16.95 percent on
January 1, 2019. The City’s contributions to the Police and Fire Fund for the year
ended December 31, 2019, were $1,066,319. The City’s contributions were equal to
the required contributions as set by state statute.
D. Pension Costs
1. GERF Pension Costs
At December 31, 2019, the City reported a liability of $9,028,491 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, 2019. The state of Minnesota’s
proportionate share of the net pension liability associated with the City totaled
$280,654. The net pension liability was measured as of June 30, 2019, and the total
pension liability used to calculate the net pension liability was determined by an
actuarial valuation as of that date. The City’s proportion of the net pension liability
was based on its respective contributions received by PERA during the
measurement period for employer payroll paid dates from July 1, 2018, through
June 30, 2019, relative to the total employer contributions received from all of
PERA’s participating employers.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(86)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
D. Pension Costs (Continued)
1. GERF Pension Costs (Continued)
At June 30, 2019, the City’s combined proportion was .1633%, an increase of
.0001% from the June 30, 2018 measurement date.
City's Proportionate Share of the Net Pension Liability 9,028,491$
State of Minnesota's Proportionate Share of the Net
Pension Liability Associated with the City 280,654
Total 9,309,145$
For the year ended December 31, 2019, the City recognized pension expense of
$1,266,408 for its proportionate share of the GERF’s pension expense. In addition,
the City recognized an additional $26,128 as pension expenses (and grant revenue)
for its proportionate share of the state of Minnesota’s contribution of $16 million to
the General Employees Fund.
At December 31, 2019, the City reported its proportionate share of the GERF’s
deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Deferred Outflows Deferred Inflows
Description of Resources of Resources
Differences Between Expected and
Actual Economic Experience 250,214$ -$
Changes in Actuarial Assumptions - 709,645
Net Difference Between Projected and Actual
Earnings on Pension Plan Investments - 915,146
Changes in Proportion and Differences Between City
Contributions and Proportionate Share of Contributions 206,454 -
City Contributions Subsequent to the Measurement Date 451,398 -
Total 908,066$ 1,624,791$
A total of $451,398 reported as deferred outflows of resources related to pensions
resulting from City contributions subsequent to the measurement date will be
recognized as a reduction of the net pension liability in the year ended December 31,
2020. Other amounts reported as deferred outflows and inflows of resources related
to pensions will be recognized in pension expense as follows:
Pension Expense
Year Ending December 31,Amount
2020 (350,244)$
2021 (653,239)
2022 (179,189)
2023 14,549
2024 -
Thereafter -
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(87)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
D. Pension Costs (Continued)
2. PEPFF Pension Costs
At December 31, 2019, the City reported a liability of $6,281,146 for its proportionate
share of the PEPFF’s net pension liability. The net pension liability was measured as
of June 30, 2019, 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,
2018 through June 30, 2019, relative to the total employer contributions received
from all of PERA’s participating employers. At June 30, 2019, the City’s proportion
was .5900%, an increase of .0207% from the June 30, 2018 measurement date. The
City also recognized $79,650 for the year ended December 31, 2019, 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 Police
and Fire Fund each year until the plan is 90 percent funded or until the State Patrol
Plan (administered by the Minnesota State Retirement System) is 90 percent funded,
whichever occurs later. In addition, the state will pay $4.5 million on October 1, 2018
and October 1, 2019 in direct state aid. Thereafter, by October 1 of each year, the
state will pay $9 million until full funding is reached or July 1, 2048, whichever is
earlier.
For the year ended December 31, 2019, the City recognized pension expense of
$1,089,210 for its proportionate share of the PEPFF pension expense.
At December 31, 2019, the City reported its proportionate share of the PEPFF’s
deferred outflows of resources and deferred inflows of resources related to pensions
from the following sources:
Deferred Outflows Deferred Inflows
Description of Resources of Resources
Differences Between Expected and
Actual Economic Experience 266,691$ 956,058$
Changes in Actuarial Assumptions 5,212,355 7,051,799
Net Difference Between Projected and Actual
Earnings on Pension Plan Investments - 1,308,214
Changes in Proportion and Differences Between City
Contributions and Proportionate Share of Contributions 659,551 134,413
City Contributions Subsequent to the Measurement Date 558,257 -
Total 6,696,854$ 9,450,484$
A total of $558,257 reported as deferred outflows of resources related to pensions
resulting from City contributions subsequent to the measurement date will be
recognized as a reduction of the net pension liability in the year ended December 31,
2020. Other amounts reported as deferred outflows and inflows of resources related
to pensions will be recognized in pension expense as follows:
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(88)
NOTE 17 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED)
D. Pension Costs (Continued)
2. PEPFF Pension Costs (Continued)
Pension Expense
Year Ending December 31,Amount
2020 (314,160)$
2021 (754,075)
2022 (2,415,154)
2023 116,386
2024 55,116
Thereafter -
For year ended December 31, 2019, the City recognized total pension expenses of
$2,355,618 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, 2019 valuation were based on the results of
actuarial experience studies. The most recent four-year experience study in the General
Employees Plan was completed in 2019. The most recent four-year experience study for
Police and Fire Plan was completed in 2016. Economic assumptions were updated in
2018 based on a review of inflation and investment return assumptions.
The following changes in actuarial assumptions occurred in 2019:
General Employees Fund
The mortality projection scale was changed from MP-2017 to MP-2018.
The employer supplemental contribution was changed prospectively, decreasing
from $31.0 million to $21.0 million per year. The State’s special funding
contribution was changed prospectively, requiring $16.0 million due per year
through 2031.
Police and Fire Fund
The mortality projection scale was changed from MP-2017 to MP-2018.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(89)
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 2 0.00%
Totals 100 %
F. Discount Rate
The discount rate used to measure the total pension liability in 2019 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 14,842,353$ 9,028,491$ 4,227,992$
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 13,729,418$ 6,281,146$ 122$
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(90)
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
2019 2,841$ 2,841$ 5% 5% 5%
2018 2,256 2,256 5% 5% 5%
2017 2,261 2,261 5% 5% 5%
Contribution Amount Percentage of Covered Payroll
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(91)
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, 2019, 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, 2019
(92)
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 City contributed state of Minnesota fire aid of $379,598 to the plan on behalf of the
Department for the year ended December 31, 2019, 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,
2019 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, 2019, the City reported a net pension liability (asset) of ($4,112,787)
for the plan. The net pension liability (asset) was measured as of December 31, 2019.
The total pension liability used to calculate the net pension liability (asset) in accordance
with GASB Statement No. 68 was determined by Van Iwaarden Associates, applying an
actuarial formula to specific census data certified by the Department as of December 31,
2019.
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(93)
NOTE 19 DEFINED BENEFIT PENSION PLANS – FIRE RELIEF ASSOCIATION (CONTINUED)
D. Pension Costs (Continued)
The following table presents the changes in the net pension liability (asset) during the
year:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability (Asset)
(a) (b) (a-b)
Beginning balance - January 1, 2018 5,573,957$ 8,499,465$ (2,925,508)$
Changes for the year:
Service cost 319,546 - 319,546
Interest on pension liability (asset) 376,417 - 376,417
Difference between expected and actual economic
experience - - -
Changes of assumptions - - -
Changes of benefit terms 388,025 - 388,025
Contributions (employer) - - -
Contributions (state) - 379,598 (379,598)
Net investment income - 1,904,143 (1,904,143)
Benefit payments (204,935) (204,935) -
Administrative costs - (12,474) 12,474
Total net changes 879,053 2,066,332 (1,187,279)
Ending balance - December 31, 2018 6,453,010$ 10,565,797$ (4,112,787)$
For the year ended December 31, 2019, the City recognized a reduction in pension
expense of $109,525.
At December 31, 2019, the City reported deferred outflows of resources, including its
contributions subsequent to the measurement date, related to pension from the following
sources:
Deferred Outflows Deferred Inflows
Description of Resources of Resources
Changes in Actuarial Assumptions 280,988$ 91,604$
Difference between expected and actual experience - 159,743
Net Difference Between Projected and Actual
Earnings on Pension Plan Investments - 782,397
City Contributions Subsequent to the Measurement Date - -
Total 280,988$ 1,033,744$
Deferred outflows of resources totaling $-0- related to pensions resulting from the City’s
contributions to the plan subsequent to the measurement date will be recognized as a
reduction of the net pension liability in the year ended December 31, 2020. Other
amounts reported as deferred outflows and inflows of resources related to the plan will
be recognized in pension expense as follows:
CITY OF LAKEVILLE
NOTES TO BASIC FINANCIAL STATEMENTS
DECEMBER 31, 2019
(94)
NOTE 19 DEFINED BENEFIT PENSION PLANS – FIRE RELIEF ASSOCIATION (CONTINUED)
E. Actuarial Assumptions
Pension Expense
Year Ending December 31,Amount
2020 (221,330)$
2021 (201,575)
2022 (79,157)
2023 (265,806)
2024 3,633
Thereafter 11,479
The total pension liability at December 31, 2019 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 2.75%
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 67.09 % 4.95% 7.45%
International Equity 5.07 5.24% 7.74%
Fixed Income 3.63 1.99% 4.49%
Real Estate and Alternatives - 4.19% 6.69%
Cash and Equivalents 24.21 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, 2019
(95)
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 (3,913,738)$ (4,112,787)$ (4,305,022)$
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, 2019
(96)
NOTE 22 TAX ABATEMENT
The City has three 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, 2019, the City paid excess tax increment in the amount of $278,644. No other
commitments were made by the City as part of these agreements.
NOTE 23 NEW STANDARDS
During the year ended December 31, 2019, the City implemented the GASB Statement
No. 84, Fiduciary Activities. The implementation of this statement resulted in beginning fund
balance of the Improvement Construction Capital Projects fund and net position in
governmental activities being increased by $4,847,212.
NOTE 24 SUBSEQUENT EVENT
Subsequent to year-end, the World Health Organization declared the spread of Coronavirus
Disease (COVID-19) a worldwide pandemic. The COVID-19 pandemic is having significant
effects on global markets, supply chains, businesses, and communities. Specific to the City,
COVID-19 may impact various parts of its 2020 operations and financial results including,
but not limited to, costs for emergency preparedness and shortages of personnel.
Management believes the City is taking appropriate actions to mitigate the negative impact.
However, the full impact of COVID-19 is unknown and cannot be reasonably estimated as
these events occurred subsequent to year-end and are still developing.
REQUIRED SUPPLEMENTARY INFORMATION
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2019
(97)
Over (Under)
Original Final Actual Final Budget
REVENUE
Property Taxes
General property taxes:
Current 18,162,309$ 18,162,309$ 18,252,465$ 90,156$
Delinquent 146,156 146,156 216,343 70,187
Fiscal Disparities 2,968,727 2,968,727 2,956,607 (12,120)
Mobile Home Tax 47,825 47,825 53,538 5,713
Gravel Tax 2,410 2,410 14,952 12,542
Total property taxes 21,327,427 21,327,427 21,493,905 166,478
Licenses and permits 2,390,498 2,448,498 3,808,132 1,359,634
Intergovernmental
Market value homestead credit - - 4,052 4,052
State-aid police 464,005 464,005 501,485 37,480
State-aid fire 363,851 383,598 383,598 -
State-aid PERA 21,303 21,303 121,750 100,447
State police and fire grants 80,621 80,621 95,993 15,372
State other grants 200 23,000 22,350 (650)
Federal other grants 59,610 59,610 89,973 30,363
Total intergovernmental 989,590 1,032,137 1,219,201 187,064
Charges for services
General government 309,645 309,645 379,770 70,125
Public safety 502,810 502,810 484,372 (18,438)
Public works 1,063,725 1,063,725 1,635,394 571,669
Parks and recreation 834,653 866,053 921,188 55,135
Total charges for services 2,710,833 2,742,233 3,420,724 678,491
Special assessments - - 2,755 2,755
Fines 346,000 346,000 354,292 8,292
Investment income
Interest Income 120,000 120,000 283,583 163,583
Increase (Decrease in Fair Market Value) - - 194,734 194,734
120,000 120,000 478,317 358,317
Donations 17,705 54,824 104,459 49,635
Miscellaneous 52,874 52,874 64,244 11,370
Total revenues 27,954,927 28,123,993 30,946,029 2,822,036
Budgeted Amounts
(continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2019
(98)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
EXPENDITURES
General government
Mayor and council
Personnel services 62,561$ 62,561$ 60,566$ (1,995)$
Commodities 50 50 99 49
