city of annandale council meeting agenda meeting …...may 06, 2019 · city of annandale payment...
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CITY OF ANNANDALE COUNCIL MEETING AGENDA
Meeting 7 May 6 2019 Regular Meeting 700 PM
Mayor Dwight Gunnarson
Councilmemberrsquos Matthew Wuollet Corey Czycalla
Shelly Jonas Jullie Hastings
NOTE If you wish to address the Council on a particular item please approach the podium ask to be recognized clearly state your name and address and sign the roster The Citizens Forum is intended for comments on items not on this meetingrsquos agenda 1 CALL TO ORDERROLL CALLADOPT AGENDA
2 SWEARING IN OF OFFICERS- FAUST AND RESERVES
3 NEW BUSINESS
A 2018 Audit
4 MINUTES ndash April 1 2019 Council Meeting and Board of Review 5 AUDITING CLAIMS
6 VISITORS
A Annandale Farmerrsquos Market 7 PUBLIC HEARINGS 8 CITIZENrsquoS FORUM 9 CONSENT AGENDA
A Departments 1) Police ndash March Report 2) Finance ndash March Report 3) Public Works ndash March Report 4) Fire ndash March Report 5) Deputy Registrar- March Report
B Other
1) Donations 2) Employment AnniversariesStep Increases 3) Fund TransfersFund Closures 4) Pay Estimates 5) Paid Leave- Corey 6) Spilled Grain- Special Event 7) Lawful Gambling Application- Boy Scouts
(See Reverse Side for Additional Agenda Items)
10 UNFINISHED BUSINESS-
11 NEW BUSINESS continued
A Southbrook Grille Street Dance B Chili Cook Off C Request to Close Parking Stalls for Bean Bag League D Purchase of Mower E Proposal to extend Lionrsquos Storage Shed F Resolutions Appointing Seasonal Staff G Call TIF Hearing H Renew Farm Lease- Olean I Resolution Appointing Engfer to Detective
10 MAYORCOUNCIL REPORTS 11 ADJOURNMENT
MINUTES ANNANDALE CITY COUNCIL
April 1 2019 CALL TO ORDERROLL CALL The City Council of Annandale Minnesota met for a regular meeting on April 1 2019 at 700 pm at the City Hall Council Chambers Councilor Gunnarson called the meeting to order at 700 pm City Council Present Wuollet Jonas Hastings Czycalla and Gunnarson City Council members absent None Also present were Administrator Hinnenkamp Tom Fenton with the Annandale Advocate Public Works Director Joe Haller Consulting Engineer Jared Voge Police Chief Herr Christine Husom and members of the public SET AGENDA Hinnenkamp requested Resolution appointing Kirby Nicka as Item I under New Business Motion was made by Wuollet and seconded by Jonas to adopt the agenda as amended The motion carried unanimously A motions are approved unaimously unless otherwise noted MINUTES A motion was made by Czycalla and seconded by Hastings to approve the minutes of the March 4 2019 meeting AUDITING CLAIMS Hinnenkamp presented an updated claims list A motion was made by Jonas and seconded by Wuollet to approve the claims 54927-54948 54975-54981 54985-54987 55006-55067 Payroll Checks 54949-54974 54982-54983 54988-55003 and EFTrsquos as presented Check 54984 was voided VISITORS Commissioner Husom provided the Council an update on projects at Wright County including the proposals for a new Human Services building and Government Center PUBLIC HEARINGS 2022 Improvement Project- Public Hearing was opened by Mayor Gunnarson at 720pm Engineer Jared Voge presented the Facility Plan After hearing no comments from the public Mayor Gunnarson closed the public hearing at 730 pm CITIZENrsquoS FORUM NONE CONSENT AGENDA A motion was made by Hastings and seconded by Wuollet to approve the Consent Agenda as presented Police Finance Fire Deputy Registrar ndash February Reports Employment AnniversariesStep Increases Carrie Krienke Fund TransferClosures Donations 1 UNFINISHED BUSINESS-
Clock Tower Staining- A motion was made be Jonas and seconded by Wuollet to approve the quote to stain the Clock Tower at Clock Tower Park Housing Incentive for 2019- HInnenkamp presented the graduated scale A motion was made by Gunnarson and seconded by Hastings to approve the Housing Incentive Program for 8 permits in 2019 with waive the fees as presented with the 4 year payback
2 NEW BUSINESS
Ordinance Rezoning Property and approving Comp Plan Amendment- A motion was made by Hastings and seconded by Czycalla to approve Ordinance Rezoning Property and approving Comp Plan Amendment for the property located at 100 Annandale Boulevard Resolution Approving Minor Subdivision- A motion was made by Wuollet and seconded by Hastings to approve Resolution Approving Minor Subdivision Request by Stadium for Street Dance- A motion was made by Jonas and seconded by Czycalla to approve the July 3rd Street Dance for Stadium Letter to MnDot on 2022 Project- A motion was made by Czycalla and seconded by Jonas to direct staff to send the letter to MnDot on the 2022 Project as presented Approve Cleaning Contract Amendment- A motion was made by Hastings and seconded by Wuollet to approve the amendments to the Cleaning Contract as presented Quotes for Crack Filling- Motion was made by Czycalla and seconded by Wuollet to approve the bid for Kamco for Crack Filling Accept Resignation of Officer Tavares- A motion was made by Czycalla and seconded by Hastings to approve the resignation of Officer Tavares Resolution Appointing Michael Ryan as Full Time Police Officer- A motion was made by Hastings and seconded by Wuollet to approve Resolution Appointing Michael Ryan as FT Police Officer Resolution appointing Nicka- A motion was made by Wuollet and seconded by Czycalla to appoint Kirby Nicka to FT Maintenance Worker MAYORCOUNCIL REPORTS Haller- Discussed training with new staff and provided an update on the work that was done with the recent weather Chief Herr- Updated on new staff training Chief has been doing safety presentation for the Church Working on video system at Rec Park Speaking on April 26th for active shooter Mayor Gunnarson- updated the Council on his visit to the capital last week for the Cityrsquos bonding bill request Hinnenkamp- informed the Council of the schedule DT meeting next week to present concepts to the DT businessproperty owners ADJOURNMENT Moved by Czycalla seconded by Wuollet to adjourn 819 pm The meeting was adjourned
______________________________ Dwight Gunnarson Mayor
ATTEST
__________________________________ Kelly Hinnenkamp City Administrator
MINUTES ANNANDALE BOARD OF ADJUSTMENT AND APPEALS
April 1 2019 CALL TO ORDERROLL CALL Pursuant to due call and notice the City Council of Annandale Minnesota met for the annual Board of Adjustment and Appeals on April 1 2019 at 630 pm at the City Hall Council Chambers Mayor Gunnarson called the meeting to order at 630 pm City Council Present Councilmemberrsquos Jonas Czycalla Burd and Hastings and Mayor Gunnarson Absent None Also present were Tammy Anderson and Conrad Anderson from the Wright County Assessors Department City Administrator Hinnenkamp 2019Assessment City Assessor Conrad Anderson introduced the 2019 Assessment Assessor Anderson read the Local Board of Appeal and Equalization Opening Statement and reviewed the details of the assessment review process Anderson reviewed the Written Appeals 102-020-002100- Christina Clark 125 Oak Avenue North Owner contacted Anderson but they have not had a chance to review the property Appeal was received 4119 102-073-001080 Rick Schultz Pintail Drive Called 4119 and they have not had a chance to review 36 Jasmine Avenue 102-700-000360 Ellis and Linda Knute After further review Anderson is recommending a value of $44100 This is for the personal property 2019 assessment was $51900 102-043-001120 001130 001140 Marlene Dingmann 631 Beech Circle requested to be changed to non-homestead Motion was made by Czycalla and seconded by Hastings to approve the recommendations of Knute and Dingmann as presented Motion was made by Wuollet and seconded by Czycalla to refer any recommended changes to Wright County for Clark and Schultz ADJOURNMENT Moved by Wuollet seconded by Jonas to adjourn at 654PM Motion carried unanimously ___________________________________ Dwight Gunnarson Mayor ATTEST __________________________________ Kelly Hinnenkamp City Administrator
CITY OF ANNANDALE Payment Approval Report - for City Council Page 1
Report dates 422019-562019 May 02 2019 0305PM
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1
1 NEOPOST USA Inc 56654756 RENTAL amp MAINTENANCE - MAI 04232019 11100 00
Total 1 11100 00
153
153 AMERIPRIDE LINEN amp APPARE 2201173387 PD - MATBRUSH 03282019 2315 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 WATER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 SEWER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 PW UNIFORM 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PD - MATBRUSH 04042019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PW UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 SEWER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 WATER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PW UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 SEWER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 WATER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PD - MATBRUSH 04112019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PD - MATBRUSH 04182019 268 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 WATER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 SEWER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PW UNIFORM 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PD - MATBRUSH 04252019 2316 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 WATER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 SEWER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PW UNIFORM 04252019 3181 00
Total 153 57099 00
180
180 ANNANDALE ADVOCATE P3158191723 CONGRATS- WRESTLING 04082019 1900 1900 04122019
180 ANNANDALE ADVOCATE P3158191723 RECYCLING AD 04082019 7000 7000 04122019
180 ANNANDALE ADVOCATE P3158191723 MINUTES 04082019 18624 18624 04122019
180 ANNANDALE ADVOCATE P3158191723 PUBLIC HEARING 04082019 1920 1920 04122019
180 ANNANDALE ADVOCATE P3158191723 ASSESSMENTS 04082019 3264 3264 04122019
180 ANNANDALE ADVOCATE P3158191723 2021 IMPR PLAN 04082019 8256 8256 04122019
180 ANNANDALE ADVOCATE P3158191723 DMV- BUSINESS OF THE WEEK 04082019 15600 15600 04122019
180 ANNANDALE ADVOCATE P3158191723 FT SEASONAL EMPLMT 04082019 16380 16380 04122019
180 ANNANDALE ADVOCATE P3158191723 NOTARY STAMP- GIEBENHAIN 04082019 3902 3902 04122019
Total 180 76846 76846
188
188 ANNANDALE AUTO CARE LLC 101394 SERVICE 08 CHEV 04182019 85579 00
188 ANNANDALE AUTO CARE LLC 101468 BATTERY 04242019 12895 00
188 ANNANDALE AUTO CARE LLC 101482 TRUCK SERVICE 04252019 142198 00
188 ANNANDALE AUTO CARE LLC 101526 TRUCK SERVICE 04262019 16470 00
Total 188 257142 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 2
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
190
190 ANNANDALE AREA CHAMBER APRIL2019 CITY EXPO BOOTH 04092019 10000 10000 04122019
Total 190 10000 10000
192
192 ANNANDALE PARTS SUPPLY 127199280 HEAD LIGHT 02282019 1699 1699 04122019
192 ANNANDALE PARTS SUPPLY 127199479 LIGHT BULBS 03042019 2565 2565 04122019
192 ANNANDALE PARTS SUPPLY 127199616 FLUSH KIT 03052019 7098 7098 04122019
192 ANNANDALE PARTS SUPPLY 127199723 HEADLIGHT BULB- SQUAD 51 03072019 949 949 04122019
192 ANNANDALE PARTS SUPPLY 127200389 GENERATOR PARTS 03182019 2318 2318 04122019
192 ANNANDALE PARTS SUPPLY 127200469 LUBE 03192019 791 791 04122019
192 ANNANDALE PARTS SUPPLY 127200476 HOSE 03192019 118 118 04122019
192 ANNANDALE PARTS SUPPLY 127200490 BATTERY 03192019 9858 9858 04122019
192 ANNANDALE PARTS SUPPLY 127200546 PARTS 03202019 1398 1398 04122019
192 ANNANDALE PARTS SUPPLY 127200609 FILTERS 03202019 23472 23472 04122019
192 ANNANDALE PARTS SUPPLY 127200627 STOP LEAK 03212019 873 873 04122019
192 ANNANDALE PARTS SUPPLY 127200652 FILTER 03222019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200654 FILTER 03212019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200713 FITTING 03222019 129 129 04122019
192 ANNANDALE PARTS SUPPLY 127200757 PARTS 03222019 2178 2178 04122019
192 ANNANDALE PARTS SUPPLY 127200939 CLEANER 03252019 2339 2339 04122019
192 ANNANDALE PARTS SUPPLY 127201161 SOAP 03282019 909 00
192 ANNANDALE PARTS SUPPLY 127201244 LUBRICANT 05012019 2373 00
192 ANNANDALE PARTS SUPPLY 127201434 HOSE REPAIR 05012019 3637 00
192 ANNANDALE PARTS SUPPLY 127201488 HOSE REPAIR 04022019 7274 00
192 ANNANDALE PARTS SUPPLY 127202184 FLARE FITTINGS 04112019 1858 00
192 ANNANDALE PARTS SUPPLY 127202518 BRAKE CLEANER 04172019 3228 00
Total 192 77828 58549
200
200 ANNANDALE EMBROIDERY 2356 APD HATS 03272019 9000 00
Total 200 9000 00
230
230 ANNANDALE-MAPLE LAKE MARCH 2019 MAR 2019 FLOW 04152019 6260800 00
Total 230 6260800 00
240
240 ANNANDALE PLUMBING 1457 RPZ TESTING 03272019 28500 00
Total 240 28500 00
424
424 BERGESCH COMPUTER SERVI 16172 SERVICE CALL 04062019 7500 00
424 BERGESCH COMPUTER SERVI 16176 ADMIN-SERVICE CALL 04062019 7500 00
Total 424 15000 00
463
463 BOLTON amp MENK INC 0231771 LGU BSA 7 STAKEHOLDERS C 04122019 11700 00
463 BOLTON amp MENK INC 0231785 2022 PROJECT FACILITY PLAN 04122019 44500 00
463 BOLTON amp MENK INC 0231788 SAND PROFILE 04122019 117250 00
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT PLANS AN 04122019 1717300 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 3
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT STREETS 04122019 38000 00
Total 463 1928750 00
646
646 CENTRA SOTA LAKE REGION L 6308214 STREETS 04092019 11697 00
646 CENTRA SOTA LAKE REGION L 6308214 PARKS 04092019 14037 00
646 CENTRA SOTA LAKE REGION L 6308214 WATER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 SEWER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 PUBLIC WORKS 04092019 33531 00
646 CENTRA SOTA LAKE REGION L 6308342 STREETS 04292019 13024 00
646 CENTRA SOTA LAKE REGION L 6308342 PARKS 04292019 15629 00
646 CENTRA SOTA LAKE REGION L 6308342 WATER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 SEWER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 PUBLIC WORKS 04292019 37335 00
646 CENTRA SOTA LAKE REGION L 6308343 STREETS 04292019 16436 00
646 CENTRA SOTA LAKE REGION L 6308343 PARKS 04292019 19723 00
646 CENTRA SOTA LAKE REGION L 6308343 WATER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 SEWER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 PUBLIC WORKS 04292019 47116 00
Total 646 274380 00
710
710 CITY OF BUFFALO MARCH2019 MONTHLY NET MOTION 04012019 2000 2000 04122019
Total 710 2000 2000
810
810 COLONIAL LIFE amp ACCIDENT 7492424-0501 INSURANCE 04162019 42770 42770 04232019
Total 810 42770 42770
900
900 COUNTRY CHEVROLET INC CVCS139790 SQUAD 52 - TIRE REPAIR 04092019 1719 00
Total 900 1719 00
1336
1336 FARM RITE EQUIPMENT INC P42298 WIPER BLADESIDLER ASSY 04012019 36766 00
1336 FARM RITE EQUIPMENT INC W13484 HYDRAULIC HOSE 04172019 40840 00
Total 1336 77606 00
1338
1338 FASTENAL COMPANY MNBUF78347 SAFETY GLASSES 04172019 4656 00
1338 FASTENAL COMPANY MNBUF78393 TOOLS 04192019 892 00
Total 1338 5548 00
1420
1420 FIRE RELIEF ASSOCIATION MARCH2019 2019 SUPPLEMENTAL REIMB 04082019 100000 00
1420 FIRE RELIEF ASSOCIATION MARCH2019 2018 SUPPLEMENTAL REIMB 04082019 313920 00
Total 1420 413920 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 4
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1508
1508 F S 3 INC 60393 SAFETY VEST 04222019 5500 00
1508 F S 3 INC 60435 SAFETY VEST 04162019 5500 00
1508 F S 3 INC 60436 SAFETY VEST 04162019 5500 00
Total 1508 16500 00
1519
1519 GALLS AN ARAMARK COMPAN 012401488 UNIFORM - HAAG 04042019 8396 00
1519 GALLS AN ARAMARK COMPAN 012412561 UNIFORM - TOWNSEND 04052019 4198 00
Total 1519 12594 00
1630
1630 GOPHER STATE ONE-CALL IN 9030176 FAX TICKETS 03312019 2295 00
Total 1630 2295 00
1660
1660 GRAINGER INC W W 6144966281 TEST BALLS 04122019 15556 00
1660 GRAINGER INC W W 9135594712 PARTS 04032019 6459 00
1660 GRAINGER INC W W 9137921475 SHOCK 04052019 4717 00
1660 GRAINGER INC W W 9138437422 HOSE 04052019 9729 00
1660 GRAINGER INC W W 9146606448 DOOR OPENER 04152019 2735 00
1660 GRAINGER INC W W 9150739945 GLOVES 04192019 6216 00
1660 GRAINGER INC W W 9152417177 GARAGE DOOR OPENERS 04222019 19056 00
Total 1660 64468 00
1710
1710 HAWKINS INC 4475748 CHEMICALS 04092019 247584 00
Total 1710 247584 00
1760
1760 HILLYARDHUTCHINSON 603390067 MOP DUST- PW 04092019 4520 00
1760 HILLYARDHUTCHINSON 603390067 FOLD TOWELSTISSUE PAPER 04092019 19613 00
1760 HILLYARDHUTCHINSON 603406861 SUPER SHINESOAPWINDOW 04232019 46059 00
1760 HILLYARDHUTCHINSON 700376971 SCRUBBER REPAIR 04192019 9600 00
Total 1760 79792 00
1780
1780 HOLIDAY CREDIT OFFICE MARCH12019 PD FUEL 04012019 93317 93317 04122019
1780 HOLIDAY CREDIT OFFICE March2019 FD- FUEL 04012019 19714 19714 04122019
Total 1780 113031 113031
2130
2130 LITTLE FALLS MACHINE INC 355406 PLOW PARTS 04242019 14150 00
Total 2130 14150 00
2190
2190 LUNDEEN BROS INC 91792 OIL CHANGE 2017 DODGE SQA 03212019 5894 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 5
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2190 5894 00
2210
2210 M amp M BUS SERVICE 10193369 DRUG TESTING- KIRBY NICKA 03152019 3000 00
2210 M amp M BUS SERVICE 10193370 ALCOHOL TESTING- KIRBY NIC 03192019 3000 00
2210 M amp M BUS SERVICE 10193419 DRUG TESTING- NICHOLLE CO 04092019 6000 00
Total 2210 12000 00
2211
2211 M amp M EXPRESS SALES amp SER 182624 MOWER PARTS 04122019 36108 00
2211 M amp M EXPRESS SALES amp SER 183289 MOWER PARTS 04182019 12319 00
Total 2211 48427 00
2260
2260 MAPLE LAKE LUMBER COMPA 168882 LUMBER 04222019 1659 00
Total 2260 1659 00
2272
2272 MARES EXCAVATING APRIL 2019 WATER LEAK 04012019 70000 00
Total 2272 70000 00
2273
2273 MARKET PLACE II 107 XTRA SOAP-FD 04012019 1332 1332 04232019
2273 MARKET PLACE II 107 MEALS- TC 04012019 5142 5142 04232019
Total 2273 6474 6474
2375
2375 METRO WEST INSPECTION SE 1978 370 BIG WOODS LN 17-04 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 250 EXCELSIOR AVE N 17-69 04252019 11145 00
2375 METRO WEST INSPECTION SE 1978 202 NONA DR 17-60 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 135 EXCELSIOR AVE N 17-127 04252019 17820 00
2375 METRO WEST INSPECTION SE 1978 630 LAKE DR W 19-7 04252019 2500 00
2375 METRO WEST INSPECTION SE 1978 212 ASH ST E 19-13 04252019 5198 00
2375 METRO WEST INSPECTION SE 1978 330 CHESTNUT ST E 19-22 04252019 2500 00
Total 2375 41663 00
2419
2419 MID-MINNESOTA CONCRETE 19073 HOT WATER 03112019 49000 00
2419 MID-MINNESOTA CONCRETE 19075 HOT WATER 03132019 49000 00
2419 MID-MINNESOTA CONCRETE 19076 HOT WATER 03042019 24500 00
Total 2419 122500 00
2425
2425 MIDWAY IRON amp METAL INC 420761 STEEL 04172019 5363 00
Total 2425 5363 00
2465
2465 MCP CARSTAR COLLISION CE 41349297 SQUAD 51 REPAIRS 01052019 175667 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 6
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2465 175667 00
2511
2511 CENTER POINT ENERGY 110 PAVILION 04122019 4986 00
2511 CENTER POINT ENERGY 111 TC 04122019 5309 00
2511 CENTER POINT ENERGY 112 OLD PW SHOP 05022019 4465 00
2511 CENTER POINT ENERGY 113 WTP 04122019 50216 00
2511 CENTER POINT ENERGY 114 HOCKEY RINK 04122019 4221 00
2511 CENTER POINT ENERGY 116 WARMING HOUSE 04162019 1500 00
2511 CENTER POINT ENERGY 116 CITY HALL 04162019 23624 00
2511 CENTER POINT ENERGY 117 FD 04122019 35974 00
Total 2511 130295 00
2525
2525 MINNESOTA COMPUTER SYST 263763 ADMIN COPIER 04082019 34758 00
2525 MINNESOTA COMPUTER SYST 463318 BW S3HR 04022019 5503 00
Total 2525 40261 00
2635
2635 CORE amp MAIN LP K426017 CULVERT 04242019 145000 00
2635 CORE amp MAIN LP K441242 LOCATOR 04222019 75265 00
Total 2635 220265 00
2698
2698 MPPOA MARCH 2019 NEW MEMBER DUES- LDF 04082019 3900 00
2698 MPPOA MARCH202019 2019 DUES- M FAUST 03202019 5000 00
Total 2698 8900 00
2819
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER- DMV 03012019 5830 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-ADMIN 03012019 13604 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-PD 03012019 2160 00
2819 NORTHERN BUSINESS PRODU 385745-0 CALCULATOR INK 03012019 440 00
2819 NORTHERN BUSINESS PRODU 386830-0 DESK TRAYSCALC ROLLERS 04082019 8169 00
2819 NORTHERN BUSINESS PRODU 386830-1 DVD-RW 03072019 2859 00
2819 NORTHERN BUSINESS PRODU 387602-0 BINDERDESK TRAYSFILE 03082019 8641 00
2819 NORTHERN BUSINESS PRODU 393165-0 PD - OFFICE SUPPLIES 35303 03272019 2158 00
2819 NORTHERN BUSINESS PRODU 396891-0 PENSSTAPLERSTAPLES 05012019 15450 00
2819 NORTHERN BUSINESS PRODU 396891-1 HEATER 05012019 5285 00
2819 NORTHERN BUSINESS PRODU 396891-2 CALCULATOR 05012019 8662 00
2819 NORTHERN BUSINESS PRODU 400116-0 FOLDERSPENS 05012019 6507 00
2819 NORTHERN BUSINESS PRODU 400134-0 EMPLOYEE FOLDERSRECPT B 05012019 16499 00
Total 2819 96264 00
2832
2832 NORTHWEST ASSOC CONSUL 24128 REZONE FOR SCHOOL 04042019 3330 00
2832 NORTHWEST ASSOC CONSUL 24128 SAND PROFILE 04042019 9450 00
2832 NORTHWEST ASSOC CONSUL 24129 VERIZON 04042019 20000 00
Total 2832 32780 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 7
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
2934
2934 PLEASANT LAKE ASSOCIATION 42919 PLEASANT LAKE ASSN 05012019 500000 00
Total 2934 500000 00
2962
2962 PRINCIPAL LIFE 108 INSURANCE 04222019 14144 14144 04232019
Total 2962 14144 14144
3161
3161 S P ELECTRIC INC 7282 OLD SPLICERS REMOVAL 04112019 99054 00
Total 3161 99054 00
3180
3180 SCHWAAB INC C039891 DATE STAMP 03272019 16776 00
3180 SCHWAAB INC C041311 REPLACE PADS 04042019 2050 00
Total 3180 18826 00
4006
4006 SHRED IT USA - MPLS 8126937775 SHREDDING SERVICES 03312019 45401 00
Total 4006 45401 00
4021
4021 SOKS RAPID CAR WASH 216-1384 SQUAD WASHES 04012019 11865 11865 04122019
Total 4021 11865 11865
4040
4040 SUMMIT COMPANIES 1368349 FIRE SYSTEM MAINT 04102019 34500 00
4040 SUMMIT COMPANIES 1368350 ANNUAL FIRE ALARM INSP 04102019 23000 00
4040 SUMMIT COMPANIES 1368538 CITY HALL FIRE SUPPRESION 04052019 19800 00
4040 SUMMIT COMPANIES 1371739 FIRE EXT MAINTENANCE 04292019 46280 00
4040 SUMMIT COMPANIES 1372404 CITY HALLPD - ANNUAL FIRE A 04292019 16715 00
Total 4040 140295 00
4130
4130 STERNBERG LANTERNS INC 50379 LIGHT SOCKETS 04122019 30000 00
Total 4130 30000 00
4222
4222 TASC IN1499967 ADMIN FEES 04172019 43320 00
Total 4222 43320 00
4269
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
Total 4269 324000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 8
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4337
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16061 16061 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
Total 4337 48181 48181
4365
4365 UTILITY CONSULTANTS INC 101046 COLIFORM 03282019 8000 00
Total 4365 8000 00
4377
4377 VERIZON WIRELESS 9827946389 PW IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 FD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 INVESTIGATOR COMPUTER 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD CELL PHONE 04102019 16639 16639 04232019
4377 VERIZON WIRELESS 9827946389 PW CELL PHONE 04102019 26360 26360 04232019
Total 4377 57003 57003
4481
4481 WEST CENTRAL SANITATION I 121 RECYCLE 04302019 362792 00
4481 WEST CENTRAL SANITATION I 121 REFUSE 04302019 936578 00
4481 WEST CENTRAL SANITATION I MARCH 2019 RECYCLE 03312019 451419 451419 04122019
4481 WEST CENTRAL SANITATION I MARCH 2019 REFUSE 03312019 908999 908999 04122019
Total 4481 2659788 1360418
4495
4495 WINDSTREAM APRIL2019 LS 805 NORWAY DR E 04032019 24428 24428 04122019
4495 WINDSTREAM APRIL32019 320-274-2793 04032019 3830 3830 04122019
Total 4495 28258 28258
4520
4520 WRIGHT COUNTY HIGHWAY DE 1340 APEX 04162019 12100 00
Total 4520 12100 00
4548
4548 WRIGHT-HENNEPIN COOPERA 104 TC 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 105 CITY HALL SECURITY 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 106 LS 1255 BUSINESS BLVD 04102019 1484 1484 04232019
4548 WRIGHT-HENNEPIN COOPERA 119 STREET LIGHTS 04102019 13973 00
Total 4548 20047 6074
4559
4559 XCEL ENERGY 0774352025 ACCOUNT 51-4985655-1 03282019 1910 1910 04122019
4559 XCEL ENERGY 0774781723 ACCOUNT 51-6464610-6 04082019 5051 5051 04122019
4559 XCEL ENERGY 0774798834 ACCOUNT 51-6875531-1 04012019 2964 2964 04122019
4559 XCEL ENERGY 0774851593 ACCOUNT 51-0011253419-4 04012019 52824 52824 04122019
4559 XCEL ENERGY 0774856745 ACCOUNT 51-0010892786-1 04012019 1379 1379 04122019
4559 XCEL ENERGY 0775014393 ACCOUNT 51-6076585-1 04022019 11396 11396 04122019
4559 XCEL ENERGY 0775442400 ACCOUNT 51-6024519-2 04042019 365444 365444 04232019
CITY OF ANNANDALE Payment Approval Report - for City Council Page 9
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4559 XCEL ENERGY 0775852647 ACCOUNT 51-6024518-1 04082019 156465 156465 04232019
4559 XCEL ENERGY 0777794063 ACCOUNT 51-4192659-4 04182019 3117 00
4559 XCEL ENERGY 0779111699 ACCOUNT 51-4985655-1 04262019 1767 00
4559 XCEL ENERGY 778173400 ACCOUNT 51-4636619-8 04222019 6391 00
Total 4559 608708 597433
4648
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 23750 00
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 00 00
4648 A R ENGH 190448 SPRING MAINTENANCE 04302019 21375 00
4648 A R ENGH 190451 SPRING MAINTENANCE- TC 04302019 14250 00
Total 4648 59375 00
4716
4716 JOVANOVICH KADLEC amp ATHM 16709 KRONQUIST LOT 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 LEASE WITH WILES 03312019 28000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 ORD AMENDMENT- MICRO DIS 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 GENERAL 03312019 8750 00
4716 JOVANOVICH KADLEC amp ATHM 16709 PERSONNEL POLICY 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 CONTROLLED BURN HOLD HA 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
Total 4716 82250 00
4721
4721 MANEY INTERNATIONAL 803662X1 PARTS 02072019 2275 2275 04122019
Total 4721 2275 2275
4734
4734 MOTOROLA SOLUTIONS INC 16042791 RADIO BATTERIES 03252019 16800 00
Total 4734 16800 00
4743
4743 CARDMEMBER SERVICE 122 ATRIST EASEL 05012019 10305 00
4743 CARDMEMBER SERVICE 122 KEROSENE 05012019 6329 00
4743 CARDMEMBER SERVICE 122 POLLUTION CONTROL 05012019 41500 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC 05012019 1639 00
4743 CARDMEMBER SERVICE 122 AMAZON- 40 AMP RELAY 05012019 2898 00
4743 CARDMEMBER SERVICE 122 A-1 - BULB KIT 05012019 2503 00
4743 CARDMEMBER SERVICE 122 MENARDS-POTHOLE PATCH 05012019 47014 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC BALL VALVE 05012019 1770 00
4743 CARDMEMBER SERVICE 122 TOTAL TOOL- SHOE - PETER 05012019 5123 00
4743 CARDMEMBER SERVICE 122 PRYOR- EXCEL CLASSES- MIS 05012019 25600 00
4743 CARDMEMBER SERVICE 122 MN CHIEFS ASSOC 05012019 19900 00
4743 CARDMEMBER SERVICE 122 BEST BUY- 05012019 8589 00
4743 CARDMEMBER SERVICE 122 BEST BUY 05012019 17178 00
4743 CARDMEMBER SERVICE 122 USPS 05012019 1149 00
4743 CARDMEMBER SERVICE 122 PAYPAL- INTER ASSOC EVID- R 05012019 5000 00
4743 CARDMEMBER SERVICE 122 ACTION TARGETS- 05012019 14662 00
4743 CARDMEMBER SERVICE 122 AMAZON- METAL DUSTPAN 05012019 2894 00
4743 CARDMEMBER SERVICE 122 AMAZON- BATTERIES 05012019 2124 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 10
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 4743 216177 00
4752
4752 NCPERS GROUP LIFE INS MAY2019 INSURANCE 04172019 1600 00
Total 4752 1600 00
4769
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 39944 00
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 00 00
Total 4769 39944 00
4793
4793 DELTA DENTAL 7626938 INSURANCE 04152019 139599 139599 04232019
Total 4793 139599 139599
4831
4831 GENERAL RENTAL CENTER OF 1174533 HEATER RENTAL 03112019 11000 00
Total 4831 11000 00
4889
4889 CLASSIC CLEANING COMPANY 28038 CITY HALL- 04082019 67375 00
4889 CLASSIC CLEANING COMPANY 28038 PD- 04082019 14700 00
4889 CLASSIC CLEANING COMPANY 28038 LIBRARY- 04082019 40425 00
4889 CLASSIC CLEANING COMPANY 28039 TC 04082019 23000 00
Total 4889 145500 00
4945
4945 COUNTRY REPAIR INC 1568 KOHLER 100 GENERAT REPAIR 02212019 348966 00
Total 4945 348966 00
4955
4955 WORKFORCE INTEGRITY NET 41219 PREEMPLOYMENT TEST KIRBY 03312019 9300 00
Total 4955 9300 00
4968
4968 Volunteer Firefighter Ben Assoc of MARCH2019 BENEFIT RENEWALS 04012019 20600 20600 04122019
Total 4968 20600 20600
5002
5002 BUREAU OF CRIMINAL APPRE 536318 CJDN 03312019 27000 00
Total 5002 27000 00
5003
5003 BOLAND PRODUCTION SUPPL 11-6569 BLANK AMMUNITION 03042019 10000 00
Total 5003 10000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 11
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5006
5006 MIDCONTINENT COMMUNICATI 157013401102 FD 04092019 14765 14765 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PW 04092019 26599 26599 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 TC 04092019 3717 3717 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 DMV 04092019 12056 12056 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PD 04092019 20823 20823 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 CITY HALL 04092019 24864 24864 04122019
Total 5006 102824 102824
5031
5031 A1 RAPID LUBE 112018 SQUAD 51 OIL CHANGE 04092019 4145 4145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 51 04092019 9145 9145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 52 04092019 1500 1500 04122019
5031 A1 RAPID LUBE 11302018 SQUAD 52 WASH 04092019 1500 1500 04122019
5031 A1 RAPID LUBE DEC2018 SQUAD 51 OIL CHANGE 04092019 5000 5000 04122019
Total 5031 21290 21290
5039
5039 KAMCO 201800 CRACKFILLING 04292019 5395141 00
Total 5039 5395141 00
5056
5056 CASEYS GENERAL STORES IN MARCH 2019 PD FUEL 04012019 6449 6449 04122019
Total 5056 6449 6449
5067
5067 ZUERCHER PA0001614 GPS RECEIVERS 03102019 32800 00
5067 ZUERCHER PA0001669 RECORDS- PROPERTY amp EVID 03292019 102100 00
Total 5067 134900 00
5074
5074 Potentia MN Solar Fund 1 LLC 2019-02-1761- 520 ASH - WTP 02282019 28907 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- CEMETARY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 370 PARK SEWAGE PUMP 02282019 7041 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 520 ASH - WTP 02282019 14573 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 605 WARREN 02282019 3083 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 200 EXCELSIOR 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- BALL PARL LIGHTING 02282019 1136 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- CITY HALL 02282019 16228 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- PAVILION 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- HOCKEY RINK 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- UNIT SOUTH 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 30 CEDAR STREET LIGHT 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 111 CEDAR ST 02282019 163 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 15 CONV CLUB RD - LS 02282019 2596 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS 805 NORWAY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 640 ACACIA 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1792- FD 02282019 5895 00
Total 5074 83677 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 12
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5075
5075 HALVORSON LANGEMO PASC 2927 ARPIL PROSECUTION 03282019 139479 139479 04232019
5075 HALVORSON LANGEMO PASC 2994 MAY PROSECUTION 04262019 139479 00
Total 5075 278958 139479
5086
5086 CLASSIC CARPET amp FLOOR CA 1312 FD- CARPET CLEANING 04102019 24500 00
Total 5086 24500 00
5099
5099 STENGER PETER march72019 WATER LICENSE 03072019 3200 3200 04042019
Total 5099 3200 3200
5101
5101 GAPINSKI AMELIA 118 MILEAGE- ST PAUL-147 MILES 04222019 8526 8526 04232019
5101 GAPINSKI AMELIA 118 LUNCH- ST PAUL 04222019 1182 1182 04232019
5101 GAPINSKI AMELIA 118 PARKING RAMP- ST PAUL 04222019 1800 1800 04232019
Total 5101 11508 11508
5103
5103 GLUNZ DAVID D 589207 1ST QTR SEXTON FEE 2019 04222019 12000 00
Total 5103 12000 00
5108
5108 RECON ROBOTICS 74975 ROBOT REPAIR 03082019 40000 00
Total 5108 40000 00
5120
5120 MELGAARD SERVICES 115 LITTLE JIMS REPAIR 03272019 65000 00
Total 5120 65000 00
5137
5137 HARTZELL STEVE DEC2018 SAFETY SHOES 04092019 13998 13998 04122019
Total 5137 13998 13998
5138
5138 HOGLUND BUS COMPANY 133269 PLOW TRUCK REPAIR 04232019 242869 00
Total 5138 242869 00
5139
5139 GIEBENHAIN KARIE APRIL 2019 TRAVELTRAINING 04292019 1259 00
Total 5139 1259 00
5140
5140 GRABHAM JUDY APRIL2019 GARDEN MATERIALS REIMBUR 04302019 12312 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 13
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 5140 12312 00
Grand Totals 23368095 2894268
Dated __________________________________________
Mayor __________________________________________
Dwight Gunnarson
City Council __________________________________________
Shelly Jonas
__________________________________________
Jullie Hastings
__________________________________________
Corey Czycalla
__________________________________________
Matthew Wuollet
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
CITY OF ANNANDALE Check Register Page 1Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03012019 03042019 1005 EFT - ASPIRE 14 47332-03012019 03042019 1006 EFT - FLEXSYSTEM 9 21153-03012019 03042019 1007 EFT - MINNESOTA 8 152678-03012019 03042019 1008 EFT-FURTHER 12 194842-03012019 03042019 1008 EFT-FURTHER 12 70000-03012019 03042019 1009 EFT-PERA 5 197211-03012019 03042019 1009 EFT-PERA 5 227551-03012019 03042019 1009 EFT-PERA 5 164253-03012019 03042019 1009 EFT-PERA 5 246377-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 291789-03152019 03182019 1011 EFT - ASPIRE 14 50777-03152019 03182019 1012 EFT - FLEXSYSTEM 9 21153-03152019 03182019 1013 EFT - MINNESOTA 8 170353-03152019 03182019 1014 EFT-FURTHER 12 199842-03152019 03182019 1015 EFT-NATIONWIDE RETIREMENT 3 45727-03152019 03182019 1016 EFT-PERA 5 202077-03152019 03182019 1016 EFT-PERA 5 233162-03152019 03182019 1016 EFT-PERA 5 167748-03152019 03182019 1016 EFT-PERA 5 251623-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 338787-03012019 03042019 3231 FERRELL MISTY 123 207493-03012019 03042019 3232 HINNENKAMP KELLY 127 296930-03012019 03042019 3233 JARMON VICKI I 134 162692-03012019 03042019 3234 KRIENKE CARRIE L 136 118186-03012019 03042019 3235 GAPINSKI AMELIA 142 76605-03012019 03042019 3236 GIEBENHAIN KARIE 143 63912-03012019 03042019 3237 HERR JEFFREY J 208 198056-03012019 03042019 3238 STANDAFER PETER A 217 171766-03012019 03042019 3239 BERG TERESA 233 29593-03012019 03042019 3240 TAVARES AARON J 234 144943-03012019 03042019 3241 PETERSON KENNETH J 235 6543-03012019 03042019 3242 ETSHOKIN LOUIS RICHARD 238 69332-03012019 03042019 3243 GRIGGS DEREK C 245 173791-03012019 03042019 3244 SMITH TARA 251 104275-03012019 03042019 3245 MARES NICHOLAS J 306 46531-03012019 03042019 3246 GLUNZ DAVID D 323 215466-03012019 03042019 3247 STENGER PETER 324 148864-03012019 03042019 3248 COREY NICHOLLE 328 176647-03012019 03042019 3249 HARTZELL STEVE 329 123679-03012019 03042019 3250 WICKER MITCHELL 360 157433-03012019 03042019 3251 HASTINGS JULLIE K 803 13391-
CITY OF ANNANDALE Check Register Page 2Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 3252 FERRELL MISTY 123 186726-03152019 03182019 3253 HINNENKAMP KELLY 127 296930-03152019 03182019 3254 JARMON VICKI I 134 156691-03152019 03182019 3255 KRIENKE CARRIE L 136 109765-03152019 03182019 3256 GAPINSKI AMELIA 142 78334-03152019 03182019 3257 GIEBENHAIN KARIE 143 62780-03152019 03182019 3258 HERR JEFFREY J 208 228423-03152019 03182019 3259 STANDAFER PETER A 217 188333-03152019 03182019 3260 TAVARES AARON J 234 143820-03152019 03182019 3261 ETSHOKIN LOUIS RICHARD 238 36648-03152019 03182019 3262 Void03152019 03182019 3263 SMITH TARA 251 100781-03152019 03182019 3264 MARES NICHOLAS J 306 9080-03152019 03182019 3265 GLUNZ DAVID D 323 263393-03152019 03182019 3266 STENGER PETER 324 156283-03152019 03182019 3267 COREY NICHOLLE 328 141112-03152019 03182019 3268 HARTZELL STEVE 329 114544-03152019 03182019 3269 WICKER MITCHELL 360 231604-03152019 03182019 3270 RANDALL STEVEN R 570 23273-03152019 03182019 3271 TOMES BRIAN C 571 19117-03152019 03182019 3272 EDWARDS DANIEL J 572 25765-03152019 03182019 3273 JARVIS TRYSTON 573 16808-03152019 03182019 3274 GRIGGS DEREK C 245 209088-03152019 03182019 53766 RAMSTAD DONALD E 533 17270 03152019 03182019 54586 RAMSTAD DONALD E 533 26412 03012019 03042019 54850 ENGFER NANCY E 204 207304-03012019 03042019 54851 FLEMMING MITCHELL E 206 33085-03012019 03042019 54852 HALLER JOSEPH D 305 277811-03012019 03042019 54853 SMART MATTHEW A 331 31168-03012019 03042019 54854 GUNNARSON DWIGHT R 802 18932-03012019 03042019 54855 JONAS SHELLY 804 13391-03012019 03042019 54856 CZYCALLA COREY 806 13391-03012019 03042019 54857 WUOLLET MATTHEW L 821 13391-03012019 03042019 54858 ROTH GREGORY W 912 1847-03012019 03042019 54859 FRANZEN CLIFFORD 913 1847-03012019 03042019 54860 SCHWARZKOPF ERIC 917 2770-03012019 03042019 54861 BAACK LONNIE L 919 1847-03012019 03042019 54862 NILSON MAYNARD A 921 1847-03012019 03042019 54863 DRISTE JOHN 950 1847-03012019 03042019 54864 PETERSON LEE W 980 1847-03012019 03042019 54865 SEAGRAVES RICHARD T 985 1847-03012019 03042019 54866 WAGNER RICHARD 990 2770-03152019 03182019 54949 ENGFER NANCY E 204 163991-03152019 03182019 54950 FLEMMING MITCHELL E 206 33085-03152019 03182019 54951 FAUST MITCHEL L 241 144665-03152019 03182019 54952 HALLER JOSEPH D 305 293266-03152019 03182019 54953 SMART MATTHEW A 331 12698-03152019 03182019 54954 BROWN JOHN D 501 16254-03152019 03182019 54955 DAGNER JOHN A 503 42112-
CITY OF ANNANDALE Check Register Page 3Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 54956 FAHEY MARCUS D 507 17270-03152019 03182019 54957 GRINDLE GARY L 512 65938-03152019 03182019 54958 HAAG BRIAN 514 151209-03152019 03182019 54959 MACHOVSKY JR DALE R 529 27088-03152019 03182019 54960 PICKEN SCOTT W 53203152019 03182019 54961 RAMSTAD DONALD E 533 35555-03152019 03182019 54962 ROEPKE JEFFREY A 535 34539-03152019 03182019 54963 TOWNSEND KRISTOPHER C 546 91057-03152019 03182019 54964 WANG RYAN A 549 46822-03152019 03182019 54965 WUOLLET MATTHEW L 553 24934-03152019 03182019 54966 TORRES HORACIO JR 563 43404-03152019 03182019 54967 KOLB JOHN E 564 25749-03152019 03182019 54968 DWENGER JOSEPH A JR 568 41557-03152019 03182019 54969 HARVEY ADAM 574 42019-03152019 03182019 54970 SCHMIDT LISA A 575 14869-03152019 03182019 54971 OLSON NATHAN G 576 14869-03152019 03182019 54972 PEARSON SEAN 577 27151-03152019 03182019 54973 SCHAUFLER CHRISTINA 578 26505-03152019 03182019 54974 HOEFER JUSTIN A 579 18101-03152019 03182019 54982 RAMSTAD DONALD E 533 26412-03152019 03182019 54983 RAMSTAD DONALD E 533 17270-
Grand Totals 119 12049646-
CITY OF ANNANDALE
REQUEST FOR COUNCIL ACTION
Originating Department Administration
Meeting Date May 6 2019
Agenda No 3A
Agenda Section New Business
Item 2018 Audit
BACKGROUND The City is required to conduct an audit annually The attached audit will be presented at the meeting RECOMMENDATION Motion to approve the 2018 Audit as presented
CPAS amp ADVISORSWILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
AUDITED FINANCIAL STATEMENTS AND
DECEMBER 31 2018
CONWAY DEUTH amp SCHMIESING PLLP
SUPPLEMENTARY INFORMATION
This page intentionally left blank
PAGE
ELECTED OFFICIALS AND ADMINISTRATION 1
INDEPENDENT AUDITORS REPORT 2-4
REQUIRED SUPPLEMENTARY INFORMATION
Managements Discussion and Analysis 5-12
BASIC FINANCIAL STATEMENTS
Statement of Net Position 13
Statement of Activities 14
Balance Sheet - Governmental Funds 15
Reconciliation of the Governmental FundsBalance Sheet to the Statement of Net Position 16
Statement of Revenues Expenditures and Changes in Fund Balances -Governmental Funds 17
Reconciliation of the Statement of Revenues Expendituresand Changes in Fund Balances of Governmental Fundsto the Statement of Activities 18
Statement of Revenues Expenditures and Changes in Fund Balances -Budget and Actual - General Fund 19
Statement of Net Position - Proprietary Funds 20
Statement of Revenues Expenses and Changes in Net Position -Proprietary Funds 21
Statement of Cash Flows - Proprietary Funds 22-23
Notes to the Financial Statements 24-57
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of the Proportionate Share of the Net Pension Liability 58
Schedule of Employer Contributions 59
Schedule of Changes in the Citys Net Pension Liability and Related Ratios 60
Notes to the Required Supplementary Information 61-63
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
PAGE
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
SUPPLEMENTARY INFORMATION
COMBINING STATEMENTS OF NONMAJOR FUNDS
Combining Balance Sheet - Nonmajor Governmental Funds 64
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds 65
Combining Balance Sheet - Nonmajor Governmental Funds - Special Revenue 66
Combining Balance Sheet - Nonmajor Governmental Funds - Debt Service 67
Combining Balance Sheet - Nonmajor Governmental Funds - Capital Projects 68
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Special Revenue 69
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Debt Service 70
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Capital Projects 71
FINANCIAL SCHEDULE
Schedule of Long-Term Liabilities 72
COMPLIANCE SECTION
Independent Auditors Report on Minnesota Legal Compliance 73
Independent Auditors Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements Performedin Accordance with Government Auditing Standards 74-75
Schedule of Findings 76-77
Summary Schedule of Prior Audit Findings 78
Elected Officials Position Term Expires
Dwight Gunnarson Mayor December 31 2018
Corey Czycalla Council Member December 31 2018
Shelly Jonas Council Member December 31 2018
Matthew Wuollet Council Member December 31 2020
Jullie Hastings Council Member December 31 2020
Administration
Kelly Hinnenkamp Administrator Appointed
Misty Ferrell Treasurer Appointed
CITY OF ANNANDALE MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATIONDECEMBER 31 2018
1
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Report on the Financial Statements
Managements Responsibility for the Financial Statements
Auditors Responsibility
beli
INDEPENDENT AUDITORS REPORT
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 Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Cityrsquos basic financial statements as listed in the table of contents
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
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
2
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 entitys 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 entitys 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
Opinions
Other Matters
Required Supplementary Information
Supplementary and Other Information
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 Annandale Minnesota as of December 31 2018 and the respective changes in financial position and where applicable cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America
Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions and the Schedule of Changes in the Citys 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 managements 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
3
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Cityrsquos basic financial statements The statements and schedules listed in the table of contents as supplementary information and the Elected Officials and Administration section are presented for purposes of additional analysis and are not a required part of the basic financial statements
The supplementary information is the responsibility of management and was derived from and relates 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 supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole
The Elected Officials and Administration section has 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 the information presented
Other Reporting Required by Government Auditing Standards
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
4
In accordance with Government Auditing Standards we have also issued our report dated May 6 2019 on our consideration of the Citys 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 results of that testing and not to provide an opinion on the effectiveness of the Cityrsquos 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 Cityrsquos internal control over financial reporting and compliance
May 6 2019
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REQUIRED SUPPLEMENTARY INFORMATION
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-
-
-
-
The City as a Whole Statement of Net Position and Statement of Activities
Our analysis of the City of Annandale begins with the Statement of Net Position and the Statement of Activities One of the most important questions asked about the Cityrsquos finances is ldquoIs the City as a whole better off or worse off as a result of the yearrsquos activitiesrdquo The Statement of Net Position and the Statement of Activities both report information about the City as a whole and about its activities in a way that helps answer this question The Statement of Net Position includes all assets and deferred outflows of resources and liabilities and deferred inflows of resources using the accrual basis of accounting In the Statement of Activities all of the current yearrsquos revenues and expenses are taken into account regardless of when cash is received or paid These two statements report the Cityrsquos net position and changes in them You can think of the Cityrsquos net positionmdashthe difference between assets and deferred outflows of resources and liabilities and deferred inflows of resourcesmdashas one way to measure the Cityrsquos financial health Over time increases or decreases in the Cityrsquos net position is one indicator of whether the Cityrsquos financial health is improving or deteriorating
You will need to consider other nonfinancial factors however to assess the overall health of the City of Annandale
In the Statement of Net Position and the Statement of Activities we divide the City into two kinds of activities
Governmental Activities - Most of the Citys basic services are reported here including general government public safety public works culture and recreation and economic development Property taxes and state and federal grants finance most of these activities
5
This annual report consists of a series of financial statements The Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the Cityrsquos finances Fund financial statements are presented after the Statement of Activities Fund financial statements also report the Cityrsquos operations in more detail than the government-wide statements by providing information about the Cityrsquos funds The notes to the financial statements provide information that is essential to a full understanding of the data provided in the government-wide and fund financial statements This annual report also contains other supplementary information in addition to the basic financial statements
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
This section of the basic financial statements of the City of Annandale (the City) presents a discussion and analysis of the Cityrsquos financial performance during the fiscal year ended December 31 2018 Please read it in conjunction with the Cityrsquos basic financial statements following this section
Financial Highlights
The assets and deferred outflows of resources of the City exceeded liabilties and deferred inflows of resources by $16461537
The Cityrsquos total net position increased by $1317551
The Cityrsquos governmental funds reported combined ending fund balances of $4349540 an increase of $122322 The Governmental Funds have $1240520 available for spending at the Citys discretion
At the end of the current fiscal year unassigned fund balance for the General Fund was $1697339 or 9417 of total General Fund expenditures of $1802505
Using This Annual Report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
The proprietary fund financial statements can be found on pages 20-23 of this report
Notes to the 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 The notes to the financial statements can be found on pages 24-57 of this report
6
Proprietary Funds - When the City of Annandale charges customers for the services it providesmdashwhether to outside customers or to other units of the Citymdashthese services are generally reported in proprietary funds Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities In fact the Cityrsquos enterprise funds are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information such as cash flows for proprietary funds
Business-Type Activities - The City charges a fee to customers to help it cover all or most of the cost of certain services it provides The Citys Water Sewer RefuseRecycling and Storm Utility funds are reported here
The Citys Most Significant Funds Fund Financial Statements
Our analysis of the Cityrsquos major funds begins with the fund financial statements These statements provide detailed information about the most significant fundsmdashnot the City as a whole Some funds are required to be established by state law and by bond covenants However the City Council establishes other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes grants and other money The Citys two kinds of funds-governmental and proprietary-use different accounting approaches
Governmental Funds - Most of the Cityrsquos basic services are reported in governmental funds Governmental funds focus on how money flows into and out of those funds and the balances left at year-end that are available for spending These funds are reported using an accounting method called modified accrual accounting which measures cash and all other financial assets that can readily be converted to cash The governmental fund statements provide a detailed short-term view of the Cityrsquos general government operations and the basic services it provides Governmental fund information helps the reader of the statements determine whether there are more or fewer financial resources that can be spent in the near future to finance the Cityrsquos programs We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation after the fund financial statements
The governmental fund financial statements can be found on pages 15-19 of this report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 5190696$ 5190633$ 63$ Net Capital Assets 10406611 10638601 (231990) Net Pension Asset 517946 440028 77918
Total Assets 16115253 16269262 (154009)
Deferred Outflows of Resources 621929 855064 (233135)
Total Assets and DeferredOutflows of Resources 16737182$ 17124326$ (387144)$
Current and Other Liabilities 1080947$ 1068593$ 12354$ Long-Term Liabilities 5393130 6383354 (990224)
Total Liabilities 6474077 7451947 (977870)
Deferred Inflows of Resources 886892 904112 (17220)
Net PositionNet Investment in Capital Assets 4962623 4377847 584776 Restricted 2021421 2178740 (157319) Unrestricted 2392169 2211680 180489
Total Net Position 9376213 8768267 607946
Total Liabilities Deferred Inflowsof Resources and Net Position 16737182$ 17124326$ (387144)$
Statement of Net Position
The Cityrsquos net position increased from a year ago Our analysis below focuses on the net position (Tables 1 and 2) andchanges in net position (Tables 3 and 4) of the Cityrsquos governmental and business-type activities
Table 1Comparative Condensed Statement of Net Position
Governmental Activities
7
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 179979$ 85557$ 94422$ Equity Interest 7004898 7023511 (18613) Net Capital Assets 10543232 10887885 (344653)
Total Assets 17728109 17996953 (268844)
Deferred Outflows of Resources 35051 59103 (24052)
Total Assets and DeferredOutflows of Resources 17763160$ 18056056$ (292896)$
Current and Other Liabilities 1595412$ 1396254$ 199158$ Long-Term Liabilities 9028762 10236810 (1208048)
Total Liabilities 10624174 11633064 (1008890)
Deferred Inflows of Resources 53662 47273 6389
Net PositionNet Investment in Capital Assets 8625232 8741281 (116049) Restricted 74208 36985 37223 Unrestricted (1614116) (2402547) 788431
Total Net Position 7085324 6375719 709605
Total Liabilities Deferred Inflowsof Resources and Net Position 17763160$ 18056056$ (292896)$
Business-Type Activities
8
Comparative Condensed Statement of Net PositionTable 2
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 652677$ 598474$ 54203$ Operating Grants and Contributions 122213 111759 10454 Capital Grants and Contributions 187016 576626 (389610)
General RevenuesProperty Taxes 1485895 1463472 22423 Tax Increments 20858 20203 655 Grants and Contributions Not Restricted 453773 422194 31579 Investment Income 16929 17237 (308) Miscellaneous 4178 17678 (13500) Gain on Sale of Asset 6034 268371 (262337)
Total Revenues 2949573 3496014 (546441)
EXPENSESGeneral Government 502902 475597 27305 Public Safety 970131 1019255 (49124) Public Works 769202 840164 (70962) Culture and Recreation 148880 762606 (613726) Economic Development 45238 85505 (40267) Interest on Long-Term Debt 160274 176897 (16623)
Total Expenses 2596627 3360024 (763397) Change in Net Position before Transfers 352946 135990 216956
TRANSFERS 255000 247000 8000 Change in Net Position 607946 382990 224956
NET POSITION BEGINNING OF YEAR 8768267 8385277 382990
NET POSITION END OF YEAR 9376213$ 8768267$ 607946$
Governmental Activities
Net position of the Citys governmental activities increased by $607946 Table 3 presents the key elements of the increase
Table 3Comparative Condensed Statement of Activities
Governmental Activities
9
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 3213338$ 2905848$ 307490$ General Revenues
Investment Income 2700 (1558) 4258 Total Revenues 3216038 2904290 311748
EXPENSESWater 492444 485751 6693 Sewer 1441099 1331721 109378 RefuseRecycling 199326 196627 2699 Storm Utility 99951 91130 8821
Total Expenses 2232820 2105229 127591 Change in Net Position before Transfers 983218 799061 184157
TRANSFERS (255000) (247000) (8000) CHANGE IN EQUITY INTEREST (18613) (70479) 51866
Change in Net Position 709605 481582 176157
NET POSITION BEGINNING OF YEAR 6375719 5894137 481582
NET POSITION END OF YEAR 7085324$ 6375719$ 709605$
Comparative Condensed Statement of Activities
Business-Type Activities
10
Table 4
Business-Type Activities
The net position of our business-type activities increased by $709605 The net increase was due to the following funds change in net position Water - $26607 decrease Sewer - $822708 increase RefuseRecycling - $9397 increase and Storm Utility - $95893 decrease
The following tables indicate the changes in net position for the Citys business-type activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Capital Project Funds - The capital projects fund balances increased by $13451
11
Over the course of the year the City of Annandale City Council did not revise the budget The General Fund budget predicted a $5178 increase in fund balance which includes the operations of the Motor Vehicle department The actual change in fund balance was an increase of $212334 This is due to both revenues being higher and expenditures being lower than anticipated Mobile Home tax revenues building permit fees and state aids were over budgeted amounts and both current and capital outlay expenditures were under budgeted amounts
Governmental Activities
Revenues - The following chart visually illustrates the Citys revenue by source for its governmental activities
Financial Analysis of the Citys Funds
General Fund - The Citys General Fund Balance increased by $212334 for 2018 The increase is mainly due to an increase in building permit fees and local government aid with a slight increase in public safety expenditures and a decrease in transfers to other funds
Special Revenue Funds - The Citys special revenue fund balances decreased by $53786 A majority of the decrease was due to expenditures for the pintail drive extension project
Debt Service Funds - The debt service fund balances decreased by $49677 The main reason for the decrease was due to customer prepayments made on special assessments in prior years
General Fund Budgetary Highlights
Fees Fines and Charges for Services
2213
Operating Grants and Contributions
414
Capital Grants and Contributions
634
Property Taxes5038 Tax Increments
071
Grants and Contributions Not Restricted1538
Investment Income057
Miscellaneous014
Gain on Sale of Asset021
Revenue by Source - Governmental Activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Long-Term Liabilities
At the end of 2018 the City of Annandale had $15543549 in bonds notes and equipment certificates outstanding Refer to Note 7 of the Notes to the Financial Statements for a schedule showing the Citys long-term liability activity
Economic Factors and Next Years Budget
The City of Annandales appointed officials considered many factors when setting the fiscal year 2019 budget rates and fees that will be charged by the funds of the City The major factor accounted for when adopting the General Fund budget was to hold all line items as much as possible to the 2018 final budget
Contacting the Citys Financial Management
This financial report is designed to provide our residents customers and creditors with a general overview of the Citys finances and to show the Citys accountability for the money it receives If you have any questions about this report or need additional information contact the City of Annandale 30 Cedar Street E Annandale Minnesota 55302
12
Capital Assets
At the end of 2018 the City of Annandale had $47826808 invested in a broad range of capital assets Refer to Note 5 of the Notes to the Financial Statements for a schedule showing the Citys capital asset activity During 2018 the City had a large increase in improvements other than buildings related to the completion of the Southside Trail project
BASIC FINANCIAL STATEMENTS
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Governmental Business-TypeActivities Activities Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Cash and Investments 3413471$ 86083$ 3499554$ Restricted Cash 74208 74208 Taxes Receivable - Delinquent 14909 14909 Special Assessments Receivable
Delinquent 4423 4158 8581 Current and Deferred 650220 14885 665105
Accounts Receivable 96631 339457 436088 Interest Receivable 9 9 Prepaid Items 75903 22861 98764 Internal Balances 385956 (385956) Due from Other Governments 186251 24283 210534 Land Held for Resale 362923 362923 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 2696744 277948 2974692 Other Capital Assets Net of Depreciation 7709867 10265284 17975151
Net Pension Asset 517946 517946 Total Assets 16115253 17728109 33843362
Deferred Outflows of Resources 621929 35051 656980
Total Assets and Deferred Outflows of Resources 16737182$ 17763160$ 34500342$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 65859$ 26908$ 92767$ Contracts Payable 27913 27913 Due to Other Governments 15676 309797 325473 Salaries and Benefits Payable 30329 7259 37588 Interest Payable 61920 78448 140368 Unearned Revenue 36250 36250
Long-Term LiabilitiesNet Pension Liability 696581 197762 894343 Other Long-Term Liabilities Due Within One Year 843000 1173000 2016000 Other Long-Term Liabilities Due in More than One Year 4696549 8831000 13527549
Total Liabilities 6474077 10624174 17098251
Deferred Inflows of Resources 886892 53662 940554
Net PositionNet Investment in Capital Assets 4962623 8625232 13587855 Restricted for
Debt Service 2009940 2009940 Tax Increment 11481 11481 Capital Replacement 74208 74208
Unrestricted 2392169 (1614116) 778053 Total Net Position 9376213 7085324 16461537
Total Liabilities Deferred Inflows of Resourcesand Net Position 16737182$ 17763160$ 34500342$
See Accompanying Notes to the Financial Statements13
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONDECEMBER 31 2018
Fees Fines and Operating CapitalCharges for Grants and Grants and Governmental Business-Type
Expenses Services Contributions Contributions Activities Activities Total
GOVERNMENTAL ACTIVITIESGeneral Government 502902$ 286176$ $ $ (216726)$ $ (216726)$ Public Safety 970131 208144 115858 41000 (605129) (605129) Public Works 769202 130069 6355 26201 (606577) (606577) Culture and Recreation 148880 15413 55109 (78358) (78358) Economic Development 45238 12875 30108 (2255) (2255) Interest on Long-Term Debt 160274 34598 (125676) (125676)
Total Governmental Activities 2596627 652677 122213 187016 (1634721) 0 (1634721)
BUSINESS-TYPE ACTIVITIESWater 492444 565694 73250 73250 Sewer 1441099 2393268 952169 952169 RefuseRecycling 199326 208571 9245 9245 Storm Utility 99951 45805 (54146) (54146)
Total Business-Type Activities 2232820 3213338 0 0 0 980518 980518
Total 4829447$ 3866015$ 122213$ 187016$ (1634721) 980518 (654203)
GENERAL REVENUESProperty Taxes 1485895 1485895 Tax Increments 20858 20858 Grants and Contributions not Restricted to Specific Programs 453773 453773 Unrestricted Investment Earnings 16929 2700 19629 Miscellaneous 4178 4178 Gain on Sale of Asset 6034 6034
TRANSFERS 255000 (255000) CHANGE IN EQUITY INTEREST (18613) (18613)
Total 2242667 (270913) 1971754 Change in Net Position 607946 709605 1317551
NET POSITION BEGINNING OF YEAR 8768267 6375719 15143986
NET POSITION END OF YEAR 9376213$ 7085324$ 16461537$
See Accompanying Notes to the Financial Statements14
CITY OF ANNANDALE MINNESOTA
STATEMENT OF ACTIVITIESYEAR ENDED DECEMBER 31 2018
Program RevenuesNet (Expense) Revenue and
Changes in Net Position
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
ASSETSCash and Investments 1062209$ 2351262$ 3413471$ Taxes Receivable - Delinquent 14534 375 14909Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 650220 650220
Accounts Receivable 5744 90887 96631Interest Receivable 9 9 Prepaid Items 73751 2152 75903Due from Other Funds 920750 190388 1111138Due from Other Governments 135407 50844 186251Land Held for Resale 362923 362923
Total Assets 2212395$ 3703483$ 5915878$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 41982$ 23877$ 65859$ Contracts Payable 3574 24339 27913 Due to Other Funds 143500 581682 725182 Due to Other Governments 6200 9476 15676Salaries and Benefits Payable 30195 134 30329Unearned Revenue 36250 36250
Total Liabilities 261701 639508 901209
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 14534 375 14909Special Assessments 650220 650220
Total Deferred Inflows of Resources 14534 650595 665129
Fund Balance Nonspendable 73751 2152 75903 Restricted 1532633 1532633 Committed 847422 847422 Assigned 165070 487992 653062Unassigned 1697339 (456819) 1240520
Total Fund Balance 1936160 2413380 4349540
Total Liabilities Deferred Inflows ofResources and Fund Balance 2212395$ 3703483$ 5915878$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
BALANCE SHEETGOVERNMENTAL FUNDS
DECEMBER 31 2018
15
2018
Total Fund Balances - Governmental Funds 4349540$
Amounts reported for governmental activities in the Statement of Net Position are differentbecause
Capital assets used in governmental activities are not financial resources and therefore arenot reported as assets in the governmental funds
Capital Assets 31934114Less Accumulated Depreciation (21527503) Net Pension Asset 517946
Certain receivables will be collected in subsequent years but are not available soon enoughto pay for the current periods expenditures and therefore are deferred in the funds
Delinquent Property Taxes 14909Special Assessments 650220
Deferred outflows and inflows of resources related to pensions are applicable to futureperiods and therefore are not reported in the funds
Deferred Outflows of Resources Related to Pensions 621929 Deferred Inflows of Resources Related to Pensions (886892)
Long-term liabilities including bonds payable are not due and payable in the current periodand therefore are not reported as liabilities in the funds
Bonds Payable (4525000) Notes Payable (1014000) Compensated Absences Payable (22979) Interest Payable (61920) Bond Discount 22430 Net Pension Liability (696581)
Total Net Position - Governmental Activities 9376213$
See Accompanying Notes to the Financial Statements16
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION
DECEMBER 31 2018
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
REVENUESProperty Taxes 1167129$ 323230$ 1490359$ Tax Increments 20858 20858 Special Assessments 149671 149671 Licenses and Permits 106197 106197 Intergovernmental 568136 30310 598446 Charges for Services 457769 51231 509000 Fines and Forfeitures 12790 4299 17089 Investment Income 22019 (5090) 16929 Contributions and Donations 1700 133758 135458 Miscellaneous 22893 679 23572
Total Revenues 2358633 708946 3067579
EXPENDITURESCurrent
General Government 412224 10807 423031 Public Safety 889531 42738 932269 Public Works 379968 379968 Culture and Recreation 111127 3735 114862 Economic Development 52358 52358
Debt Service Principal 821000 821000 Interest and Other Charges 162964 162964
Capital Outlay General Government 5206 5206 Public Safety 4449 67055 71504 Public Works 14006 14006 Culture and Recreation 102651 102651 Economic Development 144931 144931
Total Expenditures 1802505 1422245 3224750 Excess (Deficiency) of Revenues
Over (Under) Expenditures 556128 (713299) (157171)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 1145914 1145914 Transfers Out (343794) (547120) (890914)
Total Other Financing Sources (Uses) (343794) 623287 279493 Net Change in Fund Balances 212334 (90012) 122322
FUND BALANCE BEGINNING OF YEAR 1723826 2503392 4227218
FUND BALANCE END OF YEAR 1936160$ 2413380$ 4349540$
See Accompanying Notes to the Financial Statements17
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
YEAR ENDED DECEMBER 31 2018
2018
Total Net Change in Fund Balances - Governmental Funds 122322$
Amounts reported for governmental activities in the Statement of Activities are different because
Capital outlays are reported in governmental funds as expenditures However in the Statementof Activities the cost of those assets is allocated over the estimated useful lives asdepreciation expense
Capital Outlays 360225 Depreciation Expense (556497) Disposal of Capital Assets (75923) Accumulated Depreciation Related to Disposed Capital Assets 40205
Revenues in the Statement of Activities that do not provide current financial resources are notreported as revenues in the funds
Special Assessments (115073)
Delinquent property taxes receivable will be collected in subsequent years but are not availablesoon enough to pay for the current periods expenditures and therefore are deferred in the funds (4464)
Some expenses reported in the Statement of Activities do not require the use of currentresources and therefore are not reported as expenditures in governmental funds
Compensated Absences 313 Net Pension Asset 77918Net Pension Liability 151145 Deferred Outflows of Resources Related to Pensions (233135) Deferred Inflows of Resources Related to Pensions 17220
Principal Retirement of Long-Term Debt 821000 Amortization of Bond Discounts (4234) Change in Interest Payable 6924
Change in Net Position - Governmental Activities 607946$
See Accompanying Notes to the Financial Statements18
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES EXPENDITURESAND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Bond proceeds provide current financial resources to governmental funds but issuing debtincreases long-term liabilities in the Statement of Net Position Repayment of bond principalis an expenditure in the governmental funds but the repayment reduces long-term liabilities inthe Statement of Net Position
Over(Under)
FinalOriginal Final Actual Budget
REVENUESProperty Taxes 1120885$ 1120885$ 1167129$ 46244$ Licenses and Permits 61800 61800 106197 44397 Intergovernmental 541952 541952 568136 26184 Charges for Services 437744 437744 457769 20025 Fines and Forfeitures 8700 8700 12790 4090 Investment Income 22019 22019 Contributions and Donations 1700 1700 Miscellaneous 20000 20000 22893 2893
Total Revenues 2191081 2191081 2358633 167552
EXPENDITURESCurrent
General Government 435269 435269 412224 (23045) Public Safety 896497 896497 889531 (6966) Public Works 399317 399317 379968 (19349) Culture and Recreation 127325 127325 111127 (16198)
Capital OutlayGeneral Government 30500 30500 5206 (25294) Public Safety 1500 1500 4449 2949
Total Expenditures 1890408 1890408 1802505 (87903) Excess (Deficiency) of Revenues
Over (Under) Expenditures 300673 300673 556128 255455
OTHER FINANCING SOURCES (USES)Transfers Out (295495) (295495) (343794) (48299)
Net Change in Fund Balance 5178$ 5178$ 212334 207156$
FUND BALANCE BEGINNING OF YEAR 1723826
FUND BALANCE END OF YEAR 1936160$
See Accompanying Notes to the Financial Statements19
Budgeted Amounts
YEAR ENDED DECEMBER 31 2018
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL
GENERAL FUND
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current AssetsCash and Investments 23690$ 62393$ $ $ 86083$ Special Assessments Receivable
Delinquent 1167 2096 682 213 4158Current and Deferred 3859 9981 901 144 14885
Accounts Receivable 46078 269326 19878 4175 339457Prepaid Items 9433 12352 1076 22861Due from Other Governments 144 24111 24 4 24283Due from Other Funds 98000 21000 119000
Total Current Assets 182371 401259 22561 4536 610727
Noncurrent AssetsRestricted Cash 74208 74208 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 66881 191067 20000 277948Other Capital Assets Net of Depreciation 4497152 3259174 2505 2506453 10265284
Total Noncurrent Assets 4564033 10529347 22505 2506453 17622338 Total Assets 4746404 10930606 45066 2510989 18233065
Deferred Outflows of ResourcesRelated to Pensions 12805 20153 2093 35051
Total Assets and DeferredOutflows of Resources 4759209$ 10950759$ 47159$ 2510989$ 18268116$
LIABILITIES DEFERRED INFLOWS OFRESOURCES AND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 11931$ 1765$ 13212$ $ 26908$ Due to Other Funds 445076 28318 31562 504956 Due to Other Governments 453 308238 1106 309797 Salaries and Benefits Payable 2732 3813 714 7259Interest Payable 13173 65275 78448Notes Payable Due Within One Year 232000 941000 1173000
Total Current Liabilities 260289 1765167 43350 31562 2100368
Long-Term LiabilitiesNet Pension Liability 72251 113702 11809 197762Notes Payable Net of Current Amount 1576000 7255000 8831000
Total Noncurrent Liabilities 1648251 7368702 11809 0 9028762 Total Liabilities 1908540 9133869 55159 31562 11129130
Deferred Inflows of ResourcesRelated to Pensions 19605 30853 3204 53662
Net PositionNet Investment in Capital Assets 2756033 3340241 22505 2506453 8625232 Restricted for Capital Replacement 74208 74208 Unrestricted 75031 (1628412) (33709) (27026) (1614116)
Total Net Position 2831064 1786037 (11204) 2479427 7085324
Total Liabilities Deferred Inflowsof Resources and Net Position 4759209$ 10950759$ 47159$ 2510989$ 18268116$
See Accompanying Notes to the Financial Statements20
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONPROPRIETARY FUNDS
DECEMBER 31 2018
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
OPERATING REVENUESCharges for Services 565694$ 1219482$ 208571$ 45805$ 2039552$
OPERATING EXPENSESWages and Salaries 110471 188946 15086 314503Materials and Supplies 29374 29374Repairs and Maintenance 57478 21425 44 8346 87293Insurance 11074 9982 21056Electricity 27203 12231 39434Wastewater Commission Charges 871318 871318 Testing 1111 1111Contracted Services 4467 4378 162233 171078Depreciation 171475 118151 1333 87981 378940Professional Services 4717 5818 1834 524 12893Billing 14718 15335 30053Miscellaneous 17863 15245 3461 3100 39669
Total Operating Expenses 449951 1247494 199326 99951 1996722 Operating Income (Loss) 115743 (28012) 9245 (54146) 42830
NONOPERATING REVENUES (EXPENSES)Investment Income 543 1752 152 253 2700Interest and Fiscal Charges (42493) (193605) (236098) Reimbursements 1173786 1173786
Total Nonoperating Revenues(Expenses) (41950) 981933 152 253 940388
Income (Loss) Before Transfersand Other Items 73793 953921 9397 (53893) 983218
TRANSFERS AND OTHER ITEMSChange in Equity Interest (18613) (18613) Transfers In 19600 36400 56000 Transfers Out (120000) (149000) (42000) (311000)
Total Transfers and Other Items (100400) (131213) 0 (42000) (273613) Change in Net Position (26607) 822708 9397 (95893) 709605
NET POSITION BEGINNING OF YEAR 2857671 963329 (20601) 2575320 6375719
NET POSITION END OF YEAR 2831064$ 1786037$ (11204)$ 2479427$ 7085324$
See Accompanying Notes to the Financial Statements
YEAR ENDED DECEMBER 31 2018
21
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET POSITIONPROPRIETARY FUNDS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers and Users 553327$ 1022629$ 207570$ 47362$ 1830888$ Payments to Suppliers (164208) (767959) (181855) (11970) (1125992) Payments to Employees (115506) (184885) (20045) (320436)
Net Cash Provided (Used) by OperatingActivities 273613 69785 5670 35392 384460
CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIESTransfers Out (120000) (149000) (42000) (311000) Interfund Loan 33986 (4344) 6201 35843 Reimbursements 1173786 1173786
Net Cash Provided (Used) by NoncapitalFinancing Activities (120000) 1058772 (4344) (35799) 898629
CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESPrincipal Paid on Debt (226000) (920000) (1146000) Interest Paid on Debt (44518) (200960) (245478) Bonds Issued 3396 3396 Acquisition and Construction of Capital Assets (16094) (16501) (1692) (34287)
Net Cash Provided (Used) by Capital andRelated Financing Activities (283216) (1137461) (1692) 0 (1422369)
CASH FLOW FROM INVESTING ACTIVITIESInterest and Dividends Received (Paid) 543 4594 366 407 5910
Net Increase (Decrease) in Cash andCash Equivalents (129060) (4310) 0 0 (133370)
CASH AND CASH EQUIVALENTSBEGINNING OF YEAR 152750 140911 293661
CASH AND CASH EQUIVALENTSEND OF YEAR 23690$ 136601$ 0$ 0$ 160291$
RECONCILIATION OF CASH AND CASH EQUIVALENTSCash and Investments 23690$ 62393$ $ $ 86083$ Restricted Cash 74208 74208
Total Cash amp Cash Equivalents 23690$ 136601$ 0$ 0$ 160291$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
22
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CITY OF ANNANDALE MINNESOTA
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
RECONCILIATION OF OPERATING INCOME(LOSS) TO CASH FLOWS FROM OPERATINGACTIVITIESOperating Income (Loss) 115743$ (28012)$ 9245$ (54146)$ 42830$ Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided (Used) by OperatingActivities
Depreciation 171475 118151 1333 87981 378940 Pension Related Adjustments (5848) 3118 (5273) (8003)(Increase) Decrease in Assets
Special Assessments ReceivableDelinquent 300 514 (37) (113) 664 Current and Deferred (754) (4236) (573) 2077 (3486)
Accounts Receivable (11969) (190759) (1427) (453) (204608) Prepaid Items (397) (1455) (329) (2181) Due from Other Governments 56 (2372) 1036 46 (1234)
Increase (Decrease) in LiabilitiesAccounts Payable 3741 (10858) 275 (6842) Due to Other Governments 453 184751 1106 186310 Salaries and Benefits Payable 813 943 314 2070
Net Cash Provided (Used) by OperatingActivities 273613$ 69785$ 5670$ 35392$ 384460$
NONCASH INVESTING CAPITAL ANDFINANCING ACTIVITIESChange in Equity Interest 0$ (18613)$ 0$ 0$ (18613)$
See Accompanying Notes to the Financial Statements23
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A REPORTING ENTITY
Blended Component Unit - Reported as if they were part of the City
Blended Component Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
The financial statements present the City and its component units The City includes all funds organizations institutions agencies departments and offices that are not legally separate from such Component units are legally separate organizations for which the City is financially accountable or for which the exclusion of the component unit would render the financial statements of the City misleading
The City of Annandale Minnesota is a statutory city governed by an elected mayor and four council members The accompanying financial statements present the government entities for which the government is considered to be financially accountable
Joint Ventures and Jointly Governed Organizations - The relationship of the City with the entity is disclosed
The criteria used to determine if the City is financially accountable for a component unit includes whether or not 1) the City appoints the voting majority of the potential component units governing body and is able to impose its will on the potential component unit or is in a relationship of financial benefit or burden with the potential component unit or 2) the potential component unit is fiscally dependent on and there is a potential for the potential component unit to provide specific financial benefits to or impose specific financial burdens on the City
As a result of applying the component unit definition criteria above certain organizations have been defined and are presented in this report as follows
For each of the categories above the specific entities are identified as follows
The Annandale Economic Development Authority (EDA) is a legal entity separate from the City Although legally separate the Annandale EDA is reported as if it were part of the primary government because it provides services exclusively for the City Separate financial statements are not prepared for the Annandale EDA
24
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
A REPORTING ENTITY (Contd)
Joint Ventures and Jointly Governed Organizations
B GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Separate financial statements are provided for governmental funds and proprietary funds Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements
Separate financial statements can be obtained by contacting the Wastewater Commission PO Box K Annandale MN 55302
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or segment Interest on general long-term debt is considered an indirect expense and is reported separately in the Statement of Activities Program revenues include 1) charges to customers or applicants who purchase use or directly benefit from goods services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment Taxes and other items not properly included among program revenues are reported instead as general revenues Internally dedicated revenues are reported as general revenues rather than program revenues
The government-wide financial statements (ie the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the City Governmental activities which normally are supported by taxes and intergovernmental revenues are reported separately from business-type activities which rely to a significant extent on fees and charges for support
In September 2003 the City entered into a joint powers agreement with the City of Maple Lake to establish the Annandale-Maple Lake Wastewater Commission (the Commission) The purpose of the Commission is to make available wastewater treatment within the present and future boundaries of the Cities and to serve such other areas as the Commission approves As part of the joint venture the City of Annandale agrees to fund the Debt Service and Operating Funds of the Commission according to terms of the agreement The agreement states a City may terminate the agreement by written notice to the other City In such event the City of Annandale shall pay 60 of all costs incurred except each City shall pay its own attorneys fee In 2008 both Cities approved amending the joint powers agreement to include the City of Howard Lake effective January 1 2009 Each City will then have a one-third equity interest in the Commission Because there is an explicit measurable equity interest in the joint venture the interest is reported in the government-wide financial statements as well as in the Sewer Fund
25
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
The City reports the following major governmental funds
The City reports the following major enterprise funds
The Sewer Fund accounts for the operations of the Citys sewer utility
The Storm Utility Fund accounts for the activities of the Citys storm drainage operations
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting Revenues are recognized as soon as they are both measurable and available Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period For this purpose the City considers revenues to be available if they are collected within 60 days after the end of the current fiscal period Expenditures generally are recorded when a liability is incurred as under accrual accounting However debt service expenditures as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due
The General Fund is the Citys primary operating fund This fund accounts for all financial resources of the general City except those required to be accounted for in another fund
The RefuseRecycling Fund accounts for the operations of the Citys refuserecycling
Property taxes special assessments intergovernmental revenue charges for services franchise taxes licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period All other revenue items are considered to be measurable and available only when cash is received by the City
The Water Fund accounts for the operations of the Citys water utility
26
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the proprietary fund financial statements Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of related cash flows Property taxes are recognized as revenues in the year for which they are levied Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements Exceptions to this general rule are charges between the Citys utility functions and various other functions of the City Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C
D DEPOSITS AND INVESTMENTS
(1)
(2)
(3)
(4)
(5)
(6)
time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States bank
general obligations of the State of Minnesota and its municipalities and in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service
The Citys cash and cash equivalents are considered to be cash on hand deposits and highly liquid debt instruments purchased with original maturities of three months or less from the date of acquisition
27
mutual funds through shares of registered investment companies provided the mutual fund receives certain ratings depending on its investments
The City may invest in the following types of investments as authorized by Minn Stat sectsect118A04 and 118A05
securities which are direct obligations or are guaranteed or insured issues of the United States its agencies its instrumentalities or organizations created by an act of Congress except mortgage-backed securities defined as high risk by Minn Stat sect118A04 subd 6
MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (Contd)
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 funds principal ongoing operations The principal operating revenues of the enterprise funds are charges to customers for sales and services Operating expenses for enterprise funds include the cost of sales and services administrative expenses and depreciation of capital assets All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses
commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less and
with certain restrictions in repurchase agreements securities lending agreements joint powers investment trusts and guaranteed investment contracts
Cash and investments were comprised of deposits brokered certificates of deposits money market funds at various financial brokers and the 4M Fund
It is generally the Citys policy to use restricted resources first then unrestricted resources as they are needed when an expense is incurred for purposes for which both restricted and unrestricted net position are available
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations The Citys investment policy states it will comply with Minnesota Statutes Chapter 118A
The City has an investment policy in place that addresses interest rate risk credit risk concentration of credit risk and custodial credit risk as follows
Interest Rate Risk This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates The Citys investment policy states the City should manage their interest rates based on safety liquidity and the overall return on the investment The portfolio should contain both short-term and long-term investments to meet anticipated cash flow requirements Extended maturities may be utilized to take advantage of higher yields however no more than 50 of the total investments should extend beyond five years
The City invests in an external investment pool the Minnesota Municipal Money Market Fund (4M Fund) which is created under a joint powers agreement pursuant to Minn Stat sect47159 The 4M Fund is not registered with the Securities Exchange Commission (SEC) but does satisfy the requirements of Rule 2a-7 prescribed by the SEC pursuant to the Investment Company Act of 1940 (17 CFR sect2702a-7) as amended The investment in the pool is measured at the net asset value per share provided by the pool
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America The hierarchy is based on the valuation inputs used to measure the fair value of the asset Level 1 inputs are quoted prices in active markets for identical assets Level 2 inputs are significant other observable inputs Level 3 inputs are significant unobservable inputs
Custodial Credit Risk - Deposits For deposits this is the risk that in the event of bank failure the Citys deposits may not be returned to it The Citys investment policy states the collateralization level will be 110 of the market value of principal and accrued interest for balances above the FDIC insured amount When the pledged collateral consists of notes secured by first mortgages the collateral level will be 140 of the market value of principal and accrued interest
Authorized collateral includes the obligations of the US Treasury agencies and instrumentalities shares of investment companies whos only investments are in the aforementioned securities obligations of the State of Minnesota or its municipalities bankers acceptances futures contracts repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days as well as certain first mortgage notes and certain other state or local government obligations Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral
28
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
E RECEIVABLES AND PAYABLES
F PREPAID ITEMS
All trade and property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of property
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements
29
Custodial Credit Risk - Investments For an investment this is the risk that in the event of the failure of the counterparty the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party The Citys investment policy states when investments purchased by the City are held in safekeeping by a brokerdealer they must provide asset protection of $500000 through the Securities Investor Protector Corporation (SIPC) and at least another $2000000 supplemental insurance protection
The City levies its property tax for the subsequent year during the month of December December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year Such taxes become a lien on January 1 and are recorded as receivables by the City at that date The property tax is recorded as revenue when it becomes measurable and available Wright County is the collecting agency for the levy and remits the collections to the City three times a year The tax levy notice is mailed in March with the first half payment due on May 15 and the second half payment due on October 15 Tax levies from prior years that remain unpaid are classified as delinquent taxes receivable
The County Auditor submits the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year
Activity between funds that are representative of lendingborrowing arrangements outstanding at the end of the fiscal year are referred to as either due tofrom other funds (ie the current portion of interfund loans) or advances tofrom other funds (ie the noncurrent portion of interfund loans) All other outstanding balances between funds are reported as due tofrom other funds Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances
Concentration of Credit Risk This is the risk of loss attributed to the magnitude of an investment in a single issuer Investments should be diversified to avoid incurring unreasonable risk inherent in over investing in specific instruments individual financial institutions or maturities The Citys investment policy states the City will attempt to diversify their investments according to type and maturity
The County Auditor prepares the tax list for all taxable property in the City applying the applicable tax rate to the tax capacity of individual properties to arrive at the actual tax for each property The County Auditor also collects all special assessments except for certain prepayments paid directly to the City
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
G CAPITAL ASSETS
Cost
LandLand Improvements 10000$ Other Improvements 25000 BuildingsImprovements 25000 Machinery and Equipment 5000 Infrastructure 50000
Years
Buildings 5-40Improvements Other than Buildings 5-20Vehicles 5-20Machinery and Equipment 5-40Roads and Highways 20-40Infrastructure 25-40
The City does not possess any material amounts of intangible assets
30
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed Donated capital assets are recorded as capital assets at their estimated acquisition value at the date of donation
Capital assets both tangible and intangible which include property plant equipment and infrastructure assets (eg roads sidewalks and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements Capital assets are defined by the City as assets with an estimated useful life in excess of two years and an initial individual cost of more than the following
Capital Assets
Category
Based on the age of the majority of the Citys infrastructure and an exception for small governments in GASB Statement No 34 the City has determined it is not practical to capitalize infrastructure retroactively The current value of the infrastructure includes projects completed during the year ended December 31 1985 and prospectively from that date
Tangible and intangible assets of the City are depreciated using the straight-line full month convention method over the following estimated useful lives
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
H DEFERRED OUTFLOWS OF RESOURCES
I UNEARNED REVENUE
J COMPENSATED ABSENCES
K POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied Grants and certain other payments received before eligibility requirements are met are also recorded as unearned revenue
The City compensates employees who resign or retire with due notice for unused vacation and holiday pay Employees may carry over no more than 40 hours of vacation at the end of any calendar year unless approved by the City Council Unused vacation time is paid to employees upon separation from the City City employees are also allowed to earn compensatory time in lieu of overtime pay Employees may carry over no more than 40 hours of compensatory time at the end of any calendar year Unused compensatory time is paid to employees upon separation from the City
The liability for compensated absences reported in the financial statements consists of unpaid accumulated vacation and compensatory time balances The liability has been calculated using the vesting method in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included The liability for compensated absences is reported in the governmental funds only if they have matured for example as a result of employee resignations and retirements Compensated absences are accrued when incurred in the government-wide and proprietary fund financial statements The government-wide and proprietary fund Statement of Net Position reports both current and noncurrent portions of compensated absences using full accrual accounting The current portion consists of an amount based on expected or known retirements coming in the next fiscal year The noncurrent portion consists of the remaining amount of vacation and compensatory time
31
Employees of the City pay health care premiums based on their age and level of coverage Since the insurance rate is based on age the City does not have an implicit rate subsidy factor in postemployment health care expenses Additionally Minnesota Statutes require the City to allow retired employees to stay on the health care plan with the retiree responsible to pay the entire premium for continuation coverage The Citys personnel policy does not provide for any contributions upon employee retirement
In addition to assets the statement of financial position will sometimes report a separate section for deferred outflows of resources Deferred outflows of resources represents a consumption of net position that applies to a future reporting period During that future period it will be recognized as an outflow of resources (expenseexpenditure) The City has one item that qualifies for reporting in this category on the government-wide Statement of Net Position which is related to pensions
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
L PENSIONS
M LONG-TERM OBLIGATIONS
N DEFERRED INFLOWS OF RESOURCES
O FUND BALANCE
In addition to liabilities the statement of financial position will sometimes report a separate section for deferred inflows of resources Deferred inflows of resources represents an acquisition of net position that applies to a future reporting period During that future period it will be recognized as an inflow of resources (revenue) The City has items that qualify for reporting in this category on both the government-wide Statement of Net Position and the governmental fund financial statements related to property taxes special assessments and pensions
The City participates in various pension plans total pension expense for the fiscal year ended was $436446 The components of pension expense are noted in the plan summaries
For purposes of measuring the net pension liability deferred outflows of resources and deferred inflows of resources related to pensions and pension expense information about the fiduciary net position of the Public Employees Retirement Association (PERA) and the City of Annandales Fire Relief Association and additions todeductions from PERArsquos and the City of Annandales Fire Relief Associations fiduciary net position have been determined on the same basis as they are reported by PERA and the City of Annandales Fire Relief Association 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
In the fund financial statements governmental fund types recognize bond premiums and discounts as well as bond issuance costs during the current period The face amount of debt issued is reported as other financing sources Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses Issuance costs whether or not withheld from the actual debt proceeds received are reported as debt service expenditures
Nonspendable - consists of amounts that cannot be spent because it is not in spendable form or are legally or contractually required to be maintained intact such as inventories and prepaid items
Restricted - consists of amounts related to externally imposed constraints established by creditors grantors or contributors or constraints imposed by state statutory provisions
In the governmental fund financial statements fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in governmental funds These classifications are as follows
In the government-wide financial statements and proprietary fund types in the fund financial statements long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities business-type activities or proprietary fund type Statement of Net Position
32
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
O FUND BALANCE (Contd)
P NET POSITION
Q USE OF ESTIMATES
Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources in the government-wide and proprietary fund financial statements Net investment in capital assets consists of capital assets net of accumulated depreciation reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets Net position is reported as restricted in the government-wide and proprietary fund financial statements when there are limitations on their use through external restrictions imposed by creditors grantors or laws or regulations of other governments Unrestricted net position consists of all other net position that does not meet the definition of restricted or net investment in capital assets
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 In governmental funds other than the General Fund assigned fund balance represents the remaining amount that is not restricted or committed In the General Fund assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority Pursuant to City Council Resolution the City Treasurer and City Administrator are authorized to establish assignments of fund balance
33
Committed - consists of amounts that are constrained for specific purposes that are internally imposed by formal action of the City Council Those committed amounts cannot be used for any other purpose unless the Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts These constraints are established by Resolution of the City Council
Unassigned - is the residual classification for the General Fund and also reflects negative residual amounts in the remaining governmental funds
The City requires restricted amounts to be spent first when both restricted and unrestricted fund balance is available Additionally the City would first use committed then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and deferred outflows of resources and liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expendituresexpenses during the reporting period Actual results could differ from those estimates
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
A BUDGETARY INFORMATION
1
2
3
4
5
6
7
Annual appropriated budgets are adopted during the year for the General and Special Revenue Funds Annual appropriated budgets are not adopted for Debt Service Funds because effective budgetary control is alternatively achieved through bond indenture provisions Budgetary control for Capital Projects Funds is accomplished through the use of project controls and formal appropriated budgets are not adopted
34
Budgeted amounts are as originally adopted or as amended by the City Council Individual amendments were not material in relation to the original amounts budgeted Budgeted expenditure appropriations lapse at year-end
Expenditures may not legally exceed budgeted appropriations at the department level No funds budget can be increased without City Council approval The City Council may authorize transfer of budgeted amounts between departments within any fund Management may amend budgets within a department level so long as the total department budget is not changed
The City Council adopts an annual budget The amounts shown in the financial statements as budget represent the original budgeted amounts and all revisions made during the year The City follows these procedures in establishing the budgetary data reflected in the financial statements
Budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America
The budget is legally enacted through passage of a resolution after obtaining taxpayer comments The budget resolution adopted by the City Council sets forth the budgets at the function level for the General and Special Revenue Funds
Public hearings are conducted to obtain taxpayer comments
Budget requests are submitted by all department heads to the City Administrator The City Administrator compiles the budget requests into an overall preliminary City budget The City Administrator presents the proposed budget to the City Council
Encumbrances outstanding at year-end expire and outstanding purchase orders are canceled and not reported in the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (Contd)
B DEFICIT BALANCES
The following funds had deficit balances
RefuseRecycling (11204)$ Nonmajor Governmental Funds (454667)
C EXPENDITURES EXCEEDING APPROPRIATIONS
NOTE 3 DEPOSITS AND INVESTMENTS
A DEPOSITS
Checking 1669430$
B INVESTMENTS
Fair Value Level 1 Level 2 Level 3
Investments at fair valueBrokered Certificates of Deposit 1540744$ 0$ 1540744$ 0$
Investments at amortized costMoney Market Accounts 324792 4M Money Market 38796
Total Investments 1904332$
The Brokered Certificates of Deposit have a weighted average maturity of 216 years and were not rated
In accordance with applicable Minnesota Statutes the City maintains deposits at depository banks authorized by the City Council
35
There were no funds that had expenditures exceeding appropriations
Custodial Credit Risk - Deposits The Citys bank balances were not exposed to custodial credit risk because they were fully insured through the FDIC as well as collateralized with securities held by the pledging financial institutions trust department or agent and in the Citys name
Fair Value Measuring Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 3 DEPOSITS AND INVESTMENTS (Contd)
B INVESTMENTS (Contd)
The following is a summary of total deposits and investments
Deposits (Note 3A) 1669430$ Investments (Note 3B) 1904332
Total Deposits and Investments 3573762$
Statement of Net PositionCash and Investments 3499554$ Restricted Cash 74208
3573762$
NOTE 4 RECEIVABLES
Receivables are as follows
Amounts notScheduled
for CollectionDuring the
Total SubsequentReceivables Year
Governmental ActivitiesTaxes Receivable - Delinquent 14909$ $ Special Assessments Receivable 654643 584377 Accounts Receivable 96631 16271 Interest Receivable 9
Total Governmental Activities 766192$ 600648$
Business-Type ActivitiesSpecial Assessments Receivable 19043$ 9392$ Accounts Receivable 339457
Total Business-Type Activities 358500$ 9392$
Concentration of Credit Risk The City was exposed to concentration of credit risk due to the fact that some of the Citys brokered certificates of deposit exceeded 5 of the total Citys investments portfolio
36
Deposits and investments are presented in the basic financial statements as follows
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS
Capital asset activity was as follows
Beginning EndingGovernmental Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 2482508$ $ (18800)$ 2463708$ Construction in Progress 508685 248979 (524628) 233036
Total Capital AssetsNot Being Depreciated 2991193 248979 (543428) 2696744
Capital Assets Being DepreciatedBuildings 3065250 3065250 Improvements Other than Buildings 1298097 524628 1822725 Machinery and Equipment 2556167 111246 (57123) 2610290 Infrastructure 21739105 21739105
Total Capital AssetsBeing Depreciated 28658619 635874 (57123) 29237370
Less Accumulated Depreciation forBuildings 1145321 75543 1220864 Improvements Other than Buildings 858879 46992 905871 Machinery and Equipment 1568583 121681 (40205) 1650059 Infrastructure 17438428 312281 17750709
Total AccumulatedDepreciation 21011211 556497 (40205) 21527503
Total Capital Assets BeingDepreciated Net 7647408 79377 (16918) 7709867
Governmental ActivitiesNet Capital Assets 10638601$ 328356$ (560346)$ 10406611$
37
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS (Contd)
Capital asset activity was as follows
Beginning EndingBusiness-Type Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 277948$ $ $ 277948$
Capital Assets Being DepreciatedBuildings 4175245 4175245 Improvements Other than Buildings 12637 12637 Machinery and Equipment 268809 34287 303096 Infrastructure 11123768 11123768
Total Capital AssetsBeing Depreciated 15580459 34287 0 15614746
Less Accumulated Depreciation forBuildings 1499349 92233 1591582 Improvements Other than Buildings 12636 12636 Machinery and Equipment 190152 19580 209732 Infrastructure 3268385 267127 3535512
Total AccumulatedDepreciation 4970522 378940 0 5349462
Total Capital Assets BeingDepreciated Net 10609937 (344653) 0 10265284
Business-Type ActivitiesNet Capital Assets 10887885$ (344653)$ 0$ 10543232$
Depreciation expense was charged to functionsprograms as follows
Governmental ActivitiesGeneral Government 53809$ Public Safety 91620 Public Works 383653 Culture and Recreation 27415
Total Depreciation Expense - Governmental Activities 556497$
Business-Type ActivitiesWater 171475$ Sewer 118151 RefuseRecycling 1333 Storm Utility 87981
Total Depreciation Expense - Business-Type Activities 378940$
38
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 6 INTERFUND ACTIVITY
A INTERFUND BALANCES
The composition of interfund balances is as follows
Amount
General Sewer 445076$ General RefuseRecycling 28318 General Storm Utility 31562 General Nonmajor Governmental Funds 415794 Water Nonmajor Governmental Funds 98000 Sewer Nonmajor Governmental Funds 21000 Nonmajor Governmental Funds General 143500 Nonmajor Governmental Funds Nonmajor Governmental Funds 46888
Total Interfund Balances 1230138$
B INTERFUND TRANSFERS
The composition of interfund transfers is as follows
Nonmajor Governmental
Water Sewer Funds Total
Transfer OutGeneral 19600$ 36400$ 287794$ 343794$ Water 120000 120000 Sewer 149000 149000 Storm Utility 42000 42000 Nonmajor Governmental
Funds 547120 547120
Total Interfund Transfers 19600$ 36400$ 1145914$ 1201914$
Receivable Fund Payable Fund
39
The purpose of the above transfers was to provide funding for debt service capital improvement projects capital outlay and operating purposes
The purpose of the above interfund loans was to provide financing for operating purposes and to cover deficit cash balances
Transfer In
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES
A GENERAL OBLIGATION BONDS
B COMPONENTS OF LONG-TERM LIABILITIES
Interest Final BalanceRates Maturity Outstanding
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan BondsSeries 2008A 300-400 02012022 295000$
GO Special Assessment BondsGO Improvement Bonds Series 2008B 300-4125 02012024 560000 GO Improvement Bonds Series 2011A 105-415 02012032 1300000 GO Refunding Bonds Series 2011B 085-270 02012021 585000 GO Refunding Bonds Series 2012A 055-185 02012022 1035000 GO Improvement Bonds Series 2015A 110-345 02012036 750000
GO NotesGO Improvement Note of 2011 1959 08202031 846000
GO Equipment CertificateGO Equipment Certificate 2016A 2100 02012021 168000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549$
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 2819 08202023 996000$ PFA Clean Water Revenue Note 2220 08202026 8086000 PFA Water Revenue Note of 2015 1031 08202035 812000 PFA Sewer Revenue Note of 2015 1000 08202035 110000
Total Business-Type Activities 10004000$
GO Bonds are direct obligations and pledge the full faith and credit of the City These bonds generally are issued as 15 year Serial Bonds with equal debt service payments each year
The City issues General Obligation (GO) Bonds to provide financing for street improvements facility construction and tax increment projects Debt service is covered respectively by special assessments property taxes and tax increments against benefited properties with any shortfalls being paid from general taxes
40
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
B COMPONENTS OF LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for all bonded debt and notes outstanding are as follows
Principal Interest Principal Interest
70000$ 10400$ 660000$ 112343$ 70000 7600 675000 97718 75000 4700 600000 82645 80000 1600 480000 63498
220000 59861 760000 211593 680000 82489 155000 8131
295000$ 24300$ 4230000$ 718278$
2019
2029-20332024-2028
20222023
On September 27 2011 the City issued $1620000 GO Refunding Bonds Series 2011B with an interest rate of 85 to 270 The City issued the Bonds to crossover refund the $1020000 GO Fire Hall Bonds Series 2004A and the $1645000 GO Improvement Bonds Series 2004B The City completed the refunding to reduce its debt service payment over the next 9 years by $20827 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $20868
Debt service funds are used to liquidate the governmental activities outstanding bonded indebtedness and notes The Park Capital Projects Fund is used to liquidate the governmental activities outstanding contract for deed The General Fund has historically been used to liquidate the outstanding governmental activities compensated absences
GO Improvement Bonds Assessment Bonds
On April 4 2012 the City issued $2225000 GO Refunding Bonds Series 2012A with an interest rate of 55 to 185 The City issued the Bonds to refund the $1415000 GO Improvement Bonds Series 2001C and the $320000 GO Refunding Improvement Bonds Series 2003 as well as crossover refund the $3100000 GO Improvement Bonds Series 2006A The City completed the refunding to reduce its debt service payment over the next 10 years by $179206 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $161420
41
2034-2036
Governmental ActivitiesGO Special
2020
December 31
2021
Year Ending
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS (Contd)
Principal Interest Principal Interest
58000$ 16573$ 55000$ 2951$ 59000 15437 56000 1785 60000 14281 57000 598 61000 13106 62000 11911
332000 40728 214000 8423
846000$ 120459$ 168000$ 5334$
Principal Interest
1173000$ 217058$ 1200000 190488 1227000 163282 1254000 135459 1283000 151604 3466000 171976
284000 14813 117000 1808
10004000$ 1046488$
42
2023
Governmental Activities
2020
Year Ending
2029-2033
2022
2034-2035
2021
2028-2028
2024-2028
2022
2020
2019
2019
Business-Type Activities
2029-2031
GO Notes
2021
December 31Year Ending
2023
GO Equipment Certificates
GO Revenue Notes
December 31
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
D CHANGES IN LONG-TERM LIABILITIES
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Governmental ActivitiesBonds Payable
GOImprovementBonds 365000$ $ 70000$ 295000$ 70000$
GO SpecialAssessment Bonds 4870000 640000 4230000 660000
5235000 0 710000 4525000 730000
GO ImprovementNote of 2011 903000 57000 846000 58000
GO Equipment Certificate 222000 54000 168000 55000
CompensatedAbsences 23292 58115 58428 22979
Unamortized BondDiscount (26664) 4234 (22430)
Total GovernmentalActivities 6356628$ 62349$ 879428$ 5539549$ 843000$
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Business-Type ActivitiesNotes Payable
GO Revenue Notes 11146604$ 3396$ 1146000$ 10004000$ 1173000$
43
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
E CONDUIT DEBT OBLIGATIONS
The Citys conduit debt consisted of the following
Senior Housing and Health Care Revenue Refunding Note 6661528$
NOTE 8 RISK MANAGEMENT
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION
A PLAN DESCRIPTION
Firefighters of the City are members of the Association The Association is the administrator of a single-employer defined benefit pension plan available to firefighters The plan is administered by the Association pursuant to Minnesota Statutes Chapter 69 Chapter 424A and the Associations by-laws As of December 31 2017 the plan covered 28 active firefighters and 14 vested terminated fire fighters whose pension benefits are deferred
There are no other claims liabilities reported in the financial statements based on the requirements of accounting standards which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years
The Citys workers compensation insurance policy is retrospectively rated With this type of policy final premiums are determined after loss experience is known The amount of premium adjustment for 2018 is estimated to be immaterial based on workers compensation rates and salaries for the year
44
Conduit debt obligations are certain limited-obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party The City has issued various revenue bonds to provide funding to private-sector entities for projects deemed to be in the public interest Although these bonds bear the name of the City the City has no obligation for such debt Accordingly the bonds are not reported as liabilities in the financial statements of the City
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) which is a public entity risk pool currently operating as a common risk management and insurance program with other cities in the state The City pays an annual premium to the LMCIT for its insurance coverage The LMCIT is self-sustaining through commercial companies for excess claims The City is covered through the pool for any claims incurred but unreported but retains risk for the deductible portion of its insurance policies The amount of these deductibles is considered immaterial to the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
B BENEFITS PROVIDED
C CONTRIBUTIONS
D PENSION COSTS
Total Plan Net Pension Pension Fiduciary LiabilityLiability Net Position (Asset)
(a) (b) (a) - (b)
Balances at 112017 $ 569046 $ 1009074 $ (440028)Changes for the Year
Service Cost 26727 26727 Interest 34955 34955 Changes in Benefit Terms 28893 28893 Contributions - Employer 3000 (3000)Contributions - State 47693 (47693)Net Investment Income 126216 (126216)Benefit Payments (72973) (72973) Administrative Expense (8416) 8416
Net Change 17602 95520 (77918)
Balances at 12312017 $ 586648 $ 1104594 $ (517946)
The plan provides lump-sum retirement death and supplemental benefits to covered firefighters and survivors Benefits are paid based on the number of years of service multiplied by a benefit level per year of service approved by the City The plan includes a $2600 service pension benefit for each year of service Members are eligible for a lump-sum retirement benefit at 50 years of age or after completion of 20 years of service If a member is both age 50 and has completed five years of service but not 20 years of service the lump-sum pension will be reduced by 4 for each year of service less than 20 years
The plan is funded by fire state aid investment earnings and if necessary employer contributions as specified in Minnesota Statutes and voluntary City contributions As of December 31 2017 the State of Minnesota contributed $47693 in fire state aid to the plan on behalf of the Fire Department Required employer contributions are calculated annually based on statutory provisions The City made voluntary contributions of $3000 to the plan
The City reported a net pension liability (asset) of ($517946) The Citys net pension liability (asset) was measured as of December 31 2017 and the total pension liability used to calculate the net pension liability (asset) in accordance with GASB 68 was determined by an independent actuary applying an actuarial formula to specific census data certified by the fire department The following table presents the changes in net pension liability during the year
45
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
D PENSION COSTS (Contd)
The lump sum benefit increased from $2400 to $2600 per year effective January 1 2018
Differences between expected and actual economic experience $ 5346$ Changes in actuarial assumptions 3678 Net differences between projected and actual investment earnings 26024 Contributions paid to plan subsequent to measurement date 55196 State aid received for the plan subsequent to measurement date 52196
55196$ 87244$
December 31
20192020202120222023
Thereafter
For the year ended December 31 2018 the City recognized pension expense of ($15721)
The City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
$ 537
46
$55196 reported as deferred outflows of resources related to pensions resulting from City contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended December 31 2019 $52196 reported as deferred inflows of resources related to pensions resulting from state aid received for the plan subsequent to the measurement date will be recognized as an increase of the net pension liability (asset) in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pension plans will be recognized in pension expense as follows
Pension Expense Amount
(2) (17701) (14691) (1457) (1734)
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
E ACTUARIAL ASSUMPTIONS
Inflation Rate 275 percentRetirement Eligibility Later of current age and age 50Expected Long-Term Investment Return 625 percentAmortization Method
Mortality
F DISCOUNT RATE
G PENSION LIABLIITY (ASSET) SENSITIVITY
1 Decrease 1 Increasein Discount in Discount
Rate Rate(525) (625) (725)
Citys Net Pension Liability (Asset) $ (497411) $ (517946) $ (537562)
Straight-line amortization over a closed 5-year period or straight-line amortization over a close period equal to the average of the expected remaining service lives of all members that are provided with pensions through the pension planRates used in the July 1 2016 Minnesota PERA Police amp Fire Plan actuarial valuation
The discount rate used to measure the total pension liability was 625 The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at a rate specified in statute Based on that assumption the pension planrsquos 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
The following presents the net pension liability (asset) calculated using the discount rate as well as what the Citys net pension liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate
Discount Rate
The total pension liability was determined using the following actuarial assumptions applied to all periods included in the measurement
The actuarial assumptions used in the December 31 2018 valuation were based on the results of an actuarial experience study for the period January 1 2016 - December 31 2016
47
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
H PLAN INVESTMENTSINVESTMENT POLICY
- Attempt to maintain minimum funding ratio of 120- Attempt to increase the pension amount by $200 every other year- Meet twice per year to discuss any changes to allocation and prepare for a joint meeting with the City
I ASSET ALLOCATION
Domestic equityInternational equityFixed incomeReal estate and alternativesCash and equivalents
Total
J PENSION PLAN FIDUCIARY NET POSITION
10000
The best-estimates of expected future asset class returns were published in the 2017 Survey of Capital Market Assumptions produced by Horizon Actuarial Services These expected returns along with expected asset class standard deviations and correlation coefficients are based on Horizonrsquos annual survey of investment advisory firms The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data
Detailed information about the pension plans fiduciary net position is available in a separately-issued financial report
Asset Class
The plans funded status increased from 1773 to 1883 since the prior valuation This change is primarily due to investment returns in excess of expected
4500 5391000 5203500 198500 425500 079
The Association has a formal investment policy that operates within standard investment practices of the prudent person and other standards codified in Minnesota Statutes Chapter 11A and Chapter 356
The Associations pension plan assets are to be invested for the exclusive benefit of the fund members and will attempt to generate investment returns of at least 5 percent of an annualized basis over time Other goals of the Association include
The long-term expected rate of return on pension plan investments as determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns net of pension plan investment expense and inflation) are developed for each major asset class These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table
Long-Term Expected Real Rate of ReturnTarget Allocation
48
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A PLAN DESCRIPTION
B BENEFITS PROVIDED
GERP Benefits
General Employees Retirement Plan (GERP General Employees Plan accounted for in the General Employees Fund)
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
Public Employees Police and Fire Plan (PEPFP Police and Fire Plan accounted for in the Police and Fire Fund)
The Police and Fire Plan 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 Police and Fire Plan also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to PERA
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
General Employees Plan benefits are based on a memberrsquos 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 PERAs 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 12 for each of the first 10 years of service and 17 for each additional year The rates are 22 and 27 respectively for Basic members Under Method 2 the accrual rate for Coordinated members is 17 for all years of service and 27 for Basic members The accrual rates for former MERF members is 20 for each of the first 10 years of service and 25 for each additional year 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
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA) PERArsquos defined benefit pension plans are established and administered in accordance with Minnesota Statutes Chapters 353 and 356 PERArsquos defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code
49
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
B BENEFITS PROVIDED (Contd)
GERP Benefits (Contd)
PEPFP Benefits
C CONTRIBUTIONS
GERP Contributions
PEPFP Contributions
Beginning January 1 2019 benefit recipients will receive a future annual increase equal to 50 percent of the Social Security Cost of Living Adjustment not less than 10 percent and not more than 15 percent For retirements on or after January 1 2024 the first benefit increase is delayed until the retiree reaches Normal Retirement Age (not applicable to Rule of 90 retirees disability benefit recipients or survivors) A benefit recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase Members receiving benefits for at least one month but less than 12 full months as of June 30 will receive a pro rata increase
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 percent after five years up to 100 percent 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 percent after ten years up to 100 percent after twenty years of credited service The annuity accrual rate is 3 percent of average salary for each year of service For Police and Fire Plan members who were first hired prior to July 1 1989 a full annuity is available when age plus years of service equal at least 90
Beginning in 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law Post retirement increases are given each year except for annuitants who have been receiving a benefit for only 31 to 41 months These annuitants will receive a prorated amount of the increase on a sliding scale
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions Contribution rates can only be modified by the state Legislature
Coordinated Plan members were required to contribute 650 percent of their annual covered salary in fiscal year 2018 the City was required to contribute 750 percent for Coordinated Plan members The Citys contributions to the General Employees Fund for the year ended December 31 2018 were $50226 The Citys contributions were equal to the required contributions as set by state statute
Legislation increased both employee and employer contribution rates in the Police and Fire Plan Employee rates increased from 1080 percent of pay to 1130 percent and employer rates increase from 1620 percent to 1695 percent on January 1 2018 On January 1 2020 employee rates increase to 1180 percent and employer rates increase to 1770 percent The Citys contributions to the Police and Fire Fund for the year ended December 31 2018 were $57782 The Citys contributions were equal to the required contributions as set by state statute
50
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS
GERP Pension Costs
Differences between expected and actual economic experience 14670$ 16018$ Changes in actuarial assumptions 52464 61940 Differences between projected and actual investment earnings 56103 Changes in proportion 4060 13463 Contributions paid to GERP subsequent to measurement date 25165
96359$ 147524$
At December 31 2018 the City reported a liability of $543664 for its proportionate share of the General Employees Fundrsquos net pension liability The City net pension liability reflected a reduction due to the State of Minnesotarsquos contribution of $16 million to the fund in 2019 The State of Minnesota is considered a non-employer contributing entity and the statersquos contribution meets the definition of a special funding situation The State of Minnesotarsquos proportionate share of the net pension liability associated with the City totaled $17795 The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The Citys proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion share was 00098 which was a decrease of 00002 from its proportion measured as of June 30 2017
Post-retirement benefit increases were changed from 10 per year with a provision to increase to 25 upon attainment of 90 funding ratio to 50 of the Social Security Cost of Living Adjustment not less than 10 and not more than 15 beginning January 1 2019
For the year ended December 31 2018 the City recognized pension expense of $28216 for its proportionate share of GERPrsquos pension expense In addition the City recognized an additional $4150 as pension expense (and grant revenue) for its proportionate share of the State of Minnesotas contribution of $6 million to the General Employees Fund
At December 31 2018 the City reported its proportionate share of GERPrsquos deferred outflows of resources and deferred inflows of resources from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
51
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
GERP Pension Costs (Contd)
PEPFP Pension Costs
$25165 reported as deferred outflows of resources related to pensions resulting from City contributions to GERP subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to GERP pensions will be recognized in pension expense as follows
52
Year ended June 30 Pension Expense Amount
2019 13967$ 2020 (31102) 2021 (47848) 2022 (11347)
At December 31 2018 the City reported a liability of $350680 for its proportionate share of the Police and Fire Fundrsquos net pension liability The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The City proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion was 00329 which was a decrease of 00001 from its proportion measured as of June 30 2017 The City also recognized $2961 for the year ended December 31 2018 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesotarsquos on-behalf contributions to the Police and Fire Fund Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year starting in fiscal year 2014
Beginning in January 1 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law
For the year ended December 31 2018 the City recognized pension expense of $2961 for its proportionate share of the Police and Fire Planrsquos pension expense
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
PEPFP Pension Costs (Contd)
Differences between expected and actual economic experience 14159$ 88907$ Changes in actuarial assumptions 450560 517779 Differences between projected and actual investment earnings 71220 Changes in proportion 10800 27880 Contributions paid to PEPFP subsequent to measurement date 29906
505425$ 705786$
E ACTUARIAL ASSUMPTIONS
InflationSalary GrowthInvestment Rate of Return
Actuarial Assumptions GERP PEPFP
250 per year 250 per year325 after 26 years of service 325 after 25 years of service
750 750
53
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
2020 (21749)2021 (54056)2022 (147616)2023 (1380)
The total pension liability in the June 30 2018 actuarial valuation was determined using the following actuarial assumptions
$29906 reported as deferred outflows of resources related to pensions resulting from the Citys contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows
Year ended June 30 Pension Expense Amount
2019 (5466)$
At December 31 2018 the City reported its proportionate share of the Police and Fire Planrsquos deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
GERP
PEPFP
54
The total pension liability for each of the defined benefit cost-sharing plans was determined by an actuarial valuation as of June 30 2018 using the entry age normal actuarial cost method Inflation is assumed to be 250 percent for the General Employees and Police and Fire Plans Salary growth assumptions in the General Employees Plan decrease in annual increments from 1125 percent after one year of service to 325 percent after 26 years of service In the Police and Fire Plan salary growth assumptions decrease from 1225 percent after one year of service to 325 percent after 25 years of service
Mortality rates for all plans are based on RP-2014 mortality tables The tables are adjusted slightly to fit PERArsquos experience Actuarial assumptions for the General Employees Plan are reviewed every four to six years The most recent six-year experience study for the General Employees Plan was completed in 2015 The most recent four-year experience study for the Police and Fire Plan was completed in 2016 Economic assumptions were updated in 2014 based on a review of inflation and investment return assumptions
The following changes in actuarial assumptions occurred in 2018
The mortality projection scale was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 percent per year through 2044 and 250 percent per year thereafter to 125 percent per year
The mortality projection scale was changed from MP-2016 to MP-2017
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
Domestic StocksInternational StocksBondsAlternative AssetsCash
F DISCOUNT RATE
G PENSION LIABILITY SENSITIVITY
GERP PEPFP
1 Lower 650 883523$ 1520 751880$ Current Discount Rate 750 543664 1620 350680 1 Higher 850 263120 1720 18904
The discount rate used to measure the total pension liability in 2018 was 750 percent The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes Based on these assumptions the fiduciary net positions of the General Employees Fund and the Police and Fire Fund 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
The following presents the Citys proportionate share of the net pension liability for all plans it participates in calculated using the discount rate disclosed in the preceding paragraphs as well as what the Citys 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
Target Allocation
3900190020002000200
10000
Long-Term Expected Real Rate of Return
510530075590000
Asset Class
55
The State Board of Investment which manages the investments of PERA prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return 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 in the following table
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
H PENSION PLAN FIDUCIARY NET POSITION
NOTE 11 DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
Related to Pensions 656980$ 940554$
NOTE 12 FUND BALANCE
NonmajorGovernmental
General Funds Total
NonspendablePrepaid Items 73751$ 2152$ 75903$
Restricted forTax Increment 11481 11481 Debt Service 1448570 1448570 Capital Projects 72582 72582
0 1532633 1532633
CommittedCharitable Gambling Programs 11466 11466 Economic Development Promotion 835956 835956
Total Committed 0 847422 847422
AssignedFund Operations 165070 487992 653062
Unassigned 1697339 (456819) 1240520
1936160$ 2413380$ 4349540$
Detailed information about each pension plans 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 wwwmnperaorg
The following is a summary of the major components of deferred outflows and inflows as presented in the Statement of Net Position
Deferred Outflows of Resources
Deferred Inflows of Resources
The following is a summary of fund balance components
56
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 13 TAX ABATEMENT
Current YearPercent AmountAbated Abated
Dingmann Marine100 2500$
Current YearPercent AmountAbated Abated
Granite City PropertyManagement 95 20858$
NOTE 14 JOINT POWERS AGREEMENTS
A PUBLIC RECREATIONAL FACILITY
B WRIGHT COUNTY AREA TRANSIT
Wright County Area Transit is governed by a Joint Powers Board that consists of a) one vote plus additional vote for each city per 3000 rides originating in that city and b) Wright County has votes equal to the number of votes apportioned to the Cities
57
The City and Independent School District 876 (the District) have entered into an a joint powers agreement to operate a public recreational facility The City owns and will lease the real property to the Joint Powers Entity (the Entity) The District shall fund the construction of the facility The Entity shall prepare an annual budget subject to approval of the City and the District All costs for operations maintenance repairs and utilities shall be shared equally by the City and the District
The Entity is governed by a Joint Powers Board that consists of four members a) two members appointed by the City annually and b) two members appointed by the District annually
The City Wright County and other Wright County Cities have entered into an a joint powers agreement to provide affordable public transportation to their communities Cities are to pay a pro rata share of the remaining unfunded operating expenses and capital expenditures not covered by Wright County
The City is authorized by Minnesota Statute sect4691813 to enter into property tax abatement agreements for the purpose of attracting or retaining businesses Tax abatements may be granted to any business on a case-by-case basis The entity may be subject to certain stipulations determined by the City at the time the abatement is entered The amount of the abatement is automatically deducted from the property ownerrsquos tax bill
The City is authorized by Minnesota Statute sect469174 through 469179 to enter into tax increment financing plans Tax increment financing may be granted on a case-by-case basis and may be subject to certain stipulations determined by the City at the time it is entered
Business Purpose
Business Purpose
Assisting in relocating the business within the community
Housing Redevelopment Project 36 Unit Senior Housing Project
REQUIRED SUPPLEMENTARY INFORMATION
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EmployersProportionateShare of the Net Pension
Liability (Asset)States and the States Employers
Proportionate Proportionate ProportionateEmployers Share of the Share of the Share of the Plan Fiduciary
Employers Proportionate Net Pension Net Pension Net Pension Net PositionProportion Share of the Liability (Asset) Liability (Asset) Employers Liability (Asset) as a Percentageof the Net Net Pension Associated with Associated with Covered as a Percentage of of the Total
Fiscal Year Pension Liability (Asset) the Employer the Employer Payroll its Covered Payroll PensionEnding Liability (Asset) (a) (b) (a+b) (c) ((a+b)c) Liability
PensionsGERP
6302018 00098 543664$ 17795$ 561459$ 658161$ 8531 79536302017 00100 638393 8040 646433 647524 9983 75906302016 00099 803831 10468 814299 610663 13335 68916302015 00102 528617 528617 605733 8727 7819
PEPFP6302018 00329 350680$ $ 350680$ 346636$ 10117 88846302017 00330 445539 445539 339010 13142 85436302016 00340 1364479 1364479 322596 42297 63886302015 00340 386320 386320 317917 12152 8661
See Accompanying Notes to the Required Supplementary Information
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITYDECEMBER 31 2018
58
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
Contributionsin Relation Contributions
Statutorily to the Statutorily Contribution as a PercentageRequired Required Deficiency Covered of Covered
Fiscal Year Contribution Contribution (Excess) Payroll PayrollEnding (a) (b) (a-b) (d) (bd)
PensionsGERP
12312018 50226$ 50226$ $ 669680$ 75012312017 48886 48886 651813 75012312016 46583 46583 621107 75012312015 45426 45426 605680 750
PEPFP12312018 57782$ 57782$ $ 356679$ 162012312017 55371 55371 341796 162012312016 53824 53824 332247 162012312015 51688 51688 319062 1620
See Accompanying Notes to the Required Supplementary Information59
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE EMPLOYER CONTRIBUTIONSDECEMBER 31 2018
2017 2016 2015 2014
Service Cost 26727$ 26915$ 21845$ 21260$ Interest 34955 33085 27615 24816 Changes in Benefit Terms 28893 40156 Differences Between Expected and Actual Experience (7074) Changes in Assumptions (4866) Benefit Payments (72973) (7040)
Net Change in Total Pension Liability 17602 41020 89616 46076 Total Pension Liability - Beginning of Year 569046 528026 438410 392334
Total Pension Liability - End of Year 586648$ 569046$ 528026$ 438410$
Contributions - State and Local 50693$ 50325$ 49939$ 47712$ Net Investment Income 126216 69161 (34736) 46976 Benefit Payments (72973) (7040) Administrative Expense (8416) (7920) (7166) (3768) Other (275)
Net Change in Plan Fiduciary Net Position 95520 104526 8037 90645 Total Plan Fiduciary Net Position - Beginning of Year 1009074 904548 896511 805866
Total Plan Fiduciary Net Position - End of Year 1104594$ 1009074$ 904548$ 896511$
Citys Net Pension Liability (Asset) - End of Year (517946)$ (440028)$ (376522)$ (458101)$
Plan Fiduciary Net Position as a Percentage of the Total Pension Asset 18829 17733 17131 20449
60
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF CHANGES IN THE CITYS NET PENSION LIABILITY AND RELATED RATIOSDECEMBER 31 2018
The City implemented GASB Statement No 68 for the year ended December 31 2015 Information for prior years is not available
December 31
NOTE 1 CHANGES IN PLAN PROVISIONS
A GERF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
B PEPFF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
61
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
On January 1 2015 the Minneapolis Employees Retirement Fund was merged into the General Employees Fund which increased the total pension liability by $11 billion and increased the fiduciary plan net position by $892 million Upon consolidation state and employer contributions were revised
The post-retirement benefit increase to be paid after attainment of the 90 funding threshold was changed from inflation up to 25 to a fixed rate of 25
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS
A GERF
2018 Changes
2017 Changes
2016 Changes
2015 Changes
B PEPFF
2018 Changes
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 025 to 325 for payroll growth and 250 for inflation
62
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2035 and 25 per year thereafter
The mortality projection was changed from MP-2016 to MP-2017
The Combined Service Annuity (CSA) loads were changed from 08 for active members and 60 for vested and non-vested deferred members The revised CSA loads are now 00 for active member liability 150 for vested deferred member liability and 30 for non-vested deferred member liability
The assumed post-retirement benefit increase rate was changed from 10 per year for all years to 10 per year through 2044 and 25 per year thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2035 and 25 per year thereafter to 10 per year for all years
The assumed investment return was changed from 79 to 75 The single discount rate was changed from 79 to 75
The mortality projection was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 per year through 2044 and 250 per year thereafter to 125 per year
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS (Contd)
B PEPFF (Contd)
2017 Changes
Assumed rates of retirement were changed resulting in fewer retirements
Assumed percentage of married female members was decreased from 65 to 60
The assumed percentage of female members electing Joint and Survivor annuities was increased
2016 Changes
2015 Changes
63
The assumed post-retirement benefit increase rate was changed from 100 for all years to 100 per year through 2064 and 250 thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2037 and 25 thereafter to 10 per year for all future years
The assumed investment return was changed from 79 to 75 The single discount rate changed from 79 to 56
The assumed future salary increases payroll growth and inflation were decreased by 025 to 325 for payroll growth and 250 for inflation
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2037 and 25 per year thereafter
Assumed salary increases were changed as recommended in the June 30 2016 experience study The net effect is proposed rates that average 034 lower than the previous rates
The Combined Service Annuity (CSA) load was 30 for vested and non-vested deferred members The CSA has been changed to 33 for vested members and 2 for non-vested 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 096 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 30 for the first three years of service Rates beyond the select period of three years were adjusted resulting in more expected terminations overall
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
SUPPLEMENTARY INFORMATION
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Special Debt Capital Revenue Service Projects Total
ASSETSCash and Investments 436388$ 1441782$ 473092$ 2351262$ Taxes Receivable - Delinquent 23 5 347 375 Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 623285 26935 650220
Accounts Receivable 70887 20000 90887 Interest Receivable 9 9 Prepaid Items 2152 2152 Due from Other Funds 190388 190388 Due from Other Governments 1061 2365 47418 50844 Land Held for Resale 362923 362923
Total Assets 1063822$ 2071860$ 567801$ 3703483$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 12735$ $ 11142$ 23877$ Contracts Payable 2941 21398 24339 Due to Other Funds 454822 126860 581682 Due to Other Governments 3566 5910 9476 Salaries and Benefits Payable 134 134
Total Liabilities 474198 0 165310 639508
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 23 5 347 375 Special Assessments 623285 26935 650220
Total Deferred Inflows of Resources 23 623290 27282 650595
Fund Balance Nonspendable 2152 2152 Restricted 11481 1448570 72582 1532633 Committed 847422 847422 Assigned 67503 420489 487992 Unassigned (338957) (117862) (456819)
Total Fund Balance 589601 1448570 375209 2413380
Total Liabilities Deferred Inflows of Resources and Fund Balance 1063822$ 2071860$ 567801$ 3703483$
CITY OF ANNANDALE MINNESOTA
64
DECEMBER 31 2018NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
Special Debt Capital Revenue Service Projects Total
REVENUESProperty Taxes 2507$ $ 320723$ 323230$ Tax Increments 20858 20858 Special Assessments 149671 149671 Intergovernmental 30310 30310 Charges for Services 42636 8595 51231 Fines and Forfeitures 4299 4299 Investment Income (1455) (3635) (5090) Contributions and Donations 49608 84150 133758 Miscellaneous 578 101 679
Total Revenues 114732 149671 444543 708946
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 22622 42738 Culture and Recreation 3735 3735 Economic Development 52358 52358
Debt ServicePrincipal 821000 821000 Interest and Other Charges 162964 162964
Capital OutlayPublic Safety 67055 67055 Public Works 14006 14006 Culture and Recreation 14187 88464 102651 Economic Development 56446 88485 144931
Total Expenditures 153914 983964 284367 1422245 Excess (Deficiency) of Revenues
Over (Under) Expenditures (39182) (834293) 160176 (713299)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 51200 784616 310098 1145914 Transfers Out (65804) (481316) (547120)
Total Other Financing Sources (Uses) (14604) 784616 (146725) 623287 Net Change in Fund Balances (53786) (49677) 13451 (90012)
FUND BALANCE BEGINNING OF YEAR 643387 1498247 361758 2503392
FUND BALANCE END OF YEAR 589601$ 1448570$ 375209$ 2413380$
65
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
Tax Charitable Economic TIF District Abatement - Lions TIF District Training WoodlawnGambling Development No 6 Dingmann Donations No 14 Center Cemetery
(222) (407) (411) (423) (464) (465) (604) (651) Total
ASSETSCash and Investments 11466$ 385530$ 21389$ $ 18003$ $ $ $ 436388$ Taxes Receivable - Delinquent 23 23 Accounts Receivable 20856 49500 531 70887 Prepaid Items 1076 1076 2152 Due from Other Funds 190388 190388 Due from Other Governments 25 1036 1061 Land Held for Resale 362923 362923
Total Assets 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable $ 1800$ 9908$ $ $ $ 1000$ 27$ 12735$ Contracts Payable 2941 2941 Due to Other Funds 119000 18060 66198 200960 50604 454822 Due to Other Governments 3500 66 3566 Salaries and Benefits Payable 67 67 134
Total Liabilities 0 123741 9908 18060 0 69698 202093 50698 474198
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 23 23
Fund Balance Nonspendable 1076 1076 2152 Restricted 11481 11481 Committed 11466 835956 847422 Assigned 67503 67503 Unassigned (18035) (69698) (200526) (50698) (338957)
Total Fund Balance 11466 835956 11481 (18035) 67503 (69698) (199450) (49622) 589601
Total Liabilities Deferred Inflows of Resources and Fund Balance 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
66
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUECOMBINING BALANCE SHEET
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding ImprovementBonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
ASSETSCash and Investments 134649$ 53157$ 3288$ 310514$ 94388$ 360857$ 484929$ 1441782$ Taxes Receivable - Delinquent 5 5 Special Assessments Receivable
Delinquent 819 1553 2051 4423 Current and Deferred 45829 223930 9400 65636 278490 623285
Due from Other Governments 585 509 775 496 2365
Total Assets 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
DEFERRED INFLOWS OF RESOURCESAND FUND BALANCEDeferred Inflows of Resources
Unavailable RevenuesDelinquent Property Taxes $ $ $ $ $ 5$ $ 5$ Special Assessments 45829 223930 9400 65636 278490 623285
Total Deferred Inflows of Resources 45829 0 0 223930 9400 65641 278490 623290
Fund Balance Restricted 135234 53157 3288 311333 94897 363185 487476 1448570
Total Deferred Inflows of Resourcesand Fund Balance 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
DECEMBER 31 2018
67
Public Works 2020Fire Street Street Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
ASSETSCash and Investments 50334$ $ 39748$ 122304$ 20402$ 83784$ 53265$ 30658$ 72597$ $ 473092$ Taxes Receivable - Delinquent 298 49 347Special Assessments Receivable
Current and Deferred 26935 26935Accounts Receivable 20000 20000Interest Receivable 9 9Due from Other Governments 24247 20606 2565 47418
Total Assets 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 350$ $ $ $ 10792$ $ $ $ $ $ 11142$ Contracts Payable 15700 5698 21398 Due to Other Funds 44073 82787 126860 Due to Other Governments 5910 5910
Total Liabilities 350 49983 0 0 10792 0 0 15700 0 88485 165310
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 298 49 347Special Assessments 26935 26935
Total Deferred Inflows of Resources 298 0 26984 0 0 0 0 0 0 0 27282
Fund Balance Restricted 72582 72582 Assigned 74240 42313 122304 9610 83784 53265 34958 15 420489 Unassigned (29377) (88485) (117862)
Total Fund Balance 74240 (29377) 42313 122304 9610 83784 53265 34958 72597 (88485) 375209
Total Liabilities Deferred Inflow of Resources and Fund Balance 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
DECEMBER 31 2018
68
TaxCharitable Economic TIF District Abatement - TIF District Lions TIF District Training WoodlawnGambling Development No 6 Dingmann No 12 Donation No 14 Center Cemetery
(222) (407) (411) (423) (438) (464) (465) (604) (651) Total
REVENUESProperty Taxes $ $ $ 2507$ $ $ $ $ $ 2507$ Tax Increments 20858 20858 Charges for Services 12875 19641 10120 42636 Investment Income (71) (2440) (140) (76) 1239 33 (1455)Contributions and Donations 108 49500 49608Miscellaneous 78 500 578
Total Revenues (71) 10621 20718 2507 0 49424 500 20880 10153 114732
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 20116 Economic Development 18399 19816 391 13752 52358
Capital OutlayCulture and Recreation 14187 14187 Economic Development 56446 56446
Total Expenditures 0 18399 19816 0 391 14187 70198 20116 10807 153914 Excess (Deficiency) of
Revenues Over (Under) Expenditures (71) (7778) 902 2507 (391) 35237 (69698) 764 (654) (39182)
OTHER FINANCING SOURCES (USES)Transfers In 51200 51200 Transfers Out (65804) (65804)
Total Other FinancingSources (Uses) 0 (14604) 0 0 0 0 0 0 0 (14604)
Net Change in Fund Balances (71) (22382) 902 2507 (391) 35237 (69698) 764 (654) (53786)
FUND BALANCE BEGINNING OF YEAR 11537 858338 10579 (20542) 391 32266 (200214) (48968) 643387
FUND BALANCE END OF YEAR 11466$ 835956$ 11481$ (18035)$ 0$ 67503$ (69698)$ (199450)$ (49622)$ 589601$
69
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE
YEAR ENDED DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding Improvement Bonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
REVENUESSpecial Assessments 21259$ $ $ 37558$ 10657$ 20276$ 59921$ 149671$
EXPENDITURESDebt Service
Principal 80000 70000 54000 127000 210000 245000 35000 821000Interest and Other Charges 23944 14062 4095 64909 16975 18646 20333 162964
Total Expenditures 103944 84062 58095 191909 226975 263646 55333 983964 Excess (Deficiency) of
Revenues Over (Under)Expenditures (82685) (84062) (58095) (154351) (216318) (243370) 4588 (834293)
OTHER FINANCINGSOURCES (USES)Transfers In 76000 78113 22560 150000 194943 198000 65000 784616
Net Change in Fund Balances (6685) (5949) (35535) (4351) (21375) (45370) 69588 (49677)
FUND BALANCEBEGINNING OF YEAR 141919 59106 38823 315684 116272 408555 417888 1498247
FUND BALANCE END OF YEAR 135234$ 53157$ 3288$ 311333$ 94897$ 363185$ 487476$ 1448570$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
YEAR ENDED DECEMBER 31 2018
70
Public 2020Fire Street WorksStreet Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
REVENUESProperty Taxes 25092$ $ 295631$ $ $ $ $ $ $ $ 320723$ Intergovernmental 4109 26201 30310 Charges for Services 8595 8595 Fines and Forfeitures 4299 4299 Investment Income (49) 105 (324) (1118) (80) (713) (503) (495) (458) (3635) Contributions and Donations 50650 1500 2000 30000 84150 Miscellaneous 101 101
Total Revenues 75693 14309 295307 (1017) 6219 (713) 25698 29505 (458) 0 444543
EXPENDITURESCurrent
Public Safety 22622 22622 Culture and Recreation 3735 3735
Capital OutlayPublic Safety 7500 59555 67055 Public Works 14006 14006 Culture and Recreation 16429 72035 88464 Economic Development 88485 88485
Total Expenditures 30122 20164 0 14006 59555 0 0 72035 0 88485 284367 Excess (Deficiency) of
Revenues Over (Under)Expenditures 45571 (5855) 295307 (15023) (53336) (713) 25698 (42530) (458) (88485) 160176
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 8800 15693 24493 Transfers In 84943 37504 60000 20000 107651 310098 Transfers Out (107503) (288000) (78113) (7700) (481316)
Total Other FinancingSources (Uses) (22560) 37504 (288000) 68800 35693 29538 0 (7700) 0 0 (146725)
Net Change in Fund Balances 23011 31649 7307 53777 (17643) 28825 25698 (50230) (458) (88485) 13451
FUND BALANCE BEGINNING OF YEAR 51229 (61026) 35006 68527 27253 54959 27567 85188 73055 361758
FUND BALANCE END OF YEAR 74240$ (29377)$ 42313$ 122304$ 9610$ 83784$ 53265$ 34958$ 72597$ (88485)$ 375209$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
YEAR ENDED DECEMBER 31 2018
71
FINANCIAL SECTION
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Issue Interest Original Final Principal Due WithinDate Rates Issue Maturity Outstanding One Year
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan Bonds Series 2008A 050608 300-400 895000$ 020122 295000$ 70000$ GO Special Assessment Bonds
GO Improvement Bonds Series 2008B 050608 300-4125 1175000 020124 560000 85000 GO Improvement Bonds Series 2011A 060811 105-415 1700000 020132 1300000 70000 GO Refunding Bonds Series 2011B 092711 085-270 1620000 020121 585000 215000 GO Refunding Bonds Series 2012A 040412 055-185 2225000 020122 1035000 255000 GO Improvement Bonds Series 2015A 050115 110-345 820000 020136 750000 35000
GO NotesGO Improvement Note of 2011 053111 1959 1217500 082031 846000 58000
GO Equipment CertificateGO Equipment Certificate 2016A 032116 2100 222000 020121 168000 55000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549 843000
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 011304 2819 3273194 082023 996000 188000 PFA Clean Water Revenue Note 081707 2220 16036613 082026 8086000 935000 PFA Water Revenue Note of 2015 081015 1031 929105 082035 812000 44000 PFA Sewer Revenue Note of 2015 090815 1000 125359 082035 110000 6000
Total Business-Type Activities 10004000 1173000
Total All Long-Term Liabilities 15543549$ 2016000$
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF LONG-TERM LIABILITIESDECEMBER 31 2018
72
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COMPLIANCE SECTION
This page intentionally left blank
Honorable Mayor and Members of the City Council
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
INDEPENDENT AUDITORS REPORT ON MINNESOTA LEGAL COMPLIANCE
73
The Minnesota Legal Compliance Audit Guide for Cities promulgated by the State Auditor pursuant to Minn Stat sect665 contains seven categories of compliance to be tested contracting and bidding deposits and investments conflicts of interest public indebtedness claims and disbursements miscellaneous provisions and tax increment financing Our audit considered all of the listed categories
In connection with our audit nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities However our audit was not directed primarily toward obtaining knowledge of such noncompliance Accordingly had we performed additional procedures other matters may have come to our attention regarding the Citys noncompliance with the above referenced provisions
The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance Accordingly this communication is not suitable for any other purpose
City of AnnandaleAnnandale Minnesota
May 6 2019
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 majorfund and the aggregate remaining fund information as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements we considered the Citys 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 Citys internal control Accordingly we do not express an opinion on the effectiveness of the Citys 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 entitys 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
74
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 and therefore material weaknesses or significant deficiencies may exist that were not identified 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 We did identify certain deficiencies in internal control described in the accompanying Schedule of Findings as 2018-001 and 2018-002 that we consider to be significant deficiencies
INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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 the City of Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
Compliance and Other Matters
Citys Response to Findings
Purpose of this Report
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
May 6 2019
75
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 Citys internal control or on compliance This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entitys internal control and compliance Accordingly this communication is not suitable for any other purpose
As part of obtaining reasonable assurance about whether the Citys 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
The Citys responses to the findings identified in our audit are described in the accompanying Schedule of Findings The Citys responses were not subjected to the auditing procedures applied in the audit of the financial statements and accordingly we express no opinion on them
I
FINDING 2018-001
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
76
LIMITED SEGREGATION OF DUTIES
There is an absence of appropriate segregation of duties consistent with appropriate control objectives due to a limited number of employees
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The City is aware of the limited segregation of duties and will continue to review internal controls and make changes when they can be made
The lack of adequate segregation of duties could adversely affect the Citys ability to initiate record process and report financial data consistent with the assertions of management in the financial statements
The basic premise is that no one person should have access to both physical assets and the related accounting records or to all phases of a transaction The lack of such controls could result in the occurrence of a material error or fraud in relation to the financial statements not being detected by management
The City has assigned duties to staff based on a cost-benefit relationship to the City and the practicality of the level of staffing the City maintains
The City should continue to monitor and evaluate the job responsibilities assigned to staff to determine whether there is an unacceptable risk
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
I
FINDING 2018-002 AUDITOR PREPARED FINANCIAL STATEMENTS
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
77
The City does not have an internal control system designed to provide for the preparation of the financial statements being audited However based on the degree of complexity and level of detail needed to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) the City has requested the auditors to prepare them
The preparation of the financial statements and the related notes are the responsibility of management
There are a limited number of office employees and resources available to allow for the adequate preparation of the financial statements by the City
This could result in a material misstatement to the financial statements and related notes that would not be prevented or detected and corrected as a result of the Citys current internal control
The City should continue to request the assistance to draft the financial statements and related notes and thoroughly review these financial statements after they have been prepared so the City can take responsibility for them
The City is aware of this however due to significant cost and a limited number of employees it is in the Citys best financial interest to contract for the preparation of the financial statements
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Contd)
Comment Year Finding If Not Corrected Provide PlannedReference Comment Title Status Initially Occurred Corrective Action or Other Explanation
Financial Statement Findings
2017-001 Not Corrected 2009 See current year finding 2018-001
2017-002 Not Corrected 2009 See current year finding 2018-002
Minnesota Legal Compliance Findings
None
DECEMBER 31 2018SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
CITY OF ANNANDALE MINNESOTA
78
Limited Segregation of Duties
Auditor Prepared Financial Statements
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORS
WILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
MANAGEMENT LETTER
DECEMBER 31 2018
This page intentionally left blank
Page
Required Communications 1-3
Schedule of Findings on Accounting Issues and Internal Controls 4
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
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Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Significant Audit Findings
Qualitative Aspects of Accounting Practices
We have audited the financial statements of the governmental activities the business-type activities each major fund and the aggregate remaining fund information of the City of Annandale Minnesota for the year ended December 31 2018 Professional standards require that we provide you with information about our responsibilities under generallyaccepted auditing standards and Government Auditing Standards as well as certain information related to the planned scope and timing of our audit We have communicated such information in our letter to you dated December 20 2018 Professional standards also require that we communicate to you the following information related to our audit
The financial statement disclosures are neutral consistent and clear
1
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 the financial statements No new accounting policies were adopted and the application of existing policies was not changed in 2018 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 are an integral part of the financial statements prepared by management and are based on managements 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
Managements estimate of depreciation is based on the number of years an asset is in service We evaluated the key factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Managements estimate of pension liabilities is based on actuarial valuations performed by consultants specializing in those areas We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Significant Audit Findings (Contd)
Difficulties Encountered in Performing the Audit
Corrected and Uncorrected Misstatements
Disagreements with Management
Management Representations
Management Consultations with Other Independent Accountants
Other Audit Findings or Issues
Other Matters
Professional standards require us to accumulate all known and likely misstatements identified during the audit other than those that are clearly trivial and communicate them to the appropriate level of management Management has corrected all such misstatements In addition none of the misstatements detected as a result of audit procedures and corrected by management were material either individually or in the aggregate to each opinion units financial statements taken as a whole
We encountered no significant difficulties in dealing with management in performing and completing our audit
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 Citys 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
We generally discuss a variety of matters including the application of accounting principles and auditing standards with management each year prior to retention as the Citys auditors However these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention
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 We are pleased to report that no such disagreements arose during the course of our audit
We have requested certain representations from management that are included in the management representation letter dated May 6 2019
We applied certain limited procedures to Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions the Schedule of Changes in the Citys Net Pension Liability and Related Ratios and the related notes to required supplementary information which are required supplementary information that supplements the basic financial statements Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries the basic financial statements and other knowledge we obtained during our audit of the basic financial statements We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information
2
Other Matters (Contd)
Restriction on Use
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
This information is intended solely for the use of the City Council and management of the City of Annandale Minnesota and is not intended to be and should not be used by anyone other than these specified parties
3
We were not engaged to report on the Elected Officials and Administration section which accompany the financial statements but are not required supplementary information We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it
May 6 2019
We were engaged to report on the statements and schedules listed in the table of contents as supplementary information which accompany the financial statements but are not required supplementary information With respect to this supplementary information we made certain inquiries of management and evaluated the form content and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America the method of preparing it has not changed from the prior period and the information is appropriate and complete in relation to our audit of the financial statements We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves
This page intentionally left blank
4
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in internal control under standards established by the American Institute of Certified Public Accountants 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
The objective of internal accounting control is to provide reasonable but not absolute assurance as to the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of these factors necessarily requires estimates and judgments by management
It should be recognized that within the City an inherent risk is present with certain positions It is very common for cities such as the City of Annandale Minnesota to assign many major responsibilities to a few key individuals in an attempt to operate within limited budgets The inherent risk is again addressed only to maintain the awareness of the internal control structure and to encourage the Councils continual review of financial information at monthly meetings
DECEMBER 31 2018
INTERNAL CONTROL
GENERAL RECOMMENDATIONS
Throughout the course of the audit we spoke to management regarding certain items that we see as an opportunity to improve None of these were considered significant within the scope of the audit The items discussed requiring action have been resolved or are in the process of resolution We would like to acknowledge the assistance and courtesies extended to us by the personnel of the City of Annandale Minnesota
City of Annandale Minnesota
Audit ReportDecember 31 2018
Independent Auditorrsquos ReportPages 2-4bull Financial statements are the responsibility of the Cityrsquos
managementbull Our responsibility is to express opinions on these financial
statements based on our auditbull Conducted audit in accordance with Generally Accepted
Auditing Standards and Government Auditing Standardsbull Obtain reasonable assurance financials are free from
material misstatement
1
Independent Auditorrsquos Report (Contrsquod)Pages 2-4
bull Financial statements are presented fairly in our opinion
bull Internal control letter on pages 74 and 75
2
Statement of Net Position
3
2018 2017ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current and Other 12893519$ 12739729$ Capital 20949843 21526486
Total Assets 33843362 34266215
Deferred Outflows of Resources 656980 914167 Total Assets and Deferred Outflows of Resources 34500342$ 35180382$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current Liabilities 660359$ 497847$ Noncurrent Liabilities
Net Pension Liability 894343 236206 Due Within One Year 2016000 1967000 Due in More Than One Year 13527549 16383958
Total Liabilities 17098251 19085011
Deferred Inflows of Resources 940554 951385
Net PositionNet Investment in Capital Assets 13587855 13119128 Restricted 2095629 2215725 Unrestricted 778053 (190867)
Total Net Position 16461537 15143986 Total Liabilities Deferred Inflows of Resources
and Net Position 34500342$ 35180382$
10 UNFINISHED BUSINESS-
11 NEW BUSINESS continued
A Southbrook Grille Street Dance B Chili Cook Off C Request to Close Parking Stalls for Bean Bag League D Purchase of Mower E Proposal to extend Lionrsquos Storage Shed F Resolutions Appointing Seasonal Staff G Call TIF Hearing H Renew Farm Lease- Olean I Resolution Appointing Engfer to Detective
10 MAYORCOUNCIL REPORTS 11 ADJOURNMENT
MINUTES ANNANDALE CITY COUNCIL
April 1 2019 CALL TO ORDERROLL CALL The City Council of Annandale Minnesota met for a regular meeting on April 1 2019 at 700 pm at the City Hall Council Chambers Councilor Gunnarson called the meeting to order at 700 pm City Council Present Wuollet Jonas Hastings Czycalla and Gunnarson City Council members absent None Also present were Administrator Hinnenkamp Tom Fenton with the Annandale Advocate Public Works Director Joe Haller Consulting Engineer Jared Voge Police Chief Herr Christine Husom and members of the public SET AGENDA Hinnenkamp requested Resolution appointing Kirby Nicka as Item I under New Business Motion was made by Wuollet and seconded by Jonas to adopt the agenda as amended The motion carried unanimously A motions are approved unaimously unless otherwise noted MINUTES A motion was made by Czycalla and seconded by Hastings to approve the minutes of the March 4 2019 meeting AUDITING CLAIMS Hinnenkamp presented an updated claims list A motion was made by Jonas and seconded by Wuollet to approve the claims 54927-54948 54975-54981 54985-54987 55006-55067 Payroll Checks 54949-54974 54982-54983 54988-55003 and EFTrsquos as presented Check 54984 was voided VISITORS Commissioner Husom provided the Council an update on projects at Wright County including the proposals for a new Human Services building and Government Center PUBLIC HEARINGS 2022 Improvement Project- Public Hearing was opened by Mayor Gunnarson at 720pm Engineer Jared Voge presented the Facility Plan After hearing no comments from the public Mayor Gunnarson closed the public hearing at 730 pm CITIZENrsquoS FORUM NONE CONSENT AGENDA A motion was made by Hastings and seconded by Wuollet to approve the Consent Agenda as presented Police Finance Fire Deputy Registrar ndash February Reports Employment AnniversariesStep Increases Carrie Krienke Fund TransferClosures Donations 1 UNFINISHED BUSINESS-
Clock Tower Staining- A motion was made be Jonas and seconded by Wuollet to approve the quote to stain the Clock Tower at Clock Tower Park Housing Incentive for 2019- HInnenkamp presented the graduated scale A motion was made by Gunnarson and seconded by Hastings to approve the Housing Incentive Program for 8 permits in 2019 with waive the fees as presented with the 4 year payback
2 NEW BUSINESS
Ordinance Rezoning Property and approving Comp Plan Amendment- A motion was made by Hastings and seconded by Czycalla to approve Ordinance Rezoning Property and approving Comp Plan Amendment for the property located at 100 Annandale Boulevard Resolution Approving Minor Subdivision- A motion was made by Wuollet and seconded by Hastings to approve Resolution Approving Minor Subdivision Request by Stadium for Street Dance- A motion was made by Jonas and seconded by Czycalla to approve the July 3rd Street Dance for Stadium Letter to MnDot on 2022 Project- A motion was made by Czycalla and seconded by Jonas to direct staff to send the letter to MnDot on the 2022 Project as presented Approve Cleaning Contract Amendment- A motion was made by Hastings and seconded by Wuollet to approve the amendments to the Cleaning Contract as presented Quotes for Crack Filling- Motion was made by Czycalla and seconded by Wuollet to approve the bid for Kamco for Crack Filling Accept Resignation of Officer Tavares- A motion was made by Czycalla and seconded by Hastings to approve the resignation of Officer Tavares Resolution Appointing Michael Ryan as Full Time Police Officer- A motion was made by Hastings and seconded by Wuollet to approve Resolution Appointing Michael Ryan as FT Police Officer Resolution appointing Nicka- A motion was made by Wuollet and seconded by Czycalla to appoint Kirby Nicka to FT Maintenance Worker MAYORCOUNCIL REPORTS Haller- Discussed training with new staff and provided an update on the work that was done with the recent weather Chief Herr- Updated on new staff training Chief has been doing safety presentation for the Church Working on video system at Rec Park Speaking on April 26th for active shooter Mayor Gunnarson- updated the Council on his visit to the capital last week for the Cityrsquos bonding bill request Hinnenkamp- informed the Council of the schedule DT meeting next week to present concepts to the DT businessproperty owners ADJOURNMENT Moved by Czycalla seconded by Wuollet to adjourn 819 pm The meeting was adjourned
______________________________ Dwight Gunnarson Mayor
ATTEST
__________________________________ Kelly Hinnenkamp City Administrator
MINUTES ANNANDALE BOARD OF ADJUSTMENT AND APPEALS
April 1 2019 CALL TO ORDERROLL CALL Pursuant to due call and notice the City Council of Annandale Minnesota met for the annual Board of Adjustment and Appeals on April 1 2019 at 630 pm at the City Hall Council Chambers Mayor Gunnarson called the meeting to order at 630 pm City Council Present Councilmemberrsquos Jonas Czycalla Burd and Hastings and Mayor Gunnarson Absent None Also present were Tammy Anderson and Conrad Anderson from the Wright County Assessors Department City Administrator Hinnenkamp 2019Assessment City Assessor Conrad Anderson introduced the 2019 Assessment Assessor Anderson read the Local Board of Appeal and Equalization Opening Statement and reviewed the details of the assessment review process Anderson reviewed the Written Appeals 102-020-002100- Christina Clark 125 Oak Avenue North Owner contacted Anderson but they have not had a chance to review the property Appeal was received 4119 102-073-001080 Rick Schultz Pintail Drive Called 4119 and they have not had a chance to review 36 Jasmine Avenue 102-700-000360 Ellis and Linda Knute After further review Anderson is recommending a value of $44100 This is for the personal property 2019 assessment was $51900 102-043-001120 001130 001140 Marlene Dingmann 631 Beech Circle requested to be changed to non-homestead Motion was made by Czycalla and seconded by Hastings to approve the recommendations of Knute and Dingmann as presented Motion was made by Wuollet and seconded by Czycalla to refer any recommended changes to Wright County for Clark and Schultz ADJOURNMENT Moved by Wuollet seconded by Jonas to adjourn at 654PM Motion carried unanimously ___________________________________ Dwight Gunnarson Mayor ATTEST __________________________________ Kelly Hinnenkamp City Administrator
CITY OF ANNANDALE Payment Approval Report - for City Council Page 1
Report dates 422019-562019 May 02 2019 0305PM
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1
1 NEOPOST USA Inc 56654756 RENTAL amp MAINTENANCE - MAI 04232019 11100 00
Total 1 11100 00
153
153 AMERIPRIDE LINEN amp APPARE 2201173387 PD - MATBRUSH 03282019 2315 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 WATER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 SEWER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 PW UNIFORM 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PD - MATBRUSH 04042019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PW UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 SEWER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 WATER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PW UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 SEWER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 WATER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PD - MATBRUSH 04112019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PD - MATBRUSH 04182019 268 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 WATER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 SEWER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PW UNIFORM 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PD - MATBRUSH 04252019 2316 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 WATER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 SEWER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PW UNIFORM 04252019 3181 00
Total 153 57099 00
180
180 ANNANDALE ADVOCATE P3158191723 CONGRATS- WRESTLING 04082019 1900 1900 04122019
180 ANNANDALE ADVOCATE P3158191723 RECYCLING AD 04082019 7000 7000 04122019
180 ANNANDALE ADVOCATE P3158191723 MINUTES 04082019 18624 18624 04122019
180 ANNANDALE ADVOCATE P3158191723 PUBLIC HEARING 04082019 1920 1920 04122019
180 ANNANDALE ADVOCATE P3158191723 ASSESSMENTS 04082019 3264 3264 04122019
180 ANNANDALE ADVOCATE P3158191723 2021 IMPR PLAN 04082019 8256 8256 04122019
180 ANNANDALE ADVOCATE P3158191723 DMV- BUSINESS OF THE WEEK 04082019 15600 15600 04122019
180 ANNANDALE ADVOCATE P3158191723 FT SEASONAL EMPLMT 04082019 16380 16380 04122019
180 ANNANDALE ADVOCATE P3158191723 NOTARY STAMP- GIEBENHAIN 04082019 3902 3902 04122019
Total 180 76846 76846
188
188 ANNANDALE AUTO CARE LLC 101394 SERVICE 08 CHEV 04182019 85579 00
188 ANNANDALE AUTO CARE LLC 101468 BATTERY 04242019 12895 00
188 ANNANDALE AUTO CARE LLC 101482 TRUCK SERVICE 04252019 142198 00
188 ANNANDALE AUTO CARE LLC 101526 TRUCK SERVICE 04262019 16470 00
Total 188 257142 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 2
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
190
190 ANNANDALE AREA CHAMBER APRIL2019 CITY EXPO BOOTH 04092019 10000 10000 04122019
Total 190 10000 10000
192
192 ANNANDALE PARTS SUPPLY 127199280 HEAD LIGHT 02282019 1699 1699 04122019
192 ANNANDALE PARTS SUPPLY 127199479 LIGHT BULBS 03042019 2565 2565 04122019
192 ANNANDALE PARTS SUPPLY 127199616 FLUSH KIT 03052019 7098 7098 04122019
192 ANNANDALE PARTS SUPPLY 127199723 HEADLIGHT BULB- SQUAD 51 03072019 949 949 04122019
192 ANNANDALE PARTS SUPPLY 127200389 GENERATOR PARTS 03182019 2318 2318 04122019
192 ANNANDALE PARTS SUPPLY 127200469 LUBE 03192019 791 791 04122019
192 ANNANDALE PARTS SUPPLY 127200476 HOSE 03192019 118 118 04122019
192 ANNANDALE PARTS SUPPLY 127200490 BATTERY 03192019 9858 9858 04122019
192 ANNANDALE PARTS SUPPLY 127200546 PARTS 03202019 1398 1398 04122019
192 ANNANDALE PARTS SUPPLY 127200609 FILTERS 03202019 23472 23472 04122019
192 ANNANDALE PARTS SUPPLY 127200627 STOP LEAK 03212019 873 873 04122019
192 ANNANDALE PARTS SUPPLY 127200652 FILTER 03222019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200654 FILTER 03212019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200713 FITTING 03222019 129 129 04122019
192 ANNANDALE PARTS SUPPLY 127200757 PARTS 03222019 2178 2178 04122019
192 ANNANDALE PARTS SUPPLY 127200939 CLEANER 03252019 2339 2339 04122019
192 ANNANDALE PARTS SUPPLY 127201161 SOAP 03282019 909 00
192 ANNANDALE PARTS SUPPLY 127201244 LUBRICANT 05012019 2373 00
192 ANNANDALE PARTS SUPPLY 127201434 HOSE REPAIR 05012019 3637 00
192 ANNANDALE PARTS SUPPLY 127201488 HOSE REPAIR 04022019 7274 00
192 ANNANDALE PARTS SUPPLY 127202184 FLARE FITTINGS 04112019 1858 00
192 ANNANDALE PARTS SUPPLY 127202518 BRAKE CLEANER 04172019 3228 00
Total 192 77828 58549
200
200 ANNANDALE EMBROIDERY 2356 APD HATS 03272019 9000 00
Total 200 9000 00
230
230 ANNANDALE-MAPLE LAKE MARCH 2019 MAR 2019 FLOW 04152019 6260800 00
Total 230 6260800 00
240
240 ANNANDALE PLUMBING 1457 RPZ TESTING 03272019 28500 00
Total 240 28500 00
424
424 BERGESCH COMPUTER SERVI 16172 SERVICE CALL 04062019 7500 00
424 BERGESCH COMPUTER SERVI 16176 ADMIN-SERVICE CALL 04062019 7500 00
Total 424 15000 00
463
463 BOLTON amp MENK INC 0231771 LGU BSA 7 STAKEHOLDERS C 04122019 11700 00
463 BOLTON amp MENK INC 0231785 2022 PROJECT FACILITY PLAN 04122019 44500 00
463 BOLTON amp MENK INC 0231788 SAND PROFILE 04122019 117250 00
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT PLANS AN 04122019 1717300 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 3
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT STREETS 04122019 38000 00
Total 463 1928750 00
646
646 CENTRA SOTA LAKE REGION L 6308214 STREETS 04092019 11697 00
646 CENTRA SOTA LAKE REGION L 6308214 PARKS 04092019 14037 00
646 CENTRA SOTA LAKE REGION L 6308214 WATER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 SEWER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 PUBLIC WORKS 04092019 33531 00
646 CENTRA SOTA LAKE REGION L 6308342 STREETS 04292019 13024 00
646 CENTRA SOTA LAKE REGION L 6308342 PARKS 04292019 15629 00
646 CENTRA SOTA LAKE REGION L 6308342 WATER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 SEWER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 PUBLIC WORKS 04292019 37335 00
646 CENTRA SOTA LAKE REGION L 6308343 STREETS 04292019 16436 00
646 CENTRA SOTA LAKE REGION L 6308343 PARKS 04292019 19723 00
646 CENTRA SOTA LAKE REGION L 6308343 WATER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 SEWER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 PUBLIC WORKS 04292019 47116 00
Total 646 274380 00
710
710 CITY OF BUFFALO MARCH2019 MONTHLY NET MOTION 04012019 2000 2000 04122019
Total 710 2000 2000
810
810 COLONIAL LIFE amp ACCIDENT 7492424-0501 INSURANCE 04162019 42770 42770 04232019
Total 810 42770 42770
900
900 COUNTRY CHEVROLET INC CVCS139790 SQUAD 52 - TIRE REPAIR 04092019 1719 00
Total 900 1719 00
1336
1336 FARM RITE EQUIPMENT INC P42298 WIPER BLADESIDLER ASSY 04012019 36766 00
1336 FARM RITE EQUIPMENT INC W13484 HYDRAULIC HOSE 04172019 40840 00
Total 1336 77606 00
1338
1338 FASTENAL COMPANY MNBUF78347 SAFETY GLASSES 04172019 4656 00
1338 FASTENAL COMPANY MNBUF78393 TOOLS 04192019 892 00
Total 1338 5548 00
1420
1420 FIRE RELIEF ASSOCIATION MARCH2019 2019 SUPPLEMENTAL REIMB 04082019 100000 00
1420 FIRE RELIEF ASSOCIATION MARCH2019 2018 SUPPLEMENTAL REIMB 04082019 313920 00
Total 1420 413920 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 4
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1508
1508 F S 3 INC 60393 SAFETY VEST 04222019 5500 00
1508 F S 3 INC 60435 SAFETY VEST 04162019 5500 00
1508 F S 3 INC 60436 SAFETY VEST 04162019 5500 00
Total 1508 16500 00
1519
1519 GALLS AN ARAMARK COMPAN 012401488 UNIFORM - HAAG 04042019 8396 00
1519 GALLS AN ARAMARK COMPAN 012412561 UNIFORM - TOWNSEND 04052019 4198 00
Total 1519 12594 00
1630
1630 GOPHER STATE ONE-CALL IN 9030176 FAX TICKETS 03312019 2295 00
Total 1630 2295 00
1660
1660 GRAINGER INC W W 6144966281 TEST BALLS 04122019 15556 00
1660 GRAINGER INC W W 9135594712 PARTS 04032019 6459 00
1660 GRAINGER INC W W 9137921475 SHOCK 04052019 4717 00
1660 GRAINGER INC W W 9138437422 HOSE 04052019 9729 00
1660 GRAINGER INC W W 9146606448 DOOR OPENER 04152019 2735 00
1660 GRAINGER INC W W 9150739945 GLOVES 04192019 6216 00
1660 GRAINGER INC W W 9152417177 GARAGE DOOR OPENERS 04222019 19056 00
Total 1660 64468 00
1710
1710 HAWKINS INC 4475748 CHEMICALS 04092019 247584 00
Total 1710 247584 00
1760
1760 HILLYARDHUTCHINSON 603390067 MOP DUST- PW 04092019 4520 00
1760 HILLYARDHUTCHINSON 603390067 FOLD TOWELSTISSUE PAPER 04092019 19613 00
1760 HILLYARDHUTCHINSON 603406861 SUPER SHINESOAPWINDOW 04232019 46059 00
1760 HILLYARDHUTCHINSON 700376971 SCRUBBER REPAIR 04192019 9600 00
Total 1760 79792 00
1780
1780 HOLIDAY CREDIT OFFICE MARCH12019 PD FUEL 04012019 93317 93317 04122019
1780 HOLIDAY CREDIT OFFICE March2019 FD- FUEL 04012019 19714 19714 04122019
Total 1780 113031 113031
