HomeMy WebLinkAbout2013 CAFRCOMPREHENSIVE
ANNUAL
FINANCIAL
REPORT
FOR THE YEAR ENDED DECEMBER 31, 2013
MINNESOTA
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• J� S 1y-
1685 CROSSTOWN BOULEVARD N.W.. ANDOVER, MINNESOTA 55304 . (763) 755 -5100
FAX (763) 755 -8923 . WWW.CI.ANDOVER.MN.US
Comprehensive Annual Financial Report
of the
City of Andover, Minnesota
For the Year Ended
December 31, 2013
Prepared By: Finance Department
City of Andover
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
I. INTRODUCTORY SECTION
Letter of Transmittal 2
Organization 10
Organizational Chart 11
Certificate of Achievement 12
IL FINANCIAL SECTION
Independent Auditor's Report
14
Management's Discussion and Analysis
17
Basic Financial Statements:
Government -Wide Financial Statements:
Statement of Net Position
Statement 1
29
Statement of Activities
Statement 2
30
Fund Financial Statements:
Balance Sheet - Governmental Funds
Statement 3
32
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental Funds
Statement 4
34
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
Statement 5
37
Statement of Net Position - Proprietary Funds
Statement 6
38
Statement of Revenues, Expenses, and Changes in Fund Net Position -
Proprietary Funds
Statement 7
40
Statement of Cash Flows - Proprietary Funds
Statement 8
42
Statement of Fiduciary Net Position - Fiduciary Funds
Statement 9
44
Notes to Financial Statements
45
Required Supplementary Information:
Budgetary Comparison Schedule - General Fund
Statement 10
78
Schedule of Funding Progress - Other Post Employment Benefits Plan
Statement 11
80
Notes to Required Supplementary Information:
Budgets
81
Modified Approach for City Streets and Trails Infrastructure Capital Assets
81
Combining and Individual Fund Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental Funds
Statement 12
85
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Nonmajor Governmental Funds
Statement 13
86
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
Nonmajor Special Revenue Funds:
Subcombining Balance Sheet - Nonmajor Special Revenue Funds Statement 14 88
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue Funds Statement 15 90
Nonmajor Debt Service Funds:
Subcombining Balance Sheet - Nonmajor Debt Service Funds Statement 16 94
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Debt Service Funds Statement 17 96
Nonmajor Capital Projects Funds:
Subcombining Balance Sheet - Nonmajor Capital Project Funds Statement 18 100
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Capital Project Funds Statement 19 102
Special Revenue Funds:
Table 1
122
Schedules of Revenues, Expenditures and Changes in
Table 2
124
Fund Balances - Budget and Actual:
Table 3
128
EDA General
Statement 20
104
Community Development Block Grant
Statement 21
105
Community Center
Statement 22
106
Drainage and Mapping
Statement 23
107
LRRWMO
Statement 24
108
Forestry
Statement 25
109
Right -of -Way Management/Utility
Statement 26
110
Charitable Gambling
Statement 27
111
Construction Seal Coating
Statement 28
112
Internal Service Funds:
Combining Statement of Net Position - Internal Service Funds
Statement 29
114
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position -
Internal Service Funds
Statement 30
115
Combining Statement of Cash Flows - Internal Service Funds
Statement 31
116
Agency Funds:
Combining Statement of Net Position - Fiduciary Funds
Statement 32
118
Combining Statement of Changes in Assets and Liabilities - Fiduciary Funds
Statement 33
119
III. STATISTICAL SECTION
Net Position by Component - Last Ten Fiscal Years
Table 1
122
Changes in Net Position - Last Ten Fiscal Years
Table 2
124
Fund Balances - Governmental Funds - Last Ten Fiscal Years
Table 3
128
Changes in Fund Balances - Governmental Funds - Last Ten Fiscal Years
Table 4
130
Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years
Table 5
132
Property Tax Rates - Per $1,000 of Assessed Tax Capacity Value - Direct and Overlapping
Governments - Last Ten Fiscal Years
Table 6
133
Property Tax Levies and Collections - Last Ten Fiscal Years
Table 7
134
Principal Taxpayers - Current Year and Nine Years Ago
Table 8
135
Estimated Market Values and New Construction - Last Ten Fiscal Years
Table 9
136
Special Assessment Levies and Collections - Last Ten Fiscal Years
Table 10
137
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
IV. OTHER INFORMATION
Combined Schedule of Indebtedness Exhibit 1 154
Schedule of Tax Capacity Rates and Levies Exhibit 2 156
Schedule of Deferred Tax Levies - General Obligation Bonds Exhibit 3 157
Schedule of Fund Transfers Exhibit 4 158
Page
Reference
No.
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita -
Last Ten Fiscal Years
Table 11
138
Computation of Direct and Overlapping Debt
Table 12
139
Computation of Legal Debt Margin - Last Ten Fiscal Years
Table 13
140
Pledged - Revenue Coverage - Last Ten Fiscal Years
Table 14
142
Outstanding Debt by Type - Last Ten Fiscal Years
Table 15
144
Demographic and Economic Statitistics - Last Ten Years
Table 16
146
Principal Employers - Prior Year and Ten Years Ago
Table 17
147
Full Time Equivalent Employees - City Government Employees by Function/Program -
Last Ten Fiscal Years
Table 18
148
Operating Indicators by Function/Program - Last Ten Years
Table 19
150
Capital Asset Statistics by Function/Program - Last Ten Years
Table 20
152
IV. OTHER INFORMATION
Combined Schedule of Indebtedness Exhibit 1 154
Schedule of Tax Capacity Rates and Levies Exhibit 2 156
Schedule of Deferred Tax Levies - General Obligation Bonds Exhibit 3 157
Schedule of Fund Transfers Exhibit 4 158
I. INTRODUCTORY SECTION
I
1685 CROSSTOWN BOULEVARD N.W.. ANDOVER, MINNESOTA 55304 . (763) 755 -5100
FAX (763) 755 -8923 . WWW.ANDOVERMN.GOV
May 7, 2014
To the Honorable Mayor and City Council
City of Andover
1685 Crosstown Blvd. NW
Andover, Minnesota 55304
Dear Honorable Mayor and Council Members:
The Comprehensive Annual Financial Report is submitted in conformance with all applicable governing laws and regulations.
The following has set the standards forth:
*Andover City Policy and Code
*The State Auditor, State of Minnesota
*Government Finance Officers Association
*Governmental Accounting Standards Board
RESPONSIBILITY. Responsibility for both the accuracy of the presented data and the completeness of the financial statements
including all disclosures rests with the City. We believe the data, as presented, is accurate in all material aspects. This report has
been presented in a manner designed to fairly set forth the financial position and results of operations as measured by the
financial activity of its various funds.
FINANCIAL STATEMENT FORMAT. This Comprehensive Annual Financial Report is presented in three main sections:
I. Introductory
I1. Financial
I11. Statistical
The Introduction includes a list of the City's principal officials as of December 31, 2013, the table of contents, the public
officials, organizational chart, and this Letter of Transmittal. The Financial Section includes: (1) independent auditor's report;
(2) management's discussion and analysis; (3) government wide and fund financial statements; (4) notes to the financial
statements; (5) required supplementary information; (6) the combining statements, individual fund statements; and, (7) the
supplemental information. The Statistical Section includes tables and reports of various economic, social, financial and fiscal
data designed to reflect trends and ratios.
Generally Accepted Accounting Principles (GAAP) requires that management provide a narrative introduction, overview, and
analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD &A). This letter
of transmittal is designed to complement the MD &A and should be read in conjunction with it. The City of Andover's MD &A
can be found immediately following the report of the independent auditors.
REPORTING ENTITY. All City funds, departments, commissions, and other organizations for which the City of Andover is
financially accountable are presented within the Comprehensive Annual Financial Report. The Andover Firefighters' Relief
Association does not meet the established criteria for inclusion in the reporting entity, and accordingly is excluded from this
report.
GENERAL INFORMATION. The city we know today as Andover was first organized in 1857 under the name "Round Lake
Township." However, in 1860 the name was changed to "Grow Township" in honor of Senator Galusha A. Grow of
Pennsylvania. Senator Grow spoke at a political campaign in Anoka that year, and the town name was changed to reflect Senator
Grow because of his strong advocacy of the Union cause. At that time, the population was 330 and included the geographical
area we know today as Ham Lake. In fact, the area of Ham Lake was considered a part of Grow Township until 1871.
In 1972, the Grow Township Board of Supervisors recognized that the town was growing at a very rapid rate. They felt a village
form of government would provide better services to the community. Board supervisors then voted in favor of proceeding with
the incorporation process. The board voted to submit a new name for the village. "Andover Village" was chosen because the
name Andover had historical interest. The historical interest, we believe, came from the Andover train station.
To the Honorable Mayor and City Council
City of Andover, Minnesota
You may have heard the popular "train myth" about how Andover received its name. The myth states that a train tipped over in a
swamp, and an eyewitness, relaying the incident, said it "went over and over," thereby naming the city "Andover." However,
research reveals that the name Andover first appeared in an article dated March 14, 1899 in the Anoka County Union Newspaper
- before train tracks were ever built in the city.
The article stated that the Eastern Minnesota line of the Great Northern Railway was in the process of constructing railroad tracks
from the Coon Creek Cut -off to the North. The railway announced that new railroad stations with mathematical precision were to
be located five miles apart from each other. The new stations (from Coon Creek to the North, along the new railroad line) were
to be named Andover, Cedar, Bethel, Isanti, Cambridge, Stanchfield, Braham, Grasston, Cornell, and Brook Park. On July 4,
1899, the first train passed through the Andover station. Where the railway came up with the name Andover still remains
unknown.
Andover Village was established in 1972 and then became the City of Andover, a city of the fourth class, in 1974. Today the
City of Andover's population exceeds 20,000, classifying it as a second class city.
The City of Andover as it exists today consists of 23,040 acres. Andover has a population estimated at 31,375. A growing
suburb of the northern metropolitan area, the City of Andover is approximately sixteen miles from Minneapolis.
SERVICES PROVIDED. The City of Andover provides various services to the residents in the community. The current
services are:
General Government
Protective inspection Animal control
Fire protection
Mayor and City c ouncil
Financial administration
Information systems
Newsletter
Elections
Facility management
City clerk
Assessing
Engineering
Administration
Legal
Risk management
Human resources
Planning and zoning
Public Safety
Police
Protective inspection Animal control
Fire protection
Civildefense
Public Works:
Streets and highways
Street signs Traffic signals
Snow and ice removal
Central equipment maintenance Water maintenance
Street lighting
Sanitation:
Storm sewers
Sanitary sewer maintenance
Parks and Recreation
Recycling
GOVERNMENT STRUCTURE. Andover is a statutory city with the City Council appointing a City Administrator. The City
Administrator has operating responsibilities for all City functions. A list of public officials and organizational chart can be found
on page 10 and 11 respectively.
ECONOMIC CONDITION AND OUTLOOK
Moderate population growth is expected to continue in 2014 and 2015, with an estimated population of 31,500 by 2014. The rate
of residential growth as compared to the growth in the 1990's and 2000's has significantly declined as the availability of
residentially zoned property decreased. The City has experienced a significant amount of commercial growth from 2000 through
current 2013. Continual commercial growth is anticipated over the next five to ten years, beyond that growth will slow as the
amount of undeveloped commercially zoned property also declines.
The City's General Fund has two major categories of revenue, which accounted for 85% of the total in 2013. They are general
property taxes at 74% and charges for services at 11 %. In prior years, intergovernmental revenue was the second largest category
of revenue for the General Fund. Intergovernmental revenue includes state aids, such as local government aid (LGA), market
value homestead credit (MVHC), highway maintenance aid, fire relief aid and police aid; and county grants, such as recycling
and community development.
To the Honorable Mayor and City Council
City of Andover, Minnesota
During the past several years, the State of Minnesota has made numerous changes to laws pertaining to the distribution of LGA,
Homestead and Agricultural Credit Aid (HACA) and MVHC resulting in significant reductions in intergovernmental revenue.
The City has been able to make up this loss in aid through operational efficiencies and an increased tax levy, the most substantial
increase in the local tax rate took place in 2002. The tax laws that resulted in the 2002 change also greatly reduced school district
property tax levies, resulting in no net tax increase for most residential property owners. Sweeping changes approved in 2003
resulted in the loss of approximately $590,000 in aid to Andover, that loss in aid was originally intended to be for two years
(2003 & 2004) but that loss was extended to include years 2005 and 2006. The state allowed cities the ability to levy up to 60%
of the lost 2003 aid in 2004. Again, in 2008 through 2012, the State of Minnesota significantly reduced MVHC to help deal with
the state budget deficit. In 2013, the State eliminated MVHC and instituted the new market value exclusion program.
In 2014, LGA will be reinstated for the City in the amount of $73,490. Due to the unpredictability of the State, those funds will
be used to fund one -time capital projects or help offset the growing needs of the Road and Bridge Capital Projects Fund for street
improvements /replacements. The City is not intending to rely on this funding for general operational needs.
For 1998 through 2000, cities with populations over 2,500 were under levy limit restrictions imposed by the State. Levy limits
severely curb the ability of cities to generate additional tax revenue needed to respond to an increasing demand for services. For
1999 and 2000, the levy limit formula was modified to allow for increases based on commercial and industrial growth. This was
a favorable change for Andover, as the City experienced a surge in commercial growth during the past few years. Levy limits
were lifted for 2001 but were reinstated for 2002 - 2004. The 2004 levy limits were so severe that the State did not allow cities
the ability to capture residential and commercial market value growth. Levy limits were lifted from 2005 to 2008, but reinstated
for 2009 and are still in place in some form today.
The City's General Fund receives a substantial amount of revenue from licenses and permits. The past ten years are shown
below:
Revenues Change
2004
$ 674,008
n/a
2005
724,436
$ 50,428
2006
598,094
(126,342)
2007
475,893
(122,201)
2008
525,339
49,446
2009
291,903
(233,436)
2010
329,901
37,998
2011
387,206
57,305
2012
449,826
62,620
2013
536,706
86,880
Revenue from residential building continued to modestly increase through 2010, 2011, 2012 and 2013, but it is unlikely that
those revenues will reach the levels of the early 2000's as a reduced number of new residential lots are being added to the overall
lot inventory. The decrease in 2006 and 2007 is largely due to a slowing economy and home building market. A slight increase
in 2008 is primarily due to the commercial activity taking place but the decrease in 2009 is due to the continued downturn in the
economy, especially the construction industry. In 2010, 2011, 2012 and 2013, the home building market showed signs of
improvement and some commercial activity taking place accounted for the increase in permit revenue.
The City's General Fund also receives a considerable amount of revenue from charges for services. The past ten years are shown
below:
Revenues Change
2004
$ 798,795
n/a
2005
933,365
$ 134,570
2006
780,273
(153,092)
2007
1,121,642
341,369
2008
772,430
(349,212)
2009
701,289
(71,141)
2010
755,184
53,895
2011
866,584
111,400
2012
973,605
107,021
2013
1,122,461
148,856
To the Honorable Mayor and City Council
City of Andover, Minnesota
The City analyzes user fees every year as part of the budget process and makes adjustments where appropriate. Revenue from
charges for services totaled $1,121,642 in 2007 and this increase can be linked to the number of public improvement projects
being finalized and assessed in 2007. 2008 proved to be better than expected due to some residential plat activity taking place
but the decrease in 2009 was expected due to the struggling economy. In 2010, 2011, 2012 and 2013, the home building market
showed signs of improvement and some commercial activity taking place accounted for the increase in plan review revenue.
In 2013, the City issued 98 new single - family building permits with a total valuation of $20,351,892 compared to 81 new single -
family building permits with a total valuation of $15,243,007 the prior year. The past ten years are shown below:
Residential Development
New residential development included the development of a 19 lot subdivision known as Miller's Woods 4t' Addition.
Construction was also completed on a new 70 unit senior housing facility known as Arbor Oaks located at 1640 155"' Lane NW.
Construction also commenced on a new 20 unit senior housing assisted living facility known as Cherrywood of Andover located
at 1889 139th Avenue NW.
The City currently has a supply of 41 single family urban lots and 30 single family rural lots. As of spring 2014, there are 6 new
urban residential developments in various phases of the subdivision/platting approval process totaling 293 lots that have the
potential to be coming on line in 2014/2015.
Commercial Industrial Development
New institutiona l /commercial/industrial construction did occur in 2013. Wal -Mart constructed a 151,000 s.f. store located at
1851 Bunker Lake Boulevard NW. Pizza Ranch constructed a 7,000 s.f. restaurant at 13797 Jay Street NW. Christian Brothers
Automotive opened a new 9 bay repair facility located at 1716 Bunker Lake Boulevard NW.
In 2014, Measurement Specialties will be breaking ground on a 52,000 s.f. light manufacturing facility at 1711 139th Lane NW
with completion planned by the end of the year.
EMPLOYMENT
The City of Andover's largest employers are government entities. The Anoka - Hennepin School District has a significant
presence in the community and Anoka County's Parks and Highway Departments and Sheriffs Office headquarters are located in
Andover. The City of Andover is best classified as a bedroom community, since a majority of the residents commute outside of
Andover for employment opportunities. The City does anticipate with the development of the Andover Station Commercial Park
and other commercial developments that additional employment opportunities will be provided to residents in the near future.
Major employers in Andover are as follows:
Residential
Commercial / Industrial
Permits
Valuation
Permits
Valuation
2004
251
$ 36,224,546
16
$19,926,817
2005
226
34,309,393
20
6,571,671
2006
153
25,236,120
8
1,791,896
2007
91
18,347,873
9
2,403,831
2008
49
11,116,400
11
16,878,603
2009
47
9,246,347
13
767,430
2010
71
14,700,800
11
1,247,106
2011
58
11,803,000
24
11,461,453
2012
81
15,243,007
25
5,042,964
2013
98
20,351,892
15
9,249,466
Residential Development
New residential development included the development of a 19 lot subdivision known as Miller's Woods 4t' Addition.
Construction was also completed on a new 70 unit senior housing facility known as Arbor Oaks located at 1640 155"' Lane NW.
Construction also commenced on a new 20 unit senior housing assisted living facility known as Cherrywood of Andover located
at 1889 139th Avenue NW.
The City currently has a supply of 41 single family urban lots and 30 single family rural lots. As of spring 2014, there are 6 new
urban residential developments in various phases of the subdivision/platting approval process totaling 293 lots that have the
potential to be coming on line in 2014/2015.
Commercial Industrial Development
New institutiona l /commercial/industrial construction did occur in 2013. Wal -Mart constructed a 151,000 s.f. store located at
1851 Bunker Lake Boulevard NW. Pizza Ranch constructed a 7,000 s.f. restaurant at 13797 Jay Street NW. Christian Brothers
Automotive opened a new 9 bay repair facility located at 1716 Bunker Lake Boulevard NW.
In 2014, Measurement Specialties will be breaking ground on a 52,000 s.f. light manufacturing facility at 1711 139th Lane NW
with completion planned by the end of the year.
EMPLOYMENT
The City of Andover's largest employers are government entities. The Anoka - Hennepin School District has a significant
presence in the community and Anoka County's Parks and Highway Departments and Sheriffs Office headquarters are located in
Andover. The City of Andover is best classified as a bedroom community, since a majority of the residents commute outside of
Andover for employment opportunities. The City does anticipate with the development of the Andover Station Commercial Park
and other commercial developments that additional employment opportunities will be provided to residents in the near future.
Major employers in Andover are as follows:
To the Honorable Mayor and City Council
City of Andover, Minnesota
Firm
Anoka-Hennepin ISD No 11
Fairview- Andover Clinic
Kottkes' Bus Service, Inc.
YMCA
Bunker Hills Regional P ark / Activity Center
Anoka County Sheriffs Office
Target
Meadow Creek Christian School
Anoka County Highway Department
Andover County Market
MAJOR INITIATIVES
Type of Business / Product
Number of
Employees
Elementary and secondary education
900
Healthcare
300
Bus transportation
190
Youth organization - fitness center
183
County government and services
180
County government and services
178
Retail
170
Private education K 12
127
County government and services
103
Retail
100
FOR THE YEAR. The City has many accomplishments to report for 2013. The following list is a summary of some of the
major initiatives completed throughout the year.
1) Ongoing implementation of a single - family rental housing license program to provide property owners /landlords with
educational materials and checklists on how to inspect and maintain the exterior of the property, a list of potential
ordinance violations that may occur with a rental property, and an exterior inspection of the building and grounds with
city staff. This program was authorized by the Andover City Council in 2009 and is reviewed annually, there were
close to 275 single family rental licenses issued throughout the City in 2013.
2) Three street projects were completed in 2013. Two of the projects, Stenquist Addition/159t' Avenue and Heather
Street/174th Avenue /173 Lane, were funded primarily by tax levy and special assessments. The other project;
Nightingale Street was funded by State Aid, tax levy, utility funds and assessments. The Nightingale Street project
included new trails helping connect various City neighborhoods. In two of the projects, the existing bituminous was
reclaimed, concrete curb was added or replaced, storm sewer structures were replaced or added, and a new bituminous
surface was laid. For the Heather Street/174th Avenue /173Lane project, a gravel road was transformed into streets
with storm sewer, concrete curb and a new bituminous surface.
3) In 2013 the City of Andover and City of Anoka, in cooperation with the Anoka County Highway Department, saw
Bunker Lake Boulevard and County Road 7 be reconstructed and was financed by a federal grant. A trail was also
added to this reconstruction project and was funded by a Metropolitan Council Regional Trail Grant.
4) In 2013 the City saw the start and completion of a new 151,000 sq. ft. Wal -Mart Superstore. The construction was
completed on a former bar /restaurant site that fell on hard times and had fallen into delinquency. The construction of
the new Wal -Mart Store also facilitated significant off -site road improvements paid for by Wal -Mart. The store opened
in early November 2013.
5) In 2013 the City welcomed the construction of a new Pizza Ranch restaurant on an abandon Andover Station North
commercial parcel. The construction of the restaurant on the abandon site adjacent to the new Wal -Mart significantly
improves the aesthetic view of the area. The restaurant opened December 30, 2013.
6) The City welcomed Arbor Oaks, a 70 unit assisted living facility in 2013. This project was assisted by the Andover
Economic Development Authority (EDA) creating a tax increment financing district to help with site preparation
construction costs; in exchange, the developer will provide affordable rents for future tenants on 20% of the units.
7) The City continues to work with Dynamic Sealing Technologies Inc. (DSTI), a global leader in the design and
manufacturing of rotary unions and swivel joint products. In 2012, the City welcomed a 49,000 sq. ft. facility
expansion expected to generate 50 new jobs for the community. DSTI also acquired an adjacent parcel that will allow
for another facility expansion of 50,000 sq. ft. in the future, anticipated to start in 2014. In 2013, the City EDA
negotiated the sale of another parcel to DSTI, it is envisioned that a separate 100,000 sq ft manufacturing facility will
be built on the approximately 7.25 acre parcel; this facility would focus on large product manufacturing, allowing DSTI
to expand into additional markets.
8) In 2013 the City EDA negotiated the sale of an Andover Station North commercial /industrial parcel to Measurement
Specialties Incorporated, as global designer and manufacturer of sensors and sensor based systems. A December 2013
sale closing was completed on the lot, construction of a 52,000 sq. ft. manufacturing facility is set to take place in
To the Honorable Mayor and City Council
City of Andover, Minnesota
spring 2014. Once the facility is open for occupancy, approximately 100 new jobs will immediately locate to the City
of Andover and an additional 75 —100 jobs will follow shortly thereafter.
9) The City Economic Development Authority (EDA) acquired the Parkside at Andover Station residential development
in late 2011. This development was sold to a developer originally in 2003 and when residential building stalled in
2009, it became a casualty of the poor townhome market. The EDA in 2012, after a brief marketing period, sold the
model home in less than 30 days and secured a purchased agreement with Capstone Homes to build 36 single family
homes on a significant portion of the site. Capstone Homes completed the construction of the last home in this
development in late 2013.
10) In 2013 the City EDA sold a two acre parcel in the Parkside at Andover Station development area to Cherrywood
Advance Living for the construction of a 20 unit advanced living facility. Construction of the Cherrywood of Andover
facility was well underway in late 2013 and the facility is expected to open mid -2014.
11) In 2013 the City EDA sold an eight -unit townhome lot in the Parkside at Andover Station development to Capstone
Homes for the construction of an eight -unit townhome structure. Construction of the project is expected to occur in
spring 2014. With this sale, all that remains in the Parkside at Andover Station development is one four -unit townhome
lot.
12) The City of Andover EDA went through the public hearing process in 2011 to modify the City Development Plan to
create redevelopment areas of the community and to facilitate the opportunity to acquire dilapidated and substandard
multi - family homes within specified target areas. The EDA was successful in acquiring one 4 -plex property in
November of 2011 to start the redevelopment process. The EDA was also successful in acquiring a very dated
convenience store /gas station in December of 2012 to continue to add to the critical land mass necessary to start
marketing for a redevelopment project. Demolition of the convenience store /gas station was completed during summer
2013.
13) The City purchased a 40 acre parcel from Legacy Christian Academy in 2012. The purpose of the purchase was to
develop a park facility that will provide needed ball fields and community park amenities. This new facility started
Phase 1 of development in 2013 with the installation of three full size athletic (soccer /football) fields with irrigation
and accompanying parking. The facility will be open for activities in late summer /early fall of 2014.
14) The City secured a lease with Subway LLC in late 2012 to operate out of the existing Andover Community Center
concessions area in an effort to better utilize the space at the Andover Community Center. The facility was open for
business in early 2013 and to date operations have been exceeding expectations. The City felt Subway's commitment
to and promotion of healthy eating would be a great fit for the Andover Community Center and YMCA, recent
operations is proving that to be correct.
15) In 2013, the City of Andover received The Most Prolific Recycling Program in 2012 award from the Anoka County
Board of Commissioners. Andover residents had the highest recycling rate per person for all materials of any Anoka
County municipality. In 2013 City started the construction of a new Recycling Center. This construction was financed
by Anoka County grants in an effort to expand the current recycling opportunities for Anoka County residents.
16) The City Council adopted a goal to make a concerted effort toward promoting the City of Andover's image and
livability. The EDA, as part of its community marketing efforts, installed a community monument entrance sign and
two electronic reader boards in strategic locations in 2012. One electronic reader board was installed at the City Hall
campus and the other reader board was installed at the high traffic intersection of Crosstown Boulevard and Bunker
Lake Boulevard to display community events. The entrance monument was installed on Round Lake Boulevard at the
southern Andover border with Coon Rapids. One more monument was installed in 2013 on the east border along
Bunker Lake Boulevard. A future west border monument sign along Bunker Lake Boulevard will be completed along
with a future commercial development at that location.
17) The successful hosting of the City's Annual Business Appreciation Day to recognize and build awareness of the local
business community and strengthens relationships with this important element of the Andover community. This event
was coordinated through the Community Development Department.
18) The City Open Space Commission, appointed to assist in managing the successful $2,000,000 open space referendum
ballot in 2006, continues to review and make recommendations to the City Council on land that should be purchased as
permanent open space in the community. The first purchase took place in December 2009 (Martins Meadows), a
second purchase in October 2010 (Northwoods Preserve) and a third purchase that was negotiated in 2013 will close in
early 2014. Throughout 2013, the City Parks Department focused on creating nature trails, appropriate signage and
accessibility to the open space parcels.
To the Honorable Mayor and City Council
City of Andover, Minnesota
19) The City continues to make significant progress on the process of digitally imaging documents retained by the City.
The imaging project has helped the City reduce staffing through data storage retrieval efficiencies and eliminated the
need for office expansion.
20) The City continues to utilize updates to our financial management software to improve reporting and operating
efficiencies. These updates continue to yield reduced personnel costs and more timely reports. In 2013 the City
changed contractors for utility billing services.
FOR THE FUTURE. The City continues to focus on quality of life improvements throughout the City. These efforts cover a
broad array of areas including: protecting and improving the environment, revitalization of parks and public areas, expanding
recreational opportunities, providing cost - effective city services, increased communication between city representatives and the
public and added commercial /retail opportunities.
The City utilizes many avenues to reach its residents, whether through community access television, electronic reader boards, the
City newsletter or the City's webpage (www.andovermn.gov). It is important to the City that our residents are informed and have
the ability to participate in the activities of their City. The City did conduct a community survey in 2006, with the help of a
polling firm, to secure opinions and suggestions from the public. The City will again do a community survey in early 2014.
RELEVANT FINANCIAL POLICIES
The City has a policy regarding General Fund reserve balances. The City plans for an unassigned fund balance in the General
Fund equivalent to 6- months of the current year's budgeted expenditures to provide working capital between semi - annual
property tax settlements. Since the property tax settlements are received by the City in July and December, the City needs
sufficient cash reserves to avoid short -term borrowing to finance operations. The City also classifies fund balances for prepaid
items, inventories and other legal obligations. The City may also classify a portion of fund balance for special purposes.
The primary goal of the City's investment policy is to ensure the safety of the principal invested. Cash temporarily idle during
the year is invested in certificates of deposit, commercial paper, and obligations of the U.S. Treasury and government agencies.
Cash balances from all City funds are pooled into an investment fund and investment income is distributed on a pro -rata basis at
the end of each quarter. Extended maturities are utilized to take advantage of higher yields but staggered in a way to meet
projected liquidity needs.
Capital financing for major improvements is provided through improvement bonds, general obligation bonds, tax increment
bonds, or revenue bonds. Depending on the project, special assessments may be levied upon properties to share in the cost of the
improvement project. The special assessments are collected over a period of time and are used to help satisfy the improvement
bond debt or reimburse the fund used to finance the project.
The City Council has also adopted financial management policies in order to allow for the planning of adequate funding of
services desired by the public, to manage City finances wisely, and to carefully account for public funds. These policies are
reviewed each year when the annual budget is adopted. The financial management policies included: operating budget policies;
revenue policies; accounting, auditing and financial reporting policies; investment policies; debt policies; capital improvement
policies; and risk management policies.
The City Council has adopted a comprehensive set of internal control procedures. The City's accounting system was developed
and is continually evaluated to assure the adequacy of internal accounting controls. Internal accounting controls are designed to
provide reasonable but not absolute assurance in the areas of safeguarding assets against loss from unauthorized use or
disposition, reliability of financial records, and convenience of access for preparing financial statements and maintaining
accountability for assets. The concept of reasonable assurance adopted by the City Council recognizes that the evaluation of cost
and benefits requires estimates and judgments by management, and the cost of a control should not exceed the benefits likely to
be derived. All internal controls are evaluated against the above criteria. It is our belief that the City's internal accounting
controls adequately safeguard the City's assets and also provide reasonable assurance of properly recording financial
transactions.
OTHER INFORMATION
AWARDS. The Government Finance Officers Association (GFOA) of the United States and Canada presented a Distinguished
Budget Presentation Award to the City of Andover for its annual budget for the fiscal year beginning January 1, 2013. This is the
twelfth year in a row the City of Andover has received this award. In order to receive this award, a governmental unit must
publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan and as a
communications device. This award is valid for a period of one year only. We believe that the annual budget for the fiscal year
To the Honorable Mayor and City Council
City of Andover, Minnesota
beginning January 1, 2014 continues to conform to the program requirements and have submitted it to the GFOA to determine its
eligibility for another award.
The GFOA also presented the Certificate of Achievement for Excellence in Financial Reporting Award to the City of Andover
for its 2012 Comprehensive Annual Financial Report. This is the eleventh time the City of Andover has received this award. In
order to receive this award, a government unit must publish an easily readable and efficiently organized comprehensive annual
financial report whose contents conform to program standards. Such reports must satisfy both generally accepted accounting
principles and applicable legal requirements. This award is valid for a period of one year only. We believe this report for 2013
continues to conform to the Certificate of Achievement Program requirements and have submitted it to the GFOA to determine
its eligibility for another award.
INDEPENDENT AUDIT. State statutes require an annual audit by independent certified public accountants. HLB Tautges
Redpath, Ltd. was engaged by the City to render an opinion on the City's financial statements. The auditor's report on the basic
financial statements and combining and individual fund statements and schedules is included in the financial section of this
report.
ACKNOWLEDGMENTS. The preparation of this report could not have been accomplished without the efficient services and
dedication of the Finance Department staff and the consultation of the City's auditing firm. Staff members: Lee Brezinka,
Melissa Knutson and Brenda Fildes have my sincere appreciation for their contribution to the preparation of this report.
I also want to express our appreciation to the Mayor and members of the City Council for their interest and support in planning
and conducting the financial operations of the City in a fiscally responsible manner.
Respectfully submitted,
James Dickinson
City Administrator
CITY OF ANDOVER, MINNESOTA
ORGANIZATION
December 31, 2013
Office
Mayor
Council Member
Council Member
Council Member
Council Member
Name
Michael Gamache
Tony Howard
Michael Knight
Sheri Bukkila
Julie Trude
City Administrator / City Clerk
James Dickinson
Community Development Director
David Carlberg
Director of Public Works / City Engineer
David Berkowitz
Finance Manager
Lee Brezinka
Building Official
Fred Patch
Fire Chief
Dan Winkel
Attorney
Fiscal Consultants
Hawkins & Baumgartner, P.A.
Ehlers & Associates, Inc.
10
Term
January 5, 2015
January 5, 2015
January 3, 2017
January 3, 2017
January 5, 2015
Appointed
Appointed
Appointed
Appointed
Appointed
Appointed
Appointed
Appointed
CITY OF ANDOVER
Organizational Chart
is
City Council
City Attorney
City Administrator Advisory Boards
Administrative
Building Inspections
Engineering
Finance
Fire Protection
Public Works
Police Protection
Services
Administration
Financial
Fire Protection
7PIamimng
Streets /Highways
Civil Defense
Engineering
Adm n strati on
Human Resources
Assessing
Snow &Ice
Protective
Right -of- -Way
Inspections
Management
Removal
Newsletter
Facilities
Storm Sewer
Drainage &
Mapping
Management
Economic
Unallocated
Street Lighting
Lower Rum River
Development
Watershed Mgmt
Authority
Organization
Community
Forestry
Capital Equipment
Signage
Center
Reserve
Elections
Debt Service Funds
Traffic Signals
Trail &
Transportation
Animal Control
Unfinanced Projects
Parks &Recreation
Construction
Seal Coating
Information
Water Trunk
Tax Increment
Recycling
Systems
Projects
City Cleri
Bu ld ng Fund
Water
Sto m Sewer
Permanent
Sewer
Sewer Trunk
Improvement
Revolving
Road &Bridge
G.O. Capital
Central Equipment
Notes
Risk
Park Dedication
Projects
Management
is
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Andover
Minnesota
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2012
*?�� de.%pAwt-0
Executive Director /CEO
12
II. FINANCIAL SECTION
13
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Andover, Minnesota
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business -
type activities, each major fund, and the aggregate remaining fund information of the City of
Andover, Minnesota, as of and for the year ended December 31, 2013, and the related notes to the
financial statements, which collectively comprise the City of Andover, Minnesota's basic financial
statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.