Other charges and services 50,639 58,521 58,362 (159)
Total mayor and council 113,250 121,132 119,027 (2,105)
Committees/commissions
Personnel services 53,388 80,388 80,663 275
Commodities 1,630 1,630 2,191 561
Other charges and services 13,200 35,752 25,108 (10,644)
Total committees/commissions 68,218 117,770 107,962 (9,808)
City administration
Personnel services 455,248 455,248 449,052 (6,196)
Commodities 1,600 1,600 293 (1,307)
Other charges and services 20,658 31,448 20,560 (10,888)
Total city administration 477,506 488,296 469,905 (18,391)
City clerk
Personnel services 114,305 114,305 115,749 1,444
Commodities 300 300 300 -
Other charges and services 33,981 33,981 20,752 (13,229)
Total city clerk 148,586 148,586 136,801 (11,785)
Legal counsel
Other charges and services 81,000 96,000 92,545 (3,455)
Planning
Personnel services 538,195 538,195 529,936 (8,259)
Commodities 2,041 2,041 1,743 (298)
Other charges and services 40,279 40,279 31,153 (9,126)
Total planning 580,515 580,515 562,832 (17,683)
Community and economic development
Personnel services 307,121 307,121 304,550 (2,571)
Commodities 250 250 193 (57)
Other charges and services 67,866 67,866 69,880 2,014
Total community and economic development 375,237 375,237 374,623 (614)
Inspections
Personnel services 1,003,209 1,003,209 1,007,200 3,991
Commodities 13,792 13,792 10,258 (3,534)
Other charges and services 256,543 289,543 298,453 8,910
Capital Outlay - 25,000 - (25,000)
Total inspections 1,273,544 1,331,544 1,315,911 (15,633) (continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2019
(99)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
EXPENDITURES (CONTINUED)
General government (continued)
General government facilities
Personnel services 399,147$ 399,147$ 416,584$ 17,437$
Commodities 22,174 22,174 22,172 (2)
Other charges and services 186,003 186,003 187,580 1,577
Total general government facilities 607,324 607,324 626,336 19,012
Finance
Personnel services 716,653 716,653 706,841 (9,812)
Commodities 3,525 3,525 1,253 (2,272)
Other charges and services 84,251 84,251 84,966 715
Total finance 804,429 804,429 793,060 (11,369)
Information technology
Personnel services 443,618 443,618 436,504 (7,114)
Commodities 4,425 4,425 5,613 1,188
Other charges and services 340,502 340,502 366,692 26,190
Total information systems 788,545 788,545 808,809 20,264
Human resources
Personnel services 416,092 416,092 402,640 (13,452)
Commodities 3,865 3,865 4,145 280
Other charges and services 108,040 108,040 89,875 (18,165)
Total human resources 527,997 527,997 496,660 (31,337)
Insurance coverage
Other charges and services 285,000 435,727 435,727 -
Total general government 6,131,151 6,423,102 6,340,198 (82,904)
Public safety
Police
Personnel services 9,083,175 9,056,175 9,053,312 (2,863)
Commodities 401,462 371,662 339,589 (32,073)
Other charges and services 2,143,651 2,133,451 2,063,336 (70,115)
Total police 11,628,288 11,561,288 11,456,237 (105,051)
Fire Protection
Personnel services 1,609,135 1,628,882 1,612,767 (16,115)
Commodities 145,816 155,821 141,286 (14,535)
Other charges and services 279,986 279,986 286,429 6,443
Total fire protection 2,034,937 2,064,689 2,040,482 (24,207)
Total public safety 13,663,225 13,625,977 13,496,719 (129,258) (continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2019
(100)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
EXPENDITURES (CONTINUED)
Public Works
Engineering
Personnel services 769,706$ 769,706$ 779,160$ 9,454$
Commodities 12,966 12,966 7,822 (5,144)
Other charges and services 99,085 99,085 73,101 (25,984)
Capital Outlay - - 16,329 16,329
Total engineering 881,757 881,757 876,412 (5,345)
Construction services
Personnel services 552,065 552,065 490,045 (62,020)
Commodities 7,915 7,915 7,496 (419)
Other charges and services 13,890 13,890 10,699 (3,191)
Total construction services 573,870 573,870 508,240 (65,630)
Street maintenance
Personnel services 2,183,894 2,183,894 2,282,840 98,946
Commodities 746,573 746,573 834,396 87,823
Other charges and services 358,150 358,150 316,590 (41,560)
Capital Outlay - 10,929 - (10,929)
Total street maintenance 3,288,617 3,299,546 3,433,826 134,280
Total public works 4,744,244 4,755,173 4,818,478 63,305
Parks and recreation
Park maintenance
Personnel services 1,925,115 1,925,115 1,895,861 (29,254)
Commodities 296,140 296,140 272,985 (23,155)
Other charges and services 523,708 523,708 492,533 (31,175)
Total park maintenance 2,744,963 2,744,963 2,661,379 (83,584)
Recreation
Personnel services 419,055 419,055 411,217 (7,838)
Commodities 35,577 35,577 30,764 (4,813)
Other charges and services 290,505 290,505 303,512 13,007
Total recreation 745,137 745,137 745,493 356
Heritage center
Personnel services 71,576 71,576 62,955 (8,621)
Commodities 9,358 9,358 6,424 (2,934)
Other charges and services 57,740 57,740 48,603 (9,137)
Total heritage center 138,674 138,674 117,982 (20,692)
Arts center
Personnel services 299,614 324,664 347,404 22,740
Commodities 40,020 47,082 40,715 (6,367)
Other charges and services 210,415 241,810 265,437 23,627
Capital Outlay - 5,250 20,245 14,995
Total arts center 550,049 618,806 673,801 54,995
Total parks and recreation 4,178,823 4,247,580 4,198,655 (48,925)
Other 79,466 79,466 - (79,466)
Total expenditures 28,796,909 29,131,298 28,854,050 (277,248)
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES (841,982) (1,007,305) 2,091,979 3,099,284 (continued)
CITY OF LAKEVILLE
GENERAL FUND
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – BUDGETARY COMPARISON
YEAR ENDED DECEMBER 31, 2019
(101)
Over (Under)
Original Final Actual Final Budget
Budgeted Amounts
OTHER FINANCE SOURCES (USES)
Transfers In From:
Special Revenue - Communications Fund 80,866$ 80,866$ 80,866$ -$
Enterprise - Liquor Fund 158,573 158,573 164,875 6,302
Enterprise - Utility Fund 477,043 477,043 477,043 -
Internal Service - Municipal Reserves Fund 50,000 50,000 50,000 -
Transfers Out To:
Capital Projects - Technology Fund - (155,000) (155,000) -
Capital Projects - Park Improvement Fund (150,000) (150,000) (150,000) -
Capital Projects - Equipment Fund (480,000) (920,000) (920,000) -
Total Other Finance Sources (Uses) 136,482 (458,518) (452,216) 6,302
NET CHANGE IN FUND BALANCES (705,500)$ (1,465,823)$ 1,639,763 3,105,586$
FUND BALANCES
Beginning of Year 15,696,442
Change in Supplies - Inventory (132,957)
End of Year 17,203,248$
CITY OF LAKEVILLE
GENERAL FUND
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
DECEMBER 31, 2019
(102)
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, 2019 (103) GERF Schedule of the City’s Proportionate Share of the Net Pension LiabilityLast Four Fiscal Years*6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015City’s Proportion of the Net Pension Liability 0.1633% 0.1632% 0.1585% 0.1544% 0.1540%City’s Proportionate Share of the Net Pension Liability 9,028,491$ 9,053,667$ 10,118,535$ 12,536,514$ 7,981,079$ State's Proportionate Share of the Net Pension Liability Associated with the City 280,654 297,059 127,203 - - Total9,309,145$ 9,350,726$ 10,245,738$ 12,536,514$ 7,981,079$ City’s Covered Payroll11,645,116$ 10,971,998$ 10,213,446$ 9,572,229$ 9,046,858$ City’s Proportionate Share of the Net Pension Liability as a Percentage of Its Covered Payroll 77.53% 82.52% 99.07% 130.97% 88.22%Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 80.20% 79.53% 75.90% 68.90% 78.20%* The Amounts Presented for Each Fiscal Year were Determined as of 6/30.GERF Schedule of City ContributionsLast Four Fiscal Years*2019 2018 2017 2016 2015Statutorily Required Contribution896,894$ 847,485$ 791,612$ 741,919$ 705,189$ Contributions in Relation to the Statutorily Required Contribution(896,894) (847,485) (791,612) (741,919) (705,189) Contribution Deficiency (Excess)-$ -$ -$ -$ -$ City’s Covered Payroll11,958,587$ 11,299,800$ 10,554,827$ 9,892,253$ 9,402,520$ Contributions as a Percentage of Covered Payroll 7.50% 7.50% 7.50% 7.50% 7.50%* The Amounts Presented for Each Fiscal Year were Determined as of 12/31.Measurement DateFiscal 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, 2019 (104) PEPFF Schedule of the City’s Proportionate Share of the Net Pension LiabilityLast Four Fiscal Years*6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015City’s Proportion of the Net Pension Liability 0.5900% 0.5693% 0.5490% 0.5620% 0.5320%City’s Proportionate Share of the Net Pension Liability 6,281,146$ 6,068,152$ 7,412,153$ 22,554,038$ 6,044,765$ City’s Covered Payroll6,241,714$ 6,004,172$ 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 100.63% 101.07% 131.53% 415.85% 124.10%Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 89.30% 88.84% 85.40% 63.90% 86.60%* The Amounts Presented for Each Fiscal Year were Determined as of 6/30.PEPFF Schedule of City ContributionsLast Four Fiscal Years*2019 2018 2017 2016 2015Statutorily Required Contribution1,066,319$ 999,032$ 942,349$ 904,571$ 845,144$ Contributions in Relation to the Statutorily Required Contribution(1,066,319) (999,032) (942,349) (904,571) (845,144) Contribution Deficiency (Excess)-$ -$ -$ -$ -$ City’s Covered Payroll6,290,968$ 6,166,864$ 5,816,969$ 5,583,772$ 5,216,938$ Contributions as a Percentage of Covered Payroll 16.95% 16.20% 16.20% 16.20% 16.20%* The Amounts Presented for Each Fiscal Year were Determined as of 12/31.Measurement DateFiscal 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 REQUIRED SUPPLEMENTARY INFORMATION – STATE WIDE PLANS
DECEMBER 31, 2019
(105)
General Employees Fund
2019 Changes
Changes in Actuarial Assumptions
The mortality projection scale was changed from MP-2017 to MP-2018.
Changes in Plan Provisions
The employer supplemental contribution was changed prospectively, decreasing from $31.0
million to $21.0 million per year. The State’s special funding contribution was changed
prospectively, requiring $16.0 million due per year through 2031.
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.
CITY OF LAKEVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION – STATE WIDE PLANS
DECEMBER 31, 2019
(106)
General Employees Fund (Continued)
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
2019 Changes
Changes in Actuarial Assumptions:
The morality projection scale was changed from MP-2017 to MP-2018.
2018 Changes
Changes in Actuarial Assumptions:
The morality projection scale was changed from MP-2016 to MP-2017.
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.
CITY OF LAKEVILLE
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION – STATE WIDE PLANS
DECEMBER 31, 2019
(107)
Police and Fire Fund (Continued)
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, 2019
(108)
2019 2018 2017 2016 2015
Total Pension Liability (TPL)
Service Cost 319,546$ 255,975$ 231,712$ 270,846$ 223,785$
Interest 376,417 358,835 345,935 301,640 269,493
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 388,025 352,464 154,012 186,369 -
Benefit Payments, Including Member Contribution Refunds (204,935) (602,296) (276,622) (547,241) (210,816)
Net Change in Total Pension Liability 879,053 402,575 493,267 (150,892) 635,499
Total Pension Liability - Beginning 5,573,957 5,171,382 4,678,115 4,829,007 4,193,508
Total Pension Liability - Ending (a) 6,453,010 5,573,957 5,171,382 4,678,115 4,829,007
Plan Fiduciary Net Position
Municipal Contributions - - - - -
State Contributions 379,598 367,701 351,635 348,276 338,889
Net Investment Income 1,904,143 (314,875) 1,175,892 551,474 39,474
Benefit Payments, including refunds of member contributions (204,935) (602,296) (276,622) (547,241) (210,816)
Administrative Expenses (12,474) (12,042) (11,579) (9,817) (11,292)
Other - - - - (40)
Net Change in Fiduciary Net Position 2,066,332 (561,512) 1,239,326 342,692 156,215
Fiduciary Net Position - Beginning 8,499,465 9,060,977 7,821,651 7,478,959 7,322,744
Fiduciary Net Position - Ending (b) 10,565,797 8,499,465 9,060,977 7,821,651 7,478,959
Ending Net Pension Liability (Asset) (a-b) (4,112,787)$ (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) 163.73% 152.49% 175.21% 167.20% 154.88%
Covered Payroll N/A 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 N/A
*Ten Years of Data Will Eventually Be Presented When Available
Schedule of Employer Contributions
2019 2019 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, 2019
(109)
2019 2018
Total OPEB Liability
Service Cost 89,732$ 48,551$
Interest 48,182 34,601
Changes of Benefit Terms - -
Difference Between Expected and Actual Experience 87,715 -
Changes of Assumptions - -
Benefit Payments (50,869) (42,312)
Net Change in Total OPEB Liability 174,760 40,840
Total OPEB Liability - Beginning 1,061,792 1,020,952
Total OPEB Liability - Ending 1,236,552$ 1,061,792$
Total OPEB Liability 1,236,552$ 1,061,792$
Plan Fiduciary Net Position as a Percentage
of the Total OPEB Liability 0.00% 0.00%
Covered Employee Payroll 14,711,089$ 15,084,789$
City's Total OPEB Liability as a Percentage of the
Covered Employee Payroll 8.41% 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, 2019
Measurement date:January 1, 2019
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
basis for differences between expected an
experience and assumption changes.
Inflation 3.00%
Healthcare cost trend rate 6.25% for 2018, decreasing to 5.00% over 5
Salary increases 3.00%
Discount rate 3.60% (20-year municipal bond yield)
Mortality RP-2014 White Collar Mortality Tables with M
Generational Improvement Scale (with Blu
adjustment for Police and Fire Personnel)
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
(110)
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)
(111)
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.
General Obligation Debt Service 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.
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.
(continued)
(112)
NONMAJOR GOVERNMENTAL FUNDS
Capital Projects Funds (Continued)
Equipment Fund
This fund accounts for the purchase of equipment for general government, public safety, public
works, and park maintenance.
Technology Fund
This fund accounts for the purchase of equipment related to information technology.
Arenas Capital Reserve Fund
This fund accounts for the accumulation and disbursement of funds for Lakeville Arenas
improvement projects.
Capital Projects Building Fund
This fund accounts for the accumulation and disbursement of funds for the construction or
improvement of public buildings.