2130
2130 LITTLE FALLS MACHINE INC 355406 PLOW PARTS 04242019 14150 00
Total 2130 14150 00
2190
2190 LUNDEEN BROS INC 91792 OIL CHANGE 2017 DODGE SQA 03212019 5894 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 5
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2190 5894 00
2210
2210 M amp M BUS SERVICE 10193369 DRUG TESTING- KIRBY NICKA 03152019 3000 00
2210 M amp M BUS SERVICE 10193370 ALCOHOL TESTING- KIRBY NIC 03192019 3000 00
2210 M amp M BUS SERVICE 10193419 DRUG TESTING- NICHOLLE CO 04092019 6000 00
Total 2210 12000 00
2211
2211 M amp M EXPRESS SALES amp SER 182624 MOWER PARTS 04122019 36108 00
2211 M amp M EXPRESS SALES amp SER 183289 MOWER PARTS 04182019 12319 00
Total 2211 48427 00
2260
2260 MAPLE LAKE LUMBER COMPA 168882 LUMBER 04222019 1659 00
Total 2260 1659 00
2272
2272 MARES EXCAVATING APRIL 2019 WATER LEAK 04012019 70000 00
Total 2272 70000 00
2273
2273 MARKET PLACE II 107 XTRA SOAP-FD 04012019 1332 1332 04232019
2273 MARKET PLACE II 107 MEALS- TC 04012019 5142 5142 04232019
Total 2273 6474 6474
2375
2375 METRO WEST INSPECTION SE 1978 370 BIG WOODS LN 17-04 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 250 EXCELSIOR AVE N 17-69 04252019 11145 00
2375 METRO WEST INSPECTION SE 1978 202 NONA DR 17-60 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 135 EXCELSIOR AVE N 17-127 04252019 17820 00
2375 METRO WEST INSPECTION SE 1978 630 LAKE DR W 19-7 04252019 2500 00
2375 METRO WEST INSPECTION SE 1978 212 ASH ST E 19-13 04252019 5198 00
2375 METRO WEST INSPECTION SE 1978 330 CHESTNUT ST E 19-22 04252019 2500 00
Total 2375 41663 00
2419
2419 MID-MINNESOTA CONCRETE 19073 HOT WATER 03112019 49000 00
2419 MID-MINNESOTA CONCRETE 19075 HOT WATER 03132019 49000 00
2419 MID-MINNESOTA CONCRETE 19076 HOT WATER 03042019 24500 00
Total 2419 122500 00
2425
2425 MIDWAY IRON amp METAL INC 420761 STEEL 04172019 5363 00
Total 2425 5363 00
2465
2465 MCP CARSTAR COLLISION CE 41349297 SQUAD 51 REPAIRS 01052019 175667 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 6
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2465 175667 00
2511
2511 CENTER POINT ENERGY 110 PAVILION 04122019 4986 00
2511 CENTER POINT ENERGY 111 TC 04122019 5309 00
2511 CENTER POINT ENERGY 112 OLD PW SHOP 05022019 4465 00
2511 CENTER POINT ENERGY 113 WTP 04122019 50216 00
2511 CENTER POINT ENERGY 114 HOCKEY RINK 04122019 4221 00
2511 CENTER POINT ENERGY 116 WARMING HOUSE 04162019 1500 00
2511 CENTER POINT ENERGY 116 CITY HALL 04162019 23624 00
2511 CENTER POINT ENERGY 117 FD 04122019 35974 00
Total 2511 130295 00
2525
2525 MINNESOTA COMPUTER SYST 263763 ADMIN COPIER 04082019 34758 00
2525 MINNESOTA COMPUTER SYST 463318 BW S3HR 04022019 5503 00
Total 2525 40261 00
2635
2635 CORE amp MAIN LP K426017 CULVERT 04242019 145000 00
2635 CORE amp MAIN LP K441242 LOCATOR 04222019 75265 00
Total 2635 220265 00
2698
2698 MPPOA MARCH 2019 NEW MEMBER DUES- LDF 04082019 3900 00
2698 MPPOA MARCH202019 2019 DUES- M FAUST 03202019 5000 00
Total 2698 8900 00
2819
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER- DMV 03012019 5830 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-ADMIN 03012019 13604 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-PD 03012019 2160 00
2819 NORTHERN BUSINESS PRODU 385745-0 CALCULATOR INK 03012019 440 00
2819 NORTHERN BUSINESS PRODU 386830-0 DESK TRAYSCALC ROLLERS 04082019 8169 00
2819 NORTHERN BUSINESS PRODU 386830-1 DVD-RW 03072019 2859 00
2819 NORTHERN BUSINESS PRODU 387602-0 BINDERDESK TRAYSFILE 03082019 8641 00
2819 NORTHERN BUSINESS PRODU 393165-0 PD - OFFICE SUPPLIES 35303 03272019 2158 00
2819 NORTHERN BUSINESS PRODU 396891-0 PENSSTAPLERSTAPLES 05012019 15450 00
2819 NORTHERN BUSINESS PRODU 396891-1 HEATER 05012019 5285 00
2819 NORTHERN BUSINESS PRODU 396891-2 CALCULATOR 05012019 8662 00
2819 NORTHERN BUSINESS PRODU 400116-0 FOLDERSPENS 05012019 6507 00
2819 NORTHERN BUSINESS PRODU 400134-0 EMPLOYEE FOLDERSRECPT B 05012019 16499 00
Total 2819 96264 00
2832
2832 NORTHWEST ASSOC CONSUL 24128 REZONE FOR SCHOOL 04042019 3330 00
2832 NORTHWEST ASSOC CONSUL 24128 SAND PROFILE 04042019 9450 00
2832 NORTHWEST ASSOC CONSUL 24129 VERIZON 04042019 20000 00
Total 2832 32780 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 7
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
2934
2934 PLEASANT LAKE ASSOCIATION 42919 PLEASANT LAKE ASSN 05012019 500000 00
Total 2934 500000 00
2962
2962 PRINCIPAL LIFE 108 INSURANCE 04222019 14144 14144 04232019
Total 2962 14144 14144
3161
3161 S P ELECTRIC INC 7282 OLD SPLICERS REMOVAL 04112019 99054 00
Total 3161 99054 00
3180
3180 SCHWAAB INC C039891 DATE STAMP 03272019 16776 00
3180 SCHWAAB INC C041311 REPLACE PADS 04042019 2050 00
Total 3180 18826 00
4006
4006 SHRED IT USA - MPLS 8126937775 SHREDDING SERVICES 03312019 45401 00
Total 4006 45401 00
4021
4021 SOKS RAPID CAR WASH 216-1384 SQUAD WASHES 04012019 11865 11865 04122019
Total 4021 11865 11865
4040
4040 SUMMIT COMPANIES 1368349 FIRE SYSTEM MAINT 04102019 34500 00
4040 SUMMIT COMPANIES 1368350 ANNUAL FIRE ALARM INSP 04102019 23000 00
4040 SUMMIT COMPANIES 1368538 CITY HALL FIRE SUPPRESION 04052019 19800 00
4040 SUMMIT COMPANIES 1371739 FIRE EXT MAINTENANCE 04292019 46280 00
4040 SUMMIT COMPANIES 1372404 CITY HALLPD - ANNUAL FIRE A 04292019 16715 00
Total 4040 140295 00
4130
4130 STERNBERG LANTERNS INC 50379 LIGHT SOCKETS 04122019 30000 00
Total 4130 30000 00
4222
4222 TASC IN1499967 ADMIN FEES 04172019 43320 00
Total 4222 43320 00
4269
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
Total 4269 324000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 8
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4337
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16061 16061 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
Total 4337 48181 48181
4365
4365 UTILITY CONSULTANTS INC 101046 COLIFORM 03282019 8000 00
Total 4365 8000 00
4377
4377 VERIZON WIRELESS 9827946389 PW IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 FD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 INVESTIGATOR COMPUTER 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD CELL PHONE 04102019 16639 16639 04232019
4377 VERIZON WIRELESS 9827946389 PW CELL PHONE 04102019 26360 26360 04232019
Total 4377 57003 57003
4481
4481 WEST CENTRAL SANITATION I 121 RECYCLE 04302019 362792 00
4481 WEST CENTRAL SANITATION I 121 REFUSE 04302019 936578 00
4481 WEST CENTRAL SANITATION I MARCH 2019 RECYCLE 03312019 451419 451419 04122019
4481 WEST CENTRAL SANITATION I MARCH 2019 REFUSE 03312019 908999 908999 04122019
Total 4481 2659788 1360418
4495
4495 WINDSTREAM APRIL2019 LS 805 NORWAY DR E 04032019 24428 24428 04122019
4495 WINDSTREAM APRIL32019 320-274-2793 04032019 3830 3830 04122019
Total 4495 28258 28258
4520
4520 WRIGHT COUNTY HIGHWAY DE 1340 APEX 04162019 12100 00
Total 4520 12100 00
4548
4548 WRIGHT-HENNEPIN COOPERA 104 TC 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 105 CITY HALL SECURITY 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 106 LS 1255 BUSINESS BLVD 04102019 1484 1484 04232019
4548 WRIGHT-HENNEPIN COOPERA 119 STREET LIGHTS 04102019 13973 00
Total 4548 20047 6074
4559
4559 XCEL ENERGY 0774352025 ACCOUNT 51-4985655-1 03282019 1910 1910 04122019
4559 XCEL ENERGY 0774781723 ACCOUNT 51-6464610-6 04082019 5051 5051 04122019
4559 XCEL ENERGY 0774798834 ACCOUNT 51-6875531-1 04012019 2964 2964 04122019
4559 XCEL ENERGY 0774851593 ACCOUNT 51-0011253419-4 04012019 52824 52824 04122019
4559 XCEL ENERGY 0774856745 ACCOUNT 51-0010892786-1 04012019 1379 1379 04122019
4559 XCEL ENERGY 0775014393 ACCOUNT 51-6076585-1 04022019 11396 11396 04122019
4559 XCEL ENERGY 0775442400 ACCOUNT 51-6024519-2 04042019 365444 365444 04232019
CITY OF ANNANDALE Payment Approval Report - for City Council Page 9
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4559 XCEL ENERGY 0775852647 ACCOUNT 51-6024518-1 04082019 156465 156465 04232019
4559 XCEL ENERGY 0777794063 ACCOUNT 51-4192659-4 04182019 3117 00
4559 XCEL ENERGY 0779111699 ACCOUNT 51-4985655-1 04262019 1767 00
4559 XCEL ENERGY 778173400 ACCOUNT 51-4636619-8 04222019 6391 00
Total 4559 608708 597433
4648
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 23750 00
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 00 00
4648 A R ENGH 190448 SPRING MAINTENANCE 04302019 21375 00
4648 A R ENGH 190451 SPRING MAINTENANCE- TC 04302019 14250 00
Total 4648 59375 00
4716
4716 JOVANOVICH KADLEC amp ATHM 16709 KRONQUIST LOT 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 LEASE WITH WILES 03312019 28000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 ORD AMENDMENT- MICRO DIS 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 GENERAL 03312019 8750 00
4716 JOVANOVICH KADLEC amp ATHM 16709 PERSONNEL POLICY 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 CONTROLLED BURN HOLD HA 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
Total 4716 82250 00
4721
4721 MANEY INTERNATIONAL 803662X1 PARTS 02072019 2275 2275 04122019
Total 4721 2275 2275
4734
4734 MOTOROLA SOLUTIONS INC 16042791 RADIO BATTERIES 03252019 16800 00
Total 4734 16800 00
4743
4743 CARDMEMBER SERVICE 122 ATRIST EASEL 05012019 10305 00
4743 CARDMEMBER SERVICE 122 KEROSENE 05012019 6329 00
4743 CARDMEMBER SERVICE 122 POLLUTION CONTROL 05012019 41500 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC 05012019 1639 00
4743 CARDMEMBER SERVICE 122 AMAZON- 40 AMP RELAY 05012019 2898 00
4743 CARDMEMBER SERVICE 122 A-1 - BULB KIT 05012019 2503 00
4743 CARDMEMBER SERVICE 122 MENARDS-POTHOLE PATCH 05012019 47014 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC BALL VALVE 05012019 1770 00
4743 CARDMEMBER SERVICE 122 TOTAL TOOL- SHOE - PETER 05012019 5123 00
4743 CARDMEMBER SERVICE 122 PRYOR- EXCEL CLASSES- MIS 05012019 25600 00
4743 CARDMEMBER SERVICE 122 MN CHIEFS ASSOC 05012019 19900 00
4743 CARDMEMBER SERVICE 122 BEST BUY- 05012019 8589 00
4743 CARDMEMBER SERVICE 122 BEST BUY 05012019 17178 00
4743 CARDMEMBER SERVICE 122 USPS 05012019 1149 00
4743 CARDMEMBER SERVICE 122 PAYPAL- INTER ASSOC EVID- R 05012019 5000 00
4743 CARDMEMBER SERVICE 122 ACTION TARGETS- 05012019 14662 00
4743 CARDMEMBER SERVICE 122 AMAZON- METAL DUSTPAN 05012019 2894 00
4743 CARDMEMBER SERVICE 122 AMAZON- BATTERIES 05012019 2124 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 10
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 4743 216177 00
4752
4752 NCPERS GROUP LIFE INS MAY2019 INSURANCE 04172019 1600 00
Total 4752 1600 00
4769
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 39944 00
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 00 00
Total 4769 39944 00
4793
4793 DELTA DENTAL 7626938 INSURANCE 04152019 139599 139599 04232019
Total 4793 139599 139599
4831
4831 GENERAL RENTAL CENTER OF 1174533 HEATER RENTAL 03112019 11000 00
Total 4831 11000 00
4889
4889 CLASSIC CLEANING COMPANY 28038 CITY HALL- 04082019 67375 00
4889 CLASSIC CLEANING COMPANY 28038 PD- 04082019 14700 00
4889 CLASSIC CLEANING COMPANY 28038 LIBRARY- 04082019 40425 00
4889 CLASSIC CLEANING COMPANY 28039 TC 04082019 23000 00
Total 4889 145500 00
4945
4945 COUNTRY REPAIR INC 1568 KOHLER 100 GENERAT REPAIR 02212019 348966 00
Total 4945 348966 00
4955
4955 WORKFORCE INTEGRITY NET 41219 PREEMPLOYMENT TEST KIRBY 03312019 9300 00
Total 4955 9300 00
4968
4968 Volunteer Firefighter Ben Assoc of MARCH2019 BENEFIT RENEWALS 04012019 20600 20600 04122019
Total 4968 20600 20600
5002
5002 BUREAU OF CRIMINAL APPRE 536318 CJDN 03312019 27000 00
Total 5002 27000 00
5003
5003 BOLAND PRODUCTION SUPPL 11-6569 BLANK AMMUNITION 03042019 10000 00
Total 5003 10000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 11
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5006
5006 MIDCONTINENT COMMUNICATI 157013401102 FD 04092019 14765 14765 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PW 04092019 26599 26599 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 TC 04092019 3717 3717 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 DMV 04092019 12056 12056 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PD 04092019 20823 20823 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 CITY HALL 04092019 24864 24864 04122019
Total 5006 102824 102824
5031
5031 A1 RAPID LUBE 112018 SQUAD 51 OIL CHANGE 04092019 4145 4145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 51 04092019 9145 9145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 52 04092019 1500 1500 04122019
5031 A1 RAPID LUBE 11302018 SQUAD 52 WASH 04092019 1500 1500 04122019
5031 A1 RAPID LUBE DEC2018 SQUAD 51 OIL CHANGE 04092019 5000 5000 04122019
Total 5031 21290 21290
5039
5039 KAMCO 201800 CRACKFILLING 04292019 5395141 00
Total 5039 5395141 00
5056
5056 CASEYS GENERAL STORES IN MARCH 2019 PD FUEL 04012019 6449 6449 04122019
Total 5056 6449 6449
5067
5067 ZUERCHER PA0001614 GPS RECEIVERS 03102019 32800 00
5067 ZUERCHER PA0001669 RECORDS- PROPERTY amp EVID 03292019 102100 00
Total 5067 134900 00
5074
5074 Potentia MN Solar Fund 1 LLC 2019-02-1761- 520 ASH - WTP 02282019 28907 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- CEMETARY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 370 PARK SEWAGE PUMP 02282019 7041 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 520 ASH - WTP 02282019 14573 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 605 WARREN 02282019 3083 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 200 EXCELSIOR 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- BALL PARL LIGHTING 02282019 1136 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- CITY HALL 02282019 16228 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- PAVILION 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- HOCKEY RINK 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- UNIT SOUTH 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 30 CEDAR STREET LIGHT 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 111 CEDAR ST 02282019 163 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 15 CONV CLUB RD - LS 02282019 2596 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS 805 NORWAY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 640 ACACIA 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1792- FD 02282019 5895 00
Total 5074 83677 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 12
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5075
5075 HALVORSON LANGEMO PASC 2927 ARPIL PROSECUTION 03282019 139479 139479 04232019
5075 HALVORSON LANGEMO PASC 2994 MAY PROSECUTION 04262019 139479 00
Total 5075 278958 139479
5086
5086 CLASSIC CARPET amp FLOOR CA 1312 FD- CARPET CLEANING 04102019 24500 00
Total 5086 24500 00
5099
5099 STENGER PETER march72019 WATER LICENSE 03072019 3200 3200 04042019
Total 5099 3200 3200
5101
5101 GAPINSKI AMELIA 118 MILEAGE- ST PAUL-147 MILES 04222019 8526 8526 04232019
5101 GAPINSKI AMELIA 118 LUNCH- ST PAUL 04222019 1182 1182 04232019
5101 GAPINSKI AMELIA 118 PARKING RAMP- ST PAUL 04222019 1800 1800 04232019
Total 5101 11508 11508
5103
5103 GLUNZ DAVID D 589207 1ST QTR SEXTON FEE 2019 04222019 12000 00
Total 5103 12000 00
5108
5108 RECON ROBOTICS 74975 ROBOT REPAIR 03082019 40000 00
Total 5108 40000 00
5120
5120 MELGAARD SERVICES 115 LITTLE JIMS REPAIR 03272019 65000 00
Total 5120 65000 00
5137
5137 HARTZELL STEVE DEC2018 SAFETY SHOES 04092019 13998 13998 04122019
Total 5137 13998 13998
5138
5138 HOGLUND BUS COMPANY 133269 PLOW TRUCK REPAIR 04232019 242869 00
Total 5138 242869 00
5139
5139 GIEBENHAIN KARIE APRIL 2019 TRAVELTRAINING 04292019 1259 00
Total 5139 1259 00
5140
5140 GRABHAM JUDY APRIL2019 GARDEN MATERIALS REIMBUR 04302019 12312 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 13
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 5140 12312 00
Grand Totals 23368095 2894268
Dated __________________________________________
Mayor __________________________________________
Dwight Gunnarson
City Council __________________________________________
Shelly Jonas
__________________________________________
Jullie Hastings
__________________________________________
Corey Czycalla
__________________________________________
Matthew Wuollet
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
CITY OF ANNANDALE Check Register Page 1Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03012019 03042019 1005 EFT - ASPIRE 14 47332-03012019 03042019 1006 EFT - FLEXSYSTEM 9 21153-03012019 03042019 1007 EFT - MINNESOTA 8 152678-03012019 03042019 1008 EFT-FURTHER 12 194842-03012019 03042019 1008 EFT-FURTHER 12 70000-03012019 03042019 1009 EFT-PERA 5 197211-03012019 03042019 1009 EFT-PERA 5 227551-03012019 03042019 1009 EFT-PERA 5 164253-03012019 03042019 1009 EFT-PERA 5 246377-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 291789-03152019 03182019 1011 EFT - ASPIRE 14 50777-03152019 03182019 1012 EFT - FLEXSYSTEM 9 21153-03152019 03182019 1013 EFT - MINNESOTA 8 170353-03152019 03182019 1014 EFT-FURTHER 12 199842-03152019 03182019 1015 EFT-NATIONWIDE RETIREMENT 3 45727-03152019 03182019 1016 EFT-PERA 5 202077-03152019 03182019 1016 EFT-PERA 5 233162-03152019 03182019 1016 EFT-PERA 5 167748-03152019 03182019 1016 EFT-PERA 5 251623-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 338787-03012019 03042019 3231 FERRELL MISTY 123 207493-03012019 03042019 3232 HINNENKAMP KELLY 127 296930-03012019 03042019 3233 JARMON VICKI I 134 162692-03012019 03042019 3234 KRIENKE CARRIE L 136 118186-03012019 03042019 3235 GAPINSKI AMELIA 142 76605-03012019 03042019 3236 GIEBENHAIN KARIE 143 63912-03012019 03042019 3237 HERR JEFFREY J 208 198056-03012019 03042019 3238 STANDAFER PETER A 217 171766-03012019 03042019 3239 BERG TERESA 233 29593-03012019 03042019 3240 TAVARES AARON J 234 144943-03012019 03042019 3241 PETERSON KENNETH J 235 6543-03012019 03042019 3242 ETSHOKIN LOUIS RICHARD 238 69332-03012019 03042019 3243 GRIGGS DEREK C 245 173791-03012019 03042019 3244 SMITH TARA 251 104275-03012019 03042019 3245 MARES NICHOLAS J 306 46531-03012019 03042019 3246 GLUNZ DAVID D 323 215466-03012019 03042019 3247 STENGER PETER 324 148864-03012019 03042019 3248 COREY NICHOLLE 328 176647-03012019 03042019 3249 HARTZELL STEVE 329 123679-03012019 03042019 3250 WICKER MITCHELL 360 157433-03012019 03042019 3251 HASTINGS JULLIE K 803 13391-
CITY OF ANNANDALE Check Register Page 2Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 3252 FERRELL MISTY 123 186726-03152019 03182019 3253 HINNENKAMP KELLY 127 296930-03152019 03182019 3254 JARMON VICKI I 134 156691-03152019 03182019 3255 KRIENKE CARRIE L 136 109765-03152019 03182019 3256 GAPINSKI AMELIA 142 78334-03152019 03182019 3257 GIEBENHAIN KARIE 143 62780-03152019 03182019 3258 HERR JEFFREY J 208 228423-03152019 03182019 3259 STANDAFER PETER A 217 188333-03152019 03182019 3260 TAVARES AARON J 234 143820-03152019 03182019 3261 ETSHOKIN LOUIS RICHARD 238 36648-03152019 03182019 3262 Void03152019 03182019 3263 SMITH TARA 251 100781-03152019 03182019 3264 MARES NICHOLAS J 306 9080-03152019 03182019 3265 GLUNZ DAVID D 323 263393-03152019 03182019 3266 STENGER PETER 324 156283-03152019 03182019 3267 COREY NICHOLLE 328 141112-03152019 03182019 3268 HARTZELL STEVE 329 114544-03152019 03182019 3269 WICKER MITCHELL 360 231604-03152019 03182019 3270 RANDALL STEVEN R 570 23273-03152019 03182019 3271 TOMES BRIAN C 571 19117-03152019 03182019 3272 EDWARDS DANIEL J 572 25765-03152019 03182019 3273 JARVIS TRYSTON 573 16808-03152019 03182019 3274 GRIGGS DEREK C 245 209088-03152019 03182019 53766 RAMSTAD DONALD E 533 17270 03152019 03182019 54586 RAMSTAD DONALD E 533 26412 03012019 03042019 54850 ENGFER NANCY E 204 207304-03012019 03042019 54851 FLEMMING MITCHELL E 206 33085-03012019 03042019 54852 HALLER JOSEPH D 305 277811-03012019 03042019 54853 SMART MATTHEW A 331 31168-03012019 03042019 54854 GUNNARSON DWIGHT R 802 18932-03012019 03042019 54855 JONAS SHELLY 804 13391-03012019 03042019 54856 CZYCALLA COREY 806 13391-03012019 03042019 54857 WUOLLET MATTHEW L 821 13391-03012019 03042019 54858 ROTH GREGORY W 912 1847-03012019 03042019 54859 FRANZEN CLIFFORD 913 1847-03012019 03042019 54860 SCHWARZKOPF ERIC 917 2770-03012019 03042019 54861 BAACK LONNIE L 919 1847-03012019 03042019 54862 NILSON MAYNARD A 921 1847-03012019 03042019 54863 DRISTE JOHN 950 1847-03012019 03042019 54864 PETERSON LEE W 980 1847-03012019 03042019 54865 SEAGRAVES RICHARD T 985 1847-03012019 03042019 54866 WAGNER RICHARD 990 2770-03152019 03182019 54949 ENGFER NANCY E 204 163991-03152019 03182019 54950 FLEMMING MITCHELL E 206 33085-03152019 03182019 54951 FAUST MITCHEL L 241 144665-03152019 03182019 54952 HALLER JOSEPH D 305 293266-03152019 03182019 54953 SMART MATTHEW A 331 12698-03152019 03182019 54954 BROWN JOHN D 501 16254-03152019 03182019 54955 DAGNER JOHN A 503 42112-
CITY OF ANNANDALE Check Register Page 3Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 54956 FAHEY MARCUS D 507 17270-03152019 03182019 54957 GRINDLE GARY L 512 65938-03152019 03182019 54958 HAAG BRIAN 514 151209-03152019 03182019 54959 MACHOVSKY JR DALE R 529 27088-03152019 03182019 54960 PICKEN SCOTT W 53203152019 03182019 54961 RAMSTAD DONALD E 533 35555-03152019 03182019 54962 ROEPKE JEFFREY A 535 34539-03152019 03182019 54963 TOWNSEND KRISTOPHER C 546 91057-03152019 03182019 54964 WANG RYAN A 549 46822-03152019 03182019 54965 WUOLLET MATTHEW L 553 24934-03152019 03182019 54966 TORRES HORACIO JR 563 43404-03152019 03182019 54967 KOLB JOHN E 564 25749-03152019 03182019 54968 DWENGER JOSEPH A JR 568 41557-03152019 03182019 54969 HARVEY ADAM 574 42019-03152019 03182019 54970 SCHMIDT LISA A 575 14869-03152019 03182019 54971 OLSON NATHAN G 576 14869-03152019 03182019 54972 PEARSON SEAN 577 27151-03152019 03182019 54973 SCHAUFLER CHRISTINA 578 26505-03152019 03182019 54974 HOEFER JUSTIN A 579 18101-03152019 03182019 54982 RAMSTAD DONALD E 533 26412-03152019 03182019 54983 RAMSTAD DONALD E 533 17270-
Grand Totals 119 12049646-
CITY OF ANNANDALE
REQUEST FOR COUNCIL ACTION
Originating Department Administration
Meeting Date May 6 2019
Agenda No 3A
Agenda Section New Business
Item 2018 Audit
BACKGROUND The City is required to conduct an audit annually The attached audit will be presented at the meeting RECOMMENDATION Motion to approve the 2018 Audit as presented
CPAS amp ADVISORSWILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
AUDITED FINANCIAL STATEMENTS AND
DECEMBER 31 2018
CONWAY DEUTH amp SCHMIESING PLLP
SUPPLEMENTARY INFORMATION
This page intentionally left blank
PAGE
ELECTED OFFICIALS AND ADMINISTRATION 1
INDEPENDENT AUDITORS REPORT 2-4
REQUIRED SUPPLEMENTARY INFORMATION
Managements Discussion and Analysis 5-12
BASIC FINANCIAL STATEMENTS
Statement of Net Position 13
Statement of Activities 14
Balance Sheet - Governmental Funds 15
Reconciliation of the Governmental FundsBalance Sheet to the Statement of Net Position 16
Statement of Revenues Expenditures and Changes in Fund Balances -Governmental Funds 17
Reconciliation of the Statement of Revenues Expendituresand Changes in Fund Balances of Governmental Fundsto the Statement of Activities 18
Statement of Revenues Expenditures and Changes in Fund Balances -Budget and Actual - General Fund 19
Statement of Net Position - Proprietary Funds 20
Statement of Revenues Expenses and Changes in Net Position -Proprietary Funds 21
Statement of Cash Flows - Proprietary Funds 22-23
Notes to the Financial Statements 24-57
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of the Proportionate Share of the Net Pension Liability 58
Schedule of Employer Contributions 59
Schedule of Changes in the Citys Net Pension Liability and Related Ratios 60
Notes to the Required Supplementary Information 61-63
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
PAGE
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
SUPPLEMENTARY INFORMATION
COMBINING STATEMENTS OF NONMAJOR FUNDS
Combining Balance Sheet - Nonmajor Governmental Funds 64
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds 65
Combining Balance Sheet - Nonmajor Governmental Funds - Special Revenue 66
Combining Balance Sheet - Nonmajor Governmental Funds - Debt Service 67
Combining Balance Sheet - Nonmajor Governmental Funds - Capital Projects 68
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Special Revenue 69
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Debt Service 70
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Capital Projects 71
FINANCIAL SCHEDULE
Schedule of Long-Term Liabilities 72
COMPLIANCE SECTION
Independent Auditors Report on Minnesota Legal Compliance 73
Independent Auditors Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements Performedin Accordance with Government Auditing Standards 74-75
Schedule of Findings 76-77
Summary Schedule of Prior Audit Findings 78
Elected Officials Position Term Expires
Dwight Gunnarson Mayor December 31 2018
Corey Czycalla Council Member December 31 2018
Shelly Jonas Council Member December 31 2018
Matthew Wuollet Council Member December 31 2020
Jullie Hastings Council Member December 31 2020
Administration
Kelly Hinnenkamp Administrator Appointed
Misty Ferrell Treasurer Appointed
CITY OF ANNANDALE MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATIONDECEMBER 31 2018
1
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Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Report on the Financial Statements
Managements Responsibility for the Financial Statements
Auditors Responsibility
beli
INDEPENDENT AUDITORS REPORT
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 Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Cityrsquos basic financial statements as listed in the table of contents
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
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
2
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 entitys 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 entitys 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
Opinions
Other Matters
Required Supplementary Information
Supplementary and Other Information
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 Annandale Minnesota as of December 31 2018 and the respective changes in financial position and where applicable cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America
Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions and the Schedule of Changes in the Citys 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 managements 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
3
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Cityrsquos basic financial statements The statements and schedules listed in the table of contents as supplementary information and the Elected Officials and Administration section are presented for purposes of additional analysis and are not a required part of the basic financial statements
The supplementary information is the responsibility of management and was derived from and relates 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 supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole
The Elected Officials and Administration section has 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 the information presented
Other Reporting Required by Government Auditing Standards
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
4
In accordance with Government Auditing Standards we have also issued our report dated May 6 2019 on our consideration of the Citys 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 results of that testing and not to provide an opinion on the effectiveness of the Cityrsquos 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 Cityrsquos internal control over financial reporting and compliance
May 6 2019
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REQUIRED SUPPLEMENTARY INFORMATION
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-
-
-
-
The City as a Whole Statement of Net Position and Statement of Activities
Our analysis of the City of Annandale begins with the Statement of Net Position and the Statement of Activities One of the most important questions asked about the Cityrsquos finances is ldquoIs the City as a whole better off or worse off as a result of the yearrsquos activitiesrdquo The Statement of Net Position and the Statement of Activities both report information about the City as a whole and about its activities in a way that helps answer this question The Statement of Net Position includes all assets and deferred outflows of resources and liabilities and deferred inflows of resources using the accrual basis of accounting In the Statement of Activities all of the current yearrsquos revenues and expenses are taken into account regardless of when cash is received or paid These two statements report the Cityrsquos net position and changes in them You can think of the Cityrsquos net positionmdashthe difference between assets and deferred outflows of resources and liabilities and deferred inflows of resourcesmdashas one way to measure the Cityrsquos financial health Over time increases or decreases in the Cityrsquos net position is one indicator of whether the Cityrsquos financial health is improving or deteriorating
You will need to consider other nonfinancial factors however to assess the overall health of the City of Annandale
In the Statement of Net Position and the Statement of Activities we divide the City into two kinds of activities
Governmental Activities - Most of the Citys basic services are reported here including general government public safety public works culture and recreation and economic development Property taxes and state and federal grants finance most of these activities
5
This annual report consists of a series of financial statements The Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the Cityrsquos finances Fund financial statements are presented after the Statement of Activities Fund financial statements also report the Cityrsquos operations in more detail than the government-wide statements by providing information about the Cityrsquos funds The notes to the financial statements provide information that is essential to a full understanding of the data provided in the government-wide and fund financial statements This annual report also contains other supplementary information in addition to the basic financial statements
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
This section of the basic financial statements of the City of Annandale (the City) presents a discussion and analysis of the Cityrsquos financial performance during the fiscal year ended December 31 2018 Please read it in conjunction with the Cityrsquos basic financial statements following this section
Financial Highlights
The assets and deferred outflows of resources of the City exceeded liabilties and deferred inflows of resources by $16461537
The Cityrsquos total net position increased by $1317551
The Cityrsquos governmental funds reported combined ending fund balances of $4349540 an increase of $122322 The Governmental Funds have $1240520 available for spending at the Citys discretion
At the end of the current fiscal year unassigned fund balance for the General Fund was $1697339 or 9417 of total General Fund expenditures of $1802505
Using This Annual Report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
The proprietary fund financial statements can be found on pages 20-23 of this report
Notes to the 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 The notes to the financial statements can be found on pages 24-57 of this report
6
Proprietary Funds - When the City of Annandale charges customers for the services it providesmdashwhether to outside customers or to other units of the Citymdashthese services are generally reported in proprietary funds Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities In fact the Cityrsquos enterprise funds are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information such as cash flows for proprietary funds
Business-Type Activities - The City charges a fee to customers to help it cover all or most of the cost of certain services it provides The Citys Water Sewer RefuseRecycling and Storm Utility funds are reported here
The Citys Most Significant Funds Fund Financial Statements
Our analysis of the Cityrsquos major funds begins with the fund financial statements These statements provide detailed information about the most significant fundsmdashnot the City as a whole Some funds are required to be established by state law and by bond covenants However the City Council establishes other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes grants and other money The Citys two kinds of funds-governmental and proprietary-use different accounting approaches
Governmental Funds - Most of the Cityrsquos basic services are reported in governmental funds Governmental funds focus on how money flows into and out of those funds and the balances left at year-end that are available for spending These funds are reported using an accounting method called modified accrual accounting which measures cash and all other financial assets that can readily be converted to cash The governmental fund statements provide a detailed short-term view of the Cityrsquos general government operations and the basic services it provides Governmental fund information helps the reader of the statements determine whether there are more or fewer financial resources that can be spent in the near future to finance the Cityrsquos programs We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation after the fund financial statements
The governmental fund financial statements can be found on pages 15-19 of this report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 5190696$ 5190633$ 63$ Net Capital Assets 10406611 10638601 (231990) Net Pension Asset 517946 440028 77918
Total Assets 16115253 16269262 (154009)
Deferred Outflows of Resources 621929 855064 (233135)
Total Assets and DeferredOutflows of Resources 16737182$ 17124326$ (387144)$
Current and Other Liabilities 1080947$ 1068593$ 12354$ Long-Term Liabilities 5393130 6383354 (990224)
Total Liabilities 6474077 7451947 (977870)
Deferred Inflows of Resources 886892 904112 (17220)
Net PositionNet Investment in Capital Assets 4962623 4377847 584776 Restricted 2021421 2178740 (157319) Unrestricted 2392169 2211680 180489
Total Net Position 9376213 8768267 607946
Total Liabilities Deferred Inflowsof Resources and Net Position 16737182$ 17124326$ (387144)$
Statement of Net Position
The Cityrsquos net position increased from a year ago Our analysis below focuses on the net position (Tables 1 and 2) andchanges in net position (Tables 3 and 4) of the Cityrsquos governmental and business-type activities
Table 1Comparative Condensed Statement of Net Position
Governmental Activities
7
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 179979$ 85557$ 94422$ Equity Interest 7004898 7023511 (18613) Net Capital Assets 10543232 10887885 (344653)
Total Assets 17728109 17996953 (268844)
Deferred Outflows of Resources 35051 59103 (24052)
Total Assets and DeferredOutflows of Resources 17763160$ 18056056$ (292896)$
Current and Other Liabilities 1595412$ 1396254$ 199158$ Long-Term Liabilities 9028762 10236810 (1208048)
Total Liabilities 10624174 11633064 (1008890)
Deferred Inflows of Resources 53662 47273 6389
Net PositionNet Investment in Capital Assets 8625232 8741281 (116049) Restricted 74208 36985 37223 Unrestricted (1614116) (2402547) 788431
Total Net Position 7085324 6375719 709605
Total Liabilities Deferred Inflowsof Resources and Net Position 17763160$ 18056056$ (292896)$
Business-Type Activities
8
Comparative Condensed Statement of Net PositionTable 2
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 652677$ 598474$ 54203$ Operating Grants and Contributions 122213 111759 10454 Capital Grants and Contributions 187016 576626 (389610)
General RevenuesProperty Taxes 1485895 1463472 22423 Tax Increments 20858 20203 655 Grants and Contributions Not Restricted 453773 422194 31579 Investment Income 16929 17237 (308) Miscellaneous 4178 17678 (13500) Gain on Sale of Asset 6034 268371 (262337)
Total Revenues 2949573 3496014 (546441)
EXPENSESGeneral Government 502902 475597 27305 Public Safety 970131 1019255 (49124) Public Works 769202 840164 (70962) Culture and Recreation 148880 762606 (613726) Economic Development 45238 85505 (40267) Interest on Long-Term Debt 160274 176897 (16623)
Total Expenses 2596627 3360024 (763397) Change in Net Position before Transfers 352946 135990 216956
TRANSFERS 255000 247000 8000 Change in Net Position 607946 382990 224956
NET POSITION BEGINNING OF YEAR 8768267 8385277 382990
NET POSITION END OF YEAR 9376213$ 8768267$ 607946$
Governmental Activities
Net position of the Citys governmental activities increased by $607946 Table 3 presents the key elements of the increase
Table 3Comparative Condensed Statement of Activities
Governmental Activities
9
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 3213338$ 2905848$ 307490$ General Revenues
Investment Income 2700 (1558) 4258 Total Revenues 3216038 2904290 311748
EXPENSESWater 492444 485751 6693 Sewer 1441099 1331721 109378 RefuseRecycling 199326 196627 2699 Storm Utility 99951 91130 8821
Total Expenses 2232820 2105229 127591 Change in Net Position before Transfers 983218 799061 184157
TRANSFERS (255000) (247000) (8000) CHANGE IN EQUITY INTEREST (18613) (70479) 51866
Change in Net Position 709605 481582 176157
NET POSITION BEGINNING OF YEAR 6375719 5894137 481582
NET POSITION END OF YEAR 7085324$ 6375719$ 709605$
Comparative Condensed Statement of Activities
Business-Type Activities
10
Table 4
Business-Type Activities
The net position of our business-type activities increased by $709605 The net increase was due to the following funds change in net position Water - $26607 decrease Sewer - $822708 increase RefuseRecycling - $9397 increase and Storm Utility - $95893 decrease
The following tables indicate the changes in net position for the Citys business-type activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Capital Project Funds - The capital projects fund balances increased by $13451
11
Over the course of the year the City of Annandale City Council did not revise the budget The General Fund budget predicted a $5178 increase in fund balance which includes the operations of the Motor Vehicle department The actual change in fund balance was an increase of $212334 This is due to both revenues being higher and expenditures being lower than anticipated Mobile Home tax revenues building permit fees and state aids were over budgeted amounts and both current and capital outlay expenditures were under budgeted amounts
Governmental Activities
Revenues - The following chart visually illustrates the Citys revenue by source for its governmental activities
Financial Analysis of the Citys Funds
General Fund - The Citys General Fund Balance increased by $212334 for 2018 The increase is mainly due to an increase in building permit fees and local government aid with a slight increase in public safety expenditures and a decrease in transfers to other funds
Special Revenue Funds - The Citys special revenue fund balances decreased by $53786 A majority of the decrease was due to expenditures for the pintail drive extension project
Debt Service Funds - The debt service fund balances decreased by $49677 The main reason for the decrease was due to customer prepayments made on special assessments in prior years
General Fund Budgetary Highlights
Fees Fines and Charges for Services
2213
Operating Grants and Contributions
414
Capital Grants and Contributions
634
Property Taxes5038 Tax Increments
071
Grants and Contributions Not Restricted1538
Investment Income057
Miscellaneous014
Gain on Sale of Asset021
Revenue by Source - Governmental Activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Long-Term Liabilities
At the end of 2018 the City of Annandale had $15543549 in bonds notes and equipment certificates outstanding Refer to Note 7 of the Notes to the Financial Statements for a schedule showing the Citys long-term liability activity
Economic Factors and Next Years Budget
The City of Annandales appointed officials considered many factors when setting the fiscal year 2019 budget rates and fees that will be charged by the funds of the City The major factor accounted for when adopting the General Fund budget was to hold all line items as much as possible to the 2018 final budget
Contacting the Citys Financial Management
This financial report is designed to provide our residents customers and creditors with a general overview of the Citys finances and to show the Citys accountability for the money it receives If you have any questions about this report or need additional information contact the City of Annandale 30 Cedar Street E Annandale Minnesota 55302
12
Capital Assets
At the end of 2018 the City of Annandale had $47826808 invested in a broad range of capital assets Refer to Note 5 of the Notes to the Financial Statements for a schedule showing the Citys capital asset activity During 2018 the City had a large increase in improvements other than buildings related to the completion of the Southside Trail project
BASIC FINANCIAL STATEMENTS
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Governmental Business-TypeActivities Activities Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Cash and Investments 3413471$ 86083$ 3499554$ Restricted Cash 74208 74208 Taxes Receivable - Delinquent 14909 14909 Special Assessments Receivable
Delinquent 4423 4158 8581 Current and Deferred 650220 14885 665105
Accounts Receivable 96631 339457 436088 Interest Receivable 9 9 Prepaid Items 75903 22861 98764 Internal Balances 385956 (385956) Due from Other Governments 186251 24283 210534 Land Held for Resale 362923 362923 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 2696744 277948 2974692 Other Capital Assets Net of Depreciation 7709867 10265284 17975151
Net Pension Asset 517946 517946 Total Assets 16115253 17728109 33843362
Deferred Outflows of Resources 621929 35051 656980
Total Assets and Deferred Outflows of Resources 16737182$ 17763160$ 34500342$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 65859$ 26908$ 92767$ Contracts Payable 27913 27913 Due to Other Governments 15676 309797 325473 Salaries and Benefits Payable 30329 7259 37588 Interest Payable 61920 78448 140368 Unearned Revenue 36250 36250
Long-Term LiabilitiesNet Pension Liability 696581 197762 894343 Other Long-Term Liabilities Due Within One Year 843000 1173000 2016000 Other Long-Term Liabilities Due in More than One Year 4696549 8831000 13527549
Total Liabilities 6474077 10624174 17098251
Deferred Inflows of Resources 886892 53662 940554
Net PositionNet Investment in Capital Assets 4962623 8625232 13587855 Restricted for
Debt Service 2009940 2009940 Tax Increment 11481 11481 Capital Replacement 74208 74208
Unrestricted 2392169 (1614116) 778053 Total Net Position 9376213 7085324 16461537
Total Liabilities Deferred Inflows of Resourcesand Net Position 16737182$ 17763160$ 34500342$
See Accompanying Notes to the Financial Statements13
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONDECEMBER 31 2018
Fees Fines and Operating CapitalCharges for Grants and Grants and Governmental Business-Type
Expenses Services Contributions Contributions Activities Activities Total
GOVERNMENTAL ACTIVITIESGeneral Government 502902$ 286176$ $ $ (216726)$ $ (216726)$ Public Safety 970131 208144 115858 41000 (605129) (605129) Public Works 769202 130069 6355 26201 (606577) (606577) Culture and Recreation 148880 15413 55109 (78358) (78358) Economic Development 45238 12875 30108 (2255) (2255) Interest on Long-Term Debt 160274 34598 (125676) (125676)
Total Governmental Activities 2596627 652677 122213 187016 (1634721) 0 (1634721)
BUSINESS-TYPE ACTIVITIESWater 492444 565694 73250 73250 Sewer 1441099 2393268 952169 952169 RefuseRecycling 199326 208571 9245 9245 Storm Utility 99951 45805 (54146) (54146)
Total Business-Type Activities 2232820 3213338 0 0 0 980518 980518
Total 4829447$ 3866015$ 122213$ 187016$ (1634721) 980518 (654203)
GENERAL REVENUESProperty Taxes 1485895 1485895 Tax Increments 20858 20858 Grants and Contributions not Restricted to Specific Programs 453773 453773 Unrestricted Investment Earnings 16929 2700 19629 Miscellaneous 4178 4178 Gain on Sale of Asset 6034 6034
TRANSFERS 255000 (255000) CHANGE IN EQUITY INTEREST (18613) (18613)
Total 2242667 (270913) 1971754 Change in Net Position 607946 709605 1317551
NET POSITION BEGINNING OF YEAR 8768267 6375719 15143986
NET POSITION END OF YEAR 9376213$ 7085324$ 16461537$
See Accompanying Notes to the Financial Statements14
CITY OF ANNANDALE MINNESOTA
STATEMENT OF ACTIVITIESYEAR ENDED DECEMBER 31 2018
Program RevenuesNet (Expense) Revenue and
Changes in Net Position
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
ASSETSCash and Investments 1062209$ 2351262$ 3413471$ Taxes Receivable - Delinquent 14534 375 14909Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 650220 650220
Accounts Receivable 5744 90887 96631Interest Receivable 9 9 Prepaid Items 73751 2152 75903Due from Other Funds 920750 190388 1111138Due from Other Governments 135407 50844 186251Land Held for Resale 362923 362923
Total Assets 2212395$ 3703483$ 5915878$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 41982$ 23877$ 65859$ Contracts Payable 3574 24339 27913 Due to Other Funds 143500 581682 725182 Due to Other Governments 6200 9476 15676Salaries and Benefits Payable 30195 134 30329Unearned Revenue 36250 36250
Total Liabilities 261701 639508 901209
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 14534 375 14909Special Assessments 650220 650220
Total Deferred Inflows of Resources 14534 650595 665129
Fund Balance Nonspendable 73751 2152 75903 Restricted 1532633 1532633 Committed 847422 847422 Assigned 165070 487992 653062Unassigned 1697339 (456819) 1240520
Total Fund Balance 1936160 2413380 4349540
Total Liabilities Deferred Inflows ofResources and Fund Balance 2212395$ 3703483$ 5915878$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
BALANCE SHEETGOVERNMENTAL FUNDS
DECEMBER 31 2018
15
2018
Total Fund Balances - Governmental Funds 4349540$
Amounts reported for governmental activities in the Statement of Net Position are differentbecause
Capital assets used in governmental activities are not financial resources and therefore arenot reported as assets in the governmental funds
Capital Assets 31934114Less Accumulated Depreciation (21527503) Net Pension Asset 517946
Certain receivables will be collected in subsequent years but are not available soon enoughto pay for the current periods expenditures and therefore are deferred in the funds
Delinquent Property Taxes 14909Special Assessments 650220
Deferred outflows and inflows of resources related to pensions are applicable to futureperiods and therefore are not reported in the funds
Deferred Outflows of Resources Related to Pensions 621929 Deferred Inflows of Resources Related to Pensions (886892)
Long-term liabilities including bonds payable are not due and payable in the current periodand therefore are not reported as liabilities in the funds
Bonds Payable (4525000) Notes Payable (1014000) Compensated Absences Payable (22979) Interest Payable (61920) Bond Discount 22430 Net Pension Liability (696581)
Total Net Position - Governmental Activities 9376213$
See Accompanying Notes to the Financial Statements16
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION
DECEMBER 31 2018
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
REVENUESProperty Taxes 1167129$ 323230$ 1490359$ Tax Increments 20858 20858 Special Assessments 149671 149671 Licenses and Permits 106197 106197 Intergovernmental 568136 30310 598446 Charges for Services 457769 51231 509000 Fines and Forfeitures 12790 4299 17089 Investment Income 22019 (5090) 16929 Contributions and Donations 1700 133758 135458 Miscellaneous 22893 679 23572
Total Revenues 2358633 708946 3067579
EXPENDITURESCurrent
General Government 412224 10807 423031 Public Safety 889531 42738 932269 Public Works 379968 379968 Culture and Recreation 111127 3735 114862 Economic Development 52358 52358
Debt Service Principal 821000 821000 Interest and Other Charges 162964 162964
Capital Outlay General Government 5206 5206 Public Safety 4449 67055 71504 Public Works 14006 14006 Culture and Recreation 102651 102651 Economic Development 144931 144931
Total Expenditures 1802505 1422245 3224750 Excess (Deficiency) of Revenues
Over (Under) Expenditures 556128 (713299) (157171)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 1145914 1145914 Transfers Out (343794) (547120) (890914)
Total Other Financing Sources (Uses) (343794) 623287 279493 Net Change in Fund Balances 212334 (90012) 122322
FUND BALANCE BEGINNING OF YEAR 1723826 2503392 4227218
FUND BALANCE END OF YEAR 1936160$ 2413380$ 4349540$
See Accompanying Notes to the Financial Statements17
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
YEAR ENDED DECEMBER 31 2018
2018
Total Net Change in Fund Balances - Governmental Funds 122322$
Amounts reported for governmental activities in the Statement of Activities are different because
Capital outlays are reported in governmental funds as expenditures However in the Statementof Activities the cost of those assets is allocated over the estimated useful lives asdepreciation expense
Capital Outlays 360225 Depreciation Expense (556497) Disposal of Capital Assets (75923) Accumulated Depreciation Related to Disposed Capital Assets 40205
Revenues in the Statement of Activities that do not provide current financial resources are notreported as revenues in the funds
Special Assessments (115073)
Delinquent property taxes receivable will be collected in subsequent years but are not availablesoon enough to pay for the current periods expenditures and therefore are deferred in the funds (4464)
Some expenses reported in the Statement of Activities do not require the use of currentresources and therefore are not reported as expenditures in governmental funds
Compensated Absences 313 Net Pension Asset 77918Net Pension Liability 151145 Deferred Outflows of Resources Related to Pensions (233135) Deferred Inflows of Resources Related to Pensions 17220
Principal Retirement of Long-Term Debt 821000 Amortization of Bond Discounts (4234) Change in Interest Payable 6924
Change in Net Position - Governmental Activities 607946$
See Accompanying Notes to the Financial Statements18
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES EXPENDITURESAND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Bond proceeds provide current financial resources to governmental funds but issuing debtincreases long-term liabilities in the Statement of Net Position Repayment of bond principalis an expenditure in the governmental funds but the repayment reduces long-term liabilities inthe Statement of Net Position
Over(Under)
FinalOriginal Final Actual Budget
REVENUESProperty Taxes 1120885$ 1120885$ 1167129$ 46244$ Licenses and Permits 61800 61800 106197 44397 Intergovernmental 541952 541952 568136 26184 Charges for Services 437744 437744 457769 20025 Fines and Forfeitures 8700 8700 12790 4090 Investment Income 22019 22019 Contributions and Donations 1700 1700 Miscellaneous 20000 20000 22893 2893
Total Revenues 2191081 2191081 2358633 167552
EXPENDITURESCurrent
General Government 435269 435269 412224 (23045) Public Safety 896497 896497 889531 (6966) Public Works 399317 399317 379968 (19349) Culture and Recreation 127325 127325 111127 (16198)
Capital OutlayGeneral Government 30500 30500 5206 (25294) Public Safety 1500 1500 4449 2949
Total Expenditures 1890408 1890408 1802505 (87903) Excess (Deficiency) of Revenues
Over (Under) Expenditures 300673 300673 556128 255455
OTHER FINANCING SOURCES (USES)Transfers Out (295495) (295495) (343794) (48299)
Net Change in Fund Balance 5178$ 5178$ 212334 207156$
FUND BALANCE BEGINNING OF YEAR 1723826
FUND BALANCE END OF YEAR 1936160$
See Accompanying Notes to the Financial Statements19
Budgeted Amounts
YEAR ENDED DECEMBER 31 2018
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL
GENERAL FUND
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current AssetsCash and Investments 23690$ 62393$ $ $ 86083$ Special Assessments Receivable
Delinquent 1167 2096 682 213 4158Current and Deferred 3859 9981 901 144 14885
Accounts Receivable 46078 269326 19878 4175 339457Prepaid Items 9433 12352 1076 22861Due from Other Governments 144 24111 24 4 24283Due from Other Funds 98000 21000 119000
Total Current Assets 182371 401259 22561 4536 610727
Noncurrent AssetsRestricted Cash 74208 74208 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 66881 191067 20000 277948Other Capital Assets Net of Depreciation 4497152 3259174 2505 2506453 10265284
Total Noncurrent Assets 4564033 10529347 22505 2506453 17622338 Total Assets 4746404 10930606 45066 2510989 18233065
Deferred Outflows of ResourcesRelated to Pensions 12805 20153 2093 35051
Total Assets and DeferredOutflows of Resources 4759209$ 10950759$ 47159$ 2510989$ 18268116$
LIABILITIES DEFERRED INFLOWS OFRESOURCES AND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 11931$ 1765$ 13212$ $ 26908$ Due to Other Funds 445076 28318 31562 504956 Due to Other Governments 453 308238 1106 309797 Salaries and Benefits Payable 2732 3813 714 7259Interest Payable 13173 65275 78448Notes Payable Due Within One Year 232000 941000 1173000
Total Current Liabilities 260289 1765167 43350 31562 2100368
Long-Term LiabilitiesNet Pension Liability 72251 113702 11809 197762Notes Payable Net of Current Amount 1576000 7255000 8831000
Total Noncurrent Liabilities 1648251 7368702 11809 0 9028762 Total Liabilities 1908540 9133869 55159 31562 11129130
Deferred Inflows of ResourcesRelated to Pensions 19605 30853 3204 53662
Net PositionNet Investment in Capital Assets 2756033 3340241 22505 2506453 8625232 Restricted for Capital Replacement 74208 74208 Unrestricted 75031 (1628412) (33709) (27026) (1614116)
Total Net Position 2831064 1786037 (11204) 2479427 7085324
Total Liabilities Deferred Inflowsof Resources and Net Position 4759209$ 10950759$ 47159$ 2510989$ 18268116$
See Accompanying Notes to the Financial Statements20
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONPROPRIETARY FUNDS
DECEMBER 31 2018
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
OPERATING REVENUESCharges for Services 565694$ 1219482$ 208571$ 45805$ 2039552$
OPERATING EXPENSESWages and Salaries 110471 188946 15086 314503Materials and Supplies 29374 29374Repairs and Maintenance 57478 21425 44 8346 87293Insurance 11074 9982 21056Electricity 27203 12231 39434Wastewater Commission Charges 871318 871318 Testing 1111 1111Contracted Services 4467 4378 162233 171078Depreciation 171475 118151 1333 87981 378940Professional Services 4717 5818 1834 524 12893Billing 14718 15335 30053Miscellaneous 17863 15245 3461 3100 39669
Total Operating Expenses 449951 1247494 199326 99951 1996722 Operating Income (Loss) 115743 (28012) 9245 (54146) 42830
NONOPERATING REVENUES (EXPENSES)Investment Income 543 1752 152 253 2700Interest and Fiscal Charges (42493) (193605) (236098) Reimbursements 1173786 1173786
Total Nonoperating Revenues(Expenses) (41950) 981933 152 253 940388
Income (Loss) Before Transfersand Other Items 73793 953921 9397 (53893) 983218
TRANSFERS AND OTHER ITEMSChange in Equity Interest (18613) (18613) Transfers In 19600 36400 56000 Transfers Out (120000) (149000) (42000) (311000)
Total Transfers and Other Items (100400) (131213) 0 (42000) (273613) Change in Net Position (26607) 822708 9397 (95893) 709605
NET POSITION BEGINNING OF YEAR 2857671 963329 (20601) 2575320 6375719
NET POSITION END OF YEAR 2831064$ 1786037$ (11204)$ 2479427$ 7085324$
See Accompanying Notes to the Financial Statements
YEAR ENDED DECEMBER 31 2018
21
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET POSITIONPROPRIETARY FUNDS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers and Users 553327$ 1022629$ 207570$ 47362$ 1830888$ Payments to Suppliers (164208) (767959) (181855) (11970) (1125992) Payments to Employees (115506) (184885) (20045) (320436)
Net Cash Provided (Used) by OperatingActivities 273613 69785 5670 35392 384460
CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIESTransfers Out (120000) (149000) (42000) (311000) Interfund Loan 33986 (4344) 6201 35843 Reimbursements 1173786 1173786
Net Cash Provided (Used) by NoncapitalFinancing Activities (120000) 1058772 (4344) (35799) 898629
CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESPrincipal Paid on Debt (226000) (920000) (1146000) Interest Paid on Debt (44518) (200960) (245478) Bonds Issued 3396 3396 Acquisition and Construction of Capital Assets (16094) (16501) (1692) (34287)
Net Cash Provided (Used) by Capital andRelated Financing Activities (283216) (1137461) (1692) 0 (1422369)
CASH FLOW FROM INVESTING ACTIVITIESInterest and Dividends Received (Paid) 543 4594 366 407 5910
Net Increase (Decrease) in Cash andCash Equivalents (129060) (4310) 0 0 (133370)
CASH AND CASH EQUIVALENTSBEGINNING OF YEAR 152750 140911 293661
CASH AND CASH EQUIVALENTSEND OF YEAR 23690$ 136601$ 0$ 0$ 160291$
RECONCILIATION OF CASH AND CASH EQUIVALENTSCash and Investments 23690$ 62393$ $ $ 86083$ Restricted Cash 74208 74208
Total Cash amp Cash Equivalents 23690$ 136601$ 0$ 0$ 160291$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
22
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CITY OF ANNANDALE MINNESOTA
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
RECONCILIATION OF OPERATING INCOME(LOSS) TO CASH FLOWS FROM OPERATINGACTIVITIESOperating Income (Loss) 115743$ (28012)$ 9245$ (54146)$ 42830$ Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided (Used) by OperatingActivities
Depreciation 171475 118151 1333 87981 378940 Pension Related Adjustments (5848) 3118 (5273) (8003)(Increase) Decrease in Assets
Special Assessments ReceivableDelinquent 300 514 (37) (113) 664 Current and Deferred (754) (4236) (573) 2077 (3486)
Accounts Receivable (11969) (190759) (1427) (453) (204608) Prepaid Items (397) (1455) (329) (2181) Due from Other Governments 56 (2372) 1036 46 (1234)
Increase (Decrease) in LiabilitiesAccounts Payable 3741 (10858) 275 (6842) Due to Other Governments 453 184751 1106 186310 Salaries and Benefits Payable 813 943 314 2070
Net Cash Provided (Used) by OperatingActivities 273613$ 69785$ 5670$ 35392$ 384460$
NONCASH INVESTING CAPITAL ANDFINANCING ACTIVITIESChange in Equity Interest 0$ (18613)$ 0$ 0$ (18613)$
See Accompanying Notes to the Financial Statements23
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A REPORTING ENTITY
Blended Component Unit - Reported as if they were part of the City
Blended Component Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
The financial statements present the City and its component units The City includes all funds organizations institutions agencies departments and offices that are not legally separate from such Component units are legally separate organizations for which the City is financially accountable or for which the exclusion of the component unit would render the financial statements of the City misleading
The City of Annandale Minnesota is a statutory city governed by an elected mayor and four council members The accompanying financial statements present the government entities for which the government is considered to be financially accountable
Joint Ventures and Jointly Governed Organizations - The relationship of the City with the entity is disclosed
The criteria used to determine if the City is financially accountable for a component unit includes whether or not 1) the City appoints the voting majority of the potential component units governing body and is able to impose its will on the potential component unit or is in a relationship of financial benefit or burden with the potential component unit or 2) the potential component unit is fiscally dependent on and there is a potential for the potential component unit to provide specific financial benefits to or impose specific financial burdens on the City
As a result of applying the component unit definition criteria above certain organizations have been defined and are presented in this report as follows
For each of the categories above the specific entities are identified as follows
The Annandale Economic Development Authority (EDA) is a legal entity separate from the City Although legally separate the Annandale EDA is reported as if it were part of the primary government because it provides services exclusively for the City Separate financial statements are not prepared for the Annandale EDA
24
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
A REPORTING ENTITY (Contd)
Joint Ventures and Jointly Governed Organizations
B GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Separate financial statements are provided for governmental funds and proprietary funds Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements
Separate financial statements can be obtained by contacting the Wastewater Commission PO Box K Annandale MN 55302
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or segment Interest on general long-term debt is considered an indirect expense and is reported separately in the Statement of Activities Program revenues include 1) charges to customers or applicants who purchase use or directly benefit from goods services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment Taxes and other items not properly included among program revenues are reported instead as general revenues Internally dedicated revenues are reported as general revenues rather than program revenues
The government-wide financial statements (ie the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the City Governmental activities which normally are supported by taxes and intergovernmental revenues are reported separately from business-type activities which rely to a significant extent on fees and charges for support
In September 2003 the City entered into a joint powers agreement with the City of Maple Lake to establish the Annandale-Maple Lake Wastewater Commission (the Commission) The purpose of the Commission is to make available wastewater treatment within the present and future boundaries of the Cities and to serve such other areas as the Commission approves As part of the joint venture the City of Annandale agrees to fund the Debt Service and Operating Funds of the Commission according to terms of the agreement The agreement states a City may terminate the agreement by written notice to the other City In such event the City of Annandale shall pay 60 of all costs incurred except each City shall pay its own attorneys fee In 2008 both Cities approved amending the joint powers agreement to include the City of Howard Lake effective January 1 2009 Each City will then have a one-third equity interest in the Commission Because there is an explicit measurable equity interest in the joint venture the interest is reported in the government-wide financial statements as well as in the Sewer Fund
25
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
The City reports the following major governmental funds
The City reports the following major enterprise funds
The Sewer Fund accounts for the operations of the Citys sewer utility
The Storm Utility Fund accounts for the activities of the Citys storm drainage operations
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting Revenues are recognized as soon as they are both measurable and available Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period For this purpose the City considers revenues to be available if they are collected within 60 days after the end of the current fiscal period Expenditures generally are recorded when a liability is incurred as under accrual accounting However debt service expenditures as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due
The General Fund is the Citys primary operating fund This fund accounts for all financial resources of the general City except those required to be accounted for in another fund
The RefuseRecycling Fund accounts for the operations of the Citys refuserecycling
Property taxes special assessments intergovernmental revenue charges for services franchise taxes licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period All other revenue items are considered to be measurable and available only when cash is received by the City
The Water Fund accounts for the operations of the Citys water utility
26
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the proprietary fund financial statements Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of related cash flows Property taxes are recognized as revenues in the year for which they are levied Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements Exceptions to this general rule are charges between the Citys utility functions and various other functions of the City Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C
D DEPOSITS AND INVESTMENTS
(1)
(2)
(3)
(4)
(5)
(6)
time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States bank
general obligations of the State of Minnesota and its municipalities and in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service
The Citys cash and cash equivalents are considered to be cash on hand deposits and highly liquid debt instruments purchased with original maturities of three months or less from the date of acquisition
27
mutual funds through shares of registered investment companies provided the mutual fund receives certain ratings depending on its investments
The City may invest in the following types of investments as authorized by Minn Stat sectsect118A04 and 118A05
securities which are direct obligations or are guaranteed or insured issues of the United States its agencies its instrumentalities or organizations created by an act of Congress except mortgage-backed securities defined as high risk by Minn Stat sect118A04 subd 6
MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (Contd)
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 funds principal ongoing operations The principal operating revenues of the enterprise funds are charges to customers for sales and services Operating expenses for enterprise funds include the cost of sales and services administrative expenses and depreciation of capital assets All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses
commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less and
with certain restrictions in repurchase agreements securities lending agreements joint powers investment trusts and guaranteed investment contracts
Cash and investments were comprised of deposits brokered certificates of deposits money market funds at various financial brokers and the 4M Fund
It is generally the Citys policy to use restricted resources first then unrestricted resources as they are needed when an expense is incurred for purposes for which both restricted and unrestricted net position are available
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations The Citys investment policy states it will comply with Minnesota Statutes Chapter 118A
The City has an investment policy in place that addresses interest rate risk credit risk concentration of credit risk and custodial credit risk as follows
Interest Rate Risk This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates The Citys investment policy states the City should manage their interest rates based on safety liquidity and the overall return on the investment The portfolio should contain both short-term and long-term investments to meet anticipated cash flow requirements Extended maturities may be utilized to take advantage of higher yields however no more than 50 of the total investments should extend beyond five years
The City invests in an external investment pool the Minnesota Municipal Money Market Fund (4M Fund) which is created under a joint powers agreement pursuant to Minn Stat sect47159 The 4M Fund is not registered with the Securities Exchange Commission (SEC) but does satisfy the requirements of Rule 2a-7 prescribed by the SEC pursuant to the Investment Company Act of 1940 (17 CFR sect2702a-7) as amended The investment in the pool is measured at the net asset value per share provided by the pool
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America The hierarchy is based on the valuation inputs used to measure the fair value of the asset Level 1 inputs are quoted prices in active markets for identical assets Level 2 inputs are significant other observable inputs Level 3 inputs are significant unobservable inputs
Custodial Credit Risk - Deposits For deposits this is the risk that in the event of bank failure the Citys deposits may not be returned to it The Citys investment policy states the collateralization level will be 110 of the market value of principal and accrued interest for balances above the FDIC insured amount When the pledged collateral consists of notes secured by first mortgages the collateral level will be 140 of the market value of principal and accrued interest
Authorized collateral includes the obligations of the US Treasury agencies and instrumentalities shares of investment companies whos only investments are in the aforementioned securities obligations of the State of Minnesota or its municipalities bankers acceptances futures contracts repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days as well as certain first mortgage notes and certain other state or local government obligations Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral
28
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
E RECEIVABLES AND PAYABLES
F PREPAID ITEMS
All trade and property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of property
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements
29
Custodial Credit Risk - Investments For an investment this is the risk that in the event of the failure of the counterparty the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party The Citys investment policy states when investments purchased by the City are held in safekeeping by a brokerdealer they must provide asset protection of $500000 through the Securities Investor Protector Corporation (SIPC) and at least another $2000000 supplemental insurance protection
The City levies its property tax for the subsequent year during the month of December December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year Such taxes become a lien on January 1 and are recorded as receivables by the City at that date The property tax is recorded as revenue when it becomes measurable and available Wright County is the collecting agency for the levy and remits the collections to the City three times a year The tax levy notice is mailed in March with the first half payment due on May 15 and the second half payment due on October 15 Tax levies from prior years that remain unpaid are classified as delinquent taxes receivable
The County Auditor submits the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year
Activity between funds that are representative of lendingborrowing arrangements outstanding at the end of the fiscal year are referred to as either due tofrom other funds (ie the current portion of interfund loans) or advances tofrom other funds (ie the noncurrent portion of interfund loans) All other outstanding balances between funds are reported as due tofrom other funds Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances
Concentration of Credit Risk This is the risk of loss attributed to the magnitude of an investment in a single issuer Investments should be diversified to avoid incurring unreasonable risk inherent in over investing in specific instruments individual financial institutions or maturities The Citys investment policy states the City will attempt to diversify their investments according to type and maturity
The County Auditor prepares the tax list for all taxable property in the City applying the applicable tax rate to the tax capacity of individual properties to arrive at the actual tax for each property The County Auditor also collects all special assessments except for certain prepayments paid directly to the City
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
G CAPITAL ASSETS
Cost
LandLand Improvements 10000$ Other Improvements 25000 BuildingsImprovements 25000 Machinery and Equipment 5000 Infrastructure 50000
Years
Buildings 5-40Improvements Other than Buildings 5-20Vehicles 5-20Machinery and Equipment 5-40Roads and Highways 20-40Infrastructure 25-40
The City does not possess any material amounts of intangible assets
30
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed Donated capital assets are recorded as capital assets at their estimated acquisition value at the date of donation
Capital assets both tangible and intangible which include property plant equipment and infrastructure assets (eg roads sidewalks and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements Capital assets are defined by the City as assets with an estimated useful life in excess of two years and an initial individual cost of more than the following
Capital Assets
Category
Based on the age of the majority of the Citys infrastructure and an exception for small governments in GASB Statement No 34 the City has determined it is not practical to capitalize infrastructure retroactively The current value of the infrastructure includes projects completed during the year ended December 31 1985 and prospectively from that date
Tangible and intangible assets of the City are depreciated using the straight-line full month convention method over the following estimated useful lives
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
H DEFERRED OUTFLOWS OF RESOURCES
I UNEARNED REVENUE
J COMPENSATED ABSENCES
K POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied Grants and certain other payments received before eligibility requirements are met are also recorded as unearned revenue
The City compensates employees who resign or retire with due notice for unused vacation and holiday pay Employees may carry over no more than 40 hours of vacation at the end of any calendar year unless approved by the City Council Unused vacation time is paid to employees upon separation from the City City employees are also allowed to earn compensatory time in lieu of overtime pay Employees may carry over no more than 40 hours of compensatory time at the end of any calendar year Unused compensatory time is paid to employees upon separation from the City
The liability for compensated absences reported in the financial statements consists of unpaid accumulated vacation and compensatory time balances The liability has been calculated using the vesting method in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included The liability for compensated absences is reported in the governmental funds only if they have matured for example as a result of employee resignations and retirements Compensated absences are accrued when incurred in the government-wide and proprietary fund financial statements The government-wide and proprietary fund Statement of Net Position reports both current and noncurrent portions of compensated absences using full accrual accounting The current portion consists of an amount based on expected or known retirements coming in the next fiscal year The noncurrent portion consists of the remaining amount of vacation and compensatory time
31
Employees of the City pay health care premiums based on their age and level of coverage Since the insurance rate is based on age the City does not have an implicit rate subsidy factor in postemployment health care expenses Additionally Minnesota Statutes require the City to allow retired employees to stay on the health care plan with the retiree responsible to pay the entire premium for continuation coverage The Citys personnel policy does not provide for any contributions upon employee retirement
In addition to assets the statement of financial position will sometimes report a separate section for deferred outflows of resources Deferred outflows of resources represents a consumption of net position that applies to a future reporting period During that future period it will be recognized as an outflow of resources (expenseexpenditure) The City has one item that qualifies for reporting in this category on the government-wide Statement of Net Position which is related to pensions
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
L PENSIONS
M LONG-TERM OBLIGATIONS
N DEFERRED INFLOWS OF RESOURCES
O FUND BALANCE
In addition to liabilities the statement of financial position will sometimes report a separate section for deferred inflows of resources Deferred inflows of resources represents an acquisition of net position that applies to a future reporting period During that future period it will be recognized as an inflow of resources (revenue) The City has items that qualify for reporting in this category on both the government-wide Statement of Net Position and the governmental fund financial statements related to property taxes special assessments and pensions
The City participates in various pension plans total pension expense for the fiscal year ended was $436446 The components of pension expense are noted in the plan summaries
For purposes of measuring the net pension liability deferred outflows of resources and deferred inflows of resources related to pensions and pension expense information about the fiduciary net position of the Public Employees Retirement Association (PERA) and the City of Annandales Fire Relief Association and additions todeductions from PERArsquos and the City of Annandales Fire Relief Associations fiduciary net position have been determined on the same basis as they are reported by PERA and the City of Annandales Fire Relief Association 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
In the fund financial statements governmental fund types recognize bond premiums and discounts as well as bond issuance costs during the current period The face amount of debt issued is reported as other financing sources Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses Issuance costs whether or not withheld from the actual debt proceeds received are reported as debt service expenditures
Nonspendable - consists of amounts that cannot be spent because it is not in spendable form or are legally or contractually required to be maintained intact such as inventories and prepaid items
Restricted - consists of amounts related to externally imposed constraints established by creditors grantors or contributors or constraints imposed by state statutory provisions
In the governmental fund financial statements fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in governmental funds These classifications are as follows
In the government-wide financial statements and proprietary fund types in the fund financial statements long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities business-type activities or proprietary fund type Statement of Net Position
32
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
O FUND BALANCE (Contd)
P NET POSITION
Q USE OF ESTIMATES
Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources in the government-wide and proprietary fund financial statements Net investment in capital assets consists of capital assets net of accumulated depreciation reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets Net position is reported as restricted in the government-wide and proprietary fund financial statements when there are limitations on their use through external restrictions imposed by creditors grantors or laws or regulations of other governments Unrestricted net position consists of all other net position that does not meet the definition of restricted or net investment in capital assets
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 In governmental funds other than the General Fund assigned fund balance represents the remaining amount that is not restricted or committed In the General Fund assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority Pursuant to City Council Resolution the City Treasurer and City Administrator are authorized to establish assignments of fund balance
33
Committed - consists of amounts that are constrained for specific purposes that are internally imposed by formal action of the City Council Those committed amounts cannot be used for any other purpose unless the Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts These constraints are established by Resolution of the City Council
Unassigned - is the residual classification for the General Fund and also reflects negative residual amounts in the remaining governmental funds
The City requires restricted amounts to be spent first when both restricted and unrestricted fund balance is available Additionally the City would first use committed then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and deferred outflows of resources and liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expendituresexpenses during the reporting period Actual results could differ from those estimates
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
A BUDGETARY INFORMATION
1
2
3
4
5
6
7
Annual appropriated budgets are adopted during the year for the General and Special Revenue Funds Annual appropriated budgets are not adopted for Debt Service Funds because effective budgetary control is alternatively achieved through bond indenture provisions Budgetary control for Capital Projects Funds is accomplished through the use of project controls and formal appropriated budgets are not adopted
34
Budgeted amounts are as originally adopted or as amended by the City Council Individual amendments were not material in relation to the original amounts budgeted Budgeted expenditure appropriations lapse at year-end
Expenditures may not legally exceed budgeted appropriations at the department level No funds budget can be increased without City Council approval The City Council may authorize transfer of budgeted amounts between departments within any fund Management may amend budgets within a department level so long as the total department budget is not changed
The City Council adopts an annual budget The amounts shown in the financial statements as budget represent the original budgeted amounts and all revisions made during the year The City follows these procedures in establishing the budgetary data reflected in the financial statements
Budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America
The budget is legally enacted through passage of a resolution after obtaining taxpayer comments The budget resolution adopted by the City Council sets forth the budgets at the function level for the General and Special Revenue Funds
Public hearings are conducted to obtain taxpayer comments
Budget requests are submitted by all department heads to the City Administrator The City Administrator compiles the budget requests into an overall preliminary City budget The City Administrator presents the proposed budget to the City Council
Encumbrances outstanding at year-end expire and outstanding purchase orders are canceled and not reported in the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (Contd)
B DEFICIT BALANCES
The following funds had deficit balances
RefuseRecycling (11204)$ Nonmajor Governmental Funds (454667)
C EXPENDITURES EXCEEDING APPROPRIATIONS
NOTE 3 DEPOSITS AND INVESTMENTS
A DEPOSITS
Checking 1669430$
B INVESTMENTS
Fair Value Level 1 Level 2 Level 3
Investments at fair valueBrokered Certificates of Deposit 1540744$ 0$ 1540744$ 0$
Investments at amortized costMoney Market Accounts 324792 4M Money Market 38796
Total Investments 1904332$
The Brokered Certificates of Deposit have a weighted average maturity of 216 years and were not rated
In accordance with applicable Minnesota Statutes the City maintains deposits at depository banks authorized by the City Council
35
There were no funds that had expenditures exceeding appropriations
Custodial Credit Risk - Deposits The Citys bank balances were not exposed to custodial credit risk because they were fully insured through the FDIC as well as collateralized with securities held by the pledging financial institutions trust department or agent and in the Citys name
Fair Value Measuring Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 3 DEPOSITS AND INVESTMENTS (Contd)
B INVESTMENTS (Contd)
The following is a summary of total deposits and investments
Deposits (Note 3A) 1669430$ Investments (Note 3B) 1904332
Total Deposits and Investments 3573762$
Statement of Net PositionCash and Investments 3499554$ Restricted Cash 74208
3573762$
NOTE 4 RECEIVABLES
Receivables are as follows
Amounts notScheduled
for CollectionDuring the
Total SubsequentReceivables Year
Governmental ActivitiesTaxes Receivable - Delinquent 14909$ $ Special Assessments Receivable 654643 584377 Accounts Receivable 96631 16271 Interest Receivable 9
Total Governmental Activities 766192$ 600648$
Business-Type ActivitiesSpecial Assessments Receivable 19043$ 9392$ Accounts Receivable 339457
Total Business-Type Activities 358500$ 9392$
Concentration of Credit Risk The City was exposed to concentration of credit risk due to the fact that some of the Citys brokered certificates of deposit exceeded 5 of the total Citys investments portfolio
36
Deposits and investments are presented in the basic financial statements as follows
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS
Capital asset activity was as follows
Beginning EndingGovernmental Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 2482508$ $ (18800)$ 2463708$ Construction in Progress 508685 248979 (524628) 233036
Total Capital AssetsNot Being Depreciated 2991193 248979 (543428) 2696744
Capital Assets Being DepreciatedBuildings 3065250 3065250 Improvements Other than Buildings 1298097 524628 1822725 Machinery and Equipment 2556167 111246 (57123) 2610290 Infrastructure 21739105 21739105
Total Capital AssetsBeing Depreciated 28658619 635874 (57123) 29237370
Less Accumulated Depreciation forBuildings 1145321 75543 1220864 Improvements Other than Buildings 858879 46992 905871 Machinery and Equipment 1568583 121681 (40205) 1650059 Infrastructure 17438428 312281 17750709
Total AccumulatedDepreciation 21011211 556497 (40205) 21527503
Total Capital Assets BeingDepreciated Net 7647408 79377 (16918) 7709867
Governmental ActivitiesNet Capital Assets 10638601$ 328356$ (560346)$ 10406611$
37
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS (Contd)
Capital asset activity was as follows
Beginning EndingBusiness-Type Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 277948$ $ $ 277948$
Capital Assets Being DepreciatedBuildings 4175245 4175245 Improvements Other than Buildings 12637 12637 Machinery and Equipment 268809 34287 303096 Infrastructure 11123768 11123768
Total Capital AssetsBeing Depreciated 15580459 34287 0 15614746
Less Accumulated Depreciation forBuildings 1499349 92233 1591582 Improvements Other than Buildings 12636 12636 Machinery and Equipment 190152 19580 209732 Infrastructure 3268385 267127 3535512
Total AccumulatedDepreciation 4970522 378940 0 5349462
Total Capital Assets BeingDepreciated Net 10609937 (344653) 0 10265284
Business-Type ActivitiesNet Capital Assets 10887885$ (344653)$ 0$ 10543232$
Depreciation expense was charged to functionsprograms as follows
Governmental ActivitiesGeneral Government 53809$ Public Safety 91620 Public Works 383653 Culture and Recreation 27415
Total Depreciation Expense - Governmental Activities 556497$
Business-Type ActivitiesWater 171475$ Sewer 118151 RefuseRecycling 1333 Storm Utility 87981
Total Depreciation Expense - Business-Type Activities 378940$
38
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 6 INTERFUND ACTIVITY
A INTERFUND BALANCES
The composition of interfund balances is as follows
Amount
General Sewer 445076$ General RefuseRecycling 28318 General Storm Utility 31562 General Nonmajor Governmental Funds 415794 Water Nonmajor Governmental Funds 98000 Sewer Nonmajor Governmental Funds 21000 Nonmajor Governmental Funds General 143500 Nonmajor Governmental Funds Nonmajor Governmental Funds 46888
Total Interfund Balances 1230138$
B INTERFUND TRANSFERS
The composition of interfund transfers is as follows
Nonmajor Governmental
Water Sewer Funds Total
Transfer OutGeneral 19600$ 36400$ 287794$ 343794$ Water 120000 120000 Sewer 149000 149000 Storm Utility 42000 42000 Nonmajor Governmental
Funds 547120 547120
Total Interfund Transfers 19600$ 36400$ 1145914$ 1201914$
Receivable Fund Payable Fund
39
The purpose of the above transfers was to provide funding for debt service capital improvement projects capital outlay and operating purposes
The purpose of the above interfund loans was to provide financing for operating purposes and to cover deficit cash balances
Transfer In
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES
A GENERAL OBLIGATION BONDS
B COMPONENTS OF LONG-TERM LIABILITIES
Interest Final BalanceRates Maturity Outstanding
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan BondsSeries 2008A 300-400 02012022 295000$
GO Special Assessment BondsGO Improvement Bonds Series 2008B 300-4125 02012024 560000 GO Improvement Bonds Series 2011A 105-415 02012032 1300000 GO Refunding Bonds Series 2011B 085-270 02012021 585000 GO Refunding Bonds Series 2012A 055-185 02012022 1035000 GO Improvement Bonds Series 2015A 110-345 02012036 750000
GO NotesGO Improvement Note of 2011 1959 08202031 846000
GO Equipment CertificateGO Equipment Certificate 2016A 2100 02012021 168000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549$
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 2819 08202023 996000$ PFA Clean Water Revenue Note 2220 08202026 8086000 PFA Water Revenue Note of 2015 1031 08202035 812000 PFA Sewer Revenue Note of 2015 1000 08202035 110000
Total Business-Type Activities 10004000$
GO Bonds are direct obligations and pledge the full faith and credit of the City These bonds generally are issued as 15 year Serial Bonds with equal debt service payments each year
The City issues General Obligation (GO) Bonds to provide financing for street improvements facility construction and tax increment projects Debt service is covered respectively by special assessments property taxes and tax increments against benefited properties with any shortfalls being paid from general taxes
40
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
B COMPONENTS OF LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for all bonded debt and notes outstanding are as follows
Principal Interest Principal Interest
70000$ 10400$ 660000$ 112343$ 70000 7600 675000 97718 75000 4700 600000 82645 80000 1600 480000 63498
220000 59861 760000 211593 680000 82489 155000 8131
295000$ 24300$ 4230000$ 718278$
2019
2029-20332024-2028
20222023
On September 27 2011 the City issued $1620000 GO Refunding Bonds Series 2011B with an interest rate of 85 to 270 The City issued the Bonds to crossover refund the $1020000 GO Fire Hall Bonds Series 2004A and the $1645000 GO Improvement Bonds Series 2004B The City completed the refunding to reduce its debt service payment over the next 9 years by $20827 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $20868
Debt service funds are used to liquidate the governmental activities outstanding bonded indebtedness and notes The Park Capital Projects Fund is used to liquidate the governmental activities outstanding contract for deed The General Fund has historically been used to liquidate the outstanding governmental activities compensated absences
GO Improvement Bonds Assessment Bonds
On April 4 2012 the City issued $2225000 GO Refunding Bonds Series 2012A with an interest rate of 55 to 185 The City issued the Bonds to refund the $1415000 GO Improvement Bonds Series 2001C and the $320000 GO Refunding Improvement Bonds Series 2003 as well as crossover refund the $3100000 GO Improvement Bonds Series 2006A The City completed the refunding to reduce its debt service payment over the next 10 years by $179206 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $161420
41
2034-2036
Governmental ActivitiesGO Special
2020
December 31
2021
Year Ending
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS (Contd)
Principal Interest Principal Interest
58000$ 16573$ 55000$ 2951$ 59000 15437 56000 1785 60000 14281 57000 598 61000 13106 62000 11911
332000 40728 214000 8423
846000$ 120459$ 168000$ 5334$
Principal Interest
1173000$ 217058$ 1200000 190488 1227000 163282 1254000 135459 1283000 151604 3466000 171976
284000 14813 117000 1808
10004000$ 1046488$
42
2023
Governmental Activities
2020
Year Ending
2029-2033
2022
2034-2035
2021
2028-2028
2024-2028
2022
2020
2019
2019
Business-Type Activities
2029-2031
GO Notes
2021
December 31Year Ending
2023
GO Equipment Certificates
GO Revenue Notes
December 31
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
D CHANGES IN LONG-TERM LIABILITIES
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Governmental ActivitiesBonds Payable
GOImprovementBonds 365000$ $ 70000$ 295000$ 70000$
GO SpecialAssessment Bonds 4870000 640000 4230000 660000
5235000 0 710000 4525000 730000
GO ImprovementNote of 2011 903000 57000 846000 58000
GO Equipment Certificate 222000 54000 168000 55000
CompensatedAbsences 23292 58115 58428 22979
Unamortized BondDiscount (26664) 4234 (22430)
Total GovernmentalActivities 6356628$ 62349$ 879428$ 5539549$ 843000$
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Business-Type ActivitiesNotes Payable
GO Revenue Notes 11146604$ 3396$ 1146000$ 10004000$ 1173000$
43
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
E CONDUIT DEBT OBLIGATIONS
The Citys conduit debt consisted of the following
Senior Housing and Health Care Revenue Refunding Note 6661528$
NOTE 8 RISK MANAGEMENT
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION
A PLAN DESCRIPTION
Firefighters of the City are members of the Association The Association is the administrator of a single-employer defined benefit pension plan available to firefighters The plan is administered by the Association pursuant to Minnesota Statutes Chapter 69 Chapter 424A and the Associations by-laws As of December 31 2017 the plan covered 28 active firefighters and 14 vested terminated fire fighters whose pension benefits are deferred
There are no other claims liabilities reported in the financial statements based on the requirements of accounting standards which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years
The Citys workers compensation insurance policy is retrospectively rated With this type of policy final premiums are determined after loss experience is known The amount of premium adjustment for 2018 is estimated to be immaterial based on workers compensation rates and salaries for the year
44
Conduit debt obligations are certain limited-obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party The City has issued various revenue bonds to provide funding to private-sector entities for projects deemed to be in the public interest Although these bonds bear the name of the City the City has no obligation for such debt Accordingly the bonds are not reported as liabilities in the financial statements of the City
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) which is a public entity risk pool currently operating as a common risk management and insurance program with other cities in the state The City pays an annual premium to the LMCIT for its insurance coverage The LMCIT is self-sustaining through commercial companies for excess claims The City is covered through the pool for any claims incurred but unreported but retains risk for the deductible portion of its insurance policies The amount of these deductibles is considered immaterial to the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
B BENEFITS PROVIDED
C CONTRIBUTIONS
D PENSION COSTS
Total Plan Net Pension Pension Fiduciary LiabilityLiability Net Position (Asset)
(a) (b) (a) - (b)
Balances at 112017 $ 569046 $ 1009074 $ (440028)Changes for the Year
Service Cost 26727 26727 Interest 34955 34955 Changes in Benefit Terms 28893 28893 Contributions - Employer 3000 (3000)Contributions - State 47693 (47693)Net Investment Income 126216 (126216)Benefit Payments (72973) (72973) Administrative Expense (8416) 8416
Net Change 17602 95520 (77918)
Balances at 12312017 $ 586648 $ 1104594 $ (517946)
The plan provides lump-sum retirement death and supplemental benefits to covered firefighters and survivors Benefits are paid based on the number of years of service multiplied by a benefit level per year of service approved by the City The plan includes a $2600 service pension benefit for each year of service Members are eligible for a lump-sum retirement benefit at 50 years of age or after completion of 20 years of service If a member is both age 50 and has completed five years of service but not 20 years of service the lump-sum pension will be reduced by 4 for each year of service less than 20 years
The plan is funded by fire state aid investment earnings and if necessary employer contributions as specified in Minnesota Statutes and voluntary City contributions As of December 31 2017 the State of Minnesota contributed $47693 in fire state aid to the plan on behalf of the Fire Department Required employer contributions are calculated annually based on statutory provisions The City made voluntary contributions of $3000 to the plan
The City reported a net pension liability (asset) of ($517946) The Citys net pension liability (asset) was measured as of December 31 2017 and the total pension liability used to calculate the net pension liability (asset) in accordance with GASB 68 was determined by an independent actuary applying an actuarial formula to specific census data certified by the fire department The following table presents the changes in net pension liability during the year
45
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
D PENSION COSTS (Contd)
The lump sum benefit increased from $2400 to $2600 per year effective January 1 2018
Differences between expected and actual economic experience $ 5346$ Changes in actuarial assumptions 3678 Net differences between projected and actual investment earnings 26024 Contributions paid to plan subsequent to measurement date 55196 State aid received for the plan subsequent to measurement date 52196
55196$ 87244$
December 31
20192020202120222023
Thereafter
For the year ended December 31 2018 the City recognized pension expense of ($15721)
The City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
$ 537
46
$55196 reported as deferred outflows of resources related to pensions resulting from City contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended December 31 2019 $52196 reported as deferred inflows of resources related to pensions resulting from state aid received for the plan subsequent to the measurement date will be recognized as an increase of the net pension liability (asset) in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pension plans will be recognized in pension expense as follows
Pension Expense Amount
(2) (17701) (14691) (1457) (1734)
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
E ACTUARIAL ASSUMPTIONS
Inflation Rate 275 percentRetirement Eligibility Later of current age and age 50Expected Long-Term Investment Return 625 percentAmortization Method
Mortality
F DISCOUNT RATE
G PENSION LIABLIITY (ASSET) SENSITIVITY
1 Decrease 1 Increasein Discount in Discount
Rate Rate(525) (625) (725)
Citys Net Pension Liability (Asset) $ (497411) $ (517946) $ (537562)
Straight-line amortization over a closed 5-year period or straight-line amortization over a close period equal to the average of the expected remaining service lives of all members that are provided with pensions through the pension planRates used in the July 1 2016 Minnesota PERA Police amp Fire Plan actuarial valuation
The discount rate used to measure the total pension liability was 625 The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at a rate specified in statute Based on that assumption the pension planrsquos 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
The following presents the net pension liability (asset) calculated using the discount rate as well as what the Citys net pension liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate
Discount Rate
The total pension liability was determined using the following actuarial assumptions applied to all periods included in the measurement
The actuarial assumptions used in the December 31 2018 valuation were based on the results of an actuarial experience study for the period January 1 2016 - December 31 2016
47
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
H PLAN INVESTMENTSINVESTMENT POLICY
- Attempt to maintain minimum funding ratio of 120- Attempt to increase the pension amount by $200 every other year- Meet twice per year to discuss any changes to allocation and prepare for a joint meeting with the City
I ASSET ALLOCATION
Domestic equityInternational equityFixed incomeReal estate and alternativesCash and equivalents
Total
J PENSION PLAN FIDUCIARY NET POSITION
10000
The best-estimates of expected future asset class returns were published in the 2017 Survey of Capital Market Assumptions produced by Horizon Actuarial Services These expected returns along with expected asset class standard deviations and correlation coefficients are based on Horizonrsquos annual survey of investment advisory firms The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data
Detailed information about the pension plans fiduciary net position is available in a separately-issued financial report
Asset Class
The plans funded status increased from 1773 to 1883 since the prior valuation This change is primarily due to investment returns in excess of expected
4500 5391000 5203500 198500 425500 079
The Association has a formal investment policy that operates within standard investment practices of the prudent person and other standards codified in Minnesota Statutes Chapter 11A and Chapter 356
The Associations pension plan assets are to be invested for the exclusive benefit of the fund members and will attempt to generate investment returns of at least 5 percent of an annualized basis over time Other goals of the Association include
The long-term expected rate of return on pension plan investments as determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns net of pension plan investment expense and inflation) are developed for each major asset class These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table
Long-Term Expected Real Rate of ReturnTarget Allocation
48
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A PLAN DESCRIPTION
B BENEFITS PROVIDED
GERP Benefits
General Employees Retirement Plan (GERP General Employees Plan accounted for in the General Employees Fund)
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
Public Employees Police and Fire Plan (PEPFP Police and Fire Plan accounted for in the Police and Fire Fund)
The Police and Fire Plan 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 Police and Fire Plan also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to PERA
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
General Employees Plan benefits are based on a memberrsquos 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 PERAs 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 12 for each of the first 10 years of service and 17 for each additional year The rates are 22 and 27 respectively for Basic members Under Method 2 the accrual rate for Coordinated members is 17 for all years of service and 27 for Basic members The accrual rates for former MERF members is 20 for each of the first 10 years of service and 25 for each additional year 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
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA) PERArsquos defined benefit pension plans are established and administered in accordance with Minnesota Statutes Chapters 353 and 356 PERArsquos defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code
49
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
B BENEFITS PROVIDED (Contd)
GERP Benefits (Contd)
PEPFP Benefits
C CONTRIBUTIONS
GERP Contributions
PEPFP Contributions
Beginning January 1 2019 benefit recipients will receive a future annual increase equal to 50 percent of the Social Security Cost of Living Adjustment not less than 10 percent and not more than 15 percent For retirements on or after January 1 2024 the first benefit increase is delayed until the retiree reaches Normal Retirement Age (not applicable to Rule of 90 retirees disability benefit recipients or survivors) A benefit recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase Members receiving benefits for at least one month but less than 12 full months as of June 30 will receive a pro rata increase
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 percent after five years up to 100 percent 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 percent after ten years up to 100 percent after twenty years of credited service The annuity accrual rate is 3 percent of average salary for each year of service For Police and Fire Plan members who were first hired prior to July 1 1989 a full annuity is available when age plus years of service equal at least 90
Beginning in 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law Post retirement increases are given each year except for annuitants who have been receiving a benefit for only 31 to 41 months These annuitants will receive a prorated amount of the increase on a sliding scale
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions Contribution rates can only be modified by the state Legislature
Coordinated Plan members were required to contribute 650 percent of their annual covered salary in fiscal year 2018 the City was required to contribute 750 percent for Coordinated Plan members The Citys contributions to the General Employees Fund for the year ended December 31 2018 were $50226 The Citys contributions were equal to the required contributions as set by state statute
Legislation increased both employee and employer contribution rates in the Police and Fire Plan Employee rates increased from 1080 percent of pay to 1130 percent and employer rates increase from 1620 percent to 1695 percent on January 1 2018 On January 1 2020 employee rates increase to 1180 percent and employer rates increase to 1770 percent The Citys contributions to the Police and Fire Fund for the year ended December 31 2018 were $57782 The Citys contributions were equal to the required contributions as set by state statute
50
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS
GERP Pension Costs
Differences between expected and actual economic experience 14670$ 16018$ Changes in actuarial assumptions 52464 61940 Differences between projected and actual investment earnings 56103 Changes in proportion 4060 13463 Contributions paid to GERP subsequent to measurement date 25165
96359$ 147524$
At December 31 2018 the City reported a liability of $543664 for its proportionate share of the General Employees Fundrsquos net pension liability The City net pension liability reflected a reduction due to the State of Minnesotarsquos contribution of $16 million to the fund in 2019 The State of Minnesota is considered a non-employer contributing entity and the statersquos contribution meets the definition of a special funding situation The State of Minnesotarsquos proportionate share of the net pension liability associated with the City totaled $17795 The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The Citys proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion share was 00098 which was a decrease of 00002 from its proportion measured as of June 30 2017
Post-retirement benefit increases were changed from 10 per year with a provision to increase to 25 upon attainment of 90 funding ratio to 50 of the Social Security Cost of Living Adjustment not less than 10 and not more than 15 beginning January 1 2019
For the year ended December 31 2018 the City recognized pension expense of $28216 for its proportionate share of GERPrsquos pension expense In addition the City recognized an additional $4150 as pension expense (and grant revenue) for its proportionate share of the State of Minnesotas contribution of $6 million to the General Employees Fund
At December 31 2018 the City reported its proportionate share of GERPrsquos deferred outflows of resources and deferred inflows of resources from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
51
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
GERP Pension Costs (Contd)
PEPFP Pension Costs
$25165 reported as deferred outflows of resources related to pensions resulting from City contributions to GERP subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to GERP pensions will be recognized in pension expense as follows
52
Year ended June 30 Pension Expense Amount
2019 13967$ 2020 (31102) 2021 (47848) 2022 (11347)
At December 31 2018 the City reported a liability of $350680 for its proportionate share of the Police and Fire Fundrsquos net pension liability The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The City proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion was 00329 which was a decrease of 00001 from its proportion measured as of June 30 2017 The City also recognized $2961 for the year ended December 31 2018 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesotarsquos on-behalf contributions to the Police and Fire Fund Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year starting in fiscal year 2014
Beginning in January 1 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law
For the year ended December 31 2018 the City recognized pension expense of $2961 for its proportionate share of the Police and Fire Planrsquos pension expense
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
PEPFP Pension Costs (Contd)
Differences between expected and actual economic experience 14159$ 88907$ Changes in actuarial assumptions 450560 517779 Differences between projected and actual investment earnings 71220 Changes in proportion 10800 27880 Contributions paid to PEPFP subsequent to measurement date 29906
505425$ 705786$
E ACTUARIAL ASSUMPTIONS
InflationSalary GrowthInvestment Rate of Return
Actuarial Assumptions GERP PEPFP
250 per year 250 per year325 after 26 years of service 325 after 25 years of service
750 750
53
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
2020 (21749)2021 (54056)2022 (147616)2023 (1380)
The total pension liability in the June 30 2018 actuarial valuation was determined using the following actuarial assumptions
$29906 reported as deferred outflows of resources related to pensions resulting from the Citys contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows
Year ended June 30 Pension Expense Amount
2019 (5466)$
At December 31 2018 the City reported its proportionate share of the Police and Fire Planrsquos deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
GERP
PEPFP
54
The total pension liability for each of the defined benefit cost-sharing plans was determined by an actuarial valuation as of June 30 2018 using the entry age normal actuarial cost method Inflation is assumed to be 250 percent for the General Employees and Police and Fire Plans Salary growth assumptions in the General Employees Plan decrease in annual increments from 1125 percent after one year of service to 325 percent after 26 years of service In the Police and Fire Plan salary growth assumptions decrease from 1225 percent after one year of service to 325 percent after 25 years of service
Mortality rates for all plans are based on RP-2014 mortality tables The tables are adjusted slightly to fit PERArsquos experience Actuarial assumptions for the General Employees Plan are reviewed every four to six years The most recent six-year experience study for the General Employees Plan was completed in 2015 The most recent four-year experience study for the Police and Fire Plan was completed in 2016 Economic assumptions were updated in 2014 based on a review of inflation and investment return assumptions
The following changes in actuarial assumptions occurred in 2018
The mortality projection scale was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 percent per year through 2044 and 250 percent per year thereafter to 125 percent per year
The mortality projection scale was changed from MP-2016 to MP-2017
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
Domestic StocksInternational StocksBondsAlternative AssetsCash
F DISCOUNT RATE
G PENSION LIABILITY SENSITIVITY
GERP PEPFP
1 Lower 650 883523$ 1520 751880$ Current Discount Rate 750 543664 1620 350680 1 Higher 850 263120 1720 18904
The discount rate used to measure the total pension liability in 2018 was 750 percent The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes Based on these assumptions the fiduciary net positions of the General Employees Fund and the Police and Fire Fund 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
The following presents the Citys proportionate share of the net pension liability for all plans it participates in calculated using the discount rate disclosed in the preceding paragraphs as well as what the Citys 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
Target Allocation
3900190020002000200
10000
Long-Term Expected Real Rate of Return
510530075590000
Asset Class
55
The State Board of Investment which manages the investments of PERA prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return 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 in the following table
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
H PENSION PLAN FIDUCIARY NET POSITION
NOTE 11 DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
Related to Pensions 656980$ 940554$
NOTE 12 FUND BALANCE
NonmajorGovernmental
General Funds Total
NonspendablePrepaid Items 73751$ 2152$ 75903$
Restricted forTax Increment 11481 11481 Debt Service 1448570 1448570 Capital Projects 72582 72582
0 1532633 1532633
CommittedCharitable Gambling Programs 11466 11466 Economic Development Promotion 835956 835956
Total Committed 0 847422 847422
AssignedFund Operations 165070 487992 653062
Unassigned 1697339 (456819) 1240520
1936160$ 2413380$ 4349540$
Detailed information about each pension plans 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 wwwmnperaorg
The following is a summary of the major components of deferred outflows and inflows as presented in the Statement of Net Position
Deferred Outflows of Resources
Deferred Inflows of Resources
The following is a summary of fund balance components
56
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 13 TAX ABATEMENT
Current YearPercent AmountAbated Abated
Dingmann Marine100 2500$
Current YearPercent AmountAbated Abated
Granite City PropertyManagement 95 20858$
NOTE 14 JOINT POWERS AGREEMENTS
A PUBLIC RECREATIONAL FACILITY
B WRIGHT COUNTY AREA TRANSIT
Wright County Area Transit is governed by a Joint Powers Board that consists of a) one vote plus additional vote for each city per 3000 rides originating in that city and b) Wright County has votes equal to the number of votes apportioned to the Cities
57
The City and Independent School District 876 (the District) have entered into an a joint powers agreement to operate a public recreational facility The City owns and will lease the real property to the Joint Powers Entity (the Entity) The District shall fund the construction of the facility The Entity shall prepare an annual budget subject to approval of the City and the District All costs for operations maintenance repairs and utilities shall be shared equally by the City and the District
The Entity is governed by a Joint Powers Board that consists of four members a) two members appointed by the City annually and b) two members appointed by the District annually
The City Wright County and other Wright County Cities have entered into an a joint powers agreement to provide affordable public transportation to their communities Cities are to pay a pro rata share of the remaining unfunded operating expenses and capital expenditures not covered by Wright County
The City is authorized by Minnesota Statute sect4691813 to enter into property tax abatement agreements for the purpose of attracting or retaining businesses Tax abatements may be granted to any business on a case-by-case basis The entity may be subject to certain stipulations determined by the City at the time the abatement is entered The amount of the abatement is automatically deducted from the property ownerrsquos tax bill
The City is authorized by Minnesota Statute sect469174 through 469179 to enter into tax increment financing plans Tax increment financing may be granted on a case-by-case basis and may be subject to certain stipulations determined by the City at the time it is entered
Business Purpose
Business Purpose
Assisting in relocating the business within the community
Housing Redevelopment Project 36 Unit Senior Housing Project
REQUIRED SUPPLEMENTARY INFORMATION
This page intentionally left blank
EmployersProportionateShare of the Net Pension
Liability (Asset)States and the States Employers
Proportionate Proportionate ProportionateEmployers Share of the Share of the Share of the Plan Fiduciary
Employers Proportionate Net Pension Net Pension Net Pension Net PositionProportion Share of the Liability (Asset) Liability (Asset) Employers Liability (Asset) as a Percentageof the Net Net Pension Associated with Associated with Covered as a Percentage of of the Total
Fiscal Year Pension Liability (Asset) the Employer the Employer Payroll its Covered Payroll PensionEnding Liability (Asset) (a) (b) (a+b) (c) ((a+b)c) Liability
PensionsGERP
6302018 00098 543664$ 17795$ 561459$ 658161$ 8531 79536302017 00100 638393 8040 646433 647524 9983 75906302016 00099 803831 10468 814299 610663 13335 68916302015 00102 528617 528617 605733 8727 7819
PEPFP6302018 00329 350680$ $ 350680$ 346636$ 10117 88846302017 00330 445539 445539 339010 13142 85436302016 00340 1364479 1364479 322596 42297 63886302015 00340 386320 386320 317917 12152 8661
See Accompanying Notes to the Required Supplementary Information
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITYDECEMBER 31 2018
58
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
Contributionsin Relation Contributions
Statutorily to the Statutorily Contribution as a PercentageRequired Required Deficiency Covered of Covered
Fiscal Year Contribution Contribution (Excess) Payroll PayrollEnding (a) (b) (a-b) (d) (bd)
PensionsGERP
12312018 50226$ 50226$ $ 669680$ 75012312017 48886 48886 651813 75012312016 46583 46583 621107 75012312015 45426 45426 605680 750
PEPFP12312018 57782$ 57782$ $ 356679$ 162012312017 55371 55371 341796 162012312016 53824 53824 332247 162012312015 51688 51688 319062 1620
See Accompanying Notes to the Required Supplementary Information59
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE EMPLOYER CONTRIBUTIONSDECEMBER 31 2018
2017 2016 2015 2014
Service Cost 26727$ 26915$ 21845$ 21260$ Interest 34955 33085 27615 24816 Changes in Benefit Terms 28893 40156 Differences Between Expected and Actual Experience (7074) Changes in Assumptions (4866) Benefit Payments (72973) (7040)
Net Change in Total Pension Liability 17602 41020 89616 46076 Total Pension Liability - Beginning of Year 569046 528026 438410 392334
Total Pension Liability - End of Year 586648$ 569046$ 528026$ 438410$
Contributions - State and Local 50693$ 50325$ 49939$ 47712$ Net Investment Income 126216 69161 (34736) 46976 Benefit Payments (72973) (7040) Administrative Expense (8416) (7920) (7166) (3768) Other (275)
Net Change in Plan Fiduciary Net Position 95520 104526 8037 90645 Total Plan Fiduciary Net Position - Beginning of Year 1009074 904548 896511 805866
Total Plan Fiduciary Net Position - End of Year 1104594$ 1009074$ 904548$ 896511$
Citys Net Pension Liability (Asset) - End of Year (517946)$ (440028)$ (376522)$ (458101)$
Plan Fiduciary Net Position as a Percentage of the Total Pension Asset 18829 17733 17131 20449
60
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF CHANGES IN THE CITYS NET PENSION LIABILITY AND RELATED RATIOSDECEMBER 31 2018
The City implemented GASB Statement No 68 for the year ended December 31 2015 Information for prior years is not available
December 31
NOTE 1 CHANGES IN PLAN PROVISIONS
A GERF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
B PEPFF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
61
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
On January 1 2015 the Minneapolis Employees Retirement Fund was merged into the General Employees Fund which increased the total pension liability by $11 billion and increased the fiduciary plan net position by $892 million Upon consolidation state and employer contributions were revised
The post-retirement benefit increase to be paid after attainment of the 90 funding threshold was changed from inflation up to 25 to a fixed rate of 25
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS
A GERF
2018 Changes
2017 Changes
2016 Changes
2015 Changes
B PEPFF
2018 Changes
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 025 to 325 for payroll growth and 250 for inflation
62
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2035 and 25 per year thereafter
The mortality projection was changed from MP-2016 to MP-2017
The Combined Service Annuity (CSA) loads were changed from 08 for active members and 60 for vested and non-vested deferred members The revised CSA loads are now 00 for active member liability 150 for vested deferred member liability and 30 for non-vested deferred member liability
The assumed post-retirement benefit increase rate was changed from 10 per year for all years to 10 per year through 2044 and 25 per year thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2035 and 25 per year thereafter to 10 per year for all years
The assumed investment return was changed from 79 to 75 The single discount rate was changed from 79 to 75
The mortality projection was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 per year through 2044 and 250 per year thereafter to 125 per year
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS (Contd)
B PEPFF (Contd)
2017 Changes
Assumed rates of retirement were changed resulting in fewer retirements
Assumed percentage of married female members was decreased from 65 to 60
The assumed percentage of female members electing Joint and Survivor annuities was increased
2016 Changes
2015 Changes
63
The assumed post-retirement benefit increase rate was changed from 100 for all years to 100 per year through 2064 and 250 thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2037 and 25 thereafter to 10 per year for all future years
The assumed investment return was changed from 79 to 75 The single discount rate changed from 79 to 56
The assumed future salary increases payroll growth and inflation were decreased by 025 to 325 for payroll growth and 250 for inflation
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2037 and 25 per year thereafter
Assumed salary increases were changed as recommended in the June 30 2016 experience study The net effect is proposed rates that average 034 lower than the previous rates
The Combined Service Annuity (CSA) load was 30 for vested and non-vested deferred members The CSA has been changed to 33 for vested members and 2 for non-vested 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 096 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 30 for the first three years of service Rates beyond the select period of three years were adjusted resulting in more expected terminations overall
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
SUPPLEMENTARY INFORMATION
This page intentionally left blank
Special Debt Capital Revenue Service Projects Total
ASSETSCash and Investments 436388$ 1441782$ 473092$ 2351262$ Taxes Receivable - Delinquent 23 5 347 375 Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 623285 26935 650220
Accounts Receivable 70887 20000 90887 Interest Receivable 9 9 Prepaid Items 2152 2152 Due from Other Funds 190388 190388 Due from Other Governments 1061 2365 47418 50844 Land Held for Resale 362923 362923
Total Assets 1063822$ 2071860$ 567801$ 3703483$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 12735$ $ 11142$ 23877$ Contracts Payable 2941 21398 24339 Due to Other Funds 454822 126860 581682 Due to Other Governments 3566 5910 9476 Salaries and Benefits Payable 134 134
Total Liabilities 474198 0 165310 639508
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 23 5 347 375 Special Assessments 623285 26935 650220
Total Deferred Inflows of Resources 23 623290 27282 650595
Fund Balance Nonspendable 2152 2152 Restricted 11481 1448570 72582 1532633 Committed 847422 847422 Assigned 67503 420489 487992 Unassigned (338957) (117862) (456819)
Total Fund Balance 589601 1448570 375209 2413380
Total Liabilities Deferred Inflows of Resources and Fund Balance 1063822$ 2071860$ 567801$ 3703483$
CITY OF ANNANDALE MINNESOTA
64
DECEMBER 31 2018NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
Special Debt Capital Revenue Service Projects Total
REVENUESProperty Taxes 2507$ $ 320723$ 323230$ Tax Increments 20858 20858 Special Assessments 149671 149671 Intergovernmental 30310 30310 Charges for Services 42636 8595 51231 Fines and Forfeitures 4299 4299 Investment Income (1455) (3635) (5090) Contributions and Donations 49608 84150 133758 Miscellaneous 578 101 679
Total Revenues 114732 149671 444543 708946
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 22622 42738 Culture and Recreation 3735 3735 Economic Development 52358 52358
Debt ServicePrincipal 821000 821000 Interest and Other Charges 162964 162964
Capital OutlayPublic Safety 67055 67055 Public Works 14006 14006 Culture and Recreation 14187 88464 102651 Economic Development 56446 88485 144931
Total Expenditures 153914 983964 284367 1422245 Excess (Deficiency) of Revenues
Over (Under) Expenditures (39182) (834293) 160176 (713299)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 51200 784616 310098 1145914 Transfers Out (65804) (481316) (547120)
Total Other Financing Sources (Uses) (14604) 784616 (146725) 623287 Net Change in Fund Balances (53786) (49677) 13451 (90012)
FUND BALANCE BEGINNING OF YEAR 643387 1498247 361758 2503392
FUND BALANCE END OF YEAR 589601$ 1448570$ 375209$ 2413380$
65
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
Tax Charitable Economic TIF District Abatement - Lions TIF District Training WoodlawnGambling Development No 6 Dingmann Donations No 14 Center Cemetery
(222) (407) (411) (423) (464) (465) (604) (651) Total
ASSETSCash and Investments 11466$ 385530$ 21389$ $ 18003$ $ $ $ 436388$ Taxes Receivable - Delinquent 23 23 Accounts Receivable 20856 49500 531 70887 Prepaid Items 1076 1076 2152 Due from Other Funds 190388 190388 Due from Other Governments 25 1036 1061 Land Held for Resale 362923 362923
Total Assets 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable $ 1800$ 9908$ $ $ $ 1000$ 27$ 12735$ Contracts Payable 2941 2941 Due to Other Funds 119000 18060 66198 200960 50604 454822 Due to Other Governments 3500 66 3566 Salaries and Benefits Payable 67 67 134
Total Liabilities 0 123741 9908 18060 0 69698 202093 50698 474198
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 23 23
Fund Balance Nonspendable 1076 1076 2152 Restricted 11481 11481 Committed 11466 835956 847422 Assigned 67503 67503 Unassigned (18035) (69698) (200526) (50698) (338957)
Total Fund Balance 11466 835956 11481 (18035) 67503 (69698) (199450) (49622) 589601
Total Liabilities Deferred Inflows of Resources and Fund Balance 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
66
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUECOMBINING BALANCE SHEET
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding ImprovementBonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
ASSETSCash and Investments 134649$ 53157$ 3288$ 310514$ 94388$ 360857$ 484929$ 1441782$ Taxes Receivable - Delinquent 5 5 Special Assessments Receivable
Delinquent 819 1553 2051 4423 Current and Deferred 45829 223930 9400 65636 278490 623285
Due from Other Governments 585 509 775 496 2365
Total Assets 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
DEFERRED INFLOWS OF RESOURCESAND FUND BALANCEDeferred Inflows of Resources
Unavailable RevenuesDelinquent Property Taxes $ $ $ $ $ 5$ $ 5$ Special Assessments 45829 223930 9400 65636 278490 623285
Total Deferred Inflows of Resources 45829 0 0 223930 9400 65641 278490 623290
Fund Balance Restricted 135234 53157 3288 311333 94897 363185 487476 1448570
Total Deferred Inflows of Resourcesand Fund Balance 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
DECEMBER 31 2018
67
Public Works 2020Fire Street Street Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
ASSETSCash and Investments 50334$ $ 39748$ 122304$ 20402$ 83784$ 53265$ 30658$ 72597$ $ 473092$ Taxes Receivable - Delinquent 298 49 347Special Assessments Receivable
Current and Deferred 26935 26935Accounts Receivable 20000 20000Interest Receivable 9 9Due from Other Governments 24247 20606 2565 47418
Total Assets 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 350$ $ $ $ 10792$ $ $ $ $ $ 11142$ Contracts Payable 15700 5698 21398 Due to Other Funds 44073 82787 126860 Due to Other Governments 5910 5910
Total Liabilities 350 49983 0 0 10792 0 0 15700 0 88485 165310
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 298 49 347Special Assessments 26935 26935
Total Deferred Inflows of Resources 298 0 26984 0 0 0 0 0 0 0 27282
Fund Balance Restricted 72582 72582 Assigned 74240 42313 122304 9610 83784 53265 34958 15 420489 Unassigned (29377) (88485) (117862)
Total Fund Balance 74240 (29377) 42313 122304 9610 83784 53265 34958 72597 (88485) 375209
Total Liabilities Deferred Inflow of Resources and Fund Balance 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
DECEMBER 31 2018
68
TaxCharitable Economic TIF District Abatement - TIF District Lions TIF District Training WoodlawnGambling Development No 6 Dingmann No 12 Donation No 14 Center Cemetery
(222) (407) (411) (423) (438) (464) (465) (604) (651) Total
REVENUESProperty Taxes $ $ $ 2507$ $ $ $ $ $ 2507$ Tax Increments 20858 20858 Charges for Services 12875 19641 10120 42636 Investment Income (71) (2440) (140) (76) 1239 33 (1455)Contributions and Donations 108 49500 49608Miscellaneous 78 500 578
Total Revenues (71) 10621 20718 2507 0 49424 500 20880 10153 114732
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 20116 Economic Development 18399 19816 391 13752 52358
Capital OutlayCulture and Recreation 14187 14187 Economic Development 56446 56446
Total Expenditures 0 18399 19816 0 391 14187 70198 20116 10807 153914 Excess (Deficiency) of
Revenues Over (Under) Expenditures (71) (7778) 902 2507 (391) 35237 (69698) 764 (654) (39182)
OTHER FINANCING SOURCES (USES)Transfers In 51200 51200 Transfers Out (65804) (65804)
Total Other FinancingSources (Uses) 0 (14604) 0 0 0 0 0 0 0 (14604)
Net Change in Fund Balances (71) (22382) 902 2507 (391) 35237 (69698) 764 (654) (53786)
FUND BALANCE BEGINNING OF YEAR 11537 858338 10579 (20542) 391 32266 (200214) (48968) 643387
FUND BALANCE END OF YEAR 11466$ 835956$ 11481$ (18035)$ 0$ 67503$ (69698)$ (199450)$ (49622)$ 589601$
69
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE
YEAR ENDED DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding Improvement Bonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
REVENUESSpecial Assessments 21259$ $ $ 37558$ 10657$ 20276$ 59921$ 149671$
EXPENDITURESDebt Service
Principal 80000 70000 54000 127000 210000 245000 35000 821000Interest and Other Charges 23944 14062 4095 64909 16975 18646 20333 162964
Total Expenditures 103944 84062 58095 191909 226975 263646 55333 983964 Excess (Deficiency) of
Revenues Over (Under)Expenditures (82685) (84062) (58095) (154351) (216318) (243370) 4588 (834293)
OTHER FINANCINGSOURCES (USES)Transfers In 76000 78113 22560 150000 194943 198000 65000 784616
Net Change in Fund Balances (6685) (5949) (35535) (4351) (21375) (45370) 69588 (49677)
FUND BALANCEBEGINNING OF YEAR 141919 59106 38823 315684 116272 408555 417888 1498247
FUND BALANCE END OF YEAR 135234$ 53157$ 3288$ 311333$ 94897$ 363185$ 487476$ 1448570$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
YEAR ENDED DECEMBER 31 2018
70
Public 2020Fire Street WorksStreet Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
REVENUESProperty Taxes 25092$ $ 295631$ $ $ $ $ $ $ $ 320723$ Intergovernmental 4109 26201 30310 Charges for Services 8595 8595 Fines and Forfeitures 4299 4299 Investment Income (49) 105 (324) (1118) (80) (713) (503) (495) (458) (3635) Contributions and Donations 50650 1500 2000 30000 84150 Miscellaneous 101 101
Total Revenues 75693 14309 295307 (1017) 6219 (713) 25698 29505 (458) 0 444543
EXPENDITURESCurrent
Public Safety 22622 22622 Culture and Recreation 3735 3735
Capital OutlayPublic Safety 7500 59555 67055 Public Works 14006 14006 Culture and Recreation 16429 72035 88464 Economic Development 88485 88485
Total Expenditures 30122 20164 0 14006 59555 0 0 72035 0 88485 284367 Excess (Deficiency) of
Revenues Over (Under)Expenditures 45571 (5855) 295307 (15023) (53336) (713) 25698 (42530) (458) (88485) 160176
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 8800 15693 24493 Transfers In 84943 37504 60000 20000 107651 310098 Transfers Out (107503) (288000) (78113) (7700) (481316)
Total Other FinancingSources (Uses) (22560) 37504 (288000) 68800 35693 29538 0 (7700) 0 0 (146725)
Net Change in Fund Balances 23011 31649 7307 53777 (17643) 28825 25698 (50230) (458) (88485) 13451
FUND BALANCE BEGINNING OF YEAR 51229 (61026) 35006 68527 27253 54959 27567 85188 73055 361758
FUND BALANCE END OF YEAR 74240$ (29377)$ 42313$ 122304$ 9610$ 83784$ 53265$ 34958$ 72597$ (88485)$ 375209$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
YEAR ENDED DECEMBER 31 2018
71
FINANCIAL SECTION
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Issue Interest Original Final Principal Due WithinDate Rates Issue Maturity Outstanding One Year
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan Bonds Series 2008A 050608 300-400 895000$ 020122 295000$ 70000$ GO Special Assessment Bonds
GO Improvement Bonds Series 2008B 050608 300-4125 1175000 020124 560000 85000 GO Improvement Bonds Series 2011A 060811 105-415 1700000 020132 1300000 70000 GO Refunding Bonds Series 2011B 092711 085-270 1620000 020121 585000 215000 GO Refunding Bonds Series 2012A 040412 055-185 2225000 020122 1035000 255000 GO Improvement Bonds Series 2015A 050115 110-345 820000 020136 750000 35000
GO NotesGO Improvement Note of 2011 053111 1959 1217500 082031 846000 58000
GO Equipment CertificateGO Equipment Certificate 2016A 032116 2100 222000 020121 168000 55000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549 843000
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 011304 2819 3273194 082023 996000 188000 PFA Clean Water Revenue Note 081707 2220 16036613 082026 8086000 935000 PFA Water Revenue Note of 2015 081015 1031 929105 082035 812000 44000 PFA Sewer Revenue Note of 2015 090815 1000 125359 082035 110000 6000
Total Business-Type Activities 10004000 1173000
Total All Long-Term Liabilities 15543549$ 2016000$
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF LONG-TERM LIABILITIESDECEMBER 31 2018
72
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COMPLIANCE SECTION
This page intentionally left blank
Honorable Mayor and Members of the City Council
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
INDEPENDENT AUDITORS REPORT ON MINNESOTA LEGAL COMPLIANCE
73
The Minnesota Legal Compliance Audit Guide for Cities promulgated by the State Auditor pursuant to Minn Stat sect665 contains seven categories of compliance to be tested contracting and bidding deposits and investments conflicts of interest public indebtedness claims and disbursements miscellaneous provisions and tax increment financing Our audit considered all of the listed categories
In connection with our audit nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities However our audit was not directed primarily toward obtaining knowledge of such noncompliance Accordingly had we performed additional procedures other matters may have come to our attention regarding the Citys noncompliance with the above referenced provisions
The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance Accordingly this communication is not suitable for any other purpose
City of AnnandaleAnnandale Minnesota
May 6 2019
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 majorfund and the aggregate remaining fund information as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements we considered the Citys 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 Citys internal control Accordingly we do not express an opinion on the effectiveness of the Citys 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 entitys 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
74
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 and therefore material weaknesses or significant deficiencies may exist that were not identified 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 We did identify certain deficiencies in internal control described in the accompanying Schedule of Findings as 2018-001 and 2018-002 that we consider to be significant deficiencies
INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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 the City of Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
Compliance and Other Matters
Citys Response to Findings
Purpose of this Report
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
May 6 2019
75
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 Citys internal control or on compliance This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entitys internal control and compliance Accordingly this communication is not suitable for any other purpose
As part of obtaining reasonable assurance about whether the Citys 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
The Citys responses to the findings identified in our audit are described in the accompanying Schedule of Findings The Citys responses were not subjected to the auditing procedures applied in the audit of the financial statements and accordingly we express no opinion on them
I
FINDING 2018-001
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
76
LIMITED SEGREGATION OF DUTIES
There is an absence of appropriate segregation of duties consistent with appropriate control objectives due to a limited number of employees
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The City is aware of the limited segregation of duties and will continue to review internal controls and make changes when they can be made
The lack of adequate segregation of duties could adversely affect the Citys ability to initiate record process and report financial data consistent with the assertions of management in the financial statements
The basic premise is that no one person should have access to both physical assets and the related accounting records or to all phases of a transaction The lack of such controls could result in the occurrence of a material error or fraud in relation to the financial statements not being detected by management
The City has assigned duties to staff based on a cost-benefit relationship to the City and the practicality of the level of staffing the City maintains
The City should continue to monitor and evaluate the job responsibilities assigned to staff to determine whether there is an unacceptable risk
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
I
FINDING 2018-002 AUDITOR PREPARED FINANCIAL STATEMENTS
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
77
The City does not have an internal control system designed to provide for the preparation of the financial statements being audited However based on the degree of complexity and level of detail needed to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) the City has requested the auditors to prepare them
The preparation of the financial statements and the related notes are the responsibility of management
There are a limited number of office employees and resources available to allow for the adequate preparation of the financial statements by the City
This could result in a material misstatement to the financial statements and related notes that would not be prevented or detected and corrected as a result of the Citys current internal control
The City should continue to request the assistance to draft the financial statements and related notes and thoroughly review these financial statements after they have been prepared so the City can take responsibility for them
The City is aware of this however due to significant cost and a limited number of employees it is in the Citys best financial interest to contract for the preparation of the financial statements
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Contd)
Comment Year Finding If Not Corrected Provide PlannedReference Comment Title Status Initially Occurred Corrective Action or Other Explanation
Financial Statement Findings
2017-001 Not Corrected 2009 See current year finding 2018-001
2017-002 Not Corrected 2009 See current year finding 2018-002
Minnesota Legal Compliance Findings
None
DECEMBER 31 2018SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
CITY OF ANNANDALE MINNESOTA
78
Limited Segregation of Duties
Auditor Prepared Financial Statements
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORS
WILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
MANAGEMENT LETTER
DECEMBER 31 2018
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Page
Required Communications 1-3
Schedule of Findings on Accounting Issues and Internal Controls 4
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
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Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Significant Audit Findings
Qualitative Aspects of Accounting Practices
We have audited the financial statements of the governmental activities the business-type activities each major fund and the aggregate remaining fund information of the City of Annandale Minnesota for the year ended December 31 2018 Professional standards require that we provide you with information about our responsibilities under generallyaccepted auditing standards and Government Auditing Standards as well as certain information related to the planned scope and timing of our audit We have communicated such information in our letter to you dated December 20 2018 Professional standards also require that we communicate to you the following information related to our audit
The financial statement disclosures are neutral consistent and clear
1
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 the financial statements No new accounting policies were adopted and the application of existing policies was not changed in 2018 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 are an integral part of the financial statements prepared by management and are based on managements 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
Managements estimate of depreciation is based on the number of years an asset is in service We evaluated the key factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Managements estimate of pension liabilities is based on actuarial valuations performed by consultants specializing in those areas We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Significant Audit Findings (Contd)
Difficulties Encountered in Performing the Audit
Corrected and Uncorrected Misstatements
Disagreements with Management
Management Representations
Management Consultations with Other Independent Accountants
Other Audit Findings or Issues
Other Matters
Professional standards require us to accumulate all known and likely misstatements identified during the audit other than those that are clearly trivial and communicate them to the appropriate level of management Management has corrected all such misstatements In addition none of the misstatements detected as a result of audit procedures and corrected by management were material either individually or in the aggregate to each opinion units financial statements taken as a whole
We encountered no significant difficulties in dealing with management in performing and completing our audit
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 Citys 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
We generally discuss a variety of matters including the application of accounting principles and auditing standards with management each year prior to retention as the Citys auditors However these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention
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 We are pleased to report that no such disagreements arose during the course of our audit
We have requested certain representations from management that are included in the management representation letter dated May 6 2019
We applied certain limited procedures to Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions the Schedule of Changes in the Citys Net Pension Liability and Related Ratios and the related notes to required supplementary information which are required supplementary information that supplements the basic financial statements Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries the basic financial statements and other knowledge we obtained during our audit of the basic financial statements We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information
2
Other Matters (Contd)
Restriction on Use
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
This information is intended solely for the use of the City Council and management of the City of Annandale Minnesota and is not intended to be and should not be used by anyone other than these specified parties
3
We were not engaged to report on the Elected Officials and Administration section which accompany the financial statements but are not required supplementary information We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it
May 6 2019
We were engaged to report on the statements and schedules listed in the table of contents as supplementary information which accompany the financial statements but are not required supplementary information With respect to this supplementary information we made certain inquiries of management and evaluated the form content and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America the method of preparing it has not changed from the prior period and the information is appropriate and complete in relation to our audit of the financial statements We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves
This page intentionally left blank
4
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in internal control under standards established by the American Institute of Certified Public Accountants 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
The objective of internal accounting control is to provide reasonable but not absolute assurance as to the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of these factors necessarily requires estimates and judgments by management
It should be recognized that within the City an inherent risk is present with certain positions It is very common for cities such as the City of Annandale Minnesota to assign many major responsibilities to a few key individuals in an attempt to operate within limited budgets The inherent risk is again addressed only to maintain the awareness of the internal control structure and to encourage the Councils continual review of financial information at monthly meetings
DECEMBER 31 2018
INTERNAL CONTROL
GENERAL RECOMMENDATIONS
Throughout the course of the audit we spoke to management regarding certain items that we see as an opportunity to improve None of these were considered significant within the scope of the audit The items discussed requiring action have been resolved or are in the process of resolution We would like to acknowledge the assistance and courtesies extended to us by the personnel of the City of Annandale Minnesota
City of Annandale Minnesota
Audit ReportDecember 31 2018
Independent Auditorrsquos ReportPages 2-4bull Financial statements are the responsibility of the Cityrsquos
managementbull Our responsibility is to express opinions on these financial
statements based on our auditbull Conducted audit in accordance with Generally Accepted
Auditing Standards and Government Auditing Standardsbull Obtain reasonable assurance financials are free from
material misstatement
1
Independent Auditorrsquos Report (Contrsquod)Pages 2-4
bull Financial statements are presented fairly in our opinion
bull Internal control letter on pages 74 and 75
2
Statement of Net Position
3
2018 2017ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current and Other 12893519$ 12739729$ Capital 20949843 21526486
Total Assets 33843362 34266215
Deferred Outflows of Resources 656980 914167 Total Assets and Deferred Outflows of Resources 34500342$ 35180382$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current Liabilities 660359$ 497847$ Noncurrent Liabilities
Net Pension Liability 894343 236206 Due Within One Year 2016000 1967000 Due in More Than One Year 13527549 16383958
Total Liabilities 17098251 19085011
Deferred Inflows of Resources 940554 951385
Net PositionNet Investment in Capital Assets 13587855 13119128 Restricted 2095629 2215725 Unrestricted 778053 (190867)
Total Net Position 16461537 15143986 Total Liabilities Deferred Inflows of Resources
and Net Position 34500342$ 35180382$
MINUTES ANNANDALE CITY COUNCIL
April 1 2019 CALL TO ORDERROLL CALL The City Council of Annandale Minnesota met for a regular meeting on April 1 2019 at 700 pm at the City Hall Council Chambers Councilor Gunnarson called the meeting to order at 700 pm City Council Present Wuollet Jonas Hastings Czycalla and Gunnarson City Council members absent None Also present were Administrator Hinnenkamp Tom Fenton with the Annandale Advocate Public Works Director Joe Haller Consulting Engineer Jared Voge Police Chief Herr Christine Husom and members of the public SET AGENDA Hinnenkamp requested Resolution appointing Kirby Nicka as Item I under New Business Motion was made by Wuollet and seconded by Jonas to adopt the agenda as amended The motion carried unanimously A motions are approved unaimously unless otherwise noted MINUTES A motion was made by Czycalla and seconded by Hastings to approve the minutes of the March 4 2019 meeting AUDITING CLAIMS Hinnenkamp presented an updated claims list A motion was made by Jonas and seconded by Wuollet to approve the claims 54927-54948 54975-54981 54985-54987 55006-55067 Payroll Checks 54949-54974 54982-54983 54988-55003 and EFTrsquos as presented Check 54984 was voided VISITORS Commissioner Husom provided the Council an update on projects at Wright County including the proposals for a new Human Services building and Government Center PUBLIC HEARINGS 2022 Improvement Project- Public Hearing was opened by Mayor Gunnarson at 720pm Engineer Jared Voge presented the Facility Plan After hearing no comments from the public Mayor Gunnarson closed the public hearing at 730 pm CITIZENrsquoS FORUM NONE CONSENT AGENDA A motion was made by Hastings and seconded by Wuollet to approve the Consent Agenda as presented Police Finance Fire Deputy Registrar ndash February Reports Employment AnniversariesStep Increases Carrie Krienke Fund TransferClosures Donations 1 UNFINISHED BUSINESS-
Clock Tower Staining- A motion was made be Jonas and seconded by Wuollet to approve the quote to stain the Clock Tower at Clock Tower Park Housing Incentive for 2019- HInnenkamp presented the graduated scale A motion was made by Gunnarson and seconded by Hastings to approve the Housing Incentive Program for 8 permits in 2019 with waive the fees as presented with the 4 year payback
2 NEW BUSINESS
Ordinance Rezoning Property and approving Comp Plan Amendment- A motion was made by Hastings and seconded by Czycalla to approve Ordinance Rezoning Property and approving Comp Plan Amendment for the property located at 100 Annandale Boulevard Resolution Approving Minor Subdivision- A motion was made by Wuollet and seconded by Hastings to approve Resolution Approving Minor Subdivision Request by Stadium for Street Dance- A motion was made by Jonas and seconded by Czycalla to approve the July 3rd Street Dance for Stadium Letter to MnDot on 2022 Project- A motion was made by Czycalla and seconded by Jonas to direct staff to send the letter to MnDot on the 2022 Project as presented Approve Cleaning Contract Amendment- A motion was made by Hastings and seconded by Wuollet to approve the amendments to the Cleaning Contract as presented Quotes for Crack Filling- Motion was made by Czycalla and seconded by Wuollet to approve the bid for Kamco for Crack Filling Accept Resignation of Officer Tavares- A motion was made by Czycalla and seconded by Hastings to approve the resignation of Officer Tavares Resolution Appointing Michael Ryan as Full Time Police Officer- A motion was made by Hastings and seconded by Wuollet to approve Resolution Appointing Michael Ryan as FT Police Officer Resolution appointing Nicka- A motion was made by Wuollet and seconded by Czycalla to appoint Kirby Nicka to FT Maintenance Worker MAYORCOUNCIL REPORTS Haller- Discussed training with new staff and provided an update on the work that was done with the recent weather Chief Herr- Updated on new staff training Chief has been doing safety presentation for the Church Working on video system at Rec Park Speaking on April 26th for active shooter Mayor Gunnarson- updated the Council on his visit to the capital last week for the Cityrsquos bonding bill request Hinnenkamp- informed the Council of the schedule DT meeting next week to present concepts to the DT businessproperty owners ADJOURNMENT Moved by Czycalla seconded by Wuollet to adjourn 819 pm The meeting was adjourned
______________________________ Dwight Gunnarson Mayor
ATTEST
__________________________________ Kelly Hinnenkamp City Administrator
MINUTES ANNANDALE BOARD OF ADJUSTMENT AND APPEALS
April 1 2019 CALL TO ORDERROLL CALL Pursuant to due call and notice the City Council of Annandale Minnesota met for the annual Board of Adjustment and Appeals on April 1 2019 at 630 pm at the City Hall Council Chambers Mayor Gunnarson called the meeting to order at 630 pm City Council Present Councilmemberrsquos Jonas Czycalla Burd and Hastings and Mayor Gunnarson Absent None Also present were Tammy Anderson and Conrad Anderson from the Wright County Assessors Department City Administrator Hinnenkamp 2019Assessment City Assessor Conrad Anderson introduced the 2019 Assessment Assessor Anderson read the Local Board of Appeal and Equalization Opening Statement and reviewed the details of the assessment review process Anderson reviewed the Written Appeals 102-020-002100- Christina Clark 125 Oak Avenue North Owner contacted Anderson but they have not had a chance to review the property Appeal was received 4119 102-073-001080 Rick Schultz Pintail Drive Called 4119 and they have not had a chance to review 36 Jasmine Avenue 102-700-000360 Ellis and Linda Knute After further review Anderson is recommending a value of $44100 This is for the personal property 2019 assessment was $51900 102-043-001120 001130 001140 Marlene Dingmann 631 Beech Circle requested to be changed to non-homestead Motion was made by Czycalla and seconded by Hastings to approve the recommendations of Knute and Dingmann as presented Motion was made by Wuollet and seconded by Czycalla to refer any recommended changes to Wright County for Clark and Schultz ADJOURNMENT Moved by Wuollet seconded by Jonas to adjourn at 654PM Motion carried unanimously ___________________________________ Dwight Gunnarson Mayor ATTEST __________________________________ Kelly Hinnenkamp City Administrator
CITY OF ANNANDALE Payment Approval Report - for City Council Page 1
Report dates 422019-562019 May 02 2019 0305PM
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1
1 NEOPOST USA Inc 56654756 RENTAL amp MAINTENANCE - MAI 04232019 11100 00
Total 1 11100 00
153
153 AMERIPRIDE LINEN amp APPARE 2201173387 PD - MATBRUSH 03282019 2315 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 WATER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 SEWER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 PW UNIFORM 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PD - MATBRUSH 04042019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PW UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 SEWER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 WATER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PW UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 SEWER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 WATER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PD - MATBRUSH 04112019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PD - MATBRUSH 04182019 268 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 WATER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 SEWER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PW UNIFORM 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PD - MATBRUSH 04252019 2316 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 WATER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 SEWER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PW UNIFORM 04252019 3181 00
Total 153 57099 00
180
180 ANNANDALE ADVOCATE P3158191723 CONGRATS- WRESTLING 04082019 1900 1900 04122019
180 ANNANDALE ADVOCATE P3158191723 RECYCLING AD 04082019 7000 7000 04122019
180 ANNANDALE ADVOCATE P3158191723 MINUTES 04082019 18624 18624 04122019
180 ANNANDALE ADVOCATE P3158191723 PUBLIC HEARING 04082019 1920 1920 04122019
180 ANNANDALE ADVOCATE P3158191723 ASSESSMENTS 04082019 3264 3264 04122019
180 ANNANDALE ADVOCATE P3158191723 2021 IMPR PLAN 04082019 8256 8256 04122019
180 ANNANDALE ADVOCATE P3158191723 DMV- BUSINESS OF THE WEEK 04082019 15600 15600 04122019
180 ANNANDALE ADVOCATE P3158191723 FT SEASONAL EMPLMT 04082019 16380 16380 04122019
180 ANNANDALE ADVOCATE P3158191723 NOTARY STAMP- GIEBENHAIN 04082019 3902 3902 04122019
Total 180 76846 76846
188
188 ANNANDALE AUTO CARE LLC 101394 SERVICE 08 CHEV 04182019 85579 00
188 ANNANDALE AUTO CARE LLC 101468 BATTERY 04242019 12895 00
188 ANNANDALE AUTO CARE LLC 101482 TRUCK SERVICE 04252019 142198 00
188 ANNANDALE AUTO CARE LLC 101526 TRUCK SERVICE 04262019 16470 00
Total 188 257142 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 2
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
190
190 ANNANDALE AREA CHAMBER APRIL2019 CITY EXPO BOOTH 04092019 10000 10000 04122019
Total 190 10000 10000
192
192 ANNANDALE PARTS SUPPLY 127199280 HEAD LIGHT 02282019 1699 1699 04122019
192 ANNANDALE PARTS SUPPLY 127199479 LIGHT BULBS 03042019 2565 2565 04122019
192 ANNANDALE PARTS SUPPLY 127199616 FLUSH KIT 03052019 7098 7098 04122019
192 ANNANDALE PARTS SUPPLY 127199723 HEADLIGHT BULB- SQUAD 51 03072019 949 949 04122019
192 ANNANDALE PARTS SUPPLY 127200389 GENERATOR PARTS 03182019 2318 2318 04122019
192 ANNANDALE PARTS SUPPLY 127200469 LUBE 03192019 791 791 04122019
192 ANNANDALE PARTS SUPPLY 127200476 HOSE 03192019 118 118 04122019
192 ANNANDALE PARTS SUPPLY 127200490 BATTERY 03192019 9858 9858 04122019
192 ANNANDALE PARTS SUPPLY 127200546 PARTS 03202019 1398 1398 04122019
192 ANNANDALE PARTS SUPPLY 127200609 FILTERS 03202019 23472 23472 04122019
192 ANNANDALE PARTS SUPPLY 127200627 STOP LEAK 03212019 873 873 04122019
192 ANNANDALE PARTS SUPPLY 127200652 FILTER 03222019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200654 FILTER 03212019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200713 FITTING 03222019 129 129 04122019
192 ANNANDALE PARTS SUPPLY 127200757 PARTS 03222019 2178 2178 04122019
192 ANNANDALE PARTS SUPPLY 127200939 CLEANER 03252019 2339 2339 04122019
192 ANNANDALE PARTS SUPPLY 127201161 SOAP 03282019 909 00
192 ANNANDALE PARTS SUPPLY 127201244 LUBRICANT 05012019 2373 00
192 ANNANDALE PARTS SUPPLY 127201434 HOSE REPAIR 05012019 3637 00
192 ANNANDALE PARTS SUPPLY 127201488 HOSE REPAIR 04022019 7274 00
192 ANNANDALE PARTS SUPPLY 127202184 FLARE FITTINGS 04112019 1858 00
192 ANNANDALE PARTS SUPPLY 127202518 BRAKE CLEANER 04172019 3228 00
Total 192 77828 58549
200
200 ANNANDALE EMBROIDERY 2356 APD HATS 03272019 9000 00
Total 200 9000 00
230
230 ANNANDALE-MAPLE LAKE MARCH 2019 MAR 2019 FLOW 04152019 6260800 00
Total 230 6260800 00
240
240 ANNANDALE PLUMBING 1457 RPZ TESTING 03272019 28500 00
Total 240 28500 00
424
424 BERGESCH COMPUTER SERVI 16172 SERVICE CALL 04062019 7500 00
424 BERGESCH COMPUTER SERVI 16176 ADMIN-SERVICE CALL 04062019 7500 00
Total 424 15000 00
463
463 BOLTON amp MENK INC 0231771 LGU BSA 7 STAKEHOLDERS C 04122019 11700 00
463 BOLTON amp MENK INC 0231785 2022 PROJECT FACILITY PLAN 04122019 44500 00
463 BOLTON amp MENK INC 0231788 SAND PROFILE 04122019 117250 00
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT PLANS AN 04122019 1717300 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 3
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT STREETS 04122019 38000 00
Total 463 1928750 00
646
646 CENTRA SOTA LAKE REGION L 6308214 STREETS 04092019 11697 00
646 CENTRA SOTA LAKE REGION L 6308214 PARKS 04092019 14037 00
646 CENTRA SOTA LAKE REGION L 6308214 WATER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 SEWER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 PUBLIC WORKS 04092019 33531 00
646 CENTRA SOTA LAKE REGION L 6308342 STREETS 04292019 13024 00
646 CENTRA SOTA LAKE REGION L 6308342 PARKS 04292019 15629 00
646 CENTRA SOTA LAKE REGION L 6308342 WATER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 SEWER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 PUBLIC WORKS 04292019 37335 00
646 CENTRA SOTA LAKE REGION L 6308343 STREETS 04292019 16436 00
646 CENTRA SOTA LAKE REGION L 6308343 PARKS 04292019 19723 00
646 CENTRA SOTA LAKE REGION L 6308343 WATER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 SEWER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 PUBLIC WORKS 04292019 47116 00
Total 646 274380 00
710
710 CITY OF BUFFALO MARCH2019 MONTHLY NET MOTION 04012019 2000 2000 04122019
Total 710 2000 2000
810
810 COLONIAL LIFE amp ACCIDENT 7492424-0501 INSURANCE 04162019 42770 42770 04232019
Total 810 42770 42770
900
900 COUNTRY CHEVROLET INC CVCS139790 SQUAD 52 - TIRE REPAIR 04092019 1719 00
Total 900 1719 00
1336
1336 FARM RITE EQUIPMENT INC P42298 WIPER BLADESIDLER ASSY 04012019 36766 00
1336 FARM RITE EQUIPMENT INC W13484 HYDRAULIC HOSE 04172019 40840 00
Total 1336 77606 00
1338
1338 FASTENAL COMPANY MNBUF78347 SAFETY GLASSES 04172019 4656 00
1338 FASTENAL COMPANY MNBUF78393 TOOLS 04192019 892 00
Total 1338 5548 00
1420
1420 FIRE RELIEF ASSOCIATION MARCH2019 2019 SUPPLEMENTAL REIMB 04082019 100000 00
1420 FIRE RELIEF ASSOCIATION MARCH2019 2018 SUPPLEMENTAL REIMB 04082019 313920 00
Total 1420 413920 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 4
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1508
1508 F S 3 INC 60393 SAFETY VEST 04222019 5500 00
1508 F S 3 INC 60435 SAFETY VEST 04162019 5500 00
1508 F S 3 INC 60436 SAFETY VEST 04162019 5500 00
Total 1508 16500 00
1519
1519 GALLS AN ARAMARK COMPAN 012401488 UNIFORM - HAAG 04042019 8396 00
1519 GALLS AN ARAMARK COMPAN 012412561 UNIFORM - TOWNSEND 04052019 4198 00
Total 1519 12594 00
1630
1630 GOPHER STATE ONE-CALL IN 9030176 FAX TICKETS 03312019 2295 00
Total 1630 2295 00
1660
1660 GRAINGER INC W W 6144966281 TEST BALLS 04122019 15556 00
1660 GRAINGER INC W W 9135594712 PARTS 04032019 6459 00
1660 GRAINGER INC W W 9137921475 SHOCK 04052019 4717 00
1660 GRAINGER INC W W 9138437422 HOSE 04052019 9729 00
1660 GRAINGER INC W W 9146606448 DOOR OPENER 04152019 2735 00
1660 GRAINGER INC W W 9150739945 GLOVES 04192019 6216 00
1660 GRAINGER INC W W 9152417177 GARAGE DOOR OPENERS 04222019 19056 00
Total 1660 64468 00
1710
1710 HAWKINS INC 4475748 CHEMICALS 04092019 247584 00
Total 1710 247584 00
1760
1760 HILLYARDHUTCHINSON 603390067 MOP DUST- PW 04092019 4520 00
1760 HILLYARDHUTCHINSON 603390067 FOLD TOWELSTISSUE PAPER 04092019 19613 00
1760 HILLYARDHUTCHINSON 603406861 SUPER SHINESOAPWINDOW 04232019 46059 00
1760 HILLYARDHUTCHINSON 700376971 SCRUBBER REPAIR 04192019 9600 00
Total 1760 79792 00
1780
1780 HOLIDAY CREDIT OFFICE MARCH12019 PD FUEL 04012019 93317 93317 04122019
1780 HOLIDAY CREDIT OFFICE March2019 FD- FUEL 04012019 19714 19714 04122019
Total 1780 113031 113031
2130
2130 LITTLE FALLS MACHINE INC 355406 PLOW PARTS 04242019 14150 00
Total 2130 14150 00
2190
2190 LUNDEEN BROS INC 91792 OIL CHANGE 2017 DODGE SQA 03212019 5894 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 5
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2190 5894 00
2210
2210 M amp M BUS SERVICE 10193369 DRUG TESTING- KIRBY NICKA 03152019 3000 00
2210 M amp M BUS SERVICE 10193370 ALCOHOL TESTING- KIRBY NIC 03192019 3000 00
2210 M amp M BUS SERVICE 10193419 DRUG TESTING- NICHOLLE CO 04092019 6000 00
Total 2210 12000 00
2211
2211 M amp M EXPRESS SALES amp SER 182624 MOWER PARTS 04122019 36108 00
2211 M amp M EXPRESS SALES amp SER 183289 MOWER PARTS 04182019 12319 00
Total 2211 48427 00
2260
2260 MAPLE LAKE LUMBER COMPA 168882 LUMBER 04222019 1659 00
Total 2260 1659 00
2272
2272 MARES EXCAVATING APRIL 2019 WATER LEAK 04012019 70000 00
Total 2272 70000 00
2273
2273 MARKET PLACE II 107 XTRA SOAP-FD 04012019 1332 1332 04232019
2273 MARKET PLACE II 107 MEALS- TC 04012019 5142 5142 04232019
Total 2273 6474 6474
2375
2375 METRO WEST INSPECTION SE 1978 370 BIG WOODS LN 17-04 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 250 EXCELSIOR AVE N 17-69 04252019 11145 00
2375 METRO WEST INSPECTION SE 1978 202 NONA DR 17-60 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 135 EXCELSIOR AVE N 17-127 04252019 17820 00
2375 METRO WEST INSPECTION SE 1978 630 LAKE DR W 19-7 04252019 2500 00
2375 METRO WEST INSPECTION SE 1978 212 ASH ST E 19-13 04252019 5198 00
2375 METRO WEST INSPECTION SE 1978 330 CHESTNUT ST E 19-22 04252019 2500 00
Total 2375 41663 00
2419
2419 MID-MINNESOTA CONCRETE 19073 HOT WATER 03112019 49000 00
2419 MID-MINNESOTA CONCRETE 19075 HOT WATER 03132019 49000 00
2419 MID-MINNESOTA CONCRETE 19076 HOT WATER 03042019 24500 00
Total 2419 122500 00
2425
2425 MIDWAY IRON amp METAL INC 420761 STEEL 04172019 5363 00
Total 2425 5363 00
2465
2465 MCP CARSTAR COLLISION CE 41349297 SQUAD 51 REPAIRS 01052019 175667 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 6
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2465 175667 00
2511
2511 CENTER POINT ENERGY 110 PAVILION 04122019 4986 00
2511 CENTER POINT ENERGY 111 TC 04122019 5309 00
2511 CENTER POINT ENERGY 112 OLD PW SHOP 05022019 4465 00
2511 CENTER POINT ENERGY 113 WTP 04122019 50216 00
2511 CENTER POINT ENERGY 114 HOCKEY RINK 04122019 4221 00
2511 CENTER POINT ENERGY 116 WARMING HOUSE 04162019 1500 00
2511 CENTER POINT ENERGY 116 CITY HALL 04162019 23624 00
2511 CENTER POINT ENERGY 117 FD 04122019 35974 00
Total 2511 130295 00
2525
2525 MINNESOTA COMPUTER SYST 263763 ADMIN COPIER 04082019 34758 00
2525 MINNESOTA COMPUTER SYST 463318 BW S3HR 04022019 5503 00
Total 2525 40261 00
2635
2635 CORE amp MAIN LP K426017 CULVERT 04242019 145000 00
2635 CORE amp MAIN LP K441242 LOCATOR 04222019 75265 00
Total 2635 220265 00
2698
2698 MPPOA MARCH 2019 NEW MEMBER DUES- LDF 04082019 3900 00
2698 MPPOA MARCH202019 2019 DUES- M FAUST 03202019 5000 00
Total 2698 8900 00
2819
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER- DMV 03012019 5830 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-ADMIN 03012019 13604 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-PD 03012019 2160 00
2819 NORTHERN BUSINESS PRODU 385745-0 CALCULATOR INK 03012019 440 00
2819 NORTHERN BUSINESS PRODU 386830-0 DESK TRAYSCALC ROLLERS 04082019 8169 00
2819 NORTHERN BUSINESS PRODU 386830-1 DVD-RW 03072019 2859 00
2819 NORTHERN BUSINESS PRODU 387602-0 BINDERDESK TRAYSFILE 03082019 8641 00
2819 NORTHERN BUSINESS PRODU 393165-0 PD - OFFICE SUPPLIES 35303 03272019 2158 00
2819 NORTHERN BUSINESS PRODU 396891-0 PENSSTAPLERSTAPLES 05012019 15450 00
2819 NORTHERN BUSINESS PRODU 396891-1 HEATER 05012019 5285 00
2819 NORTHERN BUSINESS PRODU 396891-2 CALCULATOR 05012019 8662 00
2819 NORTHERN BUSINESS PRODU 400116-0 FOLDERSPENS 05012019 6507 00
2819 NORTHERN BUSINESS PRODU 400134-0 EMPLOYEE FOLDERSRECPT B 05012019 16499 00
Total 2819 96264 00
2832
2832 NORTHWEST ASSOC CONSUL 24128 REZONE FOR SCHOOL 04042019 3330 00
2832 NORTHWEST ASSOC CONSUL 24128 SAND PROFILE 04042019 9450 00
2832 NORTHWEST ASSOC CONSUL 24129 VERIZON 04042019 20000 00
Total 2832 32780 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 7
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
2934
2934 PLEASANT LAKE ASSOCIATION 42919 PLEASANT LAKE ASSN 05012019 500000 00
Total 2934 500000 00
2962
2962 PRINCIPAL LIFE 108 INSURANCE 04222019 14144 14144 04232019
Total 2962 14144 14144
3161
3161 S P ELECTRIC INC 7282 OLD SPLICERS REMOVAL 04112019 99054 00
Total 3161 99054 00
3180
3180 SCHWAAB INC C039891 DATE STAMP 03272019 16776 00
3180 SCHWAAB INC C041311 REPLACE PADS 04042019 2050 00
Total 3180 18826 00
4006
4006 SHRED IT USA - MPLS 8126937775 SHREDDING SERVICES 03312019 45401 00
Total 4006 45401 00
4021
4021 SOKS RAPID CAR WASH 216-1384 SQUAD WASHES 04012019 11865 11865 04122019
Total 4021 11865 11865
4040
4040 SUMMIT COMPANIES 1368349 FIRE SYSTEM MAINT 04102019 34500 00
4040 SUMMIT COMPANIES 1368350 ANNUAL FIRE ALARM INSP 04102019 23000 00
4040 SUMMIT COMPANIES 1368538 CITY HALL FIRE SUPPRESION 04052019 19800 00
4040 SUMMIT COMPANIES 1371739 FIRE EXT MAINTENANCE 04292019 46280 00
4040 SUMMIT COMPANIES 1372404 CITY HALLPD - ANNUAL FIRE A 04292019 16715 00
Total 4040 140295 00
4130
4130 STERNBERG LANTERNS INC 50379 LIGHT SOCKETS 04122019 30000 00
Total 4130 30000 00
4222
4222 TASC IN1499967 ADMIN FEES 04172019 43320 00
Total 4222 43320 00
4269
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
Total 4269 324000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 8
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4337
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16061 16061 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
Total 4337 48181 48181
4365
4365 UTILITY CONSULTANTS INC 101046 COLIFORM 03282019 8000 00
Total 4365 8000 00
4377
4377 VERIZON WIRELESS 9827946389 PW IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 FD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 INVESTIGATOR COMPUTER 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD CELL PHONE 04102019 16639 16639 04232019
4377 VERIZON WIRELESS 9827946389 PW CELL PHONE 04102019 26360 26360 04232019
Total 4377 57003 57003
4481
4481 WEST CENTRAL SANITATION I 121 RECYCLE 04302019 362792 00
4481 WEST CENTRAL SANITATION I 121 REFUSE 04302019 936578 00
4481 WEST CENTRAL SANITATION I MARCH 2019 RECYCLE 03312019 451419 451419 04122019
4481 WEST CENTRAL SANITATION I MARCH 2019 REFUSE 03312019 908999 908999 04122019
Total 4481 2659788 1360418
4495
4495 WINDSTREAM APRIL2019 LS 805 NORWAY DR E 04032019 24428 24428 04122019
4495 WINDSTREAM APRIL32019 320-274-2793 04032019 3830 3830 04122019
Total 4495 28258 28258
4520
4520 WRIGHT COUNTY HIGHWAY DE 1340 APEX 04162019 12100 00
Total 4520 12100 00
4548
4548 WRIGHT-HENNEPIN COOPERA 104 TC 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 105 CITY HALL SECURITY 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 106 LS 1255 BUSINESS BLVD 04102019 1484 1484 04232019
4548 WRIGHT-HENNEPIN COOPERA 119 STREET LIGHTS 04102019 13973 00
Total 4548 20047 6074
4559
4559 XCEL ENERGY 0774352025 ACCOUNT 51-4985655-1 03282019 1910 1910 04122019
4559 XCEL ENERGY 0774781723 ACCOUNT 51-6464610-6 04082019 5051 5051 04122019
4559 XCEL ENERGY 0774798834 ACCOUNT 51-6875531-1 04012019 2964 2964 04122019
4559 XCEL ENERGY 0774851593 ACCOUNT 51-0011253419-4 04012019 52824 52824 04122019
4559 XCEL ENERGY 0774856745 ACCOUNT 51-0010892786-1 04012019 1379 1379 04122019
4559 XCEL ENERGY 0775014393 ACCOUNT 51-6076585-1 04022019 11396 11396 04122019
4559 XCEL ENERGY 0775442400 ACCOUNT 51-6024519-2 04042019 365444 365444 04232019
CITY OF ANNANDALE Payment Approval Report - for City Council Page 9
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4559 XCEL ENERGY 0775852647 ACCOUNT 51-6024518-1 04082019 156465 156465 04232019
4559 XCEL ENERGY 0777794063 ACCOUNT 51-4192659-4 04182019 3117 00
4559 XCEL ENERGY 0779111699 ACCOUNT 51-4985655-1 04262019 1767 00
4559 XCEL ENERGY 778173400 ACCOUNT 51-4636619-8 04222019 6391 00
Total 4559 608708 597433
4648
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 23750 00
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 00 00
4648 A R ENGH 190448 SPRING MAINTENANCE 04302019 21375 00
4648 A R ENGH 190451 SPRING MAINTENANCE- TC 04302019 14250 00
Total 4648 59375 00
4716
4716 JOVANOVICH KADLEC amp ATHM 16709 KRONQUIST LOT 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 LEASE WITH WILES 03312019 28000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 ORD AMENDMENT- MICRO DIS 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 GENERAL 03312019 8750 00
4716 JOVANOVICH KADLEC amp ATHM 16709 PERSONNEL POLICY 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 CONTROLLED BURN HOLD HA 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
Total 4716 82250 00
4721
4721 MANEY INTERNATIONAL 803662X1 PARTS 02072019 2275 2275 04122019
Total 4721 2275 2275
4734
4734 MOTOROLA SOLUTIONS INC 16042791 RADIO BATTERIES 03252019 16800 00
Total 4734 16800 00
4743
4743 CARDMEMBER SERVICE 122 ATRIST EASEL 05012019 10305 00
4743 CARDMEMBER SERVICE 122 KEROSENE 05012019 6329 00
4743 CARDMEMBER SERVICE 122 POLLUTION CONTROL 05012019 41500 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC 05012019 1639 00
4743 CARDMEMBER SERVICE 122 AMAZON- 40 AMP RELAY 05012019 2898 00
4743 CARDMEMBER SERVICE 122 A-1 - BULB KIT 05012019 2503 00
4743 CARDMEMBER SERVICE 122 MENARDS-POTHOLE PATCH 05012019 47014 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC BALL VALVE 05012019 1770 00
4743 CARDMEMBER SERVICE 122 TOTAL TOOL- SHOE - PETER 05012019 5123 00
4743 CARDMEMBER SERVICE 122 PRYOR- EXCEL CLASSES- MIS 05012019 25600 00
4743 CARDMEMBER SERVICE 122 MN CHIEFS ASSOC 05012019 19900 00
4743 CARDMEMBER SERVICE 122 BEST BUY- 05012019 8589 00
4743 CARDMEMBER SERVICE 122 BEST BUY 05012019 17178 00
4743 CARDMEMBER SERVICE 122 USPS 05012019 1149 00
4743 CARDMEMBER SERVICE 122 PAYPAL- INTER ASSOC EVID- R 05012019 5000 00
4743 CARDMEMBER SERVICE 122 ACTION TARGETS- 05012019 14662 00
4743 CARDMEMBER SERVICE 122 AMAZON- METAL DUSTPAN 05012019 2894 00
4743 CARDMEMBER SERVICE 122 AMAZON- BATTERIES 05012019 2124 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 10
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 4743 216177 00
4752
4752 NCPERS GROUP LIFE INS MAY2019 INSURANCE 04172019 1600 00
Total 4752 1600 00
4769
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 39944 00
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 00 00
Total 4769 39944 00
4793
4793 DELTA DENTAL 7626938 INSURANCE 04152019 139599 139599 04232019
Total 4793 139599 139599
4831
4831 GENERAL RENTAL CENTER OF 1174533 HEATER RENTAL 03112019 11000 00
Total 4831 11000 00
4889
4889 CLASSIC CLEANING COMPANY 28038 CITY HALL- 04082019 67375 00
4889 CLASSIC CLEANING COMPANY 28038 PD- 04082019 14700 00
4889 CLASSIC CLEANING COMPANY 28038 LIBRARY- 04082019 40425 00
4889 CLASSIC CLEANING COMPANY 28039 TC 04082019 23000 00
Total 4889 145500 00
4945
4945 COUNTRY REPAIR INC 1568 KOHLER 100 GENERAT REPAIR 02212019 348966 00
Total 4945 348966 00
4955
4955 WORKFORCE INTEGRITY NET 41219 PREEMPLOYMENT TEST KIRBY 03312019 9300 00
Total 4955 9300 00
4968
4968 Volunteer Firefighter Ben Assoc of MARCH2019 BENEFIT RENEWALS 04012019 20600 20600 04122019
Total 4968 20600 20600
5002
5002 BUREAU OF CRIMINAL APPRE 536318 CJDN 03312019 27000 00
Total 5002 27000 00
5003
5003 BOLAND PRODUCTION SUPPL 11-6569 BLANK AMMUNITION 03042019 10000 00
Total 5003 10000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 11
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5006
5006 MIDCONTINENT COMMUNICATI 157013401102 FD 04092019 14765 14765 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PW 04092019 26599 26599 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 TC 04092019 3717 3717 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 DMV 04092019 12056 12056 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PD 04092019 20823 20823 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 CITY HALL 04092019 24864 24864 04122019
Total 5006 102824 102824
5031
5031 A1 RAPID LUBE 112018 SQUAD 51 OIL CHANGE 04092019 4145 4145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 51 04092019 9145 9145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 52 04092019 1500 1500 04122019
5031 A1 RAPID LUBE 11302018 SQUAD 52 WASH 04092019 1500 1500 04122019
5031 A1 RAPID LUBE DEC2018 SQUAD 51 OIL CHANGE 04092019 5000 5000 04122019
Total 5031 21290 21290
5039
5039 KAMCO 201800 CRACKFILLING 04292019 5395141 00
Total 5039 5395141 00
5056
5056 CASEYS GENERAL STORES IN MARCH 2019 PD FUEL 04012019 6449 6449 04122019
Total 5056 6449 6449
5067
5067 ZUERCHER PA0001614 GPS RECEIVERS 03102019 32800 00
5067 ZUERCHER PA0001669 RECORDS- PROPERTY amp EVID 03292019 102100 00
Total 5067 134900 00
5074
5074 Potentia MN Solar Fund 1 LLC 2019-02-1761- 520 ASH - WTP 02282019 28907 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- CEMETARY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 370 PARK SEWAGE PUMP 02282019 7041 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 520 ASH - WTP 02282019 14573 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 605 WARREN 02282019 3083 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 200 EXCELSIOR 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- BALL PARL LIGHTING 02282019 1136 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- CITY HALL 02282019 16228 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- PAVILION 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- HOCKEY RINK 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- UNIT SOUTH 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 30 CEDAR STREET LIGHT 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 111 CEDAR ST 02282019 163 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 15 CONV CLUB RD - LS 02282019 2596 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS 805 NORWAY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 640 ACACIA 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1792- FD 02282019 5895 00
Total 5074 83677 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 12
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5075
5075 HALVORSON LANGEMO PASC 2927 ARPIL PROSECUTION 03282019 139479 139479 04232019
5075 HALVORSON LANGEMO PASC 2994 MAY PROSECUTION 04262019 139479 00
Total 5075 278958 139479
5086
5086 CLASSIC CARPET amp FLOOR CA 1312 FD- CARPET CLEANING 04102019 24500 00
Total 5086 24500 00
5099
5099 STENGER PETER march72019 WATER LICENSE 03072019 3200 3200 04042019
Total 5099 3200 3200
5101
5101 GAPINSKI AMELIA 118 MILEAGE- ST PAUL-147 MILES 04222019 8526 8526 04232019
5101 GAPINSKI AMELIA 118 LUNCH- ST PAUL 04222019 1182 1182 04232019
5101 GAPINSKI AMELIA 118 PARKING RAMP- ST PAUL 04222019 1800 1800 04232019
Total 5101 11508 11508
5103
5103 GLUNZ DAVID D 589207 1ST QTR SEXTON FEE 2019 04222019 12000 00
Total 5103 12000 00
5108
5108 RECON ROBOTICS 74975 ROBOT REPAIR 03082019 40000 00
Total 5108 40000 00
5120
5120 MELGAARD SERVICES 115 LITTLE JIMS REPAIR 03272019 65000 00
Total 5120 65000 00
5137
5137 HARTZELL STEVE DEC2018 SAFETY SHOES 04092019 13998 13998 04122019
Total 5137 13998 13998
5138
5138 HOGLUND BUS COMPANY 133269 PLOW TRUCK REPAIR 04232019 242869 00
Total 5138 242869 00
5139
5139 GIEBENHAIN KARIE APRIL 2019 TRAVELTRAINING 04292019 1259 00
Total 5139 1259 00
5140
5140 GRABHAM JUDY APRIL2019 GARDEN MATERIALS REIMBUR 04302019 12312 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 13
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 5140 12312 00
Grand Totals 23368095 2894268
Dated __________________________________________
Mayor __________________________________________
Dwight Gunnarson
City Council __________________________________________
Shelly Jonas
__________________________________________
Jullie Hastings
__________________________________________
Corey Czycalla
__________________________________________
Matthew Wuollet
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