14
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities, the business -type activities, each major
fund, and the aggregate remaining fund information of the City of Andover, Minnesota, as of
December 31, 2013, and the respective changes in financial position, and, where applicable, cash
flows thereof for the year then ended in accordance with accounting principles generally accepted in
the United States of America.
Emphasis of Matter — Implementation of GASB 65
As described in Note 19 to the financial statements, in 2013, the City of Andover, Minnesota adopted
new accounting guidance, GASB Statement No. 65, Items Previously Reported as Assets and
Liabilities. Our opinion is not modified with respect to this matter.
Report on Summarized Comparative Information
We have previously audited the City of Andover, Minnesota's 2012 financial statements, and we
expressed an unmodified audit opinion on the respective financial statements of the governmental
activities, the business -type activities, each major fund, and the aggregate remaining fund information
in our report dated May 3, 2013. In our opinion, the summarized comparative information presented
herein as of and for the year ended December 31, 2012 is consistent, in all material respects, with the
audited fmancial statements from which it has been derived.
Other Matters
Required Supplemental Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis, budgetary comparison information, OPEB Schedule of
Funding Progress, and Notes to Required Supplementary Information on pages 17 through 26 and 78
through 82 be presented to supplement the basic financial statements. Such information, although not
a part of the basic financial statements, is required by the Governmental Accounting Standards Board,
who considers it to be an essential part of financial reporting for placing the basic financial statements
in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management
about the methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basic financial statements. We do not express an opinion or provide
any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
`i
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Andover, Minnesota's basic financial statements. The introductory
section, combining and individual nonmajor fund financial statements and schedules, other financial
information and statistical section, are presented for purposes of additional analysis and are not a
required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and schedules are the
responsibility of management and were derived from and relate directly to the underlying accounting
and other records used to prepare the basic financial statements. Such information has been subjected
to the auditing procedures applied in the audit of the basic financial statements and certain additional
procedures, including comparing and reconciling such information directly to the underlying
accounting and other records used to prepare the basic financial statements or to the basic financial
statements themselves, and other additional procedures in accordance with auditing standards
generally accepted in the United States of America. In our opinion, the combining and individual
nonmajor fund financial statements and schedules are fairly stated in all material respects in relation
to the basic financial statements as a whole.
The introductory, other financial information and statistical sections have not been subjected to the
auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not
express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated May 7,
2014, on our consideration of the City of Andover, Minnesota's internal control over financial
reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts,
and grant agreements and other matters. The purpose of that report is to describe the scope of our
testing of internal control over financial reporting and compliance and the results of that testing, and
not to provide an opinion on internal control over financial reporting or on compliance. That report is
an integral part of an audit performed in accordance with Government Auditing Standards in
considering the City of Andover, Minnesota's internal control over financial reporting and
compliance.
HLB TAUTGES REDPATH, LTD.
May 7, 2014
I
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
As management of the City of Andover, we offer readers of the City's financial statements this narrative overview and analysis of the
financial activities of the City for the fiscal year ended December 31, 2013. We encourage readers to consider the information presented here
in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 2 through 9 of this
report.
Financial Highlights
The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $161,297,318 (Net position). Of this amount,
$29,246,862 (unrestricted net position) may be used to meet the government's ongoing obligations to citizens and creditors in accordance
with the City's fund designations and fiscal policies.
The City's total net position increased by $946,905, primarily due to the budget savings and an increase in commercial / residential
construction.
As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $42,029,469
The City's total long -term liabilities decreased by $3,140,646 during the current fiscal year, primarily due to the scheduled debt service
payments made in 2013.
Beginning
Special
Debt
Capital
Balance
General
Revenue
Service
Projects
Totals
Nonspendable
$ 106,445
$ 1,316
$ -
$ -
$ 107,761
Restricted
-
25,321
17,767,831
3,481,292
21,274,444
Committed
-
588,516
-
-
588,516
Assigned
-
4,323
-
13,477,463
13,481,786
Unassigned
6,853,791
(211,889)
-
(64,940)
6,576,962
$ 6,960,236
$ 407,587
$ 17,767,831
$ 16,893,815
$ 42,029,469
The City's total long -term liabilities decreased by $3,140,646 during the current fiscal year, primarily due to the scheduled debt service
payments made in 2013.
Overview of the Financial Statements
The discussion and analysis are intended to serve as an introduction to the City's basic financial statements. The City's basic financial
statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview
of the City's finances, in a manner similar to a private- sector business.
17
Beginning
Ending
Balance
Additions
Reductions
Balance
Governmental activities:
Bonds payable
$ 41,724,000
$ -
$ (3,589,000)
$ 38,135,000
Other post employment benefits
142,536
36,109
(21,180)
157,465
Promissory note payable
-
983,593
-
983,593
Compensated absences
621,891
308,724
(318,046)
612,569
Total governmental activities
42,488,427
1,328,426
(3,928,226)
39,888,627
Business -type activities:
Bonds payable
7,420,000
-
(545,000)
6,875,000
Other post employment benefits
23,204
1,157
(2,888)
21,473
Compensated absences
147,922
52,976
(47,091)
153,807
Total business -type activities
7,591,126
54,133
(594,979)
7,050,280
Total City long -term liabilities
$ 50,079,553
$ 1,382,559
$ (4,523,205)
$ 46,938,907
Overview of the Financial Statements
The discussion and analysis are intended to serve as an introduction to the City's basic financial statements. The City's basic financial
statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview
of the City's finances, in a manner similar to a private- sector business.
17
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
The statement of net position presents information on all of the City's assets and liabilities, with the difference between the two reported as
net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is
improving or deteriorating.
The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes
in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g.
uncollected taxes and earned but unused vacation leave).
Both of the government -wide financial statements distinguish functions of the City that are principally supported by taxes and
intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their
costs through user fees and charges (business -type activities). The governmental activities of the City include general government, public
safety, public works, sanitation, parks and recreation, recycling and economic development. The business -type activities of the City include
water, sewer and storm sewer.
The government -wide financial statements can be found on pages 29 through 31 of this report.
Fund Financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.
Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the
government -wide financial statements. However, unlike the government -wide financial statements, governmental fund financial statements
focus on near -term inflows and outflows of spend -able resources, as well as on balances of spendable resources available at the end of the
fiscal year. Such information may be useful in evaluating a government's near -term financial requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the
information presented for governmental funds with similar information presented for governmental activities in the government -wide
financial statement. By doing so, readers may better understand the long -term impact of the City's near -term financial decisions. Both the
governmental fund balance sheet and governmental fund statement of revenues, expenditures, and change in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains eight individual major governmental funds. Information is presented separately in the governmental fund balance sheet
and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the following major funds: General
Fund, 2006 Economic Development Authority (EDA) Public Facility Lease Revenue Refunding Bonds Debt Service Fund, 2007 EDA Public
Facility Lease Revenue Refunding Bonds Debt Service Fund and the following capital projects funds (CPF): Water Trunk, Sewer Trunk,
Road and Bridge, Tax Increment Projects and Permanent Improvement Revolving.
Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-
major governmental funds is provided in the form of combining statements elsewhere in this report.
The City adopts an annual appropriated budget for its general and special revenue funds.
A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 32 through 37 of this report.
Proprietary funds. When the City charges customers for the services it provided — whether to outside customers or to other departments of
the City — these 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 revenues, expenses and changes in net position.
The enterprise funds are the same as the business -type activities reported in the government -wide statements but provide more detail and
additional information, such as cash flows, for proprietary funds. The City uses enterprise funds to account for its water, sanitary sewer and
storm sewer operations.
Internal service funds are used to report activities that provide supplies and services for the City's other departments, such as the equipment
maintenance and insurance funds. The internal service funds are reported with governmental activities in the government -wide financial
statements.
The basic proprietary fund financial statements can be found on pages 38 through 43 of this report
18
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not
reflected in the government -wide financial statements because the resources of those funds are not available to support the City's own
program. The accounting used for fiduciary funds is much like that used for proprietary funds.
The basic fiduciary fund financial statement can be found on page 44 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 45 through 76 of this report.
Other information. The combining statements referred to earlier in connection with non -major governmental funds is presented
immediately following the required supplementary information on budgetary comparisons, and on the modified approach for streets and trails
infrastructure. Combining and individual fund statements and schedules can be found on pages 85 through 119 of this report.
Government -wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets
exceeded liabilities by $161,297,318 at the close of the most recent fiscal year.
The largest portion of the City's net position ($128,258,133 or 80 percent) reflects its investment in capital assets (e.g. land, buildings,
machinery, and equipment) less any related debt used to acquire those assets that is still outstanding. It does not include any refunding debt
that has not met the refunding date of the original issue. The City uses these capital assets to provide services to citizens; consequently, these
assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be
noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to
liquidate these liabilities.
CITY OF ANDOVER'S NET POSITION
A portion of the City's net position represents resources that are subject to external restrictions on how they may be used. The remaining
balance of unrestricted net position ($29,246,862) may be used to meet the City's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the City as a
whole, as well as for its separate governmental and business -type activities.
19
Governmental Activities
Business -Type Activities
Totals
2012
2013
2012
2013
2012
2013
Current and other assets
$ 49,878,693
$ 46,234,230
$ 6,112,776
$ 6,628,421
$ 55,991,469
$ 52,862,651
Capital assets
113,388,446
115,237,130
42,342,691
41,739,659
155,731,137
156,976,789
Total assets
163,267,139
161,471,360
48,455,467
48,368,080
211,722,606
209,839,440
Long -term liabilities
outstanding
42,488,427
39,888,627
7,591,126
7,050,280
50,079,553
46,938,907
Other liabilities
1,135,303
1,460,904
157,337
142,311
1,292,640
1,603,215
Total liabilities
43,623,730
41,349,531
7,748,463
7,192,591
51,372,193
48,542,122
Net position:
Net invested in capital asset;
89,592,661
93,393,474
34,922,691
34,864,659
124,515,352
128,258,133
Restricted
4,461,020
3,792,323
-
-
4,461,020
3,792,323
Unrestricted
25,589,728
22,936,032
5,784,313
6,310,830
31,374,041
29,246,862
Total net position
$ 119,643,409
$ 120,121,829
$ 40,707,004
$ 41,175,489
$ 160,350,413
$ 161,297,318
A portion of the City's net position represents resources that are subject to external restrictions on how they may be used. The remaining
balance of unrestricted net position ($29,246,862) may be used to meet the City's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the City as a
whole, as well as for its separate governmental and business -type activities.
19
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
Government -wide Activities
Governmental activities increased the City's net position by $478,420 and business -type activities increased net position by $468,485. Key
elements of the activities are as follows:
City of Andover's Changes in Net Position
Governmental Activities Business -Type Activities Total
2012 2013 2012 2013 2012 2013
Revenues:
Program revenues:
Charges for services
Operating grants
and contributions
Capital grants
and contributions
General revenues:
Property taxes
Tax increment
Grants and contributions
not restricted to
specific programs
Unrestricted investments
earnings
Total revenues
Expenses:
General government
Public safety
Public works
Parks and recreation
Recycling
Economic development
Interest on long -term debt
Water
Sewer
Storm sewer
Total expenses
Increase (decrease) in net
position before gain on the
sale of capital assets and
transfers
Gain on the sale of
capital assets
Transfers
Increase in net position
Net position - beginning
Net position - ending
$ 3,312,966
1,358,424
2,774,126
10,594,940
2,033,932
$ 3,614,230 $ 5,014,999 $ 4,960,445 $ 8,327,965
1,119,778 - - 1,358,424
1,425,815 - - 2,774,126
10,608,678 - - 10,594,940
320,822 - - 2,033,932
$ 8,574,675
1,119,778
1,425,815
10,608,678
320,822
14,360
12,511
-
-
14,360
12,511
1,201,995
571,307
226,328
(21,533)
1,428,323
549,774
21,290,743
17,673,141
5,241,327
4,938,912
26,532,070
22,612,053
2,323,177
478,420
2,453,801
3,061,867
-
-
2,453,801
3,061,867
4,325,531
4,495,447
-
-
4,325,531
4,495,447
5,623,942
4,465,153
-
-
5,623,942
4,465,153
3,102,534
3,029,917
-
-
3,102,534
3,029,917
94,319
124,515
-
-
94,319
124,515
1,396,466
318,646
-
-
1,396,466
318,646
2,497,344
1,399,172
-
-
2,497,344
1,399,172
-
-
2,782,948
2,275,363
2,782,948
2,275,363
-
-
1,842,473
1,964,911
1,842,473
1,964,911
-
-
531,103
561,807
531,103
561,807
19,493,937
16,894,717
5,156,524
4,802,081
24,650,461
21,696,798
1,796,806
778,424
84,803
136,831
1,881,609
915,255
16,625
23,650
-
8,000
16,625
31,650
509,746
(323,654)
(509,746)
323,654
-
-
2,323,177
478,420
(424,943)
468,485
1,898,234
946,905
117,320,232
119,643,409
41,131,947
40,707,004
158,452,179
160,350,413
$ 119,643,409
$ 120,121,829
$ 40,707,004
$ 41,175,489
$160,350,413
$ 161,297,318
20
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
Governmental Activities
Following are specific graphs that provide comparisons of the governmental activities revenues and expenses:
Governmental Activities - Revenues
Unrestricted
investments earnings
Charges for services
3.2%
20.4% Grants and
Tax increment
contributions not
1.8%
restricted for specific
1.9%
programs
0.1%
Gain (loss) on the sale
Parks and recreation
of capital assets
17.9%
0.1%
Capital grants and
contributions
Public works
8.1%
Property taxes
60.0%
Operating grants and
contributions
6.3%
Governmental Activities - Expenses
Interest on long-
term debt
General government
Economic
18.1%
development
1.9%
Recycling
0.7%
Parks and recreation
17.9%
Public safety
26.7%
Public works
26.4%
MI
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
Business -Type Activities
Business -type activities increased net position by $468,485. Below are graphs showing the business -type activities revenue and expense
comparisons:
Business -Type Activities - Revenues
Unrestricted
investments
services
100.0%
Business -Type Activities - Expenses
Storm sewer
8.1%
Water
50.3°0
Sewer
41.6%
W
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
Financial Analysis of the Government's Funds
Governmental Funds. The focus of the City's governmental funds is to provide information on near -term inflows, outflows, and balances
of spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance
may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.
At the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $42,029,469. Approximately
15.6 percent of this total amount ($6,576,962) constitutes unassigned fund balance. The remainder of the fund balance ($35,452,507) is not
available for new spending because it is either 1) nonspendable ($107,761), 2) restricted ($21,274,444), 3) committed ($588,516) or 4)
assigned ($13,481,786).
Major Funds
The general fund increased by $572,395 in 2013, which was a $960,743 change from the final budget. The final budget showed a decrease
in fund balance of $388,348. The increase in fund balance is due to various departments under - spending and revenues exceeding budgets
with an increase in the number of homes being built over what was budgeted and some commercial/industrial construction taking place.
The 2006 and 2007 EDA public facility lease revenue refunding bonds debt service funds were advance refunded in 2012 to reduce its total
debt service payments over the last twenty two years of the bonds by $4,013,528 and to obtain an economic gain (difference between the
present value of the debt service payments on the old and new debt) of $2,366,409. The amount of bonds defeased at December 31, 2013
was $16,865,000. The increase in fund balance is due to the interest earned on the escrow accounts.
The water and sewer trunk capital projects funds fluctuate based on development activity and whether there is any cost sharing for pipe over -
sizing, extra depth, etc. With the reconstruction of South Coon Creek Drive, a water trunk line ($876,633) was put in place to provide
another connecting loop to the west side of town, in addition to, providing residents along that street the opportunity to hook up to city water.
The sewer trunk fund continues to receive funds from the sewer enterprise fund to be set aside for future replacements.
The road and bridge capital projects fund decreased by $1,560,815 primarily due to the advancement of road construction projects, including
those that are state aid eligible. It also includes the spend -down of previously collected state aid construction funds.
The tax increment capital projects fund increased by $1,445,947 due to the sales of land held for resale.
The permanent improvement revolving capital projects fund decreased primarily due to the one -time transfer of funds ($300,000) to the
capital equipment reserve capital projects fund for the development of a 40 acre sports complex.
Nonmajor Funds
The EDA general special revenue fund decreased $107,416 due to the decrease in TIF administration fees collected with the decertification of
TIF 1 -1.
The 2012A G.O. equipment certificates debt service fund increased by $109,491 with the collection of tax levy for future debt service
payments.
The 2012B G.O. capital improvement refunding bonds debt service fund decreased by $1,556,968 due to the refunding of 2004A capital
improvement bonds.
The 2012C G.O. abatement bonds debt service fund decreased by $323,043 due to the refunding of a small portion of the 2004 EDA public
facility lease revenue bonds.
The park dedication capital projects fund increased by $144,763 with the collection of park dedication fees as development is starting to
progress again.
The building capital projects fund decreased by $465,848 due to the purchases of land adjacent to city facilities for future expansion.
The capital equipment reserve capital projects fund decreased by $648,715 due to the development of a 40 acre sports complex.
The fluctuation of fund balance for the equipment certificate capital projects funds depends on when the bonds are issued and when the
purchases are actually made.
Proprietary funds. The City's proprietary funds provide the same type of information found in the government -wide financial statements,
but in more detail.
23
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
The unrestricted net position in the respective proprietary funds are enterprise funds of $6,228,108 (water $2,512,014, sewer $3,358,463 and
storm sewer $357,631) and internal service funds of $677,192. The enterprise funds had a net increase in net position in 2013 of $457,862
(water $924,693, sewer ($301,558) and storm sewer ($165,273)). Internal service funds had a net increase in net position of $68,180.
Capital Asset and Debt Administration
Capital assets. The City's investment in capital assets for its governmental and business type activities as of December 31, 2013, amounts to
$156,976,789 (net of accumulated depreciation). This investment in capital assets includes land, buildings, infrastructure, machinery and
equipment.
The City has elected to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement
Management Program, which includes streets and trails. Under GASB Statement No. 34, eligible infrastructure capital assets are not required
to be depreciated under the following requirements:
1) The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (a) an up -to-
date inventory; (b) perform condition assessments and summarize the results using a measurement scale; and (c) estimate annual
amount to maintain and preserve at the established condition assessment level.
2) The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established and
disclosed condition assessment level.
Prior to 2013, the continuous scale was from 0 to 100 where 0 is assigned to the least acceptable physical condition and 100 is assigned to a
new street or trail. Starting in 2013, the continuous scale was from 0 to 10, where 0 is assigned to the least acceptable physical condition and
10 is assigned the physical characteristics of a new street or trail. The City's policy is to achieve an average rating of good which is 6 — 6.9
(56 — 70 old scale) for all streets and trails. In the fall of 2013, the City conducted a physical condition assessment of the streets and trails
constructed since 1974. This assessment will be completed every three years. As of December 31, 2013, the City's street and trail system
was rated at an Overall Condition Index (OCI) of 6.9.
The City's streets and trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun's ultra-
violet rays drying out and breaking down the top layer of pavement; (3) utility company /private development trenching operations; (4) water
damage from natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the system through
short -term maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City expended $2,471,123 on
street and trail maintenance for the year ending December 31, 2013. These expenditures delayed deterioration and the overall condition of
the system remains at an appropriate OCI level through these maintenance expenditures. The City has estimated that the amount of annual
expenditures required to maintain the City's street and trail system at the average OCI rating of good is approximately $1,150,000.
24
Maintenance
Actual
OCI
Year
Estimate
Expenditures
Rating
2004
$1,000,000
$ 1,847,066
82
2005
1,000,000
1,655,715
83
2006
1,150,000
1,228,981
82
2007
1,150,000
1,256,433
81
2008
1,150,000
2,244,713
80
2009
1,150,000
1,666,216
81
2010
1,150,000
1,457,082
83
2011
1,150,000
1,770,980
83
2012
1,150,000
3,894,784
83
2013
1,150,000
2,471,123
6.9
24
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
Primary Government
Governmental activities:
Land and improvements
Streets and trails
Construction in progress
Buildings and improvements
Furniture and equipment
Machinery and equipment
Other park improvements
Total capital assets
Less accumulated depreciation for:
Buildings and improvements
Furniture and equipment
Machinery and equipment
Other park improvements
Beginning
Balance Additions
$ 9,202,841 $ 1,957,524
79,922,680
342,024
73,712
1,129,032
27,084,891
127,926
501,037
12,220
7,306,836
256,756
5,687,368
1,124,207
Ending
Deletions Balance
$ (299,499) $ 10,860,866
- 80,264,704
(1,202,744) -
- 27,212,817
- 513,257
(265,487) 7,298,105
(15,000) 6,796,575
129,779,365
4,949,689
(1,782,730) 132,946,324
8,057,076
906,117
- 8,963,193
339,283
42,170
- 381,453
5,510,646
343,316
(260,465) 5,593,497
2,483,914
302,137
(15,000) 2,771,051
Total accumulated depreciation 16,390,919 1,593,740
Governmental activities
capital assets - net
Business -type activities:
Land and improvements
Buildings and improvements
Furniture and equipment
Machinery and equipment
Collection and distribution
Total capital assets
being depreciated
Less accumulated depreciation for:
Buildings and improvements
Furniture and equipment
Machinery and equipment
Collection and distribution
(275,465) 17,709,194
113,388,446 3,355,949 (1,507,265) 115,237,130
730,243
15,877,590 -
61,390 -
1,211,412 79,725
50,501,848 946,942
730,243
- 15,877,590
- 61,390
(38,930) 1,252,207
- 51,448,790
68,382,483
1,026,667
(38,930) 69,370,220
6,770,198
549,007
- 7,319,205
45,460
4,027
- 49,487
1,058,043
49,667
(38,930) 1,068,780
18,166,091
1,026,998
- 19,193,089
Total accumulated depreciation 26,039,792 1,629,699 (38,930) 27,630,561
Business -type activities
capital assets - net
Total capital assets
42,342,691 (603,032)
41,739,659
$ 155,731,137 $ 2,752,917 $ (1,507,265) $ 156,976,789
Additional information on the City's capital assets can be found in Note 5.
Long -term debt. At the end of the current fiscal year, the City had total long -term debt outstanding of $46,759,969, a decrease of
$3,153,844 from 2012. Revenue bonds ($16,925,000) were used to finance the construction of the community center and the refunding of
portions of the community center bonds. General obligation abatement bonds ($16,995,000) were used to refund the 2006 and 2007 EDA
lease revenue refunding bonds. General obligation revenue bonds ($6,875,000) were used for an addition to the water treatment plant and the
refunding of portions of the water treatment plant bonds. Certificates of indebtedness ($680,000) financed capital equipment purchases.
Capital improvement bonds ($1,470,000) financed the construction of Fire Station #3 and the purchase of the Public Works building from the
EDA, in addition to, the refunding of those same bonds. Permanent improvement revolving bonds ($385,000) financed improvement
projects within the City and are assessed to the benefiting properties. State aid bonds ($290,000) were used to finance Municipal State Aid
(MSA) eligible road projects and the refunding of portions of the state aid bonds and the referendum bonds ($1,390,000) were used to finance
25
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2013
land acquisitions for the preservation of open space. The promissory note payable ($983,593) is being used to finance the purchase of land
adjacent to the city hall complex.
Additional long -term debt in the amount of $766,376 is for compensated absences.
City of Andover's Outstanding Debt
The City maintains an AA+ rating with a stable outlook from Standard and Poor's.
State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total Estimated Taxable Market Value. The
current debt limitation for the City is $63,707,891. Only $20,044,188 of the City's outstanding debt is counted within the statutory limitation.
Additional information on the City's long -term debt can be found in Note 6 and 7.
Requests for information. This financial report is designed to provide a general overview of the City of Andover's finances for all those
with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional
financial information should be addressed to the City of Andover, Attn: Finance Manager, 1685 Crosstown Boulevard NW, Andover,
Minnesota 55304 or by calling 763 - 755 -5100.
K
Governmental
Business -Type
Activities
Activities
Total
Bonds payable:
Revenue bonds
$ 16,925,000
$ -
$ 16,925,000
Abatement bonds
16,995,000
-
16,995,000
G.O. revenue bonds
-
6,875,000
6,875,000
Certificates of indebtedness
680,000
-
680,000
Capital improvement bonds
1,470,000
-
1,470,000
Permanent improvement revolving bonds
385,000
-
385,000
State aid bonds
290,000
-
290,000
Referendum bonds
1,390,000
-
1,390,000
Total bonds payable
38,135,000
6,875,000
45,010,000
Promissory note payable
983,593
-
983,593
Compensated absences
612,569
153,807
766,376
Total
$ 39,731,162
$ 7,028,807
$ 46,759,969
The City maintains an AA+ rating with a stable outlook from Standard and Poor's.
State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total Estimated Taxable Market Value. The
current debt limitation for the City is $63,707,891. Only $20,044,188 of the City's outstanding debt is counted within the statutory limitation.
Additional information on the City's long -term debt can be found in Note 6 and 7.
Requests for information. This financial report is designed to provide a general overview of the City of Andover's finances for all those
with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional
financial information should be addressed to the City of Andover, Attn: Finance Manager, 1685 Crosstown Boulevard NW, Andover,
Minnesota 55304 or by calling 763 - 755 -5100.
K
BASIC FINANCIAL STATEMENTS
27
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28
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET POSITION
December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Statement 1
The accompanying notes are an integral part of these financial statements.
29
Primary
Government
Government
Business -Type
Totals
Activities
Activities
2013
2012
Assets:
Cash and investments
$ 25,596,884
$ 5,069,575
$ 30,666,459 $
31,778,400
Cash and investments with escrow agent
16,922,529
-
16,922,529
17,792,716
Accrued interest
421,006
20,831
441,837
441,723
Due from other governmental units
86,431
8,347
94,778
43,683
Accounts receivable - net
196,831
1,438,038
1,634,869
1,275,242
Property taxes receivable:
Unremitted
87,789
-
87,789
72,354
Delinquent
309,444
-
309,444
437,960
Special assessments receivable:
Unremitted
2,192
910
3,102
88,793
Delinquent
17,265
65,562
82,827
237,175
Deferred
2,040,504
3,861
2,044,365
2,207,758
Inventories - at cost
208,355
21,297
229,652
289,665
Land held for resale
345,000
-
345,000
1,326,000
Capital assets - net:
Nondepreciable
91,125,570
730,243
91,855,813
89,929,476
Depreciable
24,111,560
41,009,416
65,120,976
65,801,661
Total assets
161,471,360
48,368,080
209,839,440
211,722,606
Liabilities:
Interfund payable
82,722
(82,722)
-
-
Accounts payable
330,454
34,225
364,679
312,999
Contracts payable
194,063
14,494
208,557
112,604
Deposits payable
41,680
3,546
45,226
32,869
Due to other governmental units
16,012
28,250
44,262
55,746
Salaries payable
198,009
30,053
228,062
203,955
Unearned revenue
35,138
-
35,138
25,338
Accrued interest payable
562,826
114,465
677,291
549,129
Other post employment benefits:
Due in more than one year
157,465
21,473
178,938
165,740
Compensated absences:
Due within one year
91,885
23,071
114,956
115,473
Due in more than one year
520,684
130,736
651,420
654,340
Promissory note payable:
Due within one year
196,719
-
196,719
-
Due in more than one year
786,874
-
786,874
-
Bonds /notes payable:
Due within one year
18,595,000
565,000
19,160,000
4,134,000
Due in more than one year
19,540,000
6,310,000
25,850,000
45,010,000
Total liabilities
41,349,531
7,192,591
48,542,122
51,372,193
Net position:
Net investment in capital assets
93,393,474
34,864,659
128,258,133
124,515,352
Restricted for:
Debt service
795,301
-
795,301
1,787,057
Capital improvements
3,765
-
3,765
5,430
Tax increment purposes
2,967,936
-
2,967,936
2,660,316
Public services
25,321
-
25,321
8,217
Unrestricted
22,936,032
6,310,830
29,246,862
31,374,041
Total net position
$ 120,121,829
$ 41,175,489
$ 161,297,318 $
160,350,413
The accompanying notes are an integral part of these financial statements.
29
CITY OF ANDOVER, MINNESOTA
STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Functions/Programs
Primary government:
Government activities:
General government
Public safety
Public works
Parks and recreation
Recycling
Economic development
Interest on long -term debt
Total government activities
Business -type activities:
Water
Sewer
Storm sewer
Total business -type activities
Total primary government
Program Revenues
Charges Operating Capital
For Grants and Grants and
Expenses
$ 3,061,867
$ 843,304
4,495,447
704,119
4,465,153
321,114
3,029,917
1,463,579
124,515
42,544
318,646
239,570
1,399,172
-
16,894,717 3,614,230
2,275,363
2,495,561
1,964,911
2,065,467
561,807
399,417
4,802,081
4,960,445
$ 21,696,798
$ 8,574,675
The accompanying notes are an integral part of these financial statements.
[cif
$ 20,840 $ -
382,369 -
600,393 1,178,035
- 247,780
108,286 -
7,890 -
1,119,778 1,425,815
$ 1,119,778 $ 1,425,815
General revenues:
General property taxes
Tax increment collections
Grants and contributions not
restricted to specific programs
Unrestricted investment earnings
Gain on sale of capital assets
Transfers
Total general revenues, gain on sale of
capital assets and transfers
Change in net position
Net position - beginning
Net position - ending
Statement 2
Net (Expense) Revenue and Changes in Net Position
Primary Government
Governmental
Business -Type
Totals
Activities
Activities
2013
2012
$ (2,197,723)
$ -
$ (2,197,723)
$ (1,749,709)
(3,408,959)
-
(3,408,959)
(3,395,304)
(2,365,611)
-
(2,365,611)
(1,884,661)
(1,318,558)
-
(1,318,558)
(1,558,471)
26,315
-
26,315
62,110
(79,076)
-
(79,076)
(1,046,490)
(1,391,282)
-
(1,391,282)
(2,475,896)
(10,734,894)
-
(10,734,894)
(12,048,421)
-
220,198
220,198
(210,388)
-
100,556
100,556
220,704
-
(162,390)
(162,390)
(151,841)
- 158,364 158,364 (141,525)
(10,734,894) 158,364 (10,576,530) (12,189,946)
10,608,678 -
320,822 -
12,511 -
571,307 (21,533)
23,650 8,000
(323,654) 323,654
11,213,314 310,121
478,420 468,485
119,643,409 40,707,004
$ 120,121,829 $ 41,175,489
31
10,608,678
320,822
12,511
549,774
31,650
11,523,435
946,905
160,350,413
$ 161,297,318
10,594,940
2,033,932
14,360
1,428,323
16,625
14,088,180
1,898,234
158,452,179
$ 160,350,413
CITY OF ANDOVER, MINNESOTA
BALANCESBEET
GOVERNMENTAL FUNDS
December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Total liabilities
406,376
2006 EDA Public
2007 EDA Public
6,539
5,741
Deferred inflows of resources:
Facility Lease
Facility Lease
Unavailable revenues
181,099
Revenue
Revenue
331,605
51,651
Fund balances (deficit):
Refunding Bonds
Refunding Bonds
Water Trunk
Sewer Trunk
Nonspendable
General
DSF
DSF
CPF
CPF
Assets:
-
9,706,648
6,662,794
Cash and investments $
6,408,229
$ 1,673
$ 1,668
$ 2,239,690
$ 4,828,846
Cash and investments with escrow agent
-
9,543,846
6,555,105
-
-
Accrued interest
25,516
176,331
121,223
11,339
25,060
Due from other governmental units
86,431
-
-
-
-
Accounts receivable -net
89,189
-
Interfund receivable
590,000
$ 9,721,850
$ 6,677,996
$ 2,584,076
70,000
Property taxes receivable:
Unremitted
60,739
-
Delinquent
170,873
-
Special assessments receivable:
Unremitted
63
1,442
Delinquent
10,226
-
-
Deferred
-
331,605
51,651
Inventories - at cost
106,445
-
-
Land held for resale
-
-
-
-
-
Total assets
7,547,711
9,721,850
6,677,996
2,584,076
4,975,557
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Interfund payable
-
15,000
15,000
-
Accounts payable
181,718
202
202
798
Contracts payable
36,220
-
-
-
-
Deposits payable
15,308
5,741
5,741
Due to other governmental units
8,809
-
-
Salaries payable
164,321
Unearned revenue
-
Total liabilities
406,376
15,202
15,202
6,539
5,741
Deferred inflows of resources:
Unavailable revenues
181,099
-
-
331,605
51,651
Fund balances (deficit):
Nonspendable
106,445
-
-
-
-
Restricted
-
9,706,648
6,662,794
Committed
-
-
-
-
Assigned
-
2,245,932
4,918,165
Unassigned
6,853,791
-
-
-
-
Total fund balances
6,960,236
9,706,648
6,662,794
2,245,932
4,918,165
Total liabilities, deferred inflows of resources,
and fund balances (deficit)
$ 7,366,612
$ 9,721,850
$ 6,677,996
$ 2,584,076
$ 4,975,557
Fund balance reported above
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.
Other long -term assets are not available to pay for current -period expenditures and, therefore, are reported as unavailable revenue in the funds.
Internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds.
The assets and liabilities are included in the governmental activities statement of net position along with a deduction of net
revenue attributable to business -type activities.
Long -term liabilities, including bonds payable and other post employment benefits, are not due and payable in the current period and,
therefore, are not reported in the funds.
Net position of governmental activities
The accompanying notes are an integral part of these financial statements.