CITY OF LAKEVILLE
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
DECEMBER 31, 2019
(113)
Special Debt Capital
Revenue Service Projects Totals
ASSETS
Cash and investments 961,505$ 8,328,834$ 41,829,121$ 51,119,460$
Investments held by trustee - 616,405 - 616,405
Receivables:
Interest receivable 3,361 47,835 234,892 286,088
Special assessments
Unremitted - - 112 112
Delinquent - - 353 353
Deferred - 305,828 138,237 444,065
Other - - 202,111 202,111
Accounts receivable 178,279 - 288,068 466,347
Leases receivable - 2,040,000 - 2,040,000
Total Assets 1,143,145$ 11,338,902$ 42,692,894$ 55,174,941$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCE
LIABILITIES
Salaries payable 19,124$ -$ -$ 19,124$
Accounts payable 24,434 - 1,114,927 1,139,361
Advances from other funds - - 428,936 428,936
Contracts payable - - 227,285 227,285
Deposits payable - - 111,975 111,975
Unearned revenue - - 43 43
Total Liabilities 43,558 - 1,883,166 1,926,724
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - special assessments - 304,689 340,701 645,390
Unavailable revenue - other - 2,040,000 - 2,040,000
Total Deferred Inflows of Resources - 2,344,689 340,701 2,685,390
FUND BALANCE
Restricted 120,188 8,994,213 6,182,471 15,296,872
Committed 979,399 - 34,715,258 35,694,657
Unassigned - - (428,702) (428,702)
Total Fund Balance 1,099,587 8,994,213 40,469,027 50,562,827
Total Liabilities, Deferred Inflows of
Resources, and Fund Balance 1,143,145$ 11,338,902$ 42,692,894$ 55,174,941$
CITY OF LAKEVILLE
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31, 2019
(114)
Special Debt Capital
Revenue Service Projects Totals
REVENUE
Property taxes:
Current and delinquent -$ 3,530,979$ 1,527,000$ 5,057,979$
Licenses and permits 683,977 - - 683,977
Special assessments - 48,702 91,751 140,453
Tax increment - 436,307 320,800 757,107
Intergovernmental revenue:
State-aid PERA 516 - - 516
Municipal state-aid - 734,358 119,999 854,357
Federal grants - - 64,316 64,316
County and local grants 31,758 - 732,939 764,697
Charges for services 61,289 292,100 10,248,067 10,601,456
Interest income 20,316 137,955 856,553 1,014,824
Change in fair value of investments 14,628 91,804 616,757 723,189
Donations - - 107,510 107,510
Miscellaneous - - 443,264 443,264
Total Revenue 812,484 5,272,205 15,128,956 21,213,645
EXPENDITURES
Current:
General government 688,428 - - 688,428
Capital Outlay:
General government 25,287 - 413,051 438,338
Public safety - - 669,739 669,739
Public works - - 3,832,328 3,832,328
Culture and recreation - - 2,672,158 2,672,158
Debt Service:
Principal retirement - 4,130,000 - 4,130,000
Interest on debt - 1,887,058 - 1,887,058
Fiscal charges - 18,165 - 18,165
Total Expenditures 713,715 6,035,223 7,587,276 14,336,214
EXCESS (DEFICIENCY) OF REVENUE
OVER (UNDER) EXPENDITURES 98,769 (763,018) 7,541,680 6,877,431
OTHER FINANCE SOURCES (USES)
Proceeds from the sale of capital assets - - 107,645 107,645
Transfers in from other funds 91,267 1,017,108 1,661,495 2,769,870
Transfers out to other funds (80,866) - (1,651,388) (1,732,254)
Total Other Finance Sources (Uses) 10,401 1,017,108 117,752 1,145,261
NET CHANGE IN FUND BALANCES 109,170 254,090 7,659,432 8,022,692
FUND BALANCES
Beginning of Year 990,417 8,740,123 32,809,595 42,540,135
End of Year 1,099,587$ 8,994,213$ 40,469,027$ 50,562,827$
CITY OF LAKEVILLE
SPECIAL REVENUE FUNDS (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2019
(115)
Downtown
Economic Special
Communications Development Service District Totals
ASSETS
Cash and investments 915,882$ 13,094$ 32,529$ 961,505$
Interest receivable 3,060 301 - 3,361
Accounts receivable 178,279 - - 178,279
Total Assets 1,097,221$ 13,395$ 32,529$ 1,143,145$
LIABILITIES AND
FUND BALANCE
LIABILITIES
Salaries payable 19,124$ -$ -$ 19,124$
Accounts payable 24,434 - - 24,434
Total Liabilities 43,558 - - 43,558
FUND BALANCE
Restricted 87,659 - 32,529 120,188
Committed 966,004 13,395 - 979,399
Total Fund Balance 1,053,663 13,395 32,529 1,099,587
Total Liabilities and Fund Balance 1,097,221$ 13,395$ 32,529$ 1,143,145$
CITY OF LAKEVILLE
SPECIAL REVENUE FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2019
(116)
Downtown
Economic Special
Communications Development Service District Totals
REVENUE
Licenses and permits 683,977$ -$ -$ 683,977$
Intergovernmental
State-aid PERA 516 - - 516
Other grants 31,758 - - 31,758
Charges for services 61,289 - - 61,289
Interest income 19,987 329 - 20,316
Change in fair value of investments 14,391 237 - 14,628
Total revenue 811,918 566 - 812,484
EXPENDITURES
Current:
General government 674,160 8,301 5,967 688,428
Capital outlay
General government 25,287 - - 25,287
Total expenditures 699,447 8,301 5,967 713,715
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES 112,471 (7,735) (5,967) 98,769
OTHER FINANCE SOURCES (USES)
Transfers In 91,267 - - 91,267
Transfers Out (80,866) - - (80,866)
Total other finance sources (uses) 10,401 - - 10,401
NET CHANGE IN FUND BALANCES 122,872 (7,735) (5,967) 109,170
FUND BALANCES
Beginning of Year 930,791 21,130 38,496 990,417
End of Year 1,053,663$ 13,395$ 32,529$ 1,099,587$
CITY OF LAKEVILLE
DEBT SERVICE FUNDS (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2019
(117)
Tax State-aid Water Arena HRA General
Increment Revenue Revenue Revenue Revenue Obligation Total
ASSETS
Cash and investments 3,471,776$ 882,734$ -$ 9,470$ 494,529$ 3,470,325$ 8,328,834$
Investments held by trustee - - - - 616,405 - 616,405
Interest receivable 24,801 6,451 - 1,045 767 14,771 47,835
Special assessments receivable - - - - - 305,828 305,828
Leases receivable - - - - 2,040,000 - 2,040,000
Total Assets 3,496,577$ 889,185$ -$ 10,515$ 3,151,701$ 3,790,924$ 11,338,902$
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES, AND FUND BALANCE
LIABILITIES
Interest payable -$ -$ -$ -$ -$ -$ -$
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - special assessments - - - - - 304,689 304,689
Unavailable revenue - leases - - - - 2,040,000 - 2,040,000
Total Deferred Inflows - - - - 2,040,000 304,689 2,344,689
FUND BALANCE
Restricted for debt service 3,496,577 889,185 - 10,515 1,111,701 3,486,235 8,994,213
Total Liabilities, Deferred Inflows of
Resources, and Fund Balance 3,496,577$ 889,185$ -$ 10,515$ 3,151,701$ 3,790,924$ 11,338,902$
Bonds
CITY OF LAKEVILLE
DEBT SERVICE FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2019
(118)
Tax State-aid Water Arena HRA General
Increment Revenue Revenue Revenue Revenue Obligation Total
REVENUE
Property taxes
Current and delinquent -$ -$ -$ -$ 292,100$ 3,238,879$ 3,530,979$
Tax increment 436,307 - - - - - 436,307
Intergovernmental - State-aid - 734,358 - - - - 734,358
Charges for services - - - - 292,100 - 292,100
Special Assessments - - - - - 48,702 48,702
Interest Income 69,872 14,534 - 2,274 13,557 37,718 137,955
Change in Fair Value of Investments 50,312 10,465 - 1,637 2,232 27,158 91,804
Donations - - - - - - -
Total revenues 556,491 759,357 - 3,911 599,989 3,352,457 5,272,205
EXPENDITURES
Debt Service:
Principal bond maturities 240,000 550,000 365,000 170,000 360,000 2,445,000 4,130,000
Interest on debt 36,761 180,889 249,325 9,179 219,600 1,191,304 1,887,058
Fiscal charges 2,920 1,138 2,783 - 3,818 7,506 18,165
Total expenditures 279,681 732,027 617,108 179,179 583,418 3,643,810 6,035,223
DEFICIENCY OF REVENUE
UNDER EXPENDITURES 276,810 27,330 (617,108) (175,268) 16,571 (291,353) (763,018)
OTHER FINANCE SOURCES
Transfers from (to):
Capital Projects - Water Fund - - 617,108 - - - 617,108
Enterprise - Liquor Fund - - - - - 400,000 400,000
Total other finance sources (uses) - - 617,108 - - 400,000 1,017,108
NET CHANGE IN FUND BALANCES 276,810 27,330 - (175,268) 16,571 108,647 254,090
FUND BALANCES
Beginning of Year 3,219,767 861,855 - 185,783 1,095,130 3,377,588 8,740,123
End of Year 3,496,577$ 889,185$ -$ 10,515$ 1,111,701$ 3,486,235$ 8,994,213$
Bonds
CITY OF LAKEVILLE
CAPITAL PROJECTS FUND (NONMAJOR)
COMBINING BALANCE SHEET
DECEMBER 31, 2019
(119)
Pavement Storm Water Sanitary Park Trail
Management Infrastructure Water Sewer Dedication Improvement
ASSETS
Cash and investments 1,821,217$ 8,826,518$ 11,569,291$ 9,380,377$ 6,150,574$ 697,432$
Interest receivable 9,698 55,026 50,506 51,939 35,121 5,437
Accounts receivable - 222,000 - - - 1,752
Special assessments:
Unremitted 112 - - - - -
Delinquent 353 - - - - -
Deferred - 5,126 80,989 52,122 - -
Other - 63,372 99,911 38,828 - -
Total Assets 1,831,380$ 9,172,042$ 11,800,697$ 9,523,266$ 6,185,695$ 704,621$
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCE
LIABILITIES
Accounts payable 25,853$ 104,105$ 840,521$ -$ 91,220$ -$
Advances from other funds - - - - - -
Contracts payable 19,104 16,863 181,852 - - -
Deposits payable - - - 111,975 - -
Unearned revenue - - - - 43 -
Total liabilities 44,957 120,968 1,022,373 111,975 91,263 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - special assessments 353 68,499 180,899 90,950 - -
FUND BALANCE
Restricted - - - - 6,094,432 -
Committed 1,786,070 8,982,575 10,597,425 9,320,341 - 704,621
Unassigned - - - - - -
Total fund balance 1,786,070 8,982,575 10,597,425 9,320,341 6,094,432 704,621
Total liabilities, deferred inflows of
resources, and fund balance 1,831,380$ 9,172,042$ 11,800,697$ 9,523,266$ 6,185,695$ 704,621$
(120)
Park Tax Tax Arenas Capital
Improvement Increment Abatement Equipment Technology Reserve Building Totals
337,422$ 57,019$ -$ 1,574,408$ 156,815$ 10,088$ 1,247,960$ 41,829,121$
954 364 234 17,639 49 2 7,923 234,892
- - - 64,316 - - - 288,068
- - - - - - - 112
- - - - - - - 353
- - - - - - - 138,237
- - - - - - - 202,111
338,376$ 57,383$ 234$ 1,656,363$ 156,864$ 10,090$ 1,255,883$ 42,692,894$
10,200$ -$ -$ 20,955$ -$ -$ 22,073$ 1,114,927$
- - 428,936 - - - - 428,936
- - - 9,466 - - - 227,285
- - - - - - - 111,975
- - - - - - - 43
10,200 - 428,936 30,421 - - 22,073 1,883,166
- - - - - - - 340,701
- 57,383 - 20,566 - 10,090 - 6,182,471
328,176 - - 1,605,376 156,864 - 1,233,810 34,715,258
- - (428,702) - - - - (428,702)
328,176 57,383 (428,702) 1,625,942 156,864 10,090 1,233,810 40,469,027
338,376$ 57,383$ 234$ 1,656,363$ 156,864$ 10,090$ 1,255,883$ 42,692,894$
CITY OF LAKEVILLE
CAPITAL PROJECTS FUNDS (NONMAJOR)
COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
YEAR ENDED DECEMBER 31, 2019
(121)
Pavement Storm Water Sanitary Park Trail
Management Infrastructure Water Sewer Dedication Improvement
REVENUE
Property taxes
Current 1,100,000$ -$ -$ -$ -$ -$
Tax increment - - - - - -
Intergovernmental:
Municipal state-aid 119,999 - - - - -
Federal grants - - - - - -
County and local grants 269,335 276,351 - - 9,634 169,091
Charges for services 5,900 2,372,051 3,517,166 1,198,062 3,154,888 -
Special assessments 111 198 32,200 59,242 - -
Interest income 34,092 194,078 219,189 192,157 120,035 22,429
Change in fair value of investments 24,548 139,745 157,826 138,362 86,431 16,150
Donations 836 - - - 64,863 -
Miscellaneous - - - - 3,900 -
Total revenues 1,554,821 2,982,423 3,926,381 1,587,823 3,439,751 207,670
EXPENDITURES
Capital Outlay:
General government - - - - - -
Public safety - - - - - -
Public works 1,059,044 920,382 1,020,613 119,291 - -
Parks and recreation - - - - 1,646,691 565,782
Total expenditures 1,059,044 920,382 1,020,613 119,291 1,646,691 565,782
EXCESS (DEFICIENCY) OF REVENUE OVER
(UNDER) EXPENDITURES 495,777 2,062,041 2,905,768 1,468,532 1,793,060 (358,112)
OTHER FINANCE SOURCES (USES)
Proceeds from the Sale of Capital Assets - - - - - -
Transfers from (to):
General Fund - - - - - -
Debt Service - Water Revenue Bonds - - (617,108) - - -
Capital Projects - State Aid Construction - (238,540) (128,813) - - -
Capital Projects - Improvement Construction - (553,102) - - (108,426) -
Enterprise - Liquor Fund - - - - - -
Enterprise - Utility Fund - (5,399) - - - -
Total other finance sources (uses) - (797,041) (745,921) - (108,426) -
NET CHANGE IN FUND BALANCE 495,777 1,265,000 2,159,847 1,468,532 1,684,634 (358,112)
FUND BALANCES
Beginning of Year 1,290,293 7,717,575 8,437,578 7,851,809 4,409,798 1,062,733
End of Year 1,786,070$ 8,982,575$ 10,597,425$ 9,320,341$ 6,094,432$ 704,621$
(122)
Park Tax Tax Arenas Capital
Improvement Increment Abatement Equipment Technology Reserve Building Totals
175,000$ -$ -$ 252,000$ -$ -$ -$ 1,527,000$
- 320,800 - - - - - 320,800
- - - - - - - 119,999
- - - 64,316 - - - 64,316
- - - - - - 8,528 732,939
- - - - - - - 10,248,067
- - - - - - - 91,751
6,848 803 - 35,416 1,084 52 30,370 856,553
4,931 577 - 25,501 780 38 21,868 616,757
- - - 20,566 10,000 11,245 107,510
25,664 - - 2,015 - - 411,685 443,264
212,443 322,180 - 399,814 1,864 10,090 483,696 15,128,956
- 292,369 13,125 32,485 - - 75,072 413,051
- - - 456,412 - - 213,327 669,739
- - - 532,394 - - 180,604 3,832,328
184,413 - - 176,722 - - 98,550 2,672,158
184,413 292,369 13,125 1,198,013 - - 567,553 7,587,276
28,030 29,811 (13,125) (798,199) 1,864 10,090 (83,857) 7,541,680
- - - 107,500 - - 145 107,645
150,000 - - 920,000 155,000 - - 1,225,000
- - - - - - - (617,108)
- - - - - - - (367,353)
- - - - - - (661,528)
- - - 405,495 - - - 405,495
- - - 31,000 - - - 25,601
150,000 - - 1,463,995 155,000 - 145 117,752
178,030 29,811 (13,125) 665,796 156,864 10,090 (83,712) 7,659,432
150,146 27,572 (415,577) 960,146 - - 1,317,522 32,809,595
328,176$ 57,383$ (428,702)$ 1,625,942$ 156,864$ 10,090$ 1,233,810$ 40,469,027$
CITY OF LAKEVILLE
COMMUNICATIONS – SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2019
(123)
Over (Under)
Original Final Actual Final Budget
REVENUES
Licenses and permits 687,840$ 687,840$ 683,977$ (3,863)$
Intergovernmental:
State-aid PERA 516 516 516 -
Other grants - 91,258 31,758 (59,500)
Charges for services 57,948 57,948 61,289 3,341
Interest income 3,601 3,601 19,987 16,386
Change in fair value of investments (1,543) (1,543) 14,391 15,934
Total revenues 748,362 839,620 811,918 (27,702)
EXPENDITURES - GENERAL GOVERNMENT
Current:
Personnel 461,880 461,880 457,681 (4,199)
Commodities 14,900 14,900 8,171 (6,729)
Other charges and services 310,530 377,467 208,308 (169,159)
Capital outlay 59,500 59,500 25,287 (34,213)
Total expenditures - general government 846,810 913,747 699,447 (214,300)
EXCESS (DEFICIENCY) OF REVENUES OVER
(UNDER) EXPENDITURES (98,448) (74,127) 112,471 186,598
OTHER FINANCING SOURCES (USES)
Transfers in from:
Liquor Funds 98,770 98,770 91,267 (7,503)
Utility Funds 41,472 41,472 - (41,472)
Transfers out to:
General Fund (80,866) (80,866) (80,866) -
Total other finance sources (uses) 59,376 59,376 10,401 (48,975)
NET CHANGE IN FUND BALANCE (39,072)$ (14,751)$ 122,872 137,623$
FUND BALANCES
Beginning of year 930,791
End of year 1,053,663$
Budgeted Amounts
CITY OF LAKEVILLE
ECONOMIC DEVELOPMENT – SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2019
(124)
Over (Under)
Original Final Actual Final Budget
REVENUES
Interest income 179$ 179$ 329$ 150$
Change in fair value of investments - - 237 237
Total revenues 179 179 566 387
EXPENDITURES - GENERAL GOVERNMENT
Current:
Other charges and services 12,800 12,800 8,301 (4,499)
NET CHANGE IN FUND BALANCE (12,621)$ (12,621)$ (7,735) 4,886$
FUND BALANCE
Beginning of year 21,130
End of year 13,395$
Budgeted Amounts
CITY OF LAKEVILLE
DOWNTOWN SPECIAL SERVICE DISTRICT – SPECIAL REVENUE FUND
BUDGETARY COMPARISON SCHEDULE
YEAR ENDED DECEMBER 31, 2019
(125)
Over (Under)
Original Final Actual Final Budget
REVENUES
Charges for services 13,750$ 13,750$ -$ (13,750)$
EXPENDITURES - GENERAL GOVERNMENT
Current:
Personnel 10,000 10,000 - (10,000)
Other charges and services 22,680 22,680 5,967 (16,713)
Total expenditures - general government 32,680 32,680 5,967 (26,713)
NET CHANGE IN FUND BALANCE (18,930)$ (18,930)$ (5,967) 12,963$
FUND BALANCE
Beginning of year 38,496
End of year 32,529$
Budgeted Amounts
SUPPLEMENTARY INFORMATION
CITY OF LAKEVILLE
SCHEDULE OF CHANGES IN BONDED INDEBTEDNESS
YEAR ENDED DECEMBER 31, 2019
(126)
Outstanding Outstanding
January 1 Issued Redeemed December 31
Governmental Activities:
General obligation bonds 34,555,000$ -$ 2,445,000$ 32,110,000$
G.O. improvement bonds 56,650,000 6,295,000 3,790,000 59,155,000
Tax increment bonds 1,010,000 - 240,000 770,000
State-aid street revenue bonds 5,235,000 - 550,000 4,685,000
G.O. water revenue bonds 7,595,000 - 365,000 7,230,000
Arena revenue bonds 170,000 - 170,000 -
HRA lease revenue bonds 6,440,000 - 360,000 6,080,000
Total governmental activity bonds 111,655,000 6,295,000 7,920,000 110,030,000
Business-type Activities:
Liquor revenue capital lease 2,255,000 - 215,000 2,040,000
Water revenue bonds 7,030,000 730,000 395,000 7,365,000
Sewer revenue bonds 440,000 - 55,000 385,000
Street light revenue bonds 335,000 - 30,000 305,000
Total business-type activity bonds 10,060,000 730,000 695,000 10,095,000
Total bonded indebtedness 121,715,000$ 7,025,000$ 8,615,000$ 120,125,000$
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2019
(127)
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 2/1/20 670,000$ 316,530$
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 10,525,000 1,951,755
Capital Improvement Refunding Bonds of 2014 B 8/20/14
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 16,536
Total 9,930,000 2,608,844
Street Reconstruction Refunding Bonds of 2012 B 8/15/12
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 6,145,000 681,125
Principal Maturity
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2019
(128)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
General Obligation Bonds (continued):
Street Reconstruction Refunding Bonds of 2014 B 8/20/14
Principal and interest 5.00 2/1/20 145,000$ 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 1,190,000 189,319
Street Reconstruction Bonds of 2017 A 9/8/17
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 1,430,000 285,700
Street Reconstruction Refunding Bonds of 2018 B 8/16/18
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 2,890,000 701,225
Total General Obligation Bonds 32,110,000$ 6,417,968$
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2019
(129)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
G.O. Improvement Bonds:
Improvement Refunding Bonds of 2009 B 12/30/09
Principal and interest 3.00 2/1/20 155,000$ 2,325$
Total 155,000 2,325
Improvement Bonds of 2011 A 12/1/11
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 895,000 130,591
Improvement Bonds of 2012 A 8/15/12
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 3,545,000 508,863
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2019
(130)
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 2/1/20 375,000$ 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 2,935,000 519,787
Improvement Bonds of 2014 A 8/20/14
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 5,760,000 993,790
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2019
(131)
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 2/1/20 505,000$ 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 10,345,000 3,413,926
Improvement Bonds of 2016 B 7/21/16
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 14,505,000 3,602,955
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2019
(132)
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 2/1/20 580,000$ 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 1,332
7,030,000 1,601,441
Improvement Bonds of 2018 A 7/25/18
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 1,632,700
Improvement Bonds of 2019 A 7/24/19
Principal and interest 5.00 2/1/20 - 306,700
Principal and interest 5.00 2/1/21 575,000 286,475
Principal and interest 5.00 2/1/22 575,000 257,725
Principal and interest 5.00 2/1/23 585,000 228,725
Principal and interest 5.00 2/1/24 600,000 199,100
Principal and interest 5.00 2/1/25 615,000 168,725
Principal and interest 5.00 2/1/26 635,000 137,475
Principal and interest 5.00 2/1/27 655,000 105,225
Principal and interest (call provision date) 5.00 2/1/28 665,000 72,225
Principal and interest 4.00 2/1/29 690,000 41,800
Principal and interest 4.00 2/1/30 700,000 14,000
6,295,000 1,818,175
Total G.O. Improvement Bonds 59,155,000$ 14,224,553$
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2019
(133)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
State-aid Street Revenue Bonds:
State-aid Street Refunding Bonds of 2010 A 1/1/10
Principal and interest 4.00 4/1/20 305,000$ 6,100$
Total 305,000 6,100
State-aid Street Refunding Bonds of 2011 B 12/1/11
Principal and interest 2.15 4/1/20 75,000 2,526
Principal and interest 2.15 4/1/21 80,000 860
Total 155,000 3,386
State-aid Street Bonds of 2015 A 8/20/15
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 4,225,000 1,447,357
Total State-aid Street Revenue Bonds 4,685,000$ 1,456,843$
HRA Lease Revenue Bonds:
HRA Ice Arena Lease Revenue Refunding Bonds of 2016 9/22/16
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 6,080,000 1,605,050
Total HRA Lease Revenue Bonds 6,080,000$ 1,605,050$
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2019
(134)
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 2/1/20 380,000$ 230,700$
Principal and interest 5.00 2/1/21 400,000 211,187
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 7,230,000 1,704,587
Total Water Revenue Bonds 7,230,000$ 1,704,587$
Tax Increment Refunding
Bonds of 2007 A
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 770,000 48,966
Total Governmental Activity Bonds 110,030,000$ 25,457,967$
Business-Type Activity Bonds:
Water Revenue Bonds of 2016 B 7/21/16
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 3,905
Total 5,410,000 1,214,887
Sewer Revenue Bonds of 2016 B 7/21/16
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 385,000 51,350
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2019
(135)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
Business-Type Activity Bonds (continued):
Lease Revenue Liquor Enterprise Refunding
Bonds of 2017 (Galaxie Store)
Principal and interest 2.00 2/1/20 230,000$ 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 2,040,000 248,600
Water Improvement Bonds of 2017 A 9/7/17
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 1,574
Total 780,000 155,399
Street Lights Improvement Bonds of 2017 A 9/7/17
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 5.00 2/1/26 50,000 1,249
Total 305,000 56,874
Water Improvement Bonds of 2018 A 7/25/18
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 55,000 824
445,000 96,674
(continued)
CITY OF LAKEVILLE
SCHEDULE OF BONDED INDEBTEDNESS AND ANNUAL INTEREST PAYABLE
DECEMBER 31, 2019
(136)
Issue Interest Annual
Date Rate Date Amount Interest
Principal Maturity
Business-Type Activity Bonds (continued)
Water Improvement Bonds of 2019 A 7/24/19
Principal and interest 5.00 2/1/20 -$ 35,425$
Principal and interest 5.00 2/1/21 60,000 33,250
Principal and interest 5.00 2/1/22 60,000 30,249
Principal and interest 5.00 2/1/23 65,000 27,125
Principal and interest 5.00 2/1/24 65,000 23,875
Principal and interest 5.00 2/1/25 70,000 20,500
Principal and interest 5.00 2/1/26 75,000 16,875
Principal and interest 5.00 2/1/27 80,000 13,000
Principal and interest (call provision date) 5.00 2/1/28 80,000 9,000
Principal and interest 4.00 2/1/29 85,000 5,300
Principal and interest 4.00 2/1/30 90,000 1,799
730,000 216,398
Total Business-Type Bonds 10,095,000$ 2,040,182$
Total Bonded Indebtedness and Annual Interest Payable 120,125,000$ 27,498,149$
CITY OF LAKEVILLE
COMBINED SCHEDULE OF BONDED INDEBTEDNESS
DECEMBER 31, 2019
(137)
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 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 2008 A 2.70 - 3.75 10/1/08 N/A 2/1/19
Improvement Refunding Bonds of 2009 B 2.00 - 3.00 12/30/09 N/A 2/1/20
Improvement Bonds of 2011 A 0.50 - 3.50 12/1/11 2/1/21 2/1/32
Improvement Bonds of 2012 A 2.00 - 4.00 8/15/12 2/1/22 2/1/33
Improvement Bonds of 2013 A 2.00 - 4.00 8/15/13 2/1/23 2/1/34
Improvement Bonds of 2014 A 2.00 - 3.50 8/20/14 2/1/24 2/1/35
Improvement Bonds of 2015 A 1.75 - 5.00 8/20/15 2/1/25 2/1/36
Improvement Bonds of 2016 B 1.50 - 5.00 7/21/16 2/1/25 2/1/37
Improvement Bonds of 2017 A 3.00 - 5.00 7/17/07 2/1/26 2/1/38
Improvement Bonds of 2018 A 3.00 - 5.00 7/25/18 2/1/27 2/1/29
Improvement Bonds of 2019 A 4.00 - 5.00 7/24/19 2/1/28 2/1/30
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 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
Water Revenue Bonds of 2019 A 4.00 - 5.00 7/24/19 2/1/28 2/1/30
Total Business-type Activity Bonds
Total Bonded Indebtedness
(138)
Authorized Issued Retired Outstanding Principal Interest
12,765,000$ 12,765,000$ 2,240,000$ 10,525,000$ 670,000$ 316,550$
11,065,000 11,065,000 1,135,000 9,930,000 605,000 371,988
9,685,000 9,685,000 3,540,000 6,145,000 805,000 184,650
1,595,000 1,595,000 405,000 1,190,000 145,000 46,988
1,530,000 1,530,000 100,000 1,430,000 130,000 60,750
3,115,000 3,115,000 225,000 2,890,000 220,000 108,650
39,755,000 39,755,000 7,645,000 32,110,000 2,575,000 1,089,576
620,000 620,000 620,000 - - -
4,250,000 4,250,000 4,095,000 155,000 155,000 2,325
2,385,000 2,385,000 1,490,000 895,000 190,000 22,163
6,805,000 6,805,000 3,260,000 3,545,000 555,000 105,250
4,685,000 4,685,000 1,750,000 2,935,000 375,000 81,800
8,520,000 8,520,000 2,760,000 5,760,000 710,000 198,275
11,815,000 11,815,000 1,470,000 10,345,000 505,000 385,469
15,680,000 15,680,000 1,175,000 14,505,000 825,000 445,969
7,465,000 7,465,000 435,000 7,030,000 580,000 287,431
7,690,000 7,690,000 - 7,690,000 690,000 314,550
6,295,000 6,295,000 - 6,295,000 - 306,700
76,210,000 76,210,000 17,055,000 59,155,000 4,585,000 2,149,932
2,265,000 2,265,000 1,495,000 770,000 245,000 26,908
2,265,000 2,265,000 1,495,000 770,000 245,000 26,908
2,680,000 2,680,000 2,375,000 305,000 305,000 6,100
665,000 665,000 510,000 155,000 75,000 2,526
4,730,000 4,730,000 505,000 4,225,000 180,000 156,719
8,075,000 8,075,000 3,390,000 4,685,000 560,000 165,345
8,280,000 8,280,000 1,050,000 7,230,000 380,000 230,700
8,280,000 8,280,000 1,050,000 7,230,000 380,000 230,700
1,250,000 1,250,000 1,250,000 - - -
1,250,000 1,250,000 1,250,000 - - -
7,115,000 7,115,000 1,035,000 6,080,000 370,000 208,650
7,115,000 7,115,000 1,035,000 6,080,000 370,000 208,650
142,950,000 142,950,000 32,920,000 110,030,000 8,715,000 3,871,111
2,255,000 2,255,000 215,000 2,040,000 230,000 54,200
6,075,000 6,075,000 665,000 5,410,000 365,000 169,588
495,000 495,000 110,000 385,000 60,000 13,700
835,000 835,000 55,000 780,000 70,000 33,150
335,000 335,000 30,000 305,000 35,000 14,375
445,000 445,000 - 445,000 35,000 18,275
730,000 730,000 - 730,000 - 35,426
11,170,000 11,170,000 1,075,000 10,095,000 795,000 338,714
154,120,000$ 154,120,000$ 33,995,000$ 120,125,000$ 9,510,000$ 4,209,825$
Bonds Due in 2020
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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 139
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 by Component – Governmental Activities
Changes in Net Position by Component – Business-type Activities
Changes in Net Position by Component – Total Governmental and Business-type Activities
Fund Balances – Governmental Funds
Revenue Capacity 151
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 157
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 161
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 164
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)
(139)
2010 2011 2012 2013
Governmental Activities:
Net Investment in Capital Assets 119,249,751$ 120,485,858$ 125,051,058$ 129,599,494$
Restricted 10,027,737 16,474,815 17,403,167 17,645,944
Unrestricted 2,324,315 (5,970,712) (1,923,495) 2,511,935
Total Governmental Activities Net Position 131,601,803$ 130,989,961$ 140,530,730$ 149,757,373$
Business-Type Activities:
Net Investment in Capital Assets 101,893,442$ 100,390,175$ 102,009,893$ 105,055,746$
Restricted 295,133 325,750 325,750 324,125
Unrestricted 16,363,211 16,666,856 15,658,140 13,704,281
Total Business-Type Activities Net Position 118,551,786$ 117,382,781$ 117,993,783$ 119,084,152$
Primary Government:
Net Investment in Capital Assets 221,143,193$ 220,876,033$ 227,060,951$ 234,655,240$
Restricted 10,322,870 16,800,565 17,728,917 17,970,069
Unrestricted 18,687,526 10,696,144 13,734,645 16,216,216
Total Primary Government Net Position 250,153,589$ 248,372,742$ 258,524,513$ 268,841,525$
(1)
Notes:
(1) The City implemented GASB Statement No. 65 in 2012. Net position for 2011 was restated for the effects 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.
(4) The City implemented GASB Statement No. 84 in 2019, recording a change in accounting principle that
increased restricted net position. Prior year balances were not restated.
(140)
2014 2015 2016 2017 2018 2019
135,673,737$ 141,868,136$ 149,196,480$ 144,581,700$ 142,300,205$ 154,468,792$
19,913,014 33,860,946 35,860,604 46,683,603 45,267,313 56,356,434
5,874,237 (4,929,168) 4,277,626 6,036,382 15,427,439 24,178,084
161,460,988$ 170,799,914$ 189,334,710$ 197,301,685$ 202,994,957$ 235,003,310$
109,535,106$ 116,288,771$ 129,086,090$ 135,324,120$ 138,725,763$ 143,501,608$
324,125 323,875 323,875 323,875 - -
11,318,290 8,420,410 9,757,400 10,791,344 13,878,208 15,142,309
121,177,521$ 125,033,056$ 139,167,365$ 146,439,339$ 152,603,971$ 158,643,917$
245,208,843$ 258,156,907$ 278,282,570$ 279,905,820$ 281,025,968$ 297,970,400$
20,237,139 34,184,821 36,184,479 47,007,478 45,267,313 56,356,434
17,192,527 3,491,242 14,035,026 16,827,726 29,305,647 39,320,393
282,638,509$ 295,832,970$ 328,502,075$ 343,741,024$ 355,598,928$ 393,647,227$
(2) (3) (4)
CITY OF LAKEVILLE
CHANGES IN NET POSITION BY COMPONENT – GOVERNMENTAL ACTIVITIES
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(141)
2010 2011 2012 2013
Expenses:
General government 5,248,677$ 5,134,169$ 5,258,319$ 5,363,354$
Public safety 10,858,447 11,068,287 11,202,018 11,784,109
Public works 12,197,868 13,778,800 10,849,213 11,241,434
Parks and recreation 4,775,015 4,796,035 4,780,666 5,154,919
Interest on long-term debt 3,740,076 4,383,684 3,496,878 3,864,333
Total expenses 36,820,083 39,160,975 35,587,094 37,408,149
Program Revenues:
Charges for Services:
General government 1,834,856 2,108,396 2,736,653 3,061,568
Public safety 654,226 746,207 714,587 686,130
Public works 1,967,309 2,313,334 3,588,062 4,481,445
Parks and recreation 1,555,560 1,299,364 2,087,640 2,231,757
Operating Grants and Contributions
General government 42,661 37,970 40,359 60,076
Public safety 846,553 649,253 698,949 902,783
Public works 1,399,661 1,451,359 1,396,560 1,295,018
Parks and recreation 30,144 160,852 100,315 59,653
Capital Grants and Contributions
General government - - 91,735 195,693
Public safety 21,576 26,325 19,530 -
Public works 3,025,905 2,906,106 5,569,732 6,350,827
Parks and recreation 267,360 297,245 370,237 1,296,764
Total program revenues 11,645,811 11,996,411 17,414,359 20,621,714
Net Revenue (Expense):
General government (3,371,160) (2,987,803) (2,389,572) (2,046,017)
Public safety (9,336,092) (9,646,502) (9,768,952) (10,195,196)
Public works (5,804,993) (7,108,001) (294,859) 885,856
Parks and recreation (2,921,951) (3,038,574) (2,222,474) (1,566,745)
Interest on long-term debt (3,740,076) (4,383,684) (3,496,878) (3,864,333)
Total net (expense) revenue (25,174,272) (27,164,564) (18,172,735) (16,786,435)
General Revenues and Other Changes in Net Position:
Property taxes 24,369,009 24,207,406 24,221,741 23,947,968
Investment earnings (charges)340,336 280,364 176,409 (28,949)
Gain on sale of capital assets - - 214,004 -
Transfers in (out)613,780 2,692,671 3,101,350 2,094,059
Total general revenues and other (net)25,323,125 27,180,441 27,713,504 26,013,078
Change in Net Position:
Governmental Activities 148,853$ 15,877$ 9,540,769$ 9,226,643$
(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.
(4) The City implemented GASB Statement No. 84 in 2019, recording a change in accounting principle that
increased restricted net position. Prior year balances were not restated.