CITY OF ANNANDALE Check Register Page 1Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03012019 03042019 1005 EFT - ASPIRE 14 47332-03012019 03042019 1006 EFT - FLEXSYSTEM 9 21153-03012019 03042019 1007 EFT - MINNESOTA 8 152678-03012019 03042019 1008 EFT-FURTHER 12 194842-03012019 03042019 1008 EFT-FURTHER 12 70000-03012019 03042019 1009 EFT-PERA 5 197211-03012019 03042019 1009 EFT-PERA 5 227551-03012019 03042019 1009 EFT-PERA 5 164253-03012019 03042019 1009 EFT-PERA 5 246377-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 291789-03152019 03182019 1011 EFT - ASPIRE 14 50777-03152019 03182019 1012 EFT - FLEXSYSTEM 9 21153-03152019 03182019 1013 EFT - MINNESOTA 8 170353-03152019 03182019 1014 EFT-FURTHER 12 199842-03152019 03182019 1015 EFT-NATIONWIDE RETIREMENT 3 45727-03152019 03182019 1016 EFT-PERA 5 202077-03152019 03182019 1016 EFT-PERA 5 233162-03152019 03182019 1016 EFT-PERA 5 167748-03152019 03182019 1016 EFT-PERA 5 251623-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 338787-03012019 03042019 3231 FERRELL MISTY 123 207493-03012019 03042019 3232 HINNENKAMP KELLY 127 296930-03012019 03042019 3233 JARMON VICKI I 134 162692-03012019 03042019 3234 KRIENKE CARRIE L 136 118186-03012019 03042019 3235 GAPINSKI AMELIA 142 76605-03012019 03042019 3236 GIEBENHAIN KARIE 143 63912-03012019 03042019 3237 HERR JEFFREY J 208 198056-03012019 03042019 3238 STANDAFER PETER A 217 171766-03012019 03042019 3239 BERG TERESA 233 29593-03012019 03042019 3240 TAVARES AARON J 234 144943-03012019 03042019 3241 PETERSON KENNETH J 235 6543-03012019 03042019 3242 ETSHOKIN LOUIS RICHARD 238 69332-03012019 03042019 3243 GRIGGS DEREK C 245 173791-03012019 03042019 3244 SMITH TARA 251 104275-03012019 03042019 3245 MARES NICHOLAS J 306 46531-03012019 03042019 3246 GLUNZ DAVID D 323 215466-03012019 03042019 3247 STENGER PETER 324 148864-03012019 03042019 3248 COREY NICHOLLE 328 176647-03012019 03042019 3249 HARTZELL STEVE 329 123679-03012019 03042019 3250 WICKER MITCHELL 360 157433-03012019 03042019 3251 HASTINGS JULLIE K 803 13391-
CITY OF ANNANDALE Check Register Page 2Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 3252 FERRELL MISTY 123 186726-03152019 03182019 3253 HINNENKAMP KELLY 127 296930-03152019 03182019 3254 JARMON VICKI I 134 156691-03152019 03182019 3255 KRIENKE CARRIE L 136 109765-03152019 03182019 3256 GAPINSKI AMELIA 142 78334-03152019 03182019 3257 GIEBENHAIN KARIE 143 62780-03152019 03182019 3258 HERR JEFFREY J 208 228423-03152019 03182019 3259 STANDAFER PETER A 217 188333-03152019 03182019 3260 TAVARES AARON J 234 143820-03152019 03182019 3261 ETSHOKIN LOUIS RICHARD 238 36648-03152019 03182019 3262 Void03152019 03182019 3263 SMITH TARA 251 100781-03152019 03182019 3264 MARES NICHOLAS J 306 9080-03152019 03182019 3265 GLUNZ DAVID D 323 263393-03152019 03182019 3266 STENGER PETER 324 156283-03152019 03182019 3267 COREY NICHOLLE 328 141112-03152019 03182019 3268 HARTZELL STEVE 329 114544-03152019 03182019 3269 WICKER MITCHELL 360 231604-03152019 03182019 3270 RANDALL STEVEN R 570 23273-03152019 03182019 3271 TOMES BRIAN C 571 19117-03152019 03182019 3272 EDWARDS DANIEL J 572 25765-03152019 03182019 3273 JARVIS TRYSTON 573 16808-03152019 03182019 3274 GRIGGS DEREK C 245 209088-03152019 03182019 53766 RAMSTAD DONALD E 533 17270 03152019 03182019 54586 RAMSTAD DONALD E 533 26412 03012019 03042019 54850 ENGFER NANCY E 204 207304-03012019 03042019 54851 FLEMMING MITCHELL E 206 33085-03012019 03042019 54852 HALLER JOSEPH D 305 277811-03012019 03042019 54853 SMART MATTHEW A 331 31168-03012019 03042019 54854 GUNNARSON DWIGHT R 802 18932-03012019 03042019 54855 JONAS SHELLY 804 13391-03012019 03042019 54856 CZYCALLA COREY 806 13391-03012019 03042019 54857 WUOLLET MATTHEW L 821 13391-03012019 03042019 54858 ROTH GREGORY W 912 1847-03012019 03042019 54859 FRANZEN CLIFFORD 913 1847-03012019 03042019 54860 SCHWARZKOPF ERIC 917 2770-03012019 03042019 54861 BAACK LONNIE L 919 1847-03012019 03042019 54862 NILSON MAYNARD A 921 1847-03012019 03042019 54863 DRISTE JOHN 950 1847-03012019 03042019 54864 PETERSON LEE W 980 1847-03012019 03042019 54865 SEAGRAVES RICHARD T 985 1847-03012019 03042019 54866 WAGNER RICHARD 990 2770-03152019 03182019 54949 ENGFER NANCY E 204 163991-03152019 03182019 54950 FLEMMING MITCHELL E 206 33085-03152019 03182019 54951 FAUST MITCHEL L 241 144665-03152019 03182019 54952 HALLER JOSEPH D 305 293266-03152019 03182019 54953 SMART MATTHEW A 331 12698-03152019 03182019 54954 BROWN JOHN D 501 16254-03152019 03182019 54955 DAGNER JOHN A 503 42112-
CITY OF ANNANDALE Check Register Page 3Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 54956 FAHEY MARCUS D 507 17270-03152019 03182019 54957 GRINDLE GARY L 512 65938-03152019 03182019 54958 HAAG BRIAN 514 151209-03152019 03182019 54959 MACHOVSKY JR DALE R 529 27088-03152019 03182019 54960 PICKEN SCOTT W 53203152019 03182019 54961 RAMSTAD DONALD E 533 35555-03152019 03182019 54962 ROEPKE JEFFREY A 535 34539-03152019 03182019 54963 TOWNSEND KRISTOPHER C 546 91057-03152019 03182019 54964 WANG RYAN A 549 46822-03152019 03182019 54965 WUOLLET MATTHEW L 553 24934-03152019 03182019 54966 TORRES HORACIO JR 563 43404-03152019 03182019 54967 KOLB JOHN E 564 25749-03152019 03182019 54968 DWENGER JOSEPH A JR 568 41557-03152019 03182019 54969 HARVEY ADAM 574 42019-03152019 03182019 54970 SCHMIDT LISA A 575 14869-03152019 03182019 54971 OLSON NATHAN G 576 14869-03152019 03182019 54972 PEARSON SEAN 577 27151-03152019 03182019 54973 SCHAUFLER CHRISTINA 578 26505-03152019 03182019 54974 HOEFER JUSTIN A 579 18101-03152019 03182019 54982 RAMSTAD DONALD E 533 26412-03152019 03182019 54983 RAMSTAD DONALD E 533 17270-
Grand Totals 119 12049646-
CITY OF ANNANDALE
REQUEST FOR COUNCIL ACTION
Originating Department Administration
Meeting Date May 6 2019
Agenda No 3A
Agenda Section New Business
Item 2018 Audit
BACKGROUND The City is required to conduct an audit annually The attached audit will be presented at the meeting RECOMMENDATION Motion to approve the 2018 Audit as presented
CPAS amp ADVISORSWILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
AUDITED FINANCIAL STATEMENTS AND
DECEMBER 31 2018
CONWAY DEUTH amp SCHMIESING PLLP
SUPPLEMENTARY INFORMATION
This page intentionally left blank
PAGE
ELECTED OFFICIALS AND ADMINISTRATION 1
INDEPENDENT AUDITORS REPORT 2-4
REQUIRED SUPPLEMENTARY INFORMATION
Managements Discussion and Analysis 5-12
BASIC FINANCIAL STATEMENTS
Statement of Net Position 13
Statement of Activities 14
Balance Sheet - Governmental Funds 15
Reconciliation of the Governmental FundsBalance Sheet to the Statement of Net Position 16
Statement of Revenues Expenditures and Changes in Fund Balances -Governmental Funds 17
Reconciliation of the Statement of Revenues Expendituresand Changes in Fund Balances of Governmental Fundsto the Statement of Activities 18
Statement of Revenues Expenditures and Changes in Fund Balances -Budget and Actual - General Fund 19
Statement of Net Position - Proprietary Funds 20
Statement of Revenues Expenses and Changes in Net Position -Proprietary Funds 21
Statement of Cash Flows - Proprietary Funds 22-23
Notes to the Financial Statements 24-57
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of the Proportionate Share of the Net Pension Liability 58
Schedule of Employer Contributions 59
Schedule of Changes in the Citys Net Pension Liability and Related Ratios 60
Notes to the Required Supplementary Information 61-63
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
PAGE
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
SUPPLEMENTARY INFORMATION
COMBINING STATEMENTS OF NONMAJOR FUNDS
Combining Balance Sheet - Nonmajor Governmental Funds 64
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds 65
Combining Balance Sheet - Nonmajor Governmental Funds - Special Revenue 66
Combining Balance Sheet - Nonmajor Governmental Funds - Debt Service 67
Combining Balance Sheet - Nonmajor Governmental Funds - Capital Projects 68
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Special Revenue 69
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Debt Service 70
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Capital Projects 71
FINANCIAL SCHEDULE
Schedule of Long-Term Liabilities 72
COMPLIANCE SECTION
Independent Auditors Report on Minnesota Legal Compliance 73
Independent Auditors Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements Performedin Accordance with Government Auditing Standards 74-75
Schedule of Findings 76-77
Summary Schedule of Prior Audit Findings 78
Elected Officials Position Term Expires
Dwight Gunnarson Mayor December 31 2018
Corey Czycalla Council Member December 31 2018
Shelly Jonas Council Member December 31 2018
Matthew Wuollet Council Member December 31 2020
Jullie Hastings Council Member December 31 2020
Administration
Kelly Hinnenkamp Administrator Appointed
Misty Ferrell Treasurer Appointed
CITY OF ANNANDALE MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATIONDECEMBER 31 2018
1
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Report on the Financial Statements
Managements Responsibility for the Financial Statements
Auditors Responsibility
beli
INDEPENDENT AUDITORS REPORT
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 Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Cityrsquos basic financial statements as listed in the table of contents
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
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
2
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 entitys 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 entitys 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
Opinions
Other Matters
Required Supplementary Information
Supplementary and Other Information
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 Annandale Minnesota as of December 31 2018 and the respective changes in financial position and where applicable cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America
Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions and the Schedule of Changes in the Citys 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 managements 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
3
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Cityrsquos basic financial statements The statements and schedules listed in the table of contents as supplementary information and the Elected Officials and Administration section are presented for purposes of additional analysis and are not a required part of the basic financial statements
The supplementary information is the responsibility of management and was derived from and relates 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 supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole
The Elected Officials and Administration section has 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 the information presented
Other Reporting Required by Government Auditing Standards
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
4
In accordance with Government Auditing Standards we have also issued our report dated May 6 2019 on our consideration of the Citys 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 results of that testing and not to provide an opinion on the effectiveness of the Cityrsquos 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 Cityrsquos internal control over financial reporting and compliance
May 6 2019
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REQUIRED SUPPLEMENTARY INFORMATION
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-
-
-
-
The City as a Whole Statement of Net Position and Statement of Activities
Our analysis of the City of Annandale begins with the Statement of Net Position and the Statement of Activities One of the most important questions asked about the Cityrsquos finances is ldquoIs the City as a whole better off or worse off as a result of the yearrsquos activitiesrdquo The Statement of Net Position and the Statement of Activities both report information about the City as a whole and about its activities in a way that helps answer this question The Statement of Net Position includes all assets and deferred outflows of resources and liabilities and deferred inflows of resources using the accrual basis of accounting In the Statement of Activities all of the current yearrsquos revenues and expenses are taken into account regardless of when cash is received or paid These two statements report the Cityrsquos net position and changes in them You can think of the Cityrsquos net positionmdashthe difference between assets and deferred outflows of resources and liabilities and deferred inflows of resourcesmdashas one way to measure the Cityrsquos financial health Over time increases or decreases in the Cityrsquos net position is one indicator of whether the Cityrsquos financial health is improving or deteriorating
You will need to consider other nonfinancial factors however to assess the overall health of the City of Annandale
In the Statement of Net Position and the Statement of Activities we divide the City into two kinds of activities
Governmental Activities - Most of the Citys basic services are reported here including general government public safety public works culture and recreation and economic development Property taxes and state and federal grants finance most of these activities
5
This annual report consists of a series of financial statements The Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the Cityrsquos finances Fund financial statements are presented after the Statement of Activities Fund financial statements also report the Cityrsquos operations in more detail than the government-wide statements by providing information about the Cityrsquos funds The notes to the financial statements provide information that is essential to a full understanding of the data provided in the government-wide and fund financial statements This annual report also contains other supplementary information in addition to the basic financial statements
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
This section of the basic financial statements of the City of Annandale (the City) presents a discussion and analysis of the Cityrsquos financial performance during the fiscal year ended December 31 2018 Please read it in conjunction with the Cityrsquos basic financial statements following this section
Financial Highlights
The assets and deferred outflows of resources of the City exceeded liabilties and deferred inflows of resources by $16461537
The Cityrsquos total net position increased by $1317551
The Cityrsquos governmental funds reported combined ending fund balances of $4349540 an increase of $122322 The Governmental Funds have $1240520 available for spending at the Citys discretion
At the end of the current fiscal year unassigned fund balance for the General Fund was $1697339 or 9417 of total General Fund expenditures of $1802505
Using This Annual Report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
The proprietary fund financial statements can be found on pages 20-23 of this report
Notes to the 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 The notes to the financial statements can be found on pages 24-57 of this report
6
Proprietary Funds - When the City of Annandale charges customers for the services it providesmdashwhether to outside customers or to other units of the Citymdashthese services are generally reported in proprietary funds Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities In fact the Cityrsquos enterprise funds are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information such as cash flows for proprietary funds
Business-Type Activities - The City charges a fee to customers to help it cover all or most of the cost of certain services it provides The Citys Water Sewer RefuseRecycling and Storm Utility funds are reported here
The Citys Most Significant Funds Fund Financial Statements
Our analysis of the Cityrsquos major funds begins with the fund financial statements These statements provide detailed information about the most significant fundsmdashnot the City as a whole Some funds are required to be established by state law and by bond covenants However the City Council establishes other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes grants and other money The Citys two kinds of funds-governmental and proprietary-use different accounting approaches
Governmental Funds - Most of the Cityrsquos basic services are reported in governmental funds Governmental funds focus on how money flows into and out of those funds and the balances left at year-end that are available for spending These funds are reported using an accounting method called modified accrual accounting which measures cash and all other financial assets that can readily be converted to cash The governmental fund statements provide a detailed short-term view of the Cityrsquos general government operations and the basic services it provides Governmental fund information helps the reader of the statements determine whether there are more or fewer financial resources that can be spent in the near future to finance the Cityrsquos programs We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation after the fund financial statements
The governmental fund financial statements can be found on pages 15-19 of this report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 5190696$ 5190633$ 63$ Net Capital Assets 10406611 10638601 (231990) Net Pension Asset 517946 440028 77918
Total Assets 16115253 16269262 (154009)
Deferred Outflows of Resources 621929 855064 (233135)
Total Assets and DeferredOutflows of Resources 16737182$ 17124326$ (387144)$
Current and Other Liabilities 1080947$ 1068593$ 12354$ Long-Term Liabilities 5393130 6383354 (990224)
Total Liabilities 6474077 7451947 (977870)
Deferred Inflows of Resources 886892 904112 (17220)
Net PositionNet Investment in Capital Assets 4962623 4377847 584776 Restricted 2021421 2178740 (157319) Unrestricted 2392169 2211680 180489
Total Net Position 9376213 8768267 607946
Total Liabilities Deferred Inflowsof Resources and Net Position 16737182$ 17124326$ (387144)$
Statement of Net Position
The Cityrsquos net position increased from a year ago Our analysis below focuses on the net position (Tables 1 and 2) andchanges in net position (Tables 3 and 4) of the Cityrsquos governmental and business-type activities
Table 1Comparative Condensed Statement of Net Position
Governmental Activities
7
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 179979$ 85557$ 94422$ Equity Interest 7004898 7023511 (18613) Net Capital Assets 10543232 10887885 (344653)
Total Assets 17728109 17996953 (268844)
Deferred Outflows of Resources 35051 59103 (24052)
Total Assets and DeferredOutflows of Resources 17763160$ 18056056$ (292896)$
Current and Other Liabilities 1595412$ 1396254$ 199158$ Long-Term Liabilities 9028762 10236810 (1208048)
Total Liabilities 10624174 11633064 (1008890)
Deferred Inflows of Resources 53662 47273 6389
Net PositionNet Investment in Capital Assets 8625232 8741281 (116049) Restricted 74208 36985 37223 Unrestricted (1614116) (2402547) 788431
Total Net Position 7085324 6375719 709605
Total Liabilities Deferred Inflowsof Resources and Net Position 17763160$ 18056056$ (292896)$
Business-Type Activities
8
Comparative Condensed Statement of Net PositionTable 2
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 652677$ 598474$ 54203$ Operating Grants and Contributions 122213 111759 10454 Capital Grants and Contributions 187016 576626 (389610)
General RevenuesProperty Taxes 1485895 1463472 22423 Tax Increments 20858 20203 655 Grants and Contributions Not Restricted 453773 422194 31579 Investment Income 16929 17237 (308) Miscellaneous 4178 17678 (13500) Gain on Sale of Asset 6034 268371 (262337)
Total Revenues 2949573 3496014 (546441)
EXPENSESGeneral Government 502902 475597 27305 Public Safety 970131 1019255 (49124) Public Works 769202 840164 (70962) Culture and Recreation 148880 762606 (613726) Economic Development 45238 85505 (40267) Interest on Long-Term Debt 160274 176897 (16623)
Total Expenses 2596627 3360024 (763397) Change in Net Position before Transfers 352946 135990 216956
TRANSFERS 255000 247000 8000 Change in Net Position 607946 382990 224956
NET POSITION BEGINNING OF YEAR 8768267 8385277 382990
NET POSITION END OF YEAR 9376213$ 8768267$ 607946$
Governmental Activities
Net position of the Citys governmental activities increased by $607946 Table 3 presents the key elements of the increase
Table 3Comparative Condensed Statement of Activities
Governmental Activities
9
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 3213338$ 2905848$ 307490$ General Revenues
Investment Income 2700 (1558) 4258 Total Revenues 3216038 2904290 311748
EXPENSESWater 492444 485751 6693 Sewer 1441099 1331721 109378 RefuseRecycling 199326 196627 2699 Storm Utility 99951 91130 8821
Total Expenses 2232820 2105229 127591 Change in Net Position before Transfers 983218 799061 184157
TRANSFERS (255000) (247000) (8000) CHANGE IN EQUITY INTEREST (18613) (70479) 51866
Change in Net Position 709605 481582 176157
NET POSITION BEGINNING OF YEAR 6375719 5894137 481582
NET POSITION END OF YEAR 7085324$ 6375719$ 709605$
Comparative Condensed Statement of Activities
Business-Type Activities
10
Table 4
Business-Type Activities
The net position of our business-type activities increased by $709605 The net increase was due to the following funds change in net position Water - $26607 decrease Sewer - $822708 increase RefuseRecycling - $9397 increase and Storm Utility - $95893 decrease
The following tables indicate the changes in net position for the Citys business-type activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Capital Project Funds - The capital projects fund balances increased by $13451
11
Over the course of the year the City of Annandale City Council did not revise the budget The General Fund budget predicted a $5178 increase in fund balance which includes the operations of the Motor Vehicle department The actual change in fund balance was an increase of $212334 This is due to both revenues being higher and expenditures being lower than anticipated Mobile Home tax revenues building permit fees and state aids were over budgeted amounts and both current and capital outlay expenditures were under budgeted amounts
Governmental Activities
Revenues - The following chart visually illustrates the Citys revenue by source for its governmental activities
Financial Analysis of the Citys Funds
General Fund - The Citys General Fund Balance increased by $212334 for 2018 The increase is mainly due to an increase in building permit fees and local government aid with a slight increase in public safety expenditures and a decrease in transfers to other funds
Special Revenue Funds - The Citys special revenue fund balances decreased by $53786 A majority of the decrease was due to expenditures for the pintail drive extension project
Debt Service Funds - The debt service fund balances decreased by $49677 The main reason for the decrease was due to customer prepayments made on special assessments in prior years
General Fund Budgetary Highlights
Fees Fines and Charges for Services
2213
Operating Grants and Contributions
414
Capital Grants and Contributions
634
Property Taxes5038 Tax Increments
071
Grants and Contributions Not Restricted1538
Investment Income057
Miscellaneous014
Gain on Sale of Asset021
Revenue by Source - Governmental Activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Long-Term Liabilities
At the end of 2018 the City of Annandale had $15543549 in bonds notes and equipment certificates outstanding Refer to Note 7 of the Notes to the Financial Statements for a schedule showing the Citys long-term liability activity
Economic Factors and Next Years Budget
The City of Annandales appointed officials considered many factors when setting the fiscal year 2019 budget rates and fees that will be charged by the funds of the City The major factor accounted for when adopting the General Fund budget was to hold all line items as much as possible to the 2018 final budget
Contacting the Citys Financial Management
This financial report is designed to provide our residents customers and creditors with a general overview of the Citys finances and to show the Citys accountability for the money it receives If you have any questions about this report or need additional information contact the City of Annandale 30 Cedar Street E Annandale Minnesota 55302
12
Capital Assets
At the end of 2018 the City of Annandale had $47826808 invested in a broad range of capital assets Refer to Note 5 of the Notes to the Financial Statements for a schedule showing the Citys capital asset activity During 2018 the City had a large increase in improvements other than buildings related to the completion of the Southside Trail project
BASIC FINANCIAL STATEMENTS
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Governmental Business-TypeActivities Activities Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Cash and Investments 3413471$ 86083$ 3499554$ Restricted Cash 74208 74208 Taxes Receivable - Delinquent 14909 14909 Special Assessments Receivable
Delinquent 4423 4158 8581 Current and Deferred 650220 14885 665105
Accounts Receivable 96631 339457 436088 Interest Receivable 9 9 Prepaid Items 75903 22861 98764 Internal Balances 385956 (385956) Due from Other Governments 186251 24283 210534 Land Held for Resale 362923 362923 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 2696744 277948 2974692 Other Capital Assets Net of Depreciation 7709867 10265284 17975151
Net Pension Asset 517946 517946 Total Assets 16115253 17728109 33843362
Deferred Outflows of Resources 621929 35051 656980
Total Assets and Deferred Outflows of Resources 16737182$ 17763160$ 34500342$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 65859$ 26908$ 92767$ Contracts Payable 27913 27913 Due to Other Governments 15676 309797 325473 Salaries and Benefits Payable 30329 7259 37588 Interest Payable 61920 78448 140368 Unearned Revenue 36250 36250
Long-Term LiabilitiesNet Pension Liability 696581 197762 894343 Other Long-Term Liabilities Due Within One Year 843000 1173000 2016000 Other Long-Term Liabilities Due in More than One Year 4696549 8831000 13527549
Total Liabilities 6474077 10624174 17098251
Deferred Inflows of Resources 886892 53662 940554
Net PositionNet Investment in Capital Assets 4962623 8625232 13587855 Restricted for
Debt Service 2009940 2009940 Tax Increment 11481 11481 Capital Replacement 74208 74208
Unrestricted 2392169 (1614116) 778053 Total Net Position 9376213 7085324 16461537
Total Liabilities Deferred Inflows of Resourcesand Net Position 16737182$ 17763160$ 34500342$
See Accompanying Notes to the Financial Statements13
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONDECEMBER 31 2018
Fees Fines and Operating CapitalCharges for Grants and Grants and Governmental Business-Type
Expenses Services Contributions Contributions Activities Activities Total
GOVERNMENTAL ACTIVITIESGeneral Government 502902$ 286176$ $ $ (216726)$ $ (216726)$ Public Safety 970131 208144 115858 41000 (605129) (605129) Public Works 769202 130069 6355 26201 (606577) (606577) Culture and Recreation 148880 15413 55109 (78358) (78358) Economic Development 45238 12875 30108 (2255) (2255) Interest on Long-Term Debt 160274 34598 (125676) (125676)
Total Governmental Activities 2596627 652677 122213 187016 (1634721) 0 (1634721)
BUSINESS-TYPE ACTIVITIESWater 492444 565694 73250 73250 Sewer 1441099 2393268 952169 952169 RefuseRecycling 199326 208571 9245 9245 Storm Utility 99951 45805 (54146) (54146)
Total Business-Type Activities 2232820 3213338 0 0 0 980518 980518
Total 4829447$ 3866015$ 122213$ 187016$ (1634721) 980518 (654203)
GENERAL REVENUESProperty Taxes 1485895 1485895 Tax Increments 20858 20858 Grants and Contributions not Restricted to Specific Programs 453773 453773 Unrestricted Investment Earnings 16929 2700 19629 Miscellaneous 4178 4178 Gain on Sale of Asset 6034 6034
TRANSFERS 255000 (255000) CHANGE IN EQUITY INTEREST (18613) (18613)
Total 2242667 (270913) 1971754 Change in Net Position 607946 709605 1317551
NET POSITION BEGINNING OF YEAR 8768267 6375719 15143986
NET POSITION END OF YEAR 9376213$ 7085324$ 16461537$
See Accompanying Notes to the Financial Statements14
CITY OF ANNANDALE MINNESOTA
STATEMENT OF ACTIVITIESYEAR ENDED DECEMBER 31 2018
Program RevenuesNet (Expense) Revenue and
Changes in Net Position
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
ASSETSCash and Investments 1062209$ 2351262$ 3413471$ Taxes Receivable - Delinquent 14534 375 14909Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 650220 650220
Accounts Receivable 5744 90887 96631Interest Receivable 9 9 Prepaid Items 73751 2152 75903Due from Other Funds 920750 190388 1111138Due from Other Governments 135407 50844 186251Land Held for Resale 362923 362923
Total Assets 2212395$ 3703483$ 5915878$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 41982$ 23877$ 65859$ Contracts Payable 3574 24339 27913 Due to Other Funds 143500 581682 725182 Due to Other Governments 6200 9476 15676Salaries and Benefits Payable 30195 134 30329Unearned Revenue 36250 36250
Total Liabilities 261701 639508 901209
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 14534 375 14909Special Assessments 650220 650220
Total Deferred Inflows of Resources 14534 650595 665129
Fund Balance Nonspendable 73751 2152 75903 Restricted 1532633 1532633 Committed 847422 847422 Assigned 165070 487992 653062Unassigned 1697339 (456819) 1240520
Total Fund Balance 1936160 2413380 4349540
Total Liabilities Deferred Inflows ofResources and Fund Balance 2212395$ 3703483$ 5915878$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
BALANCE SHEETGOVERNMENTAL FUNDS
DECEMBER 31 2018
15
2018
Total Fund Balances - Governmental Funds 4349540$
Amounts reported for governmental activities in the Statement of Net Position are differentbecause
Capital assets used in governmental activities are not financial resources and therefore arenot reported as assets in the governmental funds
Capital Assets 31934114Less Accumulated Depreciation (21527503) Net Pension Asset 517946
Certain receivables will be collected in subsequent years but are not available soon enoughto pay for the current periods expenditures and therefore are deferred in the funds
Delinquent Property Taxes 14909Special Assessments 650220
Deferred outflows and inflows of resources related to pensions are applicable to futureperiods and therefore are not reported in the funds
Deferred Outflows of Resources Related to Pensions 621929 Deferred Inflows of Resources Related to Pensions (886892)
Long-term liabilities including bonds payable are not due and payable in the current periodand therefore are not reported as liabilities in the funds
Bonds Payable (4525000) Notes Payable (1014000) Compensated Absences Payable (22979) Interest Payable (61920) Bond Discount 22430 Net Pension Liability (696581)
Total Net Position - Governmental Activities 9376213$
See Accompanying Notes to the Financial Statements16
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION
DECEMBER 31 2018
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
REVENUESProperty Taxes 1167129$ 323230$ 1490359$ Tax Increments 20858 20858 Special Assessments 149671 149671 Licenses and Permits 106197 106197 Intergovernmental 568136 30310 598446 Charges for Services 457769 51231 509000 Fines and Forfeitures 12790 4299 17089 Investment Income 22019 (5090) 16929 Contributions and Donations 1700 133758 135458 Miscellaneous 22893 679 23572
Total Revenues 2358633 708946 3067579
EXPENDITURESCurrent
General Government 412224 10807 423031 Public Safety 889531 42738 932269 Public Works 379968 379968 Culture and Recreation 111127 3735 114862 Economic Development 52358 52358
Debt Service Principal 821000 821000 Interest and Other Charges 162964 162964
Capital Outlay General Government 5206 5206 Public Safety 4449 67055 71504 Public Works 14006 14006 Culture and Recreation 102651 102651 Economic Development 144931 144931
Total Expenditures 1802505 1422245 3224750 Excess (Deficiency) of Revenues
Over (Under) Expenditures 556128 (713299) (157171)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 1145914 1145914 Transfers Out (343794) (547120) (890914)
Total Other Financing Sources (Uses) (343794) 623287 279493 Net Change in Fund Balances 212334 (90012) 122322
FUND BALANCE BEGINNING OF YEAR 1723826 2503392 4227218
FUND BALANCE END OF YEAR 1936160$ 2413380$ 4349540$
See Accompanying Notes to the Financial Statements17
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
YEAR ENDED DECEMBER 31 2018
2018
Total Net Change in Fund Balances - Governmental Funds 122322$
Amounts reported for governmental activities in the Statement of Activities are different because
Capital outlays are reported in governmental funds as expenditures However in the Statementof Activities the cost of those assets is allocated over the estimated useful lives asdepreciation expense
Capital Outlays 360225 Depreciation Expense (556497) Disposal of Capital Assets (75923) Accumulated Depreciation Related to Disposed Capital Assets 40205
Revenues in the Statement of Activities that do not provide current financial resources are notreported as revenues in the funds
Special Assessments (115073)
Delinquent property taxes receivable will be collected in subsequent years but are not availablesoon enough to pay for the current periods expenditures and therefore are deferred in the funds (4464)
Some expenses reported in the Statement of Activities do not require the use of currentresources and therefore are not reported as expenditures in governmental funds
Compensated Absences 313 Net Pension Asset 77918Net Pension Liability 151145 Deferred Outflows of Resources Related to Pensions (233135) Deferred Inflows of Resources Related to Pensions 17220
Principal Retirement of Long-Term Debt 821000 Amortization of Bond Discounts (4234) Change in Interest Payable 6924
Change in Net Position - Governmental Activities 607946$
See Accompanying Notes to the Financial Statements18
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES EXPENDITURESAND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Bond proceeds provide current financial resources to governmental funds but issuing debtincreases long-term liabilities in the Statement of Net Position Repayment of bond principalis an expenditure in the governmental funds but the repayment reduces long-term liabilities inthe Statement of Net Position
Over(Under)
FinalOriginal Final Actual Budget
REVENUESProperty Taxes 1120885$ 1120885$ 1167129$ 46244$ Licenses and Permits 61800 61800 106197 44397 Intergovernmental 541952 541952 568136 26184 Charges for Services 437744 437744 457769 20025 Fines and Forfeitures 8700 8700 12790 4090 Investment Income 22019 22019 Contributions and Donations 1700 1700 Miscellaneous 20000 20000 22893 2893
Total Revenues 2191081 2191081 2358633 167552
EXPENDITURESCurrent
General Government 435269 435269 412224 (23045) Public Safety 896497 896497 889531 (6966) Public Works 399317 399317 379968 (19349) Culture and Recreation 127325 127325 111127 (16198)
Capital OutlayGeneral Government 30500 30500 5206 (25294) Public Safety 1500 1500 4449 2949
Total Expenditures 1890408 1890408 1802505 (87903) Excess (Deficiency) of Revenues
Over (Under) Expenditures 300673 300673 556128 255455
OTHER FINANCING SOURCES (USES)Transfers Out (295495) (295495) (343794) (48299)
Net Change in Fund Balance 5178$ 5178$ 212334 207156$
FUND BALANCE BEGINNING OF YEAR 1723826
FUND BALANCE END OF YEAR 1936160$
See Accompanying Notes to the Financial Statements19
Budgeted Amounts
YEAR ENDED DECEMBER 31 2018
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL
GENERAL FUND
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current AssetsCash and Investments 23690$ 62393$ $ $ 86083$ Special Assessments Receivable
Delinquent 1167 2096 682 213 4158Current and Deferred 3859 9981 901 144 14885
Accounts Receivable 46078 269326 19878 4175 339457Prepaid Items 9433 12352 1076 22861Due from Other Governments 144 24111 24 4 24283Due from Other Funds 98000 21000 119000
Total Current Assets 182371 401259 22561 4536 610727
Noncurrent AssetsRestricted Cash 74208 74208 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 66881 191067 20000 277948Other Capital Assets Net of Depreciation 4497152 3259174 2505 2506453 10265284
Total Noncurrent Assets 4564033 10529347 22505 2506453 17622338 Total Assets 4746404 10930606 45066 2510989 18233065
Deferred Outflows of ResourcesRelated to Pensions 12805 20153 2093 35051
Total Assets and DeferredOutflows of Resources 4759209$ 10950759$ 47159$ 2510989$ 18268116$
LIABILITIES DEFERRED INFLOWS OFRESOURCES AND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 11931$ 1765$ 13212$ $ 26908$ Due to Other Funds 445076 28318 31562 504956 Due to Other Governments 453 308238 1106 309797 Salaries and Benefits Payable 2732 3813 714 7259Interest Payable 13173 65275 78448Notes Payable Due Within One Year 232000 941000 1173000
Total Current Liabilities 260289 1765167 43350 31562 2100368
Long-Term LiabilitiesNet Pension Liability 72251 113702 11809 197762Notes Payable Net of Current Amount 1576000 7255000 8831000
Total Noncurrent Liabilities 1648251 7368702 11809 0 9028762 Total Liabilities 1908540 9133869 55159 31562 11129130
Deferred Inflows of ResourcesRelated to Pensions 19605 30853 3204 53662
Net PositionNet Investment in Capital Assets 2756033 3340241 22505 2506453 8625232 Restricted for Capital Replacement 74208 74208 Unrestricted 75031 (1628412) (33709) (27026) (1614116)
Total Net Position 2831064 1786037 (11204) 2479427 7085324
Total Liabilities Deferred Inflowsof Resources and Net Position 4759209$ 10950759$ 47159$ 2510989$ 18268116$
See Accompanying Notes to the Financial Statements20
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONPROPRIETARY FUNDS
DECEMBER 31 2018
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
OPERATING REVENUESCharges for Services 565694$ 1219482$ 208571$ 45805$ 2039552$
OPERATING EXPENSESWages and Salaries 110471 188946 15086 314503Materials and Supplies 29374 29374Repairs and Maintenance 57478 21425 44 8346 87293Insurance 11074 9982 21056Electricity 27203 12231 39434Wastewater Commission Charges 871318 871318 Testing 1111 1111Contracted Services 4467 4378 162233 171078Depreciation 171475 118151 1333 87981 378940Professional Services 4717 5818 1834 524 12893Billing 14718 15335 30053Miscellaneous 17863 15245 3461 3100 39669
Total Operating Expenses 449951 1247494 199326 99951 1996722 Operating Income (Loss) 115743 (28012) 9245 (54146) 42830
NONOPERATING REVENUES (EXPENSES)Investment Income 543 1752 152 253 2700Interest and Fiscal Charges (42493) (193605) (236098) Reimbursements 1173786 1173786
Total Nonoperating Revenues(Expenses) (41950) 981933 152 253 940388
Income (Loss) Before Transfersand Other Items 73793 953921 9397 (53893) 983218
TRANSFERS AND OTHER ITEMSChange in Equity Interest (18613) (18613) Transfers In 19600 36400 56000 Transfers Out (120000) (149000) (42000) (311000)
Total Transfers and Other Items (100400) (131213) 0 (42000) (273613) Change in Net Position (26607) 822708 9397 (95893) 709605
NET POSITION BEGINNING OF YEAR 2857671 963329 (20601) 2575320 6375719
NET POSITION END OF YEAR 2831064$ 1786037$ (11204)$ 2479427$ 7085324$
See Accompanying Notes to the Financial Statements
YEAR ENDED DECEMBER 31 2018
21
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET POSITIONPROPRIETARY FUNDS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers and Users 553327$ 1022629$ 207570$ 47362$ 1830888$ Payments to Suppliers (164208) (767959) (181855) (11970) (1125992) Payments to Employees (115506) (184885) (20045) (320436)
Net Cash Provided (Used) by OperatingActivities 273613 69785 5670 35392 384460
CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIESTransfers Out (120000) (149000) (42000) (311000) Interfund Loan 33986 (4344) 6201 35843 Reimbursements 1173786 1173786
Net Cash Provided (Used) by NoncapitalFinancing Activities (120000) 1058772 (4344) (35799) 898629
CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESPrincipal Paid on Debt (226000) (920000) (1146000) Interest Paid on Debt (44518) (200960) (245478) Bonds Issued 3396 3396 Acquisition and Construction of Capital Assets (16094) (16501) (1692) (34287)
Net Cash Provided (Used) by Capital andRelated Financing Activities (283216) (1137461) (1692) 0 (1422369)
CASH FLOW FROM INVESTING ACTIVITIESInterest and Dividends Received (Paid) 543 4594 366 407 5910
Net Increase (Decrease) in Cash andCash Equivalents (129060) (4310) 0 0 (133370)
CASH AND CASH EQUIVALENTSBEGINNING OF YEAR 152750 140911 293661
CASH AND CASH EQUIVALENTSEND OF YEAR 23690$ 136601$ 0$ 0$ 160291$
RECONCILIATION OF CASH AND CASH EQUIVALENTSCash and Investments 23690$ 62393$ $ $ 86083$ Restricted Cash 74208 74208
Total Cash amp Cash Equivalents 23690$ 136601$ 0$ 0$ 160291$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
22
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CITY OF ANNANDALE MINNESOTA
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
RECONCILIATION OF OPERATING INCOME(LOSS) TO CASH FLOWS FROM OPERATINGACTIVITIESOperating Income (Loss) 115743$ (28012)$ 9245$ (54146)$ 42830$ Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided (Used) by OperatingActivities
Depreciation 171475 118151 1333 87981 378940 Pension Related Adjustments (5848) 3118 (5273) (8003)(Increase) Decrease in Assets
Special Assessments ReceivableDelinquent 300 514 (37) (113) 664 Current and Deferred (754) (4236) (573) 2077 (3486)
Accounts Receivable (11969) (190759) (1427) (453) (204608) Prepaid Items (397) (1455) (329) (2181) Due from Other Governments 56 (2372) 1036 46 (1234)
Increase (Decrease) in LiabilitiesAccounts Payable 3741 (10858) 275 (6842) Due to Other Governments 453 184751 1106 186310 Salaries and Benefits Payable 813 943 314 2070
Net Cash Provided (Used) by OperatingActivities 273613$ 69785$ 5670$ 35392$ 384460$
NONCASH INVESTING CAPITAL ANDFINANCING ACTIVITIESChange in Equity Interest 0$ (18613)$ 0$ 0$ (18613)$
See Accompanying Notes to the Financial Statements23
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A REPORTING ENTITY
Blended Component Unit - Reported as if they were part of the City
Blended Component Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
The financial statements present the City and its component units The City includes all funds organizations institutions agencies departments and offices that are not legally separate from such Component units are legally separate organizations for which the City is financially accountable or for which the exclusion of the component unit would render the financial statements of the City misleading
The City of Annandale Minnesota is a statutory city governed by an elected mayor and four council members The accompanying financial statements present the government entities for which the government is considered to be financially accountable
Joint Ventures and Jointly Governed Organizations - The relationship of the City with the entity is disclosed
The criteria used to determine if the City is financially accountable for a component unit includes whether or not 1) the City appoints the voting majority of the potential component units governing body and is able to impose its will on the potential component unit or is in a relationship of financial benefit or burden with the potential component unit or 2) the potential component unit is fiscally dependent on and there is a potential for the potential component unit to provide specific financial benefits to or impose specific financial burdens on the City
As a result of applying the component unit definition criteria above certain organizations have been defined and are presented in this report as follows
For each of the categories above the specific entities are identified as follows
The Annandale Economic Development Authority (EDA) is a legal entity separate from the City Although legally separate the Annandale EDA is reported as if it were part of the primary government because it provides services exclusively for the City Separate financial statements are not prepared for the Annandale EDA
24
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
A REPORTING ENTITY (Contd)
Joint Ventures and Jointly Governed Organizations
B GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Separate financial statements are provided for governmental funds and proprietary funds Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements
Separate financial statements can be obtained by contacting the Wastewater Commission PO Box K Annandale MN 55302
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or segment Interest on general long-term debt is considered an indirect expense and is reported separately in the Statement of Activities Program revenues include 1) charges to customers or applicants who purchase use or directly benefit from goods services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment Taxes and other items not properly included among program revenues are reported instead as general revenues Internally dedicated revenues are reported as general revenues rather than program revenues
The government-wide financial statements (ie the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the City Governmental activities which normally are supported by taxes and intergovernmental revenues are reported separately from business-type activities which rely to a significant extent on fees and charges for support
In September 2003 the City entered into a joint powers agreement with the City of Maple Lake to establish the Annandale-Maple Lake Wastewater Commission (the Commission) The purpose of the Commission is to make available wastewater treatment within the present and future boundaries of the Cities and to serve such other areas as the Commission approves As part of the joint venture the City of Annandale agrees to fund the Debt Service and Operating Funds of the Commission according to terms of the agreement The agreement states a City may terminate the agreement by written notice to the other City In such event the City of Annandale shall pay 60 of all costs incurred except each City shall pay its own attorneys fee In 2008 both Cities approved amending the joint powers agreement to include the City of Howard Lake effective January 1 2009 Each City will then have a one-third equity interest in the Commission Because there is an explicit measurable equity interest in the joint venture the interest is reported in the government-wide financial statements as well as in the Sewer Fund
25
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
The City reports the following major governmental funds
The City reports the following major enterprise funds
The Sewer Fund accounts for the operations of the Citys sewer utility
The Storm Utility Fund accounts for the activities of the Citys storm drainage operations
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting Revenues are recognized as soon as they are both measurable and available Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period For this purpose the City considers revenues to be available if they are collected within 60 days after the end of the current fiscal period Expenditures generally are recorded when a liability is incurred as under accrual accounting However debt service expenditures as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due
The General Fund is the Citys primary operating fund This fund accounts for all financial resources of the general City except those required to be accounted for in another fund
The RefuseRecycling Fund accounts for the operations of the Citys refuserecycling
Property taxes special assessments intergovernmental revenue charges for services franchise taxes licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period All other revenue items are considered to be measurable and available only when cash is received by the City
The Water Fund accounts for the operations of the Citys water utility
26
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the proprietary fund financial statements Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of related cash flows Property taxes are recognized as revenues in the year for which they are levied Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements Exceptions to this general rule are charges between the Citys utility functions and various other functions of the City Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C
D DEPOSITS AND INVESTMENTS
(1)
(2)
(3)
(4)
(5)
(6)
time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States bank
general obligations of the State of Minnesota and its municipalities and in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service
The Citys cash and cash equivalents are considered to be cash on hand deposits and highly liquid debt instruments purchased with original maturities of three months or less from the date of acquisition
27
mutual funds through shares of registered investment companies provided the mutual fund receives certain ratings depending on its investments
The City may invest in the following types of investments as authorized by Minn Stat sectsect118A04 and 118A05
securities which are direct obligations or are guaranteed or insured issues of the United States its agencies its instrumentalities or organizations created by an act of Congress except mortgage-backed securities defined as high risk by Minn Stat sect118A04 subd 6
MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (Contd)
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 funds principal ongoing operations The principal operating revenues of the enterprise funds are charges to customers for sales and services Operating expenses for enterprise funds include the cost of sales and services administrative expenses and depreciation of capital assets All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses
commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less and
with certain restrictions in repurchase agreements securities lending agreements joint powers investment trusts and guaranteed investment contracts
Cash and investments were comprised of deposits brokered certificates of deposits money market funds at various financial brokers and the 4M Fund
It is generally the Citys policy to use restricted resources first then unrestricted resources as they are needed when an expense is incurred for purposes for which both restricted and unrestricted net position are available
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations The Citys investment policy states it will comply with Minnesota Statutes Chapter 118A
The City has an investment policy in place that addresses interest rate risk credit risk concentration of credit risk and custodial credit risk as follows
Interest Rate Risk This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates The Citys investment policy states the City should manage their interest rates based on safety liquidity and the overall return on the investment The portfolio should contain both short-term and long-term investments to meet anticipated cash flow requirements Extended maturities may be utilized to take advantage of higher yields however no more than 50 of the total investments should extend beyond five years
The City invests in an external investment pool the Minnesota Municipal Money Market Fund (4M Fund) which is created under a joint powers agreement pursuant to Minn Stat sect47159 The 4M Fund is not registered with the Securities Exchange Commission (SEC) but does satisfy the requirements of Rule 2a-7 prescribed by the SEC pursuant to the Investment Company Act of 1940 (17 CFR sect2702a-7) as amended The investment in the pool is measured at the net asset value per share provided by the pool
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America The hierarchy is based on the valuation inputs used to measure the fair value of the asset Level 1 inputs are quoted prices in active markets for identical assets Level 2 inputs are significant other observable inputs Level 3 inputs are significant unobservable inputs
Custodial Credit Risk - Deposits For deposits this is the risk that in the event of bank failure the Citys deposits may not be returned to it The Citys investment policy states the collateralization level will be 110 of the market value of principal and accrued interest for balances above the FDIC insured amount When the pledged collateral consists of notes secured by first mortgages the collateral level will be 140 of the market value of principal and accrued interest
Authorized collateral includes the obligations of the US Treasury agencies and instrumentalities shares of investment companies whos only investments are in the aforementioned securities obligations of the State of Minnesota or its municipalities bankers acceptances futures contracts repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days as well as certain first mortgage notes and certain other state or local government obligations Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral
28
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
E RECEIVABLES AND PAYABLES
F PREPAID ITEMS
All trade and property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of property
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements
29
Custodial Credit Risk - Investments For an investment this is the risk that in the event of the failure of the counterparty the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party The Citys investment policy states when investments purchased by the City are held in safekeeping by a brokerdealer they must provide asset protection of $500000 through the Securities Investor Protector Corporation (SIPC) and at least another $2000000 supplemental insurance protection
The City levies its property tax for the subsequent year during the month of December December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year Such taxes become a lien on January 1 and are recorded as receivables by the City at that date The property tax is recorded as revenue when it becomes measurable and available Wright County is the collecting agency for the levy and remits the collections to the City three times a year The tax levy notice is mailed in March with the first half payment due on May 15 and the second half payment due on October 15 Tax levies from prior years that remain unpaid are classified as delinquent taxes receivable
The County Auditor submits the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year
Activity between funds that are representative of lendingborrowing arrangements outstanding at the end of the fiscal year are referred to as either due tofrom other funds (ie the current portion of interfund loans) or advances tofrom other funds (ie the noncurrent portion of interfund loans) All other outstanding balances between funds are reported as due tofrom other funds Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances
Concentration of Credit Risk This is the risk of loss attributed to the magnitude of an investment in a single issuer Investments should be diversified to avoid incurring unreasonable risk inherent in over investing in specific instruments individual financial institutions or maturities The Citys investment policy states the City will attempt to diversify their investments according to type and maturity
The County Auditor prepares the tax list for all taxable property in the City applying the applicable tax rate to the tax capacity of individual properties to arrive at the actual tax for each property The County Auditor also collects all special assessments except for certain prepayments paid directly to the City
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
G CAPITAL ASSETS
Cost
LandLand Improvements 10000$ Other Improvements 25000 BuildingsImprovements 25000 Machinery and Equipment 5000 Infrastructure 50000
Years
Buildings 5-40Improvements Other than Buildings 5-20Vehicles 5-20Machinery and Equipment 5-40Roads and Highways 20-40Infrastructure 25-40
The City does not possess any material amounts of intangible assets
30
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed Donated capital assets are recorded as capital assets at their estimated acquisition value at the date of donation
Capital assets both tangible and intangible which include property plant equipment and infrastructure assets (eg roads sidewalks and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements Capital assets are defined by the City as assets with an estimated useful life in excess of two years and an initial individual cost of more than the following
Capital Assets
Category
Based on the age of the majority of the Citys infrastructure and an exception for small governments in GASB Statement No 34 the City has determined it is not practical to capitalize infrastructure retroactively The current value of the infrastructure includes projects completed during the year ended December 31 1985 and prospectively from that date
Tangible and intangible assets of the City are depreciated using the straight-line full month convention method over the following estimated useful lives
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
H DEFERRED OUTFLOWS OF RESOURCES
I UNEARNED REVENUE
J COMPENSATED ABSENCES
K POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied Grants and certain other payments received before eligibility requirements are met are also recorded as unearned revenue
The City compensates employees who resign or retire with due notice for unused vacation and holiday pay Employees may carry over no more than 40 hours of vacation at the end of any calendar year unless approved by the City Council Unused vacation time is paid to employees upon separation from the City City employees are also allowed to earn compensatory time in lieu of overtime pay Employees may carry over no more than 40 hours of compensatory time at the end of any calendar year Unused compensatory time is paid to employees upon separation from the City
The liability for compensated absences reported in the financial statements consists of unpaid accumulated vacation and compensatory time balances The liability has been calculated using the vesting method in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included The liability for compensated absences is reported in the governmental funds only if they have matured for example as a result of employee resignations and retirements Compensated absences are accrued when incurred in the government-wide and proprietary fund financial statements The government-wide and proprietary fund Statement of Net Position reports both current and noncurrent portions of compensated absences using full accrual accounting The current portion consists of an amount based on expected or known retirements coming in the next fiscal year The noncurrent portion consists of the remaining amount of vacation and compensatory time
31
Employees of the City pay health care premiums based on their age and level of coverage Since the insurance rate is based on age the City does not have an implicit rate subsidy factor in postemployment health care expenses Additionally Minnesota Statutes require the City to allow retired employees to stay on the health care plan with the retiree responsible to pay the entire premium for continuation coverage The Citys personnel policy does not provide for any contributions upon employee retirement
In addition to assets the statement of financial position will sometimes report a separate section for deferred outflows of resources Deferred outflows of resources represents a consumption of net position that applies to a future reporting period During that future period it will be recognized as an outflow of resources (expenseexpenditure) The City has one item that qualifies for reporting in this category on the government-wide Statement of Net Position which is related to pensions
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
L PENSIONS
M LONG-TERM OBLIGATIONS
N DEFERRED INFLOWS OF RESOURCES
O FUND BALANCE
In addition to liabilities the statement of financial position will sometimes report a separate section for deferred inflows of resources Deferred inflows of resources represents an acquisition of net position that applies to a future reporting period During that future period it will be recognized as an inflow of resources (revenue) The City has items that qualify for reporting in this category on both the government-wide Statement of Net Position and the governmental fund financial statements related to property taxes special assessments and pensions
The City participates in various pension plans total pension expense for the fiscal year ended was $436446 The components of pension expense are noted in the plan summaries
For purposes of measuring the net pension liability deferred outflows of resources and deferred inflows of resources related to pensions and pension expense information about the fiduciary net position of the Public Employees Retirement Association (PERA) and the City of Annandales Fire Relief Association and additions todeductions from PERArsquos and the City of Annandales Fire Relief Associations fiduciary net position have been determined on the same basis as they are reported by PERA and the City of Annandales Fire Relief Association 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
In the fund financial statements governmental fund types recognize bond premiums and discounts as well as bond issuance costs during the current period The face amount of debt issued is reported as other financing sources Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses Issuance costs whether or not withheld from the actual debt proceeds received are reported as debt service expenditures
Nonspendable - consists of amounts that cannot be spent because it is not in spendable form or are legally or contractually required to be maintained intact such as inventories and prepaid items
Restricted - consists of amounts related to externally imposed constraints established by creditors grantors or contributors or constraints imposed by state statutory provisions
In the governmental fund financial statements fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in governmental funds These classifications are as follows
In the government-wide financial statements and proprietary fund types in the fund financial statements long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities business-type activities or proprietary fund type Statement of Net Position
32
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
O FUND BALANCE (Contd)
P NET POSITION
Q USE OF ESTIMATES
Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources in the government-wide and proprietary fund financial statements Net investment in capital assets consists of capital assets net of accumulated depreciation reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets Net position is reported as restricted in the government-wide and proprietary fund financial statements when there are limitations on their use through external restrictions imposed by creditors grantors or laws or regulations of other governments Unrestricted net position consists of all other net position that does not meet the definition of restricted or net investment in capital assets
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 In governmental funds other than the General Fund assigned fund balance represents the remaining amount that is not restricted or committed In the General Fund assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority Pursuant to City Council Resolution the City Treasurer and City Administrator are authorized to establish assignments of fund balance
33
Committed - consists of amounts that are constrained for specific purposes that are internally imposed by formal action of the City Council Those committed amounts cannot be used for any other purpose unless the Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts These constraints are established by Resolution of the City Council
Unassigned - is the residual classification for the General Fund and also reflects negative residual amounts in the remaining governmental funds
The City requires restricted amounts to be spent first when both restricted and unrestricted fund balance is available Additionally the City would first use committed then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and deferred outflows of resources and liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expendituresexpenses during the reporting period Actual results could differ from those estimates
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
A BUDGETARY INFORMATION
1
2
3
4
5
6
7
Annual appropriated budgets are adopted during the year for the General and Special Revenue Funds Annual appropriated budgets are not adopted for Debt Service Funds because effective budgetary control is alternatively achieved through bond indenture provisions Budgetary control for Capital Projects Funds is accomplished through the use of project controls and formal appropriated budgets are not adopted
34
Budgeted amounts are as originally adopted or as amended by the City Council Individual amendments were not material in relation to the original amounts budgeted Budgeted expenditure appropriations lapse at year-end
Expenditures may not legally exceed budgeted appropriations at the department level No funds budget can be increased without City Council approval The City Council may authorize transfer of budgeted amounts between departments within any fund Management may amend budgets within a department level so long as the total department budget is not changed
The City Council adopts an annual budget The amounts shown in the financial statements as budget represent the original budgeted amounts and all revisions made during the year The City follows these procedures in establishing the budgetary data reflected in the financial statements
Budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America
The budget is legally enacted through passage of a resolution after obtaining taxpayer comments The budget resolution adopted by the City Council sets forth the budgets at the function level for the General and Special Revenue Funds
Public hearings are conducted to obtain taxpayer comments
Budget requests are submitted by all department heads to the City Administrator The City Administrator compiles the budget requests into an overall preliminary City budget The City Administrator presents the proposed budget to the City Council
Encumbrances outstanding at year-end expire and outstanding purchase orders are canceled and not reported in the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (Contd)
B DEFICIT BALANCES
The following funds had deficit balances
RefuseRecycling (11204)$ Nonmajor Governmental Funds (454667)
C EXPENDITURES EXCEEDING APPROPRIATIONS
NOTE 3 DEPOSITS AND INVESTMENTS
A DEPOSITS
Checking 1669430$
B INVESTMENTS
Fair Value Level 1 Level 2 Level 3
Investments at fair valueBrokered Certificates of Deposit 1540744$ 0$ 1540744$ 0$
Investments at amortized costMoney Market Accounts 324792 4M Money Market 38796
Total Investments 1904332$
The Brokered Certificates of Deposit have a weighted average maturity of 216 years and were not rated
In accordance with applicable Minnesota Statutes the City maintains deposits at depository banks authorized by the City Council
35
There were no funds that had expenditures exceeding appropriations
Custodial Credit Risk - Deposits The Citys bank balances were not exposed to custodial credit risk because they were fully insured through the FDIC as well as collateralized with securities held by the pledging financial institutions trust department or agent and in the Citys name
Fair Value Measuring Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 3 DEPOSITS AND INVESTMENTS (Contd)
B INVESTMENTS (Contd)
The following is a summary of total deposits and investments
Deposits (Note 3A) 1669430$ Investments (Note 3B) 1904332
Total Deposits and Investments 3573762$
Statement of Net PositionCash and Investments 3499554$ Restricted Cash 74208
3573762$
NOTE 4 RECEIVABLES
Receivables are as follows
Amounts notScheduled
for CollectionDuring the
Total SubsequentReceivables Year
Governmental ActivitiesTaxes Receivable - Delinquent 14909$ $ Special Assessments Receivable 654643 584377 Accounts Receivable 96631 16271 Interest Receivable 9
Total Governmental Activities 766192$ 600648$
Business-Type ActivitiesSpecial Assessments Receivable 19043$ 9392$ Accounts Receivable 339457
Total Business-Type Activities 358500$ 9392$
Concentration of Credit Risk The City was exposed to concentration of credit risk due to the fact that some of the Citys brokered certificates of deposit exceeded 5 of the total Citys investments portfolio
36
Deposits and investments are presented in the basic financial statements as follows
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS
Capital asset activity was as follows
Beginning EndingGovernmental Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 2482508$ $ (18800)$ 2463708$ Construction in Progress 508685 248979 (524628) 233036
Total Capital AssetsNot Being Depreciated 2991193 248979 (543428) 2696744
Capital Assets Being DepreciatedBuildings 3065250 3065250 Improvements Other than Buildings 1298097 524628 1822725 Machinery and Equipment 2556167 111246 (57123) 2610290 Infrastructure 21739105 21739105
Total Capital AssetsBeing Depreciated 28658619 635874 (57123) 29237370
Less Accumulated Depreciation forBuildings 1145321 75543 1220864 Improvements Other than Buildings 858879 46992 905871 Machinery and Equipment 1568583 121681 (40205) 1650059 Infrastructure 17438428 312281 17750709
Total AccumulatedDepreciation 21011211 556497 (40205) 21527503
Total Capital Assets BeingDepreciated Net 7647408 79377 (16918) 7709867
Governmental ActivitiesNet Capital Assets 10638601$ 328356$ (560346)$ 10406611$
37
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS (Contd)
Capital asset activity was as follows
Beginning EndingBusiness-Type Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 277948$ $ $ 277948$
Capital Assets Being DepreciatedBuildings 4175245 4175245 Improvements Other than Buildings 12637 12637 Machinery and Equipment 268809 34287 303096 Infrastructure 11123768 11123768
Total Capital AssetsBeing Depreciated 15580459 34287 0 15614746
Less Accumulated Depreciation forBuildings 1499349 92233 1591582 Improvements Other than Buildings 12636 12636 Machinery and Equipment 190152 19580 209732 Infrastructure 3268385 267127 3535512
Total AccumulatedDepreciation 4970522 378940 0 5349462
Total Capital Assets BeingDepreciated Net 10609937 (344653) 0 10265284
Business-Type ActivitiesNet Capital Assets 10887885$ (344653)$ 0$ 10543232$
Depreciation expense was charged to functionsprograms as follows
Governmental ActivitiesGeneral Government 53809$ Public Safety 91620 Public Works 383653 Culture and Recreation 27415
Total Depreciation Expense - Governmental Activities 556497$
Business-Type ActivitiesWater 171475$ Sewer 118151 RefuseRecycling 1333 Storm Utility 87981
Total Depreciation Expense - Business-Type Activities 378940$
38
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 6 INTERFUND ACTIVITY
A INTERFUND BALANCES
The composition of interfund balances is as follows
Amount
General Sewer 445076$ General RefuseRecycling 28318 General Storm Utility 31562 General Nonmajor Governmental Funds 415794 Water Nonmajor Governmental Funds 98000 Sewer Nonmajor Governmental Funds 21000 Nonmajor Governmental Funds General 143500 Nonmajor Governmental Funds Nonmajor Governmental Funds 46888
Total Interfund Balances 1230138$
B INTERFUND TRANSFERS
The composition of interfund transfers is as follows
Nonmajor Governmental
Water Sewer Funds Total
Transfer OutGeneral 19600$ 36400$ 287794$ 343794$ Water 120000 120000 Sewer 149000 149000 Storm Utility 42000 42000 Nonmajor Governmental
Funds 547120 547120
Total Interfund Transfers 19600$ 36400$ 1145914$ 1201914$
Receivable Fund Payable Fund
39
The purpose of the above transfers was to provide funding for debt service capital improvement projects capital outlay and operating purposes
The purpose of the above interfund loans was to provide financing for operating purposes and to cover deficit cash balances
Transfer In
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES
A GENERAL OBLIGATION BONDS
B COMPONENTS OF LONG-TERM LIABILITIES
Interest Final BalanceRates Maturity Outstanding
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan BondsSeries 2008A 300-400 02012022 295000$
GO Special Assessment BondsGO Improvement Bonds Series 2008B 300-4125 02012024 560000 GO Improvement Bonds Series 2011A 105-415 02012032 1300000 GO Refunding Bonds Series 2011B 085-270 02012021 585000 GO Refunding Bonds Series 2012A 055-185 02012022 1035000 GO Improvement Bonds Series 2015A 110-345 02012036 750000
GO NotesGO Improvement Note of 2011 1959 08202031 846000
GO Equipment CertificateGO Equipment Certificate 2016A 2100 02012021 168000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549$
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 2819 08202023 996000$ PFA Clean Water Revenue Note 2220 08202026 8086000 PFA Water Revenue Note of 2015 1031 08202035 812000 PFA Sewer Revenue Note of 2015 1000 08202035 110000
Total Business-Type Activities 10004000$
GO Bonds are direct obligations and pledge the full faith and credit of the City These bonds generally are issued as 15 year Serial Bonds with equal debt service payments each year
The City issues General Obligation (GO) Bonds to provide financing for street improvements facility construction and tax increment projects Debt service is covered respectively by special assessments property taxes and tax increments against benefited properties with any shortfalls being paid from general taxes
40
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
B COMPONENTS OF LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for all bonded debt and notes outstanding are as follows
Principal Interest Principal Interest
70000$ 10400$ 660000$ 112343$ 70000 7600 675000 97718 75000 4700 600000 82645 80000 1600 480000 63498
220000 59861 760000 211593 680000 82489 155000 8131
295000$ 24300$ 4230000$ 718278$
2019
2029-20332024-2028
20222023
On September 27 2011 the City issued $1620000 GO Refunding Bonds Series 2011B with an interest rate of 85 to 270 The City issued the Bonds to crossover refund the $1020000 GO Fire Hall Bonds Series 2004A and the $1645000 GO Improvement Bonds Series 2004B The City completed the refunding to reduce its debt service payment over the next 9 years by $20827 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $20868
Debt service funds are used to liquidate the governmental activities outstanding bonded indebtedness and notes The Park Capital Projects Fund is used to liquidate the governmental activities outstanding contract for deed The General Fund has historically been used to liquidate the outstanding governmental activities compensated absences
GO Improvement Bonds Assessment Bonds
On April 4 2012 the City issued $2225000 GO Refunding Bonds Series 2012A with an interest rate of 55 to 185 The City issued the Bonds to refund the $1415000 GO Improvement Bonds Series 2001C and the $320000 GO Refunding Improvement Bonds Series 2003 as well as crossover refund the $3100000 GO Improvement Bonds Series 2006A The City completed the refunding to reduce its debt service payment over the next 10 years by $179206 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $161420
41
2034-2036
Governmental ActivitiesGO Special
2020
December 31
2021
Year Ending
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS (Contd)
Principal Interest Principal Interest
58000$ 16573$ 55000$ 2951$ 59000 15437 56000 1785 60000 14281 57000 598 61000 13106 62000 11911
332000 40728 214000 8423
846000$ 120459$ 168000$ 5334$
Principal Interest
1173000$ 217058$ 1200000 190488 1227000 163282 1254000 135459 1283000 151604 3466000 171976
284000 14813 117000 1808
10004000$ 1046488$
42
2023
Governmental Activities
2020
Year Ending
2029-2033
2022
2034-2035
2021
2028-2028
2024-2028
2022
2020
2019
2019
Business-Type Activities
2029-2031
GO Notes
2021
December 31Year Ending
2023
GO Equipment Certificates
GO Revenue Notes
December 31
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
D CHANGES IN LONG-TERM LIABILITIES
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Governmental ActivitiesBonds Payable
GOImprovementBonds 365000$ $ 70000$ 295000$ 70000$
GO SpecialAssessment Bonds 4870000 640000 4230000 660000
5235000 0 710000 4525000 730000
GO ImprovementNote of 2011 903000 57000 846000 58000
GO Equipment Certificate 222000 54000 168000 55000
CompensatedAbsences 23292 58115 58428 22979
Unamortized BondDiscount (26664) 4234 (22430)
Total GovernmentalActivities 6356628$ 62349$ 879428$ 5539549$ 843000$
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Business-Type ActivitiesNotes Payable
GO Revenue Notes 11146604$ 3396$ 1146000$ 10004000$ 1173000$
43
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
E CONDUIT DEBT OBLIGATIONS
The Citys conduit debt consisted of the following
Senior Housing and Health Care Revenue Refunding Note 6661528$
NOTE 8 RISK MANAGEMENT
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION
A PLAN DESCRIPTION
Firefighters of the City are members of the Association The Association is the administrator of a single-employer defined benefit pension plan available to firefighters The plan is administered by the Association pursuant to Minnesota Statutes Chapter 69 Chapter 424A and the Associations by-laws As of December 31 2017 the plan covered 28 active firefighters and 14 vested terminated fire fighters whose pension benefits are deferred
There are no other claims liabilities reported in the financial statements based on the requirements of accounting standards which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years
The Citys workers compensation insurance policy is retrospectively rated With this type of policy final premiums are determined after loss experience is known The amount of premium adjustment for 2018 is estimated to be immaterial based on workers compensation rates and salaries for the year
44
Conduit debt obligations are certain limited-obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party The City has issued various revenue bonds to provide funding to private-sector entities for projects deemed to be in the public interest Although these bonds bear the name of the City the City has no obligation for such debt Accordingly the bonds are not reported as liabilities in the financial statements of the City
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) which is a public entity risk pool currently operating as a common risk management and insurance program with other cities in the state The City pays an annual premium to the LMCIT for its insurance coverage The LMCIT is self-sustaining through commercial companies for excess claims The City is covered through the pool for any claims incurred but unreported but retains risk for the deductible portion of its insurance policies The amount of these deductibles is considered immaterial to the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
B BENEFITS PROVIDED
C CONTRIBUTIONS
D PENSION COSTS
Total Plan Net Pension Pension Fiduciary LiabilityLiability Net Position (Asset)
(a) (b) (a) - (b)
Balances at 112017 $ 569046 $ 1009074 $ (440028)Changes for the Year
Service Cost 26727 26727 Interest 34955 34955 Changes in Benefit Terms 28893 28893 Contributions - Employer 3000 (3000)Contributions - State 47693 (47693)Net Investment Income 126216 (126216)Benefit Payments (72973) (72973) Administrative Expense (8416) 8416
Net Change 17602 95520 (77918)
Balances at 12312017 $ 586648 $ 1104594 $ (517946)
The plan provides lump-sum retirement death and supplemental benefits to covered firefighters and survivors Benefits are paid based on the number of years of service multiplied by a benefit level per year of service approved by the City The plan includes a $2600 service pension benefit for each year of service Members are eligible for a lump-sum retirement benefit at 50 years of age or after completion of 20 years of service If a member is both age 50 and has completed five years of service but not 20 years of service the lump-sum pension will be reduced by 4 for each year of service less than 20 years
The plan is funded by fire state aid investment earnings and if necessary employer contributions as specified in Minnesota Statutes and voluntary City contributions As of December 31 2017 the State of Minnesota contributed $47693 in fire state aid to the plan on behalf of the Fire Department Required employer contributions are calculated annually based on statutory provisions The City made voluntary contributions of $3000 to the plan
The City reported a net pension liability (asset) of ($517946) The Citys net pension liability (asset) was measured as of December 31 2017 and the total pension liability used to calculate the net pension liability (asset) in accordance with GASB 68 was determined by an independent actuary applying an actuarial formula to specific census data certified by the fire department The following table presents the changes in net pension liability during the year
45
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
D PENSION COSTS (Contd)
The lump sum benefit increased from $2400 to $2600 per year effective January 1 2018
Differences between expected and actual economic experience $ 5346$ Changes in actuarial assumptions 3678 Net differences between projected and actual investment earnings 26024 Contributions paid to plan subsequent to measurement date 55196 State aid received for the plan subsequent to measurement date 52196
55196$ 87244$
December 31
20192020202120222023
Thereafter
For the year ended December 31 2018 the City recognized pension expense of ($15721)
The City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
$ 537
46
$55196 reported as deferred outflows of resources related to pensions resulting from City contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended December 31 2019 $52196 reported as deferred inflows of resources related to pensions resulting from state aid received for the plan subsequent to the measurement date will be recognized as an increase of the net pension liability (asset) in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pension plans will be recognized in pension expense as follows
Pension Expense Amount
(2) (17701) (14691) (1457) (1734)
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
E ACTUARIAL ASSUMPTIONS
Inflation Rate 275 percentRetirement Eligibility Later of current age and age 50Expected Long-Term Investment Return 625 percentAmortization Method
Mortality
F DISCOUNT RATE
G PENSION LIABLIITY (ASSET) SENSITIVITY
1 Decrease 1 Increasein Discount in Discount
Rate Rate(525) (625) (725)
Citys Net Pension Liability (Asset) $ (497411) $ (517946) $ (537562)
Straight-line amortization over a closed 5-year period or straight-line amortization over a close period equal to the average of the expected remaining service lives of all members that are provided with pensions through the pension planRates used in the July 1 2016 Minnesota PERA Police amp Fire Plan actuarial valuation
The discount rate used to measure the total pension liability was 625 The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at a rate specified in statute Based on that assumption the pension planrsquos 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
The following presents the net pension liability (asset) calculated using the discount rate as well as what the Citys net pension liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate
Discount Rate
The total pension liability was determined using the following actuarial assumptions applied to all periods included in the measurement
The actuarial assumptions used in the December 31 2018 valuation were based on the results of an actuarial experience study for the period January 1 2016 - December 31 2016
47
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
H PLAN INVESTMENTSINVESTMENT POLICY
- Attempt to maintain minimum funding ratio of 120- Attempt to increase the pension amount by $200 every other year- Meet twice per year to discuss any changes to allocation and prepare for a joint meeting with the City
I ASSET ALLOCATION
Domestic equityInternational equityFixed incomeReal estate and alternativesCash and equivalents
Total
J PENSION PLAN FIDUCIARY NET POSITION
10000
The best-estimates of expected future asset class returns were published in the 2017 Survey of Capital Market Assumptions produced by Horizon Actuarial Services These expected returns along with expected asset class standard deviations and correlation coefficients are based on Horizonrsquos annual survey of investment advisory firms The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data
Detailed information about the pension plans fiduciary net position is available in a separately-issued financial report
Asset Class
The plans funded status increased from 1773 to 1883 since the prior valuation This change is primarily due to investment returns in excess of expected
4500 5391000 5203500 198500 425500 079
The Association has a formal investment policy that operates within standard investment practices of the prudent person and other standards codified in Minnesota Statutes Chapter 11A and Chapter 356
The Associations pension plan assets are to be invested for the exclusive benefit of the fund members and will attempt to generate investment returns of at least 5 percent of an annualized basis over time Other goals of the Association include
The long-term expected rate of return on pension plan investments as determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns net of pension plan investment expense and inflation) are developed for each major asset class These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table
Long-Term Expected Real Rate of ReturnTarget Allocation
48
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A PLAN DESCRIPTION
B BENEFITS PROVIDED
GERP Benefits
General Employees Retirement Plan (GERP General Employees Plan accounted for in the General Employees Fund)
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
Public Employees Police and Fire Plan (PEPFP Police and Fire Plan accounted for in the Police and Fire Fund)
The Police and Fire Plan 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 Police and Fire Plan also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to PERA
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
General Employees Plan benefits are based on a memberrsquos 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 PERAs 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 12 for each of the first 10 years of service and 17 for each additional year The rates are 22 and 27 respectively for Basic members Under Method 2 the accrual rate for Coordinated members is 17 for all years of service and 27 for Basic members The accrual rates for former MERF members is 20 for each of the first 10 years of service and 25 for each additional year 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
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA) PERArsquos defined benefit pension plans are established and administered in accordance with Minnesota Statutes Chapters 353 and 356 PERArsquos defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code
49
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
B BENEFITS PROVIDED (Contd)
GERP Benefits (Contd)
PEPFP Benefits
C CONTRIBUTIONS
GERP Contributions
PEPFP Contributions
Beginning January 1 2019 benefit recipients will receive a future annual increase equal to 50 percent of the Social Security Cost of Living Adjustment not less than 10 percent and not more than 15 percent For retirements on or after January 1 2024 the first benefit increase is delayed until the retiree reaches Normal Retirement Age (not applicable to Rule of 90 retirees disability benefit recipients or survivors) A benefit recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase Members receiving benefits for at least one month but less than 12 full months as of June 30 will receive a pro rata increase
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 percent after five years up to 100 percent 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 percent after ten years up to 100 percent after twenty years of credited service The annuity accrual rate is 3 percent of average salary for each year of service For Police and Fire Plan members who were first hired prior to July 1 1989 a full annuity is available when age plus years of service equal at least 90
Beginning in 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law Post retirement increases are given each year except for annuitants who have been receiving a benefit for only 31 to 41 months These annuitants will receive a prorated amount of the increase on a sliding scale
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions Contribution rates can only be modified by the state Legislature
Coordinated Plan members were required to contribute 650 percent of their annual covered salary in fiscal year 2018 the City was required to contribute 750 percent for Coordinated Plan members The Citys contributions to the General Employees Fund for the year ended December 31 2018 were $50226 The Citys contributions were equal to the required contributions as set by state statute
Legislation increased both employee and employer contribution rates in the Police and Fire Plan Employee rates increased from 1080 percent of pay to 1130 percent and employer rates increase from 1620 percent to 1695 percent on January 1 2018 On January 1 2020 employee rates increase to 1180 percent and employer rates increase to 1770 percent The Citys contributions to the Police and Fire Fund for the year ended December 31 2018 were $57782 The Citys contributions were equal to the required contributions as set by state statute
50
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS
GERP Pension Costs
Differences between expected and actual economic experience 14670$ 16018$ Changes in actuarial assumptions 52464 61940 Differences between projected and actual investment earnings 56103 Changes in proportion 4060 13463 Contributions paid to GERP subsequent to measurement date 25165
96359$ 147524$
At December 31 2018 the City reported a liability of $543664 for its proportionate share of the General Employees Fundrsquos net pension liability The City net pension liability reflected a reduction due to the State of Minnesotarsquos contribution of $16 million to the fund in 2019 The State of Minnesota is considered a non-employer contributing entity and the statersquos contribution meets the definition of a special funding situation The State of Minnesotarsquos proportionate share of the net pension liability associated with the City totaled $17795 The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The Citys proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion share was 00098 which was a decrease of 00002 from its proportion measured as of June 30 2017
Post-retirement benefit increases were changed from 10 per year with a provision to increase to 25 upon attainment of 90 funding ratio to 50 of the Social Security Cost of Living Adjustment not less than 10 and not more than 15 beginning January 1 2019
For the year ended December 31 2018 the City recognized pension expense of $28216 for its proportionate share of GERPrsquos pension expense In addition the City recognized an additional $4150 as pension expense (and grant revenue) for its proportionate share of the State of Minnesotas contribution of $6 million to the General Employees Fund
At December 31 2018 the City reported its proportionate share of GERPrsquos deferred outflows of resources and deferred inflows of resources from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
51
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
GERP Pension Costs (Contd)
PEPFP Pension Costs
$25165 reported as deferred outflows of resources related to pensions resulting from City contributions to GERP subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to GERP pensions will be recognized in pension expense as follows
52
Year ended June 30 Pension Expense Amount
2019 13967$ 2020 (31102) 2021 (47848) 2022 (11347)
At December 31 2018 the City reported a liability of $350680 for its proportionate share of the Police and Fire Fundrsquos net pension liability The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The City proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion was 00329 which was a decrease of 00001 from its proportion measured as of June 30 2017 The City also recognized $2961 for the year ended December 31 2018 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesotarsquos on-behalf contributions to the Police and Fire Fund Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year starting in fiscal year 2014
Beginning in January 1 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law
For the year ended December 31 2018 the City recognized pension expense of $2961 for its proportionate share of the Police and Fire Planrsquos pension expense
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
PEPFP Pension Costs (Contd)
Differences between expected and actual economic experience 14159$ 88907$ Changes in actuarial assumptions 450560 517779 Differences between projected and actual investment earnings 71220 Changes in proportion 10800 27880 Contributions paid to PEPFP subsequent to measurement date 29906
505425$ 705786$
E ACTUARIAL ASSUMPTIONS
InflationSalary GrowthInvestment Rate of Return
Actuarial Assumptions GERP PEPFP
250 per year 250 per year325 after 26 years of service 325 after 25 years of service
750 750
53
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
2020 (21749)2021 (54056)2022 (147616)2023 (1380)
The total pension liability in the June 30 2018 actuarial valuation was determined using the following actuarial assumptions
$29906 reported as deferred outflows of resources related to pensions resulting from the Citys contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows
Year ended June 30 Pension Expense Amount
2019 (5466)$
At December 31 2018 the City reported its proportionate share of the Police and Fire Planrsquos deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
GERP
PEPFP
54
The total pension liability for each of the defined benefit cost-sharing plans was determined by an actuarial valuation as of June 30 2018 using the entry age normal actuarial cost method Inflation is assumed to be 250 percent for the General Employees and Police and Fire Plans Salary growth assumptions in the General Employees Plan decrease in annual increments from 1125 percent after one year of service to 325 percent after 26 years of service In the Police and Fire Plan salary growth assumptions decrease from 1225 percent after one year of service to 325 percent after 25 years of service
Mortality rates for all plans are based on RP-2014 mortality tables The tables are adjusted slightly to fit PERArsquos experience Actuarial assumptions for the General Employees Plan are reviewed every four to six years The most recent six-year experience study for the General Employees Plan was completed in 2015 The most recent four-year experience study for the Police and Fire Plan was completed in 2016 Economic assumptions were updated in 2014 based on a review of inflation and investment return assumptions
The following changes in actuarial assumptions occurred in 2018
The mortality projection scale was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 percent per year through 2044 and 250 percent per year thereafter to 125 percent per year
The mortality projection scale was changed from MP-2016 to MP-2017
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
Domestic StocksInternational StocksBondsAlternative AssetsCash
F DISCOUNT RATE
G PENSION LIABILITY SENSITIVITY
GERP PEPFP
1 Lower 650 883523$ 1520 751880$ Current Discount Rate 750 543664 1620 350680 1 Higher 850 263120 1720 18904
The discount rate used to measure the total pension liability in 2018 was 750 percent The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes Based on these assumptions the fiduciary net positions of the General Employees Fund and the Police and Fire Fund 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
The following presents the Citys proportionate share of the net pension liability for all plans it participates in calculated using the discount rate disclosed in the preceding paragraphs as well as what the Citys 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
Target Allocation
3900190020002000200
10000
Long-Term Expected Real Rate of Return
510530075590000
Asset Class
55
The State Board of Investment which manages the investments of PERA prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return 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 in the following table
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
H PENSION PLAN FIDUCIARY NET POSITION
NOTE 11 DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
Related to Pensions 656980$ 940554$
NOTE 12 FUND BALANCE
NonmajorGovernmental
General Funds Total
NonspendablePrepaid Items 73751$ 2152$ 75903$
Restricted forTax Increment 11481 11481 Debt Service 1448570 1448570 Capital Projects 72582 72582
0 1532633 1532633
CommittedCharitable Gambling Programs 11466 11466 Economic Development Promotion 835956 835956
Total Committed 0 847422 847422
AssignedFund Operations 165070 487992 653062
Unassigned 1697339 (456819) 1240520
1936160$ 2413380$ 4349540$
Detailed information about each pension plans 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 wwwmnperaorg
The following is a summary of the major components of deferred outflows and inflows as presented in the Statement of Net Position
Deferred Outflows of Resources
Deferred Inflows of Resources
The following is a summary of fund balance components
56
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 13 TAX ABATEMENT
Current YearPercent AmountAbated Abated
Dingmann Marine100 2500$
Current YearPercent AmountAbated Abated
Granite City PropertyManagement 95 20858$
NOTE 14 JOINT POWERS AGREEMENTS
A PUBLIC RECREATIONAL FACILITY
B WRIGHT COUNTY AREA TRANSIT
Wright County Area Transit is governed by a Joint Powers Board that consists of a) one vote plus additional vote for each city per 3000 rides originating in that city and b) Wright County has votes equal to the number of votes apportioned to the Cities
57
The City and Independent School District 876 (the District) have entered into an a joint powers agreement to operate a public recreational facility The City owns and will lease the real property to the Joint Powers Entity (the Entity) The District shall fund the construction of the facility The Entity shall prepare an annual budget subject to approval of the City and the District All costs for operations maintenance repairs and utilities shall be shared equally by the City and the District
The Entity is governed by a Joint Powers Board that consists of four members a) two members appointed by the City annually and b) two members appointed by the District annually
The City Wright County and other Wright County Cities have entered into an a joint powers agreement to provide affordable public transportation to their communities Cities are to pay a pro rata share of the remaining unfunded operating expenses and capital expenditures not covered by Wright County
The City is authorized by Minnesota Statute sect4691813 to enter into property tax abatement agreements for the purpose of attracting or retaining businesses Tax abatements may be granted to any business on a case-by-case basis The entity may be subject to certain stipulations determined by the City at the time the abatement is entered The amount of the abatement is automatically deducted from the property ownerrsquos tax bill
The City is authorized by Minnesota Statute sect469174 through 469179 to enter into tax increment financing plans Tax increment financing may be granted on a case-by-case basis and may be subject to certain stipulations determined by the City at the time it is entered
Business Purpose
Business Purpose
Assisting in relocating the business within the community
Housing Redevelopment Project 36 Unit Senior Housing Project
REQUIRED SUPPLEMENTARY INFORMATION
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EmployersProportionateShare of the Net Pension
Liability (Asset)States and the States Employers
Proportionate Proportionate ProportionateEmployers Share of the Share of the Share of the Plan Fiduciary
Employers Proportionate Net Pension Net Pension Net Pension Net PositionProportion Share of the Liability (Asset) Liability (Asset) Employers Liability (Asset) as a Percentageof the Net Net Pension Associated with Associated with Covered as a Percentage of of the Total
Fiscal Year Pension Liability (Asset) the Employer the Employer Payroll its Covered Payroll PensionEnding Liability (Asset) (a) (b) (a+b) (c) ((a+b)c) Liability
PensionsGERP
6302018 00098 543664$ 17795$ 561459$ 658161$ 8531 79536302017 00100 638393 8040 646433 647524 9983 75906302016 00099 803831 10468 814299 610663 13335 68916302015 00102 528617 528617 605733 8727 7819
PEPFP6302018 00329 350680$ $ 350680$ 346636$ 10117 88846302017 00330 445539 445539 339010 13142 85436302016 00340 1364479 1364479 322596 42297 63886302015 00340 386320 386320 317917 12152 8661
See Accompanying Notes to the Required Supplementary Information
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITYDECEMBER 31 2018
58
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
Contributionsin Relation Contributions
Statutorily to the Statutorily Contribution as a PercentageRequired Required Deficiency Covered of Covered
Fiscal Year Contribution Contribution (Excess) Payroll PayrollEnding (a) (b) (a-b) (d) (bd)
PensionsGERP
12312018 50226$ 50226$ $ 669680$ 75012312017 48886 48886 651813 75012312016 46583 46583 621107 75012312015 45426 45426 605680 750
PEPFP12312018 57782$ 57782$ $ 356679$ 162012312017 55371 55371 341796 162012312016 53824 53824 332247 162012312015 51688 51688 319062 1620
See Accompanying Notes to the Required Supplementary Information59
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE EMPLOYER CONTRIBUTIONSDECEMBER 31 2018
2017 2016 2015 2014
Service Cost 26727$ 26915$ 21845$ 21260$ Interest 34955 33085 27615 24816 Changes in Benefit Terms 28893 40156 Differences Between Expected and Actual Experience (7074) Changes in Assumptions (4866) Benefit Payments (72973) (7040)
Net Change in Total Pension Liability 17602 41020 89616 46076 Total Pension Liability - Beginning of Year 569046 528026 438410 392334
Total Pension Liability - End of Year 586648$ 569046$ 528026$ 438410$
Contributions - State and Local 50693$ 50325$ 49939$ 47712$ Net Investment Income 126216 69161 (34736) 46976 Benefit Payments (72973) (7040) Administrative Expense (8416) (7920) (7166) (3768) Other (275)
Net Change in Plan Fiduciary Net Position 95520 104526 8037 90645 Total Plan Fiduciary Net Position - Beginning of Year 1009074 904548 896511 805866
Total Plan Fiduciary Net Position - End of Year 1104594$ 1009074$ 904548$ 896511$
Citys Net Pension Liability (Asset) - End of Year (517946)$ (440028)$ (376522)$ (458101)$
Plan Fiduciary Net Position as a Percentage of the Total Pension Asset 18829 17733 17131 20449
60
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF CHANGES IN THE CITYS NET PENSION LIABILITY AND RELATED RATIOSDECEMBER 31 2018
The City implemented GASB Statement No 68 for the year ended December 31 2015 Information for prior years is not available
December 31
NOTE 1 CHANGES IN PLAN PROVISIONS
A GERF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
B PEPFF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
61
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
On January 1 2015 the Minneapolis Employees Retirement Fund was merged into the General Employees Fund which increased the total pension liability by $11 billion and increased the fiduciary plan net position by $892 million Upon consolidation state and employer contributions were revised
The post-retirement benefit increase to be paid after attainment of the 90 funding threshold was changed from inflation up to 25 to a fixed rate of 25
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS
A GERF
2018 Changes
2017 Changes
2016 Changes
2015 Changes
B PEPFF
2018 Changes
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 025 to 325 for payroll growth and 250 for inflation
62
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2035 and 25 per year thereafter
The mortality projection was changed from MP-2016 to MP-2017
The Combined Service Annuity (CSA) loads were changed from 08 for active members and 60 for vested and non-vested deferred members The revised CSA loads are now 00 for active member liability 150 for vested deferred member liability and 30 for non-vested deferred member liability
The assumed post-retirement benefit increase rate was changed from 10 per year for all years to 10 per year through 2044 and 25 per year thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2035 and 25 per year thereafter to 10 per year for all years
The assumed investment return was changed from 79 to 75 The single discount rate was changed from 79 to 75
The mortality projection was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 per year through 2044 and 250 per year thereafter to 125 per year
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS (Contd)
B PEPFF (Contd)
2017 Changes
Assumed rates of retirement were changed resulting in fewer retirements
Assumed percentage of married female members was decreased from 65 to 60
The assumed percentage of female members electing Joint and Survivor annuities was increased
2016 Changes
2015 Changes
63
The assumed post-retirement benefit increase rate was changed from 100 for all years to 100 per year through 2064 and 250 thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2037 and 25 thereafter to 10 per year for all future years
The assumed investment return was changed from 79 to 75 The single discount rate changed from 79 to 56
The assumed future salary increases payroll growth and inflation were decreased by 025 to 325 for payroll growth and 250 for inflation
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2037 and 25 per year thereafter
Assumed salary increases were changed as recommended in the June 30 2016 experience study The net effect is proposed rates that average 034 lower than the previous rates
The Combined Service Annuity (CSA) load was 30 for vested and non-vested deferred members The CSA has been changed to 33 for vested members and 2 for non-vested 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 096 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 30 for the first three years of service Rates beyond the select period of three years were adjusted resulting in more expected terminations overall
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
SUPPLEMENTARY INFORMATION
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Special Debt Capital Revenue Service Projects Total
ASSETSCash and Investments 436388$ 1441782$ 473092$ 2351262$ Taxes Receivable - Delinquent 23 5 347 375 Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 623285 26935 650220
Accounts Receivable 70887 20000 90887 Interest Receivable 9 9 Prepaid Items 2152 2152 Due from Other Funds 190388 190388 Due from Other Governments 1061 2365 47418 50844 Land Held for Resale 362923 362923
Total Assets 1063822$ 2071860$ 567801$ 3703483$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 12735$ $ 11142$ 23877$ Contracts Payable 2941 21398 24339 Due to Other Funds 454822 126860 581682 Due to Other Governments 3566 5910 9476 Salaries and Benefits Payable 134 134
Total Liabilities 474198 0 165310 639508
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 23 5 347 375 Special Assessments 623285 26935 650220
Total Deferred Inflows of Resources 23 623290 27282 650595
Fund Balance Nonspendable 2152 2152 Restricted 11481 1448570 72582 1532633 Committed 847422 847422 Assigned 67503 420489 487992 Unassigned (338957) (117862) (456819)
Total Fund Balance 589601 1448570 375209 2413380
Total Liabilities Deferred Inflows of Resources and Fund Balance 1063822$ 2071860$ 567801$ 3703483$
CITY OF ANNANDALE MINNESOTA
64
DECEMBER 31 2018NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
Special Debt Capital Revenue Service Projects Total
REVENUESProperty Taxes 2507$ $ 320723$ 323230$ Tax Increments 20858 20858 Special Assessments 149671 149671 Intergovernmental 30310 30310 Charges for Services 42636 8595 51231 Fines and Forfeitures 4299 4299 Investment Income (1455) (3635) (5090) Contributions and Donations 49608 84150 133758 Miscellaneous 578 101 679
Total Revenues 114732 149671 444543 708946
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 22622 42738 Culture and Recreation 3735 3735 Economic Development 52358 52358
Debt ServicePrincipal 821000 821000 Interest and Other Charges 162964 162964
Capital OutlayPublic Safety 67055 67055 Public Works 14006 14006 Culture and Recreation 14187 88464 102651 Economic Development 56446 88485 144931
Total Expenditures 153914 983964 284367 1422245 Excess (Deficiency) of Revenues
Over (Under) Expenditures (39182) (834293) 160176 (713299)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 51200 784616 310098 1145914 Transfers Out (65804) (481316) (547120)
Total Other Financing Sources (Uses) (14604) 784616 (146725) 623287 Net Change in Fund Balances (53786) (49677) 13451 (90012)
FUND BALANCE BEGINNING OF YEAR 643387 1498247 361758 2503392
FUND BALANCE END OF YEAR 589601$ 1448570$ 375209$ 2413380$
65
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
Tax Charitable Economic TIF District Abatement - Lions TIF District Training WoodlawnGambling Development No 6 Dingmann Donations No 14 Center Cemetery
(222) (407) (411) (423) (464) (465) (604) (651) Total
ASSETSCash and Investments 11466$ 385530$ 21389$ $ 18003$ $ $ $ 436388$ Taxes Receivable - Delinquent 23 23 Accounts Receivable 20856 49500 531 70887 Prepaid Items 1076 1076 2152 Due from Other Funds 190388 190388 Due from Other Governments 25 1036 1061 Land Held for Resale 362923 362923
Total Assets 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable $ 1800$ 9908$ $ $ $ 1000$ 27$ 12735$ Contracts Payable 2941 2941 Due to Other Funds 119000 18060 66198 200960 50604 454822 Due to Other Governments 3500 66 3566 Salaries and Benefits Payable 67 67 134
Total Liabilities 0 123741 9908 18060 0 69698 202093 50698 474198
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 23 23
Fund Balance Nonspendable 1076 1076 2152 Restricted 11481 11481 Committed 11466 835956 847422 Assigned 67503 67503 Unassigned (18035) (69698) (200526) (50698) (338957)
Total Fund Balance 11466 835956 11481 (18035) 67503 (69698) (199450) (49622) 589601
Total Liabilities Deferred Inflows of Resources and Fund Balance 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
66
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUECOMBINING BALANCE SHEET
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding ImprovementBonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
ASSETSCash and Investments 134649$ 53157$ 3288$ 310514$ 94388$ 360857$ 484929$ 1441782$ Taxes Receivable - Delinquent 5 5 Special Assessments Receivable
Delinquent 819 1553 2051 4423 Current and Deferred 45829 223930 9400 65636 278490 623285
Due from Other Governments 585 509 775 496 2365
Total Assets 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
DEFERRED INFLOWS OF RESOURCESAND FUND BALANCEDeferred Inflows of Resources
Unavailable RevenuesDelinquent Property Taxes $ $ $ $ $ 5$ $ 5$ Special Assessments 45829 223930 9400 65636 278490 623285
Total Deferred Inflows of Resources 45829 0 0 223930 9400 65641 278490 623290
Fund Balance Restricted 135234 53157 3288 311333 94897 363185 487476 1448570
Total Deferred Inflows of Resourcesand Fund Balance 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
DECEMBER 31 2018
67
Public Works 2020Fire Street Street Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
ASSETSCash and Investments 50334$ $ 39748$ 122304$ 20402$ 83784$ 53265$ 30658$ 72597$ $ 473092$ Taxes Receivable - Delinquent 298 49 347Special Assessments Receivable
Current and Deferred 26935 26935Accounts Receivable 20000 20000Interest Receivable 9 9Due from Other Governments 24247 20606 2565 47418
Total Assets 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 350$ $ $ $ 10792$ $ $ $ $ $ 11142$ Contracts Payable 15700 5698 21398 Due to Other Funds 44073 82787 126860 Due to Other Governments 5910 5910
Total Liabilities 350 49983 0 0 10792 0 0 15700 0 88485 165310
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 298 49 347Special Assessments 26935 26935
Total Deferred Inflows of Resources 298 0 26984 0 0 0 0 0 0 0 27282
Fund Balance Restricted 72582 72582 Assigned 74240 42313 122304 9610 83784 53265 34958 15 420489 Unassigned (29377) (88485) (117862)
Total Fund Balance 74240 (29377) 42313 122304 9610 83784 53265 34958 72597 (88485) 375209
Total Liabilities Deferred Inflow of Resources and Fund Balance 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
DECEMBER 31 2018
68
TaxCharitable Economic TIF District Abatement - TIF District Lions TIF District Training WoodlawnGambling Development No 6 Dingmann No 12 Donation No 14 Center Cemetery
(222) (407) (411) (423) (438) (464) (465) (604) (651) Total
REVENUESProperty Taxes $ $ $ 2507$ $ $ $ $ $ 2507$ Tax Increments 20858 20858 Charges for Services 12875 19641 10120 42636 Investment Income (71) (2440) (140) (76) 1239 33 (1455)Contributions and Donations 108 49500 49608Miscellaneous 78 500 578
Total Revenues (71) 10621 20718 2507 0 49424 500 20880 10153 114732
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 20116 Economic Development 18399 19816 391 13752 52358
Capital OutlayCulture and Recreation 14187 14187 Economic Development 56446 56446
Total Expenditures 0 18399 19816 0 391 14187 70198 20116 10807 153914 Excess (Deficiency) of
Revenues Over (Under) Expenditures (71) (7778) 902 2507 (391) 35237 (69698) 764 (654) (39182)
OTHER FINANCING SOURCES (USES)Transfers In 51200 51200 Transfers Out (65804) (65804)
Total Other FinancingSources (Uses) 0 (14604) 0 0 0 0 0 0 0 (14604)
Net Change in Fund Balances (71) (22382) 902 2507 (391) 35237 (69698) 764 (654) (53786)
FUND BALANCE BEGINNING OF YEAR 11537 858338 10579 (20542) 391 32266 (200214) (48968) 643387
FUND BALANCE END OF YEAR 11466$ 835956$ 11481$ (18035)$ 0$ 67503$ (69698)$ (199450)$ (49622)$ 589601$
69
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE
YEAR ENDED DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding Improvement Bonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
REVENUESSpecial Assessments 21259$ $ $ 37558$ 10657$ 20276$ 59921$ 149671$
EXPENDITURESDebt Service
Principal 80000 70000 54000 127000 210000 245000 35000 821000Interest and Other Charges 23944 14062 4095 64909 16975 18646 20333 162964
Total Expenditures 103944 84062 58095 191909 226975 263646 55333 983964 Excess (Deficiency) of
Revenues Over (Under)Expenditures (82685) (84062) (58095) (154351) (216318) (243370) 4588 (834293)
OTHER FINANCINGSOURCES (USES)Transfers In 76000 78113 22560 150000 194943 198000 65000 784616
Net Change in Fund Balances (6685) (5949) (35535) (4351) (21375) (45370) 69588 (49677)
FUND BALANCEBEGINNING OF YEAR 141919 59106 38823 315684 116272 408555 417888 1498247
FUND BALANCE END OF YEAR 135234$ 53157$ 3288$ 311333$ 94897$ 363185$ 487476$ 1448570$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
YEAR ENDED DECEMBER 31 2018
70
Public 2020Fire Street WorksStreet Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
REVENUESProperty Taxes 25092$ $ 295631$ $ $ $ $ $ $ $ 320723$ Intergovernmental 4109 26201 30310 Charges for Services 8595 8595 Fines and Forfeitures 4299 4299 Investment Income (49) 105 (324) (1118) (80) (713) (503) (495) (458) (3635) Contributions and Donations 50650 1500 2000 30000 84150 Miscellaneous 101 101
Total Revenues 75693 14309 295307 (1017) 6219 (713) 25698 29505 (458) 0 444543
EXPENDITURESCurrent
Public Safety 22622 22622 Culture and Recreation 3735 3735
Capital OutlayPublic Safety 7500 59555 67055 Public Works 14006 14006 Culture and Recreation 16429 72035 88464 Economic Development 88485 88485
Total Expenditures 30122 20164 0 14006 59555 0 0 72035 0 88485 284367 Excess (Deficiency) of
Revenues Over (Under)Expenditures 45571 (5855) 295307 (15023) (53336) (713) 25698 (42530) (458) (88485) 160176
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 8800 15693 24493 Transfers In 84943 37504 60000 20000 107651 310098 Transfers Out (107503) (288000) (78113) (7700) (481316)
Total Other FinancingSources (Uses) (22560) 37504 (288000) 68800 35693 29538 0 (7700) 0 0 (146725)
Net Change in Fund Balances 23011 31649 7307 53777 (17643) 28825 25698 (50230) (458) (88485) 13451
FUND BALANCE BEGINNING OF YEAR 51229 (61026) 35006 68527 27253 54959 27567 85188 73055 361758
FUND BALANCE END OF YEAR 74240$ (29377)$ 42313$ 122304$ 9610$ 83784$ 53265$ 34958$ 72597$ (88485)$ 375209$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
YEAR ENDED DECEMBER 31 2018
71
FINANCIAL SECTION
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Issue Interest Original Final Principal Due WithinDate Rates Issue Maturity Outstanding One Year
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan Bonds Series 2008A 050608 300-400 895000$ 020122 295000$ 70000$ GO Special Assessment Bonds
GO Improvement Bonds Series 2008B 050608 300-4125 1175000 020124 560000 85000 GO Improvement Bonds Series 2011A 060811 105-415 1700000 020132 1300000 70000 GO Refunding Bonds Series 2011B 092711 085-270 1620000 020121 585000 215000 GO Refunding Bonds Series 2012A 040412 055-185 2225000 020122 1035000 255000 GO Improvement Bonds Series 2015A 050115 110-345 820000 020136 750000 35000
GO NotesGO Improvement Note of 2011 053111 1959 1217500 082031 846000 58000
GO Equipment CertificateGO Equipment Certificate 2016A 032116 2100 222000 020121 168000 55000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549 843000
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 011304 2819 3273194 082023 996000 188000 PFA Clean Water Revenue Note 081707 2220 16036613 082026 8086000 935000 PFA Water Revenue Note of 2015 081015 1031 929105 082035 812000 44000 PFA Sewer Revenue Note of 2015 090815 1000 125359 082035 110000 6000
Total Business-Type Activities 10004000 1173000
Total All Long-Term Liabilities 15543549$ 2016000$
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF LONG-TERM LIABILITIESDECEMBER 31 2018
72
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COMPLIANCE SECTION
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Honorable Mayor and Members of the City Council
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
INDEPENDENT AUDITORS REPORT ON MINNESOTA LEGAL COMPLIANCE
73
The Minnesota Legal Compliance Audit Guide for Cities promulgated by the State Auditor pursuant to Minn Stat sect665 contains seven categories of compliance to be tested contracting and bidding deposits and investments conflicts of interest public indebtedness claims and disbursements miscellaneous provisions and tax increment financing Our audit considered all of the listed categories
In connection with our audit nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities However our audit was not directed primarily toward obtaining knowledge of such noncompliance Accordingly had we performed additional procedures other matters may have come to our attention regarding the Citys noncompliance with the above referenced provisions
The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance Accordingly this communication is not suitable for any other purpose
City of AnnandaleAnnandale Minnesota
May 6 2019
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 majorfund and the aggregate remaining fund information as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements we considered the Citys 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 Citys internal control Accordingly we do not express an opinion on the effectiveness of the Citys 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 entitys 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
74
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 and therefore material weaknesses or significant deficiencies may exist that were not identified 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 We did identify certain deficiencies in internal control described in the accompanying Schedule of Findings as 2018-001 and 2018-002 that we consider to be significant deficiencies
INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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 the City of Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
Compliance and Other Matters
Citys Response to Findings
Purpose of this Report
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
May 6 2019
75
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 Citys internal control or on compliance This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entitys internal control and compliance Accordingly this communication is not suitable for any other purpose
As part of obtaining reasonable assurance about whether the Citys 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
The Citys responses to the findings identified in our audit are described in the accompanying Schedule of Findings The Citys responses were not subjected to the auditing procedures applied in the audit of the financial statements and accordingly we express no opinion on them
I
FINDING 2018-001
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
76
LIMITED SEGREGATION OF DUTIES
There is an absence of appropriate segregation of duties consistent with appropriate control objectives due to a limited number of employees
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The City is aware of the limited segregation of duties and will continue to review internal controls and make changes when they can be made
The lack of adequate segregation of duties could adversely affect the Citys ability to initiate record process and report financial data consistent with the assertions of management in the financial statements
The basic premise is that no one person should have access to both physical assets and the related accounting records or to all phases of a transaction The lack of such controls could result in the occurrence of a material error or fraud in relation to the financial statements not being detected by management
The City has assigned duties to staff based on a cost-benefit relationship to the City and the practicality of the level of staffing the City maintains
The City should continue to monitor and evaluate the job responsibilities assigned to staff to determine whether there is an unacceptable risk
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
I
FINDING 2018-002 AUDITOR PREPARED FINANCIAL STATEMENTS
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
77
The City does not have an internal control system designed to provide for the preparation of the financial statements being audited However based on the degree of complexity and level of detail needed to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) the City has requested the auditors to prepare them
The preparation of the financial statements and the related notes are the responsibility of management
There are a limited number of office employees and resources available to allow for the adequate preparation of the financial statements by the City
This could result in a material misstatement to the financial statements and related notes that would not be prevented or detected and corrected as a result of the Citys current internal control
The City should continue to request the assistance to draft the financial statements and related notes and thoroughly review these financial statements after they have been prepared so the City can take responsibility for them
The City is aware of this however due to significant cost and a limited number of employees it is in the Citys best financial interest to contract for the preparation of the financial statements
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Contd)
Comment Year Finding If Not Corrected Provide PlannedReference Comment Title Status Initially Occurred Corrective Action or Other Explanation
Financial Statement Findings
2017-001 Not Corrected 2009 See current year finding 2018-001
2017-002 Not Corrected 2009 See current year finding 2018-002
Minnesota Legal Compliance Findings
None
DECEMBER 31 2018SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
CITY OF ANNANDALE MINNESOTA
78
Limited Segregation of Duties
Auditor Prepared Financial Statements
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORS
WILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
MANAGEMENT LETTER
DECEMBER 31 2018
This page intentionally left blank
Page
Required Communications 1-3
Schedule of Findings on Accounting Issues and Internal Controls 4
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Significant Audit Findings
Qualitative Aspects of Accounting Practices
We have audited the financial statements of the governmental activities the business-type activities each major fund and the aggregate remaining fund information of the City of Annandale Minnesota for the year ended December 31 2018 Professional standards require that we provide you with information about our responsibilities under generallyaccepted auditing standards and Government Auditing Standards as well as certain information related to the planned scope and timing of our audit We have communicated such information in our letter to you dated December 20 2018 Professional standards also require that we communicate to you the following information related to our audit
The financial statement disclosures are neutral consistent and clear
1
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 the financial statements No new accounting policies were adopted and the application of existing policies was not changed in 2018 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 are an integral part of the financial statements prepared by management and are based on managements 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
Managements estimate of depreciation is based on the number of years an asset is in service We evaluated the key factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Managements estimate of pension liabilities is based on actuarial valuations performed by consultants specializing in those areas We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Significant Audit Findings (Contd)
Difficulties Encountered in Performing the Audit
Corrected and Uncorrected Misstatements
Disagreements with Management
Management Representations
Management Consultations with Other Independent Accountants
Other Audit Findings or Issues
Other Matters
Professional standards require us to accumulate all known and likely misstatements identified during the audit other than those that are clearly trivial and communicate them to the appropriate level of management Management has corrected all such misstatements In addition none of the misstatements detected as a result of audit procedures and corrected by management were material either individually or in the aggregate to each opinion units financial statements taken as a whole
We encountered no significant difficulties in dealing with management in performing and completing our audit
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 Citys 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
We generally discuss a variety of matters including the application of accounting principles and auditing standards with management each year prior to retention as the Citys auditors However these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention
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 We are pleased to report that no such disagreements arose during the course of our audit
We have requested certain representations from management that are included in the management representation letter dated May 6 2019
We applied certain limited procedures to Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions the Schedule of Changes in the Citys Net Pension Liability and Related Ratios and the related notes to required supplementary information which are required supplementary information that supplements the basic financial statements Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries the basic financial statements and other knowledge we obtained during our audit of the basic financial statements We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information
2
Other Matters (Contd)
Restriction on Use
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
This information is intended solely for the use of the City Council and management of the City of Annandale Minnesota and is not intended to be and should not be used by anyone other than these specified parties
3
We were not engaged to report on the Elected Officials and Administration section which accompany the financial statements but are not required supplementary information We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it
May 6 2019
We were engaged to report on the statements and schedules listed in the table of contents as supplementary information which accompany the financial statements but are not required supplementary information With respect to this supplementary information we made certain inquiries of management and evaluated the form content and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America the method of preparing it has not changed from the prior period and the information is appropriate and complete in relation to our audit of the financial statements We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves
This page intentionally left blank
4
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in internal control under standards established by the American Institute of Certified Public Accountants 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
The objective of internal accounting control is to provide reasonable but not absolute assurance as to the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of these factors necessarily requires estimates and judgments by management
It should be recognized that within the City an inherent risk is present with certain positions It is very common for cities such as the City of Annandale Minnesota to assign many major responsibilities to a few key individuals in an attempt to operate within limited budgets The inherent risk is again addressed only to maintain the awareness of the internal control structure and to encourage the Councils continual review of financial information at monthly meetings
DECEMBER 31 2018
INTERNAL CONTROL
GENERAL RECOMMENDATIONS
Throughout the course of the audit we spoke to management regarding certain items that we see as an opportunity to improve None of these were considered significant within the scope of the audit The items discussed requiring action have been resolved or are in the process of resolution We would like to acknowledge the assistance and courtesies extended to us by the personnel of the City of Annandale Minnesota
City of Annandale Minnesota
Audit ReportDecember 31 2018
Independent Auditorrsquos ReportPages 2-4bull Financial statements are the responsibility of the Cityrsquos
managementbull Our responsibility is to express opinions on these financial
statements based on our auditbull Conducted audit in accordance with Generally Accepted
Auditing Standards and Government Auditing Standardsbull Obtain reasonable assurance financials are free from
material misstatement
1
Independent Auditorrsquos Report (Contrsquod)Pages 2-4
bull Financial statements are presented fairly in our opinion
bull Internal control letter on pages 74 and 75
2
Statement of Net Position
3
2018 2017ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current and Other 12893519$ 12739729$ Capital 20949843 21526486
Total Assets 33843362 34266215
Deferred Outflows of Resources 656980 914167 Total Assets and Deferred Outflows of Resources 34500342$ 35180382$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current Liabilities 660359$ 497847$ Noncurrent Liabilities
Net Pension Liability 894343 236206 Due Within One Year 2016000 1967000 Due in More Than One Year 13527549 16383958
Total Liabilities 17098251 19085011
Deferred Inflows of Resources 940554 951385
Net PositionNet Investment in Capital Assets 13587855 13119128 Restricted 2095629 2215725 Unrestricted 778053 (190867)
Total Net Position 16461537 15143986 Total Liabilities Deferred Inflows of Resources
and Net Position 34500342$ 35180382$
Ordinance Rezoning Property and approving Comp Plan Amendment- A motion was made by Hastings and seconded by Czycalla to approve Ordinance Rezoning Property and approving Comp Plan Amendment for the property located at 100 Annandale Boulevard Resolution Approving Minor Subdivision- A motion was made by Wuollet and seconded by Hastings to approve Resolution Approving Minor Subdivision Request by Stadium for Street Dance- A motion was made by Jonas and seconded by Czycalla to approve the July 3rd Street Dance for Stadium Letter to MnDot on 2022 Project- A motion was made by Czycalla and seconded by Jonas to direct staff to send the letter to MnDot on the 2022 Project as presented Approve Cleaning Contract Amendment- A motion was made by Hastings and seconded by Wuollet to approve the amendments to the Cleaning Contract as presented Quotes for Crack Filling- Motion was made by Czycalla and seconded by Wuollet to approve the bid for Kamco for Crack Filling Accept Resignation of Officer Tavares- A motion was made by Czycalla and seconded by Hastings to approve the resignation of Officer Tavares Resolution Appointing Michael Ryan as Full Time Police Officer- A motion was made by Hastings and seconded by Wuollet to approve Resolution Appointing Michael Ryan as FT Police Officer Resolution appointing Nicka- A motion was made by Wuollet and seconded by Czycalla to appoint Kirby Nicka to FT Maintenance Worker MAYORCOUNCIL REPORTS Haller- Discussed training with new staff and provided an update on the work that was done with the recent weather Chief Herr- Updated on new staff training Chief has been doing safety presentation for the Church Working on video system at Rec Park Speaking on April 26th for active shooter Mayor Gunnarson- updated the Council on his visit to the capital last week for the Cityrsquos bonding bill request Hinnenkamp- informed the Council of the schedule DT meeting next week to present concepts to the DT businessproperty owners ADJOURNMENT Moved by Czycalla seconded by Wuollet to adjourn 819 pm The meeting was adjourned
______________________________ Dwight Gunnarson Mayor
ATTEST
__________________________________ Kelly Hinnenkamp City Administrator
MINUTES ANNANDALE BOARD OF ADJUSTMENT AND APPEALS
April 1 2019 CALL TO ORDERROLL CALL Pursuant to due call and notice the City Council of Annandale Minnesota met for the annual Board of Adjustment and Appeals on April 1 2019 at 630 pm at the City Hall Council Chambers Mayor Gunnarson called the meeting to order at 630 pm City Council Present Councilmemberrsquos Jonas Czycalla Burd and Hastings and Mayor Gunnarson Absent None Also present were Tammy Anderson and Conrad Anderson from the Wright County Assessors Department City Administrator Hinnenkamp 2019Assessment City Assessor Conrad Anderson introduced the 2019 Assessment Assessor Anderson read the Local Board of Appeal and Equalization Opening Statement and reviewed the details of the assessment review process Anderson reviewed the Written Appeals 102-020-002100- Christina Clark 125 Oak Avenue North Owner contacted Anderson but they have not had a chance to review the property Appeal was received 4119 102-073-001080 Rick Schultz Pintail Drive Called 4119 and they have not had a chance to review 36 Jasmine Avenue 102-700-000360 Ellis and Linda Knute After further review Anderson is recommending a value of $44100 This is for the personal property 2019 assessment was $51900 102-043-001120 001130 001140 Marlene Dingmann 631 Beech Circle requested to be changed to non-homestead Motion was made by Czycalla and seconded by Hastings to approve the recommendations of Knute and Dingmann as presented Motion was made by Wuollet and seconded by Czycalla to refer any recommended changes to Wright County for Clark and Schultz ADJOURNMENT Moved by Wuollet seconded by Jonas to adjourn at 654PM Motion carried unanimously ___________________________________ Dwight Gunnarson Mayor ATTEST __________________________________ Kelly Hinnenkamp City Administrator
CITY OF ANNANDALE Payment Approval Report - for City Council Page 1
Report dates 422019-562019 May 02 2019 0305PM
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1
1 NEOPOST USA Inc 56654756 RENTAL amp MAINTENANCE - MAI 04232019 11100 00
Total 1 11100 00
153
153 AMERIPRIDE LINEN amp APPARE 2201173387 PD - MATBRUSH 03282019 2315 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 WATER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 SEWER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 PW UNIFORM 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PD - MATBRUSH 04042019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PW UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 SEWER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 WATER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PW UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 SEWER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 WATER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PD - MATBRUSH 04112019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PD - MATBRUSH 04182019 268 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 WATER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 SEWER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PW UNIFORM 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PD - MATBRUSH 04252019 2316 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 WATER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 SEWER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PW UNIFORM 04252019 3181 00
Total 153 57099 00
180
180 ANNANDALE ADVOCATE P3158191723 CONGRATS- WRESTLING 04082019 1900 1900 04122019
180 ANNANDALE ADVOCATE P3158191723 RECYCLING AD 04082019 7000 7000 04122019
180 ANNANDALE ADVOCATE P3158191723 MINUTES 04082019 18624 18624 04122019
180 ANNANDALE ADVOCATE P3158191723 PUBLIC HEARING 04082019 1920 1920 04122019
180 ANNANDALE ADVOCATE P3158191723 ASSESSMENTS 04082019 3264 3264 04122019
180 ANNANDALE ADVOCATE P3158191723 2021 IMPR PLAN 04082019 8256 8256 04122019
180 ANNANDALE ADVOCATE P3158191723 DMV- BUSINESS OF THE WEEK 04082019 15600 15600 04122019
180 ANNANDALE ADVOCATE P3158191723 FT SEASONAL EMPLMT 04082019 16380 16380 04122019
180 ANNANDALE ADVOCATE P3158191723 NOTARY STAMP- GIEBENHAIN 04082019 3902 3902 04122019
Total 180 76846 76846
188
188 ANNANDALE AUTO CARE LLC 101394 SERVICE 08 CHEV 04182019 85579 00
188 ANNANDALE AUTO CARE LLC 101468 BATTERY 04242019 12895 00
188 ANNANDALE AUTO CARE LLC 101482 TRUCK SERVICE 04252019 142198 00
188 ANNANDALE AUTO CARE LLC 101526 TRUCK SERVICE 04262019 16470 00
Total 188 257142 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 2
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
190
190 ANNANDALE AREA CHAMBER APRIL2019 CITY EXPO BOOTH 04092019 10000 10000 04122019
Total 190 10000 10000
192
192 ANNANDALE PARTS SUPPLY 127199280 HEAD LIGHT 02282019 1699 1699 04122019
192 ANNANDALE PARTS SUPPLY 127199479 LIGHT BULBS 03042019 2565 2565 04122019
192 ANNANDALE PARTS SUPPLY 127199616 FLUSH KIT 03052019 7098 7098 04122019
192 ANNANDALE PARTS SUPPLY 127199723 HEADLIGHT BULB- SQUAD 51 03072019 949 949 04122019
192 ANNANDALE PARTS SUPPLY 127200389 GENERATOR PARTS 03182019 2318 2318 04122019
192 ANNANDALE PARTS SUPPLY 127200469 LUBE 03192019 791 791 04122019
192 ANNANDALE PARTS SUPPLY 127200476 HOSE 03192019 118 118 04122019
192 ANNANDALE PARTS SUPPLY 127200490 BATTERY 03192019 9858 9858 04122019
192 ANNANDALE PARTS SUPPLY 127200546 PARTS 03202019 1398 1398 04122019
192 ANNANDALE PARTS SUPPLY 127200609 FILTERS 03202019 23472 23472 04122019
192 ANNANDALE PARTS SUPPLY 127200627 STOP LEAK 03212019 873 873 04122019
192 ANNANDALE PARTS SUPPLY 127200652 FILTER 03222019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200654 FILTER 03212019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200713 FITTING 03222019 129 129 04122019
192 ANNANDALE PARTS SUPPLY 127200757 PARTS 03222019 2178 2178 04122019
192 ANNANDALE PARTS SUPPLY 127200939 CLEANER 03252019 2339 2339 04122019
192 ANNANDALE PARTS SUPPLY 127201161 SOAP 03282019 909 00
192 ANNANDALE PARTS SUPPLY 127201244 LUBRICANT 05012019 2373 00
192 ANNANDALE PARTS SUPPLY 127201434 HOSE REPAIR 05012019 3637 00
192 ANNANDALE PARTS SUPPLY 127201488 HOSE REPAIR 04022019 7274 00
192 ANNANDALE PARTS SUPPLY 127202184 FLARE FITTINGS 04112019 1858 00
192 ANNANDALE PARTS SUPPLY 127202518 BRAKE CLEANER 04172019 3228 00
Total 192 77828 58549
200
200 ANNANDALE EMBROIDERY 2356 APD HATS 03272019 9000 00
Total 200 9000 00
230
230 ANNANDALE-MAPLE LAKE MARCH 2019 MAR 2019 FLOW 04152019 6260800 00
Total 230 6260800 00
240
240 ANNANDALE PLUMBING 1457 RPZ TESTING 03272019 28500 00
Total 240 28500 00
424
424 BERGESCH COMPUTER SERVI 16172 SERVICE CALL 04062019 7500 00
424 BERGESCH COMPUTER SERVI 16176 ADMIN-SERVICE CALL 04062019 7500 00
Total 424 15000 00
463
463 BOLTON amp MENK INC 0231771 LGU BSA 7 STAKEHOLDERS C 04122019 11700 00
463 BOLTON amp MENK INC 0231785 2022 PROJECT FACILITY PLAN 04122019 44500 00
463 BOLTON amp MENK INC 0231788 SAND PROFILE 04122019 117250 00
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT PLANS AN 04122019 1717300 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 3
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT STREETS 04122019 38000 00
Total 463 1928750 00
646
646 CENTRA SOTA LAKE REGION L 6308214 STREETS 04092019 11697 00
646 CENTRA SOTA LAKE REGION L 6308214 PARKS 04092019 14037 00
646 CENTRA SOTA LAKE REGION L 6308214 WATER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 SEWER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 PUBLIC WORKS 04092019 33531 00
646 CENTRA SOTA LAKE REGION L 6308342 STREETS 04292019 13024 00
646 CENTRA SOTA LAKE REGION L 6308342 PARKS 04292019 15629 00
646 CENTRA SOTA LAKE REGION L 6308342 WATER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 SEWER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 PUBLIC WORKS 04292019 37335 00
646 CENTRA SOTA LAKE REGION L 6308343 STREETS 04292019 16436 00
646 CENTRA SOTA LAKE REGION L 6308343 PARKS 04292019 19723 00
646 CENTRA SOTA LAKE REGION L 6308343 WATER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 SEWER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 PUBLIC WORKS 04292019 47116 00
Total 646 274380 00
710
710 CITY OF BUFFALO MARCH2019 MONTHLY NET MOTION 04012019 2000 2000 04122019
Total 710 2000 2000
810
810 COLONIAL LIFE amp ACCIDENT 7492424-0501 INSURANCE 04162019 42770 42770 04232019
Total 810 42770 42770
900
900 COUNTRY CHEVROLET INC CVCS139790 SQUAD 52 - TIRE REPAIR 04092019 1719 00
Total 900 1719 00
1336
1336 FARM RITE EQUIPMENT INC P42298 WIPER BLADESIDLER ASSY 04012019 36766 00
1336 FARM RITE EQUIPMENT INC W13484 HYDRAULIC HOSE 04172019 40840 00
Total 1336 77606 00
1338
1338 FASTENAL COMPANY MNBUF78347 SAFETY GLASSES 04172019 4656 00
1338 FASTENAL COMPANY MNBUF78393 TOOLS 04192019 892 00
Total 1338 5548 00
1420
1420 FIRE RELIEF ASSOCIATION MARCH2019 2019 SUPPLEMENTAL REIMB 04082019 100000 00
1420 FIRE RELIEF ASSOCIATION MARCH2019 2018 SUPPLEMENTAL REIMB 04082019 313920 00
Total 1420 413920 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 4
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1508
1508 F S 3 INC 60393 SAFETY VEST 04222019 5500 00
1508 F S 3 INC 60435 SAFETY VEST 04162019 5500 00
1508 F S 3 INC 60436 SAFETY VEST 04162019 5500 00
Total 1508 16500 00
1519
1519 GALLS AN ARAMARK COMPAN 012401488 UNIFORM - HAAG 04042019 8396 00
1519 GALLS AN ARAMARK COMPAN 012412561 UNIFORM - TOWNSEND 04052019 4198 00
Total 1519 12594 00
1630
1630 GOPHER STATE ONE-CALL IN 9030176 FAX TICKETS 03312019 2295 00
Total 1630 2295 00
1660
1660 GRAINGER INC W W 6144966281 TEST BALLS 04122019 15556 00
1660 GRAINGER INC W W 9135594712 PARTS 04032019 6459 00
1660 GRAINGER INC W W 9137921475 SHOCK 04052019 4717 00
1660 GRAINGER INC W W 9138437422 HOSE 04052019 9729 00
1660 GRAINGER INC W W 9146606448 DOOR OPENER 04152019 2735 00
1660 GRAINGER INC W W 9150739945 GLOVES 04192019 6216 00
1660 GRAINGER INC W W 9152417177 GARAGE DOOR OPENERS 04222019 19056 00
Total 1660 64468 00
1710
1710 HAWKINS INC 4475748 CHEMICALS 04092019 247584 00
Total 1710 247584 00
1760
1760 HILLYARDHUTCHINSON 603390067 MOP DUST- PW 04092019 4520 00
1760 HILLYARDHUTCHINSON 603390067 FOLD TOWELSTISSUE PAPER 04092019 19613 00
1760 HILLYARDHUTCHINSON 603406861 SUPER SHINESOAPWINDOW 04232019 46059 00
1760 HILLYARDHUTCHINSON 700376971 SCRUBBER REPAIR 04192019 9600 00
Total 1760 79792 00
1780
1780 HOLIDAY CREDIT OFFICE MARCH12019 PD FUEL 04012019 93317 93317 04122019
1780 HOLIDAY CREDIT OFFICE March2019 FD- FUEL 04012019 19714 19714 04122019
Total 1780 113031 113031
2130
2130 LITTLE FALLS MACHINE INC 355406 PLOW PARTS 04242019 14150 00
Total 2130 14150 00
2190
2190 LUNDEEN BROS INC 91792 OIL CHANGE 2017 DODGE SQA 03212019 5894 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 5
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2190 5894 00
2210
2210 M amp M BUS SERVICE 10193369 DRUG TESTING- KIRBY NICKA 03152019 3000 00
2210 M amp M BUS SERVICE 10193370 ALCOHOL TESTING- KIRBY NIC 03192019 3000 00
2210 M amp M BUS SERVICE 10193419 DRUG TESTING- NICHOLLE CO 04092019 6000 00
Total 2210 12000 00
2211
2211 M amp M EXPRESS SALES amp SER 182624 MOWER PARTS 04122019 36108 00
2211 M amp M EXPRESS SALES amp SER 183289 MOWER PARTS 04182019 12319 00
Total 2211 48427 00
2260
2260 MAPLE LAKE LUMBER COMPA 168882 LUMBER 04222019 1659 00
Total 2260 1659 00
2272
2272 MARES EXCAVATING APRIL 2019 WATER LEAK 04012019 70000 00
Total 2272 70000 00
2273
2273 MARKET PLACE II 107 XTRA SOAP-FD 04012019 1332 1332 04232019
2273 MARKET PLACE II 107 MEALS- TC 04012019 5142 5142 04232019
Total 2273 6474 6474
2375
2375 METRO WEST INSPECTION SE 1978 370 BIG WOODS LN 17-04 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 250 EXCELSIOR AVE N 17-69 04252019 11145 00
2375 METRO WEST INSPECTION SE 1978 202 NONA DR 17-60 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 135 EXCELSIOR AVE N 17-127 04252019 17820 00
2375 METRO WEST INSPECTION SE 1978 630 LAKE DR W 19-7 04252019 2500 00
2375 METRO WEST INSPECTION SE 1978 212 ASH ST E 19-13 04252019 5198 00
2375 METRO WEST INSPECTION SE 1978 330 CHESTNUT ST E 19-22 04252019 2500 00
Total 2375 41663 00
2419
2419 MID-MINNESOTA CONCRETE 19073 HOT WATER 03112019 49000 00
2419 MID-MINNESOTA CONCRETE 19075 HOT WATER 03132019 49000 00
2419 MID-MINNESOTA CONCRETE 19076 HOT WATER 03042019 24500 00
Total 2419 122500 00
2425
2425 MIDWAY IRON amp METAL INC 420761 STEEL 04172019 5363 00
Total 2425 5363 00
2465
2465 MCP CARSTAR COLLISION CE 41349297 SQUAD 51 REPAIRS 01052019 175667 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 6
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2465 175667 00
2511
2511 CENTER POINT ENERGY 110 PAVILION 04122019 4986 00
2511 CENTER POINT ENERGY 111 TC 04122019 5309 00
2511 CENTER POINT ENERGY 112 OLD PW SHOP 05022019 4465 00
2511 CENTER POINT ENERGY 113 WTP 04122019 50216 00
2511 CENTER POINT ENERGY 114 HOCKEY RINK 04122019 4221 00
2511 CENTER POINT ENERGY 116 WARMING HOUSE 04162019 1500 00
2511 CENTER POINT ENERGY 116 CITY HALL 04162019 23624 00
2511 CENTER POINT ENERGY 117 FD 04122019 35974 00
Total 2511 130295 00
2525
2525 MINNESOTA COMPUTER SYST 263763 ADMIN COPIER 04082019 34758 00
2525 MINNESOTA COMPUTER SYST 463318 BW S3HR 04022019 5503 00
Total 2525 40261 00
2635
2635 CORE amp MAIN LP K426017 CULVERT 04242019 145000 00
2635 CORE amp MAIN LP K441242 LOCATOR 04222019 75265 00
Total 2635 220265 00
2698
2698 MPPOA MARCH 2019 NEW MEMBER DUES- LDF 04082019 3900 00
2698 MPPOA MARCH202019 2019 DUES- M FAUST 03202019 5000 00
Total 2698 8900 00
2819
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER- DMV 03012019 5830 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-ADMIN 03012019 13604 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-PD 03012019 2160 00
2819 NORTHERN BUSINESS PRODU 385745-0 CALCULATOR INK 03012019 440 00
2819 NORTHERN BUSINESS PRODU 386830-0 DESK TRAYSCALC ROLLERS 04082019 8169 00
2819 NORTHERN BUSINESS PRODU 386830-1 DVD-RW 03072019 2859 00
2819 NORTHERN BUSINESS PRODU 387602-0 BINDERDESK TRAYSFILE 03082019 8641 00
2819 NORTHERN BUSINESS PRODU 393165-0 PD - OFFICE SUPPLIES 35303 03272019 2158 00
2819 NORTHERN BUSINESS PRODU 396891-0 PENSSTAPLERSTAPLES 05012019 15450 00
2819 NORTHERN BUSINESS PRODU 396891-1 HEATER 05012019 5285 00
2819 NORTHERN BUSINESS PRODU 396891-2 CALCULATOR 05012019 8662 00
2819 NORTHERN BUSINESS PRODU 400116-0 FOLDERSPENS 05012019 6507 00
2819 NORTHERN BUSINESS PRODU 400134-0 EMPLOYEE FOLDERSRECPT B 05012019 16499 00
Total 2819 96264 00
2832
2832 NORTHWEST ASSOC CONSUL 24128 REZONE FOR SCHOOL 04042019 3330 00
2832 NORTHWEST ASSOC CONSUL 24128 SAND PROFILE 04042019 9450 00
2832 NORTHWEST ASSOC CONSUL 24129 VERIZON 04042019 20000 00
Total 2832 32780 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 7
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
2934
2934 PLEASANT LAKE ASSOCIATION 42919 PLEASANT LAKE ASSN 05012019 500000 00
Total 2934 500000 00
2962
2962 PRINCIPAL LIFE 108 INSURANCE 04222019 14144 14144 04232019
Total 2962 14144 14144
3161
3161 S P ELECTRIC INC 7282 OLD SPLICERS REMOVAL 04112019 99054 00
Total 3161 99054 00
3180
3180 SCHWAAB INC C039891 DATE STAMP 03272019 16776 00
3180 SCHWAAB INC C041311 REPLACE PADS 04042019 2050 00
Total 3180 18826 00
4006
4006 SHRED IT USA - MPLS 8126937775 SHREDDING SERVICES 03312019 45401 00
Total 4006 45401 00
4021
4021 SOKS RAPID CAR WASH 216-1384 SQUAD WASHES 04012019 11865 11865 04122019
Total 4021 11865 11865
4040
4040 SUMMIT COMPANIES 1368349 FIRE SYSTEM MAINT 04102019 34500 00
4040 SUMMIT COMPANIES 1368350 ANNUAL FIRE ALARM INSP 04102019 23000 00
4040 SUMMIT COMPANIES 1368538 CITY HALL FIRE SUPPRESION 04052019 19800 00
4040 SUMMIT COMPANIES 1371739 FIRE EXT MAINTENANCE 04292019 46280 00
4040 SUMMIT COMPANIES 1372404 CITY HALLPD - ANNUAL FIRE A 04292019 16715 00
Total 4040 140295 00
4130
4130 STERNBERG LANTERNS INC 50379 LIGHT SOCKETS 04122019 30000 00
Total 4130 30000 00
4222
4222 TASC IN1499967 ADMIN FEES 04172019 43320 00
Total 4222 43320 00
4269
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
Total 4269 324000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 8
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4337
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16061 16061 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
Total 4337 48181 48181
4365
4365 UTILITY CONSULTANTS INC 101046 COLIFORM 03282019 8000 00
Total 4365 8000 00
4377
4377 VERIZON WIRELESS 9827946389 PW IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 FD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 INVESTIGATOR COMPUTER 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD CELL PHONE 04102019 16639 16639 04232019
4377 VERIZON WIRELESS 9827946389 PW CELL PHONE 04102019 26360 26360 04232019
Total 4377 57003 57003
4481
4481 WEST CENTRAL SANITATION I 121 RECYCLE 04302019 362792 00
4481 WEST CENTRAL SANITATION I 121 REFUSE 04302019 936578 00
4481 WEST CENTRAL SANITATION I MARCH 2019 RECYCLE 03312019 451419 451419 04122019
4481 WEST CENTRAL SANITATION I MARCH 2019 REFUSE 03312019 908999 908999 04122019
Total 4481 2659788 1360418
4495
4495 WINDSTREAM APRIL2019 LS 805 NORWAY DR E 04032019 24428 24428 04122019
4495 WINDSTREAM APRIL32019 320-274-2793 04032019 3830 3830 04122019
Total 4495 28258 28258
4520
4520 WRIGHT COUNTY HIGHWAY DE 1340 APEX 04162019 12100 00
Total 4520 12100 00
4548
4548 WRIGHT-HENNEPIN COOPERA 104 TC 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 105 CITY HALL SECURITY 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 106 LS 1255 BUSINESS BLVD 04102019 1484 1484 04232019
4548 WRIGHT-HENNEPIN COOPERA 119 STREET LIGHTS 04102019 13973 00
Total 4548 20047 6074
4559
4559 XCEL ENERGY 0774352025 ACCOUNT 51-4985655-1 03282019 1910 1910 04122019
4559 XCEL ENERGY 0774781723 ACCOUNT 51-6464610-6 04082019 5051 5051 04122019
4559 XCEL ENERGY 0774798834 ACCOUNT 51-6875531-1 04012019 2964 2964 04122019
4559 XCEL ENERGY 0774851593 ACCOUNT 51-0011253419-4 04012019 52824 52824 04122019
4559 XCEL ENERGY 0774856745 ACCOUNT 51-0010892786-1 04012019 1379 1379 04122019
4559 XCEL ENERGY 0775014393 ACCOUNT 51-6076585-1 04022019 11396 11396 04122019
4559 XCEL ENERGY 0775442400 ACCOUNT 51-6024519-2 04042019 365444 365444 04232019
CITY OF ANNANDALE Payment Approval Report - for City Council Page 9
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4559 XCEL ENERGY 0775852647 ACCOUNT 51-6024518-1 04082019 156465 156465 04232019
4559 XCEL ENERGY 0777794063 ACCOUNT 51-4192659-4 04182019 3117 00
4559 XCEL ENERGY 0779111699 ACCOUNT 51-4985655-1 04262019 1767 00
4559 XCEL ENERGY 778173400 ACCOUNT 51-4636619-8 04222019 6391 00
Total 4559 608708 597433
4648
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 23750 00
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 00 00
4648 A R ENGH 190448 SPRING MAINTENANCE 04302019 21375 00
4648 A R ENGH 190451 SPRING MAINTENANCE- TC 04302019 14250 00
Total 4648 59375 00
4716
4716 JOVANOVICH KADLEC amp ATHM 16709 KRONQUIST LOT 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 LEASE WITH WILES 03312019 28000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 ORD AMENDMENT- MICRO DIS 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 GENERAL 03312019 8750 00
4716 JOVANOVICH KADLEC amp ATHM 16709 PERSONNEL POLICY 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 CONTROLLED BURN HOLD HA 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
Total 4716 82250 00
4721
4721 MANEY INTERNATIONAL 803662X1 PARTS 02072019 2275 2275 04122019
Total 4721 2275 2275
4734
4734 MOTOROLA SOLUTIONS INC 16042791 RADIO BATTERIES 03252019 16800 00
Total 4734 16800 00
4743
4743 CARDMEMBER SERVICE 122 ATRIST EASEL 05012019 10305 00
4743 CARDMEMBER SERVICE 122 KEROSENE 05012019 6329 00
4743 CARDMEMBER SERVICE 122 POLLUTION CONTROL 05012019 41500 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC 05012019 1639 00
4743 CARDMEMBER SERVICE 122 AMAZON- 40 AMP RELAY 05012019 2898 00
4743 CARDMEMBER SERVICE 122 A-1 - BULB KIT 05012019 2503 00
4743 CARDMEMBER SERVICE 122 MENARDS-POTHOLE PATCH 05012019 47014 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC BALL VALVE 05012019 1770 00
4743 CARDMEMBER SERVICE 122 TOTAL TOOL- SHOE - PETER 05012019 5123 00
4743 CARDMEMBER SERVICE 122 PRYOR- EXCEL CLASSES- MIS 05012019 25600 00
4743 CARDMEMBER SERVICE 122 MN CHIEFS ASSOC 05012019 19900 00
4743 CARDMEMBER SERVICE 122 BEST BUY- 05012019 8589 00
4743 CARDMEMBER SERVICE 122 BEST BUY 05012019 17178 00
4743 CARDMEMBER SERVICE 122 USPS 05012019 1149 00
4743 CARDMEMBER SERVICE 122 PAYPAL- INTER ASSOC EVID- R 05012019 5000 00
4743 CARDMEMBER SERVICE 122 ACTION TARGETS- 05012019 14662 00
4743 CARDMEMBER SERVICE 122 AMAZON- METAL DUSTPAN 05012019 2894 00
4743 CARDMEMBER SERVICE 122 AMAZON- BATTERIES 05012019 2124 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 10
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 4743 216177 00
4752
4752 NCPERS GROUP LIFE INS MAY2019 INSURANCE 04172019 1600 00
Total 4752 1600 00
4769
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 39944 00
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 00 00
Total 4769 39944 00
4793
4793 DELTA DENTAL 7626938 INSURANCE 04152019 139599 139599 04232019
Total 4793 139599 139599
4831
4831 GENERAL RENTAL CENTER OF 1174533 HEATER RENTAL 03112019 11000 00
Total 4831 11000 00
4889
4889 CLASSIC CLEANING COMPANY 28038 CITY HALL- 04082019 67375 00
4889 CLASSIC CLEANING COMPANY 28038 PD- 04082019 14700 00
4889 CLASSIC CLEANING COMPANY 28038 LIBRARY- 04082019 40425 00
4889 CLASSIC CLEANING COMPANY 28039 TC 04082019 23000 00
Total 4889 145500 00
4945
4945 COUNTRY REPAIR INC 1568 KOHLER 100 GENERAT REPAIR 02212019 348966 00
Total 4945 348966 00
4955
4955 WORKFORCE INTEGRITY NET 41219 PREEMPLOYMENT TEST KIRBY 03312019 9300 00
Total 4955 9300 00
4968
4968 Volunteer Firefighter Ben Assoc of MARCH2019 BENEFIT RENEWALS 04012019 20600 20600 04122019
Total 4968 20600 20600
5002
5002 BUREAU OF CRIMINAL APPRE 536318 CJDN 03312019 27000 00
Total 5002 27000 00
5003
5003 BOLAND PRODUCTION SUPPL 11-6569 BLANK AMMUNITION 03042019 10000 00
Total 5003 10000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 11
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5006
5006 MIDCONTINENT COMMUNICATI 157013401102 FD 04092019 14765 14765 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PW 04092019 26599 26599 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 TC 04092019 3717 3717 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 DMV 04092019 12056 12056 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PD 04092019 20823 20823 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 CITY HALL 04092019 24864 24864 04122019
Total 5006 102824 102824
5031
5031 A1 RAPID LUBE 112018 SQUAD 51 OIL CHANGE 04092019 4145 4145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 51 04092019 9145 9145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 52 04092019 1500 1500 04122019
5031 A1 RAPID LUBE 11302018 SQUAD 52 WASH 04092019 1500 1500 04122019
5031 A1 RAPID LUBE DEC2018 SQUAD 51 OIL CHANGE 04092019 5000 5000 04122019
Total 5031 21290 21290
5039
5039 KAMCO 201800 CRACKFILLING 04292019 5395141 00
Total 5039 5395141 00
5056
5056 CASEYS GENERAL STORES IN MARCH 2019 PD FUEL 04012019 6449 6449 04122019
Total 5056 6449 6449
5067
5067 ZUERCHER PA0001614 GPS RECEIVERS 03102019 32800 00
5067 ZUERCHER PA0001669 RECORDS- PROPERTY amp EVID 03292019 102100 00
Total 5067 134900 00
5074
5074 Potentia MN Solar Fund 1 LLC 2019-02-1761- 520 ASH - WTP 02282019 28907 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- CEMETARY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 370 PARK SEWAGE PUMP 02282019 7041 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 520 ASH - WTP 02282019 14573 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 605 WARREN 02282019 3083 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 200 EXCELSIOR 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- BALL PARL LIGHTING 02282019 1136 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- CITY HALL 02282019 16228 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- PAVILION 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- HOCKEY RINK 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- UNIT SOUTH 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 30 CEDAR STREET LIGHT 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 111 CEDAR ST 02282019 163 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 15 CONV CLUB RD - LS 02282019 2596 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS 805 NORWAY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 640 ACACIA 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1792- FD 02282019 5895 00
Total 5074 83677 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 12
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5075
5075 HALVORSON LANGEMO PASC 2927 ARPIL PROSECUTION 03282019 139479 139479 04232019
5075 HALVORSON LANGEMO PASC 2994 MAY PROSECUTION 04262019 139479 00
Total 5075 278958 139479
5086
5086 CLASSIC CARPET amp FLOOR CA 1312 FD- CARPET CLEANING 04102019 24500 00
Total 5086 24500 00
5099
5099 STENGER PETER march72019 WATER LICENSE 03072019 3200 3200 04042019
Total 5099 3200 3200
5101
5101 GAPINSKI AMELIA 118 MILEAGE- ST PAUL-147 MILES 04222019 8526 8526 04232019
5101 GAPINSKI AMELIA 118 LUNCH- ST PAUL 04222019 1182 1182 04232019
5101 GAPINSKI AMELIA 118 PARKING RAMP- ST PAUL 04222019 1800 1800 04232019
Total 5101 11508 11508
5103
5103 GLUNZ DAVID D 589207 1ST QTR SEXTON FEE 2019 04222019 12000 00
Total 5103 12000 00
5108
5108 RECON ROBOTICS 74975 ROBOT REPAIR 03082019 40000 00
Total 5108 40000 00
5120
5120 MELGAARD SERVICES 115 LITTLE JIMS REPAIR 03272019 65000 00
Total 5120 65000 00
5137
5137 HARTZELL STEVE DEC2018 SAFETY SHOES 04092019 13998 13998 04122019
Total 5137 13998 13998
5138
5138 HOGLUND BUS COMPANY 133269 PLOW TRUCK REPAIR 04232019 242869 00
Total 5138 242869 00
5139
5139 GIEBENHAIN KARIE APRIL 2019 TRAVELTRAINING 04292019 1259 00
Total 5139 1259 00
5140
5140 GRABHAM JUDY APRIL2019 GARDEN MATERIALS REIMBUR 04302019 12312 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 13
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 5140 12312 00
Grand Totals 23368095 2894268
Dated __________________________________________
Mayor __________________________________________
Dwight Gunnarson
City Council __________________________________________
Shelly Jonas
__________________________________________
Jullie Hastings
__________________________________________
Corey Czycalla
__________________________________________
Matthew Wuollet
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
CITY OF ANNANDALE Check Register Page 1Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03012019 03042019 1005 EFT - ASPIRE 14 47332-03012019 03042019 1006 EFT - FLEXSYSTEM 9 21153-03012019 03042019 1007 EFT - MINNESOTA 8 152678-03012019 03042019 1008 EFT-FURTHER 12 194842-03012019 03042019 1008 EFT-FURTHER 12 70000-03012019 03042019 1009 EFT-PERA 5 197211-03012019 03042019 1009 EFT-PERA 5 227551-03012019 03042019 1009 EFT-PERA 5 164253-03012019 03042019 1009 EFT-PERA 5 246377-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 291789-03152019 03182019 1011 EFT - ASPIRE 14 50777-03152019 03182019 1012 EFT - FLEXSYSTEM 9 21153-03152019 03182019 1013 EFT - MINNESOTA 8 170353-03152019 03182019 1014 EFT-FURTHER 12 199842-03152019 03182019 1015 EFT-NATIONWIDE RETIREMENT 3 45727-03152019 03182019 1016 EFT-PERA 5 202077-03152019 03182019 1016 EFT-PERA 5 233162-03152019 03182019 1016 EFT-PERA 5 167748-03152019 03182019 1016 EFT-PERA 5 251623-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 338787-03012019 03042019 3231 FERRELL MISTY 123 207493-03012019 03042019 3232 HINNENKAMP KELLY 127 296930-03012019 03042019 3233 JARMON VICKI I 134 162692-03012019 03042019 3234 KRIENKE CARRIE L 136 118186-03012019 03042019 3235 GAPINSKI AMELIA 142 76605-03012019 03042019 3236 GIEBENHAIN KARIE 143 63912-03012019 03042019 3237 HERR JEFFREY J 208 198056-03012019 03042019 3238 STANDAFER PETER A 217 171766-03012019 03042019 3239 BERG TERESA 233 29593-03012019 03042019 3240 TAVARES AARON J 234 144943-03012019 03042019 3241 PETERSON KENNETH J 235 6543-03012019 03042019 3242 ETSHOKIN LOUIS RICHARD 238 69332-03012019 03042019 3243 GRIGGS DEREK C 245 173791-03012019 03042019 3244 SMITH TARA 251 104275-03012019 03042019 3245 MARES NICHOLAS J 306 46531-03012019 03042019 3246 GLUNZ DAVID D 323 215466-03012019 03042019 3247 STENGER PETER 324 148864-03012019 03042019 3248 COREY NICHOLLE 328 176647-03012019 03042019 3249 HARTZELL STEVE 329 123679-03012019 03042019 3250 WICKER MITCHELL 360 157433-03012019 03042019 3251 HASTINGS JULLIE K 803 13391-
CITY OF ANNANDALE Check Register Page 2Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 3252 FERRELL MISTY 123 186726-03152019 03182019 3253 HINNENKAMP KELLY 127 296930-03152019 03182019 3254 JARMON VICKI I 134 156691-03152019 03182019 3255 KRIENKE CARRIE L 136 109765-03152019 03182019 3256 GAPINSKI AMELIA 142 78334-03152019 03182019 3257 GIEBENHAIN KARIE 143 62780-03152019 03182019 3258 HERR JEFFREY J 208 228423-03152019 03182019 3259 STANDAFER PETER A 217 188333-03152019 03182019 3260 TAVARES AARON J 234 143820-03152019 03182019 3261 ETSHOKIN LOUIS RICHARD 238 36648-03152019 03182019 3262 Void03152019 03182019 3263 SMITH TARA 251 100781-03152019 03182019 3264 MARES NICHOLAS J 306 9080-03152019 03182019 3265 GLUNZ DAVID D 323 263393-03152019 03182019 3266 STENGER PETER 324 156283-03152019 03182019 3267 COREY NICHOLLE 328 141112-03152019 03182019 3268 HARTZELL STEVE 329 114544-03152019 03182019 3269 WICKER MITCHELL 360 231604-03152019 03182019 3270 RANDALL STEVEN R 570 23273-03152019 03182019 3271 TOMES BRIAN C 571 19117-03152019 03182019 3272 EDWARDS DANIEL J 572 25765-03152019 03182019 3273 JARVIS TRYSTON 573 16808-03152019 03182019 3274 GRIGGS DEREK C 245 209088-03152019 03182019 53766 RAMSTAD DONALD E 533 17270 03152019 03182019 54586 RAMSTAD DONALD E 533 26412 03012019 03042019 54850 ENGFER NANCY E 204 207304-03012019 03042019 54851 FLEMMING MITCHELL E 206 33085-03012019 03042019 54852 HALLER JOSEPH D 305 277811-03012019 03042019 54853 SMART MATTHEW A 331 31168-03012019 03042019 54854 GUNNARSON DWIGHT R 802 18932-03012019 03042019 54855 JONAS SHELLY 804 13391-03012019 03042019 54856 CZYCALLA COREY 806 13391-03012019 03042019 54857 WUOLLET MATTHEW L 821 13391-03012019 03042019 54858 ROTH GREGORY W 912 1847-03012019 03042019 54859 FRANZEN CLIFFORD 913 1847-03012019 03042019 54860 SCHWARZKOPF ERIC 917 2770-03012019 03042019 54861 BAACK LONNIE L 919 1847-03012019 03042019 54862 NILSON MAYNARD A 921 1847-03012019 03042019 54863 DRISTE JOHN 950 1847-03012019 03042019 54864 PETERSON LEE W 980 1847-03012019 03042019 54865 SEAGRAVES RICHARD T 985 1847-03012019 03042019 54866 WAGNER RICHARD 990 2770-03152019 03182019 54949 ENGFER NANCY E 204 163991-03152019 03182019 54950 FLEMMING MITCHELL E 206 33085-03152019 03182019 54951 FAUST MITCHEL L 241 144665-03152019 03182019 54952 HALLER JOSEPH D 305 293266-03152019 03182019 54953 SMART MATTHEW A 331 12698-03152019 03182019 54954 BROWN JOHN D 501 16254-03152019 03182019 54955 DAGNER JOHN A 503 42112-
CITY OF ANNANDALE Check Register Page 3Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 54956 FAHEY MARCUS D 507 17270-03152019 03182019 54957 GRINDLE GARY L 512 65938-03152019 03182019 54958 HAAG BRIAN 514 151209-03152019 03182019 54959 MACHOVSKY JR DALE R 529 27088-03152019 03182019 54960 PICKEN SCOTT W 53203152019 03182019 54961 RAMSTAD DONALD E 533 35555-03152019 03182019 54962 ROEPKE JEFFREY A 535 34539-03152019 03182019 54963 TOWNSEND KRISTOPHER C 546 91057-03152019 03182019 54964 WANG RYAN A 549 46822-03152019 03182019 54965 WUOLLET MATTHEW L 553 24934-03152019 03182019 54966 TORRES HORACIO JR 563 43404-03152019 03182019 54967 KOLB JOHN E 564 25749-03152019 03182019 54968 DWENGER JOSEPH A JR 568 41557-03152019 03182019 54969 HARVEY ADAM 574 42019-03152019 03182019 54970 SCHMIDT LISA A 575 14869-03152019 03182019 54971 OLSON NATHAN G 576 14869-03152019 03182019 54972 PEARSON SEAN 577 27151-03152019 03182019 54973 SCHAUFLER CHRISTINA 578 26505-03152019 03182019 54974 HOEFER JUSTIN A 579 18101-03152019 03182019 54982 RAMSTAD DONALD E 533 26412-03152019 03182019 54983 RAMSTAD DONALD E 533 17270-
Grand Totals 119 12049646-
CITY OF ANNANDALE
REQUEST FOR COUNCIL ACTION
Originating Department Administration
Meeting Date May 6 2019
Agenda No 3A
Agenda Section New Business
Item 2018 Audit
BACKGROUND The City is required to conduct an audit annually The attached audit will be presented at the meeting RECOMMENDATION Motion to approve the 2018 Audit as presented
CPAS amp ADVISORSWILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
AUDITED FINANCIAL STATEMENTS AND
DECEMBER 31 2018
CONWAY DEUTH amp SCHMIESING PLLP
SUPPLEMENTARY INFORMATION
This page intentionally left blank
PAGE
ELECTED OFFICIALS AND ADMINISTRATION 1
INDEPENDENT AUDITORS REPORT 2-4
REQUIRED SUPPLEMENTARY INFORMATION
Managements Discussion and Analysis 5-12
BASIC FINANCIAL STATEMENTS
Statement of Net Position 13
Statement of Activities 14
Balance Sheet - Governmental Funds 15
Reconciliation of the Governmental FundsBalance Sheet to the Statement of Net Position 16
Statement of Revenues Expenditures and Changes in Fund Balances -Governmental Funds 17
Reconciliation of the Statement of Revenues Expendituresand Changes in Fund Balances of Governmental Fundsto the Statement of Activities 18
Statement of Revenues Expenditures and Changes in Fund Balances -Budget and Actual - General Fund 19
Statement of Net Position - Proprietary Funds 20
Statement of Revenues Expenses and Changes in Net Position -Proprietary Funds 21
Statement of Cash Flows - Proprietary Funds 22-23
Notes to the Financial Statements 24-57
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of the Proportionate Share of the Net Pension Liability 58
Schedule of Employer Contributions 59
Schedule of Changes in the Citys Net Pension Liability and Related Ratios 60
Notes to the Required Supplementary Information 61-63
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
PAGE
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
SUPPLEMENTARY INFORMATION
COMBINING STATEMENTS OF NONMAJOR FUNDS
Combining Balance Sheet - Nonmajor Governmental Funds 64
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds 65
Combining Balance Sheet - Nonmajor Governmental Funds - Special Revenue 66
Combining Balance Sheet - Nonmajor Governmental Funds - Debt Service 67
Combining Balance Sheet - Nonmajor Governmental Funds - Capital Projects 68
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Special Revenue 69
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Debt Service 70
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Capital Projects 71
FINANCIAL SCHEDULE
Schedule of Long-Term Liabilities 72
COMPLIANCE SECTION
Independent Auditors Report on Minnesota Legal Compliance 73
Independent Auditors Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements Performedin Accordance with Government Auditing Standards 74-75
Schedule of Findings 76-77
Summary Schedule of Prior Audit Findings 78
Elected Officials Position Term Expires
Dwight Gunnarson Mayor December 31 2018
Corey Czycalla Council Member December 31 2018
Shelly Jonas Council Member December 31 2018
Matthew Wuollet Council Member December 31 2020
Jullie Hastings Council Member December 31 2020
Administration
Kelly Hinnenkamp Administrator Appointed
Misty Ferrell Treasurer Appointed
CITY OF ANNANDALE MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATIONDECEMBER 31 2018
1
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Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Report on the Financial Statements
Managements Responsibility for the Financial Statements
Auditors Responsibility
beli
INDEPENDENT AUDITORS REPORT
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 Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Cityrsquos basic financial statements as listed in the table of contents
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
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
2
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 entitys 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 entitys 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
Opinions
Other Matters
Required Supplementary Information
Supplementary and Other Information
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 Annandale Minnesota as of December 31 2018 and the respective changes in financial position and where applicable cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America
Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions and the Schedule of Changes in the Citys 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 managements 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
3
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Cityrsquos basic financial statements The statements and schedules listed in the table of contents as supplementary information and the Elected Officials and Administration section are presented for purposes of additional analysis and are not a required part of the basic financial statements
The supplementary information is the responsibility of management and was derived from and relates 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 supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole
The Elected Officials and Administration section has 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 the information presented
Other Reporting Required by Government Auditing Standards
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
4
In accordance with Government Auditing Standards we have also issued our report dated May 6 2019 on our consideration of the Citys 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 results of that testing and not to provide an opinion on the effectiveness of the Cityrsquos 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 Cityrsquos internal control over financial reporting and compliance
May 6 2019
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REQUIRED SUPPLEMENTARY INFORMATION
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-
-
-
-
The City as a Whole Statement of Net Position and Statement of Activities
Our analysis of the City of Annandale begins with the Statement of Net Position and the Statement of Activities One of the most important questions asked about the Cityrsquos finances is ldquoIs the City as a whole better off or worse off as a result of the yearrsquos activitiesrdquo The Statement of Net Position and the Statement of Activities both report information about the City as a whole and about its activities in a way that helps answer this question The Statement of Net Position includes all assets and deferred outflows of resources and liabilities and deferred inflows of resources using the accrual basis of accounting In the Statement of Activities all of the current yearrsquos revenues and expenses are taken into account regardless of when cash is received or paid These two statements report the Cityrsquos net position and changes in them You can think of the Cityrsquos net positionmdashthe difference between assets and deferred outflows of resources and liabilities and deferred inflows of resourcesmdashas one way to measure the Cityrsquos financial health Over time increases or decreases in the Cityrsquos net position is one indicator of whether the Cityrsquos financial health is improving or deteriorating
You will need to consider other nonfinancial factors however to assess the overall health of the City of Annandale
In the Statement of Net Position and the Statement of Activities we divide the City into two kinds of activities
Governmental Activities - Most of the Citys basic services are reported here including general government public safety public works culture and recreation and economic development Property taxes and state and federal grants finance most of these activities
5
This annual report consists of a series of financial statements The Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the Cityrsquos finances Fund financial statements are presented after the Statement of Activities Fund financial statements also report the Cityrsquos operations in more detail than the government-wide statements by providing information about the Cityrsquos funds The notes to the financial statements provide information that is essential to a full understanding of the data provided in the government-wide and fund financial statements This annual report also contains other supplementary information in addition to the basic financial statements
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
This section of the basic financial statements of the City of Annandale (the City) presents a discussion and analysis of the Cityrsquos financial performance during the fiscal year ended December 31 2018 Please read it in conjunction with the Cityrsquos basic financial statements following this section
Financial Highlights
The assets and deferred outflows of resources of the City exceeded liabilties and deferred inflows of resources by $16461537
The Cityrsquos total net position increased by $1317551
The Cityrsquos governmental funds reported combined ending fund balances of $4349540 an increase of $122322 The Governmental Funds have $1240520 available for spending at the Citys discretion
At the end of the current fiscal year unassigned fund balance for the General Fund was $1697339 or 9417 of total General Fund expenditures of $1802505
Using This Annual Report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
The proprietary fund financial statements can be found on pages 20-23 of this report
Notes to the 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 The notes to the financial statements can be found on pages 24-57 of this report
6
Proprietary Funds - When the City of Annandale charges customers for the services it providesmdashwhether to outside customers or to other units of the Citymdashthese services are generally reported in proprietary funds Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities In fact the Cityrsquos enterprise funds are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information such as cash flows for proprietary funds
Business-Type Activities - The City charges a fee to customers to help it cover all or most of the cost of certain services it provides The Citys Water Sewer RefuseRecycling and Storm Utility funds are reported here
The Citys Most Significant Funds Fund Financial Statements
Our analysis of the Cityrsquos major funds begins with the fund financial statements These statements provide detailed information about the most significant fundsmdashnot the City as a whole Some funds are required to be established by state law and by bond covenants However the City Council establishes other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes grants and other money The Citys two kinds of funds-governmental and proprietary-use different accounting approaches
Governmental Funds - Most of the Cityrsquos basic services are reported in governmental funds Governmental funds focus on how money flows into and out of those funds and the balances left at year-end that are available for spending These funds are reported using an accounting method called modified accrual accounting which measures cash and all other financial assets that can readily be converted to cash The governmental fund statements provide a detailed short-term view of the Cityrsquos general government operations and the basic services it provides Governmental fund information helps the reader of the statements determine whether there are more or fewer financial resources that can be spent in the near future to finance the Cityrsquos programs We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation after the fund financial statements
The governmental fund financial statements can be found on pages 15-19 of this report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 5190696$ 5190633$ 63$ Net Capital Assets 10406611 10638601 (231990) Net Pension Asset 517946 440028 77918
Total Assets 16115253 16269262 (154009)
Deferred Outflows of Resources 621929 855064 (233135)
Total Assets and DeferredOutflows of Resources 16737182$ 17124326$ (387144)$
Current and Other Liabilities 1080947$ 1068593$ 12354$ Long-Term Liabilities 5393130 6383354 (990224)
Total Liabilities 6474077 7451947 (977870)
Deferred Inflows of Resources 886892 904112 (17220)
Net PositionNet Investment in Capital Assets 4962623 4377847 584776 Restricted 2021421 2178740 (157319) Unrestricted 2392169 2211680 180489
Total Net Position 9376213 8768267 607946
Total Liabilities Deferred Inflowsof Resources and Net Position 16737182$ 17124326$ (387144)$
Statement of Net Position
The Cityrsquos net position increased from a year ago Our analysis below focuses on the net position (Tables 1 and 2) andchanges in net position (Tables 3 and 4) of the Cityrsquos governmental and business-type activities
Table 1Comparative Condensed Statement of Net Position
Governmental Activities
7
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 179979$ 85557$ 94422$ Equity Interest 7004898 7023511 (18613) Net Capital Assets 10543232 10887885 (344653)
Total Assets 17728109 17996953 (268844)
Deferred Outflows of Resources 35051 59103 (24052)
Total Assets and DeferredOutflows of Resources 17763160$ 18056056$ (292896)$
Current and Other Liabilities 1595412$ 1396254$ 199158$ Long-Term Liabilities 9028762 10236810 (1208048)
Total Liabilities 10624174 11633064 (1008890)
Deferred Inflows of Resources 53662 47273 6389
Net PositionNet Investment in Capital Assets 8625232 8741281 (116049) Restricted 74208 36985 37223 Unrestricted (1614116) (2402547) 788431
Total Net Position 7085324 6375719 709605
Total Liabilities Deferred Inflowsof Resources and Net Position 17763160$ 18056056$ (292896)$
Business-Type Activities
8
Comparative Condensed Statement of Net PositionTable 2
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 652677$ 598474$ 54203$ Operating Grants and Contributions 122213 111759 10454 Capital Grants and Contributions 187016 576626 (389610)
General RevenuesProperty Taxes 1485895 1463472 22423 Tax Increments 20858 20203 655 Grants and Contributions Not Restricted 453773 422194 31579 Investment Income 16929 17237 (308) Miscellaneous 4178 17678 (13500) Gain on Sale of Asset 6034 268371 (262337)
Total Revenues 2949573 3496014 (546441)
EXPENSESGeneral Government 502902 475597 27305 Public Safety 970131 1019255 (49124) Public Works 769202 840164 (70962) Culture and Recreation 148880 762606 (613726) Economic Development 45238 85505 (40267) Interest on Long-Term Debt 160274 176897 (16623)
Total Expenses 2596627 3360024 (763397) Change in Net Position before Transfers 352946 135990 216956
TRANSFERS 255000 247000 8000 Change in Net Position 607946 382990 224956
NET POSITION BEGINNING OF YEAR 8768267 8385277 382990