32
Statement 3
-
Tax
Permanent
630,000
(660,000)
-
-
Road &
Increment
Improvement
Other
Infra
Totals
263,656
Bridge
Projects
Revolving
Governmental
Activity
Governmental Funds
CPF
CPF
CPF
Funds
Eliminations
2013
2012
$ 3,185,790 $
2,653,037
$ 964,049
$ 4,693,989
$
$ 24,976,971 $
26,362,103
-
-
-
823,578
23,566
16,922,529
17,792,716
17,301
12,358
4,587
24,265
35,138
417,980
419,608
-
-
-
-
873,730
86,431
39,554
598,355
107,642
196,831
145,720
-
-
152,640
-
(660,000)
-
-
8,499
854
17,697
-
87,789
72,354
23,911
62,020
107,761
52,640
309,444
437,960
687
-
21,274,444
-
-
2,192
88,793
7,039
-
-
681,413
3,114,711
17,265
176,574
1,154,205
3,326
499,717
-
-
2,040,504
2,207,758
-
-
-
1,316
3,114,711
107,761
161,648
-
245,000
-
100,000
-
345,000
1,326,000
4,397,432
2,976,595
1,468,353
5,821,127
(660,000)
45,510,697
49,230,788
-
-
630,000
(660,000)
-
-
742
6,452
104,121
294,235
263,656
93,595
-
64,248
194,063
88,475
750
-
14,140
41,680
29,362
2,479
2,207
2,517
16,012
26,946
-
-
23,566
187,887
164,578
-
-
35,138
35,138
25,338
97,566
8,659
-
873,730
(660,000)
769,015
598,355
1,185,155
310,346
499,717
152,640
2,712,213
4,148,291
-
-
-
1,316
107,761
161,648
2,657,590
2,247,412
21,274,444
21,307,923
-
-
-
588,516
588,516
681,413
3,114,711
968,636
2,234,342
13,481,786
16,420,228
-
-
-
(276,829)
6,576,962
5,912,930
3,114,711
2,657,590
968,636
4,794,757
42,029,469
44,484,142
$ 4,397,432
$ 2,976,595
$ 1,468,353
$ 5,821,127
$ (660,000)
$ 45,510,697
$ 49,230,788
$ 42,029,469 $ 44,484,142
115,237,130 113,388,446
2,712,213 4,148,291
594,470 536,913
(40,451,453) (42,914,383)
$ 120,121,829 $ 119,643,409
33
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
The accompanying notes are an integral part of these financial statements.
34
2006 EDA Public
2007 EDA Public
Facility Lease
Facility Lease
Revenue
Revenue
Refunding Bonds
Refunding Bonds
Water Trunk
Sewer Trunk
General
DSF
DSF
CPF
CPF
Revenues:
General properly taxes
$ 7,376,284
$
$
$
$
Tax increment collections
-
Licenses and permits
536,706
Intergovernmental
710,071
-
-
Special assessments
-
34,216
23,110
Charges for services
1,122,461
-
-
Fines
96,130
-
Investment income
(17,096)
422,965
290,707
(19,830)
(19,019)
Miscellaneous:
Park dedication fees
-
-
-
-
Connection charges
332,853
103,775
Rent
-
-
-
Other
140,983
-
-
-
-
Total revenues
9,965,539
422,965
290,707
347,239
107,866
Expenditures:
Current:
General government
2,308,878
-
-
-
-
Public safety
4,299,120
-
-
Public works
1,634,685
7,338
50,902
Parks and recreation
946,545
-
-
Recycling
123,595
Economic development
-
Unallocated
75,517
Capital outlay:
General government
-
Public safety
12,220
-
-
Public works
-
89,979
89,979
Parks and recreation
-
-
-
Recycling
54,514
Economic development
-
Debt service:
Principal retirement
Interest
Paying agent fees
-
-
Professional services
202
202
-
-
Construction/acquisition costs
-
-
-
876,633
70,309
Total expenditures
9,455,074
202
202
973,950
211,190
Revenues over (under) expenditures
510,465
422,763
290,505
(626,711)
(103,324)
Other financing sources (uses):
Transfers in
196,930
-
-
400,000
Transfers out
(135,000)
(4,242)
-
Bonds issued
Refunding bonds issued
Redemption of refunded bonds
Bond premium
Proceeds from the sale of capital assets
-
Total other financing sources (uses)
61,930
-
(4,242)
400,000
Net increase(decrease)in fund balance
572,395
422,763
290,505
(630,953)
296,676
Fund balance - January 1
6,387,841
9,283,885
6,372,289
2,876,885
4,621,489
Fund balance - December 31
$ 6,960,236
$ 9,706,648
$ 6,662,794
$ 2,245,932
S 4,918,165
The accompanying notes are an integral part of these financial statements.
34
Statement 4
09
Tax
Permanent
Road &
Increment
Improvement
Other
Intra
Totals
Bridge
Projects
Revolving
Governmental
Activity
Governmental Funds
CPF
CPF
CPF
Funds
Eliminations
2013
2012
$ 1,032,176
$ -
$
$ 2,274,515
$
$ 10,682,975 $
10,638,117
-
375,040
-
375,040
2,035,663
-
-
-
536,706
449,826
156,086
1,172
-
247,718
1,115,047
3,493,528
385,121
3,664
598,889
-
1,045,000
792,460
-
-
-
684,458
1,806,919
1,874,321
-
-
96,130
97,571
(44,690)
15,355
(8,625)
(46,511)
573,256
1,191,438
-
205,080
205,080
47,700
-
436,628
170,202
-
-
639,423
639,423
639,983
3,600
1,276,644
308,337
(30,600)
1,698,964
645,897
1,532,293
1,671,875
590,264
4,313,020
(30,600)
19,211,168
22,076,706
-
-
-
338,400
2,647,278
2,280,373
-
-
2,578
4,301,698
4,092,073
2,470,978
413
87,138
4,251,454
5,415,924
-
-
1,043,912
1,990,457
2,001,624
-
-
123,595
94,328
274,962
133,248
408,210
1,537,611
-
-
75,517
63,371
-
-
23,077
-
6,783
19,003
23,600
342,024
668,205
1,190,187
-
289,456
1,195,093
1,484,549
577,835
-
-
54,514
58,314
15,098
15,098
40,191
1,689,000
1,689,000
1,842,000
1,262,302
1,262,302
1,768,748
3,489
3,489
9,014
1,616
2,020
216,364
-
-
-
-
946,942
110,650
3,102,458
274,962
413
6,446,862
20,465,313
20,155,097
(1,570,165)
1,396,913
589,851
(2,133,842)
(30,600)
(1,254,145)
1,921,609
9,350
-
-
1,340,283
(1,319,033)
627,530
627,530
-
(685,000)
(529,633)
1,349,633
(4,242)
(7,134)
-
585,000
18,885,000
(1,900,000)
(1,900,000)
(17,907,898)
-
-
-
133,164
-
49,034
27,150
-
76,184
16,625
9,350
49,034
(685,000)
(1,062,200)
30,600
(1,200,528)
2,332,287
(1,560,815)
1,445,947
(95,149)
(3,196,042)
-
(2,454,673)
4,253,896
4,675,526
1,211,643
1,063,785
7,990,799
44,484,142
40,230,246
$ 3,114,711
$ 2,657,590
$ 968,636
$ 4,794,757
$
$ 42,029,469 $
44,484,142
09
- This page intentionally left blank -
[c%
C1rfY OF ANDOVER, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES,
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Amounts reported for governmental activities in the
statement of activities (page 30) are different because:
Net changes in fund balances - total governmental funds (page 35)
Governmental funds report capital outlays as expenditures. However, in the statement of
activities the cost of those assets is allocated over their estimated useful lives and reported
as depreciation expense. This is the amount by which capital outlays exceeded depreciation
in the current period.
The net effect of various miscellaneous transactions involving capital assets is to increase
(decrease) net position (i.e., sales, trade -ins, and donations).
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds.
The issuance of long -term debt (e.g., bonds, leases) provides current financial resources to
governmental funds, while the repayment of the principal of long -term debt consumes the
current financial resources of governmental funds. Neither transaction, however, has any
effect on net position. This amount is the net effect of these differences in the treatment of
long -term debt and related items.
Vested post employment benefits are reported in the governmental funds when amounts are
paid. The statement of activities reports the benefits earned during the years. This amount
is the net effect of employee benefits earned and paid during the year.
Transfer out of governmental capital assets contributed to Enterprise Funds.
Some expenses reported in the statement of activities do not require use of current financial
resources and, therefore, are not reported as expenditures in governmental funds.
Internal service funds are used by management to charge the cost of equipment maintenance
and insurance to individual funds. This amount is the portion of net revenue attributable to
governmental activities.
Change in net position of governmental activities (page 31)
The accompanying notes are an integral part of these financial statements.
37
Statement 5
9,013 2012.
$ (2,454,673) $ 4,253,896
2,116,553 (743,325)
(304,520)
(1,436,078) (646,520)
3,589,000
(763,000)
(14,929)
(19,550)
(946,942)
(110,650)
(127,548)
276,724
57,557
75,602
$ 478,420
$ 2,323,177
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Noncurrent assets:
Water
Sewer
Storm Sewer
Assets:
Current assets:
730,243
Cash and cash equivalents
$ 2,143,439
$ 2,674,455
$ 251,681
Accrued interest
7,333
12,311
1,187
Due from other governmental units
-
8,347
-
Accounts receivable - net
585,864
714,483
137,691
Special assessments receivable:
(13,253,873)
(10,202,083)
(4,174,605)
Unremitted
286
544
80
Delinquent
23,243
35,214
7,105
Deferred
-
-
3,861
Inventories - at cost
21,297
-
Total current assets
2,781,462
3,445,354
401,605
Noncurrent assets:
Capital assets:
Land
730,243
Buildings and structures
15,877,590
-
-
Machinery and equipment
292,000
524,604
496,993
Distribution and collection system
17,139,015
24,151,782
10,157,993
Total capital assets
34,038,848
24,676,386
10,654,986
Less: Allowance for depreciation
(13,253,873)
(10,202,083)
(4,174,605)
Total noncurrent assets
20,784,975
14,474,303
6,480,381
Total assets
23,566,437
17,919,657
6,881,986
Liabilities:
Current liabilities:
Accounts payable
24,959
4,635
4,631
Contracts payable
4,229
3,506
6,759
Deposits payable
3,546
-
-
Interest payable
114,465
-
Due to other governmental units
20,987
7,263
-
Salaries payable
13,755
12,234
4,064
Bonds payable - due within one year
565,000
-
-
Compensated absences payable - due within one year
11,784
7,009
4,278
Total current liabilities
758,725
34,647
19,732
Noncurrent liabilities:
Other post employment benefits - due in more than one year
8,947
12,526
-
Bonds payable - due in more than one year
6,310,000
-
-
Compensated absences payable - due in more than one year
66,776
39,718
24,242
Total noncurrent liabilities
6,385,723
52,244
24,242
Total liabilities
7,144,448
86,891
43,974
Net position:
Net investment in capital assets
13,909,975
14,474,303
6,480,381
Unrestricted
2,512,014
3,358,463
357,631
Total net position
$ 16,421,989
$ 17,832,766
$ 6,838,012
Net position reported above
Amounts reported for business -type activities in the statement of net position are different because:
Internal service funds are used by management to charge the cost of equipment maintenance
and insurance to individual funds. This amount is the portion of net revenue attributable to
business -type activities.
Net position of business -type activities
The accompanying notes are an integral part of these financial statements.
38
Statement 6
Totals
Governmental Activities -
Totals Internal Service Funds
2013
2012
2013
2012
$ 5,069,575
$ 4,862,440
$ 619,913
$ 553,857
20,831
19,533
3,026
2,582
8,347
4,129
-
-
1,438,038
1,129,459
63
910
-
65,562
60,601
3,861
-
-
-
21,297
36,614
100,594
91,403
6,628,421
6,112,776
723,533
647,905
730,243
730,243
-
-
15,877,590
15,877,590
1,313,597
1,272,802
51,448,790
50,501,848
69,370,220
68,382,483
(27,630,561)
(26,039,792)
41,739,659
42,342,691
48,368,080
48,455,467
723,533
647,905
34,225
19,469
36,219
29,874
14,494
24,129
-
-
3,546
3,507
114,465
123,173
-
28,250
28,785
-
15
30,053
30,373
10,122
9,004
565,000
545,000
-
-
23,071
22,189
-
813,104
796,625
46,341
38,893
21,473
23,204
-
-
6,310,000
6,875,000
130,736
125,733
6,462,209
7,023,937
-
-
7,275,313
7,820,562
46,341
38,893
34,864,659
34,922,691
-
-
6,228,108
5,712,214
677,192
609,012
$ 41,092,767
$ 40,634,905
$ 677,192
$ 609,012
$ 41,092,767 $ 40,634,905
82,722 72,099
$ 41,175,489 $ 40,707,004
K1]
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Net changes in net position reported above
Amounts reported for business -type activities in the statement of activities are different because:
Internal service funds are used by management to charge the cost of equipment maintenance
and insurance to individual funds. This amount is the portion of net revenue attributable to
business -type activities.
Change in net position of business -type activities
The accompanying notes are an intregral part of these financial statements.
40
Water
Sewer
Storm Sewer
Operating revenues:
User charges
$ 2,447,707
$ 2,061,034
$ 398,961
Meters
23,395
-
-
Permit fees
4,200
-
-
Penalties
2,288
1,958
456
Other
17,971
2,475
-
Total operating revenues
2,495,561
2,065,467
399,417
Operating expenses:
Personal services
381,133
291,446
186,493
Supplies
197,184
30,655
12,094
Other service charges
556,621
170,951
127,723
Disposal charges
-
982,847
-
Depreciation
887,719
503,665
238,315
Total operating expenses
2,022,657
1,979,564
564,625
Operating income (loss)
472,904
85,903
(165,208)
Nonoperating revenues (expenses):
Investment income
(6,378)
(15,090)
(65)
Gain on sale of capital assets
4,000
4,000
-
Interest expense
(276,458)
-
-
Total nonoperating revenues (expenses)
(278,836)
(11,090)
(65)
Income (loss) before contributions
and transfers
194,068
74,813
(165,273)
Capital contributions
876,633
70,309
-
Transfers:
Transfers in
4,242
-
-
Transfers out
(150,250)
(446,680)
-
Total transfers
(146,008)
(446,680)
-
Change in net position
924,693
(301,558)
(165,273)
Net position - January 1
15,497,296
18,134,324
7,003,285
Net position - December 31
$ 16,421,989
$ 17,832,766
$ 6,838,012
Net changes in net position reported above
Amounts reported for business -type activities in the statement of activities are different because:
Internal service funds are used by management to charge the cost of equipment maintenance
and insurance to individual funds. This amount is the portion of net revenue attributable to
business -type activities.
Change in net position of business -type activities
The accompanying notes are an intregral part of these financial statements.
40
Statement 7
Totals
Intra Governmental Activities -
Activity Totals Internal Service Funds
Eliminations 2013 2012 2013 2012
$ -
$ 4,907,702
$ 4,963,812
$ 1,070,619
$ 1,015,822
-
23,395
16,598
-
-
-
4,200
3,850
-
-
-
4,702
14,912
-
-
-
20,446
15,827
82,384
76,985
4,960,445
5,014,999
1,153,003
1,092,807
859,072
904,944
354,288
370,216
239,933
241,054
355,708
327,740
(30,600)
824,695
1,032,171
372,878
312,294
982,847
881,028
-
-
1,629,699
1,633,760
-
-
(30,600)
4,536,246
4,692,957
1,082,874
1,010,250
30,600
424,199
322,042
70,129
82,557
-
(21,533)
226,328
(1,949)
10,557
8,000
-
-
(276,458)
(481,079)
-
-
(289,991)
(254,751)
(1,949)
10,557
30,600
134,208
67,291
68,180
93,114
-
946,942
110,650
-
-
- 4,242
(30,600) (627,530)
(30,600) (623,288)
- 457,862
- 40,634,905
$ - $ 41,092,767
7,134
(627,530)
(620,396) -
(442,455) 68,180
41,077,360 609,012
$ 40,634,905 $ 677,192
$ 457,862 $ (442,455)
10,623 17,512
$ 468,485 $ (424,943)
41
93,114
515,898
$ 609,012
CITY OF ANDOVER, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Cash flows from operating activities:
Receipts from customers and users
Payment to suppliers
Payment to employees
Net cash flows from operating activities
Cash flows from noncapital financing activities:
Transfers in
Transfers out
Net cash flows from noncapital financing activities
Cash flows from capital and related financing activities:
Acquisition of capital assets
Interest paid on debt
Payment of bonds
Proceeds from the sale of capital assets
Net cash flows from capital and related financing activities
Cash flows from investing activities:
Investment income
Net increase in cash and cash equivalents
Cash and cash equivalents - January 1
Cash and cash equivalents - December 31
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation
Changes in assets and liabilities:
Decrease (increase) in due from other governmental units
Decrease (increase) in accounts receivable
Decrease (increase) in prepaid items
Decrease (increase) in special assessments
Decrease (increase) in inventory
Increase (decrease) in accounts payable
Increase (decrease) in contracts payable
Increase (decrease) in deposits payable
Increase (decrease) in due to other governmental units
Increase (decrease) in salaries payable
Increase (decrease) in other post employment benefit,
Increase (decrease) in compensated absences
Total adjustments
Net cash provided (used) by operating activities
Noncash investing, capital and financing activities:
Assets contributed to the Enterprise Funds
The accompanying notes are an integral part of these financial statements.
42
Water
Sewer
Storm Sewer
$ 2,305,675
$ 1,964,283
$ 367,958
(742,008)
(1,182,075)
(134,050)
(382,518)
(287,648)
(185,072)
1,181,149
494,560
48,836
4,242
(150,250) (446,680)
(146,008) (446,680)
(54,573) (25,152)
(285,166)
(545,000) -
4,000 4,000
(826,166) (50,573) (25,152)
(7,318)
(15,205)
(308)
201,657
(17,898)
23,376
1,941,782
2,692,353
228,305
$
2,143,439
$
2,674,455
$ 251,681
$
472,904
$
85,903
$ (165,208)
887,719
503,665
238,315
-
(4,218)
-
(185,480)
(97,184)
(25,915)
(4,406)
218
(5,544)
15,317
-
-
7,751
2,572
4,433
(10,522)
(447)
1,334
39
-
-
(788)
253
-
(2,199)
1,739
140
(2,655)
924
-
3,469
1,135
1,281
708,245
408,657
214,044
$
1,181,149
$
494,560
$ 48,836
$
876,633
$
70,309
$
Statement 8
Totals
4,242 7,134
(596,930) (596,930)
(592,688) (589,796)
(79,725)
(4,482)
Governmental Activities -
Totals
Internal Service Funds
2013
2012
2013
2012
$ 4,637,916
$ 4,958,803
$ 1,153,066
$ 1,094,255
(2,058,133)
(2,161,847)
(731,447)
(634,392)
(855,238)
(895,063)
(353,170)
(368,042)
1,724,545
1,901,893
68,449
91,821
4,242 7,134
(596,930) (596,930)
(592,688) (589,796)
(79,725)
(4,482)
$ 70,129 $
82,557
(285,166)
(620,675)
1,633,760
-
(545,000)
(6,980,000)
5,095
8,000
(308,579)
(50,663)
63
(901,891)
(7,605,157)
18,000
-
(22,831)
336,591
(2,393)
10,380
207,135
(5,956,469)
66,056
102,201
4,862,440
10,818,909
553,857
451,656
$ 5,069,575
$ 4,862,440
$ 619,913
$ 553,857
$ 393,599
$ 291,442
$ 70,129 $
82,557
1,629,699
1,633,760
-
-
(4,218)
5,095
-
(308,579)
(50,663)
63
1,448
18,000
1,750
(9,732)
(10,628)
-
15,317
1,604
(9,191)
(3,612)
14,756
(649)
6,345
9,239
(9,635)
1,238
-
-
39
(213)
-
-
(535)
3,026
(15)
15
(320)
1,534
1,118
424
(1,731)
(222)
-
-
5,885
8,569
-
1,330,946
1,610,451
(1,680)
9,264
$ 1,724,545
$ 1,901,893
$ 68,449 $
91,821
$ 946,942
$ 110,650
$ $
43
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET POSITION
FIDUCIARY FUNDS
Agency Funds
December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Assets:
Cash and investments
Liabilities:
Accounts payable
Deposits payable
Total liabilities
The accompanying notes are an integral part of these financial statements.
44
Statement 9
pill 01111VA
$ 477,364 $ 321,891
58,679 8,011
418,685 313,880
$ 477,364 $ 321,891
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Andover was incorporated in 1974 and operates under the State of Minnesota Statutory Plan A form of government. The
governing body consists of a five- member City council elected by voters of the City.
The financial statements of the City have been prepared in conformity with generally accepted accounting principles as applied to
governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant
accounting policies.
A. FINANCIAL REPORTING ENTITY
As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the
City (the primary government) and its component units. The component units discussed below are included in the City's
reporting entity because of the significance of their operational or financial relationships with the City.
COMPONENT UNITS
In conformity with generally accepted accounting principles, the financial statements of the component units have been
included in the financial reporting entity as blended component units.
The Andover Economic Development Authority (EDA) is an entity legally separate from the City. However, for financial
reporting purposes, the EDA is reported as if it were part of the City's operations because the members of the City Council
serve as EDA Board Members and its purpose is to promote development within the City. The activity of the EDA is reported
in the EDA General Special Revenue Fund. Separate financial statements are not prepared for the EDA.
B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information
on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of
interfund activity has been removed from these statements. 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.
The statement of activities demonstrates the degree to which the direct expenses of a given function or business -type activity
are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or business -type
activity. 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 business -type activity and 2) grants and contributions that are restricted
to meeting the operational or capital requirements of a particular function or business -type activity. Taxes and other items not
included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the
latter are excluded from the government -wide financial statements. Major individual governmental funds and major individual
enterprise funds are reported as separate columns in the fund financial statements.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION
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. The City's only fiduciary funds are agency funds. Agency funds are custodial in
nature (assets equal liabilities) and do not involve measurement of results of 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 all revenues, except reimbursement grants, to be available if they are
W
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are
collected within one year of 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.
Property taxes, special assessments, intergovernmental revenues, charges for services 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. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible
to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when
cash is received by the City.
The City reports the following major governmental funds:
The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government,
except those required to be accounted for in another fund.
The 2006 EDA Public Facility Lease Revenue Refunding Bonds Debt Service Fund (DSF) was established to refund
portions of debt associated with the construction of the Andover YMCA Community Center.
The 2007 EDA Public Facility Lease Revenue Refunding Bonds DSF was established to refund portions of debt associated
with the construction of the Andover YMCA Community Center.
The Water Trunk Capital Projects Fund (CPF) is used to account for water access fees and trunk improvements as part of
development. It is also used to reserve monies that will be needed for capital infrastructure replacements in the future.
The Sewer Trunk CPF is used to account for sewer access fees and sanitary sewer improvements.
The Road and Bridge CPF accounts for all road projects and the pavement management program, which includes annual
seal coating, crack sealing and overlays for roads.
The Tax Increment Projects CPF is used to account for activities in TIF districts 1 -1, 1 -2, 1 -3, 1 -4 and all TIF land sales
and expenditures to reach the goals of the TIF district plans.
The Permanent Improvement Revolving CPF serves as a long -term funding source for large capital improvement
expenditures.
The City reports the following major proprietary funds:
The Water Fund accounts for the water service charges, which are used to finance the water system operating expenses.
The Sewer Fund accounts for the sewer service charges, which are used to finance the sanitary sewer system operating
expenses.
The Storm Sewer Fund accounts for the storm sewer utility charges, which are used to finance the storm sewer operating
expenses.
Additionally, the City reports the following fund types:
Internal Service Funds (ISF) are used to provide equipment maintenance and insurance to other departments of the City
on a cost reimbursement basis.
The Agency Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals,
private organizations, and/or other governmental units. It is used to account for the collection and distribution of funds
relating to development activities and retiree insurance premiums.
As a general rule the effect of interfund activity has been eliminated from the government -wide financial statements.
Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved
external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve
..I;
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
other funds of the City. Elimination of these charges would distort the direct costs and program revenues reported for the
various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges
provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments.
Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues
include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. The principal operating revenues of the water and sewer 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 on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues
and expenses.
When both restricted and unrestricted resources are available for an allowable use, it is the City's policy to use restricted
resources first, and then unrestricted resources as they are needed.
D. BUDGETS
Budgets are legally adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets
are legally adopted for the General and Special Revenue Funds. Budgeted expenditure appropriations lapse at year -end.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are
recorded in order to reserve that portion of the appropriation, is not employed by the City because it is at present not
considered necessary to assure effective budgetary control or to facilitate effective cash management.
E. LEGAL COMPLIANCE - BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
1. The City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the
following January 1. The budget includes proposed expenditures and the means of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through City Council action.
4. Expenditures may legally exceed budgeted appropriations at the fund level through City Council action. Also, the
City Council may authorize transfers of budgeted amounts between departments within any fund.
5. Formal budgetary integration is employed as a management control device during the year for the General Fund and
Special Revenue Funds. Budgetary control for Capital Projects Funds is accomplished through the use of project
controls.
6. The legal level of budgetary control is at the department level for the General Fund and at the fund level for the
Special Revenue Funds. Also inherent in this controlling function is the management philosophy that the existence
of a particular item or appropriation in the approved budget does not automatically mean that it will be spent. The
budget process has flexibility in that, where need has been properly demonstrated, an adjustment can be made within
the department budget by the City Administrator or between departments by the City Council.
7. The City Council made supplemental budget appropriations throughout the year. Individual amendments were not
material in relation to the original appropriations which were adjusted.
The following is a listing of Special Revenue Funds whose expenditures exceed budget appropriations:
47
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
F inal Over
Budget Actual Budget
Special Revenue Funds:
Community Center $ 892,220 $ 971,108 $ 78,888
The expenditures over budget were funded by greater than anticipated revenues and/or available fund balance.
F. CASH AND INVESTMENTS
Cash balances from all funds are combined and invested to the extent available in authorized investments. Earnings from such
investments are allocated to the individual funds on the basis of applicable cash balance participation of each fund.
The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund
shown as interfund receivables in the advancing fund, and an interfund payable in the fund with the deficit, until adequate
resources are received. These interfund balances are eliminated on the government -wide financial statements.
Investments are stated at fair value, based upon quoted market prices. Short -term investments, such as commercial paper and
banker's acceptances, are reported at amortized cost. Investments in 20, like external investment pools, are also stated at
amortized cost.
For purposes of the Statement of Cash Flows of Proprietary Fund Types, cash equivalents are defined as short -term, highly
liquid investments that are both:
a. readily convertible to known amounts of cash, or
b. so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
The City's policy considers cash equivalents to be those that meet the above criteria and have original maturities of three
months or less.
G. RECEIVABLES AND PAYABLES
During the course of operations, numerous transactions occur between individual funds for goods provided or services
rendered. Short -term interfund loans are classified as "interfund receivables /payables." All short -term interfund receivables
and payables at December 31, 2013 are planned to be eliminated in 2014. Long -term interfund loans are classified as
"interfund loan receivable /payable." Any residual balances outstanding between the governmental activities and business -type
activities are reported in the government -wide financial statements as "internal balances."
Interfund loan receivables, as reported in the fund financial statements, are offset by a fund balance reserve account in
applicable governmental funds to indicate that they are not available for appropriation and are not expendable available
financial resources.
Property taxes and special assessments receivable have been reported net of estimated uncollectible accounts. (See Note 1 H
and I). Because utility bills are considered liens on property, no estimated uncollectible amounts are established.
Uncollectible amounts are not material for other receivables and have not been reported.
H. PROPERTY TAX REVENUE RECOGNITION
The City levies its property tax for the subsequent year during the month of December and it is certified to Anoka County.
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 the following January 1. Anoka County is the collecting agency for the levy and remits the collections
to the City three times a year. Taxes not collected as of December 31 each year are shown as delinquent taxes receivable.
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.
48
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
The County Auditor submits a list of taxes to be collected on each parcel of property to the County Treasurer in January of
each year. The County Treasurer collects all taxes and is required to mail copies of all personal property tax statements by
April 15, and copies of all real estate tax statements by April 15, of each year. Property owners are required to pay one -half of
their real estate taxes due by May 15 and the balance by October 15.
If taxes due May 15 are not paid on time, a penalty of 3% is assessed on homesteaded property and 7% on nonhomesteaded
property. An additional 1% penalty is added each month the taxes remain unpaid, until October 15. If the taxes due May 15
are not paid by October 15, a 2% penalty per month is added to homesteaded property and 4% per month to nonhomesteaded
property until January 1.
If the taxes are not paid by January 1, further penalties are added. Penalties and interest apply to both taxes and special
assessments. There are some exceptions to the above penalties, but they are not material.
Within 30 days after the tax settlement date, the County Treasurer is required to pay 70% of the estimated collections of taxes
and special assessments to the City Treasurer. The County Treasurer must pay the balance to the City Treasurer within 60
days after settlement, provided that after 45 days interest accrues at the rate of 8% per annum.
GOVERNMENT -WIDE FINANCIAL STATEMENTS
The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not
material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the
current period. In practice, current and delinquent taxes and State credits received by the City in July, December and January
are recognized as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the
following January) and taxes and credits not received at the year -end are classified as delinquent and due from County taxes
receivable. The portion of delinquent taxes not collected by the City in January is fully offset by deferred inflow of resources
because they are not available to finance current expenditures.
L SPECIAL ASSESSMENT REVENUE RECOGNITION
Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment
improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years
usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by
the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future
installments without interest or prepayment penalties.
Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is
made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go
delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit properties are allocated first to the
County's costs of administering all tax forfeit properties. Pursuant to State Statutes, a property shall be subject to a tax forfeit
sale after three years unless it is homesteaded, agricultural or seasonal recreational land in which event the property is subject
to such sale after five years.
K�] �/ aR0 1u1a01MJIIN011 ► /11►[yI11MISKINIa851a011f.`.'
The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council.
Uncollectible special assessments are not material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
The City recognizes revenue from special assessments when it becomes measurable and available to finance expenditures of
the current fiscal period. In practice, current and delinquent special assessments received by the City are recognized as
revenue for the current year. Special assessments that are collected by the County by December 31 (remitted to the City the
following January) and are also recognized as revenue for the current year. All remaining delinquent, deferred and special
deferred assessments receivable in governmental funding are completely offset by deferred inflow of resources.
49
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
J. INVENTORIES
Inventories of the Governmental Funds and the Proprietary Funds are stated at cost, which approximates market, using the
first -in, first -out (FIFO) method.
Inventories of Governmental Funds are recorded as expenditures when consumed rather than when purchased.
IL PREPAID ITEMS
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. Prepaid items are reported using the consumption method and recorded as
expenditures /expenses at the time of consumption.
L. LAND HELD FOR RESALE
Land held for resale represents various property purchases made by the City with the intent to sell in order to increase tax base
or attract new business. These assets are stated at the lower of cost or net realizable value.
M. CAPITAL ASSETS
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar
items) and intangible assets such as easements and computer software, 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
initial, individual cost of more than $5,000 (except for easements which is $10,000) and an estimated useful life in excess of
one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital
assets are recorded at estimated fair market value at the date of donation. The City has chosen the modified approach for
reporting street and trail system capital assets.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not
capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the
construction phase of capital assets of business -type activities is included as part of the capitalized value of the assets
constructed. For the year ended December 31, 2013, no interest was capitalized in connection with construction in progress.
The City implemented GASB Statement No. 51. Accounting and Financial Reporting for Intangible Assets effective January 1,
2010 which required the City to capitalize and amortize intangible assets. Intangible assets include easements and computer
software. Pursuant to GASB Statement 51, in the case of initial capitalization of intangible assets, the City chose to capitalize
intangible assets retroactively to 1980, except for permanent easements and internally generated software. The City has
already accounted for computer software at historical cost and therefore retroactive reporting was not necessary. The City
does not have any temporary easements to record that meet the threshold of $10,000.
Property, plant and equipment of the primary government, as well as the component units, are depreciated/amortized using the
straight line method over the following estimated useful lives:
Assets
Li fe
Buildings and improvements
10 - 30years
Furniture and equipment ( including software)
5 - 10 years
Machinery and equipment
5 - 10 years
Other park improvements
10 - 30 years
Storm sewer
50 years
Distribution and collection systems
50 years
Temporary easements
5 - 15 years
50
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
The City elected to use the modified approach as defined by GASB Statement No. 34 for infrastructure reporting of its streets
and trails. The City conducted a physical assessment in the fall of 2013 of the condition of the streets and trails constructed
since 1974. This condition assessment will be performed every 3 years. Each segment of City owned street or trail was
assigned a physical condition based on potential defects. An Overall Condition Index (OCI) was assigned to each segment.
The index is expressed in a continuous scale from 0 to 10, where 0 is assigned to the least acceptable physical condition and 10
is assigned to those segments that have the characteristic of a new street or trail. The following conditions were defined:
Range Description
8- 10
Excellent
7-7.9
Very good
6-6.9
Good
4-5.9
Fair
2-3.9
Poor
1 - 1.9
Very poor
0- .9
Substandard
The City's policy relative to maintaining the street and trail assets is to achieve an average rating of "Good" for all segments.
This acceptable rating allows minor cracking and patching of the pavement along with minor roughness that could be
noticeable to the users of the system.
N. COMPENSATED ABSENCES
City employees earn vacation and sick pay accruing each payroll period. Unused vacation can be accrued by the employees up
to a maximum of 200 hours as of the anniversary date of the individual's employment with the City, unless a specific
authorization is granted to an employee. All vacation pay is accrued when incurred in the government -wide and proprietary
fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for
example, as a result of employee resignations and retirements.
Employees can also accrue an unlimited amount of unused sick leave. Employees with two or more years of service are
entitled to receive severance pay equal to a percentage of unused sick pay ranging from 20 -50 percent based on years of
service, up to a maximum of 400 hours. The liability for severance pay is accounted for the same as accrued vacation pay.
O. LONG -TERM OBLIGATIONS
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. Bond premiums and discounts are immaterial and are expensed in the year of
bond issuance.
In the fund financial statements, governmental fund types recognize bond premiums and discounts 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.
P. FUND BALANCE CLASSIFICATIONS
In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which
amounts in those funds can be spent. These classifications are as follows:
Nonspendable — consists of amounts that are not in spendable form, such as prepaid items.
Restricted — consists of amounts related to externally imposed constraints established by creditors, grantors or
contributors; or constraints imposed by state statutory provisions.
Committed — consists of internally imposed constraints. These constraints are established by Resolution of the City
Council.
51
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Assigned — consists of internally imposed constraints. These constraints reflect the specific purpose for which it is the
City's intended use. These constraints are established by the City Council and/or management. Pursuant to City Council
Resolution, the City's Administrator and Finance Director are authorized to establish assignments of fund balance.
Unassigned— is the residual classification for the general fund and also reflects negative residual amounts in other funds.
When both restricted and unrestricted resources are available for use, it is the City's policy to first use restricted resources, and
then use unrestricted resources as they are needed. When unrestricted resources are available for use, it is the City's policy to
use resources in the following order: 1) committed, 2) assigned, and 3) unassigned.
Q. INTERFUND TRANSACTIONS
Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute
reimbursements to a fund for expenditures /expenses initially made from it that are properly applicable to another fund, are
recorded as expenditures /expenses in the reimbursing fund and as reductions of expenditures /expenses in the fund that is
reimbursed. Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash
between funds. All other interfund transactions are reported as transfers.