(142)
2014 2015 2016 2017 2018 2019
6,051,985$ 5,893,261$ 8,028,316$ 4,579,478$ 7,203,308$ 7,902,490$
11,807,183 12,236,411 16,369,670 14,250,572 14,141,045 14,927,426
14,776,390 15,365,976 17,711,240 18,944,454 22,336,416 21,015,480
5,202,168 5,762,890 5,626,149 6,645,057 6,661,852 7,178,164
3,665,421 3,296,665 3,930,168 3,268,426 3,468,814 3,332,465
41,503,147 42,555,203 51,665,543 47,687,987 53,811,435 54,356,025
3,219,644 3,730,342 4,094,298 4,348,910 5,584,036 6,506,302
660,910 926,168 954,395 934,444 1,059,236 838,664
5,280,338 8,311,017 8,401,512 7,081,317 6,792,249 9,166,886
2,808,885 3,699,025 3,685,202 2,369,615 2,455,851 4,098,580
5,399 7,132 772,998 68,095 23,772 97,964
825,434 980,310 989,342 1,061,252 1,149,691 1,168,857
3,665,373 4,145,806 4,942,834 1,382,380 4,313,934 3,142,430
66,575 186,118 91,869 55,300 11,422 204,737
2,762,609 77,006 138,593 62,101 61,193 116,750
- - 8,500 - - -
6,892,230 12,702,266 23,604,519 13,018,689 9,183,039 21,234,628
436,107 1,004,480 2,932,612 182,387 194,327 112,725
26,623,504 35,769,670 50,616,674 30,564,490 30,828,750 46,688,523
(64,333) (2,078,781) (3,022,427) (100,372) (1,534,307) (1,181,474)
(10,320,839) (10,329,933) (14,417,433) (12,254,876) (11,932,118) (12,919,905)
1,061,551 9,793,113 19,237,625 2,537,932 (2,047,194) 12,528,464
(1,890,601) (873,267) 1,083,534 (4,037,755) (4,000,252) (2,762,122)
(3,665,421) (3,296,665) (3,930,168) (3,268,426) (3,468,814) (3,332,465)
(14,879,643) (6,785,533) (1,048,869) (17,123,497) (22,982,685) (7,667,502)
24,465,333 25,338,778 26,173,822 27,317,169 28,641,302 30,897,445
552,444 368,232 388,672 597,513 907,138 2,769,074
- - - - - -
1,565,481 (1,549,881) (6,978,829) (2,824,210) (492,418) 1,162,124
26,583,258 24,157,129 19,583,665 25,090,472 29,056,022 34,828,643
11,703,615$ 17,371,596$ 18,534,796$ 7,966,975$ 6,073,337$ 27,161,141$
(2) (3) (4)
CITY OF LAKEVILLE
CHANGES IN NET POSITION BY COMPONENT – BUSINESS-TYPE ACTIVITIES
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(143)
2010 2011 2012 2013
Expenses:
Liquor 13,575,521$ 13,265,645$ 13,773,286$ 13,906,263$
Utility 9,903,296 10,401,650 10,365,651 10,863,625
Total expenses 23,478,817 23,667,295 24,138,937 24,769,888
Program Revenues:
Charges for Services:
Liquor 14,763,552 14,373,261 15,220,064 15,381,124
Utility 7,432,391 8,866,345 9,542,284 9,126,838
Operating Grants and Contributions
Liquor 3,762 3,762 3,762 3,762
Utility 3,264 59,707 103,525 69,968
Capital Grants and Contributions
Liquor 17,050 - - -
Utility 999,716 1,129,764 2,903,043 3,414,738
Total program revenues 23,219,735 24,432,839 27,772,678 27,996,430
Net Revenue (Expense):
Liquor 1,208,843 1,111,378 1,450,540 1,478,623
Utility (1,467,925) (345,834) 2,183,201 1,747,919
Total net (expense) revenue (259,082) 765,544 3,633,741 3,226,542
General Revenues and Other Changes in Net Position:
Investment income (charges)150,632 130,403 78,611 (42,114)
Disposal of capital assets - - - -
Transfers in (out)(613,780) (2,692,671) (3,101,350) (2,094,059)
Total general revenues and other (net)(463,148) (2,562,268) (3,022,739) (2,136,173)
Change in Net Position:
Business-type Activities (722,230)$ (1,796,724)$ 611,002$ 1,090,369$
(1)
Notes:
(1) The City implemented GASB Statement No. 65 in 2012. Net position for 2011 was restated for the effects 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.
(144)
2014 2015 2016 2017 2018 2019
13,577,019$ 12,852,980$ 13,268,419$ 13,638,043$ 14,234,337$ 15,267,133$
11,462,552 11,946,778 13,558,839 14,138,885 14,815,914 16,386,516
25,039,571 24,799,758 26,827,258 27,776,928 29,050,251 31,653,649
14,883,858 13,611,294 14,130,830 14,583,514 15,276,433 16,288,986
9,296,118 9,216,463 10,692,185 12,585,450 13,613,145 14,215,952
3,762 3,762 3,762 6,716 13,421 6,453
112,181 85,754 111,572 166,227 51,035 643,919
- - - - - -
4,252,192 6,009,075 8,973,280 4,791,313 4,075,854 7,240,758
28,548,111 28,926,348 33,911,629 32,133,220 33,029,888 38,396,068
1,310,601 762,076 866,173 952,187 1,055,517 1,028,306
2,197,939 3,364,514 6,218,198 3,404,105 2,924,120 5,714,113
3,508,540 4,126,590 7,084,371 4,356,292 3,979,637 6,742,419
150,310 52,461 71,109 91,472 160,165 459,651
- - - - 1,601,334 -
(1,565,481) 1,549,881 6,978,829 2,824,210 492,418 (1,162,124)
(1,415,171) 1,602,342 7,049,938 2,915,682 2,253,917 (702,473)
2,093,369$ 5,728,932$ 14,134,309$ 7,271,974$ 6,233,554$ 6,039,946$
(2) (3) (4)
CITY OF LAKEVILLE
CHANGES IN NET POSITION BY COMPONENT – TOTAL GOVERNMENTAL
AND BUSINESS-TYPE ACTIVITIES
LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING)
(145)
2010 2011 2012 2013
Expenses:
Governmental activities 36,820,083$ 39,160,975$ 35,587,094$ 37,408,149$
Business-type activities 23,478,817 23,667,295 24,138,937 24,769,888
Total expenses 60,298,900 62,828,270 59,726,031 62,178,037
Program Revenues:
Governmental activities 11,645,811 11,996,411 17,414,359 20,621,714
Business-type activities 23,219,735 24,432,839 27,772,678 27,996,430
Total program revenues 34,865,546 36,429,250 45,187,037 48,618,144
Net Revenue (Expense):
Governmental activities (25,174,272) (27,164,564) (18,172,735) (16,786,435)
Business-type activities (259,082) 765,544 3,633,741 3,226,542
Total net (expense) revenue (25,433,354) (26,399,020) (14,538,994) (13,559,893)
General Revenues and Other Changes in Net Position:
Governmental activities 25,323,125 27,180,441 27,713,504 26,013,078
Business-type activities (463,148) (2,562,268) (3,022,739) (2,136,173)
Total general revenues and other (net) 24,859,977 24,618,173 24,690,765 23,876,905
Change in Net Position:
Governmental activities 148,853 15,877 9,540,769 9,226,643
Business-type activities (722,230) (1,796,724) 611,002 1,090,369
Total change in net position (573,377)$ (1,780,847)$ 10,151,771$ 10,317,012$
(1)
Note:
(1) The City implemented GASB Statement No. 65 in 2012. Net position for 2011 was restated for the effects 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.
(4) The City implemented GASB Statement No. 84 in 2019, recording a change in accounting principle that
increased restricted net position. Prior year balances were not restated.
(146)
2014 2015 2016 2017 2018 2019
41,503,147$ 42,555,203$ 51,665,543$ 47,687,987$ 53,811,435$ 54,356,025$
25,039,571 24,799,758 26,827,258 27,776,928 29,050,251 31,653,649
66,542,718 67,354,961 78,492,801 75,464,915 82,861,686 86,009,674
26,623,504 35,769,670 50,616,674 30,564,490 30,828,750 46,688,523
28,548,111 28,926,348 33,911,629 32,133,220 33,029,888 38,396,068
55,171,615 64,696,018 84,528,303 62,697,710 63,858,638 85,084,591
(14,879,643) (6,785,533) (1,048,869) (17,123,497) (22,982,685) (7,667,502)
3,508,540 4,126,590 7,084,371 4,356,292 3,979,637 6,742,419
(11,371,103) (2,658,943) 6,035,502 (12,767,205) (19,003,048) (925,083)
26,583,258 24,157,129 19,583,665 25,090,472 29,056,022 34,828,643
(1,415,171) 1,602,342 7,049,938 2,915,682 2,253,917 (702,473)
25,168,087 25,759,471 26,633,603 28,006,154 31,309,939 34,126,170
11,703,615 17,371,596 18,534,796 7,966,975 6,073,337 27,161,141
2,093,369 5,728,932 14,134,309 7,271,974 6,233,554 6,039,946
13,796,984$ 23,100,528$ 32,669,105$ 15,238,949$ 12,306,891$ 33,201,087$
(2) (3) (4)
CITY OF LAKEVILLE
FUND BALANCES – GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(147)
2010 2011 2012 2013
General Fund:
Reserved 10,726$ -$ -$ -$
Unreserved 9,385,202 - - -
Nonspendable - 384,329 256,476 126,014
Restricted - - - -
Committed - - - 45,000
Assigned - 519,146 620,725 -
Unassigned - 9,644,863 10,614,574 9,495,546
Total general fund 9,395,928 10,548,338 11,491,775 9,666,560
All Other Governmental Funds:
Reserved 11,060,144 - - -
Unreserved, Reported in:
Special Revenue Funds 1,444,846 - - -
Capital Project Funds 15,384,343 - - -
Nonspendable - 75 - -
Restricted - 14,744,057 38,587,037 38,716,666
Committed - 9,989,221 11,861,800 16,620,820
Unassigned - (112,102) (233,910) (221,630)
Total all other governmental funds 27,889,333 24,621,251 50,214,927 55,115,856
Total Governmental Funds:
Reserved 11,070,870 - - -
Unreserved, Reported in:26,214,391 - - -
Nonspendable - 384,404 256,476 126,014
Restricted - 14,744,057 38,587,037 38,716,666
Committed - 9,989,221 11,861,800 16,665,820
Assigned - 519,146 620,725 -
Unassigned - 9,532,761 10,380,664 9,273,916
Total governmental funds 37,285,261$ 35,169,589$ 61,706,702$ 64,782,416$
All governmental funds percentage change 23.3% -5.7% 75.5% 5.0%
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.
(148)
2014 2015 2016 2017 2018 2019
-$ -$ -$ -$ -$ -$
- - - - - -
221,704 447,284 695,830 914,375 876,394 748,231
- - - - - 175,590
45,000 45,000 - - - 100,000
- - 1,478,522 741,864 705,500 749,675
10,805,065 11,882,644 12,902,148 13,613,203 14,011,567 15,429,752
11,071,769 12,374,928 15,076,500 15,269,442 15,593,461 17,203,248
- - - - - -
- - - - - -
- - - - - -
169 - - - 11,630 -
44,319,872 35,659,756 37,947,697 29,887,820 25,773,762 36,333,665
17,154,096 17,937,431 21,651,118 26,519,559 30,327,238 36,071,889
(632,035) (3,492,389) (726,681) (876,594) (415,577) (428,702)
60,842,102 50,104,798 58,872,134 55,530,785 55,697,053 71,976,852
- - - - - -
- - - - - -
221,873 447,284 695,830 914,375 888,024 748,231
44,319,872 35,659,756 37,947,697 29,887,820 25,773,762 36,509,255
17,199,096 17,982,431 21,651,118 26,519,559 30,327,238 36,171,889
- - 1,478,522 741,864 705,500 749,675
10,173,030 8,390,255 12,175,467 12,736,609 13,595,990 15,001,050
71,913,871$ 62,479,726$ 73,948,634$ 70,800,227$ 71,290,514$ 89,180,100$
11.0% -13.1% 18.4% -4.3% 0.7% 25.1%
CITY OF LAKEVILLE
CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(MODIFIED ACCRUAL BASIS OF ACCOUNTING)
(149)
2010 2011 2012 2013
Revenues:
Property taxes and tax increment 24,435,538$ 24,057,622$ 24,453,849$ 23,981,375$
Licenses and permits 1,565,028 1,820,408 2,429,951 2,727,494
Intergovernmental 4,242,195 2,622,487 2,291,376 3,534,512
Charges for services 4,002,246 3,938,204 5,833,776 6,925,867
Special assessments 573,301 622,799 1,132,126 1,143,349
Investment income (charges) 337,788 270,378 174,358 (28,008)
Donations 155,477 269,762 207,391 265,953
Miscellaneous 732,816 731,763 871,798 885,323
Total Revenues 36,044,389 34,333,423 37,394,625 39,435,865
Expenditures:
General government 4,687,662 4,493,368 4,572,777 4,774,775
Public safety 9,337,884 9,755,251 9,844,232 10,113,958
Public works 3,593,862 3,019,293 3,245,103 3,766,665
Parks and recreation 3,038,433 3,047,906 3,050,782 3,206,004
Capital outlay 4,611,659 10,345,908 12,413,360 12,523,103
Debt Service:
Principal retirement 7,337,338 7,689,182 7,642,027 5,825,000
Interest on debt 3,945,265 3,633,285 3,358,324 3,948,740
Fiscal charges 61,222 78,143 173,072 26,351
Total Expenditures 36,613,325 42,062,336 44,299,677 44,184,596
Excess (Deficiency) of Revenues
Over (Under) Expenditures (568,936) (7,728,913) (6,905,052) (4,748,731)
Other Financing Sources (Uses):
Transfers in 5,740,982 5,324,043 6,699,447 7,094,079
Transfers out (5,046,945) (2,524,276) (2,839,332) (4,857,921)
Bond, note, loan and lease proceeds 2,680,000 4,265,000 29,255,000 4,685,000
Payment on refunded bonds called (7,955,000) - (1,830,000) -
Premium on bonds issued 99,322 - 1,957,050 78,287
Sale of capital assets 540,067 - 200,000 825,000
Total Other Financing Sources (Uses) (3,941,574) 7,064,767 33,442,165 7,824,445
Net Change in Fund Balances (4,510,510)$ (664,146)$ 26,537,113$ 3,075,714$
Debt Service as a Percentage of
Noncapital Expenditures 32.9% 31.6% 32.2% 28.6%
Note: The City has no taxes other than property taxes and tax increment.