NET POSITION END OF YEAR 9376213$ 8768267$ 607946$
Governmental Activities
Net position of the Citys governmental activities increased by $607946 Table 3 presents the key elements of the increase
Table 3Comparative Condensed Statement of Activities
Governmental Activities
9
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 3213338$ 2905848$ 307490$ General Revenues
Investment Income 2700 (1558) 4258 Total Revenues 3216038 2904290 311748
EXPENSESWater 492444 485751 6693 Sewer 1441099 1331721 109378 RefuseRecycling 199326 196627 2699 Storm Utility 99951 91130 8821
Total Expenses 2232820 2105229 127591 Change in Net Position before Transfers 983218 799061 184157
TRANSFERS (255000) (247000) (8000) CHANGE IN EQUITY INTEREST (18613) (70479) 51866
Change in Net Position 709605 481582 176157
NET POSITION BEGINNING OF YEAR 6375719 5894137 481582
NET POSITION END OF YEAR 7085324$ 6375719$ 709605$
Comparative Condensed Statement of Activities
Business-Type Activities
10
Table 4
Business-Type Activities
The net position of our business-type activities increased by $709605 The net increase was due to the following funds change in net position Water - $26607 decrease Sewer - $822708 increase RefuseRecycling - $9397 increase and Storm Utility - $95893 decrease
The following tables indicate the changes in net position for the Citys business-type activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Capital Project Funds - The capital projects fund balances increased by $13451
11
Over the course of the year the City of Annandale City Council did not revise the budget The General Fund budget predicted a $5178 increase in fund balance which includes the operations of the Motor Vehicle department The actual change in fund balance was an increase of $212334 This is due to both revenues being higher and expenditures being lower than anticipated Mobile Home tax revenues building permit fees and state aids were over budgeted amounts and both current and capital outlay expenditures were under budgeted amounts
Governmental Activities
Revenues - The following chart visually illustrates the Citys revenue by source for its governmental activities
Financial Analysis of the Citys Funds
General Fund - The Citys General Fund Balance increased by $212334 for 2018 The increase is mainly due to an increase in building permit fees and local government aid with a slight increase in public safety expenditures and a decrease in transfers to other funds
Special Revenue Funds - The Citys special revenue fund balances decreased by $53786 A majority of the decrease was due to expenditures for the pintail drive extension project
Debt Service Funds - The debt service fund balances decreased by $49677 The main reason for the decrease was due to customer prepayments made on special assessments in prior years
General Fund Budgetary Highlights
Fees Fines and Charges for Services
2213
Operating Grants and Contributions
414
Capital Grants and Contributions
634
Property Taxes5038 Tax Increments
071
Grants and Contributions Not Restricted1538
Investment Income057
Miscellaneous014
Gain on Sale of Asset021
Revenue by Source - Governmental Activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Long-Term Liabilities
At the end of 2018 the City of Annandale had $15543549 in bonds notes and equipment certificates outstanding Refer to Note 7 of the Notes to the Financial Statements for a schedule showing the Citys long-term liability activity
Economic Factors and Next Years Budget
The City of Annandales appointed officials considered many factors when setting the fiscal year 2019 budget rates and fees that will be charged by the funds of the City The major factor accounted for when adopting the General Fund budget was to hold all line items as much as possible to the 2018 final budget
Contacting the Citys Financial Management
This financial report is designed to provide our residents customers and creditors with a general overview of the Citys finances and to show the Citys accountability for the money it receives If you have any questions about this report or need additional information contact the City of Annandale 30 Cedar Street E Annandale Minnesota 55302
12
Capital Assets
At the end of 2018 the City of Annandale had $47826808 invested in a broad range of capital assets Refer to Note 5 of the Notes to the Financial Statements for a schedule showing the Citys capital asset activity During 2018 the City had a large increase in improvements other than buildings related to the completion of the Southside Trail project
BASIC FINANCIAL STATEMENTS
This page intentionally left blank
Governmental Business-TypeActivities Activities Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Cash and Investments 3413471$ 86083$ 3499554$ Restricted Cash 74208 74208 Taxes Receivable - Delinquent 14909 14909 Special Assessments Receivable
Delinquent 4423 4158 8581 Current and Deferred 650220 14885 665105
Accounts Receivable 96631 339457 436088 Interest Receivable 9 9 Prepaid Items 75903 22861 98764 Internal Balances 385956 (385956) Due from Other Governments 186251 24283 210534 Land Held for Resale 362923 362923 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 2696744 277948 2974692 Other Capital Assets Net of Depreciation 7709867 10265284 17975151
Net Pension Asset 517946 517946 Total Assets 16115253 17728109 33843362
Deferred Outflows of Resources 621929 35051 656980
Total Assets and Deferred Outflows of Resources 16737182$ 17763160$ 34500342$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 65859$ 26908$ 92767$ Contracts Payable 27913 27913 Due to Other Governments 15676 309797 325473 Salaries and Benefits Payable 30329 7259 37588 Interest Payable 61920 78448 140368 Unearned Revenue 36250 36250
Long-Term LiabilitiesNet Pension Liability 696581 197762 894343 Other Long-Term Liabilities Due Within One Year 843000 1173000 2016000 Other Long-Term Liabilities Due in More than One Year 4696549 8831000 13527549
Total Liabilities 6474077 10624174 17098251
Deferred Inflows of Resources 886892 53662 940554
Net PositionNet Investment in Capital Assets 4962623 8625232 13587855 Restricted for
Debt Service 2009940 2009940 Tax Increment 11481 11481 Capital Replacement 74208 74208
Unrestricted 2392169 (1614116) 778053 Total Net Position 9376213 7085324 16461537
Total Liabilities Deferred Inflows of Resourcesand Net Position 16737182$ 17763160$ 34500342$
See Accompanying Notes to the Financial Statements13
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONDECEMBER 31 2018
Fees Fines and Operating CapitalCharges for Grants and Grants and Governmental Business-Type
Expenses Services Contributions Contributions Activities Activities Total
GOVERNMENTAL ACTIVITIESGeneral Government 502902$ 286176$ $ $ (216726)$ $ (216726)$ Public Safety 970131 208144 115858 41000 (605129) (605129) Public Works 769202 130069 6355 26201 (606577) (606577) Culture and Recreation 148880 15413 55109 (78358) (78358) Economic Development 45238 12875 30108 (2255) (2255) Interest on Long-Term Debt 160274 34598 (125676) (125676)
Total Governmental Activities 2596627 652677 122213 187016 (1634721) 0 (1634721)
BUSINESS-TYPE ACTIVITIESWater 492444 565694 73250 73250 Sewer 1441099 2393268 952169 952169 RefuseRecycling 199326 208571 9245 9245 Storm Utility 99951 45805 (54146) (54146)
Total Business-Type Activities 2232820 3213338 0 0 0 980518 980518
Total 4829447$ 3866015$ 122213$ 187016$ (1634721) 980518 (654203)
GENERAL REVENUESProperty Taxes 1485895 1485895 Tax Increments 20858 20858 Grants and Contributions not Restricted to Specific Programs 453773 453773 Unrestricted Investment Earnings 16929 2700 19629 Miscellaneous 4178 4178 Gain on Sale of Asset 6034 6034
TRANSFERS 255000 (255000) CHANGE IN EQUITY INTEREST (18613) (18613)
Total 2242667 (270913) 1971754 Change in Net Position 607946 709605 1317551
NET POSITION BEGINNING OF YEAR 8768267 6375719 15143986
NET POSITION END OF YEAR 9376213$ 7085324$ 16461537$
See Accompanying Notes to the Financial Statements14
CITY OF ANNANDALE MINNESOTA
STATEMENT OF ACTIVITIESYEAR ENDED DECEMBER 31 2018
Program RevenuesNet (Expense) Revenue and
Changes in Net Position
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
ASSETSCash and Investments 1062209$ 2351262$ 3413471$ Taxes Receivable - Delinquent 14534 375 14909Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 650220 650220
Accounts Receivable 5744 90887 96631Interest Receivable 9 9 Prepaid Items 73751 2152 75903Due from Other Funds 920750 190388 1111138Due from Other Governments 135407 50844 186251Land Held for Resale 362923 362923
Total Assets 2212395$ 3703483$ 5915878$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 41982$ 23877$ 65859$ Contracts Payable 3574 24339 27913 Due to Other Funds 143500 581682 725182 Due to Other Governments 6200 9476 15676Salaries and Benefits Payable 30195 134 30329Unearned Revenue 36250 36250
Total Liabilities 261701 639508 901209
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 14534 375 14909Special Assessments 650220 650220
Total Deferred Inflows of Resources 14534 650595 665129
Fund Balance Nonspendable 73751 2152 75903 Restricted 1532633 1532633 Committed 847422 847422 Assigned 165070 487992 653062Unassigned 1697339 (456819) 1240520
Total Fund Balance 1936160 2413380 4349540
Total Liabilities Deferred Inflows ofResources and Fund Balance 2212395$ 3703483$ 5915878$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
BALANCE SHEETGOVERNMENTAL FUNDS
DECEMBER 31 2018
15
2018
Total Fund Balances - Governmental Funds 4349540$
Amounts reported for governmental activities in the Statement of Net Position are differentbecause
Capital assets used in governmental activities are not financial resources and therefore arenot reported as assets in the governmental funds
Capital Assets 31934114Less Accumulated Depreciation (21527503) Net Pension Asset 517946
Certain receivables will be collected in subsequent years but are not available soon enoughto pay for the current periods expenditures and therefore are deferred in the funds
Delinquent Property Taxes 14909Special Assessments 650220
Deferred outflows and inflows of resources related to pensions are applicable to futureperiods and therefore are not reported in the funds
Deferred Outflows of Resources Related to Pensions 621929 Deferred Inflows of Resources Related to Pensions (886892)
Long-term liabilities including bonds payable are not due and payable in the current periodand therefore are not reported as liabilities in the funds
Bonds Payable (4525000) Notes Payable (1014000) Compensated Absences Payable (22979) Interest Payable (61920) Bond Discount 22430 Net Pension Liability (696581)
Total Net Position - Governmental Activities 9376213$
See Accompanying Notes to the Financial Statements16
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION
DECEMBER 31 2018
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
REVENUESProperty Taxes 1167129$ 323230$ 1490359$ Tax Increments 20858 20858 Special Assessments 149671 149671 Licenses and Permits 106197 106197 Intergovernmental 568136 30310 598446 Charges for Services 457769 51231 509000 Fines and Forfeitures 12790 4299 17089 Investment Income 22019 (5090) 16929 Contributions and Donations 1700 133758 135458 Miscellaneous 22893 679 23572
Total Revenues 2358633 708946 3067579
EXPENDITURESCurrent
General Government 412224 10807 423031 Public Safety 889531 42738 932269 Public Works 379968 379968 Culture and Recreation 111127 3735 114862 Economic Development 52358 52358
Debt Service Principal 821000 821000 Interest and Other Charges 162964 162964
Capital Outlay General Government 5206 5206 Public Safety 4449 67055 71504 Public Works 14006 14006 Culture and Recreation 102651 102651 Economic Development 144931 144931
Total Expenditures 1802505 1422245 3224750 Excess (Deficiency) of Revenues
Over (Under) Expenditures 556128 (713299) (157171)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 1145914 1145914 Transfers Out (343794) (547120) (890914)
Total Other Financing Sources (Uses) (343794) 623287 279493 Net Change in Fund Balances 212334 (90012) 122322
FUND BALANCE BEGINNING OF YEAR 1723826 2503392 4227218
FUND BALANCE END OF YEAR 1936160$ 2413380$ 4349540$
See Accompanying Notes to the Financial Statements17
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
YEAR ENDED DECEMBER 31 2018
2018
Total Net Change in Fund Balances - Governmental Funds 122322$
Amounts reported for governmental activities in the Statement of Activities are different because
Capital outlays are reported in governmental funds as expenditures However in the Statementof Activities the cost of those assets is allocated over the estimated useful lives asdepreciation expense
Capital Outlays 360225 Depreciation Expense (556497) Disposal of Capital Assets (75923) Accumulated Depreciation Related to Disposed Capital Assets 40205
Revenues in the Statement of Activities that do not provide current financial resources are notreported as revenues in the funds
Special Assessments (115073)
Delinquent property taxes receivable will be collected in subsequent years but are not availablesoon enough to pay for the current periods expenditures and therefore are deferred in the funds (4464)
Some expenses reported in the Statement of Activities do not require the use of currentresources and therefore are not reported as expenditures in governmental funds
Compensated Absences 313 Net Pension Asset 77918Net Pension Liability 151145 Deferred Outflows of Resources Related to Pensions (233135) Deferred Inflows of Resources Related to Pensions 17220
Principal Retirement of Long-Term Debt 821000 Amortization of Bond Discounts (4234) Change in Interest Payable 6924
Change in Net Position - Governmental Activities 607946$
See Accompanying Notes to the Financial Statements18
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES EXPENDITURESAND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Bond proceeds provide current financial resources to governmental funds but issuing debtincreases long-term liabilities in the Statement of Net Position Repayment of bond principalis an expenditure in the governmental funds but the repayment reduces long-term liabilities inthe Statement of Net Position
Over(Under)
FinalOriginal Final Actual Budget
REVENUESProperty Taxes 1120885$ 1120885$ 1167129$ 46244$ Licenses and Permits 61800 61800 106197 44397 Intergovernmental 541952 541952 568136 26184 Charges for Services 437744 437744 457769 20025 Fines and Forfeitures 8700 8700 12790 4090 Investment Income 22019 22019 Contributions and Donations 1700 1700 Miscellaneous 20000 20000 22893 2893
Total Revenues 2191081 2191081 2358633 167552
EXPENDITURESCurrent
General Government 435269 435269 412224 (23045) Public Safety 896497 896497 889531 (6966) Public Works 399317 399317 379968 (19349) Culture and Recreation 127325 127325 111127 (16198)
Capital OutlayGeneral Government 30500 30500 5206 (25294) Public Safety 1500 1500 4449 2949
Total Expenditures 1890408 1890408 1802505 (87903) Excess (Deficiency) of Revenues
Over (Under) Expenditures 300673 300673 556128 255455
OTHER FINANCING SOURCES (USES)Transfers Out (295495) (295495) (343794) (48299)
Net Change in Fund Balance 5178$ 5178$ 212334 207156$
FUND BALANCE BEGINNING OF YEAR 1723826
FUND BALANCE END OF YEAR 1936160$
See Accompanying Notes to the Financial Statements19
Budgeted Amounts
YEAR ENDED DECEMBER 31 2018
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL
GENERAL FUND
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current AssetsCash and Investments 23690$ 62393$ $ $ 86083$ Special Assessments Receivable
Delinquent 1167 2096 682 213 4158Current and Deferred 3859 9981 901 144 14885
Accounts Receivable 46078 269326 19878 4175 339457Prepaid Items 9433 12352 1076 22861Due from Other Governments 144 24111 24 4 24283Due from Other Funds 98000 21000 119000
Total Current Assets 182371 401259 22561 4536 610727
Noncurrent AssetsRestricted Cash 74208 74208 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 66881 191067 20000 277948Other Capital Assets Net of Depreciation 4497152 3259174 2505 2506453 10265284
Total Noncurrent Assets 4564033 10529347 22505 2506453 17622338 Total Assets 4746404 10930606 45066 2510989 18233065
Deferred Outflows of ResourcesRelated to Pensions 12805 20153 2093 35051
Total Assets and DeferredOutflows of Resources 4759209$ 10950759$ 47159$ 2510989$ 18268116$
LIABILITIES DEFERRED INFLOWS OFRESOURCES AND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 11931$ 1765$ 13212$ $ 26908$ Due to Other Funds 445076 28318 31562 504956 Due to Other Governments 453 308238 1106 309797 Salaries and Benefits Payable 2732 3813 714 7259Interest Payable 13173 65275 78448Notes Payable Due Within One Year 232000 941000 1173000
Total Current Liabilities 260289 1765167 43350 31562 2100368
Long-Term LiabilitiesNet Pension Liability 72251 113702 11809 197762Notes Payable Net of Current Amount 1576000 7255000 8831000
Total Noncurrent Liabilities 1648251 7368702 11809 0 9028762 Total Liabilities 1908540 9133869 55159 31562 11129130
Deferred Inflows of ResourcesRelated to Pensions 19605 30853 3204 53662
Net PositionNet Investment in Capital Assets 2756033 3340241 22505 2506453 8625232 Restricted for Capital Replacement 74208 74208 Unrestricted 75031 (1628412) (33709) (27026) (1614116)
Total Net Position 2831064 1786037 (11204) 2479427 7085324
Total Liabilities Deferred Inflowsof Resources and Net Position 4759209$ 10950759$ 47159$ 2510989$ 18268116$
See Accompanying Notes to the Financial Statements20
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONPROPRIETARY FUNDS
DECEMBER 31 2018
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
OPERATING REVENUESCharges for Services 565694$ 1219482$ 208571$ 45805$ 2039552$
OPERATING EXPENSESWages and Salaries 110471 188946 15086 314503Materials and Supplies 29374 29374Repairs and Maintenance 57478 21425 44 8346 87293Insurance 11074 9982 21056Electricity 27203 12231 39434Wastewater Commission Charges 871318 871318 Testing 1111 1111Contracted Services 4467 4378 162233 171078Depreciation 171475 118151 1333 87981 378940Professional Services 4717 5818 1834 524 12893Billing 14718 15335 30053Miscellaneous 17863 15245 3461 3100 39669
Total Operating Expenses 449951 1247494 199326 99951 1996722 Operating Income (Loss) 115743 (28012) 9245 (54146) 42830
NONOPERATING REVENUES (EXPENSES)Investment Income 543 1752 152 253 2700Interest and Fiscal Charges (42493) (193605) (236098) Reimbursements 1173786 1173786
Total Nonoperating Revenues(Expenses) (41950) 981933 152 253 940388
Income (Loss) Before Transfersand Other Items 73793 953921 9397 (53893) 983218
TRANSFERS AND OTHER ITEMSChange in Equity Interest (18613) (18613) Transfers In 19600 36400 56000 Transfers Out (120000) (149000) (42000) (311000)
Total Transfers and Other Items (100400) (131213) 0 (42000) (273613) Change in Net Position (26607) 822708 9397 (95893) 709605
NET POSITION BEGINNING OF YEAR 2857671 963329 (20601) 2575320 6375719
NET POSITION END OF YEAR 2831064$ 1786037$ (11204)$ 2479427$ 7085324$
See Accompanying Notes to the Financial Statements
YEAR ENDED DECEMBER 31 2018
21
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET POSITIONPROPRIETARY FUNDS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers and Users 553327$ 1022629$ 207570$ 47362$ 1830888$ Payments to Suppliers (164208) (767959) (181855) (11970) (1125992) Payments to Employees (115506) (184885) (20045) (320436)
Net Cash Provided (Used) by OperatingActivities 273613 69785 5670 35392 384460
CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIESTransfers Out (120000) (149000) (42000) (311000) Interfund Loan 33986 (4344) 6201 35843 Reimbursements 1173786 1173786
Net Cash Provided (Used) by NoncapitalFinancing Activities (120000) 1058772 (4344) (35799) 898629
CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESPrincipal Paid on Debt (226000) (920000) (1146000) Interest Paid on Debt (44518) (200960) (245478) Bonds Issued 3396 3396 Acquisition and Construction of Capital Assets (16094) (16501) (1692) (34287)
Net Cash Provided (Used) by Capital andRelated Financing Activities (283216) (1137461) (1692) 0 (1422369)
CASH FLOW FROM INVESTING ACTIVITIESInterest and Dividends Received (Paid) 543 4594 366 407 5910
Net Increase (Decrease) in Cash andCash Equivalents (129060) (4310) 0 0 (133370)
CASH AND CASH EQUIVALENTSBEGINNING OF YEAR 152750 140911 293661
CASH AND CASH EQUIVALENTSEND OF YEAR 23690$ 136601$ 0$ 0$ 160291$
RECONCILIATION OF CASH AND CASH EQUIVALENTSCash and Investments 23690$ 62393$ $ $ 86083$ Restricted Cash 74208 74208
Total Cash amp Cash Equivalents 23690$ 136601$ 0$ 0$ 160291$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
22
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CITY OF ANNANDALE MINNESOTA
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
RECONCILIATION OF OPERATING INCOME(LOSS) TO CASH FLOWS FROM OPERATINGACTIVITIESOperating Income (Loss) 115743$ (28012)$ 9245$ (54146)$ 42830$ Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided (Used) by OperatingActivities
Depreciation 171475 118151 1333 87981 378940 Pension Related Adjustments (5848) 3118 (5273) (8003)(Increase) Decrease in Assets
Special Assessments ReceivableDelinquent 300 514 (37) (113) 664 Current and Deferred (754) (4236) (573) 2077 (3486)
Accounts Receivable (11969) (190759) (1427) (453) (204608) Prepaid Items (397) (1455) (329) (2181) Due from Other Governments 56 (2372) 1036 46 (1234)
Increase (Decrease) in LiabilitiesAccounts Payable 3741 (10858) 275 (6842) Due to Other Governments 453 184751 1106 186310 Salaries and Benefits Payable 813 943 314 2070
Net Cash Provided (Used) by OperatingActivities 273613$ 69785$ 5670$ 35392$ 384460$
NONCASH INVESTING CAPITAL ANDFINANCING ACTIVITIESChange in Equity Interest 0$ (18613)$ 0$ 0$ (18613)$
See Accompanying Notes to the Financial Statements23
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A REPORTING ENTITY
Blended Component Unit - Reported as if they were part of the City
Blended Component Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
The financial statements present the City and its component units The City includes all funds organizations institutions agencies departments and offices that are not legally separate from such Component units are legally separate organizations for which the City is financially accountable or for which the exclusion of the component unit would render the financial statements of the City misleading
The City of Annandale Minnesota is a statutory city governed by an elected mayor and four council members The accompanying financial statements present the government entities for which the government is considered to be financially accountable
Joint Ventures and Jointly Governed Organizations - The relationship of the City with the entity is disclosed
The criteria used to determine if the City is financially accountable for a component unit includes whether or not 1) the City appoints the voting majority of the potential component units governing body and is able to impose its will on the potential component unit or is in a relationship of financial benefit or burden with the potential component unit or 2) the potential component unit is fiscally dependent on and there is a potential for the potential component unit to provide specific financial benefits to or impose specific financial burdens on the City
As a result of applying the component unit definition criteria above certain organizations have been defined and are presented in this report as follows
For each of the categories above the specific entities are identified as follows
The Annandale Economic Development Authority (EDA) is a legal entity separate from the City Although legally separate the Annandale EDA is reported as if it were part of the primary government because it provides services exclusively for the City Separate financial statements are not prepared for the Annandale EDA
24
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
A REPORTING ENTITY (Contd)
Joint Ventures and Jointly Governed Organizations
B GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Separate financial statements are provided for governmental funds and proprietary funds Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements
Separate financial statements can be obtained by contacting the Wastewater Commission PO Box K Annandale MN 55302
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or segment Interest on general long-term debt is considered an indirect expense and is reported separately in the Statement of Activities Program revenues include 1) charges to customers or applicants who purchase use or directly benefit from goods services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment Taxes and other items not properly included among program revenues are reported instead as general revenues Internally dedicated revenues are reported as general revenues rather than program revenues
The government-wide financial statements (ie the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the City Governmental activities which normally are supported by taxes and intergovernmental revenues are reported separately from business-type activities which rely to a significant extent on fees and charges for support
In September 2003 the City entered into a joint powers agreement with the City of Maple Lake to establish the Annandale-Maple Lake Wastewater Commission (the Commission) The purpose of the Commission is to make available wastewater treatment within the present and future boundaries of the Cities and to serve such other areas as the Commission approves As part of the joint venture the City of Annandale agrees to fund the Debt Service and Operating Funds of the Commission according to terms of the agreement The agreement states a City may terminate the agreement by written notice to the other City In such event the City of Annandale shall pay 60 of all costs incurred except each City shall pay its own attorneys fee In 2008 both Cities approved amending the joint powers agreement to include the City of Howard Lake effective January 1 2009 Each City will then have a one-third equity interest in the Commission Because there is an explicit measurable equity interest in the joint venture the interest is reported in the government-wide financial statements as well as in the Sewer Fund
25
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
The City reports the following major governmental funds
The City reports the following major enterprise funds
The Sewer Fund accounts for the operations of the Citys sewer utility
The Storm Utility Fund accounts for the activities of the Citys storm drainage operations
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting Revenues are recognized as soon as they are both measurable and available Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period For this purpose the City considers revenues to be available if they are collected within 60 days after the end of the current fiscal period Expenditures generally are recorded when a liability is incurred as under accrual accounting However debt service expenditures as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due
The General Fund is the Citys primary operating fund This fund accounts for all financial resources of the general City except those required to be accounted for in another fund
The RefuseRecycling Fund accounts for the operations of the Citys refuserecycling
Property taxes special assessments intergovernmental revenue charges for services franchise taxes licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period All other revenue items are considered to be measurable and available only when cash is received by the City
The Water Fund accounts for the operations of the Citys water utility
26
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the proprietary fund financial statements Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of related cash flows Property taxes are recognized as revenues in the year for which they are levied Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements Exceptions to this general rule are charges between the Citys utility functions and various other functions of the City Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C
D DEPOSITS AND INVESTMENTS
(1)
(2)
(3)
(4)
(5)
(6)
time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States bank
general obligations of the State of Minnesota and its municipalities and in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service
The Citys cash and cash equivalents are considered to be cash on hand deposits and highly liquid debt instruments purchased with original maturities of three months or less from the date of acquisition
27
mutual funds through shares of registered investment companies provided the mutual fund receives certain ratings depending on its investments
The City may invest in the following types of investments as authorized by Minn Stat sectsect118A04 and 118A05
securities which are direct obligations or are guaranteed or insured issues of the United States its agencies its instrumentalities or organizations created by an act of Congress except mortgage-backed securities defined as high risk by Minn Stat sect118A04 subd 6
MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (Contd)
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 funds principal ongoing operations The principal operating revenues of the enterprise funds are charges to customers for sales and services Operating expenses for enterprise funds include the cost of sales and services administrative expenses and depreciation of capital assets All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses
commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less and
with certain restrictions in repurchase agreements securities lending agreements joint powers investment trusts and guaranteed investment contracts
Cash and investments were comprised of deposits brokered certificates of deposits money market funds at various financial brokers and the 4M Fund
It is generally the Citys policy to use restricted resources first then unrestricted resources as they are needed when an expense is incurred for purposes for which both restricted and unrestricted net position are available
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations The Citys investment policy states it will comply with Minnesota Statutes Chapter 118A
The City has an investment policy in place that addresses interest rate risk credit risk concentration of credit risk and custodial credit risk as follows
Interest Rate Risk This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates The Citys investment policy states the City should manage their interest rates based on safety liquidity and the overall return on the investment The portfolio should contain both short-term and long-term investments to meet anticipated cash flow requirements Extended maturities may be utilized to take advantage of higher yields however no more than 50 of the total investments should extend beyond five years
The City invests in an external investment pool the Minnesota Municipal Money Market Fund (4M Fund) which is created under a joint powers agreement pursuant to Minn Stat sect47159 The 4M Fund is not registered with the Securities Exchange Commission (SEC) but does satisfy the requirements of Rule 2a-7 prescribed by the SEC pursuant to the Investment Company Act of 1940 (17 CFR sect2702a-7) as amended The investment in the pool is measured at the net asset value per share provided by the pool
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America The hierarchy is based on the valuation inputs used to measure the fair value of the asset Level 1 inputs are quoted prices in active markets for identical assets Level 2 inputs are significant other observable inputs Level 3 inputs are significant unobservable inputs
Custodial Credit Risk - Deposits For deposits this is the risk that in the event of bank failure the Citys deposits may not be returned to it The Citys investment policy states the collateralization level will be 110 of the market value of principal and accrued interest for balances above the FDIC insured amount When the pledged collateral consists of notes secured by first mortgages the collateral level will be 140 of the market value of principal and accrued interest
Authorized collateral includes the obligations of the US Treasury agencies and instrumentalities shares of investment companies whos only investments are in the aforementioned securities obligations of the State of Minnesota or its municipalities bankers acceptances futures contracts repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days as well as certain first mortgage notes and certain other state or local government obligations Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral
28
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
E RECEIVABLES AND PAYABLES
F PREPAID ITEMS
All trade and property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of property
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements
29
Custodial Credit Risk - Investments For an investment this is the risk that in the event of the failure of the counterparty the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party The Citys investment policy states when investments purchased by the City are held in safekeeping by a brokerdealer they must provide asset protection of $500000 through the Securities Investor Protector Corporation (SIPC) and at least another $2000000 supplemental insurance protection
The City levies its property tax for the subsequent year during the month of December December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year Such taxes become a lien on January 1 and are recorded as receivables by the City at that date The property tax is recorded as revenue when it becomes measurable and available Wright County is the collecting agency for the levy and remits the collections to the City three times a year The tax levy notice is mailed in March with the first half payment due on May 15 and the second half payment due on October 15 Tax levies from prior years that remain unpaid are classified as delinquent taxes receivable
The County Auditor submits the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year
Activity between funds that are representative of lendingborrowing arrangements outstanding at the end of the fiscal year are referred to as either due tofrom other funds (ie the current portion of interfund loans) or advances tofrom other funds (ie the noncurrent portion of interfund loans) All other outstanding balances between funds are reported as due tofrom other funds Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances
Concentration of Credit Risk This is the risk of loss attributed to the magnitude of an investment in a single issuer Investments should be diversified to avoid incurring unreasonable risk inherent in over investing in specific instruments individual financial institutions or maturities The Citys investment policy states the City will attempt to diversify their investments according to type and maturity
The County Auditor prepares the tax list for all taxable property in the City applying the applicable tax rate to the tax capacity of individual properties to arrive at the actual tax for each property The County Auditor also collects all special assessments except for certain prepayments paid directly to the City
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
G CAPITAL ASSETS
Cost
LandLand Improvements 10000$ Other Improvements 25000 BuildingsImprovements 25000 Machinery and Equipment 5000 Infrastructure 50000
Years
Buildings 5-40Improvements Other than Buildings 5-20Vehicles 5-20Machinery and Equipment 5-40Roads and Highways 20-40Infrastructure 25-40
The City does not possess any material amounts of intangible assets
30
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed Donated capital assets are recorded as capital assets at their estimated acquisition value at the date of donation
Capital assets both tangible and intangible which include property plant equipment and infrastructure assets (eg roads sidewalks and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements Capital assets are defined by the City as assets with an estimated useful life in excess of two years and an initial individual cost of more than the following
Capital Assets
Category
Based on the age of the majority of the Citys infrastructure and an exception for small governments in GASB Statement No 34 the City has determined it is not practical to capitalize infrastructure retroactively The current value of the infrastructure includes projects completed during the year ended December 31 1985 and prospectively from that date
Tangible and intangible assets of the City are depreciated using the straight-line full month convention method over the following estimated useful lives
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
H DEFERRED OUTFLOWS OF RESOURCES
I UNEARNED REVENUE
J COMPENSATED ABSENCES
K POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied Grants and certain other payments received before eligibility requirements are met are also recorded as unearned revenue
The City compensates employees who resign or retire with due notice for unused vacation and holiday pay Employees may carry over no more than 40 hours of vacation at the end of any calendar year unless approved by the City Council Unused vacation time is paid to employees upon separation from the City City employees are also allowed to earn compensatory time in lieu of overtime pay Employees may carry over no more than 40 hours of compensatory time at the end of any calendar year Unused compensatory time is paid to employees upon separation from the City
The liability for compensated absences reported in the financial statements consists of unpaid accumulated vacation and compensatory time balances The liability has been calculated using the vesting method in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included The liability for compensated absences is reported in the governmental funds only if they have matured for example as a result of employee resignations and retirements Compensated absences are accrued when incurred in the government-wide and proprietary fund financial statements The government-wide and proprietary fund Statement of Net Position reports both current and noncurrent portions of compensated absences using full accrual accounting The current portion consists of an amount based on expected or known retirements coming in the next fiscal year The noncurrent portion consists of the remaining amount of vacation and compensatory time
31
Employees of the City pay health care premiums based on their age and level of coverage Since the insurance rate is based on age the City does not have an implicit rate subsidy factor in postemployment health care expenses Additionally Minnesota Statutes require the City to allow retired employees to stay on the health care plan with the retiree responsible to pay the entire premium for continuation coverage The Citys personnel policy does not provide for any contributions upon employee retirement
In addition to assets the statement of financial position will sometimes report a separate section for deferred outflows of resources Deferred outflows of resources represents a consumption of net position that applies to a future reporting period During that future period it will be recognized as an outflow of resources (expenseexpenditure) The City has one item that qualifies for reporting in this category on the government-wide Statement of Net Position which is related to pensions
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
L PENSIONS
M LONG-TERM OBLIGATIONS
N DEFERRED INFLOWS OF RESOURCES
O FUND BALANCE
In addition to liabilities the statement of financial position will sometimes report a separate section for deferred inflows of resources Deferred inflows of resources represents an acquisition of net position that applies to a future reporting period During that future period it will be recognized as an inflow of resources (revenue) The City has items that qualify for reporting in this category on both the government-wide Statement of Net Position and the governmental fund financial statements related to property taxes special assessments and pensions
The City participates in various pension plans total pension expense for the fiscal year ended was $436446 The components of pension expense are noted in the plan summaries
For purposes of measuring the net pension liability deferred outflows of resources and deferred inflows of resources related to pensions and pension expense information about the fiduciary net position of the Public Employees Retirement Association (PERA) and the City of Annandales Fire Relief Association and additions todeductions from PERArsquos and the City of Annandales Fire Relief Associations fiduciary net position have been determined on the same basis as they are reported by PERA and the City of Annandales Fire Relief Association 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
In the fund financial statements governmental fund types recognize bond premiums and discounts as well as bond issuance costs during the current period The face amount of debt issued is reported as other financing sources Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses Issuance costs whether or not withheld from the actual debt proceeds received are reported as debt service expenditures
Nonspendable - consists of amounts that cannot be spent because it is not in spendable form or are legally or contractually required to be maintained intact such as inventories and prepaid items
Restricted - consists of amounts related to externally imposed constraints established by creditors grantors or contributors or constraints imposed by state statutory provisions
In the governmental fund financial statements fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in governmental funds These classifications are as follows
In the government-wide financial statements and proprietary fund types in the fund financial statements long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities business-type activities or proprietary fund type Statement of Net Position
32
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
O FUND BALANCE (Contd)
P NET POSITION
Q USE OF ESTIMATES
Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources in the government-wide and proprietary fund financial statements Net investment in capital assets consists of capital assets net of accumulated depreciation reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets Net position is reported as restricted in the government-wide and proprietary fund financial statements when there are limitations on their use through external restrictions imposed by creditors grantors or laws or regulations of other governments Unrestricted net position consists of all other net position that does not meet the definition of restricted or net investment in capital assets
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 In governmental funds other than the General Fund assigned fund balance represents the remaining amount that is not restricted or committed In the General Fund assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority Pursuant to City Council Resolution the City Treasurer and City Administrator are authorized to establish assignments of fund balance
33
Committed - consists of amounts that are constrained for specific purposes that are internally imposed by formal action of the City Council Those committed amounts cannot be used for any other purpose unless the Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts These constraints are established by Resolution of the City Council
Unassigned - is the residual classification for the General Fund and also reflects negative residual amounts in the remaining governmental funds
The City requires restricted amounts to be spent first when both restricted and unrestricted fund balance is available Additionally the City would first use committed then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and deferred outflows of resources and liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expendituresexpenses during the reporting period Actual results could differ from those estimates
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
A BUDGETARY INFORMATION
1
2
3
4
5
6
7
Annual appropriated budgets are adopted during the year for the General and Special Revenue Funds Annual appropriated budgets are not adopted for Debt Service Funds because effective budgetary control is alternatively achieved through bond indenture provisions Budgetary control for Capital Projects Funds is accomplished through the use of project controls and formal appropriated budgets are not adopted
34
Budgeted amounts are as originally adopted or as amended by the City Council Individual amendments were not material in relation to the original amounts budgeted Budgeted expenditure appropriations lapse at year-end
Expenditures may not legally exceed budgeted appropriations at the department level No funds budget can be increased without City Council approval The City Council may authorize transfer of budgeted amounts between departments within any fund Management may amend budgets within a department level so long as the total department budget is not changed
The City Council adopts an annual budget The amounts shown in the financial statements as budget represent the original budgeted amounts and all revisions made during the year The City follows these procedures in establishing the budgetary data reflected in the financial statements
Budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America
The budget is legally enacted through passage of a resolution after obtaining taxpayer comments The budget resolution adopted by the City Council sets forth the budgets at the function level for the General and Special Revenue Funds
Public hearings are conducted to obtain taxpayer comments
Budget requests are submitted by all department heads to the City Administrator The City Administrator compiles the budget requests into an overall preliminary City budget The City Administrator presents the proposed budget to the City Council
Encumbrances outstanding at year-end expire and outstanding purchase orders are canceled and not reported in the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (Contd)
B DEFICIT BALANCES
The following funds had deficit balances
RefuseRecycling (11204)$ Nonmajor Governmental Funds (454667)
C EXPENDITURES EXCEEDING APPROPRIATIONS
NOTE 3 DEPOSITS AND INVESTMENTS
A DEPOSITS
Checking 1669430$
B INVESTMENTS
Fair Value Level 1 Level 2 Level 3
Investments at fair valueBrokered Certificates of Deposit 1540744$ 0$ 1540744$ 0$
Investments at amortized costMoney Market Accounts 324792 4M Money Market 38796
Total Investments 1904332$
The Brokered Certificates of Deposit have a weighted average maturity of 216 years and were not rated
In accordance with applicable Minnesota Statutes the City maintains deposits at depository banks authorized by the City Council
35
There were no funds that had expenditures exceeding appropriations
Custodial Credit Risk - Deposits The Citys bank balances were not exposed to custodial credit risk because they were fully insured through the FDIC as well as collateralized with securities held by the pledging financial institutions trust department or agent and in the Citys name
Fair Value Measuring Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 3 DEPOSITS AND INVESTMENTS (Contd)
B INVESTMENTS (Contd)
The following is a summary of total deposits and investments
Deposits (Note 3A) 1669430$ Investments (Note 3B) 1904332
Total Deposits and Investments 3573762$
Statement of Net PositionCash and Investments 3499554$ Restricted Cash 74208
3573762$
NOTE 4 RECEIVABLES
Receivables are as follows
Amounts notScheduled
for CollectionDuring the
Total SubsequentReceivables Year
Governmental ActivitiesTaxes Receivable - Delinquent 14909$ $ Special Assessments Receivable 654643 584377 Accounts Receivable 96631 16271 Interest Receivable 9
Total Governmental Activities 766192$ 600648$
Business-Type ActivitiesSpecial Assessments Receivable 19043$ 9392$ Accounts Receivable 339457
Total Business-Type Activities 358500$ 9392$
Concentration of Credit Risk The City was exposed to concentration of credit risk due to the fact that some of the Citys brokered certificates of deposit exceeded 5 of the total Citys investments portfolio
36
Deposits and investments are presented in the basic financial statements as follows
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS
Capital asset activity was as follows
Beginning EndingGovernmental Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 2482508$ $ (18800)$ 2463708$ Construction in Progress 508685 248979 (524628) 233036
Total Capital AssetsNot Being Depreciated 2991193 248979 (543428) 2696744
Capital Assets Being DepreciatedBuildings 3065250 3065250 Improvements Other than Buildings 1298097 524628 1822725 Machinery and Equipment 2556167 111246 (57123) 2610290 Infrastructure 21739105 21739105
Total Capital AssetsBeing Depreciated 28658619 635874 (57123) 29237370
Less Accumulated Depreciation forBuildings 1145321 75543 1220864 Improvements Other than Buildings 858879 46992 905871 Machinery and Equipment 1568583 121681 (40205) 1650059 Infrastructure 17438428 312281 17750709
Total AccumulatedDepreciation 21011211 556497 (40205) 21527503
Total Capital Assets BeingDepreciated Net 7647408 79377 (16918) 7709867
Governmental ActivitiesNet Capital Assets 10638601$ 328356$ (560346)$ 10406611$
37
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS (Contd)
Capital asset activity was as follows
Beginning EndingBusiness-Type Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 277948$ $ $ 277948$
Capital Assets Being DepreciatedBuildings 4175245 4175245 Improvements Other than Buildings 12637 12637 Machinery and Equipment 268809 34287 303096 Infrastructure 11123768 11123768
Total Capital AssetsBeing Depreciated 15580459 34287 0 15614746
Less Accumulated Depreciation forBuildings 1499349 92233 1591582 Improvements Other than Buildings 12636 12636 Machinery and Equipment 190152 19580 209732 Infrastructure 3268385 267127 3535512
Total AccumulatedDepreciation 4970522 378940 0 5349462
Total Capital Assets BeingDepreciated Net 10609937 (344653) 0 10265284
Business-Type ActivitiesNet Capital Assets 10887885$ (344653)$ 0$ 10543232$
Depreciation expense was charged to functionsprograms as follows
Governmental ActivitiesGeneral Government 53809$ Public Safety 91620 Public Works 383653 Culture and Recreation 27415
Total Depreciation Expense - Governmental Activities 556497$
Business-Type ActivitiesWater 171475$ Sewer 118151 RefuseRecycling 1333 Storm Utility 87981
Total Depreciation Expense - Business-Type Activities 378940$
38
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 6 INTERFUND ACTIVITY
A INTERFUND BALANCES
The composition of interfund balances is as follows
Amount
General Sewer 445076$ General RefuseRecycling 28318 General Storm Utility 31562 General Nonmajor Governmental Funds 415794 Water Nonmajor Governmental Funds 98000 Sewer Nonmajor Governmental Funds 21000 Nonmajor Governmental Funds General 143500 Nonmajor Governmental Funds Nonmajor Governmental Funds 46888
Total Interfund Balances 1230138$
B INTERFUND TRANSFERS
The composition of interfund transfers is as follows
Nonmajor Governmental
Water Sewer Funds Total
Transfer OutGeneral 19600$ 36400$ 287794$ 343794$ Water 120000 120000 Sewer 149000 149000 Storm Utility 42000 42000 Nonmajor Governmental
Funds 547120 547120
Total Interfund Transfers 19600$ 36400$ 1145914$ 1201914$
Receivable Fund Payable Fund
39
The purpose of the above transfers was to provide funding for debt service capital improvement projects capital outlay and operating purposes
The purpose of the above interfund loans was to provide financing for operating purposes and to cover deficit cash balances
Transfer In
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES
A GENERAL OBLIGATION BONDS
B COMPONENTS OF LONG-TERM LIABILITIES
Interest Final BalanceRates Maturity Outstanding
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan BondsSeries 2008A 300-400 02012022 295000$
GO Special Assessment BondsGO Improvement Bonds Series 2008B 300-4125 02012024 560000 GO Improvement Bonds Series 2011A 105-415 02012032 1300000 GO Refunding Bonds Series 2011B 085-270 02012021 585000 GO Refunding Bonds Series 2012A 055-185 02012022 1035000 GO Improvement Bonds Series 2015A 110-345 02012036 750000
GO NotesGO Improvement Note of 2011 1959 08202031 846000
GO Equipment CertificateGO Equipment Certificate 2016A 2100 02012021 168000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549$
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 2819 08202023 996000$ PFA Clean Water Revenue Note 2220 08202026 8086000 PFA Water Revenue Note of 2015 1031 08202035 812000 PFA Sewer Revenue Note of 2015 1000 08202035 110000
Total Business-Type Activities 10004000$
GO Bonds are direct obligations and pledge the full faith and credit of the City These bonds generally are issued as 15 year Serial Bonds with equal debt service payments each year
The City issues General Obligation (GO) Bonds to provide financing for street improvements facility construction and tax increment projects Debt service is covered respectively by special assessments property taxes and tax increments against benefited properties with any shortfalls being paid from general taxes
40
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
B COMPONENTS OF LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for all bonded debt and notes outstanding are as follows
Principal Interest Principal Interest
70000$ 10400$ 660000$ 112343$ 70000 7600 675000 97718 75000 4700 600000 82645 80000 1600 480000 63498
220000 59861 760000 211593 680000 82489 155000 8131
295000$ 24300$ 4230000$ 718278$
2019
2029-20332024-2028
20222023
On September 27 2011 the City issued $1620000 GO Refunding Bonds Series 2011B with an interest rate of 85 to 270 The City issued the Bonds to crossover refund the $1020000 GO Fire Hall Bonds Series 2004A and the $1645000 GO Improvement Bonds Series 2004B The City completed the refunding to reduce its debt service payment over the next 9 years by $20827 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $20868
Debt service funds are used to liquidate the governmental activities outstanding bonded indebtedness and notes The Park Capital Projects Fund is used to liquidate the governmental activities outstanding contract for deed The General Fund has historically been used to liquidate the outstanding governmental activities compensated absences
GO Improvement Bonds Assessment Bonds
On April 4 2012 the City issued $2225000 GO Refunding Bonds Series 2012A with an interest rate of 55 to 185 The City issued the Bonds to refund the $1415000 GO Improvement Bonds Series 2001C and the $320000 GO Refunding Improvement Bonds Series 2003 as well as crossover refund the $3100000 GO Improvement Bonds Series 2006A The City completed the refunding to reduce its debt service payment over the next 10 years by $179206 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $161420
41
2034-2036
Governmental ActivitiesGO Special
2020
December 31
2021
Year Ending
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS (Contd)
Principal Interest Principal Interest
58000$ 16573$ 55000$ 2951$ 59000 15437 56000 1785 60000 14281 57000 598 61000 13106 62000 11911
332000 40728 214000 8423
846000$ 120459$ 168000$ 5334$
Principal Interest
1173000$ 217058$ 1200000 190488 1227000 163282 1254000 135459 1283000 151604 3466000 171976
284000 14813 117000 1808
10004000$ 1046488$
42
2023
Governmental Activities
2020
Year Ending
2029-2033
2022
2034-2035
2021
2028-2028
2024-2028
2022
2020
2019
2019
Business-Type Activities
2029-2031
GO Notes
2021
December 31Year Ending
2023
GO Equipment Certificates
GO Revenue Notes
December 31
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
D CHANGES IN LONG-TERM LIABILITIES
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Governmental ActivitiesBonds Payable
GOImprovementBonds 365000$ $ 70000$ 295000$ 70000$
GO SpecialAssessment Bonds 4870000 640000 4230000 660000
5235000 0 710000 4525000 730000
GO ImprovementNote of 2011 903000 57000 846000 58000
GO Equipment Certificate 222000 54000 168000 55000
CompensatedAbsences 23292 58115 58428 22979
Unamortized BondDiscount (26664) 4234 (22430)
Total GovernmentalActivities 6356628$ 62349$ 879428$ 5539549$ 843000$
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Business-Type ActivitiesNotes Payable
GO Revenue Notes 11146604$ 3396$ 1146000$ 10004000$ 1173000$
43
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
E CONDUIT DEBT OBLIGATIONS
The Citys conduit debt consisted of the following
Senior Housing and Health Care Revenue Refunding Note 6661528$
NOTE 8 RISK MANAGEMENT
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION
A PLAN DESCRIPTION
Firefighters of the City are members of the Association The Association is the administrator of a single-employer defined benefit pension plan available to firefighters The plan is administered by the Association pursuant to Minnesota Statutes Chapter 69 Chapter 424A and the Associations by-laws As of December 31 2017 the plan covered 28 active firefighters and 14 vested terminated fire fighters whose pension benefits are deferred
There are no other claims liabilities reported in the financial statements based on the requirements of accounting standards which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years
The Citys workers compensation insurance policy is retrospectively rated With this type of policy final premiums are determined after loss experience is known The amount of premium adjustment for 2018 is estimated to be immaterial based on workers compensation rates and salaries for the year
44
Conduit debt obligations are certain limited-obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party The City has issued various revenue bonds to provide funding to private-sector entities for projects deemed to be in the public interest Although these bonds bear the name of the City the City has no obligation for such debt Accordingly the bonds are not reported as liabilities in the financial statements of the City
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) which is a public entity risk pool currently operating as a common risk management and insurance program with other cities in the state The City pays an annual premium to the LMCIT for its insurance coverage The LMCIT is self-sustaining through commercial companies for excess claims The City is covered through the pool for any claims incurred but unreported but retains risk for the deductible portion of its insurance policies The amount of these deductibles is considered immaterial to the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
B BENEFITS PROVIDED
C CONTRIBUTIONS
D PENSION COSTS
Total Plan Net Pension Pension Fiduciary LiabilityLiability Net Position (Asset)
(a) (b) (a) - (b)
Balances at 112017 $ 569046 $ 1009074 $ (440028)Changes for the Year
Service Cost 26727 26727 Interest 34955 34955 Changes in Benefit Terms 28893 28893 Contributions - Employer 3000 (3000)Contributions - State 47693 (47693)Net Investment Income 126216 (126216)Benefit Payments (72973) (72973) Administrative Expense (8416) 8416
Net Change 17602 95520 (77918)
Balances at 12312017 $ 586648 $ 1104594 $ (517946)
The plan provides lump-sum retirement death and supplemental benefits to covered firefighters and survivors Benefits are paid based on the number of years of service multiplied by a benefit level per year of service approved by the City The plan includes a $2600 service pension benefit for each year of service Members are eligible for a lump-sum retirement benefit at 50 years of age or after completion of 20 years of service If a member is both age 50 and has completed five years of service but not 20 years of service the lump-sum pension will be reduced by 4 for each year of service less than 20 years
The plan is funded by fire state aid investment earnings and if necessary employer contributions as specified in Minnesota Statutes and voluntary City contributions As of December 31 2017 the State of Minnesota contributed $47693 in fire state aid to the plan on behalf of the Fire Department Required employer contributions are calculated annually based on statutory provisions The City made voluntary contributions of $3000 to the plan
The City reported a net pension liability (asset) of ($517946) The Citys net pension liability (asset) was measured as of December 31 2017 and the total pension liability used to calculate the net pension liability (asset) in accordance with GASB 68 was determined by an independent actuary applying an actuarial formula to specific census data certified by the fire department The following table presents the changes in net pension liability during the year
45
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
D PENSION COSTS (Contd)
The lump sum benefit increased from $2400 to $2600 per year effective January 1 2018
Differences between expected and actual economic experience $ 5346$ Changes in actuarial assumptions 3678 Net differences between projected and actual investment earnings 26024 Contributions paid to plan subsequent to measurement date 55196 State aid received for the plan subsequent to measurement date 52196
55196$ 87244$
December 31
20192020202120222023
Thereafter
For the year ended December 31 2018 the City recognized pension expense of ($15721)
The City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
$ 537
46
$55196 reported as deferred outflows of resources related to pensions resulting from City contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended December 31 2019 $52196 reported as deferred inflows of resources related to pensions resulting from state aid received for the plan subsequent to the measurement date will be recognized as an increase of the net pension liability (asset) in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pension plans will be recognized in pension expense as follows
Pension Expense Amount
(2) (17701) (14691) (1457) (1734)
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
E ACTUARIAL ASSUMPTIONS
Inflation Rate 275 percentRetirement Eligibility Later of current age and age 50Expected Long-Term Investment Return 625 percentAmortization Method
Mortality
F DISCOUNT RATE
G PENSION LIABLIITY (ASSET) SENSITIVITY
1 Decrease 1 Increasein Discount in Discount
Rate Rate(525) (625) (725)
Citys Net Pension Liability (Asset) $ (497411) $ (517946) $ (537562)
Straight-line amortization over a closed 5-year period or straight-line amortization over a close period equal to the average of the expected remaining service lives of all members that are provided with pensions through the pension planRates used in the July 1 2016 Minnesota PERA Police amp Fire Plan actuarial valuation
The discount rate used to measure the total pension liability was 625 The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at a rate specified in statute Based on that assumption the pension planrsquos 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
The following presents the net pension liability (asset) calculated using the discount rate as well as what the Citys net pension liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate
Discount Rate
The total pension liability was determined using the following actuarial assumptions applied to all periods included in the measurement
The actuarial assumptions used in the December 31 2018 valuation were based on the results of an actuarial experience study for the period January 1 2016 - December 31 2016
47
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
H PLAN INVESTMENTSINVESTMENT POLICY
- Attempt to maintain minimum funding ratio of 120- Attempt to increase the pension amount by $200 every other year- Meet twice per year to discuss any changes to allocation and prepare for a joint meeting with the City
I ASSET ALLOCATION
Domestic equityInternational equityFixed incomeReal estate and alternativesCash and equivalents
Total
J PENSION PLAN FIDUCIARY NET POSITION
10000
The best-estimates of expected future asset class returns were published in the 2017 Survey of Capital Market Assumptions produced by Horizon Actuarial Services These expected returns along with expected asset class standard deviations and correlation coefficients are based on Horizonrsquos annual survey of investment advisory firms The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data
Detailed information about the pension plans fiduciary net position is available in a separately-issued financial report
Asset Class
The plans funded status increased from 1773 to 1883 since the prior valuation This change is primarily due to investment returns in excess of expected
4500 5391000 5203500 198500 425500 079
The Association has a formal investment policy that operates within standard investment practices of the prudent person and other standards codified in Minnesota Statutes Chapter 11A and Chapter 356
The Associations pension plan assets are to be invested for the exclusive benefit of the fund members and will attempt to generate investment returns of at least 5 percent of an annualized basis over time Other goals of the Association include
The long-term expected rate of return on pension plan investments as determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns net of pension plan investment expense and inflation) are developed for each major asset class These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table
Long-Term Expected Real Rate of ReturnTarget Allocation
48
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A PLAN DESCRIPTION
B BENEFITS PROVIDED
GERP Benefits
General Employees Retirement Plan (GERP General Employees Plan accounted for in the General Employees Fund)
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
Public Employees Police and Fire Plan (PEPFP Police and Fire Plan accounted for in the Police and Fire Fund)
The Police and Fire Plan 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 Police and Fire Plan also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to PERA
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
General Employees Plan benefits are based on a memberrsquos 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 PERAs 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 12 for each of the first 10 years of service and 17 for each additional year The rates are 22 and 27 respectively for Basic members Under Method 2 the accrual rate for Coordinated members is 17 for all years of service and 27 for Basic members The accrual rates for former MERF members is 20 for each of the first 10 years of service and 25 for each additional year 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
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA) PERArsquos defined benefit pension plans are established and administered in accordance with Minnesota Statutes Chapters 353 and 356 PERArsquos defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code
49
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
B BENEFITS PROVIDED (Contd)
GERP Benefits (Contd)
PEPFP Benefits
C CONTRIBUTIONS
GERP Contributions
PEPFP Contributions
Beginning January 1 2019 benefit recipients will receive a future annual increase equal to 50 percent of the Social Security Cost of Living Adjustment not less than 10 percent and not more than 15 percent For retirements on or after January 1 2024 the first benefit increase is delayed until the retiree reaches Normal Retirement Age (not applicable to Rule of 90 retirees disability benefit recipients or survivors) A benefit recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase Members receiving benefits for at least one month but less than 12 full months as of June 30 will receive a pro rata increase
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 percent after five years up to 100 percent 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 percent after ten years up to 100 percent after twenty years of credited service The annuity accrual rate is 3 percent of average salary for each year of service For Police and Fire Plan members who were first hired prior to July 1 1989 a full annuity is available when age plus years of service equal at least 90
Beginning in 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law Post retirement increases are given each year except for annuitants who have been receiving a benefit for only 31 to 41 months These annuitants will receive a prorated amount of the increase on a sliding scale
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions Contribution rates can only be modified by the state Legislature
Coordinated Plan members were required to contribute 650 percent of their annual covered salary in fiscal year 2018 the City was required to contribute 750 percent for Coordinated Plan members The Citys contributions to the General Employees Fund for the year ended December 31 2018 were $50226 The Citys contributions were equal to the required contributions as set by state statute
Legislation increased both employee and employer contribution rates in the Police and Fire Plan Employee rates increased from 1080 percent of pay to 1130 percent and employer rates increase from 1620 percent to 1695 percent on January 1 2018 On January 1 2020 employee rates increase to 1180 percent and employer rates increase to 1770 percent The Citys contributions to the Police and Fire Fund for the year ended December 31 2018 were $57782 The Citys contributions were equal to the required contributions as set by state statute
50
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS
GERP Pension Costs
Differences between expected and actual economic experience 14670$ 16018$ Changes in actuarial assumptions 52464 61940 Differences between projected and actual investment earnings 56103 Changes in proportion 4060 13463 Contributions paid to GERP subsequent to measurement date 25165
96359$ 147524$
At December 31 2018 the City reported a liability of $543664 for its proportionate share of the General Employees Fundrsquos net pension liability The City net pension liability reflected a reduction due to the State of Minnesotarsquos contribution of $16 million to the fund in 2019 The State of Minnesota is considered a non-employer contributing entity and the statersquos contribution meets the definition of a special funding situation The State of Minnesotarsquos proportionate share of the net pension liability associated with the City totaled $17795 The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The Citys proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion share was 00098 which was a decrease of 00002 from its proportion measured as of June 30 2017
Post-retirement benefit increases were changed from 10 per year with a provision to increase to 25 upon attainment of 90 funding ratio to 50 of the Social Security Cost of Living Adjustment not less than 10 and not more than 15 beginning January 1 2019
For the year ended December 31 2018 the City recognized pension expense of $28216 for its proportionate share of GERPrsquos pension expense In addition the City recognized an additional $4150 as pension expense (and grant revenue) for its proportionate share of the State of Minnesotas contribution of $6 million to the General Employees Fund
At December 31 2018 the City reported its proportionate share of GERPrsquos deferred outflows of resources and deferred inflows of resources from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
51
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
GERP Pension Costs (Contd)
PEPFP Pension Costs
$25165 reported as deferred outflows of resources related to pensions resulting from City contributions to GERP subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to GERP pensions will be recognized in pension expense as follows
52
Year ended June 30 Pension Expense Amount
2019 13967$ 2020 (31102) 2021 (47848) 2022 (11347)
At December 31 2018 the City reported a liability of $350680 for its proportionate share of the Police and Fire Fundrsquos net pension liability The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The City proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion was 00329 which was a decrease of 00001 from its proportion measured as of June 30 2017 The City also recognized $2961 for the year ended December 31 2018 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesotarsquos on-behalf contributions to the Police and Fire Fund Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year starting in fiscal year 2014
Beginning in January 1 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law
For the year ended December 31 2018 the City recognized pension expense of $2961 for its proportionate share of the Police and Fire Planrsquos pension expense
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
PEPFP Pension Costs (Contd)
Differences between expected and actual economic experience 14159$ 88907$ Changes in actuarial assumptions 450560 517779 Differences between projected and actual investment earnings 71220 Changes in proportion 10800 27880 Contributions paid to PEPFP subsequent to measurement date 29906
505425$ 705786$
E ACTUARIAL ASSUMPTIONS
InflationSalary GrowthInvestment Rate of Return
Actuarial Assumptions GERP PEPFP
250 per year 250 per year325 after 26 years of service 325 after 25 years of service
750 750
53
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
2020 (21749)2021 (54056)2022 (147616)2023 (1380)
The total pension liability in the June 30 2018 actuarial valuation was determined using the following actuarial assumptions
$29906 reported as deferred outflows of resources related to pensions resulting from the Citys contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows
Year ended June 30 Pension Expense Amount
2019 (5466)$
At December 31 2018 the City reported its proportionate share of the Police and Fire Planrsquos deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
GERP
PEPFP
54
The total pension liability for each of the defined benefit cost-sharing plans was determined by an actuarial valuation as of June 30 2018 using the entry age normal actuarial cost method Inflation is assumed to be 250 percent for the General Employees and Police and Fire Plans Salary growth assumptions in the General Employees Plan decrease in annual increments from 1125 percent after one year of service to 325 percent after 26 years of service In the Police and Fire Plan salary growth assumptions decrease from 1225 percent after one year of service to 325 percent after 25 years of service
Mortality rates for all plans are based on RP-2014 mortality tables The tables are adjusted slightly to fit PERArsquos experience Actuarial assumptions for the General Employees Plan are reviewed every four to six years The most recent six-year experience study for the General Employees Plan was completed in 2015 The most recent four-year experience study for the Police and Fire Plan was completed in 2016 Economic assumptions were updated in 2014 based on a review of inflation and investment return assumptions
The following changes in actuarial assumptions occurred in 2018
The mortality projection scale was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 percent per year through 2044 and 250 percent per year thereafter to 125 percent per year
The mortality projection scale was changed from MP-2016 to MP-2017
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
Domestic StocksInternational StocksBondsAlternative AssetsCash
F DISCOUNT RATE
G PENSION LIABILITY SENSITIVITY
GERP PEPFP
1 Lower 650 883523$ 1520 751880$ Current Discount Rate 750 543664 1620 350680 1 Higher 850 263120 1720 18904
The discount rate used to measure the total pension liability in 2018 was 750 percent The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes Based on these assumptions the fiduciary net positions of the General Employees Fund and the Police and Fire Fund 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
The following presents the Citys proportionate share of the net pension liability for all plans it participates in calculated using the discount rate disclosed in the preceding paragraphs as well as what the Citys 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
Target Allocation
3900190020002000200
10000
Long-Term Expected Real Rate of Return
510530075590000
Asset Class
55
The State Board of Investment which manages the investments of PERA prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return 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 in the following table
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
H PENSION PLAN FIDUCIARY NET POSITION
NOTE 11 DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
Related to Pensions 656980$ 940554$
NOTE 12 FUND BALANCE
NonmajorGovernmental
General Funds Total
NonspendablePrepaid Items 73751$ 2152$ 75903$
Restricted forTax Increment 11481 11481 Debt Service 1448570 1448570 Capital Projects 72582 72582
0 1532633 1532633
CommittedCharitable Gambling Programs 11466 11466 Economic Development Promotion 835956 835956
Total Committed 0 847422 847422
AssignedFund Operations 165070 487992 653062
Unassigned 1697339 (456819) 1240520
1936160$ 2413380$ 4349540$
Detailed information about each pension plans 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 wwwmnperaorg
The following is a summary of the major components of deferred outflows and inflows as presented in the Statement of Net Position
Deferred Outflows of Resources
Deferred Inflows of Resources
The following is a summary of fund balance components
56
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 13 TAX ABATEMENT
Current YearPercent AmountAbated Abated
Dingmann Marine100 2500$
Current YearPercent AmountAbated Abated
Granite City PropertyManagement 95 20858$
NOTE 14 JOINT POWERS AGREEMENTS
A PUBLIC RECREATIONAL FACILITY
B WRIGHT COUNTY AREA TRANSIT
Wright County Area Transit is governed by a Joint Powers Board that consists of a) one vote plus additional vote for each city per 3000 rides originating in that city and b) Wright County has votes equal to the number of votes apportioned to the Cities
57
The City and Independent School District 876 (the District) have entered into an a joint powers agreement to operate a public recreational facility The City owns and will lease the real property to the Joint Powers Entity (the Entity) The District shall fund the construction of the facility The Entity shall prepare an annual budget subject to approval of the City and the District All costs for operations maintenance repairs and utilities shall be shared equally by the City and the District
The Entity is governed by a Joint Powers Board that consists of four members a) two members appointed by the City annually and b) two members appointed by the District annually
The City Wright County and other Wright County Cities have entered into an a joint powers agreement to provide affordable public transportation to their communities Cities are to pay a pro rata share of the remaining unfunded operating expenses and capital expenditures not covered by Wright County
The City is authorized by Minnesota Statute sect4691813 to enter into property tax abatement agreements for the purpose of attracting or retaining businesses Tax abatements may be granted to any business on a case-by-case basis The entity may be subject to certain stipulations determined by the City at the time the abatement is entered The amount of the abatement is automatically deducted from the property ownerrsquos tax bill
The City is authorized by Minnesota Statute sect469174 through 469179 to enter into tax increment financing plans Tax increment financing may be granted on a case-by-case basis and may be subject to certain stipulations determined by the City at the time it is entered
Business Purpose
Business Purpose
Assisting in relocating the business within the community
Housing Redevelopment Project 36 Unit Senior Housing Project
REQUIRED SUPPLEMENTARY INFORMATION
This page intentionally left blank
EmployersProportionateShare of the Net Pension
Liability (Asset)States and the States Employers
Proportionate Proportionate ProportionateEmployers Share of the Share of the Share of the Plan Fiduciary
Employers Proportionate Net Pension Net Pension Net Pension Net PositionProportion Share of the Liability (Asset) Liability (Asset) Employers Liability (Asset) as a Percentageof the Net Net Pension Associated with Associated with Covered as a Percentage of of the Total
Fiscal Year Pension Liability (Asset) the Employer the Employer Payroll its Covered Payroll PensionEnding Liability (Asset) (a) (b) (a+b) (c) ((a+b)c) Liability
PensionsGERP
6302018 00098 543664$ 17795$ 561459$ 658161$ 8531 79536302017 00100 638393 8040 646433 647524 9983 75906302016 00099 803831 10468 814299 610663 13335 68916302015 00102 528617 528617 605733 8727 7819
PEPFP6302018 00329 350680$ $ 350680$ 346636$ 10117 88846302017 00330 445539 445539 339010 13142 85436302016 00340 1364479 1364479 322596 42297 63886302015 00340 386320 386320 317917 12152 8661
See Accompanying Notes to the Required Supplementary Information
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITYDECEMBER 31 2018
58
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
Contributionsin Relation Contributions
Statutorily to the Statutorily Contribution as a PercentageRequired Required Deficiency Covered of Covered
Fiscal Year Contribution Contribution (Excess) Payroll PayrollEnding (a) (b) (a-b) (d) (bd)
PensionsGERP
12312018 50226$ 50226$ $ 669680$ 75012312017 48886 48886 651813 75012312016 46583 46583 621107 75012312015 45426 45426 605680 750
PEPFP12312018 57782$ 57782$ $ 356679$ 162012312017 55371 55371 341796 162012312016 53824 53824 332247 162012312015 51688 51688 319062 1620
See Accompanying Notes to the Required Supplementary Information59
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE EMPLOYER CONTRIBUTIONSDECEMBER 31 2018
2017 2016 2015 2014
Service Cost 26727$ 26915$ 21845$ 21260$ Interest 34955 33085 27615 24816 Changes in Benefit Terms 28893 40156 Differences Between Expected and Actual Experience (7074) Changes in Assumptions (4866) Benefit Payments (72973) (7040)
Net Change in Total Pension Liability 17602 41020 89616 46076 Total Pension Liability - Beginning of Year 569046 528026 438410 392334
Total Pension Liability - End of Year 586648$ 569046$ 528026$ 438410$
Contributions - State and Local 50693$ 50325$ 49939$ 47712$ Net Investment Income 126216 69161 (34736) 46976 Benefit Payments (72973) (7040) Administrative Expense (8416) (7920) (7166) (3768) Other (275)
Net Change in Plan Fiduciary Net Position 95520 104526 8037 90645 Total Plan Fiduciary Net Position - Beginning of Year 1009074 904548 896511 805866
Total Plan Fiduciary Net Position - End of Year 1104594$ 1009074$ 904548$ 896511$
Citys Net Pension Liability (Asset) - End of Year (517946)$ (440028)$ (376522)$ (458101)$
Plan Fiduciary Net Position as a Percentage of the Total Pension Asset 18829 17733 17131 20449
60
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF CHANGES IN THE CITYS NET PENSION LIABILITY AND RELATED RATIOSDECEMBER 31 2018
The City implemented GASB Statement No 68 for the year ended December 31 2015 Information for prior years is not available
December 31
NOTE 1 CHANGES IN PLAN PROVISIONS
A GERF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
B PEPFF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
61
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
On January 1 2015 the Minneapolis Employees Retirement Fund was merged into the General Employees Fund which increased the total pension liability by $11 billion and increased the fiduciary plan net position by $892 million Upon consolidation state and employer contributions were revised
The post-retirement benefit increase to be paid after attainment of the 90 funding threshold was changed from inflation up to 25 to a fixed rate of 25
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS
A GERF
2018 Changes
2017 Changes
2016 Changes
2015 Changes
B PEPFF
2018 Changes
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 025 to 325 for payroll growth and 250 for inflation
62
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2035 and 25 per year thereafter
The mortality projection was changed from MP-2016 to MP-2017
The Combined Service Annuity (CSA) loads were changed from 08 for active members and 60 for vested and non-vested deferred members The revised CSA loads are now 00 for active member liability 150 for vested deferred member liability and 30 for non-vested deferred member liability
The assumed post-retirement benefit increase rate was changed from 10 per year for all years to 10 per year through 2044 and 25 per year thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2035 and 25 per year thereafter to 10 per year for all years
The assumed investment return was changed from 79 to 75 The single discount rate was changed from 79 to 75
The mortality projection was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 per year through 2044 and 250 per year thereafter to 125 per year
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS (Contd)
B PEPFF (Contd)
2017 Changes
Assumed rates of retirement were changed resulting in fewer retirements
Assumed percentage of married female members was decreased from 65 to 60
The assumed percentage of female members electing Joint and Survivor annuities was increased
2016 Changes
2015 Changes
63
The assumed post-retirement benefit increase rate was changed from 100 for all years to 100 per year through 2064 and 250 thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2037 and 25 thereafter to 10 per year for all future years
The assumed investment return was changed from 79 to 75 The single discount rate changed from 79 to 56
The assumed future salary increases payroll growth and inflation were decreased by 025 to 325 for payroll growth and 250 for inflation
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2037 and 25 per year thereafter
Assumed salary increases were changed as recommended in the June 30 2016 experience study The net effect is proposed rates that average 034 lower than the previous rates
The Combined Service Annuity (CSA) load was 30 for vested and non-vested deferred members The CSA has been changed to 33 for vested members and 2 for non-vested 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 096 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 30 for the first three years of service Rates beyond the select period of three years were adjusted resulting in more expected terminations overall
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
SUPPLEMENTARY INFORMATION
This page intentionally left blank
Special Debt Capital Revenue Service Projects Total
ASSETSCash and Investments 436388$ 1441782$ 473092$ 2351262$ Taxes Receivable - Delinquent 23 5 347 375 Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 623285 26935 650220
Accounts Receivable 70887 20000 90887 Interest Receivable 9 9 Prepaid Items 2152 2152 Due from Other Funds 190388 190388 Due from Other Governments 1061 2365 47418 50844 Land Held for Resale 362923 362923
Total Assets 1063822$ 2071860$ 567801$ 3703483$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 12735$ $ 11142$ 23877$ Contracts Payable 2941 21398 24339 Due to Other Funds 454822 126860 581682 Due to Other Governments 3566 5910 9476 Salaries and Benefits Payable 134 134
Total Liabilities 474198 0 165310 639508
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 23 5 347 375 Special Assessments 623285 26935 650220
Total Deferred Inflows of Resources 23 623290 27282 650595
Fund Balance Nonspendable 2152 2152 Restricted 11481 1448570 72582 1532633 Committed 847422 847422 Assigned 67503 420489 487992 Unassigned (338957) (117862) (456819)
Total Fund Balance 589601 1448570 375209 2413380
Total Liabilities Deferred Inflows of Resources and Fund Balance 1063822$ 2071860$ 567801$ 3703483$
CITY OF ANNANDALE MINNESOTA
64
DECEMBER 31 2018NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
Special Debt Capital Revenue Service Projects Total
REVENUESProperty Taxes 2507$ $ 320723$ 323230$ Tax Increments 20858 20858 Special Assessments 149671 149671 Intergovernmental 30310 30310 Charges for Services 42636 8595 51231 Fines and Forfeitures 4299 4299 Investment Income (1455) (3635) (5090) Contributions and Donations 49608 84150 133758 Miscellaneous 578 101 679
Total Revenues 114732 149671 444543 708946
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 22622 42738 Culture and Recreation 3735 3735 Economic Development 52358 52358
Debt ServicePrincipal 821000 821000 Interest and Other Charges 162964 162964
Capital OutlayPublic Safety 67055 67055 Public Works 14006 14006 Culture and Recreation 14187 88464 102651 Economic Development 56446 88485 144931
Total Expenditures 153914 983964 284367 1422245 Excess (Deficiency) of Revenues
Over (Under) Expenditures (39182) (834293) 160176 (713299)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 51200 784616 310098 1145914 Transfers Out (65804) (481316) (547120)
Total Other Financing Sources (Uses) (14604) 784616 (146725) 623287 Net Change in Fund Balances (53786) (49677) 13451 (90012)
FUND BALANCE BEGINNING OF YEAR 643387 1498247 361758 2503392
FUND BALANCE END OF YEAR 589601$ 1448570$ 375209$ 2413380$
65
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
Tax Charitable Economic TIF District Abatement - Lions TIF District Training WoodlawnGambling Development No 6 Dingmann Donations No 14 Center Cemetery
(222) (407) (411) (423) (464) (465) (604) (651) Total
ASSETSCash and Investments 11466$ 385530$ 21389$ $ 18003$ $ $ $ 436388$ Taxes Receivable - Delinquent 23 23 Accounts Receivable 20856 49500 531 70887 Prepaid Items 1076 1076 2152 Due from Other Funds 190388 190388 Due from Other Governments 25 1036 1061 Land Held for Resale 362923 362923
Total Assets 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable $ 1800$ 9908$ $ $ $ 1000$ 27$ 12735$ Contracts Payable 2941 2941 Due to Other Funds 119000 18060 66198 200960 50604 454822 Due to Other Governments 3500 66 3566 Salaries and Benefits Payable 67 67 134
Total Liabilities 0 123741 9908 18060 0 69698 202093 50698 474198
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 23 23
Fund Balance Nonspendable 1076 1076 2152 Restricted 11481 11481 Committed 11466 835956 847422 Assigned 67503 67503 Unassigned (18035) (69698) (200526) (50698) (338957)
Total Fund Balance 11466 835956 11481 (18035) 67503 (69698) (199450) (49622) 589601
Total Liabilities Deferred Inflows of Resources and Fund Balance 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
66
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUECOMBINING BALANCE SHEET
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding ImprovementBonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
ASSETSCash and Investments 134649$ 53157$ 3288$ 310514$ 94388$ 360857$ 484929$ 1441782$ Taxes Receivable - Delinquent 5 5 Special Assessments Receivable
Delinquent 819 1553 2051 4423 Current and Deferred 45829 223930 9400 65636 278490 623285
Due from Other Governments 585 509 775 496 2365
Total Assets 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
DEFERRED INFLOWS OF RESOURCESAND FUND BALANCEDeferred Inflows of Resources
Unavailable RevenuesDelinquent Property Taxes $ $ $ $ $ 5$ $ 5$ Special Assessments 45829 223930 9400 65636 278490 623285
Total Deferred Inflows of Resources 45829 0 0 223930 9400 65641 278490 623290
Fund Balance Restricted 135234 53157 3288 311333 94897 363185 487476 1448570
Total Deferred Inflows of Resourcesand Fund Balance 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
DECEMBER 31 2018
67
Public Works 2020Fire Street Street Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
ASSETSCash and Investments 50334$ $ 39748$ 122304$ 20402$ 83784$ 53265$ 30658$ 72597$ $ 473092$ Taxes Receivable - Delinquent 298 49 347Special Assessments Receivable
Current and Deferred 26935 26935Accounts Receivable 20000 20000Interest Receivable 9 9Due from Other Governments 24247 20606 2565 47418
Total Assets 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 350$ $ $ $ 10792$ $ $ $ $ $ 11142$ Contracts Payable 15700 5698 21398 Due to Other Funds 44073 82787 126860 Due to Other Governments 5910 5910
Total Liabilities 350 49983 0 0 10792 0 0 15700 0 88485 165310
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 298 49 347Special Assessments 26935 26935
Total Deferred Inflows of Resources 298 0 26984 0 0 0 0 0 0 0 27282
Fund Balance Restricted 72582 72582 Assigned 74240 42313 122304 9610 83784 53265 34958 15 420489 Unassigned (29377) (88485) (117862)
Total Fund Balance 74240 (29377) 42313 122304 9610 83784 53265 34958 72597 (88485) 375209
Total Liabilities Deferred Inflow of Resources and Fund Balance 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
DECEMBER 31 2018
68
TaxCharitable Economic TIF District Abatement - TIF District Lions TIF District Training WoodlawnGambling Development No 6 Dingmann No 12 Donation No 14 Center Cemetery
(222) (407) (411) (423) (438) (464) (465) (604) (651) Total
REVENUESProperty Taxes $ $ $ 2507$ $ $ $ $ $ 2507$ Tax Increments 20858 20858 Charges for Services 12875 19641 10120 42636 Investment Income (71) (2440) (140) (76) 1239 33 (1455)Contributions and Donations 108 49500 49608Miscellaneous 78 500 578
Total Revenues (71) 10621 20718 2507 0 49424 500 20880 10153 114732
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 20116 Economic Development 18399 19816 391 13752 52358
Capital OutlayCulture and Recreation 14187 14187 Economic Development 56446 56446
Total Expenditures 0 18399 19816 0 391 14187 70198 20116 10807 153914 Excess (Deficiency) of
Revenues Over (Under) Expenditures (71) (7778) 902 2507 (391) 35237 (69698) 764 (654) (39182)
OTHER FINANCING SOURCES (USES)Transfers In 51200 51200 Transfers Out (65804) (65804)
Total Other FinancingSources (Uses) 0 (14604) 0 0 0 0 0 0 0 (14604)
Net Change in Fund Balances (71) (22382) 902 2507 (391) 35237 (69698) 764 (654) (53786)
FUND BALANCE BEGINNING OF YEAR 11537 858338 10579 (20542) 391 32266 (200214) (48968) 643387
FUND BALANCE END OF YEAR 11466$ 835956$ 11481$ (18035)$ 0$ 67503$ (69698)$ (199450)$ (49622)$ 589601$
69
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE
YEAR ENDED DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding Improvement Bonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
REVENUESSpecial Assessments 21259$ $ $ 37558$ 10657$ 20276$ 59921$ 149671$
EXPENDITURESDebt Service
Principal 80000 70000 54000 127000 210000 245000 35000 821000Interest and Other Charges 23944 14062 4095 64909 16975 18646 20333 162964
Total Expenditures 103944 84062 58095 191909 226975 263646 55333 983964 Excess (Deficiency) of
Revenues Over (Under)Expenditures (82685) (84062) (58095) (154351) (216318) (243370) 4588 (834293)
OTHER FINANCINGSOURCES (USES)Transfers In 76000 78113 22560 150000 194943 198000 65000 784616
Net Change in Fund Balances (6685) (5949) (35535) (4351) (21375) (45370) 69588 (49677)
FUND BALANCEBEGINNING OF YEAR 141919 59106 38823 315684 116272 408555 417888 1498247
FUND BALANCE END OF YEAR 135234$ 53157$ 3288$ 311333$ 94897$ 363185$ 487476$ 1448570$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
YEAR ENDED DECEMBER 31 2018
70
Public 2020Fire Street WorksStreet Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
REVENUESProperty Taxes 25092$ $ 295631$ $ $ $ $ $ $ $ 320723$ Intergovernmental 4109 26201 30310 Charges for Services 8595 8595 Fines and Forfeitures 4299 4299 Investment Income (49) 105 (324) (1118) (80) (713) (503) (495) (458) (3635) Contributions and Donations 50650 1500 2000 30000 84150 Miscellaneous 101 101
Total Revenues 75693 14309 295307 (1017) 6219 (713) 25698 29505 (458) 0 444543
EXPENDITURESCurrent
Public Safety 22622 22622 Culture and Recreation 3735 3735
Capital OutlayPublic Safety 7500 59555 67055 Public Works 14006 14006 Culture and Recreation 16429 72035 88464 Economic Development 88485 88485
Total Expenditures 30122 20164 0 14006 59555 0 0 72035 0 88485 284367 Excess (Deficiency) of
Revenues Over (Under)Expenditures 45571 (5855) 295307 (15023) (53336) (713) 25698 (42530) (458) (88485) 160176
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 8800 15693 24493 Transfers In 84943 37504 60000 20000 107651 310098 Transfers Out (107503) (288000) (78113) (7700) (481316)
Total Other FinancingSources (Uses) (22560) 37504 (288000) 68800 35693 29538 0 (7700) 0 0 (146725)
Net Change in Fund Balances 23011 31649 7307 53777 (17643) 28825 25698 (50230) (458) (88485) 13451
FUND BALANCE BEGINNING OF YEAR 51229 (61026) 35006 68527 27253 54959 27567 85188 73055 361758
FUND BALANCE END OF YEAR 74240$ (29377)$ 42313$ 122304$ 9610$ 83784$ 53265$ 34958$ 72597$ (88485)$ 375209$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
YEAR ENDED DECEMBER 31 2018
71
FINANCIAL SECTION
This page intentionally left blank
Issue Interest Original Final Principal Due WithinDate Rates Issue Maturity Outstanding One Year
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan Bonds Series 2008A 050608 300-400 895000$ 020122 295000$ 70000$ GO Special Assessment Bonds
GO Improvement Bonds Series 2008B 050608 300-4125 1175000 020124 560000 85000 GO Improvement Bonds Series 2011A 060811 105-415 1700000 020132 1300000 70000 GO Refunding Bonds Series 2011B 092711 085-270 1620000 020121 585000 215000 GO Refunding Bonds Series 2012A 040412 055-185 2225000 020122 1035000 255000 GO Improvement Bonds Series 2015A 050115 110-345 820000 020136 750000 35000
GO NotesGO Improvement Note of 2011 053111 1959 1217500 082031 846000 58000
GO Equipment CertificateGO Equipment Certificate 2016A 032116 2100 222000 020121 168000 55000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549 843000
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 011304 2819 3273194 082023 996000 188000 PFA Clean Water Revenue Note 081707 2220 16036613 082026 8086000 935000 PFA Water Revenue Note of 2015 081015 1031 929105 082035 812000 44000 PFA Sewer Revenue Note of 2015 090815 1000 125359 082035 110000 6000
Total Business-Type Activities 10004000 1173000
Total All Long-Term Liabilities 15543549$ 2016000$
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF LONG-TERM LIABILITIESDECEMBER 31 2018
72
This page intentionally left blank
COMPLIANCE SECTION
This page intentionally left blank
Honorable Mayor and Members of the City Council
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
INDEPENDENT AUDITORS REPORT ON MINNESOTA LEGAL COMPLIANCE
73
The Minnesota Legal Compliance Audit Guide for Cities promulgated by the State Auditor pursuant to Minn Stat sect665 contains seven categories of compliance to be tested contracting and bidding deposits and investments conflicts of interest public indebtedness claims and disbursements miscellaneous provisions and tax increment financing Our audit considered all of the listed categories
In connection with our audit nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities However our audit was not directed primarily toward obtaining knowledge of such noncompliance Accordingly had we performed additional procedures other matters may have come to our attention regarding the Citys noncompliance with the above referenced provisions
The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance Accordingly this communication is not suitable for any other purpose
City of AnnandaleAnnandale Minnesota
May 6 2019
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 majorfund and the aggregate remaining fund information as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements we considered the Citys 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 Citys internal control Accordingly we do not express an opinion on the effectiveness of the Citys 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 entitys 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
74
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 and therefore material weaknesses or significant deficiencies may exist that were not identified 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 We did identify certain deficiencies in internal control described in the accompanying Schedule of Findings as 2018-001 and 2018-002 that we consider to be significant deficiencies
INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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 the City of Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
Compliance and Other Matters
Citys Response to Findings
Purpose of this Report
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
May 6 2019
75
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 Citys internal control or on compliance This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entitys internal control and compliance Accordingly this communication is not suitable for any other purpose
As part of obtaining reasonable assurance about whether the Citys 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
The Citys responses to the findings identified in our audit are described in the accompanying Schedule of Findings The Citys responses were not subjected to the auditing procedures applied in the audit of the financial statements and accordingly we express no opinion on them
I
FINDING 2018-001
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
76
LIMITED SEGREGATION OF DUTIES
There is an absence of appropriate segregation of duties consistent with appropriate control objectives due to a limited number of employees
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The City is aware of the limited segregation of duties and will continue to review internal controls and make changes when they can be made
The lack of adequate segregation of duties could adversely affect the Citys ability to initiate record process and report financial data consistent with the assertions of management in the financial statements
The basic premise is that no one person should have access to both physical assets and the related accounting records or to all phases of a transaction The lack of such controls could result in the occurrence of a material error or fraud in relation to the financial statements not being detected by management
The City has assigned duties to staff based on a cost-benefit relationship to the City and the practicality of the level of staffing the City maintains
The City should continue to monitor and evaluate the job responsibilities assigned to staff to determine whether there is an unacceptable risk
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
I
FINDING 2018-002 AUDITOR PREPARED FINANCIAL STATEMENTS
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
77
The City does not have an internal control system designed to provide for the preparation of the financial statements being audited However based on the degree of complexity and level of detail needed to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) the City has requested the auditors to prepare them
The preparation of the financial statements and the related notes are the responsibility of management
There are a limited number of office employees and resources available to allow for the adequate preparation of the financial statements by the City
This could result in a material misstatement to the financial statements and related notes that would not be prevented or detected and corrected as a result of the Citys current internal control
The City should continue to request the assistance to draft the financial statements and related notes and thoroughly review these financial statements after they have been prepared so the City can take responsibility for them
The City is aware of this however due to significant cost and a limited number of employees it is in the Citys best financial interest to contract for the preparation of the financial statements
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Contd)
Comment Year Finding If Not Corrected Provide PlannedReference Comment Title Status Initially Occurred Corrective Action or Other Explanation
Financial Statement Findings
2017-001 Not Corrected 2009 See current year finding 2018-001
2017-002 Not Corrected 2009 See current year finding 2018-002
Minnesota Legal Compliance Findings
None
DECEMBER 31 2018SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
CITY OF ANNANDALE MINNESOTA
78
Limited Segregation of Duties
Auditor Prepared Financial Statements
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORS
WILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
MANAGEMENT LETTER
DECEMBER 31 2018
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Page
Required Communications 1-3
Schedule of Findings on Accounting Issues and Internal Controls 4
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
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Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Significant Audit Findings
Qualitative Aspects of Accounting Practices
We have audited the financial statements of the governmental activities the business-type activities each major fund and the aggregate remaining fund information of the City of Annandale Minnesota for the year ended December 31 2018 Professional standards require that we provide you with information about our responsibilities under generallyaccepted auditing standards and Government Auditing Standards as well as certain information related to the planned scope and timing of our audit We have communicated such information in our letter to you dated December 20 2018 Professional standards also require that we communicate to you the following information related to our audit
The financial statement disclosures are neutral consistent and clear
1
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 the financial statements No new accounting policies were adopted and the application of existing policies was not changed in 2018 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 are an integral part of the financial statements prepared by management and are based on managements 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
Managements estimate of depreciation is based on the number of years an asset is in service We evaluated the key factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Managements estimate of pension liabilities is based on actuarial valuations performed by consultants specializing in those areas We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Significant Audit Findings (Contd)
Difficulties Encountered in Performing the Audit
Corrected and Uncorrected Misstatements
Disagreements with Management
Management Representations
Management Consultations with Other Independent Accountants
Other Audit Findings or Issues
Other Matters
Professional standards require us to accumulate all known and likely misstatements identified during the audit other than those that are clearly trivial and communicate them to the appropriate level of management Management has corrected all such misstatements In addition none of the misstatements detected as a result of audit procedures and corrected by management were material either individually or in the aggregate to each opinion units financial statements taken as a whole
We encountered no significant difficulties in dealing with management in performing and completing our audit
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 Citys 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
We generally discuss a variety of matters including the application of accounting principles and auditing standards with management each year prior to retention as the Citys auditors However these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention
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 We are pleased to report that no such disagreements arose during the course of our audit
We have requested certain representations from management that are included in the management representation letter dated May 6 2019
We applied certain limited procedures to Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions the Schedule of Changes in the Citys Net Pension Liability and Related Ratios and the related notes to required supplementary information which are required supplementary information that supplements the basic financial statements Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries the basic financial statements and other knowledge we obtained during our audit of the basic financial statements We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information
2
Other Matters (Contd)
Restriction on Use
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
This information is intended solely for the use of the City Council and management of the City of Annandale Minnesota and is not intended to be and should not be used by anyone other than these specified parties
3
We were not engaged to report on the Elected Officials and Administration section which accompany the financial statements but are not required supplementary information We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it
May 6 2019
We were engaged to report on the statements and schedules listed in the table of contents as supplementary information which accompany the financial statements but are not required supplementary information With respect to this supplementary information we made certain inquiries of management and evaluated the form content and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America the method of preparing it has not changed from the prior period and the information is appropriate and complete in relation to our audit of the financial statements We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves
This page intentionally left blank
4
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in internal control under standards established by the American Institute of Certified Public Accountants 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
The objective of internal accounting control is to provide reasonable but not absolute assurance as to the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of these factors necessarily requires estimates and judgments by management
It should be recognized that within the City an inherent risk is present with certain positions It is very common for cities such as the City of Annandale Minnesota to assign many major responsibilities to a few key individuals in an attempt to operate within limited budgets The inherent risk is again addressed only to maintain the awareness of the internal control structure and to encourage the Councils continual review of financial information at monthly meetings
DECEMBER 31 2018
INTERNAL CONTROL
GENERAL RECOMMENDATIONS
Throughout the course of the audit we spoke to management regarding certain items that we see as an opportunity to improve None of these were considered significant within the scope of the audit The items discussed requiring action have been resolved or are in the process of resolution We would like to acknowledge the assistance and courtesies extended to us by the personnel of the City of Annandale Minnesota
City of Annandale Minnesota
Audit ReportDecember 31 2018
Independent Auditorrsquos ReportPages 2-4bull Financial statements are the responsibility of the Cityrsquos
managementbull Our responsibility is to express opinions on these financial
statements based on our auditbull Conducted audit in accordance with Generally Accepted
Auditing Standards and Government Auditing Standardsbull Obtain reasonable assurance financials are free from
material misstatement
1
Independent Auditorrsquos Report (Contrsquod)Pages 2-4
bull Financial statements are presented fairly in our opinion
bull Internal control letter on pages 74 and 75
2
Statement of Net Position
3
2018 2017ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current and Other 12893519$ 12739729$ Capital 20949843 21526486
Total Assets 33843362 34266215
Deferred Outflows of Resources 656980 914167 Total Assets and Deferred Outflows of Resources 34500342$ 35180382$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current Liabilities 660359$ 497847$ Noncurrent Liabilities
Net Pension Liability 894343 236206 Due Within One Year 2016000 1967000 Due in More Than One Year 13527549 16383958
Total Liabilities 17098251 19085011
Deferred Inflows of Resources 940554 951385
Net PositionNet Investment in Capital Assets 13587855 13119128 Restricted 2095629 2215725 Unrestricted 778053 (190867)
Total Net Position 16461537 15143986 Total Liabilities Deferred Inflows of Resources
and Net Position 34500342$ 35180382$
__________________________________ Kelly Hinnenkamp City Administrator
MINUTES ANNANDALE BOARD OF ADJUSTMENT AND APPEALS
April 1 2019 CALL TO ORDERROLL CALL Pursuant to due call and notice the City Council of Annandale Minnesota met for the annual Board of Adjustment and Appeals on April 1 2019 at 630 pm at the City Hall Council Chambers Mayor Gunnarson called the meeting to order at 630 pm City Council Present Councilmemberrsquos Jonas Czycalla Burd and Hastings and Mayor Gunnarson Absent None Also present were Tammy Anderson and Conrad Anderson from the Wright County Assessors Department City Administrator Hinnenkamp 2019Assessment City Assessor Conrad Anderson introduced the 2019 Assessment Assessor Anderson read the Local Board of Appeal and Equalization Opening Statement and reviewed the details of the assessment review process Anderson reviewed the Written Appeals 102-020-002100- Christina Clark 125 Oak Avenue North Owner contacted Anderson but they have not had a chance to review the property Appeal was received 4119 102-073-001080 Rick Schultz Pintail Drive Called 4119 and they have not had a chance to review 36 Jasmine Avenue 102-700-000360 Ellis and Linda Knute After further review Anderson is recommending a value of $44100 This is for the personal property 2019 assessment was $51900 102-043-001120 001130 001140 Marlene Dingmann 631 Beech Circle requested to be changed to non-homestead Motion was made by Czycalla and seconded by Hastings to approve the recommendations of Knute and Dingmann as presented Motion was made by Wuollet and seconded by Czycalla to refer any recommended changes to Wright County for Clark and Schultz ADJOURNMENT Moved by Wuollet seconded by Jonas to adjourn at 654PM Motion carried unanimously ___________________________________ Dwight Gunnarson Mayor ATTEST __________________________________ Kelly Hinnenkamp City Administrator
CITY OF ANNANDALE Payment Approval Report - for City Council Page 1
Report dates 422019-562019 May 02 2019 0305PM
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1
1 NEOPOST USA Inc 56654756 RENTAL amp MAINTENANCE - MAI 04232019 11100 00
Total 1 11100 00
153
153 AMERIPRIDE LINEN amp APPARE 2201173387 PD - MATBRUSH 03282019 2315 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 WATER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 SEWER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 PW UNIFORM 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PD - MATBRUSH 04042019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PW UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 SEWER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 WATER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PW UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 SEWER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 WATER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PD - MATBRUSH 04112019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PD - MATBRUSH 04182019 268 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 WATER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 SEWER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PW UNIFORM 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PD - MATBRUSH 04252019 2316 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 WATER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 SEWER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PW UNIFORM 04252019 3181 00
Total 153 57099 00
180
180 ANNANDALE ADVOCATE P3158191723 CONGRATS- WRESTLING 04082019 1900 1900 04122019
180 ANNANDALE ADVOCATE P3158191723 RECYCLING AD 04082019 7000 7000 04122019
180 ANNANDALE ADVOCATE P3158191723 MINUTES 04082019 18624 18624 04122019
180 ANNANDALE ADVOCATE P3158191723 PUBLIC HEARING 04082019 1920 1920 04122019
180 ANNANDALE ADVOCATE P3158191723 ASSESSMENTS 04082019 3264 3264 04122019
180 ANNANDALE ADVOCATE P3158191723 2021 IMPR PLAN 04082019 8256 8256 04122019
180 ANNANDALE ADVOCATE P3158191723 DMV- BUSINESS OF THE WEEK 04082019 15600 15600 04122019
180 ANNANDALE ADVOCATE P3158191723 FT SEASONAL EMPLMT 04082019 16380 16380 04122019
180 ANNANDALE ADVOCATE P3158191723 NOTARY STAMP- GIEBENHAIN 04082019 3902 3902 04122019
Total 180 76846 76846
188
188 ANNANDALE AUTO CARE LLC 101394 SERVICE 08 CHEV 04182019 85579 00
188 ANNANDALE AUTO CARE LLC 101468 BATTERY 04242019 12895 00
188 ANNANDALE AUTO CARE LLC 101482 TRUCK SERVICE 04252019 142198 00
188 ANNANDALE AUTO CARE LLC 101526 TRUCK SERVICE 04262019 16470 00
Total 188 257142 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 2
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
190
190 ANNANDALE AREA CHAMBER APRIL2019 CITY EXPO BOOTH 04092019 10000 10000 04122019
Total 190 10000 10000
192
192 ANNANDALE PARTS SUPPLY 127199280 HEAD LIGHT 02282019 1699 1699 04122019
192 ANNANDALE PARTS SUPPLY 127199479 LIGHT BULBS 03042019 2565 2565 04122019
192 ANNANDALE PARTS SUPPLY 127199616 FLUSH KIT 03052019 7098 7098 04122019
192 ANNANDALE PARTS SUPPLY 127199723 HEADLIGHT BULB- SQUAD 51 03072019 949 949 04122019
192 ANNANDALE PARTS SUPPLY 127200389 GENERATOR PARTS 03182019 2318 2318 04122019
192 ANNANDALE PARTS SUPPLY 127200469 LUBE 03192019 791 791 04122019
192 ANNANDALE PARTS SUPPLY 127200476 HOSE 03192019 118 118 04122019
192 ANNANDALE PARTS SUPPLY 127200490 BATTERY 03192019 9858 9858 04122019
192 ANNANDALE PARTS SUPPLY 127200546 PARTS 03202019 1398 1398 04122019
192 ANNANDALE PARTS SUPPLY 127200609 FILTERS 03202019 23472 23472 04122019
192 ANNANDALE PARTS SUPPLY 127200627 STOP LEAK 03212019 873 873 04122019
192 ANNANDALE PARTS SUPPLY 127200652 FILTER 03222019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200654 FILTER 03212019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200713 FITTING 03222019 129 129 04122019
192 ANNANDALE PARTS SUPPLY 127200757 PARTS 03222019 2178 2178 04122019
192 ANNANDALE PARTS SUPPLY 127200939 CLEANER 03252019 2339 2339 04122019
192 ANNANDALE PARTS SUPPLY 127201161 SOAP 03282019 909 00
192 ANNANDALE PARTS SUPPLY 127201244 LUBRICANT 05012019 2373 00
192 ANNANDALE PARTS SUPPLY 127201434 HOSE REPAIR 05012019 3637 00
192 ANNANDALE PARTS SUPPLY 127201488 HOSE REPAIR 04022019 7274 00
192 ANNANDALE PARTS SUPPLY 127202184 FLARE FITTINGS 04112019 1858 00
192 ANNANDALE PARTS SUPPLY 127202518 BRAKE CLEANER 04172019 3228 00
Total 192 77828 58549
200
200 ANNANDALE EMBROIDERY 2356 APD HATS 03272019 9000 00
Total 200 9000 00
230
230 ANNANDALE-MAPLE LAKE MARCH 2019 MAR 2019 FLOW 04152019 6260800 00
Total 230 6260800 00
240
240 ANNANDALE PLUMBING 1457 RPZ TESTING 03272019 28500 00
Total 240 28500 00
424
424 BERGESCH COMPUTER SERVI 16172 SERVICE CALL 04062019 7500 00
424 BERGESCH COMPUTER SERVI 16176 ADMIN-SERVICE CALL 04062019 7500 00
Total 424 15000 00
463
463 BOLTON amp MENK INC 0231771 LGU BSA 7 STAKEHOLDERS C 04122019 11700 00
463 BOLTON amp MENK INC 0231785 2022 PROJECT FACILITY PLAN 04122019 44500 00
463 BOLTON amp MENK INC 0231788 SAND PROFILE 04122019 117250 00
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT PLANS AN 04122019 1717300 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 3
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT STREETS 04122019 38000 00
Total 463 1928750 00
646
646 CENTRA SOTA LAKE REGION L 6308214 STREETS 04092019 11697 00
646 CENTRA SOTA LAKE REGION L 6308214 PARKS 04092019 14037 00
646 CENTRA SOTA LAKE REGION L 6308214 WATER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 SEWER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 PUBLIC WORKS 04092019 33531 00
646 CENTRA SOTA LAKE REGION L 6308342 STREETS 04292019 13024 00
646 CENTRA SOTA LAKE REGION L 6308342 PARKS 04292019 15629 00
646 CENTRA SOTA LAKE REGION L 6308342 WATER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 SEWER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 PUBLIC WORKS 04292019 37335 00
646 CENTRA SOTA LAKE REGION L 6308343 STREETS 04292019 16436 00
646 CENTRA SOTA LAKE REGION L 6308343 PARKS 04292019 19723 00
646 CENTRA SOTA LAKE REGION L 6308343 WATER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 SEWER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 PUBLIC WORKS 04292019 47116 00
Total 646 274380 00
710
710 CITY OF BUFFALO MARCH2019 MONTHLY NET MOTION 04012019 2000 2000 04122019
Total 710 2000 2000
810
810 COLONIAL LIFE amp ACCIDENT 7492424-0501 INSURANCE 04162019 42770 42770 04232019
Total 810 42770 42770
900
900 COUNTRY CHEVROLET INC CVCS139790 SQUAD 52 - TIRE REPAIR 04092019 1719 00
Total 900 1719 00
1336
1336 FARM RITE EQUIPMENT INC P42298 WIPER BLADESIDLER ASSY 04012019 36766 00
1336 FARM RITE EQUIPMENT INC W13484 HYDRAULIC HOSE 04172019 40840 00
Total 1336 77606 00
1338
1338 FASTENAL COMPANY MNBUF78347 SAFETY GLASSES 04172019 4656 00
1338 FASTENAL COMPANY MNBUF78393 TOOLS 04192019 892 00
Total 1338 5548 00
1420
1420 FIRE RELIEF ASSOCIATION MARCH2019 2019 SUPPLEMENTAL REIMB 04082019 100000 00
1420 FIRE RELIEF ASSOCIATION MARCH2019 2018 SUPPLEMENTAL REIMB 04082019 313920 00
Total 1420 413920 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 4
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1508
1508 F S 3 INC 60393 SAFETY VEST 04222019 5500 00
1508 F S 3 INC 60435 SAFETY VEST 04162019 5500 00
1508 F S 3 INC 60436 SAFETY VEST 04162019 5500 00
Total 1508 16500 00
1519
1519 GALLS AN ARAMARK COMPAN 012401488 UNIFORM - HAAG 04042019 8396 00
1519 GALLS AN ARAMARK COMPAN 012412561 UNIFORM - TOWNSEND 04052019 4198 00
Total 1519 12594 00
1630
1630 GOPHER STATE ONE-CALL IN 9030176 FAX TICKETS 03312019 2295 00
Total 1630 2295 00
1660
1660 GRAINGER INC W W 6144966281 TEST BALLS 04122019 15556 00
1660 GRAINGER INC W W 9135594712 PARTS 04032019 6459 00
1660 GRAINGER INC W W 9137921475 SHOCK 04052019 4717 00
1660 GRAINGER INC W W 9138437422 HOSE 04052019 9729 00
1660 GRAINGER INC W W 9146606448 DOOR OPENER 04152019 2735 00
1660 GRAINGER INC W W 9150739945 GLOVES 04192019 6216 00
1660 GRAINGER INC W W 9152417177 GARAGE DOOR OPENERS 04222019 19056 00
Total 1660 64468 00
1710
1710 HAWKINS INC 4475748 CHEMICALS 04092019 247584 00
Total 1710 247584 00
1760
1760 HILLYARDHUTCHINSON 603390067 MOP DUST- PW 04092019 4520 00
1760 HILLYARDHUTCHINSON 603390067 FOLD TOWELSTISSUE PAPER 04092019 19613 00
1760 HILLYARDHUTCHINSON 603406861 SUPER SHINESOAPWINDOW 04232019 46059 00
1760 HILLYARDHUTCHINSON 700376971 SCRUBBER REPAIR 04192019 9600 00
Total 1760 79792 00
1780
1780 HOLIDAY CREDIT OFFICE MARCH12019 PD FUEL 04012019 93317 93317 04122019
1780 HOLIDAY CREDIT OFFICE March2019 FD- FUEL 04012019 19714 19714 04122019
Total 1780 113031 113031
2130
2130 LITTLE FALLS MACHINE INC 355406 PLOW PARTS 04242019 14150 00
Total 2130 14150 00
2190
2190 LUNDEEN BROS INC 91792 OIL CHANGE 2017 DODGE SQA 03212019 5894 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 5
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2190 5894 00
2210
2210 M amp M BUS SERVICE 10193369 DRUG TESTING- KIRBY NICKA 03152019 3000 00
2210 M amp M BUS SERVICE 10193370 ALCOHOL TESTING- KIRBY NIC 03192019 3000 00
2210 M amp M BUS SERVICE 10193419 DRUG TESTING- NICHOLLE CO 04092019 6000 00
Total 2210 12000 00
2211
2211 M amp M EXPRESS SALES amp SER 182624 MOWER PARTS 04122019 36108 00
2211 M amp M EXPRESS SALES amp SER 183289 MOWER PARTS 04182019 12319 00
Total 2211 48427 00
2260
2260 MAPLE LAKE LUMBER COMPA 168882 LUMBER 04222019 1659 00
Total 2260 1659 00
2272
2272 MARES EXCAVATING APRIL 2019 WATER LEAK 04012019 70000 00
Total 2272 70000 00
2273
2273 MARKET PLACE II 107 XTRA SOAP-FD 04012019 1332 1332 04232019
2273 MARKET PLACE II 107 MEALS- TC 04012019 5142 5142 04232019
Total 2273 6474 6474
2375
2375 METRO WEST INSPECTION SE 1978 370 BIG WOODS LN 17-04 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 250 EXCELSIOR AVE N 17-69 04252019 11145 00
2375 METRO WEST INSPECTION SE 1978 202 NONA DR 17-60 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 135 EXCELSIOR AVE N 17-127 04252019 17820 00
2375 METRO WEST INSPECTION SE 1978 630 LAKE DR W 19-7 04252019 2500 00
2375 METRO WEST INSPECTION SE 1978 212 ASH ST E 19-13 04252019 5198 00
2375 METRO WEST INSPECTION SE 1978 330 CHESTNUT ST E 19-22 04252019 2500 00
Total 2375 41663 00
2419
2419 MID-MINNESOTA CONCRETE 19073 HOT WATER 03112019 49000 00
2419 MID-MINNESOTA CONCRETE 19075 HOT WATER 03132019 49000 00
2419 MID-MINNESOTA CONCRETE 19076 HOT WATER 03042019 24500 00
Total 2419 122500 00
2425
2425 MIDWAY IRON amp METAL INC 420761 STEEL 04172019 5363 00
Total 2425 5363 00
2465
2465 MCP CARSTAR COLLISION CE 41349297 SQUAD 51 REPAIRS 01052019 175667 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 6
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2465 175667 00
2511
2511 CENTER POINT ENERGY 110 PAVILION 04122019 4986 00
2511 CENTER POINT ENERGY 111 TC 04122019 5309 00
2511 CENTER POINT ENERGY 112 OLD PW SHOP 05022019 4465 00
2511 CENTER POINT ENERGY 113 WTP 04122019 50216 00
2511 CENTER POINT ENERGY 114 HOCKEY RINK 04122019 4221 00
2511 CENTER POINT ENERGY 116 WARMING HOUSE 04162019 1500 00
2511 CENTER POINT ENERGY 116 CITY HALL 04162019 23624 00
2511 CENTER POINT ENERGY 117 FD 04122019 35974 00
Total 2511 130295 00
2525
2525 MINNESOTA COMPUTER SYST 263763 ADMIN COPIER 04082019 34758 00
2525 MINNESOTA COMPUTER SYST 463318 BW S3HR 04022019 5503 00
Total 2525 40261 00
2635
2635 CORE amp MAIN LP K426017 CULVERT 04242019 145000 00
2635 CORE amp MAIN LP K441242 LOCATOR 04222019 75265 00
Total 2635 220265 00
2698
2698 MPPOA MARCH 2019 NEW MEMBER DUES- LDF 04082019 3900 00
2698 MPPOA MARCH202019 2019 DUES- M FAUST 03202019 5000 00
Total 2698 8900 00
2819
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER- DMV 03012019 5830 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-ADMIN 03012019 13604 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-PD 03012019 2160 00
2819 NORTHERN BUSINESS PRODU 385745-0 CALCULATOR INK 03012019 440 00
2819 NORTHERN BUSINESS PRODU 386830-0 DESK TRAYSCALC ROLLERS 04082019 8169 00
2819 NORTHERN BUSINESS PRODU 386830-1 DVD-RW 03072019 2859 00
2819 NORTHERN BUSINESS PRODU 387602-0 BINDERDESK TRAYSFILE 03082019 8641 00
2819 NORTHERN BUSINESS PRODU 393165-0 PD - OFFICE SUPPLIES 35303 03272019 2158 00
2819 NORTHERN BUSINESS PRODU 396891-0 PENSSTAPLERSTAPLES 05012019 15450 00
2819 NORTHERN BUSINESS PRODU 396891-1 HEATER 05012019 5285 00
2819 NORTHERN BUSINESS PRODU 396891-2 CALCULATOR 05012019 8662 00
2819 NORTHERN BUSINESS PRODU 400116-0 FOLDERSPENS 05012019 6507 00
2819 NORTHERN BUSINESS PRODU 400134-0 EMPLOYEE FOLDERSRECPT B 05012019 16499 00
Total 2819 96264 00
2832
2832 NORTHWEST ASSOC CONSUL 24128 REZONE FOR SCHOOL 04042019 3330 00
2832 NORTHWEST ASSOC CONSUL 24128 SAND PROFILE 04042019 9450 00
2832 NORTHWEST ASSOC CONSUL 24129 VERIZON 04042019 20000 00
Total 2832 32780 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 7
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
2934
2934 PLEASANT LAKE ASSOCIATION 42919 PLEASANT LAKE ASSN 05012019 500000 00
Total 2934 500000 00
2962
2962 PRINCIPAL LIFE 108 INSURANCE 04222019 14144 14144 04232019
Total 2962 14144 14144
3161
3161 S P ELECTRIC INC 7282 OLD SPLICERS REMOVAL 04112019 99054 00
Total 3161 99054 00
3180
3180 SCHWAAB INC C039891 DATE STAMP 03272019 16776 00
3180 SCHWAAB INC C041311 REPLACE PADS 04042019 2050 00
Total 3180 18826 00
4006
4006 SHRED IT USA - MPLS 8126937775 SHREDDING SERVICES 03312019 45401 00
Total 4006 45401 00
4021
4021 SOKS RAPID CAR WASH 216-1384 SQUAD WASHES 04012019 11865 11865 04122019
Total 4021 11865 11865
4040
4040 SUMMIT COMPANIES 1368349 FIRE SYSTEM MAINT 04102019 34500 00
4040 SUMMIT COMPANIES 1368350 ANNUAL FIRE ALARM INSP 04102019 23000 00
4040 SUMMIT COMPANIES 1368538 CITY HALL FIRE SUPPRESION 04052019 19800 00
4040 SUMMIT COMPANIES 1371739 FIRE EXT MAINTENANCE 04292019 46280 00
4040 SUMMIT COMPANIES 1372404 CITY HALLPD - ANNUAL FIRE A 04292019 16715 00
Total 4040 140295 00
4130
4130 STERNBERG LANTERNS INC 50379 LIGHT SOCKETS 04122019 30000 00
Total 4130 30000 00
4222
4222 TASC IN1499967 ADMIN FEES 04172019 43320 00
Total 4222 43320 00
4269
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
Total 4269 324000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 8
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4337
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16061 16061 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
Total 4337 48181 48181
4365
4365 UTILITY CONSULTANTS INC 101046 COLIFORM 03282019 8000 00
Total 4365 8000 00
4377
4377 VERIZON WIRELESS 9827946389 PW IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 FD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 INVESTIGATOR COMPUTER 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD CELL PHONE 04102019 16639 16639 04232019
4377 VERIZON WIRELESS 9827946389 PW CELL PHONE 04102019 26360 26360 04232019
Total 4377 57003 57003
4481
4481 WEST CENTRAL SANITATION I 121 RECYCLE 04302019 362792 00
4481 WEST CENTRAL SANITATION I 121 REFUSE 04302019 936578 00
4481 WEST CENTRAL SANITATION I MARCH 2019 RECYCLE 03312019 451419 451419 04122019
4481 WEST CENTRAL SANITATION I MARCH 2019 REFUSE 03312019 908999 908999 04122019
Total 4481 2659788 1360418
4495
4495 WINDSTREAM APRIL2019 LS 805 NORWAY DR E 04032019 24428 24428 04122019
4495 WINDSTREAM APRIL32019 320-274-2793 04032019 3830 3830 04122019
Total 4495 28258 28258
4520
4520 WRIGHT COUNTY HIGHWAY DE 1340 APEX 04162019 12100 00
Total 4520 12100 00
4548
4548 WRIGHT-HENNEPIN COOPERA 104 TC 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 105 CITY HALL SECURITY 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 106 LS 1255 BUSINESS BLVD 04102019 1484 1484 04232019
4548 WRIGHT-HENNEPIN COOPERA 119 STREET LIGHTS 04102019 13973 00
Total 4548 20047 6074
4559
4559 XCEL ENERGY 0774352025 ACCOUNT 51-4985655-1 03282019 1910 1910 04122019
4559 XCEL ENERGY 0774781723 ACCOUNT 51-6464610-6 04082019 5051 5051 04122019
4559 XCEL ENERGY 0774798834 ACCOUNT 51-6875531-1 04012019 2964 2964 04122019
4559 XCEL ENERGY 0774851593 ACCOUNT 51-0011253419-4 04012019 52824 52824 04122019
4559 XCEL ENERGY 0774856745 ACCOUNT 51-0010892786-1 04012019 1379 1379 04122019
4559 XCEL ENERGY 0775014393 ACCOUNT 51-6076585-1 04022019 11396 11396 04122019
4559 XCEL ENERGY 0775442400 ACCOUNT 51-6024519-2 04042019 365444 365444 04232019
CITY OF ANNANDALE Payment Approval Report - for City Council Page 9
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4559 XCEL ENERGY 0775852647 ACCOUNT 51-6024518-1 04082019 156465 156465 04232019
4559 XCEL ENERGY 0777794063 ACCOUNT 51-4192659-4 04182019 3117 00
4559 XCEL ENERGY 0779111699 ACCOUNT 51-4985655-1 04262019 1767 00
4559 XCEL ENERGY 778173400 ACCOUNT 51-4636619-8 04222019 6391 00
Total 4559 608708 597433
4648
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 23750 00
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 00 00
4648 A R ENGH 190448 SPRING MAINTENANCE 04302019 21375 00
4648 A R ENGH 190451 SPRING MAINTENANCE- TC 04302019 14250 00
Total 4648 59375 00
4716
4716 JOVANOVICH KADLEC amp ATHM 16709 KRONQUIST LOT 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 LEASE WITH WILES 03312019 28000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 ORD AMENDMENT- MICRO DIS 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 GENERAL 03312019 8750 00
4716 JOVANOVICH KADLEC amp ATHM 16709 PERSONNEL POLICY 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 CONTROLLED BURN HOLD HA 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
Total 4716 82250 00
4721
4721 MANEY INTERNATIONAL 803662X1 PARTS 02072019 2275 2275 04122019
Total 4721 2275 2275
4734
4734 MOTOROLA SOLUTIONS INC 16042791 RADIO BATTERIES 03252019 16800 00
Total 4734 16800 00
4743
4743 CARDMEMBER SERVICE 122 ATRIST EASEL 05012019 10305 00
4743 CARDMEMBER SERVICE 122 KEROSENE 05012019 6329 00
4743 CARDMEMBER SERVICE 122 POLLUTION CONTROL 05012019 41500 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC 05012019 1639 00
4743 CARDMEMBER SERVICE 122 AMAZON- 40 AMP RELAY 05012019 2898 00
4743 CARDMEMBER SERVICE 122 A-1 - BULB KIT 05012019 2503 00
4743 CARDMEMBER SERVICE 122 MENARDS-POTHOLE PATCH 05012019 47014 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC BALL VALVE 05012019 1770 00
4743 CARDMEMBER SERVICE 122 TOTAL TOOL- SHOE - PETER 05012019 5123 00
4743 CARDMEMBER SERVICE 122 PRYOR- EXCEL CLASSES- MIS 05012019 25600 00
4743 CARDMEMBER SERVICE 122 MN CHIEFS ASSOC 05012019 19900 00
4743 CARDMEMBER SERVICE 122 BEST BUY- 05012019 8589 00
4743 CARDMEMBER SERVICE 122 BEST BUY 05012019 17178 00
4743 CARDMEMBER SERVICE 122 USPS 05012019 1149 00
4743 CARDMEMBER SERVICE 122 PAYPAL- INTER ASSOC EVID- R 05012019 5000 00
4743 CARDMEMBER SERVICE 122 ACTION TARGETS- 05012019 14662 00
4743 CARDMEMBER SERVICE 122 AMAZON- METAL DUSTPAN 05012019 2894 00
4743 CARDMEMBER SERVICE 122 AMAZON- BATTERIES 05012019 2124 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 10
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 4743 216177 00
4752
4752 NCPERS GROUP LIFE INS MAY2019 INSURANCE 04172019 1600 00
Total 4752 1600 00
4769
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 39944 00
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 00 00
Total 4769 39944 00
4793
4793 DELTA DENTAL 7626938 INSURANCE 04152019 139599 139599 04232019
Total 4793 139599 139599
4831
4831 GENERAL RENTAL CENTER OF 1174533 HEATER RENTAL 03112019 11000 00
Total 4831 11000 00
4889
4889 CLASSIC CLEANING COMPANY 28038 CITY HALL- 04082019 67375 00
4889 CLASSIC CLEANING COMPANY 28038 PD- 04082019 14700 00
4889 CLASSIC CLEANING COMPANY 28038 LIBRARY- 04082019 40425 00
4889 CLASSIC CLEANING COMPANY 28039 TC 04082019 23000 00
Total 4889 145500 00
4945
4945 COUNTRY REPAIR INC 1568 KOHLER 100 GENERAT REPAIR 02212019 348966 00
Total 4945 348966 00
4955
4955 WORKFORCE INTEGRITY NET 41219 PREEMPLOYMENT TEST KIRBY 03312019 9300 00
Total 4955 9300 00
4968
4968 Volunteer Firefighter Ben Assoc of MARCH2019 BENEFIT RENEWALS 04012019 20600 20600 04122019
Total 4968 20600 20600
5002
5002 BUREAU OF CRIMINAL APPRE 536318 CJDN 03312019 27000 00
Total 5002 27000 00
5003
5003 BOLAND PRODUCTION SUPPL 11-6569 BLANK AMMUNITION 03042019 10000 00
Total 5003 10000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 11
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5006
5006 MIDCONTINENT COMMUNICATI 157013401102 FD 04092019 14765 14765 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PW 04092019 26599 26599 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 TC 04092019 3717 3717 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 DMV 04092019 12056 12056 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PD 04092019 20823 20823 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 CITY HALL 04092019 24864 24864 04122019
Total 5006 102824 102824
5031
5031 A1 RAPID LUBE 112018 SQUAD 51 OIL CHANGE 04092019 4145 4145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 51 04092019 9145 9145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 52 04092019 1500 1500 04122019
5031 A1 RAPID LUBE 11302018 SQUAD 52 WASH 04092019 1500 1500 04122019
5031 A1 RAPID LUBE DEC2018 SQUAD 51 OIL CHANGE 04092019 5000 5000 04122019
Total 5031 21290 21290
5039
5039 KAMCO 201800 CRACKFILLING 04292019 5395141 00
Total 5039 5395141 00
5056
5056 CASEYS GENERAL STORES IN MARCH 2019 PD FUEL 04012019 6449 6449 04122019
Total 5056 6449 6449
5067
5067 ZUERCHER PA0001614 GPS RECEIVERS 03102019 32800 00
5067 ZUERCHER PA0001669 RECORDS- PROPERTY amp EVID 03292019 102100 00
Total 5067 134900 00
5074
5074 Potentia MN Solar Fund 1 LLC 2019-02-1761- 520 ASH - WTP 02282019 28907 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- CEMETARY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 370 PARK SEWAGE PUMP 02282019 7041 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 520 ASH - WTP 02282019 14573 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 605 WARREN 02282019 3083 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 200 EXCELSIOR 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- BALL PARL LIGHTING 02282019 1136 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- CITY HALL 02282019 16228 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- PAVILION 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- HOCKEY RINK 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- UNIT SOUTH 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 30 CEDAR STREET LIGHT 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 111 CEDAR ST 02282019 163 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 15 CONV CLUB RD - LS 02282019 2596 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS 805 NORWAY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 640 ACACIA 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1792- FD 02282019 5895 00
Total 5074 83677 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 12
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5075
5075 HALVORSON LANGEMO PASC 2927 ARPIL PROSECUTION 03282019 139479 139479 04232019
5075 HALVORSON LANGEMO PASC 2994 MAY PROSECUTION 04262019 139479 00
Total 5075 278958 139479
5086
5086 CLASSIC CARPET amp FLOOR CA 1312 FD- CARPET CLEANING 04102019 24500 00
Total 5086 24500 00
5099
5099 STENGER PETER march72019 WATER LICENSE 03072019 3200 3200 04042019
Total 5099 3200 3200
5101
5101 GAPINSKI AMELIA 118 MILEAGE- ST PAUL-147 MILES 04222019 8526 8526 04232019
5101 GAPINSKI AMELIA 118 LUNCH- ST PAUL 04222019 1182 1182 04232019
5101 GAPINSKI AMELIA 118 PARKING RAMP- ST PAUL 04222019 1800 1800 04232019
Total 5101 11508 11508
5103
5103 GLUNZ DAVID D 589207 1ST QTR SEXTON FEE 2019 04222019 12000 00
Total 5103 12000 00
5108
5108 RECON ROBOTICS 74975 ROBOT REPAIR 03082019 40000 00
Total 5108 40000 00
5120
5120 MELGAARD SERVICES 115 LITTLE JIMS REPAIR 03272019 65000 00
Total 5120 65000 00
5137
5137 HARTZELL STEVE DEC2018 SAFETY SHOES 04092019 13998 13998 04122019
Total 5137 13998 13998
5138
5138 HOGLUND BUS COMPANY 133269 PLOW TRUCK REPAIR 04232019 242869 00
Total 5138 242869 00
5139
5139 GIEBENHAIN KARIE APRIL 2019 TRAVELTRAINING 04292019 1259 00
Total 5139 1259 00
5140
5140 GRABHAM JUDY APRIL2019 GARDEN MATERIALS REIMBUR 04302019 12312 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 13
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 5140 12312 00
Grand Totals 23368095 2894268
Dated __________________________________________
Mayor __________________________________________
Dwight Gunnarson
City Council __________________________________________
Shelly Jonas
__________________________________________
Jullie Hastings
__________________________________________
Corey Czycalla
__________________________________________
Matthew Wuollet
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
CITY OF ANNANDALE Check Register Page 1Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03012019 03042019 1005 EFT - ASPIRE 14 47332-03012019 03042019 1006 EFT - FLEXSYSTEM 9 21153-03012019 03042019 1007 EFT - MINNESOTA 8 152678-03012019 03042019 1008 EFT-FURTHER 12 194842-03012019 03042019 1008 EFT-FURTHER 12 70000-03012019 03042019 1009 EFT-PERA 5 197211-03012019 03042019 1009 EFT-PERA 5 227551-03012019 03042019 1009 EFT-PERA 5 164253-03012019 03042019 1009 EFT-PERA 5 246377-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 291789-03152019 03182019 1011 EFT - ASPIRE 14 50777-03152019 03182019 1012 EFT - FLEXSYSTEM 9 21153-03152019 03182019 1013 EFT - MINNESOTA 8 170353-03152019 03182019 1014 EFT-FURTHER 12 199842-03152019 03182019 1015 EFT-NATIONWIDE RETIREMENT 3 45727-03152019 03182019 1016 EFT-PERA 5 202077-03152019 03182019 1016 EFT-PERA 5 233162-03152019 03182019 1016 EFT-PERA 5 167748-03152019 03182019 1016 EFT-PERA 5 251623-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 338787-03012019 03042019 3231 FERRELL MISTY 123 207493-03012019 03042019 3232 HINNENKAMP KELLY 127 296930-03012019 03042019 3233 JARMON VICKI I 134 162692-03012019 03042019 3234 KRIENKE CARRIE L 136 118186-03012019 03042019 3235 GAPINSKI AMELIA 142 76605-03012019 03042019 3236 GIEBENHAIN KARIE 143 63912-03012019 03042019 3237 HERR JEFFREY J 208 198056-03012019 03042019 3238 STANDAFER PETER A 217 171766-03012019 03042019 3239 BERG TERESA 233 29593-03012019 03042019 3240 TAVARES AARON J 234 144943-03012019 03042019 3241 PETERSON KENNETH J 235 6543-03012019 03042019 3242 ETSHOKIN LOUIS RICHARD 238 69332-03012019 03042019 3243 GRIGGS DEREK C 245 173791-03012019 03042019 3244 SMITH TARA 251 104275-03012019 03042019 3245 MARES NICHOLAS J 306 46531-03012019 03042019 3246 GLUNZ DAVID D 323 215466-03012019 03042019 3247 STENGER PETER 324 148864-03012019 03042019 3248 COREY NICHOLLE 328 176647-03012019 03042019 3249 HARTZELL STEVE 329 123679-03012019 03042019 3250 WICKER MITCHELL 360 157433-03012019 03042019 3251 HASTINGS JULLIE K 803 13391-
CITY OF ANNANDALE Check Register Page 2Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 3252 FERRELL MISTY 123 186726-03152019 03182019 3253 HINNENKAMP KELLY 127 296930-03152019 03182019 3254 JARMON VICKI I 134 156691-03152019 03182019 3255 KRIENKE CARRIE L 136 109765-03152019 03182019 3256 GAPINSKI AMELIA 142 78334-03152019 03182019 3257 GIEBENHAIN KARIE 143 62780-03152019 03182019 3258 HERR JEFFREY J 208 228423-03152019 03182019 3259 STANDAFER PETER A 217 188333-03152019 03182019 3260 TAVARES AARON J 234 143820-03152019 03182019 3261 ETSHOKIN LOUIS RICHARD 238 36648-03152019 03182019 3262 Void03152019 03182019 3263 SMITH TARA 251 100781-03152019 03182019 3264 MARES NICHOLAS J 306 9080-03152019 03182019 3265 GLUNZ DAVID D 323 263393-03152019 03182019 3266 STENGER PETER 324 156283-03152019 03182019 3267 COREY NICHOLLE 328 141112-03152019 03182019 3268 HARTZELL STEVE 329 114544-03152019 03182019 3269 WICKER MITCHELL 360 231604-03152019 03182019 3270 RANDALL STEVEN R 570 23273-03152019 03182019 3271 TOMES BRIAN C 571 19117-03152019 03182019 3272 EDWARDS DANIEL J 572 25765-03152019 03182019 3273 JARVIS TRYSTON 573 16808-03152019 03182019 3274 GRIGGS DEREK C 245 209088-03152019 03182019 53766 RAMSTAD DONALD E 533 17270 03152019 03182019 54586 RAMSTAD DONALD E 533 26412 03012019 03042019 54850 ENGFER NANCY E 204 207304-03012019 03042019 54851 FLEMMING MITCHELL E 206 33085-03012019 03042019 54852 HALLER JOSEPH D 305 277811-03012019 03042019 54853 SMART MATTHEW A 331 31168-03012019 03042019 54854 GUNNARSON DWIGHT R 802 18932-03012019 03042019 54855 JONAS SHELLY 804 13391-03012019 03042019 54856 CZYCALLA COREY 806 13391-03012019 03042019 54857 WUOLLET MATTHEW L 821 13391-03012019 03042019 54858 ROTH GREGORY W 912 1847-03012019 03042019 54859 FRANZEN CLIFFORD 913 1847-03012019 03042019 54860 SCHWARZKOPF ERIC 917 2770-03012019 03042019 54861 BAACK LONNIE L 919 1847-03012019 03042019 54862 NILSON MAYNARD A 921 1847-03012019 03042019 54863 DRISTE JOHN 950 1847-03012019 03042019 54864 PETERSON LEE W 980 1847-03012019 03042019 54865 SEAGRAVES RICHARD T 985 1847-03012019 03042019 54866 WAGNER RICHARD 990 2770-03152019 03182019 54949 ENGFER NANCY E 204 163991-03152019 03182019 54950 FLEMMING MITCHELL E 206 33085-03152019 03182019 54951 FAUST MITCHEL L 241 144665-03152019 03182019 54952 HALLER JOSEPH D 305 293266-03152019 03182019 54953 SMART MATTHEW A 331 12698-03152019 03182019 54954 BROWN JOHN D 501 16254-03152019 03182019 54955 DAGNER JOHN A 503 42112-
CITY OF ANNANDALE Check Register Page 3Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 54956 FAHEY MARCUS D 507 17270-03152019 03182019 54957 GRINDLE GARY L 512 65938-03152019 03182019 54958 HAAG BRIAN 514 151209-03152019 03182019 54959 MACHOVSKY JR DALE R 529 27088-03152019 03182019 54960 PICKEN SCOTT W 53203152019 03182019 54961 RAMSTAD DONALD E 533 35555-03152019 03182019 54962 ROEPKE JEFFREY A 535 34539-03152019 03182019 54963 TOWNSEND KRISTOPHER C 546 91057-03152019 03182019 54964 WANG RYAN A 549 46822-03152019 03182019 54965 WUOLLET MATTHEW L 553 24934-03152019 03182019 54966 TORRES HORACIO JR 563 43404-03152019 03182019 54967 KOLB JOHN E 564 25749-03152019 03182019 54968 DWENGER JOSEPH A JR 568 41557-03152019 03182019 54969 HARVEY ADAM 574 42019-03152019 03182019 54970 SCHMIDT LISA A 575 14869-03152019 03182019 54971 OLSON NATHAN G 576 14869-03152019 03182019 54972 PEARSON SEAN 577 27151-03152019 03182019 54973 SCHAUFLER CHRISTINA 578 26505-03152019 03182019 54974 HOEFER JUSTIN A 579 18101-03152019 03182019 54982 RAMSTAD DONALD E 533 26412-03152019 03182019 54983 RAMSTAD DONALD E 533 17270-
Grand Totals 119 12049646-
CITY OF ANNANDALE
REQUEST FOR COUNCIL ACTION
Originating Department Administration
Meeting Date May 6 2019
Agenda No 3A
Agenda Section New Business
Item 2018 Audit
BACKGROUND The City is required to conduct an audit annually The attached audit will be presented at the meeting RECOMMENDATION Motion to approve the 2018 Audit as presented
CPAS amp ADVISORSWILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
AUDITED FINANCIAL STATEMENTS AND
DECEMBER 31 2018
CONWAY DEUTH amp SCHMIESING PLLP
SUPPLEMENTARY INFORMATION
This page intentionally left blank
PAGE
ELECTED OFFICIALS AND ADMINISTRATION 1
INDEPENDENT AUDITORS REPORT 2-4
REQUIRED SUPPLEMENTARY INFORMATION
Managements Discussion and Analysis 5-12
BASIC FINANCIAL STATEMENTS
Statement of Net Position 13
Statement of Activities 14
Balance Sheet - Governmental Funds 15
Reconciliation of the Governmental FundsBalance Sheet to the Statement of Net Position 16
Statement of Revenues Expenditures and Changes in Fund Balances -Governmental Funds 17
Reconciliation of the Statement of Revenues Expendituresand Changes in Fund Balances of Governmental Fundsto the Statement of Activities 18
Statement of Revenues Expenditures and Changes in Fund Balances -Budget and Actual - General Fund 19
Statement of Net Position - Proprietary Funds 20
Statement of Revenues Expenses and Changes in Net Position -Proprietary Funds 21
Statement of Cash Flows - Proprietary Funds 22-23
Notes to the Financial Statements 24-57
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of the Proportionate Share of the Net Pension Liability 58
Schedule of Employer Contributions 59
Schedule of Changes in the Citys Net Pension Liability and Related Ratios 60
Notes to the Required Supplementary Information 61-63
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
PAGE
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
SUPPLEMENTARY INFORMATION
COMBINING STATEMENTS OF NONMAJOR FUNDS
Combining Balance Sheet - Nonmajor Governmental Funds 64
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds 65
Combining Balance Sheet - Nonmajor Governmental Funds - Special Revenue 66
Combining Balance Sheet - Nonmajor Governmental Funds - Debt Service 67
Combining Balance Sheet - Nonmajor Governmental Funds - Capital Projects 68
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Special Revenue 69
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Debt Service 70
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Capital Projects 71
FINANCIAL SCHEDULE
Schedule of Long-Term Liabilities 72
COMPLIANCE SECTION
Independent Auditors Report on Minnesota Legal Compliance 73
Independent Auditors Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements Performedin Accordance with Government Auditing Standards 74-75
Schedule of Findings 76-77
Summary Schedule of Prior Audit Findings 78
Elected Officials Position Term Expires
Dwight Gunnarson Mayor December 31 2018
Corey Czycalla Council Member December 31 2018
Shelly Jonas Council Member December 31 2018
Matthew Wuollet Council Member December 31 2020
Jullie Hastings Council Member December 31 2020
Administration
Kelly Hinnenkamp Administrator Appointed
Misty Ferrell Treasurer Appointed
CITY OF ANNANDALE MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATIONDECEMBER 31 2018
1
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Report on the Financial Statements
Managements Responsibility for the Financial Statements
Auditors Responsibility
beli
INDEPENDENT AUDITORS REPORT
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 Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Cityrsquos basic financial statements as listed in the table of contents
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
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
2
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 entitys 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 entitys 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
Opinions
Other Matters
Required Supplementary Information
Supplementary and Other Information
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 Annandale Minnesota as of December 31 2018 and the respective changes in financial position and where applicable cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America
Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions and the Schedule of Changes in the Citys 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 managements 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
3
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Cityrsquos basic financial statements The statements and schedules listed in the table of contents as supplementary information and the Elected Officials and Administration section are presented for purposes of additional analysis and are not a required part of the basic financial statements
The supplementary information is the responsibility of management and was derived from and relates 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 supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole
The Elected Officials and Administration section has 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 the information presented
Other Reporting Required by Government Auditing Standards
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
4
In accordance with Government Auditing Standards we have also issued our report dated May 6 2019 on our consideration of the Citys 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 results of that testing and not to provide an opinion on the effectiveness of the Cityrsquos 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 Cityrsquos internal control over financial reporting and compliance
May 6 2019
This page intentionally left blank
REQUIRED SUPPLEMENTARY INFORMATION
This page intentionally left blank
-
-
-
-
The City as a Whole Statement of Net Position and Statement of Activities
Our analysis of the City of Annandale begins with the Statement of Net Position and the Statement of Activities One of the most important questions asked about the Cityrsquos finances is ldquoIs the City as a whole better off or worse off as a result of the yearrsquos activitiesrdquo The Statement of Net Position and the Statement of Activities both report information about the City as a whole and about its activities in a way that helps answer this question The Statement of Net Position includes all assets and deferred outflows of resources and liabilities and deferred inflows of resources using the accrual basis of accounting In the Statement of Activities all of the current yearrsquos revenues and expenses are taken into account regardless of when cash is received or paid These two statements report the Cityrsquos net position and changes in them You can think of the Cityrsquos net positionmdashthe difference between assets and deferred outflows of resources and liabilities and deferred inflows of resourcesmdashas one way to measure the Cityrsquos financial health Over time increases or decreases in the Cityrsquos net position is one indicator of whether the Cityrsquos financial health is improving or deteriorating
You will need to consider other nonfinancial factors however to assess the overall health of the City of Annandale
In the Statement of Net Position and the Statement of Activities we divide the City into two kinds of activities
Governmental Activities - Most of the Citys basic services are reported here including general government public safety public works culture and recreation and economic development Property taxes and state and federal grants finance most of these activities
5
This annual report consists of a series of financial statements The Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the Cityrsquos finances Fund financial statements are presented after the Statement of Activities Fund financial statements also report the Cityrsquos operations in more detail than the government-wide statements by providing information about the Cityrsquos funds The notes to the financial statements provide information that is essential to a full understanding of the data provided in the government-wide and fund financial statements This annual report also contains other supplementary information in addition to the basic financial statements
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
This section of the basic financial statements of the City of Annandale (the City) presents a discussion and analysis of the Cityrsquos financial performance during the fiscal year ended December 31 2018 Please read it in conjunction with the Cityrsquos basic financial statements following this section
Financial Highlights
The assets and deferred outflows of resources of the City exceeded liabilties and deferred inflows of resources by $16461537
The Cityrsquos total net position increased by $1317551
The Cityrsquos governmental funds reported combined ending fund balances of $4349540 an increase of $122322 The Governmental Funds have $1240520 available for spending at the Citys discretion
At the end of the current fiscal year unassigned fund balance for the General Fund was $1697339 or 9417 of total General Fund expenditures of $1802505
Using This Annual Report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
The proprietary fund financial statements can be found on pages 20-23 of this report
Notes to the 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 The notes to the financial statements can be found on pages 24-57 of this report
6
Proprietary Funds - When the City of Annandale charges customers for the services it providesmdashwhether to outside customers or to other units of the Citymdashthese services are generally reported in proprietary funds Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities In fact the Cityrsquos enterprise funds are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information such as cash flows for proprietary funds
Business-Type Activities - The City charges a fee to customers to help it cover all or most of the cost of certain services it provides The Citys Water Sewer RefuseRecycling and Storm Utility funds are reported here
The Citys Most Significant Funds Fund Financial Statements
Our analysis of the Cityrsquos major funds begins with the fund financial statements These statements provide detailed information about the most significant fundsmdashnot the City as a whole Some funds are required to be established by state law and by bond covenants However the City Council establishes other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes grants and other money The Citys two kinds of funds-governmental and proprietary-use different accounting approaches
Governmental Funds - Most of the Cityrsquos basic services are reported in governmental funds Governmental funds focus on how money flows into and out of those funds and the balances left at year-end that are available for spending These funds are reported using an accounting method called modified accrual accounting which measures cash and all other financial assets that can readily be converted to cash The governmental fund statements provide a detailed short-term view of the Cityrsquos general government operations and the basic services it provides Governmental fund information helps the reader of the statements determine whether there are more or fewer financial resources that can be spent in the near future to finance the Cityrsquos programs We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation after the fund financial statements
The governmental fund financial statements can be found on pages 15-19 of this report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 5190696$ 5190633$ 63$ Net Capital Assets 10406611 10638601 (231990) Net Pension Asset 517946 440028 77918
Total Assets 16115253 16269262 (154009)
Deferred Outflows of Resources 621929 855064 (233135)
Total Assets and DeferredOutflows of Resources 16737182$ 17124326$ (387144)$
Current and Other Liabilities 1080947$ 1068593$ 12354$ Long-Term Liabilities 5393130 6383354 (990224)
Total Liabilities 6474077 7451947 (977870)
Deferred Inflows of Resources 886892 904112 (17220)
Net PositionNet Investment in Capital Assets 4962623 4377847 584776 Restricted 2021421 2178740 (157319) Unrestricted 2392169 2211680 180489
Total Net Position 9376213 8768267 607946
Total Liabilities Deferred Inflowsof Resources and Net Position 16737182$ 17124326$ (387144)$
Statement of Net Position
The Cityrsquos net position increased from a year ago Our analysis below focuses on the net position (Tables 1 and 2) andchanges in net position (Tables 3 and 4) of the Cityrsquos governmental and business-type activities
Table 1Comparative Condensed Statement of Net Position
Governmental Activities
7
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 179979$ 85557$ 94422$ Equity Interest 7004898 7023511 (18613) Net Capital Assets 10543232 10887885 (344653)
Total Assets 17728109 17996953 (268844)
Deferred Outflows of Resources 35051 59103 (24052)
Total Assets and DeferredOutflows of Resources 17763160$ 18056056$ (292896)$
Current and Other Liabilities 1595412$ 1396254$ 199158$ Long-Term Liabilities 9028762 10236810 (1208048)
Total Liabilities 10624174 11633064 (1008890)
Deferred Inflows of Resources 53662 47273 6389
Net PositionNet Investment in Capital Assets 8625232 8741281 (116049) Restricted 74208 36985 37223 Unrestricted (1614116) (2402547) 788431
Total Net Position 7085324 6375719 709605
Total Liabilities Deferred Inflowsof Resources and Net Position 17763160$ 18056056$ (292896)$
Business-Type Activities
8
Comparative Condensed Statement of Net PositionTable 2
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 652677$ 598474$ 54203$ Operating Grants and Contributions 122213 111759 10454 Capital Grants and Contributions 187016 576626 (389610)
General RevenuesProperty Taxes 1485895 1463472 22423 Tax Increments 20858 20203 655 Grants and Contributions Not Restricted 453773 422194 31579 Investment Income 16929 17237 (308) Miscellaneous 4178 17678 (13500) Gain on Sale of Asset 6034 268371 (262337)
Total Revenues 2949573 3496014 (546441)
EXPENSESGeneral Government 502902 475597 27305 Public Safety 970131 1019255 (49124) Public Works 769202 840164 (70962) Culture and Recreation 148880 762606 (613726) Economic Development 45238 85505 (40267) Interest on Long-Term Debt 160274 176897 (16623)
Total Expenses 2596627 3360024 (763397) Change in Net Position before Transfers 352946 135990 216956
TRANSFERS 255000 247000 8000 Change in Net Position 607946 382990 224956
NET POSITION BEGINNING OF YEAR 8768267 8385277 382990
NET POSITION END OF YEAR 9376213$ 8768267$ 607946$
Governmental Activities
Net position of the Citys governmental activities increased by $607946 Table 3 presents the key elements of the increase
Table 3Comparative Condensed Statement of Activities
Governmental Activities
9
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 3213338$ 2905848$ 307490$ General Revenues
Investment Income 2700 (1558) 4258 Total Revenues 3216038 2904290 311748
EXPENSESWater 492444 485751 6693 Sewer 1441099 1331721 109378 RefuseRecycling 199326 196627 2699 Storm Utility 99951 91130 8821
Total Expenses 2232820 2105229 127591 Change in Net Position before Transfers 983218 799061 184157
TRANSFERS (255000) (247000) (8000) CHANGE IN EQUITY INTEREST (18613) (70479) 51866
Change in Net Position 709605 481582 176157
NET POSITION BEGINNING OF YEAR 6375719 5894137 481582
NET POSITION END OF YEAR 7085324$ 6375719$ 709605$
Comparative Condensed Statement of Activities
Business-Type Activities
10
Table 4
Business-Type Activities
The net position of our business-type activities increased by $709605 The net increase was due to the following funds change in net position Water - $26607 decrease Sewer - $822708 increase RefuseRecycling - $9397 increase and Storm Utility - $95893 decrease
The following tables indicate the changes in net position for the Citys business-type activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Capital Project Funds - The capital projects fund balances increased by $13451
11
Over the course of the year the City of Annandale City Council did not revise the budget The General Fund budget predicted a $5178 increase in fund balance which includes the operations of the Motor Vehicle department The actual change in fund balance was an increase of $212334 This is due to both revenues being higher and expenditures being lower than anticipated Mobile Home tax revenues building permit fees and state aids were over budgeted amounts and both current and capital outlay expenditures were under budgeted amounts
Governmental Activities
Revenues - The following chart visually illustrates the Citys revenue by source for its governmental activities
Financial Analysis of the Citys Funds
General Fund - The Citys General Fund Balance increased by $212334 for 2018 The increase is mainly due to an increase in building permit fees and local government aid with a slight increase in public safety expenditures and a decrease in transfers to other funds
Special Revenue Funds - The Citys special revenue fund balances decreased by $53786 A majority of the decrease was due to expenditures for the pintail drive extension project
Debt Service Funds - The debt service fund balances decreased by $49677 The main reason for the decrease was due to customer prepayments made on special assessments in prior years
General Fund Budgetary Highlights
Fees Fines and Charges for Services
2213
Operating Grants and Contributions
414
Capital Grants and Contributions
634
Property Taxes5038 Tax Increments
071
Grants and Contributions Not Restricted1538
Investment Income057
Miscellaneous014
Gain on Sale of Asset021
Revenue by Source - Governmental Activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Long-Term Liabilities
At the end of 2018 the City of Annandale had $15543549 in bonds notes and equipment certificates outstanding Refer to Note 7 of the Notes to the Financial Statements for a schedule showing the Citys long-term liability activity
Economic Factors and Next Years Budget
The City of Annandales appointed officials considered many factors when setting the fiscal year 2019 budget rates and fees that will be charged by the funds of the City The major factor accounted for when adopting the General Fund budget was to hold all line items as much as possible to the 2018 final budget
Contacting the Citys Financial Management
This financial report is designed to provide our residents customers and creditors with a general overview of the Citys finances and to show the Citys accountability for the money it receives If you have any questions about this report or need additional information contact the City of Annandale 30 Cedar Street E Annandale Minnesota 55302
12
Capital Assets
At the end of 2018 the City of Annandale had $47826808 invested in a broad range of capital assets Refer to Note 5 of the Notes to the Financial Statements for a schedule showing the Citys capital asset activity During 2018 the City had a large increase in improvements other than buildings related to the completion of the Southside Trail project
BASIC FINANCIAL STATEMENTS
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Governmental Business-TypeActivities Activities Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Cash and Investments 3413471$ 86083$ 3499554$ Restricted Cash 74208 74208 Taxes Receivable - Delinquent 14909 14909 Special Assessments Receivable
Delinquent 4423 4158 8581 Current and Deferred 650220 14885 665105
Accounts Receivable 96631 339457 436088 Interest Receivable 9 9 Prepaid Items 75903 22861 98764 Internal Balances 385956 (385956) Due from Other Governments 186251 24283 210534 Land Held for Resale 362923 362923 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 2696744 277948 2974692 Other Capital Assets Net of Depreciation 7709867 10265284 17975151
Net Pension Asset 517946 517946 Total Assets 16115253 17728109 33843362
Deferred Outflows of Resources 621929 35051 656980
Total Assets and Deferred Outflows of Resources 16737182$ 17763160$ 34500342$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 65859$ 26908$ 92767$ Contracts Payable 27913 27913 Due to Other Governments 15676 309797 325473 Salaries and Benefits Payable 30329 7259 37588 Interest Payable 61920 78448 140368 Unearned Revenue 36250 36250
Long-Term LiabilitiesNet Pension Liability 696581 197762 894343 Other Long-Term Liabilities Due Within One Year 843000 1173000 2016000 Other Long-Term Liabilities Due in More than One Year 4696549 8831000 13527549
Total Liabilities 6474077 10624174 17098251
Deferred Inflows of Resources 886892 53662 940554
Net PositionNet Investment in Capital Assets 4962623 8625232 13587855 Restricted for
Debt Service 2009940 2009940 Tax Increment 11481 11481 Capital Replacement 74208 74208
Unrestricted 2392169 (1614116) 778053 Total Net Position 9376213 7085324 16461537
Total Liabilities Deferred Inflows of Resourcesand Net Position 16737182$ 17763160$ 34500342$
See Accompanying Notes to the Financial Statements13
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONDECEMBER 31 2018
Fees Fines and Operating CapitalCharges for Grants and Grants and Governmental Business-Type
Expenses Services Contributions Contributions Activities Activities Total
GOVERNMENTAL ACTIVITIESGeneral Government 502902$ 286176$ $ $ (216726)$ $ (216726)$ Public Safety 970131 208144 115858 41000 (605129) (605129) Public Works 769202 130069 6355 26201 (606577) (606577) Culture and Recreation 148880 15413 55109 (78358) (78358) Economic Development 45238 12875 30108 (2255) (2255) Interest on Long-Term Debt 160274 34598 (125676) (125676)
Total Governmental Activities 2596627 652677 122213 187016 (1634721) 0 (1634721)
BUSINESS-TYPE ACTIVITIESWater 492444 565694 73250 73250 Sewer 1441099 2393268 952169 952169 RefuseRecycling 199326 208571 9245 9245 Storm Utility 99951 45805 (54146) (54146)
Total Business-Type Activities 2232820 3213338 0 0 0 980518 980518
Total 4829447$ 3866015$ 122213$ 187016$ (1634721) 980518 (654203)
GENERAL REVENUESProperty Taxes 1485895 1485895 Tax Increments 20858 20858 Grants and Contributions not Restricted to Specific Programs 453773 453773 Unrestricted Investment Earnings 16929 2700 19629 Miscellaneous 4178 4178 Gain on Sale of Asset 6034 6034
TRANSFERS 255000 (255000) CHANGE IN EQUITY INTEREST (18613) (18613)
Total 2242667 (270913) 1971754 Change in Net Position 607946 709605 1317551
NET POSITION BEGINNING OF YEAR 8768267 6375719 15143986
NET POSITION END OF YEAR 9376213$ 7085324$ 16461537$
See Accompanying Notes to the Financial Statements14
CITY OF ANNANDALE MINNESOTA
STATEMENT OF ACTIVITIESYEAR ENDED DECEMBER 31 2018
Program RevenuesNet (Expense) Revenue and
Changes in Net Position
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
ASSETSCash and Investments 1062209$ 2351262$ 3413471$ Taxes Receivable - Delinquent 14534 375 14909Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 650220 650220
Accounts Receivable 5744 90887 96631Interest Receivable 9 9 Prepaid Items 73751 2152 75903Due from Other Funds 920750 190388 1111138Due from Other Governments 135407 50844 186251Land Held for Resale 362923 362923
Total Assets 2212395$ 3703483$ 5915878$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 41982$ 23877$ 65859$ Contracts Payable 3574 24339 27913 Due to Other Funds 143500 581682 725182 Due to Other Governments 6200 9476 15676Salaries and Benefits Payable 30195 134 30329Unearned Revenue 36250 36250
Total Liabilities 261701 639508 901209
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 14534 375 14909Special Assessments 650220 650220
Total Deferred Inflows of Resources 14534 650595 665129
Fund Balance Nonspendable 73751 2152 75903 Restricted 1532633 1532633 Committed 847422 847422 Assigned 165070 487992 653062Unassigned 1697339 (456819) 1240520
Total Fund Balance 1936160 2413380 4349540
Total Liabilities Deferred Inflows ofResources and Fund Balance 2212395$ 3703483$ 5915878$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
BALANCE SHEETGOVERNMENTAL FUNDS
DECEMBER 31 2018
15
2018
Total Fund Balances - Governmental Funds 4349540$
Amounts reported for governmental activities in the Statement of Net Position are differentbecause
Capital assets used in governmental activities are not financial resources and therefore arenot reported as assets in the governmental funds
Capital Assets 31934114Less Accumulated Depreciation (21527503) Net Pension Asset 517946
Certain receivables will be collected in subsequent years but are not available soon enoughto pay for the current periods expenditures and therefore are deferred in the funds
Delinquent Property Taxes 14909Special Assessments 650220
Deferred outflows and inflows of resources related to pensions are applicable to futureperiods and therefore are not reported in the funds
Deferred Outflows of Resources Related to Pensions 621929 Deferred Inflows of Resources Related to Pensions (886892)
Long-term liabilities including bonds payable are not due and payable in the current periodand therefore are not reported as liabilities in the funds
Bonds Payable (4525000) Notes Payable (1014000) Compensated Absences Payable (22979) Interest Payable (61920) Bond Discount 22430 Net Pension Liability (696581)
Total Net Position - Governmental Activities 9376213$
See Accompanying Notes to the Financial Statements16
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION
DECEMBER 31 2018
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
REVENUESProperty Taxes 1167129$ 323230$ 1490359$ Tax Increments 20858 20858 Special Assessments 149671 149671 Licenses and Permits 106197 106197 Intergovernmental 568136 30310 598446 Charges for Services 457769 51231 509000 Fines and Forfeitures 12790 4299 17089 Investment Income 22019 (5090) 16929 Contributions and Donations 1700 133758 135458 Miscellaneous 22893 679 23572
Total Revenues 2358633 708946 3067579
EXPENDITURESCurrent
General Government 412224 10807 423031 Public Safety 889531 42738 932269 Public Works 379968 379968 Culture and Recreation 111127 3735 114862 Economic Development 52358 52358
Debt Service Principal 821000 821000 Interest and Other Charges 162964 162964
Capital Outlay General Government 5206 5206 Public Safety 4449 67055 71504 Public Works 14006 14006 Culture and Recreation 102651 102651 Economic Development 144931 144931
Total Expenditures 1802505 1422245 3224750 Excess (Deficiency) of Revenues
Over (Under) Expenditures 556128 (713299) (157171)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 1145914 1145914 Transfers Out (343794) (547120) (890914)
Total Other Financing Sources (Uses) (343794) 623287 279493 Net Change in Fund Balances 212334 (90012) 122322
FUND BALANCE BEGINNING OF YEAR 1723826 2503392 4227218
FUND BALANCE END OF YEAR 1936160$ 2413380$ 4349540$
See Accompanying Notes to the Financial Statements17
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
YEAR ENDED DECEMBER 31 2018
2018
Total Net Change in Fund Balances - Governmental Funds 122322$
Amounts reported for governmental activities in the Statement of Activities are different because
Capital outlays are reported in governmental funds as expenditures However in the Statementof Activities the cost of those assets is allocated over the estimated useful lives asdepreciation expense
Capital Outlays 360225 Depreciation Expense (556497) Disposal of Capital Assets (75923) Accumulated Depreciation Related to Disposed Capital Assets 40205
Revenues in the Statement of Activities that do not provide current financial resources are notreported as revenues in the funds
Special Assessments (115073)
Delinquent property taxes receivable will be collected in subsequent years but are not availablesoon enough to pay for the current periods expenditures and therefore are deferred in the funds (4464)
Some expenses reported in the Statement of Activities do not require the use of currentresources and therefore are not reported as expenditures in governmental funds
Compensated Absences 313 Net Pension Asset 77918Net Pension Liability 151145 Deferred Outflows of Resources Related to Pensions (233135) Deferred Inflows of Resources Related to Pensions 17220
Principal Retirement of Long-Term Debt 821000 Amortization of Bond Discounts (4234) Change in Interest Payable 6924
Change in Net Position - Governmental Activities 607946$
See Accompanying Notes to the Financial Statements18
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES EXPENDITURESAND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Bond proceeds provide current financial resources to governmental funds but issuing debtincreases long-term liabilities in the Statement of Net Position Repayment of bond principalis an expenditure in the governmental funds but the repayment reduces long-term liabilities inthe Statement of Net Position
Over(Under)
FinalOriginal Final Actual Budget
REVENUESProperty Taxes 1120885$ 1120885$ 1167129$ 46244$ Licenses and Permits 61800 61800 106197 44397 Intergovernmental 541952 541952 568136 26184 Charges for Services 437744 437744 457769 20025 Fines and Forfeitures 8700 8700 12790 4090 Investment Income 22019 22019 Contributions and Donations 1700 1700 Miscellaneous 20000 20000 22893 2893
Total Revenues 2191081 2191081 2358633 167552
EXPENDITURESCurrent
General Government 435269 435269 412224 (23045) Public Safety 896497 896497 889531 (6966) Public Works 399317 399317 379968 (19349) Culture and Recreation 127325 127325 111127 (16198)
Capital OutlayGeneral Government 30500 30500 5206 (25294) Public Safety 1500 1500 4449 2949
Total Expenditures 1890408 1890408 1802505 (87903) Excess (Deficiency) of Revenues
Over (Under) Expenditures 300673 300673 556128 255455
OTHER FINANCING SOURCES (USES)Transfers Out (295495) (295495) (343794) (48299)
Net Change in Fund Balance 5178$ 5178$ 212334 207156$
FUND BALANCE BEGINNING OF YEAR 1723826
FUND BALANCE END OF YEAR 1936160$
See Accompanying Notes to the Financial Statements19
Budgeted Amounts
YEAR ENDED DECEMBER 31 2018
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL
GENERAL FUND
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current AssetsCash and Investments 23690$ 62393$ $ $ 86083$ Special Assessments Receivable
Delinquent 1167 2096 682 213 4158Current and Deferred 3859 9981 901 144 14885
Accounts Receivable 46078 269326 19878 4175 339457Prepaid Items 9433 12352 1076 22861Due from Other Governments 144 24111 24 4 24283Due from Other Funds 98000 21000 119000
Total Current Assets 182371 401259 22561 4536 610727
Noncurrent AssetsRestricted Cash 74208 74208 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 66881 191067 20000 277948Other Capital Assets Net of Depreciation 4497152 3259174 2505 2506453 10265284
Total Noncurrent Assets 4564033 10529347 22505 2506453 17622338 Total Assets 4746404 10930606 45066 2510989 18233065
Deferred Outflows of ResourcesRelated to Pensions 12805 20153 2093 35051
Total Assets and DeferredOutflows of Resources 4759209$ 10950759$ 47159$ 2510989$ 18268116$
LIABILITIES DEFERRED INFLOWS OFRESOURCES AND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 11931$ 1765$ 13212$ $ 26908$ Due to Other Funds 445076 28318 31562 504956 Due to Other Governments 453 308238 1106 309797 Salaries and Benefits Payable 2732 3813 714 7259Interest Payable 13173 65275 78448Notes Payable Due Within One Year 232000 941000 1173000
Total Current Liabilities 260289 1765167 43350 31562 2100368
Long-Term LiabilitiesNet Pension Liability 72251 113702 11809 197762Notes Payable Net of Current Amount 1576000 7255000 8831000
Total Noncurrent Liabilities 1648251 7368702 11809 0 9028762 Total Liabilities 1908540 9133869 55159 31562 11129130
Deferred Inflows of ResourcesRelated to Pensions 19605 30853 3204 53662
Net PositionNet Investment in Capital Assets 2756033 3340241 22505 2506453 8625232 Restricted for Capital Replacement 74208 74208 Unrestricted 75031 (1628412) (33709) (27026) (1614116)
Total Net Position 2831064 1786037 (11204) 2479427 7085324
Total Liabilities Deferred Inflowsof Resources and Net Position 4759209$ 10950759$ 47159$ 2510989$ 18268116$
See Accompanying Notes to the Financial Statements20
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONPROPRIETARY FUNDS
DECEMBER 31 2018
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
OPERATING REVENUESCharges for Services 565694$ 1219482$ 208571$ 45805$ 2039552$
OPERATING EXPENSESWages and Salaries 110471 188946 15086 314503Materials and Supplies 29374 29374Repairs and Maintenance 57478 21425 44 8346 87293Insurance 11074 9982 21056Electricity 27203 12231 39434Wastewater Commission Charges 871318 871318 Testing 1111 1111Contracted Services 4467 4378 162233 171078Depreciation 171475 118151 1333 87981 378940Professional Services 4717 5818 1834 524 12893Billing 14718 15335 30053Miscellaneous 17863 15245 3461 3100 39669
Total Operating Expenses 449951 1247494 199326 99951 1996722 Operating Income (Loss) 115743 (28012) 9245 (54146) 42830
NONOPERATING REVENUES (EXPENSES)Investment Income 543 1752 152 253 2700Interest and Fiscal Charges (42493) (193605) (236098) Reimbursements 1173786 1173786
Total Nonoperating Revenues(Expenses) (41950) 981933 152 253 940388
Income (Loss) Before Transfersand Other Items 73793 953921 9397 (53893) 983218
TRANSFERS AND OTHER ITEMSChange in Equity Interest (18613) (18613) Transfers In 19600 36400 56000 Transfers Out (120000) (149000) (42000) (311000)
Total Transfers and Other Items (100400) (131213) 0 (42000) (273613) Change in Net Position (26607) 822708 9397 (95893) 709605
NET POSITION BEGINNING OF YEAR 2857671 963329 (20601) 2575320 6375719
NET POSITION END OF YEAR 2831064$ 1786037$ (11204)$ 2479427$ 7085324$
See Accompanying Notes to the Financial Statements
YEAR ENDED DECEMBER 31 2018
21
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET POSITIONPROPRIETARY FUNDS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers and Users 553327$ 1022629$ 207570$ 47362$ 1830888$ Payments to Suppliers (164208) (767959) (181855) (11970) (1125992) Payments to Employees (115506) (184885) (20045) (320436)
Net Cash Provided (Used) by OperatingActivities 273613 69785 5670 35392 384460
CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIESTransfers Out (120000) (149000) (42000) (311000) Interfund Loan 33986 (4344) 6201 35843 Reimbursements 1173786 1173786
Net Cash Provided (Used) by NoncapitalFinancing Activities (120000) 1058772 (4344) (35799) 898629
CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESPrincipal Paid on Debt (226000) (920000) (1146000) Interest Paid on Debt (44518) (200960) (245478) Bonds Issued 3396 3396 Acquisition and Construction of Capital Assets (16094) (16501) (1692) (34287)
Net Cash Provided (Used) by Capital andRelated Financing Activities (283216) (1137461) (1692) 0 (1422369)
CASH FLOW FROM INVESTING ACTIVITIESInterest and Dividends Received (Paid) 543 4594 366 407 5910
Net Increase (Decrease) in Cash andCash Equivalents (129060) (4310) 0 0 (133370)
CASH AND CASH EQUIVALENTSBEGINNING OF YEAR 152750 140911 293661
CASH AND CASH EQUIVALENTSEND OF YEAR 23690$ 136601$ 0$ 0$ 160291$
RECONCILIATION OF CASH AND CASH EQUIVALENTSCash and Investments 23690$ 62393$ $ $ 86083$ Restricted Cash 74208 74208
Total Cash amp Cash Equivalents 23690$ 136601$ 0$ 0$ 160291$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
22
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CITY OF ANNANDALE MINNESOTA
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
RECONCILIATION OF OPERATING INCOME(LOSS) TO CASH FLOWS FROM OPERATINGACTIVITIESOperating Income (Loss) 115743$ (28012)$ 9245$ (54146)$ 42830$ Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided (Used) by OperatingActivities
Depreciation 171475 118151 1333 87981 378940 Pension Related Adjustments (5848) 3118 (5273) (8003)(Increase) Decrease in Assets
Special Assessments ReceivableDelinquent 300 514 (37) (113) 664 Current and Deferred (754) (4236) (573) 2077 (3486)
Accounts Receivable (11969) (190759) (1427) (453) (204608) Prepaid Items (397) (1455) (329) (2181) Due from Other Governments 56 (2372) 1036 46 (1234)
Increase (Decrease) in LiabilitiesAccounts Payable 3741 (10858) 275 (6842) Due to Other Governments 453 184751 1106 186310 Salaries and Benefits Payable 813 943 314 2070