R. USE OF ESTIMATES
The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires
management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual
results could differ from such estimates.
S. RECLASSIFICATIONS
Certain amounts presented in prior year data have been reclassified in order to be consistent with the current year's
presentation.
T. COMPARATIVE TOTALS
The basic financial statements and combining and individual fund financial statements and schedules include certain prior -
year summarized comparative information in total but not at the level of detail required for a presentation in conformity with
generally accepted accounting principles. Accordingly, such information should be read in conjunction with the government's
financial statements for the year ended December 31, 2012, from which the summarized information was derived.
U. DEFERRED INFLOWS OF RESOURCES
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position
that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The
government has one type of item, which arises only under a modified accrual basis of accounting, that qualifies for reporting in
this category. Accordingly, the item, unavailable revenue, is reported only in the governmental fund balance sheet. The
governmental funds report unavailable revenues from the following sources: property taxes, tax increment taxes, special
assessments and land held for resale.
6%
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
V. RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
1. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET
AND THE GOVERNMENT -WIDE STATEMENT OF NET POSITION
The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net
position — governmental activities as reported in the government -wide statement of net position. One element of that
reconciliation explains that "long -term liabilities, including bonds payable and other post employment benefits, are not
due and payable in the current period and therefore are not reported in the funds." The details of this ($40,451,453)
difference are as follows:
Bondspayable $ (38,135,000)
Promissory note payable (983,593)
Accrued interest payable (562,826)
Other post employment benefits (157,465)
Compensated absences (612,569)
Net adjustment to reduce fund balance - total governmental
funds to arrive at net position - governmental activities $ (40,451,453)
Another element of that reconciliation states that "internal service funds are used by management to charge the cost of
equipment maintenance and insurance to individual funds. The assets and liabilities are included in the governmental
statement of net position along with a deduction of net revenue attributable to business -type activities." The details of this
$594,470 difference are as follows:
Internal Service Funds net position $ 677,192
Net revenue attributable to business -type activities (82,722)
Net adjustment to increase fund balance - total governmental
funds to arrive at net position- governmental activities $ 594,470
2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES AND THE GOVERNMENT -WIDE
STATEMENT OF ACTIVITIES
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation
between net changes in fund balances — total governmental funds and changes in net position of governmental activities
as reported in the government -wide statement of activities. One element of that reconciliation explains that
"Governmental Funds report capital outlays as expenditures. However, in the statement of activities the cost of those
assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $2,116,553
difference are as follows:
Capitaloutlay $ 2,763,351
Construction /acquisition costs 946,942
Depreciation expense (1,593,740)
Net adjustment to increase net changes in fund balances - total governmental
fundsto arrive at changes in netposition of governmental activities $ 2,116,553
Another element of that reconciliation states that "The net effect of various miscellaneous transactions involving capital
assets (i.e., sales, trade -ins, and donations) is to increase (decrease) net assets." The details of this ($304,520) difference
are as follows:
53
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
In the statement of activities, only the gain on the sale of capital assets is
reported However, in the governmental funds, the proceeds from the sale
increase financial resources. Thus, the change in net assets differs from the
change in fund balance by the cost of the capital assets sold. $ (304,520)
Net adjustment to decrease net changes in fund balances - total governmental
fundsto arrive at changes in netassets of governmental activities. $ (304,520)
Another element of that reconciliation states "Revenues on the Statement of Activities that do not provide current
financial resources are not reported as revenues in the funds." The details of this ($1,436,078) difference are as follows:
Unavailable revenue - general property taxes:
At December 31, 2012 $ (321,721)
At December 31, 2013 247,424
Unavailable revenue - tax increment taxes:
At December 31, 2012 (116,238)
At December 31, 2013 62,020
Unavailable revenue - special assessments:
At December 31, 2012 (2,384,332)
At December 31, 2013 2,057,769
Unavailable revenue - land held for resale:
At December 31, 2012 (1,326,000)
At December 31, 2013 345,000
Netadjustments to decrease net changes in fundbalances - total governmental
funds to arrive at changes in net position of governmental activities $ (1,436,078)
Another element of that reconciliation states "the issuance of long -term debt (e.g., bonds, leases) provides current
financial resources to governmental funds, while the repayment of the long -term debt consumes the current financial
resources of governmental funds." Neither transaction, however, has any effect on net position. The details of this
$3,589,000 difference are as follows:
Principal repayments:
Revenue bonds
$ 450,000
Capital improvement bonds
1,985,000
Abatement bonds
320,000
Special assessment bonds
375,000
Referendum bonds
135,000
Certificates of indebtedness
94,000
State aidbonds
230,000
Net adjustment to increase net changes in fand balances - total governmental
fundsto arrive at changes in net assets of governmental activities
$ 3,589,000
Another element of that reconciliation states that "Some expenses reported in the statement of activities do not require the
use of current financial resources and therefore are not reported as expenditures in governmental funds." The details of
this ($127,548) difference are as follows:
Compensated absences $ 9,322
Accrued interest (136,870)
Netadjustment to decrease net changes in fund balances - total governmental
funds to arrive at changes in netposition of governmental activities $ (127,548)
54
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Another element of that reconciliation states that "internal service funds are used by management to charge the cost of
equipment maintenance and insurance to individual funds. This amount is the portion of net revenue attributable to
governmental activities." The details of this $57,557 difference are as follows:
Internal S ervice Funds change in netposition $ 68,180
Netrevenue attributable to business -type activities (10,623)
Net adjustment to increase fund balance - total governmental
funds to arrive at net position- governmental activities $ 57,557
Note 2 DEPOSITS AND INVESTMENTS
DEPOSITS
In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of
which are members of the Federal Reserve System.
Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of
collateral pledged must equal 110% of the deposits not covered by insurance or bonds.
Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Clerk/Treasurer or in a financial
institution other than that furnishing the collateral. Authorized collateral includes the following:
a) United States government treasury bills, treasury notes, treasury bonds;
b) Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service
available to the government entity;
c) General obligation securities of any state or local government with taxing powers which is rated "A" or better by a national
bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated "AA"
or better by a national bond rating service;
d) Unrated general obligation securities of a local government with taxing powers may be pledged as collateral against funds
deposited by that same local government entity;
e) Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence
that the bank's public debt is rated "AA" or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation; and
t) Time deposits that are fully insured by the Federal Deposits Insurance Corporation.
Custodial Credit Risk — Deposits: Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be
returned to it. State statutes require that insurance, surety bonds or collateral protect all City deposits. The market value of
collateral pledged must equal 110% of deposits not covered by insurance or bonds. As of December 31, 2013, the bank balance of
the City's deposits was covered by federal depository insurance or covered by perfected collateral pledged and held in the City's
name. The City has no additional deposit policies addressing custodial credit risk.
INVESTMENTS
Minnesota Statutes authorize the City to invest in the following:
a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities or organizations created
by an act of congress, excluding mortgage- backed securities defined as high risk.
b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments
are in securities described in (a) above, general obligation tax- exempt securities, or repurchase or reverse repurchase
agreements.
c) Obligations of the State of Minnesota or any of its municipalities as follows:
6'f.".
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
1) any security which is a general obligation of any state or local government with taxing powers which is rated "A" or
better by a national bond rating service;
2) any security which is a revenue obligation of any state or local government with taxing powers which is rated "AA" or
better by a national bond rating service; and
3) a general obligation of the Minnesota housing finance agency which is a moral obligation of the State of Minnesota and is
rated "A" or better by a national bond rating agency.
d) Bankers acceptance of United States banks eligible for purchase by the Federal Reserve System.
e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in
270 days or less.
f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization
exceeding $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York;
certain Minnesota securities broker- dealers; or, a bank qualified as a depositor.
g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469.178,
subdivision 5; or 475.61, subdivision 6.
As of December 31, 2013, the City had the following investments and maturities:
Credit
Investment Type Rating
Money market funds N/A
Minnesota Municipal
Money Market Fund N/A
Certificates of deposit N/A
Investment Maturities (in Years)
Fair Less Than More Than
Value 1 1- 5 6-10 10
$ 4,611,310 $ 4,611,310 $
4,993 4,993
2,989,047 1,295,757
1,448,377 244,913
Local /State governments
B/BLB2
60,106
60,106
-
-
-
A/Al /A2
1,512,277
619,008
530,125
363,144
-
AA1 /AA2/AA3
9,564,426
2,064,273
4,258,225
2,166,374
1,075,554
AAA
4,943,492
125,245
2,440,039
1,819,887
558,321
U.S. agencies
AAA
21,084,332
17,065,203
2,311,455
873,249
834,425
FNMA REMIC
N/A
21,873
-
21,873
-
-
U.S. agencies
N/A
12,702
4
12,698
-
-
Total investments
44,804,558
$25,845,899
$11,022,792
$ 5,467,567
$ 2,468,300
Deposits 3,261,794
Total cash and investments $48,066,352
The following is a reconciliation of the City's total cash and investment balances at December 31, 2013:
Government-wide statement of net position
Cash and investments $ 30,666,459
Cash and investments with escrow agent 16,922,529
Fiduciary funds statement ofnetposition 477,364
Total $ 48,066,352
6'S
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
The Minnesota Municipal Money Market Fund is regulated by Minnesota Statutes and the Board of Directors of the League of
Minnesota Cities and is an external investment pool not registered with the Securities Exchange Commission (SEC) that follows the
same regulatory rules of the SEC under rule 2a7. The fair value of the position in the pool is the same as the value of the pool
shares.
Custodial credit risk - investments — For investments in securities, custodial credit risk is the risk that in the event of a failure of the
counterparty, the City will not be able to recover the value of its investment securities that are in the possession of an outside party.
As of December 31, 2013, $250,000 of the City's $44,804,558 investments was uninsured and unregistered, with securities held in
the City's name.
Interest rate risk - The City has a formal investment policy that states the City will minimize the risk that the market value of
securities in the portfolio will fall due to the changes in general interest rates, by:
1) Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby
avoiding the need to sell securities on the open market prior to maturity.
2) Investing operating funds primarily in shorter -term securities, money market mutual funds or similar investment pools.
FNMA REMIC — The City invests in REMIC's in accordance with State law and the City's investment policy. These securities are
based on cash flows from payments on underlying mortgages. Therefore, they are sensitive to prepayments by mortgages, which
may result from a decline in interest rates.
Credit Risk - The City has a formal investment policy that states the City will minimize the credit risk, the risk of loss due to the
failure of the security issuer or backer, by:
1) Limiting investments to the safest types of securities.
2) Pre - qualifying the financial institutions, broker /dealers, intermediaries and advisers with which the City will do business.
A list will be maintained of financial institutions authorized to provide investment services. In addition, a list also will be
maintained of approved security broker /dealers selected by creditworthiness. These may include "primary" dealers or
regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 150-1.
All financial institutions and broker /dealers who desire to become qualified for investment transactions must supply:
audited financial statements, proof of National Association of Securities Dealers (NASD) certification, proof of state
registration, completed broker /dealer questionnaire, and certification of having read and understood and agreeing to
comply with the City's investment policy.
An annual review of the financial condition and registration of qualified financial institutions and broker /dealers will be
conducted by the City Administrator.
Concentration of Credit Risk - More than 47% of the City's investments are in various holdings with U.S. agencies; Federal Home
Loan Bank (1.4 %), Federal Farm Credit Bank (2.5 %), Federal National Mortgage Association (3.4 %), Federal Home Loan
Mortgage Corporation (1.8 %) and U.S. Treasury (38.1 %). The City's policy on concentration of investments is as follows:
1) Diversification - The investments shall be diversified by:
a) investments to avoid over concentration in securities from a specific issuer or business sector (excluding U.S.
Treasury securities),
b) limiting investment in securities that have higher credit risks,
c) investing in securities with varying maturities, and
d) continuously investing a portion of the portfolio in readily available funds such as local government investment
pools (LGIPs), money market funds or overnight repurchase agreements to ensure that appropriate liquidity is
maintained in order to meet ongoing obligations.
2) Maximum Maturities - To the extent possible, the City shall attempt to match its investments with anticipated cash flow
requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing, or having
average lifes, of more than five (5) years from the date of purchase or in accordance with state and local statutes and
ordinances.
57
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Reserve funds and other funds with longer -term investment horizons may be invested in securities exceeding five (5)
years if the maturity of such investments are made to coincide as nearly as practicable with the expected use of funds.
The intent to invest in securities with longer maturitues shall be disclosed in writing to the legislative body.
Because of inherent difficulties in accurately forecasting cash flow requirements, a portion of the portfolio should be
continuously invested in readily available funds such as local government investment pools, money market funds, or
overnight repurchase agreements to ensure that appropriate liquidity is maintained to meet ongoing obligations.
Note 3 RECEIVABLES
Significant receivables balances not expected to be collected within one year of December 31, 2013 are as follows:
Delinquent Delinquent Special
Property Tax Assessment
Taxes Increment Receivable Total
Major Funds
General Fund
$ 76,893
$ - $ 10,226
$ 87,119
Water Trunk CPF
-
- 325,000
325,000
Sewer Trunk CPF
-
- 40,820
40,820
Road andBridge CPF
10,759
- 990,327
1,001,086
Tax Increment Projects CPF
-
32,250 -
32,250
Permanent Improvement Revolving CPF
-
- 416,482
416,482
Nonmajor Funds
23,688
- -
23,688
Total
$ 111,340
$ 32,250 $ 1,782,855
$ 1,926,445
Note 4 UNAVAILABLE REVENUES
Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be
available to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of unavailable
revenue reported in the governmental funds were as follows:
Property Tax Special Land Held
Taxes Increment Assessments for Resale Total
Maj or F unds
General Fund $ 170,873 $ $ 10,226 $ - $ 181,099
Water Trunk CPF - 331,605 - 331,605
Sewer Trunk CPF - - 51,651 - 51,651
Road and Bridge CPF 23,911 - 1,161,244 - 1,185,155
Tax Increment Projects CPF - 62,020 3,326 245,000 310,346
Permanent Improvement Revolving CPF - - 499,717 - 499,717
NonmajorFunds 52,640 - - 100,000 152,640
Total S 247,424 $ 62,020 $ 2,057,769 $ 345,000 $ 2,712,213
Note 5 CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the government -wide
statement of net position. The City elected to use the modified approach as defined by GASB Statement No. 34 for infrastructure
reporting for its streets and trails. As a result, no accumulated depreciation or depreciation expense has been recorded for this system. A
more detailed discussion of the modified approach is presented in the Required Supplementary Information section of this report. All
58
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
other capital assets including other infrastructure systems were reported using the basic approach whereby accumulated depreciation and
depreciation expense have been recorded. Capital asset activity for the year ended December 31, 2013 was as follows:
Primary Government
Governmental activities:
Capital assetsnotbeing depreciated-
Land and improvements
Streets and trails
Construction in progress
Total capital assets not being depreciated
Capital assetsbeing depreciated
Beginning Ending
Balance Additions Deletions Balance
$ 9,202,841 $ 1,957,524 $ (299,499) $ 10,860,866
79,922,680 342,024 - 80,264,704
73,712 1,129,032 (1,202,744) -
89,199,233 3,428,580 (1,502,243) 91,125,570
Buildings and improvements
27,084,891
127,926 -
27,212,817
Furniture and equipment (including software)
501,037
12,220 -
513,257
Machinery and equipment
7,306,836
256,756 (265,487)
7,298,105
Other park improvements
5,687,368
1,124,207 (15,000)
6,796,575
Total capital assets being depreciated
40,580,132
1,521,109 (280,487)
41,820,754
Less accumulated depreciation for
Buildings and improvements
8,057,076
906,117
-
8,963,193
Furniture and equipment
339,283
42,170
-
381,453
Machinery and equipment
5,510,646
343,316
(260,465)
5,593,497
Other park improvements
2,483,914
302,137
(15,000)
2,771,051
Total accumulated depreciation
16,390,919
1,593,740
(275,465)
17,709,194
Total capital assets being depreciated - net
24,189,213
(72,631)
(5,022)
24,111,560
Governmental activities capital assets - net
$ 113,388,446
$ 3,355,949
$ (1,507,265)
$ 115,237,130
59
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Primary Government
Business -type activities:
Capital assetsnotbeing depreciated-
Land and improvements
Capital assetsbeing depreciated-
Buildings and improvements
Furniture and equipment (including software)
Machinery and equipment
Collection and distribution
Total capital assets being depreciated
Less accumulated depreciation for:
Beginning
$ 730,243 $ -
15,877,590 -
61,390 -
1,211,412 79,725
50,501,848 946,942
A'7 zc) ')nn i n) r "7
Ending
Deletions Balance
$ - $ 730,243
- 15,877,590
- 61,390
(38,930) 1,252,207
- 51,448,790
(38,930) 68,63 9,97 7
Buildings and improvements
6,770,198
549,007 -
7,319,205
Furniture and equipment
45,460
4,027 -
49,487
Machinery and equipment
1,058,043
49,667 (38,930)
1,068,780
Collection and distribution
18,166,091
1,026,998 -
19,193,089
Total accumulated depreciation
26,039,792
1,629,699 (38,930)
27,630,561
Total capital assets being depreciated -net
41,612,448
(603,032) -
41,009,416
Business -type activities capital assets - net
$ 42,342,691
L_( 303 2 $ -
$ 41,739,659
Depreciation/amortization expense was charged to functions /programs of the primary government as follows:
Governmental activities:
General government
$
83,490
Public safety
229,590
Public works
241,943
Parks and recreation
1,026,401
Recycling
1,880
Economic development
10,436
Total depreciation /amortization expense- governmental activities $ 1,593,740
Business -type activities:
Water
Sewer
Storm sewer
$ 887,719
503,665
238,315
Total depreciation /amortization expense - business -type activities $ 1,629,699
CONSTRUCTION COMMITMENTS
At December 31, 2013, the City had the following construction project contracts in progress
60
Contract
Remaining
Project#
Project
Amount
Commitment
12 -28
Nightingale St Reconstruction
$ 1,197,711
$ 147,169
13 -02
2013 Street Reconstruction
833,463
43,154
13 -30
Roof Replacements - City Hall, Fire St #1 and #2
300,000
35,000
$ 2,331,174
$ 225,323
60
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 6 LONGTERM DEBT
The City issues general obligation bonds, equipment certificates and promissory notes to provide funds for the acquisition and
construction of major capital facilities. The reporting entity's long -term debt is segregated between the amounts to be repaid from
governmental activities and amounts to be repaid from business -type activities.
Issue Maturity Interest Original Payable
Date Date Rate Issue 12/31/13
GOVERNMENTAL ACTIVITIES:
1,390,000
Revenue Bonds:
38,135,000
2004 EDA Pub Fac Lease Rev Bonds
4/23/2004
Abatement Bonds:
612,569
2012C G.O. AbatementBonds
12/27/2012
Certificates of Indebtedness:
$ 46,759,969
2011A G.O. Equipment Certificates
3/1/2011
2012A G.O. Equipment Certificates
322/2012
Total certificates of indebtedness
Capital Improvement Bonds:
2012B G.O. Capital Improvement Ref Bonds
322/2012
Permanent Improvement Revolving (PIR) Bonds.
2010A G.O. PIR Refunding Bonds
2/18/2010
State Aid Bonds.
2009A G.O. State Aid Street Refunding Bonds 326/2009
Referendum Bonds:
2010A G.O. Open Space Referendum Bonds 2/18/2010
Total - bonded indebtedness
2/1/2014 2.12 -5.40% $ 19,580,000 $16,925,000
2/1/2031 1.00 -3.00% 17,315,000 16,995,000
2/1/2014 2.00% 265,000 95,000
2/1/2017 2.00% 585,000 585,000
850,000 680,000
2/1/2016 2.00% 1,570,000 1,470,000
2/1/2014 2.00% 1,480,000 385,000
2/1/2015 2.25 -2.80% 955,000 290,000
2/1/2022
Pro mis sory note payable 12/172013 11/15/2018
Compensated absences payable
Total governmental activities indebtedness
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds.
2007B G.O. Water Revenue Refunding Bonds 3/13/2007
2009A G.O. Water Revenue Bonds 326/2009
Total general obligation revenue bonds
Compensated absences payable
Total business -type activities indebtedness
Total City indebtedness
61
2.00 -3.12% 1,660,000
1,390,000
43,410,000
38,135,000
n/a 983,593
983,593
-
612,569
44,393,593
39,731,162
2/1/2023 4.00 -4.25% 6,570,000
6,085,000
2/1/2024 2.00 -4.25% 1,025,000
790,000
7,595,000
6,875,000
-
153,807
7,595,000
7,028,807
$ 51,988,593
$ 46,759,969
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Annual debt service requirements to maturity for general obligation bonds are as follows:
Total $ 1,390,000 $ 183,981 $ 6,875,000 $ 1,502,115
Annual debt service requirements to maturity for the promissory note payable is as follows
Governmental Activities
Promissory Note Payable
Principal Interest
2014
$ 196,719 $ -
2015
Governmental Activities
2016
196,719 -
2017
196,718 -
Revenue Bonds
Abatement Bonds
Certificates of Indebtedness
$ 983,593 $ -
Principal
Interest
Principal
Interest
Principal
Interest
2014
$16,925,000
$ 434,373
$ 320,000
$ 385,681
$ 95,000
$
12,650
2015
-
-
835,000
379,906
-
11,700
2016
-
-
845,000
371,506
50,000
11,200
2017
-
-
855,000
358,731
535,000
5,350
2018
-
-
870,000
341,481
-
-
2019 -2023
-
-
4,625,000
1,435,756
-
-
2024 -2028
-
-
5,160,000
881,028
-
-
2029 -2032
-
-
3,485,000
159,075
-
-
Total
$16,925,000
$ 434,373
$ 16,995,000
$ 4,313,164
$ 680,000
$
40,900
Governmental Activities
Permanent Improvement
Capital Improvement Bonds
Revolving
Bonds
State Aid Bonds
Principal
Interest
Principal
Interest
Principal
Interest
2014
$ 500,000
$ 24,400
$ 385,000
$ 3,850
$ 230,000
$
4,785
2015
500,000
14,400
-
-
60,000
840
2016
470,000
4,700
-
-
-
-
Total
$ 1,470,000
$ 43,500
$ 3 85 .000
$ 3,850
$ 290,000
$
5,625
Government
Activities
Business -Type
Activities
Referendum Bonds
G.O. Revenue Bonds
Principal
Interest
Principal
Interest
2014
$ 140,000
$ 34,765
$ 565,000
$ 263,806
2015
145,000
31,915
590,000
241,486
2016
145,000
28,942
615,000
218,101
2017
150,000
25,657
635,000
193,751
2018
155,000
21,841
665,000
168,339
2019 -2023
655,000
40,861
3,720,000
414,826
2024 -2027
-
-
85,000
1,806
Total $ 1,390,000 $ 183,981 $ 6,875,000 $ 1,502,115
Annual debt service requirements to maturity for the promissory note payable is as follows
Governmental Activities
Promissory Note Payable
Principal Interest
2014
$ 196,719 $ -
2015
196,718 -
2016
196,719 -
2017
196,718 -
2018
196,719 -
Total
$ 983,593 $ -
62
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
It is not practical to determine the specific year for payment of long -term accrued compensated absences.
CHANGE IN LONG -TERM LIABILITIES
Long -term liability activity for the year ended December 31, 2013, was as follows:
Governmental activities:
Bonds payable:
Revenue bonds
Abatement bonds
Certificates of indebtedness
Capital improvement bonds
Permanent improvement revolving bonds
State aid bonds
Referendum bonds
Total bonds payable
Promissory note payable
Compensated absences
Total governmental activities
long -term liabilities
Business -type activities:
Bonds payable:
G.O. revenue bonds
Compensated absences
Total business -type activities
long -term liabilities
Beginning
Ending
Due Within
Balance
Additions Reductions
Balance
One Year
$ 17,375,000
$ - $ (450,000)
$ 16,925,000
$16,925,000
17,315,000
- (320,000)
16,995,000
320,000
774,000
- (94,000)
680,000
95,000
3,455,000
- (1,985,000)
1,470,000
500,000
760,000
- (375,000)
385,000
385,000
520,000
- (230,000)
290,000
230,000
1,525,000
- (135,000)
1,390,000
140,000
41, 724,000
- (3,589,000) 38,135,000 18,595,000
983,593 - 983,593 196,719
621,891 308,724 (318,046) 612,569 91,885
$ 42,345,891 $ 1,292,317 $ (3,907,046) $ 39,731,162 $18,883,604
$ 7,420,000 $
147,922
- $ (545,000) $ 6,875,000 $ 565,000
52,976 (47,091) 153,807 23,071
$ 7,567,922 $ 52,976 $ (592,091) $ 7,028,807 $ 588,071
For the governmental activities, bonds and the promissory note payable can be summarized in the following categories:
The revenue bonds were used to construct a 132,000 square foot community center. The bonds are payable from annual lease
payments received by the EDA from the YMCA, operating revenues from the ice arena and field house, and, if necessary, a
debt service tax levy. These bonds do constitute debt for the purpose of computing statutory debt limits.
The abatement bonds are going to be used to purchase the 132,000 square foot building from the EDA. The bonds are general
obligations of the City for which it pledges its full faith, credit and taxing powers to the payment of principal and interest on
the bonds.
The certificates of indebtedness are used to finance the purchase of capital equipment. The certificates are general obligations
of the City for which it pledges its full faith, credit and taxing powers to the payment of principal and interest on the
certificates.
The capital improvement bonds were used to purchase the 30,000 square foot public works building from the EDA and to
finance the construction of a new fire station. The bonds are general obligations of the City for which it pledges its full faith,
credit and taxing powers to the payment of principal and interest on the bonds.
The permanent improvement revolving bonds are used to finance assessable improvements within the City, including but not
limited to sanitary sewer and water line connections, storm sewer, streets, sidewalks and curb & gutter. The bonds are payable
63
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
primarily from special assessments levied against properties benefited by the improvements. In addition, the bonds are general
obligations of the City for which its full faith, credit and taxing powers are pledged without limitation as to rate or amount.
The state aid bonds were used to finance the Municipal State Aid (MSA) eligible costs of the Andover Boulevard project. The
bonds are payable entirely from state -aid received by the City from construction and maintenance of the state aid street system.
The City has pledged an amount of money from its account in the state -aid street fund sufficient to pay the principal and
interest of the bonds. In addition, the bonds are general obligations of the City for which its full faith, credit and taxing powers
are pledged without limitation as to rate or amount.
The referendum bonds were used to finance various land acquisitions for open space preservation within the City. The bonds
are general obligations of the City for which it pledges its full faith, credit and taxing powers to the payment of principal and
interest on the certificates.
The promissory note payable was used to finance the purchase of 13 acres adjacent to the city hall campus for future
expansion. The note is payable from monies set aside in the Building Capital Projects Fund.
For the governmental activities, compensated absences are generally liquidated through the General Fund.
For the business -type activities, the G.O. revenue bonds were used to finance the construction of a water treatment plant. The bonds
are payable from net revenues of the water system and are general obligations of the City for which its full faith, credit and taxing
powers are pledged.
REVENUES PLEDGED
2004 EDA Public Facility Lease Revenue Bonds. The EDA has pledged future lease revenue, operating revenues (net of operating
expenses) and, if necessary, a debt service tax levy to repay the $19,580,000 bonds issued in April 2004. Proceeds from the bonds
provided financing for the construction of Andover YMCA Community Center. Lease revenues were projected to produce 100% of
the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $17,359,373,
payable through February 2014. For the current year, principal and interest paid and total net operating revenues, lease revenue and
tax levy were $1,328,534 and $862,469, respectively. A portion of the Series 2004 Bonds were refunded by the 2006 Series
Refunding Bonds of $10,000,000 and the 2007 Series Refunding Bonds of $6,865,000, both with a crossover date of February 1,
2014. The 2006 Series Refunding Bonds and the 2007 Series Refunding Bonds were refunded by the 2012C Series Abatement
Bonds deeming the 2006 Series and 2007 Series defeased for financial reporting purposes. Future lease revenues, net operating
revenues and, if necessary, debt service tax levy will be used to repay the Series 2012C Abatement Bonds through 2031.
2012C G.O. Abatement Bonds. The City has pledged future lease revenue, operating revenues (net of operating expenses) and, if
necessary, a debt service tax levy to repay the $17,315,000 bonds issued in December 2012. Proceeds from this bond will be
refunding the 2004 EDA Public Facility Lease Revenue Bonds. Lease revenues were projected to produce 100% of the debt service
requirements over the life of the bonds. Total principal and interest remaining on the 2012C bonds is $21,308,164, payable through
February 2031. For the current year, principal and interest paid and total property tax revenues were $550,519 and $577,945,
respectively.
2011A G.O. Equipment Certificates. The City has pledged future property tax revenue to repay the $265,000 bonds issued in March
2011. Proceeds from the bonds were used to finance the purchase of capital equipment. Property taxes were projected to produce
100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $95,950,
payable through February 2014. For the current year, principal and interest paid and total property tax revenues were $96,840 and
$101,727, respectively.
2012A G.O. Equipment Certificates. The City has pledged future property tax revenue to repay the $585,000 bonds issued in March
2012. Proceeds from the bonds were used to finance the purchase of capital equipment. Property taxes were projected to produce
100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the bonds is $624,950,
payable through February 2017. For the current year, interest paid and total property tax revenues were $15,893 and $124,978,
respectively.
2004A G.O. Capital Improvement Bonds. The City has pledged future property tax revenue to repay the $3,890,000 bonds issued in
March 2004. Proceeds from the bonds were used to purchase the public works facility from the EDA and to finance the
construction of a new fire station. Property taxes were projected to produce 100% of the debt service requirements over the life of
the bonds. For the current year, principal and interest paid and total property tax revenues were $1,918,134 and $378,253,
64
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
respectively. The remaining portion of the Series 2004 Bonds were refunded by the 2012B Series Refunding Bonds of $1,570,000
on February 1, 2013. At which time, future property tax revenue to repay will be used to repay the Series 2012 Refunding Bonds.
2012E G.O. Capital Improvement Refunding Bonds. The City has pledged future property tax revenue to repay the $1,570,000
bonds issued in March 2012. Proceeds from the bonds refunded the Series 2004A Bonds. Property taxes were projected to produce
100% of the debt service requirements over the life of the bonds. Total principal and interest remaining on the 2012B bonds is
$1,513,500, payable through February 2016. For the current year, interest paid and total property tax revenues were $141,652 and
$141,286, respectively.
2010A Permanent Improvement Revolving Refunding Bonds. The City has pledged future special assessment revenue to repay the
$1,660,000 bonds issued in February 2010. Proceeds from the bonds refunded the Series 2006A Bonds. Special assessments were
projected to produce 100% of the debt service requirements over the life of the bonds. All revenues from the special assessments
are paid into the Permanent Improvement Revolving CPF and used to pay debt service as needed. Total principal and interest
remaining on the bonds is $388,850, payable through February 2014. For the current year, principal and interest paid and monies
transferred from the Permanent Improvement Revolving CPF were $386,450 and $385,000, respectively.
2009A State Aid Street Refunding Bonds. The City has pledged future municipal state aid (MSA) allotments to repay the $955,000
bonds issued in March 2009. Proceeds of the bonds refunded the Series 2001B Bonds. The bonds are payable solely from MSA
allotments through 2015. Total principal and interest remaining on the bonds is $295,625, payable through February 2015. For the
current year, principal and interest paid and MSA revenues were $240,765 and $237,890, respectively.
2010A G.O. Open Space Referendum Bonds. The City has pledged future property tax revenue to repay the $1,660,000 bonds
issued in February 2010. Proceeds from the bonds were used to fmance various land acquisitions for open space preservation
within the City. Property taxes were projected to produce 100% of the debt service requirements over the life of the bonds. Total
principal and interest remaining on the bonds is $1,573,981, payable through February 2022. For the current year, principal and
interest paid and total property tax revenues were $172,515 and $185,825, respectively.
2007E G.O. Water Revenue Bonds. The City has pledged future water customer revenues, net of operating expenses, to repay the
$6,570,000 bonds issued in March 2007. Proceeds of the bonds refunded the Series 2002 Bonds. The bonds are payable from water
customer net revenues and are payable through 2023. The total principal and interest remaining on the bonds is $7,411,090. The
principal and interest paid for the current year and total customer net revenues were $741,446 and $1,214,615, respectively.
2009A G.O. Water Revenue Bonds. The City has pledged future water customer revenues, net of operating expenses, to repay the
$1,025,000 bonds issued in March 2009. Proceeds of the bonds provided financing for the addition to the water treatment plant.
The bonds are payable from water customer net revenues and are payable through 2024. The total principal and interest remaining
on the bonds is $966,025. The principal and interest paid for the current year and total customer net revenues were $88,720 and
$1,214,615, respectively.
ADVANCE CROSSOVER REFUNDING
On December 1, 2006, the City issued $10,000,000 in Public Facility Lease Revenue Refunding Bonds, Series 2006 with an
average interest rate of 4.29% to advance refund $9,755,000 of outstanding 2004 Series Bonds with an average interest rate of
5.17 %. The net proceeds of $9,782,338 were used to purchase U.S. Government Securities. Those securities were deposited in an
irrevocable trust with an escrow agent to provide for the interest on the refunding bonds before the crossover date and called
principal on the refunded bonds on February 1, 2014.
The City advance refunded a portion of the 2004 Public Facilities Lease Revenue Bonds to reduce its total debt service payments
over the last twenty years of the bond by $755,979 and to obtain an economic gain (difference between the present value of the debt
service payments on the old and new debt) of $375,573.
The City is responsible for the debt service of the refunded bonds until the crossover date. Assets held with the escrow agent total
$9,543,846 at December 31, 2013.
On January 1, 2007, the City issued $6,865,000 in Public Facility Lease Revenue Refunding Bonds, Series 2007 with an average
interest rate of 4.31% to advance refund $6,700,000 of outstanding 2004 Series Bonds with an average interest rate of 5.17 %. The
net proceeds of $6,710,306 were used to purchase U.S. Government Securities. Those securities were deposited in an irrevocable
trust with an escrow agent to provide for the interest on the refunding bonds before the crossover date and called principal on the
refunded bonds on February 1, 2014.
65
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
The City advance refunded a portion of the 2004 Public Facilities Lease Revenue Bonds to reduce its total debt service payments
over the last twenty years of the bond by $517,163 and to obtain an economic gain (difference between the present value of the debt
service payments on the old and new debt) of $250,417.
The City is responsible for the debt service of the refunded bonds until the crossover date. Assets held with the escrow agent total
$6,555,105 at December 31, 2013.