(150)
2014 2015 2016 2017 2018 2019
24,524,709$ 25,215,734$ 26,131,569$ 27,401,195$ 28,612,384$ 30,855,832$
2,836,555 3,325,293 3,706,567 3,988,189 3,899,604 4,492,109
4,979,156 5,232,193 9,043,356 3,771,886 5,090,762 8,901,495
8,405,492 12,443,152 13,289,708 10,016,017 11,828,549 15,046,177
1,636,267 1,736,905 2,308,223 2,812,587 3,139,103 3,683,354
548,842 366,555 387,604 597,513 907,138 2,769,074
242,627 356,446 550,255 238,383 309,970 211,969
3,411,579 1,155,073 2,828,177 846,035 835,986 861,800
46,585,227 49,831,351 58,245,459 49,671,805 54,623,496 66,821,810
5,690,230 5,226,864 5,783,013 6,424,260 6,656,824 7,028,626
10,305,450 10,892,071 11,513,170 12,775,807 13,061,572 13,496,719
3,805,470 3,856,984 4,245,072 9,786,321 4,741,200 4,802,149
3,330,488 3,532,376 3,497,041 5,222,503 3,998,735 4,178,410
21,420,875 31,649,447 37,938,823 11,995,449 25,065,276 20,906,745
5,995,000 7,385,000 5,935,000 6,885,000 10,420,000 8,920,000
3,700,590 3,735,120 3,970,010 3,881,179 3,948,999 3,877,764
176,789 33,071 327,052 129,158 96,729 44,429
54,424,892 66,310,933 73,209,181 57,099,677 67,989,335 63,254,842
(7,839,665) (16,479,582) (14,963,722) (7,427,872) (13,365,839) 3,566,968
3,489,225 6,883,879 5,179,668 8,355,474 6,038,479 5,120,699
(1,644,624) (4,928,951) (3,222,237) (6,661,840) (4,167,132) (2,980,605)
21,180,000 16,545,000 31,075,000 11,987,171 13,805,000 6,295,000
(10,035,000) (12,460,000) (9,535,000) (11,368,146) (3,320,000) -
1,981,519 1,005,509 2,626,731 1,309,907 1,005,336 1,065,624
- - - 516,380 530,734 107,645
14,971,120 7,045,437 26,124,162 4,138,946 13,892,417 9,608,363
7,131,455$ (9,434,145)$ 11,160,440$ (3,288,926)$ 526,578$ 13,175,331$
25.3% 25.6% 19.6% 22.6% 26.9% 25.7%
CITY OF LAKEVILLE
TAX CAPACITY VALUATION AND ASSESSOR’S TAXABLE MARKET VALUE OF TAXABLE
PROPERTY
LAST TEN FISCAL YEARS
(151)
Fiscal Year 2010 2011 2012
Taxable Net Tax Capacity Valuation of Taxable Property
Tax capacity value 65,235,789$ 61,005,594$ 57,583,990$
Less:
Captured tax increment tax capacity (1,998,923) (904,389) (862,243)
Contributions to fiscal disparities pool (5,623,626) (5,845,456) (5,591,597)
Plus:
Distribution from fiscal disparities pool 7,429,875 7,807,412 7,194,884
Total taxable net tax capacity 65,043,115$ 62,063,161$ 58,325,034$
Taxable Net Tax Capacity Valuation by Class of Property
Homestead residential 48,558,421$ 44,951,025$ 41,780,807$
Commercial/industrial, public utility,
and personal property 14,626,593 15,226,802 14,711,893
Non-homestead residential/apartments 1,127,962 1,271,776 1,265,526
Agriculture and seasonal/recreational 730,139 613,558 566,808
Total taxable net tax capacity 65,043,115$ 62,063,161$ 58,325,034$
Assessor’s taxable market valuation 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 1.134%1.159%1.160%
Direct tax capacity rate 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.
(152)
2013 2014 2015 2016 2017 2018 2019
54,853,225$ 57,174,306$ 62,811,855$ 65,634,896$ 69,887,094$ 75,422,344$ 82,737,259$
(863,946) (861,019) (446,760) (497,171) (596,348) (609,048) (774,382)
(5,494,207) (5,439,491) (5,481,001) (5,411,614) (5,524,685) (5,828,030) (6,190,357)
6,825,229 6,316,073 6,323,361 6,635,572 7,139,972 7,672,379 8,151,580
55,320,301$ 57,189,869$ 63,207,455$ 66,361,683$ 70,906,033$ 76,657,645$ 83,924,100$
38,983,401$ 41,029,548$ 46,374,248$ 49,048,168$ 52,427,026$ 57,017,144$ 63,032,149$
14,351,101 13,833,973 14,223,709 14,754,095 15,842,447 16,870,980 17,893,911
1,311,388 1,468,225 1,629,527 1,656,581 1,736,856 1,938,329 2,206,240
674,411 858,123 979,971 902,839 899,704 831,192 791,800
55,320,301$ 57,189,869$ 63,207,455$ 66,361,683$ 70,906,033$ 76,657,645$ 83,924,100$
4,767,475,321$ 4,995,818,217$ 5,553,395,148$ 5,825,279,418$ 6,201,221,856$ 6,702,242,762$ 7,374,033,988$
1.160%1.145%1.138%1.139%1.143%1.144%1.138%
41.234%40.696%38.948%38.669%37.510%36.419%35.607%
CITY OF LAKEVILLE
PROPERTY TAX RATES – DIRECT AND OVERLAPPING GOVERNMENTS
LAST TEN FISCAL YEARS
(153)
Operating Debt Service Total Debt Service
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%
2019 27.192% 8.415% 35.607% - 25.386% - 192 51.401% 0.18968% 4.227% 116.621% 0.18968%
194 32.535% 0.26992% 97.755% 0.26992%
196 20.613% 0.26162% 85.833% 0.26162%
Notes:
Taxes are determined by multiplying the taxable net tax capacity by the tax capacity rate and market valued based rate expressed as
a percentage. The foregoing tax capacity rates do not reflect reductions for state property tax credits.
Special Districts include: Metropolitan Mosquito Control, Metropolitan Council, Metropolitan Transit District, Dakota County
Community Development Agency, Light Rail Authority, and Vermillion River Watershed District.
Source: Dakota County Auditor and Treasurer’s Office.
Fiscal
Year
Referendum
Levy (Market
Value-based)
General Levy
(Tax Capacity-
based)
Referendum
Levy (Market
Value-based)
General
Levy (Tax
Capacity-
based)
Referendum
Levy (Market
Value-
based)
Ind.
School
District
Overlapping Rates
City of Lakeville Total Direct and
Direct Rates Dakota County School District Overlapping Rates
Special
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, 2019 AND DECEMBER 31, 2010
(154)
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 469,086$ 1 0.6%
Southfork Apartments LLC Apartments 453,999 2 0.5% 191,100$ 9 0.3%
Dakota Electric Association Utility 404,454 3 0.5% 310,076 3 0.5%
Lakeville 2004, LLC Commercial 321,488 4 0.4% 333,532 1 0.5%
Inland Argonne Village, LLC Retail 295,896 5 0.4% 259,673 4 0.4%
Fulford Group, LLC Agriculture 291,324 6 0.4%
Heritage Commons, LLC Retail 274,908 7 0.3% 327,592 2 0.5%
Hy-Vee Inc. Commercial 273,790 8 0.3%
Walker Highview Hills, LLC Apartments 264,041 9 0.3% 220,599 8 0.3%
Xcel Energy Utility 255,582 10 0.3%
Target Corporation Retail 256,414 5 0.4%
LFT Real Estate Company Inc. Real Estate 248,628 6 0.4%
FR/CAL Interstate South LLC Real Estate 226,950 7 0.3%
Muller Family Theaters of Lakeville Commercial 190,496 10 0.3%
Total principal taxpayers 3,304,568 4.0% 2,565,060 3.9%
All other taxpayers 79,432,691 96.0%62,670,729 96.1%
Total City of Lakeville taxpayers 82,737,259$ 100.0%65,235,789$ 100.0%
Source: Dakota County Auditor and Treasurer’s Office.
2019 2010
CITY OF LAKEVILLE
PROPERTY TAX LEVY AND COLLECTIONS
LAST TEN FISCAL YEARS
(155)
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
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% 160,521 24,728,549 100.00%
2016 25,679,619 25,566,236 99.56% 113,383 25,679,619 100.00%
2017 26,679,614 26,534,636 99.46% 135,882 26,670,518 99.97%
2018 28,001,550 27,857,045 99.48% 144,505 28,001,550 100.00%
2019 29,948,890 29,815,159 99.55% - 29,815,159 99.55%
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
2010 731,494$ 3.04%
2011 835,005$ 3.61%
2012 -$ -
2013 -$ -
2014 -$ -
2015 -$ -
2016 -$ -
2017 -$ -
2018 -$ -
2019 -$ -
(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
(156)
Business-type Total
General Metropolitan Activity Total Outstanding
Fiscal Obligation Other Capital Council Revenue Outstanding Population Debt
Year Bonds Bonds Leases Loan Bond Debt (1)Per Capita
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 3.4 2,056
2019 111,718,611 8,654,054 - 1,897,014 8,876,565 131,146,244 65,831 N/A 1,992
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
(157)
Percentage Net
Gross Debt Payable Debt Service Net Taxable of Net Bonded Bonded
Fiscal Bonded From Other Monies Bonded Net Tax Debt to Taxable
(3)Debt
Year Debt Sources (1)Available (2)Debt Capacity Net Tax Capacity Population Per Capita
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
2019 120,372,665 71,840,000 4,239,541 44,293,124 83,924,100 52.78% 65,831 673
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, 2019
(158)
Debt Applicable to Taxable
Debt Net Tax Capacity in the City
Governmental Unit Outstanding (2)Percentage (2)Amount
Overlapping Debt (1)
Independent School District #194 114,301,513$ 70.60% 80,696,868$
Independent School District #192 172,005,000 18.70% 32,164,935
Independent School District #196 143,850,000 7.00% 10,069,500
Special District
Metropolitan Council 267,860,000 3.10%4,536,200
127,467,503
Direct Debt
City of Lakeville bonded debt 120,372,665 100.00%120,372,665
247,840,168$
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
(159)
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
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 32,676,212 168,391,071 16.25%
2019 7,374,033,988 221,221,020 30,120,459 191,100,561 13.62%
Legal Debt Margin Calculation:Fiscal Year 2019
Assessor’s taxable market valuation 7,374,033,988$
Legal debt limit:
3% of Assessor’s taxable market valuation 221,221,020$
Amount of debt applicable to legal debt limit:
Gross bonded debt 120,125,000$
Less debt payable from sources other than taxes:
G.O. Improvement bonds 59,155,000$
Tax increment bonds 770,000
State-aid street revenue bonds 4,685,000
Water connection revenue bonds 7,230,000
HRA lease revenue 5,870,000
Water revenue bonds 7,365,000
Street Light revenue bonds 305,000
Sewer revenue bonds 385,000 (85,765,000)
Debt payable from taxes 34,360,000
Less debt service monies available to pay
principal and interest (4,239,541)
Net bonded debt applicable to debt limit 30,120,459 30,120,459
Legal debt margin 191,100,561$
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
(160)
Net Revenue
Available
Fiscal Gross (1)Operating For Debt Times
Year Revenues Expenses Service Principal Interest Total Coverage
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
2019 8,610,576 3,156,154 5,454,422 895,000 478,105 1,373,105 3.97
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
(161)
Percentage Personal Per Capita
(1)Increase from Income (2)Personal Housing units
Year Population Previous Year (in thousands)Income Single Multiple Total Valuation
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% 3,901,921 60,651 478 49 527 159,251,000
2019 65,831 2.33% N/A N/A 556 64 620 180,622,000
Annual percentage
increase average last
ten fiscal years 1.68%
Labor Unemployment Labor Unemployment State of United
Year Force Rate Force Rate Minnesota States
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%
*2019 36,610 2.7% 242,855 2.9% 3.5% 3.4%
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, 2019.
* 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, 2019 AND DECEMBER 31, 2010
(162)
Principal Employer (1)Product/Service Employees Rank %Employees Rank %
Independent School District #194 Elementary & secondary schools 1,211 1 3.3% 1,596 1 5.2%
Hearthside Food Solutions Food service contractors 556 2 1.5% 750 2 2.4%
Treehouse Brands Breakfast cereal products 550 3 1.5% 515 3 1.7%
Schmitty & Sons School and charter bus service 454 4 1.2%
Post Consumer Brands Cereal production 417 5 1.1% 200 7 0.6%
BTD Manufacturing Metal manufacturing 359 6 1.0%
Menasha Corporation Corrugated & solid fiber box mfg. 306 7 0.8% 194 8 0.6%
City of Lakeville (2) City government 231 8 0.6% 201 6 0.7%
FedEx Freight Ground distribution 228 9 0.6%
Imperial Plastics, Inc Plastics material & resin mfg. 215 10 0.6% 285 5 0.9%
Despatch Industries, Inc. Industrial furnace & oven mfg. 300 4 1.0%
Image Trend Software development 141 9 0.5%
Verified Credentials, Inc Security background services 106 10 0.3%
Total principal employers 4,527 12.4% 4,288 13.9%
All other employers 32,083 87.6% 26,494 86.1%
Total City of Lakeville civilian labor force (3) 36,610 100.0% 30,782 100.0%
Source:
(1) Telephone survey of individual employers, 2019
(2) As of December 31, 2019 (full-time equivalent).
(3) MN Department of Employment and Economic Development (DEED) as of December 31, 2019.
2019 2010
CITY OF LAKEVILLE
COMMERCIAL AND INDUSTRIAL BUILDING PERMITS ISSUED
YEARS 2019 AND 2018
(163)
BUSINESS PRODUCT/SERVICE VALUATION (1)
Park Nicollet Medical clinic 8,158,000$
U-Haul Storage facility 7,500,000
Hampton Inn & Suites Hotel 7,000,000
QA1 Automotive parts manufacturing 6,886,000
Schneiderman's Furniture Retail furniture store 5,100,000
Compeer Financial Financial services 4,700,000
Lee Lake Storage Storage Facility 4,203,000
Wings Financial Credit Union Financial services 2,700,000
Aldi Grocery store 2,100,000
Hy-Vee Fast & Fresh Gas & convenience store 1,500,000
Gliori Multi-tenant industrial building 1,400,000
Polytek Surface Coatings Floor coatings installation 1,358,000
O'Reillys Auto Parts Retail 932,000
Springs at Lakeville Rental townhomes 918,000
Advanced Oral Surgery Medical 850,000
Valvoline Oil Change Automotive 800,000
Reliable Mini Storage Self-storage facility 525,000
BUSINESS PRODUCT/SERVICE VALUATION (1)
Recycle Minnesota (LSI) Recycling facility 2,487,000$
MotoPrimo Motorsports retail 2,290,000
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
Coldwell Banker Burnet Real estate sales 700,000
SBF Commercial Holdings Event space 661,000
Miller Hartwig Insurance Insurance 644,000
Lakeville Liquor Commercial additions (2) 570,000
Gander Outdoors Outdoor retail 526,000
Menasha Packaging manufacturing 500,000
Notes:
(1) Valuation excludes land and personal property.
Source: City of Lakeville Inspections Department.