Net Cash Provided (Used) by OperatingActivities 273613$ 69785$ 5670$ 35392$ 384460$
NONCASH INVESTING CAPITAL ANDFINANCING ACTIVITIESChange in Equity Interest 0$ (18613)$ 0$ 0$ (18613)$
See Accompanying Notes to the Financial Statements23
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A REPORTING ENTITY
Blended Component Unit - Reported as if they were part of the City
Blended Component Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
The financial statements present the City and its component units The City includes all funds organizations institutions agencies departments and offices that are not legally separate from such Component units are legally separate organizations for which the City is financially accountable or for which the exclusion of the component unit would render the financial statements of the City misleading
The City of Annandale Minnesota is a statutory city governed by an elected mayor and four council members The accompanying financial statements present the government entities for which the government is considered to be financially accountable
Joint Ventures and Jointly Governed Organizations - The relationship of the City with the entity is disclosed
The criteria used to determine if the City is financially accountable for a component unit includes whether or not 1) the City appoints the voting majority of the potential component units governing body and is able to impose its will on the potential component unit or is in a relationship of financial benefit or burden with the potential component unit or 2) the potential component unit is fiscally dependent on and there is a potential for the potential component unit to provide specific financial benefits to or impose specific financial burdens on the City
As a result of applying the component unit definition criteria above certain organizations have been defined and are presented in this report as follows
For each of the categories above the specific entities are identified as follows
The Annandale Economic Development Authority (EDA) is a legal entity separate from the City Although legally separate the Annandale EDA is reported as if it were part of the primary government because it provides services exclusively for the City Separate financial statements are not prepared for the Annandale EDA
24
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
A REPORTING ENTITY (Contd)
Joint Ventures and Jointly Governed Organizations
B GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Separate financial statements are provided for governmental funds and proprietary funds Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements
Separate financial statements can be obtained by contacting the Wastewater Commission PO Box K Annandale MN 55302
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or segment Interest on general long-term debt is considered an indirect expense and is reported separately in the Statement of Activities Program revenues include 1) charges to customers or applicants who purchase use or directly benefit from goods services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment Taxes and other items not properly included among program revenues are reported instead as general revenues Internally dedicated revenues are reported as general revenues rather than program revenues
The government-wide financial statements (ie the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the City Governmental activities which normally are supported by taxes and intergovernmental revenues are reported separately from business-type activities which rely to a significant extent on fees and charges for support
In September 2003 the City entered into a joint powers agreement with the City of Maple Lake to establish the Annandale-Maple Lake Wastewater Commission (the Commission) The purpose of the Commission is to make available wastewater treatment within the present and future boundaries of the Cities and to serve such other areas as the Commission approves As part of the joint venture the City of Annandale agrees to fund the Debt Service and Operating Funds of the Commission according to terms of the agreement The agreement states a City may terminate the agreement by written notice to the other City In such event the City of Annandale shall pay 60 of all costs incurred except each City shall pay its own attorneys fee In 2008 both Cities approved amending the joint powers agreement to include the City of Howard Lake effective January 1 2009 Each City will then have a one-third equity interest in the Commission Because there is an explicit measurable equity interest in the joint venture the interest is reported in the government-wide financial statements as well as in the Sewer Fund
25
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
The City reports the following major governmental funds
The City reports the following major enterprise funds
The Sewer Fund accounts for the operations of the Citys sewer utility
The Storm Utility Fund accounts for the activities of the Citys storm drainage operations
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting Revenues are recognized as soon as they are both measurable and available Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period For this purpose the City considers revenues to be available if they are collected within 60 days after the end of the current fiscal period Expenditures generally are recorded when a liability is incurred as under accrual accounting However debt service expenditures as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due
The General Fund is the Citys primary operating fund This fund accounts for all financial resources of the general City except those required to be accounted for in another fund
The RefuseRecycling Fund accounts for the operations of the Citys refuserecycling
Property taxes special assessments intergovernmental revenue charges for services franchise taxes licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period All other revenue items are considered to be measurable and available only when cash is received by the City
The Water Fund accounts for the operations of the Citys water utility
26
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the proprietary fund financial statements Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of related cash flows Property taxes are recognized as revenues in the year for which they are levied Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements Exceptions to this general rule are charges between the Citys utility functions and various other functions of the City Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C
D DEPOSITS AND INVESTMENTS
(1)
(2)
(3)
(4)
(5)
(6)
time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States bank
general obligations of the State of Minnesota and its municipalities and in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service
The Citys cash and cash equivalents are considered to be cash on hand deposits and highly liquid debt instruments purchased with original maturities of three months or less from the date of acquisition
27
mutual funds through shares of registered investment companies provided the mutual fund receives certain ratings depending on its investments
The City may invest in the following types of investments as authorized by Minn Stat sectsect118A04 and 118A05
securities which are direct obligations or are guaranteed or insured issues of the United States its agencies its instrumentalities or organizations created by an act of Congress except mortgage-backed securities defined as high risk by Minn Stat sect118A04 subd 6
MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (Contd)
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 funds principal ongoing operations The principal operating revenues of the enterprise funds are charges to customers for sales and services Operating expenses for enterprise funds include the cost of sales and services administrative expenses and depreciation of capital assets All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses
commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less and
with certain restrictions in repurchase agreements securities lending agreements joint powers investment trusts and guaranteed investment contracts
Cash and investments were comprised of deposits brokered certificates of deposits money market funds at various financial brokers and the 4M Fund
It is generally the Citys policy to use restricted resources first then unrestricted resources as they are needed when an expense is incurred for purposes for which both restricted and unrestricted net position are available
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations The Citys investment policy states it will comply with Minnesota Statutes Chapter 118A
The City has an investment policy in place that addresses interest rate risk credit risk concentration of credit risk and custodial credit risk as follows
Interest Rate Risk This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates The Citys investment policy states the City should manage their interest rates based on safety liquidity and the overall return on the investment The portfolio should contain both short-term and long-term investments to meet anticipated cash flow requirements Extended maturities may be utilized to take advantage of higher yields however no more than 50 of the total investments should extend beyond five years
The City invests in an external investment pool the Minnesota Municipal Money Market Fund (4M Fund) which is created under a joint powers agreement pursuant to Minn Stat sect47159 The 4M Fund is not registered with the Securities Exchange Commission (SEC) but does satisfy the requirements of Rule 2a-7 prescribed by the SEC pursuant to the Investment Company Act of 1940 (17 CFR sect2702a-7) as amended The investment in the pool is measured at the net asset value per share provided by the pool
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America The hierarchy is based on the valuation inputs used to measure the fair value of the asset Level 1 inputs are quoted prices in active markets for identical assets Level 2 inputs are significant other observable inputs Level 3 inputs are significant unobservable inputs
Custodial Credit Risk - Deposits For deposits this is the risk that in the event of bank failure the Citys deposits may not be returned to it The Citys investment policy states the collateralization level will be 110 of the market value of principal and accrued interest for balances above the FDIC insured amount When the pledged collateral consists of notes secured by first mortgages the collateral level will be 140 of the market value of principal and accrued interest
Authorized collateral includes the obligations of the US Treasury agencies and instrumentalities shares of investment companies whos only investments are in the aforementioned securities obligations of the State of Minnesota or its municipalities bankers acceptances futures contracts repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days as well as certain first mortgage notes and certain other state or local government obligations Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral
28
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
E RECEIVABLES AND PAYABLES
F PREPAID ITEMS
All trade and property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of property
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements
29
Custodial Credit Risk - Investments For an investment this is the risk that in the event of the failure of the counterparty the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party The Citys investment policy states when investments purchased by the City are held in safekeeping by a brokerdealer they must provide asset protection of $500000 through the Securities Investor Protector Corporation (SIPC) and at least another $2000000 supplemental insurance protection
The City levies its property tax for the subsequent year during the month of December December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year Such taxes become a lien on January 1 and are recorded as receivables by the City at that date The property tax is recorded as revenue when it becomes measurable and available Wright County is the collecting agency for the levy and remits the collections to the City three times a year The tax levy notice is mailed in March with the first half payment due on May 15 and the second half payment due on October 15 Tax levies from prior years that remain unpaid are classified as delinquent taxes receivable
The County Auditor submits the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year
Activity between funds that are representative of lendingborrowing arrangements outstanding at the end of the fiscal year are referred to as either due tofrom other funds (ie the current portion of interfund loans) or advances tofrom other funds (ie the noncurrent portion of interfund loans) All other outstanding balances between funds are reported as due tofrom other funds Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances
Concentration of Credit Risk This is the risk of loss attributed to the magnitude of an investment in a single issuer Investments should be diversified to avoid incurring unreasonable risk inherent in over investing in specific instruments individual financial institutions or maturities The Citys investment policy states the City will attempt to diversify their investments according to type and maturity
The County Auditor prepares the tax list for all taxable property in the City applying the applicable tax rate to the tax capacity of individual properties to arrive at the actual tax for each property The County Auditor also collects all special assessments except for certain prepayments paid directly to the City
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
G CAPITAL ASSETS
Cost
LandLand Improvements 10000$ Other Improvements 25000 BuildingsImprovements 25000 Machinery and Equipment 5000 Infrastructure 50000
Years
Buildings 5-40Improvements Other than Buildings 5-20Vehicles 5-20Machinery and Equipment 5-40Roads and Highways 20-40Infrastructure 25-40
The City does not possess any material amounts of intangible assets
30
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed Donated capital assets are recorded as capital assets at their estimated acquisition value at the date of donation
Capital assets both tangible and intangible which include property plant equipment and infrastructure assets (eg roads sidewalks and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements Capital assets are defined by the City as assets with an estimated useful life in excess of two years and an initial individual cost of more than the following
Capital Assets
Category
Based on the age of the majority of the Citys infrastructure and an exception for small governments in GASB Statement No 34 the City has determined it is not practical to capitalize infrastructure retroactively The current value of the infrastructure includes projects completed during the year ended December 31 1985 and prospectively from that date
Tangible and intangible assets of the City are depreciated using the straight-line full month convention method over the following estimated useful lives
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
H DEFERRED OUTFLOWS OF RESOURCES
I UNEARNED REVENUE
J COMPENSATED ABSENCES
K POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied Grants and certain other payments received before eligibility requirements are met are also recorded as unearned revenue
The City compensates employees who resign or retire with due notice for unused vacation and holiday pay Employees may carry over no more than 40 hours of vacation at the end of any calendar year unless approved by the City Council Unused vacation time is paid to employees upon separation from the City City employees are also allowed to earn compensatory time in lieu of overtime pay Employees may carry over no more than 40 hours of compensatory time at the end of any calendar year Unused compensatory time is paid to employees upon separation from the City
The liability for compensated absences reported in the financial statements consists of unpaid accumulated vacation and compensatory time balances The liability has been calculated using the vesting method in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included The liability for compensated absences is reported in the governmental funds only if they have matured for example as a result of employee resignations and retirements Compensated absences are accrued when incurred in the government-wide and proprietary fund financial statements The government-wide and proprietary fund Statement of Net Position reports both current and noncurrent portions of compensated absences using full accrual accounting The current portion consists of an amount based on expected or known retirements coming in the next fiscal year The noncurrent portion consists of the remaining amount of vacation and compensatory time
31
Employees of the City pay health care premiums based on their age and level of coverage Since the insurance rate is based on age the City does not have an implicit rate subsidy factor in postemployment health care expenses Additionally Minnesota Statutes require the City to allow retired employees to stay on the health care plan with the retiree responsible to pay the entire premium for continuation coverage The Citys personnel policy does not provide for any contributions upon employee retirement
In addition to assets the statement of financial position will sometimes report a separate section for deferred outflows of resources Deferred outflows of resources represents a consumption of net position that applies to a future reporting period During that future period it will be recognized as an outflow of resources (expenseexpenditure) The City has one item that qualifies for reporting in this category on the government-wide Statement of Net Position which is related to pensions
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
L PENSIONS
M LONG-TERM OBLIGATIONS
N DEFERRED INFLOWS OF RESOURCES
O FUND BALANCE
In addition to liabilities the statement of financial position will sometimes report a separate section for deferred inflows of resources Deferred inflows of resources represents an acquisition of net position that applies to a future reporting period During that future period it will be recognized as an inflow of resources (revenue) The City has items that qualify for reporting in this category on both the government-wide Statement of Net Position and the governmental fund financial statements related to property taxes special assessments and pensions
The City participates in various pension plans total pension expense for the fiscal year ended was $436446 The components of pension expense are noted in the plan summaries
For purposes of measuring the net pension liability deferred outflows of resources and deferred inflows of resources related to pensions and pension expense information about the fiduciary net position of the Public Employees Retirement Association (PERA) and the City of Annandales Fire Relief Association and additions todeductions from PERArsquos and the City of Annandales Fire Relief Associations fiduciary net position have been determined on the same basis as they are reported by PERA and the City of Annandales Fire Relief Association 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
In the fund financial statements governmental fund types recognize bond premiums and discounts as well as bond issuance costs during the current period The face amount of debt issued is reported as other financing sources Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses Issuance costs whether or not withheld from the actual debt proceeds received are reported as debt service expenditures
Nonspendable - consists of amounts that cannot be spent because it is not in spendable form or are legally or contractually required to be maintained intact such as inventories and prepaid items
Restricted - consists of amounts related to externally imposed constraints established by creditors grantors or contributors or constraints imposed by state statutory provisions
In the governmental fund financial statements fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in governmental funds These classifications are as follows
In the government-wide financial statements and proprietary fund types in the fund financial statements long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities business-type activities or proprietary fund type Statement of Net Position
32
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
O FUND BALANCE (Contd)
P NET POSITION
Q USE OF ESTIMATES
Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources in the government-wide and proprietary fund financial statements Net investment in capital assets consists of capital assets net of accumulated depreciation reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets Net position is reported as restricted in the government-wide and proprietary fund financial statements when there are limitations on their use through external restrictions imposed by creditors grantors or laws or regulations of other governments Unrestricted net position consists of all other net position that does not meet the definition of restricted or net investment in capital assets
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 In governmental funds other than the General Fund assigned fund balance represents the remaining amount that is not restricted or committed In the General Fund assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority Pursuant to City Council Resolution the City Treasurer and City Administrator are authorized to establish assignments of fund balance
33
Committed - consists of amounts that are constrained for specific purposes that are internally imposed by formal action of the City Council Those committed amounts cannot be used for any other purpose unless the Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts These constraints are established by Resolution of the City Council
Unassigned - is the residual classification for the General Fund and also reflects negative residual amounts in the remaining governmental funds
The City requires restricted amounts to be spent first when both restricted and unrestricted fund balance is available Additionally the City would first use committed then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and deferred outflows of resources and liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expendituresexpenses during the reporting period Actual results could differ from those estimates
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
A BUDGETARY INFORMATION
1
2
3
4
5
6
7
Annual appropriated budgets are adopted during the year for the General and Special Revenue Funds Annual appropriated budgets are not adopted for Debt Service Funds because effective budgetary control is alternatively achieved through bond indenture provisions Budgetary control for Capital Projects Funds is accomplished through the use of project controls and formal appropriated budgets are not adopted
34
Budgeted amounts are as originally adopted or as amended by the City Council Individual amendments were not material in relation to the original amounts budgeted Budgeted expenditure appropriations lapse at year-end
Expenditures may not legally exceed budgeted appropriations at the department level No funds budget can be increased without City Council approval The City Council may authorize transfer of budgeted amounts between departments within any fund Management may amend budgets within a department level so long as the total department budget is not changed
The City Council adopts an annual budget The amounts shown in the financial statements as budget represent the original budgeted amounts and all revisions made during the year The City follows these procedures in establishing the budgetary data reflected in the financial statements
Budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America
The budget is legally enacted through passage of a resolution after obtaining taxpayer comments The budget resolution adopted by the City Council sets forth the budgets at the function level for the General and Special Revenue Funds
Public hearings are conducted to obtain taxpayer comments
Budget requests are submitted by all department heads to the City Administrator The City Administrator compiles the budget requests into an overall preliminary City budget The City Administrator presents the proposed budget to the City Council
Encumbrances outstanding at year-end expire and outstanding purchase orders are canceled and not reported in the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (Contd)
B DEFICIT BALANCES
The following funds had deficit balances
RefuseRecycling (11204)$ Nonmajor Governmental Funds (454667)
C EXPENDITURES EXCEEDING APPROPRIATIONS
NOTE 3 DEPOSITS AND INVESTMENTS
A DEPOSITS
Checking 1669430$
B INVESTMENTS
Fair Value Level 1 Level 2 Level 3
Investments at fair valueBrokered Certificates of Deposit 1540744$ 0$ 1540744$ 0$
Investments at amortized costMoney Market Accounts 324792 4M Money Market 38796
Total Investments 1904332$
The Brokered Certificates of Deposit have a weighted average maturity of 216 years and were not rated
In accordance with applicable Minnesota Statutes the City maintains deposits at depository banks authorized by the City Council
35
There were no funds that had expenditures exceeding appropriations
Custodial Credit Risk - Deposits The Citys bank balances were not exposed to custodial credit risk because they were fully insured through the FDIC as well as collateralized with securities held by the pledging financial institutions trust department or agent and in the Citys name
Fair Value Measuring Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 3 DEPOSITS AND INVESTMENTS (Contd)
B INVESTMENTS (Contd)
The following is a summary of total deposits and investments
Deposits (Note 3A) 1669430$ Investments (Note 3B) 1904332
Total Deposits and Investments 3573762$
Statement of Net PositionCash and Investments 3499554$ Restricted Cash 74208
3573762$
NOTE 4 RECEIVABLES
Receivables are as follows
Amounts notScheduled
for CollectionDuring the
Total SubsequentReceivables Year
Governmental ActivitiesTaxes Receivable - Delinquent 14909$ $ Special Assessments Receivable 654643 584377 Accounts Receivable 96631 16271 Interest Receivable 9
Total Governmental Activities 766192$ 600648$
Business-Type ActivitiesSpecial Assessments Receivable 19043$ 9392$ Accounts Receivable 339457
Total Business-Type Activities 358500$ 9392$
Concentration of Credit Risk The City was exposed to concentration of credit risk due to the fact that some of the Citys brokered certificates of deposit exceeded 5 of the total Citys investments portfolio
36
Deposits and investments are presented in the basic financial statements as follows
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS
Capital asset activity was as follows
Beginning EndingGovernmental Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 2482508$ $ (18800)$ 2463708$ Construction in Progress 508685 248979 (524628) 233036
Total Capital AssetsNot Being Depreciated 2991193 248979 (543428) 2696744
Capital Assets Being DepreciatedBuildings 3065250 3065250 Improvements Other than Buildings 1298097 524628 1822725 Machinery and Equipment 2556167 111246 (57123) 2610290 Infrastructure 21739105 21739105
Total Capital AssetsBeing Depreciated 28658619 635874 (57123) 29237370
Less Accumulated Depreciation forBuildings 1145321 75543 1220864 Improvements Other than Buildings 858879 46992 905871 Machinery and Equipment 1568583 121681 (40205) 1650059 Infrastructure 17438428 312281 17750709
Total AccumulatedDepreciation 21011211 556497 (40205) 21527503
Total Capital Assets BeingDepreciated Net 7647408 79377 (16918) 7709867
Governmental ActivitiesNet Capital Assets 10638601$ 328356$ (560346)$ 10406611$
37
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS (Contd)
Capital asset activity was as follows
Beginning EndingBusiness-Type Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 277948$ $ $ 277948$
Capital Assets Being DepreciatedBuildings 4175245 4175245 Improvements Other than Buildings 12637 12637 Machinery and Equipment 268809 34287 303096 Infrastructure 11123768 11123768
Total Capital AssetsBeing Depreciated 15580459 34287 0 15614746
Less Accumulated Depreciation forBuildings 1499349 92233 1591582 Improvements Other than Buildings 12636 12636 Machinery and Equipment 190152 19580 209732 Infrastructure 3268385 267127 3535512
Total AccumulatedDepreciation 4970522 378940 0 5349462
Total Capital Assets BeingDepreciated Net 10609937 (344653) 0 10265284
Business-Type ActivitiesNet Capital Assets 10887885$ (344653)$ 0$ 10543232$
Depreciation expense was charged to functionsprograms as follows
Governmental ActivitiesGeneral Government 53809$ Public Safety 91620 Public Works 383653 Culture and Recreation 27415
Total Depreciation Expense - Governmental Activities 556497$
Business-Type ActivitiesWater 171475$ Sewer 118151 RefuseRecycling 1333 Storm Utility 87981
Total Depreciation Expense - Business-Type Activities 378940$
38
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 6 INTERFUND ACTIVITY
A INTERFUND BALANCES
The composition of interfund balances is as follows
Amount
General Sewer 445076$ General RefuseRecycling 28318 General Storm Utility 31562 General Nonmajor Governmental Funds 415794 Water Nonmajor Governmental Funds 98000 Sewer Nonmajor Governmental Funds 21000 Nonmajor Governmental Funds General 143500 Nonmajor Governmental Funds Nonmajor Governmental Funds 46888
Total Interfund Balances 1230138$
B INTERFUND TRANSFERS
The composition of interfund transfers is as follows
Nonmajor Governmental
Water Sewer Funds Total
Transfer OutGeneral 19600$ 36400$ 287794$ 343794$ Water 120000 120000 Sewer 149000 149000 Storm Utility 42000 42000 Nonmajor Governmental
Funds 547120 547120
Total Interfund Transfers 19600$ 36400$ 1145914$ 1201914$
Receivable Fund Payable Fund
39
The purpose of the above transfers was to provide funding for debt service capital improvement projects capital outlay and operating purposes
The purpose of the above interfund loans was to provide financing for operating purposes and to cover deficit cash balances
Transfer In
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES
A GENERAL OBLIGATION BONDS
B COMPONENTS OF LONG-TERM LIABILITIES
Interest Final BalanceRates Maturity Outstanding
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan BondsSeries 2008A 300-400 02012022 295000$
GO Special Assessment BondsGO Improvement Bonds Series 2008B 300-4125 02012024 560000 GO Improvement Bonds Series 2011A 105-415 02012032 1300000 GO Refunding Bonds Series 2011B 085-270 02012021 585000 GO Refunding Bonds Series 2012A 055-185 02012022 1035000 GO Improvement Bonds Series 2015A 110-345 02012036 750000
GO NotesGO Improvement Note of 2011 1959 08202031 846000
GO Equipment CertificateGO Equipment Certificate 2016A 2100 02012021 168000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549$
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 2819 08202023 996000$ PFA Clean Water Revenue Note 2220 08202026 8086000 PFA Water Revenue Note of 2015 1031 08202035 812000 PFA Sewer Revenue Note of 2015 1000 08202035 110000
Total Business-Type Activities 10004000$
GO Bonds are direct obligations and pledge the full faith and credit of the City These bonds generally are issued as 15 year Serial Bonds with equal debt service payments each year
The City issues General Obligation (GO) Bonds to provide financing for street improvements facility construction and tax increment projects Debt service is covered respectively by special assessments property taxes and tax increments against benefited properties with any shortfalls being paid from general taxes
40
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
B COMPONENTS OF LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for all bonded debt and notes outstanding are as follows
Principal Interest Principal Interest
70000$ 10400$ 660000$ 112343$ 70000 7600 675000 97718 75000 4700 600000 82645 80000 1600 480000 63498
220000 59861 760000 211593 680000 82489 155000 8131
295000$ 24300$ 4230000$ 718278$
2019
2029-20332024-2028
20222023
On September 27 2011 the City issued $1620000 GO Refunding Bonds Series 2011B with an interest rate of 85 to 270 The City issued the Bonds to crossover refund the $1020000 GO Fire Hall Bonds Series 2004A and the $1645000 GO Improvement Bonds Series 2004B The City completed the refunding to reduce its debt service payment over the next 9 years by $20827 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $20868
Debt service funds are used to liquidate the governmental activities outstanding bonded indebtedness and notes The Park Capital Projects Fund is used to liquidate the governmental activities outstanding contract for deed The General Fund has historically been used to liquidate the outstanding governmental activities compensated absences
GO Improvement Bonds Assessment Bonds
On April 4 2012 the City issued $2225000 GO Refunding Bonds Series 2012A with an interest rate of 55 to 185 The City issued the Bonds to refund the $1415000 GO Improvement Bonds Series 2001C and the $320000 GO Refunding Improvement Bonds Series 2003 as well as crossover refund the $3100000 GO Improvement Bonds Series 2006A The City completed the refunding to reduce its debt service payment over the next 10 years by $179206 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $161420
41
2034-2036
Governmental ActivitiesGO Special
2020
December 31
2021
Year Ending
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS (Contd)
Principal Interest Principal Interest
58000$ 16573$ 55000$ 2951$ 59000 15437 56000 1785 60000 14281 57000 598 61000 13106 62000 11911
332000 40728 214000 8423
846000$ 120459$ 168000$ 5334$
Principal Interest
1173000$ 217058$ 1200000 190488 1227000 163282 1254000 135459 1283000 151604 3466000 171976
284000 14813 117000 1808
10004000$ 1046488$
42
2023
Governmental Activities
2020
Year Ending
2029-2033
2022
2034-2035
2021
2028-2028
2024-2028
2022
2020
2019
2019
Business-Type Activities
2029-2031
GO Notes
2021
December 31Year Ending
2023
GO Equipment Certificates
GO Revenue Notes
December 31
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
D CHANGES IN LONG-TERM LIABILITIES
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Governmental ActivitiesBonds Payable
GOImprovementBonds 365000$ $ 70000$ 295000$ 70000$
GO SpecialAssessment Bonds 4870000 640000 4230000 660000
5235000 0 710000 4525000 730000
GO ImprovementNote of 2011 903000 57000 846000 58000
GO Equipment Certificate 222000 54000 168000 55000
CompensatedAbsences 23292 58115 58428 22979
Unamortized BondDiscount (26664) 4234 (22430)
Total GovernmentalActivities 6356628$ 62349$ 879428$ 5539549$ 843000$
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Business-Type ActivitiesNotes Payable
GO Revenue Notes 11146604$ 3396$ 1146000$ 10004000$ 1173000$
43
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
E CONDUIT DEBT OBLIGATIONS
The Citys conduit debt consisted of the following
Senior Housing and Health Care Revenue Refunding Note 6661528$
NOTE 8 RISK MANAGEMENT
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION
A PLAN DESCRIPTION
Firefighters of the City are members of the Association The Association is the administrator of a single-employer defined benefit pension plan available to firefighters The plan is administered by the Association pursuant to Minnesota Statutes Chapter 69 Chapter 424A and the Associations by-laws As of December 31 2017 the plan covered 28 active firefighters and 14 vested terminated fire fighters whose pension benefits are deferred
There are no other claims liabilities reported in the financial statements based on the requirements of accounting standards which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years
The Citys workers compensation insurance policy is retrospectively rated With this type of policy final premiums are determined after loss experience is known The amount of premium adjustment for 2018 is estimated to be immaterial based on workers compensation rates and salaries for the year
44
Conduit debt obligations are certain limited-obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party The City has issued various revenue bonds to provide funding to private-sector entities for projects deemed to be in the public interest Although these bonds bear the name of the City the City has no obligation for such debt Accordingly the bonds are not reported as liabilities in the financial statements of the City
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) which is a public entity risk pool currently operating as a common risk management and insurance program with other cities in the state The City pays an annual premium to the LMCIT for its insurance coverage The LMCIT is self-sustaining through commercial companies for excess claims The City is covered through the pool for any claims incurred but unreported but retains risk for the deductible portion of its insurance policies The amount of these deductibles is considered immaterial to the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
B BENEFITS PROVIDED
C CONTRIBUTIONS
D PENSION COSTS
Total Plan Net Pension Pension Fiduciary LiabilityLiability Net Position (Asset)
(a) (b) (a) - (b)
Balances at 112017 $ 569046 $ 1009074 $ (440028)Changes for the Year
Service Cost 26727 26727 Interest 34955 34955 Changes in Benefit Terms 28893 28893 Contributions - Employer 3000 (3000)Contributions - State 47693 (47693)Net Investment Income 126216 (126216)Benefit Payments (72973) (72973) Administrative Expense (8416) 8416
Net Change 17602 95520 (77918)
Balances at 12312017 $ 586648 $ 1104594 $ (517946)
The plan provides lump-sum retirement death and supplemental benefits to covered firefighters and survivors Benefits are paid based on the number of years of service multiplied by a benefit level per year of service approved by the City The plan includes a $2600 service pension benefit for each year of service Members are eligible for a lump-sum retirement benefit at 50 years of age or after completion of 20 years of service If a member is both age 50 and has completed five years of service but not 20 years of service the lump-sum pension will be reduced by 4 for each year of service less than 20 years
The plan is funded by fire state aid investment earnings and if necessary employer contributions as specified in Minnesota Statutes and voluntary City contributions As of December 31 2017 the State of Minnesota contributed $47693 in fire state aid to the plan on behalf of the Fire Department Required employer contributions are calculated annually based on statutory provisions The City made voluntary contributions of $3000 to the plan
The City reported a net pension liability (asset) of ($517946) The Citys net pension liability (asset) was measured as of December 31 2017 and the total pension liability used to calculate the net pension liability (asset) in accordance with GASB 68 was determined by an independent actuary applying an actuarial formula to specific census data certified by the fire department The following table presents the changes in net pension liability during the year
45
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
D PENSION COSTS (Contd)
The lump sum benefit increased from $2400 to $2600 per year effective January 1 2018
Differences between expected and actual economic experience $ 5346$ Changes in actuarial assumptions 3678 Net differences between projected and actual investment earnings 26024 Contributions paid to plan subsequent to measurement date 55196 State aid received for the plan subsequent to measurement date 52196
55196$ 87244$
December 31
20192020202120222023
Thereafter
For the year ended December 31 2018 the City recognized pension expense of ($15721)
The City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
$ 537
46
$55196 reported as deferred outflows of resources related to pensions resulting from City contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended December 31 2019 $52196 reported as deferred inflows of resources related to pensions resulting from state aid received for the plan subsequent to the measurement date will be recognized as an increase of the net pension liability (asset) in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pension plans will be recognized in pension expense as follows
Pension Expense Amount
(2) (17701) (14691) (1457) (1734)
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
E ACTUARIAL ASSUMPTIONS
Inflation Rate 275 percentRetirement Eligibility Later of current age and age 50Expected Long-Term Investment Return 625 percentAmortization Method
Mortality
F DISCOUNT RATE
G PENSION LIABLIITY (ASSET) SENSITIVITY
1 Decrease 1 Increasein Discount in Discount
Rate Rate(525) (625) (725)
Citys Net Pension Liability (Asset) $ (497411) $ (517946) $ (537562)
Straight-line amortization over a closed 5-year period or straight-line amortization over a close period equal to the average of the expected remaining service lives of all members that are provided with pensions through the pension planRates used in the July 1 2016 Minnesota PERA Police amp Fire Plan actuarial valuation
The discount rate used to measure the total pension liability was 625 The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at a rate specified in statute Based on that assumption the pension planrsquos 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
The following presents the net pension liability (asset) calculated using the discount rate as well as what the Citys net pension liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate
Discount Rate
The total pension liability was determined using the following actuarial assumptions applied to all periods included in the measurement
The actuarial assumptions used in the December 31 2018 valuation were based on the results of an actuarial experience study for the period January 1 2016 - December 31 2016
47
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
H PLAN INVESTMENTSINVESTMENT POLICY
- Attempt to maintain minimum funding ratio of 120- Attempt to increase the pension amount by $200 every other year- Meet twice per year to discuss any changes to allocation and prepare for a joint meeting with the City
I ASSET ALLOCATION
Domestic equityInternational equityFixed incomeReal estate and alternativesCash and equivalents
Total
J PENSION PLAN FIDUCIARY NET POSITION
10000
The best-estimates of expected future asset class returns were published in the 2017 Survey of Capital Market Assumptions produced by Horizon Actuarial Services These expected returns along with expected asset class standard deviations and correlation coefficients are based on Horizonrsquos annual survey of investment advisory firms The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data
Detailed information about the pension plans fiduciary net position is available in a separately-issued financial report
Asset Class
The plans funded status increased from 1773 to 1883 since the prior valuation This change is primarily due to investment returns in excess of expected
4500 5391000 5203500 198500 425500 079
The Association has a formal investment policy that operates within standard investment practices of the prudent person and other standards codified in Minnesota Statutes Chapter 11A and Chapter 356
The Associations pension plan assets are to be invested for the exclusive benefit of the fund members and will attempt to generate investment returns of at least 5 percent of an annualized basis over time Other goals of the Association include
The long-term expected rate of return on pension plan investments as determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns net of pension plan investment expense and inflation) are developed for each major asset class These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table
Long-Term Expected Real Rate of ReturnTarget Allocation
48
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A PLAN DESCRIPTION
B BENEFITS PROVIDED
GERP Benefits
General Employees Retirement Plan (GERP General Employees Plan accounted for in the General Employees Fund)
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
Public Employees Police and Fire Plan (PEPFP Police and Fire Plan accounted for in the Police and Fire Fund)
The Police and Fire Plan 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 Police and Fire Plan also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to PERA
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
General Employees Plan benefits are based on a memberrsquos 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 PERAs 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 12 for each of the first 10 years of service and 17 for each additional year The rates are 22 and 27 respectively for Basic members Under Method 2 the accrual rate for Coordinated members is 17 for all years of service and 27 for Basic members The accrual rates for former MERF members is 20 for each of the first 10 years of service and 25 for each additional year 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
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA) PERArsquos defined benefit pension plans are established and administered in accordance with Minnesota Statutes Chapters 353 and 356 PERArsquos defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code
49
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
B BENEFITS PROVIDED (Contd)
GERP Benefits (Contd)
PEPFP Benefits
C CONTRIBUTIONS
GERP Contributions
PEPFP Contributions
Beginning January 1 2019 benefit recipients will receive a future annual increase equal to 50 percent of the Social Security Cost of Living Adjustment not less than 10 percent and not more than 15 percent For retirements on or after January 1 2024 the first benefit increase is delayed until the retiree reaches Normal Retirement Age (not applicable to Rule of 90 retirees disability benefit recipients or survivors) A benefit recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase Members receiving benefits for at least one month but less than 12 full months as of June 30 will receive a pro rata increase
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 percent after five years up to 100 percent 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 percent after ten years up to 100 percent after twenty years of credited service The annuity accrual rate is 3 percent of average salary for each year of service For Police and Fire Plan members who were first hired prior to July 1 1989 a full annuity is available when age plus years of service equal at least 90
Beginning in 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law Post retirement increases are given each year except for annuitants who have been receiving a benefit for only 31 to 41 months These annuitants will receive a prorated amount of the increase on a sliding scale
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions Contribution rates can only be modified by the state Legislature
Coordinated Plan members were required to contribute 650 percent of their annual covered salary in fiscal year 2018 the City was required to contribute 750 percent for Coordinated Plan members The Citys contributions to the General Employees Fund for the year ended December 31 2018 were $50226 The Citys contributions were equal to the required contributions as set by state statute
Legislation increased both employee and employer contribution rates in the Police and Fire Plan Employee rates increased from 1080 percent of pay to 1130 percent and employer rates increase from 1620 percent to 1695 percent on January 1 2018 On January 1 2020 employee rates increase to 1180 percent and employer rates increase to 1770 percent The Citys contributions to the Police and Fire Fund for the year ended December 31 2018 were $57782 The Citys contributions were equal to the required contributions as set by state statute
50
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS
GERP Pension Costs
Differences between expected and actual economic experience 14670$ 16018$ Changes in actuarial assumptions 52464 61940 Differences between projected and actual investment earnings 56103 Changes in proportion 4060 13463 Contributions paid to GERP subsequent to measurement date 25165
96359$ 147524$
At December 31 2018 the City reported a liability of $543664 for its proportionate share of the General Employees Fundrsquos net pension liability The City net pension liability reflected a reduction due to the State of Minnesotarsquos contribution of $16 million to the fund in 2019 The State of Minnesota is considered a non-employer contributing entity and the statersquos contribution meets the definition of a special funding situation The State of Minnesotarsquos proportionate share of the net pension liability associated with the City totaled $17795 The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The Citys proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion share was 00098 which was a decrease of 00002 from its proportion measured as of June 30 2017
Post-retirement benefit increases were changed from 10 per year with a provision to increase to 25 upon attainment of 90 funding ratio to 50 of the Social Security Cost of Living Adjustment not less than 10 and not more than 15 beginning January 1 2019
For the year ended December 31 2018 the City recognized pension expense of $28216 for its proportionate share of GERPrsquos pension expense In addition the City recognized an additional $4150 as pension expense (and grant revenue) for its proportionate share of the State of Minnesotas contribution of $6 million to the General Employees Fund
At December 31 2018 the City reported its proportionate share of GERPrsquos deferred outflows of resources and deferred inflows of resources from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
51
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
GERP Pension Costs (Contd)
PEPFP Pension Costs
$25165 reported as deferred outflows of resources related to pensions resulting from City contributions to GERP subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to GERP pensions will be recognized in pension expense as follows
52
Year ended June 30 Pension Expense Amount
2019 13967$ 2020 (31102) 2021 (47848) 2022 (11347)
At December 31 2018 the City reported a liability of $350680 for its proportionate share of the Police and Fire Fundrsquos net pension liability The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The City proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion was 00329 which was a decrease of 00001 from its proportion measured as of June 30 2017 The City also recognized $2961 for the year ended December 31 2018 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesotarsquos on-behalf contributions to the Police and Fire Fund Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year starting in fiscal year 2014
Beginning in January 1 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law
For the year ended December 31 2018 the City recognized pension expense of $2961 for its proportionate share of the Police and Fire Planrsquos pension expense
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
PEPFP Pension Costs (Contd)
Differences between expected and actual economic experience 14159$ 88907$ Changes in actuarial assumptions 450560 517779 Differences between projected and actual investment earnings 71220 Changes in proportion 10800 27880 Contributions paid to PEPFP subsequent to measurement date 29906
505425$ 705786$
E ACTUARIAL ASSUMPTIONS
InflationSalary GrowthInvestment Rate of Return
Actuarial Assumptions GERP PEPFP
250 per year 250 per year325 after 26 years of service 325 after 25 years of service
750 750
53
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
2020 (21749)2021 (54056)2022 (147616)2023 (1380)
The total pension liability in the June 30 2018 actuarial valuation was determined using the following actuarial assumptions
$29906 reported as deferred outflows of resources related to pensions resulting from the Citys contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows
Year ended June 30 Pension Expense Amount
2019 (5466)$
At December 31 2018 the City reported its proportionate share of the Police and Fire Planrsquos deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
GERP
PEPFP
54
The total pension liability for each of the defined benefit cost-sharing plans was determined by an actuarial valuation as of June 30 2018 using the entry age normal actuarial cost method Inflation is assumed to be 250 percent for the General Employees and Police and Fire Plans Salary growth assumptions in the General Employees Plan decrease in annual increments from 1125 percent after one year of service to 325 percent after 26 years of service In the Police and Fire Plan salary growth assumptions decrease from 1225 percent after one year of service to 325 percent after 25 years of service
Mortality rates for all plans are based on RP-2014 mortality tables The tables are adjusted slightly to fit PERArsquos experience Actuarial assumptions for the General Employees Plan are reviewed every four to six years The most recent six-year experience study for the General Employees Plan was completed in 2015 The most recent four-year experience study for the Police and Fire Plan was completed in 2016 Economic assumptions were updated in 2014 based on a review of inflation and investment return assumptions
The following changes in actuarial assumptions occurred in 2018
The mortality projection scale was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 percent per year through 2044 and 250 percent per year thereafter to 125 percent per year
The mortality projection scale was changed from MP-2016 to MP-2017
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
Domestic StocksInternational StocksBondsAlternative AssetsCash
F DISCOUNT RATE
G PENSION LIABILITY SENSITIVITY
GERP PEPFP
1 Lower 650 883523$ 1520 751880$ Current Discount Rate 750 543664 1620 350680 1 Higher 850 263120 1720 18904
The discount rate used to measure the total pension liability in 2018 was 750 percent The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes Based on these assumptions the fiduciary net positions of the General Employees Fund and the Police and Fire Fund 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
The following presents the Citys proportionate share of the net pension liability for all plans it participates in calculated using the discount rate disclosed in the preceding paragraphs as well as what the Citys 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
Target Allocation
3900190020002000200
10000
Long-Term Expected Real Rate of Return
510530075590000
Asset Class
55
The State Board of Investment which manages the investments of PERA prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return 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 in the following table
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
H PENSION PLAN FIDUCIARY NET POSITION
NOTE 11 DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
Related to Pensions 656980$ 940554$
NOTE 12 FUND BALANCE
NonmajorGovernmental
General Funds Total
NonspendablePrepaid Items 73751$ 2152$ 75903$
Restricted forTax Increment 11481 11481 Debt Service 1448570 1448570 Capital Projects 72582 72582
0 1532633 1532633
CommittedCharitable Gambling Programs 11466 11466 Economic Development Promotion 835956 835956
Total Committed 0 847422 847422
AssignedFund Operations 165070 487992 653062
Unassigned 1697339 (456819) 1240520
1936160$ 2413380$ 4349540$
Detailed information about each pension plans 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 wwwmnperaorg
The following is a summary of the major components of deferred outflows and inflows as presented in the Statement of Net Position
Deferred Outflows of Resources
Deferred Inflows of Resources
The following is a summary of fund balance components
56
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 13 TAX ABATEMENT
Current YearPercent AmountAbated Abated
Dingmann Marine100 2500$
Current YearPercent AmountAbated Abated
Granite City PropertyManagement 95 20858$
NOTE 14 JOINT POWERS AGREEMENTS
A PUBLIC RECREATIONAL FACILITY
B WRIGHT COUNTY AREA TRANSIT
Wright County Area Transit is governed by a Joint Powers Board that consists of a) one vote plus additional vote for each city per 3000 rides originating in that city and b) Wright County has votes equal to the number of votes apportioned to the Cities
57
The City and Independent School District 876 (the District) have entered into an a joint powers agreement to operate a public recreational facility The City owns and will lease the real property to the Joint Powers Entity (the Entity) The District shall fund the construction of the facility The Entity shall prepare an annual budget subject to approval of the City and the District All costs for operations maintenance repairs and utilities shall be shared equally by the City and the District
The Entity is governed by a Joint Powers Board that consists of four members a) two members appointed by the City annually and b) two members appointed by the District annually
The City Wright County and other Wright County Cities have entered into an a joint powers agreement to provide affordable public transportation to their communities Cities are to pay a pro rata share of the remaining unfunded operating expenses and capital expenditures not covered by Wright County
The City is authorized by Minnesota Statute sect4691813 to enter into property tax abatement agreements for the purpose of attracting or retaining businesses Tax abatements may be granted to any business on a case-by-case basis The entity may be subject to certain stipulations determined by the City at the time the abatement is entered The amount of the abatement is automatically deducted from the property ownerrsquos tax bill
The City is authorized by Minnesota Statute sect469174 through 469179 to enter into tax increment financing plans Tax increment financing may be granted on a case-by-case basis and may be subject to certain stipulations determined by the City at the time it is entered
Business Purpose
Business Purpose
Assisting in relocating the business within the community
Housing Redevelopment Project 36 Unit Senior Housing Project
REQUIRED SUPPLEMENTARY INFORMATION
This page intentionally left blank
EmployersProportionateShare of the Net Pension
Liability (Asset)States and the States Employers
Proportionate Proportionate ProportionateEmployers Share of the Share of the Share of the Plan Fiduciary
Employers Proportionate Net Pension Net Pension Net Pension Net PositionProportion Share of the Liability (Asset) Liability (Asset) Employers Liability (Asset) as a Percentageof the Net Net Pension Associated with Associated with Covered as a Percentage of of the Total
Fiscal Year Pension Liability (Asset) the Employer the Employer Payroll its Covered Payroll PensionEnding Liability (Asset) (a) (b) (a+b) (c) ((a+b)c) Liability
PensionsGERP
6302018 00098 543664$ 17795$ 561459$ 658161$ 8531 79536302017 00100 638393 8040 646433 647524 9983 75906302016 00099 803831 10468 814299 610663 13335 68916302015 00102 528617 528617 605733 8727 7819
PEPFP6302018 00329 350680$ $ 350680$ 346636$ 10117 88846302017 00330 445539 445539 339010 13142 85436302016 00340 1364479 1364479 322596 42297 63886302015 00340 386320 386320 317917 12152 8661
See Accompanying Notes to the Required Supplementary Information
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITYDECEMBER 31 2018
58
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
Contributionsin Relation Contributions
Statutorily to the Statutorily Contribution as a PercentageRequired Required Deficiency Covered of Covered
Fiscal Year Contribution Contribution (Excess) Payroll PayrollEnding (a) (b) (a-b) (d) (bd)
PensionsGERP
12312018 50226$ 50226$ $ 669680$ 75012312017 48886 48886 651813 75012312016 46583 46583 621107 75012312015 45426 45426 605680 750
PEPFP12312018 57782$ 57782$ $ 356679$ 162012312017 55371 55371 341796 162012312016 53824 53824 332247 162012312015 51688 51688 319062 1620
See Accompanying Notes to the Required Supplementary Information59
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE EMPLOYER CONTRIBUTIONSDECEMBER 31 2018
2017 2016 2015 2014
Service Cost 26727$ 26915$ 21845$ 21260$ Interest 34955 33085 27615 24816 Changes in Benefit Terms 28893 40156 Differences Between Expected and Actual Experience (7074) Changes in Assumptions (4866) Benefit Payments (72973) (7040)
Net Change in Total Pension Liability 17602 41020 89616 46076 Total Pension Liability - Beginning of Year 569046 528026 438410 392334
Total Pension Liability - End of Year 586648$ 569046$ 528026$ 438410$
Contributions - State and Local 50693$ 50325$ 49939$ 47712$ Net Investment Income 126216 69161 (34736) 46976 Benefit Payments (72973) (7040) Administrative Expense (8416) (7920) (7166) (3768) Other (275)
Net Change in Plan Fiduciary Net Position 95520 104526 8037 90645 Total Plan Fiduciary Net Position - Beginning of Year 1009074 904548 896511 805866
Total Plan Fiduciary Net Position - End of Year 1104594$ 1009074$ 904548$ 896511$
Citys Net Pension Liability (Asset) - End of Year (517946)$ (440028)$ (376522)$ (458101)$
Plan Fiduciary Net Position as a Percentage of the Total Pension Asset 18829 17733 17131 20449
60
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF CHANGES IN THE CITYS NET PENSION LIABILITY AND RELATED RATIOSDECEMBER 31 2018
The City implemented GASB Statement No 68 for the year ended December 31 2015 Information for prior years is not available
December 31
NOTE 1 CHANGES IN PLAN PROVISIONS
A GERF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
B PEPFF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
61
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
On January 1 2015 the Minneapolis Employees Retirement Fund was merged into the General Employees Fund which increased the total pension liability by $11 billion and increased the fiduciary plan net position by $892 million Upon consolidation state and employer contributions were revised
The post-retirement benefit increase to be paid after attainment of the 90 funding threshold was changed from inflation up to 25 to a fixed rate of 25
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS
A GERF
2018 Changes
2017 Changes
2016 Changes
2015 Changes
B PEPFF
2018 Changes
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 025 to 325 for payroll growth and 250 for inflation
62
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2035 and 25 per year thereafter
The mortality projection was changed from MP-2016 to MP-2017
The Combined Service Annuity (CSA) loads were changed from 08 for active members and 60 for vested and non-vested deferred members The revised CSA loads are now 00 for active member liability 150 for vested deferred member liability and 30 for non-vested deferred member liability
The assumed post-retirement benefit increase rate was changed from 10 per year for all years to 10 per year through 2044 and 25 per year thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2035 and 25 per year thereafter to 10 per year for all years
The assumed investment return was changed from 79 to 75 The single discount rate was changed from 79 to 75
The mortality projection was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 per year through 2044 and 250 per year thereafter to 125 per year
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS (Contd)
B PEPFF (Contd)
2017 Changes
Assumed rates of retirement were changed resulting in fewer retirements
Assumed percentage of married female members was decreased from 65 to 60
The assumed percentage of female members electing Joint and Survivor annuities was increased
2016 Changes
2015 Changes
63
The assumed post-retirement benefit increase rate was changed from 100 for all years to 100 per year through 2064 and 250 thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2037 and 25 thereafter to 10 per year for all future years
The assumed investment return was changed from 79 to 75 The single discount rate changed from 79 to 56
The assumed future salary increases payroll growth and inflation were decreased by 025 to 325 for payroll growth and 250 for inflation
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2037 and 25 per year thereafter
Assumed salary increases were changed as recommended in the June 30 2016 experience study The net effect is proposed rates that average 034 lower than the previous rates
The Combined Service Annuity (CSA) load was 30 for vested and non-vested deferred members The CSA has been changed to 33 for vested members and 2 for non-vested 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 096 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 30 for the first three years of service Rates beyond the select period of three years were adjusted resulting in more expected terminations overall
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
SUPPLEMENTARY INFORMATION
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Special Debt Capital Revenue Service Projects Total
ASSETSCash and Investments 436388$ 1441782$ 473092$ 2351262$ Taxes Receivable - Delinquent 23 5 347 375 Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 623285 26935 650220
Accounts Receivable 70887 20000 90887 Interest Receivable 9 9 Prepaid Items 2152 2152 Due from Other Funds 190388 190388 Due from Other Governments 1061 2365 47418 50844 Land Held for Resale 362923 362923
Total Assets 1063822$ 2071860$ 567801$ 3703483$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 12735$ $ 11142$ 23877$ Contracts Payable 2941 21398 24339 Due to Other Funds 454822 126860 581682 Due to Other Governments 3566 5910 9476 Salaries and Benefits Payable 134 134
Total Liabilities 474198 0 165310 639508
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 23 5 347 375 Special Assessments 623285 26935 650220
Total Deferred Inflows of Resources 23 623290 27282 650595
Fund Balance Nonspendable 2152 2152 Restricted 11481 1448570 72582 1532633 Committed 847422 847422 Assigned 67503 420489 487992 Unassigned (338957) (117862) (456819)
Total Fund Balance 589601 1448570 375209 2413380
Total Liabilities Deferred Inflows of Resources and Fund Balance 1063822$ 2071860$ 567801$ 3703483$
CITY OF ANNANDALE MINNESOTA
64
DECEMBER 31 2018NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
Special Debt Capital Revenue Service Projects Total
REVENUESProperty Taxes 2507$ $ 320723$ 323230$ Tax Increments 20858 20858 Special Assessments 149671 149671 Intergovernmental 30310 30310 Charges for Services 42636 8595 51231 Fines and Forfeitures 4299 4299 Investment Income (1455) (3635) (5090) Contributions and Donations 49608 84150 133758 Miscellaneous 578 101 679
Total Revenues 114732 149671 444543 708946
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 22622 42738 Culture and Recreation 3735 3735 Economic Development 52358 52358
Debt ServicePrincipal 821000 821000 Interest and Other Charges 162964 162964
Capital OutlayPublic Safety 67055 67055 Public Works 14006 14006 Culture and Recreation 14187 88464 102651 Economic Development 56446 88485 144931
Total Expenditures 153914 983964 284367 1422245 Excess (Deficiency) of Revenues
Over (Under) Expenditures (39182) (834293) 160176 (713299)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 51200 784616 310098 1145914 Transfers Out (65804) (481316) (547120)
Total Other Financing Sources (Uses) (14604) 784616 (146725) 623287 Net Change in Fund Balances (53786) (49677) 13451 (90012)
FUND BALANCE BEGINNING OF YEAR 643387 1498247 361758 2503392
FUND BALANCE END OF YEAR 589601$ 1448570$ 375209$ 2413380$
65
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
Tax Charitable Economic TIF District Abatement - Lions TIF District Training WoodlawnGambling Development No 6 Dingmann Donations No 14 Center Cemetery
(222) (407) (411) (423) (464) (465) (604) (651) Total
ASSETSCash and Investments 11466$ 385530$ 21389$ $ 18003$ $ $ $ 436388$ Taxes Receivable - Delinquent 23 23 Accounts Receivable 20856 49500 531 70887 Prepaid Items 1076 1076 2152 Due from Other Funds 190388 190388 Due from Other Governments 25 1036 1061 Land Held for Resale 362923 362923
Total Assets 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable $ 1800$ 9908$ $ $ $ 1000$ 27$ 12735$ Contracts Payable 2941 2941 Due to Other Funds 119000 18060 66198 200960 50604 454822 Due to Other Governments 3500 66 3566 Salaries and Benefits Payable 67 67 134
Total Liabilities 0 123741 9908 18060 0 69698 202093 50698 474198
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 23 23
Fund Balance Nonspendable 1076 1076 2152 Restricted 11481 11481 Committed 11466 835956 847422 Assigned 67503 67503 Unassigned (18035) (69698) (200526) (50698) (338957)
Total Fund Balance 11466 835956 11481 (18035) 67503 (69698) (199450) (49622) 589601
Total Liabilities Deferred Inflows of Resources and Fund Balance 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
66
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUECOMBINING BALANCE SHEET
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding ImprovementBonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
ASSETSCash and Investments 134649$ 53157$ 3288$ 310514$ 94388$ 360857$ 484929$ 1441782$ Taxes Receivable - Delinquent 5 5 Special Assessments Receivable
Delinquent 819 1553 2051 4423 Current and Deferred 45829 223930 9400 65636 278490 623285
Due from Other Governments 585 509 775 496 2365
Total Assets 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
DEFERRED INFLOWS OF RESOURCESAND FUND BALANCEDeferred Inflows of Resources
Unavailable RevenuesDelinquent Property Taxes $ $ $ $ $ 5$ $ 5$ Special Assessments 45829 223930 9400 65636 278490 623285
Total Deferred Inflows of Resources 45829 0 0 223930 9400 65641 278490 623290
Fund Balance Restricted 135234 53157 3288 311333 94897 363185 487476 1448570
Total Deferred Inflows of Resourcesand Fund Balance 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
DECEMBER 31 2018
67
Public Works 2020Fire Street Street Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
ASSETSCash and Investments 50334$ $ 39748$ 122304$ 20402$ 83784$ 53265$ 30658$ 72597$ $ 473092$ Taxes Receivable - Delinquent 298 49 347Special Assessments Receivable
Current and Deferred 26935 26935Accounts Receivable 20000 20000Interest Receivable 9 9Due from Other Governments 24247 20606 2565 47418
Total Assets 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 350$ $ $ $ 10792$ $ $ $ $ $ 11142$ Contracts Payable 15700 5698 21398 Due to Other Funds 44073 82787 126860 Due to Other Governments 5910 5910
Total Liabilities 350 49983 0 0 10792 0 0 15700 0 88485 165310
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 298 49 347Special Assessments 26935 26935
Total Deferred Inflows of Resources 298 0 26984 0 0 0 0 0 0 0 27282
Fund Balance Restricted 72582 72582 Assigned 74240 42313 122304 9610 83784 53265 34958 15 420489 Unassigned (29377) (88485) (117862)
Total Fund Balance 74240 (29377) 42313 122304 9610 83784 53265 34958 72597 (88485) 375209
Total Liabilities Deferred Inflow of Resources and Fund Balance 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
DECEMBER 31 2018
68
TaxCharitable Economic TIF District Abatement - TIF District Lions TIF District Training WoodlawnGambling Development No 6 Dingmann No 12 Donation No 14 Center Cemetery
(222) (407) (411) (423) (438) (464) (465) (604) (651) Total
REVENUESProperty Taxes $ $ $ 2507$ $ $ $ $ $ 2507$ Tax Increments 20858 20858 Charges for Services 12875 19641 10120 42636 Investment Income (71) (2440) (140) (76) 1239 33 (1455)Contributions and Donations 108 49500 49608Miscellaneous 78 500 578
Total Revenues (71) 10621 20718 2507 0 49424 500 20880 10153 114732
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 20116 Economic Development 18399 19816 391 13752 52358
Capital OutlayCulture and Recreation 14187 14187 Economic Development 56446 56446
Total Expenditures 0 18399 19816 0 391 14187 70198 20116 10807 153914 Excess (Deficiency) of
Revenues Over (Under) Expenditures (71) (7778) 902 2507 (391) 35237 (69698) 764 (654) (39182)
OTHER FINANCING SOURCES (USES)Transfers In 51200 51200 Transfers Out (65804) (65804)
Total Other FinancingSources (Uses) 0 (14604) 0 0 0 0 0 0 0 (14604)
Net Change in Fund Balances (71) (22382) 902 2507 (391) 35237 (69698) 764 (654) (53786)
FUND BALANCE BEGINNING OF YEAR 11537 858338 10579 (20542) 391 32266 (200214) (48968) 643387
FUND BALANCE END OF YEAR 11466$ 835956$ 11481$ (18035)$ 0$ 67503$ (69698)$ (199450)$ (49622)$ 589601$
69
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE
YEAR ENDED DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding Improvement Bonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
REVENUESSpecial Assessments 21259$ $ $ 37558$ 10657$ 20276$ 59921$ 149671$
EXPENDITURESDebt Service
Principal 80000 70000 54000 127000 210000 245000 35000 821000Interest and Other Charges 23944 14062 4095 64909 16975 18646 20333 162964
Total Expenditures 103944 84062 58095 191909 226975 263646 55333 983964 Excess (Deficiency) of
Revenues Over (Under)Expenditures (82685) (84062) (58095) (154351) (216318) (243370) 4588 (834293)
OTHER FINANCINGSOURCES (USES)Transfers In 76000 78113 22560 150000 194943 198000 65000 784616
Net Change in Fund Balances (6685) (5949) (35535) (4351) (21375) (45370) 69588 (49677)
FUND BALANCEBEGINNING OF YEAR 141919 59106 38823 315684 116272 408555 417888 1498247
FUND BALANCE END OF YEAR 135234$ 53157$ 3288$ 311333$ 94897$ 363185$ 487476$ 1448570$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
YEAR ENDED DECEMBER 31 2018
70
Public 2020Fire Street WorksStreet Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
REVENUESProperty Taxes 25092$ $ 295631$ $ $ $ $ $ $ $ 320723$ Intergovernmental 4109 26201 30310 Charges for Services 8595 8595 Fines and Forfeitures 4299 4299 Investment Income (49) 105 (324) (1118) (80) (713) (503) (495) (458) (3635) Contributions and Donations 50650 1500 2000 30000 84150 Miscellaneous 101 101
Total Revenues 75693 14309 295307 (1017) 6219 (713) 25698 29505 (458) 0 444543
EXPENDITURESCurrent
Public Safety 22622 22622 Culture and Recreation 3735 3735
Capital OutlayPublic Safety 7500 59555 67055 Public Works 14006 14006 Culture and Recreation 16429 72035 88464 Economic Development 88485 88485
Total Expenditures 30122 20164 0 14006 59555 0 0 72035 0 88485 284367 Excess (Deficiency) of
Revenues Over (Under)Expenditures 45571 (5855) 295307 (15023) (53336) (713) 25698 (42530) (458) (88485) 160176
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 8800 15693 24493 Transfers In 84943 37504 60000 20000 107651 310098 Transfers Out (107503) (288000) (78113) (7700) (481316)
Total Other FinancingSources (Uses) (22560) 37504 (288000) 68800 35693 29538 0 (7700) 0 0 (146725)
Net Change in Fund Balances 23011 31649 7307 53777 (17643) 28825 25698 (50230) (458) (88485) 13451
FUND BALANCE BEGINNING OF YEAR 51229 (61026) 35006 68527 27253 54959 27567 85188 73055 361758
FUND BALANCE END OF YEAR 74240$ (29377)$ 42313$ 122304$ 9610$ 83784$ 53265$ 34958$ 72597$ (88485)$ 375209$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
YEAR ENDED DECEMBER 31 2018
71
FINANCIAL SECTION
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Issue Interest Original Final Principal Due WithinDate Rates Issue Maturity Outstanding One Year
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan Bonds Series 2008A 050608 300-400 895000$ 020122 295000$ 70000$ GO Special Assessment Bonds
GO Improvement Bonds Series 2008B 050608 300-4125 1175000 020124 560000 85000 GO Improvement Bonds Series 2011A 060811 105-415 1700000 020132 1300000 70000 GO Refunding Bonds Series 2011B 092711 085-270 1620000 020121 585000 215000 GO Refunding Bonds Series 2012A 040412 055-185 2225000 020122 1035000 255000 GO Improvement Bonds Series 2015A 050115 110-345 820000 020136 750000 35000
GO NotesGO Improvement Note of 2011 053111 1959 1217500 082031 846000 58000
GO Equipment CertificateGO Equipment Certificate 2016A 032116 2100 222000 020121 168000 55000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549 843000
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 011304 2819 3273194 082023 996000 188000 PFA Clean Water Revenue Note 081707 2220 16036613 082026 8086000 935000 PFA Water Revenue Note of 2015 081015 1031 929105 082035 812000 44000 PFA Sewer Revenue Note of 2015 090815 1000 125359 082035 110000 6000
Total Business-Type Activities 10004000 1173000
Total All Long-Term Liabilities 15543549$ 2016000$
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF LONG-TERM LIABILITIESDECEMBER 31 2018
72
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COMPLIANCE SECTION
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Honorable Mayor and Members of the City Council
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
INDEPENDENT AUDITORS REPORT ON MINNESOTA LEGAL COMPLIANCE
73
The Minnesota Legal Compliance Audit Guide for Cities promulgated by the State Auditor pursuant to Minn Stat sect665 contains seven categories of compliance to be tested contracting and bidding deposits and investments conflicts of interest public indebtedness claims and disbursements miscellaneous provisions and tax increment financing Our audit considered all of the listed categories
In connection with our audit nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities However our audit was not directed primarily toward obtaining knowledge of such noncompliance Accordingly had we performed additional procedures other matters may have come to our attention regarding the Citys noncompliance with the above referenced provisions
The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance Accordingly this communication is not suitable for any other purpose
City of AnnandaleAnnandale Minnesota
May 6 2019
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 majorfund and the aggregate remaining fund information as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
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Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements we considered the Citys 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 Citys internal control Accordingly we do not express an opinion on the effectiveness of the Citys 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 entitys 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
74
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 and therefore material weaknesses or significant deficiencies may exist that were not identified 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 We did identify certain deficiencies in internal control described in the accompanying Schedule of Findings as 2018-001 and 2018-002 that we consider to be significant deficiencies
INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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 the City of Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
Compliance and Other Matters
Citys Response to Findings
Purpose of this Report
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
May 6 2019
75
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 Citys internal control or on compliance This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entitys internal control and compliance Accordingly this communication is not suitable for any other purpose
As part of obtaining reasonable assurance about whether the Citys 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
The Citys responses to the findings identified in our audit are described in the accompanying Schedule of Findings The Citys responses were not subjected to the auditing procedures applied in the audit of the financial statements and accordingly we express no opinion on them
I
FINDING 2018-001
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
76
LIMITED SEGREGATION OF DUTIES
There is an absence of appropriate segregation of duties consistent with appropriate control objectives due to a limited number of employees
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The City is aware of the limited segregation of duties and will continue to review internal controls and make changes when they can be made
The lack of adequate segregation of duties could adversely affect the Citys ability to initiate record process and report financial data consistent with the assertions of management in the financial statements
The basic premise is that no one person should have access to both physical assets and the related accounting records or to all phases of a transaction The lack of such controls could result in the occurrence of a material error or fraud in relation to the financial statements not being detected by management
The City has assigned duties to staff based on a cost-benefit relationship to the City and the practicality of the level of staffing the City maintains
The City should continue to monitor and evaluate the job responsibilities assigned to staff to determine whether there is an unacceptable risk
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
I
FINDING 2018-002 AUDITOR PREPARED FINANCIAL STATEMENTS
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
77
The City does not have an internal control system designed to provide for the preparation of the financial statements being audited However based on the degree of complexity and level of detail needed to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) the City has requested the auditors to prepare them
The preparation of the financial statements and the related notes are the responsibility of management
There are a limited number of office employees and resources available to allow for the adequate preparation of the financial statements by the City
This could result in a material misstatement to the financial statements and related notes that would not be prevented or detected and corrected as a result of the Citys current internal control
The City should continue to request the assistance to draft the financial statements and related notes and thoroughly review these financial statements after they have been prepared so the City can take responsibility for them
The City is aware of this however due to significant cost and a limited number of employees it is in the Citys best financial interest to contract for the preparation of the financial statements
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Contd)
Comment Year Finding If Not Corrected Provide PlannedReference Comment Title Status Initially Occurred Corrective Action or Other Explanation
Financial Statement Findings
2017-001 Not Corrected 2009 See current year finding 2018-001
2017-002 Not Corrected 2009 See current year finding 2018-002
Minnesota Legal Compliance Findings
None
DECEMBER 31 2018SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
CITY OF ANNANDALE MINNESOTA
78
Limited Segregation of Duties
Auditor Prepared Financial Statements
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORS
WILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
MANAGEMENT LETTER
DECEMBER 31 2018
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Page
Required Communications 1-3
Schedule of Findings on Accounting Issues and Internal Controls 4
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
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Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Significant Audit Findings
Qualitative Aspects of Accounting Practices
We have audited the financial statements of the governmental activities the business-type activities each major fund and the aggregate remaining fund information of the City of Annandale Minnesota for the year ended December 31 2018 Professional standards require that we provide you with information about our responsibilities under generallyaccepted auditing standards and Government Auditing Standards as well as certain information related to the planned scope and timing of our audit We have communicated such information in our letter to you dated December 20 2018 Professional standards also require that we communicate to you the following information related to our audit
The financial statement disclosures are neutral consistent and clear
1
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 the financial statements No new accounting policies were adopted and the application of existing policies was not changed in 2018 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 are an integral part of the financial statements prepared by management and are based on managements 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
Managements estimate of depreciation is based on the number of years an asset is in service We evaluated the key factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Managements estimate of pension liabilities is based on actuarial valuations performed by consultants specializing in those areas We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Significant Audit Findings (Contd)
Difficulties Encountered in Performing the Audit
Corrected and Uncorrected Misstatements
Disagreements with Management
Management Representations
Management Consultations with Other Independent Accountants
Other Audit Findings or Issues
Other Matters
Professional standards require us to accumulate all known and likely misstatements identified during the audit other than those that are clearly trivial and communicate them to the appropriate level of management Management has corrected all such misstatements In addition none of the misstatements detected as a result of audit procedures and corrected by management were material either individually or in the aggregate to each opinion units financial statements taken as a whole
We encountered no significant difficulties in dealing with management in performing and completing our audit
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 Citys 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
We generally discuss a variety of matters including the application of accounting principles and auditing standards with management each year prior to retention as the Citys auditors However these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention
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 We are pleased to report that no such disagreements arose during the course of our audit
We have requested certain representations from management that are included in the management representation letter dated May 6 2019
We applied certain limited procedures to Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions the Schedule of Changes in the Citys Net Pension Liability and Related Ratios and the related notes to required supplementary information which are required supplementary information that supplements the basic financial statements Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries the basic financial statements and other knowledge we obtained during our audit of the basic financial statements We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information
2
Other Matters (Contd)
Restriction on Use
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
This information is intended solely for the use of the City Council and management of the City of Annandale Minnesota and is not intended to be and should not be used by anyone other than these specified parties
3
We were not engaged to report on the Elected Officials and Administration section which accompany the financial statements but are not required supplementary information We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it
May 6 2019
We were engaged to report on the statements and schedules listed in the table of contents as supplementary information which accompany the financial statements but are not required supplementary information With respect to this supplementary information we made certain inquiries of management and evaluated the form content and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America the method of preparing it has not changed from the prior period and the information is appropriate and complete in relation to our audit of the financial statements We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves
This page intentionally left blank
4
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in internal control under standards established by the American Institute of Certified Public Accountants 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
The objective of internal accounting control is to provide reasonable but not absolute assurance as to the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of these factors necessarily requires estimates and judgments by management
It should be recognized that within the City an inherent risk is present with certain positions It is very common for cities such as the City of Annandale Minnesota to assign many major responsibilities to a few key individuals in an attempt to operate within limited budgets The inherent risk is again addressed only to maintain the awareness of the internal control structure and to encourage the Councils continual review of financial information at monthly meetings
DECEMBER 31 2018
INTERNAL CONTROL
GENERAL RECOMMENDATIONS
Throughout the course of the audit we spoke to management regarding certain items that we see as an opportunity to improve None of these were considered significant within the scope of the audit The items discussed requiring action have been resolved or are in the process of resolution We would like to acknowledge the assistance and courtesies extended to us by the personnel of the City of Annandale Minnesota
City of Annandale Minnesota
Audit ReportDecember 31 2018
Independent Auditorrsquos ReportPages 2-4bull Financial statements are the responsibility of the Cityrsquos
managementbull Our responsibility is to express opinions on these financial
statements based on our auditbull Conducted audit in accordance with Generally Accepted
Auditing Standards and Government Auditing Standardsbull Obtain reasonable assurance financials are free from
material misstatement
1
Independent Auditorrsquos Report (Contrsquod)Pages 2-4
bull Financial statements are presented fairly in our opinion
bull Internal control letter on pages 74 and 75
2
Statement of Net Position
3
2018 2017ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current and Other 12893519$ 12739729$ Capital 20949843 21526486
Total Assets 33843362 34266215
Deferred Outflows of Resources 656980 914167 Total Assets and Deferred Outflows of Resources 34500342$ 35180382$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current Liabilities 660359$ 497847$ Noncurrent Liabilities
Net Pension Liability 894343 236206 Due Within One Year 2016000 1967000 Due in More Than One Year 13527549 16383958
Total Liabilities 17098251 19085011
Deferred Inflows of Resources 940554 951385
Net PositionNet Investment in Capital Assets 13587855 13119128 Restricted 2095629 2215725 Unrestricted 778053 (190867)
Total Net Position 16461537 15143986 Total Liabilities Deferred Inflows of Resources
and Net Position 34500342$ 35180382$
MINUTES ANNANDALE BOARD OF ADJUSTMENT AND APPEALS
April 1 2019 CALL TO ORDERROLL CALL Pursuant to due call and notice the City Council of Annandale Minnesota met for the annual Board of Adjustment and Appeals on April 1 2019 at 630 pm at the City Hall Council Chambers Mayor Gunnarson called the meeting to order at 630 pm City Council Present Councilmemberrsquos Jonas Czycalla Burd and Hastings and Mayor Gunnarson Absent None Also present were Tammy Anderson and Conrad Anderson from the Wright County Assessors Department City Administrator Hinnenkamp 2019Assessment City Assessor Conrad Anderson introduced the 2019 Assessment Assessor Anderson read the Local Board of Appeal and Equalization Opening Statement and reviewed the details of the assessment review process Anderson reviewed the Written Appeals 102-020-002100- Christina Clark 125 Oak Avenue North Owner contacted Anderson but they have not had a chance to review the property Appeal was received 4119 102-073-001080 Rick Schultz Pintail Drive Called 4119 and they have not had a chance to review 36 Jasmine Avenue 102-700-000360 Ellis and Linda Knute After further review Anderson is recommending a value of $44100 This is for the personal property 2019 assessment was $51900 102-043-001120 001130 001140 Marlene Dingmann 631 Beech Circle requested to be changed to non-homestead Motion was made by Czycalla and seconded by Hastings to approve the recommendations of Knute and Dingmann as presented Motion was made by Wuollet and seconded by Czycalla to refer any recommended changes to Wright County for Clark and Schultz ADJOURNMENT Moved by Wuollet seconded by Jonas to adjourn at 654PM Motion carried unanimously ___________________________________ Dwight Gunnarson Mayor ATTEST __________________________________ Kelly Hinnenkamp City Administrator
CITY OF ANNANDALE Payment Approval Report - for City Council Page 1
Report dates 422019-562019 May 02 2019 0305PM
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1
1 NEOPOST USA Inc 56654756 RENTAL amp MAINTENANCE - MAI 04232019 11100 00
Total 1 11100 00
153
153 AMERIPRIDE LINEN amp APPARE 2201173387 PD - MATBRUSH 03282019 2315 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 WATER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 SEWER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 PW UNIFORM 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PD - MATBRUSH 04042019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PW UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 SEWER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 WATER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PW UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 SEWER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 WATER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PD - MATBRUSH 04112019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PD - MATBRUSH 04182019 268 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 WATER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 SEWER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PW UNIFORM 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PD - MATBRUSH 04252019 2316 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 WATER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 SEWER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PW UNIFORM 04252019 3181 00
Total 153 57099 00
180
180 ANNANDALE ADVOCATE P3158191723 CONGRATS- WRESTLING 04082019 1900 1900 04122019
180 ANNANDALE ADVOCATE P3158191723 RECYCLING AD 04082019 7000 7000 04122019
180 ANNANDALE ADVOCATE P3158191723 MINUTES 04082019 18624 18624 04122019
180 ANNANDALE ADVOCATE P3158191723 PUBLIC HEARING 04082019 1920 1920 04122019
180 ANNANDALE ADVOCATE P3158191723 ASSESSMENTS 04082019 3264 3264 04122019
180 ANNANDALE ADVOCATE P3158191723 2021 IMPR PLAN 04082019 8256 8256 04122019
180 ANNANDALE ADVOCATE P3158191723 DMV- BUSINESS OF THE WEEK 04082019 15600 15600 04122019
180 ANNANDALE ADVOCATE P3158191723 FT SEASONAL EMPLMT 04082019 16380 16380 04122019
180 ANNANDALE ADVOCATE P3158191723 NOTARY STAMP- GIEBENHAIN 04082019 3902 3902 04122019
Total 180 76846 76846
188
188 ANNANDALE AUTO CARE LLC 101394 SERVICE 08 CHEV 04182019 85579 00
188 ANNANDALE AUTO CARE LLC 101468 BATTERY 04242019 12895 00
188 ANNANDALE AUTO CARE LLC 101482 TRUCK SERVICE 04252019 142198 00
188 ANNANDALE AUTO CARE LLC 101526 TRUCK SERVICE 04262019 16470 00
Total 188 257142 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 2
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
190
190 ANNANDALE AREA CHAMBER APRIL2019 CITY EXPO BOOTH 04092019 10000 10000 04122019
Total 190 10000 10000
192
192 ANNANDALE PARTS SUPPLY 127199280 HEAD LIGHT 02282019 1699 1699 04122019
192 ANNANDALE PARTS SUPPLY 127199479 LIGHT BULBS 03042019 2565 2565 04122019
192 ANNANDALE PARTS SUPPLY 127199616 FLUSH KIT 03052019 7098 7098 04122019
192 ANNANDALE PARTS SUPPLY 127199723 HEADLIGHT BULB- SQUAD 51 03072019 949 949 04122019
192 ANNANDALE PARTS SUPPLY 127200389 GENERATOR PARTS 03182019 2318 2318 04122019
192 ANNANDALE PARTS SUPPLY 127200469 LUBE 03192019 791 791 04122019
192 ANNANDALE PARTS SUPPLY 127200476 HOSE 03192019 118 118 04122019
192 ANNANDALE PARTS SUPPLY 127200490 BATTERY 03192019 9858 9858 04122019
192 ANNANDALE PARTS SUPPLY 127200546 PARTS 03202019 1398 1398 04122019
192 ANNANDALE PARTS SUPPLY 127200609 FILTERS 03202019 23472 23472 04122019
192 ANNANDALE PARTS SUPPLY 127200627 STOP LEAK 03212019 873 873 04122019
192 ANNANDALE PARTS SUPPLY 127200652 FILTER 03222019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200654 FILTER 03212019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200713 FITTING 03222019 129 129 04122019
192 ANNANDALE PARTS SUPPLY 127200757 PARTS 03222019 2178 2178 04122019
192 ANNANDALE PARTS SUPPLY 127200939 CLEANER 03252019 2339 2339 04122019
192 ANNANDALE PARTS SUPPLY 127201161 SOAP 03282019 909 00
192 ANNANDALE PARTS SUPPLY 127201244 LUBRICANT 05012019 2373 00
192 ANNANDALE PARTS SUPPLY 127201434 HOSE REPAIR 05012019 3637 00
192 ANNANDALE PARTS SUPPLY 127201488 HOSE REPAIR 04022019 7274 00
192 ANNANDALE PARTS SUPPLY 127202184 FLARE FITTINGS 04112019 1858 00
192 ANNANDALE PARTS SUPPLY 127202518 BRAKE CLEANER 04172019 3228 00
Total 192 77828 58549
200
200 ANNANDALE EMBROIDERY 2356 APD HATS 03272019 9000 00
Total 200 9000 00
230
230 ANNANDALE-MAPLE LAKE MARCH 2019 MAR 2019 FLOW 04152019 6260800 00
Total 230 6260800 00
240
240 ANNANDALE PLUMBING 1457 RPZ TESTING 03272019 28500 00
Total 240 28500 00
424
424 BERGESCH COMPUTER SERVI 16172 SERVICE CALL 04062019 7500 00
424 BERGESCH COMPUTER SERVI 16176 ADMIN-SERVICE CALL 04062019 7500 00
Total 424 15000 00
463
463 BOLTON amp MENK INC 0231771 LGU BSA 7 STAKEHOLDERS C 04122019 11700 00
463 BOLTON amp MENK INC 0231785 2022 PROJECT FACILITY PLAN 04122019 44500 00
463 BOLTON amp MENK INC 0231788 SAND PROFILE 04122019 117250 00
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT PLANS AN 04122019 1717300 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 3
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT STREETS 04122019 38000 00
Total 463 1928750 00
646
646 CENTRA SOTA LAKE REGION L 6308214 STREETS 04092019 11697 00
646 CENTRA SOTA LAKE REGION L 6308214 PARKS 04092019 14037 00
646 CENTRA SOTA LAKE REGION L 6308214 WATER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 SEWER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 PUBLIC WORKS 04092019 33531 00
646 CENTRA SOTA LAKE REGION L 6308342 STREETS 04292019 13024 00
646 CENTRA SOTA LAKE REGION L 6308342 PARKS 04292019 15629 00
646 CENTRA SOTA LAKE REGION L 6308342 WATER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 SEWER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 PUBLIC WORKS 04292019 37335 00
646 CENTRA SOTA LAKE REGION L 6308343 STREETS 04292019 16436 00
646 CENTRA SOTA LAKE REGION L 6308343 PARKS 04292019 19723 00
646 CENTRA SOTA LAKE REGION L 6308343 WATER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 SEWER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 PUBLIC WORKS 04292019 47116 00
Total 646 274380 00
710
710 CITY OF BUFFALO MARCH2019 MONTHLY NET MOTION 04012019 2000 2000 04122019
Total 710 2000 2000
810
810 COLONIAL LIFE amp ACCIDENT 7492424-0501 INSURANCE 04162019 42770 42770 04232019
Total 810 42770 42770
900
900 COUNTRY CHEVROLET INC CVCS139790 SQUAD 52 - TIRE REPAIR 04092019 1719 00
Total 900 1719 00
1336
1336 FARM RITE EQUIPMENT INC P42298 WIPER BLADESIDLER ASSY 04012019 36766 00
1336 FARM RITE EQUIPMENT INC W13484 HYDRAULIC HOSE 04172019 40840 00
Total 1336 77606 00
1338
1338 FASTENAL COMPANY MNBUF78347 SAFETY GLASSES 04172019 4656 00
1338 FASTENAL COMPANY MNBUF78393 TOOLS 04192019 892 00
Total 1338 5548 00
1420
1420 FIRE RELIEF ASSOCIATION MARCH2019 2019 SUPPLEMENTAL REIMB 04082019 100000 00
1420 FIRE RELIEF ASSOCIATION MARCH2019 2018 SUPPLEMENTAL REIMB 04082019 313920 00
Total 1420 413920 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 4
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1508
1508 F S 3 INC 60393 SAFETY VEST 04222019 5500 00
1508 F S 3 INC 60435 SAFETY VEST 04162019 5500 00
1508 F S 3 INC 60436 SAFETY VEST 04162019 5500 00
Total 1508 16500 00
1519
1519 GALLS AN ARAMARK COMPAN 012401488 UNIFORM - HAAG 04042019 8396 00
1519 GALLS AN ARAMARK COMPAN 012412561 UNIFORM - TOWNSEND 04052019 4198 00
Total 1519 12594 00
1630
1630 GOPHER STATE ONE-CALL IN 9030176 FAX TICKETS 03312019 2295 00
Total 1630 2295 00
1660
1660 GRAINGER INC W W 6144966281 TEST BALLS 04122019 15556 00
1660 GRAINGER INC W W 9135594712 PARTS 04032019 6459 00
1660 GRAINGER INC W W 9137921475 SHOCK 04052019 4717 00
1660 GRAINGER INC W W 9138437422 HOSE 04052019 9729 00
1660 GRAINGER INC W W 9146606448 DOOR OPENER 04152019 2735 00
1660 GRAINGER INC W W 9150739945 GLOVES 04192019 6216 00
1660 GRAINGER INC W W 9152417177 GARAGE DOOR OPENERS 04222019 19056 00
Total 1660 64468 00
1710
1710 HAWKINS INC 4475748 CHEMICALS 04092019 247584 00
Total 1710 247584 00
1760
1760 HILLYARDHUTCHINSON 603390067 MOP DUST- PW 04092019 4520 00
1760 HILLYARDHUTCHINSON 603390067 FOLD TOWELSTISSUE PAPER 04092019 19613 00
1760 HILLYARDHUTCHINSON 603406861 SUPER SHINESOAPWINDOW 04232019 46059 00
1760 HILLYARDHUTCHINSON 700376971 SCRUBBER REPAIR 04192019 9600 00
Total 1760 79792 00
1780
1780 HOLIDAY CREDIT OFFICE MARCH12019 PD FUEL 04012019 93317 93317 04122019
1780 HOLIDAY CREDIT OFFICE March2019 FD- FUEL 04012019 19714 19714 04122019
Total 1780 113031 113031
2130
2130 LITTLE FALLS MACHINE INC 355406 PLOW PARTS 04242019 14150 00
Total 2130 14150 00
2190
2190 LUNDEEN BROS INC 91792 OIL CHANGE 2017 DODGE SQA 03212019 5894 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 5
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2190 5894 00
2210
2210 M amp M BUS SERVICE 10193369 DRUG TESTING- KIRBY NICKA 03152019 3000 00
2210 M amp M BUS SERVICE 10193370 ALCOHOL TESTING- KIRBY NIC 03192019 3000 00
2210 M amp M BUS SERVICE 10193419 DRUG TESTING- NICHOLLE CO 04092019 6000 00
Total 2210 12000 00
2211
2211 M amp M EXPRESS SALES amp SER 182624 MOWER PARTS 04122019 36108 00
2211 M amp M EXPRESS SALES amp SER 183289 MOWER PARTS 04182019 12319 00
Total 2211 48427 00
2260
2260 MAPLE LAKE LUMBER COMPA 168882 LUMBER 04222019 1659 00
Total 2260 1659 00
2272
2272 MARES EXCAVATING APRIL 2019 WATER LEAK 04012019 70000 00
Total 2272 70000 00
2273
2273 MARKET PLACE II 107 XTRA SOAP-FD 04012019 1332 1332 04232019
2273 MARKET PLACE II 107 MEALS- TC 04012019 5142 5142 04232019
Total 2273 6474 6474
2375
2375 METRO WEST INSPECTION SE 1978 370 BIG WOODS LN 17-04 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 250 EXCELSIOR AVE N 17-69 04252019 11145 00
2375 METRO WEST INSPECTION SE 1978 202 NONA DR 17-60 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 135 EXCELSIOR AVE N 17-127 04252019 17820 00
2375 METRO WEST INSPECTION SE 1978 630 LAKE DR W 19-7 04252019 2500 00
2375 METRO WEST INSPECTION SE 1978 212 ASH ST E 19-13 04252019 5198 00
2375 METRO WEST INSPECTION SE 1978 330 CHESTNUT ST E 19-22 04252019 2500 00
Total 2375 41663 00
2419
2419 MID-MINNESOTA CONCRETE 19073 HOT WATER 03112019 49000 00
2419 MID-MINNESOTA CONCRETE 19075 HOT WATER 03132019 49000 00
2419 MID-MINNESOTA CONCRETE 19076 HOT WATER 03042019 24500 00
Total 2419 122500 00
2425
2425 MIDWAY IRON amp METAL INC 420761 STEEL 04172019 5363 00
Total 2425 5363 00
2465
2465 MCP CARSTAR COLLISION CE 41349297 SQUAD 51 REPAIRS 01052019 175667 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 6
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2465 175667 00
2511
2511 CENTER POINT ENERGY 110 PAVILION 04122019 4986 00
2511 CENTER POINT ENERGY 111 TC 04122019 5309 00
2511 CENTER POINT ENERGY 112 OLD PW SHOP 05022019 4465 00
2511 CENTER POINT ENERGY 113 WTP 04122019 50216 00
2511 CENTER POINT ENERGY 114 HOCKEY RINK 04122019 4221 00
2511 CENTER POINT ENERGY 116 WARMING HOUSE 04162019 1500 00
2511 CENTER POINT ENERGY 116 CITY HALL 04162019 23624 00
2511 CENTER POINT ENERGY 117 FD 04122019 35974 00
Total 2511 130295 00
2525
2525 MINNESOTA COMPUTER SYST 263763 ADMIN COPIER 04082019 34758 00
2525 MINNESOTA COMPUTER SYST 463318 BW S3HR 04022019 5503 00
Total 2525 40261 00
2635
2635 CORE amp MAIN LP K426017 CULVERT 04242019 145000 00
2635 CORE amp MAIN LP K441242 LOCATOR 04222019 75265 00
Total 2635 220265 00
2698
2698 MPPOA MARCH 2019 NEW MEMBER DUES- LDF 04082019 3900 00
2698 MPPOA MARCH202019 2019 DUES- M FAUST 03202019 5000 00
Total 2698 8900 00
2819
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER- DMV 03012019 5830 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-ADMIN 03012019 13604 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-PD 03012019 2160 00
2819 NORTHERN BUSINESS PRODU 385745-0 CALCULATOR INK 03012019 440 00
2819 NORTHERN BUSINESS PRODU 386830-0 DESK TRAYSCALC ROLLERS 04082019 8169 00
2819 NORTHERN BUSINESS PRODU 386830-1 DVD-RW 03072019 2859 00
2819 NORTHERN BUSINESS PRODU 387602-0 BINDERDESK TRAYSFILE 03082019 8641 00
2819 NORTHERN BUSINESS PRODU 393165-0 PD - OFFICE SUPPLIES 35303 03272019 2158 00
2819 NORTHERN BUSINESS PRODU 396891-0 PENSSTAPLERSTAPLES 05012019 15450 00
2819 NORTHERN BUSINESS PRODU 396891-1 HEATER 05012019 5285 00
2819 NORTHERN BUSINESS PRODU 396891-2 CALCULATOR 05012019 8662 00
2819 NORTHERN BUSINESS PRODU 400116-0 FOLDERSPENS 05012019 6507 00
2819 NORTHERN BUSINESS PRODU 400134-0 EMPLOYEE FOLDERSRECPT B 05012019 16499 00
Total 2819 96264 00
2832
2832 NORTHWEST ASSOC CONSUL 24128 REZONE FOR SCHOOL 04042019 3330 00
2832 NORTHWEST ASSOC CONSUL 24128 SAND PROFILE 04042019 9450 00
2832 NORTHWEST ASSOC CONSUL 24129 VERIZON 04042019 20000 00
Total 2832 32780 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 7
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
2934
2934 PLEASANT LAKE ASSOCIATION 42919 PLEASANT LAKE ASSN 05012019 500000 00
Total 2934 500000 00
2962
2962 PRINCIPAL LIFE 108 INSURANCE 04222019 14144 14144 04232019
Total 2962 14144 14144
3161
3161 S P ELECTRIC INC 7282 OLD SPLICERS REMOVAL 04112019 99054 00
Total 3161 99054 00
3180
3180 SCHWAAB INC C039891 DATE STAMP 03272019 16776 00
3180 SCHWAAB INC C041311 REPLACE PADS 04042019 2050 00
Total 3180 18826 00
4006
4006 SHRED IT USA - MPLS 8126937775 SHREDDING SERVICES 03312019 45401 00
Total 4006 45401 00
4021
4021 SOKS RAPID CAR WASH 216-1384 SQUAD WASHES 04012019 11865 11865 04122019
Total 4021 11865 11865
4040
4040 SUMMIT COMPANIES 1368349 FIRE SYSTEM MAINT 04102019 34500 00
4040 SUMMIT COMPANIES 1368350 ANNUAL FIRE ALARM INSP 04102019 23000 00
4040 SUMMIT COMPANIES 1368538 CITY HALL FIRE SUPPRESION 04052019 19800 00
4040 SUMMIT COMPANIES 1371739 FIRE EXT MAINTENANCE 04292019 46280 00
4040 SUMMIT COMPANIES 1372404 CITY HALLPD - ANNUAL FIRE A 04292019 16715 00
Total 4040 140295 00
4130
4130 STERNBERG LANTERNS INC 50379 LIGHT SOCKETS 04122019 30000 00
Total 4130 30000 00
4222
4222 TASC IN1499967 ADMIN FEES 04172019 43320 00
Total 4222 43320 00
4269
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
Total 4269 324000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 8
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4337
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16061 16061 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
Total 4337 48181 48181
4365
4365 UTILITY CONSULTANTS INC 101046 COLIFORM 03282019 8000 00
Total 4365 8000 00
4377
4377 VERIZON WIRELESS 9827946389 PW IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 FD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 INVESTIGATOR COMPUTER 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD CELL PHONE 04102019 16639 16639 04232019
4377 VERIZON WIRELESS 9827946389 PW CELL PHONE 04102019 26360 26360 04232019
Total 4377 57003 57003
4481
4481 WEST CENTRAL SANITATION I 121 RECYCLE 04302019 362792 00
4481 WEST CENTRAL SANITATION I 121 REFUSE 04302019 936578 00
4481 WEST CENTRAL SANITATION I MARCH 2019 RECYCLE 03312019 451419 451419 04122019
4481 WEST CENTRAL SANITATION I MARCH 2019 REFUSE 03312019 908999 908999 04122019
Total 4481 2659788 1360418
4495
4495 WINDSTREAM APRIL2019 LS 805 NORWAY DR E 04032019 24428 24428 04122019
4495 WINDSTREAM APRIL32019 320-274-2793 04032019 3830 3830 04122019
Total 4495 28258 28258
4520
4520 WRIGHT COUNTY HIGHWAY DE 1340 APEX 04162019 12100 00
Total 4520 12100 00
4548
4548 WRIGHT-HENNEPIN COOPERA 104 TC 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 105 CITY HALL SECURITY 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 106 LS 1255 BUSINESS BLVD 04102019 1484 1484 04232019
4548 WRIGHT-HENNEPIN COOPERA 119 STREET LIGHTS 04102019 13973 00
Total 4548 20047 6074
4559
4559 XCEL ENERGY 0774352025 ACCOUNT 51-4985655-1 03282019 1910 1910 04122019
4559 XCEL ENERGY 0774781723 ACCOUNT 51-6464610-6 04082019 5051 5051 04122019
4559 XCEL ENERGY 0774798834 ACCOUNT 51-6875531-1 04012019 2964 2964 04122019
4559 XCEL ENERGY 0774851593 ACCOUNT 51-0011253419-4 04012019 52824 52824 04122019
4559 XCEL ENERGY 0774856745 ACCOUNT 51-0010892786-1 04012019 1379 1379 04122019
4559 XCEL ENERGY 0775014393 ACCOUNT 51-6076585-1 04022019 11396 11396 04122019
4559 XCEL ENERGY 0775442400 ACCOUNT 51-6024519-2 04042019 365444 365444 04232019
CITY OF ANNANDALE Payment Approval Report - for City Council Page 9
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4559 XCEL ENERGY 0775852647 ACCOUNT 51-6024518-1 04082019 156465 156465 04232019
4559 XCEL ENERGY 0777794063 ACCOUNT 51-4192659-4 04182019 3117 00
4559 XCEL ENERGY 0779111699 ACCOUNT 51-4985655-1 04262019 1767 00
4559 XCEL ENERGY 778173400 ACCOUNT 51-4636619-8 04222019 6391 00
Total 4559 608708 597433
4648
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 23750 00
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 00 00
4648 A R ENGH 190448 SPRING MAINTENANCE 04302019 21375 00
4648 A R ENGH 190451 SPRING MAINTENANCE- TC 04302019 14250 00
Total 4648 59375 00
4716
4716 JOVANOVICH KADLEC amp ATHM 16709 KRONQUIST LOT 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 LEASE WITH WILES 03312019 28000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 ORD AMENDMENT- MICRO DIS 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 GENERAL 03312019 8750 00
4716 JOVANOVICH KADLEC amp ATHM 16709 PERSONNEL POLICY 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 CONTROLLED BURN HOLD HA 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
Total 4716 82250 00
4721
4721 MANEY INTERNATIONAL 803662X1 PARTS 02072019 2275 2275 04122019
Total 4721 2275 2275
4734
4734 MOTOROLA SOLUTIONS INC 16042791 RADIO BATTERIES 03252019 16800 00
Total 4734 16800 00
4743
4743 CARDMEMBER SERVICE 122 ATRIST EASEL 05012019 10305 00
4743 CARDMEMBER SERVICE 122 KEROSENE 05012019 6329 00
4743 CARDMEMBER SERVICE 122 POLLUTION CONTROL 05012019 41500 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC 05012019 1639 00
4743 CARDMEMBER SERVICE 122 AMAZON- 40 AMP RELAY 05012019 2898 00
4743 CARDMEMBER SERVICE 122 A-1 - BULB KIT 05012019 2503 00
4743 CARDMEMBER SERVICE 122 MENARDS-POTHOLE PATCH 05012019 47014 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC BALL VALVE 05012019 1770 00
4743 CARDMEMBER SERVICE 122 TOTAL TOOL- SHOE - PETER 05012019 5123 00
4743 CARDMEMBER SERVICE 122 PRYOR- EXCEL CLASSES- MIS 05012019 25600 00
4743 CARDMEMBER SERVICE 122 MN CHIEFS ASSOC 05012019 19900 00
4743 CARDMEMBER SERVICE 122 BEST BUY- 05012019 8589 00
4743 CARDMEMBER SERVICE 122 BEST BUY 05012019 17178 00
4743 CARDMEMBER SERVICE 122 USPS 05012019 1149 00
4743 CARDMEMBER SERVICE 122 PAYPAL- INTER ASSOC EVID- R 05012019 5000 00
4743 CARDMEMBER SERVICE 122 ACTION TARGETS- 05012019 14662 00
4743 CARDMEMBER SERVICE 122 AMAZON- METAL DUSTPAN 05012019 2894 00
4743 CARDMEMBER SERVICE 122 AMAZON- BATTERIES 05012019 2124 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 10
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 4743 216177 00
4752
4752 NCPERS GROUP LIFE INS MAY2019 INSURANCE 04172019 1600 00
Total 4752 1600 00
4769
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 39944 00
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 00 00
Total 4769 39944 00
4793
4793 DELTA DENTAL 7626938 INSURANCE 04152019 139599 139599 04232019
Total 4793 139599 139599
4831
4831 GENERAL RENTAL CENTER OF 1174533 HEATER RENTAL 03112019 11000 00
Total 4831 11000 00
4889
4889 CLASSIC CLEANING COMPANY 28038 CITY HALL- 04082019 67375 00
4889 CLASSIC CLEANING COMPANY 28038 PD- 04082019 14700 00
4889 CLASSIC CLEANING COMPANY 28038 LIBRARY- 04082019 40425 00
4889 CLASSIC CLEANING COMPANY 28039 TC 04082019 23000 00
Total 4889 145500 00
4945
4945 COUNTRY REPAIR INC 1568 KOHLER 100 GENERAT REPAIR 02212019 348966 00
Total 4945 348966 00
4955
4955 WORKFORCE INTEGRITY NET 41219 PREEMPLOYMENT TEST KIRBY 03312019 9300 00
Total 4955 9300 00
4968
4968 Volunteer Firefighter Ben Assoc of MARCH2019 BENEFIT RENEWALS 04012019 20600 20600 04122019
Total 4968 20600 20600
5002
5002 BUREAU OF CRIMINAL APPRE 536318 CJDN 03312019 27000 00
Total 5002 27000 00
5003
5003 BOLAND PRODUCTION SUPPL 11-6569 BLANK AMMUNITION 03042019 10000 00
Total 5003 10000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 11
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5006
5006 MIDCONTINENT COMMUNICATI 157013401102 FD 04092019 14765 14765 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PW 04092019 26599 26599 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 TC 04092019 3717 3717 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 DMV 04092019 12056 12056 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PD 04092019 20823 20823 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 CITY HALL 04092019 24864 24864 04122019
Total 5006 102824 102824
5031
5031 A1 RAPID LUBE 112018 SQUAD 51 OIL CHANGE 04092019 4145 4145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 51 04092019 9145 9145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 52 04092019 1500 1500 04122019
5031 A1 RAPID LUBE 11302018 SQUAD 52 WASH 04092019 1500 1500 04122019
5031 A1 RAPID LUBE DEC2018 SQUAD 51 OIL CHANGE 04092019 5000 5000 04122019
Total 5031 21290 21290
5039
5039 KAMCO 201800 CRACKFILLING 04292019 5395141 00
Total 5039 5395141 00
5056
5056 CASEYS GENERAL STORES IN MARCH 2019 PD FUEL 04012019 6449 6449 04122019
Total 5056 6449 6449
5067
5067 ZUERCHER PA0001614 GPS RECEIVERS 03102019 32800 00
5067 ZUERCHER PA0001669 RECORDS- PROPERTY amp EVID 03292019 102100 00
Total 5067 134900 00
5074
5074 Potentia MN Solar Fund 1 LLC 2019-02-1761- 520 ASH - WTP 02282019 28907 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- CEMETARY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 370 PARK SEWAGE PUMP 02282019 7041 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 520 ASH - WTP 02282019 14573 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 605 WARREN 02282019 3083 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 200 EXCELSIOR 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- BALL PARL LIGHTING 02282019 1136 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- CITY HALL 02282019 16228 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- PAVILION 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- HOCKEY RINK 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- UNIT SOUTH 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 30 CEDAR STREET LIGHT 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 111 CEDAR ST 02282019 163 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 15 CONV CLUB RD - LS 02282019 2596 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS 805 NORWAY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 640 ACACIA 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1792- FD 02282019 5895 00
Total 5074 83677 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 12
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5075
5075 HALVORSON LANGEMO PASC 2927 ARPIL PROSECUTION 03282019 139479 139479 04232019
5075 HALVORSON LANGEMO PASC 2994 MAY PROSECUTION 04262019 139479 00
Total 5075 278958 139479
5086
5086 CLASSIC CARPET amp FLOOR CA 1312 FD- CARPET CLEANING 04102019 24500 00
Total 5086 24500 00
5099
5099 STENGER PETER march72019 WATER LICENSE 03072019 3200 3200 04042019
Total 5099 3200 3200
5101
5101 GAPINSKI AMELIA 118 MILEAGE- ST PAUL-147 MILES 04222019 8526 8526 04232019
5101 GAPINSKI AMELIA 118 LUNCH- ST PAUL 04222019 1182 1182 04232019
5101 GAPINSKI AMELIA 118 PARKING RAMP- ST PAUL 04222019 1800 1800 04232019
Total 5101 11508 11508
5103
5103 GLUNZ DAVID D 589207 1ST QTR SEXTON FEE 2019 04222019 12000 00
Total 5103 12000 00
5108
5108 RECON ROBOTICS 74975 ROBOT REPAIR 03082019 40000 00
Total 5108 40000 00
5120
5120 MELGAARD SERVICES 115 LITTLE JIMS REPAIR 03272019 65000 00
Total 5120 65000 00
5137
5137 HARTZELL STEVE DEC2018 SAFETY SHOES 04092019 13998 13998 04122019
Total 5137 13998 13998
5138
5138 HOGLUND BUS COMPANY 133269 PLOW TRUCK REPAIR 04232019 242869 00
Total 5138 242869 00
5139
5139 GIEBENHAIN KARIE APRIL 2019 TRAVELTRAINING 04292019 1259 00
Total 5139 1259 00
5140
5140 GRABHAM JUDY APRIL2019 GARDEN MATERIALS REIMBUR 04302019 12312 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 13
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 5140 12312 00
Grand Totals 23368095 2894268
Dated __________________________________________
Mayor __________________________________________
Dwight Gunnarson
City Council __________________________________________
Shelly Jonas
__________________________________________
Jullie Hastings
__________________________________________
Corey Czycalla
__________________________________________
Matthew Wuollet
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
CITY OF ANNANDALE Check Register Page 1Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03012019 03042019 1005 EFT - ASPIRE 14 47332-03012019 03042019 1006 EFT - FLEXSYSTEM 9 21153-03012019 03042019 1007 EFT - MINNESOTA 8 152678-03012019 03042019 1008 EFT-FURTHER 12 194842-03012019 03042019 1008 EFT-FURTHER 12 70000-03012019 03042019 1009 EFT-PERA 5 197211-03012019 03042019 1009 EFT-PERA 5 227551-03012019 03042019 1009 EFT-PERA 5 164253-03012019 03042019 1009 EFT-PERA 5 246377-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 291789-03152019 03182019 1011 EFT - ASPIRE 14 50777-03152019 03182019 1012 EFT - FLEXSYSTEM 9 21153-03152019 03182019 1013 EFT - MINNESOTA 8 170353-03152019 03182019 1014 EFT-FURTHER 12 199842-03152019 03182019 1015 EFT-NATIONWIDE RETIREMENT 3 45727-03152019 03182019 1016 EFT-PERA 5 202077-03152019 03182019 1016 EFT-PERA 5 233162-03152019 03182019 1016 EFT-PERA 5 167748-03152019 03182019 1016 EFT-PERA 5 251623-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 338787-03012019 03042019 3231 FERRELL MISTY 123 207493-03012019 03042019 3232 HINNENKAMP KELLY 127 296930-03012019 03042019 3233 JARMON VICKI I 134 162692-03012019 03042019 3234 KRIENKE CARRIE L 136 118186-03012019 03042019 3235 GAPINSKI AMELIA 142 76605-03012019 03042019 3236 GIEBENHAIN KARIE 143 63912-03012019 03042019 3237 HERR JEFFREY J 208 198056-03012019 03042019 3238 STANDAFER PETER A 217 171766-03012019 03042019 3239 BERG TERESA 233 29593-03012019 03042019 3240 TAVARES AARON J 234 144943-03012019 03042019 3241 PETERSON KENNETH J 235 6543-03012019 03042019 3242 ETSHOKIN LOUIS RICHARD 238 69332-03012019 03042019 3243 GRIGGS DEREK C 245 173791-03012019 03042019 3244 SMITH TARA 251 104275-03012019 03042019 3245 MARES NICHOLAS J 306 46531-03012019 03042019 3246 GLUNZ DAVID D 323 215466-03012019 03042019 3247 STENGER PETER 324 148864-03012019 03042019 3248 COREY NICHOLLE 328 176647-03012019 03042019 3249 HARTZELL STEVE 329 123679-03012019 03042019 3250 WICKER MITCHELL 360 157433-03012019 03042019 3251 HASTINGS JULLIE K 803 13391-
CITY OF ANNANDALE Check Register Page 2Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 3252 FERRELL MISTY 123 186726-03152019 03182019 3253 HINNENKAMP KELLY 127 296930-03152019 03182019 3254 JARMON VICKI I 134 156691-03152019 03182019 3255 KRIENKE CARRIE L 136 109765-03152019 03182019 3256 GAPINSKI AMELIA 142 78334-03152019 03182019 3257 GIEBENHAIN KARIE 143 62780-03152019 03182019 3258 HERR JEFFREY J 208 228423-03152019 03182019 3259 STANDAFER PETER A 217 188333-03152019 03182019 3260 TAVARES AARON J 234 143820-03152019 03182019 3261 ETSHOKIN LOUIS RICHARD 238 36648-03152019 03182019 3262 Void03152019 03182019 3263 SMITH TARA 251 100781-03152019 03182019 3264 MARES NICHOLAS J 306 9080-03152019 03182019 3265 GLUNZ DAVID D 323 263393-03152019 03182019 3266 STENGER PETER 324 156283-03152019 03182019 3267 COREY NICHOLLE 328 141112-03152019 03182019 3268 HARTZELL STEVE 329 114544-03152019 03182019 3269 WICKER MITCHELL 360 231604-03152019 03182019 3270 RANDALL STEVEN R 570 23273-03152019 03182019 3271 TOMES BRIAN C 571 19117-03152019 03182019 3272 EDWARDS DANIEL J 572 25765-03152019 03182019 3273 JARVIS TRYSTON 573 16808-03152019 03182019 3274 GRIGGS DEREK C 245 209088-03152019 03182019 53766 RAMSTAD DONALD E 533 17270 03152019 03182019 54586 RAMSTAD DONALD E 533 26412 03012019 03042019 54850 ENGFER NANCY E 204 207304-03012019 03042019 54851 FLEMMING MITCHELL E 206 33085-03012019 03042019 54852 HALLER JOSEPH D 305 277811-03012019 03042019 54853 SMART MATTHEW A 331 31168-03012019 03042019 54854 GUNNARSON DWIGHT R 802 18932-03012019 03042019 54855 JONAS SHELLY 804 13391-03012019 03042019 54856 CZYCALLA COREY 806 13391-03012019 03042019 54857 WUOLLET MATTHEW L 821 13391-03012019 03042019 54858 ROTH GREGORY W 912 1847-03012019 03042019 54859 FRANZEN CLIFFORD 913 1847-03012019 03042019 54860 SCHWARZKOPF ERIC 917 2770-03012019 03042019 54861 BAACK LONNIE L 919 1847-03012019 03042019 54862 NILSON MAYNARD A 921 1847-03012019 03042019 54863 DRISTE JOHN 950 1847-03012019 03042019 54864 PETERSON LEE W 980 1847-03012019 03042019 54865 SEAGRAVES RICHARD T 985 1847-03012019 03042019 54866 WAGNER RICHARD 990 2770-03152019 03182019 54949 ENGFER NANCY E 204 163991-03152019 03182019 54950 FLEMMING MITCHELL E 206 33085-03152019 03182019 54951 FAUST MITCHEL L 241 144665-03152019 03182019 54952 HALLER JOSEPH D 305 293266-03152019 03182019 54953 SMART MATTHEW A 331 12698-03152019 03182019 54954 BROWN JOHN D 501 16254-03152019 03182019 54955 DAGNER JOHN A 503 42112-
CITY OF ANNANDALE Check Register Page 3Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 54956 FAHEY MARCUS D 507 17270-03152019 03182019 54957 GRINDLE GARY L 512 65938-03152019 03182019 54958 HAAG BRIAN 514 151209-03152019 03182019 54959 MACHOVSKY JR DALE R 529 27088-03152019 03182019 54960 PICKEN SCOTT W 53203152019 03182019 54961 RAMSTAD DONALD E 533 35555-03152019 03182019 54962 ROEPKE JEFFREY A 535 34539-03152019 03182019 54963 TOWNSEND KRISTOPHER C 546 91057-03152019 03182019 54964 WANG RYAN A 549 46822-03152019 03182019 54965 WUOLLET MATTHEW L 553 24934-03152019 03182019 54966 TORRES HORACIO JR 563 43404-03152019 03182019 54967 KOLB JOHN E 564 25749-03152019 03182019 54968 DWENGER JOSEPH A JR 568 41557-03152019 03182019 54969 HARVEY ADAM 574 42019-03152019 03182019 54970 SCHMIDT LISA A 575 14869-03152019 03182019 54971 OLSON NATHAN G 576 14869-03152019 03182019 54972 PEARSON SEAN 577 27151-03152019 03182019 54973 SCHAUFLER CHRISTINA 578 26505-03152019 03182019 54974 HOEFER JUSTIN A 579 18101-03152019 03182019 54982 RAMSTAD DONALD E 533 26412-03152019 03182019 54983 RAMSTAD DONALD E 533 17270-
Grand Totals 119 12049646-
CITY OF ANNANDALE
REQUEST FOR COUNCIL ACTION
Originating Department Administration
Meeting Date May 6 2019
Agenda No 3A
Agenda Section New Business
Item 2018 Audit
BACKGROUND The City is required to conduct an audit annually The attached audit will be presented at the meeting RECOMMENDATION Motion to approve the 2018 Audit as presented
CPAS amp ADVISORSWILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
AUDITED FINANCIAL STATEMENTS AND
DECEMBER 31 2018
CONWAY DEUTH amp SCHMIESING PLLP
SUPPLEMENTARY INFORMATION
This page intentionally left blank
PAGE
ELECTED OFFICIALS AND ADMINISTRATION 1
INDEPENDENT AUDITORS REPORT 2-4
REQUIRED SUPPLEMENTARY INFORMATION
Managements Discussion and Analysis 5-12
BASIC FINANCIAL STATEMENTS
Statement of Net Position 13
Statement of Activities 14
Balance Sheet - Governmental Funds 15
Reconciliation of the Governmental FundsBalance Sheet to the Statement of Net Position 16
Statement of Revenues Expenditures and Changes in Fund Balances -Governmental Funds 17
Reconciliation of the Statement of Revenues Expendituresand Changes in Fund Balances of Governmental Fundsto the Statement of Activities 18
Statement of Revenues Expenditures and Changes in Fund Balances -Budget and Actual - General Fund 19
Statement of Net Position - Proprietary Funds 20
Statement of Revenues Expenses and Changes in Net Position -Proprietary Funds 21
Statement of Cash Flows - Proprietary Funds 22-23
Notes to the Financial Statements 24-57
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of the Proportionate Share of the Net Pension Liability 58
Schedule of Employer Contributions 59
Schedule of Changes in the Citys Net Pension Liability and Related Ratios 60
Notes to the Required Supplementary Information 61-63
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
PAGE
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
SUPPLEMENTARY INFORMATION
COMBINING STATEMENTS OF NONMAJOR FUNDS
Combining Balance Sheet - Nonmajor Governmental Funds 64
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds 65
Combining Balance Sheet - Nonmajor Governmental Funds - Special Revenue 66
Combining Balance Sheet - Nonmajor Governmental Funds - Debt Service 67
Combining Balance Sheet - Nonmajor Governmental Funds - Capital Projects 68
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Special Revenue 69
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Debt Service 70
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Capital Projects 71
FINANCIAL SCHEDULE
Schedule of Long-Term Liabilities 72
COMPLIANCE SECTION
Independent Auditors Report on Minnesota Legal Compliance 73
Independent Auditors Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements Performedin Accordance with Government Auditing Standards 74-75
Schedule of Findings 76-77
Summary Schedule of Prior Audit Findings 78
Elected Officials Position Term Expires
Dwight Gunnarson Mayor December 31 2018
Corey Czycalla Council Member December 31 2018
Shelly Jonas Council Member December 31 2018
Matthew Wuollet Council Member December 31 2020
Jullie Hastings Council Member December 31 2020
Administration
Kelly Hinnenkamp Administrator Appointed
Misty Ferrell Treasurer Appointed
CITY OF ANNANDALE MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATIONDECEMBER 31 2018
1
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Report on the Financial Statements
Managements Responsibility for the Financial Statements
Auditors Responsibility
beli
INDEPENDENT AUDITORS REPORT
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 Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Cityrsquos basic financial statements as listed in the table of contents
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
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
2
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 entitys 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 entitys 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
Opinions
Other Matters
Required Supplementary Information
Supplementary and Other Information
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 Annandale Minnesota as of December 31 2018 and the respective changes in financial position and where applicable cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America
Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions and the Schedule of Changes in the Citys 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 managements 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
3
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Cityrsquos basic financial statements The statements and schedules listed in the table of contents as supplementary information and the Elected Officials and Administration section are presented for purposes of additional analysis and are not a required part of the basic financial statements
The supplementary information is the responsibility of management and was derived from and relates 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 supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole
The Elected Officials and Administration section has 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 the information presented
Other Reporting Required by Government Auditing Standards
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
4
In accordance with Government Auditing Standards we have also issued our report dated May 6 2019 on our consideration of the Citys 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 results of that testing and not to provide an opinion on the effectiveness of the Cityrsquos 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 Cityrsquos internal control over financial reporting and compliance
May 6 2019
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REQUIRED SUPPLEMENTARY INFORMATION
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-
-
-
-
The City as a Whole Statement of Net Position and Statement of Activities
Our analysis of the City of Annandale begins with the Statement of Net Position and the Statement of Activities One of the most important questions asked about the Cityrsquos finances is ldquoIs the City as a whole better off or worse off as a result of the yearrsquos activitiesrdquo The Statement of Net Position and the Statement of Activities both report information about the City as a whole and about its activities in a way that helps answer this question The Statement of Net Position includes all assets and deferred outflows of resources and liabilities and deferred inflows of resources using the accrual basis of accounting In the Statement of Activities all of the current yearrsquos revenues and expenses are taken into account regardless of when cash is received or paid These two statements report the Cityrsquos net position and changes in them You can think of the Cityrsquos net positionmdashthe difference between assets and deferred outflows of resources and liabilities and deferred inflows of resourcesmdashas one way to measure the Cityrsquos financial health Over time increases or decreases in the Cityrsquos net position is one indicator of whether the Cityrsquos financial health is improving or deteriorating
You will need to consider other nonfinancial factors however to assess the overall health of the City of Annandale
In the Statement of Net Position and the Statement of Activities we divide the City into two kinds of activities
Governmental Activities - Most of the Citys basic services are reported here including general government public safety public works culture and recreation and economic development Property taxes and state and federal grants finance most of these activities
5
This annual report consists of a series of financial statements The Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the Cityrsquos finances Fund financial statements are presented after the Statement of Activities Fund financial statements also report the Cityrsquos operations in more detail than the government-wide statements by providing information about the Cityrsquos funds The notes to the financial statements provide information that is essential to a full understanding of the data provided in the government-wide and fund financial statements This annual report also contains other supplementary information in addition to the basic financial statements
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
This section of the basic financial statements of the City of Annandale (the City) presents a discussion and analysis of the Cityrsquos financial performance during the fiscal year ended December 31 2018 Please read it in conjunction with the Cityrsquos basic financial statements following this section
Financial Highlights
The assets and deferred outflows of resources of the City exceeded liabilties and deferred inflows of resources by $16461537
The Cityrsquos total net position increased by $1317551
The Cityrsquos governmental funds reported combined ending fund balances of $4349540 an increase of $122322 The Governmental Funds have $1240520 available for spending at the Citys discretion
At the end of the current fiscal year unassigned fund balance for the General Fund was $1697339 or 9417 of total General Fund expenditures of $1802505
Using This Annual Report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
The proprietary fund financial statements can be found on pages 20-23 of this report
Notes to the 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 The notes to the financial statements can be found on pages 24-57 of this report
6
Proprietary Funds - When the City of Annandale charges customers for the services it providesmdashwhether to outside customers or to other units of the Citymdashthese services are generally reported in proprietary funds Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities In fact the Cityrsquos enterprise funds are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information such as cash flows for proprietary funds
Business-Type Activities - The City charges a fee to customers to help it cover all or most of the cost of certain services it provides The Citys Water Sewer RefuseRecycling and Storm Utility funds are reported here
The Citys Most Significant Funds Fund Financial Statements
Our analysis of the Cityrsquos major funds begins with the fund financial statements These statements provide detailed information about the most significant fundsmdashnot the City as a whole Some funds are required to be established by state law and by bond covenants However the City Council establishes other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes grants and other money The Citys two kinds of funds-governmental and proprietary-use different accounting approaches
Governmental Funds - Most of the Cityrsquos basic services are reported in governmental funds Governmental funds focus on how money flows into and out of those funds and the balances left at year-end that are available for spending These funds are reported using an accounting method called modified accrual accounting which measures cash and all other financial assets that can readily be converted to cash The governmental fund statements provide a detailed short-term view of the Cityrsquos general government operations and the basic services it provides Governmental fund information helps the reader of the statements determine whether there are more or fewer financial resources that can be spent in the near future to finance the Cityrsquos programs We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation after the fund financial statements
The governmental fund financial statements can be found on pages 15-19 of this report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 5190696$ 5190633$ 63$ Net Capital Assets 10406611 10638601 (231990) Net Pension Asset 517946 440028 77918
Total Assets 16115253 16269262 (154009)
Deferred Outflows of Resources 621929 855064 (233135)
Total Assets and DeferredOutflows of Resources 16737182$ 17124326$ (387144)$
Current and Other Liabilities 1080947$ 1068593$ 12354$ Long-Term Liabilities 5393130 6383354 (990224)
Total Liabilities 6474077 7451947 (977870)
Deferred Inflows of Resources 886892 904112 (17220)
Net PositionNet Investment in Capital Assets 4962623 4377847 584776 Restricted 2021421 2178740 (157319) Unrestricted 2392169 2211680 180489
Total Net Position 9376213 8768267 607946
Total Liabilities Deferred Inflowsof Resources and Net Position 16737182$ 17124326$ (387144)$
Statement of Net Position
The Cityrsquos net position increased from a year ago Our analysis below focuses on the net position (Tables 1 and 2) andchanges in net position (Tables 3 and 4) of the Cityrsquos governmental and business-type activities
Table 1Comparative Condensed Statement of Net Position
Governmental Activities
7
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 179979$ 85557$ 94422$ Equity Interest 7004898 7023511 (18613) Net Capital Assets 10543232 10887885 (344653)
Total Assets 17728109 17996953 (268844)
Deferred Outflows of Resources 35051 59103 (24052)
Total Assets and DeferredOutflows of Resources 17763160$ 18056056$ (292896)$
Current and Other Liabilities 1595412$ 1396254$ 199158$ Long-Term Liabilities 9028762 10236810 (1208048)
Total Liabilities 10624174 11633064 (1008890)
Deferred Inflows of Resources 53662 47273 6389
Net PositionNet Investment in Capital Assets 8625232 8741281 (116049) Restricted 74208 36985 37223 Unrestricted (1614116) (2402547) 788431
Total Net Position 7085324 6375719 709605
Total Liabilities Deferred Inflowsof Resources and Net Position 17763160$ 18056056$ (292896)$
Business-Type Activities
8
Comparative Condensed Statement of Net PositionTable 2
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 652677$ 598474$ 54203$ Operating Grants and Contributions 122213 111759 10454 Capital Grants and Contributions 187016 576626 (389610)
General RevenuesProperty Taxes 1485895 1463472 22423 Tax Increments 20858 20203 655 Grants and Contributions Not Restricted 453773 422194 31579 Investment Income 16929 17237 (308) Miscellaneous 4178 17678 (13500) Gain on Sale of Asset 6034 268371 (262337)
Total Revenues 2949573 3496014 (546441)
EXPENSESGeneral Government 502902 475597 27305 Public Safety 970131 1019255 (49124) Public Works 769202 840164 (70962) Culture and Recreation 148880 762606 (613726) Economic Development 45238 85505 (40267) Interest on Long-Term Debt 160274 176897 (16623)
Total Expenses 2596627 3360024 (763397) Change in Net Position before Transfers 352946 135990 216956
TRANSFERS 255000 247000 8000 Change in Net Position 607946 382990 224956
NET POSITION BEGINNING OF YEAR 8768267 8385277 382990
NET POSITION END OF YEAR 9376213$ 8768267$ 607946$
Governmental Activities
Net position of the Citys governmental activities increased by $607946 Table 3 presents the key elements of the increase
Table 3Comparative Condensed Statement of Activities
Governmental Activities
9
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 3213338$ 2905848$ 307490$ General Revenues
Investment Income 2700 (1558) 4258 Total Revenues 3216038 2904290 311748
EXPENSESWater 492444 485751 6693 Sewer 1441099 1331721 109378 RefuseRecycling 199326 196627 2699 Storm Utility 99951 91130 8821
Total Expenses 2232820 2105229 127591 Change in Net Position before Transfers 983218 799061 184157
TRANSFERS (255000) (247000) (8000) CHANGE IN EQUITY INTEREST (18613) (70479) 51866
Change in Net Position 709605 481582 176157
NET POSITION BEGINNING OF YEAR 6375719 5894137 481582
NET POSITION END OF YEAR 7085324$ 6375719$ 709605$
Comparative Condensed Statement of Activities
Business-Type Activities
10
Table 4
Business-Type Activities
The net position of our business-type activities increased by $709605 The net increase was due to the following funds change in net position Water - $26607 decrease Sewer - $822708 increase RefuseRecycling - $9397 increase and Storm Utility - $95893 decrease
The following tables indicate the changes in net position for the Citys business-type activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Capital Project Funds - The capital projects fund balances increased by $13451
11
Over the course of the year the City of Annandale City Council did not revise the budget The General Fund budget predicted a $5178 increase in fund balance which includes the operations of the Motor Vehicle department The actual change in fund balance was an increase of $212334 This is due to both revenues being higher and expenditures being lower than anticipated Mobile Home tax revenues building permit fees and state aids were over budgeted amounts and both current and capital outlay expenditures were under budgeted amounts
Governmental Activities
Revenues - The following chart visually illustrates the Citys revenue by source for its governmental activities
Financial Analysis of the Citys Funds
General Fund - The Citys General Fund Balance increased by $212334 for 2018 The increase is mainly due to an increase in building permit fees and local government aid with a slight increase in public safety expenditures and a decrease in transfers to other funds
Special Revenue Funds - The Citys special revenue fund balances decreased by $53786 A majority of the decrease was due to expenditures for the pintail drive extension project
Debt Service Funds - The debt service fund balances decreased by $49677 The main reason for the decrease was due to customer prepayments made on special assessments in prior years
General Fund Budgetary Highlights
Fees Fines and Charges for Services
2213
Operating Grants and Contributions
414
Capital Grants and Contributions
634
Property Taxes5038 Tax Increments
071
Grants and Contributions Not Restricted1538
Investment Income057
Miscellaneous014
Gain on Sale of Asset021
Revenue by Source - Governmental Activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Long-Term Liabilities
At the end of 2018 the City of Annandale had $15543549 in bonds notes and equipment certificates outstanding Refer to Note 7 of the Notes to the Financial Statements for a schedule showing the Citys long-term liability activity
Economic Factors and Next Years Budget
The City of Annandales appointed officials considered many factors when setting the fiscal year 2019 budget rates and fees that will be charged by the funds of the City The major factor accounted for when adopting the General Fund budget was to hold all line items as much as possible to the 2018 final budget
Contacting the Citys Financial Management
This financial report is designed to provide our residents customers and creditors with a general overview of the Citys finances and to show the Citys accountability for the money it receives If you have any questions about this report or need additional information contact the City of Annandale 30 Cedar Street E Annandale Minnesota 55302
12
Capital Assets
At the end of 2018 the City of Annandale had $47826808 invested in a broad range of capital assets Refer to Note 5 of the Notes to the Financial Statements for a schedule showing the Citys capital asset activity During 2018 the City had a large increase in improvements other than buildings related to the completion of the Southside Trail project
BASIC FINANCIAL STATEMENTS
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Governmental Business-TypeActivities Activities Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Cash and Investments 3413471$ 86083$ 3499554$ Restricted Cash 74208 74208 Taxes Receivable - Delinquent 14909 14909 Special Assessments Receivable
Delinquent 4423 4158 8581 Current and Deferred 650220 14885 665105
Accounts Receivable 96631 339457 436088 Interest Receivable 9 9 Prepaid Items 75903 22861 98764 Internal Balances 385956 (385956) Due from Other Governments 186251 24283 210534 Land Held for Resale 362923 362923 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 2696744 277948 2974692 Other Capital Assets Net of Depreciation 7709867 10265284 17975151
Net Pension Asset 517946 517946 Total Assets 16115253 17728109 33843362
Deferred Outflows of Resources 621929 35051 656980
Total Assets and Deferred Outflows of Resources 16737182$ 17763160$ 34500342$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 65859$ 26908$ 92767$ Contracts Payable 27913 27913 Due to Other Governments 15676 309797 325473 Salaries and Benefits Payable 30329 7259 37588 Interest Payable 61920 78448 140368 Unearned Revenue 36250 36250
Long-Term LiabilitiesNet Pension Liability 696581 197762 894343 Other Long-Term Liabilities Due Within One Year 843000 1173000 2016000 Other Long-Term Liabilities Due in More than One Year 4696549 8831000 13527549
Total Liabilities 6474077 10624174 17098251
Deferred Inflows of Resources 886892 53662 940554
Net PositionNet Investment in Capital Assets 4962623 8625232 13587855 Restricted for
Debt Service 2009940 2009940 Tax Increment 11481 11481 Capital Replacement 74208 74208
Unrestricted 2392169 (1614116) 778053 Total Net Position 9376213 7085324 16461537
Total Liabilities Deferred Inflows of Resourcesand Net Position 16737182$ 17763160$ 34500342$
See Accompanying Notes to the Financial Statements13
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONDECEMBER 31 2018
Fees Fines and Operating CapitalCharges for Grants and Grants and Governmental Business-Type
Expenses Services Contributions Contributions Activities Activities Total
GOVERNMENTAL ACTIVITIESGeneral Government 502902$ 286176$ $ $ (216726)$ $ (216726)$ Public Safety 970131 208144 115858 41000 (605129) (605129) Public Works 769202 130069 6355 26201 (606577) (606577) Culture and Recreation 148880 15413 55109 (78358) (78358) Economic Development 45238 12875 30108 (2255) (2255) Interest on Long-Term Debt 160274 34598 (125676) (125676)
Total Governmental Activities 2596627 652677 122213 187016 (1634721) 0 (1634721)
BUSINESS-TYPE ACTIVITIESWater 492444 565694 73250 73250 Sewer 1441099 2393268 952169 952169 RefuseRecycling 199326 208571 9245 9245 Storm Utility 99951 45805 (54146) (54146)
Total Business-Type Activities 2232820 3213338 0 0 0 980518 980518
Total 4829447$ 3866015$ 122213$ 187016$ (1634721) 980518 (654203)
GENERAL REVENUESProperty Taxes 1485895 1485895 Tax Increments 20858 20858 Grants and Contributions not Restricted to Specific Programs 453773 453773 Unrestricted Investment Earnings 16929 2700 19629 Miscellaneous 4178 4178 Gain on Sale of Asset 6034 6034
TRANSFERS 255000 (255000) CHANGE IN EQUITY INTEREST (18613) (18613)
Total 2242667 (270913) 1971754 Change in Net Position 607946 709605 1317551
NET POSITION BEGINNING OF YEAR 8768267 6375719 15143986
NET POSITION END OF YEAR 9376213$ 7085324$ 16461537$
See Accompanying Notes to the Financial Statements14
CITY OF ANNANDALE MINNESOTA
STATEMENT OF ACTIVITIESYEAR ENDED DECEMBER 31 2018
Program RevenuesNet (Expense) Revenue and
Changes in Net Position
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
ASSETSCash and Investments 1062209$ 2351262$ 3413471$ Taxes Receivable - Delinquent 14534 375 14909Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 650220 650220
Accounts Receivable 5744 90887 96631Interest Receivable 9 9 Prepaid Items 73751 2152 75903Due from Other Funds 920750 190388 1111138Due from Other Governments 135407 50844 186251Land Held for Resale 362923 362923
Total Assets 2212395$ 3703483$ 5915878$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 41982$ 23877$ 65859$ Contracts Payable 3574 24339 27913 Due to Other Funds 143500 581682 725182 Due to Other Governments 6200 9476 15676Salaries and Benefits Payable 30195 134 30329Unearned Revenue 36250 36250
Total Liabilities 261701 639508 901209
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 14534 375 14909Special Assessments 650220 650220
Total Deferred Inflows of Resources 14534 650595 665129
Fund Balance Nonspendable 73751 2152 75903 Restricted 1532633 1532633 Committed 847422 847422 Assigned 165070 487992 653062Unassigned 1697339 (456819) 1240520
Total Fund Balance 1936160 2413380 4349540
Total Liabilities Deferred Inflows ofResources and Fund Balance 2212395$ 3703483$ 5915878$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
BALANCE SHEETGOVERNMENTAL FUNDS
DECEMBER 31 2018
15
2018
Total Fund Balances - Governmental Funds 4349540$
Amounts reported for governmental activities in the Statement of Net Position are differentbecause
Capital assets used in governmental activities are not financial resources and therefore arenot reported as assets in the governmental funds
Capital Assets 31934114Less Accumulated Depreciation (21527503) Net Pension Asset 517946
Certain receivables will be collected in subsequent years but are not available soon enoughto pay for the current periods expenditures and therefore are deferred in the funds
Delinquent Property Taxes 14909Special Assessments 650220
Deferred outflows and inflows of resources related to pensions are applicable to futureperiods and therefore are not reported in the funds
Deferred Outflows of Resources Related to Pensions 621929 Deferred Inflows of Resources Related to Pensions (886892)
Long-term liabilities including bonds payable are not due and payable in the current periodand therefore are not reported as liabilities in the funds
Bonds Payable (4525000) Notes Payable (1014000) Compensated Absences Payable (22979) Interest Payable (61920) Bond Discount 22430 Net Pension Liability (696581)
Total Net Position - Governmental Activities 9376213$
See Accompanying Notes to the Financial Statements16
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION
DECEMBER 31 2018
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
REVENUESProperty Taxes 1167129$ 323230$ 1490359$ Tax Increments 20858 20858 Special Assessments 149671 149671 Licenses and Permits 106197 106197 Intergovernmental 568136 30310 598446 Charges for Services 457769 51231 509000 Fines and Forfeitures 12790 4299 17089 Investment Income 22019 (5090) 16929 Contributions and Donations 1700 133758 135458 Miscellaneous 22893 679 23572
Total Revenues 2358633 708946 3067579
EXPENDITURESCurrent
General Government 412224 10807 423031 Public Safety 889531 42738 932269 Public Works 379968 379968 Culture and Recreation 111127 3735 114862 Economic Development 52358 52358
Debt Service Principal 821000 821000 Interest and Other Charges 162964 162964
Capital Outlay General Government 5206 5206 Public Safety 4449 67055 71504 Public Works 14006 14006 Culture and Recreation 102651 102651 Economic Development 144931 144931
Total Expenditures 1802505 1422245 3224750 Excess (Deficiency) of Revenues
Over (Under) Expenditures 556128 (713299) (157171)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 1145914 1145914 Transfers Out (343794) (547120) (890914)
Total Other Financing Sources (Uses) (343794) 623287 279493 Net Change in Fund Balances 212334 (90012) 122322
FUND BALANCE BEGINNING OF YEAR 1723826 2503392 4227218
FUND BALANCE END OF YEAR 1936160$ 2413380$ 4349540$
See Accompanying Notes to the Financial Statements17
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
YEAR ENDED DECEMBER 31 2018
2018
Total Net Change in Fund Balances - Governmental Funds 122322$
Amounts reported for governmental activities in the Statement of Activities are different because
Capital outlays are reported in governmental funds as expenditures However in the Statementof Activities the cost of those assets is allocated over the estimated useful lives asdepreciation expense
Capital Outlays 360225 Depreciation Expense (556497) Disposal of Capital Assets (75923) Accumulated Depreciation Related to Disposed Capital Assets 40205
Revenues in the Statement of Activities that do not provide current financial resources are notreported as revenues in the funds
Special Assessments (115073)
Delinquent property taxes receivable will be collected in subsequent years but are not availablesoon enough to pay for the current periods expenditures and therefore are deferred in the funds (4464)
Some expenses reported in the Statement of Activities do not require the use of currentresources and therefore are not reported as expenditures in governmental funds
Compensated Absences 313 Net Pension Asset 77918Net Pension Liability 151145 Deferred Outflows of Resources Related to Pensions (233135) Deferred Inflows of Resources Related to Pensions 17220
Principal Retirement of Long-Term Debt 821000 Amortization of Bond Discounts (4234) Change in Interest Payable 6924
Change in Net Position - Governmental Activities 607946$
See Accompanying Notes to the Financial Statements18
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES EXPENDITURESAND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Bond proceeds provide current financial resources to governmental funds but issuing debtincreases long-term liabilities in the Statement of Net Position Repayment of bond principalis an expenditure in the governmental funds but the repayment reduces long-term liabilities inthe Statement of Net Position
Over(Under)
FinalOriginal Final Actual Budget
REVENUESProperty Taxes 1120885$ 1120885$ 1167129$ 46244$ Licenses and Permits 61800 61800 106197 44397 Intergovernmental 541952 541952 568136 26184 Charges for Services 437744 437744 457769 20025 Fines and Forfeitures 8700 8700 12790 4090 Investment Income 22019 22019 Contributions and Donations 1700 1700 Miscellaneous 20000 20000 22893 2893
Total Revenues 2191081 2191081 2358633 167552
EXPENDITURESCurrent
General Government 435269 435269 412224 (23045) Public Safety 896497 896497 889531 (6966) Public Works 399317 399317 379968 (19349) Culture and Recreation 127325 127325 111127 (16198)
Capital OutlayGeneral Government 30500 30500 5206 (25294) Public Safety 1500 1500 4449 2949
Total Expenditures 1890408 1890408 1802505 (87903) Excess (Deficiency) of Revenues
Over (Under) Expenditures 300673 300673 556128 255455
OTHER FINANCING SOURCES (USES)Transfers Out (295495) (295495) (343794) (48299)
Net Change in Fund Balance 5178$ 5178$ 212334 207156$
FUND BALANCE BEGINNING OF YEAR 1723826
FUND BALANCE END OF YEAR 1936160$
See Accompanying Notes to the Financial Statements19
Budgeted Amounts
YEAR ENDED DECEMBER 31 2018
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL
GENERAL FUND
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current AssetsCash and Investments 23690$ 62393$ $ $ 86083$ Special Assessments Receivable
Delinquent 1167 2096 682 213 4158Current and Deferred 3859 9981 901 144 14885
Accounts Receivable 46078 269326 19878 4175 339457Prepaid Items 9433 12352 1076 22861Due from Other Governments 144 24111 24 4 24283Due from Other Funds 98000 21000 119000
Total Current Assets 182371 401259 22561 4536 610727
Noncurrent AssetsRestricted Cash 74208 74208 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 66881 191067 20000 277948Other Capital Assets Net of Depreciation 4497152 3259174 2505 2506453 10265284
Total Noncurrent Assets 4564033 10529347 22505 2506453 17622338 Total Assets 4746404 10930606 45066 2510989 18233065
Deferred Outflows of ResourcesRelated to Pensions 12805 20153 2093 35051
Total Assets and DeferredOutflows of Resources 4759209$ 10950759$ 47159$ 2510989$ 18268116$
LIABILITIES DEFERRED INFLOWS OFRESOURCES AND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 11931$ 1765$ 13212$ $ 26908$ Due to Other Funds 445076 28318 31562 504956 Due to Other Governments 453 308238 1106 309797 Salaries and Benefits Payable 2732 3813 714 7259Interest Payable 13173 65275 78448Notes Payable Due Within One Year 232000 941000 1173000
Total Current Liabilities 260289 1765167 43350 31562 2100368
Long-Term LiabilitiesNet Pension Liability 72251 113702 11809 197762Notes Payable Net of Current Amount 1576000 7255000 8831000
Total Noncurrent Liabilities 1648251 7368702 11809 0 9028762 Total Liabilities 1908540 9133869 55159 31562 11129130
Deferred Inflows of ResourcesRelated to Pensions 19605 30853 3204 53662
Net PositionNet Investment in Capital Assets 2756033 3340241 22505 2506453 8625232 Restricted for Capital Replacement 74208 74208 Unrestricted 75031 (1628412) (33709) (27026) (1614116)
Total Net Position 2831064 1786037 (11204) 2479427 7085324
Total Liabilities Deferred Inflowsof Resources and Net Position 4759209$ 10950759$ 47159$ 2510989$ 18268116$
See Accompanying Notes to the Financial Statements20
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONPROPRIETARY FUNDS
DECEMBER 31 2018
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
OPERATING REVENUESCharges for Services 565694$ 1219482$ 208571$ 45805$ 2039552$
OPERATING EXPENSESWages and Salaries 110471 188946 15086 314503Materials and Supplies 29374 29374Repairs and Maintenance 57478 21425 44 8346 87293Insurance 11074 9982 21056Electricity 27203 12231 39434Wastewater Commission Charges 871318 871318 Testing 1111 1111Contracted Services 4467 4378 162233 171078Depreciation 171475 118151 1333 87981 378940Professional Services 4717 5818 1834 524 12893Billing 14718 15335 30053Miscellaneous 17863 15245 3461 3100 39669
Total Operating Expenses 449951 1247494 199326 99951 1996722 Operating Income (Loss) 115743 (28012) 9245 (54146) 42830
NONOPERATING REVENUES (EXPENSES)Investment Income 543 1752 152 253 2700Interest and Fiscal Charges (42493) (193605) (236098) Reimbursements 1173786 1173786
Total Nonoperating Revenues(Expenses) (41950) 981933 152 253 940388
Income (Loss) Before Transfersand Other Items 73793 953921 9397 (53893) 983218
TRANSFERS AND OTHER ITEMSChange in Equity Interest (18613) (18613) Transfers In 19600 36400 56000 Transfers Out (120000) (149000) (42000) (311000)
Total Transfers and Other Items (100400) (131213) 0 (42000) (273613) Change in Net Position (26607) 822708 9397 (95893) 709605
NET POSITION BEGINNING OF YEAR 2857671 963329 (20601) 2575320 6375719
NET POSITION END OF YEAR 2831064$ 1786037$ (11204)$ 2479427$ 7085324$
See Accompanying Notes to the Financial Statements
YEAR ENDED DECEMBER 31 2018
21
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET POSITIONPROPRIETARY FUNDS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers and Users 553327$ 1022629$ 207570$ 47362$ 1830888$ Payments to Suppliers (164208) (767959) (181855) (11970) (1125992) Payments to Employees (115506) (184885) (20045) (320436)
Net Cash Provided (Used) by OperatingActivities 273613 69785 5670 35392 384460
CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIESTransfers Out (120000) (149000) (42000) (311000) Interfund Loan 33986 (4344) 6201 35843 Reimbursements 1173786 1173786
Net Cash Provided (Used) by NoncapitalFinancing Activities (120000) 1058772 (4344) (35799) 898629
CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESPrincipal Paid on Debt (226000) (920000) (1146000) Interest Paid on Debt (44518) (200960) (245478) Bonds Issued 3396 3396 Acquisition and Construction of Capital Assets (16094) (16501) (1692) (34287)
Net Cash Provided (Used) by Capital andRelated Financing Activities (283216) (1137461) (1692) 0 (1422369)
CASH FLOW FROM INVESTING ACTIVITIESInterest and Dividends Received (Paid) 543 4594 366 407 5910
Net Increase (Decrease) in Cash andCash Equivalents (129060) (4310) 0 0 (133370)
CASH AND CASH EQUIVALENTSBEGINNING OF YEAR 152750 140911 293661
CASH AND CASH EQUIVALENTSEND OF YEAR 23690$ 136601$ 0$ 0$ 160291$
RECONCILIATION OF CASH AND CASH EQUIVALENTSCash and Investments 23690$ 62393$ $ $ 86083$ Restricted Cash 74208 74208
Total Cash amp Cash Equivalents 23690$ 136601$ 0$ 0$ 160291$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
22
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CITY OF ANNANDALE MINNESOTA
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
RECONCILIATION OF OPERATING INCOME(LOSS) TO CASH FLOWS FROM OPERATINGACTIVITIESOperating Income (Loss) 115743$ (28012)$ 9245$ (54146)$ 42830$ Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided (Used) by OperatingActivities
Depreciation 171475 118151 1333 87981 378940 Pension Related Adjustments (5848) 3118 (5273) (8003)(Increase) Decrease in Assets
Special Assessments ReceivableDelinquent 300 514 (37) (113) 664 Current and Deferred (754) (4236) (573) 2077 (3486)
Accounts Receivable (11969) (190759) (1427) (453) (204608) Prepaid Items (397) (1455) (329) (2181) Due from Other Governments 56 (2372) 1036 46 (1234)
Increase (Decrease) in LiabilitiesAccounts Payable 3741 (10858) 275 (6842) Due to Other Governments 453 184751 1106 186310 Salaries and Benefits Payable 813 943 314 2070
Net Cash Provided (Used) by OperatingActivities 273613$ 69785$ 5670$ 35392$ 384460$
NONCASH INVESTING CAPITAL ANDFINANCING ACTIVITIESChange in Equity Interest 0$ (18613)$ 0$ 0$ (18613)$
See Accompanying Notes to the Financial Statements23
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A REPORTING ENTITY
Blended Component Unit - Reported as if they were part of the City
Blended Component Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
The financial statements present the City and its component units The City includes all funds organizations institutions agencies departments and offices that are not legally separate from such Component units are legally separate organizations for which the City is financially accountable or for which the exclusion of the component unit would render the financial statements of the City misleading
The City of Annandale Minnesota is a statutory city governed by an elected mayor and four council members The accompanying financial statements present the government entities for which the government is considered to be financially accountable
Joint Ventures and Jointly Governed Organizations - The relationship of the City with the entity is disclosed
The criteria used to determine if the City is financially accountable for a component unit includes whether or not 1) the City appoints the voting majority of the potential component units governing body and is able to impose its will on the potential component unit or is in a relationship of financial benefit or burden with the potential component unit or 2) the potential component unit is fiscally dependent on and there is a potential for the potential component unit to provide specific financial benefits to or impose specific financial burdens on the City
As a result of applying the component unit definition criteria above certain organizations have been defined and are presented in this report as follows
For each of the categories above the specific entities are identified as follows
The Annandale Economic Development Authority (EDA) is a legal entity separate from the City Although legally separate the Annandale EDA is reported as if it were part of the primary government because it provides services exclusively for the City Separate financial statements are not prepared for the Annandale EDA
24
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
A REPORTING ENTITY (Contd)
Joint Ventures and Jointly Governed Organizations
B GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Separate financial statements are provided for governmental funds and proprietary funds Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements
Separate financial statements can be obtained by contacting the Wastewater Commission PO Box K Annandale MN 55302
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or segment Interest on general long-term debt is considered an indirect expense and is reported separately in the Statement of Activities Program revenues include 1) charges to customers or applicants who purchase use or directly benefit from goods services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment Taxes and other items not properly included among program revenues are reported instead as general revenues Internally dedicated revenues are reported as general revenues rather than program revenues
The government-wide financial statements (ie the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the City Governmental activities which normally are supported by taxes and intergovernmental revenues are reported separately from business-type activities which rely to a significant extent on fees and charges for support
In September 2003 the City entered into a joint powers agreement with the City of Maple Lake to establish the Annandale-Maple Lake Wastewater Commission (the Commission) The purpose of the Commission is to make available wastewater treatment within the present and future boundaries of the Cities and to serve such other areas as the Commission approves As part of the joint venture the City of Annandale agrees to fund the Debt Service and Operating Funds of the Commission according to terms of the agreement The agreement states a City may terminate the agreement by written notice to the other City In such event the City of Annandale shall pay 60 of all costs incurred except each City shall pay its own attorneys fee In 2008 both Cities approved amending the joint powers agreement to include the City of Howard Lake effective January 1 2009 Each City will then have a one-third equity interest in the Commission Because there is an explicit measurable equity interest in the joint venture the interest is reported in the government-wide financial statements as well as in the Sewer Fund
25
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
The City reports the following major governmental funds
The City reports the following major enterprise funds
The Sewer Fund accounts for the operations of the Citys sewer utility
The Storm Utility Fund accounts for the activities of the Citys storm drainage operations
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting Revenues are recognized as soon as they are both measurable and available Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period For this purpose the City considers revenues to be available if they are collected within 60 days after the end of the current fiscal period Expenditures generally are recorded when a liability is incurred as under accrual accounting However debt service expenditures as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due
The General Fund is the Citys primary operating fund This fund accounts for all financial resources of the general City except those required to be accounted for in another fund
The RefuseRecycling Fund accounts for the operations of the Citys refuserecycling
Property taxes special assessments intergovernmental revenue charges for services franchise taxes licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period All other revenue items are considered to be measurable and available only when cash is received by the City
The Water Fund accounts for the operations of the Citys water utility
26
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the proprietary fund financial statements Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of related cash flows Property taxes are recognized as revenues in the year for which they are levied Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements Exceptions to this general rule are charges between the Citys utility functions and various other functions of the City Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C
D DEPOSITS AND INVESTMENTS
(1)
(2)
(3)
(4)
(5)
(6)
time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States bank
general obligations of the State of Minnesota and its municipalities and in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service
The Citys cash and cash equivalents are considered to be cash on hand deposits and highly liquid debt instruments purchased with original maturities of three months or less from the date of acquisition
27
mutual funds through shares of registered investment companies provided the mutual fund receives certain ratings depending on its investments
The City may invest in the following types of investments as authorized by Minn Stat sectsect118A04 and 118A05
securities which are direct obligations or are guaranteed or insured issues of the United States its agencies its instrumentalities or organizations created by an act of Congress except mortgage-backed securities defined as high risk by Minn Stat sect118A04 subd 6
MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (Contd)
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 funds principal ongoing operations The principal operating revenues of the enterprise funds are charges to customers for sales and services Operating expenses for enterprise funds include the cost of sales and services administrative expenses and depreciation of capital assets All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses
commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less and
with certain restrictions in repurchase agreements securities lending agreements joint powers investment trusts and guaranteed investment contracts
Cash and investments were comprised of deposits brokered certificates of deposits money market funds at various financial brokers and the 4M Fund
It is generally the Citys policy to use restricted resources first then unrestricted resources as they are needed when an expense is incurred for purposes for which both restricted and unrestricted net position are available
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations The Citys investment policy states it will comply with Minnesota Statutes Chapter 118A
The City has an investment policy in place that addresses interest rate risk credit risk concentration of credit risk and custodial credit risk as follows
Interest Rate Risk This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates The Citys investment policy states the City should manage their interest rates based on safety liquidity and the overall return on the investment The portfolio should contain both short-term and long-term investments to meet anticipated cash flow requirements Extended maturities may be utilized to take advantage of higher yields however no more than 50 of the total investments should extend beyond five years
The City invests in an external investment pool the Minnesota Municipal Money Market Fund (4M Fund) which is created under a joint powers agreement pursuant to Minn Stat sect47159 The 4M Fund is not registered with the Securities Exchange Commission (SEC) but does satisfy the requirements of Rule 2a-7 prescribed by the SEC pursuant to the Investment Company Act of 1940 (17 CFR sect2702a-7) as amended The investment in the pool is measured at the net asset value per share provided by the pool
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America The hierarchy is based on the valuation inputs used to measure the fair value of the asset Level 1 inputs are quoted prices in active markets for identical assets Level 2 inputs are significant other observable inputs Level 3 inputs are significant unobservable inputs
Custodial Credit Risk - Deposits For deposits this is the risk that in the event of bank failure the Citys deposits may not be returned to it The Citys investment policy states the collateralization level will be 110 of the market value of principal and accrued interest for balances above the FDIC insured amount When the pledged collateral consists of notes secured by first mortgages the collateral level will be 140 of the market value of principal and accrued interest
Authorized collateral includes the obligations of the US Treasury agencies and instrumentalities shares of investment companies whos only investments are in the aforementioned securities obligations of the State of Minnesota or its municipalities bankers acceptances futures contracts repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days as well as certain first mortgage notes and certain other state or local government obligations Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral
28
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
E RECEIVABLES AND PAYABLES
F PREPAID ITEMS
All trade and property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of property
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements
29
Custodial Credit Risk - Investments For an investment this is the risk that in the event of the failure of the counterparty the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party The Citys investment policy states when investments purchased by the City are held in safekeeping by a brokerdealer they must provide asset protection of $500000 through the Securities Investor Protector Corporation (SIPC) and at least another $2000000 supplemental insurance protection
The City levies its property tax for the subsequent year during the month of December December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year Such taxes become a lien on January 1 and are recorded as receivables by the City at that date The property tax is recorded as revenue when it becomes measurable and available Wright County is the collecting agency for the levy and remits the collections to the City three times a year The tax levy notice is mailed in March with the first half payment due on May 15 and the second half payment due on October 15 Tax levies from prior years that remain unpaid are classified as delinquent taxes receivable
The County Auditor submits the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year
Activity between funds that are representative of lendingborrowing arrangements outstanding at the end of the fiscal year are referred to as either due tofrom other funds (ie the current portion of interfund loans) or advances tofrom other funds (ie the noncurrent portion of interfund loans) All other outstanding balances between funds are reported as due tofrom other funds Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances
Concentration of Credit Risk This is the risk of loss attributed to the magnitude of an investment in a single issuer Investments should be diversified to avoid incurring unreasonable risk inherent in over investing in specific instruments individual financial institutions or maturities The Citys investment policy states the City will attempt to diversify their investments according to type and maturity
The County Auditor prepares the tax list for all taxable property in the City applying the applicable tax rate to the tax capacity of individual properties to arrive at the actual tax for each property The County Auditor also collects all special assessments except for certain prepayments paid directly to the City
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
G CAPITAL ASSETS
Cost
LandLand Improvements 10000$ Other Improvements 25000 BuildingsImprovements 25000 Machinery and Equipment 5000 Infrastructure 50000
Years
Buildings 5-40Improvements Other than Buildings 5-20Vehicles 5-20Machinery and Equipment 5-40Roads and Highways 20-40Infrastructure 25-40
The City does not possess any material amounts of intangible assets
30
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed Donated capital assets are recorded as capital assets at their estimated acquisition value at the date of donation
Capital assets both tangible and intangible which include property plant equipment and infrastructure assets (eg roads sidewalks and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements Capital assets are defined by the City as assets with an estimated useful life in excess of two years and an initial individual cost of more than the following
Capital Assets
Category
Based on the age of the majority of the Citys infrastructure and an exception for small governments in GASB Statement No 34 the City has determined it is not practical to capitalize infrastructure retroactively The current value of the infrastructure includes projects completed during the year ended December 31 1985 and prospectively from that date
Tangible and intangible assets of the City are depreciated using the straight-line full month convention method over the following estimated useful lives
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
H DEFERRED OUTFLOWS OF RESOURCES
I UNEARNED REVENUE
J COMPENSATED ABSENCES
K POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied Grants and certain other payments received before eligibility requirements are met are also recorded as unearned revenue
The City compensates employees who resign or retire with due notice for unused vacation and holiday pay Employees may carry over no more than 40 hours of vacation at the end of any calendar year unless approved by the City Council Unused vacation time is paid to employees upon separation from the City City employees are also allowed to earn compensatory time in lieu of overtime pay Employees may carry over no more than 40 hours of compensatory time at the end of any calendar year Unused compensatory time is paid to employees upon separation from the City
The liability for compensated absences reported in the financial statements consists of unpaid accumulated vacation and compensatory time balances The liability has been calculated using the vesting method in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included The liability for compensated absences is reported in the governmental funds only if they have matured for example as a result of employee resignations and retirements Compensated absences are accrued when incurred in the government-wide and proprietary fund financial statements The government-wide and proprietary fund Statement of Net Position reports both current and noncurrent portions of compensated absences using full accrual accounting The current portion consists of an amount based on expected or known retirements coming in the next fiscal year The noncurrent portion consists of the remaining amount of vacation and compensatory time
31
Employees of the City pay health care premiums based on their age and level of coverage Since the insurance rate is based on age the City does not have an implicit rate subsidy factor in postemployment health care expenses Additionally Minnesota Statutes require the City to allow retired employees to stay on the health care plan with the retiree responsible to pay the entire premium for continuation coverage The Citys personnel policy does not provide for any contributions upon employee retirement
In addition to assets the statement of financial position will sometimes report a separate section for deferred outflows of resources Deferred outflows of resources represents a consumption of net position that applies to a future reporting period During that future period it will be recognized as an outflow of resources (expenseexpenditure) The City has one item that qualifies for reporting in this category on the government-wide Statement of Net Position which is related to pensions
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
L PENSIONS
M LONG-TERM OBLIGATIONS
N DEFERRED INFLOWS OF RESOURCES
O FUND BALANCE
In addition to liabilities the statement of financial position will sometimes report a separate section for deferred inflows of resources Deferred inflows of resources represents an acquisition of net position that applies to a future reporting period During that future period it will be recognized as an inflow of resources (revenue) The City has items that qualify for reporting in this category on both the government-wide Statement of Net Position and the governmental fund financial statements related to property taxes special assessments and pensions
The City participates in various pension plans total pension expense for the fiscal year ended was $436446 The components of pension expense are noted in the plan summaries
For purposes of measuring the net pension liability deferred outflows of resources and deferred inflows of resources related to pensions and pension expense information about the fiduciary net position of the Public Employees Retirement Association (PERA) and the City of Annandales Fire Relief Association and additions todeductions from PERArsquos and the City of Annandales Fire Relief Associations fiduciary net position have been determined on the same basis as they are reported by PERA and the City of Annandales Fire Relief Association 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
In the fund financial statements governmental fund types recognize bond premiums and discounts as well as bond issuance costs during the current period The face amount of debt issued is reported as other financing sources Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses Issuance costs whether or not withheld from the actual debt proceeds received are reported as debt service expenditures
Nonspendable - consists of amounts that cannot be spent because it is not in spendable form or are legally or contractually required to be maintained intact such as inventories and prepaid items
Restricted - consists of amounts related to externally imposed constraints established by creditors grantors or contributors or constraints imposed by state statutory provisions
In the governmental fund financial statements fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in governmental funds These classifications are as follows
In the government-wide financial statements and proprietary fund types in the fund financial statements long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities business-type activities or proprietary fund type Statement of Net Position
32
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
O FUND BALANCE (Contd)
P NET POSITION
Q USE OF ESTIMATES
Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources in the government-wide and proprietary fund financial statements Net investment in capital assets consists of capital assets net of accumulated depreciation reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets Net position is reported as restricted in the government-wide and proprietary fund financial statements when there are limitations on their use through external restrictions imposed by creditors grantors or laws or regulations of other governments Unrestricted net position consists of all other net position that does not meet the definition of restricted or net investment in capital assets