Refunded
Payment Bonds Refunding Bonds
Date Total Series 2006 Series 2006
Debt Service Commitment
Escrow Account
Series 2006 Series 2007 City
2014 $ 17,359,373 F Advanced Refunded in 2012 $ 9,755,000 $ 6,700,000 $ 904,373
ADVANCE REFUNDING
On December 27, 2012, the City issued $17,315,000 in Taxable General Obligation Abatement Bonds, Series 2012C with an
average interest rate of 2.56% to advance refund $10,000,000 of outstanding 2006 Series Bonds with an average interest rate of
4.29% and $6,865,000 of outstanding 2007 Series Bonds with an average interest rate of 4.31 %. The net proceeds of $16,833,582
were used to purchase U.S. Government Securities. Those securities were deposited in an irrevocable trust with an escrow agent to
provide for payment of the principal and interest.
The City advance refunded the 2006 and 2007 Public Facilities Lease Revenue Refunding Bonds to reduce its total debt service
payments over the last twenty two years of the bonds by $4,013,528 and to obtain an economic gain (difference between the present
value of the debt service payments on the old and new debt) of $2,366,409. The amount of bonds defeased at December 31, 2013
was $16,865,000.
Note 7 LEGAL DEBT MARGIN
The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property taxes.
The City's legal debt margin for 2013 and 2012 is computed as follows:
December 31,
2013 2012
Estimated taxable market v alue
$ 2,123, 596, 35 8
Debt limit (3% of market value)
63,707,891
Amount of debtapplicable to debt limit:
Total bonded debt
$ 45,010,000
Less: Nonapplicable debt
G.O. water revenue bonds
(6,875,000)
Permanent improvement revolving bonds
(385,000)
State aidbonds
(290,000)
Less: Cash and investments inrelated
debt service funds
(17,415,812)
Total debt applicable to debtlimit
20,044,188
Legal debt margin
$ 43,663,703
66
$ 2,202,135,356
66,064,061_
$ 49,144,000
(7,420, 000)
(760,000)
(520,000)
(18,497,679)
21,946,32 1
$ 44,117,740
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 8 DEFINED BENEFIT PENSION PLANS - STATEWIDE
1�WROWNU *YyN1y0[610
All full -time and certain part -time employees of the City are covered by defined benefit plans administered by the Public
Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund
(GERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost - sharing, multiple - employer retirement plans.
These plans are established and administered in accordance with Minnesota Statutes, Chapters 353 and 356.
GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social
Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers,
firefighters and peace officers who qualify for membership by statute are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible
members. Benefits are established by State Statute, and vest after five years of credited service. The defined retirement
benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of
credit at termination of service.
Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives
the higher of a step -rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the
annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first 10 years of service and 2.7% for
each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2% of average salary for each of the first 10
years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan
members and 1.7% for Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate is
3.0% for each year of service. For all PEPFF and GERF members hired prior to July 1, 1989 whose annuity is calculated using
Method 1, a full annuity is available when age plus years of service equal 90. Normal retirement age is 55 for PEPFF members
and 65 for Basic and Coordinated members hired prior to July 1, 1989. Normal retirement age is the age for unreduced Social
Security benefits capped at 66 for Coordinated members hired on or after July 1, 1989. A reduced retirement annuity is also
available to eligible members seeking early retirement.
There are different types of annuities available to members upon retirement. A single -life annuity is a lifetime annuity that
ceases upon the death of the retiree — no survivor annuity is payable. There are also various types of joint and survivor annuity
options available which will be payable over joint lives. Members may also leave their contributions in the fund upon
termination of public service in order to qualify for a deferred annuity at retirement age. Refunds of contributions are available
at any time to members who leave public service, but before retirement benefits begin.
The benefit provisions stated in the previous paragraphs of this section are current provisions and apply to active plan
participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the
provisions in effect at the time they last terminated their public service.
PERA issues a publicly available financial report that includes financial statements and required supplementary information for
GERF and PEPFF. That report may be obtained on the internet at www.mnpera.org, by writing to PERA, 60 Empire Drive
#200, St. Paul, Minnesota, 55103 -2088 or by calling (651) 296 -7460 or 1- 800 - 652 -9026.
B. FUNDING POLICY
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and
amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by
state statutes. GERF Basic Plan members and Coordinated Plan members were required to contribute 9.10% and 6.25 %,
respectively, of their annual covered salary in 2013. PEPFF members are required to contribute 9.60% of their annual covered
salary in 2013. In 2013, the City was required to contribute the following percentages of annual covered payroll: 11.78% for
Basic Plan members, 7.25% for Coordinated Plan members, and 14.4% for PEPFF members. The City's contributions to the
Public Employees Retirement Fund for the years ending December 31, 2013, 2012 and 2011 were $256,560, $245,654 and
$255,552, respectively. The City's contributions to the Public Employees Police and Fire Fund for the years ending December
31, 2013, 2012 and 2011 were $26,588, $26,108 and $27,004, respectively. The City's contributions were equal to the
contractually required contributions for each year as set by state statute.
67
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
C. DEFINED CONTRIBUTION LUMP SUM SERVICE PENSION PLAN — VOLUNTEER FIREFIGHTERS RELIEF
ASSOCIATION
PLAN DESCRIPTION
Members of the City's volunteer fire department are members of the Andover Firefighters' Relief Association. The
Association is the administrator of a single - employer defined contribution plan available to firefighters that was established
October 9, 1979 and operates under the provisions of Minnesota Statutes Section 424A. It is governed by a board of six
members elected by the members of the Association for three -year terms. The City's Mayor, Finance Manager and Fire Chief
are ex- officio members of the Board of Trustees.
The Association provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of
eligible members.
1. Twenty -Year Service Pension — In order to be entitled to a pension benefit, a firefighter must have completed a
minimum of five years of service with the Department and five years membership in the Association and attain the
age of 50 years. The firefighter will then be 40% vested. This percentage increases 4% per year until the twentieth
year when 100% vesting will occur. Because this is a defined contribution plan, the amount of the retirement benefit
is not predetermined, but rather is based on the individual member's allocable portion of contributions made during
the participation period.
2. Deferred Pension — If the retired or terminated member has not attained age 50 and is otherwise eligible for the
pension benefit, the balance of the member's account will be credited with earned interest at the rate permitted by
Minnesota Statutes Section 424.A02, Subd.7.
3. Disability Benefit — If a member of the Association becomes totally and permanently disabled due to injury,
disability, sickness or dismemberment as a result of performance of duty, a disability payment will be made after one
hundred days of disability.
4. Death Benefit — In the event of death of an active member or deferred pensioner, the member's individual account
balance will be paid to the surviving spouse, surviving children or the estate of the member after approval by the
Board.
The Association issues a publicly available financial report that includes financial statements and required supplementary
information. That report may be obtained by writing to Andover Firefighters' Relief Association, 13875 Crosstown Boulevard
NW, Andover, Minnesota 55304.
FUNDING POLICY
The State of Minnesota contributes amortization aid, or two percent fire aid, in accordance with state statute requirements.
Plan members are not required to contribute to the plan. The state legislature may amend contribution requirements of the City
and State. The City is allowed to make voluntary contributions of other public funds pursuant to Minnesota Statutes Chapter
69. The City receives the State aid contribution and is required by state statutes to pass this through as payment to the
Association. This transaction is recorded as revenue and expenditure in the City's financial statements. Contributions for the
last three years are as follows:
Year
Ending City State Total
12/31/2011 $ 50,000 $ 106,170 $ 156,170
12/31/2012 50,000 107,440 157,440
12/31/2013 50,000 153,555 203,555
Note 9 OTHER POST EMPLOYMENT BENEFITS (OPEB)
In 2008, the City prospectively implemented the requirement of a new accounting pronouncement, GASB Statement No. 45, Accounting
and Financial Reporting by Employers for Post Employment Benefits Other than Pensions.
68
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
A. PLAN DESCRIPTION
In addition to providing the pension benefits described in Note 8, the City provides post employment health care benefits (as
defined in paragraph B) for retired employees through a single employer defined benefit plan. The term plan refers to the
City's requirement by State Statute to provide retirees with access to health insurance. The OPEB plan is administered by the
City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a, and 299A.465.
The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended
by the City through its personnel manual and collective bargaining agreements with employee groups. The Plan is not
accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan. The Plan does not issue a
separate report.
B. BENEFITS PROVIDED
Retirees
The City is required by State Statute to allow retirees to continue participation in the City's group health insurance plan if the
individual terminates service with the City through service retirement or disability retirement. Employees who satisfy the rule
of 90 or attain age 55 and have completed 10 years of service at termination can immediately commence medical benefits.
Retirees may obtain dependent coverage while the participating retiree is under age 65. Covered spouses may continue
coverage after the retiree's death. The surviving spouse of an active employee may continue coverage in the group health
insurance plan after the employee's death.
All health care coverage is provided through the City's group health insurance plan. The retiree is required to pay 100% of
their premium cost for the City- sponsored group health insurance plan. The premium is a blended rate determined by the
entire active and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees,
the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active
employees. Upon a retiree reaching age 65 years of age, Medicare becomes the primary insurer and the City's plan becomes
secondary.
C. PARTICIPANTS
As of the actuarial valuation dated January 2011, participants consisted of
Retirees and beneficiaries currently
purchasing health insurance through the City
Active employees
Total
53
55
Participating employers 1
D. FUNDING POLICY
The additional cost of using a blended rate for actives and retirees is currently funded on a pay -as- you -go basis. The City
Council may change the funding policy at any time.
E. ANNUAL OPEB COSTS AND NET OPEB OBLIGATION
The City's annual other post employment benefit (OPEB) cost is calculated based on the annual requirement contribution
(ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The
ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortized
any unfunded actuarial liabilities (or funding excess) over period not to exceed 30 years. The net OPEB obligation as of
December 31, 2013, was calculated as follows:
69
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Annual required contribution (ARC)
$ 40,221
Amortization of net OPEB obligation
(9,585)
Interest on net OPEB obligation
6,630
Annual OPEB cost
37,266
Contributions made during the year
(24,068)
Increase (decrease) in net OPEB obligation
13,198
Net OPEB obligation - beginning of year
165,740
Net OPEB obligation - end of year $ 178,938
The City had an actuarial valuation performed for the plan as of January 1, 2011 to determine the funded status of the plan as
of that date as well as the employer's annual required contribution (ARC) for the fiscal year ended December 31, 2013. The
City's annual OPEB cost (expense) of $40,221 was equal to the ARC for the fiscal year, as the transition liability was set at
zero as of December 31, 2007. The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and
the net OPEB obligation for 2011, 2012 and 2013 are as follows:
Percentage of
Annual OPEB Net OPEB
Cost Contributed Obligation
17.2% $ 146,412
47.3% 165,740
64.6% 178,938
For the governmental activities, other post employment benefits are generally liquidated through the General Fund.
F. FUNDED STATUS AND FUNDING PROGRESS
The City currently has no assets that have been irrevocably deposited in a trust for future health benefits; therefore, the
actuarial value of assets is zero. The funded status of the plan was as follows:
Annual
Employer
Fiscal Year Ended
OPEB Cost
Contributions
December 31, 2011
$ 35,632
$ 6,141
December 31, 2012
36,650
17,322
December 31, 2013
37,266
24,068
Percentage of
Annual OPEB Net OPEB
Cost Contributed Obligation
17.2% $ 146,412
47.3% 165,740
64.6% 178,938
For the governmental activities, other post employment benefits are generally liquidated through the General Fund.
F. FUNDED STATUS AND FUNDING PROGRESS
The City currently has no assets that have been irrevocably deposited in a trust for future health benefits; therefore, the
actuarial value of assets is zero. The funded status of the plan was as follows:
G. ACTUARIAL METHODS AND ASSUMPTIONS
UAAL as a
Percentage of
Fund Covered Covered
Ratio Payroll Payroll
(a/b) (c) ((b -a) /c)
0.00% $ 5,298,367 5.15%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events in the future. Examples include assumptions about future employment, mortality and the
health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions
(ARC) of the employer are subject to continual revision as actual results are compared with past expectations and new
estimates are made about the future. The schedule of funding progress, presented as required supplementary information
following the notes to the financial statements, presents multi -year trend information that shows whether the actuarial value of
plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
70
Unfunded
Actuarial
Actuarial
Actuarial
Accrued
Actuarial Value of
Accrued
Liability
Valuation Date Assets
Liability *
(UAAL )
(a)
(b)
(b -a)
January 1, 2011 $ -
$ 273,046
$ 273,046
*using the Projected Unit Credit actuarial method
G. ACTUARIAL METHODS AND ASSUMPTIONS
UAAL as a
Percentage of
Fund Covered Covered
Ratio Payroll Payroll
(a/b) (c) ((b -a) /c)
0.00% $ 5,298,367 5.15%
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events in the future. Examples include assumptions about future employment, mortality and the
health care cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions
(ARC) of the employer are subject to continual revision as actual results are compared with past expectations and new
estimates are made about the future. The schedule of funding progress, presented as required supplementary information
following the notes to the financial statements, presents multi -year trend information that shows whether the actuarial value of
plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.
70
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the
employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern
of sharing of benefit cost between the employer and plan members to that point. The actuarial methods and assumptions used
include techniques that are designed to reduce the effect of short -term volatility in actuarial accrued liabilities and the actuarial
value of assets, consistent with the long -term perspective of the calculations. The plan's unfunded actuarial accrued liability is
being amortized as a level dollar amount over 30 years on an open basis. The remaining amortized period at 12/31/2013 was
28 years. The actuarial value of assets was $0.
In the January 1, 2011 actuarial valuation, the Projected Unit Credit Actuarial cost method was used. The following actuarial
assumptions were used:
1. Discount rate — 4.0%
2. Inflation rate — 3.0%
3. Monthly rates — life expectancies were based on mortality tables at the National Center for Health Statistics
4. Retirement age — latest of age 62, plan eligibility or current age
5. Participation rate — 75% of future retirees employees expected to retire in the future will elect coverage at retirement
and continue coverage to age 65; 100% of current retirees will continue their coverage until age 65
6. Spouse participation — spouse continue coverage until age 65
7. Health care cost rate —10% reduced by 0.5% each year to arrive at an ultimate health care cost trend 5.0 %.
Note 10 INTERFUND RECEIVABLES/PAYABLES, LOANS AND TRANSFERS
Individual fund interfund receivable and payable balances at December 31, 2013 are as follows:
Fund
Governmental Funds:
Major Funds.
General Fund
2006 EDA Public Facility Lease Revenue Refunding Bonds DSF
2007 EDA Public Facility Lease Revenue Refunding Bonds DSF
Sewer Trunk CPF
Nonmajor Governmental Funds
Total governmental funds
Receivable
Payable
$ 590,000
$ -
-
15,000
-
15,000
70,000
-
-
630,000
$ 660,000
$ 660,000
Interfund receivables and payables are representative of lending/borrowing arrangements to cover deficit cash balances at the end of the
fiscal year.
The City made the following interfund transfers during the year:
71
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Transfer In
Transfer Out
Amount Purpose
General Fund
Water Fund
$ 150,250
Admin allocation
General Fund
Sewer Fund
46,680
Admin allocation
Sewer Trunk CPF
Sewer Fund
400,000
Replacement reserve
Road &Bridge CPF
NonmajorFund
9,350
Roadway degredation
Water Fund
Water Trunk Fund CPF
4,242
Debt service allocation
Nonmajor Fund
Permanent Improvement Revolving Fund CPF
385,000
Debt service allocation
Nonmajor Fund
General Fund
135,000
Parkimprovements
Nonmajor Fund
Permanent Improvement Revolving Fund CPF
300,000
Parkimprovements
Nonmajor Fund
Nonmajor Fund
371,598
Debt service allocation
Nonmajor Fund
Nonmajor Fund
48,685
Close debt service fund
Nonmajor Fund
NonmajorFund
100,000
Parkimprovements
$ 1,950,805
Additionally, computer service fees paid by the Water, Sewer and Storm Sewer Enterprise Funds to the General Fund have been
reclassified as transfers on the Government -Wide Statement of Activities as follows:
Transfer In Transfer Out
Governmental Activities $ 30,600 $ -
Business -Type Activities - 30,600
Total $ 30,600 $ 30,600
Note 11 TAX INCREMENT DISTRICTS
The City is the administering authority for the following tax increment finance districts:
1. Name of District:
Type of District:
Authorizing Law.
Established-
Duration of District:
Original net tax capacity:
Current net tax capacity:
Andover Redevelopment District 1 -2
Redevelopment
M.S. Section 472
1986
Through 2014
$ 4,542
198,692
Captured net tax capacity - retained by the City $ 194,150
2. Name of District:
Type of District:
Authorizing Law.
Established-
Duration of District:
Original net tax capacity:
Current net tax capacity:
Tax Increment Financing District 1 -3
(Farmstead Project)
Redevelopment
M.S. Section 469
1997
Through 2025
$ 7,314
ins ')or
Captured net tax capacity -retained by the City $ 139,981
W
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Name of District:
Type of District:
Authorizing Law.
Established-
Duration of District:
Original net tax capacity:
Current net tax capacity:
Tax Increment Financing District 1 -4
Redevelopment
M.S. Section 469
2005
Through 2031
$ 30,727
33,176
Captured nettax capacity
-retained by the City $ 2,449
Name of District:
Tax Increment Financing District 1 -5
Type of District:
Redevelopment
Authorizing Law.
M.S. Section 469
Established
2012
Duration of District:
Through 2039
Original net tax capacity:
$ 9,072
Current net tax capacity:
8,100
Captured net tax capacity - retained by the City $ -
Note 12 DEFICIT FUND BALANCES
The City has deficit fund balances at December 31, 2013 as follows:
Fund Amount
Nonmajor Special Revenue Funds.
Coninunity Center $ 210,573
Nonmajor Capital Projects Funds:
Storm Sewer Project 64,940
Note 13 CONTINGENCIES
A. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts, theft of, damage to and destruction of assets; errors and omissions;
injuries to employees; and natural disasters. The City participates in the League of Minnesota Cities Insurance Trust (LMCIT),
a public entity risk pool for its general property and casualty, workers' compensation, and other miscellaneous insurance
coverages.
Workers compensation coverage is provided through a pooled self - insurance program through the LMCIT. The City pays an
annual premium to LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT
reinsures through Workers Compensation Reinsurance Association (WCRA) as required by law. The City also has a $2,500
deductible per occurrence to further decrease the cost of coverage. Final premiums are determined after an audit of payroll
subsequent to the close of the agreement year and are subject to revisions in rates, payrolls and experience modification. The
amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid.
Property, casualty, and automobile insurance coverage are provided through a pooled self - insurance program through the
LMCIT. The City pays an annual premium to the LMCIT. The LMCIT reinsures through commercial companies for claims in
excess of various amounts. The City retains risk for the deductible portions. These deductibles are considered immaterial to
the financial statements.
The City continues to carry commercial insurance for all other risks of loss, including employee health and disability
insurance.
73
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
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.
B. LITIGATION
The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant
are either covered by insurance; of an immaterial amount; or, in the judgment of the City attorney, remotely recoverable by
plaintiffs.
C. FEDERAL AND STATE FUNDS
The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of
funds received under these programs generally requires compliance with the terms and conditions specified in the grant
agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a
liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material
effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the
City at December 31, 2013.
D. TAX INCREMENT DISTRICTS
The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any
disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that
they are not aware of any instances of noncompliance that would have a material effect on the financial statements.
E. PAY -AS -YOU -GO TAX INCREMENT
The City has two tax increment pay -as- you -go agreements. The agreements are not a general obligation of the City and are
payable solely from tax increments. Accordingly, these agreements are not reflected in the financial statements of the City.
Details of the pay -as- you -go are as follows:
TIF District #1 -3, Farmstead Project: The pay -as- you -go agreement for TIF District #1 -3 provides for the payment of 90% of
all tax increment received and will be completed February 1, 2015.
TIF District #1 -5, Arbor Oaks Project: The pay -as- you -go agreement for TIF District #1 -5 provides for the payment of 90% of
all tax increment received and will be completed February 1, 2029.
Note 14 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT
General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond issues sold by the
City are partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting properties. When a
bond issue to be financed partially or completely by ad valorem tax levies is sold, specific annual amounts of such tax levies are stated in
the bond resolution and the County Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax levies
are subject to cancellation when and if the City has provided alternative sources of financing. The City Council is required to levy any
additional taxes found necessary for full payment of principal and interest.
These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31, 2013. Future
scheduled tax levies for all bonds outstanding at December 31, 2013 totaled $27,465,103.
Note 15 FUND BALANCE
A. CLASSIFICATIONS
At December 31, 2013, a summary of the governmental fund balance classifications are as follows:
74
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Nonspendable
Inventory
Restrcted for
Debt servce
Tax mer -cut
Public services
Equipmentpurcbases
Op. spacemfe -d-
Total restricted
Committed to
Econemc development
Citysmappiog syskm
Surface watermanagement
Public right of ways management
Sealcoating new developments
Total committed
Asstgnedto:
Water system
Sanitary sewer system
Street rehabilitation
Developmentpurpos ; s
Forest resources programs
Public services
Pads improvement
Facditiesmanagement
Pedestrian trals
Capital improvements
Total assgned
Unassigned
Total
2006 EDA
2007 EDA
- 4,918,165 - - - -
4,918,165
- - 3,114,711 - - -
3,114,711
- - - - 96$636 -
Public
Public
3,559
764
764
- - - - - 343,151
343,151
Fac Lease
Fac Lease
- - - - - 106,678
Tax
Permanent
687,274
Revenue
Revenue Water
Sewer Road&
Increment
hnprovement
Other
RefBonds
RefBonds Thmk
Trunk Bridge
Projects
Revol✓ing
Gove ml
General DST
DST CPF
CPT CPF
CPF
CPF
Fonds
Total
$ 106,445 $
$ $
$ $
$
$
$ 1,316
$ 107,761
- 9,706,698
6,662,794 -
- -
-
-
1,398,389
17,767,831
_ _
_ _
_ _
2,657,590
-
-
2,657,590
- -
- -
- -
-
-
25,321
25,321
- -
- -
- -
-
-
50,552
50,552
773,150
773,150
9, 706,698
6,662,794
2,657,590
2,247,412
21,274,444
- -
- -
- -
-
-
405,838
405,838
- -
- -
- -
-
-
132,453
132,453
- -
- -
- -
-
-
4,089
4,089
- -
- -
- -
-
-
45,008
45,008
1,128
1,128
588,516
588,516
2,245,932 - - - - -
2,245,932
- 4,918,165 - - - -
4,918,165
- - 3,114,711 - - -
3,114,711
- - - - 96$636 -
968,636
- - - - - 3,559
3,559
764
764
- - - - - 343,151
343,151
- - - - - 1,092,916
1,092,916
- - - - - 106,678
106,678
- - - - - 687,274
687,274
2,245,932 4,918,165 3,114,711 9%636 2,234,342 13,481,786
6.853.791 (276829) 6576962
$ 6,960,236 $ 9,706,698 $ 6,662,794 $ 2,245,932 $ 4,918,165 $ 3,114,711 $ 2,657,590 $ 96$636 $ 4,794,757 $ 42,029,469
B. MINIMUM UNASSIGNED FUND BALANCE POLICY
The City Council has formally adopted a policy regarding the minimum unassigned fund balance for the General Fund. The
most significant revenue source of the General Fund is property taxes. This revenue source is received in two installments
during the year - July and December. As such, it is the City's goal to begin each fiscal year with sufficient working capital to
fund operations between each semi - annual receipt of property taxes.
The policy established a year -end targeted unassigned fund balance amount for cash -flow timing needs in the range of 51 -53%
of the subsequent year's budgeted expenditures. At December 31, 2013, the unassigned fund balance of the General Fund
targeted for cash -flow needs was 68% of the subsequent year's budgeted expenditures.
Note 16 CONDUIT DEBT OBLIGATION
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 beyond the resources provided by related leases or loans. Accordingly, the bonds are not reported as liabilities in the financial
statements of the City.
As of December 31, 2013, the following revenue bonds were outstanding:
Date of Original Outstanding
Project Issue Issue Retired 12/31/2013
Presbyterian Homes of Andover, Inc. 11/1/2003 $ 13,145,000 $ (2,680,519) $10,464,481
r1i
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2013
Note 17 OPERATING LEASES
The City received revenue from agreements for the lease of space for antennas placed on the water tower and an emergency siren pole.
The City also has leases with the Greater Minneapolis YMCA and Subway Real Estate, LLC for building space at the Andover YMCA
Community Center. Terms of each lease are as follows:
Future minimum lease payments are unavailable at this time due to changing variables: CPI and the completion of the capital campaign
for the community center.
Note 18 RECENTLY ISSUED ACCOUNTING STANDARDS
The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for
these financial statements:
Statement No. 67 Financial Reporting for Pension Plans — an amendment of GASB Statement No. 25. The provisions of this
Statement are effective for financial statements for periods beginning after June 15, 2013.
Statement No. 68 Accounting and Financial Reporting of Pensions —an amendment of GASB Statement No. 27. The provisions of
this Statement are effective for financial statements for periods beginning after June 15, 2014.
Statement No. 70 Financial Reporting for Nonexchange Financial Guarantees. The provisions of this Statement are effective for
financial statements for periods beginning after June 15, 2013.
Statement No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date — an amendment of GASB
Statement No. 68. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2013.
The effect these standards may have on future financial statements is not determinable at this time.
Note 19 CHANGE IN ACCOUNTING PRINCIPLE
For the year ended December 31, 2013, the City implemented GASB Statement No. 65. GASB Statement No. 65, Items Previously
Reported as Assets and Liabilities resulted in accounts previously presented as liabilities being reclassified as deferred inflows of
resources.
Note 20 SUBSEQUENT EVENTS
The City of Andover sold $1,555,000 of General Obligation Equipment Certificates, Series 2014A on May 29"', 2014 to finance the
purchase of public safety and public works. The rates of the bonds range from 1.50% to 2.0% with a true interest cost of 1.165 %.
Principal payments are due in 2015 — 2020.
W",
2013
Lease
Annual Lease
Expiration
Renewal
Location
Lessee
Amount
Adj ustment Factor
Date
Options
City Hall water tower
Sprint Nextel
$ 28,661
Greater of CPI or 4%
12/31/2017
3- 5 year terms
City Hall water tower
T- Mobile USA, Inc
23,375
Greater of CPI or 4%
12/31/2016
3 - 5 year terms
Emergency Siren Pole
T- Mobile USA, Inc
7,000
$1,000 annual increase
6/17/2018
3 - 5 year terms
Andover YMCA Comm Ctr
Greater Minneapolis YMCA
635,000
None
8/12035
N/A
Rose Parkwater tower
Clear Wireless LLC
15,463
3 % annually
7/31/2014
5- 5 year terms
Andover YMCA Comm Ctr
SubwayReal Estate, LLC
14,917
$600 annual increase
10/2/2015
3 - 3 year terms
Future minimum lease payments are unavailable at this time due to changing variables: CPI and the completion of the capital campaign
for the community center.
Note 18 RECENTLY ISSUED ACCOUNTING STANDARDS
The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for
these financial statements:
Statement No. 67 Financial Reporting for Pension Plans — an amendment of GASB Statement No. 25. The provisions of this
Statement are effective for financial statements for periods beginning after June 15, 2013.
Statement No. 68 Accounting and Financial Reporting of Pensions —an amendment of GASB Statement No. 27. The provisions of
this Statement are effective for financial statements for periods beginning after June 15, 2014.
Statement No. 70 Financial Reporting for Nonexchange Financial Guarantees. The provisions of this Statement are effective for
financial statements for periods beginning after June 15, 2013.
Statement No. 71 Pension Transition for Contributions Made Subsequent to the Measurement Date — an amendment of GASB
Statement No. 68. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2013.
The effect these standards may have on future financial statements is not determinable at this time.
Note 19 CHANGE IN ACCOUNTING PRINCIPLE
For the year ended December 31, 2013, the City implemented GASB Statement No. 65. GASB Statement No. 65, Items Previously
Reported as Assets and Liabilities resulted in accounts previously presented as liabilities being reclassified as deferred inflows of
resources.
Note 20 SUBSEQUENT EVENTS
The City of Andover sold $1,555,000 of General Obligation Equipment Certificates, Series 2014A on May 29"', 2014 to finance the
purchase of public safety and public works. The rates of the bonds range from 1.50% to 2.0% with a true interest cost of 1.165 %.
Principal payments are due in 2015 — 2020.
W",
REQUIRED SUPPLEMENTARY INFORMATION
77
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
2,740,899
2,740,899
2,740,899
Statement 10
BUDGETARY COMPARISON SCHEDULE
- GENERAL FUND
1,117,444
1,127,444
1,114,759
12,685
For The Year Ended December 31, 2013
Protective inspection
393,530
393,530
423,495
(29,965)
With Comparative Actual Amounts For The Year Ended December 31, 2012
Civil defense
17,188
17,188
13,930
3,258
14,087
Animal control
Variance with
9,950
6,037
3,913
8,503
Total public safety
Final Budget -
4,289,011
4,299,120
Budgeted Amounts
4,088,073
2013
Positive
2012
Original
Final
Actual
(Negative)
Actual
Revenues:
12,357
570,631
Snow and ice removal
511,834
511,834
General property taxes
$ 7,398,782 $
7,398,782
$ 7,376,284
$ (22,498)
$ 7,340,532
Licenses and permits
288,355
288,355
536,706
248,351
449,826
Intergovernmental
596,564
596,564
710,071
113,507
653,720
Charges for services
619,850
619,850
1,122,461
502,611
973,605
Fines
100,750
100,750
96,130
(4,620)
97,571
Investment income
65,000
65,000
(17,096)
(82,096)
95,364
Miscellaneous
90,350
90,350
140,983
50,633
149,857
Total revenues
9,159,651
9,159,651
9,965,539
805,888
9,760,475
Expenditures:
Current:
General government:
Mayor and City council
87,953
87,953
83,595
4,358
83,622
Administration
143,995
150,595
147,503
3,092
140,047
Newsletter
25,500
25,500
17,678
7,822
22,336
Human resources
42,770
27,370
17,906
9,464
12,485
Legal
178,300
178,300
173,244
5,056
170,930
City clerk
108,925
111,425
108,311
3,114
101,378
Elections
54,155
54,155
11,353
42,802
39,613
Financial administration
221,256
221,256
215,215
6,041
207,337
Assessing
150,000
150,000
144,561
5,439
143,338
Information systems
161,252
158,852
135,981
22,871
136,025
Planning and zoning
360,970
360,970
349,488
11,482
318,524
Engineering
440,168
442,868
452,788
(9,920)
427,339
Facility management
556,187
561,187
451,255
109,932
420,794
Total general government
2,531,431
2,530,431
2,308,878
221,553
2,223,768
Public safety
Police
2,740,899
2,740,899
2,740,899
-
2,693,896
Fire protection
1,117,444
1,127,444
1,114,759
12,685
1,016,835
Protective inspection
393,530
393,530
423,495
(29,965)
354,752
Civil defense
17,188
17,188
13,930
3,258
14,087
Animal control
9,950
9,950
6,037
3,913
8,503
Total public safety
4,279,011
4,289,011
4,299,120
(10,109)
4,088,073
Public works:
Streets and highways
584,611
585,111
572,754
12,357
570,631
Snow and ice removal
511,834
511,834
630,798
(118,964)
420,174
Street signs
198,693
198,693
162,859
35,834
170,200
Traffic signals
36,000
36,000
26,241
9,759
27,457
Street lighting
246,400
246,400
242,033
4,367
228,635
Total public works
$ 1,577,538
$ 1,578,038
$ 1,634,685
$ (56,647)
$ 1,417,097
(Continued)
78
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Expenditures:
Current: (continued)
Parks and recreation
Recycling
Unallocated
Total current
Capital outlay:
Public safety
Recycling
Total capital outlay
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net increase (decrease) in fund balance
Fund balance - January 1
Fund balance - December 31
Statement 10
(Continued)
Variance with
Final Budget -
Budgeted Amounts 2013 Positive 2012
Original Final Actual (Negative) Actual
$ 1,014,366
$ 994,866
$ 946,545
$ 48,321
$ 912,750
128,633
128,633
123,595
5,038
94,328
88,950
88,950
75,517
13,433
63,371
9,619,929
9,609,929
9,388,340
221,589
8,799,387
-
-
12,220
(12,220)
-
-
-
54,514
(54,514)
58,314
-
-
66,734
(66,734)
58,314
9,619,929
9,609,929
9,455,074
154,855
8,857,701
(460,278)
(450,278)
510,465
960,743
902,774
196,930 196,930 196,930
- (135,000) (135,000)
196,930 61,930 61,930
$ (263,348) $ (388,348) 572,395
79
6,387,841
$ 6,960,236
- 196,930
(600,000)
- (403,070)
$ 960,743 499,704
5,888,137
$ 6,387,841
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS -
OTHER POST EMPLOYMENT BENEFITS PLAN
For The Year Ended December 31, 2013
Statement 11
The City implemented GASB Statement No. 45 for the year ended December 31, 2008. Information for prior years is not available.
80
Unfunded
Actuarial
UAAL as a
Actuarial
Actuarial
Accrued
Percentage of
Actuarial
Value of
Accrued
Liability
Fund
Covered
Covered
Valuation Date
Assets
Liability
(UAAL)
Ratio
Payroll
Payroll
(a)
(b)
(b -a)
(a/b)
(c)
((b -a) /c)
January 1, 2008
$ -
$ 324,387
$ 324,387
0.00%
$ 5,400,000
6.01%
January 1, 2011
-
273,046
273,046
0.00%
5,298,367
5.15%
The City implemented GASB Statement No. 45 for the year ended December 31, 2008. Information for prior years is not available.
80
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2013
Note A BUDGETS
The General Fund budget is legally adopted on a basis consistent with accounting principles generally accepted in the United States of
America. The legal level of budgetary control is at the departmental level for the General Fund. The following is a listing of General
Fund departments whose expenditures exceed budget appropriations.
General Fund-
Current:
General government
Engineering
Public safety
Protective inspection
Public works
Snow and ice removal
Capital outlay:
Public safety
Recycling
Final Over
Budget Actual Budget
$ 442,868 $ 452,788 $ 9,920
393,530 423,495 29,965
511,834 630,798 118,964
- 12,220 12,220
- 54,514 54,514
Note B MODIFIED APPROACH FOR CITY STREETS AND TRAILS INFRASTRUCTURE CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City is required to account for and report infrastructure capital assets. The City defines
infrastructure as the basic physical assets including the street and trail system; water treatment and distribution system; wastewater
collection system; park and recreation lands and improvement system; storm water conveyance system; and building combined with site
amenities such as parking and landscape areas used by the City in the conduct of its business. Each major infrastructure can be divided
into subsystems. For example, the street and trail system can be divided into pavement widths, curb type and sidewalk. City owned
streets could further be classified as collector or local. Subsystem detail is not presented in these basic financial statements; however, the
City maintains detailed information on these subsystems.