NEW BUILDING PERMITS 2019 AND 2018 (in excess of $500,000)
EXPANSION OR REMODEL BUILDING PERMITS 2019 AND 2018 (in excess of $500,000)
CITY OF LAKEVILLE
EMPLOYEES BY FUNCTION/PROGRAM (FULL-TIME EQUIVALENT)
LAST TEN FISCAL YEARS
(164)
Function/Program 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
General government
City administration 2.5 2.5 2.5 2.4 2.8 3.0 3.0 3.0 3.0 3.0
Communications 4.0 4.0 4.0 4.0 4.0 4.0 3.9 4.5 5.2 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 6.4 6.0 7.0 7.0 7.0 6.6 6.7 7.0 7.0 6.7
Information Technology 3.0 3.0 3.0 2.9 3.0 3.0 3.1 3.8 4.0 4.0
Human resources 2.8 2.8 2.8 2.8 2.8 3.2 4.0 4.0 4.0 4.0
Planning 3.0 3.0 3.0 2.8 3.5 3.5 3.5 4.2 4.5 4.5
Community and economic development 2.5 2.5 2.5 2.5 2.4 2.5 2.5 2.4 2.5 2.5
Protective inspection 8.0 8.0 7.0 7.0 7.0 7.6 8.0 8.4 9.0 9.1
General government buildings 3.0 3.0 3.0 3.0 3.0 3.0 4.6 5.5 6.0 6.2
Total general government 36.2 35.8 35.8 35.4 36.5 37.4 40.2 43.8 46.2 46.2
Public safety
Police officers (sworn) 51.5 51.9 53.0 50.2 54.0 52.8 54.7 54.6 57.0 56.2
Police administration 10.8 11.3 12.2 11.5 11.8 12.5 13.4 14.8 13.1 13.6
Fire (excluding volunteer firefighters)4.6 4.6 4.6 4.6 4.6 5.3 5.5 5.4 5.6 5.6
Total public safety 66.9 67.8 69.8 66.3 70.4 70.6 73.6 74.8 75.7 75.4
Public works
Engineering 9.0 6.8 7.0 6.0 6.0 6.4 6.6 7.6 7.3 7.5
Construction Services - - - - 2.0 3.9 3.7 3.3 4.0 4.3
Street maintenance 19.0 19.0 19.3 19.3 21.0 20.4 21.6 21.7 21.9 22.1
Total public works 28.0 25.8 26.3 25.3 29.0 30.7 31.9 32.6 33.2 33.9
Parks and recreation
Park maintenance 15.0 15.0 15.0 15.0 15.0 14.8 14.0 15.1 16.4 16.0
Recreation 4.7 4.7 4.7 5.6 5.6 5.5 5.8 6.5 6.4 6.5
Arts center 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.6 3.8 3.7
Total parks and recreation 23.4 23.4 23.4 24.3 24.3 24.0 23.5 25.2 26.6 26.2
Total governmental activities 154.5 152.8 155.3 151.3 160.2 162.7 169.2 176.4 181.7 181.7
Liquor 25.7 25.8 25.7 24.9 26.3 24.4 25.3 26.1 26.0 26.1
Utility 18.0 20.0 20.0 20.0 21.0 21.6 21.3 23.1 24.3 23.4
Total business-type activities 43.7 45.8 45.7 44.9 47.3 46.0 46.6 49.2 50.3 49.5
Total employees 198.2 198.6 201.0 196.2 207.5 208.7 215.8 225.6 232.0 231.2
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
(165)
Function 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
General government
Number of registered voters 32,617 N/A 32,200 N/A 36,571 N/A 41,124 N/A 41,693 N/A
Number of final plats approved 10 12 14 15 16 23 19 20 25 16
Number of building permits issued 1,421 1,467 2,349 1,647 3,852 2,030 1,889 1,829 1,875 4,260
Valuation of building permits
issued (in millions) 49$ 77$ 119$ 142$ 139$ 183$ 218$ 248$ 234$ 276$
Public safety
Total calls for service 38,723 33,883 38,895 33,328 35,980 47,072 47,724 38,036 43,268 46,006
Traffic stops 12,310 9,210 11,426 8,251 10,531 17,681 18,239 15,680 18,412 18,700
Non-traffic related calls 26,413 24,673 27,469 25,077 25,449 29,391 29,485 22,356 24,856 27,306
Number of volunteer firefighters 74 83 77 79 80 83 85 86 82 88
Number of annual fire calls 1,189 1,262 1,208 1,062 1,103 1,192 1,347 1,477 1,500 1,694
Public works
City street miles added 1.0 1.4 2.6 2.8 4.5 4.5 17.0 3.1 3.6 7.5
Parks and recreation
Park acres mowed 427 429 429 430 430 430 430 430 430 430
Park facility reservations taken 661 655 717 888 958 1,024 742 551 562 580
Program activity registrations taken 8,369 9,051 9,850 9,310 9,627 9,231 8,141 6,294 6,490 7,510
Liquor
Annual sales (in millions) 14.7$ 14.4$ 15.2$ 15.4$ 14.9$ 13.6$ 14.1$ 14.6$ 16.9$ 16.4$
Utility (in millions of gallons)
Water (average daily consumption) 4.8 5.7 6.7 5.9 5.5 5.2 5.5 5.8 5.8 5.2
Sanitary sewer (1) 3.3 3.3 3.4 3.4 3.4 3.2 3.4 3.4 3.5 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
(166)
Function (1)2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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) 259.0 260.0 261.4 264.0 266.8 271.3 288.3 291.4 295.0 302.5
Parks and recreation
Acres of parks, conservation areas,
and greenways 1,579 1,586 1,590 1,590 1,590 1,590 1,600 1,600 1,600 1,677
Parks 58595959595960606161
Conservation areas 18182020202020202020
Trails and sidewalks - paved (miles) 97 98 99 103 107 109 110 111 117 118
Ice rinks - outdoor (fully boarded) 11 11 11 11 11 11 11 11 11 11
Ice rinks - indoor 3 3 33333333
Fields (softball, soccer, baseball,
football, Lacrosse) 96979797979696969797
Courts (basketball, volleyball, tennis,
pickleball)39 38 38 38 38 38 38 43 43 43
Playgrounds 41424242434344444646
Swimming beaches 3333333332
Liquor
Number of on-sale stores owned 2222222211
Number of on-sale stores leased 1111111122
Utility
Water
Water mains (miles) 311 313 313 321 321 321 321 346 350 358
Fire hydrants 3,386 3,434 3,434 3,572 3,572 3,572 3,572 3,818 3,885 3,969
Wells 17 17 17 17 17 17 18 18 19 19
Water Towers 5 5 5 5 5 5 5 6 6 6
Sanitary sewer
Sanitary sewer mains (miles) 259 261 261 261 261 261 261 261 264 270
Sanitary sewer lift stations 19 19 19 20 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, 2019
(1)
CliftonLarsonAllen LLP
CLAconnect.com
June 5, 2020
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, 2019. The purpose of this
report is to provide comments resulting from our audit process and to communicate information relevant
to city finances in Minnesota. We have organized this report into the following sections:
Audit Summary
Governmental Funds Overview
Enterprise Funds Overview
Government-Wide Financial Statements
Legislative Updates
Accounting and Auditing Updates
We would be pleased to further discuss any of the information contained in this report or any other
concerns that you would like us to address. We would also like to express our thanks for the courtesy
and assistance extended to us during the course of our audit.
The purpose of this report is solely to provide those charged with governance of the City, management,
and those who have responsibility for oversight of the financial reporting process comments resulting
from our audit process and information relevant to city finances in Minnesota. Accordingly, this report is
not suitable for any other purpose.
CliftonLarsonAllen LLP
Minneapolis, Minnesota
June 5, 2020
(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, 2019, 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, 2019:
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.
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 2018 fiscal year, local ad valorem property tax levies provided 41.5 percent of the total
governmental fund revenues for cities over 2,500 in population, and 36.7 percent for cities under 2,500
in population. Property tax levies certified by Minnesota cities for 2019 increased about 5.7 percent
over 2018, compared to an increase of 5.6 percent the prior year. Levy limits were not in place for 2018
or 2019.
The total market value of property in Minnesota cities increased about 7.1 percent for the 2019 levy
year, following an increase of 5.3 percent for levy year 2018, an increase of 5.6 percent for 2017, an
increase of 5.7 percent for 2016, an increase of 8.5 percent for 2015, and a four-year trend of declining
market values for levy years 2010 through 2014.
The City’s taxable market value increased 8.1 percent for taxes payable in 2018 and 10.0 percent for
taxes payable in 2019. The following graph shows the City’s changes in taxable market value over the
past 10 years plus 2020:
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
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legislative changes to tax rates and exemptions. The City’s tax capacity increased 9.7 percent and 7.9
percent for taxes payable in 2019 and 2018, 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
$90
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019MillionsTax 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 2018 and 2019 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 the City’s 2019 tax capacity rate with other comparable
cities:
21.105
25.920
31.521 33.020 33.177 34.746 34.943 35.227 35.952 35.607
39.603 40.045
44.474 53.537
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 2019 median home estimated market value of $304,500
and estimated taxable market value of $293,684. The City of Lakeville when compared to other local
cities is right in the middle. This chart is an estimate of only the City’s portion of taxes and excludes
other taxing jurisdictions (i.e. schools, county, special districts).
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GOVERNMENTAL FUND BALANCES
The following table summarizes the changes in the fund balances of the City’s governmental funds
during the year ended December 31, 2019, presented both by fund balance classification and by fund:
Increase
2019 2018 (Decrease)
Fund Balances of Governmental Funds
Total by Classification
Nonspendable 748,231$ 888,024$ (139,793)$
Restricted 36,509,255 25,773,762 10,735,493
Committed 36,171,889 30,327,238 5,844,651
Assigned 749,675 705,500 44,175
Unassigned 15,001,050 13,595,990 1,405,060
Total governmental funds 89,180,100$ 71,290,514$ 17,889,586$
Total by Fund
General 17,203,248$ 15,696,442$ 1,506,806$
G.O. Improvement Debt Service 12,656,863 10,602,818 2,054,045
Improvement Construction Capital Projects 6,714,974 1,754,599 4,960,375
Municipal State Aid Capital Projects 2,042,188 696,520 1,345,668
Nonmajor Funds 50,562,827 42,540,135 8,022,692
Total governmental funds. 89,180,100$ 71,290,514$ 17,889,586$
Fund Balance
As of December 31,
In total, the fund balances of the City’s governmental funds increased $17,889,586 during the year
ended December 31, 2019.
The majority of the increase was due to the restricted fund balances of $10.7 million, committed fund
balances of $5.8 million, and unassigned fund balances of $1.4 million, which offset a decrease in the
nonspendable fund balances of $140 thousand. The increase in restricted fund balances was due
primarily related to the City’s implementation of Governmental Accounting Standards Board Statement
No. 84 during the year ended December 31, 2019 which resulted in an increase of $4.8 million of
additional restricted fund balances and then additional collections related to park dedication fees, state
aids and special assessments. 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 $2.8 million
more than budgeted for revenues as well as $.3 million under budget on expenditures.
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GOVERNMENTAL FUNDS REVENUE AND EXPENDITURES
The following table presents the per capita revenue of the City’s governmental funds for the past three
years, along with state-wide averages.
We have included the most recent comparative state-wide averages available from the Office of the
State Auditor to provide a benchmark for interpreting the City’s data. The amounts received from the
typical major sources of governmental fund revenue will naturally vary between cities based on factors
such as the City’s stage of development, location, size and density of its population, property values,
services it provides, and other attributes. It will also differ from year-to-year due to the effect of inflation
and changes in the City’s operation. Also, certain data on these tables may be classified differently than
how they appear on the City’s financial statements in order to be more comparable to the state-wide
information, particularly in separating capital expenditures from current expenditures.
We have designed this section of our management report using per capita data in order to better
identify unique or unusual trends and activities of your city. We intend for this type of comparative and
trend information to complement, rather than duplicate, information in the Management’s Discussion
and Analysis. An inherent difficulty in presenting per capita information is the accuracy of the population
count, which for most years is based on estimates.
State‐Wide
Year December 31, 2018 2017 2018 2019
Population 20,000 ‐ 100,000 61,993 64,334 65,831
Property taxes 493$ 433$ 436$ 457$
Tax increments 43 9 9 12
Franchise and other taxes 50 6 5 1
Special assessments 57 45 49 56
Licenses and permits 47 64 61 68
Intergovernmental revenues 157 61 79 135
Charges for services 112 162 184 229
Other 49 21 27 58
Total Revenue 1,009 801 849 1,015
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, however in 2019 the City surpassed other similarly sized cities,
due mainly to increases in charges for services and intergovernmental revenues during the year.
Total governmental funds revenues were $66.8 million in 2019, about $12.2 million (22.3 percent) more
than the prior year. On a per capita basis, governmental fund revenue for 2019 was $166 more than the
prior year. Property tax revenue was $21 per capita higher than the previous year due to a levy
increase. Intergovernmental revenues were $56 per capita more than last year due to an increase in
municipal state-aid revenue as there were several large capital projects in 2019. Charges for services
were $45 per capita more than last year due to increased in collections of fees during 2019. Revenue in
the “other” category shown above increased $31 per capita, due primarily to additional investment
returns both realized and unrealized.
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Below is a chart of the City of Lakeville’s 2019 governmental funds revenue per capita as compared to
the average per capita revenues for the governmental funds of several comparable cities for the year
2018. 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
$600
Revenues Per Capita
Lakeville Comparable Average
The expenditures of governmental funds will also vary from state-wide averages and from year-to-year,
based on the City’s circumstances. Expenditures are classified into three types as follows:
Current – These are typically the general operating type expenditures occurring on an annual
basis, and are primarily funded by general sources such as taxes and intergovernmental
revenues.
Capital Outlay – These expenditures do not occur on a consistent basis, more typically
fluctuating significantly from year-to-year. Many of these expenditures are project-oriented, and
are often funded by specific sources that have benefited from the expenditure, such as special
assessment improvement projects.
Debt Service – Although the expenditures for debt service may be relatively consistent over the
term of the respective debt, the funding source is the important factor. Some debt may be repaid
through specific sources such as special assessments or redevelopment funding, while other
debt may be repaid with general property taxes.
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The City’s expenditures per capita of its governmental funds for the past three years, together with
state-wide averages, are presented in the following table:
State‐Wide
Year December 31, 2018 2017 2018 2019
Population 20,000 ‐ 100,000 61,993 64,334 65,831
Current
General Government 104$ 104$ 103$ 107$
Public Safety 294 206 203 205
Public Works 108 158 74 73
Parks and recreation 100 84 62 63
606 552 442 448
Capital Outlay
And construction 279 193 390 318
Debt Service
Principal 109 111 162 135
Interest and fiscal 29 65 63 60
139 176 225 195
Total Expenditures 1,024 921 1,057 961
City of Lakeville
Governmental Fund Expenditures per Capita
With State‐Wide Averages by Population Class
Total expenditures in the City’s governmental funds for 2019 were $63.25 million, a decrease of $4.74
million (7.0 percent) from the previous year, or $96 per capita. The decrease was primarily due to
capital outlay, which was $72 per capita less than the previous year, primarily due to several large
street and utility improvement projects during 2018 and a decrease in debt service of $30 per capita.
Below is a chart of the City of Lakeville’s 2019 governmental funds expenditures per capita as
compared to the average per capita expenditures for the governmental funds of several comparable
cities for the year 2018.
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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, 2019 was $23,171,764, an
increase of $8,352,753. Total fund balance at December 31, 2019 was $17,203,248, which is an
increase of $1,506,806 from the prior year, and $3,105,586 higher than projected in the City’s final
budget.
As the graph illustrates, the City has generally been able to maintain healthy cash and fund balance
levels as the volume of financial activity has grown. This is an important factor because a government,
like any organization, requires a certain amount of equity to operate. A healthy financial position allows
the City to avoid volatility in tax rates; helps minimize the impact of state funding changes; allows for
the adequate and consistent funding of services, repairs, and unexpected costs; and is a factor in
determining the City’s bond rating and resulting interest costs. Maintaining an adequate fund balance
has become increasingly important given the fluctuations in state funding for cities in recent years.
A trend that is typical to Minnesota local governments, especially the General Fund of cities, is the
unusual cash flow experienced throughout the year. The City’s General Fund cash disbursements are
made fairly evenly during the year other than the impact of seasonal services such as snowplowing,
street maintenance, and park activities. Cash receipts of the General Fund are quite a different story.
Taxes comprise about 70 percent of the fund’s total annual revenue. Approximately half of these
revenues are received by the City in July and the rest in December. Consequently, the City needs to
have adequate cash reserves to finance its everyday operations between these payments.
The City’s General Fund’s unrestricted fund balance at the end of the 2019 fiscal year represents
approximately 56.4 percent of annual expenditures based on 2019 levels, compared to 52.8 percent at
the end of the previous year.
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The following graph reflects the City’s General Fund revenue sources for 2019 compared to budget:
General Fund revenue for 2019 was $30,946,029, which was $2,822,036 (10.0 percent) more than
budget.
Licenses and permits revenue was over budget by $1,359,634, 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.
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Overall, General Fund revenues increased $2,434,313 (8.5 percent) from the previous year. Property
tax revenue was $1,376,956 more than last year due to a 6.95 percent increase in the property tax levy.
Intergovernmental revenue increased $38,863 due to additional grants being received. Revenue from
charges for services increased $38,862 due primarily to an increase in public works fees. Licenses and
permits increased $599,854 due primarily to an increase in building permits during 2019. Finally,
revenue in the “all other” category as shown above was $379,778 higher than last year, primarily due to
an increase in investment returns.
The following graph illustrates the components of General Fund spending for 2019 compared to
budget:
Total General Fund expenditures for 2019 were $28,854,050, which was $277,248 (1.0 percent) under
the final budget. General Fund expenditures were under budget in every functional area except public
works, as shown in the graph above. General government expenditures were $82,904 under budget,
with the largest savings in city administration, city clerk, planning, inspections, finance, and human
resources. Public safety expenditures were $129,258 under budget, primarily in police commodities and
other charges and services. Parks and recreation expenditures were $48,925 under budget, mainly in
park maintenance and the heritage center. Public works costs were over budget by $63,305, primarily
due to street maintenance.