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 In governmental funds other than the General Fund assigned fund balance represents the remaining amount that is not restricted or committed In the General Fund assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority Pursuant to City Council Resolution the City Treasurer and City Administrator are authorized to establish assignments of fund balance
33
Committed - consists of amounts that are constrained for specific purposes that are internally imposed by formal action of the City Council Those committed amounts cannot be used for any other purpose unless the Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts These constraints are established by Resolution of the City Council
Unassigned - is the residual classification for the General Fund and also reflects negative residual amounts in the remaining governmental funds
The City requires restricted amounts to be spent first when both restricted and unrestricted fund balance is available Additionally the City would first use committed then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and deferred outflows of resources and liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expendituresexpenses during the reporting period Actual results could differ from those estimates
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
A BUDGETARY INFORMATION
1
2
3
4
5
6
7
Annual appropriated budgets are adopted during the year for the General and Special Revenue Funds Annual appropriated budgets are not adopted for Debt Service Funds because effective budgetary control is alternatively achieved through bond indenture provisions Budgetary control for Capital Projects Funds is accomplished through the use of project controls and formal appropriated budgets are not adopted
34
Budgeted amounts are as originally adopted or as amended by the City Council Individual amendments were not material in relation to the original amounts budgeted Budgeted expenditure appropriations lapse at year-end
Expenditures may not legally exceed budgeted appropriations at the department level No funds budget can be increased without City Council approval The City Council may authorize transfer of budgeted amounts between departments within any fund Management may amend budgets within a department level so long as the total department budget is not changed
The City Council adopts an annual budget The amounts shown in the financial statements as budget represent the original budgeted amounts and all revisions made during the year The City follows these procedures in establishing the budgetary data reflected in the financial statements
Budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America
The budget is legally enacted through passage of a resolution after obtaining taxpayer comments The budget resolution adopted by the City Council sets forth the budgets at the function level for the General and Special Revenue Funds
Public hearings are conducted to obtain taxpayer comments
Budget requests are submitted by all department heads to the City Administrator The City Administrator compiles the budget requests into an overall preliminary City budget The City Administrator presents the proposed budget to the City Council
Encumbrances outstanding at year-end expire and outstanding purchase orders are canceled and not reported in the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (Contd)
B DEFICIT BALANCES
The following funds had deficit balances
RefuseRecycling (11204)$ Nonmajor Governmental Funds (454667)
C EXPENDITURES EXCEEDING APPROPRIATIONS
NOTE 3 DEPOSITS AND INVESTMENTS
A DEPOSITS
Checking 1669430$
B INVESTMENTS
Fair Value Level 1 Level 2 Level 3
Investments at fair valueBrokered Certificates of Deposit 1540744$ 0$ 1540744$ 0$
Investments at amortized costMoney Market Accounts 324792 4M Money Market 38796
Total Investments 1904332$
The Brokered Certificates of Deposit have a weighted average maturity of 216 years and were not rated
In accordance with applicable Minnesota Statutes the City maintains deposits at depository banks authorized by the City Council
35
There were no funds that had expenditures exceeding appropriations
Custodial Credit Risk - Deposits The Citys bank balances were not exposed to custodial credit risk because they were fully insured through the FDIC as well as collateralized with securities held by the pledging financial institutions trust department or agent and in the Citys name
Fair Value Measuring Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 3 DEPOSITS AND INVESTMENTS (Contd)
B INVESTMENTS (Contd)
The following is a summary of total deposits and investments
Deposits (Note 3A) 1669430$ Investments (Note 3B) 1904332
Total Deposits and Investments 3573762$
Statement of Net PositionCash and Investments 3499554$ Restricted Cash 74208
3573762$
NOTE 4 RECEIVABLES
Receivables are as follows
Amounts notScheduled
for CollectionDuring the
Total SubsequentReceivables Year
Governmental ActivitiesTaxes Receivable - Delinquent 14909$ $ Special Assessments Receivable 654643 584377 Accounts Receivable 96631 16271 Interest Receivable 9
Total Governmental Activities 766192$ 600648$
Business-Type ActivitiesSpecial Assessments Receivable 19043$ 9392$ Accounts Receivable 339457
Total Business-Type Activities 358500$ 9392$
Concentration of Credit Risk The City was exposed to concentration of credit risk due to the fact that some of the Citys brokered certificates of deposit exceeded 5 of the total Citys investments portfolio
36
Deposits and investments are presented in the basic financial statements as follows
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS
Capital asset activity was as follows
Beginning EndingGovernmental Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 2482508$ $ (18800)$ 2463708$ Construction in Progress 508685 248979 (524628) 233036
Total Capital AssetsNot Being Depreciated 2991193 248979 (543428) 2696744
Capital Assets Being DepreciatedBuildings 3065250 3065250 Improvements Other than Buildings 1298097 524628 1822725 Machinery and Equipment 2556167 111246 (57123) 2610290 Infrastructure 21739105 21739105
Total Capital AssetsBeing Depreciated 28658619 635874 (57123) 29237370
Less Accumulated Depreciation forBuildings 1145321 75543 1220864 Improvements Other than Buildings 858879 46992 905871 Machinery and Equipment 1568583 121681 (40205) 1650059 Infrastructure 17438428 312281 17750709
Total AccumulatedDepreciation 21011211 556497 (40205) 21527503
Total Capital Assets BeingDepreciated Net 7647408 79377 (16918) 7709867
Governmental ActivitiesNet Capital Assets 10638601$ 328356$ (560346)$ 10406611$
37
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS (Contd)
Capital asset activity was as follows
Beginning EndingBusiness-Type Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 277948$ $ $ 277948$
Capital Assets Being DepreciatedBuildings 4175245 4175245 Improvements Other than Buildings 12637 12637 Machinery and Equipment 268809 34287 303096 Infrastructure 11123768 11123768
Total Capital AssetsBeing Depreciated 15580459 34287 0 15614746
Less Accumulated Depreciation forBuildings 1499349 92233 1591582 Improvements Other than Buildings 12636 12636 Machinery and Equipment 190152 19580 209732 Infrastructure 3268385 267127 3535512
Total AccumulatedDepreciation 4970522 378940 0 5349462
Total Capital Assets BeingDepreciated Net 10609937 (344653) 0 10265284
Business-Type ActivitiesNet Capital Assets 10887885$ (344653)$ 0$ 10543232$
Depreciation expense was charged to functionsprograms as follows
Governmental ActivitiesGeneral Government 53809$ Public Safety 91620 Public Works 383653 Culture and Recreation 27415
Total Depreciation Expense - Governmental Activities 556497$
Business-Type ActivitiesWater 171475$ Sewer 118151 RefuseRecycling 1333 Storm Utility 87981
Total Depreciation Expense - Business-Type Activities 378940$
38
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 6 INTERFUND ACTIVITY
A INTERFUND BALANCES
The composition of interfund balances is as follows
Amount
General Sewer 445076$ General RefuseRecycling 28318 General Storm Utility 31562 General Nonmajor Governmental Funds 415794 Water Nonmajor Governmental Funds 98000 Sewer Nonmajor Governmental Funds 21000 Nonmajor Governmental Funds General 143500 Nonmajor Governmental Funds Nonmajor Governmental Funds 46888
Total Interfund Balances 1230138$
B INTERFUND TRANSFERS
The composition of interfund transfers is as follows
Nonmajor Governmental
Water Sewer Funds Total
Transfer OutGeneral 19600$ 36400$ 287794$ 343794$ Water 120000 120000 Sewer 149000 149000 Storm Utility 42000 42000 Nonmajor Governmental
Funds 547120 547120
Total Interfund Transfers 19600$ 36400$ 1145914$ 1201914$
Receivable Fund Payable Fund
39
The purpose of the above transfers was to provide funding for debt service capital improvement projects capital outlay and operating purposes
The purpose of the above interfund loans was to provide financing for operating purposes and to cover deficit cash balances
Transfer In
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES
A GENERAL OBLIGATION BONDS
B COMPONENTS OF LONG-TERM LIABILITIES
Interest Final BalanceRates Maturity Outstanding
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan BondsSeries 2008A 300-400 02012022 295000$
GO Special Assessment BondsGO Improvement Bonds Series 2008B 300-4125 02012024 560000 GO Improvement Bonds Series 2011A 105-415 02012032 1300000 GO Refunding Bonds Series 2011B 085-270 02012021 585000 GO Refunding Bonds Series 2012A 055-185 02012022 1035000 GO Improvement Bonds Series 2015A 110-345 02012036 750000
GO NotesGO Improvement Note of 2011 1959 08202031 846000
GO Equipment CertificateGO Equipment Certificate 2016A 2100 02012021 168000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549$
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 2819 08202023 996000$ PFA Clean Water Revenue Note 2220 08202026 8086000 PFA Water Revenue Note of 2015 1031 08202035 812000 PFA Sewer Revenue Note of 2015 1000 08202035 110000
Total Business-Type Activities 10004000$
GO Bonds are direct obligations and pledge the full faith and credit of the City These bonds generally are issued as 15 year Serial Bonds with equal debt service payments each year
The City issues General Obligation (GO) Bonds to provide financing for street improvements facility construction and tax increment projects Debt service is covered respectively by special assessments property taxes and tax increments against benefited properties with any shortfalls being paid from general taxes
40
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
B COMPONENTS OF LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for all bonded debt and notes outstanding are as follows
Principal Interest Principal Interest
70000$ 10400$ 660000$ 112343$ 70000 7600 675000 97718 75000 4700 600000 82645 80000 1600 480000 63498
220000 59861 760000 211593 680000 82489 155000 8131
295000$ 24300$ 4230000$ 718278$
2019
2029-20332024-2028
20222023
On September 27 2011 the City issued $1620000 GO Refunding Bonds Series 2011B with an interest rate of 85 to 270 The City issued the Bonds to crossover refund the $1020000 GO Fire Hall Bonds Series 2004A and the $1645000 GO Improvement Bonds Series 2004B The City completed the refunding to reduce its debt service payment over the next 9 years by $20827 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $20868
Debt service funds are used to liquidate the governmental activities outstanding bonded indebtedness and notes The Park Capital Projects Fund is used to liquidate the governmental activities outstanding contract for deed The General Fund has historically been used to liquidate the outstanding governmental activities compensated absences
GO Improvement Bonds Assessment Bonds
On April 4 2012 the City issued $2225000 GO Refunding Bonds Series 2012A with an interest rate of 55 to 185 The City issued the Bonds to refund the $1415000 GO Improvement Bonds Series 2001C and the $320000 GO Refunding Improvement Bonds Series 2003 as well as crossover refund the $3100000 GO Improvement Bonds Series 2006A The City completed the refunding to reduce its debt service payment over the next 10 years by $179206 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $161420
41
2034-2036
Governmental ActivitiesGO Special
2020
December 31
2021
Year Ending
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS (Contd)
Principal Interest Principal Interest
58000$ 16573$ 55000$ 2951$ 59000 15437 56000 1785 60000 14281 57000 598 61000 13106 62000 11911
332000 40728 214000 8423
846000$ 120459$ 168000$ 5334$
Principal Interest
1173000$ 217058$ 1200000 190488 1227000 163282 1254000 135459 1283000 151604 3466000 171976
284000 14813 117000 1808
10004000$ 1046488$
42
2023
Governmental Activities
2020
Year Ending
2029-2033
2022
2034-2035
2021
2028-2028
2024-2028
2022
2020
2019
2019
Business-Type Activities
2029-2031
GO Notes
2021
December 31Year Ending
2023
GO Equipment Certificates
GO Revenue Notes
December 31
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
D CHANGES IN LONG-TERM LIABILITIES
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Governmental ActivitiesBonds Payable
GOImprovementBonds 365000$ $ 70000$ 295000$ 70000$
GO SpecialAssessment Bonds 4870000 640000 4230000 660000
5235000 0 710000 4525000 730000
GO ImprovementNote of 2011 903000 57000 846000 58000
GO Equipment Certificate 222000 54000 168000 55000
CompensatedAbsences 23292 58115 58428 22979
Unamortized BondDiscount (26664) 4234 (22430)
Total GovernmentalActivities 6356628$ 62349$ 879428$ 5539549$ 843000$
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Business-Type ActivitiesNotes Payable
GO Revenue Notes 11146604$ 3396$ 1146000$ 10004000$ 1173000$
43
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
E CONDUIT DEBT OBLIGATIONS
The Citys conduit debt consisted of the following
Senior Housing and Health Care Revenue Refunding Note 6661528$
NOTE 8 RISK MANAGEMENT
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION
A PLAN DESCRIPTION
Firefighters of the City are members of the Association The Association is the administrator of a single-employer defined benefit pension plan available to firefighters The plan is administered by the Association pursuant to Minnesota Statutes Chapter 69 Chapter 424A and the Associations by-laws As of December 31 2017 the plan covered 28 active firefighters and 14 vested terminated fire fighters whose pension benefits are deferred
There are no other claims liabilities reported in the financial statements based on the requirements of accounting standards which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years
The Citys workers compensation insurance policy is retrospectively rated With this type of policy final premiums are determined after loss experience is known The amount of premium adjustment for 2018 is estimated to be immaterial based on workers compensation rates and salaries for the year
44
Conduit debt obligations are certain limited-obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party The City has issued various revenue bonds to provide funding to private-sector entities for projects deemed to be in the public interest Although these bonds bear the name of the City the City has no obligation for such debt Accordingly the bonds are not reported as liabilities in the financial statements of the City
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) which is a public entity risk pool currently operating as a common risk management and insurance program with other cities in the state The City pays an annual premium to the LMCIT for its insurance coverage The LMCIT is self-sustaining through commercial companies for excess claims The City is covered through the pool for any claims incurred but unreported but retains risk for the deductible portion of its insurance policies The amount of these deductibles is considered immaterial to the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
B BENEFITS PROVIDED
C CONTRIBUTIONS
D PENSION COSTS
Total Plan Net Pension Pension Fiduciary LiabilityLiability Net Position (Asset)
(a) (b) (a) - (b)
Balances at 112017 $ 569046 $ 1009074 $ (440028)Changes for the Year
Service Cost 26727 26727 Interest 34955 34955 Changes in Benefit Terms 28893 28893 Contributions - Employer 3000 (3000)Contributions - State 47693 (47693)Net Investment Income 126216 (126216)Benefit Payments (72973) (72973) Administrative Expense (8416) 8416
Net Change 17602 95520 (77918)
Balances at 12312017 $ 586648 $ 1104594 $ (517946)
The plan provides lump-sum retirement death and supplemental benefits to covered firefighters and survivors Benefits are paid based on the number of years of service multiplied by a benefit level per year of service approved by the City The plan includes a $2600 service pension benefit for each year of service Members are eligible for a lump-sum retirement benefit at 50 years of age or after completion of 20 years of service If a member is both age 50 and has completed five years of service but not 20 years of service the lump-sum pension will be reduced by 4 for each year of service less than 20 years
The plan is funded by fire state aid investment earnings and if necessary employer contributions as specified in Minnesota Statutes and voluntary City contributions As of December 31 2017 the State of Minnesota contributed $47693 in fire state aid to the plan on behalf of the Fire Department Required employer contributions are calculated annually based on statutory provisions The City made voluntary contributions of $3000 to the plan
The City reported a net pension liability (asset) of ($517946) The Citys net pension liability (asset) was measured as of December 31 2017 and the total pension liability used to calculate the net pension liability (asset) in accordance with GASB 68 was determined by an independent actuary applying an actuarial formula to specific census data certified by the fire department The following table presents the changes in net pension liability during the year
45
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
D PENSION COSTS (Contd)
The lump sum benefit increased from $2400 to $2600 per year effective January 1 2018
Differences between expected and actual economic experience $ 5346$ Changes in actuarial assumptions 3678 Net differences between projected and actual investment earnings 26024 Contributions paid to plan subsequent to measurement date 55196 State aid received for the plan subsequent to measurement date 52196
55196$ 87244$
December 31
20192020202120222023
Thereafter
For the year ended December 31 2018 the City recognized pension expense of ($15721)
The City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
$ 537
46
$55196 reported as deferred outflows of resources related to pensions resulting from City contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended December 31 2019 $52196 reported as deferred inflows of resources related to pensions resulting from state aid received for the plan subsequent to the measurement date will be recognized as an increase of the net pension liability (asset) in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pension plans will be recognized in pension expense as follows
Pension Expense Amount
(2) (17701) (14691) (1457) (1734)
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
E ACTUARIAL ASSUMPTIONS
Inflation Rate 275 percentRetirement Eligibility Later of current age and age 50Expected Long-Term Investment Return 625 percentAmortization Method
Mortality
F DISCOUNT RATE
G PENSION LIABLIITY (ASSET) SENSITIVITY
1 Decrease 1 Increasein Discount in Discount
Rate Rate(525) (625) (725)
Citys Net Pension Liability (Asset) $ (497411) $ (517946) $ (537562)
Straight-line amortization over a closed 5-year period or straight-line amortization over a close period equal to the average of the expected remaining service lives of all members that are provided with pensions through the pension planRates used in the July 1 2016 Minnesota PERA Police amp Fire Plan actuarial valuation
The discount rate used to measure the total pension liability was 625 The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at a rate specified in statute Based on that assumption the pension planrsquos 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
The following presents the net pension liability (asset) calculated using the discount rate as well as what the Citys net pension liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate
Discount Rate
The total pension liability was determined using the following actuarial assumptions applied to all periods included in the measurement
The actuarial assumptions used in the December 31 2018 valuation were based on the results of an actuarial experience study for the period January 1 2016 - December 31 2016
47
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
H PLAN INVESTMENTSINVESTMENT POLICY
- Attempt to maintain minimum funding ratio of 120- Attempt to increase the pension amount by $200 every other year- Meet twice per year to discuss any changes to allocation and prepare for a joint meeting with the City
I ASSET ALLOCATION
Domestic equityInternational equityFixed incomeReal estate and alternativesCash and equivalents
Total
J PENSION PLAN FIDUCIARY NET POSITION
10000
The best-estimates of expected future asset class returns were published in the 2017 Survey of Capital Market Assumptions produced by Horizon Actuarial Services These expected returns along with expected asset class standard deviations and correlation coefficients are based on Horizonrsquos annual survey of investment advisory firms The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data
Detailed information about the pension plans fiduciary net position is available in a separately-issued financial report
Asset Class
The plans funded status increased from 1773 to 1883 since the prior valuation This change is primarily due to investment returns in excess of expected
4500 5391000 5203500 198500 425500 079
The Association has a formal investment policy that operates within standard investment practices of the prudent person and other standards codified in Minnesota Statutes Chapter 11A and Chapter 356
The Associations pension plan assets are to be invested for the exclusive benefit of the fund members and will attempt to generate investment returns of at least 5 percent of an annualized basis over time Other goals of the Association include
The long-term expected rate of return on pension plan investments as determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns net of pension plan investment expense and inflation) are developed for each major asset class These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table
Long-Term Expected Real Rate of ReturnTarget Allocation
48
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A PLAN DESCRIPTION
B BENEFITS PROVIDED
GERP Benefits
General Employees Retirement Plan (GERP General Employees Plan accounted for in the General Employees Fund)
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
Public Employees Police and Fire Plan (PEPFP Police and Fire Plan accounted for in the Police and Fire Fund)
The Police and Fire Plan 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 Police and Fire Plan also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to PERA
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
General Employees Plan benefits are based on a memberrsquos 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 PERAs 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 12 for each of the first 10 years of service and 17 for each additional year The rates are 22 and 27 respectively for Basic members Under Method 2 the accrual rate for Coordinated members is 17 for all years of service and 27 for Basic members The accrual rates for former MERF members is 20 for each of the first 10 years of service and 25 for each additional year 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
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA) PERArsquos defined benefit pension plans are established and administered in accordance with Minnesota Statutes Chapters 353 and 356 PERArsquos defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code
49
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
B BENEFITS PROVIDED (Contd)
GERP Benefits (Contd)
PEPFP Benefits
C CONTRIBUTIONS
GERP Contributions
PEPFP Contributions
Beginning January 1 2019 benefit recipients will receive a future annual increase equal to 50 percent of the Social Security Cost of Living Adjustment not less than 10 percent and not more than 15 percent For retirements on or after January 1 2024 the first benefit increase is delayed until the retiree reaches Normal Retirement Age (not applicable to Rule of 90 retirees disability benefit recipients or survivors) A benefit recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase Members receiving benefits for at least one month but less than 12 full months as of June 30 will receive a pro rata increase
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 percent after five years up to 100 percent 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 percent after ten years up to 100 percent after twenty years of credited service The annuity accrual rate is 3 percent of average salary for each year of service For Police and Fire Plan members who were first hired prior to July 1 1989 a full annuity is available when age plus years of service equal at least 90
Beginning in 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law Post retirement increases are given each year except for annuitants who have been receiving a benefit for only 31 to 41 months These annuitants will receive a prorated amount of the increase on a sliding scale
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions Contribution rates can only be modified by the state Legislature
Coordinated Plan members were required to contribute 650 percent of their annual covered salary in fiscal year 2018 the City was required to contribute 750 percent for Coordinated Plan members The Citys contributions to the General Employees Fund for the year ended December 31 2018 were $50226 The Citys contributions were equal to the required contributions as set by state statute
Legislation increased both employee and employer contribution rates in the Police and Fire Plan Employee rates increased from 1080 percent of pay to 1130 percent and employer rates increase from 1620 percent to 1695 percent on January 1 2018 On January 1 2020 employee rates increase to 1180 percent and employer rates increase to 1770 percent The Citys contributions to the Police and Fire Fund for the year ended December 31 2018 were $57782 The Citys contributions were equal to the required contributions as set by state statute
50
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS
GERP Pension Costs
Differences between expected and actual economic experience 14670$ 16018$ Changes in actuarial assumptions 52464 61940 Differences between projected and actual investment earnings 56103 Changes in proportion 4060 13463 Contributions paid to GERP subsequent to measurement date 25165
96359$ 147524$
At December 31 2018 the City reported a liability of $543664 for its proportionate share of the General Employees Fundrsquos net pension liability The City net pension liability reflected a reduction due to the State of Minnesotarsquos contribution of $16 million to the fund in 2019 The State of Minnesota is considered a non-employer contributing entity and the statersquos contribution meets the definition of a special funding situation The State of Minnesotarsquos proportionate share of the net pension liability associated with the City totaled $17795 The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The Citys proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion share was 00098 which was a decrease of 00002 from its proportion measured as of June 30 2017
Post-retirement benefit increases were changed from 10 per year with a provision to increase to 25 upon attainment of 90 funding ratio to 50 of the Social Security Cost of Living Adjustment not less than 10 and not more than 15 beginning January 1 2019
For the year ended December 31 2018 the City recognized pension expense of $28216 for its proportionate share of GERPrsquos pension expense In addition the City recognized an additional $4150 as pension expense (and grant revenue) for its proportionate share of the State of Minnesotas contribution of $6 million to the General Employees Fund
At December 31 2018 the City reported its proportionate share of GERPrsquos deferred outflows of resources and deferred inflows of resources from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
51
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
GERP Pension Costs (Contd)
PEPFP Pension Costs
$25165 reported as deferred outflows of resources related to pensions resulting from City contributions to GERP subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to GERP pensions will be recognized in pension expense as follows
52
Year ended June 30 Pension Expense Amount
2019 13967$ 2020 (31102) 2021 (47848) 2022 (11347)
At December 31 2018 the City reported a liability of $350680 for its proportionate share of the Police and Fire Fundrsquos net pension liability The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The City proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion was 00329 which was a decrease of 00001 from its proportion measured as of June 30 2017 The City also recognized $2961 for the year ended December 31 2018 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesotarsquos on-behalf contributions to the Police and Fire Fund Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year starting in fiscal year 2014
Beginning in January 1 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law
For the year ended December 31 2018 the City recognized pension expense of $2961 for its proportionate share of the Police and Fire Planrsquos pension expense
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
PEPFP Pension Costs (Contd)
Differences between expected and actual economic experience 14159$ 88907$ Changes in actuarial assumptions 450560 517779 Differences between projected and actual investment earnings 71220 Changes in proportion 10800 27880 Contributions paid to PEPFP subsequent to measurement date 29906
505425$ 705786$
E ACTUARIAL ASSUMPTIONS
InflationSalary GrowthInvestment Rate of Return
Actuarial Assumptions GERP PEPFP
250 per year 250 per year325 after 26 years of service 325 after 25 years of service
750 750
53
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
2020 (21749)2021 (54056)2022 (147616)2023 (1380)
The total pension liability in the June 30 2018 actuarial valuation was determined using the following actuarial assumptions
$29906 reported as deferred outflows of resources related to pensions resulting from the Citys contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows
Year ended June 30 Pension Expense Amount
2019 (5466)$
At December 31 2018 the City reported its proportionate share of the Police and Fire Planrsquos deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
GERP
PEPFP
54
The total pension liability for each of the defined benefit cost-sharing plans was determined by an actuarial valuation as of June 30 2018 using the entry age normal actuarial cost method Inflation is assumed to be 250 percent for the General Employees and Police and Fire Plans Salary growth assumptions in the General Employees Plan decrease in annual increments from 1125 percent after one year of service to 325 percent after 26 years of service In the Police and Fire Plan salary growth assumptions decrease from 1225 percent after one year of service to 325 percent after 25 years of service
Mortality rates for all plans are based on RP-2014 mortality tables The tables are adjusted slightly to fit PERArsquos experience Actuarial assumptions for the General Employees Plan are reviewed every four to six years The most recent six-year experience study for the General Employees Plan was completed in 2015 The most recent four-year experience study for the Police and Fire Plan was completed in 2016 Economic assumptions were updated in 2014 based on a review of inflation and investment return assumptions
The following changes in actuarial assumptions occurred in 2018
The mortality projection scale was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 percent per year through 2044 and 250 percent per year thereafter to 125 percent per year
The mortality projection scale was changed from MP-2016 to MP-2017
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
Domestic StocksInternational StocksBondsAlternative AssetsCash
F DISCOUNT RATE
G PENSION LIABILITY SENSITIVITY
GERP PEPFP
1 Lower 650 883523$ 1520 751880$ Current Discount Rate 750 543664 1620 350680 1 Higher 850 263120 1720 18904
The discount rate used to measure the total pension liability in 2018 was 750 percent The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes Based on these assumptions the fiduciary net positions of the General Employees Fund and the Police and Fire Fund 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
The following presents the Citys proportionate share of the net pension liability for all plans it participates in calculated using the discount rate disclosed in the preceding paragraphs as well as what the Citys 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
Target Allocation
3900190020002000200
10000
Long-Term Expected Real Rate of Return
510530075590000
Asset Class
55
The State Board of Investment which manages the investments of PERA prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return 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 in the following table
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
H PENSION PLAN FIDUCIARY NET POSITION
NOTE 11 DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
Related to Pensions 656980$ 940554$
NOTE 12 FUND BALANCE
NonmajorGovernmental
General Funds Total
NonspendablePrepaid Items 73751$ 2152$ 75903$
Restricted forTax Increment 11481 11481 Debt Service 1448570 1448570 Capital Projects 72582 72582
0 1532633 1532633
CommittedCharitable Gambling Programs 11466 11466 Economic Development Promotion 835956 835956
Total Committed 0 847422 847422
AssignedFund Operations 165070 487992 653062
Unassigned 1697339 (456819) 1240520
1936160$ 2413380$ 4349540$
Detailed information about each pension plans 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 wwwmnperaorg
The following is a summary of the major components of deferred outflows and inflows as presented in the Statement of Net Position
Deferred Outflows of Resources
Deferred Inflows of Resources
The following is a summary of fund balance components
56
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 13 TAX ABATEMENT
Current YearPercent AmountAbated Abated
Dingmann Marine100 2500$
Current YearPercent AmountAbated Abated
Granite City PropertyManagement 95 20858$
NOTE 14 JOINT POWERS AGREEMENTS
A PUBLIC RECREATIONAL FACILITY
B WRIGHT COUNTY AREA TRANSIT
Wright County Area Transit is governed by a Joint Powers Board that consists of a) one vote plus additional vote for each city per 3000 rides originating in that city and b) Wright County has votes equal to the number of votes apportioned to the Cities
57
The City and Independent School District 876 (the District) have entered into an a joint powers agreement to operate a public recreational facility The City owns and will lease the real property to the Joint Powers Entity (the Entity) The District shall fund the construction of the facility The Entity shall prepare an annual budget subject to approval of the City and the District All costs for operations maintenance repairs and utilities shall be shared equally by the City and the District
The Entity is governed by a Joint Powers Board that consists of four members a) two members appointed by the City annually and b) two members appointed by the District annually
The City Wright County and other Wright County Cities have entered into an a joint powers agreement to provide affordable public transportation to their communities Cities are to pay a pro rata share of the remaining unfunded operating expenses and capital expenditures not covered by Wright County
The City is authorized by Minnesota Statute sect4691813 to enter into property tax abatement agreements for the purpose of attracting or retaining businesses Tax abatements may be granted to any business on a case-by-case basis The entity may be subject to certain stipulations determined by the City at the time the abatement is entered The amount of the abatement is automatically deducted from the property ownerrsquos tax bill
The City is authorized by Minnesota Statute sect469174 through 469179 to enter into tax increment financing plans Tax increment financing may be granted on a case-by-case basis and may be subject to certain stipulations determined by the City at the time it is entered
Business Purpose
Business Purpose
Assisting in relocating the business within the community
Housing Redevelopment Project 36 Unit Senior Housing Project
REQUIRED SUPPLEMENTARY INFORMATION
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EmployersProportionateShare of the Net Pension
Liability (Asset)States and the States Employers
Proportionate Proportionate ProportionateEmployers Share of the Share of the Share of the Plan Fiduciary
Employers Proportionate Net Pension Net Pension Net Pension Net PositionProportion Share of the Liability (Asset) Liability (Asset) Employers Liability (Asset) as a Percentageof the Net Net Pension Associated with Associated with Covered as a Percentage of of the Total
Fiscal Year Pension Liability (Asset) the Employer the Employer Payroll its Covered Payroll PensionEnding Liability (Asset) (a) (b) (a+b) (c) ((a+b)c) Liability
PensionsGERP
6302018 00098 543664$ 17795$ 561459$ 658161$ 8531 79536302017 00100 638393 8040 646433 647524 9983 75906302016 00099 803831 10468 814299 610663 13335 68916302015 00102 528617 528617 605733 8727 7819
PEPFP6302018 00329 350680$ $ 350680$ 346636$ 10117 88846302017 00330 445539 445539 339010 13142 85436302016 00340 1364479 1364479 322596 42297 63886302015 00340 386320 386320 317917 12152 8661
See Accompanying Notes to the Required Supplementary Information
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITYDECEMBER 31 2018
58
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
Contributionsin Relation Contributions
Statutorily to the Statutorily Contribution as a PercentageRequired Required Deficiency Covered of Covered
Fiscal Year Contribution Contribution (Excess) Payroll PayrollEnding (a) (b) (a-b) (d) (bd)
PensionsGERP
12312018 50226$ 50226$ $ 669680$ 75012312017 48886 48886 651813 75012312016 46583 46583 621107 75012312015 45426 45426 605680 750
PEPFP12312018 57782$ 57782$ $ 356679$ 162012312017 55371 55371 341796 162012312016 53824 53824 332247 162012312015 51688 51688 319062 1620
See Accompanying Notes to the Required Supplementary Information59
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE EMPLOYER CONTRIBUTIONSDECEMBER 31 2018
2017 2016 2015 2014
Service Cost 26727$ 26915$ 21845$ 21260$ Interest 34955 33085 27615 24816 Changes in Benefit Terms 28893 40156 Differences Between Expected and Actual Experience (7074) Changes in Assumptions (4866) Benefit Payments (72973) (7040)
Net Change in Total Pension Liability 17602 41020 89616 46076 Total Pension Liability - Beginning of Year 569046 528026 438410 392334
Total Pension Liability - End of Year 586648$ 569046$ 528026$ 438410$
Contributions - State and Local 50693$ 50325$ 49939$ 47712$ Net Investment Income 126216 69161 (34736) 46976 Benefit Payments (72973) (7040) Administrative Expense (8416) (7920) (7166) (3768) Other (275)
Net Change in Plan Fiduciary Net Position 95520 104526 8037 90645 Total Plan Fiduciary Net Position - Beginning of Year 1009074 904548 896511 805866
Total Plan Fiduciary Net Position - End of Year 1104594$ 1009074$ 904548$ 896511$
Citys Net Pension Liability (Asset) - End of Year (517946)$ (440028)$ (376522)$ (458101)$
Plan Fiduciary Net Position as a Percentage of the Total Pension Asset 18829 17733 17131 20449
60
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF CHANGES IN THE CITYS NET PENSION LIABILITY AND RELATED RATIOSDECEMBER 31 2018
The City implemented GASB Statement No 68 for the year ended December 31 2015 Information for prior years is not available
December 31
NOTE 1 CHANGES IN PLAN PROVISIONS
A GERF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
B PEPFF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
61
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
On January 1 2015 the Minneapolis Employees Retirement Fund was merged into the General Employees Fund which increased the total pension liability by $11 billion and increased the fiduciary plan net position by $892 million Upon consolidation state and employer contributions were revised
The post-retirement benefit increase to be paid after attainment of the 90 funding threshold was changed from inflation up to 25 to a fixed rate of 25
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS
A GERF
2018 Changes
2017 Changes
2016 Changes
2015 Changes
B PEPFF
2018 Changes
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 025 to 325 for payroll growth and 250 for inflation
62
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2035 and 25 per year thereafter
The mortality projection was changed from MP-2016 to MP-2017
The Combined Service Annuity (CSA) loads were changed from 08 for active members and 60 for vested and non-vested deferred members The revised CSA loads are now 00 for active member liability 150 for vested deferred member liability and 30 for non-vested deferred member liability
The assumed post-retirement benefit increase rate was changed from 10 per year for all years to 10 per year through 2044 and 25 per year thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2035 and 25 per year thereafter to 10 per year for all years
The assumed investment return was changed from 79 to 75 The single discount rate was changed from 79 to 75
The mortality projection was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 per year through 2044 and 250 per year thereafter to 125 per year
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS (Contd)
B PEPFF (Contd)
2017 Changes
Assumed rates of retirement were changed resulting in fewer retirements
Assumed percentage of married female members was decreased from 65 to 60
The assumed percentage of female members electing Joint and Survivor annuities was increased
2016 Changes
2015 Changes
63
The assumed post-retirement benefit increase rate was changed from 100 for all years to 100 per year through 2064 and 250 thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2037 and 25 thereafter to 10 per year for all future years
The assumed investment return was changed from 79 to 75 The single discount rate changed from 79 to 56
The assumed future salary increases payroll growth and inflation were decreased by 025 to 325 for payroll growth and 250 for inflation
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2037 and 25 per year thereafter
Assumed salary increases were changed as recommended in the June 30 2016 experience study The net effect is proposed rates that average 034 lower than the previous rates
The Combined Service Annuity (CSA) load was 30 for vested and non-vested deferred members The CSA has been changed to 33 for vested members and 2 for non-vested 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 096 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 30 for the first three years of service Rates beyond the select period of three years were adjusted resulting in more expected terminations overall
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
SUPPLEMENTARY INFORMATION
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Special Debt Capital Revenue Service Projects Total
ASSETSCash and Investments 436388$ 1441782$ 473092$ 2351262$ Taxes Receivable - Delinquent 23 5 347 375 Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 623285 26935 650220
Accounts Receivable 70887 20000 90887 Interest Receivable 9 9 Prepaid Items 2152 2152 Due from Other Funds 190388 190388 Due from Other Governments 1061 2365 47418 50844 Land Held for Resale 362923 362923
Total Assets 1063822$ 2071860$ 567801$ 3703483$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 12735$ $ 11142$ 23877$ Contracts Payable 2941 21398 24339 Due to Other Funds 454822 126860 581682 Due to Other Governments 3566 5910 9476 Salaries and Benefits Payable 134 134
Total Liabilities 474198 0 165310 639508
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 23 5 347 375 Special Assessments 623285 26935 650220
Total Deferred Inflows of Resources 23 623290 27282 650595
Fund Balance Nonspendable 2152 2152 Restricted 11481 1448570 72582 1532633 Committed 847422 847422 Assigned 67503 420489 487992 Unassigned (338957) (117862) (456819)
Total Fund Balance 589601 1448570 375209 2413380
Total Liabilities Deferred Inflows of Resources and Fund Balance 1063822$ 2071860$ 567801$ 3703483$
CITY OF ANNANDALE MINNESOTA
64
DECEMBER 31 2018NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
Special Debt Capital Revenue Service Projects Total
REVENUESProperty Taxes 2507$ $ 320723$ 323230$ Tax Increments 20858 20858 Special Assessments 149671 149671 Intergovernmental 30310 30310 Charges for Services 42636 8595 51231 Fines and Forfeitures 4299 4299 Investment Income (1455) (3635) (5090) Contributions and Donations 49608 84150 133758 Miscellaneous 578 101 679
Total Revenues 114732 149671 444543 708946
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 22622 42738 Culture and Recreation 3735 3735 Economic Development 52358 52358
Debt ServicePrincipal 821000 821000 Interest and Other Charges 162964 162964
Capital OutlayPublic Safety 67055 67055 Public Works 14006 14006 Culture and Recreation 14187 88464 102651 Economic Development 56446 88485 144931
Total Expenditures 153914 983964 284367 1422245 Excess (Deficiency) of Revenues
Over (Under) Expenditures (39182) (834293) 160176 (713299)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 51200 784616 310098 1145914 Transfers Out (65804) (481316) (547120)
Total Other Financing Sources (Uses) (14604) 784616 (146725) 623287 Net Change in Fund Balances (53786) (49677) 13451 (90012)
FUND BALANCE BEGINNING OF YEAR 643387 1498247 361758 2503392
FUND BALANCE END OF YEAR 589601$ 1448570$ 375209$ 2413380$
65
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
Tax Charitable Economic TIF District Abatement - Lions TIF District Training WoodlawnGambling Development No 6 Dingmann Donations No 14 Center Cemetery
(222) (407) (411) (423) (464) (465) (604) (651) Total
ASSETSCash and Investments 11466$ 385530$ 21389$ $ 18003$ $ $ $ 436388$ Taxes Receivable - Delinquent 23 23 Accounts Receivable 20856 49500 531 70887 Prepaid Items 1076 1076 2152 Due from Other Funds 190388 190388 Due from Other Governments 25 1036 1061 Land Held for Resale 362923 362923
Total Assets 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable $ 1800$ 9908$ $ $ $ 1000$ 27$ 12735$ Contracts Payable 2941 2941 Due to Other Funds 119000 18060 66198 200960 50604 454822 Due to Other Governments 3500 66 3566 Salaries and Benefits Payable 67 67 134
Total Liabilities 0 123741 9908 18060 0 69698 202093 50698 474198
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 23 23
Fund Balance Nonspendable 1076 1076 2152 Restricted 11481 11481 Committed 11466 835956 847422 Assigned 67503 67503 Unassigned (18035) (69698) (200526) (50698) (338957)
Total Fund Balance 11466 835956 11481 (18035) 67503 (69698) (199450) (49622) 589601
Total Liabilities Deferred Inflows of Resources and Fund Balance 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
66
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUECOMBINING BALANCE SHEET
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding ImprovementBonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
ASSETSCash and Investments 134649$ 53157$ 3288$ 310514$ 94388$ 360857$ 484929$ 1441782$ Taxes Receivable - Delinquent 5 5 Special Assessments Receivable
Delinquent 819 1553 2051 4423 Current and Deferred 45829 223930 9400 65636 278490 623285
Due from Other Governments 585 509 775 496 2365
Total Assets 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
DEFERRED INFLOWS OF RESOURCESAND FUND BALANCEDeferred Inflows of Resources
Unavailable RevenuesDelinquent Property Taxes $ $ $ $ $ 5$ $ 5$ Special Assessments 45829 223930 9400 65636 278490 623285
Total Deferred Inflows of Resources 45829 0 0 223930 9400 65641 278490 623290
Fund Balance Restricted 135234 53157 3288 311333 94897 363185 487476 1448570
Total Deferred Inflows of Resourcesand Fund Balance 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
DECEMBER 31 2018
67
Public Works 2020Fire Street Street Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
ASSETSCash and Investments 50334$ $ 39748$ 122304$ 20402$ 83784$ 53265$ 30658$ 72597$ $ 473092$ Taxes Receivable - Delinquent 298 49 347Special Assessments Receivable
Current and Deferred 26935 26935Accounts Receivable 20000 20000Interest Receivable 9 9Due from Other Governments 24247 20606 2565 47418
Total Assets 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 350$ $ $ $ 10792$ $ $ $ $ $ 11142$ Contracts Payable 15700 5698 21398 Due to Other Funds 44073 82787 126860 Due to Other Governments 5910 5910
Total Liabilities 350 49983 0 0 10792 0 0 15700 0 88485 165310
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 298 49 347Special Assessments 26935 26935
Total Deferred Inflows of Resources 298 0 26984 0 0 0 0 0 0 0 27282
Fund Balance Restricted 72582 72582 Assigned 74240 42313 122304 9610 83784 53265 34958 15 420489 Unassigned (29377) (88485) (117862)
Total Fund Balance 74240 (29377) 42313 122304 9610 83784 53265 34958 72597 (88485) 375209
Total Liabilities Deferred Inflow of Resources and Fund Balance 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
DECEMBER 31 2018
68
TaxCharitable Economic TIF District Abatement - TIF District Lions TIF District Training WoodlawnGambling Development No 6 Dingmann No 12 Donation No 14 Center Cemetery
(222) (407) (411) (423) (438) (464) (465) (604) (651) Total
REVENUESProperty Taxes $ $ $ 2507$ $ $ $ $ $ 2507$ Tax Increments 20858 20858 Charges for Services 12875 19641 10120 42636 Investment Income (71) (2440) (140) (76) 1239 33 (1455)Contributions and Donations 108 49500 49608Miscellaneous 78 500 578
Total Revenues (71) 10621 20718 2507 0 49424 500 20880 10153 114732
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 20116 Economic Development 18399 19816 391 13752 52358
Capital OutlayCulture and Recreation 14187 14187 Economic Development 56446 56446
Total Expenditures 0 18399 19816 0 391 14187 70198 20116 10807 153914 Excess (Deficiency) of
Revenues Over (Under) Expenditures (71) (7778) 902 2507 (391) 35237 (69698) 764 (654) (39182)
OTHER FINANCING SOURCES (USES)Transfers In 51200 51200 Transfers Out (65804) (65804)
Total Other FinancingSources (Uses) 0 (14604) 0 0 0 0 0 0 0 (14604)
Net Change in Fund Balances (71) (22382) 902 2507 (391) 35237 (69698) 764 (654) (53786)
FUND BALANCE BEGINNING OF YEAR 11537 858338 10579 (20542) 391 32266 (200214) (48968) 643387
FUND BALANCE END OF YEAR 11466$ 835956$ 11481$ (18035)$ 0$ 67503$ (69698)$ (199450)$ (49622)$ 589601$
69
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE
YEAR ENDED DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding Improvement Bonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
REVENUESSpecial Assessments 21259$ $ $ 37558$ 10657$ 20276$ 59921$ 149671$
EXPENDITURESDebt Service
Principal 80000 70000 54000 127000 210000 245000 35000 821000Interest and Other Charges 23944 14062 4095 64909 16975 18646 20333 162964
Total Expenditures 103944 84062 58095 191909 226975 263646 55333 983964 Excess (Deficiency) of
Revenues Over (Under)Expenditures (82685) (84062) (58095) (154351) (216318) (243370) 4588 (834293)
OTHER FINANCINGSOURCES (USES)Transfers In 76000 78113 22560 150000 194943 198000 65000 784616
Net Change in Fund Balances (6685) (5949) (35535) (4351) (21375) (45370) 69588 (49677)
FUND BALANCEBEGINNING OF YEAR 141919 59106 38823 315684 116272 408555 417888 1498247
FUND BALANCE END OF YEAR 135234$ 53157$ 3288$ 311333$ 94897$ 363185$ 487476$ 1448570$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
YEAR ENDED DECEMBER 31 2018
70
Public 2020Fire Street WorksStreet Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
REVENUESProperty Taxes 25092$ $ 295631$ $ $ $ $ $ $ $ 320723$ Intergovernmental 4109 26201 30310 Charges for Services 8595 8595 Fines and Forfeitures 4299 4299 Investment Income (49) 105 (324) (1118) (80) (713) (503) (495) (458) (3635) Contributions and Donations 50650 1500 2000 30000 84150 Miscellaneous 101 101
Total Revenues 75693 14309 295307 (1017) 6219 (713) 25698 29505 (458) 0 444543
EXPENDITURESCurrent
Public Safety 22622 22622 Culture and Recreation 3735 3735
Capital OutlayPublic Safety 7500 59555 67055 Public Works 14006 14006 Culture and Recreation 16429 72035 88464 Economic Development 88485 88485
Total Expenditures 30122 20164 0 14006 59555 0 0 72035 0 88485 284367 Excess (Deficiency) of
Revenues Over (Under)Expenditures 45571 (5855) 295307 (15023) (53336) (713) 25698 (42530) (458) (88485) 160176
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 8800 15693 24493 Transfers In 84943 37504 60000 20000 107651 310098 Transfers Out (107503) (288000) (78113) (7700) (481316)
Total Other FinancingSources (Uses) (22560) 37504 (288000) 68800 35693 29538 0 (7700) 0 0 (146725)
Net Change in Fund Balances 23011 31649 7307 53777 (17643) 28825 25698 (50230) (458) (88485) 13451
FUND BALANCE BEGINNING OF YEAR 51229 (61026) 35006 68527 27253 54959 27567 85188 73055 361758
FUND BALANCE END OF YEAR 74240$ (29377)$ 42313$ 122304$ 9610$ 83784$ 53265$ 34958$ 72597$ (88485)$ 375209$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
YEAR ENDED DECEMBER 31 2018
71
FINANCIAL SECTION
This page intentionally left blank
Issue Interest Original Final Principal Due WithinDate Rates Issue Maturity Outstanding One Year
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan Bonds Series 2008A 050608 300-400 895000$ 020122 295000$ 70000$ GO Special Assessment Bonds
GO Improvement Bonds Series 2008B 050608 300-4125 1175000 020124 560000 85000 GO Improvement Bonds Series 2011A 060811 105-415 1700000 020132 1300000 70000 GO Refunding Bonds Series 2011B 092711 085-270 1620000 020121 585000 215000 GO Refunding Bonds Series 2012A 040412 055-185 2225000 020122 1035000 255000 GO Improvement Bonds Series 2015A 050115 110-345 820000 020136 750000 35000
GO NotesGO Improvement Note of 2011 053111 1959 1217500 082031 846000 58000
GO Equipment CertificateGO Equipment Certificate 2016A 032116 2100 222000 020121 168000 55000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549 843000
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 011304 2819 3273194 082023 996000 188000 PFA Clean Water Revenue Note 081707 2220 16036613 082026 8086000 935000 PFA Water Revenue Note of 2015 081015 1031 929105 082035 812000 44000 PFA Sewer Revenue Note of 2015 090815 1000 125359 082035 110000 6000
Total Business-Type Activities 10004000 1173000
Total All Long-Term Liabilities 15543549$ 2016000$
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF LONG-TERM LIABILITIESDECEMBER 31 2018
72
This page intentionally left blank
COMPLIANCE SECTION
This page intentionally left blank
Honorable Mayor and Members of the City Council
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
INDEPENDENT AUDITORS REPORT ON MINNESOTA LEGAL COMPLIANCE
73
The Minnesota Legal Compliance Audit Guide for Cities promulgated by the State Auditor pursuant to Minn Stat sect665 contains seven categories of compliance to be tested contracting and bidding deposits and investments conflicts of interest public indebtedness claims and disbursements miscellaneous provisions and tax increment financing Our audit considered all of the listed categories
In connection with our audit nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities However our audit was not directed primarily toward obtaining knowledge of such noncompliance Accordingly had we performed additional procedures other matters may have come to our attention regarding the Citys noncompliance with the above referenced provisions
The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance Accordingly this communication is not suitable for any other purpose
City of AnnandaleAnnandale Minnesota
May 6 2019
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 majorfund and the aggregate remaining fund information as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements we considered the Citys 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 Citys internal control Accordingly we do not express an opinion on the effectiveness of the Citys 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 entitys 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
74
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 and therefore material weaknesses or significant deficiencies may exist that were not identified 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 We did identify certain deficiencies in internal control described in the accompanying Schedule of Findings as 2018-001 and 2018-002 that we consider to be significant deficiencies
INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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 the City of Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
Compliance and Other Matters
Citys Response to Findings
Purpose of this Report
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
May 6 2019
75
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 Citys internal control or on compliance This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entitys internal control and compliance Accordingly this communication is not suitable for any other purpose
As part of obtaining reasonable assurance about whether the Citys 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
The Citys responses to the findings identified in our audit are described in the accompanying Schedule of Findings The Citys responses were not subjected to the auditing procedures applied in the audit of the financial statements and accordingly we express no opinion on them
I
FINDING 2018-001
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
76
LIMITED SEGREGATION OF DUTIES
There is an absence of appropriate segregation of duties consistent with appropriate control objectives due to a limited number of employees
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The City is aware of the limited segregation of duties and will continue to review internal controls and make changes when they can be made
The lack of adequate segregation of duties could adversely affect the Citys ability to initiate record process and report financial data consistent with the assertions of management in the financial statements
The basic premise is that no one person should have access to both physical assets and the related accounting records or to all phases of a transaction The lack of such controls could result in the occurrence of a material error or fraud in relation to the financial statements not being detected by management
The City has assigned duties to staff based on a cost-benefit relationship to the City and the practicality of the level of staffing the City maintains
The City should continue to monitor and evaluate the job responsibilities assigned to staff to determine whether there is an unacceptable risk
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
I
FINDING 2018-002 AUDITOR PREPARED FINANCIAL STATEMENTS
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
77
The City does not have an internal control system designed to provide for the preparation of the financial statements being audited However based on the degree of complexity and level of detail needed to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) the City has requested the auditors to prepare them
The preparation of the financial statements and the related notes are the responsibility of management
There are a limited number of office employees and resources available to allow for the adequate preparation of the financial statements by the City
This could result in a material misstatement to the financial statements and related notes that would not be prevented or detected and corrected as a result of the Citys current internal control
The City should continue to request the assistance to draft the financial statements and related notes and thoroughly review these financial statements after they have been prepared so the City can take responsibility for them
The City is aware of this however due to significant cost and a limited number of employees it is in the Citys best financial interest to contract for the preparation of the financial statements
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Contd)
Comment Year Finding If Not Corrected Provide PlannedReference Comment Title Status Initially Occurred Corrective Action or Other Explanation
Financial Statement Findings
2017-001 Not Corrected 2009 See current year finding 2018-001
2017-002 Not Corrected 2009 See current year finding 2018-002
Minnesota Legal Compliance Findings
None
DECEMBER 31 2018SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
CITY OF ANNANDALE MINNESOTA
78
Limited Segregation of Duties
Auditor Prepared Financial Statements
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORS
WILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
MANAGEMENT LETTER
DECEMBER 31 2018
This page intentionally left blank
Page
Required Communications 1-3
Schedule of Findings on Accounting Issues and Internal Controls 4
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Significant Audit Findings
Qualitative Aspects of Accounting Practices
We have audited the financial statements of the governmental activities the business-type activities each major fund and the aggregate remaining fund information of the City of Annandale Minnesota for the year ended December 31 2018 Professional standards require that we provide you with information about our responsibilities under generallyaccepted auditing standards and Government Auditing Standards as well as certain information related to the planned scope and timing of our audit We have communicated such information in our letter to you dated December 20 2018 Professional standards also require that we communicate to you the following information related to our audit
The financial statement disclosures are neutral consistent and clear
1
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 the financial statements No new accounting policies were adopted and the application of existing policies was not changed in 2018 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 are an integral part of the financial statements prepared by management and are based on managements 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
Managements estimate of depreciation is based on the number of years an asset is in service We evaluated the key factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Managements estimate of pension liabilities is based on actuarial valuations performed by consultants specializing in those areas We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Significant Audit Findings (Contd)
Difficulties Encountered in Performing the Audit
Corrected and Uncorrected Misstatements
Disagreements with Management
Management Representations
Management Consultations with Other Independent Accountants
Other Audit Findings or Issues
Other Matters
Professional standards require us to accumulate all known and likely misstatements identified during the audit other than those that are clearly trivial and communicate them to the appropriate level of management Management has corrected all such misstatements In addition none of the misstatements detected as a result of audit procedures and corrected by management were material either individually or in the aggregate to each opinion units financial statements taken as a whole
We encountered no significant difficulties in dealing with management in performing and completing our audit
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 Citys 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
We generally discuss a variety of matters including the application of accounting principles and auditing standards with management each year prior to retention as the Citys auditors However these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention
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 We are pleased to report that no such disagreements arose during the course of our audit
We have requested certain representations from management that are included in the management representation letter dated May 6 2019
We applied certain limited procedures to Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions the Schedule of Changes in the Citys Net Pension Liability and Related Ratios and the related notes to required supplementary information which are required supplementary information that supplements the basic financial statements Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries the basic financial statements and other knowledge we obtained during our audit of the basic financial statements We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information
2
Other Matters (Contd)
Restriction on Use
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
This information is intended solely for the use of the City Council and management of the City of Annandale Minnesota and is not intended to be and should not be used by anyone other than these specified parties
3
We were not engaged to report on the Elected Officials and Administration section which accompany the financial statements but are not required supplementary information We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it
May 6 2019
We were engaged to report on the statements and schedules listed in the table of contents as supplementary information which accompany the financial statements but are not required supplementary information With respect to this supplementary information we made certain inquiries of management and evaluated the form content and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America the method of preparing it has not changed from the prior period and the information is appropriate and complete in relation to our audit of the financial statements We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves
This page intentionally left blank
4
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in internal control under standards established by the American Institute of Certified Public Accountants 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
The objective of internal accounting control is to provide reasonable but not absolute assurance as to the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of these factors necessarily requires estimates and judgments by management
It should be recognized that within the City an inherent risk is present with certain positions It is very common for cities such as the City of Annandale Minnesota to assign many major responsibilities to a few key individuals in an attempt to operate within limited budgets The inherent risk is again addressed only to maintain the awareness of the internal control structure and to encourage the Councils continual review of financial information at monthly meetings
DECEMBER 31 2018
INTERNAL CONTROL
GENERAL RECOMMENDATIONS
Throughout the course of the audit we spoke to management regarding certain items that we see as an opportunity to improve None of these were considered significant within the scope of the audit The items discussed requiring action have been resolved or are in the process of resolution We would like to acknowledge the assistance and courtesies extended to us by the personnel of the City of Annandale Minnesota
City of Annandale Minnesota
Audit ReportDecember 31 2018
Independent Auditorrsquos ReportPages 2-4bull Financial statements are the responsibility of the Cityrsquos
managementbull Our responsibility is to express opinions on these financial
statements based on our auditbull Conducted audit in accordance with Generally Accepted
Auditing Standards and Government Auditing Standardsbull Obtain reasonable assurance financials are free from
material misstatement
1
Independent Auditorrsquos Report (Contrsquod)Pages 2-4
bull Financial statements are presented fairly in our opinion
bull Internal control letter on pages 74 and 75
2
Statement of Net Position
3
2018 2017ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current and Other 12893519$ 12739729$ Capital 20949843 21526486
Total Assets 33843362 34266215
Deferred Outflows of Resources 656980 914167 Total Assets and Deferred Outflows of Resources 34500342$ 35180382$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current Liabilities 660359$ 497847$ Noncurrent Liabilities
Net Pension Liability 894343 236206 Due Within One Year 2016000 1967000 Due in More Than One Year 13527549 16383958
Total Liabilities 17098251 19085011
Deferred Inflows of Resources 940554 951385
Net PositionNet Investment in Capital Assets 13587855 13119128 Restricted 2095629 2215725 Unrestricted 778053 (190867)
Total Net Position 16461537 15143986 Total Liabilities Deferred Inflows of Resources
and Net Position 34500342$ 35180382$
CITY OF ANNANDALE Payment Approval Report - for City Council Page 1
Report dates 422019-562019 May 02 2019 0305PM
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1
1 NEOPOST USA Inc 56654756 RENTAL amp MAINTENANCE - MAI 04232019 11100 00
Total 1 11100 00
153
153 AMERIPRIDE LINEN amp APPARE 2201173387 PD - MATBRUSH 03282019 2315 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 WATER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 SEWER UNIFORMS 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201173387 PW UNIFORM 03282019 3149 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PD - MATBRUSH 04042019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 PW UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 SEWER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201176511 WATER UNIFORMS 04042019 3145 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PW UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 SEWER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 WATER UNIFORMS 04112019 3940 00
153 AMERIPRIDE LINEN amp APPARE 2201179182 PD - MATBRUSH 04112019 270 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PD - MATBRUSH 04182019 268 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 WATER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 SEWER UNIFORMS 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201181847 PW UNIFORM 04182019 3805 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PD - MATBRUSH 04252019 2316 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 WATER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 SEWER UNIFORMS 04252019 3181 00
153 AMERIPRIDE LINEN amp APPARE 2201184785 PW UNIFORM 04252019 3181 00
Total 153 57099 00
180
180 ANNANDALE ADVOCATE P3158191723 CONGRATS- WRESTLING 04082019 1900 1900 04122019
180 ANNANDALE ADVOCATE P3158191723 RECYCLING AD 04082019 7000 7000 04122019
180 ANNANDALE ADVOCATE P3158191723 MINUTES 04082019 18624 18624 04122019
180 ANNANDALE ADVOCATE P3158191723 PUBLIC HEARING 04082019 1920 1920 04122019
180 ANNANDALE ADVOCATE P3158191723 ASSESSMENTS 04082019 3264 3264 04122019
180 ANNANDALE ADVOCATE P3158191723 2021 IMPR PLAN 04082019 8256 8256 04122019
180 ANNANDALE ADVOCATE P3158191723 DMV- BUSINESS OF THE WEEK 04082019 15600 15600 04122019
180 ANNANDALE ADVOCATE P3158191723 FT SEASONAL EMPLMT 04082019 16380 16380 04122019
180 ANNANDALE ADVOCATE P3158191723 NOTARY STAMP- GIEBENHAIN 04082019 3902 3902 04122019
Total 180 76846 76846
188
188 ANNANDALE AUTO CARE LLC 101394 SERVICE 08 CHEV 04182019 85579 00
188 ANNANDALE AUTO CARE LLC 101468 BATTERY 04242019 12895 00
188 ANNANDALE AUTO CARE LLC 101482 TRUCK SERVICE 04252019 142198 00
188 ANNANDALE AUTO CARE LLC 101526 TRUCK SERVICE 04262019 16470 00
Total 188 257142 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 2
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
190
190 ANNANDALE AREA CHAMBER APRIL2019 CITY EXPO BOOTH 04092019 10000 10000 04122019
Total 190 10000 10000
192
192 ANNANDALE PARTS SUPPLY 127199280 HEAD LIGHT 02282019 1699 1699 04122019
192 ANNANDALE PARTS SUPPLY 127199479 LIGHT BULBS 03042019 2565 2565 04122019
192 ANNANDALE PARTS SUPPLY 127199616 FLUSH KIT 03052019 7098 7098 04122019
192 ANNANDALE PARTS SUPPLY 127199723 HEADLIGHT BULB- SQUAD 51 03072019 949 949 04122019
192 ANNANDALE PARTS SUPPLY 127200389 GENERATOR PARTS 03182019 2318 2318 04122019
192 ANNANDALE PARTS SUPPLY 127200469 LUBE 03192019 791 791 04122019
192 ANNANDALE PARTS SUPPLY 127200476 HOSE 03192019 118 118 04122019
192 ANNANDALE PARTS SUPPLY 127200490 BATTERY 03192019 9858 9858 04122019
192 ANNANDALE PARTS SUPPLY 127200546 PARTS 03202019 1398 1398 04122019
192 ANNANDALE PARTS SUPPLY 127200609 FILTERS 03202019 23472 23472 04122019
192 ANNANDALE PARTS SUPPLY 127200627 STOP LEAK 03212019 873 873 04122019
192 ANNANDALE PARTS SUPPLY 127200652 FILTER 03222019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200654 FILTER 03212019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200713 FITTING 03222019 129 129 04122019
192 ANNANDALE PARTS SUPPLY 127200757 PARTS 03222019 2178 2178 04122019
192 ANNANDALE PARTS SUPPLY 127200939 CLEANER 03252019 2339 2339 04122019
192 ANNANDALE PARTS SUPPLY 127201161 SOAP 03282019 909 00
192 ANNANDALE PARTS SUPPLY 127201244 LUBRICANT 05012019 2373 00
192 ANNANDALE PARTS SUPPLY 127201434 HOSE REPAIR 05012019 3637 00
192 ANNANDALE PARTS SUPPLY 127201488 HOSE REPAIR 04022019 7274 00
192 ANNANDALE PARTS SUPPLY 127202184 FLARE FITTINGS 04112019 1858 00
192 ANNANDALE PARTS SUPPLY 127202518 BRAKE CLEANER 04172019 3228 00
Total 192 77828 58549
200
200 ANNANDALE EMBROIDERY 2356 APD HATS 03272019 9000 00
Total 200 9000 00
230
230 ANNANDALE-MAPLE LAKE MARCH 2019 MAR 2019 FLOW 04152019 6260800 00
Total 230 6260800 00
240
240 ANNANDALE PLUMBING 1457 RPZ TESTING 03272019 28500 00
Total 240 28500 00
424
424 BERGESCH COMPUTER SERVI 16172 SERVICE CALL 04062019 7500 00
424 BERGESCH COMPUTER SERVI 16176 ADMIN-SERVICE CALL 04062019 7500 00
Total 424 15000 00
463
463 BOLTON amp MENK INC 0231771 LGU BSA 7 STAKEHOLDERS C 04122019 11700 00
463 BOLTON amp MENK INC 0231785 2022 PROJECT FACILITY PLAN 04122019 44500 00
463 BOLTON amp MENK INC 0231788 SAND PROFILE 04122019 117250 00
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT PLANS AN 04122019 1717300 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 3
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT STREETS 04122019 38000 00
Total 463 1928750 00
646
646 CENTRA SOTA LAKE REGION L 6308214 STREETS 04092019 11697 00
646 CENTRA SOTA LAKE REGION L 6308214 PARKS 04092019 14037 00
646 CENTRA SOTA LAKE REGION L 6308214 WATER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 SEWER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 PUBLIC WORKS 04092019 33531 00
646 CENTRA SOTA LAKE REGION L 6308342 STREETS 04292019 13024 00
646 CENTRA SOTA LAKE REGION L 6308342 PARKS 04292019 15629 00
646 CENTRA SOTA LAKE REGION L 6308342 WATER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 SEWER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 PUBLIC WORKS 04292019 37335 00
646 CENTRA SOTA LAKE REGION L 6308343 STREETS 04292019 16436 00
646 CENTRA SOTA LAKE REGION L 6308343 PARKS 04292019 19723 00
646 CENTRA SOTA LAKE REGION L 6308343 WATER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 SEWER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 PUBLIC WORKS 04292019 47116 00
Total 646 274380 00
710
710 CITY OF BUFFALO MARCH2019 MONTHLY NET MOTION 04012019 2000 2000 04122019
Total 710 2000 2000
810
810 COLONIAL LIFE amp ACCIDENT 7492424-0501 INSURANCE 04162019 42770 42770 04232019
Total 810 42770 42770
900
900 COUNTRY CHEVROLET INC CVCS139790 SQUAD 52 - TIRE REPAIR 04092019 1719 00
Total 900 1719 00
1336
1336 FARM RITE EQUIPMENT INC P42298 WIPER BLADESIDLER ASSY 04012019 36766 00
1336 FARM RITE EQUIPMENT INC W13484 HYDRAULIC HOSE 04172019 40840 00
Total 1336 77606 00
1338
1338 FASTENAL COMPANY MNBUF78347 SAFETY GLASSES 04172019 4656 00
1338 FASTENAL COMPANY MNBUF78393 TOOLS 04192019 892 00
Total 1338 5548 00
1420
1420 FIRE RELIEF ASSOCIATION MARCH2019 2019 SUPPLEMENTAL REIMB 04082019 100000 00
1420 FIRE RELIEF ASSOCIATION MARCH2019 2018 SUPPLEMENTAL REIMB 04082019 313920 00
Total 1420 413920 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 4
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1508
1508 F S 3 INC 60393 SAFETY VEST 04222019 5500 00
1508 F S 3 INC 60435 SAFETY VEST 04162019 5500 00
1508 F S 3 INC 60436 SAFETY VEST 04162019 5500 00
Total 1508 16500 00
1519
1519 GALLS AN ARAMARK COMPAN 012401488 UNIFORM - HAAG 04042019 8396 00
1519 GALLS AN ARAMARK COMPAN 012412561 UNIFORM - TOWNSEND 04052019 4198 00
Total 1519 12594 00
1630
1630 GOPHER STATE ONE-CALL IN 9030176 FAX TICKETS 03312019 2295 00
Total 1630 2295 00
1660
1660 GRAINGER INC W W 6144966281 TEST BALLS 04122019 15556 00
1660 GRAINGER INC W W 9135594712 PARTS 04032019 6459 00
1660 GRAINGER INC W W 9137921475 SHOCK 04052019 4717 00
1660 GRAINGER INC W W 9138437422 HOSE 04052019 9729 00
1660 GRAINGER INC W W 9146606448 DOOR OPENER 04152019 2735 00
1660 GRAINGER INC W W 9150739945 GLOVES 04192019 6216 00
1660 GRAINGER INC W W 9152417177 GARAGE DOOR OPENERS 04222019 19056 00
Total 1660 64468 00
1710
1710 HAWKINS INC 4475748 CHEMICALS 04092019 247584 00
Total 1710 247584 00
1760
1760 HILLYARDHUTCHINSON 603390067 MOP DUST- PW 04092019 4520 00
1760 HILLYARDHUTCHINSON 603390067 FOLD TOWELSTISSUE PAPER 04092019 19613 00
1760 HILLYARDHUTCHINSON 603406861 SUPER SHINESOAPWINDOW 04232019 46059 00
1760 HILLYARDHUTCHINSON 700376971 SCRUBBER REPAIR 04192019 9600 00
Total 1760 79792 00
1780
1780 HOLIDAY CREDIT OFFICE MARCH12019 PD FUEL 04012019 93317 93317 04122019
1780 HOLIDAY CREDIT OFFICE March2019 FD- FUEL 04012019 19714 19714 04122019
Total 1780 113031 113031
2130
2130 LITTLE FALLS MACHINE INC 355406 PLOW PARTS 04242019 14150 00
Total 2130 14150 00
2190
2190 LUNDEEN BROS INC 91792 OIL CHANGE 2017 DODGE SQA 03212019 5894 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 5
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2190 5894 00
2210
2210 M amp M BUS SERVICE 10193369 DRUG TESTING- KIRBY NICKA 03152019 3000 00
2210 M amp M BUS SERVICE 10193370 ALCOHOL TESTING- KIRBY NIC 03192019 3000 00
2210 M amp M BUS SERVICE 10193419 DRUG TESTING- NICHOLLE CO 04092019 6000 00
Total 2210 12000 00
2211
2211 M amp M EXPRESS SALES amp SER 182624 MOWER PARTS 04122019 36108 00
2211 M amp M EXPRESS SALES amp SER 183289 MOWER PARTS 04182019 12319 00
Total 2211 48427 00
2260
2260 MAPLE LAKE LUMBER COMPA 168882 LUMBER 04222019 1659 00
Total 2260 1659 00
2272
2272 MARES EXCAVATING APRIL 2019 WATER LEAK 04012019 70000 00
Total 2272 70000 00
2273
2273 MARKET PLACE II 107 XTRA SOAP-FD 04012019 1332 1332 04232019
2273 MARKET PLACE II 107 MEALS- TC 04012019 5142 5142 04232019
Total 2273 6474 6474
2375
2375 METRO WEST INSPECTION SE 1978 370 BIG WOODS LN 17-04 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 250 EXCELSIOR AVE N 17-69 04252019 11145 00
2375 METRO WEST INSPECTION SE 1978 202 NONA DR 17-60 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 135 EXCELSIOR AVE N 17-127 04252019 17820 00
2375 METRO WEST INSPECTION SE 1978 630 LAKE DR W 19-7 04252019 2500 00
2375 METRO WEST INSPECTION SE 1978 212 ASH ST E 19-13 04252019 5198 00
2375 METRO WEST INSPECTION SE 1978 330 CHESTNUT ST E 19-22 04252019 2500 00
Total 2375 41663 00
2419
2419 MID-MINNESOTA CONCRETE 19073 HOT WATER 03112019 49000 00
2419 MID-MINNESOTA CONCRETE 19075 HOT WATER 03132019 49000 00
2419 MID-MINNESOTA CONCRETE 19076 HOT WATER 03042019 24500 00
Total 2419 122500 00
2425
2425 MIDWAY IRON amp METAL INC 420761 STEEL 04172019 5363 00
Total 2425 5363 00
2465
2465 MCP CARSTAR COLLISION CE 41349297 SQUAD 51 REPAIRS 01052019 175667 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 6
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2465 175667 00
2511
2511 CENTER POINT ENERGY 110 PAVILION 04122019 4986 00
2511 CENTER POINT ENERGY 111 TC 04122019 5309 00
2511 CENTER POINT ENERGY 112 OLD PW SHOP 05022019 4465 00
2511 CENTER POINT ENERGY 113 WTP 04122019 50216 00
2511 CENTER POINT ENERGY 114 HOCKEY RINK 04122019 4221 00
2511 CENTER POINT ENERGY 116 WARMING HOUSE 04162019 1500 00
2511 CENTER POINT ENERGY 116 CITY HALL 04162019 23624 00
2511 CENTER POINT ENERGY 117 FD 04122019 35974 00
Total 2511 130295 00
2525
2525 MINNESOTA COMPUTER SYST 263763 ADMIN COPIER 04082019 34758 00
2525 MINNESOTA COMPUTER SYST 463318 BW S3HR 04022019 5503 00
Total 2525 40261 00
2635
2635 CORE amp MAIN LP K426017 CULVERT 04242019 145000 00
2635 CORE amp MAIN LP K441242 LOCATOR 04222019 75265 00
Total 2635 220265 00
2698
2698 MPPOA MARCH 2019 NEW MEMBER DUES- LDF 04082019 3900 00
2698 MPPOA MARCH202019 2019 DUES- M FAUST 03202019 5000 00
Total 2698 8900 00
2819
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER- DMV 03012019 5830 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-ADMIN 03012019 13604 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-PD 03012019 2160 00
2819 NORTHERN BUSINESS PRODU 385745-0 CALCULATOR INK 03012019 440 00
2819 NORTHERN BUSINESS PRODU 386830-0 DESK TRAYSCALC ROLLERS 04082019 8169 00
2819 NORTHERN BUSINESS PRODU 386830-1 DVD-RW 03072019 2859 00
2819 NORTHERN BUSINESS PRODU 387602-0 BINDERDESK TRAYSFILE 03082019 8641 00
2819 NORTHERN BUSINESS PRODU 393165-0 PD - OFFICE SUPPLIES 35303 03272019 2158 00
2819 NORTHERN BUSINESS PRODU 396891-0 PENSSTAPLERSTAPLES 05012019 15450 00
2819 NORTHERN BUSINESS PRODU 396891-1 HEATER 05012019 5285 00
2819 NORTHERN BUSINESS PRODU 396891-2 CALCULATOR 05012019 8662 00
2819 NORTHERN BUSINESS PRODU 400116-0 FOLDERSPENS 05012019 6507 00
2819 NORTHERN BUSINESS PRODU 400134-0 EMPLOYEE FOLDERSRECPT B 05012019 16499 00
Total 2819 96264 00
2832
2832 NORTHWEST ASSOC CONSUL 24128 REZONE FOR SCHOOL 04042019 3330 00
2832 NORTHWEST ASSOC CONSUL 24128 SAND PROFILE 04042019 9450 00
2832 NORTHWEST ASSOC CONSUL 24129 VERIZON 04042019 20000 00
Total 2832 32780 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 7
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
2934
2934 PLEASANT LAKE ASSOCIATION 42919 PLEASANT LAKE ASSN 05012019 500000 00
Total 2934 500000 00
2962
2962 PRINCIPAL LIFE 108 INSURANCE 04222019 14144 14144 04232019
Total 2962 14144 14144
3161
3161 S P ELECTRIC INC 7282 OLD SPLICERS REMOVAL 04112019 99054 00
Total 3161 99054 00
3180
3180 SCHWAAB INC C039891 DATE STAMP 03272019 16776 00
3180 SCHWAAB INC C041311 REPLACE PADS 04042019 2050 00
Total 3180 18826 00
4006
4006 SHRED IT USA - MPLS 8126937775 SHREDDING SERVICES 03312019 45401 00
Total 4006 45401 00
4021
4021 SOKS RAPID CAR WASH 216-1384 SQUAD WASHES 04012019 11865 11865 04122019
Total 4021 11865 11865
4040
4040 SUMMIT COMPANIES 1368349 FIRE SYSTEM MAINT 04102019 34500 00
4040 SUMMIT COMPANIES 1368350 ANNUAL FIRE ALARM INSP 04102019 23000 00
4040 SUMMIT COMPANIES 1368538 CITY HALL FIRE SUPPRESION 04052019 19800 00
4040 SUMMIT COMPANIES 1371739 FIRE EXT MAINTENANCE 04292019 46280 00
4040 SUMMIT COMPANIES 1372404 CITY HALLPD - ANNUAL FIRE A 04292019 16715 00
Total 4040 140295 00
4130
4130 STERNBERG LANTERNS INC 50379 LIGHT SOCKETS 04122019 30000 00
Total 4130 30000 00
4222
4222 TASC IN1499967 ADMIN FEES 04172019 43320 00
Total 4222 43320 00
4269
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
Total 4269 324000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 8
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4337
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16061 16061 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
Total 4337 48181 48181
4365
4365 UTILITY CONSULTANTS INC 101046 COLIFORM 03282019 8000 00
Total 4365 8000 00
4377
4377 VERIZON WIRELESS 9827946389 PW IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 FD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 INVESTIGATOR COMPUTER 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD CELL PHONE 04102019 16639 16639 04232019
4377 VERIZON WIRELESS 9827946389 PW CELL PHONE 04102019 26360 26360 04232019
Total 4377 57003 57003
4481
4481 WEST CENTRAL SANITATION I 121 RECYCLE 04302019 362792 00
4481 WEST CENTRAL SANITATION I 121 REFUSE 04302019 936578 00
4481 WEST CENTRAL SANITATION I MARCH 2019 RECYCLE 03312019 451419 451419 04122019
4481 WEST CENTRAL SANITATION I MARCH 2019 REFUSE 03312019 908999 908999 04122019
Total 4481 2659788 1360418
4495
4495 WINDSTREAM APRIL2019 LS 805 NORWAY DR E 04032019 24428 24428 04122019
4495 WINDSTREAM APRIL32019 320-274-2793 04032019 3830 3830 04122019
Total 4495 28258 28258
4520
4520 WRIGHT COUNTY HIGHWAY DE 1340 APEX 04162019 12100 00
Total 4520 12100 00
4548
4548 WRIGHT-HENNEPIN COOPERA 104 TC 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 105 CITY HALL SECURITY 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 106 LS 1255 BUSINESS BLVD 04102019 1484 1484 04232019
4548 WRIGHT-HENNEPIN COOPERA 119 STREET LIGHTS 04102019 13973 00
Total 4548 20047 6074
4559
4559 XCEL ENERGY 0774352025 ACCOUNT 51-4985655-1 03282019 1910 1910 04122019
4559 XCEL ENERGY 0774781723 ACCOUNT 51-6464610-6 04082019 5051 5051 04122019
4559 XCEL ENERGY 0774798834 ACCOUNT 51-6875531-1 04012019 2964 2964 04122019
4559 XCEL ENERGY 0774851593 ACCOUNT 51-0011253419-4 04012019 52824 52824 04122019
4559 XCEL ENERGY 0774856745 ACCOUNT 51-0010892786-1 04012019 1379 1379 04122019
4559 XCEL ENERGY 0775014393 ACCOUNT 51-6076585-1 04022019 11396 11396 04122019
4559 XCEL ENERGY 0775442400 ACCOUNT 51-6024519-2 04042019 365444 365444 04232019
CITY OF ANNANDALE Payment Approval Report - for City Council Page 9
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4559 XCEL ENERGY 0775852647 ACCOUNT 51-6024518-1 04082019 156465 156465 04232019
4559 XCEL ENERGY 0777794063 ACCOUNT 51-4192659-4 04182019 3117 00
4559 XCEL ENERGY 0779111699 ACCOUNT 51-4985655-1 04262019 1767 00
4559 XCEL ENERGY 778173400 ACCOUNT 51-4636619-8 04222019 6391 00
Total 4559 608708 597433
4648
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 23750 00
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 00 00
4648 A R ENGH 190448 SPRING MAINTENANCE 04302019 21375 00
4648 A R ENGH 190451 SPRING MAINTENANCE- TC 04302019 14250 00
Total 4648 59375 00
4716
4716 JOVANOVICH KADLEC amp ATHM 16709 KRONQUIST LOT 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 LEASE WITH WILES 03312019 28000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 ORD AMENDMENT- MICRO DIS 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 GENERAL 03312019 8750 00
4716 JOVANOVICH KADLEC amp ATHM 16709 PERSONNEL POLICY 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 CONTROLLED BURN HOLD HA 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
Total 4716 82250 00
4721
4721 MANEY INTERNATIONAL 803662X1 PARTS 02072019 2275 2275 04122019
Total 4721 2275 2275
4734
4734 MOTOROLA SOLUTIONS INC 16042791 RADIO BATTERIES 03252019 16800 00
Total 4734 16800 00
4743
4743 CARDMEMBER SERVICE 122 ATRIST EASEL 05012019 10305 00
4743 CARDMEMBER SERVICE 122 KEROSENE 05012019 6329 00
4743 CARDMEMBER SERVICE 122 POLLUTION CONTROL 05012019 41500 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC 05012019 1639 00
4743 CARDMEMBER SERVICE 122 AMAZON- 40 AMP RELAY 05012019 2898 00
4743 CARDMEMBER SERVICE 122 A-1 - BULB KIT 05012019 2503 00
4743 CARDMEMBER SERVICE 122 MENARDS-POTHOLE PATCH 05012019 47014 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC BALL VALVE 05012019 1770 00
4743 CARDMEMBER SERVICE 122 TOTAL TOOL- SHOE - PETER 05012019 5123 00
4743 CARDMEMBER SERVICE 122 PRYOR- EXCEL CLASSES- MIS 05012019 25600 00
4743 CARDMEMBER SERVICE 122 MN CHIEFS ASSOC 05012019 19900 00
4743 CARDMEMBER SERVICE 122 BEST BUY- 05012019 8589 00
4743 CARDMEMBER SERVICE 122 BEST BUY 05012019 17178 00
4743 CARDMEMBER SERVICE 122 USPS 05012019 1149 00
4743 CARDMEMBER SERVICE 122 PAYPAL- INTER ASSOC EVID- R 05012019 5000 00
4743 CARDMEMBER SERVICE 122 ACTION TARGETS- 05012019 14662 00
4743 CARDMEMBER SERVICE 122 AMAZON- METAL DUSTPAN 05012019 2894 00
4743 CARDMEMBER SERVICE 122 AMAZON- BATTERIES 05012019 2124 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 10
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 4743 216177 00
4752
4752 NCPERS GROUP LIFE INS MAY2019 INSURANCE 04172019 1600 00
Total 4752 1600 00
4769
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 39944 00
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 00 00
Total 4769 39944 00
4793
4793 DELTA DENTAL 7626938 INSURANCE 04152019 139599 139599 04232019
Total 4793 139599 139599
4831
4831 GENERAL RENTAL CENTER OF 1174533 HEATER RENTAL 03112019 11000 00
Total 4831 11000 00
4889
4889 CLASSIC CLEANING COMPANY 28038 CITY HALL- 04082019 67375 00
4889 CLASSIC CLEANING COMPANY 28038 PD- 04082019 14700 00
4889 CLASSIC CLEANING COMPANY 28038 LIBRARY- 04082019 40425 00
4889 CLASSIC CLEANING COMPANY 28039 TC 04082019 23000 00
Total 4889 145500 00
4945
4945 COUNTRY REPAIR INC 1568 KOHLER 100 GENERAT REPAIR 02212019 348966 00
Total 4945 348966 00
4955
4955 WORKFORCE INTEGRITY NET 41219 PREEMPLOYMENT TEST KIRBY 03312019 9300 00
Total 4955 9300 00
4968
4968 Volunteer Firefighter Ben Assoc of MARCH2019 BENEFIT RENEWALS 04012019 20600 20600 04122019
Total 4968 20600 20600
5002
5002 BUREAU OF CRIMINAL APPRE 536318 CJDN 03312019 27000 00
Total 5002 27000 00
5003
5003 BOLAND PRODUCTION SUPPL 11-6569 BLANK AMMUNITION 03042019 10000 00
Total 5003 10000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 11
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5006
5006 MIDCONTINENT COMMUNICATI 157013401102 FD 04092019 14765 14765 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PW 04092019 26599 26599 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 TC 04092019 3717 3717 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 DMV 04092019 12056 12056 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PD 04092019 20823 20823 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 CITY HALL 04092019 24864 24864 04122019
Total 5006 102824 102824
5031
5031 A1 RAPID LUBE 112018 SQUAD 51 OIL CHANGE 04092019 4145 4145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 51 04092019 9145 9145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 52 04092019 1500 1500 04122019
5031 A1 RAPID LUBE 11302018 SQUAD 52 WASH 04092019 1500 1500 04122019
5031 A1 RAPID LUBE DEC2018 SQUAD 51 OIL CHANGE 04092019 5000 5000 04122019
Total 5031 21290 21290
5039
5039 KAMCO 201800 CRACKFILLING 04292019 5395141 00
Total 5039 5395141 00
5056
5056 CASEYS GENERAL STORES IN MARCH 2019 PD FUEL 04012019 6449 6449 04122019
Total 5056 6449 6449
5067
5067 ZUERCHER PA0001614 GPS RECEIVERS 03102019 32800 00
5067 ZUERCHER PA0001669 RECORDS- PROPERTY amp EVID 03292019 102100 00
Total 5067 134900 00
5074
5074 Potentia MN Solar Fund 1 LLC 2019-02-1761- 520 ASH - WTP 02282019 28907 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- CEMETARY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 370 PARK SEWAGE PUMP 02282019 7041 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 520 ASH - WTP 02282019 14573 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 605 WARREN 02282019 3083 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 200 EXCELSIOR 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- BALL PARL LIGHTING 02282019 1136 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- CITY HALL 02282019 16228 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- PAVILION 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- HOCKEY RINK 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- UNIT SOUTH 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 30 CEDAR STREET LIGHT 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 111 CEDAR ST 02282019 163 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 15 CONV CLUB RD - LS 02282019 2596 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS 805 NORWAY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 640 ACACIA 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1792- FD 02282019 5895 00
Total 5074 83677 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 12
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5075
5075 HALVORSON LANGEMO PASC 2927 ARPIL PROSECUTION 03282019 139479 139479 04232019
5075 HALVORSON LANGEMO PASC 2994 MAY PROSECUTION 04262019 139479 00
Total 5075 278958 139479
5086
5086 CLASSIC CARPET amp FLOOR CA 1312 FD- CARPET CLEANING 04102019 24500 00
Total 5086 24500 00
5099
5099 STENGER PETER march72019 WATER LICENSE 03072019 3200 3200 04042019
Total 5099 3200 3200
5101
5101 GAPINSKI AMELIA 118 MILEAGE- ST PAUL-147 MILES 04222019 8526 8526 04232019
5101 GAPINSKI AMELIA 118 LUNCH- ST PAUL 04222019 1182 1182 04232019
5101 GAPINSKI AMELIA 118 PARKING RAMP- ST PAUL 04222019 1800 1800 04232019
Total 5101 11508 11508
5103
5103 GLUNZ DAVID D 589207 1ST QTR SEXTON FEE 2019 04222019 12000 00
Total 5103 12000 00
5108
5108 RECON ROBOTICS 74975 ROBOT REPAIR 03082019 40000 00
Total 5108 40000 00
5120
5120 MELGAARD SERVICES 115 LITTLE JIMS REPAIR 03272019 65000 00
Total 5120 65000 00
5137
5137 HARTZELL STEVE DEC2018 SAFETY SHOES 04092019 13998 13998 04122019
Total 5137 13998 13998
5138
5138 HOGLUND BUS COMPANY 133269 PLOW TRUCK REPAIR 04232019 242869 00
Total 5138 242869 00
5139
5139 GIEBENHAIN KARIE APRIL 2019 TRAVELTRAINING 04292019 1259 00
Total 5139 1259 00
5140
5140 GRABHAM JUDY APRIL2019 GARDEN MATERIALS REIMBUR 04302019 12312 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 13
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 5140 12312 00
Grand Totals 23368095 2894268
Dated __________________________________________
Mayor __________________________________________
Dwight Gunnarson
City Council __________________________________________
Shelly Jonas
__________________________________________
Jullie Hastings
__________________________________________
Corey Czycalla
__________________________________________
Matthew Wuollet
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
CITY OF ANNANDALE Check Register Page 1Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03012019 03042019 1005 EFT - ASPIRE 14 47332-03012019 03042019 1006 EFT - FLEXSYSTEM 9 21153-03012019 03042019 1007 EFT - MINNESOTA 8 152678-03012019 03042019 1008 EFT-FURTHER 12 194842-03012019 03042019 1008 EFT-FURTHER 12 70000-03012019 03042019 1009 EFT-PERA 5 197211-03012019 03042019 1009 EFT-PERA 5 227551-03012019 03042019 1009 EFT-PERA 5 164253-03012019 03042019 1009 EFT-PERA 5 246377-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 291789-03152019 03182019 1011 EFT - ASPIRE 14 50777-03152019 03182019 1012 EFT - FLEXSYSTEM 9 21153-03152019 03182019 1013 EFT - MINNESOTA 8 170353-03152019 03182019 1014 EFT-FURTHER 12 199842-03152019 03182019 1015 EFT-NATIONWIDE RETIREMENT 3 45727-03152019 03182019 1016 EFT-PERA 5 202077-03152019 03182019 1016 EFT-PERA 5 233162-03152019 03182019 1016 EFT-PERA 5 167748-03152019 03182019 1016 EFT-PERA 5 251623-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 338787-03012019 03042019 3231 FERRELL MISTY 123 207493-03012019 03042019 3232 HINNENKAMP KELLY 127 296930-03012019 03042019 3233 JARMON VICKI I 134 162692-03012019 03042019 3234 KRIENKE CARRIE L 136 118186-03012019 03042019 3235 GAPINSKI AMELIA 142 76605-03012019 03042019 3236 GIEBENHAIN KARIE 143 63912-03012019 03042019 3237 HERR JEFFREY J 208 198056-03012019 03042019 3238 STANDAFER PETER A 217 171766-03012019 03042019 3239 BERG TERESA 233 29593-03012019 03042019 3240 TAVARES AARON J 234 144943-03012019 03042019 3241 PETERSON KENNETH J 235 6543-03012019 03042019 3242 ETSHOKIN LOUIS RICHARD 238 69332-03012019 03042019 3243 GRIGGS DEREK C 245 173791-03012019 03042019 3244 SMITH TARA 251 104275-03012019 03042019 3245 MARES NICHOLAS J 306 46531-03012019 03042019 3246 GLUNZ DAVID D 323 215466-03012019 03042019 3247 STENGER PETER 324 148864-03012019 03042019 3248 COREY NICHOLLE 328 176647-03012019 03042019 3249 HARTZELL STEVE 329 123679-03012019 03042019 3250 WICKER MITCHELL 360 157433-03012019 03042019 3251 HASTINGS JULLIE K 803 13391-
CITY OF ANNANDALE Check Register Page 2Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 3252 FERRELL MISTY 123 186726-03152019 03182019 3253 HINNENKAMP KELLY 127 296930-03152019 03182019 3254 JARMON VICKI I 134 156691-03152019 03182019 3255 KRIENKE CARRIE L 136 109765-03152019 03182019 3256 GAPINSKI AMELIA 142 78334-03152019 03182019 3257 GIEBENHAIN KARIE 143 62780-03152019 03182019 3258 HERR JEFFREY J 208 228423-03152019 03182019 3259 STANDAFER PETER A 217 188333-03152019 03182019 3260 TAVARES AARON J 234 143820-03152019 03182019 3261 ETSHOKIN LOUIS RICHARD 238 36648-03152019 03182019 3262 Void03152019 03182019 3263 SMITH TARA 251 100781-03152019 03182019 3264 MARES NICHOLAS J 306 9080-03152019 03182019 3265 GLUNZ DAVID D 323 263393-03152019 03182019 3266 STENGER PETER 324 156283-03152019 03182019 3267 COREY NICHOLLE 328 141112-03152019 03182019 3268 HARTZELL STEVE 329 114544-03152019 03182019 3269 WICKER MITCHELL 360 231604-03152019 03182019 3270 RANDALL STEVEN R 570 23273-03152019 03182019 3271 TOMES BRIAN C 571 19117-03152019 03182019 3272 EDWARDS DANIEL J 572 25765-03152019 03182019 3273 JARVIS TRYSTON 573 16808-03152019 03182019 3274 GRIGGS DEREK C 245 209088-03152019 03182019 53766 RAMSTAD DONALD E 533 17270 03152019 03182019 54586 RAMSTAD DONALD E 533 26412 03012019 03042019 54850 ENGFER NANCY E 204 207304-03012019 03042019 54851 FLEMMING MITCHELL E 206 33085-03012019 03042019 54852 HALLER JOSEPH D 305 277811-03012019 03042019 54853 SMART MATTHEW A 331 31168-03012019 03042019 54854 GUNNARSON DWIGHT R 802 18932-03012019 03042019 54855 JONAS SHELLY 804 13391-03012019 03042019 54856 CZYCALLA COREY 806 13391-03012019 03042019 54857 WUOLLET MATTHEW L 821 13391-03012019 03042019 54858 ROTH GREGORY W 912 1847-03012019 03042019 54859 FRANZEN CLIFFORD 913 1847-03012019 03042019 54860 SCHWARZKOPF ERIC 917 2770-03012019 03042019 54861 BAACK LONNIE L 919 1847-03012019 03042019 54862 NILSON MAYNARD A 921 1847-03012019 03042019 54863 DRISTE JOHN 950 1847-03012019 03042019 54864 PETERSON LEE W 980 1847-03012019 03042019 54865 SEAGRAVES RICHARD T 985 1847-03012019 03042019 54866 WAGNER RICHARD 990 2770-03152019 03182019 54949 ENGFER NANCY E 204 163991-03152019 03182019 54950 FLEMMING MITCHELL E 206 33085-03152019 03182019 54951 FAUST MITCHEL L 241 144665-03152019 03182019 54952 HALLER JOSEPH D 305 293266-03152019 03182019 54953 SMART MATTHEW A 331 12698-03152019 03182019 54954 BROWN JOHN D 501 16254-03152019 03182019 54955 DAGNER JOHN A 503 42112-
CITY OF ANNANDALE Check Register Page 3Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 54956 FAHEY MARCUS D 507 17270-03152019 03182019 54957 GRINDLE GARY L 512 65938-03152019 03182019 54958 HAAG BRIAN 514 151209-03152019 03182019 54959 MACHOVSKY JR DALE R 529 27088-03152019 03182019 54960 PICKEN SCOTT W 53203152019 03182019 54961 RAMSTAD DONALD E 533 35555-03152019 03182019 54962 ROEPKE JEFFREY A 535 34539-03152019 03182019 54963 TOWNSEND KRISTOPHER C 546 91057-03152019 03182019 54964 WANG RYAN A 549 46822-03152019 03182019 54965 WUOLLET MATTHEW L 553 24934-03152019 03182019 54966 TORRES HORACIO JR 563 43404-03152019 03182019 54967 KOLB JOHN E 564 25749-03152019 03182019 54968 DWENGER JOSEPH A JR 568 41557-03152019 03182019 54969 HARVEY ADAM 574 42019-03152019 03182019 54970 SCHMIDT LISA A 575 14869-03152019 03182019 54971 OLSON NATHAN G 576 14869-03152019 03182019 54972 PEARSON SEAN 577 27151-03152019 03182019 54973 SCHAUFLER CHRISTINA 578 26505-03152019 03182019 54974 HOEFER JUSTIN A 579 18101-03152019 03182019 54982 RAMSTAD DONALD E 533 26412-03152019 03182019 54983 RAMSTAD DONALD E 533 17270-
Grand Totals 119 12049646-
CITY OF ANNANDALE
REQUEST FOR COUNCIL ACTION
Originating Department Administration
Meeting Date May 6 2019
Agenda No 3A
Agenda Section New Business
Item 2018 Audit
BACKGROUND The City is required to conduct an audit annually The attached audit will be presented at the meeting RECOMMENDATION Motion to approve the 2018 Audit as presented
CPAS amp ADVISORSWILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
AUDITED FINANCIAL STATEMENTS AND
DECEMBER 31 2018
CONWAY DEUTH amp SCHMIESING PLLP
SUPPLEMENTARY INFORMATION
This page intentionally left blank
PAGE
ELECTED OFFICIALS AND ADMINISTRATION 1
INDEPENDENT AUDITORS REPORT 2-4
REQUIRED SUPPLEMENTARY INFORMATION
Managements Discussion and Analysis 5-12
BASIC FINANCIAL STATEMENTS
Statement of Net Position 13
Statement of Activities 14
Balance Sheet - Governmental Funds 15
Reconciliation of the Governmental FundsBalance Sheet to the Statement of Net Position 16
Statement of Revenues Expenditures and Changes in Fund Balances -Governmental Funds 17
Reconciliation of the Statement of Revenues Expendituresand Changes in Fund Balances of Governmental Fundsto the Statement of Activities 18
Statement of Revenues Expenditures and Changes in Fund Balances -Budget and Actual - General Fund 19
Statement of Net Position - Proprietary Funds 20
Statement of Revenues Expenses and Changes in Net Position -Proprietary Funds 21
Statement of Cash Flows - Proprietary Funds 22-23
Notes to the Financial Statements 24-57
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of the Proportionate Share of the Net Pension Liability 58
Schedule of Employer Contributions 59
Schedule of Changes in the Citys Net Pension Liability and Related Ratios 60
Notes to the Required Supplementary Information 61-63
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
PAGE
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
SUPPLEMENTARY INFORMATION
COMBINING STATEMENTS OF NONMAJOR FUNDS
Combining Balance Sheet - Nonmajor Governmental Funds 64
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds 65
Combining Balance Sheet - Nonmajor Governmental Funds - Special Revenue 66
Combining Balance Sheet - Nonmajor Governmental Funds - Debt Service 67
Combining Balance Sheet - Nonmajor Governmental Funds - Capital Projects 68
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Special Revenue 69
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Debt Service 70
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Capital Projects 71
FINANCIAL SCHEDULE
Schedule of Long-Term Liabilities 72
COMPLIANCE SECTION
Independent Auditors Report on Minnesota Legal Compliance 73
Independent Auditors Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements Performedin Accordance with Government Auditing Standards 74-75
Schedule of Findings 76-77
Summary Schedule of Prior Audit Findings 78
Elected Officials Position Term Expires
Dwight Gunnarson Mayor December 31 2018
Corey Czycalla Council Member December 31 2018
Shelly Jonas Council Member December 31 2018
Matthew Wuollet Council Member December 31 2020
Jullie Hastings Council Member December 31 2020
Administration
Kelly Hinnenkamp Administrator Appointed
Misty Ferrell Treasurer Appointed
CITY OF ANNANDALE MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATIONDECEMBER 31 2018
1
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Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Report on the Financial Statements
Managements Responsibility for the Financial Statements
Auditors Responsibility
beli
INDEPENDENT AUDITORS REPORT
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 Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Cityrsquos basic financial statements as listed in the table of contents
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
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
2
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 entitys 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 entitys 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
Opinions
Other Matters
Required Supplementary Information
Supplementary and Other Information
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 Annandale Minnesota as of December 31 2018 and the respective changes in financial position and where applicable cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America
Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions and the Schedule of Changes in the Citys 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 managements 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
3
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Cityrsquos basic financial statements The statements and schedules listed in the table of contents as supplementary information and the Elected Officials and Administration section are presented for purposes of additional analysis and are not a required part of the basic financial statements
The supplementary information is the responsibility of management and was derived from and relates 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 supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole
The Elected Officials and Administration section has 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 the information presented
Other Reporting Required by Government Auditing Standards
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
4
In accordance with Government Auditing Standards we have also issued our report dated May 6 2019 on our consideration of the Citys 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 results of that testing and not to provide an opinion on the effectiveness of the Cityrsquos 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 Cityrsquos internal control over financial reporting and compliance
May 6 2019
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REQUIRED SUPPLEMENTARY INFORMATION
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-
-
-
-
The City as a Whole Statement of Net Position and Statement of Activities
Our analysis of the City of Annandale begins with the Statement of Net Position and the Statement of Activities One of the most important questions asked about the Cityrsquos finances is ldquoIs the City as a whole better off or worse off as a result of the yearrsquos activitiesrdquo The Statement of Net Position and the Statement of Activities both report information about the City as a whole and about its activities in a way that helps answer this question The Statement of Net Position includes all assets and deferred outflows of resources and liabilities and deferred inflows of resources using the accrual basis of accounting In the Statement of Activities all of the current yearrsquos revenues and expenses are taken into account regardless of when cash is received or paid These two statements report the Cityrsquos net position and changes in them You can think of the Cityrsquos net positionmdashthe difference between assets and deferred outflows of resources and liabilities and deferred inflows of resourcesmdashas one way to measure the Cityrsquos financial health Over time increases or decreases in the Cityrsquos net position is one indicator of whether the Cityrsquos financial health is improving or deteriorating
You will need to consider other nonfinancial factors however to assess the overall health of the City of Annandale
In the Statement of Net Position and the Statement of Activities we divide the City into two kinds of activities
Governmental Activities - Most of the Citys basic services are reported here including general government public safety public works culture and recreation and economic development Property taxes and state and federal grants finance most of these activities
5
This annual report consists of a series of financial statements The Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the Cityrsquos finances Fund financial statements are presented after the Statement of Activities Fund financial statements also report the Cityrsquos operations in more detail than the government-wide statements by providing information about the Cityrsquos funds The notes to the financial statements provide information that is essential to a full understanding of the data provided in the government-wide and fund financial statements This annual report also contains other supplementary information in addition to the basic financial statements
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
This section of the basic financial statements of the City of Annandale (the City) presents a discussion and analysis of the Cityrsquos financial performance during the fiscal year ended December 31 2018 Please read it in conjunction with the Cityrsquos basic financial statements following this section
Financial Highlights
The assets and deferred outflows of resources of the City exceeded liabilties and deferred inflows of resources by $16461537
The Cityrsquos total net position increased by $1317551
The Cityrsquos governmental funds reported combined ending fund balances of $4349540 an increase of $122322 The Governmental Funds have $1240520 available for spending at the Citys discretion
At the end of the current fiscal year unassigned fund balance for the General Fund was $1697339 or 9417 of total General Fund expenditures of $1802505
Using This Annual Report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
The proprietary fund financial statements can be found on pages 20-23 of this report
Notes to the 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 The notes to the financial statements can be found on pages 24-57 of this report
6
Proprietary Funds - When the City of Annandale charges customers for the services it providesmdashwhether to outside customers or to other units of the Citymdashthese services are generally reported in proprietary funds Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities In fact the Cityrsquos enterprise funds are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information such as cash flows for proprietary funds
Business-Type Activities - The City charges a fee to customers to help it cover all or most of the cost of certain services it provides The Citys Water Sewer RefuseRecycling and Storm Utility funds are reported here
The Citys Most Significant Funds Fund Financial Statements
Our analysis of the Cityrsquos major funds begins with the fund financial statements These statements provide detailed information about the most significant fundsmdashnot the City as a whole Some funds are required to be established by state law and by bond covenants However the City Council establishes other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes grants and other money The Citys two kinds of funds-governmental and proprietary-use different accounting approaches
Governmental Funds - Most of the Cityrsquos basic services are reported in governmental funds Governmental funds focus on how money flows into and out of those funds and the balances left at year-end that are available for spending These funds are reported using an accounting method called modified accrual accounting which measures cash and all other financial assets that can readily be converted to cash The governmental fund statements provide a detailed short-term view of the Cityrsquos general government operations and the basic services it provides Governmental fund information helps the reader of the statements determine whether there are more or fewer financial resources that can be spent in the near future to finance the Cityrsquos programs We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation after the fund financial statements
The governmental fund financial statements can be found on pages 15-19 of this report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 5190696$ 5190633$ 63$ Net Capital Assets 10406611 10638601 (231990) Net Pension Asset 517946 440028 77918
Total Assets 16115253 16269262 (154009)
Deferred Outflows of Resources 621929 855064 (233135)
Total Assets and DeferredOutflows of Resources 16737182$ 17124326$ (387144)$
Current and Other Liabilities 1080947$ 1068593$ 12354$ Long-Term Liabilities 5393130 6383354 (990224)
Total Liabilities 6474077 7451947 (977870)
Deferred Inflows of Resources 886892 904112 (17220)
Net PositionNet Investment in Capital Assets 4962623 4377847 584776 Restricted 2021421 2178740 (157319) Unrestricted 2392169 2211680 180489
Total Net Position 9376213 8768267 607946
Total Liabilities Deferred Inflowsof Resources and Net Position 16737182$ 17124326$ (387144)$
Statement of Net Position
The Cityrsquos net position increased from a year ago Our analysis below focuses on the net position (Tables 1 and 2) andchanges in net position (Tables 3 and 4) of the Cityrsquos governmental and business-type activities
Table 1Comparative Condensed Statement of Net Position
Governmental Activities
7
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 179979$ 85557$ 94422$ Equity Interest 7004898 7023511 (18613) Net Capital Assets 10543232 10887885 (344653)
Total Assets 17728109 17996953 (268844)
Deferred Outflows of Resources 35051 59103 (24052)
Total Assets and DeferredOutflows of Resources 17763160$ 18056056$ (292896)$
Current and Other Liabilities 1595412$ 1396254$ 199158$ Long-Term Liabilities 9028762 10236810 (1208048)
Total Liabilities 10624174 11633064 (1008890)
Deferred Inflows of Resources 53662 47273 6389
Net PositionNet Investment in Capital Assets 8625232 8741281 (116049) Restricted 74208 36985 37223 Unrestricted (1614116) (2402547) 788431
Total Net Position 7085324 6375719 709605
Total Liabilities Deferred Inflowsof Resources and Net Position 17763160$ 18056056$ (292896)$
Business-Type Activities
8
Comparative Condensed Statement of Net PositionTable 2
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 652677$ 598474$ 54203$ Operating Grants and Contributions 122213 111759 10454 Capital Grants and Contributions 187016 576626 (389610)
General RevenuesProperty Taxes 1485895 1463472 22423 Tax Increments 20858 20203 655 Grants and Contributions Not Restricted 453773 422194 31579 Investment Income 16929 17237 (308) Miscellaneous 4178 17678 (13500) Gain on Sale of Asset 6034 268371 (262337)
Total Revenues 2949573 3496014 (546441)
EXPENSESGeneral Government 502902 475597 27305 Public Safety 970131 1019255 (49124) Public Works 769202 840164 (70962) Culture and Recreation 148880 762606 (613726) Economic Development 45238 85505 (40267) Interest on Long-Term Debt 160274 176897 (16623)
Total Expenses 2596627 3360024 (763397) Change in Net Position before Transfers 352946 135990 216956
TRANSFERS 255000 247000 8000 Change in Net Position 607946 382990 224956
NET POSITION BEGINNING OF YEAR 8768267 8385277 382990
NET POSITION END OF YEAR 9376213$ 8768267$ 607946$
Governmental Activities
Net position of the Citys governmental activities increased by $607946 Table 3 presents the key elements of the increase
Table 3Comparative Condensed Statement of Activities
Governmental Activities
9
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 3213338$ 2905848$ 307490$ General Revenues
Investment Income 2700 (1558) 4258 Total Revenues 3216038 2904290 311748
EXPENSESWater 492444 485751 6693 Sewer 1441099 1331721 109378 RefuseRecycling 199326 196627 2699 Storm Utility 99951 91130 8821
Total Expenses 2232820 2105229 127591 Change in Net Position before Transfers 983218 799061 184157
TRANSFERS (255000) (247000) (8000) CHANGE IN EQUITY INTEREST (18613) (70479) 51866
Change in Net Position 709605 481582 176157
NET POSITION BEGINNING OF YEAR 6375719 5894137 481582
NET POSITION END OF YEAR 7085324$ 6375719$ 709605$
Comparative Condensed Statement of Activities
Business-Type Activities
10
Table 4
Business-Type Activities
The net position of our business-type activities increased by $709605 The net increase was due to the following funds change in net position Water - $26607 decrease Sewer - $822708 increase RefuseRecycling - $9397 increase and Storm Utility - $95893 decrease
The following tables indicate the changes in net position for the Citys business-type activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Capital Project Funds - The capital projects fund balances increased by $13451
11
Over the course of the year the City of Annandale City Council did not revise the budget The General Fund budget predicted a $5178 increase in fund balance which includes the operations of the Motor Vehicle department The actual change in fund balance was an increase of $212334 This is due to both revenues being higher and expenditures being lower than anticipated Mobile Home tax revenues building permit fees and state aids were over budgeted amounts and both current and capital outlay expenditures were under budgeted amounts
Governmental Activities
Revenues - The following chart visually illustrates the Citys revenue by source for its governmental activities
Financial Analysis of the Citys Funds
General Fund - The Citys General Fund Balance increased by $212334 for 2018 The increase is mainly due to an increase in building permit fees and local government aid with a slight increase in public safety expenditures and a decrease in transfers to other funds
Special Revenue Funds - The Citys special revenue fund balances decreased by $53786 A majority of the decrease was due to expenditures for the pintail drive extension project
Debt Service Funds - The debt service fund balances decreased by $49677 The main reason for the decrease was due to customer prepayments made on special assessments in prior years
General Fund Budgetary Highlights
Fees Fines and Charges for Services
2213
Operating Grants and Contributions
414
Capital Grants and Contributions
634
Property Taxes5038 Tax Increments
071
Grants and Contributions Not Restricted1538
Investment Income057
Miscellaneous014
Gain on Sale of Asset021
Revenue by Source - Governmental Activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Long-Term Liabilities
At the end of 2018 the City of Annandale had $15543549 in bonds notes and equipment certificates outstanding Refer to Note 7 of the Notes to the Financial Statements for a schedule showing the Citys long-term liability activity
Economic Factors and Next Years Budget
The City of Annandales appointed officials considered many factors when setting the fiscal year 2019 budget rates and fees that will be charged by the funds of the City The major factor accounted for when adopting the General Fund budget was to hold all line items as much as possible to the 2018 final budget
Contacting the Citys Financial Management
This financial report is designed to provide our residents customers and creditors with a general overview of the Citys finances and to show the Citys accountability for the money it receives If you have any questions about this report or need additional information contact the City of Annandale 30 Cedar Street E Annandale Minnesota 55302
12
Capital Assets
At the end of 2018 the City of Annandale had $47826808 invested in a broad range of capital assets Refer to Note 5 of the Notes to the Financial Statements for a schedule showing the Citys capital asset activity During 2018 the City had a large increase in improvements other than buildings related to the completion of the Southside Trail project
BASIC FINANCIAL STATEMENTS
This page intentionally left blank
Governmental Business-TypeActivities Activities Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Cash and Investments 3413471$ 86083$ 3499554$ Restricted Cash 74208 74208 Taxes Receivable - Delinquent 14909 14909 Special Assessments Receivable
Delinquent 4423 4158 8581 Current and Deferred 650220 14885 665105
Accounts Receivable 96631 339457 436088 Interest Receivable 9 9 Prepaid Items 75903 22861 98764 Internal Balances 385956 (385956) Due from Other Governments 186251 24283 210534 Land Held for Resale 362923 362923 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 2696744 277948 2974692 Other Capital Assets Net of Depreciation 7709867 10265284 17975151
Net Pension Asset 517946 517946 Total Assets 16115253 17728109 33843362
Deferred Outflows of Resources 621929 35051 656980
Total Assets and Deferred Outflows of Resources 16737182$ 17763160$ 34500342$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 65859$ 26908$ 92767$ Contracts Payable 27913 27913 Due to Other Governments 15676 309797 325473 Salaries and Benefits Payable 30329 7259 37588 Interest Payable 61920 78448 140368 Unearned Revenue 36250 36250
Long-Term LiabilitiesNet Pension Liability 696581 197762 894343 Other Long-Term Liabilities Due Within One Year 843000 1173000 2016000 Other Long-Term Liabilities Due in More than One Year 4696549 8831000 13527549
Total Liabilities 6474077 10624174 17098251
Deferred Inflows of Resources 886892 53662 940554
Net PositionNet Investment in Capital Assets 4962623 8625232 13587855 Restricted for
Debt Service 2009940 2009940 Tax Increment 11481 11481 Capital Replacement 74208 74208
Unrestricted 2392169 (1614116) 778053 Total Net Position 9376213 7085324 16461537
Total Liabilities Deferred Inflows of Resourcesand Net Position 16737182$ 17763160$ 34500342$
See Accompanying Notes to the Financial Statements13
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONDECEMBER 31 2018
Fees Fines and Operating CapitalCharges for Grants and Grants and Governmental Business-Type
Expenses Services Contributions Contributions Activities Activities Total
GOVERNMENTAL ACTIVITIESGeneral Government 502902$ 286176$ $ $ (216726)$ $ (216726)$ Public Safety 970131 208144 115858 41000 (605129) (605129) Public Works 769202 130069 6355 26201 (606577) (606577) Culture and Recreation 148880 15413 55109 (78358) (78358) Economic Development 45238 12875 30108 (2255) (2255) Interest on Long-Term Debt 160274 34598 (125676) (125676)
Total Governmental Activities 2596627 652677 122213 187016 (1634721) 0 (1634721)
BUSINESS-TYPE ACTIVITIESWater 492444 565694 73250 73250 Sewer 1441099 2393268 952169 952169 RefuseRecycling 199326 208571 9245 9245 Storm Utility 99951 45805 (54146) (54146)
Total Business-Type Activities 2232820 3213338 0 0 0 980518 980518
Total 4829447$ 3866015$ 122213$ 187016$ (1634721) 980518 (654203)
GENERAL REVENUESProperty Taxes 1485895 1485895 Tax Increments 20858 20858 Grants and Contributions not Restricted to Specific Programs 453773 453773 Unrestricted Investment Earnings 16929 2700 19629 Miscellaneous 4178 4178 Gain on Sale of Asset 6034 6034
TRANSFERS 255000 (255000) CHANGE IN EQUITY INTEREST (18613) (18613)
Total 2242667 (270913) 1971754 Change in Net Position 607946 709605 1317551
NET POSITION BEGINNING OF YEAR 8768267 6375719 15143986
NET POSITION END OF YEAR 9376213$ 7085324$ 16461537$
See Accompanying Notes to the Financial Statements14
CITY OF ANNANDALE MINNESOTA
STATEMENT OF ACTIVITIESYEAR ENDED DECEMBER 31 2018
Program RevenuesNet (Expense) Revenue and
Changes in Net Position
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
ASSETSCash and Investments 1062209$ 2351262$ 3413471$ Taxes Receivable - Delinquent 14534 375 14909Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 650220 650220
Accounts Receivable 5744 90887 96631Interest Receivable 9 9 Prepaid Items 73751 2152 75903Due from Other Funds 920750 190388 1111138Due from Other Governments 135407 50844 186251Land Held for Resale 362923 362923
Total Assets 2212395$ 3703483$ 5915878$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 41982$ 23877$ 65859$ Contracts Payable 3574 24339 27913 Due to Other Funds 143500 581682 725182 Due to Other Governments 6200 9476 15676Salaries and Benefits Payable 30195 134 30329Unearned Revenue 36250 36250
Total Liabilities 261701 639508 901209
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 14534 375 14909Special Assessments 650220 650220
Total Deferred Inflows of Resources 14534 650595 665129
Fund Balance Nonspendable 73751 2152 75903 Restricted 1532633 1532633 Committed 847422 847422 Assigned 165070 487992 653062Unassigned 1697339 (456819) 1240520
Total Fund Balance 1936160 2413380 4349540
Total Liabilities Deferred Inflows ofResources and Fund Balance 2212395$ 3703483$ 5915878$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
BALANCE SHEETGOVERNMENTAL FUNDS
DECEMBER 31 2018
15
2018
Total Fund Balances - Governmental Funds 4349540$
Amounts reported for governmental activities in the Statement of Net Position are differentbecause
Capital assets used in governmental activities are not financial resources and therefore arenot reported as assets in the governmental funds
Capital Assets 31934114Less Accumulated Depreciation (21527503) Net Pension Asset 517946
Certain receivables will be collected in subsequent years but are not available soon enoughto pay for the current periods expenditures and therefore are deferred in the funds
Delinquent Property Taxes 14909Special Assessments 650220
Deferred outflows and inflows of resources related to pensions are applicable to futureperiods and therefore are not reported in the funds
Deferred Outflows of Resources Related to Pensions 621929 Deferred Inflows of Resources Related to Pensions (886892)
Long-term liabilities including bonds payable are not due and payable in the current periodand therefore are not reported as liabilities in the funds
Bonds Payable (4525000) Notes Payable (1014000) Compensated Absences Payable (22979) Interest Payable (61920) Bond Discount 22430 Net Pension Liability (696581)
Total Net Position - Governmental Activities 9376213$
See Accompanying Notes to the Financial Statements16
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION
DECEMBER 31 2018
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
REVENUESProperty Taxes 1167129$ 323230$ 1490359$ Tax Increments 20858 20858 Special Assessments 149671 149671 Licenses and Permits 106197 106197 Intergovernmental 568136 30310 598446 Charges for Services 457769 51231 509000 Fines and Forfeitures 12790 4299 17089 Investment Income 22019 (5090) 16929 Contributions and Donations 1700 133758 135458 Miscellaneous 22893 679 23572
Total Revenues 2358633 708946 3067579
EXPENDITURESCurrent
General Government 412224 10807 423031 Public Safety 889531 42738 932269 Public Works 379968 379968 Culture and Recreation 111127 3735 114862 Economic Development 52358 52358
Debt Service Principal 821000 821000 Interest and Other Charges 162964 162964
Capital Outlay General Government 5206 5206 Public Safety 4449 67055 71504 Public Works 14006 14006 Culture and Recreation 102651 102651 Economic Development 144931 144931
Total Expenditures 1802505 1422245 3224750 Excess (Deficiency) of Revenues
Over (Under) Expenditures 556128 (713299) (157171)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 1145914 1145914 Transfers Out (343794) (547120) (890914)
Total Other Financing Sources (Uses) (343794) 623287 279493 Net Change in Fund Balances 212334 (90012) 122322
FUND BALANCE BEGINNING OF YEAR 1723826 2503392 4227218
FUND BALANCE END OF YEAR 1936160$ 2413380$ 4349540$
See Accompanying Notes to the Financial Statements17
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
YEAR ENDED DECEMBER 31 2018
2018
Total Net Change in Fund Balances - Governmental Funds 122322$
Amounts reported for governmental activities in the Statement of Activities are different because
Capital outlays are reported in governmental funds as expenditures However in the Statementof Activities the cost of those assets is allocated over the estimated useful lives asdepreciation expense
Capital Outlays 360225 Depreciation Expense (556497) Disposal of Capital Assets (75923) Accumulated Depreciation Related to Disposed Capital Assets 40205
Revenues in the Statement of Activities that do not provide current financial resources are notreported as revenues in the funds
Special Assessments (115073)
Delinquent property taxes receivable will be collected in subsequent years but are not availablesoon enough to pay for the current periods expenditures and therefore are deferred in the funds (4464)
Some expenses reported in the Statement of Activities do not require the use of currentresources and therefore are not reported as expenditures in governmental funds
Compensated Absences 313 Net Pension Asset 77918Net Pension Liability 151145 Deferred Outflows of Resources Related to Pensions (233135) Deferred Inflows of Resources Related to Pensions 17220
Principal Retirement of Long-Term Debt 821000 Amortization of Bond Discounts (4234) Change in Interest Payable 6924
Change in Net Position - Governmental Activities 607946$
See Accompanying Notes to the Financial Statements18
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES EXPENDITURESAND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Bond proceeds provide current financial resources to governmental funds but issuing debtincreases long-term liabilities in the Statement of Net Position Repayment of bond principalis an expenditure in the governmental funds but the repayment reduces long-term liabilities inthe Statement of Net Position
Over(Under)
FinalOriginal Final Actual Budget
REVENUESProperty Taxes 1120885$ 1120885$ 1167129$ 46244$ Licenses and Permits 61800 61800 106197 44397 Intergovernmental 541952 541952 568136 26184 Charges for Services 437744 437744 457769 20025 Fines and Forfeitures 8700 8700 12790 4090 Investment Income 22019 22019 Contributions and Donations 1700 1700 Miscellaneous 20000 20000 22893 2893
Total Revenues 2191081 2191081 2358633 167552
EXPENDITURESCurrent
General Government 435269 435269 412224 (23045) Public Safety 896497 896497 889531 (6966) Public Works 399317 399317 379968 (19349) Culture and Recreation 127325 127325 111127 (16198)
Capital OutlayGeneral Government 30500 30500 5206 (25294) Public Safety 1500 1500 4449 2949
Total Expenditures 1890408 1890408 1802505 (87903) Excess (Deficiency) of Revenues
Over (Under) Expenditures 300673 300673 556128 255455
OTHER FINANCING SOURCES (USES)Transfers Out (295495) (295495) (343794) (48299)
Net Change in Fund Balance 5178$ 5178$ 212334 207156$
FUND BALANCE BEGINNING OF YEAR 1723826
FUND BALANCE END OF YEAR 1936160$
See Accompanying Notes to the Financial Statements19
Budgeted Amounts
YEAR ENDED DECEMBER 31 2018
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL
GENERAL FUND
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current AssetsCash and Investments 23690$ 62393$ $ $ 86083$ Special Assessments Receivable
Delinquent 1167 2096 682 213 4158Current and Deferred 3859 9981 901 144 14885
Accounts Receivable 46078 269326 19878 4175 339457Prepaid Items 9433 12352 1076 22861Due from Other Governments 144 24111 24 4 24283Due from Other Funds 98000 21000 119000
Total Current Assets 182371 401259 22561 4536 610727
Noncurrent AssetsRestricted Cash 74208 74208 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 66881 191067 20000 277948Other Capital Assets Net of Depreciation 4497152 3259174 2505 2506453 10265284
Total Noncurrent Assets 4564033 10529347 22505 2506453 17622338 Total Assets 4746404 10930606 45066 2510989 18233065
Deferred Outflows of ResourcesRelated to Pensions 12805 20153 2093 35051
Total Assets and DeferredOutflows of Resources 4759209$ 10950759$ 47159$ 2510989$ 18268116$
LIABILITIES DEFERRED INFLOWS OFRESOURCES AND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 11931$ 1765$ 13212$ $ 26908$ Due to Other Funds 445076 28318 31562 504956 Due to Other Governments 453 308238 1106 309797 Salaries and Benefits Payable 2732 3813 714 7259Interest Payable 13173 65275 78448Notes Payable Due Within One Year 232000 941000 1173000
Total Current Liabilities 260289 1765167 43350 31562 2100368
Long-Term LiabilitiesNet Pension Liability 72251 113702 11809 197762Notes Payable Net of Current Amount 1576000 7255000 8831000
Total Noncurrent Liabilities 1648251 7368702 11809 0 9028762 Total Liabilities 1908540 9133869 55159 31562 11129130
Deferred Inflows of ResourcesRelated to Pensions 19605 30853 3204 53662
Net PositionNet Investment in Capital Assets 2756033 3340241 22505 2506453 8625232 Restricted for Capital Replacement 74208 74208 Unrestricted 75031 (1628412) (33709) (27026) (1614116)
Total Net Position 2831064 1786037 (11204) 2479427 7085324
Total Liabilities Deferred Inflowsof Resources and Net Position 4759209$ 10950759$ 47159$ 2510989$ 18268116$
See Accompanying Notes to the Financial Statements20
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONPROPRIETARY FUNDS
DECEMBER 31 2018
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
OPERATING REVENUESCharges for Services 565694$ 1219482$ 208571$ 45805$ 2039552$
OPERATING EXPENSESWages and Salaries 110471 188946 15086 314503Materials and Supplies 29374 29374Repairs and Maintenance 57478 21425 44 8346 87293Insurance 11074 9982 21056Electricity 27203 12231 39434Wastewater Commission Charges 871318 871318 Testing 1111 1111Contracted Services 4467 4378 162233 171078Depreciation 171475 118151 1333 87981 378940Professional Services 4717 5818 1834 524 12893Billing 14718 15335 30053Miscellaneous 17863 15245 3461 3100 39669
Total Operating Expenses 449951 1247494 199326 99951 1996722 Operating Income (Loss) 115743 (28012) 9245 (54146) 42830
NONOPERATING REVENUES (EXPENSES)Investment Income 543 1752 152 253 2700Interest and Fiscal Charges (42493) (193605) (236098) Reimbursements 1173786 1173786
Total Nonoperating Revenues(Expenses) (41950) 981933 152 253 940388
Income (Loss) Before Transfersand Other Items 73793 953921 9397 (53893) 983218
TRANSFERS AND OTHER ITEMSChange in Equity Interest (18613) (18613) Transfers In 19600 36400 56000 Transfers Out (120000) (149000) (42000) (311000)
Total Transfers and Other Items (100400) (131213) 0 (42000) (273613) Change in Net Position (26607) 822708 9397 (95893) 709605
NET POSITION BEGINNING OF YEAR 2857671 963329 (20601) 2575320 6375719
NET POSITION END OF YEAR 2831064$ 1786037$ (11204)$ 2479427$ 7085324$
See Accompanying Notes to the Financial Statements
YEAR ENDED DECEMBER 31 2018
21
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET POSITIONPROPRIETARY FUNDS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers and Users 553327$ 1022629$ 207570$ 47362$ 1830888$ Payments to Suppliers (164208) (767959) (181855) (11970) (1125992) Payments to Employees (115506) (184885) (20045) (320436)
Net Cash Provided (Used) by OperatingActivities 273613 69785 5670 35392 384460
CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIESTransfers Out (120000) (149000) (42000) (311000) Interfund Loan 33986 (4344) 6201 35843 Reimbursements 1173786 1173786
Net Cash Provided (Used) by NoncapitalFinancing Activities (120000) 1058772 (4344) (35799) 898629
CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESPrincipal Paid on Debt (226000) (920000) (1146000) Interest Paid on Debt (44518) (200960) (245478) Bonds Issued 3396 3396 Acquisition and Construction of Capital Assets (16094) (16501) (1692) (34287)
Net Cash Provided (Used) by Capital andRelated Financing Activities (283216) (1137461) (1692) 0 (1422369)
CASH FLOW FROM INVESTING ACTIVITIESInterest and Dividends Received (Paid) 543 4594 366 407 5910
Net Increase (Decrease) in Cash andCash Equivalents (129060) (4310) 0 0 (133370)
CASH AND CASH EQUIVALENTSBEGINNING OF YEAR 152750 140911 293661
CASH AND CASH EQUIVALENTSEND OF YEAR 23690$ 136601$ 0$ 0$ 160291$
RECONCILIATION OF CASH AND CASH EQUIVALENTSCash and Investments 23690$ 62393$ $ $ 86083$ Restricted Cash 74208 74208
Total Cash amp Cash Equivalents 23690$ 136601$ 0$ 0$ 160291$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
22
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CITY OF ANNANDALE MINNESOTA
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
RECONCILIATION OF OPERATING INCOME(LOSS) TO CASH FLOWS FROM OPERATINGACTIVITIESOperating Income (Loss) 115743$ (28012)$ 9245$ (54146)$ 42830$ Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided (Used) by OperatingActivities
Depreciation 171475 118151 1333 87981 378940 Pension Related Adjustments (5848) 3118 (5273) (8003)(Increase) Decrease in Assets
Special Assessments ReceivableDelinquent 300 514 (37) (113) 664 Current and Deferred (754) (4236) (573) 2077 (3486)
Accounts Receivable (11969) (190759) (1427) (453) (204608) Prepaid Items (397) (1455) (329) (2181) Due from Other Governments 56 (2372) 1036 46 (1234)
Increase (Decrease) in LiabilitiesAccounts Payable 3741 (10858) 275 (6842) Due to Other Governments 453 184751 1106 186310 Salaries and Benefits Payable 813 943 314 2070
Net Cash Provided (Used) by OperatingActivities 273613$ 69785$ 5670$ 35392$ 384460$
NONCASH INVESTING CAPITAL ANDFINANCING ACTIVITIESChange in Equity Interest 0$ (18613)$ 0$ 0$ (18613)$
See Accompanying Notes to the Financial Statements23
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A REPORTING ENTITY
Blended Component Unit - Reported as if they were part of the City
Blended Component Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
The financial statements present the City and its component units The City includes all funds organizations institutions agencies departments and offices that are not legally separate from such Component units are legally separate organizations for which the City is financially accountable or for which the exclusion of the component unit would render the financial statements of the City misleading
The City of Annandale Minnesota is a statutory city governed by an elected mayor and four council members The accompanying financial statements present the government entities for which the government is considered to be financially accountable
Joint Ventures and Jointly Governed Organizations - The relationship of the City with the entity is disclosed
The criteria used to determine if the City is financially accountable for a component unit includes whether or not 1) the City appoints the voting majority of the potential component units governing body and is able to impose its will on the potential component unit or is in a relationship of financial benefit or burden with the potential component unit or 2) the potential component unit is fiscally dependent on and there is a potential for the potential component unit to provide specific financial benefits to or impose specific financial burdens on the City
As a result of applying the component unit definition criteria above certain organizations have been defined and are presented in this report as follows
For each of the categories above the specific entities are identified as follows
The Annandale Economic Development Authority (EDA) is a legal entity separate from the City Although legally separate the Annandale EDA is reported as if it were part of the primary government because it provides services exclusively for the City Separate financial statements are not prepared for the Annandale EDA
24
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
A REPORTING ENTITY (Contd)
Joint Ventures and Jointly Governed Organizations
B GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Separate financial statements are provided for governmental funds and proprietary funds Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements
Separate financial statements can be obtained by contacting the Wastewater Commission PO Box K Annandale MN 55302
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or segment Interest on general long-term debt is considered an indirect expense and is reported separately in the Statement of Activities Program revenues include 1) charges to customers or applicants who purchase use or directly benefit from goods services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment Taxes and other items not properly included among program revenues are reported instead as general revenues Internally dedicated revenues are reported as general revenues rather than program revenues
The government-wide financial statements (ie the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the City Governmental activities which normally are supported by taxes and intergovernmental revenues are reported separately from business-type activities which rely to a significant extent on fees and charges for support
In September 2003 the City entered into a joint powers agreement with the City of Maple Lake to establish the Annandale-Maple Lake Wastewater Commission (the Commission) The purpose of the Commission is to make available wastewater treatment within the present and future boundaries of the Cities and to serve such other areas as the Commission approves As part of the joint venture the City of Annandale agrees to fund the Debt Service and Operating Funds of the Commission according to terms of the agreement The agreement states a City may terminate the agreement by written notice to the other City In such event the City of Annandale shall pay 60 of all costs incurred except each City shall pay its own attorneys fee In 2008 both Cities approved amending the joint powers agreement to include the City of Howard Lake effective January 1 2009 Each City will then have a one-third equity interest in the Commission Because there is an explicit measurable equity interest in the joint venture the interest is reported in the government-wide financial statements as well as in the Sewer Fund
25
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
The City reports the following major governmental funds
The City reports the following major enterprise funds
The Sewer Fund accounts for the operations of the Citys sewer utility
The Storm Utility Fund accounts for the activities of the Citys storm drainage operations
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting Revenues are recognized as soon as they are both measurable and available Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period For this purpose the City considers revenues to be available if they are collected within 60 days after the end of the current fiscal period Expenditures generally are recorded when a liability is incurred as under accrual accounting However debt service expenditures as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due
The General Fund is the Citys primary operating fund This fund accounts for all financial resources of the general City except those required to be accounted for in another fund
The RefuseRecycling Fund accounts for the operations of the Citys refuserecycling
Property taxes special assessments intergovernmental revenue charges for services franchise taxes licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period All other revenue items are considered to be measurable and available only when cash is received by the City
The Water Fund accounts for the operations of the Citys water utility
26
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the proprietary fund financial statements Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of related cash flows Property taxes are recognized as revenues in the year for which they are levied Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements Exceptions to this general rule are charges between the Citys utility functions and various other functions of the City Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C
D DEPOSITS AND INVESTMENTS
(1)
(2)
(3)
(4)
(5)
(6)
time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States bank
general obligations of the State of Minnesota and its municipalities and in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service
The Citys cash and cash equivalents are considered to be cash on hand deposits and highly liquid debt instruments purchased with original maturities of three months or less from the date of acquisition
27
mutual funds through shares of registered investment companies provided the mutual fund receives certain ratings depending on its investments
The City may invest in the following types of investments as authorized by Minn Stat sectsect118A04 and 118A05
securities which are direct obligations or are guaranteed or insured issues of the United States its agencies its instrumentalities or organizations created by an act of Congress except mortgage-backed securities defined as high risk by Minn Stat sect118A04 subd 6
MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (Contd)
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 funds principal ongoing operations The principal operating revenues of the enterprise funds are charges to customers for sales and services Operating expenses for enterprise funds include the cost of sales and services administrative expenses and depreciation of capital assets All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses
commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less and
with certain restrictions in repurchase agreements securities lending agreements joint powers investment trusts and guaranteed investment contracts
Cash and investments were comprised of deposits brokered certificates of deposits money market funds at various financial brokers and the 4M Fund
It is generally the Citys policy to use restricted resources first then unrestricted resources as they are needed when an expense is incurred for purposes for which both restricted and unrestricted net position are available
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations The Citys investment policy states it will comply with Minnesota Statutes Chapter 118A
The City has an investment policy in place that addresses interest rate risk credit risk concentration of credit risk and custodial credit risk as follows
Interest Rate Risk This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates The Citys investment policy states the City should manage their interest rates based on safety liquidity and the overall return on the investment The portfolio should contain both short-term and long-term investments to meet anticipated cash flow requirements Extended maturities may be utilized to take advantage of higher yields however no more than 50 of the total investments should extend beyond five years
The City invests in an external investment pool the Minnesota Municipal Money Market Fund (4M Fund) which is created under a joint powers agreement pursuant to Minn Stat sect47159 The 4M Fund is not registered with the Securities Exchange Commission (SEC) but does satisfy the requirements of Rule 2a-7 prescribed by the SEC pursuant to the Investment Company Act of 1940 (17 CFR sect2702a-7) as amended The investment in the pool is measured at the net asset value per share provided by the pool
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America The hierarchy is based on the valuation inputs used to measure the fair value of the asset Level 1 inputs are quoted prices in active markets for identical assets Level 2 inputs are significant other observable inputs Level 3 inputs are significant unobservable inputs
Custodial Credit Risk - Deposits For deposits this is the risk that in the event of bank failure the Citys deposits may not be returned to it The Citys investment policy states the collateralization level will be 110 of the market value of principal and accrued interest for balances above the FDIC insured amount When the pledged collateral consists of notes secured by first mortgages the collateral level will be 140 of the market value of principal and accrued interest
Authorized collateral includes the obligations of the US Treasury agencies and instrumentalities shares of investment companies whos only investments are in the aforementioned securities obligations of the State of Minnesota or its municipalities bankers acceptances futures contracts repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days as well as certain first mortgage notes and certain other state or local government obligations Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral
28
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
E RECEIVABLES AND PAYABLES
F PREPAID ITEMS
All trade and property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of property
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements
29
Custodial Credit Risk - Investments For an investment this is the risk that in the event of the failure of the counterparty the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party The Citys investment policy states when investments purchased by the City are held in safekeeping by a brokerdealer they must provide asset protection of $500000 through the Securities Investor Protector Corporation (SIPC) and at least another $2000000 supplemental insurance protection
The City levies its property tax for the subsequent year during the month of December December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year Such taxes become a lien on January 1 and are recorded as receivables by the City at that date The property tax is recorded as revenue when it becomes measurable and available Wright County is the collecting agency for the levy and remits the collections to the City three times a year The tax levy notice is mailed in March with the first half payment due on May 15 and the second half payment due on October 15 Tax levies from prior years that remain unpaid are classified as delinquent taxes receivable
The County Auditor submits the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year
Activity between funds that are representative of lendingborrowing arrangements outstanding at the end of the fiscal year are referred to as either due tofrom other funds (ie the current portion of interfund loans) or advances tofrom other funds (ie the noncurrent portion of interfund loans) All other outstanding balances between funds are reported as due tofrom other funds Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances
Concentration of Credit Risk This is the risk of loss attributed to the magnitude of an investment in a single issuer Investments should be diversified to avoid incurring unreasonable risk inherent in over investing in specific instruments individual financial institutions or maturities The Citys investment policy states the City will attempt to diversify their investments according to type and maturity
The County Auditor prepares the tax list for all taxable property in the City applying the applicable tax rate to the tax capacity of individual properties to arrive at the actual tax for each property The County Auditor also collects all special assessments except for certain prepayments paid directly to the City
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
G CAPITAL ASSETS
Cost
LandLand Improvements 10000$ Other Improvements 25000 BuildingsImprovements 25000 Machinery and Equipment 5000 Infrastructure 50000
Years
Buildings 5-40Improvements Other than Buildings 5-20Vehicles 5-20Machinery and Equipment 5-40Roads and Highways 20-40Infrastructure 25-40
The City does not possess any material amounts of intangible assets
30
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed Donated capital assets are recorded as capital assets at their estimated acquisition value at the date of donation
Capital assets both tangible and intangible which include property plant equipment and infrastructure assets (eg roads sidewalks and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements Capital assets are defined by the City as assets with an estimated useful life in excess of two years and an initial individual cost of more than the following
Capital Assets
Category
Based on the age of the majority of the Citys infrastructure and an exception for small governments in GASB Statement No 34 the City has determined it is not practical to capitalize infrastructure retroactively The current value of the infrastructure includes projects completed during the year ended December 31 1985 and prospectively from that date
Tangible and intangible assets of the City are depreciated using the straight-line full month convention method over the following estimated useful lives
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
H DEFERRED OUTFLOWS OF RESOURCES
I UNEARNED REVENUE
J COMPENSATED ABSENCES
K POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied Grants and certain other payments received before eligibility requirements are met are also recorded as unearned revenue
The City compensates employees who resign or retire with due notice for unused vacation and holiday pay Employees may carry over no more than 40 hours of vacation at the end of any calendar year unless approved by the City Council Unused vacation time is paid to employees upon separation from the City City employees are also allowed to earn compensatory time in lieu of overtime pay Employees may carry over no more than 40 hours of compensatory time at the end of any calendar year Unused compensatory time is paid to employees upon separation from the City
The liability for compensated absences reported in the financial statements consists of unpaid accumulated vacation and compensatory time balances The liability has been calculated using the vesting method in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included The liability for compensated absences is reported in the governmental funds only if they have matured for example as a result of employee resignations and retirements Compensated absences are accrued when incurred in the government-wide and proprietary fund financial statements The government-wide and proprietary fund Statement of Net Position reports both current and noncurrent portions of compensated absences using full accrual accounting The current portion consists of an amount based on expected or known retirements coming in the next fiscal year The noncurrent portion consists of the remaining amount of vacation and compensatory time
31
Employees of the City pay health care premiums based on their age and level of coverage Since the insurance rate is based on age the City does not have an implicit rate subsidy factor in postemployment health care expenses Additionally Minnesota Statutes require the City to allow retired employees to stay on the health care plan with the retiree responsible to pay the entire premium for continuation coverage The Citys personnel policy does not provide for any contributions upon employee retirement
In addition to assets the statement of financial position will sometimes report a separate section for deferred outflows of resources Deferred outflows of resources represents a consumption of net position that applies to a future reporting period During that future period it will be recognized as an outflow of resources (expenseexpenditure) The City has one item that qualifies for reporting in this category on the government-wide Statement of Net Position which is related to pensions
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
L PENSIONS
M LONG-TERM OBLIGATIONS
N DEFERRED INFLOWS OF RESOURCES
O FUND BALANCE
In addition to liabilities the statement of financial position will sometimes report a separate section for deferred inflows of resources Deferred inflows of resources represents an acquisition of net position that applies to a future reporting period During that future period it will be recognized as an inflow of resources (revenue) The City has items that qualify for reporting in this category on both the government-wide Statement of Net Position and the governmental fund financial statements related to property taxes special assessments and pensions
The City participates in various pension plans total pension expense for the fiscal year ended was $436446 The components of pension expense are noted in the plan summaries
For purposes of measuring the net pension liability deferred outflows of resources and deferred inflows of resources related to pensions and pension expense information about the fiduciary net position of the Public Employees Retirement Association (PERA) and the City of Annandales Fire Relief Association and additions todeductions from PERArsquos and the City of Annandales Fire Relief Associations fiduciary net position have been determined on the same basis as they are reported by PERA and the City of Annandales Fire Relief Association 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
In the fund financial statements governmental fund types recognize bond premiums and discounts as well as bond issuance costs during the current period The face amount of debt issued is reported as other financing sources Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses Issuance costs whether or not withheld from the actual debt proceeds received are reported as debt service expenditures
Nonspendable - consists of amounts that cannot be spent because it is not in spendable form or are legally or contractually required to be maintained intact such as inventories and prepaid items
Restricted - consists of amounts related to externally imposed constraints established by creditors grantors or contributors or constraints imposed by state statutory provisions
In the governmental fund financial statements fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in governmental funds These classifications are as follows
In the government-wide financial statements and proprietary fund types in the fund financial statements long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities business-type activities or proprietary fund type Statement of Net Position
32
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
O FUND BALANCE (Contd)
P NET POSITION
Q USE OF ESTIMATES
Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources in the government-wide and proprietary fund financial statements Net investment in capital assets consists of capital assets net of accumulated depreciation reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets Net position is reported as restricted in the government-wide and proprietary fund financial statements when there are limitations on their use through external restrictions imposed by creditors grantors or laws or regulations of other governments Unrestricted net position consists of all other net position that does not meet the definition of restricted or net investment in capital assets
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 In governmental funds other than the General Fund assigned fund balance represents the remaining amount that is not restricted or committed In the General Fund assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority Pursuant to City Council Resolution the City Treasurer and City Administrator are authorized to establish assignments of fund balance
33
Committed - consists of amounts that are constrained for specific purposes that are internally imposed by formal action of the City Council Those committed amounts cannot be used for any other purpose unless the Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts These constraints are established by Resolution of the City Council
Unassigned - is the residual classification for the General Fund and also reflects negative residual amounts in the remaining governmental funds
The City requires restricted amounts to be spent first when both restricted and unrestricted fund balance is available Additionally the City would first use committed then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and deferred outflows of resources and liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expendituresexpenses during the reporting period Actual results could differ from those estimates
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
A BUDGETARY INFORMATION
1
2
3
4
5
6
7
Annual appropriated budgets are adopted during the year for the General and Special Revenue Funds Annual appropriated budgets are not adopted for Debt Service Funds because effective budgetary control is alternatively achieved through bond indenture provisions Budgetary control for Capital Projects Funds is accomplished through the use of project controls and formal appropriated budgets are not adopted
34
Budgeted amounts are as originally adopted or as amended by the City Council Individual amendments were not material in relation to the original amounts budgeted Budgeted expenditure appropriations lapse at year-end
Expenditures may not legally exceed budgeted appropriations at the department level No funds budget can be increased without City Council approval The City Council may authorize transfer of budgeted amounts between departments within any fund Management may amend budgets within a department level so long as the total department budget is not changed
The City Council adopts an annual budget The amounts shown in the financial statements as budget represent the original budgeted amounts and all revisions made during the year The City follows these procedures in establishing the budgetary data reflected in the financial statements
Budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America
The budget is legally enacted through passage of a resolution after obtaining taxpayer comments The budget resolution adopted by the City Council sets forth the budgets at the function level for the General and Special Revenue Funds
Public hearings are conducted to obtain taxpayer comments
Budget requests are submitted by all department heads to the City Administrator The City Administrator compiles the budget requests into an overall preliminary City budget The City Administrator presents the proposed budget to the City Council
Encumbrances outstanding at year-end expire and outstanding purchase orders are canceled and not reported in the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (Contd)
B DEFICIT BALANCES
The following funds had deficit balances
RefuseRecycling (11204)$ Nonmajor Governmental Funds (454667)
C EXPENDITURES EXCEEDING APPROPRIATIONS
NOTE 3 DEPOSITS AND INVESTMENTS
A DEPOSITS
Checking 1669430$
B INVESTMENTS
Fair Value Level 1 Level 2 Level 3
Investments at fair valueBrokered Certificates of Deposit 1540744$ 0$ 1540744$ 0$
Investments at amortized costMoney Market Accounts 324792 4M Money Market 38796
Total Investments 1904332$
The Brokered Certificates of Deposit have a weighted average maturity of 216 years and were not rated
In accordance with applicable Minnesota Statutes the City maintains deposits at depository banks authorized by the City Council
35
There were no funds that had expenditures exceeding appropriations
Custodial Credit Risk - Deposits The Citys bank balances were not exposed to custodial credit risk because they were fully insured through the FDIC as well as collateralized with securities held by the pledging financial institutions trust department or agent and in the Citys name
Fair Value Measuring Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 3 DEPOSITS AND INVESTMENTS (Contd)
B INVESTMENTS (Contd)
The following is a summary of total deposits and investments
Deposits (Note 3A) 1669430$ Investments (Note 3B) 1904332
Total Deposits and Investments 3573762$
Statement of Net PositionCash and Investments 3499554$ Restricted Cash 74208
3573762$
NOTE 4 RECEIVABLES
Receivables are as follows
Amounts notScheduled
for CollectionDuring the
Total SubsequentReceivables Year
Governmental ActivitiesTaxes Receivable - Delinquent 14909$ $ Special Assessments Receivable 654643 584377 Accounts Receivable 96631 16271 Interest Receivable 9
Total Governmental Activities 766192$ 600648$
Business-Type ActivitiesSpecial Assessments Receivable 19043$ 9392$ Accounts Receivable 339457
Total Business-Type Activities 358500$ 9392$
Concentration of Credit Risk The City was exposed to concentration of credit risk due to the fact that some of the Citys brokered certificates of deposit exceeded 5 of the total Citys investments portfolio
36
Deposits and investments are presented in the basic financial statements as follows
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS
Capital asset activity was as follows
Beginning EndingGovernmental Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 2482508$ $ (18800)$ 2463708$ Construction in Progress 508685 248979 (524628) 233036
Total Capital AssetsNot Being Depreciated 2991193 248979 (543428) 2696744
Capital Assets Being DepreciatedBuildings 3065250 3065250 Improvements Other than Buildings 1298097 524628 1822725 Machinery and Equipment 2556167 111246 (57123) 2610290 Infrastructure 21739105 21739105
Total Capital AssetsBeing Depreciated 28658619 635874 (57123) 29237370
Less Accumulated Depreciation forBuildings 1145321 75543 1220864 Improvements Other than Buildings 858879 46992 905871 Machinery and Equipment 1568583 121681 (40205) 1650059 Infrastructure 17438428 312281 17750709
Total AccumulatedDepreciation 21011211 556497 (40205) 21527503
Total Capital Assets BeingDepreciated Net 7647408 79377 (16918) 7709867
Governmental ActivitiesNet Capital Assets 10638601$ 328356$ (560346)$ 10406611$
37
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS (Contd)
Capital asset activity was as follows
Beginning EndingBusiness-Type Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 277948$ $ $ 277948$
Capital Assets Being DepreciatedBuildings 4175245 4175245 Improvements Other than Buildings 12637 12637 Machinery and Equipment 268809 34287 303096 Infrastructure 11123768 11123768
Total Capital AssetsBeing Depreciated 15580459 34287 0 15614746
Less Accumulated Depreciation forBuildings 1499349 92233 1591582 Improvements Other than Buildings 12636 12636 Machinery and Equipment 190152 19580 209732 Infrastructure 3268385 267127 3535512
Total AccumulatedDepreciation 4970522 378940 0 5349462
Total Capital Assets BeingDepreciated Net 10609937 (344653) 0 10265284
Business-Type ActivitiesNet Capital Assets 10887885$ (344653)$ 0$ 10543232$
Depreciation expense was charged to functionsprograms as follows
Governmental ActivitiesGeneral Government 53809$ Public Safety 91620 Public Works 383653 Culture and Recreation 27415
Total Depreciation Expense - Governmental Activities 556497$
Business-Type ActivitiesWater 171475$ Sewer 118151 RefuseRecycling 1333 Storm Utility 87981
Total Depreciation Expense - Business-Type Activities 378940$
38
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 6 INTERFUND ACTIVITY
A INTERFUND BALANCES
The composition of interfund balances is as follows
Amount
General Sewer 445076$ General RefuseRecycling 28318 General Storm Utility 31562 General Nonmajor Governmental Funds 415794 Water Nonmajor Governmental Funds 98000 Sewer Nonmajor Governmental Funds 21000 Nonmajor Governmental Funds General 143500 Nonmajor Governmental Funds Nonmajor Governmental Funds 46888
Total Interfund Balances 1230138$
B INTERFUND TRANSFERS
The composition of interfund transfers is as follows
Nonmajor Governmental
Water Sewer Funds Total
Transfer OutGeneral 19600$ 36400$ 287794$ 343794$ Water 120000 120000 Sewer 149000 149000 Storm Utility 42000 42000 Nonmajor Governmental
Funds 547120 547120
Total Interfund Transfers 19600$ 36400$ 1145914$ 1201914$
Receivable Fund Payable Fund
39
The purpose of the above transfers was to provide funding for debt service capital improvement projects capital outlay and operating purposes
The purpose of the above interfund loans was to provide financing for operating purposes and to cover deficit cash balances
Transfer In
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES
A GENERAL OBLIGATION BONDS
B COMPONENTS OF LONG-TERM LIABILITIES
Interest Final BalanceRates Maturity Outstanding
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan BondsSeries 2008A 300-400 02012022 295000$
GO Special Assessment BondsGO Improvement Bonds Series 2008B 300-4125 02012024 560000 GO Improvement Bonds Series 2011A 105-415 02012032 1300000 GO Refunding Bonds Series 2011B 085-270 02012021 585000 GO Refunding Bonds Series 2012A 055-185 02012022 1035000 GO Improvement Bonds Series 2015A 110-345 02012036 750000
GO NotesGO Improvement Note of 2011 1959 08202031 846000
GO Equipment CertificateGO Equipment Certificate 2016A 2100 02012021 168000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549$
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 2819 08202023 996000$ PFA Clean Water Revenue Note 2220 08202026 8086000 PFA Water Revenue Note of 2015 1031 08202035 812000 PFA Sewer Revenue Note of 2015 1000 08202035 110000
Total Business-Type Activities 10004000$
GO Bonds are direct obligations and pledge the full faith and credit of the City These bonds generally are issued as 15 year Serial Bonds with equal debt service payments each year
The City issues General Obligation (GO) Bonds to provide financing for street improvements facility construction and tax increment projects Debt service is covered respectively by special assessments property taxes and tax increments against benefited properties with any shortfalls being paid from general taxes
40
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
B COMPONENTS OF LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for all bonded debt and notes outstanding are as follows
Principal Interest Principal Interest
70000$ 10400$ 660000$ 112343$ 70000 7600 675000 97718 75000 4700 600000 82645 80000 1600 480000 63498
220000 59861 760000 211593 680000 82489 155000 8131
295000$ 24300$ 4230000$ 718278$
2019
2029-20332024-2028
20222023
On September 27 2011 the City issued $1620000 GO Refunding Bonds Series 2011B with an interest rate of 85 to 270 The City issued the Bonds to crossover refund the $1020000 GO Fire Hall Bonds Series 2004A and the $1645000 GO Improvement Bonds Series 2004B The City completed the refunding to reduce its debt service payment over the next 9 years by $20827 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $20868
Debt service funds are used to liquidate the governmental activities outstanding bonded indebtedness and notes The Park Capital Projects Fund is used to liquidate the governmental activities outstanding contract for deed The General Fund has historically been used to liquidate the outstanding governmental activities compensated absences
GO Improvement Bonds Assessment Bonds
On April 4 2012 the City issued $2225000 GO Refunding Bonds Series 2012A with an interest rate of 55 to 185 The City issued the Bonds to refund the $1415000 GO Improvement Bonds Series 2001C and the $320000 GO Refunding Improvement Bonds Series 2003 as well as crossover refund the $3100000 GO Improvement Bonds Series 2006A The City completed the refunding to reduce its debt service payment over the next 10 years by $179206 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $161420
41
2034-2036
Governmental ActivitiesGO Special
2020
December 31
2021
Year Ending
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS (Contd)
Principal Interest Principal Interest
58000$ 16573$ 55000$ 2951$ 59000 15437 56000 1785 60000 14281 57000 598 61000 13106 62000 11911
332000 40728 214000 8423
846000$ 120459$ 168000$ 5334$
Principal Interest
1173000$ 217058$ 1200000 190488 1227000 163282 1254000 135459 1283000 151604 3466000 171976
284000 14813 117000 1808
10004000$ 1046488$
42
2023
Governmental Activities
2020
Year Ending
2029-2033
2022
2034-2035
2021
2028-2028
2024-2028
2022
2020
2019
2019
Business-Type Activities
2029-2031
GO Notes
2021
December 31Year Ending
2023
GO Equipment Certificates
GO Revenue Notes
December 31
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
D CHANGES IN LONG-TERM LIABILITIES
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Governmental ActivitiesBonds Payable
GOImprovementBonds 365000$ $ 70000$ 295000$ 70000$
GO SpecialAssessment Bonds 4870000 640000 4230000 660000
5235000 0 710000 4525000 730000
GO ImprovementNote of 2011 903000 57000 846000 58000
GO Equipment Certificate 222000 54000 168000 55000
CompensatedAbsences 23292 58115 58428 22979
Unamortized BondDiscount (26664) 4234 (22430)
Total GovernmentalActivities 6356628$ 62349$ 879428$ 5539549$ 843000$
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Business-Type ActivitiesNotes Payable
GO Revenue Notes 11146604$ 3396$ 1146000$ 10004000$ 1173000$
43
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
E CONDUIT DEBT OBLIGATIONS
The Citys conduit debt consisted of the following
Senior Housing and Health Care Revenue Refunding Note 6661528$
NOTE 8 RISK MANAGEMENT
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION
A PLAN DESCRIPTION
Firefighters of the City are members of the Association The Association is the administrator of a single-employer defined benefit pension plan available to firefighters The plan is administered by the Association pursuant to Minnesota Statutes Chapter 69 Chapter 424A and the Associations by-laws As of December 31 2017 the plan covered 28 active firefighters and 14 vested terminated fire fighters whose pension benefits are deferred
There are no other claims liabilities reported in the financial statements based on the requirements of accounting standards which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years
The Citys workers compensation insurance policy is retrospectively rated With this type of policy final premiums are determined after loss experience is known The amount of premium adjustment for 2018 is estimated to be immaterial based on workers compensation rates and salaries for the year
44
Conduit debt obligations are certain limited-obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party The City has issued various revenue bonds to provide funding to private-sector entities for projects deemed to be in the public interest Although these bonds bear the name of the City the City has no obligation for such debt Accordingly the bonds are not reported as liabilities in the financial statements of the City
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) which is a public entity risk pool currently operating as a common risk management and insurance program with other cities in the state The City pays an annual premium to the LMCIT for its insurance coverage The LMCIT is self-sustaining through commercial companies for excess claims The City is covered through the pool for any claims incurred but unreported but retains risk for the deductible portion of its insurance policies The amount of these deductibles is considered immaterial to the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
B BENEFITS PROVIDED
C CONTRIBUTIONS
D PENSION COSTS
Total Plan Net Pension Pension Fiduciary LiabilityLiability Net Position (Asset)
(a) (b) (a) - (b)
Balances at 112017 $ 569046 $ 1009074 $ (440028)Changes for the Year
Service Cost 26727 26727 Interest 34955 34955 Changes in Benefit Terms 28893 28893 Contributions - Employer 3000 (3000)Contributions - State 47693 (47693)Net Investment Income 126216 (126216)Benefit Payments (72973) (72973) Administrative Expense (8416) 8416
Net Change 17602 95520 (77918)
Balances at 12312017 $ 586648 $ 1104594 $ (517946)
The plan provides lump-sum retirement death and supplemental benefits to covered firefighters and survivors Benefits are paid based on the number of years of service multiplied by a benefit level per year of service approved by the City The plan includes a $2600 service pension benefit for each year of service Members are eligible for a lump-sum retirement benefit at 50 years of age or after completion of 20 years of service If a member is both age 50 and has completed five years of service but not 20 years of service the lump-sum pension will be reduced by 4 for each year of service less than 20 years
The plan is funded by fire state aid investment earnings and if necessary employer contributions as specified in Minnesota Statutes and voluntary City contributions As of December 31 2017 the State of Minnesota contributed $47693 in fire state aid to the plan on behalf of the Fire Department Required employer contributions are calculated annually based on statutory provisions The City made voluntary contributions of $3000 to the plan
The City reported a net pension liability (asset) of ($517946) The Citys net pension liability (asset) was measured as of December 31 2017 and the total pension liability used to calculate the net pension liability (asset) in accordance with GASB 68 was determined by an independent actuary applying an actuarial formula to specific census data certified by the fire department The following table presents the changes in net pension liability during the year
45
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
D PENSION COSTS (Contd)
The lump sum benefit increased from $2400 to $2600 per year effective January 1 2018
Differences between expected and actual economic experience $ 5346$ Changes in actuarial assumptions 3678 Net differences between projected and actual investment earnings 26024 Contributions paid to plan subsequent to measurement date 55196 State aid received for the plan subsequent to measurement date 52196
55196$ 87244$
December 31
20192020202120222023
Thereafter
For the year ended December 31 2018 the City recognized pension expense of ($15721)
The City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
$ 537
46
$55196 reported as deferred outflows of resources related to pensions resulting from City contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended December 31 2019 $52196 reported as deferred inflows of resources related to pensions resulting from state aid received for the plan subsequent to the measurement date will be recognized as an increase of the net pension liability (asset) in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pension plans will be recognized in pension expense as follows
Pension Expense Amount
(2) (17701) (14691) (1457) (1734)
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
E ACTUARIAL ASSUMPTIONS
Inflation Rate 275 percentRetirement Eligibility Later of current age and age 50Expected Long-Term Investment Return 625 percentAmortization Method
Mortality
F DISCOUNT RATE
G PENSION LIABLIITY (ASSET) SENSITIVITY
1 Decrease 1 Increasein Discount in Discount
Rate Rate(525) (625) (725)
Citys Net Pension Liability (Asset) $ (497411) $ (517946) $ (537562)
Straight-line amortization over a closed 5-year period or straight-line amortization over a close period equal to the average of the expected remaining service lives of all members that are provided with pensions through the pension planRates used in the July 1 2016 Minnesota PERA Police amp Fire Plan actuarial valuation
The discount rate used to measure the total pension liability was 625 The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at a rate specified in statute Based on that assumption the pension planrsquos 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
The following presents the net pension liability (asset) calculated using the discount rate as well as what the Citys net pension liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate
Discount Rate
The total pension liability was determined using the following actuarial assumptions applied to all periods included in the measurement
The actuarial assumptions used in the December 31 2018 valuation were based on the results of an actuarial experience study for the period January 1 2016 - December 31 2016
47
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
H PLAN INVESTMENTSINVESTMENT POLICY
- Attempt to maintain minimum funding ratio of 120- Attempt to increase the pension amount by $200 every other year- Meet twice per year to discuss any changes to allocation and prepare for a joint meeting with the City
I ASSET ALLOCATION
Domestic equityInternational equityFixed incomeReal estate and alternativesCash and equivalents
Total
J PENSION PLAN FIDUCIARY NET POSITION
10000
The best-estimates of expected future asset class returns were published in the 2017 Survey of Capital Market Assumptions produced by Horizon Actuarial Services These expected returns along with expected asset class standard deviations and correlation coefficients are based on Horizonrsquos annual survey of investment advisory firms The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data
Detailed information about the pension plans fiduciary net position is available in a separately-issued financial report
Asset Class
The plans funded status increased from 1773 to 1883 since the prior valuation This change is primarily due to investment returns in excess of expected
4500 5391000 5203500 198500 425500 079
The Association has a formal investment policy that operates within standard investment practices of the prudent person and other standards codified in Minnesota Statutes Chapter 11A and Chapter 356
The Associations pension plan assets are to be invested for the exclusive benefit of the fund members and will attempt to generate investment returns of at least 5 percent of an annualized basis over time Other goals of the Association include
The long-term expected rate of return on pension plan investments as determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns net of pension plan investment expense and inflation) are developed for each major asset class These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table
Long-Term Expected Real Rate of ReturnTarget Allocation
48
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A PLAN DESCRIPTION
B BENEFITS PROVIDED
GERP Benefits
General Employees Retirement Plan (GERP General Employees Plan accounted for in the General Employees Fund)
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
Public Employees Police and Fire Plan (PEPFP Police and Fire Plan accounted for in the Police and Fire Fund)