The City has elected to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement
Management Program. Under GASB Statement No. 34, eligible infrastructure capital assets are not required to be depreciated under the
following requirements:
1) The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (1) an up
to -date inventory; (2) perform condition assessments and summarize the results using a measurement scale; and (3) estimate
annual amount to maintain and preserve at the established condition assessment level.
2) The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established
and disclosed condition assessment level.
The City's policy relative to maintaining the street and trail assets is to achieve an average rating of "Good" for all segments. This
acceptable rating allows minor cracking and patching of the pavement along with minor roughness that could be noticeable to the users
of the system.
In the fall of 2013, the City conducted a physical condition assessment of the streets and trails constructed since 1974. This assessment
will be performed every three years. Each street and trail segment was assigned a physical condition based on potential defects. An
Overall Condition Index (OCI) was assigned to each street and trail and expressed in a continuous scale. Prior to 2013, the continuous
scale was from 0 to 100 where 0 is assigned to the least acceptable physical condition and 100 is assigned to a new street or trail.
Starting in 2013, the continuous scale was from 0 to 10, where 0 is assigned to the least acceptable physical condition and 10 is assigned
the physical characteristics of a new street or trail. The following conditions were defined:
81
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2013
Prior to
2013 2013
Rating Rating
Condition Scale Scale
Excellent 8
86-100 8
8-10
V
Very Good 7
71- 8
85 7
7-7.9
Good 5
56-70 6
6-6.9
As of December 31, 2013, the City's street and trail system was rated at an OCI index of 6.9 on the average with detail condition as
follows:
% of Street
Condition and Trails
Excellentto Good 91.80/0
Fair 8.1%
Poor to Substandard 0.1%
The City's streets and trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun's
ultra - violet rays drying out and breaking down the top layer of pavement; (3) utility company /private development trenching operations;
(4) water damage from natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the
system through short -term maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City
expended $2,471,123 on street and trail maintenance for the year ending December 31, 2013. These expenditures delayed deterioration;
however, the overall condition of the system was not improved through these maintenance expenditures. The City has estimated that the
amount of annual expenditures required to maintain the City's street and trail system at the average OCI rating of good is approximately
$1,150,000.
Maintenance Actual OCI
Year Estimate Expenditures Rating
2004 $1,000,000 $ 1,847,066 82
2005 1,000,000 1,655,715 83
2006 1,150,000 1,228,981 82
2007 1,150,000 1,256,433 81
2008 1,150,000 2,244,713 80
2009 1,150,000 1,666,216 81
2010 1,150,000 1,457,082 83
2011 1,150,000 1,770,980 83
2012 1,150,000 3,894,784 83
2013 1,150,000 2,471,123 6.9
The City has an on -going street and trail rehabilitation program funded in the Capital Improvement Program that is intended to improve
the condition rating of the City streets and trails. The rehabilitation program is formulated based on the deficiencies identified as a part
of its Pavement Management Program.
82
The City has an on -going street and trail rehabilitation program funded in the Capital Improvement Program that is intended to improve
the condition rating of the City streets and trails. The rehabilitation program is formulated based on the deficiencies identified as a part
of its Pavement Management Program.
82
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
83
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
A Special Revenue Fund is used to account for the proceeds of specific revenue sources that are legally restricted to
expenditures for specified purposes. Revenues for these funds can come from a variety of sources, such as taxes,
fees, gifts and grants or contributions from other governmental entities. Expenditures from these funds are normally
restricted by statute, local ordinance or grant agreements. The funds may be used for either operations or capital
outlay as legal restrictions mandate.
DEBT SERVICE FUNDS
A Debt Service Fund accounts for the accumulation of resources for, and the payment of general long -term
principal, interest and other related costs.
CAPITAL PROJECTS FUNDS
A Capital Projects Fund is used to account for acquisition or construction of major capital facilities financed mainly
with governmental fund resources, general obligation debt, special assessments, special assessment debt, grants or
other resources that are not part of Proprietary Funds or Trust Funds.
84
CITY OF ANDOVER, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2013
With Comparative Totals For December 31, 2012
Statement 12
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Totals
Interfund payable
Special
Debt
Capital
Nonmajor Governmental Funds
470,000
Revenue
Service
Projects
2013
2012
Assets:
Contracts payable
2,748
-
61,500
64,248
Cash and investments
$ 662,166
$ 880,426
$ 3,151,397
$ 4,693,989 $
6,054,449
Cash and investments with escrow agent
101,008
722,570
-
823,578
2,407,897
Accrued interest
3,308
1,919
19,038
24,265
27,253
Accounts receivable - net
107,642
-
-
107,642
69,282
Property taxes receivable:
Total liabilities
468,215
221,616
183,899
873,730
Unremitted
362
15,090
2,245
17,697
12,565
Delinquent
1,029
45,296
6,315
52,640
67,981
Inventories - at cost
1,316
-
-
1,316
1,471
Land held for resale
-
-
100,000
100,000
-
Total assets
876,831
1,665,301
3,278,995
5,821,127
8,640,898
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Interfund payable
340,000
220,000
70,000
630,000
470,000
Accounts payable
50,146
1,616
52,359
104,121
55,689
Contracts payable
2,748
-
61,500
64,248
-
Deposits payable
14,140
-
-
14,140
5,481
Due to other governmental units
2,477
-
40
2,517
3,747
Salaries payable
23,566
-
-
23,566
21,863
Unearned revenue
35,138
-
-
35,138
25,338
Total liabilities
468,215
221,616
183,899
873,730
582,118
Deferred inflows of resources:
Unavailable revenues
1,029
45,296
106,315
152,640
67,981
Fund balance (deficit):
Nonspendable
1,316
-
-
1,316
1,471
Restricted
25,321
1,398,389
823,702
2,247,412
4,440,106
Committed
588,516
-
-
588,516
681,413
Assigned
4,323
-
2,230,019
2,234,342
3,182,543
Unassigned
(211,889)
-
(64,940)
(276,829)
(314,734)
Total fund balance (deficit)
407,587
1,398,389
2,988,781
4,794,757
7,990,799
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
$ 876,831
$ 1,665,301
$ 3,278,995
$ 5,821,127
$ 8,640,898
85
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2013
With Comparative Totals For The Year Ended December 31, 2012
Statement 13
Expenditures:
Totals
Current:
Special
Debt
Capital
Nonmajor Governmental Funds
Revenue
Service
Projects
2013
2012
Revenues:
Public safety
-
-
2,578
2,578
General property taxes
$ 39,913
$ 1,962,018
$ 272,584
$ 2,274,515 $
2,217,021
Intergovernmental
9,828
237,890
-
247,718
251,448
Charges for services
684,458
-
-
684,458
900,716
Investment income
(9,240)
(16,269)
(21,002)
(46,511)
100,579
Miscellaneous:
General government
-
-
-
-
Park dedication fees
-
-
205,080
205,080
47,700
Rent
639,423
-
-
639,423
639,983
Other
192,517
-
115,820
308,337
181,031
Total revenues
1,556,899
2,183,639
572,482
4,313,020
4,338,478
Expenditures:
Current:
General government
3,736
-
334,664
338,400
56,605
Public safety
-
-
2,578
2,578
4,000
Public works
87,102
-
36
87,138
99,963
Parks and recreation
971,108
-
72,804
1,043,912
1,088,874
Economic development
133,248
-
-
133,248
168,970
Capital outlay:
General government
-
-
-
-
23,077
Public safety
-
-
6,783
6,783
23,600
Public works
-
-
668,205
668,205
-
Parks and recreation
-
-
1,195,093
1,195,093
577,835
Economic development
15,098
-
-
15,098
40,191
Debt service:
Principal retirement
-
1,689,000
-
1,689,000
1,842,000
Interest
-
1,262,302
-
1,262,302
1,052,537
Paying agent fees
-
3,489
-
3,489
4,574
Professional service
-
1,616
-
1,616
216,364
Total expenditures
1,210,292
2,956,407
2,280,163
6,446,862
5,198,590
Revenues over (under) expenditures
346,607
(772,768)
(1,707,681)
(2,133,842)
(860,112)
Other financing sources (uses):
Transfers in
-
756,598
583,685
1,340,283
2,076,586
Transfers out
(380,948)
(48,685)
(100,000)
(529,633)
(381,401)
Bonds issued
-
-
-
-
585,000
Refunding bonds issued
-
-
-
-
18,885,000
Redemption of refunded bonds
-
(1,900,000)
-
(1,900,000)
(16,833,583)
Bond premium
-
-
-
-
133,164
Proceeds from sale of capital assets
-
-
27,150
27,150
16,625
Total other financing sources (uses)
(380,948)
(1,192,087)
510,835
(1,062,200)
4,481,391
Net increase (decrease) in fund balance
(34,341)
(1,964,855)
(1,196,846)
(3,196,042)
3,621,279
Fund balance - January 1
441,928
3,363,244
4,185,627
7,990,799
4,369,520
Fund balance - December 31
$ 407,587
$ 1,398,389
$ 2,988,781
$ 4,794,757
$ 7,990,799
86
NONMAJOR SPECIAL REVENUE FUNDS
The City of Andover had the following Special Revenue Funds during the year:
EDA General - This fund was established to account for activities designed to promote quality economic
development within the community.
Community Development Block Grant - This fund accounts for the financial operations of a federal grant for rental
housing rehabilitation.
Community Center - This fund is used to account for the operations of the Andover YMCA / Community Center,
particularly the ice arena, field house and concessions. The aquatic's portion of the Community Center is under the
operations of the YMCA.
Drainage and Mapper - This fund accounts for resources necessary to maintain existing maps and developing new
maps and mapping systems for the City.
LRRWMO - This fund is used to account for the City's involvement with the Lower Rum River Watershed
Management Organization ( LRRWMO).
Fores - This fund was established to account for the protection of forest resources and the development of control
plans to ensure preservation or restoration of these resources.
Right -of -Way Management/Utility - This fund is used to account for activity associated with the management of the
public right -of -ways.
Charitable Gambling - This fund accounts for the 10% of net profits received from gambling activities by local non-
profit organizations. According to state statute, all expenditures from this fund must be for public services and
police, fire and other emergency or public safety- related services, equipment, and training, excluding pension
obligations.
Construction Seal Coating - This fund accounts for the contributions associated with land development to be used
for the respective developments first application of crack seal and seal coat.
87
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2013
With Comparative Totals For December 31, 2012
88
Community
Drainage
EDA
Development
Community
and
General
Block Grant
Center
Mapping
Assets:
Cash and investments $
393,866
$ 320
$ 20,458
$ 131,782
Cash and investments with escrow agent
-
-
101,008
-
Accrued interest
2,102
-
-
671
Accounts receivable
15,858
-
91,495
-
Property taxes receivable:
Unremitted
-
-
-
-
Delinquent
-
-
-
-
Inventories - at cost
-
-
1,316
-
Total assets
411,826
320
214,277
132,453
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Interfund payable
-
-
340,000
-
Accounts payable
1,717
-
48,322
-
Contracts payable
-
-
2,748
-
Deposits payable
-
-
14,140
-
Due to other governmental units
-
320
2,157
-
Salaries payable
4,271
-
17,483
-
Unearned revenue
-
-
-
-
Total liabilities
5,988
320
424,850
-
Deferred inflows of resources:
Unavailable revenues
-
-
-
-
Fund balance (deficit):
Nonspendable
-
-
1,316
-
Restricted
-
-
-
-
Committed
405,838
-
-
132,453
Assigned
-
-
-
-
Unassigned
-
-
(211,889)
-
Total fund balance (deficit)
405,838
-
(210,573)
132,453
Total liabilities, deferred inflows of
resources, and fund balances (deficit) $
411,826
$ 320
$ 214,277
$ 132,453
88
Statement 14
Right -of -Way Totals
Management/ Charitable Construction Nonmajor Special Revenue Funds
LRRWMO Forestry Utility Gambling Seal Coating 2013 2012
$ 4,779 $ 3,559 $ 45,348 $ 25,973 $ 36,081 $ 662,166 $ 723,181
- - - - - 101,008 101,590
- - 238 112 185 3,308 3,294
- - 289 - - 107,642 69,282
362 - - - - 362 227
1,029 - - - - 1,029 1,187
- - - - - 1,316 1,471
6,170 3,559 45,875 26,085 36,266 876,831 900,232
-
- -
-
-
340,000
350,000
107
- -
-
-
50,146
51,038
-
- -
-
-
2,748
-
-
- -
-
-
14,140
5,481
-
- -
-
-
2,477
3,397
945
- 867
-
-
23,566
21,863
-
- -
-
35,138
35,138
25,338
1,052
- 867
-
35,138
468,215
457,117
1,029
- -
-
-
1,029
1,187
-
- -
-
-
1,316
1,471
-
- -
25,321
-
25,321
8,217
4,089
- 45,008
-
1,128
588,516
681,413
-
3,559 -
764
-
4,323
1,738
-
- -
-
-
(211,889)
(250,911)
4,089
3,559 45,008
26,085
1,128
407,587
441,928
$ 6,170 $
3,559 $ 45,875
$ 26,085
$ 36,266
$ 876,831
$ 900,232
89
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2013
With Comparative Totals For The Year Ended December 31, 2012
90
Drainage
EDA
Community
and
General
Center
Mapping
LRRWMO
Revenues:
General property taxes
$ -
$ -
$ -
$ 39,913
Intergovernmental
-
-
-
-
Charges for services
37,306
587,356
34,634
-
Investment income
(2,996)
(5,510)
(345)
(131)
Miscellaneous:
Rent
-
639,423
-
-
Other
6,620
160,304
-
-
Total revenues
40,930
1,381,573
34,289
39,782
Expenditures:
Current:
General government
-
-
-
-
Public works
-
-
7,897
39,428
Parks and recreation
-
971,108
-
-
Economic development
133,248
-
-
-
Capital outlay:
Parks and recreation
-
-
-
-
Economic development
15,098
-
-
-
Total expenditures
148,346
971,108
7,897
39,428
Revenues over (under) expenditures
(107,416)
410,465
26,392
354
Other financing sources (uses):
Transfers out
-
(371,598)
-
-
Net increase (decrease) in fund balance
(107,416)
38,867
26,392
354
Fund balance (deficit) - January 1
513,254
(249,440)
106,061
3,735
Fund balance (deficit) - December 31
$ 405,838
$ (210,573)
$ 132,453
$ 4,089
90
Statement 15
91
Right -of -Way
Totals
Management/
Charitable
Construction
Nonmajor Special Revenue Funds
Forestry
Utility
Gambling
Seal Coating
2013
2012
$ -
$ - $
-
$ -
$ 39,913
$ 39,705
9,828
-
-
-
9,828
-
-
25,162
-
-
684,458
900,716
14
(385)
156
(43)
(9,240)
3,913
-
-
-
-
639,423
639,983
4,753
-
20,840
-
192,517
160,927
14,595
24,777
20,996
(43)
1,556,899
1,745,244
-
-
3,736
-
3,736
5,000
12,166
27,466
-
145
87,102
93,076
-
-
-
-
971,108
1,004,025
-
-
-
-
133,248
168,970
-
-
-
-
-
7,161
-
-
-
-
15,098
40,191
12,166
27,466
3,736
145
1,210,292
1,318,423
2,429
(2,689)
17,260
(188)
346,607
426,821
-
(9,350)
-
-
(380,948)
(371,598)
2,429
(12,039)
17,260
(188)
(34,341)
55,223
1,130
57,047
8,825
1,316
441,928
386,705
$ 3,559
$ 45,008 $
26,085
$ 1,128
$ 407,587
$ 441,928
91
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MA
NONMAJOR DEBT SERVICE FUNDS
The City's Debt Service Funds account for eight types of bonded indebtedness:
• Certificates of Indebtedness
• Capital Improvement Bonds
• Revenue Bonds
• Abatement Bonds
• Permanent Improvement Revolving Bonds
• State Aid Bonds
• Referendum Bonds
Certificates of Indebtedness - (G.O. Equipment Certificates - 2011A and 2012A) are repaid primarily from general
property taxes.
Capital Improvement Bonds - (G.O. Capital Improvement Bonds 2004A and Refunding 2012B) are repaid primarily
from general property taxes
Revenue Bonds - (EDA Public Facility Lease Revenue Bonds 2004) are repaid from annual lease payments from
the YMCA, Community Center operations and general property tax.
Abatement Bonds - (G.O. Abatement bonds of 2012C) are repaid from annual lease payments from the YMCA,
Community Center operations and general property tax.
Permanent Improvement Revolving (PIR) Bonds - (G.O. PIR Refunding Bonds of 2010A) are used to finance
assessable improvements within the City and are repaid primarily from special assessments levied against benefited
properties.
State Aid Bonds - (State Aid Refunding Bonds of 2009A) are used to finance MSA eligible cost for road
construction and improvements. These bonds are repaid from a portion of state aid allotments received by the City.
Referendum Bonds — (Open Space Referendum Bonds of 2010A) are used to finance the purchase of land to remain
as open space.
93
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2013
With Comparative Totals For December 31, 2012
94
G.O. Capital
EDA Public
G.O.
G.O.
Improvement
Facility Lease
G.O.
Equipment
Equipment
Refunding
Revenue
Abatement
Certificate
Certificate
Bonds
Bonds
Bonds
2011A
2012A
2012B
2004
2012C
Assets:
Cash and investments
$ 105,310
$ 235,015
$ 21,943
$ 7,755
$ 30,786
Cash and investments with escrow agent
-
-
-
722,570
-
Accrued interest
-
943
-
-
-
Property taxes receivable:
Unremitted
793
974
4,049
3,522
4,504
Delinquent
3,038
3,732
4,130
13,498
17,259
Total assets
109,141
240,664
30,122
747,345
52,549
Liabilities, Deferred Inflows of Resources and
Fund Balances
Liabilities:
Interfund payable
-
-
-
220,000
-
Accounts payable
202
202
202
202
202
Total liabilities
202
202
202
220,202
202
Deferred inflows of resources:
Unavailable revenues
3,038
3,732
4,130
13,498
17,259
Fund balance (deficit):
Restricted
105,901
236,730
25,790
513,645
35,088
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
$ 109,141
$ 240,664
$ 30,122
$ 747,345
$ 52,549
94
G.O.
PIR Fund
State Aid
Open Space
Refunding
Refunding
Referendum
Bonds
Bonds
Bonds
2010A
2009A
2010A
Statement 16
Totals
Nonmajor Debt Service Funds
2013 2012
$ 8,091 $ 281,385 $ 190,141 $ 880,426 $ 1,097,650
- - - 722,570 2,306,307
- 394 582 1,919 3,549
- - 1,248 15,090 10,738
- - 3,639 45,296 58,595
8,091 281,779 195,610 1,665,301 3,476,839_
- - - 220,000 55,000
202 202 202 1,616 -
202 202 202 221,616 55,000
- - 3,639 45,296 58,595
7,889 281,577 191,769 1,398,389 3,363,244
$ 8,091 $ 281,779 $ 195,610 $ 1,665,301 $ 3,476,839
4i
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2013
With Comparative Totals For The Year Ended December 31, 2012
K
G.O. Capital
EDA Public
G.O.
G.O.
G.O. Capital
Improvement
Facility Lease
Equipment
Equipment
Improvement
Refunding
Revenue
Certificate
Certificate
Bonds
Bonds
Bonds
2011A
2012A
2004A
2012B
2004
Revenues:
General property taxes
$ 101,727
$ 124,978
$ 378,253
$ 141,286
$ 452,004
Intergovernmental
-
-
-
-
-
Investment income
(899)
1,033
(3,309)
(975)
(5,084)
Total revenues
100,828
126,011
374,944
140 311
446,920
Expenditures:
Debt service:
Principal retirement
94,000
-
330,000
100,000
105,000
Interest
2,840
15,893
33,134
41,652
878,534
Paying agent fees
-
425
-
425
2,000
Professional services
202
202
-
202
202
Total expenditures
97,042
16,520
363,134
142,279
985,736
Revenues over (under) expenditures
3,786
109,491
11,810
(1,968)
(538,816)
Other financing sources (uses):
Transfers in
-
-
-
-
371,598
Transfers out
-
-
(48,685)
-
-
Refunding bonds issued
-
-
-
-
-
Redemption of refunded bonds
-
-
-
(1,555,000)
-
Bond premium
-
-
-
-
-
Total other financing sources (uses)
-
-
(48,685)
(1,555,000)
371,598
Net increase (decrease) in fund balance
3,786
109,491
(36,875)
(1,556,968)
(167,218)
Fund balance - January 1
102,115
127,239
36,875
1,582,758
680,863
Fund balance - December 31
$ 105,901
$ 236,730
$ -
$ 25,790
$ 513,645
K
G.O.
Abatement
Bonds
G.O.
PIR Fund
Refunding
Bonds
2010A
State
Aid Bonds
Open Space
Referendum
Bonds
2010A
Statement 17
Totals
Nonmajor Debt Service Funds
2013 2012
$ 577,945
$ -
$ -
$ 185,825
$ 1,962,018
$ 1,905,219
-
-
237,890
-
237,890
251,448
(5,267)
(123)
(551)
(1,094)
(16,269)
2,095
572,678
(123)
237,339
184,731
2,183,639
2,158,762
320,000
375,000
230,000
135,000
1,689,000
1,842,000
230,519
11,450
10,765
37,515
1,262,302
1,052,537
-
213
213
213
3,489
4,574
202
202
202
202
1,616
216,364
550,721
386,865
241,180
172,930
2,956,407
3,115,475
21,957
(386,988)
(3,841)
11,801
(772,768)
(956,713)
-
385,000
-
-
756,598
766,401
-
-
-
-
(48,685)
(9,803)
-
-
-
-
-
18,885,000
(345,000)
-
-
-
(1,900,000)
(16,833,583)
-
-
-
-
-
102,759
(345,000)
385,000
-
-
(1,192,087)
2,910,774
(323,043)
(1,988)
(3,841)
11,801
(1,964,855)
1,954,061
358,131
9,877
285,418
179,968
3,363,244
1,409,183
$ 35,088
$ 7,889
$ 281,577
$ 191,769
$ 1,398,389
$ 3,363,244
97
- This page intentionally left blank -
98
NONMAJOR CAPITAL PROJECT FUNDS
The City of Andover had the following Capital Projects Funds during the year:
Storm Sewer Project - This fund was established to account for storm sewer fees and improvements as part of
development and ongoing maintenance.
Park Dedication - This fund was established to account for contributions associated with land development to be
used for constructing and upgrading the City's park system.
Building Fund - This fund was established to account for miscellaneous building improvements for all facilities.
Trail and Transportation - This fund is used to account for contributions associated with land development to be
used for constructing and upgrading the City's trail system.
Capital Equipment Reserve - This fund is used to account for the capital equipment/projects levy and the various
capital expenditures it will be used for.
Equipment Certificates 2012A - This fund was established to account for the purchase of capital equipment that was
financed through the issuance of capital notes.
Open Space Referendum Bonds 2010A - This fund was established to account for the purchase of various land
acquisitions for open space preservation within the City.
99
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2013
Comparative Totals For December 31, 2012
100
Storm
Sewer
Park
Building
Trail &
Project
Dedication
Fund
Transportation
Assets:
Cash and investments
$ 5,060
$ 341,014
$ 1,085,304
$ 106,148
Accrued interest
-
1,629
7,612
530
Property taxes receivable:
Unremitted
-
508
-
-
Delinquent
-
1,428
-
-
Land held for resale
-
-
100,000
-
Total assets
5,060
344,579
1,192,916
106,678
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Interfund payables
70,000
-
-
-
Accounts payable
-
-
-
-
Contracts payable
-
-
-
-
Due to other government units
-
-
-
-
Total liabilities
70,000
-
-
-
Deferred inflows of resources:
Unavailable revenues
-
1,428
100,000
-
Fund balance (deficit):
Restricted
-
-
-
-
Assigned
-
343,151
1,092,916
106,678
Unassigned
(64,940)
-
-
-
Total fund balance (deficit)
(64,940)
343,151
1,092,916
106,678
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
$ 5,060
$ 344,579
$ 1,192,916
$ 106,678
100
Statement 18
Open Space
Capital Equipment Referendum Totals
Equipment Certificates Bonds Nonmaior Capital Pro iects Funds
$ 793,934 $ 50,727 $ 769,210 $ 3,151,397 $ 4,233,618
5,327 - 3,940 19,038 20,410
1,737 - - 2,245 1,600
4,887 - - 6,315 8,199
- - - 100,000 -
805,885 50,727 773.150 3,278,995 4,263,827
-
-
70,000
65,000
52,184
175
52,359
4,651
61,500
-
- 61,500
-
40
-
- 40
350
113,724
175
- 183,899
70,001
4,887
-
- 106,315
8,199
-
50,552
773,150 823,702
1,068,645
687,274
-
- 2,230,019
3,180,805
-
-
- (64,940)
(63,823)
687,274
50,552
773,150 2,988,781
4,185,627
$ 805,885 $
50,727
$ 773,150 $ 3,278,995
$ 4,263,827
IN
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For The Year Ended December 31, 2013
With Comparative Totals For The Year Ended December 31, 2012
102
Storm
Sewer
Park
Building
Trail &
Project
Dedication
Fund
Transportation
Revenues:
General property taxes
$ -
$ 61,635
$ -
$ -
Investment income
(1,117)
505
(10,063)
(209)
Miscellaneous:
Park dedication fees
-
205,080
-
-
Other
-
700
47
19,223
Total revenues
(1,117)
267,920
(10,016)
19,014
Expenditures:
Current:
General government
-
-
-
-
Public safety
-
-
-
-
Public works
-
-
-
-
Parks and recreation
-
23,157
-
-
Capital outlay:
General government
-
-
-
-
Public safety
-
-
-
-
Public works
-
-
504,517
-
Parks and recreation
-
-
-
-
Total expenditures
-
23,157
504,517
-
Revenues over (under) expenditures
(1,117)
244,763
(514,533)
19,014
Other financing sources (uses):
Transfers in
-
-
48,685
-
Transfers out
-
(100,000)
-
-
Bonds issued
-
-
-
-
Bond premium
-
-
-
-
Proceeds from sale of capital assets
-
-
-
Total other financing sources (uses)
-
(100,000)
48,685
-
Net increase (decrease) in fund balance
(1,117)
144,763
(465,848)
19,014
Fund balance (deficit) - January 1
(63,823)
198,388
1,558,764
87,664
Fund balance (deficit) - December 31
$ (64,940)
$ 343,151
$ 1,092,916
$ 106,678
102
Statement 19
(1,207,365) (246,059) (2,384) (1,707,681) (330,220)
535,000
-
Open Space
1,310,185
-
Capital
Equipment
Referendum
Totals
-
Equipment
Certificates
Bonds
Nonmajor Capital Projects Funds
Reserve
2012A
2010A
2013
2012
$ 210,949
$ -
$ -
$ 272,584 $
272,097
(1,464)
(4,270)
(4,384)
(21,002)
94,571
-
-
-
205,080
47,700
92,350
-
3,500
115,820
20,104
301,835
(4,270)
(884)
572,482
434,472
334,664
-
-
334,664
51,605
2,578
-
-
2,578
4,000
-
36
-
36
6,887
48,147
-
1,500
72,804
84,849
-
-
-
-
23,077
6,783
-
-
6,783
23,600
-
163,688
-
668,205
-
1,117,028
78,065
-
1,195,093
570,674
1,509,200
241,789
1,500
2,280,163
764,692
(1,207,365) (246,059) (2,384) (1,707,681) (330,220)
535,000
-
- 583,685
1,310,185
-
-
- (100,000)
-
-
-
- -
585,000
-
-
- -
30,405
23,650
3,500
- 27,150
16,625
558,650
3,500
- 510,835
1,942,215
(648,715)
(242,559)
(2,384) (1,196,846)
1,611,995
1,335,989
293,111
775,534 4,185,627
2,573,632
$ 687,274
$ 50,552
$ 773,150 $ 2,988,781
$ 4,185,627
103
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - EDA GENERAL
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Statement 20
Variance with
Final Budget -
Budgeted Amounts
2013
Positive
2012
Original
Final
Actual
(Negative)
Actual
Revenues:
Charges for services $ 75,000
$ 75,000
$ 37,306
$ (37,694)
$ 190,538
Investment income 5,000
5,000
(2,996)
(7,996)
7,222
Miscellaneous -
-
6,620
6,620
509
Total revenues 80,000
80,000
40,930
(39,070)
198,269
Expenditures:
Current:
Economic development 221,255
191,255
133,248
58,007
142,296
Capital outlay:
Economic development -
30,000
15,098
14,902
40,191
Total expenditures 221,255
221,255
148,346
72,909
182,487
Net increase (decrease) in fund balance $ (141,255)
$ (141,255)
(107,416)
$ 33,839
15,782
Fund balance (deficit) - January 1
513,254
497,472
Fund balance (deficit) - December 31
$ 405,838
$ 513,254
104
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - COMMUNITY DEVELOPMENT BLOCK GRANT
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Revenues:
Intergovernmental
Investment income
Miscellaneous
Total revenues
Expenditures:
Current:
Economic development
Net increase (decrease) in fund balance
Fund balance (deficit) - January 1
Fund balance (deficit) - December 31
Budgeted Amounts 2013
Original Final Actual
$ 25,000 $ 25,000 $ -
25,000 25,000
25.000 25,000
1[11.7
Statement 21
Variance with
Final Budget -
Positive
2012
(Negative)
Actual
$ (25,000)
$ -
-
(517)
-
1,951
(25,000)
1,434
25,000 26,674
$ - (25,240)
25,240
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - COMMUNITY CENTER
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Revenues:
Charges for services
Investment income
Miscellaneous:
Rent
Other
Total revenues
Expenditures:
Current:
Parks and recreation
Capital outlay:
Parks and recreation
Total expenditures
Revenue over (under) expenditures
Other financing sources (uses)
Transfers out
Net increase (decrease) in fund balance
Fund balance (deficit) - January 1
Fund balance (deficit) - December 31
Statement 22
(371,598) (371,598) (371,598)
$ 75,782 $ 75,782 38,867
(249,440)
$ (210,573)
106
$ (36,915)
(371,598)
48,090
(297,530)
$ (249,440)
Variance with
Final Budget -
Budgeted
Amounts
2013
Positive
2012
Original
Final
Actual
(Negative)
Actual
$ 545,000
$ 545,000
$ 587,356
$ 42,356
$ 658,931
-
-
(5,510)
(5,510)
(6,781)
635,000
635,000
639,423
4,423
639,983
159,600
159,600
160,304
704
138,741
1,339,600
1,339,600
1,381,573
41,973
1,430,874
892,220
892,220
971,108
(78,888)
1,004,025
-
-
-
-
7,161
892,220
892,220
971,108
(78,888)
1,011,186
447,380
447,380
410,465
(36,915)
419,688
(371,598) (371,598) (371,598)
$ 75,782 $ 75,782 38,867
(249,440)
$ (210,573)
106
$ (36,915)
(371,598)
48,090
(297,530)
$ (249,440)
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - DRAINAGE AND MAPPING
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Revenues:
Charges for services
Investment income
Total Revenues
Expenditures:
Current:
Public works
Net increase (decrease) in fund balance
Fund balance (deficit) - January 1
Fund balance (deficit) - December 31
Statement 23
118YA
106,061
$ 132,453
98,010
$ 106,061
Variance with
Final Budget -
Budgeted
Amounts
2013
Positive
2012
Original
Final
Actual
(Negative)
Actual
$ 8,000
$ 8,000
$ 34,634
$ 26,634
$ 12,248
1,200
1,200
(345)
(1,545)
2,026
9,200
9,200
34,289
25,089
14,274
10,605
10,605
7,897
2,708
6,223
$ (1,405)
$ (1,405)
26,392
$ 27,797
8,051
118YA
106,061
$ 132,453
98,010
$ 106,061
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - LRRWMO
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Statement 24
Variance with
Final Budget -
Budgeted Amounts
2013
Positive
2012
Original Final
Actual
(Negative)
Actual
Revenues:
General property taxes $ 40,000 $ 40,000
$ 39,913
$ (87)
$ 39,705
Investment income 100 100
(131)
(231)
(215)
Total revenues 40,100 40,100
39,782
(318)
39,490
Expenditures:
Current:
Public works 40,729 40,729
39,428
1,301
46,834
Net increase (decrease) in fund balance $ (629) $ (629)
354
$ 983
(7,344)
Fund balance (deficit) - January 1
3,735
11,079
Fund balance (deficit) - December 31
$ 4,089
$ 3,735
108
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - FORESTRY
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Statement 25
Variance with
Final Budget -
Budgeted Amounts
2013
Positive
2012
Original
Final
Actual
(Negative)
Actual
Revenues:
Intergovernmental
$ 12,500 $
12,500
$ 9,828
$ (2,672)
$ -
Investment income
100
100
14
(86)
(25)
Miscellaneous
10,000
10,000
4,753
(5,247)
6,510
Total revenues
22,600
22,600
14,595
(8,005)
6,485
Expenditures:
Current:
Public works
22,500
22,500
12,166
10,334
13,168
Net increase (decrease) in fund balance
$ 100 $
100
2,429
$ 2,329
(6,683)
Fund balance (deficit) - January 1
1,130
7,813
Fund balance (deficit) - December 31
$ 3,559
$ 1,130
109
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - RIGHT -OF -WAY MANAGEMENT/UTILITY
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Revenues:
Charges for services
Investment income
Total revenues
Expenditures:
Current:
Public works
Revenue over (under) expenditures
Other financing sources (uses):
Transfers out
Net increase (decrease) in fund balance
Fund balance (deficit) - January 1
Fund balance (deficit) - December 31
Statement 26
Variance with
Final Budget -
Budgeted Amounts 2013 Positive 2012
Original Final Actual (Negative) Actual
$ 10,000 $
10,000
$ 25,162
$ 15,162 $
38,999
500
500
(385)
(885)
1,252
10,500
10,500
24,777
14,277
40,251
29,138
29,138
27,466
1,672
26,851
(18,638)
(18,638)
(2,689)
15,949
13,400
(9,350) (9,350) (9,350) -
$ (27,988) $ (27,988) (12,039) $ 15,949
57,047
$ 45,008
110
13,400
43,647
$ 57,047
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CHARITABLE GAMBLING
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Revenues:
Investment income
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Net increase (decrease) in fund balance
Fund balance (deficit) - January 1
Fund balance (deficit) - December 31
Statement 27
Variance with
Final Budget -
Budgeted Amounts 2013 Positive 2012
Original Final Actual (Negative) Actual
156 $ 156 $ 193
7,000 7.000 20,840 13,840 13,216
7,000 7,000 20,996 13,996 13,409
6,000 6,000 3,736 2,264 5,000
$ 1,000 $ 1,000 17,260 $ 16,260 8,409
111
8,825
$ 26,085
416
$ 8,825
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CONSTRUCTION SEAL COATING
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2013
With Comparative Actual Amounts For The Year Ended December 31, 2012
Revenues:
Charges for services
Investment income
Total revenues
Expenditures:
Current:
Public works
Net increase (decrease) in fund balance
Fund balance (deficit) - January 1
Fund balance (deficit) - December 31
Statement 28
Variance with
Final Budget -
Budgeted Amounts 2013 Positive 2012
Original Final Actual (Negative) Actual
$ 5,000 $ 5,000 $ - $ (5,000) $ -
300 300 (43) (343) 758
5,300 5,300 (43) (5,343) 758
5,000 5,000
$ 300 $ 300
IBM
145 4,855
(188) $ (488)
1,316
$ 1,128
758
558
$ 1,316
INTERNAL SERVICE FUNDS
Internal Service Funds are used to account for the financing of goods or services provided by one department or
agency to other departments or agencies of the government and to other government units, on a cost reimbursement
basis. The City of Andover had the following Internal Service Funds during the year:
Central Equipment Maintenance — This fund accounts for the maintenance of the equipment for the City.