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The following graph presents the City’s General Fund expenditures by function for the last five years:
Total General Fund expenditures for 2019 were $998,419 (3.6 percent) higher than the previous year,
with the increase spread across all program areas. The majority of the increase was in personnel costs,
which were due to contractual wage increases, inflationary benefit cost increases, and the addition of
about four full-time employees compared to the prior year.
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ENTERPRISE FUNDS OVERVIEW
The City maintains two enterprise funds to account for services the City provides that are financed
primarily through fees charged to those utilizing the service. This section of the report provides you with
an overview of the financial trends and activities of the City’s enterprise funds, which include the (water,
sewer, street light, and environmental resources) Utility Fund and Liquor Fund.
ENTERPRISE FUNDS FINANCIAL POSITION
The following table summarizes the changes in the financial position of the City’s enterprise funds
during the years ended December 31, 2019 and 2018, presented both by classification and by fund:
Increase
2019 2018 (Decrease)
Net Position of enterprise funds
Total by classification
Net Investment in capital assets 143,501,608$ 138,725,763$ 4,775,845$
Restricted for Debt Service ‐ ‐ ‐
Unrestricted 14,885,199 13,667,586 1,217,613
Total Enterprise Funds 158,386,807$ 152,393,349$ 5,993,458$
Total by Fund
Liquor 6,144,090$ 6,087,122$ 56,968$
Utility 152,242,717 146,306,227 5,936,490
Total Enterprise Funds 158,386,807$ 152,393,349$ 5,993,458$
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 $5,993,458 during the year ended
December 31, 2019. The Liquor Fund net position increased by $56,968, due primarily to a 6.6 percent
increase in sales. Transfers out were $1.07 million. The increases in both the net investment in capital
assets and the net position of the Utility Enterprise Fund were primarily due to capital infrastructure
contributions of $8.2 million received from developers, other government agencies, and the City’s
governmental funds.
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LIQUOR FUND
The following graphs present five years of operating results for the Liquor Fund:
The Liquor Fund ended 2019 with a net position of $6,144,090, an increase of $56,968 from current
year operations. Of this, $3,160,024 represents net investment in capital assets leaving an unrestricted
net position of $2,984,066.
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Gross liquor sales for 2019 were $16,288,986, an increase of $1,012,553 (6.6 percent) from 2018. The
Liquor Fund generated a gross profit of $4,059,424 in 2019, or about 24.9 percent, of gross sales.
Operating expenses for 2019 were $3,052,447, an increase of $268,890 (9.7 percent) from the prior
year as it includes a full year of operating lease costs for the Kenrick location. Net operating income for
2019 was $1,006,977, or about 6.2 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 2019 as the City has faced significant increases to competition in previous years.
The Liquor Fund also made transfers out of $1,065,062 to support the General Fund, for debt service,
and for various capital needs.
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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 2019 with net position of $152,242,717, an increase of $5,936,490 from current
year operations. Of the net position balance, $140,341,584 represents the City’s net investment in utility
capital assets, leaving $11,901,133 of unrestricted net position.
Utility Fund operating revenue was $14,215,952 for 2019, an increase of $602,807 (4.4 percent),
mainly due to increase in water usage and sewer discharge coupled with an increase in rates.
Operating expenses (including depreciation of $4,782,286) were $16,208,263, which represents an
increase of $1,579,803 (10.8 percent). The increase was primarily attributable to increases in the Met
Council disposal charges and depreciation.
The Utility Fund also received capital contributions of $8,168,728 in 2019 from developers, other
governmental agencies, and the City’s governmental funds.
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GOVERNMENT-WIDE FINANCIAL STATEMENTS
In addition to fund-based information, the current reporting model for governmental entities also
requires the inclusion of two government-wide financial statements designed to present a clear picture
of the City as a single, unified entity. These government-wide financial statements provide information
on the total cost of delivering services, including capital assets and long-term liabilities.
STATEMENT OF NET POSITION
The Statement of Net Position essentially tells you what your city owns and owes at a given point in
time, the last day of the fiscal year. Theoretically, net position represents the resources the City has
leftover to use for providing services after its debts are settled. However, those resources are not
always in spendable form, or there may be restrictions on how some of those resources can be used.
Therefore, net position is divided into three components: net investment in capital assets, restricted,
and unrestricted.
The following table presents the components of City’s net position as of December 31, 2019 and 2018,
for governmental activities and business-type activities:
Increase
2019 2018 (Decrease)
Net Position
Governmental Activities
Net Investment in capital assets 154,468,792$ 142,300,205$ 12,168,587$
Restricted 56,356,434 45,267,313 11,089,121
Unrestricted 24,178,084 15,427,439 8,750,645
Total governmental activities 235,003,310$ 202,994,957$ 32,008,353$
Business‐type activities
Net Investment in capital assets 143,501,608$ 138,725,763$ 4,775,845$
Unrestricted 15,142,309 13,878,208 1,264,101
Total business‐type activities 158,643,917 152,603,971 6,039,946
Total net position 393,647,227$ 355,598,928$ 38,048,299$
As of December 31,
The total net position of the City increased $38.0 million during the 2019 fiscal year. Of the increase,
$32.0 million came from governmental activities and $6.0 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 2019, which
totaled about $20.6 million.
The increase in governmental activities restricted net position was the result of several factors,
including an increase in special assessments restricted for future debt service; capital grants
(contributions); and increases in assets restricted for fire relief pensions.
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STATEMENT OF ACTIVITIES
The Statement of Activities tracks the City’s yearly revenues and expenses, as well as any other
transactions that increase or reduce total net position. These amounts represent the full cost of
providing services. The Statement of Activities provides a more comprehensive measure than just the
amount of cash that changed hands, as reflected in the fund-based financial statements. This
statement includes the cost of supplies used, depreciation of long-lived capital assets, and other
accrual-based expenses.
The following table presents the change in the net position of the City for the years ended December
31, 2019 and 2018:
2018
Program
Expenses Revenues Net Change Net Change
Net (expense) revenue
Governmental activities
General government 7,902,490$ 6,721,016$ (1,181,474)$ (1,534,307)$
Public safety 14,927,426 2,007,521 (12,919,905) (11,932,118)
Public works 21,015,480 33,543,944 12,528,464 (2,047,194)
Parks and recreation 7,178,164 4,416,042 (2,762,122) (4,000,252)
Interest on long‐term debt 3,332,465 ‐ (3,332,465) (3,468,814)
Business‐type activities
Liquor 15,267,133 16,295,439 1,028,306 1,055,517
Utility 16,386,516 22,100,629 5,714,113 2,924,120
Total net (expense) revenue 86,009,674$ 85,084,591$ (925,083) (19,003,048)
General Revenues
Property taxes and tax increments 30,897,445 28,641,302
Investment earnings 3,228,725 1,067,303
Other ‐ gain on disposal of assets ‐ 1,601,334
Total general revenues 34,126,170 31,309,939
Change in net position 33,201,087 12,306,891
Net position , beginning 355,598,928 343,741,024
Change in Accounting Principles 4,847,212 (448,987)
Net position ‐ ending 393,647,227$ 355,598,928$
2019
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 increased capital contributions, utility connection
charges and special assessments of $17.1 million during 2019.
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LEGISLATIVE UPDATES
Even with the 2020 legislative session ending during the COVID Pandemic, there were still some things
accomplished as part of the session. The following is a summary of recent legislation affecting
Minnesota cities in 2019/2020 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. Starting in 2022 LGA will be adjusted
each year by an inflation factor as defined in State Statute.
COVID-19 Response – Cities must adopt a COVID-19 Preparedness Plan by June 29, 2020,
under Executive Order 20-74 by Governor Walz.
CARES Act – The State of Minnesota was allocated approximately $1.8 billion in funding
through the Federal CARES Act. Of this amount, the Legislature is considering bills that would
distribute $667 million to cities, counties, and townships in Minnesota. These funds will be
restricted as to their use as defined by the U.S. Department of Treasury and any unused funds
as of November 1, 2020, must be returned to the State of Minnesota.
Employment Taxes – As part of the CARES Act, employers were able to defer some of the
employer’s portion of payroll taxes withheld. There have been mixed messages around this
portion of the CARES Act about whether it applied to governmental entities or only private
businesses. The most recent proposed instructions to the IRS Form 941, indicates this portion
of the CARES Act would apply to local governments as well. Further information will be getting
published by the IRS prior to the due date of IRS Form 941 is due for second quarter 2020.
Construction Retainage – Effective August 1, 2019, enacted as part of an omnibus jobs,
economic development, energy, and commerce finance bill, there was significant changes to
retainage that cities withhold as part of construction contracts. The most significant impact on
cities is that the new law requires cities to now release retainage that is withheld from
contractors within 60 days after “substantial completion” of a construction project with some
limited exceptions.
Pensions – Governor Walz is expected to sign an omnibus pension bill that contains dozens of
provisions related to retirement plans in Minnesota, however the most significant portions of the
bill are related specifically to relief associations. This Bill has passed both the House and
Senate unanimously. The key provisions are as follows:
Flexible use of fire state aid – allows cities with a combined full-time and volunteer/paid
on-call) department to allocate state fire aid if certain stipulations are met.
Dissolution process provided for associations that are terminating their plans.
Plan conversions procedures provided for associations converting from defined benefit
to defined contribution type plans.
Maximum lump sum increased from $10,000 to $15,000.
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The bill also provided several technical corrections and recommendations as provided
by the State Auditor’s Fire Relief Association Working Group.
Elections – COVID-19 Elections Legislation signed by Governor Walz, provided procedures for
the State primary and general elections. Along with giving cities the ability to designate new
polling place until July 2020, deputizing health care facility employees to administer absentee
voting to residents or patients, and giving cities the ability to start processing absentee ballots
14 days instead of 7 days prior to the election and up to 3 days after the elections, it also
allocated federal Help America Vote Act (HAVA) funds to taxing authorities.
Bonding Bill – There was no bonding bill approved and signed during the legislative session
pre-Pandemic, however one is on the table for consideration during a special session.
Topics not making it to the Governor – Due to the timing of the Pandemic, there were
numerous items that didn’t make it out of the Legislature and to the Governor’s desk for
signature. These include but are not limited to: a bonding bill, housing assistance, omnibus tax
bill, workers’ compensation funding, and an omnibus liquor bill.
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ACCOUNTING AND AUDITING UPDATES
GASB Statement No. 95, “Postponement of the Effective Dates of Certain Authoratative
Guidance” – This standard postpones the effective dates of Statement Nos. 83, 84, 88, 89, 90, 91, 92,
and 93 by 12 months and Statement No. 87 by 18 months. The effective dates in the applicable
summaries below have been modified to reflect these dates.
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, 2019.
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 June 15, 2021.
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, 2019.
GASB Statement No 91 “Conduit Debt Obligations” – 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, 2021.
GASB Statement No 92 “Omnibus 2020” – the primary objectives of this Statement are to enhance
comparability in accounting and financial reporting and to improve the consistency of authoritative
literature by addressing practice issues that have been identified during implementation and
applications of certain GASB Statements, which include Statement Nos 87, 73, and 84, as well as other
practice areas such as intra-entity transfers of assets, asset retirement obligations, public entity risk
pools, and terminology used to refer to derivative instruments. This Statement is effective at various
dates ranging from immediately to fiscal years beginning after June 15, 2021 based on the underlying
Statement that was impacted.
GASB Statement No 93 “Replacement of Interbank Offered Rates” – the primary objective of this
Statement is to provide guidance to governments that are using interbank offered rates are part of their
derivative instruments, as the interbank offered rates are going to stop being used internationally at the
end of 2021. This Statement is effective for periods beginning after June 15, 2021.
GASB Statement No 94 “Public-Private and Public-Public Partnerships and Availability Payment
Arrangements” – the primary objective of this Statement is to improve financial reporting by
addressing issues realated to public-private and public-public partnership arrangements (PPPs) and
provide guidance for accounting and financial reporting for availability payment arrangements (APAs).
This Statement is effective for periods beginning after June 15, 2022.
(22)
GASB Statement No 96 “Subscription-Based Information Technology Arrangements” – the
primary objective of this Statement is to provide guidance on the accounting and financial reporting for
subscription-based information technology arrangements for government end users. This Statement is
effective for periods beginning after June 15, 2022.
Honorable Mayor and the City Council
City of 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, 2019, and have issued our report thereon dated June 5, 2020. 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.
During the year ended December 31, 2019, the City changed accounting policies related to its
accounting for fiduciary activities by adopting Governmental Accounting Standards Board (GASB)
Statement No. 84, Fiduciary Activities. The statement provides guidance regarding the identification of
fiduciary activities for accounting and reporting purposes and how those activities should be reported.
Fiduciary Funds and beginning net position were restated to reflect this implementation, as well as
restatement of the Improvement Construction capital projects fund.
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, 2019. We evaluated the key factors and assumptions used to develop the
value of investments in determining that it is reasonable in relation to the financial statements
taken as a whole.
Management’s estimate of the depreciation expense on capital assets is based on
management’s estimated useful lives of those assets. We evaluated the key factors and
assumptions used to develop the allowance in determining that it is reasonable in relation to the
financial statements taken as a whole.
Honorable Mayor and the City Council
City of Lakeville, Minnesota
Page 2
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
whole.
Management’s estimate of the City’s net pension asset and related deferred inflows and
outflows related to the City’s Fire Relief Association are based on an actuarially determined
liability. This liability is based on various assumptions including the investments rate of return,
projected salary increases, and mortality rates. We evaluated the key factors and assumptions
used to develop the liability in determining that it is reasonable in relation to the financial
statements taken as a whole.
Financial statement disclosures
Certain financial statement disclosures are particularly sensitive because of their significance to
financial statement users. There were no particularly sensitive financial statement disclosures.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties encountered in performing the audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Uncorrected misstatements
Professional standards require us to accumulate all misstatements identified during the audit, other
than those that are clearly trivial, and communicate them to the appropriate level of management.
Management did not identify and we did not notify them of any uncorrected financial statement
misstatements.
Corrected misstatements
Management did not identify and we did not notify them of any financial statement misstatements
detected as a result of audit procedures.
Honorable Mayor and the City Council
City of Lakeville, Minnesota
Page 3
Disagreements with management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditors’ report. No such disagreements arose during our audit.
Management representations
We have requested certain representations from management that are included in the management
representation letter dated June 5, 2020.
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 5, 2020, 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.
With respect to the combining and individual fund financial statements and additional debt schedules
(collectively, the supplementary information) accompanying the financial statements, on which we were
engaged to report in relation to the financial statements as a whole, we made certain inquiries of
management and evaluated the form, content, and methods of preparing the information to determine
that the information complies with accounting principles generally accepted in the United States of
America, the method of preparing it has not changed from the prior period or the reasons for such
changes, and the information is appropriate and complete in relation to our audit of the financial
statements. We compared and reconciled the supplementary information to the underlying accounting
records used to prepare the financial statements or to the financial statements themselves. We have
issued our report thereon dated June 5, 2020.
Honorable Mayor and the City Council
City of Lakeville, Minnesota
Page 4
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 5, 2020
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 the City Council
City of 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, 2019, 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 5, 2020.
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 the 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 5, 2020
INDEPENDENT AUDITORS’ REPORT ON MINNESOTA LEGAL COMPLIANCE
Honorable Mayor and the City Council
City of Lakeville, Minnesota
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the governmental
activities, the business-type activities, each major fund, and the aggregate remaining fund information
of the City of Lakeville, Minnesota (the City) as of and for the year ended December 31, 2019, and the
related notes to the financial statements, which collectively comprise the City’s basic financial
statements, and have issued our report thereon dated June 5, 2020.
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 contracting and bidding, deposits and investments, conflicts of
interest, public indebtedness, claims and disbursements, miscellaneous provisions, and tax increment
financing of the Minnesota Legal Compliance Audit Guide for Cities, promulgated by the State Auditor
pursuant to Minn. Stat. §6.65, insofar as they relate to accounting matters. 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 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 5, 2020