The Police and Fire Plan 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 Police and Fire Plan also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to PERA
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
General Employees Plan benefits are based on a memberrsquos 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 PERAs 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 12 for each of the first 10 years of service and 17 for each additional year The rates are 22 and 27 respectively for Basic members Under Method 2 the accrual rate for Coordinated members is 17 for all years of service and 27 for Basic members The accrual rates for former MERF members is 20 for each of the first 10 years of service and 25 for each additional year 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
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA) PERArsquos defined benefit pension plans are established and administered in accordance with Minnesota Statutes Chapters 353 and 356 PERArsquos defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code
49
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
B BENEFITS PROVIDED (Contd)
GERP Benefits (Contd)
PEPFP Benefits
C CONTRIBUTIONS
GERP Contributions
PEPFP Contributions
Beginning January 1 2019 benefit recipients will receive a future annual increase equal to 50 percent of the Social Security Cost of Living Adjustment not less than 10 percent and not more than 15 percent For retirements on or after January 1 2024 the first benefit increase is delayed until the retiree reaches Normal Retirement Age (not applicable to Rule of 90 retirees disability benefit recipients or survivors) A benefit recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase Members receiving benefits for at least one month but less than 12 full months as of June 30 will receive a pro rata increase
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 percent after five years up to 100 percent 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 percent after ten years up to 100 percent after twenty years of credited service The annuity accrual rate is 3 percent of average salary for each year of service For Police and Fire Plan members who were first hired prior to July 1 1989 a full annuity is available when age plus years of service equal at least 90
Beginning in 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law Post retirement increases are given each year except for annuitants who have been receiving a benefit for only 31 to 41 months These annuitants will receive a prorated amount of the increase on a sliding scale
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions Contribution rates can only be modified by the state Legislature
Coordinated Plan members were required to contribute 650 percent of their annual covered salary in fiscal year 2018 the City was required to contribute 750 percent for Coordinated Plan members The Citys contributions to the General Employees Fund for the year ended December 31 2018 were $50226 The Citys contributions were equal to the required contributions as set by state statute
Legislation increased both employee and employer contribution rates in the Police and Fire Plan Employee rates increased from 1080 percent of pay to 1130 percent and employer rates increase from 1620 percent to 1695 percent on January 1 2018 On January 1 2020 employee rates increase to 1180 percent and employer rates increase to 1770 percent The Citys contributions to the Police and Fire Fund for the year ended December 31 2018 were $57782 The Citys contributions were equal to the required contributions as set by state statute
50
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS
GERP Pension Costs
Differences between expected and actual economic experience 14670$ 16018$ Changes in actuarial assumptions 52464 61940 Differences between projected and actual investment earnings 56103 Changes in proportion 4060 13463 Contributions paid to GERP subsequent to measurement date 25165
96359$ 147524$
At December 31 2018 the City reported a liability of $543664 for its proportionate share of the General Employees Fundrsquos net pension liability The City net pension liability reflected a reduction due to the State of Minnesotarsquos contribution of $16 million to the fund in 2019 The State of Minnesota is considered a non-employer contributing entity and the statersquos contribution meets the definition of a special funding situation The State of Minnesotarsquos proportionate share of the net pension liability associated with the City totaled $17795 The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The Citys proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion share was 00098 which was a decrease of 00002 from its proportion measured as of June 30 2017
Post-retirement benefit increases were changed from 10 per year with a provision to increase to 25 upon attainment of 90 funding ratio to 50 of the Social Security Cost of Living Adjustment not less than 10 and not more than 15 beginning January 1 2019
For the year ended December 31 2018 the City recognized pension expense of $28216 for its proportionate share of GERPrsquos pension expense In addition the City recognized an additional $4150 as pension expense (and grant revenue) for its proportionate share of the State of Minnesotas contribution of $6 million to the General Employees Fund
At December 31 2018 the City reported its proportionate share of GERPrsquos deferred outflows of resources and deferred inflows of resources from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
51
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
GERP Pension Costs (Contd)
PEPFP Pension Costs
$25165 reported as deferred outflows of resources related to pensions resulting from City contributions to GERP subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to GERP pensions will be recognized in pension expense as follows
52
Year ended June 30 Pension Expense Amount
2019 13967$ 2020 (31102) 2021 (47848) 2022 (11347)
At December 31 2018 the City reported a liability of $350680 for its proportionate share of the Police and Fire Fundrsquos net pension liability The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The City proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion was 00329 which was a decrease of 00001 from its proportion measured as of June 30 2017 The City also recognized $2961 for the year ended December 31 2018 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesotarsquos on-behalf contributions to the Police and Fire Fund Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year starting in fiscal year 2014
Beginning in January 1 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law
For the year ended December 31 2018 the City recognized pension expense of $2961 for its proportionate share of the Police and Fire Planrsquos pension expense
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
PEPFP Pension Costs (Contd)
Differences between expected and actual economic experience 14159$ 88907$ Changes in actuarial assumptions 450560 517779 Differences between projected and actual investment earnings 71220 Changes in proportion 10800 27880 Contributions paid to PEPFP subsequent to measurement date 29906
505425$ 705786$
E ACTUARIAL ASSUMPTIONS
InflationSalary GrowthInvestment Rate of Return
Actuarial Assumptions GERP PEPFP
250 per year 250 per year325 after 26 years of service 325 after 25 years of service
750 750
53
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
2020 (21749)2021 (54056)2022 (147616)2023 (1380)
The total pension liability in the June 30 2018 actuarial valuation was determined using the following actuarial assumptions
$29906 reported as deferred outflows of resources related to pensions resulting from the Citys contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows
Year ended June 30 Pension Expense Amount
2019 (5466)$
At December 31 2018 the City reported its proportionate share of the Police and Fire Planrsquos deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
GERP
PEPFP
54
The total pension liability for each of the defined benefit cost-sharing plans was determined by an actuarial valuation as of June 30 2018 using the entry age normal actuarial cost method Inflation is assumed to be 250 percent for the General Employees and Police and Fire Plans Salary growth assumptions in the General Employees Plan decrease in annual increments from 1125 percent after one year of service to 325 percent after 26 years of service In the Police and Fire Plan salary growth assumptions decrease from 1225 percent after one year of service to 325 percent after 25 years of service
Mortality rates for all plans are based on RP-2014 mortality tables The tables are adjusted slightly to fit PERArsquos experience Actuarial assumptions for the General Employees Plan are reviewed every four to six years The most recent six-year experience study for the General Employees Plan was completed in 2015 The most recent four-year experience study for the Police and Fire Plan was completed in 2016 Economic assumptions were updated in 2014 based on a review of inflation and investment return assumptions
The following changes in actuarial assumptions occurred in 2018
The mortality projection scale was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 percent per year through 2044 and 250 percent per year thereafter to 125 percent per year
The mortality projection scale was changed from MP-2016 to MP-2017
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
Domestic StocksInternational StocksBondsAlternative AssetsCash
F DISCOUNT RATE
G PENSION LIABILITY SENSITIVITY
GERP PEPFP
1 Lower 650 883523$ 1520 751880$ Current Discount Rate 750 543664 1620 350680 1 Higher 850 263120 1720 18904
The discount rate used to measure the total pension liability in 2018 was 750 percent The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes Based on these assumptions the fiduciary net positions of the General Employees Fund and the Police and Fire Fund 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
The following presents the Citys proportionate share of the net pension liability for all plans it participates in calculated using the discount rate disclosed in the preceding paragraphs as well as what the Citys 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
Target Allocation
3900190020002000200
10000
Long-Term Expected Real Rate of Return
510530075590000
Asset Class
55
The State Board of Investment which manages the investments of PERA prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return 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 in the following table
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
H PENSION PLAN FIDUCIARY NET POSITION
NOTE 11 DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
Related to Pensions 656980$ 940554$
NOTE 12 FUND BALANCE
NonmajorGovernmental
General Funds Total
NonspendablePrepaid Items 73751$ 2152$ 75903$
Restricted forTax Increment 11481 11481 Debt Service 1448570 1448570 Capital Projects 72582 72582
0 1532633 1532633
CommittedCharitable Gambling Programs 11466 11466 Economic Development Promotion 835956 835956
Total Committed 0 847422 847422
AssignedFund Operations 165070 487992 653062
Unassigned 1697339 (456819) 1240520
1936160$ 2413380$ 4349540$
Detailed information about each pension plans 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 wwwmnperaorg
The following is a summary of the major components of deferred outflows and inflows as presented in the Statement of Net Position
Deferred Outflows of Resources
Deferred Inflows of Resources
The following is a summary of fund balance components
56
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 13 TAX ABATEMENT
Current YearPercent AmountAbated Abated
Dingmann Marine100 2500$
Current YearPercent AmountAbated Abated
Granite City PropertyManagement 95 20858$
NOTE 14 JOINT POWERS AGREEMENTS
A PUBLIC RECREATIONAL FACILITY
B WRIGHT COUNTY AREA TRANSIT
Wright County Area Transit is governed by a Joint Powers Board that consists of a) one vote plus additional vote for each city per 3000 rides originating in that city and b) Wright County has votes equal to the number of votes apportioned to the Cities
57
The City and Independent School District 876 (the District) have entered into an a joint powers agreement to operate a public recreational facility The City owns and will lease the real property to the Joint Powers Entity (the Entity) The District shall fund the construction of the facility The Entity shall prepare an annual budget subject to approval of the City and the District All costs for operations maintenance repairs and utilities shall be shared equally by the City and the District
The Entity is governed by a Joint Powers Board that consists of four members a) two members appointed by the City annually and b) two members appointed by the District annually
The City Wright County and other Wright County Cities have entered into an a joint powers agreement to provide affordable public transportation to their communities Cities are to pay a pro rata share of the remaining unfunded operating expenses and capital expenditures not covered by Wright County
The City is authorized by Minnesota Statute sect4691813 to enter into property tax abatement agreements for the purpose of attracting or retaining businesses Tax abatements may be granted to any business on a case-by-case basis The entity may be subject to certain stipulations determined by the City at the time the abatement is entered The amount of the abatement is automatically deducted from the property ownerrsquos tax bill
The City is authorized by Minnesota Statute sect469174 through 469179 to enter into tax increment financing plans Tax increment financing may be granted on a case-by-case basis and may be subject to certain stipulations determined by the City at the time it is entered
Business Purpose
Business Purpose
Assisting in relocating the business within the community
Housing Redevelopment Project 36 Unit Senior Housing Project
REQUIRED SUPPLEMENTARY INFORMATION
This page intentionally left blank
EmployersProportionateShare of the Net Pension
Liability (Asset)States and the States Employers
Proportionate Proportionate ProportionateEmployers Share of the Share of the Share of the Plan Fiduciary
Employers Proportionate Net Pension Net Pension Net Pension Net PositionProportion Share of the Liability (Asset) Liability (Asset) Employers Liability (Asset) as a Percentageof the Net Net Pension Associated with Associated with Covered as a Percentage of of the Total
Fiscal Year Pension Liability (Asset) the Employer the Employer Payroll its Covered Payroll PensionEnding Liability (Asset) (a) (b) (a+b) (c) ((a+b)c) Liability
PensionsGERP
6302018 00098 543664$ 17795$ 561459$ 658161$ 8531 79536302017 00100 638393 8040 646433 647524 9983 75906302016 00099 803831 10468 814299 610663 13335 68916302015 00102 528617 528617 605733 8727 7819
PEPFP6302018 00329 350680$ $ 350680$ 346636$ 10117 88846302017 00330 445539 445539 339010 13142 85436302016 00340 1364479 1364479 322596 42297 63886302015 00340 386320 386320 317917 12152 8661
See Accompanying Notes to the Required Supplementary Information
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITYDECEMBER 31 2018
58
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
Contributionsin Relation Contributions
Statutorily to the Statutorily Contribution as a PercentageRequired Required Deficiency Covered of Covered
Fiscal Year Contribution Contribution (Excess) Payroll PayrollEnding (a) (b) (a-b) (d) (bd)
PensionsGERP
12312018 50226$ 50226$ $ 669680$ 75012312017 48886 48886 651813 75012312016 46583 46583 621107 75012312015 45426 45426 605680 750
PEPFP12312018 57782$ 57782$ $ 356679$ 162012312017 55371 55371 341796 162012312016 53824 53824 332247 162012312015 51688 51688 319062 1620
See Accompanying Notes to the Required Supplementary Information59
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE EMPLOYER CONTRIBUTIONSDECEMBER 31 2018
2017 2016 2015 2014
Service Cost 26727$ 26915$ 21845$ 21260$ Interest 34955 33085 27615 24816 Changes in Benefit Terms 28893 40156 Differences Between Expected and Actual Experience (7074) Changes in Assumptions (4866) Benefit Payments (72973) (7040)
Net Change in Total Pension Liability 17602 41020 89616 46076 Total Pension Liability - Beginning of Year 569046 528026 438410 392334
Total Pension Liability - End of Year 586648$ 569046$ 528026$ 438410$
Contributions - State and Local 50693$ 50325$ 49939$ 47712$ Net Investment Income 126216 69161 (34736) 46976 Benefit Payments (72973) (7040) Administrative Expense (8416) (7920) (7166) (3768) Other (275)
Net Change in Plan Fiduciary Net Position 95520 104526 8037 90645 Total Plan Fiduciary Net Position - Beginning of Year 1009074 904548 896511 805866
Total Plan Fiduciary Net Position - End of Year 1104594$ 1009074$ 904548$ 896511$
Citys Net Pension Liability (Asset) - End of Year (517946)$ (440028)$ (376522)$ (458101)$
Plan Fiduciary Net Position as a Percentage of the Total Pension Asset 18829 17733 17131 20449
60
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF CHANGES IN THE CITYS NET PENSION LIABILITY AND RELATED RATIOSDECEMBER 31 2018
The City implemented GASB Statement No 68 for the year ended December 31 2015 Information for prior years is not available
December 31
NOTE 1 CHANGES IN PLAN PROVISIONS
A GERF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
B PEPFF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
61
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
On January 1 2015 the Minneapolis Employees Retirement Fund was merged into the General Employees Fund which increased the total pension liability by $11 billion and increased the fiduciary plan net position by $892 million Upon consolidation state and employer contributions were revised
The post-retirement benefit increase to be paid after attainment of the 90 funding threshold was changed from inflation up to 25 to a fixed rate of 25
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS
A GERF
2018 Changes
2017 Changes
2016 Changes
2015 Changes
B PEPFF
2018 Changes
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 025 to 325 for payroll growth and 250 for inflation
62
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2035 and 25 per year thereafter
The mortality projection was changed from MP-2016 to MP-2017
The Combined Service Annuity (CSA) loads were changed from 08 for active members and 60 for vested and non-vested deferred members The revised CSA loads are now 00 for active member liability 150 for vested deferred member liability and 30 for non-vested deferred member liability
The assumed post-retirement benefit increase rate was changed from 10 per year for all years to 10 per year through 2044 and 25 per year thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2035 and 25 per year thereafter to 10 per year for all years
The assumed investment return was changed from 79 to 75 The single discount rate was changed from 79 to 75
The mortality projection was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 per year through 2044 and 250 per year thereafter to 125 per year
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS (Contd)
B PEPFF (Contd)
2017 Changes
Assumed rates of retirement were changed resulting in fewer retirements
Assumed percentage of married female members was decreased from 65 to 60
The assumed percentage of female members electing Joint and Survivor annuities was increased
2016 Changes
2015 Changes
63
The assumed post-retirement benefit increase rate was changed from 100 for all years to 100 per year through 2064 and 250 thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2037 and 25 thereafter to 10 per year for all future years
The assumed investment return was changed from 79 to 75 The single discount rate changed from 79 to 56
The assumed future salary increases payroll growth and inflation were decreased by 025 to 325 for payroll growth and 250 for inflation
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2037 and 25 per year thereafter
Assumed salary increases were changed as recommended in the June 30 2016 experience study The net effect is proposed rates that average 034 lower than the previous rates
The Combined Service Annuity (CSA) load was 30 for vested and non-vested deferred members The CSA has been changed to 33 for vested members and 2 for non-vested 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 096 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 30 for the first three years of service Rates beyond the select period of three years were adjusted resulting in more expected terminations overall
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
SUPPLEMENTARY INFORMATION
This page intentionally left blank
Special Debt Capital Revenue Service Projects Total
ASSETSCash and Investments 436388$ 1441782$ 473092$ 2351262$ Taxes Receivable - Delinquent 23 5 347 375 Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 623285 26935 650220
Accounts Receivable 70887 20000 90887 Interest Receivable 9 9 Prepaid Items 2152 2152 Due from Other Funds 190388 190388 Due from Other Governments 1061 2365 47418 50844 Land Held for Resale 362923 362923
Total Assets 1063822$ 2071860$ 567801$ 3703483$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 12735$ $ 11142$ 23877$ Contracts Payable 2941 21398 24339 Due to Other Funds 454822 126860 581682 Due to Other Governments 3566 5910 9476 Salaries and Benefits Payable 134 134
Total Liabilities 474198 0 165310 639508
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 23 5 347 375 Special Assessments 623285 26935 650220
Total Deferred Inflows of Resources 23 623290 27282 650595
Fund Balance Nonspendable 2152 2152 Restricted 11481 1448570 72582 1532633 Committed 847422 847422 Assigned 67503 420489 487992 Unassigned (338957) (117862) (456819)
Total Fund Balance 589601 1448570 375209 2413380
Total Liabilities Deferred Inflows of Resources and Fund Balance 1063822$ 2071860$ 567801$ 3703483$
CITY OF ANNANDALE MINNESOTA
64
DECEMBER 31 2018NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
Special Debt Capital Revenue Service Projects Total
REVENUESProperty Taxes 2507$ $ 320723$ 323230$ Tax Increments 20858 20858 Special Assessments 149671 149671 Intergovernmental 30310 30310 Charges for Services 42636 8595 51231 Fines and Forfeitures 4299 4299 Investment Income (1455) (3635) (5090) Contributions and Donations 49608 84150 133758 Miscellaneous 578 101 679
Total Revenues 114732 149671 444543 708946
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 22622 42738 Culture and Recreation 3735 3735 Economic Development 52358 52358
Debt ServicePrincipal 821000 821000 Interest and Other Charges 162964 162964
Capital OutlayPublic Safety 67055 67055 Public Works 14006 14006 Culture and Recreation 14187 88464 102651 Economic Development 56446 88485 144931
Total Expenditures 153914 983964 284367 1422245 Excess (Deficiency) of Revenues
Over (Under) Expenditures (39182) (834293) 160176 (713299)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 51200 784616 310098 1145914 Transfers Out (65804) (481316) (547120)
Total Other Financing Sources (Uses) (14604) 784616 (146725) 623287 Net Change in Fund Balances (53786) (49677) 13451 (90012)
FUND BALANCE BEGINNING OF YEAR 643387 1498247 361758 2503392
FUND BALANCE END OF YEAR 589601$ 1448570$ 375209$ 2413380$
65
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
Tax Charitable Economic TIF District Abatement - Lions TIF District Training WoodlawnGambling Development No 6 Dingmann Donations No 14 Center Cemetery
(222) (407) (411) (423) (464) (465) (604) (651) Total
ASSETSCash and Investments 11466$ 385530$ 21389$ $ 18003$ $ $ $ 436388$ Taxes Receivable - Delinquent 23 23 Accounts Receivable 20856 49500 531 70887 Prepaid Items 1076 1076 2152 Due from Other Funds 190388 190388 Due from Other Governments 25 1036 1061 Land Held for Resale 362923 362923
Total Assets 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable $ 1800$ 9908$ $ $ $ 1000$ 27$ 12735$ Contracts Payable 2941 2941 Due to Other Funds 119000 18060 66198 200960 50604 454822 Due to Other Governments 3500 66 3566 Salaries and Benefits Payable 67 67 134
Total Liabilities 0 123741 9908 18060 0 69698 202093 50698 474198
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 23 23
Fund Balance Nonspendable 1076 1076 2152 Restricted 11481 11481 Committed 11466 835956 847422 Assigned 67503 67503 Unassigned (18035) (69698) (200526) (50698) (338957)
Total Fund Balance 11466 835956 11481 (18035) 67503 (69698) (199450) (49622) 589601
Total Liabilities Deferred Inflows of Resources and Fund Balance 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
66
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUECOMBINING BALANCE SHEET
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding ImprovementBonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
ASSETSCash and Investments 134649$ 53157$ 3288$ 310514$ 94388$ 360857$ 484929$ 1441782$ Taxes Receivable - Delinquent 5 5 Special Assessments Receivable
Delinquent 819 1553 2051 4423 Current and Deferred 45829 223930 9400 65636 278490 623285
Due from Other Governments 585 509 775 496 2365
Total Assets 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
DEFERRED INFLOWS OF RESOURCESAND FUND BALANCEDeferred Inflows of Resources
Unavailable RevenuesDelinquent Property Taxes $ $ $ $ $ 5$ $ 5$ Special Assessments 45829 223930 9400 65636 278490 623285
Total Deferred Inflows of Resources 45829 0 0 223930 9400 65641 278490 623290
Fund Balance Restricted 135234 53157 3288 311333 94897 363185 487476 1448570
Total Deferred Inflows of Resourcesand Fund Balance 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
DECEMBER 31 2018
67
Public Works 2020Fire Street Street Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
ASSETSCash and Investments 50334$ $ 39748$ 122304$ 20402$ 83784$ 53265$ 30658$ 72597$ $ 473092$ Taxes Receivable - Delinquent 298 49 347Special Assessments Receivable
Current and Deferred 26935 26935Accounts Receivable 20000 20000Interest Receivable 9 9Due from Other Governments 24247 20606 2565 47418
Total Assets 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 350$ $ $ $ 10792$ $ $ $ $ $ 11142$ Contracts Payable 15700 5698 21398 Due to Other Funds 44073 82787 126860 Due to Other Governments 5910 5910
Total Liabilities 350 49983 0 0 10792 0 0 15700 0 88485 165310
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 298 49 347Special Assessments 26935 26935
Total Deferred Inflows of Resources 298 0 26984 0 0 0 0 0 0 0 27282
Fund Balance Restricted 72582 72582 Assigned 74240 42313 122304 9610 83784 53265 34958 15 420489 Unassigned (29377) (88485) (117862)
Total Fund Balance 74240 (29377) 42313 122304 9610 83784 53265 34958 72597 (88485) 375209
Total Liabilities Deferred Inflow of Resources and Fund Balance 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
DECEMBER 31 2018
68
TaxCharitable Economic TIF District Abatement - TIF District Lions TIF District Training WoodlawnGambling Development No 6 Dingmann No 12 Donation No 14 Center Cemetery
(222) (407) (411) (423) (438) (464) (465) (604) (651) Total
REVENUESProperty Taxes $ $ $ 2507$ $ $ $ $ $ 2507$ Tax Increments 20858 20858 Charges for Services 12875 19641 10120 42636 Investment Income (71) (2440) (140) (76) 1239 33 (1455)Contributions and Donations 108 49500 49608Miscellaneous 78 500 578
Total Revenues (71) 10621 20718 2507 0 49424 500 20880 10153 114732
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 20116 Economic Development 18399 19816 391 13752 52358
Capital OutlayCulture and Recreation 14187 14187 Economic Development 56446 56446
Total Expenditures 0 18399 19816 0 391 14187 70198 20116 10807 153914 Excess (Deficiency) of
Revenues Over (Under) Expenditures (71) (7778) 902 2507 (391) 35237 (69698) 764 (654) (39182)
OTHER FINANCING SOURCES (USES)Transfers In 51200 51200 Transfers Out (65804) (65804)
Total Other FinancingSources (Uses) 0 (14604) 0 0 0 0 0 0 0 (14604)
Net Change in Fund Balances (71) (22382) 902 2507 (391) 35237 (69698) 764 (654) (53786)
FUND BALANCE BEGINNING OF YEAR 11537 858338 10579 (20542) 391 32266 (200214) (48968) 643387
FUND BALANCE END OF YEAR 11466$ 835956$ 11481$ (18035)$ 0$ 67503$ (69698)$ (199450)$ (49622)$ 589601$
69
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE
YEAR ENDED DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding Improvement Bonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
REVENUESSpecial Assessments 21259$ $ $ 37558$ 10657$ 20276$ 59921$ 149671$
EXPENDITURESDebt Service
Principal 80000 70000 54000 127000 210000 245000 35000 821000Interest and Other Charges 23944 14062 4095 64909 16975 18646 20333 162964
Total Expenditures 103944 84062 58095 191909 226975 263646 55333 983964 Excess (Deficiency) of
Revenues Over (Under)Expenditures (82685) (84062) (58095) (154351) (216318) (243370) 4588 (834293)
OTHER FINANCINGSOURCES (USES)Transfers In 76000 78113 22560 150000 194943 198000 65000 784616
Net Change in Fund Balances (6685) (5949) (35535) (4351) (21375) (45370) 69588 (49677)
FUND BALANCEBEGINNING OF YEAR 141919 59106 38823 315684 116272 408555 417888 1498247
FUND BALANCE END OF YEAR 135234$ 53157$ 3288$ 311333$ 94897$ 363185$ 487476$ 1448570$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
YEAR ENDED DECEMBER 31 2018
70
Public 2020Fire Street WorksStreet Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
REVENUESProperty Taxes 25092$ $ 295631$ $ $ $ $ $ $ $ 320723$ Intergovernmental 4109 26201 30310 Charges for Services 8595 8595 Fines and Forfeitures 4299 4299 Investment Income (49) 105 (324) (1118) (80) (713) (503) (495) (458) (3635) Contributions and Donations 50650 1500 2000 30000 84150 Miscellaneous 101 101
Total Revenues 75693 14309 295307 (1017) 6219 (713) 25698 29505 (458) 0 444543
EXPENDITURESCurrent
Public Safety 22622 22622 Culture and Recreation 3735 3735
Capital OutlayPublic Safety 7500 59555 67055 Public Works 14006 14006 Culture and Recreation 16429 72035 88464 Economic Development 88485 88485
Total Expenditures 30122 20164 0 14006 59555 0 0 72035 0 88485 284367 Excess (Deficiency) of
Revenues Over (Under)Expenditures 45571 (5855) 295307 (15023) (53336) (713) 25698 (42530) (458) (88485) 160176
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 8800 15693 24493 Transfers In 84943 37504 60000 20000 107651 310098 Transfers Out (107503) (288000) (78113) (7700) (481316)
Total Other FinancingSources (Uses) (22560) 37504 (288000) 68800 35693 29538 0 (7700) 0 0 (146725)
Net Change in Fund Balances 23011 31649 7307 53777 (17643) 28825 25698 (50230) (458) (88485) 13451
FUND BALANCE BEGINNING OF YEAR 51229 (61026) 35006 68527 27253 54959 27567 85188 73055 361758
FUND BALANCE END OF YEAR 74240$ (29377)$ 42313$ 122304$ 9610$ 83784$ 53265$ 34958$ 72597$ (88485)$ 375209$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
YEAR ENDED DECEMBER 31 2018
71
FINANCIAL SECTION
This page intentionally left blank
Issue Interest Original Final Principal Due WithinDate Rates Issue Maturity Outstanding One Year
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan Bonds Series 2008A 050608 300-400 895000$ 020122 295000$ 70000$ GO Special Assessment Bonds
GO Improvement Bonds Series 2008B 050608 300-4125 1175000 020124 560000 85000 GO Improvement Bonds Series 2011A 060811 105-415 1700000 020132 1300000 70000 GO Refunding Bonds Series 2011B 092711 085-270 1620000 020121 585000 215000 GO Refunding Bonds Series 2012A 040412 055-185 2225000 020122 1035000 255000 GO Improvement Bonds Series 2015A 050115 110-345 820000 020136 750000 35000
GO NotesGO Improvement Note of 2011 053111 1959 1217500 082031 846000 58000
GO Equipment CertificateGO Equipment Certificate 2016A 032116 2100 222000 020121 168000 55000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549 843000
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 011304 2819 3273194 082023 996000 188000 PFA Clean Water Revenue Note 081707 2220 16036613 082026 8086000 935000 PFA Water Revenue Note of 2015 081015 1031 929105 082035 812000 44000 PFA Sewer Revenue Note of 2015 090815 1000 125359 082035 110000 6000
Total Business-Type Activities 10004000 1173000
Total All Long-Term Liabilities 15543549$ 2016000$
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF LONG-TERM LIABILITIESDECEMBER 31 2018
72
This page intentionally left blank
COMPLIANCE SECTION
This page intentionally left blank
Honorable Mayor and Members of the City Council
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
INDEPENDENT AUDITORS REPORT ON MINNESOTA LEGAL COMPLIANCE
73
The Minnesota Legal Compliance Audit Guide for Cities promulgated by the State Auditor pursuant to Minn Stat sect665 contains seven categories of compliance to be tested contracting and bidding deposits and investments conflicts of interest public indebtedness claims and disbursements miscellaneous provisions and tax increment financing Our audit considered all of the listed categories
In connection with our audit nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities However our audit was not directed primarily toward obtaining knowledge of such noncompliance Accordingly had we performed additional procedures other matters may have come to our attention regarding the Citys noncompliance with the above referenced provisions
The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance Accordingly this communication is not suitable for any other purpose
City of AnnandaleAnnandale Minnesota
May 6 2019
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 majorfund and the aggregate remaining fund information as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements we considered the Citys 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 Citys internal control Accordingly we do not express an opinion on the effectiveness of the Citys 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 entitys 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
74
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 and therefore material weaknesses or significant deficiencies may exist that were not identified 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 We did identify certain deficiencies in internal control described in the accompanying Schedule of Findings as 2018-001 and 2018-002 that we consider to be significant deficiencies
INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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 the City of Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
Compliance and Other Matters
Citys Response to Findings
Purpose of this Report
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
May 6 2019
75
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 Citys internal control or on compliance This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entitys internal control and compliance Accordingly this communication is not suitable for any other purpose
As part of obtaining reasonable assurance about whether the Citys 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
The Citys responses to the findings identified in our audit are described in the accompanying Schedule of Findings The Citys responses were not subjected to the auditing procedures applied in the audit of the financial statements and accordingly we express no opinion on them
I
FINDING 2018-001
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
76
LIMITED SEGREGATION OF DUTIES
There is an absence of appropriate segregation of duties consistent with appropriate control objectives due to a limited number of employees
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The City is aware of the limited segregation of duties and will continue to review internal controls and make changes when they can be made
The lack of adequate segregation of duties could adversely affect the Citys ability to initiate record process and report financial data consistent with the assertions of management in the financial statements
The basic premise is that no one person should have access to both physical assets and the related accounting records or to all phases of a transaction The lack of such controls could result in the occurrence of a material error or fraud in relation to the financial statements not being detected by management
The City has assigned duties to staff based on a cost-benefit relationship to the City and the practicality of the level of staffing the City maintains
The City should continue to monitor and evaluate the job responsibilities assigned to staff to determine whether there is an unacceptable risk
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
I
FINDING 2018-002 AUDITOR PREPARED FINANCIAL STATEMENTS
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
77
The City does not have an internal control system designed to provide for the preparation of the financial statements being audited However based on the degree of complexity and level of detail needed to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) the City has requested the auditors to prepare them
The preparation of the financial statements and the related notes are the responsibility of management
There are a limited number of office employees and resources available to allow for the adequate preparation of the financial statements by the City
This could result in a material misstatement to the financial statements and related notes that would not be prevented or detected and corrected as a result of the Citys current internal control
The City should continue to request the assistance to draft the financial statements and related notes and thoroughly review these financial statements after they have been prepared so the City can take responsibility for them
The City is aware of this however due to significant cost and a limited number of employees it is in the Citys best financial interest to contract for the preparation of the financial statements
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Contd)
Comment Year Finding If Not Corrected Provide PlannedReference Comment Title Status Initially Occurred Corrective Action or Other Explanation
Financial Statement Findings
2017-001 Not Corrected 2009 See current year finding 2018-001
2017-002 Not Corrected 2009 See current year finding 2018-002
Minnesota Legal Compliance Findings
None
DECEMBER 31 2018SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
CITY OF ANNANDALE MINNESOTA
78
Limited Segregation of Duties
Auditor Prepared Financial Statements
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORS
WILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
MANAGEMENT LETTER
DECEMBER 31 2018
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Page
Required Communications 1-3
Schedule of Findings on Accounting Issues and Internal Controls 4
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Significant Audit Findings
Qualitative Aspects of Accounting Practices
We have audited the financial statements of the governmental activities the business-type activities each major fund and the aggregate remaining fund information of the City of Annandale Minnesota for the year ended December 31 2018 Professional standards require that we provide you with information about our responsibilities under generallyaccepted auditing standards and Government Auditing Standards as well as certain information related to the planned scope and timing of our audit We have communicated such information in our letter to you dated December 20 2018 Professional standards also require that we communicate to you the following information related to our audit
The financial statement disclosures are neutral consistent and clear
1
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 the financial statements No new accounting policies were adopted and the application of existing policies was not changed in 2018 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 are an integral part of the financial statements prepared by management and are based on managements 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
Managements estimate of depreciation is based on the number of years an asset is in service We evaluated the key factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Managements estimate of pension liabilities is based on actuarial valuations performed by consultants specializing in those areas We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Significant Audit Findings (Contd)
Difficulties Encountered in Performing the Audit
Corrected and Uncorrected Misstatements
Disagreements with Management
Management Representations
Management Consultations with Other Independent Accountants
Other Audit Findings or Issues
Other Matters
Professional standards require us to accumulate all known and likely misstatements identified during the audit other than those that are clearly trivial and communicate them to the appropriate level of management Management has corrected all such misstatements In addition none of the misstatements detected as a result of audit procedures and corrected by management were material either individually or in the aggregate to each opinion units financial statements taken as a whole
We encountered no significant difficulties in dealing with management in performing and completing our audit
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 Citys 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
We generally discuss a variety of matters including the application of accounting principles and auditing standards with management each year prior to retention as the Citys auditors However these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention
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 We are pleased to report that no such disagreements arose during the course of our audit
We have requested certain representations from management that are included in the management representation letter dated May 6 2019
We applied certain limited procedures to Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions the Schedule of Changes in the Citys Net Pension Liability and Related Ratios and the related notes to required supplementary information which are required supplementary information that supplements the basic financial statements Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries the basic financial statements and other knowledge we obtained during our audit of the basic financial statements We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information
2
Other Matters (Contd)
Restriction on Use
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
This information is intended solely for the use of the City Council and management of the City of Annandale Minnesota and is not intended to be and should not be used by anyone other than these specified parties
3
We were not engaged to report on the Elected Officials and Administration section which accompany the financial statements but are not required supplementary information We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it
May 6 2019
We were engaged to report on the statements and schedules listed in the table of contents as supplementary information which accompany the financial statements but are not required supplementary information With respect to this supplementary information we made certain inquiries of management and evaluated the form content and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America the method of preparing it has not changed from the prior period and the information is appropriate and complete in relation to our audit of the financial statements We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves
This page intentionally left blank
4
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in internal control under standards established by the American Institute of Certified Public Accountants 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
The objective of internal accounting control is to provide reasonable but not absolute assurance as to the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of these factors necessarily requires estimates and judgments by management
It should be recognized that within the City an inherent risk is present with certain positions It is very common for cities such as the City of Annandale Minnesota to assign many major responsibilities to a few key individuals in an attempt to operate within limited budgets The inherent risk is again addressed only to maintain the awareness of the internal control structure and to encourage the Councils continual review of financial information at monthly meetings
DECEMBER 31 2018
INTERNAL CONTROL
GENERAL RECOMMENDATIONS
Throughout the course of the audit we spoke to management regarding certain items that we see as an opportunity to improve None of these were considered significant within the scope of the audit The items discussed requiring action have been resolved or are in the process of resolution We would like to acknowledge the assistance and courtesies extended to us by the personnel of the City of Annandale Minnesota
City of Annandale Minnesota
Audit ReportDecember 31 2018
Independent Auditorrsquos ReportPages 2-4bull Financial statements are the responsibility of the Cityrsquos
managementbull Our responsibility is to express opinions on these financial
statements based on our auditbull Conducted audit in accordance with Generally Accepted
Auditing Standards and Government Auditing Standardsbull Obtain reasonable assurance financials are free from
material misstatement
1
Independent Auditorrsquos Report (Contrsquod)Pages 2-4
bull Financial statements are presented fairly in our opinion
bull Internal control letter on pages 74 and 75
2
Statement of Net Position
3
2018 2017ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current and Other 12893519$ 12739729$ Capital 20949843 21526486
Total Assets 33843362 34266215
Deferred Outflows of Resources 656980 914167 Total Assets and Deferred Outflows of Resources 34500342$ 35180382$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current Liabilities 660359$ 497847$ Noncurrent Liabilities
Net Pension Liability 894343 236206 Due Within One Year 2016000 1967000 Due in More Than One Year 13527549 16383958
Total Liabilities 17098251 19085011
Deferred Inflows of Resources 940554 951385
Net PositionNet Investment in Capital Assets 13587855 13119128 Restricted 2095629 2215725 Unrestricted 778053 (190867)
Total Net Position 16461537 15143986 Total Liabilities Deferred Inflows of Resources
and Net Position 34500342$ 35180382$
CITY OF ANNANDALE Payment Approval Report - for City Council Page 2
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
190
190 ANNANDALE AREA CHAMBER APRIL2019 CITY EXPO BOOTH 04092019 10000 10000 04122019
Total 190 10000 10000
192
192 ANNANDALE PARTS SUPPLY 127199280 HEAD LIGHT 02282019 1699 1699 04122019
192 ANNANDALE PARTS SUPPLY 127199479 LIGHT BULBS 03042019 2565 2565 04122019
192 ANNANDALE PARTS SUPPLY 127199616 FLUSH KIT 03052019 7098 7098 04122019
192 ANNANDALE PARTS SUPPLY 127199723 HEADLIGHT BULB- SQUAD 51 03072019 949 949 04122019
192 ANNANDALE PARTS SUPPLY 127200389 GENERATOR PARTS 03182019 2318 2318 04122019
192 ANNANDALE PARTS SUPPLY 127200469 LUBE 03192019 791 791 04122019
192 ANNANDALE PARTS SUPPLY 127200476 HOSE 03192019 118 118 04122019
192 ANNANDALE PARTS SUPPLY 127200490 BATTERY 03192019 9858 9858 04122019
192 ANNANDALE PARTS SUPPLY 127200546 PARTS 03202019 1398 1398 04122019
192 ANNANDALE PARTS SUPPLY 127200609 FILTERS 03202019 23472 23472 04122019
192 ANNANDALE PARTS SUPPLY 127200627 STOP LEAK 03212019 873 873 04122019
192 ANNANDALE PARTS SUPPLY 127200652 FILTER 03222019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200654 FILTER 03212019 1382 1382 04122019
192 ANNANDALE PARTS SUPPLY 127200713 FITTING 03222019 129 129 04122019
192 ANNANDALE PARTS SUPPLY 127200757 PARTS 03222019 2178 2178 04122019
192 ANNANDALE PARTS SUPPLY 127200939 CLEANER 03252019 2339 2339 04122019
192 ANNANDALE PARTS SUPPLY 127201161 SOAP 03282019 909 00
192 ANNANDALE PARTS SUPPLY 127201244 LUBRICANT 05012019 2373 00
192 ANNANDALE PARTS SUPPLY 127201434 HOSE REPAIR 05012019 3637 00
192 ANNANDALE PARTS SUPPLY 127201488 HOSE REPAIR 04022019 7274 00
192 ANNANDALE PARTS SUPPLY 127202184 FLARE FITTINGS 04112019 1858 00
192 ANNANDALE PARTS SUPPLY 127202518 BRAKE CLEANER 04172019 3228 00
Total 192 77828 58549
200
200 ANNANDALE EMBROIDERY 2356 APD HATS 03272019 9000 00
Total 200 9000 00
230
230 ANNANDALE-MAPLE LAKE MARCH 2019 MAR 2019 FLOW 04152019 6260800 00
Total 230 6260800 00
240
240 ANNANDALE PLUMBING 1457 RPZ TESTING 03272019 28500 00
Total 240 28500 00
424
424 BERGESCH COMPUTER SERVI 16172 SERVICE CALL 04062019 7500 00
424 BERGESCH COMPUTER SERVI 16176 ADMIN-SERVICE CALL 04062019 7500 00
Total 424 15000 00
463
463 BOLTON amp MENK INC 0231771 LGU BSA 7 STAKEHOLDERS C 04122019 11700 00
463 BOLTON amp MENK INC 0231785 2022 PROJECT FACILITY PLAN 04122019 44500 00
463 BOLTON amp MENK INC 0231788 SAND PROFILE 04122019 117250 00
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT PLANS AN 04122019 1717300 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 3
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT STREETS 04122019 38000 00
Total 463 1928750 00
646
646 CENTRA SOTA LAKE REGION L 6308214 STREETS 04092019 11697 00
646 CENTRA SOTA LAKE REGION L 6308214 PARKS 04092019 14037 00
646 CENTRA SOTA LAKE REGION L 6308214 WATER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 SEWER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 PUBLIC WORKS 04092019 33531 00
646 CENTRA SOTA LAKE REGION L 6308342 STREETS 04292019 13024 00
646 CENTRA SOTA LAKE REGION L 6308342 PARKS 04292019 15629 00
646 CENTRA SOTA LAKE REGION L 6308342 WATER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 SEWER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 PUBLIC WORKS 04292019 37335 00
646 CENTRA SOTA LAKE REGION L 6308343 STREETS 04292019 16436 00
646 CENTRA SOTA LAKE REGION L 6308343 PARKS 04292019 19723 00
646 CENTRA SOTA LAKE REGION L 6308343 WATER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 SEWER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 PUBLIC WORKS 04292019 47116 00
Total 646 274380 00
710
710 CITY OF BUFFALO MARCH2019 MONTHLY NET MOTION 04012019 2000 2000 04122019
Total 710 2000 2000
810
810 COLONIAL LIFE amp ACCIDENT 7492424-0501 INSURANCE 04162019 42770 42770 04232019
Total 810 42770 42770
900
900 COUNTRY CHEVROLET INC CVCS139790 SQUAD 52 - TIRE REPAIR 04092019 1719 00
Total 900 1719 00
1336
1336 FARM RITE EQUIPMENT INC P42298 WIPER BLADESIDLER ASSY 04012019 36766 00
1336 FARM RITE EQUIPMENT INC W13484 HYDRAULIC HOSE 04172019 40840 00
Total 1336 77606 00
1338
1338 FASTENAL COMPANY MNBUF78347 SAFETY GLASSES 04172019 4656 00
1338 FASTENAL COMPANY MNBUF78393 TOOLS 04192019 892 00
Total 1338 5548 00
1420
1420 FIRE RELIEF ASSOCIATION MARCH2019 2019 SUPPLEMENTAL REIMB 04082019 100000 00
1420 FIRE RELIEF ASSOCIATION MARCH2019 2018 SUPPLEMENTAL REIMB 04082019 313920 00
Total 1420 413920 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 4
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1508
1508 F S 3 INC 60393 SAFETY VEST 04222019 5500 00
1508 F S 3 INC 60435 SAFETY VEST 04162019 5500 00
1508 F S 3 INC 60436 SAFETY VEST 04162019 5500 00
Total 1508 16500 00
1519
1519 GALLS AN ARAMARK COMPAN 012401488 UNIFORM - HAAG 04042019 8396 00
1519 GALLS AN ARAMARK COMPAN 012412561 UNIFORM - TOWNSEND 04052019 4198 00
Total 1519 12594 00
1630
1630 GOPHER STATE ONE-CALL IN 9030176 FAX TICKETS 03312019 2295 00
Total 1630 2295 00
1660
1660 GRAINGER INC W W 6144966281 TEST BALLS 04122019 15556 00
1660 GRAINGER INC W W 9135594712 PARTS 04032019 6459 00
1660 GRAINGER INC W W 9137921475 SHOCK 04052019 4717 00
1660 GRAINGER INC W W 9138437422 HOSE 04052019 9729 00
1660 GRAINGER INC W W 9146606448 DOOR OPENER 04152019 2735 00
1660 GRAINGER INC W W 9150739945 GLOVES 04192019 6216 00
1660 GRAINGER INC W W 9152417177 GARAGE DOOR OPENERS 04222019 19056 00
Total 1660 64468 00
1710
1710 HAWKINS INC 4475748 CHEMICALS 04092019 247584 00
Total 1710 247584 00
1760
1760 HILLYARDHUTCHINSON 603390067 MOP DUST- PW 04092019 4520 00
1760 HILLYARDHUTCHINSON 603390067 FOLD TOWELSTISSUE PAPER 04092019 19613 00
1760 HILLYARDHUTCHINSON 603406861 SUPER SHINESOAPWINDOW 04232019 46059 00
1760 HILLYARDHUTCHINSON 700376971 SCRUBBER REPAIR 04192019 9600 00
Total 1760 79792 00
1780
1780 HOLIDAY CREDIT OFFICE MARCH12019 PD FUEL 04012019 93317 93317 04122019
1780 HOLIDAY CREDIT OFFICE March2019 FD- FUEL 04012019 19714 19714 04122019
Total 1780 113031 113031
2130
2130 LITTLE FALLS MACHINE INC 355406 PLOW PARTS 04242019 14150 00
Total 2130 14150 00
2190
2190 LUNDEEN BROS INC 91792 OIL CHANGE 2017 DODGE SQA 03212019 5894 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 5
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2190 5894 00
2210
2210 M amp M BUS SERVICE 10193369 DRUG TESTING- KIRBY NICKA 03152019 3000 00
2210 M amp M BUS SERVICE 10193370 ALCOHOL TESTING- KIRBY NIC 03192019 3000 00
2210 M amp M BUS SERVICE 10193419 DRUG TESTING- NICHOLLE CO 04092019 6000 00
Total 2210 12000 00
2211
2211 M amp M EXPRESS SALES amp SER 182624 MOWER PARTS 04122019 36108 00
2211 M amp M EXPRESS SALES amp SER 183289 MOWER PARTS 04182019 12319 00
Total 2211 48427 00
2260
2260 MAPLE LAKE LUMBER COMPA 168882 LUMBER 04222019 1659 00
Total 2260 1659 00
2272
2272 MARES EXCAVATING APRIL 2019 WATER LEAK 04012019 70000 00
Total 2272 70000 00
2273
2273 MARKET PLACE II 107 XTRA SOAP-FD 04012019 1332 1332 04232019
2273 MARKET PLACE II 107 MEALS- TC 04012019 5142 5142 04232019
Total 2273 6474 6474
2375
2375 METRO WEST INSPECTION SE 1978 370 BIG WOODS LN 17-04 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 250 EXCELSIOR AVE N 17-69 04252019 11145 00
2375 METRO WEST INSPECTION SE 1978 202 NONA DR 17-60 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 135 EXCELSIOR AVE N 17-127 04252019 17820 00
2375 METRO WEST INSPECTION SE 1978 630 LAKE DR W 19-7 04252019 2500 00
2375 METRO WEST INSPECTION SE 1978 212 ASH ST E 19-13 04252019 5198 00
2375 METRO WEST INSPECTION SE 1978 330 CHESTNUT ST E 19-22 04252019 2500 00
Total 2375 41663 00
2419
2419 MID-MINNESOTA CONCRETE 19073 HOT WATER 03112019 49000 00
2419 MID-MINNESOTA CONCRETE 19075 HOT WATER 03132019 49000 00
2419 MID-MINNESOTA CONCRETE 19076 HOT WATER 03042019 24500 00
Total 2419 122500 00
2425
2425 MIDWAY IRON amp METAL INC 420761 STEEL 04172019 5363 00
Total 2425 5363 00
2465
2465 MCP CARSTAR COLLISION CE 41349297 SQUAD 51 REPAIRS 01052019 175667 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 6
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2465 175667 00
2511
2511 CENTER POINT ENERGY 110 PAVILION 04122019 4986 00
2511 CENTER POINT ENERGY 111 TC 04122019 5309 00
2511 CENTER POINT ENERGY 112 OLD PW SHOP 05022019 4465 00
2511 CENTER POINT ENERGY 113 WTP 04122019 50216 00
2511 CENTER POINT ENERGY 114 HOCKEY RINK 04122019 4221 00
2511 CENTER POINT ENERGY 116 WARMING HOUSE 04162019 1500 00
2511 CENTER POINT ENERGY 116 CITY HALL 04162019 23624 00
2511 CENTER POINT ENERGY 117 FD 04122019 35974 00
Total 2511 130295 00
2525
2525 MINNESOTA COMPUTER SYST 263763 ADMIN COPIER 04082019 34758 00
2525 MINNESOTA COMPUTER SYST 463318 BW S3HR 04022019 5503 00
Total 2525 40261 00
2635
2635 CORE amp MAIN LP K426017 CULVERT 04242019 145000 00
2635 CORE amp MAIN LP K441242 LOCATOR 04222019 75265 00
Total 2635 220265 00
2698
2698 MPPOA MARCH 2019 NEW MEMBER DUES- LDF 04082019 3900 00
2698 MPPOA MARCH202019 2019 DUES- M FAUST 03202019 5000 00
Total 2698 8900 00
2819
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER- DMV 03012019 5830 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-ADMIN 03012019 13604 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-PD 03012019 2160 00
2819 NORTHERN BUSINESS PRODU 385745-0 CALCULATOR INK 03012019 440 00
2819 NORTHERN BUSINESS PRODU 386830-0 DESK TRAYSCALC ROLLERS 04082019 8169 00
2819 NORTHERN BUSINESS PRODU 386830-1 DVD-RW 03072019 2859 00
2819 NORTHERN BUSINESS PRODU 387602-0 BINDERDESK TRAYSFILE 03082019 8641 00
2819 NORTHERN BUSINESS PRODU 393165-0 PD - OFFICE SUPPLIES 35303 03272019 2158 00
2819 NORTHERN BUSINESS PRODU 396891-0 PENSSTAPLERSTAPLES 05012019 15450 00
2819 NORTHERN BUSINESS PRODU 396891-1 HEATER 05012019 5285 00
2819 NORTHERN BUSINESS PRODU 396891-2 CALCULATOR 05012019 8662 00
2819 NORTHERN BUSINESS PRODU 400116-0 FOLDERSPENS 05012019 6507 00
2819 NORTHERN BUSINESS PRODU 400134-0 EMPLOYEE FOLDERSRECPT B 05012019 16499 00
Total 2819 96264 00
2832
2832 NORTHWEST ASSOC CONSUL 24128 REZONE FOR SCHOOL 04042019 3330 00
2832 NORTHWEST ASSOC CONSUL 24128 SAND PROFILE 04042019 9450 00
2832 NORTHWEST ASSOC CONSUL 24129 VERIZON 04042019 20000 00
Total 2832 32780 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 7
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
2934
2934 PLEASANT LAKE ASSOCIATION 42919 PLEASANT LAKE ASSN 05012019 500000 00
Total 2934 500000 00
2962
2962 PRINCIPAL LIFE 108 INSURANCE 04222019 14144 14144 04232019
Total 2962 14144 14144
3161
3161 S P ELECTRIC INC 7282 OLD SPLICERS REMOVAL 04112019 99054 00
Total 3161 99054 00
3180
3180 SCHWAAB INC C039891 DATE STAMP 03272019 16776 00
3180 SCHWAAB INC C041311 REPLACE PADS 04042019 2050 00
Total 3180 18826 00
4006
4006 SHRED IT USA - MPLS 8126937775 SHREDDING SERVICES 03312019 45401 00
Total 4006 45401 00
4021
4021 SOKS RAPID CAR WASH 216-1384 SQUAD WASHES 04012019 11865 11865 04122019
Total 4021 11865 11865
4040
4040 SUMMIT COMPANIES 1368349 FIRE SYSTEM MAINT 04102019 34500 00
4040 SUMMIT COMPANIES 1368350 ANNUAL FIRE ALARM INSP 04102019 23000 00
4040 SUMMIT COMPANIES 1368538 CITY HALL FIRE SUPPRESION 04052019 19800 00
4040 SUMMIT COMPANIES 1371739 FIRE EXT MAINTENANCE 04292019 46280 00
4040 SUMMIT COMPANIES 1372404 CITY HALLPD - ANNUAL FIRE A 04292019 16715 00
Total 4040 140295 00
4130
4130 STERNBERG LANTERNS INC 50379 LIGHT SOCKETS 04122019 30000 00
Total 4130 30000 00
4222
4222 TASC IN1499967 ADMIN FEES 04172019 43320 00
Total 4222 43320 00
4269
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
Total 4269 324000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 8
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4337
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16061 16061 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
Total 4337 48181 48181
4365
4365 UTILITY CONSULTANTS INC 101046 COLIFORM 03282019 8000 00
Total 4365 8000 00
4377
4377 VERIZON WIRELESS 9827946389 PW IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 FD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 INVESTIGATOR COMPUTER 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD CELL PHONE 04102019 16639 16639 04232019
4377 VERIZON WIRELESS 9827946389 PW CELL PHONE 04102019 26360 26360 04232019
Total 4377 57003 57003
4481
4481 WEST CENTRAL SANITATION I 121 RECYCLE 04302019 362792 00
4481 WEST CENTRAL SANITATION I 121 REFUSE 04302019 936578 00
4481 WEST CENTRAL SANITATION I MARCH 2019 RECYCLE 03312019 451419 451419 04122019
4481 WEST CENTRAL SANITATION I MARCH 2019 REFUSE 03312019 908999 908999 04122019
Total 4481 2659788 1360418
4495
4495 WINDSTREAM APRIL2019 LS 805 NORWAY DR E 04032019 24428 24428 04122019
4495 WINDSTREAM APRIL32019 320-274-2793 04032019 3830 3830 04122019
Total 4495 28258 28258
4520
4520 WRIGHT COUNTY HIGHWAY DE 1340 APEX 04162019 12100 00
Total 4520 12100 00
4548
4548 WRIGHT-HENNEPIN COOPERA 104 TC 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 105 CITY HALL SECURITY 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 106 LS 1255 BUSINESS BLVD 04102019 1484 1484 04232019
4548 WRIGHT-HENNEPIN COOPERA 119 STREET LIGHTS 04102019 13973 00
Total 4548 20047 6074
4559
4559 XCEL ENERGY 0774352025 ACCOUNT 51-4985655-1 03282019 1910 1910 04122019
4559 XCEL ENERGY 0774781723 ACCOUNT 51-6464610-6 04082019 5051 5051 04122019
4559 XCEL ENERGY 0774798834 ACCOUNT 51-6875531-1 04012019 2964 2964 04122019
4559 XCEL ENERGY 0774851593 ACCOUNT 51-0011253419-4 04012019 52824 52824 04122019
4559 XCEL ENERGY 0774856745 ACCOUNT 51-0010892786-1 04012019 1379 1379 04122019
4559 XCEL ENERGY 0775014393 ACCOUNT 51-6076585-1 04022019 11396 11396 04122019
4559 XCEL ENERGY 0775442400 ACCOUNT 51-6024519-2 04042019 365444 365444 04232019
CITY OF ANNANDALE Payment Approval Report - for City Council Page 9
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4559 XCEL ENERGY 0775852647 ACCOUNT 51-6024518-1 04082019 156465 156465 04232019
4559 XCEL ENERGY 0777794063 ACCOUNT 51-4192659-4 04182019 3117 00
4559 XCEL ENERGY 0779111699 ACCOUNT 51-4985655-1 04262019 1767 00
4559 XCEL ENERGY 778173400 ACCOUNT 51-4636619-8 04222019 6391 00
Total 4559 608708 597433
4648
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 23750 00
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 00 00
4648 A R ENGH 190448 SPRING MAINTENANCE 04302019 21375 00
4648 A R ENGH 190451 SPRING MAINTENANCE- TC 04302019 14250 00
Total 4648 59375 00
4716
4716 JOVANOVICH KADLEC amp ATHM 16709 KRONQUIST LOT 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 LEASE WITH WILES 03312019 28000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 ORD AMENDMENT- MICRO DIS 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 GENERAL 03312019 8750 00
4716 JOVANOVICH KADLEC amp ATHM 16709 PERSONNEL POLICY 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 CONTROLLED BURN HOLD HA 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
Total 4716 82250 00
4721
4721 MANEY INTERNATIONAL 803662X1 PARTS 02072019 2275 2275 04122019
Total 4721 2275 2275
4734
4734 MOTOROLA SOLUTIONS INC 16042791 RADIO BATTERIES 03252019 16800 00
Total 4734 16800 00
4743
4743 CARDMEMBER SERVICE 122 ATRIST EASEL 05012019 10305 00
4743 CARDMEMBER SERVICE 122 KEROSENE 05012019 6329 00
4743 CARDMEMBER SERVICE 122 POLLUTION CONTROL 05012019 41500 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC 05012019 1639 00
4743 CARDMEMBER SERVICE 122 AMAZON- 40 AMP RELAY 05012019 2898 00
4743 CARDMEMBER SERVICE 122 A-1 - BULB KIT 05012019 2503 00
4743 CARDMEMBER SERVICE 122 MENARDS-POTHOLE PATCH 05012019 47014 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC BALL VALVE 05012019 1770 00
4743 CARDMEMBER SERVICE 122 TOTAL TOOL- SHOE - PETER 05012019 5123 00
4743 CARDMEMBER SERVICE 122 PRYOR- EXCEL CLASSES- MIS 05012019 25600 00
4743 CARDMEMBER SERVICE 122 MN CHIEFS ASSOC 05012019 19900 00
4743 CARDMEMBER SERVICE 122 BEST BUY- 05012019 8589 00
4743 CARDMEMBER SERVICE 122 BEST BUY 05012019 17178 00
4743 CARDMEMBER SERVICE 122 USPS 05012019 1149 00
4743 CARDMEMBER SERVICE 122 PAYPAL- INTER ASSOC EVID- R 05012019 5000 00
4743 CARDMEMBER SERVICE 122 ACTION TARGETS- 05012019 14662 00
4743 CARDMEMBER SERVICE 122 AMAZON- METAL DUSTPAN 05012019 2894 00
4743 CARDMEMBER SERVICE 122 AMAZON- BATTERIES 05012019 2124 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 10
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 4743 216177 00
4752
4752 NCPERS GROUP LIFE INS MAY2019 INSURANCE 04172019 1600 00
Total 4752 1600 00
4769
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 39944 00
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 00 00
Total 4769 39944 00
4793
4793 DELTA DENTAL 7626938 INSURANCE 04152019 139599 139599 04232019
Total 4793 139599 139599
4831
4831 GENERAL RENTAL CENTER OF 1174533 HEATER RENTAL 03112019 11000 00
Total 4831 11000 00
4889
4889 CLASSIC CLEANING COMPANY 28038 CITY HALL- 04082019 67375 00
4889 CLASSIC CLEANING COMPANY 28038 PD- 04082019 14700 00
4889 CLASSIC CLEANING COMPANY 28038 LIBRARY- 04082019 40425 00
4889 CLASSIC CLEANING COMPANY 28039 TC 04082019 23000 00
Total 4889 145500 00
4945
4945 COUNTRY REPAIR INC 1568 KOHLER 100 GENERAT REPAIR 02212019 348966 00
Total 4945 348966 00
4955
4955 WORKFORCE INTEGRITY NET 41219 PREEMPLOYMENT TEST KIRBY 03312019 9300 00
Total 4955 9300 00
4968
4968 Volunteer Firefighter Ben Assoc of MARCH2019 BENEFIT RENEWALS 04012019 20600 20600 04122019
Total 4968 20600 20600
5002
5002 BUREAU OF CRIMINAL APPRE 536318 CJDN 03312019 27000 00
Total 5002 27000 00
5003
5003 BOLAND PRODUCTION SUPPL 11-6569 BLANK AMMUNITION 03042019 10000 00
Total 5003 10000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 11
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5006
5006 MIDCONTINENT COMMUNICATI 157013401102 FD 04092019 14765 14765 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PW 04092019 26599 26599 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 TC 04092019 3717 3717 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 DMV 04092019 12056 12056 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PD 04092019 20823 20823 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 CITY HALL 04092019 24864 24864 04122019
Total 5006 102824 102824
5031
5031 A1 RAPID LUBE 112018 SQUAD 51 OIL CHANGE 04092019 4145 4145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 51 04092019 9145 9145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 52 04092019 1500 1500 04122019
5031 A1 RAPID LUBE 11302018 SQUAD 52 WASH 04092019 1500 1500 04122019
5031 A1 RAPID LUBE DEC2018 SQUAD 51 OIL CHANGE 04092019 5000 5000 04122019
Total 5031 21290 21290
5039
5039 KAMCO 201800 CRACKFILLING 04292019 5395141 00
Total 5039 5395141 00
5056
5056 CASEYS GENERAL STORES IN MARCH 2019 PD FUEL 04012019 6449 6449 04122019
Total 5056 6449 6449
5067
5067 ZUERCHER PA0001614 GPS RECEIVERS 03102019 32800 00
5067 ZUERCHER PA0001669 RECORDS- PROPERTY amp EVID 03292019 102100 00
Total 5067 134900 00
5074
5074 Potentia MN Solar Fund 1 LLC 2019-02-1761- 520 ASH - WTP 02282019 28907 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- CEMETARY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 370 PARK SEWAGE PUMP 02282019 7041 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 520 ASH - WTP 02282019 14573 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 605 WARREN 02282019 3083 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 200 EXCELSIOR 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- BALL PARL LIGHTING 02282019 1136 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- CITY HALL 02282019 16228 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- PAVILION 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- HOCKEY RINK 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- UNIT SOUTH 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 30 CEDAR STREET LIGHT 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 111 CEDAR ST 02282019 163 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 15 CONV CLUB RD - LS 02282019 2596 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS 805 NORWAY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 640 ACACIA 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1792- FD 02282019 5895 00
Total 5074 83677 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 12
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5075
5075 HALVORSON LANGEMO PASC 2927 ARPIL PROSECUTION 03282019 139479 139479 04232019
5075 HALVORSON LANGEMO PASC 2994 MAY PROSECUTION 04262019 139479 00
Total 5075 278958 139479
5086
5086 CLASSIC CARPET amp FLOOR CA 1312 FD- CARPET CLEANING 04102019 24500 00
Total 5086 24500 00
5099
5099 STENGER PETER march72019 WATER LICENSE 03072019 3200 3200 04042019
Total 5099 3200 3200
5101
5101 GAPINSKI AMELIA 118 MILEAGE- ST PAUL-147 MILES 04222019 8526 8526 04232019
5101 GAPINSKI AMELIA 118 LUNCH- ST PAUL 04222019 1182 1182 04232019
5101 GAPINSKI AMELIA 118 PARKING RAMP- ST PAUL 04222019 1800 1800 04232019
Total 5101 11508 11508
5103
5103 GLUNZ DAVID D 589207 1ST QTR SEXTON FEE 2019 04222019 12000 00
Total 5103 12000 00
5108
5108 RECON ROBOTICS 74975 ROBOT REPAIR 03082019 40000 00
Total 5108 40000 00
5120
5120 MELGAARD SERVICES 115 LITTLE JIMS REPAIR 03272019 65000 00
Total 5120 65000 00
5137
5137 HARTZELL STEVE DEC2018 SAFETY SHOES 04092019 13998 13998 04122019
Total 5137 13998 13998
5138
5138 HOGLUND BUS COMPANY 133269 PLOW TRUCK REPAIR 04232019 242869 00
Total 5138 242869 00
5139
5139 GIEBENHAIN KARIE APRIL 2019 TRAVELTRAINING 04292019 1259 00
Total 5139 1259 00
5140
5140 GRABHAM JUDY APRIL2019 GARDEN MATERIALS REIMBUR 04302019 12312 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 13
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 5140 12312 00
Grand Totals 23368095 2894268
Dated __________________________________________
Mayor __________________________________________
Dwight Gunnarson
City Council __________________________________________
Shelly Jonas
__________________________________________
Jullie Hastings
__________________________________________
Corey Czycalla
__________________________________________
Matthew Wuollet
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
CITY OF ANNANDALE Check Register Page 1Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03012019 03042019 1005 EFT - ASPIRE 14 47332-03012019 03042019 1006 EFT - FLEXSYSTEM 9 21153-03012019 03042019 1007 EFT - MINNESOTA 8 152678-03012019 03042019 1008 EFT-FURTHER 12 194842-03012019 03042019 1008 EFT-FURTHER 12 70000-03012019 03042019 1009 EFT-PERA 5 197211-03012019 03042019 1009 EFT-PERA 5 227551-03012019 03042019 1009 EFT-PERA 5 164253-03012019 03042019 1009 EFT-PERA 5 246377-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 291789-03152019 03182019 1011 EFT - ASPIRE 14 50777-03152019 03182019 1012 EFT - FLEXSYSTEM 9 21153-03152019 03182019 1013 EFT - MINNESOTA 8 170353-03152019 03182019 1014 EFT-FURTHER 12 199842-03152019 03182019 1015 EFT-NATIONWIDE RETIREMENT 3 45727-03152019 03182019 1016 EFT-PERA 5 202077-03152019 03182019 1016 EFT-PERA 5 233162-03152019 03182019 1016 EFT-PERA 5 167748-03152019 03182019 1016 EFT-PERA 5 251623-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 338787-03012019 03042019 3231 FERRELL MISTY 123 207493-03012019 03042019 3232 HINNENKAMP KELLY 127 296930-03012019 03042019 3233 JARMON VICKI I 134 162692-03012019 03042019 3234 KRIENKE CARRIE L 136 118186-03012019 03042019 3235 GAPINSKI AMELIA 142 76605-03012019 03042019 3236 GIEBENHAIN KARIE 143 63912-03012019 03042019 3237 HERR JEFFREY J 208 198056-03012019 03042019 3238 STANDAFER PETER A 217 171766-03012019 03042019 3239 BERG TERESA 233 29593-03012019 03042019 3240 TAVARES AARON J 234 144943-03012019 03042019 3241 PETERSON KENNETH J 235 6543-03012019 03042019 3242 ETSHOKIN LOUIS RICHARD 238 69332-03012019 03042019 3243 GRIGGS DEREK C 245 173791-03012019 03042019 3244 SMITH TARA 251 104275-03012019 03042019 3245 MARES NICHOLAS J 306 46531-03012019 03042019 3246 GLUNZ DAVID D 323 215466-03012019 03042019 3247 STENGER PETER 324 148864-03012019 03042019 3248 COREY NICHOLLE 328 176647-03012019 03042019 3249 HARTZELL STEVE 329 123679-03012019 03042019 3250 WICKER MITCHELL 360 157433-03012019 03042019 3251 HASTINGS JULLIE K 803 13391-
CITY OF ANNANDALE Check Register Page 2Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 3252 FERRELL MISTY 123 186726-03152019 03182019 3253 HINNENKAMP KELLY 127 296930-03152019 03182019 3254 JARMON VICKI I 134 156691-03152019 03182019 3255 KRIENKE CARRIE L 136 109765-03152019 03182019 3256 GAPINSKI AMELIA 142 78334-03152019 03182019 3257 GIEBENHAIN KARIE 143 62780-03152019 03182019 3258 HERR JEFFREY J 208 228423-03152019 03182019 3259 STANDAFER PETER A 217 188333-03152019 03182019 3260 TAVARES AARON J 234 143820-03152019 03182019 3261 ETSHOKIN LOUIS RICHARD 238 36648-03152019 03182019 3262 Void03152019 03182019 3263 SMITH TARA 251 100781-03152019 03182019 3264 MARES NICHOLAS J 306 9080-03152019 03182019 3265 GLUNZ DAVID D 323 263393-03152019 03182019 3266 STENGER PETER 324 156283-03152019 03182019 3267 COREY NICHOLLE 328 141112-03152019 03182019 3268 HARTZELL STEVE 329 114544-03152019 03182019 3269 WICKER MITCHELL 360 231604-03152019 03182019 3270 RANDALL STEVEN R 570 23273-03152019 03182019 3271 TOMES BRIAN C 571 19117-03152019 03182019 3272 EDWARDS DANIEL J 572 25765-03152019 03182019 3273 JARVIS TRYSTON 573 16808-03152019 03182019 3274 GRIGGS DEREK C 245 209088-03152019 03182019 53766 RAMSTAD DONALD E 533 17270 03152019 03182019 54586 RAMSTAD DONALD E 533 26412 03012019 03042019 54850 ENGFER NANCY E 204 207304-03012019 03042019 54851 FLEMMING MITCHELL E 206 33085-03012019 03042019 54852 HALLER JOSEPH D 305 277811-03012019 03042019 54853 SMART MATTHEW A 331 31168-03012019 03042019 54854 GUNNARSON DWIGHT R 802 18932-03012019 03042019 54855 JONAS SHELLY 804 13391-03012019 03042019 54856 CZYCALLA COREY 806 13391-03012019 03042019 54857 WUOLLET MATTHEW L 821 13391-03012019 03042019 54858 ROTH GREGORY W 912 1847-03012019 03042019 54859 FRANZEN CLIFFORD 913 1847-03012019 03042019 54860 SCHWARZKOPF ERIC 917 2770-03012019 03042019 54861 BAACK LONNIE L 919 1847-03012019 03042019 54862 NILSON MAYNARD A 921 1847-03012019 03042019 54863 DRISTE JOHN 950 1847-03012019 03042019 54864 PETERSON LEE W 980 1847-03012019 03042019 54865 SEAGRAVES RICHARD T 985 1847-03012019 03042019 54866 WAGNER RICHARD 990 2770-03152019 03182019 54949 ENGFER NANCY E 204 163991-03152019 03182019 54950 FLEMMING MITCHELL E 206 33085-03152019 03182019 54951 FAUST MITCHEL L 241 144665-03152019 03182019 54952 HALLER JOSEPH D 305 293266-03152019 03182019 54953 SMART MATTHEW A 331 12698-03152019 03182019 54954 BROWN JOHN D 501 16254-03152019 03182019 54955 DAGNER JOHN A 503 42112-
CITY OF ANNANDALE Check Register Page 3Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 54956 FAHEY MARCUS D 507 17270-03152019 03182019 54957 GRINDLE GARY L 512 65938-03152019 03182019 54958 HAAG BRIAN 514 151209-03152019 03182019 54959 MACHOVSKY JR DALE R 529 27088-03152019 03182019 54960 PICKEN SCOTT W 53203152019 03182019 54961 RAMSTAD DONALD E 533 35555-03152019 03182019 54962 ROEPKE JEFFREY A 535 34539-03152019 03182019 54963 TOWNSEND KRISTOPHER C 546 91057-03152019 03182019 54964 WANG RYAN A 549 46822-03152019 03182019 54965 WUOLLET MATTHEW L 553 24934-03152019 03182019 54966 TORRES HORACIO JR 563 43404-03152019 03182019 54967 KOLB JOHN E 564 25749-03152019 03182019 54968 DWENGER JOSEPH A JR 568 41557-03152019 03182019 54969 HARVEY ADAM 574 42019-03152019 03182019 54970 SCHMIDT LISA A 575 14869-03152019 03182019 54971 OLSON NATHAN G 576 14869-03152019 03182019 54972 PEARSON SEAN 577 27151-03152019 03182019 54973 SCHAUFLER CHRISTINA 578 26505-03152019 03182019 54974 HOEFER JUSTIN A 579 18101-03152019 03182019 54982 RAMSTAD DONALD E 533 26412-03152019 03182019 54983 RAMSTAD DONALD E 533 17270-
Grand Totals 119 12049646-
CITY OF ANNANDALE
REQUEST FOR COUNCIL ACTION
Originating Department Administration
Meeting Date May 6 2019
Agenda No 3A
Agenda Section New Business
Item 2018 Audit
BACKGROUND The City is required to conduct an audit annually The attached audit will be presented at the meeting RECOMMENDATION Motion to approve the 2018 Audit as presented
CPAS amp ADVISORSWILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
AUDITED FINANCIAL STATEMENTS AND
DECEMBER 31 2018
CONWAY DEUTH amp SCHMIESING PLLP
SUPPLEMENTARY INFORMATION
This page intentionally left blank
PAGE
ELECTED OFFICIALS AND ADMINISTRATION 1
INDEPENDENT AUDITORS REPORT 2-4
REQUIRED SUPPLEMENTARY INFORMATION
Managements Discussion and Analysis 5-12
BASIC FINANCIAL STATEMENTS
Statement of Net Position 13
Statement of Activities 14
Balance Sheet - Governmental Funds 15
Reconciliation of the Governmental FundsBalance Sheet to the Statement of Net Position 16
Statement of Revenues Expenditures and Changes in Fund Balances -Governmental Funds 17
Reconciliation of the Statement of Revenues Expendituresand Changes in Fund Balances of Governmental Fundsto the Statement of Activities 18
Statement of Revenues Expenditures and Changes in Fund Balances -Budget and Actual - General Fund 19
Statement of Net Position - Proprietary Funds 20
Statement of Revenues Expenses and Changes in Net Position -Proprietary Funds 21
Statement of Cash Flows - Proprietary Funds 22-23
Notes to the Financial Statements 24-57
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of the Proportionate Share of the Net Pension Liability 58
Schedule of Employer Contributions 59
Schedule of Changes in the Citys Net Pension Liability and Related Ratios 60
Notes to the Required Supplementary Information 61-63
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
PAGE
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
SUPPLEMENTARY INFORMATION
COMBINING STATEMENTS OF NONMAJOR FUNDS
Combining Balance Sheet - Nonmajor Governmental Funds 64
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds 65
Combining Balance Sheet - Nonmajor Governmental Funds - Special Revenue 66
Combining Balance Sheet - Nonmajor Governmental Funds - Debt Service 67
Combining Balance Sheet - Nonmajor Governmental Funds - Capital Projects 68
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Special Revenue 69
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Debt Service 70
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Capital Projects 71
FINANCIAL SCHEDULE
Schedule of Long-Term Liabilities 72
COMPLIANCE SECTION
Independent Auditors Report on Minnesota Legal Compliance 73
Independent Auditors Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements Performedin Accordance with Government Auditing Standards 74-75
Schedule of Findings 76-77
Summary Schedule of Prior Audit Findings 78
Elected Officials Position Term Expires
Dwight Gunnarson Mayor December 31 2018
Corey Czycalla Council Member December 31 2018
Shelly Jonas Council Member December 31 2018
Matthew Wuollet Council Member December 31 2020
Jullie Hastings Council Member December 31 2020
Administration
Kelly Hinnenkamp Administrator Appointed
Misty Ferrell Treasurer Appointed
CITY OF ANNANDALE MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATIONDECEMBER 31 2018
1
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Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Report on the Financial Statements
Managements Responsibility for the Financial Statements
Auditors Responsibility
beli
INDEPENDENT AUDITORS REPORT
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 Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Cityrsquos basic financial statements as listed in the table of contents
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
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
2
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 entitys 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 entitys 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
Opinions
Other Matters
Required Supplementary Information
Supplementary and Other Information
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 Annandale Minnesota as of December 31 2018 and the respective changes in financial position and where applicable cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America
Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions and the Schedule of Changes in the Citys 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 managements 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
3
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Cityrsquos basic financial statements The statements and schedules listed in the table of contents as supplementary information and the Elected Officials and Administration section are presented for purposes of additional analysis and are not a required part of the basic financial statements
The supplementary information is the responsibility of management and was derived from and relates 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 supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole
The Elected Officials and Administration section has 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 the information presented
Other Reporting Required by Government Auditing Standards
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
4
In accordance with Government Auditing Standards we have also issued our report dated May 6 2019 on our consideration of the Citys 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 results of that testing and not to provide an opinion on the effectiveness of the Cityrsquos 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 Cityrsquos internal control over financial reporting and compliance
May 6 2019
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REQUIRED SUPPLEMENTARY INFORMATION
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-
-
-
-
The City as a Whole Statement of Net Position and Statement of Activities
Our analysis of the City of Annandale begins with the Statement of Net Position and the Statement of Activities One of the most important questions asked about the Cityrsquos finances is ldquoIs the City as a whole better off or worse off as a result of the yearrsquos activitiesrdquo The Statement of Net Position and the Statement of Activities both report information about the City as a whole and about its activities in a way that helps answer this question The Statement of Net Position includes all assets and deferred outflows of resources and liabilities and deferred inflows of resources using the accrual basis of accounting In the Statement of Activities all of the current yearrsquos revenues and expenses are taken into account regardless of when cash is received or paid These two statements report the Cityrsquos net position and changes in them You can think of the Cityrsquos net positionmdashthe difference between assets and deferred outflows of resources and liabilities and deferred inflows of resourcesmdashas one way to measure the Cityrsquos financial health Over time increases or decreases in the Cityrsquos net position is one indicator of whether the Cityrsquos financial health is improving or deteriorating
You will need to consider other nonfinancial factors however to assess the overall health of the City of Annandale
In the Statement of Net Position and the Statement of Activities we divide the City into two kinds of activities
Governmental Activities - Most of the Citys basic services are reported here including general government public safety public works culture and recreation and economic development Property taxes and state and federal grants finance most of these activities
5
This annual report consists of a series of financial statements The Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the Cityrsquos finances Fund financial statements are presented after the Statement of Activities Fund financial statements also report the Cityrsquos operations in more detail than the government-wide statements by providing information about the Cityrsquos funds The notes to the financial statements provide information that is essential to a full understanding of the data provided in the government-wide and fund financial statements This annual report also contains other supplementary information in addition to the basic financial statements
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
This section of the basic financial statements of the City of Annandale (the City) presents a discussion and analysis of the Cityrsquos financial performance during the fiscal year ended December 31 2018 Please read it in conjunction with the Cityrsquos basic financial statements following this section
Financial Highlights
The assets and deferred outflows of resources of the City exceeded liabilties and deferred inflows of resources by $16461537
The Cityrsquos total net position increased by $1317551
The Cityrsquos governmental funds reported combined ending fund balances of $4349540 an increase of $122322 The Governmental Funds have $1240520 available for spending at the Citys discretion
At the end of the current fiscal year unassigned fund balance for the General Fund was $1697339 or 9417 of total General Fund expenditures of $1802505
Using This Annual Report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
The proprietary fund financial statements can be found on pages 20-23 of this report
Notes to the 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 The notes to the financial statements can be found on pages 24-57 of this report
6
Proprietary Funds - When the City of Annandale charges customers for the services it providesmdashwhether to outside customers or to other units of the Citymdashthese services are generally reported in proprietary funds Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities In fact the Cityrsquos enterprise funds are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information such as cash flows for proprietary funds
Business-Type Activities - The City charges a fee to customers to help it cover all or most of the cost of certain services it provides The Citys Water Sewer RefuseRecycling and Storm Utility funds are reported here
The Citys Most Significant Funds Fund Financial Statements
Our analysis of the Cityrsquos major funds begins with the fund financial statements These statements provide detailed information about the most significant fundsmdashnot the City as a whole Some funds are required to be established by state law and by bond covenants However the City Council establishes other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes grants and other money The Citys two kinds of funds-governmental and proprietary-use different accounting approaches
Governmental Funds - Most of the Cityrsquos basic services are reported in governmental funds Governmental funds focus on how money flows into and out of those funds and the balances left at year-end that are available for spending These funds are reported using an accounting method called modified accrual accounting which measures cash and all other financial assets that can readily be converted to cash The governmental fund statements provide a detailed short-term view of the Cityrsquos general government operations and the basic services it provides Governmental fund information helps the reader of the statements determine whether there are more or fewer financial resources that can be spent in the near future to finance the Cityrsquos programs We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation after the fund financial statements
The governmental fund financial statements can be found on pages 15-19 of this report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 5190696$ 5190633$ 63$ Net Capital Assets 10406611 10638601 (231990) Net Pension Asset 517946 440028 77918
Total Assets 16115253 16269262 (154009)
Deferred Outflows of Resources 621929 855064 (233135)
Total Assets and DeferredOutflows of Resources 16737182$ 17124326$ (387144)$
Current and Other Liabilities 1080947$ 1068593$ 12354$ Long-Term Liabilities 5393130 6383354 (990224)
Total Liabilities 6474077 7451947 (977870)
Deferred Inflows of Resources 886892 904112 (17220)
Net PositionNet Investment in Capital Assets 4962623 4377847 584776 Restricted 2021421 2178740 (157319) Unrestricted 2392169 2211680 180489
Total Net Position 9376213 8768267 607946
Total Liabilities Deferred Inflowsof Resources and Net Position 16737182$ 17124326$ (387144)$
Statement of Net Position
The Cityrsquos net position increased from a year ago Our analysis below focuses on the net position (Tables 1 and 2) andchanges in net position (Tables 3 and 4) of the Cityrsquos governmental and business-type activities
Table 1Comparative Condensed Statement of Net Position
Governmental Activities
7
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 179979$ 85557$ 94422$ Equity Interest 7004898 7023511 (18613) Net Capital Assets 10543232 10887885 (344653)
Total Assets 17728109 17996953 (268844)
Deferred Outflows of Resources 35051 59103 (24052)
Total Assets and DeferredOutflows of Resources 17763160$ 18056056$ (292896)$
Current and Other Liabilities 1595412$ 1396254$ 199158$ Long-Term Liabilities 9028762 10236810 (1208048)
Total Liabilities 10624174 11633064 (1008890)
Deferred Inflows of Resources 53662 47273 6389
Net PositionNet Investment in Capital Assets 8625232 8741281 (116049) Restricted 74208 36985 37223 Unrestricted (1614116) (2402547) 788431
Total Net Position 7085324 6375719 709605
Total Liabilities Deferred Inflowsof Resources and Net Position 17763160$ 18056056$ (292896)$
Business-Type Activities
8
Comparative Condensed Statement of Net PositionTable 2
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 652677$ 598474$ 54203$ Operating Grants and Contributions 122213 111759 10454 Capital Grants and Contributions 187016 576626 (389610)
General RevenuesProperty Taxes 1485895 1463472 22423 Tax Increments 20858 20203 655 Grants and Contributions Not Restricted 453773 422194 31579 Investment Income 16929 17237 (308) Miscellaneous 4178 17678 (13500) Gain on Sale of Asset 6034 268371 (262337)
Total Revenues 2949573 3496014 (546441)
EXPENSESGeneral Government 502902 475597 27305 Public Safety 970131 1019255 (49124) Public Works 769202 840164 (70962) Culture and Recreation 148880 762606 (613726) Economic Development 45238 85505 (40267) Interest on Long-Term Debt 160274 176897 (16623)
Total Expenses 2596627 3360024 (763397) Change in Net Position before Transfers 352946 135990 216956
TRANSFERS 255000 247000 8000 Change in Net Position 607946 382990 224956
NET POSITION BEGINNING OF YEAR 8768267 8385277 382990
NET POSITION END OF YEAR 9376213$ 8768267$ 607946$
Governmental Activities
Net position of the Citys governmental activities increased by $607946 Table 3 presents the key elements of the increase
Table 3Comparative Condensed Statement of Activities
Governmental Activities
9
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 3213338$ 2905848$ 307490$ General Revenues
Investment Income 2700 (1558) 4258 Total Revenues 3216038 2904290 311748
EXPENSESWater 492444 485751 6693 Sewer 1441099 1331721 109378 RefuseRecycling 199326 196627 2699 Storm Utility 99951 91130 8821
Total Expenses 2232820 2105229 127591 Change in Net Position before Transfers 983218 799061 184157
TRANSFERS (255000) (247000) (8000) CHANGE IN EQUITY INTEREST (18613) (70479) 51866
Change in Net Position 709605 481582 176157
NET POSITION BEGINNING OF YEAR 6375719 5894137 481582
NET POSITION END OF YEAR 7085324$ 6375719$ 709605$
Comparative Condensed Statement of Activities
Business-Type Activities
10
Table 4
Business-Type Activities
The net position of our business-type activities increased by $709605 The net increase was due to the following funds change in net position Water - $26607 decrease Sewer - $822708 increase RefuseRecycling - $9397 increase and Storm Utility - $95893 decrease
The following tables indicate the changes in net position for the Citys business-type activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Capital Project Funds - The capital projects fund balances increased by $13451
11
Over the course of the year the City of Annandale City Council did not revise the budget The General Fund budget predicted a $5178 increase in fund balance which includes the operations of the Motor Vehicle department The actual change in fund balance was an increase of $212334 This is due to both revenues being higher and expenditures being lower than anticipated Mobile Home tax revenues building permit fees and state aids were over budgeted amounts and both current and capital outlay expenditures were under budgeted amounts
Governmental Activities
Revenues - The following chart visually illustrates the Citys revenue by source for its governmental activities
Financial Analysis of the Citys Funds
General Fund - The Citys General Fund Balance increased by $212334 for 2018 The increase is mainly due to an increase in building permit fees and local government aid with a slight increase in public safety expenditures and a decrease in transfers to other funds
Special Revenue Funds - The Citys special revenue fund balances decreased by $53786 A majority of the decrease was due to expenditures for the pintail drive extension project
Debt Service Funds - The debt service fund balances decreased by $49677 The main reason for the decrease was due to customer prepayments made on special assessments in prior years
General Fund Budgetary Highlights
Fees Fines and Charges for Services
2213
Operating Grants and Contributions
414
Capital Grants and Contributions
634
Property Taxes5038 Tax Increments
071
Grants and Contributions Not Restricted1538
Investment Income057
Miscellaneous014
Gain on Sale of Asset021
Revenue by Source - Governmental Activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Long-Term Liabilities
At the end of 2018 the City of Annandale had $15543549 in bonds notes and equipment certificates outstanding Refer to Note 7 of the Notes to the Financial Statements for a schedule showing the Citys long-term liability activity
Economic Factors and Next Years Budget
The City of Annandales appointed officials considered many factors when setting the fiscal year 2019 budget rates and fees that will be charged by the funds of the City The major factor accounted for when adopting the General Fund budget was to hold all line items as much as possible to the 2018 final budget
Contacting the Citys Financial Management
This financial report is designed to provide our residents customers and creditors with a general overview of the Citys finances and to show the Citys accountability for the money it receives If you have any questions about this report or need additional information contact the City of Annandale 30 Cedar Street E Annandale Minnesota 55302
12
Capital Assets
At the end of 2018 the City of Annandale had $47826808 invested in a broad range of capital assets Refer to Note 5 of the Notes to the Financial Statements for a schedule showing the Citys capital asset activity During 2018 the City had a large increase in improvements other than buildings related to the completion of the Southside Trail project
BASIC FINANCIAL STATEMENTS
This page intentionally left blank
Governmental Business-TypeActivities Activities Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Cash and Investments 3413471$ 86083$ 3499554$ Restricted Cash 74208 74208 Taxes Receivable - Delinquent 14909 14909 Special Assessments Receivable
Delinquent 4423 4158 8581 Current and Deferred 650220 14885 665105
Accounts Receivable 96631 339457 436088 Interest Receivable 9 9 Prepaid Items 75903 22861 98764 Internal Balances 385956 (385956) Due from Other Governments 186251 24283 210534 Land Held for Resale 362923 362923 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 2696744 277948 2974692 Other Capital Assets Net of Depreciation 7709867 10265284 17975151
Net Pension Asset 517946 517946 Total Assets 16115253 17728109 33843362
Deferred Outflows of Resources 621929 35051 656980
Total Assets and Deferred Outflows of Resources 16737182$ 17763160$ 34500342$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 65859$ 26908$ 92767$ Contracts Payable 27913 27913 Due to Other Governments 15676 309797 325473 Salaries and Benefits Payable 30329 7259 37588 Interest Payable 61920 78448 140368 Unearned Revenue 36250 36250
Long-Term LiabilitiesNet Pension Liability 696581 197762 894343 Other Long-Term Liabilities Due Within One Year 843000 1173000 2016000 Other Long-Term Liabilities Due in More than One Year 4696549 8831000 13527549
Total Liabilities 6474077 10624174 17098251
Deferred Inflows of Resources 886892 53662 940554
Net PositionNet Investment in Capital Assets 4962623 8625232 13587855 Restricted for
Debt Service 2009940 2009940 Tax Increment 11481 11481 Capital Replacement 74208 74208
Unrestricted 2392169 (1614116) 778053 Total Net Position 9376213 7085324 16461537
Total Liabilities Deferred Inflows of Resourcesand Net Position 16737182$ 17763160$ 34500342$
See Accompanying Notes to the Financial Statements13
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONDECEMBER 31 2018
Fees Fines and Operating CapitalCharges for Grants and Grants and Governmental Business-Type
Expenses Services Contributions Contributions Activities Activities Total
GOVERNMENTAL ACTIVITIESGeneral Government 502902$ 286176$ $ $ (216726)$ $ (216726)$ Public Safety 970131 208144 115858 41000 (605129) (605129) Public Works 769202 130069 6355 26201 (606577) (606577) Culture and Recreation 148880 15413 55109 (78358) (78358) Economic Development 45238 12875 30108 (2255) (2255) Interest on Long-Term Debt 160274 34598 (125676) (125676)
Total Governmental Activities 2596627 652677 122213 187016 (1634721) 0 (1634721)
BUSINESS-TYPE ACTIVITIESWater 492444 565694 73250 73250 Sewer 1441099 2393268 952169 952169 RefuseRecycling 199326 208571 9245 9245 Storm Utility 99951 45805 (54146) (54146)
Total Business-Type Activities 2232820 3213338 0 0 0 980518 980518
Total 4829447$ 3866015$ 122213$ 187016$ (1634721) 980518 (654203)
GENERAL REVENUESProperty Taxes 1485895 1485895 Tax Increments 20858 20858 Grants and Contributions not Restricted to Specific Programs 453773 453773 Unrestricted Investment Earnings 16929 2700 19629 Miscellaneous 4178 4178 Gain on Sale of Asset 6034 6034
TRANSFERS 255000 (255000) CHANGE IN EQUITY INTEREST (18613) (18613)
Total 2242667 (270913) 1971754 Change in Net Position 607946 709605 1317551
NET POSITION BEGINNING OF YEAR 8768267 6375719 15143986
NET POSITION END OF YEAR 9376213$ 7085324$ 16461537$
See Accompanying Notes to the Financial Statements14
CITY OF ANNANDALE MINNESOTA
STATEMENT OF ACTIVITIESYEAR ENDED DECEMBER 31 2018
Program RevenuesNet (Expense) Revenue and
Changes in Net Position
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
ASSETSCash and Investments 1062209$ 2351262$ 3413471$ Taxes Receivable - Delinquent 14534 375 14909Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 650220 650220
Accounts Receivable 5744 90887 96631Interest Receivable 9 9 Prepaid Items 73751 2152 75903Due from Other Funds 920750 190388 1111138Due from Other Governments 135407 50844 186251Land Held for Resale 362923 362923
Total Assets 2212395$ 3703483$ 5915878$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 41982$ 23877$ 65859$ Contracts Payable 3574 24339 27913 Due to Other Funds 143500 581682 725182 Due to Other Governments 6200 9476 15676Salaries and Benefits Payable 30195 134 30329Unearned Revenue 36250 36250
Total Liabilities 261701 639508 901209
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 14534 375 14909Special Assessments 650220 650220
Total Deferred Inflows of Resources 14534 650595 665129
Fund Balance Nonspendable 73751 2152 75903 Restricted 1532633 1532633 Committed 847422 847422 Assigned 165070 487992 653062Unassigned 1697339 (456819) 1240520
Total Fund Balance 1936160 2413380 4349540
Total Liabilities Deferred Inflows ofResources and Fund Balance 2212395$ 3703483$ 5915878$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
BALANCE SHEETGOVERNMENTAL FUNDS
DECEMBER 31 2018
15
2018
Total Fund Balances - Governmental Funds 4349540$
Amounts reported for governmental activities in the Statement of Net Position are differentbecause
Capital assets used in governmental activities are not financial resources and therefore arenot reported as assets in the governmental funds
Capital Assets 31934114Less Accumulated Depreciation (21527503) Net Pension Asset 517946
Certain receivables will be collected in subsequent years but are not available soon enoughto pay for the current periods expenditures and therefore are deferred in the funds
Delinquent Property Taxes 14909Special Assessments 650220
Deferred outflows and inflows of resources related to pensions are applicable to futureperiods and therefore are not reported in the funds
Deferred Outflows of Resources Related to Pensions 621929 Deferred Inflows of Resources Related to Pensions (886892)
Long-term liabilities including bonds payable are not due and payable in the current periodand therefore are not reported as liabilities in the funds
Bonds Payable (4525000) Notes Payable (1014000) Compensated Absences Payable (22979) Interest Payable (61920) Bond Discount 22430 Net Pension Liability (696581)
Total Net Position - Governmental Activities 9376213$
See Accompanying Notes to the Financial Statements16
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION
DECEMBER 31 2018
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
REVENUESProperty Taxes 1167129$ 323230$ 1490359$ Tax Increments 20858 20858 Special Assessments 149671 149671 Licenses and Permits 106197 106197 Intergovernmental 568136 30310 598446 Charges for Services 457769 51231 509000 Fines and Forfeitures 12790 4299 17089 Investment Income 22019 (5090) 16929 Contributions and Donations 1700 133758 135458 Miscellaneous 22893 679 23572
Total Revenues 2358633 708946 3067579
EXPENDITURESCurrent
General Government 412224 10807 423031 Public Safety 889531 42738 932269 Public Works 379968 379968 Culture and Recreation 111127 3735 114862 Economic Development 52358 52358
Debt Service Principal 821000 821000 Interest and Other Charges 162964 162964
Capital Outlay General Government 5206 5206 Public Safety 4449 67055 71504 Public Works 14006 14006 Culture and Recreation 102651 102651 Economic Development 144931 144931
Total Expenditures 1802505 1422245 3224750 Excess (Deficiency) of Revenues
Over (Under) Expenditures 556128 (713299) (157171)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 1145914 1145914 Transfers Out (343794) (547120) (890914)
Total Other Financing Sources (Uses) (343794) 623287 279493 Net Change in Fund Balances 212334 (90012) 122322
FUND BALANCE BEGINNING OF YEAR 1723826 2503392 4227218
FUND BALANCE END OF YEAR 1936160$ 2413380$ 4349540$
See Accompanying Notes to the Financial Statements17
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
YEAR ENDED DECEMBER 31 2018
2018
Total Net Change in Fund Balances - Governmental Funds 122322$
Amounts reported for governmental activities in the Statement of Activities are different because
Capital outlays are reported in governmental funds as expenditures However in the Statementof Activities the cost of those assets is allocated over the estimated useful lives asdepreciation expense
Capital Outlays 360225 Depreciation Expense (556497) Disposal of Capital Assets (75923) Accumulated Depreciation Related to Disposed Capital Assets 40205
Revenues in the Statement of Activities that do not provide current financial resources are notreported as revenues in the funds
Special Assessments (115073)
Delinquent property taxes receivable will be collected in subsequent years but are not availablesoon enough to pay for the current periods expenditures and therefore are deferred in the funds (4464)
Some expenses reported in the Statement of Activities do not require the use of currentresources and therefore are not reported as expenditures in governmental funds
Compensated Absences 313 Net Pension Asset 77918Net Pension Liability 151145 Deferred Outflows of Resources Related to Pensions (233135) Deferred Inflows of Resources Related to Pensions 17220
Principal Retirement of Long-Term Debt 821000 Amortization of Bond Discounts (4234) Change in Interest Payable 6924
Change in Net Position - Governmental Activities 607946$
See Accompanying Notes to the Financial Statements18
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES EXPENDITURESAND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Bond proceeds provide current financial resources to governmental funds but issuing debtincreases long-term liabilities in the Statement of Net Position Repayment of bond principalis an expenditure in the governmental funds but the repayment reduces long-term liabilities inthe Statement of Net Position
Over(Under)
FinalOriginal Final Actual Budget
REVENUESProperty Taxes 1120885$ 1120885$ 1167129$ 46244$ Licenses and Permits 61800 61800 106197 44397 Intergovernmental 541952 541952 568136 26184 Charges for Services 437744 437744 457769 20025 Fines and Forfeitures 8700 8700 12790 4090 Investment Income 22019 22019 Contributions and Donations 1700 1700 Miscellaneous 20000 20000 22893 2893
Total Revenues 2191081 2191081 2358633 167552
EXPENDITURESCurrent
General Government 435269 435269 412224 (23045) Public Safety 896497 896497 889531 (6966) Public Works 399317 399317 379968 (19349) Culture and Recreation 127325 127325 111127 (16198)
Capital OutlayGeneral Government 30500 30500 5206 (25294) Public Safety 1500 1500 4449 2949
Total Expenditures 1890408 1890408 1802505 (87903) Excess (Deficiency) of Revenues
Over (Under) Expenditures 300673 300673 556128 255455
OTHER FINANCING SOURCES (USES)Transfers Out (295495) (295495) (343794) (48299)
Net Change in Fund Balance 5178$ 5178$ 212334 207156$
FUND BALANCE BEGINNING OF YEAR 1723826
FUND BALANCE END OF YEAR 1936160$
See Accompanying Notes to the Financial Statements19
Budgeted Amounts
YEAR ENDED DECEMBER 31 2018
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL
GENERAL FUND
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current AssetsCash and Investments 23690$ 62393$ $ $ 86083$ Special Assessments Receivable
Delinquent 1167 2096 682 213 4158Current and Deferred 3859 9981 901 144 14885
Accounts Receivable 46078 269326 19878 4175 339457Prepaid Items 9433 12352 1076 22861Due from Other Governments 144 24111 24 4 24283Due from Other Funds 98000 21000 119000
Total Current Assets 182371 401259 22561 4536 610727
Noncurrent AssetsRestricted Cash 74208 74208 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 66881 191067 20000 277948Other Capital Assets Net of Depreciation 4497152 3259174 2505 2506453 10265284
Total Noncurrent Assets 4564033 10529347 22505 2506453 17622338 Total Assets 4746404 10930606 45066 2510989 18233065
Deferred Outflows of ResourcesRelated to Pensions 12805 20153 2093 35051
Total Assets and DeferredOutflows of Resources 4759209$ 10950759$ 47159$ 2510989$ 18268116$
LIABILITIES DEFERRED INFLOWS OFRESOURCES AND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 11931$ 1765$ 13212$ $ 26908$ Due to Other Funds 445076 28318 31562 504956 Due to Other Governments 453 308238 1106 309797 Salaries and Benefits Payable 2732 3813 714 7259Interest Payable 13173 65275 78448Notes Payable Due Within One Year 232000 941000 1173000
Total Current Liabilities 260289 1765167 43350 31562 2100368
Long-Term LiabilitiesNet Pension Liability 72251 113702 11809 197762Notes Payable Net of Current Amount 1576000 7255000 8831000
Total Noncurrent Liabilities 1648251 7368702 11809 0 9028762 Total Liabilities 1908540 9133869 55159 31562 11129130
Deferred Inflows of ResourcesRelated to Pensions 19605 30853 3204 53662
Net PositionNet Investment in Capital Assets 2756033 3340241 22505 2506453 8625232 Restricted for Capital Replacement 74208 74208 Unrestricted 75031 (1628412) (33709) (27026) (1614116)
Total Net Position 2831064 1786037 (11204) 2479427 7085324
Total Liabilities Deferred Inflowsof Resources and Net Position 4759209$ 10950759$ 47159$ 2510989$ 18268116$
See Accompanying Notes to the Financial Statements20
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONPROPRIETARY FUNDS
DECEMBER 31 2018
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
OPERATING REVENUESCharges for Services 565694$ 1219482$ 208571$ 45805$ 2039552$
OPERATING EXPENSESWages and Salaries 110471 188946 15086 314503Materials and Supplies 29374 29374Repairs and Maintenance 57478 21425 44 8346 87293Insurance 11074 9982 21056Electricity 27203 12231 39434Wastewater Commission Charges 871318 871318 Testing 1111 1111Contracted Services 4467 4378 162233 171078Depreciation 171475 118151 1333 87981 378940Professional Services 4717 5818 1834 524 12893Billing 14718 15335 30053Miscellaneous 17863 15245 3461 3100 39669
Total Operating Expenses 449951 1247494 199326 99951 1996722 Operating Income (Loss) 115743 (28012) 9245 (54146) 42830
NONOPERATING REVENUES (EXPENSES)Investment Income 543 1752 152 253 2700Interest and Fiscal Charges (42493) (193605) (236098) Reimbursements 1173786 1173786
Total Nonoperating Revenues(Expenses) (41950) 981933 152 253 940388
Income (Loss) Before Transfersand Other Items 73793 953921 9397 (53893) 983218
TRANSFERS AND OTHER ITEMSChange in Equity Interest (18613) (18613) Transfers In 19600 36400 56000 Transfers Out (120000) (149000) (42000) (311000)
Total Transfers and Other Items (100400) (131213) 0 (42000) (273613) Change in Net Position (26607) 822708 9397 (95893) 709605
NET POSITION BEGINNING OF YEAR 2857671 963329 (20601) 2575320 6375719
NET POSITION END OF YEAR 2831064$ 1786037$ (11204)$ 2479427$ 7085324$
See Accompanying Notes to the Financial Statements
YEAR ENDED DECEMBER 31 2018
21
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET POSITIONPROPRIETARY FUNDS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers and Users 553327$ 1022629$ 207570$ 47362$ 1830888$ Payments to Suppliers (164208) (767959) (181855) (11970) (1125992) Payments to Employees (115506) (184885) (20045) (320436)
Net Cash Provided (Used) by OperatingActivities 273613 69785 5670 35392 384460
CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIESTransfers Out (120000) (149000) (42000) (311000) Interfund Loan 33986 (4344) 6201 35843 Reimbursements 1173786 1173786
Net Cash Provided (Used) by NoncapitalFinancing Activities (120000) 1058772 (4344) (35799) 898629
CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESPrincipal Paid on Debt (226000) (920000) (1146000) Interest Paid on Debt (44518) (200960) (245478) Bonds Issued 3396 3396 Acquisition and Construction of Capital Assets (16094) (16501) (1692) (34287)
Net Cash Provided (Used) by Capital andRelated Financing Activities (283216) (1137461) (1692) 0 (1422369)
CASH FLOW FROM INVESTING ACTIVITIESInterest and Dividends Received (Paid) 543 4594 366 407 5910
Net Increase (Decrease) in Cash andCash Equivalents (129060) (4310) 0 0 (133370)
CASH AND CASH EQUIVALENTSBEGINNING OF YEAR 152750 140911 293661
CASH AND CASH EQUIVALENTSEND OF YEAR 23690$ 136601$ 0$ 0$ 160291$
RECONCILIATION OF CASH AND CASH EQUIVALENTSCash and Investments 23690$ 62393$ $ $ 86083$ Restricted Cash 74208 74208
Total Cash amp Cash Equivalents 23690$ 136601$ 0$ 0$ 160291$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
22
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CITY OF ANNANDALE MINNESOTA
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
RECONCILIATION OF OPERATING INCOME(LOSS) TO CASH FLOWS FROM OPERATINGACTIVITIESOperating Income (Loss) 115743$ (28012)$ 9245$ (54146)$ 42830$ Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided (Used) by OperatingActivities
Depreciation 171475 118151 1333 87981 378940 Pension Related Adjustments (5848) 3118 (5273) (8003)(Increase) Decrease in Assets
Special Assessments ReceivableDelinquent 300 514 (37) (113) 664 Current and Deferred (754) (4236) (573) 2077 (3486)
Accounts Receivable (11969) (190759) (1427) (453) (204608) Prepaid Items (397) (1455) (329) (2181) Due from Other Governments 56 (2372) 1036 46 (1234)
Increase (Decrease) in LiabilitiesAccounts Payable 3741 (10858) 275 (6842) Due to Other Governments 453 184751 1106 186310 Salaries and Benefits Payable 813 943 314 2070
Net Cash Provided (Used) by OperatingActivities 273613$ 69785$ 5670$ 35392$ 384460$
NONCASH INVESTING CAPITAL ANDFINANCING ACTIVITIESChange in Equity Interest 0$ (18613)$ 0$ 0$ (18613)$
See Accompanying Notes to the Financial Statements23
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A REPORTING ENTITY
Blended Component Unit - Reported as if they were part of the City
Blended Component Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
The financial statements present the City and its component units The City includes all funds organizations institutions agencies departments and offices that are not legally separate from such Component units are legally separate organizations for which the City is financially accountable or for which the exclusion of the component unit would render the financial statements of the City misleading
The City of Annandale Minnesota is a statutory city governed by an elected mayor and four council members The accompanying financial statements present the government entities for which the government is considered to be financially accountable
Joint Ventures and Jointly Governed Organizations - The relationship of the City with the entity is disclosed
The criteria used to determine if the City is financially accountable for a component unit includes whether or not 1) the City appoints the voting majority of the potential component units governing body and is able to impose its will on the potential component unit or is in a relationship of financial benefit or burden with the potential component unit or 2) the potential component unit is fiscally dependent on and there is a potential for the potential component unit to provide specific financial benefits to or impose specific financial burdens on the City
As a result of applying the component unit definition criteria above certain organizations have been defined and are presented in this report as follows
For each of the categories above the specific entities are identified as follows
The Annandale Economic Development Authority (EDA) is a legal entity separate from the City Although legally separate the Annandale EDA is reported as if it were part of the primary government because it provides services exclusively for the City Separate financial statements are not prepared for the Annandale EDA
24
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
A REPORTING ENTITY (Contd)
Joint Ventures and Jointly Governed Organizations
B GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Separate financial statements are provided for governmental funds and proprietary funds Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements
Separate financial statements can be obtained by contacting the Wastewater Commission PO Box K Annandale MN 55302
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or segment Interest on general long-term debt is considered an indirect expense and is reported separately in the Statement of Activities Program revenues include 1) charges to customers or applicants who purchase use or directly benefit from goods services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment Taxes and other items not properly included among program revenues are reported instead as general revenues Internally dedicated revenues are reported as general revenues rather than program revenues
The government-wide financial statements (ie the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the City Governmental activities which normally are supported by taxes and intergovernmental revenues are reported separately from business-type activities which rely to a significant extent on fees and charges for support
In September 2003 the City entered into a joint powers agreement with the City of Maple Lake to establish the Annandale-Maple Lake Wastewater Commission (the Commission) The purpose of the Commission is to make available wastewater treatment within the present and future boundaries of the Cities and to serve such other areas as the Commission approves As part of the joint venture the City of Annandale agrees to fund the Debt Service and Operating Funds of the Commission according to terms of the agreement The agreement states a City may terminate the agreement by written notice to the other City In such event the City of Annandale shall pay 60 of all costs incurred except each City shall pay its own attorneys fee In 2008 both Cities approved amending the joint powers agreement to include the City of Howard Lake effective January 1 2009 Each City will then have a one-third equity interest in the Commission Because there is an explicit measurable equity interest in the joint venture the interest is reported in the government-wide financial statements as well as in the Sewer Fund
25
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
The City reports the following major governmental funds
The City reports the following major enterprise funds
The Sewer Fund accounts for the operations of the Citys sewer utility
The Storm Utility Fund accounts for the activities of the Citys storm drainage operations
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting Revenues are recognized as soon as they are both measurable and available Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period For this purpose the City considers revenues to be available if they are collected within 60 days after the end of the current fiscal period Expenditures generally are recorded when a liability is incurred as under accrual accounting However debt service expenditures as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due
The General Fund is the Citys primary operating fund This fund accounts for all financial resources of the general City except those required to be accounted for in another fund
The RefuseRecycling Fund accounts for the operations of the Citys refuserecycling
Property taxes special assessments intergovernmental revenue charges for services franchise taxes licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period All other revenue items are considered to be measurable and available only when cash is received by the City
The Water Fund accounts for the operations of the Citys water utility
26
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the proprietary fund financial statements Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of related cash flows Property taxes are recognized as revenues in the year for which they are levied Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements Exceptions to this general rule are charges between the Citys utility functions and various other functions of the City Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C
D DEPOSITS AND INVESTMENTS
(1)
(2)
(3)
(4)
(5)
(6)
time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States bank
general obligations of the State of Minnesota and its municipalities and in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service
The Citys cash and cash equivalents are considered to be cash on hand deposits and highly liquid debt instruments purchased with original maturities of three months or less from the date of acquisition
27
mutual funds through shares of registered investment companies provided the mutual fund receives certain ratings depending on its investments
The City may invest in the following types of investments as authorized by Minn Stat sectsect118A04 and 118A05
securities which are direct obligations or are guaranteed or insured issues of the United States its agencies its instrumentalities or organizations created by an act of Congress except mortgage-backed securities defined as high risk by Minn Stat sect118A04 subd 6
MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (Contd)
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 funds principal ongoing operations The principal operating revenues of the enterprise funds are charges to customers for sales and services Operating expenses for enterprise funds include the cost of sales and services administrative expenses and depreciation of capital assets All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses
commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less and
with certain restrictions in repurchase agreements securities lending agreements joint powers investment trusts and guaranteed investment contracts
Cash and investments were comprised of deposits brokered certificates of deposits money market funds at various financial brokers and the 4M Fund
It is generally the Citys policy to use restricted resources first then unrestricted resources as they are needed when an expense is incurred for purposes for which both restricted and unrestricted net position are available
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations The Citys investment policy states it will comply with Minnesota Statutes Chapter 118A
The City has an investment policy in place that addresses interest rate risk credit risk concentration of credit risk and custodial credit risk as follows
Interest Rate Risk This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates The Citys investment policy states the City should manage their interest rates based on safety liquidity and the overall return on the investment The portfolio should contain both short-term and long-term investments to meet anticipated cash flow requirements Extended maturities may be utilized to take advantage of higher yields however no more than 50 of the total investments should extend beyond five years
The City invests in an external investment pool the Minnesota Municipal Money Market Fund (4M Fund) which is created under a joint powers agreement pursuant to Minn Stat sect47159 The 4M Fund is not registered with the Securities Exchange Commission (SEC) but does satisfy the requirements of Rule 2a-7 prescribed by the SEC pursuant to the Investment Company Act of 1940 (17 CFR sect2702a-7) as amended The investment in the pool is measured at the net asset value per share provided by the pool
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America The hierarchy is based on the valuation inputs used to measure the fair value of the asset Level 1 inputs are quoted prices in active markets for identical assets Level 2 inputs are significant other observable inputs Level 3 inputs are significant unobservable inputs
Custodial Credit Risk - Deposits For deposits this is the risk that in the event of bank failure the Citys deposits may not be returned to it The Citys investment policy states the collateralization level will be 110 of the market value of principal and accrued interest for balances above the FDIC insured amount When the pledged collateral consists of notes secured by first mortgages the collateral level will be 140 of the market value of principal and accrued interest
Authorized collateral includes the obligations of the US Treasury agencies and instrumentalities shares of investment companies whos only investments are in the aforementioned securities obligations of the State of Minnesota or its municipalities bankers acceptances futures contracts repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days as well as certain first mortgage notes and certain other state or local government obligations Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral
28
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
E RECEIVABLES AND PAYABLES
F PREPAID ITEMS
All trade and property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of property
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements
29
Custodial Credit Risk - Investments For an investment this is the risk that in the event of the failure of the counterparty the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party The Citys investment policy states when investments purchased by the City are held in safekeeping by a brokerdealer they must provide asset protection of $500000 through the Securities Investor Protector Corporation (SIPC) and at least another $2000000 supplemental insurance protection
The City levies its property tax for the subsequent year during the month of December December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year Such taxes become a lien on January 1 and are recorded as receivables by the City at that date The property tax is recorded as revenue when it becomes measurable and available Wright County is the collecting agency for the levy and remits the collections to the City three times a year The tax levy notice is mailed in March with the first half payment due on May 15 and the second half payment due on October 15 Tax levies from prior years that remain unpaid are classified as delinquent taxes receivable
The County Auditor submits the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year
Activity between funds that are representative of lendingborrowing arrangements outstanding at the end of the fiscal year are referred to as either due tofrom other funds (ie the current portion of interfund loans) or advances tofrom other funds (ie the noncurrent portion of interfund loans) All other outstanding balances between funds are reported as due tofrom other funds Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances
Concentration of Credit Risk This is the risk of loss attributed to the magnitude of an investment in a single issuer Investments should be diversified to avoid incurring unreasonable risk inherent in over investing in specific instruments individual financial institutions or maturities The Citys investment policy states the City will attempt to diversify their investments according to type and maturity
The County Auditor prepares the tax list for all taxable property in the City applying the applicable tax rate to the tax capacity of individual properties to arrive at the actual tax for each property The County Auditor also collects all special assessments except for certain prepayments paid directly to the City
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
G CAPITAL ASSETS
Cost
LandLand Improvements 10000$ Other Improvements 25000 BuildingsImprovements 25000 Machinery and Equipment 5000 Infrastructure 50000
Years
Buildings 5-40Improvements Other than Buildings 5-20Vehicles 5-20Machinery and Equipment 5-40Roads and Highways 20-40Infrastructure 25-40
The City does not possess any material amounts of intangible assets
30
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed Donated capital assets are recorded as capital assets at their estimated acquisition value at the date of donation
Capital assets both tangible and intangible which include property plant equipment and infrastructure assets (eg roads sidewalks and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements Capital assets are defined by the City as assets with an estimated useful life in excess of two years and an initial individual cost of more than the following
Capital Assets
Category
Based on the age of the majority of the Citys infrastructure and an exception for small governments in GASB Statement No 34 the City has determined it is not practical to capitalize infrastructure retroactively The current value of the infrastructure includes projects completed during the year ended December 31 1985 and prospectively from that date
Tangible and intangible assets of the City are depreciated using the straight-line full month convention method over the following estimated useful lives
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
H DEFERRED OUTFLOWS OF RESOURCES
I UNEARNED REVENUE
J COMPENSATED ABSENCES
K POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied Grants and certain other payments received before eligibility requirements are met are also recorded as unearned revenue
The City compensates employees who resign or retire with due notice for unused vacation and holiday pay Employees may carry over no more than 40 hours of vacation at the end of any calendar year unless approved by the City Council Unused vacation time is paid to employees upon separation from the City City employees are also allowed to earn compensatory time in lieu of overtime pay Employees may carry over no more than 40 hours of compensatory time at the end of any calendar year Unused compensatory time is paid to employees upon separation from the City
The liability for compensated absences reported in the financial statements consists of unpaid accumulated vacation and compensatory time balances The liability has been calculated using the vesting method in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included The liability for compensated absences is reported in the governmental funds only if they have matured for example as a result of employee resignations and retirements Compensated absences are accrued when incurred in the government-wide and proprietary fund financial statements The government-wide and proprietary fund Statement of Net Position reports both current and noncurrent portions of compensated absences using full accrual accounting The current portion consists of an amount based on expected or known retirements coming in the next fiscal year The noncurrent portion consists of the remaining amount of vacation and compensatory time
31
Employees of the City pay health care premiums based on their age and level of coverage Since the insurance rate is based on age the City does not have an implicit rate subsidy factor in postemployment health care expenses Additionally Minnesota Statutes require the City to allow retired employees to stay on the health care plan with the retiree responsible to pay the entire premium for continuation coverage The Citys personnel policy does not provide for any contributions upon employee retirement
In addition to assets the statement of financial position will sometimes report a separate section for deferred outflows of resources Deferred outflows of resources represents a consumption of net position that applies to a future reporting period During that future period it will be recognized as an outflow of resources (expenseexpenditure) The City has one item that qualifies for reporting in this category on the government-wide Statement of Net Position which is related to pensions
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
L PENSIONS
M LONG-TERM OBLIGATIONS
N DEFERRED INFLOWS OF RESOURCES
O FUND BALANCE
In addition to liabilities the statement of financial position will sometimes report a separate section for deferred inflows of resources Deferred inflows of resources represents an acquisition of net position that applies to a future reporting period During that future period it will be recognized as an inflow of resources (revenue) The City has items that qualify for reporting in this category on both the government-wide Statement of Net Position and the governmental fund financial statements related to property taxes special assessments and pensions
The City participates in various pension plans total pension expense for the fiscal year ended was $436446 The components of pension expense are noted in the plan summaries
For purposes of measuring the net pension liability deferred outflows of resources and deferred inflows of resources related to pensions and pension expense information about the fiduciary net position of the Public Employees Retirement Association (PERA) and the City of Annandales Fire Relief Association and additions todeductions from PERArsquos and the City of Annandales Fire Relief Associations fiduciary net position have been determined on the same basis as they are reported by PERA and the City of Annandales Fire Relief Association 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
In the fund financial statements governmental fund types recognize bond premiums and discounts as well as bond issuance costs during the current period The face amount of debt issued is reported as other financing sources Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses Issuance costs whether or not withheld from the actual debt proceeds received are reported as debt service expenditures
Nonspendable - consists of amounts that cannot be spent because it is not in spendable form or are legally or contractually required to be maintained intact such as inventories and prepaid items
Restricted - consists of amounts related to externally imposed constraints established by creditors grantors or contributors or constraints imposed by state statutory provisions
In the governmental fund financial statements fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in governmental funds These classifications are as follows
In the government-wide financial statements and proprietary fund types in the fund financial statements long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities business-type activities or proprietary fund type Statement of Net Position
32
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
O FUND BALANCE (Contd)
P NET POSITION
Q USE OF ESTIMATES
Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources in the government-wide and proprietary fund financial statements Net investment in capital assets consists of capital assets net of accumulated depreciation reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets Net position is reported as restricted in the government-wide and proprietary fund financial statements when there are limitations on their use through external restrictions imposed by creditors grantors or laws or regulations of other governments Unrestricted net position consists of all other net position that does not meet the definition of restricted or net investment in capital assets
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 In governmental funds other than the General Fund assigned fund balance represents the remaining amount that is not restricted or committed In the General Fund assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority Pursuant to City Council Resolution the City Treasurer and City Administrator are authorized to establish assignments of fund balance
33
Committed - consists of amounts that are constrained for specific purposes that are internally imposed by formal action of the City Council Those committed amounts cannot be used for any other purpose unless the Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts These constraints are established by Resolution of the City Council
Unassigned - is the residual classification for the General Fund and also reflects negative residual amounts in the remaining governmental funds
The City requires restricted amounts to be spent first when both restricted and unrestricted fund balance is available Additionally the City would first use committed then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and deferred outflows of resources and liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expendituresexpenses during the reporting period Actual results could differ from those estimates
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
A BUDGETARY INFORMATION
1
2
3
4
5
6
7
Annual appropriated budgets are adopted during the year for the General and Special Revenue Funds Annual appropriated budgets are not adopted for Debt Service Funds because effective budgetary control is alternatively achieved through bond indenture provisions Budgetary control for Capital Projects Funds is accomplished through the use of project controls and formal appropriated budgets are not adopted
34
Budgeted amounts are as originally adopted or as amended by the City Council Individual amendments were not material in relation to the original amounts budgeted Budgeted expenditure appropriations lapse at year-end
Expenditures may not legally exceed budgeted appropriations at the department level No funds budget can be increased without City Council approval The City Council may authorize transfer of budgeted amounts between departments within any fund Management may amend budgets within a department level so long as the total department budget is not changed
The City Council adopts an annual budget The amounts shown in the financial statements as budget represent the original budgeted amounts and all revisions made during the year The City follows these procedures in establishing the budgetary data reflected in the financial statements
Budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America
The budget is legally enacted through passage of a resolution after obtaining taxpayer comments The budget resolution adopted by the City Council sets forth the budgets at the function level for the General and Special Revenue Funds
Public hearings are conducted to obtain taxpayer comments
Budget requests are submitted by all department heads to the City Administrator The City Administrator compiles the budget requests into an overall preliminary City budget The City Administrator presents the proposed budget to the City Council
Encumbrances outstanding at year-end expire and outstanding purchase orders are canceled and not reported in the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (Contd)
B DEFICIT BALANCES
The following funds had deficit balances
RefuseRecycling (11204)$ Nonmajor Governmental Funds (454667)
C EXPENDITURES EXCEEDING APPROPRIATIONS
NOTE 3 DEPOSITS AND INVESTMENTS
A DEPOSITS
Checking 1669430$
B INVESTMENTS
Fair Value Level 1 Level 2 Level 3
Investments at fair valueBrokered Certificates of Deposit 1540744$ 0$ 1540744$ 0$
Investments at amortized costMoney Market Accounts 324792 4M Money Market 38796
Total Investments 1904332$
The Brokered Certificates of Deposit have a weighted average maturity of 216 years and were not rated
In accordance with applicable Minnesota Statutes the City maintains deposits at depository banks authorized by the City Council
35
There were no funds that had expenditures exceeding appropriations
Custodial Credit Risk - Deposits The Citys bank balances were not exposed to custodial credit risk because they were fully insured through the FDIC as well as collateralized with securities held by the pledging financial institutions trust department or agent and in the Citys name
Fair Value Measuring Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 3 DEPOSITS AND INVESTMENTS (Contd)
B INVESTMENTS (Contd)
The following is a summary of total deposits and investments
Deposits (Note 3A) 1669430$ Investments (Note 3B) 1904332
Total Deposits and Investments 3573762$
Statement of Net PositionCash and Investments 3499554$ Restricted Cash 74208
3573762$
NOTE 4 RECEIVABLES
Receivables are as follows
Amounts notScheduled
for CollectionDuring the
Total SubsequentReceivables Year
Governmental ActivitiesTaxes Receivable - Delinquent 14909$ $ Special Assessments Receivable 654643 584377 Accounts Receivable 96631 16271 Interest Receivable 9
Total Governmental Activities 766192$ 600648$
Business-Type ActivitiesSpecial Assessments Receivable 19043$ 9392$ Accounts Receivable 339457
Total Business-Type Activities 358500$ 9392$
Concentration of Credit Risk The City was exposed to concentration of credit risk due to the fact that some of the Citys brokered certificates of deposit exceeded 5 of the total Citys investments portfolio
36
Deposits and investments are presented in the basic financial statements as follows
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS
Capital asset activity was as follows
Beginning EndingGovernmental Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 2482508$ $ (18800)$ 2463708$ Construction in Progress 508685 248979 (524628) 233036
Total Capital AssetsNot Being Depreciated 2991193 248979 (543428) 2696744
Capital Assets Being DepreciatedBuildings 3065250 3065250 Improvements Other than Buildings 1298097 524628 1822725 Machinery and Equipment 2556167 111246 (57123) 2610290 Infrastructure 21739105 21739105
Total Capital AssetsBeing Depreciated 28658619 635874 (57123) 29237370
Less Accumulated Depreciation forBuildings 1145321 75543 1220864 Improvements Other than Buildings 858879 46992 905871 Machinery and Equipment 1568583 121681 (40205) 1650059 Infrastructure 17438428 312281 17750709
Total AccumulatedDepreciation 21011211 556497 (40205) 21527503
Total Capital Assets BeingDepreciated Net 7647408 79377 (16918) 7709867
Governmental ActivitiesNet Capital Assets 10638601$ 328356$ (560346)$ 10406611$
37
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS (Contd)
Capital asset activity was as follows
Beginning EndingBusiness-Type Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 277948$ $ $ 277948$
Capital Assets Being DepreciatedBuildings 4175245 4175245 Improvements Other than Buildings 12637 12637 Machinery and Equipment 268809 34287 303096 Infrastructure 11123768 11123768
Total Capital AssetsBeing Depreciated 15580459 34287 0 15614746
Less Accumulated Depreciation forBuildings 1499349 92233 1591582 Improvements Other than Buildings 12636 12636 Machinery and Equipment 190152 19580 209732 Infrastructure 3268385 267127 3535512
Total AccumulatedDepreciation 4970522 378940 0 5349462
Total Capital Assets BeingDepreciated Net 10609937 (344653) 0 10265284
Business-Type ActivitiesNet Capital Assets 10887885$ (344653)$ 0$ 10543232$
Depreciation expense was charged to functionsprograms as follows
Governmental ActivitiesGeneral Government 53809$ Public Safety 91620 Public Works 383653 Culture and Recreation 27415
Total Depreciation Expense - Governmental Activities 556497$
Business-Type ActivitiesWater 171475$ Sewer 118151 RefuseRecycling 1333 Storm Utility 87981
Total Depreciation Expense - Business-Type Activities 378940$
38
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 6 INTERFUND ACTIVITY
A INTERFUND BALANCES
The composition of interfund balances is as follows
Amount
General Sewer 445076$ General RefuseRecycling 28318 General Storm Utility 31562 General Nonmajor Governmental Funds 415794 Water Nonmajor Governmental Funds 98000 Sewer Nonmajor Governmental Funds 21000 Nonmajor Governmental Funds General 143500 Nonmajor Governmental Funds Nonmajor Governmental Funds 46888
Total Interfund Balances 1230138$
B INTERFUND TRANSFERS
The composition of interfund transfers is as follows
Nonmajor Governmental
Water Sewer Funds Total
Transfer OutGeneral 19600$ 36400$ 287794$ 343794$ Water 120000 120000 Sewer 149000 149000 Storm Utility 42000 42000 Nonmajor Governmental
Funds 547120 547120
Total Interfund Transfers 19600$ 36400$ 1145914$ 1201914$
Receivable Fund Payable Fund
39
The purpose of the above transfers was to provide funding for debt service capital improvement projects capital outlay and operating purposes
The purpose of the above interfund loans was to provide financing for operating purposes and to cover deficit cash balances
Transfer In
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES
A GENERAL OBLIGATION BONDS
B COMPONENTS OF LONG-TERM LIABILITIES
Interest Final BalanceRates Maturity Outstanding
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan BondsSeries 2008A 300-400 02012022 295000$
GO Special Assessment BondsGO Improvement Bonds Series 2008B 300-4125 02012024 560000 GO Improvement Bonds Series 2011A 105-415 02012032 1300000 GO Refunding Bonds Series 2011B 085-270 02012021 585000 GO Refunding Bonds Series 2012A 055-185 02012022 1035000 GO Improvement Bonds Series 2015A 110-345 02012036 750000
GO NotesGO Improvement Note of 2011 1959 08202031 846000
GO Equipment CertificateGO Equipment Certificate 2016A 2100 02012021 168000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549$
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 2819 08202023 996000$ PFA Clean Water Revenue Note 2220 08202026 8086000 PFA Water Revenue Note of 2015 1031 08202035 812000 PFA Sewer Revenue Note of 2015 1000 08202035 110000
Total Business-Type Activities 10004000$
GO Bonds are direct obligations and pledge the full faith and credit of the City These bonds generally are issued as 15 year Serial Bonds with equal debt service payments each year
The City issues General Obligation (GO) Bonds to provide financing for street improvements facility construction and tax increment projects Debt service is covered respectively by special assessments property taxes and tax increments against benefited properties with any shortfalls being paid from general taxes
40
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
B COMPONENTS OF LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for all bonded debt and notes outstanding are as follows
Principal Interest Principal Interest
70000$ 10400$ 660000$ 112343$ 70000 7600 675000 97718 75000 4700 600000 82645 80000 1600 480000 63498
220000 59861 760000 211593 680000 82489 155000 8131
295000$ 24300$ 4230000$ 718278$
2019
2029-20332024-2028
20222023
On September 27 2011 the City issued $1620000 GO Refunding Bonds Series 2011B with an interest rate of 85 to 270 The City issued the Bonds to crossover refund the $1020000 GO Fire Hall Bonds Series 2004A and the $1645000 GO Improvement Bonds Series 2004B The City completed the refunding to reduce its debt service payment over the next 9 years by $20827 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $20868
Debt service funds are used to liquidate the governmental activities outstanding bonded indebtedness and notes The Park Capital Projects Fund is used to liquidate the governmental activities outstanding contract for deed The General Fund has historically been used to liquidate the outstanding governmental activities compensated absences
GO Improvement Bonds Assessment Bonds
On April 4 2012 the City issued $2225000 GO Refunding Bonds Series 2012A with an interest rate of 55 to 185 The City issued the Bonds to refund the $1415000 GO Improvement Bonds Series 2001C and the $320000 GO Refunding Improvement Bonds Series 2003 as well as crossover refund the $3100000 GO Improvement Bonds Series 2006A The City completed the refunding to reduce its debt service payment over the next 10 years by $179206 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $161420
41
2034-2036
Governmental ActivitiesGO Special
2020
December 31
2021
Year Ending
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS (Contd)
Principal Interest Principal Interest
58000$ 16573$ 55000$ 2951$ 59000 15437 56000 1785 60000 14281 57000 598 61000 13106 62000 11911
332000 40728 214000 8423
846000$ 120459$ 168000$ 5334$
Principal Interest
1173000$ 217058$ 1200000 190488 1227000 163282 1254000 135459 1283000 151604 3466000 171976
284000 14813 117000 1808
10004000$ 1046488$
42
2023
Governmental Activities
2020
Year Ending
2029-2033
2022
2034-2035
2021
2028-2028
2024-2028
2022
2020
2019
2019
Business-Type Activities
2029-2031
GO Notes
2021
December 31Year Ending
2023
GO Equipment Certificates
GO Revenue Notes
December 31
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
D CHANGES IN LONG-TERM LIABILITIES
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Governmental ActivitiesBonds Payable
GOImprovementBonds 365000$ $ 70000$ 295000$ 70000$
GO SpecialAssessment Bonds 4870000 640000 4230000 660000
5235000 0 710000 4525000 730000
GO ImprovementNote of 2011 903000 57000 846000 58000
GO Equipment Certificate 222000 54000 168000 55000
CompensatedAbsences 23292 58115 58428 22979
Unamortized BondDiscount (26664) 4234 (22430)
Total GovernmentalActivities 6356628$ 62349$ 879428$ 5539549$ 843000$
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Business-Type ActivitiesNotes Payable
GO Revenue Notes 11146604$ 3396$ 1146000$ 10004000$ 1173000$
43
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
E CONDUIT DEBT OBLIGATIONS
The Citys conduit debt consisted of the following
Senior Housing and Health Care Revenue Refunding Note 6661528$
NOTE 8 RISK MANAGEMENT
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION
A PLAN DESCRIPTION
Firefighters of the City are members of the Association The Association is the administrator of a single-employer defined benefit pension plan available to firefighters The plan is administered by the Association pursuant to Minnesota Statutes Chapter 69 Chapter 424A and the Associations by-laws As of December 31 2017 the plan covered 28 active firefighters and 14 vested terminated fire fighters whose pension benefits are deferred
There are no other claims liabilities reported in the financial statements based on the requirements of accounting standards which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years
The Citys workers compensation insurance policy is retrospectively rated With this type of policy final premiums are determined after loss experience is known The amount of premium adjustment for 2018 is estimated to be immaterial based on workers compensation rates and salaries for the year
44
Conduit debt obligations are certain limited-obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party The City has issued various revenue bonds to provide funding to private-sector entities for projects deemed to be in the public interest Although these bonds bear the name of the City the City has no obligation for such debt Accordingly the bonds are not reported as liabilities in the financial statements of the City
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) which is a public entity risk pool currently operating as a common risk management and insurance program with other cities in the state The City pays an annual premium to the LMCIT for its insurance coverage The LMCIT is self-sustaining through commercial companies for excess claims The City is covered through the pool for any claims incurred but unreported but retains risk for the deductible portion of its insurance policies The amount of these deductibles is considered immaterial to the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
B BENEFITS PROVIDED
C CONTRIBUTIONS
D PENSION COSTS
Total Plan Net Pension Pension Fiduciary LiabilityLiability Net Position (Asset)
(a) (b) (a) - (b)
Balances at 112017 $ 569046 $ 1009074 $ (440028)Changes for the Year
Service Cost 26727 26727 Interest 34955 34955 Changes in Benefit Terms 28893 28893 Contributions - Employer 3000 (3000)Contributions - State 47693 (47693)Net Investment Income 126216 (126216)Benefit Payments (72973) (72973) Administrative Expense (8416) 8416
Net Change 17602 95520 (77918)
Balances at 12312017 $ 586648 $ 1104594 $ (517946)
The plan provides lump-sum retirement death and supplemental benefits to covered firefighters and survivors Benefits are paid based on the number of years of service multiplied by a benefit level per year of service approved by the City The plan includes a $2600 service pension benefit for each year of service Members are eligible for a lump-sum retirement benefit at 50 years of age or after completion of 20 years of service If a member is both age 50 and has completed five years of service but not 20 years of service the lump-sum pension will be reduced by 4 for each year of service less than 20 years
The plan is funded by fire state aid investment earnings and if necessary employer contributions as specified in Minnesota Statutes and voluntary City contributions As of December 31 2017 the State of Minnesota contributed $47693 in fire state aid to the plan on behalf of the Fire Department Required employer contributions are calculated annually based on statutory provisions The City made voluntary contributions of $3000 to the plan
The City reported a net pension liability (asset) of ($517946) The Citys net pension liability (asset) was measured as of December 31 2017 and the total pension liability used to calculate the net pension liability (asset) in accordance with GASB 68 was determined by an independent actuary applying an actuarial formula to specific census data certified by the fire department The following table presents the changes in net pension liability during the year
45
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
D PENSION COSTS (Contd)
The lump sum benefit increased from $2400 to $2600 per year effective January 1 2018
Differences between expected and actual economic experience $ 5346$ Changes in actuarial assumptions 3678 Net differences between projected and actual investment earnings 26024 Contributions paid to plan subsequent to measurement date 55196 State aid received for the plan subsequent to measurement date 52196
55196$ 87244$
December 31
20192020202120222023
Thereafter
For the year ended December 31 2018 the City recognized pension expense of ($15721)
The City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
$ 537
46
$55196 reported as deferred outflows of resources related to pensions resulting from City contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended December 31 2019 $52196 reported as deferred inflows of resources related to pensions resulting from state aid received for the plan subsequent to the measurement date will be recognized as an increase of the net pension liability (asset) in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pension plans will be recognized in pension expense as follows
Pension Expense Amount
(2) (17701) (14691) (1457) (1734)
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
E ACTUARIAL ASSUMPTIONS
Inflation Rate 275 percentRetirement Eligibility Later of current age and age 50Expected Long-Term Investment Return 625 percentAmortization Method
Mortality
F DISCOUNT RATE
G PENSION LIABLIITY (ASSET) SENSITIVITY
1 Decrease 1 Increasein Discount in Discount
Rate Rate(525) (625) (725)
Citys Net Pension Liability (Asset) $ (497411) $ (517946) $ (537562)
Straight-line amortization over a closed 5-year period or straight-line amortization over a close period equal to the average of the expected remaining service lives of all members that are provided with pensions through the pension planRates used in the July 1 2016 Minnesota PERA Police amp Fire Plan actuarial valuation
The discount rate used to measure the total pension liability was 625 The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at a rate specified in statute Based on that assumption the pension planrsquos 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
The following presents the net pension liability (asset) calculated using the discount rate as well as what the Citys net pension liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate
Discount Rate
The total pension liability was determined using the following actuarial assumptions applied to all periods included in the measurement
The actuarial assumptions used in the December 31 2018 valuation were based on the results of an actuarial experience study for the period January 1 2016 - December 31 2016
47
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
H PLAN INVESTMENTSINVESTMENT POLICY
- Attempt to maintain minimum funding ratio of 120- Attempt to increase the pension amount by $200 every other year- Meet twice per year to discuss any changes to allocation and prepare for a joint meeting with the City
I ASSET ALLOCATION
Domestic equityInternational equityFixed incomeReal estate and alternativesCash and equivalents
Total
J PENSION PLAN FIDUCIARY NET POSITION
10000
The best-estimates of expected future asset class returns were published in the 2017 Survey of Capital Market Assumptions produced by Horizon Actuarial Services These expected returns along with expected asset class standard deviations and correlation coefficients are based on Horizonrsquos annual survey of investment advisory firms The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data
Detailed information about the pension plans fiduciary net position is available in a separately-issued financial report
Asset Class
The plans funded status increased from 1773 to 1883 since the prior valuation This change is primarily due to investment returns in excess of expected
4500 5391000 5203500 198500 425500 079
The Association has a formal investment policy that operates within standard investment practices of the prudent person and other standards codified in Minnesota Statutes Chapter 11A and Chapter 356
The Associations pension plan assets are to be invested for the exclusive benefit of the fund members and will attempt to generate investment returns of at least 5 percent of an annualized basis over time Other goals of the Association include
The long-term expected rate of return on pension plan investments as determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns net of pension plan investment expense and inflation) are developed for each major asset class These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table
Long-Term Expected Real Rate of ReturnTarget Allocation
48
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A PLAN DESCRIPTION
B BENEFITS PROVIDED
GERP Benefits
General Employees Retirement Plan (GERP General Employees Plan accounted for in the General Employees Fund)
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
Public Employees Police and Fire Plan (PEPFP Police and Fire Plan accounted for in the Police and Fire Fund)
The Police and Fire Plan 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 Police and Fire Plan also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to PERA
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
General Employees Plan benefits are based on a memberrsquos 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 PERAs 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 12 for each of the first 10 years of service and 17 for each additional year The rates are 22 and 27 respectively for Basic members Under Method 2 the accrual rate for Coordinated members is 17 for all years of service and 27 for Basic members The accrual rates for former MERF members is 20 for each of the first 10 years of service and 25 for each additional year 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
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA) PERArsquos defined benefit pension plans are established and administered in accordance with Minnesota Statutes Chapters 353 and 356 PERArsquos defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code
49
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
B BENEFITS PROVIDED (Contd)
GERP Benefits (Contd)
PEPFP Benefits
C CONTRIBUTIONS
GERP Contributions
PEPFP Contributions
Beginning January 1 2019 benefit recipients will receive a future annual increase equal to 50 percent of the Social Security Cost of Living Adjustment not less than 10 percent and not more than 15 percent For retirements on or after January 1 2024 the first benefit increase is delayed until the retiree reaches Normal Retirement Age (not applicable to Rule of 90 retirees disability benefit recipients or survivors) A benefit recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase Members receiving benefits for at least one month but less than 12 full months as of June 30 will receive a pro rata increase
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 percent after five years up to 100 percent 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 percent after ten years up to 100 percent after twenty years of credited service The annuity accrual rate is 3 percent of average salary for each year of service For Police and Fire Plan members who were first hired prior to July 1 1989 a full annuity is available when age plus years of service equal at least 90
Beginning in 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law Post retirement increases are given each year except for annuitants who have been receiving a benefit for only 31 to 41 months These annuitants will receive a prorated amount of the increase on a sliding scale
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions Contribution rates can only be modified by the state Legislature
Coordinated Plan members were required to contribute 650 percent of their annual covered salary in fiscal year 2018 the City was required to contribute 750 percent for Coordinated Plan members The Citys contributions to the General Employees Fund for the year ended December 31 2018 were $50226 The Citys contributions were equal to the required contributions as set by state statute
Legislation increased both employee and employer contribution rates in the Police and Fire Plan Employee rates increased from 1080 percent of pay to 1130 percent and employer rates increase from 1620 percent to 1695 percent on January 1 2018 On January 1 2020 employee rates increase to 1180 percent and employer rates increase to 1770 percent The Citys contributions to the Police and Fire Fund for the year ended December 31 2018 were $57782 The Citys contributions were equal to the required contributions as set by state statute
50
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS
GERP Pension Costs
Differences between expected and actual economic experience 14670$ 16018$ Changes in actuarial assumptions 52464 61940 Differences between projected and actual investment earnings 56103 Changes in proportion 4060 13463 Contributions paid to GERP subsequent to measurement date 25165
96359$ 147524$
At December 31 2018 the City reported a liability of $543664 for its proportionate share of the General Employees Fundrsquos net pension liability The City net pension liability reflected a reduction due to the State of Minnesotarsquos contribution of $16 million to the fund in 2019 The State of Minnesota is considered a non-employer contributing entity and the statersquos contribution meets the definition of a special funding situation The State of Minnesotarsquos proportionate share of the net pension liability associated with the City totaled $17795 The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The Citys proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion share was 00098 which was a decrease of 00002 from its proportion measured as of June 30 2017
Post-retirement benefit increases were changed from 10 per year with a provision to increase to 25 upon attainment of 90 funding ratio to 50 of the Social Security Cost of Living Adjustment not less than 10 and not more than 15 beginning January 1 2019
For the year ended December 31 2018 the City recognized pension expense of $28216 for its proportionate share of GERPrsquos pension expense In addition the City recognized an additional $4150 as pension expense (and grant revenue) for its proportionate share of the State of Minnesotas contribution of $6 million to the General Employees Fund
At December 31 2018 the City reported its proportionate share of GERPrsquos deferred outflows of resources and deferred inflows of resources from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
51
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
GERP Pension Costs (Contd)
PEPFP Pension Costs
$25165 reported as deferred outflows of resources related to pensions resulting from City contributions to GERP subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to GERP pensions will be recognized in pension expense as follows
52
Year ended June 30 Pension Expense Amount
2019 13967$ 2020 (31102) 2021 (47848) 2022 (11347)
At December 31 2018 the City reported a liability of $350680 for its proportionate share of the Police and Fire Fundrsquos net pension liability The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The City proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion was 00329 which was a decrease of 00001 from its proportion measured as of June 30 2017 The City also recognized $2961 for the year ended December 31 2018 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesotarsquos on-behalf contributions to the Police and Fire Fund Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year starting in fiscal year 2014
Beginning in January 1 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law
For the year ended December 31 2018 the City recognized pension expense of $2961 for its proportionate share of the Police and Fire Planrsquos pension expense
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
PEPFP Pension Costs (Contd)
Differences between expected and actual economic experience 14159$ 88907$ Changes in actuarial assumptions 450560 517779 Differences between projected and actual investment earnings 71220 Changes in proportion 10800 27880 Contributions paid to PEPFP subsequent to measurement date 29906
505425$ 705786$
E ACTUARIAL ASSUMPTIONS
InflationSalary GrowthInvestment Rate of Return
Actuarial Assumptions GERP PEPFP
250 per year 250 per year325 after 26 years of service 325 after 25 years of service
750 750
53
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
2020 (21749)2021 (54056)2022 (147616)2023 (1380)
The total pension liability in the June 30 2018 actuarial valuation was determined using the following actuarial assumptions
$29906 reported as deferred outflows of resources related to pensions resulting from the Citys contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows
Year ended June 30 Pension Expense Amount
2019 (5466)$
At December 31 2018 the City reported its proportionate share of the Police and Fire Planrsquos deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
GERP
PEPFP
54
The total pension liability for each of the defined benefit cost-sharing plans was determined by an actuarial valuation as of June 30 2018 using the entry age normal actuarial cost method Inflation is assumed to be 250 percent for the General Employees and Police and Fire Plans Salary growth assumptions in the General Employees Plan decrease in annual increments from 1125 percent after one year of service to 325 percent after 26 years of service In the Police and Fire Plan salary growth assumptions decrease from 1225 percent after one year of service to 325 percent after 25 years of service
Mortality rates for all plans are based on RP-2014 mortality tables The tables are adjusted slightly to fit PERArsquos experience Actuarial assumptions for the General Employees Plan are reviewed every four to six years The most recent six-year experience study for the General Employees Plan was completed in 2015 The most recent four-year experience study for the Police and Fire Plan was completed in 2016 Economic assumptions were updated in 2014 based on a review of inflation and investment return assumptions
The following changes in actuarial assumptions occurred in 2018
The mortality projection scale was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 percent per year through 2044 and 250 percent per year thereafter to 125 percent per year
The mortality projection scale was changed from MP-2016 to MP-2017
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
Domestic StocksInternational StocksBondsAlternative AssetsCash
F DISCOUNT RATE
G PENSION LIABILITY SENSITIVITY
GERP PEPFP
1 Lower 650 883523$ 1520 751880$ Current Discount Rate 750 543664 1620 350680 1 Higher 850 263120 1720 18904
The discount rate used to measure the total pension liability in 2018 was 750 percent The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes Based on these assumptions the fiduciary net positions of the General Employees Fund and the Police and Fire Fund 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
The following presents the Citys proportionate share of the net pension liability for all plans it participates in calculated using the discount rate disclosed in the preceding paragraphs as well as what the Citys 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
Target Allocation
3900190020002000200
10000
Long-Term Expected Real Rate of Return
510530075590000
Asset Class
55
The State Board of Investment which manages the investments of PERA prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return 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 in the following table
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
H PENSION PLAN FIDUCIARY NET POSITION
NOTE 11 DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
Related to Pensions 656980$ 940554$
NOTE 12 FUND BALANCE
NonmajorGovernmental
General Funds Total
NonspendablePrepaid Items 73751$ 2152$ 75903$
Restricted forTax Increment 11481 11481 Debt Service 1448570 1448570 Capital Projects 72582 72582
0 1532633 1532633
CommittedCharitable Gambling Programs 11466 11466 Economic Development Promotion 835956 835956
Total Committed 0 847422 847422
AssignedFund Operations 165070 487992 653062
Unassigned 1697339 (456819) 1240520
1936160$ 2413380$ 4349540$
Detailed information about each pension plans 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 wwwmnperaorg
The following is a summary of the major components of deferred outflows and inflows as presented in the Statement of Net Position
Deferred Outflows of Resources
Deferred Inflows of Resources
The following is a summary of fund balance components
56
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 13 TAX ABATEMENT
Current YearPercent AmountAbated Abated
Dingmann Marine100 2500$
Current YearPercent AmountAbated Abated
Granite City PropertyManagement 95 20858$
NOTE 14 JOINT POWERS AGREEMENTS
A PUBLIC RECREATIONAL FACILITY
B WRIGHT COUNTY AREA TRANSIT
Wright County Area Transit is governed by a Joint Powers Board that consists of a) one vote plus additional vote for each city per 3000 rides originating in that city and b) Wright County has votes equal to the number of votes apportioned to the Cities
57
The City and Independent School District 876 (the District) have entered into an a joint powers agreement to operate a public recreational facility The City owns and will lease the real property to the Joint Powers Entity (the Entity) The District shall fund the construction of the facility The Entity shall prepare an annual budget subject to approval of the City and the District All costs for operations maintenance repairs and utilities shall be shared equally by the City and the District
The Entity is governed by a Joint Powers Board that consists of four members a) two members appointed by the City annually and b) two members appointed by the District annually
The City Wright County and other Wright County Cities have entered into an a joint powers agreement to provide affordable public transportation to their communities Cities are to pay a pro rata share of the remaining unfunded operating expenses and capital expenditures not covered by Wright County
The City is authorized by Minnesota Statute sect4691813 to enter into property tax abatement agreements for the purpose of attracting or retaining businesses Tax abatements may be granted to any business on a case-by-case basis The entity may be subject to certain stipulations determined by the City at the time the abatement is entered The amount of the abatement is automatically deducted from the property ownerrsquos tax bill
The City is authorized by Minnesota Statute sect469174 through 469179 to enter into tax increment financing plans Tax increment financing may be granted on a case-by-case basis and may be subject to certain stipulations determined by the City at the time it is entered
Business Purpose
Business Purpose
Assisting in relocating the business within the community
Housing Redevelopment Project 36 Unit Senior Housing Project
REQUIRED SUPPLEMENTARY INFORMATION
This page intentionally left blank
EmployersProportionateShare of the Net Pension
Liability (Asset)States and the States Employers
Proportionate Proportionate ProportionateEmployers Share of the Share of the Share of the Plan Fiduciary
Employers Proportionate Net Pension Net Pension Net Pension Net PositionProportion Share of the Liability (Asset) Liability (Asset) Employers Liability (Asset) as a Percentageof the Net Net Pension Associated with Associated with Covered as a Percentage of of the Total
Fiscal Year Pension Liability (Asset) the Employer the Employer Payroll its Covered Payroll PensionEnding Liability (Asset) (a) (b) (a+b) (c) ((a+b)c) Liability
PensionsGERP
6302018 00098 543664$ 17795$ 561459$ 658161$ 8531 79536302017 00100 638393 8040 646433 647524 9983 75906302016 00099 803831 10468 814299 610663 13335 68916302015 00102 528617 528617 605733 8727 7819
PEPFP6302018 00329 350680$ $ 350680$ 346636$ 10117 88846302017 00330 445539 445539 339010 13142 85436302016 00340 1364479 1364479 322596 42297 63886302015 00340 386320 386320 317917 12152 8661
See Accompanying Notes to the Required Supplementary Information
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITYDECEMBER 31 2018
58
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
Contributionsin Relation Contributions
Statutorily to the Statutorily Contribution as a PercentageRequired Required Deficiency Covered of Covered
Fiscal Year Contribution Contribution (Excess) Payroll PayrollEnding (a) (b) (a-b) (d) (bd)
PensionsGERP
12312018 50226$ 50226$ $ 669680$ 75012312017 48886 48886 651813 75012312016 46583 46583 621107 75012312015 45426 45426 605680 750
PEPFP12312018 57782$ 57782$ $ 356679$ 162012312017 55371 55371 341796 162012312016 53824 53824 332247 162012312015 51688 51688 319062 1620
See Accompanying Notes to the Required Supplementary Information59
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE EMPLOYER CONTRIBUTIONSDECEMBER 31 2018
2017 2016 2015 2014
Service Cost 26727$ 26915$ 21845$ 21260$ Interest 34955 33085 27615 24816 Changes in Benefit Terms 28893 40156 Differences Between Expected and Actual Experience (7074) Changes in Assumptions (4866) Benefit Payments (72973) (7040)
Net Change in Total Pension Liability 17602 41020 89616 46076 Total Pension Liability - Beginning of Year 569046 528026 438410 392334
Total Pension Liability - End of Year 586648$ 569046$ 528026$ 438410$
Contributions - State and Local 50693$ 50325$ 49939$ 47712$ Net Investment Income 126216 69161 (34736) 46976 Benefit Payments (72973) (7040) Administrative Expense (8416) (7920) (7166) (3768) Other (275)
Net Change in Plan Fiduciary Net Position 95520 104526 8037 90645 Total Plan Fiduciary Net Position - Beginning of Year 1009074 904548 896511 805866
Total Plan Fiduciary Net Position - End of Year 1104594$ 1009074$ 904548$ 896511$
Citys Net Pension Liability (Asset) - End of Year (517946)$ (440028)$ (376522)$ (458101)$
Plan Fiduciary Net Position as a Percentage of the Total Pension Asset 18829 17733 17131 20449
60
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF CHANGES IN THE CITYS NET PENSION LIABILITY AND RELATED RATIOSDECEMBER 31 2018
The City implemented GASB Statement No 68 for the year ended December 31 2015 Information for prior years is not available
December 31
NOTE 1 CHANGES IN PLAN PROVISIONS
A GERF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
B PEPFF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
61
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
On January 1 2015 the Minneapolis Employees Retirement Fund was merged into the General Employees Fund which increased the total pension liability by $11 billion and increased the fiduciary plan net position by $892 million Upon consolidation state and employer contributions were revised
The post-retirement benefit increase to be paid after attainment of the 90 funding threshold was changed from inflation up to 25 to a fixed rate of 25
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS
A GERF
2018 Changes
2017 Changes
2016 Changes
2015 Changes
B PEPFF
2018 Changes
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 025 to 325 for payroll growth and 250 for inflation
62
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2035 and 25 per year thereafter
The mortality projection was changed from MP-2016 to MP-2017
The Combined Service Annuity (CSA) loads were changed from 08 for active members and 60 for vested and non-vested deferred members The revised CSA loads are now 00 for active member liability 150 for vested deferred member liability and 30 for non-vested deferred member liability
The assumed post-retirement benefit increase rate was changed from 10 per year for all years to 10 per year through 2044 and 25 per year thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2035 and 25 per year thereafter to 10 per year for all years
The assumed investment return was changed from 79 to 75 The single discount rate was changed from 79 to 75
The mortality projection was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 per year through 2044 and 250 per year thereafter to 125 per year
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS (Contd)
B PEPFF (Contd)
2017 Changes
Assumed rates of retirement were changed resulting in fewer retirements
Assumed percentage of married female members was decreased from 65 to 60
The assumed percentage of female members electing Joint and Survivor annuities was increased
2016 Changes
2015 Changes
63
The assumed post-retirement benefit increase rate was changed from 100 for all years to 100 per year through 2064 and 250 thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2037 and 25 thereafter to 10 per year for all future years
The assumed investment return was changed from 79 to 75 The single discount rate changed from 79 to 56
The assumed future salary increases payroll growth and inflation were decreased by 025 to 325 for payroll growth and 250 for inflation
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2037 and 25 per year thereafter
Assumed salary increases were changed as recommended in the June 30 2016 experience study The net effect is proposed rates that average 034 lower than the previous rates
The Combined Service Annuity (CSA) load was 30 for vested and non-vested deferred members The CSA has been changed to 33 for vested members and 2 for non-vested 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 096 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 30 for the first three years of service Rates beyond the select period of three years were adjusted resulting in more expected terminations overall
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
SUPPLEMENTARY INFORMATION
This page intentionally left blank
Special Debt Capital Revenue Service Projects Total
ASSETSCash and Investments 436388$ 1441782$ 473092$ 2351262$ Taxes Receivable - Delinquent 23 5 347 375 Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 623285 26935 650220
Accounts Receivable 70887 20000 90887 Interest Receivable 9 9 Prepaid Items 2152 2152 Due from Other Funds 190388 190388 Due from Other Governments 1061 2365 47418 50844 Land Held for Resale 362923 362923
Total Assets 1063822$ 2071860$ 567801$ 3703483$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 12735$ $ 11142$ 23877$ Contracts Payable 2941 21398 24339 Due to Other Funds 454822 126860 581682 Due to Other Governments 3566 5910 9476 Salaries and Benefits Payable 134 134
Total Liabilities 474198 0 165310 639508
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 23 5 347 375 Special Assessments 623285 26935 650220
Total Deferred Inflows of Resources 23 623290 27282 650595
Fund Balance Nonspendable 2152 2152 Restricted 11481 1448570 72582 1532633 Committed 847422 847422 Assigned 67503 420489 487992 Unassigned (338957) (117862) (456819)
Total Fund Balance 589601 1448570 375209 2413380
Total Liabilities Deferred Inflows of Resources and Fund Balance 1063822$ 2071860$ 567801$ 3703483$
CITY OF ANNANDALE MINNESOTA
64
DECEMBER 31 2018NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
Special Debt Capital Revenue Service Projects Total
REVENUESProperty Taxes 2507$ $ 320723$ 323230$ Tax Increments 20858 20858 Special Assessments 149671 149671 Intergovernmental 30310 30310 Charges for Services 42636 8595 51231 Fines and Forfeitures 4299 4299 Investment Income (1455) (3635) (5090) Contributions and Donations 49608 84150 133758 Miscellaneous 578 101 679
Total Revenues 114732 149671 444543 708946
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 22622 42738 Culture and Recreation 3735 3735 Economic Development 52358 52358
Debt ServicePrincipal 821000 821000 Interest and Other Charges 162964 162964
Capital OutlayPublic Safety 67055 67055 Public Works 14006 14006 Culture and Recreation 14187 88464 102651 Economic Development 56446 88485 144931
Total Expenditures 153914 983964 284367 1422245 Excess (Deficiency) of Revenues
Over (Under) Expenditures (39182) (834293) 160176 (713299)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 51200 784616 310098 1145914 Transfers Out (65804) (481316) (547120)
Total Other Financing Sources (Uses) (14604) 784616 (146725) 623287 Net Change in Fund Balances (53786) (49677) 13451 (90012)
FUND BALANCE BEGINNING OF YEAR 643387 1498247 361758 2503392
FUND BALANCE END OF YEAR 589601$ 1448570$ 375209$ 2413380$
65
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
Tax Charitable Economic TIF District Abatement - Lions TIF District Training WoodlawnGambling Development No 6 Dingmann Donations No 14 Center Cemetery
(222) (407) (411) (423) (464) (465) (604) (651) Total
ASSETSCash and Investments 11466$ 385530$ 21389$ $ 18003$ $ $ $ 436388$ Taxes Receivable - Delinquent 23 23 Accounts Receivable 20856 49500 531 70887 Prepaid Items 1076 1076 2152 Due from Other Funds 190388 190388 Due from Other Governments 25 1036 1061 Land Held for Resale 362923 362923
Total Assets 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable $ 1800$ 9908$ $ $ $ 1000$ 27$ 12735$ Contracts Payable 2941 2941 Due to Other Funds 119000 18060 66198 200960 50604 454822 Due to Other Governments 3500 66 3566 Salaries and Benefits Payable 67 67 134
Total Liabilities 0 123741 9908 18060 0 69698 202093 50698 474198
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 23 23
Fund Balance Nonspendable 1076 1076 2152 Restricted 11481 11481 Committed 11466 835956 847422 Assigned 67503 67503 Unassigned (18035) (69698) (200526) (50698) (338957)
Total Fund Balance 11466 835956 11481 (18035) 67503 (69698) (199450) (49622) 589601
Total Liabilities Deferred Inflows of Resources and Fund Balance 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
66
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUECOMBINING BALANCE SHEET
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding ImprovementBonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
ASSETSCash and Investments 134649$ 53157$ 3288$ 310514$ 94388$ 360857$ 484929$ 1441782$ Taxes Receivable - Delinquent 5 5 Special Assessments Receivable
Delinquent 819 1553 2051 4423 Current and Deferred 45829 223930 9400 65636 278490 623285
Due from Other Governments 585 509 775 496 2365
Total Assets 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
DEFERRED INFLOWS OF RESOURCESAND FUND BALANCEDeferred Inflows of Resources
Unavailable RevenuesDelinquent Property Taxes $ $ $ $ $ 5$ $ 5$ Special Assessments 45829 223930 9400 65636 278490 623285
Total Deferred Inflows of Resources 45829 0 0 223930 9400 65641 278490 623290
Fund Balance Restricted 135234 53157 3288 311333 94897 363185 487476 1448570
Total Deferred Inflows of Resourcesand Fund Balance 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
DECEMBER 31 2018
67
Public Works 2020Fire Street Street Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
ASSETSCash and Investments 50334$ $ 39748$ 122304$ 20402$ 83784$ 53265$ 30658$ 72597$ $ 473092$ Taxes Receivable - Delinquent 298 49 347Special Assessments Receivable