Risk Management — This fund accounts for the expenditures in payment of insurance deductibles, loss reduction,
safety training and administrative expense.
113
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
December 31, 2013
With Comparative Totals for December 31, 2012
Central
Equipment Risk
Maintenance Management
Statement 29
Totals
2013 2012
Assets:
Current assets:
Cash and cash equivalents
$ 303,243
$ 316,670
$ 619,913
$ 553,857
Accrued interest
1,675
1,351
3,026
2,582
Accounts receivable
-
-
-
63
Inventories - at cost
100,594
-
100,594
91,403
Total assets
405,512
318,021
723,533
647,905
Liabilities:
Current liabilities:
Accounts payable
36,009
210
36,219
29,874
Due to other governmental units
-
-
-
15
Salaries payable
9,510
612
10,122
9,004
Total liabilities
45,519
822
46,341
38,893
Net position:
Unrestricted
$ 359,993
$ 317,199
$ 677,192
$ 609,012
ISE
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2013
With Comparative Totals For The Year Ended December 31, 2012
Central
Equipment Risk
Maintenance Management
Operating revenues
Statement 30
Totals
2013 2012
User charges
$ 699,603
$ 371,016
$ 1,070,619
$ 1,015,822
Other
1,091
81,293
82,384
76,985
Total operating revenues
700,694
452,309
1,153,003
1,092,807
Operating expenses:
Personal services
224,783
129,505
354,288
370,216
Supplies
335,432
20,276
355,708
327,740
Other service charges
124,315
248,563
372,878
312,294
Total operating expenses
684,530
398,344
1,082,874
1,010,250
Operating income (loss)
16,164
53,965
70,129
82,557
Nonoperating revenues (expenses):
Investment income
(1,372)
(577)
(1,949)
10,557
Change in net position
14,792
53,388
68,180
93,114
Net position - January 1
345,201
263,811
609,012
515,898
Net position - December 31
$ 359,993
$ 317,199
$ 677,192
$ 609,012
115
C1rfY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2013
With Comparative Totals For The Year Ended December 31, 2012
Cash flows from operating activities:
Receipts from customers and users
Payment to suppliers
Payment to employees
Net cash flows from operating activities
Cash flows from investing activities:
Investment income
Net increase in cash and cash equivalents
Cash and cash equivalents - January 1
Cash and cash equivalents - December 31
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Changes in assets and liabilities:
Decrease (increase) in prepaid items
Decrease (increase) in accounts receivable
Decrease (increase) in inventory
Increase (decrease) in accounts payable
Increase (decrease) in due to other governmental units
Increase (decrease) in salaries payable
Total adjustments
Net cash provided by operating activities
Central
Equipment
$ 700,757
(454,816)
(223,741)
22,200
Risk
Manaeement
$ 452,309
(276,631)
(129,429)
46,249
Totals
2013
$ 1,153,066
(731,447)
(353,170)
68,449
Statement 31
2012
$ 1,094,255
(634,392)
(368,042)
91,821
(1,472)
(921)
(2,393)
10,380
20,728
45,328
66,056
102,201
282,515
271,342
553,857
451,656
$ 303,243
$ 316,670
$ 619,913
$ 553,857
$ 16,164
$ 53,965
$ 70,129
$ 82,557
63
(9,191)
14,137
(15)
1,042
6,036
$ 22,200
ifib:
(7,792)
(7,716)
$ 46,249
63
(9,191)
6,345
(15)
1,118
(1,680)
$ 68,449
1,750
1,448
(3,612)
9,239
15
9,264
$ 91,821
AGENCY FUNDS
Agency Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals,
private organizations and/or other governmental units. The City of Andover had the following Agency Funds
during the year:
General Escrow — This fund is used to account for distribution of funds for insurance premiums of retirees.
General Agency — This fund is used to account for the collection and distribution of funds relating to building and
land development activities.
MIN
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET POSITION
FIDUCIARY FUNDS
December 31, 2013
General
Escrow
Assets:
Cash and investments
$ 45,074
Liabilities:
Accounts payable
124
Deposits payable
44,950
Total liabilities
$ 45,074
ifiE i
General
Agency
$ 432,290
58,555
373,735
$ 432,290
Statement 32
Total
$ 477,364
58,679
418,685
$ 477,364
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Statement 33
FIDUCIARY FUNDS
For The Year Ended December 31, 2013
General Escrow Fund
Assets:
Cash and investments
Liabilities:
Accounts payable
Deposits payable
Total liabilities
General Agency Fund
Assets:
Cash and investments
Liabilities:
Accounts payable
Deposits payable
Total liabilities
Total Fiduciary Funds
Assets:
Cash and investments
Liabilities:
Accounts payable
Deposits payable
Total liabilities
Balance Balance
January 1, December 31,
$ 22,131
$ 76,325
$ (53,382) $
45,074
8,011
26
26,297
(26,199)
124
22,105
50,028
(27,183)
44,950
$ 22,131
$ 76,325
$ (53,382) $
45,074
$ 299,760
$ 963,476
$ (830,946) $
432,290
8,011
7,985
403,033
(352,463)
58,555
291,775
560,443
(478,483)
373,735
$ 299,760
$ 963,476
$ (830,946) $
432,290
$ 321,891
$ 1,039,801
$ (884,328) $
477,364
8,011
429,330
(378,662)
58,679
313,880
610,471
(505,666)
418,685
$ 321,891
$ 1,039,801
$ (884,328) $
477,364
119
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120
III. STATISTICAL SECTION
This part of the City of Andover's comprehensive annual financial report presents detailed information as a context for
understanding what the information in the financial statements, note disclosures, and required supplementary information
says about the City's overall financial health.
Contents
Page
Financial Trends 122
These tables contain trend information to help the reader understand how the City's financial performance
and well -being have changed over time.
Revenue Capacity 132
These tables contain information to help the reader assess the City's most significant local revenue
source, the property tax.
Debt Capacity 138
These tables present information to help the reader assess the affordability of the City's current levels of
outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information 146
These tables offer demographic and economic indicators to help the reader understand the environment
within which the City of Andover's financial activities take place.
Operating Information 148
These tables contain service and infrastructure data to help the reader understand how the information in
the City's financial report relates to the services the City provides and the activities it performs.
121
CITY OF ANDOVER, MINNESOTA
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
Governmental Activities
87,342,022
103,240,249
102,468,182
115,866,535
Net investment in capital assets
$ 52,230,713
$ 67,652,236
$ 64,114,553
$ 77,285,905
Restricted
17,182,422
6,565,168
14,838,788
7,763,716
Unrestricted
19,617,813
19,740,176
19,808,248
21,294,876
Total governmental activities net position
89,030,948
93,957,580
98,761,589
106,344,497
Business -Type Activities
Net investment in capital assets
35,111,309
35,588,013
38,249,916
38,580,630
Unrestricted
3,197,522
3,032,746
3,451,261
3,659,887
Total business -type activities net position
38,308,831
38,620,759
41,701,177
42,240,517
Primary Government
Net investment in capital assets
87,342,022
103,240,249
102,468,182
115,866,535
Restricted
17,182,422
6,565,168
14,838,788
7,763,716
Unrestricted
22,815,335
22,772,922
23,259,509
24,954,763
Total primary government net position
$ 127,339,779
$ 132,578,339
$ 140,566,479
$ 148,585,014
1"�
Table 1
$ 79,644,769
$ 83,394,872
$ 87,206,607
$ 90,859,970
$ 89,592,661
$ 93,393,474
8,345,185
8,252,691
6,364,714
3,107,253
4,461,020
3,792,323
19,904,063
19,442,008
21,071,212
23,353,009
25,589,728
22,936,032
107,894,017
111,089,571
114,642,533
117,320,232
119,643,409
120,121,829
37,606,052
36,939,962
36,140,050
36,031,319
34,922,691
34,864,659
4,005,471
4,875,384
4,912,822
5,100,628
5,784,313
6,310,830
41,611,523
41,815,346
41,052,872
41,131,947
40,707,004
41,175,489
117,250,821
120,334,834
123,346,657
126,891,289
124,515,352
128,258,133
8,345,185
8,252,691
6,364,714
3,107,253
4,461,020
3,792,323
23,909,534
24,317,392
25,984,034
28,453,637
31,374,041
29,246,862
$ 149,505,540
$ 152,904,917
$ 155,695,405
$ 158,452,179
$ 160,350,413
$ 161,297,318
123
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
Business -type activities
Water
2004
2005
2006
2007
Expenses
1,351,506
1,555,010
1,585,548
1,631,224
Governmental activities:
389,290
400,114
408,003
537,151
General government
$ 2,265,215
$ 2,432,433
$ 2,637,584
$ 2,509,011
Public safety
3,138,069
3,353,798
3,443,285
3,851,086
Public works
5,268,813
3,937,423
3,031,459
3,783,509
Sanitation
26,843
-
-
-
Parks and recreation
2,028,177
1,575,582
2,442,305
2,954,753
Recycling
113,234
118,599
91,378
94,929
Economic development
941,624
459,635
626,103
2,265,605
Interest on long -term debt
1,708,303
1,797,469
1,668,444
2,303,567
Total governmental activities expenses
15,490,278
13,674,939
13,940,558
17,762,460
Business -type activities
Water
1,956,995
2,160,502
2,232,144
2,587,847
Sewer
1,351,506
1,555,010
1,585,548
1,631,224
Storm sewer
389,290
400,114
408,003
537,151
Total business -type activities expenses
3,697,791
4,115,626
4,225,695
4,756,222
Total primary government expenses
19,188,069
17,790,565
18,166,253
22,518,682
Program Revenues
Governmental activities:
Charges for services:
General government
814,518
709,538
471,573
785,600
Public safety
936,061
1,001,912
804,447
662,299
Public works
495,835
379,890
325,672
408,656
Parks and recreation
29,683
461,679
749,407
859,531
Recycling
29,062
32,810
35,379
33,158
Economic development
-
-
218,605
182,535
Operating grants and contributions
1,640,389
2,535,140
959,286
1,129,099
Capital grants and contributions
7,010,826
3,934,686
4,920,694
8,794,164
Total governmental activities program revenue
10,956,374
9,055,655
8,485,063
12,855,042
Business -type activities:
Charges for services:
Water
1,723,068
1,510,119
1,768,388
2,025,452
Sewer
1,361,839
1,550,745
1,691,728
1,771,670
Storm sewer
242,090
248,753
287,397
288,372
Operating grants and contributions
-
-
-
-
Capital grants and contributions
214,920
823,797
2,761,282
158,113
Total business -type activities program revenue
3,541,917
4,133,414
6,508,795
4,243,607
Total primary government program revenues
14,498,291
13,189,069
14,993,858
17,098,649
Nct (Expcnsc)/Rcvcnuc
Governmental activities
(4,533,904)
(4,619,284)
(5,455,495)
(4,907,418)
Business -type activities
(155,874)
17,788
2,283,100
(512,615)
Total primary government net expense
$ (4,689,778)
$ (4,601,496)
$ (3,172,395)
$ (5,420,033)
124
Table 2
$ 2,505,105
$ 2,413,916
$ 2,398,007
$ 2,406,750
$ 2,453,801
$ 3,061,867
4,035,884
4,237,401
4,157,050
4,214,316
4,325,531
4,495,447
5,144,197
3,776,367
3,445,403
4,029,164
5,623,942
4,465,153
2,963,218
2,880,595
3,447,730
2,945,742
3,102,534
3,029,917
85,397
86,949
108,785
109,293
94,319
124,515
540,285
481,632
654,961
777,298
1,396,466
318,646
2,219,130
2,146,960
1,936,731
1,796,782
2,497,344
1,399,172
17,493,216
16,023, 820
16,148,667
16,279,345
19,493,937
16,894,717
5,067,407
5,521,564
5,631,492
5,497,883
7,445,516
6,159,823
2,563,781
2,594,713
2,585,469
2,655,926
2,782,948
2,275,363
1,794,891
1,831,505
1,915,072
1,914,113
1,842,473
1,964,911
521,975
536,619
532,168
614,958
531,103
561,807
4,880,647
4,962,837
5,032,709
5,184,997
5,156,524
4,802,081
22,373,863
20,986,657
21,181,376
21,464,342
24,650,461
21,696,798
647,081
483,639
454,419
532,764
690,875
843,304
721,289
412,113
479,516
540,089
607,715
704,119
427,043
316,451
337,360
309,066
308,583
321,114
1,049,032
1,495, 779
1,432,672
1,498, 847
1,495, 872
1,463, 579
35,897
29,479
40,504
48,339
39,530
42,544
199,840
185,539
211,121
235,134
170,391
239,570
917,618
966,635
1,214,066
977,553
1,358,424
1,119,778
1,069,607
1,631,929
1,461,834
1,356,091
2,774,126
1,425,815
5,067,407
5,521,564
5,631,492
5,497,883
7,445,516
6,159,823
1,987,432
2,127,676
2,077,305
2,119,954
2,572,560
2,495,561
1,869,327
1,967,997
1,964,117
1,990,218
2,063,177
2,065,467
297,125
325,392
338,823
358,708
379,262
399,417
-
-
9,380
-
-
-
142,133
793,589
-
-
-
-
4,296,017
5,214,654
4,389,625
4,468,880
5,014,999
4,960,445
9,363,424
10,736,218
10,021,117
9,966,763
12,460,515
11,120,268
(12,425,809)
(10,502,256)
(10,517,175)
(10,781,462)
(12,048,421)
(10,734,894)
(584,630)
251,817
(643,084)
(716,117)
(141,525)
158,364
$ (13,010,439)
$ (10,250,439)
$ (11,160,259)
$ (11,497,579)
$ (12,189,946)
$ (10,576,530)
125
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
Business -type activities
Unrestricted investment earnings
2004
2005
2006
2007
General Revenues and Other Changes in Net Position
6,854
-
5,900
-
Governmental activities:
1,735,251
438,426
704,042
714,577
Taxes:
1,750,000
486,046
797,318
1,051,955
General property taxes
$ 6,260,772
$ 7,066,852
$ 8,084,559
$ 8,897,755
Tax increment collections
1,186,396
1,285,195
1,562,131
1,661,204
Grants and contributions not restricted to
3,819,384
4,323,395
4,804,009
7,582,908
specific programs
141,870
86,906
77,642
486,626
Unrestricted investment earnings
681,563
690,648
1,019,304
1,967,583
Gain on sale of capital assets
1,817,938
251,504
219,910
191,735
Transfers
(1,735,251)
(438,426)
(704,042)
(714,577)
Total governmental activities
8,353,288
8,942,679
10,259,504
12,490,326
Business -type activities
Unrestricted investment earnings
7,895
47,620
87,376
337,378
Gain on sale of capital assets
6,854
-
5,900
-
Transfers
1,735,251
438,426
704,042
714,577
Total business -type activities
1,750,000
486,046
797,318
1,051,955
Total primary government
10,103,288
9,428,725
11,056,822
13,542,281
Change in Net Position
Governmental activities
3,819,384
4,323,395
4,804,009
7,582,908
Business -type activities
1,594,126
503,834
3,080,418
539,340
Total primary government
$ 5,413,510
$ 4,827,229
$ 7,884,427
$ 8,122,248
126
Table 2
cont
$ 9,752,701
$ 10,175,519
$ 10,336,536
$ 10,292,674
$ 10,594,940
$ 10,608,678
1,783,270
1,930,669
2,074,589
2,005,056
2,033,932
320,822
274,402
131,084
84,875
86,802
14,360
12,511
1,514,012
1,032,507
1,114,451
1,399,987
1,201,995
571,307
234,070
6,144
22,500
91,693
16,625
23,650
416,874
421,887
437,186
(417,051)
509,746
(323,654)
13,975,329
13,697,810
14,070,137
13,459,161
14,371,598
11,213,314
372,510
373,893
317,796
370,641
226,328
(21,533)
-
-
-
7,500
-
8,000
(416,874)
(421,887)
(437,186)
417,051
(509,746)
323,654
(44,364)
(47,994)
(119,390)
795,192
(283,418)
310,121
13,930,965
13,649,816
13,950,747
14,254,353
14,088,180
11,523,435
1,549,520
3,195,554
3,552,962
2,677,699
2,323,177
478,420
(628,994)
203,823
(762,474)
79,075
(424,943)
468,485
$ 920,526
$ 3,399,377
$ 2,790,488
$ 2,756,774
$ 1,898,234
$ 946,905
127
CITY OF ANDOVER, MINNESOTA
FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2004
2005
2006
2007
Gcncral Fund
Reserved $
85,586
$ 126,320
$ 144,496 $
208,216
Unreserved
3,216,979
3,076,157
3,248,317
3,682,244
Nonspendable
-
-
-
-
Unassigned
-
-
-
-
Total general fund
3,302,565
3,202,477
3,392,813
3,890,460
All Other Governmcntal Funds
Reserved
13,263,819
3,267,027
12,022,454 �l�
22,106,660 (2)
Unreserved reported in:
Special revenue funds
1,951,529
1,264,369
1,246,388
1,204,453
Capital project funds
14,982,950
14,526,468
14,379,760
11,955,138
Nonspendable
-
-
-
-
Restricted
-
-
-
-
Committed
-
-
-
-
Assigned
-
-
-
-
Unassigned
-
-
-
-
Total all other governmental funds
30,198,298
19,057,864
27,648,602
35,266,251
Total governmental funds $
33,500,863
$ 22,260,341
$ 31,041,415 $
39,156,711
Note: (1) In 2006, the EDA issued $10,000,000 of Public Facility Lease Revenue Refunding Bonds to refund a portion of the 2004
EDA's $19,580,000 Public Facility Lease Revenue Bonds, Series 2004.
(z) In 2007, the EDA issued $6,865,000 of Public Facility Lease Revenue Refunding Bonds to refund a portion of the 2004
EDA's $19,580,000 Public Facility Lease Revenue Bonds, Series 2004.
In 2011, the City adopted the provisions of Governmental Accounting Standards Board Statement No. 54, Fund Balance Reporting
and Governmental Fund Type Definitions.
128
Table 3
2008 2009 2010 2011 2012 2013
$ 193,805
$ 207,515
$ 206,666
$ -
$ -
$ -
3,981,230
4,120,897
4,904,239
-
-
-
-
-
-
222,641
160,177
106,445
-
-
-
5,665,496
6,227,664
6,853,791
4,175,035
4,328,412
5,110,905
5,888,137
6,387,841
6,960,236
20,754,303
20,756,195
19,258,490
-
-
-
941,259
1,233,202
1,135,919
-
-
-
13,416,129
14,170,266
14,714,140
-
-
-
-
-
-
16,074
1,471
1,316
-
-
-
19,741,214
21,307,923
21,274,444
-
-
-
650,766
681,413
588,516
-
-
-
14,451,306
16,420,228
13,481,786
-
-
-
(517,251)
(314,734)
(276,829)
35,111,691
36,159,663
35,108,549
34,342,109
38,096,301
35,069,233
$ 39,286,726
$ 40,488,075
$ 40,219,454
$ 40,230,246
$ 44,484,142
$ 42,029,469
129
CITY OF ANDOVER, MINNESOTA
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
Expenditures
2004
2005
2006
2007
Revenues
2,171,248
2,349,965
2,343,332
2,399,297
General property taxes
$ 6,272,762
$ 7,033,613
$ 8,057,592
$ 8,833,249
Tax increment collections
1,193,467
1,285,639
1,546,394
1,659,222
Licenses and permits
674,008
724,436
598,094
475,893
Intergovernmental
1,755,041
2,663,683
2,661,726
1,644,914
Special assessments
4,243,328
2,045,969
1,289,590
3,342,039
Charges for services
1,389,245
1,692,316
1,770,156
2,035,735
Fines
79,450
90,530
91,490
101,445
Investment income
678,308
684,173
1,014,801
1,962,379
Miscellaneous:
Park dedication fees
842,042
286,316
626,567
113,013
Connection charges
1,720,520
1,311,426
372,133
829,624
Rent
-
-
-
-
Other
658,037
578,389
395,789
621,798
Total revenues
19,506,208
18,396,490
18,424,332
21,619,311
Expenditures
1,076,000
224,000
522,000
578,925
General government
2,171,248
2,349,965
2,343,332
2,399,297
Public safety
2,915,958
3,093,298
3,268,236
3,580,240
Public works
4,944,489
3,650,351
2,817,475
3,491,353
Sanitation
26,732
-
-
-
Parks and recreation
1,315,100
1,309,987
1,599,885
1,825,706
Recycling
114,052
116,506
90,590
94,669
Economic development
918,451
426,708
626,103
2,265,605
Unallocated
21,992
9,798
8,454
6,915
Capital outlay
1,420,387
1,616,709
987,075
2,803,485
Debt service:
Principal retirement
6,839,000
8,487,000
5,254,000
3,275,000
Interest
1,063,363
2,042,003
1,683,599
2,089,857
Other
94,869
13,226
253,134
167,187
Construction/acquisition costs
12,154,653
11,146,387
4,579,910
360,742
Total expenditures
34,000,294
34,261,938
23,511,793
22,360,056
Revenues over (under) expenditures
(14,494,086)
(15,865,448)
(5,087,461)
(740,745)
Other Financing Sources (Uses)
Transfers in
1,076,000
224,000
522,000
578,925
Transfers out
(739,438)
-
(167,424)
(57,671)
Bonds issued
21,280,000
4,210,000
2,910,000
760,000
Refunding bonds issued
6,450,000
-
10,000,000
6,865,000
Redemption of refunded bonds
(2,145,864)
-
-
-
Bond premium
23,438
-
-
3,401
Bond discount
(497,883)
(28,961)
-
-
Proceeds from the sale of capital assets
2,872,654
219,887
603,959
706,386
Total other financing sources (uses)
28,318,907
4,624,926
13,868,535
8,856,041
Net increase (decrease) in fund balance
$ 13,824,821
$ (11,240,522)
$ 8,781,074
$ 8,115,296
Debt service as a percentage of
noncapital expenditures
38.69%
48.97%
38.66%
27.95%
130
Table 4
$ 9,695,103
$ 10,168,143
$ 10,267,085
$ 10,279,967
$ 10,638,117
$ 10,682,975
1,762,119
1,951,343
2,015,123
1,976,800
2,035,663
375,040
525,339
291,903
329,901
387,206
449,826
536,706
1,175,205
1,654,614
1,989,420
1,876,685
3,493,528
1,115,047
1,638,006
1,421,591
1,725,695
891,942
792,460
1,045,000
1,724,052
1,579,659
1,604,681
1,732,791
1,874,321
1,806,919
104,930
110,779
104,780
99,777
97,571
96,130
1,508,265
1,029,683
1,107,335
1,386,698
1,191,438
573,256
133,585
41,216
32,649
51,706
47,700
205,080
254,903
20,119
48,086
27,165
170,202
436,628
-
637,305
638,037
641,859
639,983
639,423
800,857
381,548
396,186
332,992
645,897
1,698,964
19,322,364
19,287,903
20,258,978
19,685,588
22,076,706
19,211,168
2,366,574
2,242,662
2,255,793
2,298,571
2,280,373
2,647,278
3,796,965
4,015,410
3,920,073
3,965,541
4,092,073
4,301,698
4,843,288
3,545,132
3,204,444
3,788,636
5,415,924
4,251,454
1,953,822
1,891,125
2,433,495
1,926,220
2,001,624
1,990,457
86,631
85,527
109,034
109,911
94,328
123,595
538,293
477,648
650,977
966,687
1,537,611
408,210
17,999
19,540
24,953
30,631
63,371
75,517
1,460,662
1,519,944
1,324,881
985,399
723,017
2,763,351
3,460,000
3,865,000
5,779,000
4,100,000
1,842,000
1,689,000
2,253,223
2,178,233
2,030,267
1,855,538
1,768,748
1,262,302
15,645
39,265
29,939
10,430
225,378
5,509
-
-
101,153
1,044,581
110,650
946,942
20,793,102
19,879,486
21,864,009
21,082,145
20,155,097
20,465,313
(1,470,738)
(591,583)
(1,605,031)
(1,396,557)
1,921,609
(1,254,145)
580,343
587,530
627,530
627,530
627,530
627,530
(163,469)
(165,643)
(89,191)
-
(7,134)
(4,242)
630,000
385,000
1,660,000
265,000
585,000
-
-
955,000
1,480,000
-
18,885,000
-
-
-
(2,416,834)
(17,907,898)
(1,900,000)
-
18,781
31,688
-
133,164
-
553,879
12,264
43,217
514,819
16,625
76,184
1,600,753
1,792,932
1,336,410
1,407,349
2,332,287
(1,200,528)
$ 130,015
$ 1,201,349
$ (268,621)
$ 10,792
$ 4,253,896
$ (2,454,673)
29.55%
32.92%
38.21%
31.26%
18.69%
17.61%
131
CITY OF ANDOVER, MINNESOTA
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
Last Ten Fiscal Years
Source: Anoka County Property Tax Division
132
Table 5
Net Tax Capacity
as a Percentage
1.05%
1.05%
1.05%
1.05%
1.05%
1.05%
1.06%
1.06%
1.06%
1.06%
Real Property
Personal Property
Total
Total
Taxable
Net Tax
Taxable
Net Tax
Taxable
Net Tax
Direct
Year
Market Value
Capacity
Market Value
Capacity
Market Value
Capacity
Tax Rate
2004
$ 1,945,523,200
$ 20,142,088
$ 20,761,100
$ 414,016
$ 1,966,284,300
$ 20,556,104
31.592%
2005
2,222,567,900
23,027,376
21,718,900
433,669
2,244,286,800
23,461,045
31.415%
2006
2,521,587,700
26,204,279
22,003,500
439,356
2,543,591,200
26,643,635
31.894%
2007
2,778,464,100
28,897,916
21,998,500
439,246
2,800,462,600
29,337,162
31.327%
2008
2,948,801,500
30,749,076
20,837,800
416,000
2,969,639,300
31,165,076
31.603%
2009
2,961,410,400
31,023,349
21,185,200
422,931
2,982,595,600
31,446,280
32.484%
2010
2,685,802,600
28,233,178
24,712,000
493,441
2,710,514,600
28,726,619
36.814%
2011
2,444,519,600
25,667,544
25,425,400
506,806
2,469,945,000
26,174,350
38.731%
2012
2,176,836,156
22,945,277
25,299,200
504,304
2,202,135,356
23,449,581
42.539%
2013
2,097,459,658
22,048,362
26,136,700
520,656
2,123,596,358
22,569,018
41.170%
Source: Anoka County Property Tax Division
132
Table 5
Net Tax Capacity
as a Percentage
1.05%
1.05%
1.05%
1.05%
1.05%
1.05%
1.06%
1.06%
1.06%
1.06%
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX RATES - PER $1,000 OF ASSESSED TAX CAPACITY VALUE
DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
Source: Anoka County Property Tax Division
133
Table 6
Overlapping
Direct City
General
Debt
Lower
Total
Taxes
Oper
Service
Rum
58.593%
Payable
Levy
Levy
Watershed
Total
87.791%
19.337%
30.675%
3.671%
2005
24.182%
6.895%
0.338%
31.415%
2006
24.790%
6.757%
0.347%
31.894%
2007
24.948%
6.055%
0.324%
31.327%
2008
24.962%
6.333%
0.308%
31.603%
2009
25.755%
6.426%
0.303%
32.484%
2010
30.507%
5.977%
0.330%
36.814%
2011
31.914%
6.461%
0.356%
38.731%
2012
35.138%
6.952%
0.449%
42.539%
2013
33.676%
6.989%
0.449%
41.114%
2014
35.486%
7.711%
0.460%
43.657%
Source: Anoka County Property Tax Division
133
Table 6
Overlapping
Governments
School
County
Other
Total
Total
21.492%
33.080%
4.021%
58.593%
90.008%
20.046%
32.096%
3.755%
55.897%
87.791%
19.337%
30.675%
3.671%
53.683%
85.010%
16.962%
31.041%
4.604%
52.607%
84.210%
18.247%
32.051%
3.251%
53.549%
86.033%
20.236%
35.273%
3.436%
58.945%
95.759%
24.023%
39.884%
4.872%
68.779%
107.510%
21.447%
41.056%
3.626%
66.129%
108.668%
26.751%
44.328%
3.912%
74.991%
116.105%
28.265%
43.239%
4.354%
75.858%
119.515%
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS
Last Eight Fiscal Years
Table 7
* Included in the total tax levy is approximately $400,000 of market value homestead credit (MVHC) that the City will not be receiving. Due to State legislative
actions to deal with the State budget deficit, the MVHC program was significantly reduced for the City.
Information for years prior to 2006 is not available.
134
Collected Within the Fiscal Year of Levy
Total
Market Value
Collections In
Total Collections to Date
Tax
Tax
Homestead
Total
Percentage
Subsequent
Percentage
Year
Levy
Levy
Credit
Collected
of Levy
Years
Amount
of Levy
2006
$ 8,550,919
$ 7,977,278
$ 1,700 *
$ 7,978,978
93.31%
$ 108,138
$ 8,087,116
94.58%
2007
9,316,427
8,738,606
410,519
9,149,125
98.20%
150,039
9,299,164
99.81%
2008
10,153,718
9,554,131
198,214 *
9,752,345
96.05%
179,852
9,932,197
97.82%
2009
10,593,520
9,992,240
54,629 *
10,046,869
94.84%
143,527
10,190,396
96.19%
2010
10,856,299
10,125,752
3,905 *
10,129,657
93.31%
157,591
10,287,248
94.76%
2011
10,856,299
10,119,681
853 *
10,120,534
93.22%
110,010
10,230,545
94.24%
2012
10,631,299
10,460,838
2,354
10,463,192
98.42%
83,872
10,547,064
99.21%
2013
10,631,299
10,535,521
1,246
10,536,767
99.11%
Not Available
* Included in the total tax levy is approximately $400,000 of market value homestead credit (MVHC) that the City will not be receiving. Due to State legislative
actions to deal with the State budget deficit, the MVHC program was significantly reduced for the City.
Information for years prior to 2006 is not available.
134
CITY OF ANDOVER, MINNESOTA
PRINCIPAL TAXPAYERS
Current Year and Nine Years Ago
2013 2004
Total $ 1,321,509 5.86%
Net Tax Capacity $ 22,569,018
Source: Anoka County Property Tax Division
I&R
Net
Tax
Capacity Rank
$ 108,114
187,734
150,544
145,276
52,064
114,304
68,054
49,584
29,086
28,856
$ 933,616
$ 17,951,904
5
1
2
3
7
4
6
8
9
10
Table 8
Percentage of
Total City
Tax Capacity
0.60%
1.05%
0.84%
0.81%
0.29%
0.64%
0.38%
0.28%
0.16%
5.21%
Net
Percentage of
Tax
Total City
Taxpayers
Capacity
Rank
Tax Capacity
Minnegasco, Inc.
$ 211,244
1
0.94%
Great River Energy
194,038
2
0.86%
Connexus Energy
193,140
3
0.86%
Target Corporation
160,048
4
0.71%
Presbyterian Homes of Andover
140,847
5
0.62%
Andover Limited Partnership
117,528
6
0.52%
Andover Station LLC
97,182
7
0.43%
DST Properties LLC
81,678
8
0.36%
Fairbanks Properties LLC
65,926
9
0.29%
Columbia Park Properties
59,878
10
0.27%
116 LLC
-
United Power Association
Individual
Xcel Energy
Health Partners
Total $ 1,321,509 5.86%
Net Tax Capacity $ 22,569,018
Source: Anoka County Property Tax Division
I&R
Net
Tax
Capacity Rank
$ 108,114
187,734
150,544
145,276
52,064
114,304
68,054
49,584
29,086
28,856
$ 933,616
$ 17,951,904
5
1
2
3
7
4
6
8
9
10
Table 8
Percentage of
Total City
Tax Capacity
0.60%
1.05%
0.84%
0.81%
0.29%
0.64%
0.38%
0.28%
0.16%
5.21%
CITY OF ANDOVER, MINNESOTA
ESTIMATED MARKET VALUES AND NEW CONSTRUCTION
Last Ten Fiscal Years
Table 9
New Construction
Estimated Market Values
Commercial / Industrial
Commercial /
Permits
Value
Year
Industrial (1)
Residential
Total
2004
$ 144,629,100
$ 1,936,079,400
$ 2,080,708,500
2005
168,684,200
2,174,640,000
2,343,324,200
2006
191,931,800
2,433,776,200
2,625,708,000
2007
211,760,900
2,663,389,900
2,875,150,800
2008
233,801,700
2,813,037,200
3,046,838,900
2009
248,129,500
2,807,144,500
3,055,274,000
2010
229,977,800
2,526,288,900
2,756,266,700
2011
199,728,200
2,305,897,900
2,505,626,100
2012
192,112,500
2,206,195,400
2,398,307,900
2013
174,971,400
2,141,898,900
2,316,870,300
Table 9
Note: (1) Also includes agricultural, public utility, railroad operating property, and personal property.
136
New Construction
Commercial / Industrial
Residential
Permits
Value
Permits
Value
16
$ 19,926,817
251
$ 36,224,546
20
6,571,671
226
34,309,393
8
1,791,896
153
25,236,120
9
2,403,831
91
18,347,873
11
16,878,603
49
11,116,400
11
767,430
47
9,246,347
11
1,247,106
71
14,700,800
24
11,461,453
58
11,803,000
25
5,042,964
81
15,243,007
15
9,249,466
98
20,351,892
Note: (1) Also includes agricultural, public utility, railroad operating property, and personal property.