Current and Deferred 26935 26935Accounts Receivable 20000 20000Interest Receivable 9 9Due from Other Governments 24247 20606 2565 47418
Total Assets 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 350$ $ $ $ 10792$ $ $ $ $ $ 11142$ Contracts Payable 15700 5698 21398 Due to Other Funds 44073 82787 126860 Due to Other Governments 5910 5910
Total Liabilities 350 49983 0 0 10792 0 0 15700 0 88485 165310
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 298 49 347Special Assessments 26935 26935
Total Deferred Inflows of Resources 298 0 26984 0 0 0 0 0 0 0 27282
Fund Balance Restricted 72582 72582 Assigned 74240 42313 122304 9610 83784 53265 34958 15 420489 Unassigned (29377) (88485) (117862)
Total Fund Balance 74240 (29377) 42313 122304 9610 83784 53265 34958 72597 (88485) 375209
Total Liabilities Deferred Inflow of Resources and Fund Balance 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
DECEMBER 31 2018
68
TaxCharitable Economic TIF District Abatement - TIF District Lions TIF District Training WoodlawnGambling Development No 6 Dingmann No 12 Donation No 14 Center Cemetery
(222) (407) (411) (423) (438) (464) (465) (604) (651) Total
REVENUESProperty Taxes $ $ $ 2507$ $ $ $ $ $ 2507$ Tax Increments 20858 20858 Charges for Services 12875 19641 10120 42636 Investment Income (71) (2440) (140) (76) 1239 33 (1455)Contributions and Donations 108 49500 49608Miscellaneous 78 500 578
Total Revenues (71) 10621 20718 2507 0 49424 500 20880 10153 114732
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 20116 Economic Development 18399 19816 391 13752 52358
Capital OutlayCulture and Recreation 14187 14187 Economic Development 56446 56446
Total Expenditures 0 18399 19816 0 391 14187 70198 20116 10807 153914 Excess (Deficiency) of
Revenues Over (Under) Expenditures (71) (7778) 902 2507 (391) 35237 (69698) 764 (654) (39182)
OTHER FINANCING SOURCES (USES)Transfers In 51200 51200 Transfers Out (65804) (65804)
Total Other FinancingSources (Uses) 0 (14604) 0 0 0 0 0 0 0 (14604)
Net Change in Fund Balances (71) (22382) 902 2507 (391) 35237 (69698) 764 (654) (53786)
FUND BALANCE BEGINNING OF YEAR 11537 858338 10579 (20542) 391 32266 (200214) (48968) 643387
FUND BALANCE END OF YEAR 11466$ 835956$ 11481$ (18035)$ 0$ 67503$ (69698)$ (199450)$ (49622)$ 589601$
69
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE
YEAR ENDED DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding Improvement Bonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
REVENUESSpecial Assessments 21259$ $ $ 37558$ 10657$ 20276$ 59921$ 149671$
EXPENDITURESDebt Service
Principal 80000 70000 54000 127000 210000 245000 35000 821000Interest and Other Charges 23944 14062 4095 64909 16975 18646 20333 162964
Total Expenditures 103944 84062 58095 191909 226975 263646 55333 983964 Excess (Deficiency) of
Revenues Over (Under)Expenditures (82685) (84062) (58095) (154351) (216318) (243370) 4588 (834293)
OTHER FINANCINGSOURCES (USES)Transfers In 76000 78113 22560 150000 194943 198000 65000 784616
Net Change in Fund Balances (6685) (5949) (35535) (4351) (21375) (45370) 69588 (49677)
FUND BALANCEBEGINNING OF YEAR 141919 59106 38823 315684 116272 408555 417888 1498247
FUND BALANCE END OF YEAR 135234$ 53157$ 3288$ 311333$ 94897$ 363185$ 487476$ 1448570$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
YEAR ENDED DECEMBER 31 2018
70
Public 2020Fire Street WorksStreet Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
REVENUESProperty Taxes 25092$ $ 295631$ $ $ $ $ $ $ $ 320723$ Intergovernmental 4109 26201 30310 Charges for Services 8595 8595 Fines and Forfeitures 4299 4299 Investment Income (49) 105 (324) (1118) (80) (713) (503) (495) (458) (3635) Contributions and Donations 50650 1500 2000 30000 84150 Miscellaneous 101 101
Total Revenues 75693 14309 295307 (1017) 6219 (713) 25698 29505 (458) 0 444543
EXPENDITURESCurrent
Public Safety 22622 22622 Culture and Recreation 3735 3735
Capital OutlayPublic Safety 7500 59555 67055 Public Works 14006 14006 Culture and Recreation 16429 72035 88464 Economic Development 88485 88485
Total Expenditures 30122 20164 0 14006 59555 0 0 72035 0 88485 284367 Excess (Deficiency) of
Revenues Over (Under)Expenditures 45571 (5855) 295307 (15023) (53336) (713) 25698 (42530) (458) (88485) 160176
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 8800 15693 24493 Transfers In 84943 37504 60000 20000 107651 310098 Transfers Out (107503) (288000) (78113) (7700) (481316)
Total Other FinancingSources (Uses) (22560) 37504 (288000) 68800 35693 29538 0 (7700) 0 0 (146725)
Net Change in Fund Balances 23011 31649 7307 53777 (17643) 28825 25698 (50230) (458) (88485) 13451
FUND BALANCE BEGINNING OF YEAR 51229 (61026) 35006 68527 27253 54959 27567 85188 73055 361758
FUND BALANCE END OF YEAR 74240$ (29377)$ 42313$ 122304$ 9610$ 83784$ 53265$ 34958$ 72597$ (88485)$ 375209$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
YEAR ENDED DECEMBER 31 2018
71
FINANCIAL SECTION
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Issue Interest Original Final Principal Due WithinDate Rates Issue Maturity Outstanding One Year
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan Bonds Series 2008A 050608 300-400 895000$ 020122 295000$ 70000$ GO Special Assessment Bonds
GO Improvement Bonds Series 2008B 050608 300-4125 1175000 020124 560000 85000 GO Improvement Bonds Series 2011A 060811 105-415 1700000 020132 1300000 70000 GO Refunding Bonds Series 2011B 092711 085-270 1620000 020121 585000 215000 GO Refunding Bonds Series 2012A 040412 055-185 2225000 020122 1035000 255000 GO Improvement Bonds Series 2015A 050115 110-345 820000 020136 750000 35000
GO NotesGO Improvement Note of 2011 053111 1959 1217500 082031 846000 58000
GO Equipment CertificateGO Equipment Certificate 2016A 032116 2100 222000 020121 168000 55000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549 843000
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 011304 2819 3273194 082023 996000 188000 PFA Clean Water Revenue Note 081707 2220 16036613 082026 8086000 935000 PFA Water Revenue Note of 2015 081015 1031 929105 082035 812000 44000 PFA Sewer Revenue Note of 2015 090815 1000 125359 082035 110000 6000
Total Business-Type Activities 10004000 1173000
Total All Long-Term Liabilities 15543549$ 2016000$
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF LONG-TERM LIABILITIESDECEMBER 31 2018
72
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COMPLIANCE SECTION
This page intentionally left blank
Honorable Mayor and Members of the City Council
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
INDEPENDENT AUDITORS REPORT ON MINNESOTA LEGAL COMPLIANCE
73
The Minnesota Legal Compliance Audit Guide for Cities promulgated by the State Auditor pursuant to Minn Stat sect665 contains seven categories of compliance to be tested contracting and bidding deposits and investments conflicts of interest public indebtedness claims and disbursements miscellaneous provisions and tax increment financing Our audit considered all of the listed categories
In connection with our audit nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities However our audit was not directed primarily toward obtaining knowledge of such noncompliance Accordingly had we performed additional procedures other matters may have come to our attention regarding the Citys noncompliance with the above referenced provisions
The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance Accordingly this communication is not suitable for any other purpose
City of AnnandaleAnnandale Minnesota
May 6 2019
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 majorfund and the aggregate remaining fund information as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements we considered the Citys 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 Citys internal control Accordingly we do not express an opinion on the effectiveness of the Citys 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 entitys 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
74
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 and therefore material weaknesses or significant deficiencies may exist that were not identified 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 We did identify certain deficiencies in internal control described in the accompanying Schedule of Findings as 2018-001 and 2018-002 that we consider to be significant deficiencies
INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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 the City of Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
Compliance and Other Matters
Citys Response to Findings
Purpose of this Report
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
May 6 2019
75
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 Citys internal control or on compliance This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entitys internal control and compliance Accordingly this communication is not suitable for any other purpose
As part of obtaining reasonable assurance about whether the Citys 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
The Citys responses to the findings identified in our audit are described in the accompanying Schedule of Findings The Citys responses were not subjected to the auditing procedures applied in the audit of the financial statements and accordingly we express no opinion on them
I
FINDING 2018-001
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
76
LIMITED SEGREGATION OF DUTIES
There is an absence of appropriate segregation of duties consistent with appropriate control objectives due to a limited number of employees
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The City is aware of the limited segregation of duties and will continue to review internal controls and make changes when they can be made
The lack of adequate segregation of duties could adversely affect the Citys ability to initiate record process and report financial data consistent with the assertions of management in the financial statements
The basic premise is that no one person should have access to both physical assets and the related accounting records or to all phases of a transaction The lack of such controls could result in the occurrence of a material error or fraud in relation to the financial statements not being detected by management
The City has assigned duties to staff based on a cost-benefit relationship to the City and the practicality of the level of staffing the City maintains
The City should continue to monitor and evaluate the job responsibilities assigned to staff to determine whether there is an unacceptable risk
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
I
FINDING 2018-002 AUDITOR PREPARED FINANCIAL STATEMENTS
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
77
The City does not have an internal control system designed to provide for the preparation of the financial statements being audited However based on the degree of complexity and level of detail needed to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) the City has requested the auditors to prepare them
The preparation of the financial statements and the related notes are the responsibility of management
There are a limited number of office employees and resources available to allow for the adequate preparation of the financial statements by the City
This could result in a material misstatement to the financial statements and related notes that would not be prevented or detected and corrected as a result of the Citys current internal control
The City should continue to request the assistance to draft the financial statements and related notes and thoroughly review these financial statements after they have been prepared so the City can take responsibility for them
The City is aware of this however due to significant cost and a limited number of employees it is in the Citys best financial interest to contract for the preparation of the financial statements
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Contd)
Comment Year Finding If Not Corrected Provide PlannedReference Comment Title Status Initially Occurred Corrective Action or Other Explanation
Financial Statement Findings
2017-001 Not Corrected 2009 See current year finding 2018-001
2017-002 Not Corrected 2009 See current year finding 2018-002
Minnesota Legal Compliance Findings
None
DECEMBER 31 2018SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
CITY OF ANNANDALE MINNESOTA
78
Limited Segregation of Duties
Auditor Prepared Financial Statements
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORS
WILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
MANAGEMENT LETTER
DECEMBER 31 2018
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Page
Required Communications 1-3
Schedule of Findings on Accounting Issues and Internal Controls 4
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
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Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Significant Audit Findings
Qualitative Aspects of Accounting Practices
We have audited the financial statements of the governmental activities the business-type activities each major fund and the aggregate remaining fund information of the City of Annandale Minnesota for the year ended December 31 2018 Professional standards require that we provide you with information about our responsibilities under generallyaccepted auditing standards and Government Auditing Standards as well as certain information related to the planned scope and timing of our audit We have communicated such information in our letter to you dated December 20 2018 Professional standards also require that we communicate to you the following information related to our audit
The financial statement disclosures are neutral consistent and clear
1
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 the financial statements No new accounting policies were adopted and the application of existing policies was not changed in 2018 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 are an integral part of the financial statements prepared by management and are based on managements 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
Managements estimate of depreciation is based on the number of years an asset is in service We evaluated the key factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Managements estimate of pension liabilities is based on actuarial valuations performed by consultants specializing in those areas We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Significant Audit Findings (Contd)
Difficulties Encountered in Performing the Audit
Corrected and Uncorrected Misstatements
Disagreements with Management
Management Representations
Management Consultations with Other Independent Accountants
Other Audit Findings or Issues
Other Matters
Professional standards require us to accumulate all known and likely misstatements identified during the audit other than those that are clearly trivial and communicate them to the appropriate level of management Management has corrected all such misstatements In addition none of the misstatements detected as a result of audit procedures and corrected by management were material either individually or in the aggregate to each opinion units financial statements taken as a whole
We encountered no significant difficulties in dealing with management in performing and completing our audit
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 Citys 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
We generally discuss a variety of matters including the application of accounting principles and auditing standards with management each year prior to retention as the Citys auditors However these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention
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 We are pleased to report that no such disagreements arose during the course of our audit
We have requested certain representations from management that are included in the management representation letter dated May 6 2019
We applied certain limited procedures to Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions the Schedule of Changes in the Citys Net Pension Liability and Related Ratios and the related notes to required supplementary information which are required supplementary information that supplements the basic financial statements Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries the basic financial statements and other knowledge we obtained during our audit of the basic financial statements We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information
2
Other Matters (Contd)
Restriction on Use
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
This information is intended solely for the use of the City Council and management of the City of Annandale Minnesota and is not intended to be and should not be used by anyone other than these specified parties
3
We were not engaged to report on the Elected Officials and Administration section which accompany the financial statements but are not required supplementary information We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it
May 6 2019
We were engaged to report on the statements and schedules listed in the table of contents as supplementary information which accompany the financial statements but are not required supplementary information With respect to this supplementary information we made certain inquiries of management and evaluated the form content and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America the method of preparing it has not changed from the prior period and the information is appropriate and complete in relation to our audit of the financial statements We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves
This page intentionally left blank
4
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in internal control under standards established by the American Institute of Certified Public Accountants 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
The objective of internal accounting control is to provide reasonable but not absolute assurance as to the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of these factors necessarily requires estimates and judgments by management
It should be recognized that within the City an inherent risk is present with certain positions It is very common for cities such as the City of Annandale Minnesota to assign many major responsibilities to a few key individuals in an attempt to operate within limited budgets The inherent risk is again addressed only to maintain the awareness of the internal control structure and to encourage the Councils continual review of financial information at monthly meetings
DECEMBER 31 2018
INTERNAL CONTROL
GENERAL RECOMMENDATIONS
Throughout the course of the audit we spoke to management regarding certain items that we see as an opportunity to improve None of these were considered significant within the scope of the audit The items discussed requiring action have been resolved or are in the process of resolution We would like to acknowledge the assistance and courtesies extended to us by the personnel of the City of Annandale Minnesota
City of Annandale Minnesota
Audit ReportDecember 31 2018
Independent Auditorrsquos ReportPages 2-4bull Financial statements are the responsibility of the Cityrsquos
managementbull Our responsibility is to express opinions on these financial
statements based on our auditbull Conducted audit in accordance with Generally Accepted
Auditing Standards and Government Auditing Standardsbull Obtain reasonable assurance financials are free from
material misstatement
1
Independent Auditorrsquos Report (Contrsquod)Pages 2-4
bull Financial statements are presented fairly in our opinion
bull Internal control letter on pages 74 and 75
2
Statement of Net Position
3
2018 2017ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current and Other 12893519$ 12739729$ Capital 20949843 21526486
Total Assets 33843362 34266215
Deferred Outflows of Resources 656980 914167 Total Assets and Deferred Outflows of Resources 34500342$ 35180382$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current Liabilities 660359$ 497847$ Noncurrent Liabilities
Net Pension Liability 894343 236206 Due Within One Year 2016000 1967000 Due in More Than One Year 13527549 16383958
Total Liabilities 17098251 19085011
Deferred Inflows of Resources 940554 951385
Net PositionNet Investment in Capital Assets 13587855 13119128 Restricted 2095629 2215725 Unrestricted 778053 (190867)
Total Net Position 16461537 15143986 Total Liabilities Deferred Inflows of Resources
and Net Position 34500342$ 35180382$
CITY OF ANNANDALE Payment Approval Report - for City Council Page 3
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
463 BOLTON amp MENK INC 0231793 2020 IMPROVEMENT STREETS 04122019 38000 00
Total 463 1928750 00
646
646 CENTRA SOTA LAKE REGION L 6308214 STREETS 04092019 11697 00
646 CENTRA SOTA LAKE REGION L 6308214 PARKS 04092019 14037 00
646 CENTRA SOTA LAKE REGION L 6308214 WATER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 SEWER 04092019 9358 00
646 CENTRA SOTA LAKE REGION L 6308214 PUBLIC WORKS 04092019 33531 00
646 CENTRA SOTA LAKE REGION L 6308342 STREETS 04292019 13024 00
646 CENTRA SOTA LAKE REGION L 6308342 PARKS 04292019 15629 00
646 CENTRA SOTA LAKE REGION L 6308342 WATER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 SEWER 04292019 10419 00
646 CENTRA SOTA LAKE REGION L 6308342 PUBLIC WORKS 04292019 37335 00
646 CENTRA SOTA LAKE REGION L 6308343 STREETS 04292019 16436 00
646 CENTRA SOTA LAKE REGION L 6308343 PARKS 04292019 19723 00
646 CENTRA SOTA LAKE REGION L 6308343 WATER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 SEWER 04292019 13149 00
646 CENTRA SOTA LAKE REGION L 6308343 PUBLIC WORKS 04292019 47116 00
Total 646 274380 00
710
710 CITY OF BUFFALO MARCH2019 MONTHLY NET MOTION 04012019 2000 2000 04122019
Total 710 2000 2000
810
810 COLONIAL LIFE amp ACCIDENT 7492424-0501 INSURANCE 04162019 42770 42770 04232019
Total 810 42770 42770
900
900 COUNTRY CHEVROLET INC CVCS139790 SQUAD 52 - TIRE REPAIR 04092019 1719 00
Total 900 1719 00
1336
1336 FARM RITE EQUIPMENT INC P42298 WIPER BLADESIDLER ASSY 04012019 36766 00
1336 FARM RITE EQUIPMENT INC W13484 HYDRAULIC HOSE 04172019 40840 00
Total 1336 77606 00
1338
1338 FASTENAL COMPANY MNBUF78347 SAFETY GLASSES 04172019 4656 00
1338 FASTENAL COMPANY MNBUF78393 TOOLS 04192019 892 00
Total 1338 5548 00
1420
1420 FIRE RELIEF ASSOCIATION MARCH2019 2019 SUPPLEMENTAL REIMB 04082019 100000 00
1420 FIRE RELIEF ASSOCIATION MARCH2019 2018 SUPPLEMENTAL REIMB 04082019 313920 00
Total 1420 413920 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 4
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
1508
1508 F S 3 INC 60393 SAFETY VEST 04222019 5500 00
1508 F S 3 INC 60435 SAFETY VEST 04162019 5500 00
1508 F S 3 INC 60436 SAFETY VEST 04162019 5500 00
Total 1508 16500 00
1519
1519 GALLS AN ARAMARK COMPAN 012401488 UNIFORM - HAAG 04042019 8396 00
1519 GALLS AN ARAMARK COMPAN 012412561 UNIFORM - TOWNSEND 04052019 4198 00
Total 1519 12594 00
1630
1630 GOPHER STATE ONE-CALL IN 9030176 FAX TICKETS 03312019 2295 00
Total 1630 2295 00
1660
1660 GRAINGER INC W W 6144966281 TEST BALLS 04122019 15556 00
1660 GRAINGER INC W W 9135594712 PARTS 04032019 6459 00
1660 GRAINGER INC W W 9137921475 SHOCK 04052019 4717 00
1660 GRAINGER INC W W 9138437422 HOSE 04052019 9729 00
1660 GRAINGER INC W W 9146606448 DOOR OPENER 04152019 2735 00
1660 GRAINGER INC W W 9150739945 GLOVES 04192019 6216 00
1660 GRAINGER INC W W 9152417177 GARAGE DOOR OPENERS 04222019 19056 00
Total 1660 64468 00
1710
1710 HAWKINS INC 4475748 CHEMICALS 04092019 247584 00
Total 1710 247584 00
1760
1760 HILLYARDHUTCHINSON 603390067 MOP DUST- PW 04092019 4520 00
1760 HILLYARDHUTCHINSON 603390067 FOLD TOWELSTISSUE PAPER 04092019 19613 00
1760 HILLYARDHUTCHINSON 603406861 SUPER SHINESOAPWINDOW 04232019 46059 00
1760 HILLYARDHUTCHINSON 700376971 SCRUBBER REPAIR 04192019 9600 00
Total 1760 79792 00
1780
1780 HOLIDAY CREDIT OFFICE MARCH12019 PD FUEL 04012019 93317 93317 04122019
1780 HOLIDAY CREDIT OFFICE March2019 FD- FUEL 04012019 19714 19714 04122019
Total 1780 113031 113031
2130
2130 LITTLE FALLS MACHINE INC 355406 PLOW PARTS 04242019 14150 00
Total 2130 14150 00
2190
2190 LUNDEEN BROS INC 91792 OIL CHANGE 2017 DODGE SQA 03212019 5894 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 5
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2190 5894 00
2210
2210 M amp M BUS SERVICE 10193369 DRUG TESTING- KIRBY NICKA 03152019 3000 00
2210 M amp M BUS SERVICE 10193370 ALCOHOL TESTING- KIRBY NIC 03192019 3000 00
2210 M amp M BUS SERVICE 10193419 DRUG TESTING- NICHOLLE CO 04092019 6000 00
Total 2210 12000 00
2211
2211 M amp M EXPRESS SALES amp SER 182624 MOWER PARTS 04122019 36108 00
2211 M amp M EXPRESS SALES amp SER 183289 MOWER PARTS 04182019 12319 00
Total 2211 48427 00
2260
2260 MAPLE LAKE LUMBER COMPA 168882 LUMBER 04222019 1659 00
Total 2260 1659 00
2272
2272 MARES EXCAVATING APRIL 2019 WATER LEAK 04012019 70000 00
Total 2272 70000 00
2273
2273 MARKET PLACE II 107 XTRA SOAP-FD 04012019 1332 1332 04232019
2273 MARKET PLACE II 107 MEALS- TC 04012019 5142 5142 04232019
Total 2273 6474 6474
2375
2375 METRO WEST INSPECTION SE 1978 370 BIG WOODS LN 17-04 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 250 EXCELSIOR AVE N 17-69 04252019 11145 00
2375 METRO WEST INSPECTION SE 1978 202 NONA DR 17-60 04252019 1250 00
2375 METRO WEST INSPECTION SE 1978 135 EXCELSIOR AVE N 17-127 04252019 17820 00
2375 METRO WEST INSPECTION SE 1978 630 LAKE DR W 19-7 04252019 2500 00
2375 METRO WEST INSPECTION SE 1978 212 ASH ST E 19-13 04252019 5198 00
2375 METRO WEST INSPECTION SE 1978 330 CHESTNUT ST E 19-22 04252019 2500 00
Total 2375 41663 00
2419
2419 MID-MINNESOTA CONCRETE 19073 HOT WATER 03112019 49000 00
2419 MID-MINNESOTA CONCRETE 19075 HOT WATER 03132019 49000 00
2419 MID-MINNESOTA CONCRETE 19076 HOT WATER 03042019 24500 00
Total 2419 122500 00
2425
2425 MIDWAY IRON amp METAL INC 420761 STEEL 04172019 5363 00
Total 2425 5363 00
2465
2465 MCP CARSTAR COLLISION CE 41349297 SQUAD 51 REPAIRS 01052019 175667 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 6
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 2465 175667 00
2511
2511 CENTER POINT ENERGY 110 PAVILION 04122019 4986 00
2511 CENTER POINT ENERGY 111 TC 04122019 5309 00
2511 CENTER POINT ENERGY 112 OLD PW SHOP 05022019 4465 00
2511 CENTER POINT ENERGY 113 WTP 04122019 50216 00
2511 CENTER POINT ENERGY 114 HOCKEY RINK 04122019 4221 00
2511 CENTER POINT ENERGY 116 WARMING HOUSE 04162019 1500 00
2511 CENTER POINT ENERGY 116 CITY HALL 04162019 23624 00
2511 CENTER POINT ENERGY 117 FD 04122019 35974 00
Total 2511 130295 00
2525
2525 MINNESOTA COMPUTER SYST 263763 ADMIN COPIER 04082019 34758 00
2525 MINNESOTA COMPUTER SYST 463318 BW S3HR 04022019 5503 00
Total 2525 40261 00
2635
2635 CORE amp MAIN LP K426017 CULVERT 04242019 145000 00
2635 CORE amp MAIN LP K441242 LOCATOR 04222019 75265 00
Total 2635 220265 00
2698
2698 MPPOA MARCH 2019 NEW MEMBER DUES- LDF 04082019 3900 00
2698 MPPOA MARCH202019 2019 DUES- M FAUST 03202019 5000 00
Total 2698 8900 00
2819
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER- DMV 03012019 5830 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-ADMIN 03012019 13604 00
2819 NORTHERN BUSINESS PRODU 385496-0 PAPER-PD 03012019 2160 00
2819 NORTHERN BUSINESS PRODU 385745-0 CALCULATOR INK 03012019 440 00
2819 NORTHERN BUSINESS PRODU 386830-0 DESK TRAYSCALC ROLLERS 04082019 8169 00
2819 NORTHERN BUSINESS PRODU 386830-1 DVD-RW 03072019 2859 00
2819 NORTHERN BUSINESS PRODU 387602-0 BINDERDESK TRAYSFILE 03082019 8641 00
2819 NORTHERN BUSINESS PRODU 393165-0 PD - OFFICE SUPPLIES 35303 03272019 2158 00
2819 NORTHERN BUSINESS PRODU 396891-0 PENSSTAPLERSTAPLES 05012019 15450 00
2819 NORTHERN BUSINESS PRODU 396891-1 HEATER 05012019 5285 00
2819 NORTHERN BUSINESS PRODU 396891-2 CALCULATOR 05012019 8662 00
2819 NORTHERN BUSINESS PRODU 400116-0 FOLDERSPENS 05012019 6507 00
2819 NORTHERN BUSINESS PRODU 400134-0 EMPLOYEE FOLDERSRECPT B 05012019 16499 00
Total 2819 96264 00
2832
2832 NORTHWEST ASSOC CONSUL 24128 REZONE FOR SCHOOL 04042019 3330 00
2832 NORTHWEST ASSOC CONSUL 24128 SAND PROFILE 04042019 9450 00
2832 NORTHWEST ASSOC CONSUL 24129 VERIZON 04042019 20000 00
Total 2832 32780 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 7
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
2934
2934 PLEASANT LAKE ASSOCIATION 42919 PLEASANT LAKE ASSN 05012019 500000 00
Total 2934 500000 00
2962
2962 PRINCIPAL LIFE 108 INSURANCE 04222019 14144 14144 04232019
Total 2962 14144 14144
3161
3161 S P ELECTRIC INC 7282 OLD SPLICERS REMOVAL 04112019 99054 00
Total 3161 99054 00
3180
3180 SCHWAAB INC C039891 DATE STAMP 03272019 16776 00
3180 SCHWAAB INC C041311 REPLACE PADS 04042019 2050 00
Total 3180 18826 00
4006
4006 SHRED IT USA - MPLS 8126937775 SHREDDING SERVICES 03312019 45401 00
Total 4006 45401 00
4021
4021 SOKS RAPID CAR WASH 216-1384 SQUAD WASHES 04012019 11865 11865 04122019
Total 4021 11865 11865
4040
4040 SUMMIT COMPANIES 1368349 FIRE SYSTEM MAINT 04102019 34500 00
4040 SUMMIT COMPANIES 1368350 ANNUAL FIRE ALARM INSP 04102019 23000 00
4040 SUMMIT COMPANIES 1368538 CITY HALL FIRE SUPPRESION 04052019 19800 00
4040 SUMMIT COMPANIES 1371739 FIRE EXT MAINTENANCE 04292019 46280 00
4040 SUMMIT COMPANIES 1372404 CITY HALLPD - ANNUAL FIRE A 04292019 16715 00
Total 4040 140295 00
4130
4130 STERNBERG LANTERNS INC 50379 LIGHT SOCKETS 04122019 30000 00
Total 4130 30000 00
4222
4222 TASC IN1499967 ADMIN FEES 04172019 43320 00
Total 4222 43320 00
4269
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
4269 TRUEMAN WELTERS EB19158 TRACTOR RENTAL 04102019 162000 00
Total 4269 324000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 8
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4337
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16061 16061 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
4337 UNITED STATES POSTAL SERV April2019 UTILITY BILLS 04302019 16060 16060 04302019
Total 4337 48181 48181
4365
4365 UTILITY CONSULTANTS INC 101046 COLIFORM 03282019 8000 00
Total 4365 8000 00
4377
4377 VERIZON WIRELESS 9827946389 PW IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 FD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD IPAD 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 INVESTIGATOR COMPUTER 04102019 3501 3501 04232019
4377 VERIZON WIRELESS 9827946389 PD CELL PHONE 04102019 16639 16639 04232019
4377 VERIZON WIRELESS 9827946389 PW CELL PHONE 04102019 26360 26360 04232019
Total 4377 57003 57003
4481
4481 WEST CENTRAL SANITATION I 121 RECYCLE 04302019 362792 00
4481 WEST CENTRAL SANITATION I 121 REFUSE 04302019 936578 00
4481 WEST CENTRAL SANITATION I MARCH 2019 RECYCLE 03312019 451419 451419 04122019
4481 WEST CENTRAL SANITATION I MARCH 2019 REFUSE 03312019 908999 908999 04122019
Total 4481 2659788 1360418
4495
4495 WINDSTREAM APRIL2019 LS 805 NORWAY DR E 04032019 24428 24428 04122019
4495 WINDSTREAM APRIL32019 320-274-2793 04032019 3830 3830 04122019
Total 4495 28258 28258
4520
4520 WRIGHT COUNTY HIGHWAY DE 1340 APEX 04162019 12100 00
Total 4520 12100 00
4548
4548 WRIGHT-HENNEPIN COOPERA 104 TC 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 105 CITY HALL SECURITY 04102019 2295 2295 04232019
4548 WRIGHT-HENNEPIN COOPERA 106 LS 1255 BUSINESS BLVD 04102019 1484 1484 04232019
4548 WRIGHT-HENNEPIN COOPERA 119 STREET LIGHTS 04102019 13973 00
Total 4548 20047 6074
4559
4559 XCEL ENERGY 0774352025 ACCOUNT 51-4985655-1 03282019 1910 1910 04122019
4559 XCEL ENERGY 0774781723 ACCOUNT 51-6464610-6 04082019 5051 5051 04122019
4559 XCEL ENERGY 0774798834 ACCOUNT 51-6875531-1 04012019 2964 2964 04122019
4559 XCEL ENERGY 0774851593 ACCOUNT 51-0011253419-4 04012019 52824 52824 04122019
4559 XCEL ENERGY 0774856745 ACCOUNT 51-0010892786-1 04012019 1379 1379 04122019
4559 XCEL ENERGY 0775014393 ACCOUNT 51-6076585-1 04022019 11396 11396 04122019
4559 XCEL ENERGY 0775442400 ACCOUNT 51-6024519-2 04042019 365444 365444 04232019
CITY OF ANNANDALE Payment Approval Report - for City Council Page 9
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
4559 XCEL ENERGY 0775852647 ACCOUNT 51-6024518-1 04082019 156465 156465 04232019
4559 XCEL ENERGY 0777794063 ACCOUNT 51-4192659-4 04182019 3117 00
4559 XCEL ENERGY 0779111699 ACCOUNT 51-4985655-1 04262019 1767 00
4559 XCEL ENERGY 778173400 ACCOUNT 51-4636619-8 04222019 6391 00
Total 4559 608708 597433
4648
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 23750 00
4648 A R ENGH 190447 SPRING MAINTENANCE- CITY 04302019 00 00
4648 A R ENGH 190448 SPRING MAINTENANCE 04302019 21375 00
4648 A R ENGH 190451 SPRING MAINTENANCE- TC 04302019 14250 00
Total 4648 59375 00
4716
4716 JOVANOVICH KADLEC amp ATHM 16709 KRONQUIST LOT 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 LEASE WITH WILES 03312019 28000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 ORD AMENDMENT- MICRO DIS 03312019 5250 00
4716 JOVANOVICH KADLEC amp ATHM 16709 GENERAL 03312019 8750 00
4716 JOVANOVICH KADLEC amp ATHM 16709 PERSONNEL POLICY 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 CONTROLLED BURN HOLD HA 03312019 14000 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
4716 JOVANOVICH KADLEC amp ATHM 16709 BANKRUPTCY- WINDSTREAM 03312019 3500 00
Total 4716 82250 00
4721
4721 MANEY INTERNATIONAL 803662X1 PARTS 02072019 2275 2275 04122019
Total 4721 2275 2275
4734
4734 MOTOROLA SOLUTIONS INC 16042791 RADIO BATTERIES 03252019 16800 00
Total 4734 16800 00
4743
4743 CARDMEMBER SERVICE 122 ATRIST EASEL 05012019 10305 00
4743 CARDMEMBER SERVICE 122 KEROSENE 05012019 6329 00
4743 CARDMEMBER SERVICE 122 POLLUTION CONTROL 05012019 41500 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC 05012019 1639 00
4743 CARDMEMBER SERVICE 122 AMAZON- 40 AMP RELAY 05012019 2898 00
4743 CARDMEMBER SERVICE 122 A-1 - BULB KIT 05012019 2503 00
4743 CARDMEMBER SERVICE 122 MENARDS-POTHOLE PATCH 05012019 47014 00
4743 CARDMEMBER SERVICE 122 MENARDS- PVC BALL VALVE 05012019 1770 00
4743 CARDMEMBER SERVICE 122 TOTAL TOOL- SHOE - PETER 05012019 5123 00
4743 CARDMEMBER SERVICE 122 PRYOR- EXCEL CLASSES- MIS 05012019 25600 00
4743 CARDMEMBER SERVICE 122 MN CHIEFS ASSOC 05012019 19900 00
4743 CARDMEMBER SERVICE 122 BEST BUY- 05012019 8589 00
4743 CARDMEMBER SERVICE 122 BEST BUY 05012019 17178 00
4743 CARDMEMBER SERVICE 122 USPS 05012019 1149 00
4743 CARDMEMBER SERVICE 122 PAYPAL- INTER ASSOC EVID- R 05012019 5000 00
4743 CARDMEMBER SERVICE 122 ACTION TARGETS- 05012019 14662 00
4743 CARDMEMBER SERVICE 122 AMAZON- METAL DUSTPAN 05012019 2894 00
4743 CARDMEMBER SERVICE 122 AMAZON- BATTERIES 05012019 2124 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 10
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 4743 216177 00
4752
4752 NCPERS GROUP LIFE INS MAY2019 INSURANCE 04172019 1600 00
Total 4752 1600 00
4769
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 39944 00
4769 CWP ENTERPRISES INC 5024 HYDRAULIC HOSE 04182019 00 00
Total 4769 39944 00
4793
4793 DELTA DENTAL 7626938 INSURANCE 04152019 139599 139599 04232019
Total 4793 139599 139599
4831
4831 GENERAL RENTAL CENTER OF 1174533 HEATER RENTAL 03112019 11000 00
Total 4831 11000 00
4889
4889 CLASSIC CLEANING COMPANY 28038 CITY HALL- 04082019 67375 00
4889 CLASSIC CLEANING COMPANY 28038 PD- 04082019 14700 00
4889 CLASSIC CLEANING COMPANY 28038 LIBRARY- 04082019 40425 00
4889 CLASSIC CLEANING COMPANY 28039 TC 04082019 23000 00
Total 4889 145500 00
4945
4945 COUNTRY REPAIR INC 1568 KOHLER 100 GENERAT REPAIR 02212019 348966 00
Total 4945 348966 00
4955
4955 WORKFORCE INTEGRITY NET 41219 PREEMPLOYMENT TEST KIRBY 03312019 9300 00
Total 4955 9300 00
4968
4968 Volunteer Firefighter Ben Assoc of MARCH2019 BENEFIT RENEWALS 04012019 20600 20600 04122019
Total 4968 20600 20600
5002
5002 BUREAU OF CRIMINAL APPRE 536318 CJDN 03312019 27000 00
Total 5002 27000 00
5003
5003 BOLAND PRODUCTION SUPPL 11-6569 BLANK AMMUNITION 03042019 10000 00
Total 5003 10000 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 11
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5006
5006 MIDCONTINENT COMMUNICATI 157013401102 FD 04092019 14765 14765 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PW 04092019 26599 26599 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 TC 04092019 3717 3717 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 DMV 04092019 12056 12056 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 PD 04092019 20823 20823 04122019
5006 MIDCONTINENT COMMUNICATI 157013401102 CITY HALL 04092019 24864 24864 04122019
Total 5006 102824 102824
5031
5031 A1 RAPID LUBE 112018 SQUAD 51 OIL CHANGE 04092019 4145 4145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 51 04092019 9145 9145 04122019
5031 A1 RAPID LUBE 112418 SQUAD 52 04092019 1500 1500 04122019
5031 A1 RAPID LUBE 11302018 SQUAD 52 WASH 04092019 1500 1500 04122019
5031 A1 RAPID LUBE DEC2018 SQUAD 51 OIL CHANGE 04092019 5000 5000 04122019
Total 5031 21290 21290
5039
5039 KAMCO 201800 CRACKFILLING 04292019 5395141 00
Total 5039 5395141 00
5056
5056 CASEYS GENERAL STORES IN MARCH 2019 PD FUEL 04012019 6449 6449 04122019
Total 5056 6449 6449
5067
5067 ZUERCHER PA0001614 GPS RECEIVERS 03102019 32800 00
5067 ZUERCHER PA0001669 RECORDS- PROPERTY amp EVID 03292019 102100 00
Total 5067 134900 00
5074
5074 Potentia MN Solar Fund 1 LLC 2019-02-1761- 520 ASH - WTP 02282019 28907 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- CEMETARY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 370 PARK SEWAGE PUMP 02282019 7041 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1762- 520 ASH - WTP 02282019 14573 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 605 WARREN 02282019 3083 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS- 200 EXCELSIOR 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- BALL PARL LIGHTING 02282019 1136 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- CITY HALL 02282019 16228 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- PAVILION 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- HOCKEY RINK 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- UNIT SOUTH 02282019 487 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 30 CEDAR STREET LIGHT 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 111 CEDAR ST 02282019 163 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 15 CONV CLUB RD - LS 02282019 2596 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- LS 805 NORWAY 02282019 324 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1763- 640 ACACIA 02282019 811 00
5074 Potentia MN Solar Fund 1 LLC 2019-02-1792- FD 02282019 5895 00
Total 5074 83677 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 12
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
5075
5075 HALVORSON LANGEMO PASC 2927 ARPIL PROSECUTION 03282019 139479 139479 04232019
5075 HALVORSON LANGEMO PASC 2994 MAY PROSECUTION 04262019 139479 00
Total 5075 278958 139479
5086
5086 CLASSIC CARPET amp FLOOR CA 1312 FD- CARPET CLEANING 04102019 24500 00
Total 5086 24500 00
5099
5099 STENGER PETER march72019 WATER LICENSE 03072019 3200 3200 04042019
Total 5099 3200 3200
5101
5101 GAPINSKI AMELIA 118 MILEAGE- ST PAUL-147 MILES 04222019 8526 8526 04232019
5101 GAPINSKI AMELIA 118 LUNCH- ST PAUL 04222019 1182 1182 04232019
5101 GAPINSKI AMELIA 118 PARKING RAMP- ST PAUL 04222019 1800 1800 04232019
Total 5101 11508 11508
5103
5103 GLUNZ DAVID D 589207 1ST QTR SEXTON FEE 2019 04222019 12000 00
Total 5103 12000 00
5108
5108 RECON ROBOTICS 74975 ROBOT REPAIR 03082019 40000 00
Total 5108 40000 00
5120
5120 MELGAARD SERVICES 115 LITTLE JIMS REPAIR 03272019 65000 00
Total 5120 65000 00
5137
5137 HARTZELL STEVE DEC2018 SAFETY SHOES 04092019 13998 13998 04122019
Total 5137 13998 13998
5138
5138 HOGLUND BUS COMPANY 133269 PLOW TRUCK REPAIR 04232019 242869 00
Total 5138 242869 00
5139
5139 GIEBENHAIN KARIE APRIL 2019 TRAVELTRAINING 04292019 1259 00
Total 5139 1259 00
5140
5140 GRABHAM JUDY APRIL2019 GARDEN MATERIALS REIMBUR 04302019 12312 00
CITY OF ANNANDALE Payment Approval Report - for City Council Page 13
Report dates 422019-562019 May 02 2019 0305PM
Vendor Vendor Name Invoice Number Description Invoice Date Net Amount Paid Date Paid Voided
Invoice Amount
Total 5140 12312 00
Grand Totals 23368095 2894268
Dated __________________________________________
Mayor __________________________________________
Dwight Gunnarson
City Council __________________________________________
Shelly Jonas
__________________________________________
Jullie Hastings
__________________________________________
Corey Czycalla
__________________________________________
Matthew Wuollet
Report Criteria
Detail report
Invoices with totals above $0 included
Paid and unpaid invoices included
Invoice DetailGL Account = 101-699
CITY OF ANNANDALE Check Register Page 1Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03012019 03042019 1005 EFT - ASPIRE 14 47332-03012019 03042019 1006 EFT - FLEXSYSTEM 9 21153-03012019 03042019 1007 EFT - MINNESOTA 8 152678-03012019 03042019 1008 EFT-FURTHER 12 194842-03012019 03042019 1008 EFT-FURTHER 12 70000-03012019 03042019 1009 EFT-PERA 5 197211-03012019 03042019 1009 EFT-PERA 5 227551-03012019 03042019 1009 EFT-PERA 5 164253-03012019 03042019 1009 EFT-PERA 5 246377-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 192246-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 64617-03012019 03042019 1010 EFTPS 7 291789-03152019 03182019 1011 EFT - ASPIRE 14 50777-03152019 03182019 1012 EFT - FLEXSYSTEM 9 21153-03152019 03182019 1013 EFT - MINNESOTA 8 170353-03152019 03182019 1014 EFT-FURTHER 12 199842-03152019 03182019 1015 EFT-NATIONWIDE RETIREMENT 3 45727-03152019 03182019 1016 EFT-PERA 5 202077-03152019 03182019 1016 EFT-PERA 5 233162-03152019 03182019 1016 EFT-PERA 5 167748-03152019 03182019 1016 EFT-PERA 5 251623-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 246445-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 80760-03152019 03182019 1017 EFTPS 7 338787-03012019 03042019 3231 FERRELL MISTY 123 207493-03012019 03042019 3232 HINNENKAMP KELLY 127 296930-03012019 03042019 3233 JARMON VICKI I 134 162692-03012019 03042019 3234 KRIENKE CARRIE L 136 118186-03012019 03042019 3235 GAPINSKI AMELIA 142 76605-03012019 03042019 3236 GIEBENHAIN KARIE 143 63912-03012019 03042019 3237 HERR JEFFREY J 208 198056-03012019 03042019 3238 STANDAFER PETER A 217 171766-03012019 03042019 3239 BERG TERESA 233 29593-03012019 03042019 3240 TAVARES AARON J 234 144943-03012019 03042019 3241 PETERSON KENNETH J 235 6543-03012019 03042019 3242 ETSHOKIN LOUIS RICHARD 238 69332-03012019 03042019 3243 GRIGGS DEREK C 245 173791-03012019 03042019 3244 SMITH TARA 251 104275-03012019 03042019 3245 MARES NICHOLAS J 306 46531-03012019 03042019 3246 GLUNZ DAVID D 323 215466-03012019 03042019 3247 STENGER PETER 324 148864-03012019 03042019 3248 COREY NICHOLLE 328 176647-03012019 03042019 3249 HARTZELL STEVE 329 123679-03012019 03042019 3250 WICKER MITCHELL 360 157433-03012019 03042019 3251 HASTINGS JULLIE K 803 13391-
CITY OF ANNANDALE Check Register Page 2Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 3252 FERRELL MISTY 123 186726-03152019 03182019 3253 HINNENKAMP KELLY 127 296930-03152019 03182019 3254 JARMON VICKI I 134 156691-03152019 03182019 3255 KRIENKE CARRIE L 136 109765-03152019 03182019 3256 GAPINSKI AMELIA 142 78334-03152019 03182019 3257 GIEBENHAIN KARIE 143 62780-03152019 03182019 3258 HERR JEFFREY J 208 228423-03152019 03182019 3259 STANDAFER PETER A 217 188333-03152019 03182019 3260 TAVARES AARON J 234 143820-03152019 03182019 3261 ETSHOKIN LOUIS RICHARD 238 36648-03152019 03182019 3262 Void03152019 03182019 3263 SMITH TARA 251 100781-03152019 03182019 3264 MARES NICHOLAS J 306 9080-03152019 03182019 3265 GLUNZ DAVID D 323 263393-03152019 03182019 3266 STENGER PETER 324 156283-03152019 03182019 3267 COREY NICHOLLE 328 141112-03152019 03182019 3268 HARTZELL STEVE 329 114544-03152019 03182019 3269 WICKER MITCHELL 360 231604-03152019 03182019 3270 RANDALL STEVEN R 570 23273-03152019 03182019 3271 TOMES BRIAN C 571 19117-03152019 03182019 3272 EDWARDS DANIEL J 572 25765-03152019 03182019 3273 JARVIS TRYSTON 573 16808-03152019 03182019 3274 GRIGGS DEREK C 245 209088-03152019 03182019 53766 RAMSTAD DONALD E 533 17270 03152019 03182019 54586 RAMSTAD DONALD E 533 26412 03012019 03042019 54850 ENGFER NANCY E 204 207304-03012019 03042019 54851 FLEMMING MITCHELL E 206 33085-03012019 03042019 54852 HALLER JOSEPH D 305 277811-03012019 03042019 54853 SMART MATTHEW A 331 31168-03012019 03042019 54854 GUNNARSON DWIGHT R 802 18932-03012019 03042019 54855 JONAS SHELLY 804 13391-03012019 03042019 54856 CZYCALLA COREY 806 13391-03012019 03042019 54857 WUOLLET MATTHEW L 821 13391-03012019 03042019 54858 ROTH GREGORY W 912 1847-03012019 03042019 54859 FRANZEN CLIFFORD 913 1847-03012019 03042019 54860 SCHWARZKOPF ERIC 917 2770-03012019 03042019 54861 BAACK LONNIE L 919 1847-03012019 03042019 54862 NILSON MAYNARD A 921 1847-03012019 03042019 54863 DRISTE JOHN 950 1847-03012019 03042019 54864 PETERSON LEE W 980 1847-03012019 03042019 54865 SEAGRAVES RICHARD T 985 1847-03012019 03042019 54866 WAGNER RICHARD 990 2770-03152019 03182019 54949 ENGFER NANCY E 204 163991-03152019 03182019 54950 FLEMMING MITCHELL E 206 33085-03152019 03182019 54951 FAUST MITCHEL L 241 144665-03152019 03182019 54952 HALLER JOSEPH D 305 293266-03152019 03182019 54953 SMART MATTHEW A 331 12698-03152019 03182019 54954 BROWN JOHN D 501 16254-03152019 03182019 54955 DAGNER JOHN A 503 42112-
CITY OF ANNANDALE Check Register Page 3Report Dates 312019-3312019 Apr 30 2019 0431PM
Pay Period Check Check PayeeDate Issue Date Number Payee ID Amount
03152019 03182019 54956 FAHEY MARCUS D 507 17270-03152019 03182019 54957 GRINDLE GARY L 512 65938-03152019 03182019 54958 HAAG BRIAN 514 151209-03152019 03182019 54959 MACHOVSKY JR DALE R 529 27088-03152019 03182019 54960 PICKEN SCOTT W 53203152019 03182019 54961 RAMSTAD DONALD E 533 35555-03152019 03182019 54962 ROEPKE JEFFREY A 535 34539-03152019 03182019 54963 TOWNSEND KRISTOPHER C 546 91057-03152019 03182019 54964 WANG RYAN A 549 46822-03152019 03182019 54965 WUOLLET MATTHEW L 553 24934-03152019 03182019 54966 TORRES HORACIO JR 563 43404-03152019 03182019 54967 KOLB JOHN E 564 25749-03152019 03182019 54968 DWENGER JOSEPH A JR 568 41557-03152019 03182019 54969 HARVEY ADAM 574 42019-03152019 03182019 54970 SCHMIDT LISA A 575 14869-03152019 03182019 54971 OLSON NATHAN G 576 14869-03152019 03182019 54972 PEARSON SEAN 577 27151-03152019 03182019 54973 SCHAUFLER CHRISTINA 578 26505-03152019 03182019 54974 HOEFER JUSTIN A 579 18101-03152019 03182019 54982 RAMSTAD DONALD E 533 26412-03152019 03182019 54983 RAMSTAD DONALD E 533 17270-
Grand Totals 119 12049646-
CITY OF ANNANDALE
REQUEST FOR COUNCIL ACTION
Originating Department Administration
Meeting Date May 6 2019
Agenda No 3A
Agenda Section New Business
Item 2018 Audit
BACKGROUND The City is required to conduct an audit annually The attached audit will be presented at the meeting RECOMMENDATION Motion to approve the 2018 Audit as presented
CPAS amp ADVISORSWILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
AUDITED FINANCIAL STATEMENTS AND
DECEMBER 31 2018
CONWAY DEUTH amp SCHMIESING PLLP
SUPPLEMENTARY INFORMATION
This page intentionally left blank
PAGE
ELECTED OFFICIALS AND ADMINISTRATION 1
INDEPENDENT AUDITORS REPORT 2-4
REQUIRED SUPPLEMENTARY INFORMATION
Managements Discussion and Analysis 5-12
BASIC FINANCIAL STATEMENTS
Statement of Net Position 13
Statement of Activities 14
Balance Sheet - Governmental Funds 15
Reconciliation of the Governmental FundsBalance Sheet to the Statement of Net Position 16
Statement of Revenues Expenditures and Changes in Fund Balances -Governmental Funds 17
Reconciliation of the Statement of Revenues Expendituresand Changes in Fund Balances of Governmental Fundsto the Statement of Activities 18
Statement of Revenues Expenditures and Changes in Fund Balances -Budget and Actual - General Fund 19
Statement of Net Position - Proprietary Funds 20
Statement of Revenues Expenses and Changes in Net Position -Proprietary Funds 21
Statement of Cash Flows - Proprietary Funds 22-23
Notes to the Financial Statements 24-57
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of the Proportionate Share of the Net Pension Liability 58
Schedule of Employer Contributions 59
Schedule of Changes in the Citys Net Pension Liability and Related Ratios 60
Notes to the Required Supplementary Information 61-63
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
PAGE
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
SUPPLEMENTARY INFORMATION
COMBINING STATEMENTS OF NONMAJOR FUNDS
Combining Balance Sheet - Nonmajor Governmental Funds 64
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds 65
Combining Balance Sheet - Nonmajor Governmental Funds - Special Revenue 66
Combining Balance Sheet - Nonmajor Governmental Funds - Debt Service 67
Combining Balance Sheet - Nonmajor Governmental Funds - Capital Projects 68
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Special Revenue 69
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Debt Service 70
Combining Statement of Revenues Expenditures and Changes in Fund Balances -Nonmajor Governmental Funds - Capital Projects 71
FINANCIAL SCHEDULE
Schedule of Long-Term Liabilities 72
COMPLIANCE SECTION
Independent Auditors Report on Minnesota Legal Compliance 73
Independent Auditors Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of Financial Statements Performedin Accordance with Government Auditing Standards 74-75
Schedule of Findings 76-77
Summary Schedule of Prior Audit Findings 78
Elected Officials Position Term Expires
Dwight Gunnarson Mayor December 31 2018
Corey Czycalla Council Member December 31 2018
Shelly Jonas Council Member December 31 2018
Matthew Wuollet Council Member December 31 2020
Jullie Hastings Council Member December 31 2020
Administration
Kelly Hinnenkamp Administrator Appointed
Misty Ferrell Treasurer Appointed
CITY OF ANNANDALE MINNESOTA
ELECTED OFFICIALS AND ADMINISTRATIONDECEMBER 31 2018
1
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Report on the Financial Statements
Managements Responsibility for the Financial Statements
Auditors Responsibility
beli
INDEPENDENT AUDITORS REPORT
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 Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Cityrsquos basic financial statements as listed in the table of contents
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
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
2
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 entitys 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 entitys 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
Opinions
Other Matters
Required Supplementary Information
Supplementary and Other Information
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 Annandale Minnesota as of December 31 2018 and the respective changes in financial position and where applicable cash flows thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America
Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions and the Schedule of Changes in the Citys 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 managements 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
3
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Cityrsquos basic financial statements The statements and schedules listed in the table of contents as supplementary information and the Elected Officials and Administration section are presented for purposes of additional analysis and are not a required part of the basic financial statements
The supplementary information is the responsibility of management and was derived from and relates 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 supplementary information is fairly stated in all material respects in relation to the basic financial statements as a whole
The Elected Officials and Administration section has 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 the information presented
Other Reporting Required by Government Auditing Standards
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
4
In accordance with Government Auditing Standards we have also issued our report dated May 6 2019 on our consideration of the Citys 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 results of that testing and not to provide an opinion on the effectiveness of the Cityrsquos 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 Cityrsquos internal control over financial reporting and compliance
May 6 2019
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REQUIRED SUPPLEMENTARY INFORMATION
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-
-
-
-
The City as a Whole Statement of Net Position and Statement of Activities
Our analysis of the City of Annandale begins with the Statement of Net Position and the Statement of Activities One of the most important questions asked about the Cityrsquos finances is ldquoIs the City as a whole better off or worse off as a result of the yearrsquos activitiesrdquo The Statement of Net Position and the Statement of Activities both report information about the City as a whole and about its activities in a way that helps answer this question The Statement of Net Position includes all assets and deferred outflows of resources and liabilities and deferred inflows of resources using the accrual basis of accounting In the Statement of Activities all of the current yearrsquos revenues and expenses are taken into account regardless of when cash is received or paid These two statements report the Cityrsquos net position and changes in them You can think of the Cityrsquos net positionmdashthe difference between assets and deferred outflows of resources and liabilities and deferred inflows of resourcesmdashas one way to measure the Cityrsquos financial health Over time increases or decreases in the Cityrsquos net position is one indicator of whether the Cityrsquos financial health is improving or deteriorating
You will need to consider other nonfinancial factors however to assess the overall health of the City of Annandale
In the Statement of Net Position and the Statement of Activities we divide the City into two kinds of activities
Governmental Activities - Most of the Citys basic services are reported here including general government public safety public works culture and recreation and economic development Property taxes and state and federal grants finance most of these activities
5
This annual report consists of a series of financial statements The Statement of Net Position and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the Cityrsquos finances Fund financial statements are presented after the Statement of Activities Fund financial statements also report the Cityrsquos operations in more detail than the government-wide statements by providing information about the Cityrsquos funds The notes to the financial statements provide information that is essential to a full understanding of the data provided in the government-wide and fund financial statements This annual report also contains other supplementary information in addition to the basic financial statements
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
This section of the basic financial statements of the City of Annandale (the City) presents a discussion and analysis of the Cityrsquos financial performance during the fiscal year ended December 31 2018 Please read it in conjunction with the Cityrsquos basic financial statements following this section
Financial Highlights
The assets and deferred outflows of resources of the City exceeded liabilties and deferred inflows of resources by $16461537
The Cityrsquos total net position increased by $1317551
The Cityrsquos governmental funds reported combined ending fund balances of $4349540 an increase of $122322 The Governmental Funds have $1240520 available for spending at the Citys discretion
At the end of the current fiscal year unassigned fund balance for the General Fund was $1697339 or 9417 of total General Fund expenditures of $1802505
Using This Annual Report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
The proprietary fund financial statements can be found on pages 20-23 of this report
Notes to the 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 The notes to the financial statements can be found on pages 24-57 of this report
6
Proprietary Funds - When the City of Annandale charges customers for the services it providesmdashwhether to outside customers or to other units of the Citymdashthese services are generally reported in proprietary funds Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities In fact the Cityrsquos enterprise funds are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information such as cash flows for proprietary funds
Business-Type Activities - The City charges a fee to customers to help it cover all or most of the cost of certain services it provides The Citys Water Sewer RefuseRecycling and Storm Utility funds are reported here
The Citys Most Significant Funds Fund Financial Statements
Our analysis of the Cityrsquos major funds begins with the fund financial statements These statements provide detailed information about the most significant fundsmdashnot the City as a whole Some funds are required to be established by state law and by bond covenants However the City Council establishes other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes grants and other money The Citys two kinds of funds-governmental and proprietary-use different accounting approaches
Governmental Funds - Most of the Cityrsquos basic services are reported in governmental funds Governmental funds focus on how money flows into and out of those funds and the balances left at year-end that are available for spending These funds are reported using an accounting method called modified accrual accounting which measures cash and all other financial assets that can readily be converted to cash The governmental fund statements provide a detailed short-term view of the Cityrsquos general government operations and the basic services it provides Governmental fund information helps the reader of the statements determine whether there are more or fewer financial resources that can be spent in the near future to finance the Cityrsquos programs We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in a reconciliation after the fund financial statements
The governmental fund financial statements can be found on pages 15-19 of this report
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 5190696$ 5190633$ 63$ Net Capital Assets 10406611 10638601 (231990) Net Pension Asset 517946 440028 77918
Total Assets 16115253 16269262 (154009)
Deferred Outflows of Resources 621929 855064 (233135)
Total Assets and DeferredOutflows of Resources 16737182$ 17124326$ (387144)$
Current and Other Liabilities 1080947$ 1068593$ 12354$ Long-Term Liabilities 5393130 6383354 (990224)
Total Liabilities 6474077 7451947 (977870)
Deferred Inflows of Resources 886892 904112 (17220)
Net PositionNet Investment in Capital Assets 4962623 4377847 584776 Restricted 2021421 2178740 (157319) Unrestricted 2392169 2211680 180489
Total Net Position 9376213 8768267 607946
Total Liabilities Deferred Inflowsof Resources and Net Position 16737182$ 17124326$ (387144)$
Statement of Net Position
The Cityrsquos net position increased from a year ago Our analysis below focuses on the net position (Tables 1 and 2) andchanges in net position (Tables 3 and 4) of the Cityrsquos governmental and business-type activities
Table 1Comparative Condensed Statement of Net Position
Governmental Activities
7
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeCurrent and Other Assets 179979$ 85557$ 94422$ Equity Interest 7004898 7023511 (18613) Net Capital Assets 10543232 10887885 (344653)
Total Assets 17728109 17996953 (268844)
Deferred Outflows of Resources 35051 59103 (24052)
Total Assets and DeferredOutflows of Resources 17763160$ 18056056$ (292896)$
Current and Other Liabilities 1595412$ 1396254$ 199158$ Long-Term Liabilities 9028762 10236810 (1208048)
Total Liabilities 10624174 11633064 (1008890)
Deferred Inflows of Resources 53662 47273 6389
Net PositionNet Investment in Capital Assets 8625232 8741281 (116049) Restricted 74208 36985 37223 Unrestricted (1614116) (2402547) 788431
Total Net Position 7085324 6375719 709605
Total Liabilities Deferred Inflowsof Resources and Net Position 17763160$ 18056056$ (292896)$
Business-Type Activities
8
Comparative Condensed Statement of Net PositionTable 2
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 652677$ 598474$ 54203$ Operating Grants and Contributions 122213 111759 10454 Capital Grants and Contributions 187016 576626 (389610)
General RevenuesProperty Taxes 1485895 1463472 22423 Tax Increments 20858 20203 655 Grants and Contributions Not Restricted 453773 422194 31579 Investment Income 16929 17237 (308) Miscellaneous 4178 17678 (13500) Gain on Sale of Asset 6034 268371 (262337)
Total Revenues 2949573 3496014 (546441)
EXPENSESGeneral Government 502902 475597 27305 Public Safety 970131 1019255 (49124) Public Works 769202 840164 (70962) Culture and Recreation 148880 762606 (613726) Economic Development 45238 85505 (40267) Interest on Long-Term Debt 160274 176897 (16623)
Total Expenses 2596627 3360024 (763397) Change in Net Position before Transfers 352946 135990 216956
TRANSFERS 255000 247000 8000 Change in Net Position 607946 382990 224956
NET POSITION BEGINNING OF YEAR 8768267 8385277 382990
NET POSITION END OF YEAR 9376213$ 8768267$ 607946$
Governmental Activities
Net position of the Citys governmental activities increased by $607946 Table 3 presents the key elements of the increase
Table 3Comparative Condensed Statement of Activities
Governmental Activities
9
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
2018 2017 ChangeREVENUESProgram Revenues
Fees Fines and Charges for Services 3213338$ 2905848$ 307490$ General Revenues
Investment Income 2700 (1558) 4258 Total Revenues 3216038 2904290 311748
EXPENSESWater 492444 485751 6693 Sewer 1441099 1331721 109378 RefuseRecycling 199326 196627 2699 Storm Utility 99951 91130 8821
Total Expenses 2232820 2105229 127591 Change in Net Position before Transfers 983218 799061 184157
TRANSFERS (255000) (247000) (8000) CHANGE IN EQUITY INTEREST (18613) (70479) 51866
Change in Net Position 709605 481582 176157
NET POSITION BEGINNING OF YEAR 6375719 5894137 481582
NET POSITION END OF YEAR 7085324$ 6375719$ 709605$
Comparative Condensed Statement of Activities
Business-Type Activities
10
Table 4
Business-Type Activities
The net position of our business-type activities increased by $709605 The net increase was due to the following funds change in net position Water - $26607 decrease Sewer - $822708 increase RefuseRecycling - $9397 increase and Storm Utility - $95893 decrease
The following tables indicate the changes in net position for the Citys business-type activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Capital Project Funds - The capital projects fund balances increased by $13451
11
Over the course of the year the City of Annandale City Council did not revise the budget The General Fund budget predicted a $5178 increase in fund balance which includes the operations of the Motor Vehicle department The actual change in fund balance was an increase of $212334 This is due to both revenues being higher and expenditures being lower than anticipated Mobile Home tax revenues building permit fees and state aids were over budgeted amounts and both current and capital outlay expenditures were under budgeted amounts
Governmental Activities
Revenues - The following chart visually illustrates the Citys revenue by source for its governmental activities
Financial Analysis of the Citys Funds
General Fund - The Citys General Fund Balance increased by $212334 for 2018 The increase is mainly due to an increase in building permit fees and local government aid with a slight increase in public safety expenditures and a decrease in transfers to other funds
Special Revenue Funds - The Citys special revenue fund balances decreased by $53786 A majority of the decrease was due to expenditures for the pintail drive extension project
Debt Service Funds - The debt service fund balances decreased by $49677 The main reason for the decrease was due to customer prepayments made on special assessments in prior years
General Fund Budgetary Highlights
Fees Fines and Charges for Services
2213
Operating Grants and Contributions
414
Capital Grants and Contributions
634
Property Taxes5038 Tax Increments
071
Grants and Contributions Not Restricted1538
Investment Income057
Miscellaneous014
Gain on Sale of Asset021
Revenue by Source - Governmental Activities
CITY OF ANNANDALE MINNESOTA
MANAGEMENTS DISCUSSION AND ANALYSISDECEMBER 31 2018
Long-Term Liabilities
At the end of 2018 the City of Annandale had $15543549 in bonds notes and equipment certificates outstanding Refer to Note 7 of the Notes to the Financial Statements for a schedule showing the Citys long-term liability activity
Economic Factors and Next Years Budget
The City of Annandales appointed officials considered many factors when setting the fiscal year 2019 budget rates and fees that will be charged by the funds of the City The major factor accounted for when adopting the General Fund budget was to hold all line items as much as possible to the 2018 final budget
Contacting the Citys Financial Management
This financial report is designed to provide our residents customers and creditors with a general overview of the Citys finances and to show the Citys accountability for the money it receives If you have any questions about this report or need additional information contact the City of Annandale 30 Cedar Street E Annandale Minnesota 55302
12
Capital Assets
At the end of 2018 the City of Annandale had $47826808 invested in a broad range of capital assets Refer to Note 5 of the Notes to the Financial Statements for a schedule showing the Citys capital asset activity During 2018 the City had a large increase in improvements other than buildings related to the completion of the Southside Trail project
BASIC FINANCIAL STATEMENTS
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Governmental Business-TypeActivities Activities Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Cash and Investments 3413471$ 86083$ 3499554$ Restricted Cash 74208 74208 Taxes Receivable - Delinquent 14909 14909 Special Assessments Receivable
Delinquent 4423 4158 8581 Current and Deferred 650220 14885 665105
Accounts Receivable 96631 339457 436088 Interest Receivable 9 9 Prepaid Items 75903 22861 98764 Internal Balances 385956 (385956) Due from Other Governments 186251 24283 210534 Land Held for Resale 362923 362923 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 2696744 277948 2974692 Other Capital Assets Net of Depreciation 7709867 10265284 17975151
Net Pension Asset 517946 517946 Total Assets 16115253 17728109 33843362
Deferred Outflows of Resources 621929 35051 656980
Total Assets and Deferred Outflows of Resources 16737182$ 17763160$ 34500342$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 65859$ 26908$ 92767$ Contracts Payable 27913 27913 Due to Other Governments 15676 309797 325473 Salaries and Benefits Payable 30329 7259 37588 Interest Payable 61920 78448 140368 Unearned Revenue 36250 36250
Long-Term LiabilitiesNet Pension Liability 696581 197762 894343 Other Long-Term Liabilities Due Within One Year 843000 1173000 2016000 Other Long-Term Liabilities Due in More than One Year 4696549 8831000 13527549
Total Liabilities 6474077 10624174 17098251
Deferred Inflows of Resources 886892 53662 940554
Net PositionNet Investment in Capital Assets 4962623 8625232 13587855 Restricted for
Debt Service 2009940 2009940 Tax Increment 11481 11481 Capital Replacement 74208 74208
Unrestricted 2392169 (1614116) 778053 Total Net Position 9376213 7085324 16461537
Total Liabilities Deferred Inflows of Resourcesand Net Position 16737182$ 17763160$ 34500342$
See Accompanying Notes to the Financial Statements13
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONDECEMBER 31 2018
Fees Fines and Operating CapitalCharges for Grants and Grants and Governmental Business-Type
Expenses Services Contributions Contributions Activities Activities Total
GOVERNMENTAL ACTIVITIESGeneral Government 502902$ 286176$ $ $ (216726)$ $ (216726)$ Public Safety 970131 208144 115858 41000 (605129) (605129) Public Works 769202 130069 6355 26201 (606577) (606577) Culture and Recreation 148880 15413 55109 (78358) (78358) Economic Development 45238 12875 30108 (2255) (2255) Interest on Long-Term Debt 160274 34598 (125676) (125676)
Total Governmental Activities 2596627 652677 122213 187016 (1634721) 0 (1634721)
BUSINESS-TYPE ACTIVITIESWater 492444 565694 73250 73250 Sewer 1441099 2393268 952169 952169 RefuseRecycling 199326 208571 9245 9245 Storm Utility 99951 45805 (54146) (54146)
Total Business-Type Activities 2232820 3213338 0 0 0 980518 980518
Total 4829447$ 3866015$ 122213$ 187016$ (1634721) 980518 (654203)
GENERAL REVENUESProperty Taxes 1485895 1485895 Tax Increments 20858 20858 Grants and Contributions not Restricted to Specific Programs 453773 453773 Unrestricted Investment Earnings 16929 2700 19629 Miscellaneous 4178 4178 Gain on Sale of Asset 6034 6034
TRANSFERS 255000 (255000) CHANGE IN EQUITY INTEREST (18613) (18613)
Total 2242667 (270913) 1971754 Change in Net Position 607946 709605 1317551
NET POSITION BEGINNING OF YEAR 8768267 6375719 15143986
NET POSITION END OF YEAR 9376213$ 7085324$ 16461537$
See Accompanying Notes to the Financial Statements14
CITY OF ANNANDALE MINNESOTA
STATEMENT OF ACTIVITIESYEAR ENDED DECEMBER 31 2018
Program RevenuesNet (Expense) Revenue and
Changes in Net Position
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
ASSETSCash and Investments 1062209$ 2351262$ 3413471$ Taxes Receivable - Delinquent 14534 375 14909Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 650220 650220
Accounts Receivable 5744 90887 96631Interest Receivable 9 9 Prepaid Items 73751 2152 75903Due from Other Funds 920750 190388 1111138Due from Other Governments 135407 50844 186251Land Held for Resale 362923 362923
Total Assets 2212395$ 3703483$ 5915878$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 41982$ 23877$ 65859$ Contracts Payable 3574 24339 27913 Due to Other Funds 143500 581682 725182 Due to Other Governments 6200 9476 15676Salaries and Benefits Payable 30195 134 30329Unearned Revenue 36250 36250
Total Liabilities 261701 639508 901209
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 14534 375 14909Special Assessments 650220 650220
Total Deferred Inflows of Resources 14534 650595 665129
Fund Balance Nonspendable 73751 2152 75903 Restricted 1532633 1532633 Committed 847422 847422 Assigned 165070 487992 653062Unassigned 1697339 (456819) 1240520
Total Fund Balance 1936160 2413380 4349540
Total Liabilities Deferred Inflows ofResources and Fund Balance 2212395$ 3703483$ 5915878$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
BALANCE SHEETGOVERNMENTAL FUNDS
DECEMBER 31 2018
15
2018
Total Fund Balances - Governmental Funds 4349540$
Amounts reported for governmental activities in the Statement of Net Position are differentbecause
Capital assets used in governmental activities are not financial resources and therefore arenot reported as assets in the governmental funds
Capital Assets 31934114Less Accumulated Depreciation (21527503) Net Pension Asset 517946
Certain receivables will be collected in subsequent years but are not available soon enoughto pay for the current periods expenditures and therefore are deferred in the funds
Delinquent Property Taxes 14909Special Assessments 650220
Deferred outflows and inflows of resources related to pensions are applicable to futureperiods and therefore are not reported in the funds
Deferred Outflows of Resources Related to Pensions 621929 Deferred Inflows of Resources Related to Pensions (886892)
Long-term liabilities including bonds payable are not due and payable in the current periodand therefore are not reported as liabilities in the funds
Bonds Payable (4525000) Notes Payable (1014000) Compensated Absences Payable (22979) Interest Payable (61920) Bond Discount 22430 Net Pension Liability (696581)
Total Net Position - Governmental Activities 9376213$
See Accompanying Notes to the Financial Statements16
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION
DECEMBER 31 2018
Nonmajor TotalGeneral Governmental Governmental
(101 102) Funds Funds
REVENUESProperty Taxes 1167129$ 323230$ 1490359$ Tax Increments 20858 20858 Special Assessments 149671 149671 Licenses and Permits 106197 106197 Intergovernmental 568136 30310 598446 Charges for Services 457769 51231 509000 Fines and Forfeitures 12790 4299 17089 Investment Income 22019 (5090) 16929 Contributions and Donations 1700 133758 135458 Miscellaneous 22893 679 23572
Total Revenues 2358633 708946 3067579
EXPENDITURESCurrent
General Government 412224 10807 423031 Public Safety 889531 42738 932269 Public Works 379968 379968 Culture and Recreation 111127 3735 114862 Economic Development 52358 52358
Debt Service Principal 821000 821000 Interest and Other Charges 162964 162964
Capital Outlay General Government 5206 5206 Public Safety 4449 67055 71504 Public Works 14006 14006 Culture and Recreation 102651 102651 Economic Development 144931 144931
Total Expenditures 1802505 1422245 3224750 Excess (Deficiency) of Revenues
Over (Under) Expenditures 556128 (713299) (157171)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 1145914 1145914 Transfers Out (343794) (547120) (890914)
Total Other Financing Sources (Uses) (343794) 623287 279493 Net Change in Fund Balances 212334 (90012) 122322
FUND BALANCE BEGINNING OF YEAR 1723826 2503392 4227218
FUND BALANCE END OF YEAR 1936160$ 2413380$ 4349540$
See Accompanying Notes to the Financial Statements17
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
YEAR ENDED DECEMBER 31 2018
2018
Total Net Change in Fund Balances - Governmental Funds 122322$
Amounts reported for governmental activities in the Statement of Activities are different because
Capital outlays are reported in governmental funds as expenditures However in the Statementof Activities the cost of those assets is allocated over the estimated useful lives asdepreciation expense
Capital Outlays 360225 Depreciation Expense (556497) Disposal of Capital Assets (75923) Accumulated Depreciation Related to Disposed Capital Assets 40205
Revenues in the Statement of Activities that do not provide current financial resources are notreported as revenues in the funds
Special Assessments (115073)
Delinquent property taxes receivable will be collected in subsequent years but are not availablesoon enough to pay for the current periods expenditures and therefore are deferred in the funds (4464)
Some expenses reported in the Statement of Activities do not require the use of currentresources and therefore are not reported as expenditures in governmental funds
Compensated Absences 313 Net Pension Asset 77918Net Pension Liability 151145 Deferred Outflows of Resources Related to Pensions (233135) Deferred Inflows of Resources Related to Pensions 17220
Principal Retirement of Long-Term Debt 821000 Amortization of Bond Discounts (4234) Change in Interest Payable 6924
Change in Net Position - Governmental Activities 607946$
See Accompanying Notes to the Financial Statements18
CITY OF ANNANDALE MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES EXPENDITURESAND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Bond proceeds provide current financial resources to governmental funds but issuing debtincreases long-term liabilities in the Statement of Net Position Repayment of bond principalis an expenditure in the governmental funds but the repayment reduces long-term liabilities inthe Statement of Net Position
Over(Under)
FinalOriginal Final Actual Budget
REVENUESProperty Taxes 1120885$ 1120885$ 1167129$ 46244$ Licenses and Permits 61800 61800 106197 44397 Intergovernmental 541952 541952 568136 26184 Charges for Services 437744 437744 457769 20025 Fines and Forfeitures 8700 8700 12790 4090 Investment Income 22019 22019 Contributions and Donations 1700 1700 Miscellaneous 20000 20000 22893 2893
Total Revenues 2191081 2191081 2358633 167552
EXPENDITURESCurrent
General Government 435269 435269 412224 (23045) Public Safety 896497 896497 889531 (6966) Public Works 399317 399317 379968 (19349) Culture and Recreation 127325 127325 111127 (16198)
Capital OutlayGeneral Government 30500 30500 5206 (25294) Public Safety 1500 1500 4449 2949
Total Expenditures 1890408 1890408 1802505 (87903) Excess (Deficiency) of Revenues
Over (Under) Expenditures 300673 300673 556128 255455
OTHER FINANCING SOURCES (USES)Transfers Out (295495) (295495) (343794) (48299)
Net Change in Fund Balance 5178$ 5178$ 212334 207156$
FUND BALANCE BEGINNING OF YEAR 1723826
FUND BALANCE END OF YEAR 1936160$
See Accompanying Notes to the Financial Statements19
Budgeted Amounts
YEAR ENDED DECEMBER 31 2018
CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESBUDGET AND ACTUAL
GENERAL FUND
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current AssetsCash and Investments 23690$ 62393$ $ $ 86083$ Special Assessments Receivable
Delinquent 1167 2096 682 213 4158Current and Deferred 3859 9981 901 144 14885
Accounts Receivable 46078 269326 19878 4175 339457Prepaid Items 9433 12352 1076 22861Due from Other Governments 144 24111 24 4 24283Due from Other Funds 98000 21000 119000
Total Current Assets 182371 401259 22561 4536 610727
Noncurrent AssetsRestricted Cash 74208 74208 Equity Interest in Joint Venture 7004898 7004898 Capital Assets
Assets Not Being Depreciated 66881 191067 20000 277948Other Capital Assets Net of Depreciation 4497152 3259174 2505 2506453 10265284
Total Noncurrent Assets 4564033 10529347 22505 2506453 17622338 Total Assets 4746404 10930606 45066 2510989 18233065
Deferred Outflows of ResourcesRelated to Pensions 12805 20153 2093 35051
Total Assets and DeferredOutflows of Resources 4759209$ 10950759$ 47159$ 2510989$ 18268116$
LIABILITIES DEFERRED INFLOWS OFRESOURCES AND NET POSITIONLiabilities
Current LiabilitiesAccounts Payable 11931$ 1765$ 13212$ $ 26908$ Due to Other Funds 445076 28318 31562 504956 Due to Other Governments 453 308238 1106 309797 Salaries and Benefits Payable 2732 3813 714 7259Interest Payable 13173 65275 78448Notes Payable Due Within One Year 232000 941000 1173000
Total Current Liabilities 260289 1765167 43350 31562 2100368
Long-Term LiabilitiesNet Pension Liability 72251 113702 11809 197762Notes Payable Net of Current Amount 1576000 7255000 8831000
Total Noncurrent Liabilities 1648251 7368702 11809 0 9028762 Total Liabilities 1908540 9133869 55159 31562 11129130
Deferred Inflows of ResourcesRelated to Pensions 19605 30853 3204 53662
Net PositionNet Investment in Capital Assets 2756033 3340241 22505 2506453 8625232 Restricted for Capital Replacement 74208 74208 Unrestricted 75031 (1628412) (33709) (27026) (1614116)
Total Net Position 2831064 1786037 (11204) 2479427 7085324
Total Liabilities Deferred Inflowsof Resources and Net Position 4759209$ 10950759$ 47159$ 2510989$ 18268116$
See Accompanying Notes to the Financial Statements20
CITY OF ANNANDALE MINNESOTA
STATEMENT OF NET POSITIONPROPRIETARY FUNDS
DECEMBER 31 2018
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
OPERATING REVENUESCharges for Services 565694$ 1219482$ 208571$ 45805$ 2039552$
OPERATING EXPENSESWages and Salaries 110471 188946 15086 314503Materials and Supplies 29374 29374Repairs and Maintenance 57478 21425 44 8346 87293Insurance 11074 9982 21056Electricity 27203 12231 39434Wastewater Commission Charges 871318 871318 Testing 1111 1111Contracted Services 4467 4378 162233 171078Depreciation 171475 118151 1333 87981 378940Professional Services 4717 5818 1834 524 12893Billing 14718 15335 30053Miscellaneous 17863 15245 3461 3100 39669
Total Operating Expenses 449951 1247494 199326 99951 1996722 Operating Income (Loss) 115743 (28012) 9245 (54146) 42830
NONOPERATING REVENUES (EXPENSES)Investment Income 543 1752 152 253 2700Interest and Fiscal Charges (42493) (193605) (236098) Reimbursements 1173786 1173786
Total Nonoperating Revenues(Expenses) (41950) 981933 152 253 940388
Income (Loss) Before Transfersand Other Items 73793 953921 9397 (53893) 983218
TRANSFERS AND OTHER ITEMSChange in Equity Interest (18613) (18613) Transfers In 19600 36400 56000 Transfers Out (120000) (149000) (42000) (311000)
Total Transfers and Other Items (100400) (131213) 0 (42000) (273613) Change in Net Position (26607) 822708 9397 (95893) 709605
NET POSITION BEGINNING OF YEAR 2857671 963329 (20601) 2575320 6375719
NET POSITION END OF YEAR 2831064$ 1786037$ (11204)$ 2479427$ 7085324$
See Accompanying Notes to the Financial Statements
YEAR ENDED DECEMBER 31 2018
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CITY OF ANNANDALE MINNESOTA
STATEMENT OF REVENUES EXPENSES AND CHANGES IN NET POSITIONPROPRIETARY FUNDS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CASH FLOWS FROM OPERATING ACTIVITIESReceipts from Customers and Users 553327$ 1022629$ 207570$ 47362$ 1830888$ Payments to Suppliers (164208) (767959) (181855) (11970) (1125992) Payments to Employees (115506) (184885) (20045) (320436)
Net Cash Provided (Used) by OperatingActivities 273613 69785 5670 35392 384460
CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIESTransfers Out (120000) (149000) (42000) (311000) Interfund Loan 33986 (4344) 6201 35843 Reimbursements 1173786 1173786
Net Cash Provided (Used) by NoncapitalFinancing Activities (120000) 1058772 (4344) (35799) 898629
CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESPrincipal Paid on Debt (226000) (920000) (1146000) Interest Paid on Debt (44518) (200960) (245478) Bonds Issued 3396 3396 Acquisition and Construction of Capital Assets (16094) (16501) (1692) (34287)
Net Cash Provided (Used) by Capital andRelated Financing Activities (283216) (1137461) (1692) 0 (1422369)
CASH FLOW FROM INVESTING ACTIVITIESInterest and Dividends Received (Paid) 543 4594 366 407 5910
Net Increase (Decrease) in Cash andCash Equivalents (129060) (4310) 0 0 (133370)
CASH AND CASH EQUIVALENTSBEGINNING OF YEAR 152750 140911 293661
CASH AND CASH EQUIVALENTSEND OF YEAR 23690$ 136601$ 0$ 0$ 160291$
RECONCILIATION OF CASH AND CASH EQUIVALENTSCash and Investments 23690$ 62393$ $ $ 86083$ Restricted Cash 74208 74208
Total Cash amp Cash Equivalents 23690$ 136601$ 0$ 0$ 160291$
See Accompanying Notes to the Financial Statements
CITY OF ANNANDALE MINNESOTA
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YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
Refuse Storm Water Sewer Recycling Utility
(601 330 461) (602 462) (603) (605 463) Total
CITY OF ANNANDALE MINNESOTA
YEAR ENDED DECEMBER 31 2018PROPRIETARY FUNDS
STATEMENT OF CASH FLOWS
Business-Type Activities - Enterprise Funds
RECONCILIATION OF OPERATING INCOME(LOSS) TO CASH FLOWS FROM OPERATINGACTIVITIESOperating Income (Loss) 115743$ (28012)$ 9245$ (54146)$ 42830$ Adjustments to Reconcile Operating Income
(Loss) to Net Cash Provided (Used) by OperatingActivities
Depreciation 171475 118151 1333 87981 378940 Pension Related Adjustments (5848) 3118 (5273) (8003)(Increase) Decrease in Assets
Special Assessments ReceivableDelinquent 300 514 (37) (113) 664 Current and Deferred (754) (4236) (573) 2077 (3486)
Accounts Receivable (11969) (190759) (1427) (453) (204608) Prepaid Items (397) (1455) (329) (2181) Due from Other Governments 56 (2372) 1036 46 (1234)
Increase (Decrease) in LiabilitiesAccounts Payable 3741 (10858) 275 (6842) Due to Other Governments 453 184751 1106 186310 Salaries and Benefits Payable 813 943 314 2070
Net Cash Provided (Used) by OperatingActivities 273613$ 69785$ 5670$ 35392$ 384460$
NONCASH INVESTING CAPITAL ANDFINANCING ACTIVITIESChange in Equity Interest 0$ (18613)$ 0$ 0$ (18613)$
See Accompanying Notes to the Financial Statements23
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A REPORTING ENTITY
Blended Component Unit - Reported as if they were part of the City
Blended Component Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
The financial statements present the City and its component units The City includes all funds organizations institutions agencies departments and offices that are not legally separate from such Component units are legally separate organizations for which the City is financially accountable or for which the exclusion of the component unit would render the financial statements of the City misleading
The City of Annandale Minnesota is a statutory city governed by an elected mayor and four council members The accompanying financial statements present the government entities for which the government is considered to be financially accountable
Joint Ventures and Jointly Governed Organizations - The relationship of the City with the entity is disclosed
The criteria used to determine if the City is financially accountable for a component unit includes whether or not 1) the City appoints the voting majority of the potential component units governing body and is able to impose its will on the potential component unit or is in a relationship of financial benefit or burden with the potential component unit or 2) the potential component unit is fiscally dependent on and there is a potential for the potential component unit to provide specific financial benefits to or impose specific financial burdens on the City
As a result of applying the component unit definition criteria above certain organizations have been defined and are presented in this report as follows
For each of the categories above the specific entities are identified as follows
The Annandale Economic Development Authority (EDA) is a legal entity separate from the City Although legally separate the Annandale EDA is reported as if it were part of the primary government because it provides services exclusively for the City Separate financial statements are not prepared for the Annandale EDA
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CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
A REPORTING ENTITY (Contd)
Joint Ventures and Jointly Governed Organizations
B GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
Separate financial statements are provided for governmental funds and proprietary funds Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements
Separate financial statements can be obtained by contacting the Wastewater Commission PO Box K Annandale MN 55302
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or segment Interest on general long-term debt is considered an indirect expense and is reported separately in the Statement of Activities Program revenues include 1) charges to customers or applicants who purchase use or directly benefit from goods services or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment Taxes and other items not properly included among program revenues are reported instead as general revenues Internally dedicated revenues are reported as general revenues rather than program revenues
The government-wide financial statements (ie the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the City Governmental activities which normally are supported by taxes and intergovernmental revenues are reported separately from business-type activities which rely to a significant extent on fees and charges for support
In September 2003 the City entered into a joint powers agreement with the City of Maple Lake to establish the Annandale-Maple Lake Wastewater Commission (the Commission) The purpose of the Commission is to make available wastewater treatment within the present and future boundaries of the Cities and to serve such other areas as the Commission approves As part of the joint venture the City of Annandale agrees to fund the Debt Service and Operating Funds of the Commission according to terms of the agreement The agreement states a City may terminate the agreement by written notice to the other City In such event the City of Annandale shall pay 60 of all costs incurred except each City shall pay its own attorneys fee In 2008 both Cities approved amending the joint powers agreement to include the City of Howard Lake effective January 1 2009 Each City will then have a one-third equity interest in the Commission Because there is an explicit measurable equity interest in the joint venture the interest is reported in the government-wide financial statements as well as in the Sewer Fund
25
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
The City reports the following major governmental funds
The City reports the following major enterprise funds
The Sewer Fund accounts for the operations of the Citys sewer utility
The Storm Utility Fund accounts for the activities of the Citys storm drainage operations
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting Revenues are recognized as soon as they are both measurable and available Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period For this purpose the City considers revenues to be available if they are collected within 60 days after the end of the current fiscal period Expenditures generally are recorded when a liability is incurred as under accrual accounting However debt service expenditures as well as expenditures related to compensated absences and claims and judgments are recorded only when payment is due
The General Fund is the Citys primary operating fund This fund accounts for all financial resources of the general City except those required to be accounted for in another fund
The RefuseRecycling Fund accounts for the operations of the Citys refuserecycling
Property taxes special assessments intergovernmental revenue charges for services franchise taxes licenses and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period All other revenue items are considered to be measurable and available only when cash is received by the City
The Water Fund accounts for the operations of the Citys water utility
26
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting as are the proprietary fund financial statements Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of related cash flows Property taxes are recognized as revenues in the year for which they are levied Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met
As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements Exceptions to this general rule are charges between the Citys utility functions and various other functions of the City Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
C
D DEPOSITS AND INVESTMENTS
(1)
(2)
(3)
(4)
(5)
(6)
time deposits that are fully insured by the Federal Deposit Insurance Corporation or bankers acceptances of United States bank
general obligations of the State of Minnesota and its municipalities and in certain state agency and local obligations of Minnesota and other states provided such obligations have certain specified bond ratings by a national bond rating service
The Citys cash and cash equivalents are considered to be cash on hand deposits and highly liquid debt instruments purchased with original maturities of three months or less from the date of acquisition
27
mutual funds through shares of registered investment companies provided the mutual fund receives certain ratings depending on its investments
The City may invest in the following types of investments as authorized by Minn Stat sectsect118A04 and 118A05
securities which are direct obligations or are guaranteed or insured issues of the United States its agencies its instrumentalities or organizations created by an act of Congress except mortgage-backed securities defined as high risk by Minn Stat sect118A04 subd 6
MEASUREMENT FOCUS BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (Contd)
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 funds principal ongoing operations The principal operating revenues of the enterprise funds are charges to customers for sales and services Operating expenses for enterprise funds include the cost of sales and services administrative expenses and depreciation of capital assets All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses
commercial paper issued by United States corporations or their Canadian subsidiaries that is rated in the highest quality category by at least two nationally recognized rating agencies and matures in 270 days or less and
with certain restrictions in repurchase agreements securities lending agreements joint powers investment trusts and guaranteed investment contracts
Cash and investments were comprised of deposits brokered certificates of deposits money market funds at various financial brokers and the 4M Fund
It is generally the Citys policy to use restricted resources first then unrestricted resources as they are needed when an expense is incurred for purposes for which both restricted and unrestricted net position are available
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations State law limits investments in commercial paper and corporate bonds to the top two ratings issued by nationally recognized statistical rating organizations The Citys investment policy states it will comply with Minnesota Statutes Chapter 118A
The City has an investment policy in place that addresses interest rate risk credit risk concentration of credit risk and custodial credit risk as follows
Interest Rate Risk This is the risk that market values of securities in a portfolio would decrease due to changes in market interest rates The Citys investment policy states the City should manage their interest rates based on safety liquidity and the overall return on the investment The portfolio should contain both short-term and long-term investments to meet anticipated cash flow requirements Extended maturities may be utilized to take advantage of higher yields however no more than 50 of the total investments should extend beyond five years
The City invests in an external investment pool the Minnesota Municipal Money Market Fund (4M Fund) which is created under a joint powers agreement pursuant to Minn Stat sect47159 The 4M Fund is not registered with the Securities Exchange Commission (SEC) but does satisfy the requirements of Rule 2a-7 prescribed by the SEC pursuant to the Investment Company Act of 1940 (17 CFR sect2702a-7) as amended The investment in the pool is measured at the net asset value per share provided by the pool
The City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America The hierarchy is based on the valuation inputs used to measure the fair value of the asset Level 1 inputs are quoted prices in active markets for identical assets Level 2 inputs are significant other observable inputs Level 3 inputs are significant unobservable inputs
Custodial Credit Risk - Deposits For deposits this is the risk that in the event of bank failure the Citys deposits may not be returned to it The Citys investment policy states the collateralization level will be 110 of the market value of principal and accrued interest for balances above the FDIC insured amount When the pledged collateral consists of notes secured by first mortgages the collateral level will be 140 of the market value of principal and accrued interest
Authorized collateral includes the obligations of the US Treasury agencies and instrumentalities shares of investment companies whos only investments are in the aforementioned securities obligations of the State of Minnesota or its municipalities bankers acceptances futures contracts repurchase and reverse repurchase agreements and commercial paper of the highest quality with a maturity of no longer than 270 days as well as certain first mortgage notes and certain other state or local government obligations Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City treasurer or in a financial institution other than that furnishing the collateral
28
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
D DEPOSITS AND INVESTMENTS (Contd)
E RECEIVABLES AND PAYABLES
F PREPAID ITEMS
All trade and property tax receivables are shown at a gross amount since both are assessable to the property taxes and are collectible upon the sale of property
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements
29
Custodial Credit Risk - Investments For an investment this is the risk that in the event of the failure of the counterparty the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party The Citys investment policy states when investments purchased by the City are held in safekeeping by a brokerdealer they must provide asset protection of $500000 through the Securities Investor Protector Corporation (SIPC) and at least another $2000000 supplemental insurance protection
The City levies its property tax for the subsequent year during the month of December December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year Such taxes become a lien on January 1 and are recorded as receivables by the City at that date The property tax is recorded as revenue when it becomes measurable and available Wright County is the collecting agency for the levy and remits the collections to the City three times a year The tax levy notice is mailed in March with the first half payment due on May 15 and the second half payment due on October 15 Tax levies from prior years that remain unpaid are classified as delinquent taxes receivable
The County Auditor submits the list of taxes and special assessments to be collected on each parcel of property to the County Treasurer in January of each year
Activity between funds that are representative of lendingborrowing arrangements outstanding at the end of the fiscal year are referred to as either due tofrom other funds (ie the current portion of interfund loans) or advances tofrom other funds (ie the noncurrent portion of interfund loans) All other outstanding balances between funds are reported as due tofrom other funds Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances
Concentration of Credit Risk This is the risk of loss attributed to the magnitude of an investment in a single issuer Investments should be diversified to avoid incurring unreasonable risk inherent in over investing in specific instruments individual financial institutions or maturities The Citys investment policy states the City will attempt to diversify their investments according to type and maturity
The County Auditor prepares the tax list for all taxable property in the City applying the applicable tax rate to the tax capacity of individual properties to arrive at the actual tax for each property The County Auditor also collects all special assessments except for certain prepayments paid directly to the City
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
G CAPITAL ASSETS
Cost
LandLand Improvements 10000$ Other Improvements 25000 BuildingsImprovements 25000 Machinery and Equipment 5000 Infrastructure 50000
Years
Buildings 5-40Improvements Other than Buildings 5-20Vehicles 5-20Machinery and Equipment 5-40Roads and Highways 20-40Infrastructure 25-40
The City does not possess any material amounts of intangible assets
30
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed Donated capital assets are recorded as capital assets at their estimated acquisition value at the date of donation
Capital assets both tangible and intangible which include property plant equipment and infrastructure assets (eg roads sidewalks and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements Capital assets are defined by the City as assets with an estimated useful life in excess of two years and an initial individual cost of more than the following
Capital Assets
Category
Based on the age of the majority of the Citys infrastructure and an exception for small governments in GASB Statement No 34 the City has determined it is not practical to capitalize infrastructure retroactively The current value of the infrastructure includes projects completed during the year ended December 31 1985 and prospectively from that date
Tangible and intangible assets of the City are depreciated using the straight-line full month convention method over the following estimated useful lives
The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
H DEFERRED OUTFLOWS OF RESOURCES
I UNEARNED REVENUE
J COMPENSATED ABSENCES
K POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS
Unearned revenue arises when assets are recognized before revenue recognition criteria have been satisfied Grants and certain other payments received before eligibility requirements are met are also recorded as unearned revenue
The City compensates employees who resign or retire with due notice for unused vacation and holiday pay Employees may carry over no more than 40 hours of vacation at the end of any calendar year unless approved by the City Council Unused vacation time is paid to employees upon separation from the City City employees are also allowed to earn compensatory time in lieu of overtime pay Employees may carry over no more than 40 hours of compensatory time at the end of any calendar year Unused compensatory time is paid to employees upon separation from the City
The liability for compensated absences reported in the financial statements consists of unpaid accumulated vacation and compensatory time balances The liability has been calculated using the vesting method in which leave amounts for both employees who currently are eligible to receive termination payments and other employees who are expected to become eligible in the future to receive such payments upon termination are included The liability for compensated absences is reported in the governmental funds only if they have matured for example as a result of employee resignations and retirements Compensated absences are accrued when incurred in the government-wide and proprietary fund financial statements The government-wide and proprietary fund Statement of Net Position reports both current and noncurrent portions of compensated absences using full accrual accounting The current portion consists of an amount based on expected or known retirements coming in the next fiscal year The noncurrent portion consists of the remaining amount of vacation and compensatory time
31
Employees of the City pay health care premiums based on their age and level of coverage Since the insurance rate is based on age the City does not have an implicit rate subsidy factor in postemployment health care expenses Additionally Minnesota Statutes require the City to allow retired employees to stay on the health care plan with the retiree responsible to pay the entire premium for continuation coverage The Citys personnel policy does not provide for any contributions upon employee retirement
In addition to assets the statement of financial position will sometimes report a separate section for deferred outflows of resources Deferred outflows of resources represents a consumption of net position that applies to a future reporting period During that future period it will be recognized as an outflow of resources (expenseexpenditure) The City has one item that qualifies for reporting in this category on the government-wide Statement of Net Position which is related to pensions
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
L PENSIONS
M LONG-TERM OBLIGATIONS
N DEFERRED INFLOWS OF RESOURCES
O FUND BALANCE
In addition to liabilities the statement of financial position will sometimes report a separate section for deferred inflows of resources Deferred inflows of resources represents an acquisition of net position that applies to a future reporting period During that future period it will be recognized as an inflow of resources (revenue) The City has items that qualify for reporting in this category on both the government-wide Statement of Net Position and the governmental fund financial statements related to property taxes special assessments and pensions
The City participates in various pension plans total pension expense for the fiscal year ended was $436446 The components of pension expense are noted in the plan summaries
For purposes of measuring the net pension liability deferred outflows of resources and deferred inflows of resources related to pensions and pension expense information about the fiduciary net position of the Public Employees Retirement Association (PERA) and the City of Annandales Fire Relief Association and additions todeductions from PERArsquos and the City of Annandales Fire Relief Associations fiduciary net position have been determined on the same basis as they are reported by PERA and the City of Annandales Fire Relief Association 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
In the fund financial statements governmental fund types recognize bond premiums and discounts as well as bond issuance costs during the current period The face amount of debt issued is reported as other financing sources Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses Issuance costs whether or not withheld from the actual debt proceeds received are reported as debt service expenditures
Nonspendable - consists of amounts that cannot be spent because it is not in spendable form or are legally or contractually required to be maintained intact such as inventories and prepaid items
Restricted - consists of amounts related to externally imposed constraints established by creditors grantors or contributors or constraints imposed by state statutory provisions
In the governmental fund financial statements fund balance is divided into five classifications based primarily on the extent to which the City is bound to observe constraints imposed upon the use of resources reported in governmental funds These classifications are as follows
In the government-wide financial statements and proprietary fund types in the fund financial statements long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities business-type activities or proprietary fund type Statement of Net Position
32
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)
O FUND BALANCE (Contd)
P NET POSITION
Q USE OF ESTIMATES
Net position represents the difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources in the government-wide and proprietary fund financial statements Net investment in capital assets consists of capital assets net of accumulated depreciation reduced by the outstanding balance of any long-term debt used to build or acquire the capital assets Net position is reported as restricted in the government-wide and proprietary fund financial statements when there are limitations on their use through external restrictions imposed by creditors grantors or laws or regulations of other governments Unrestricted net position consists of all other net position that does not meet the definition of restricted or net investment in capital assets
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 In governmental funds other than the General Fund assigned fund balance represents the remaining amount that is not restricted or committed In the General Fund assigned amounts represent intended uses established by the governing body itself or by an official to which the governing body delegates the authority Pursuant to City Council Resolution the City Treasurer and City Administrator are authorized to establish assignments of fund balance
33
Committed - consists of amounts that are constrained for specific purposes that are internally imposed by formal action of the City Council Those committed amounts cannot be used for any other purpose unless the Council removes or changes the specified use by taking the same type of action it employed to previously commit those amounts These constraints are established by Resolution of the City Council
Unassigned - is the residual classification for the General Fund and also reflects negative residual amounts in the remaining governmental funds
The City requires restricted amounts to be spent first when both restricted and unrestricted fund balance is available Additionally the City would first use committed then assigned and lastly unassigned amounts of unrestricted fund balance when expenditures are made
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and deferred outflows of resources and liabilities and deferred inflows of resources and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expendituresexpenses during the reporting period Actual results could differ from those estimates
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY
A BUDGETARY INFORMATION
1
2
3
4
5
6
7
Annual appropriated budgets are adopted during the year for the General and Special Revenue Funds Annual appropriated budgets are not adopted for Debt Service Funds because effective budgetary control is alternatively achieved through bond indenture provisions Budgetary control for Capital Projects Funds is accomplished through the use of project controls and formal appropriated budgets are not adopted
34
Budgeted amounts are as originally adopted or as amended by the City Council Individual amendments were not material in relation to the original amounts budgeted Budgeted expenditure appropriations lapse at year-end
Expenditures may not legally exceed budgeted appropriations at the department level No funds budget can be increased without City Council approval The City Council may authorize transfer of budgeted amounts between departments within any fund Management may amend budgets within a department level so long as the total department budget is not changed
The City Council adopts an annual budget The amounts shown in the financial statements as budget represent the original budgeted amounts and all revisions made during the year The City follows these procedures in establishing the budgetary data reflected in the financial statements
Budgets for the General and Special Revenue Funds are adopted on a basis consistent with accounting principles generally accepted in the United States of America
The budget is legally enacted through passage of a resolution after obtaining taxpayer comments The budget resolution adopted by the City Council sets forth the budgets at the function level for the General and Special Revenue Funds
Public hearings are conducted to obtain taxpayer comments
Budget requests are submitted by all department heads to the City Administrator The City Administrator compiles the budget requests into an overall preliminary City budget The City Administrator presents the proposed budget to the City Council
Encumbrances outstanding at year-end expire and outstanding purchase orders are canceled and not reported in the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 2 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (Contd)
B DEFICIT BALANCES
The following funds had deficit balances
RefuseRecycling (11204)$ Nonmajor Governmental Funds (454667)
C EXPENDITURES EXCEEDING APPROPRIATIONS
NOTE 3 DEPOSITS AND INVESTMENTS
A DEPOSITS
Checking 1669430$
B INVESTMENTS
Fair Value Level 1 Level 2 Level 3
Investments at fair valueBrokered Certificates of Deposit 1540744$ 0$ 1540744$ 0$
Investments at amortized costMoney Market Accounts 324792 4M Money Market 38796
Total Investments 1904332$
The Brokered Certificates of Deposit have a weighted average maturity of 216 years and were not rated
In accordance with applicable Minnesota Statutes the City maintains deposits at depository banks authorized by the City Council
35
There were no funds that had expenditures exceeding appropriations
Custodial Credit Risk - Deposits The Citys bank balances were not exposed to custodial credit risk because they were fully insured through the FDIC as well as collateralized with securities held by the pledging financial institutions trust department or agent and in the Citys name
Fair Value Measuring Unit
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 3 DEPOSITS AND INVESTMENTS (Contd)
B INVESTMENTS (Contd)
The following is a summary of total deposits and investments
Deposits (Note 3A) 1669430$ Investments (Note 3B) 1904332
Total Deposits and Investments 3573762$
Statement of Net PositionCash and Investments 3499554$ Restricted Cash 74208
3573762$
NOTE 4 RECEIVABLES
Receivables are as follows
Amounts notScheduled
for CollectionDuring the
Total SubsequentReceivables Year
Governmental ActivitiesTaxes Receivable - Delinquent 14909$ $ Special Assessments Receivable 654643 584377 Accounts Receivable 96631 16271 Interest Receivable 9
Total Governmental Activities 766192$ 600648$
Business-Type ActivitiesSpecial Assessments Receivable 19043$ 9392$ Accounts Receivable 339457
Total Business-Type Activities 358500$ 9392$
Concentration of Credit Risk The City was exposed to concentration of credit risk due to the fact that some of the Citys brokered certificates of deposit exceeded 5 of the total Citys investments portfolio
36
Deposits and investments are presented in the basic financial statements as follows
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS
Capital asset activity was as follows
Beginning EndingGovernmental Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 2482508$ $ (18800)$ 2463708$ Construction in Progress 508685 248979 (524628) 233036
Total Capital AssetsNot Being Depreciated 2991193 248979 (543428) 2696744
Capital Assets Being DepreciatedBuildings 3065250 3065250 Improvements Other than Buildings 1298097 524628 1822725 Machinery and Equipment 2556167 111246 (57123) 2610290 Infrastructure 21739105 21739105
Total Capital AssetsBeing Depreciated 28658619 635874 (57123) 29237370
Less Accumulated Depreciation forBuildings 1145321 75543 1220864 Improvements Other than Buildings 858879 46992 905871 Machinery and Equipment 1568583 121681 (40205) 1650059 Infrastructure 17438428 312281 17750709
Total AccumulatedDepreciation 21011211 556497 (40205) 21527503
Total Capital Assets BeingDepreciated Net 7647408 79377 (16918) 7709867
Governmental ActivitiesNet Capital Assets 10638601$ 328356$ (560346)$ 10406611$
37
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 5 CAPITAL ASSETS (Contd)
Capital asset activity was as follows
Beginning EndingBusiness-Type Activities Balance Increase Decrease Balance
Capital Assets Not Being DepreciatedLand 277948$ $ $ 277948$
Capital Assets Being DepreciatedBuildings 4175245 4175245 Improvements Other than Buildings 12637 12637 Machinery and Equipment 268809 34287 303096 Infrastructure 11123768 11123768
Total Capital AssetsBeing Depreciated 15580459 34287 0 15614746
Less Accumulated Depreciation forBuildings 1499349 92233 1591582 Improvements Other than Buildings 12636 12636 Machinery and Equipment 190152 19580 209732 Infrastructure 3268385 267127 3535512
Total AccumulatedDepreciation 4970522 378940 0 5349462
Total Capital Assets BeingDepreciated Net 10609937 (344653) 0 10265284
Business-Type ActivitiesNet Capital Assets 10887885$ (344653)$ 0$ 10543232$
Depreciation expense was charged to functionsprograms as follows
Governmental ActivitiesGeneral Government 53809$ Public Safety 91620 Public Works 383653 Culture and Recreation 27415
Total Depreciation Expense - Governmental Activities 556497$
Business-Type ActivitiesWater 171475$ Sewer 118151 RefuseRecycling 1333 Storm Utility 87981
Total Depreciation Expense - Business-Type Activities 378940$
38
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 6 INTERFUND ACTIVITY
A INTERFUND BALANCES
The composition of interfund balances is as follows
Amount
General Sewer 445076$ General RefuseRecycling 28318 General Storm Utility 31562 General Nonmajor Governmental Funds 415794 Water Nonmajor Governmental Funds 98000 Sewer Nonmajor Governmental Funds 21000 Nonmajor Governmental Funds General 143500 Nonmajor Governmental Funds Nonmajor Governmental Funds 46888
Total Interfund Balances 1230138$
B INTERFUND TRANSFERS
The composition of interfund transfers is as follows
Nonmajor Governmental
Water Sewer Funds Total
Transfer OutGeneral 19600$ 36400$ 287794$ 343794$ Water 120000 120000 Sewer 149000 149000 Storm Utility 42000 42000 Nonmajor Governmental
Funds 547120 547120
Total Interfund Transfers 19600$ 36400$ 1145914$ 1201914$
Receivable Fund Payable Fund
39
The purpose of the above transfers was to provide funding for debt service capital improvement projects capital outlay and operating purposes
The purpose of the above interfund loans was to provide financing for operating purposes and to cover deficit cash balances
Transfer In
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES
A GENERAL OBLIGATION BONDS
B COMPONENTS OF LONG-TERM LIABILITIES
Interest Final BalanceRates Maturity Outstanding
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan BondsSeries 2008A 300-400 02012022 295000$
GO Special Assessment BondsGO Improvement Bonds Series 2008B 300-4125 02012024 560000 GO Improvement Bonds Series 2011A 105-415 02012032 1300000 GO Refunding Bonds Series 2011B 085-270 02012021 585000 GO Refunding Bonds Series 2012A 055-185 02012022 1035000 GO Improvement Bonds Series 2015A 110-345 02012036 750000
GO NotesGO Improvement Note of 2011 1959 08202031 846000
GO Equipment CertificateGO Equipment Certificate 2016A 2100 02012021 168000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549$
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 2819 08202023 996000$ PFA Clean Water Revenue Note 2220 08202026 8086000 PFA Water Revenue Note of 2015 1031 08202035 812000 PFA Sewer Revenue Note of 2015 1000 08202035 110000
Total Business-Type Activities 10004000$
GO Bonds are direct obligations and pledge the full faith and credit of the City These bonds generally are issued as 15 year Serial Bonds with equal debt service payments each year
The City issues General Obligation (GO) Bonds to provide financing for street improvements facility construction and tax increment projects Debt service is covered respectively by special assessments property taxes and tax increments against benefited properties with any shortfalls being paid from general taxes
40
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
B COMPONENTS OF LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS
Annual debt service requirements to maturity for all bonded debt and notes outstanding are as follows
Principal Interest Principal Interest
70000$ 10400$ 660000$ 112343$ 70000 7600 675000 97718 75000 4700 600000 82645 80000 1600 480000 63498
220000 59861 760000 211593 680000 82489 155000 8131
295000$ 24300$ 4230000$ 718278$
2019
2029-20332024-2028
20222023
On September 27 2011 the City issued $1620000 GO Refunding Bonds Series 2011B with an interest rate of 85 to 270 The City issued the Bonds to crossover refund the $1020000 GO Fire Hall Bonds Series 2004A and the $1645000 GO Improvement Bonds Series 2004B The City completed the refunding to reduce its debt service payment over the next 9 years by $20827 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $20868
Debt service funds are used to liquidate the governmental activities outstanding bonded indebtedness and notes The Park Capital Projects Fund is used to liquidate the governmental activities outstanding contract for deed The General Fund has historically been used to liquidate the outstanding governmental activities compensated absences
GO Improvement Bonds Assessment Bonds
On April 4 2012 the City issued $2225000 GO Refunding Bonds Series 2012A with an interest rate of 55 to 185 The City issued the Bonds to refund the $1415000 GO Improvement Bonds Series 2001C and the $320000 GO Refunding Improvement Bonds Series 2003 as well as crossover refund the $3100000 GO Improvement Bonds Series 2006A The City completed the refunding to reduce its debt service payment over the next 10 years by $179206 This results in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $161420
41
2034-2036
Governmental ActivitiesGO Special
2020
December 31
2021
Year Ending
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
C MINIMUM DEBT PAYMENTS (Contd)
Principal Interest Principal Interest
58000$ 16573$ 55000$ 2951$ 59000 15437 56000 1785 60000 14281 57000 598 61000 13106 62000 11911
332000 40728 214000 8423
846000$ 120459$ 168000$ 5334$
Principal Interest
1173000$ 217058$ 1200000 190488 1227000 163282 1254000 135459 1283000 151604 3466000 171976
284000 14813 117000 1808
10004000$ 1046488$
42
2023
Governmental Activities
2020
Year Ending
2029-2033
2022
2034-2035
2021
2028-2028
2024-2028
2022
2020
2019
2019
Business-Type Activities
2029-2031
GO Notes
2021
December 31Year Ending
2023
GO Equipment Certificates
GO Revenue Notes
December 31
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
D CHANGES IN LONG-TERM LIABILITIES
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Governmental ActivitiesBonds Payable
GOImprovementBonds 365000$ $ 70000$ 295000$ 70000$
GO SpecialAssessment Bonds 4870000 640000 4230000 660000
5235000 0 710000 4525000 730000
GO ImprovementNote of 2011 903000 57000 846000 58000
GO Equipment Certificate 222000 54000 168000 55000
CompensatedAbsences 23292 58115 58428 22979
Unamortized BondDiscount (26664) 4234 (22430)
Total GovernmentalActivities 6356628$ 62349$ 879428$ 5539549$ 843000$
Beginning Ending Due Within Balance Additions Reductions Balance One Year
Business-Type ActivitiesNotes Payable
GO Revenue Notes 11146604$ 3396$ 1146000$ 10004000$ 1173000$
43
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 7 LONG-TERM LIABILITIES (Contd)
E CONDUIT DEBT OBLIGATIONS
The Citys conduit debt consisted of the following
Senior Housing and Health Care Revenue Refunding Note 6661528$
NOTE 8 RISK MANAGEMENT
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION
A PLAN DESCRIPTION
Firefighters of the City are members of the Association The Association is the administrator of a single-employer defined benefit pension plan available to firefighters The plan is administered by the Association pursuant to Minnesota Statutes Chapter 69 Chapter 424A and the Associations by-laws As of December 31 2017 the plan covered 28 active firefighters and 14 vested terminated fire fighters whose pension benefits are deferred
There are no other claims liabilities reported in the financial statements based on the requirements of accounting standards which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated
There were no significant reductions in insurance from the previous year or settlements in excess of insurance coverage for any of the past three fiscal years
The Citys workers compensation insurance policy is retrospectively rated With this type of policy final premiums are determined after loss experience is known The amount of premium adjustment for 2018 is estimated to be immaterial based on workers compensation rates and salaries for the year
44
Conduit debt obligations are certain limited-obligation revenue bonds or similar debt instruments issued for the express purpose of providing capital financing for a specific third party The City has issued various revenue bonds to provide funding to private-sector entities for projects deemed to be in the public interest Although these bonds bear the name of the City the City has no obligation for such debt Accordingly the bonds are not reported as liabilities in the financial statements of the City
The City purchases commercial insurance coverage through the League of Minnesota Cities Insurance Trust (LMCIT) which is a public entity risk pool currently operating as a common risk management and insurance program with other cities in the state The City pays an annual premium to the LMCIT for its insurance coverage The LMCIT is self-sustaining through commercial companies for excess claims The City is covered through the pool for any claims incurred but unreported but retains risk for the deductible portion of its insurance policies The amount of these deductibles is considered immaterial to the financial statements
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
B BENEFITS PROVIDED
C CONTRIBUTIONS
D PENSION COSTS
Total Plan Net Pension Pension Fiduciary LiabilityLiability Net Position (Asset)
(a) (b) (a) - (b)
Balances at 112017 $ 569046 $ 1009074 $ (440028)Changes for the Year
Service Cost 26727 26727 Interest 34955 34955 Changes in Benefit Terms 28893 28893 Contributions - Employer 3000 (3000)Contributions - State 47693 (47693)Net Investment Income 126216 (126216)Benefit Payments (72973) (72973) Administrative Expense (8416) 8416
Net Change 17602 95520 (77918)
Balances at 12312017 $ 586648 $ 1104594 $ (517946)
The plan provides lump-sum retirement death and supplemental benefits to covered firefighters and survivors Benefits are paid based on the number of years of service multiplied by a benefit level per year of service approved by the City The plan includes a $2600 service pension benefit for each year of service Members are eligible for a lump-sum retirement benefit at 50 years of age or after completion of 20 years of service If a member is both age 50 and has completed five years of service but not 20 years of service the lump-sum pension will be reduced by 4 for each year of service less than 20 years
The plan is funded by fire state aid investment earnings and if necessary employer contributions as specified in Minnesota Statutes and voluntary City contributions As of December 31 2017 the State of Minnesota contributed $47693 in fire state aid to the plan on behalf of the Fire Department Required employer contributions are calculated annually based on statutory provisions The City made voluntary contributions of $3000 to the plan
The City reported a net pension liability (asset) of ($517946) The Citys net pension liability (asset) was measured as of December 31 2017 and the total pension liability used to calculate the net pension liability (asset) in accordance with GASB 68 was determined by an independent actuary applying an actuarial formula to specific census data certified by the fire department The following table presents the changes in net pension liability during the year
45
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
D PENSION COSTS (Contd)
The lump sum benefit increased from $2400 to $2600 per year effective January 1 2018
Differences between expected and actual economic experience $ 5346$ Changes in actuarial assumptions 3678 Net differences between projected and actual investment earnings 26024 Contributions paid to plan subsequent to measurement date 55196 State aid received for the plan subsequent to measurement date 52196
55196$ 87244$
December 31
20192020202120222023
Thereafter
For the year ended December 31 2018 the City recognized pension expense of ($15721)
The City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
$ 537
46
$55196 reported as deferred outflows of resources related to pensions resulting from City contributions to the pension plan subsequent to the measurement date will be recognized as a reduction of the net pension liability (asset) in the year ended December 31 2019 $52196 reported as deferred inflows of resources related to pensions resulting from state aid received for the plan subsequent to the measurement date will be recognized as an increase of the net pension liability (asset) in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pension plans will be recognized in pension expense as follows
Pension Expense Amount
(2) (17701) (14691) (1457) (1734)
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
E ACTUARIAL ASSUMPTIONS
Inflation Rate 275 percentRetirement Eligibility Later of current age and age 50Expected Long-Term Investment Return 625 percentAmortization Method
Mortality
F DISCOUNT RATE
G PENSION LIABLIITY (ASSET) SENSITIVITY
1 Decrease 1 Increasein Discount in Discount
Rate Rate(525) (625) (725)
Citys Net Pension Liability (Asset) $ (497411) $ (517946) $ (537562)
Straight-line amortization over a closed 5-year period or straight-line amortization over a close period equal to the average of the expected remaining service lives of all members that are provided with pensions through the pension planRates used in the July 1 2016 Minnesota PERA Police amp Fire Plan actuarial valuation
The discount rate used to measure the total pension liability was 625 The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at a rate specified in statute Based on that assumption the pension planrsquos 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
The following presents the net pension liability (asset) calculated using the discount rate as well as what the Citys net pension liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage point higher than the current discount rate
Discount Rate
The total pension liability was determined using the following actuarial assumptions applied to all periods included in the measurement
The actuarial assumptions used in the December 31 2018 valuation were based on the results of an actuarial experience study for the period January 1 2016 - December 31 2016
47
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 9 CITY OF ANNANDALE FIRE RELIEF ASSOCIATION (Contd)
H PLAN INVESTMENTSINVESTMENT POLICY
- Attempt to maintain minimum funding ratio of 120- Attempt to increase the pension amount by $200 every other year- Meet twice per year to discuss any changes to allocation and prepare for a joint meeting with the City
I ASSET ALLOCATION
Domestic equityInternational equityFixed incomeReal estate and alternativesCash and equivalents
Total
J PENSION PLAN FIDUCIARY NET POSITION
10000
The best-estimates of expected future asset class returns were published in the 2017 Survey of Capital Market Assumptions produced by Horizon Actuarial Services These expected returns along with expected asset class standard deviations and correlation coefficients are based on Horizonrsquos annual survey of investment advisory firms The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data
Detailed information about the pension plans fiduciary net position is available in a separately-issued financial report
Asset Class
The plans funded status increased from 1773 to 1883 since the prior valuation This change is primarily due to investment returns in excess of expected
4500 5391000 5203500 198500 425500 079
The Association has a formal investment policy that operates within standard investment practices of the prudent person and other standards codified in Minnesota Statutes Chapter 11A and Chapter 356
The Associations pension plan assets are to be invested for the exclusive benefit of the fund members and will attempt to generate investment returns of at least 5 percent of an annualized basis over time Other goals of the Association include
The long-term expected rate of return on pension plan investments as determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns net of pension plan investment expense and inflation) are developed for each major asset class These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table
Long-Term Expected Real Rate of ReturnTarget Allocation
48
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A PLAN DESCRIPTION
B BENEFITS PROVIDED
GERP Benefits
General Employees Retirement Plan (GERP General Employees Plan accounted for in the General Employees Fund)
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
Public Employees Police and Fire Plan (PEPFP Police and Fire Plan accounted for in the Police and Fire Fund)
The Police and Fire Plan 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 Police and Fire Plan also covers police officers and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to PERA
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
General Employees Plan benefits are based on a memberrsquos 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 PERAs 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 12 for each of the first 10 years of service and 17 for each additional year The rates are 22 and 27 respectively for Basic members Under Method 2 the accrual rate for Coordinated members is 17 for all years of service and 27 for Basic members The accrual rates for former MERF members is 20 for each of the first 10 years of service and 25 for each additional year 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
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA) PERArsquos defined benefit pension plans are established and administered in accordance with Minnesota Statutes Chapters 353 and 356 PERArsquos defined benefit pension plans are tax qualified plans under Section 401(a) of the Internal Revenue Code
49
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
B BENEFITS PROVIDED (Contd)
GERP Benefits (Contd)
PEPFP Benefits
C CONTRIBUTIONS
GERP Contributions
PEPFP Contributions
Beginning January 1 2019 benefit recipients will receive a future annual increase equal to 50 percent of the Social Security Cost of Living Adjustment not less than 10 percent and not more than 15 percent For retirements on or after January 1 2024 the first benefit increase is delayed until the retiree reaches Normal Retirement Age (not applicable to Rule of 90 retirees disability benefit recipients or survivors) A benefit recipient who has been receiving a benefit for at least 12 full months as of June 30 will receive a full increase Members receiving benefits for at least one month but less than 12 full months as of June 30 will receive a pro rata increase
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 percent after five years up to 100 percent 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 percent after ten years up to 100 percent after twenty years of credited service The annuity accrual rate is 3 percent of average salary for each year of service For Police and Fire Plan members who were first hired prior to July 1 1989 a full annuity is available when age plus years of service equal at least 90
Beginning in 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law Post retirement increases are given each year except for annuitants who have been receiving a benefit for only 31 to 41 months These annuitants will receive a prorated amount of the increase on a sliding scale
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions Contribution rates can only be modified by the state Legislature
Coordinated Plan members were required to contribute 650 percent of their annual covered salary in fiscal year 2018 the City was required to contribute 750 percent for Coordinated Plan members The Citys contributions to the General Employees Fund for the year ended December 31 2018 were $50226 The Citys contributions were equal to the required contributions as set by state statute
Legislation increased both employee and employer contribution rates in the Police and Fire Plan Employee rates increased from 1080 percent of pay to 1130 percent and employer rates increase from 1620 percent to 1695 percent on January 1 2018 On January 1 2020 employee rates increase to 1180 percent and employer rates increase to 1770 percent The Citys contributions to the Police and Fire Fund for the year ended December 31 2018 were $57782 The Citys contributions were equal to the required contributions as set by state statute
50
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS
GERP Pension Costs
Differences between expected and actual economic experience 14670$ 16018$ Changes in actuarial assumptions 52464 61940 Differences between projected and actual investment earnings 56103 Changes in proportion 4060 13463 Contributions paid to GERP subsequent to measurement date 25165
96359$ 147524$
At December 31 2018 the City reported a liability of $543664 for its proportionate share of the General Employees Fundrsquos net pension liability The City net pension liability reflected a reduction due to the State of Minnesotarsquos contribution of $16 million to the fund in 2019 The State of Minnesota is considered a non-employer contributing entity and the statersquos contribution meets the definition of a special funding situation The State of Minnesotarsquos proportionate share of the net pension liability associated with the City totaled $17795 The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The Citys proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion share was 00098 which was a decrease of 00002 from its proportion measured as of June 30 2017
Post-retirement benefit increases were changed from 10 per year with a provision to increase to 25 upon attainment of 90 funding ratio to 50 of the Social Security Cost of Living Adjustment not less than 10 and not more than 15 beginning January 1 2019
For the year ended December 31 2018 the City recognized pension expense of $28216 for its proportionate share of GERPrsquos pension expense In addition the City recognized an additional $4150 as pension expense (and grant revenue) for its proportionate share of the State of Minnesotas contribution of $6 million to the General Employees Fund
At December 31 2018 the City reported its proportionate share of GERPrsquos deferred outflows of resources and deferred inflows of resources from the following sources
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
51
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
GERP Pension Costs (Contd)
PEPFP Pension Costs
$25165 reported as deferred outflows of resources related to pensions resulting from City contributions to GERP subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to GERP pensions will be recognized in pension expense as follows
52
Year ended June 30 Pension Expense Amount
2019 13967$ 2020 (31102) 2021 (47848) 2022 (11347)
At December 31 2018 the City reported a liability of $350680 for its proportionate share of the Police and Fire Fundrsquos net pension liability The net pension liability was measured as of June 30 2018 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date The City proportion of the net pension liability was based on the Citys contributions received by PERA during the measurement period for employer payroll paid dates from July 1 2017 through June 30 2018 relative to the total employer contributions received from all of PERArsquos participating employers At June 30 2018 the Citys proportion was 00329 which was a decrease of 00001 from its proportion measured as of June 30 2017 The City also recognized $2961 for the year ended December 31 2018 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesotarsquos on-behalf contributions to the Police and Fire Fund Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the Police and Fire Fund each year starting in fiscal year 2014
Beginning in January 1 2019 the COLA will be fixed at 1 percent Under funding measurements from 2017 the 25 percent COLA trigger was never expected to occur and was subsequently removed from law
For the year ended December 31 2018 the City recognized pension expense of $2961 for its proportionate share of the Police and Fire Planrsquos pension expense
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
D PENSION COSTS (Contd)
PEPFP Pension Costs (Contd)
Differences between expected and actual economic experience 14159$ 88907$ Changes in actuarial assumptions 450560 517779 Differences between projected and actual investment earnings 71220 Changes in proportion 10800 27880 Contributions paid to PEPFP subsequent to measurement date 29906
505425$ 705786$
E ACTUARIAL ASSUMPTIONS
InflationSalary GrowthInvestment Rate of Return
Actuarial Assumptions GERP PEPFP
250 per year 250 per year325 after 26 years of service 325 after 25 years of service
750 750
53
Deferred Outflows of Resources
Deferred Inflows of Resources
Totals
2020 (21749)2021 (54056)2022 (147616)2023 (1380)
The total pension liability in the June 30 2018 actuarial valuation was determined using the following actuarial assumptions
$29906 reported as deferred outflows of resources related to pensions resulting from the Citys contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31 2019 Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows
Year ended June 30 Pension Expense Amount
2019 (5466)$
At December 31 2018 the City reported its proportionate share of the Police and Fire Planrsquos deferred outflows of resources and deferred inflows of resources related to pensions from the following sources
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
GERP
PEPFP
54
The total pension liability for each of the defined benefit cost-sharing plans was determined by an actuarial valuation as of June 30 2018 using the entry age normal actuarial cost method Inflation is assumed to be 250 percent for the General Employees and Police and Fire Plans Salary growth assumptions in the General Employees Plan decrease in annual increments from 1125 percent after one year of service to 325 percent after 26 years of service In the Police and Fire Plan salary growth assumptions decrease from 1225 percent after one year of service to 325 percent after 25 years of service
Mortality rates for all plans are based on RP-2014 mortality tables The tables are adjusted slightly to fit PERArsquos experience Actuarial assumptions for the General Employees Plan are reviewed every four to six years The most recent six-year experience study for the General Employees Plan was completed in 2015 The most recent four-year experience study for the Police and Fire Plan was completed in 2016 Economic assumptions were updated in 2014 based on a review of inflation and investment return assumptions
The following changes in actuarial assumptions occurred in 2018
The mortality projection scale was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 percent per year through 2044 and 250 percent per year thereafter to 125 percent per year
The mortality projection scale was changed from MP-2016 to MP-2017
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
E ACTUARIAL ASSUMPTIONS (Contd)
Domestic StocksInternational StocksBondsAlternative AssetsCash
F DISCOUNT RATE
G PENSION LIABILITY SENSITIVITY
GERP PEPFP
1 Lower 650 883523$ 1520 751880$ Current Discount Rate 750 543664 1620 350680 1 Higher 850 263120 1720 18904
The discount rate used to measure the total pension liability in 2018 was 750 percent The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes Based on these assumptions the fiduciary net positions of the General Employees Fund and the Police and Fire Fund 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
The following presents the Citys proportionate share of the net pension liability for all plans it participates in calculated using the discount rate disclosed in the preceding paragraphs as well as what the Citys 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
Target Allocation
3900190020002000200
10000
Long-Term Expected Real Rate of Return
510530075590000
Asset Class
55
The State Board of Investment which manages the investments of PERA prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return 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 in the following table
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 10 DEFINED BENEFIT PENSION PLANS - STATEWIDE (Contd)
H PENSION PLAN FIDUCIARY NET POSITION
NOTE 11 DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES
Related to Pensions 656980$ 940554$
NOTE 12 FUND BALANCE
NonmajorGovernmental
General Funds Total
NonspendablePrepaid Items 73751$ 2152$ 75903$
Restricted forTax Increment 11481 11481 Debt Service 1448570 1448570 Capital Projects 72582 72582
0 1532633 1532633
CommittedCharitable Gambling Programs 11466 11466 Economic Development Promotion 835956 835956
Total Committed 0 847422 847422
AssignedFund Operations 165070 487992 653062
Unassigned 1697339 (456819) 1240520
1936160$ 2413380$ 4349540$
Detailed information about each pension plans 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 wwwmnperaorg
The following is a summary of the major components of deferred outflows and inflows as presented in the Statement of Net Position
Deferred Outflows of Resources
Deferred Inflows of Resources
The following is a summary of fund balance components
56
CITY OF ANNANDALE MINNESOTA
NOTES TO THE FINANCIAL STATEMENTSDECEMBER 31 2018
NOTE 13 TAX ABATEMENT
Current YearPercent AmountAbated Abated
Dingmann Marine100 2500$
Current YearPercent AmountAbated Abated
Granite City PropertyManagement 95 20858$
NOTE 14 JOINT POWERS AGREEMENTS
A PUBLIC RECREATIONAL FACILITY
B WRIGHT COUNTY AREA TRANSIT
Wright County Area Transit is governed by a Joint Powers Board that consists of a) one vote plus additional vote for each city per 3000 rides originating in that city and b) Wright County has votes equal to the number of votes apportioned to the Cities
57
The City and Independent School District 876 (the District) have entered into an a joint powers agreement to operate a public recreational facility The City owns and will lease the real property to the Joint Powers Entity (the Entity) The District shall fund the construction of the facility The Entity shall prepare an annual budget subject to approval of the City and the District All costs for operations maintenance repairs and utilities shall be shared equally by the City and the District
The Entity is governed by a Joint Powers Board that consists of four members a) two members appointed by the City annually and b) two members appointed by the District annually
The City Wright County and other Wright County Cities have entered into an a joint powers agreement to provide affordable public transportation to their communities Cities are to pay a pro rata share of the remaining unfunded operating expenses and capital expenditures not covered by Wright County
The City is authorized by Minnesota Statute sect4691813 to enter into property tax abatement agreements for the purpose of attracting or retaining businesses Tax abatements may be granted to any business on a case-by-case basis The entity may be subject to certain stipulations determined by the City at the time the abatement is entered The amount of the abatement is automatically deducted from the property ownerrsquos tax bill
The City is authorized by Minnesota Statute sect469174 through 469179 to enter into tax increment financing plans Tax increment financing may be granted on a case-by-case basis and may be subject to certain stipulations determined by the City at the time it is entered
Business Purpose
Business Purpose
Assisting in relocating the business within the community
Housing Redevelopment Project 36 Unit Senior Housing Project
REQUIRED SUPPLEMENTARY INFORMATION
This page intentionally left blank
EmployersProportionateShare of the Net Pension
Liability (Asset)States and the States Employers
Proportionate Proportionate ProportionateEmployers Share of the Share of the Share of the Plan Fiduciary
Employers Proportionate Net Pension Net Pension Net Pension Net PositionProportion Share of the Liability (Asset) Liability (Asset) Employers Liability (Asset) as a Percentageof the Net Net Pension Associated with Associated with Covered as a Percentage of of the Total
Fiscal Year Pension Liability (Asset) the Employer the Employer Payroll its Covered Payroll PensionEnding Liability (Asset) (a) (b) (a+b) (c) ((a+b)c) Liability
PensionsGERP
6302018 00098 543664$ 17795$ 561459$ 658161$ 8531 79536302017 00100 638393 8040 646433 647524 9983 75906302016 00099 803831 10468 814299 610663 13335 68916302015 00102 528617 528617 605733 8727 7819
PEPFP6302018 00329 350680$ $ 350680$ 346636$ 10117 88846302017 00330 445539 445539 339010 13142 85436302016 00340 1364479 1364479 322596 42297 63886302015 00340 386320 386320 317917 12152 8661
See Accompanying Notes to the Required Supplementary Information
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITYDECEMBER 31 2018
58
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
Contributionsin Relation Contributions
Statutorily to the Statutorily Contribution as a PercentageRequired Required Deficiency Covered of Covered
Fiscal Year Contribution Contribution (Excess) Payroll PayrollEnding (a) (b) (a-b) (d) (bd)
PensionsGERP
12312018 50226$ 50226$ $ 669680$ 75012312017 48886 48886 651813 75012312016 46583 46583 621107 75012312015 45426 45426 605680 750
PEPFP12312018 57782$ 57782$ $ 356679$ 162012312017 55371 55371 341796 162012312016 53824 53824 332247 162012312015 51688 51688 319062 1620
See Accompanying Notes to the Required Supplementary Information59
The City implemented GASB Statement No 68 for fiscal year ended December 31 2015 Information for prior years is not available
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF PROPORTIONATE EMPLOYER CONTRIBUTIONSDECEMBER 31 2018
2017 2016 2015 2014
Service Cost 26727$ 26915$ 21845$ 21260$ Interest 34955 33085 27615 24816 Changes in Benefit Terms 28893 40156 Differences Between Expected and Actual Experience (7074) Changes in Assumptions (4866) Benefit Payments (72973) (7040)
Net Change in Total Pension Liability 17602 41020 89616 46076 Total Pension Liability - Beginning of Year 569046 528026 438410 392334
Total Pension Liability - End of Year 586648$ 569046$ 528026$ 438410$
Contributions - State and Local 50693$ 50325$ 49939$ 47712$ Net Investment Income 126216 69161 (34736) 46976 Benefit Payments (72973) (7040) Administrative Expense (8416) (7920) (7166) (3768) Other (275)
Net Change in Plan Fiduciary Net Position 95520 104526 8037 90645 Total Plan Fiduciary Net Position - Beginning of Year 1009074 904548 896511 805866
Total Plan Fiduciary Net Position - End of Year 1104594$ 1009074$ 904548$ 896511$
Citys Net Pension Liability (Asset) - End of Year (517946)$ (440028)$ (376522)$ (458101)$
Plan Fiduciary Net Position as a Percentage of the Total Pension Asset 18829 17733 17131 20449
60
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF CHANGES IN THE CITYS NET PENSION LIABILITY AND RELATED RATIOSDECEMBER 31 2018
The City implemented GASB Statement No 68 for the year ended December 31 2015 Information for prior years is not available
December 31
NOTE 1 CHANGES IN PLAN PROVISIONS
A GERF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
B PEPFF
2018 Changes
No changes
2017 Changes
No changes
2016 Changes
No changes
2015 Changes
61
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
On January 1 2015 the Minneapolis Employees Retirement Fund was merged into the General Employees Fund which increased the total pension liability by $11 billion and increased the fiduciary plan net position by $892 million Upon consolidation state and employer contributions were revised
The post-retirement benefit increase to be paid after attainment of the 90 funding threshold was changed from inflation up to 25 to a fixed rate of 25
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS
A GERF
2018 Changes
2017 Changes
2016 Changes
2015 Changes
B PEPFF
2018 Changes
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 025 to 325 for payroll growth and 250 for inflation
62
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2035 and 25 per year thereafter
The mortality projection was changed from MP-2016 to MP-2017
The Combined Service Annuity (CSA) loads were changed from 08 for active members and 60 for vested and non-vested deferred members The revised CSA loads are now 00 for active member liability 150 for vested deferred member liability and 30 for non-vested deferred member liability
The assumed post-retirement benefit increase rate was changed from 10 per year for all years to 10 per year through 2044 and 25 per year thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2035 and 25 per year thereafter to 10 per year for all years
The assumed investment return was changed from 79 to 75 The single discount rate was changed from 79 to 75
The mortality projection was changed from MP-2015 to MP-2017
The assumed benefit increase was changed from 100 per year through 2044 and 250 per year thereafter to 125 per year
CITY OF ANNANDALE MINNESOTA
NOTES TO REQUIRED SUPPLEMENTARY INFORMATIONDECEMBER 31 2018
NOTE 2 CHANGES IN ACTUARIAL ASSUMPTIONS (Contd)
B PEPFF (Contd)
2017 Changes
Assumed rates of retirement were changed resulting in fewer retirements
Assumed percentage of married female members was decreased from 65 to 60
The assumed percentage of female members electing Joint and Survivor annuities was increased
2016 Changes
2015 Changes
63
The assumed post-retirement benefit increase rate was changed from 100 for all years to 100 per year through 2064 and 250 thereafter
The assumed post-retirement benefit increase rate was changed from 10 per year through 2037 and 25 thereafter to 10 per year for all future years
The assumed investment return was changed from 79 to 75 The single discount rate changed from 79 to 56
The assumed future salary increases payroll growth and inflation were decreased by 025 to 325 for payroll growth and 250 for inflation
The assumed post-retirement benefit increase rate was changed from 10 per year through 2030 and 25 per year thereafter to 10 per year through 2037 and 25 per year thereafter
Assumed salary increases were changed as recommended in the June 30 2016 experience study The net effect is proposed rates that average 034 lower than the previous rates
The Combined Service Annuity (CSA) load was 30 for vested and non-vested deferred members The CSA has been changed to 33 for vested members and 2 for non-vested 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 096 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 30 for the first three years of service Rates beyond the select period of three years were adjusted resulting in more expected terminations overall
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
SUPPLEMENTARY INFORMATION
This page intentionally left blank
Special Debt Capital Revenue Service Projects Total
ASSETSCash and Investments 436388$ 1441782$ 473092$ 2351262$ Taxes Receivable - Delinquent 23 5 347 375 Special Assessments Receivable
Delinquent 4423 4423 Current and Deferred 623285 26935 650220
Accounts Receivable 70887 20000 90887 Interest Receivable 9 9 Prepaid Items 2152 2152 Due from Other Funds 190388 190388 Due from Other Governments 1061 2365 47418 50844 Land Held for Resale 362923 362923
Total Assets 1063822$ 2071860$ 567801$ 3703483$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 12735$ $ 11142$ 23877$ Contracts Payable 2941 21398 24339 Due to Other Funds 454822 126860 581682 Due to Other Governments 3566 5910 9476 Salaries and Benefits Payable 134 134
Total Liabilities 474198 0 165310 639508
Deferred Inflows of ResourcesUnavailable Revenues
Delinquent Property Taxes 23 5 347 375 Special Assessments 623285 26935 650220
Total Deferred Inflows of Resources 23 623290 27282 650595
Fund Balance Nonspendable 2152 2152 Restricted 11481 1448570 72582 1532633 Committed 847422 847422 Assigned 67503 420489 487992 Unassigned (338957) (117862) (456819)
Total Fund Balance 589601 1448570 375209 2413380
Total Liabilities Deferred Inflows of Resources and Fund Balance 1063822$ 2071860$ 567801$ 3703483$
CITY OF ANNANDALE MINNESOTA
64
DECEMBER 31 2018NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
Special Debt Capital Revenue Service Projects Total
REVENUESProperty Taxes 2507$ $ 320723$ 323230$ Tax Increments 20858 20858 Special Assessments 149671 149671 Intergovernmental 30310 30310 Charges for Services 42636 8595 51231 Fines and Forfeitures 4299 4299 Investment Income (1455) (3635) (5090) Contributions and Donations 49608 84150 133758 Miscellaneous 578 101 679
Total Revenues 114732 149671 444543 708946
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 22622 42738 Culture and Recreation 3735 3735 Economic Development 52358 52358
Debt ServicePrincipal 821000 821000 Interest and Other Charges 162964 162964
Capital OutlayPublic Safety 67055 67055 Public Works 14006 14006 Culture and Recreation 14187 88464 102651 Economic Development 56446 88485 144931
Total Expenditures 153914 983964 284367 1422245 Excess (Deficiency) of Revenues
Over (Under) Expenditures (39182) (834293) 160176 (713299)
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 24493 24493 Transfers In 51200 784616 310098 1145914 Transfers Out (65804) (481316) (547120)
Total Other Financing Sources (Uses) (14604) 784616 (146725) 623287 Net Change in Fund Balances (53786) (49677) 13451 (90012)
FUND BALANCE BEGINNING OF YEAR 643387 1498247 361758 2503392
FUND BALANCE END OF YEAR 589601$ 1448570$ 375209$ 2413380$
65
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED DECEMBER 31 2018
Tax Charitable Economic TIF District Abatement - Lions TIF District Training WoodlawnGambling Development No 6 Dingmann Donations No 14 Center Cemetery
(222) (407) (411) (423) (464) (465) (604) (651) Total
ASSETSCash and Investments 11466$ 385530$ 21389$ $ 18003$ $ $ $ 436388$ Taxes Receivable - Delinquent 23 23 Accounts Receivable 20856 49500 531 70887 Prepaid Items 1076 1076 2152 Due from Other Funds 190388 190388 Due from Other Governments 25 1036 1061 Land Held for Resale 362923 362923
Total Assets 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable $ 1800$ 9908$ $ $ $ 1000$ 27$ 12735$ Contracts Payable 2941 2941 Due to Other Funds 119000 18060 66198 200960 50604 454822 Due to Other Governments 3500 66 3566 Salaries and Benefits Payable 67 67 134
Total Liabilities 0 123741 9908 18060 0 69698 202093 50698 474198
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 23 23
Fund Balance Nonspendable 1076 1076 2152 Restricted 11481 11481 Committed 11466 835956 847422 Assigned 67503 67503 Unassigned (18035) (69698) (200526) (50698) (338957)
Total Fund Balance 11466 835956 11481 (18035) 67503 (69698) (199450) (49622) 589601
Total Liabilities Deferred Inflows of Resources and Fund Balance 11466$ 959697$ 21389$ 48$ 67503$ 0$ 2643$ 1076$ 1063822$
66
NONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUECOMBINING BALANCE SHEET
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding ImprovementBonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
ASSETSCash and Investments 134649$ 53157$ 3288$ 310514$ 94388$ 360857$ 484929$ 1441782$ Taxes Receivable - Delinquent 5 5 Special Assessments Receivable
Delinquent 819 1553 2051 4423 Current and Deferred 45829 223930 9400 65636 278490 623285
Due from Other Governments 585 509 775 496 2365
Total Assets 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
DEFERRED INFLOWS OF RESOURCESAND FUND BALANCEDeferred Inflows of Resources
Unavailable RevenuesDelinquent Property Taxes $ $ $ $ $ 5$ $ 5$ Special Assessments 45829 223930 9400 65636 278490 623285
Total Deferred Inflows of Resources 45829 0 0 223930 9400 65641 278490 623290
Fund Balance Restricted 135234 53157 3288 311333 94897 363185 487476 1448570
Total Deferred Inflows of Resourcesand Fund Balance 181063$ 53157$ 3288$ 535263$ 104297$ 428826$ 765966$ 2071860$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
DECEMBER 31 2018
67
Public Works 2020Fire Street Street Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
ASSETSCash and Investments 50334$ $ 39748$ 122304$ 20402$ 83784$ 53265$ 30658$ 72597$ $ 473092$ Taxes Receivable - Delinquent 298 49 347Special Assessments Receivable
Current and Deferred 26935 26935Accounts Receivable 20000 20000Interest Receivable 9 9Due from Other Governments 24247 20606 2565 47418
Total Assets 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
LIABILITIES DEFERRED INFLOWS OF RESOURCES AND FUND BALANCELiabilities
Accounts Payable 350$ $ $ $ 10792$ $ $ $ $ $ 11142$ Contracts Payable 15700 5698 21398 Due to Other Funds 44073 82787 126860 Due to Other Governments 5910 5910
Total Liabilities 350 49983 0 0 10792 0 0 15700 0 88485 165310
Deferred Inflows of Resources Unavailable Revenues
Delinquent Property Taxes 298 49 347Special Assessments 26935 26935
Total Deferred Inflows of Resources 298 0 26984 0 0 0 0 0 0 0 27282
Fund Balance Restricted 72582 72582 Assigned 74240 42313 122304 9610 83784 53265 34958 15 420489 Unassigned (29377) (88485) (117862)
Total Fund Balance 74240 (29377) 42313 122304 9610 83784 53265 34958 72597 (88485) 375209
Total Liabilities Deferred Inflow of Resources and Fund Balance 74888$ 20606$ 69297$ 122304$ 20402$ 83784$ 53265$ 50658$ 72597$ 0$ 567801$
CITY OF ANNANDALE MINNESOTA
COMBINING BALANCE SHEETNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
DECEMBER 31 2018
68
TaxCharitable Economic TIF District Abatement - TIF District Lions TIF District Training WoodlawnGambling Development No 6 Dingmann No 12 Donation No 14 Center Cemetery
(222) (407) (411) (423) (438) (464) (465) (604) (651) Total
REVENUESProperty Taxes $ $ $ 2507$ $ $ $ $ $ 2507$ Tax Increments 20858 20858 Charges for Services 12875 19641 10120 42636 Investment Income (71) (2440) (140) (76) 1239 33 (1455)Contributions and Donations 108 49500 49608Miscellaneous 78 500 578
Total Revenues (71) 10621 20718 2507 0 49424 500 20880 10153 114732
EXPENDITURESCurrent
General Government 10807 10807 Public Safety 20116 20116 Economic Development 18399 19816 391 13752 52358
Capital OutlayCulture and Recreation 14187 14187 Economic Development 56446 56446
Total Expenditures 0 18399 19816 0 391 14187 70198 20116 10807 153914 Excess (Deficiency) of
Revenues Over (Under) Expenditures (71) (7778) 902 2507 (391) 35237 (69698) 764 (654) (39182)
OTHER FINANCING SOURCES (USES)Transfers In 51200 51200 Transfers Out (65804) (65804)
Total Other FinancingSources (Uses) 0 (14604) 0 0 0 0 0 0 0 (14604)
Net Change in Fund Balances (71) (22382) 902 2507 (391) 35237 (69698) 764 (654) (53786)
FUND BALANCE BEGINNING OF YEAR 11537 858338 10579 (20542) 391 32266 (200214) (48968) 643387
FUND BALANCE END OF YEAR 11466$ 835956$ 11481$ (18035)$ 0$ 67503$ (69698)$ (199450)$ (49622)$ 589601$
69
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - SPECIAL REVENUE
YEAR ENDED DECEMBER 31 2018
GO CapitalGO Improvement GO GO GO GO GO
Improvement Plan Refunding Equipment Improvement Refunding Refunding Improvement Bonds of Bonds of Certificate Bonds of Bonds of Bonds of Bonds of
2008B (332) 2008A (333) 2016A (334) 2011A (335) 2011B (336) 2012A (337) 2015A (338) Total
REVENUESSpecial Assessments 21259$ $ $ 37558$ 10657$ 20276$ 59921$ 149671$
EXPENDITURESDebt Service
Principal 80000 70000 54000 127000 210000 245000 35000 821000Interest and Other Charges 23944 14062 4095 64909 16975 18646 20333 162964
Total Expenditures 103944 84062 58095 191909 226975 263646 55333 983964 Excess (Deficiency) of
Revenues Over (Under)Expenditures (82685) (84062) (58095) (154351) (216318) (243370) 4588 (834293)
OTHER FINANCINGSOURCES (USES)Transfers In 76000 78113 22560 150000 194943 198000 65000 784616
Net Change in Fund Balances (6685) (5949) (35535) (4351) (21375) (45370) 69588 (49677)
FUND BALANCEBEGINNING OF YEAR 141919 59106 38823 315684 116272 408555 417888 1498247
FUND BALANCE END OF YEAR 135234$ 53157$ 3288$ 311333$ 94897$ 363185$ 487476$ 1448570$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - DEBT SERVICE
YEAR ENDED DECEMBER 31 2018
70
Public 2020Fire Street WorksStreet Police Building Street Recreational 2015 Improvement
Equipment Park Capital Outlay Equipment Equipment Capital Outlay Maintenance Facility Street Project Project(496 402) (460) (494) (495) (497) (498) (493) (425) (459) (466) Total
REVENUESProperty Taxes 25092$ $ 295631$ $ $ $ $ $ $ $ 320723$ Intergovernmental 4109 26201 30310 Charges for Services 8595 8595 Fines and Forfeitures 4299 4299 Investment Income (49) 105 (324) (1118) (80) (713) (503) (495) (458) (3635) Contributions and Donations 50650 1500 2000 30000 84150 Miscellaneous 101 101
Total Revenues 75693 14309 295307 (1017) 6219 (713) 25698 29505 (458) 0 444543
EXPENDITURESCurrent
Public Safety 22622 22622 Culture and Recreation 3735 3735
Capital OutlayPublic Safety 7500 59555 67055 Public Works 14006 14006 Culture and Recreation 16429 72035 88464 Economic Development 88485 88485
Total Expenditures 30122 20164 0 14006 59555 0 0 72035 0 88485 284367 Excess (Deficiency) of
Revenues Over (Under)Expenditures 45571 (5855) 295307 (15023) (53336) (713) 25698 (42530) (458) (88485) 160176
OTHER FINANCING SOURCES (USES)Proceeds from Sale of Assets 8800 15693 24493 Transfers In 84943 37504 60000 20000 107651 310098 Transfers Out (107503) (288000) (78113) (7700) (481316)
Total Other FinancingSources (Uses) (22560) 37504 (288000) 68800 35693 29538 0 (7700) 0 0 (146725)
Net Change in Fund Balances 23011 31649 7307 53777 (17643) 28825 25698 (50230) (458) (88485) 13451
FUND BALANCE BEGINNING OF YEAR 51229 (61026) 35006 68527 27253 54959 27567 85188 73055 361758
FUND BALANCE END OF YEAR 74240$ (29377)$ 42313$ 122304$ 9610$ 83784$ 53265$ 34958$ 72597$ (88485)$ 375209$
CITY OF ANNANDALE MINNESOTA
COMBINING STATEMENT OF REVENUES EXPENDITURES AND CHANGES IN FUND BALANCESNONMAJOR GOVERNMENTAL FUNDS - CAPITAL PROJECTS
YEAR ENDED DECEMBER 31 2018
71
FINANCIAL SECTION
This page intentionally left blank
Issue Interest Original Final Principal Due WithinDate Rates Issue Maturity Outstanding One Year
Governmental ActivitiesGO Improvement Bonds
GO Capital Improvement Plan Bonds Series 2008A 050608 300-400 895000$ 020122 295000$ 70000$ GO Special Assessment Bonds
GO Improvement Bonds Series 2008B 050608 300-4125 1175000 020124 560000 85000 GO Improvement Bonds Series 2011A 060811 105-415 1700000 020132 1300000 70000 GO Refunding Bonds Series 2011B 092711 085-270 1620000 020121 585000 215000 GO Refunding Bonds Series 2012A 040412 055-185 2225000 020122 1035000 255000 GO Improvement Bonds Series 2015A 050115 110-345 820000 020136 750000 35000
GO NotesGO Improvement Note of 2011 053111 1959 1217500 082031 846000 58000
GO Equipment CertificateGO Equipment Certificate 2016A 032116 2100 222000 020121 168000 55000
Compensated Absences 22979 Unamortized Bond Discount (22430)
Total Governmental Activities 5539549 843000
Business-Type ActivitiesGO Revenue Notes
PFA Water Revenue Note 011304 2819 3273194 082023 996000 188000 PFA Clean Water Revenue Note 081707 2220 16036613 082026 8086000 935000 PFA Water Revenue Note of 2015 081015 1031 929105 082035 812000 44000 PFA Sewer Revenue Note of 2015 090815 1000 125359 082035 110000 6000
Total Business-Type Activities 10004000 1173000
Total All Long-Term Liabilities 15543549$ 2016000$
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF LONG-TERM LIABILITIESDECEMBER 31 2018
72
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COMPLIANCE SECTION
This page intentionally left blank
Honorable Mayor and Members of the City Council
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
INDEPENDENT AUDITORS REPORT ON MINNESOTA LEGAL COMPLIANCE
73
The Minnesota Legal Compliance Audit Guide for Cities promulgated by the State Auditor pursuant to Minn Stat sect665 contains seven categories of compliance to be tested contracting and bidding deposits and investments conflicts of interest public indebtedness claims and disbursements miscellaneous provisions and tax increment financing Our audit considered all of the listed categories
In connection with our audit nothing came to our attention that caused us to believe that the City failed to comply with the provisions of the Minnesota Legal Compliance Audit Guide for Cities However our audit was not directed primarily toward obtaining knowledge of such noncompliance Accordingly had we performed additional procedures other matters may have come to our attention regarding the Citys noncompliance with the above referenced provisions
The purpose of this report is solely to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance Accordingly this communication is not suitable for any other purpose
City of AnnandaleAnnandale Minnesota
May 6 2019
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 majorfund and the aggregate remaining fund information as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
This page intentionally left blank
Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements we considered the Citys 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 Citys internal control Accordingly we do not express an opinion on the effectiveness of the Citys 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 entitys 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
74
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 and therefore material weaknesses or significant deficiencies may exist that were not identified 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 We did identify certain deficiencies in internal control described in the accompanying Schedule of Findings as 2018-001 and 2018-002 that we consider to be significant deficiencies
INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
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 the City of Annandale Minnesota as of and for the year ended December 31 2018 and the related notes to the financial statements which collectively comprise the Citys basic financial statements and have issued our report thereon dated May 6 2019
Compliance and Other Matters
Citys Response to Findings
Purpose of this Report
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
May 6 2019
75
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 Citys internal control or on compliance This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entitys internal control and compliance Accordingly this communication is not suitable for any other purpose
As part of obtaining reasonable assurance about whether the Citys 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
The Citys responses to the findings identified in our audit are described in the accompanying Schedule of Findings The Citys responses were not subjected to the auditing procedures applied in the audit of the financial statements and accordingly we express no opinion on them
I
FINDING 2018-001
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
76
LIMITED SEGREGATION OF DUTIES
There is an absence of appropriate segregation of duties consistent with appropriate control objectives due to a limited number of employees
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The City is aware of the limited segregation of duties and will continue to review internal controls and make changes when they can be made
The lack of adequate segregation of duties could adversely affect the Citys ability to initiate record process and report financial data consistent with the assertions of management in the financial statements
The basic premise is that no one person should have access to both physical assets and the related accounting records or to all phases of a transaction The lack of such controls could result in the occurrence of a material error or fraud in relation to the financial statements not being detected by management
The City has assigned duties to staff based on a cost-benefit relationship to the City and the practicality of the level of staffing the City maintains
The City should continue to monitor and evaluate the job responsibilities assigned to staff to determine whether there is an unacceptable risk
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGSDECEMBER 31 2018
I
FINDING 2018-002 AUDITOR PREPARED FINANCIAL STATEMENTS
Condition
Criteria
Cause
Effect
Recommendation
CORRECTIVE ACTION PLAN (CAP)Explanation of Disagreement with Audit FindingsNone
Actions Planned in Response to Findings
Official Responsible for Ensuring CAPKelly Hinnenkamp Administrator
Planned Completion Date for CAPDecember 31 2019
Plan to Monitor Completion of CAPCity Council
77
The City does not have an internal control system designed to provide for the preparation of the financial statements being audited However based on the degree of complexity and level of detail needed to prepare the financial statements in accordance with accounting principles generally accepted in the United States of America (GAAP) the City has requested the auditors to prepare them
The preparation of the financial statements and the related notes are the responsibility of management
There are a limited number of office employees and resources available to allow for the adequate preparation of the financial statements by the City
This could result in a material misstatement to the financial statements and related notes that would not be prevented or detected and corrected as a result of the Citys current internal control
The City should continue to request the assistance to draft the financial statements and related notes and thoroughly review these financial statements after they have been prepared so the City can take responsibility for them
The City is aware of this however due to significant cost and a limited number of employees it is in the Citys best financial interest to contract for the preparation of the financial statements
FINDINGS RELATED TO FINANCIAL STATEMENTS AUDITED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS (Contd)
Comment Year Finding If Not Corrected Provide PlannedReference Comment Title Status Initially Occurred Corrective Action or Other Explanation
Financial Statement Findings
2017-001 Not Corrected 2009 See current year finding 2018-001
2017-002 Not Corrected 2009 See current year finding 2018-002
Minnesota Legal Compliance Findings
None
DECEMBER 31 2018SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
CITY OF ANNANDALE MINNESOTA
78
Limited Segregation of Duties
Auditor Prepared Financial Statements
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORS
WILLMAR MINNESOTA
CITY OF ANNANDALE MINNESOTA
MANAGEMENT LETTER
DECEMBER 31 2018
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Page
Required Communications 1-3
Schedule of Findings on Accounting Issues and Internal Controls 4
CITY OF ANNANDALE MINNESOTA
DECEMBER 31 2018TABLE OF CONTENTS
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Honorable Mayor and Members of the City CouncilCity of AnnandaleAnnandale Minnesota
Significant Audit Findings
Qualitative Aspects of Accounting Practices
We have audited the financial statements of the governmental activities the business-type activities each major fund and the aggregate remaining fund information of the City of Annandale Minnesota for the year ended December 31 2018 Professional standards require that we provide you with information about our responsibilities under generallyaccepted auditing standards and Government Auditing Standards as well as certain information related to the planned scope and timing of our audit We have communicated such information in our letter to you dated December 20 2018 Professional standards also require that we communicate to you the following information related to our audit
The financial statement disclosures are neutral consistent and clear
1
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 the financial statements No new accounting policies were adopted and the application of existing policies was not changed in 2018 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 are an integral part of the financial statements prepared by management and are based on managements 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
Managements estimate of depreciation is based on the number of years an asset is in service We evaluated the key factors and assumptions used to develop the depreciation estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Managements estimate of pension liabilities is based on actuarial valuations performed by consultants specializing in those areas We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole
Significant Audit Findings (Contd)
Difficulties Encountered in Performing the Audit
Corrected and Uncorrected Misstatements
Disagreements with Management
Management Representations
Management Consultations with Other Independent Accountants
Other Audit Findings or Issues
Other Matters
Professional standards require us to accumulate all known and likely misstatements identified during the audit other than those that are clearly trivial and communicate them to the appropriate level of management Management has corrected all such misstatements In addition none of the misstatements detected as a result of audit procedures and corrected by management were material either individually or in the aggregate to each opinion units financial statements taken as a whole
We encountered no significant difficulties in dealing with management in performing and completing our audit
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 Citys 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
We generally discuss a variety of matters including the application of accounting principles and auditing standards with management each year prior to retention as the Citys auditors However these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention
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 We are pleased to report that no such disagreements arose during the course of our audit
We have requested certain representations from management that are included in the management representation letter dated May 6 2019
We applied certain limited procedures to Managements Discussion and Analysis the Schedule of Proportionate Share of the Net Pension Liability Schedule of Employer Contributions the Schedule of Changes in the Citys Net Pension Liability and Related Ratios and the related notes to required supplementary information which are required supplementary information that supplements the basic financial statements Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries the basic financial statements and other knowledge we obtained during our audit of the basic financial statements We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information
2
Other Matters (Contd)
Restriction on Use
CONWAY DEUTH amp SCHMIESING PLLPCPAS amp ADVISORSWILLMAR MINNESOTA
This information is intended solely for the use of the City Council and management of the City of Annandale Minnesota and is not intended to be and should not be used by anyone other than these specified parties
3
We were not engaged to report on the Elected Officials and Administration section which accompany the financial statements but are not required supplementary information We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it
May 6 2019
We were engaged to report on the statements and schedules listed in the table of contents as supplementary information which accompany the financial statements but are not required supplementary information With respect to this supplementary information we made certain inquiries of management and evaluated the form content and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America the method of preparing it has not changed from the prior period and the information is appropriate and complete in relation to our audit of the financial statements We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves
This page intentionally left blank
4
CITY OF ANNANDALE MINNESOTA
SCHEDULE OF FINDINGS ON ACCOUNTING ISSUES AND INTERNAL CONTROLS
We noted certain matters involving the internal control structure and its operation that we consider being deficiencies in internal control under standards established by the American Institute of Certified Public Accountants 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
The objective of internal accounting control is to provide reasonable but not absolute assurance as to the safeguarding of assets against loss from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the valuation of these factors necessarily requires estimates and judgments by management
It should be recognized that within the City an inherent risk is present with certain positions It is very common for cities such as the City of Annandale Minnesota to assign many major responsibilities to a few key individuals in an attempt to operate within limited budgets The inherent risk is again addressed only to maintain the awareness of the internal control structure and to encourage the Councils continual review of financial information at monthly meetings
DECEMBER 31 2018
INTERNAL CONTROL
GENERAL RECOMMENDATIONS
Throughout the course of the audit we spoke to management regarding certain items that we see as an opportunity to improve None of these were considered significant within the scope of the audit The items discussed requiring action have been resolved or are in the process of resolution We would like to acknowledge the assistance and courtesies extended to us by the personnel of the City of Annandale Minnesota
City of Annandale Minnesota
Audit ReportDecember 31 2018
Independent Auditorrsquos ReportPages 2-4bull Financial statements are the responsibility of the Cityrsquos
managementbull Our responsibility is to express opinions on these financial
statements based on our auditbull Conducted audit in accordance with Generally Accepted
Auditing Standards and Government Auditing Standardsbull Obtain reasonable assurance financials are free from
material misstatement
1
Independent Auditorrsquos Report (Contrsquod)Pages 2-4
bull Financial statements are presented fairly in our opinion
bull Internal control letter on pages 74 and 75
2
Statement of Net Position
3
2018 2017ASSETS AND DEFERRED OUTFLOWS OF RESOURCESAssets
Current and Other 12893519$ 12739729$ Capital 20949843 21526486
Total Assets 33843362 34266215
Deferred Outflows of Resources 656980 914167 Total Assets and Deferred Outflows of Resources 34500342$ 35180382$
LIABILITIES DEFERRED INFLOWS OF RESOURCESAND NET POSITIONLiabilities
Current Liabilities 660359$ 497847$ Noncurrent Liabilities
Net Pension Liability 894343 236206 Due Within One Year 2016000 1967000 Due in More Than One Year 13527549 16383958
Total Liabilities 17098251 19085011
Deferred Inflows of Resources 940554 951385
Net PositionNet Investment in Capital Assets 13587855 13119128 Restricted 2095629 2215725 Unrestricted 778053 (190867)
Total Net Position 16461537 15143986 Total Liabilities Deferred Inflows of Resources
and Net Position 34500342$ 35180382$