136
CTIYY OF ANDOVER, MINNESOTA
SPECIAL ASSESSMENT LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Table 10
Note: (1) Only includes assessments certified to Anoka County.
137
Total
Delinquent
Collections
Assessments
Current
Current
Percent of
Delinquent
Total
as a Percent of
Outstanding
as a Percent of
Assessments
Assessments
Assessments
Assessment
Assessment
Current
Delinquent
Current
Year
Due (1)
Collected
Collected
Collections
Collections
Assessments Due
Assessments
Assessments Due
2004
$ 192,373
$ 189,279
98.39%
$ 7,921
$ 197,200
102.51%
$ 15,157
7.88%
2005
178,434
175,471
98.34%
4,002
179,473
100.58%
22,217
12.45%
2006
225,365
192,477
85.41%
4,790
197,267
87.53%
51,721
22.95%
2007
163,817
142,750
87.14%
12,460
155,210
94.75%
76,420
46.65%
2008
366,203
330,304
90.20%
1,479
331,783
90.60%
174,810
47.74%
2009
319,448
332,739
104.16%
36,693
369,432
115.65%
202,999
63.55%
2010
325,361
314,097
96.54%
61,247
375,344
115.36%
218,860
67.27%
2011
308,794
304,164
98.50%
5,112
309,276
100.16%
267,016
86.47%
2012
348,129
376,601
108.18%
25,087
401,688
115.38%
237,175
68.13%
2013
338,411
387,584
114.53%
168,941
556,525
164.45%
82,826
24.47%
Note: (1) Only includes assessments certified to Anoka County.
137
ClrfY OF ANDOVER, MINNESOTA
RATIO OF NET BONDED DEBT
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
Table 11
Notes: (1) Source: Metropolitan Council
(2) Only includes debt supported by tax levy.
* 2004 is the start of the 2004 EDA Public Facility Revenue Bonds of which approximately half of the annual debt service payments
will come from a lease with the YMCA.
138
General Bonded Debt Outstanding (2)
Less Debt
Gross
Service Fund
Net
Percentage
Net Bonded
Fiscal
Estimated
Bonded
Cash and
Bonded
of Estimated
Debt
Year
Population (1)
Market Value
Debt
Investments
Debt
Market Value
Per Capita
2004
29,262
$ 2,080,708,500
$ 24,236,000
$ (815,322)
$ 23,420,678 *
1.13%
$ 800.38
2005
30,080
2,343,324,500
24,389,000
(1,041,140)
23,347,860
1.00%
776.19
2006
30,222
2,625,708,000
33,850,000
(10,739,510)
23,110,490
0.88%
764.69
2007
30,263
2,875,150,800
40,880,000
(17,822,418)
23,057,582
0.80%
761.91
2008
31,023
3,046,838,900
40,565,000
(17,939,959)
22,625,041
0.74%
729.30
2009
31,298
3,055,274,000
39,690,000
(17,973,588)
21,716,412
0.71%
693.86
2010
30,598
2,756,266,700
40,026,000
(17,768,743)
22,257,257
0.81%
727.41
2011
30,847
2,505,626,100
39,096,000
(17,779,964)
21,316,036
0.85%
691.02
2012
31,125
2,398,307,900
40,444,000
(18,497,679)
21,946,321
0.92%
705.10
2013
31,375
2,316,870,300
37,460,000
(17,415,812)
20,044,188
0.87%
638.86
Notes: (1) Source: Metropolitan Council
(2) Only includes debt supported by tax levy.
* 2004 is the start of the 2004 EDA Public Facility Revenue Bonds of which approximately half of the annual debt service payments
will come from a lease with the YMCA.
138
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
December 31, 2013
Table 12
Notes: (1) Information obtained from Anoka County
(2) Overlapping governments are those that coincide with the geographical boundaries of the city. This schedule estimates
the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City.
This process recognizes that, when considering the City's ability to issue and repay long -term debt, the entire debt burden
borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a
resident, and therefore responsible for repaying the debt, of each overlapping government.
139
Gross General
Obligation
Percentage
Net Amount
Bonded Debt
Applicable
Applicable
Outstanding
to City (2)
to City
Direct:
City of Andover
$ 39,118,593
100.0000%
$ 39,118,593
Overlapping:
Anoka County
119,000,000
(1)
9.1422%
10,879,268
ISD No. 11 Anoka - Hennepin
72,239,061
(1)
13.0373%
9,418,013
ISD No. 15 St. Francis
27,600,000
(1)
6.5472%
1,807,015
Metropolitan Council
196,680,000
(1)
0.8275%
1,627,602
Total overlapping debt
23,731,898
Total overlapping and direct debt
$ 62,850,491
Notes: (1) Information obtained from Anoka County
(2) Overlapping governments are those that coincide with the geographical boundaries of the city. This schedule estimates
the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City.
This process recognizes that, when considering the City's ability to issue and repay long -term debt, the entire debt burden
borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a
resident, and therefore responsible for repaying the debt, of each overlapping government.
139
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF LEGAL DEBT MARGIN
Last Ten Fiscal Years
2004 2005 2006 2007 2008
Estimated Taxable Market Value
$ 2,080,708,500
$ 2,343,324,200
$ 2,625,708,000
$ 2,800,462,600 $
2,969,639,300
Debt limitation:
Debt limit percent
2%
2%
2%
2%
3%
Debt limit in dollars
41,614,170
46,866,484
52,514,160
56,009,252
89,089,179
Debt applicable to limit:
Total bonded debt
56,941,000
52,344,000
59,665,000
70,240,000
67,050,000
Less: Nonapplicable debt
G.O. water revenue bonds
(9,470,000)
(9,150,000)
(8,815,000)
(15,040,000)
(14,680,000)
Special assessment bonds
(3,560,000)
(3,560,000)
(3,560,000)
(3,015,000)
Tax increment bonds
(13,215,000)
(7,065,000)
(4,715,000)
(4,010,000)
(3,275,000)
Permanent improvement
revolving bonds
(7,680,000)
(5,975,000)
(6,660,000)
(4,835,000)
(3,755,000)
State aid bonds
(2,340,000)
(2,205,000)
(2,065,000)
(1,915,000)
(1,760,000)
Less: Cash and investments in
related debt service funds
(815,322)
(1,041,140)
(10,739,510)
(17,822,418)
(17,939,959)
Total debt applicable to limitation
23,420,678
23,347,860
23,110,490
23,057,582
22,625,041
Legal debt margin
$ 18,193,492
$ 23,518,624
$ 29,403,670
$ 32,951,670 $
66,464,138
Total debt applicable to the limit as
a percentage of debt limit
56.28%
49.82%
44.01%
41.17%
25.40%
140
Table 13
2009 2010 2011 2012 2013
$ 2,982,595,600
$ 2,710,514,800
$ 2,469,945,000
$ 2,202,135,356
$ 2,123,596,358
3%
3%
3%
3%
3%
89,477,868
81,315,444
74,098,350
66,064,061
63,707,891
65,175,000
59,671,000
55,361,000
49,144,000
45,010,000
(15,330,000)
(14,875,000)
(14,400,000)
(7,420,000)
(6,875,000)
(2,450,000)
(600,000)
(2,515,000)
(1,735,000)
(2,635,000)
(1,480,000)
(1,125,000)
(760,000)
(385,000)
(2,555,000)
(955,000)
(740,000)
(520,000)
(290,000)
(17,973,588)
(17,768,743)
(17,779,964)
(18,497,679)
(17,415,812)
21,716,412
22,257,257
21,316,036
21,946,321
20,044,188
$ 67,761,456
$ 59,058,187
$ 52,782,314
$ 44,117,740
$ 43,663,703
24.27%
27.37%
28.77%
33.22%
31.46%
141
CITY OF ANDOVER, MINNESOTA
PLEDGED - REVENUE COVERAGE
Last Ten Fiscal Years
Table 14
Water Revenue Bonds
Water Enterprise Fund
Fiscal
Operating
Less: Operating
Transfers
Net Available
Debt Service
Year
Revenues
Expenses (1)
In (2)
Revenue
Principal
Interest
Coverage
2004
$ 2,462,506
$ 1,492,307
$ 739,438
$ 970,199
$ 310,000 $
429,438
1.31
2005
1,510,119
1,111,874
-
398,245
320,000
421,393
0.54
2006
1,935,812
1,139,500
167,424
796,312
335,000
411,720
1.07
2007
2,025,452
1,264,370
57,671
818,753
345,000
395,775
1.11
2008
1,987,432
1,218,444
163,469
932,457
360,000
382,753
1.26
2009
2,127,676
1,264,398
165,643
1,028,921
375,000
393,828
1.34
2010
2,077,305
1,249,420
89,191
917,076
455,000
384,713
1.09
2011
2,119,954
1,318,848
-
801,106
475,000
366,065
0.95
2012
2,572,560
1,592,417
7,134
987,277
6,980,000
214,933
0.14
2013
2,495,561
1,285,188
4,242
1,214,615
545,000
28,095
2.12
2004 EDA Public Facility Lease Revenue Bonds (3)
Community
Center Special Revenue Fund
Debt Service
Fiscal
Operating
Less: Operating
Net Available
General Property
Debt Service
Year
Revenue
Expenses
Revenue
Tax Revenue
Principal
Interest
Coverage
2005
$ 522,839
$ 589,900
$ (67,061)
$ 748,376
$ $
1,194,167
(0.06)
2006
741,241
748,146
(6,905)
800,349
185,000
964,102
(0.01)
2007
876,136
799,909
76,227
844,123
185,000
959,731
0.80
2008
998,287
900,228
98,059
890,709
190,000
954,381
0.86
2009
1,422,614
903,446
519,168
940,640
390,000
944,806
1.09
2010
1,351,069
882,364
468,705
885,349
405,000
930,684
1.01
2011
1,414,617
991,098
423,519
908,894
415,000
914,891
1.00
2012
1,430,874
1,011,186
419,688
1,091,430
435,000
897,456
1.13
2013
1,381,573
971,108
410,465
452,004
450,000
878,534
0.65
Special Assessment and Permanent Improvement Revolving Bonds
Fiscal
Special Assessment
Debt Service
Year
Revenue
Principal
Interest
Coverage
2004
$ 4,243,328
$ 2,210,000
$ 283,657
1.70
2005
2,045,969
1,705,000
192,153
1.08
2006
1,289,590
1,765,000
289,174
0.63
2007
2,966,380
1,825,000
314,152
1.39
2008
1,184,928
1,625,000
243,340
0.63
2009
993,703
1,685,000
198,232
0.53
2010
1,210,641
3,005,000
110,822
0.39
2011
552,356
955,000
36,250
0.56
2012
268,116
365,000
18,850
0.70
2013
598,889
375,000
11,450
1.55
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
(1) Operating expenses includes transfers out because the administrative allocation and replacement reserve transfer
is built into the user fees. Operating expenses does not include interest and depreciation.
(2) The transfer in is included because a portion of the trunk connection charge associated with adding additional users to the water
system is designated to compensate prior years capital investment in water utility infrastructure and the treatment plant.
(3) Half of the facility financed by these bonds is leased to the Greater Minneapolis YMCA, their lease payments started
in 2008. Future YMCA lease payments will significantly reduce the City's obligation on debt service payments.
142
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143
CITY OF ANDOVER, MINNESOTA
OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
City of Andover's Outstanding Debt
Governmental activities
Revenue bonds
Abatement bonds
Special assessment bonds
Tax increment bonds
Certificates of indebtedness
Capital improvement bonds
Permanent improvement
revolving bonds
State aid bonds
Referendum bonds
Promissory note payable
Total governmental activities
Business -type activities
G.O. revenue bonds
Total outstanding debt
Total outstanding debt as a
percentage of personal income
Total outstanding debt per capita
2004
2005
2006
2007
$ 19,580,000
$ 19,580,000
$ 29,395,000
$ 36,075,000
-
3,560,000
3,560,000
3,560,000
13,215,000
7,065,000
4,715,000
4,010,000
766,000
699,000
580,000
1,280,000
3,890,000
4,110,000
3,875,000
3,525,000
7,680,000
5,975,000
6,660,000
4,835,000
2,340,000
2,205,000
2,065,000
1,915,000
47,471,000
43,194,000
50,850,000
55,200,000
9,470,000
9,150,000
8,815,000
15,040,000
$ 56,941,000
$ 52,344,000
$ 59,665,000
$ 70,240,000
7.68%
6.35%
6.98%
7.99%
$ 1,946
$ 1,740
$ 1,969
$ 2,321
144
Table 15
2008 2009 2010 2011 2012 2013
$ 35,885,000
$ 35,495,000
$ 35,090,000
$ 34,675,000
$ 17,375,000
$ 16,925,000
-
-
-
-
17,315,000
16,995,000
3,015,000
2,450,000
600,000
-
-
-
3,275,000
2,515,000
1,735,000
-
-
-
1,525,000
1,420,000
781,000
561,000
774,000
680,000
3,155,000
2,775,000
2,495,000
2,200,000
3,455,000
1,470,000
3,755,000
2,635,000
1,480,000
1,125,000
760,000
385,000
1,760,000
2,555,000
955,000
740,000
520,000
290,000
-
-
1,660,000
1,660,000
1,525,000
1,390,000
-
-
-
-
-
983,593
52,370,000
49,845,000
44,796,000
40,961,000
41,724,000
39,118,593
14,680,000
15,330,000
14,875,000
14,400,000
7,420,000
6,875,000
$ 67,050,000
$ 65,175,000
$ 59,671,000
$ 55,361,000
$ 49,144,000
$ 45,993,593
7.62%
7.10%
6.65%
6.17%
5.28%
5.04%
$ 2,161
$ 2,082
$ 1,950
$ 1,795
$ 1,579
$ 1,466
145
CITY OF ANDOVER, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS Table 16
Last Ten Years
Notes: (1) Estimates from Metropolitan Council
(2) The personal income is calculated by taking the per capita income of Anoka County and multiplying it
by the population for both the City and County.
(3) Information from U.S. Census Bureau
146
City
of Andover
Anoka County
Personal
Personal
Per Capita
Unemployment
Year
Population (1)
Income (2)
Population (3)
Income (2)
Income (3)
Percentage
2004
29,262
$ 741,235,722
316,778
$ 8,024,303,518
$ 25,331
4.5%
2005
30,080
824,041,600
320,803
8,788,398,185
27,395
3.8%
2006
30,222
852,774,174
327,005
9,227,100,085
28,217
4.0%
2007
30,263
879,549,003
326,252
9,482,028,265
29,064
4.6%
2008
31,023
880,029,441
327,090
9,278,562,030
28,367
5.5%
2009
31,298
917,375,678
331,582
9,719,000,002
29,311
8.5%
2010
30,598
897,408,742
335,308
9,834,248,332
29,329
7.1%
2011
30,847
896,999,913
330,844
9,620,612,676
29,079
5.8%
2012
31,125
930,450,750
336,414
10,056,760,116
29,894
5.9%
2013
31,375
950,631,125
339,534
10,287,540,666
30,299
5.1%
Notes: (1) Estimates from Metropolitan Council
(2) The personal income is calculated by taking the per capita income of Anoka County and multiplying it
by the population for both the City and County.
(3) Information from U.S. Census Bureau
146
CITY OF ANDOVER, MINNESOTA
PRINCIPAL EMPLOYERS
Current Year and Ten Years Ago
Taxnaver
Anoka Hennepin I.S.D. No. 11
Fairview Andover Clinic
Anoka County Sheriffs Office
Kottkes' Bus Service, Inc.
Wal -Mart
YMCA
Target
Anoka County Highway Department
Bunker Hills Regional Park/Activity Center
Andover County Market
Festival Foods
Farmstead at Andover
Ed Fields & Sons, Inc.
McDonald's
Meadow Creek Christian School
City of Andover
Total
2013 2003
2,389 100.0%
Source: Minnesota Department of Employment and Economic Development
(1) Number of district employees that work in school buildings located within the City.
147
Table 17
Percentage
of Total City
Employees
Rank
Employment
760 (1)
1
31.8%
300
2
12.6%
250
3
10.5%
225
4
9.4%
210
5
8.8%
186
6
7.8%
170
7
7.1%
103
8
4.3%
100
9
4.2%
85
10
3.6%
2,389 100.0%
Source: Minnesota Department of Employment and Economic Development
(1) Number of district employees that work in school buildings located within the City.
147
Table 17
1,398 100.0%
Percentage
of Total City
Employees
Rank
Employment
523
1
37.4%
173
2
12.4%
102
5
7.3%
145
3
10.4%
120
4
8.6%
86
6
6.2%
70
7
5.0%
60
8
4.3%
60
9
4.3%
59
10
4.2%
1,398 100.0%
CITY OF ANDOVER, XHNNESOTA
FULL TIME EQUIVALENT EMPLOYEES
Table 18
CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Governmental:
Administration
1.34
1.47
1.30
1.45
1.15
1.15
1.15
0.91
1.15
1.15
Human resources
0.06
0.06
0.07
0.02
0.01
0.02
0.02
0.02
0.02
0.02
City clerk
1.84
1.84
1.84
1.91
1.43
1.29
1.34
1.34
1.34
1.34
Elections
0.10
0.10
0.10
0.10
0.08
0.10
0.10
0.10
0.10
0.10
Financial administration
3.72
2.99
3.95
2.35
1.97
1.85
1.85
1.84
1.85
1.85
Information systems
1.01
0.91
0.91
0.91
0.91
0.91
0.91
0.91
0.91
0.91
Planning and zoning
3.57
4.57
4.75
4.75
4.25
3.70
3.70
3.76
3.70
3.70
Engineering
4.57
4.67
4.57
4.78
4.41
4.28
4.33
4.16
4.33
4.33
Facility Management
-
-
-
-
-
0.33
0.20
0.21
0.07
0.22
EDA general
1.38
1.21
0.70
0.70
0.85
0.90
0.85
0.78
0.85
0.85
LRRWMO
0.31
0.21
0.21
0.21
0.21
0.20
0.20
0.24
0.20
0.20
Risk management
0.13
0.13
0.18
0.10
0.10
0.10
0.10
0.10
0.10
0.10
Public Safety:
Fire
3.31
3.25
3.10
3.10
3.10
3.10
3.10
3.10
3.10
3.10
Protective inspection
5.91
5.58
6.03
6.08
5.78
3.93
3.93
3.66
3.93
3.93
Civil defense
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
Public Works:
Streets and highways
5.02
5.35
6.12
6.20
6.00
5.05
5.10
5.59
5.46
5.10
Snow and ice
3.85
3.92
3.27
3.49
3.21
2.45
2.45
2.57
2.03
2.55
Street signs
1.17
1.20
1.35
1.44
1.41
1.31
1.41
1.46
1.43
1.41
Forestry
0.10
0.10
0.10
-
-
-
-
-
-
-
ROW management / utility
0.75
0.85
0.85
0.60
0.65
0.50
0.20
0.16
0.20
0.20
Water
4.93
5.04
5.57
4.78
4.84
4.63
4.63
4.70
4.74
4.63
Sewer
2.77
3.15
2.97
3.18
3.24
3.38
3.38
3.23
3.17
3.38
Storm sewer
1.60
1.60
2.01
1.95
2.20
2.55
2.55
2.87
2.54
2.55
Central equipment
2.90
2.91
2.92
2.96
2.96
2.87
2.90
2.91
2.91
2.90
Park & Recreation:
Park and recreation
6.66
6.85
7.33
7.05
6.85
6.66
6.71
6.69
6.77
7.60
Community center
-
2.10
2.12
2.12
2.23
2.96
3.11
3.04
3.25
3.10
Recycling
1.21
1.26
0.93
0.88
0.86
1.23
1.23
0.96
1.30
1.23
58.55
61.37
63.30
61.16
58.75
55.50
55.50
55.36
55.50
56.50
Source: City Finance Department
Note: Employees are allocated to various departments based on the functions that they perform.
148
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149
CITY OF ANDOVER, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Years
Function/Program
2004
2005
2006
2007
2008
General government:
Registered voters
16,094
n/a
17,500
n/a
17,830
Number of precincts
10
n/a
10
n/a
10
Public safety:
Police:
Number of calls for services
12,675
12,861
14,500
12,150
11,617
Number of traffic citations
1,795
1,795
1,850
1,710
2,475
Number of patrol hours
30,856
30,856
30,858
30,240
30,240
Fire:
Fire responses
420
325
460
366
326
Emergency medical responses
580
594
690
736
797
Protective inspections:
Inspections
6,396
6,536
8,117
5,456
5,020
Residential permits
251
226
153
91
49
Other permits
1,162
2,473
3,128
2,095
1,862
Public works:
Streets and highways:
Asphalt streets maintained (miles)
176
178
182
189
189
Gravel roads maintained (miles)
8
8
7
8
8
Cul -de -sacs and dead ends maintained
310
320
324
330
336
Parks and recreation:
Number of City parks
58
58
63
65
66
Total acreage mowed
272
265
273
297
297
Ballfields maintained
26
25
25
27
28
Number of playgrounds
36
33
36
37
37
Soccer fields maintained
22
20
19
16
19
Trail maintained (miles)
24
26
29
35
35
Community center bookings (hrs):
Fieldhouse
n/a
1,405
7,450
8,514
8,282
Ice arena
n/a
2,002
2,405
2,497
2,393
Water:
New connections
220
247
197
63
33
Total customers
5,410
5,657
5,854
5,917
5,950
Annual consumption
(thousands of gallons)
862,265
856,671
911,712
1,046,789
993,626
Sanitary Sewer:
New connections
198
229
186
120
23
Total customers
6,291
6,528
6,717
6,777
6,800
Storm Sewer:
Total customers
9,446
9,516
9,744
9,785
9,800
Storm sewer lines maintained (miles)
39
43
47
65
66
Source: Various City Departments
W111
Table 19
2009 2010 2011 2012 2013
n/a 18,713 n/a 18,366 n/a
n/a 10 n/a 10 n/a
11,075
11,441
11,650
10,963
10,659
2,848
1,926
2,000
2,202
2,450
30,240
30,240
29,200
29,200
29,200
305
323
265
320
300
754
722
764
816
900
3,716
2,860
3,074
3,872
3,766
42
71
58
81
98
1,543
1,773
1,755
1,714
1,716
189
190
191
191
200
8
8
7
7
7
338
338
338
338
338
66
47
50
49
50
293
293
302
302
318
28
28
28
28
28
37
38
38
38
39
19
19
21
17
20
35
35
35
33
35
9,718
11,099
11,461
11,426
11,831
2,640
2,583
2,575
2,805
2,543
145
56
78
38
108
6,095
6,151
6,229
6,267
6,375
1,000,971
905,561
854,672
1,050,378
947,201
183
75
77
38
108
6,983
7,058
7,135
7,173
7,281
9,950
10,042
10,126
10,164
10,583
69
69
69
69
73
IN
CITY OF ANDOVER, XHNNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Years
Table 20
Function/Program 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Public Safety:
Fire :
Stations 3 3 3 3 3 3 3 3 3 3
Fire vehicles 18 18 18 20 20 21 22 21 21 20
Protective inspections:
Vehicles 4 3 3 3 3 3 3 4 4 4
Streets (miles)
184
186
189
189
189
189
190
191
191
200
Streetlights
7,505
7,551
8,101
1,204
1,212
1,215
1,218
1,225
1,231
1,231
Traffic signals
18
20
20
22
23
23
24
24
24
24
Parks and Recreation:
Parks
58
58
63
65
66
66
47
50
49
50
Ball fields
35
25
28
27
28
28
28
28
28
28
Soccer fields
25
16
16
16
19
19
19
21
17
20
Playgrounds
36
33
36
37
37
37
38
38
38
39
Trails (miles)
24
26
29
35
35
35
35
35
33
35
Community centers
-
1
1
1
1
1
1
1
1
1
Water:
Water treatment plants
1
1
1
1
1
1
1
1
1
1
Storage facilities
3
3
3
3
3
3
2
2
2
2
Water main (miles)
1
79
84
108
108
108
108
109
111
112
Connections
5,300
5,450
5,760
5,917
5,950
6,095
6,151
6,229
6,267
6,375
Sanitary sewer:
Sewer main (miles)
n/a
82
87
91
91
91
93
93
93
94
Connections
6,100
6,250
6,560
6,777
6,800
6,983
7,058
7,135
7,173
7,281
Number of lift stations
7
8
9
9
9
9
9
9
9
9
Storm sewer:
Storm sewer lines (miles)
39
43
47
65
66
69
69
69
69
73
152
IV. OTHER FINANCIAL INFORMATION
153
CITY OF ANDOVER, MINNESOTA
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2013
GOVERNMENTAL ACTIVITIES:
Revenue Bonds:
2004 EDA Pub Fac Lease Revenue Bonds
Abatement Bonds:
2012C G.O. Abatement Bonds
Certificates of Indebtedness:
2011A G.O. Equipment Certificates
2012A G.O. Equipment Certificates
Total certificates of indebtedness
Capital Improvement Bonds:
2004A G.O. Capital Improvement Bonds
2012B G.O. Capital Improvement Refunding Bonds
Total capital improvement bonds
Permanent Improvement Revolving Bonds:
2010A Perm Improv Revolving Refunding Bonds
State Aid Bonds:
2009A State Aid Street Refunding Bonds
Referendum Bonds:
2010A G.O. Open Space Referendum Bonds
Total bonded indebtedness
Promissory note payable
Compensated absences payable
Total governmental activities indebtedness
BUSINESS -TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2007B G.O. Water Revenue Refunding Bonds
2009A G.O. Water Revenue Bonds
Total general obligation revenue bonds
Compensated absences payable
Total business -type activities indebtedness
Total City indebtedness
48,283,593
3/13/2007 2/1/2023 4.00 -4.25% 6,570,000
3/26/2009 2/1/2024 2.00 -4.25% 1,025,000
7,595,000
154
7,595,000
$ 55,878,593
Authorized
Issue
Maturity
Interest
and
Date
Date
Rate
Issue
4/23/2004
2/1/2014
2.21 -5.40%
$ 19,580,000
12/27/2012
2/1/2031
1.00 -3.00%
17,315,000
3/1/2011
2/1/2014
2.00%
265,000
3/22/2012
2/1/2017
2.00%
585,000
850,000
3/16/2004
2/1/2013
2.00 -3.75%
3,890,000
3/22/2012
2/1/2016
2.00%
1,570,000
5,460,000
2/18/2010
2/1/2014
2.00%
1,480,000
3/26/2009
2/1/2015
2.25 -2.80%
955,000
2/18/2010
2/1/2022
2.00-3.12%
1,660,000
47,300,000
12/17/2013
11/15/2018
n/a
983,593
48,283,593
3/13/2007 2/1/2023 4.00 -4.25% 6,570,000
3/26/2009 2/1/2024 2.00 -4.25% 1,025,000
7,595,000
154
7,595,000
$ 55,878,593
Exhibit 1
Principal Payments
Prior Current Outstanding 2014 Payment
Years Year 12/31/13 Principal Interest Total
$ 2,205,000 $ 450,000 $ 16,925,000 $ 16,925,000 $ 434,373 $ 17,359,373
- 320,000 16,995,000 320,000 385,681 705,681
76,000 94,000 95,000 95,000 950 95,950
- - 585,000 - 11,700 11,700
76,000 94,000 680,000 95,000 12,650 107,650
2,005,000 1,885,000 - - - -
- 100,000 1,470,000 500,000 24,400 524,400
2,005,000 1,985,000 1,470,000 500,000 24,400 524,400
720,000 375,000 385,000 385,000 3,850 388,850
435,000 230,000 290,000 230,000 4,785 234,785
135,000 135,000 1,390,000 140,000 34,765 174,765
5,576,000 3,589,000 38,135,000 18,595,000 900,504 19,495,504
- - 983,593 196,719 - 196,719
- - 612,569 - - -
5,576,000 3,589,000 39,731,162 18,791,719 900,504 19,692,223
- 485,000 6,085,000 505,000 236,646 741,646
175,000 60,000 790,000 60,000 27,160 87,160
175,000 545,000 6,875,000 565,000 263,806 828,806
- - 153,807 - - -
175,000 545,000 7,028,807 565,000 263,806 828,806
$ 5,751,000 $ 4,134,000 $ 46,759,969 $ 19,356,719 $ 1,164,310 $ 20,521,029
155
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF TAX CAPACITY RATES AND LEVIES
Tax capacity values
Captured tax increment value
Fiscal disparities - contribution
Local taxable value
Fiscal disparities - distribution
Adjusted tax capacity
General Revenue Levy:
General Fund
Capital Equipment/Projects
Parks Projects
Road and Bridge
Pedestrian Trail Maintenance
Total General Revenue Levy
Debt Service Levy:
2004A G.O. Capital Improvement Bonds
2004 EDA Public Facility Revenue Bonds
2011A G.O. Equipment Certificate
2012A G.O. Equipment Certificate
2012B G.O. Capital Improv Refund Bonds
2012C G.O. Abatement Bonds
2014 G.O. Equipment Certificate
Total Debt Service Levy
Lower Rum River Watershed
Total
Voter - Approved Open Space Referendum - MV
Exhibit 2
Taxes Payable
$ 21,978,322
(327,433)
(1,035,107)
20,615,782
4,202,605
$ 24,818,387
2014
Certified Tax Capacity
Levy Rate
$ 7,435,891
210,000
61,500
967,197
58,271
8,732,859
181,803
140,000
561,015
740,965
260,000
1,883,783
40,000
10,656,642
$ 10,843,925
156
35.486%
7.711%
0.460%
43.657%
0.00841%
$ 22,569,018
(336,580)
(1,077,175)
21,155,263
4,256,749
$ 25,412,012
2013
Certified Tax Capacity
Levy Rate
$ 7,332,857
210,000
61,500
967,197
58,271
8,629,825
381,290
452,082
101,745
125,000
138,339
578,045
1,776,501
40,000
10,446,326
184,973
$ 10,631,299
33.723%
6.998%
41.170%
0.00814%
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIES
GENERAL OBLIGATION BONDS
December 31, 2013
Exhibit 3
157
Capital
EDA Public
Open Space
Certificates of
Improvement
Facility Lease
Abatement
Referendum
Total
Taxes
Indebtedness
Refunding Bonds
Revenue Bonds
Bonds
Bonds
Deferred Tax
Payable
2012A
2012B
2004
2012C
2010A
Levies
2014
$ 24,570
$ 555,870
$ 949,592
$ 742,645
$ 184,973
$ 2,457,650
2015
64,785
545,370
-
1,280,035
187,283
2,077,473
2016
572,985
503,370
-
1,281,768
184,238
2,542,361
2017
-
-
-
1,283,395
186,291
1,469,686
2018
-
-
-
1,281,190
187,840
1,469,030
2019
-
-
-
1,278,670
188,777
1,467,447
2020
-
-
-
1,286,335
183,989
1,470,324
2021
-
-
-
1,282,975
184,199
1,467,174
2022
-
-
-
1,284,550
184,078
1,468,628
2023
-
-
-
1,280,455
-
1,280,455
2024
-
-
-
1,285,285
-
1,285,285
2025
-
-
-
1,283,015
-
1,283,015
2026
-
-
-
1,282,883
-
1,282,883
2027
-
-
-
1,280,744
-
1,280,744
2028
-
-
-
1,281,781
-
1,281,781
2029
-
-
-
1,291,027
-
1,291,027
2030
-
-
-
1,292,340
-
1,292,340
2031
-
-
-
1,297,800
-
1,297,800
$ 662,340
$ 1,604,610
$ 949,592
$ 22,576,893
$ 1,671,668
$ 27,465,103
157
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERS
December 31, 2013
158
Exhibit 4
General Fund Admin Allocation
General Fund Admin Allocation
Development of 40 Acre Park Complex
Debt Service Allocation
Roadway Degredation
Debt Service Allocation
Close Debt Service Fund
Debt Service Allocation
Debt Service Allocation
Replacement Reserve
Roadway Degredation
Park Development Tax Levy Transfer
Close Debt Service Fund
Development of 40 Acre Park Complex
Park Development Tax Levy Transfer
Development of 40 Acre Park Complex
Development of 40 Acre Park Complex
Debt Service Allocation
Debt Service Allocation
General Fund Admin Allocation
General Fund Admin Allocation
Replacement Reserve
Transfer
Transfer
In
Out
General Fund
Water EF
$ 150,250
$
Sewer EF
46,680
-
135,000
Total General Fund
196,930
135,000
Special Revenue Funds (SRF)
Community Center SIZE
2004 EDA Public Facility Lease Revenue Bond DSF
-
371,598
Right of Way Management / Utility SRI
Road and Bridge CPF
9,350
Total Special Revenue Funds
-
380,948
Debt Service Funds (DSF)
2004 EDA Public Facility Lease Revenue Bonds DSF
Community Center SIZE
371,598
-
2004A G.O. Capital Improvement Bonds DSF
Building CPF
-
48,685
2010A PIR Refunding Bonds DSF
PIR CPF
385,000
-
Total Debt Service Funds
756,598
48,685
Capital Proiects Funds (CPF)
Water Trunk CPF
Water EF
-
4,242
Sewer Trunk CPF
Sewer EF
400,000
-
Road and Bridge CPF
Right of Way Management / Utility SRI
9,350
-
Park Dedication Projects CPF
Capital Equipment Reserve CPF
-
100,000
Building CPF
2004A G.O. Capital Improvement Bonds DSF
48,685
-
Capital Equipment Reserve CPF
General Fund
135,000
Park Dedication Projects CPF
100,000
PIR CPF
300,000
535,000
-
PIR CPF
Capital Equipment Reserve CPF
-
300,000
2010A PIR Refunding Bonds DSF
385,000
-
685,000
Total Capital Projects Funds
993,035
789,242
Enterprise Funds (EF)
Water EF
Water Trunk CPF
4,242
-
General Fund
-
150,250
4,242
150,250
Sewer EF
General Fund
-
46,680
Sewer Trunk CPF
400,000
-
446,680
Total Enterprise Funds
4,242
596,930
Total All Funds
$ 1,950,805
$ 1,950,805
158
Exhibit 4
General Fund Admin Allocation
General Fund Admin Allocation
Development of 40 Acre Park Complex
Debt Service Allocation
Roadway Degredation
Debt Service Allocation
Close Debt Service Fund
Debt Service Allocation
Debt Service Allocation
Replacement Reserve
Roadway Degredation
Park Development Tax Levy Transfer
Close Debt Service Fund
Development of 40 Acre Park Complex
Park Development Tax Levy Transfer
Development of 40 Acre Park Complex
Development of 40 Acre Park Complex
Debt Service Allocation
Debt Service Allocation
General Fund Admin Allocation
General Fund Admin Allocation
Replacement Reserve