HomeMy WebLinkAbout2014 CAFR
COMPREHENSIVE
ANNUAL
FINANCIAL
REPORT
FOR THE YEAR ENDED DECEMBER 31, 2014
MINNESOTA
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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, 2014
Prepared By: Finance Department
City of Andover
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
I. INTRODUCTORY SECTION
Letter of Transmittal2
Organization10
Organizational Chart11
Certificate of Achievement12
II. FINANCIAL SECTION
Independent Auditor's Report14
Management's Discussion and Analysis17
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net PositionStatement 129
Statement of ActivitiesStatement 230
Fund Financial Statements:
Balance Sheet - Governmental FundsStatement 332
Statement of Revenues, Expenditures, and Changes in Fund Balances -
Governmental FundsStatement 434
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities Statement 537
Statement of Net Position - Proprietary FundsStatement 638
Statement of Revenues, Expenses, and Changes in Fund Net Position -
Proprietary FundsStatement 740
Statement of Cash Flows - Proprietary FundsStatement 842
Statement of Net Position - Fiduciary FundsStatement 944
Notes to Financial Statements45
Required Supplementary Information:
Budgetary Comparison Schedule - General FundStatement 1078
Schedule of Funding Progress - Other Post Employment Benefits PlanStatement 1180
Notes to Required Supplementary Information:
Budgets81
Modified Approach for City Streets and Trails Infrastructure Capital Assets81
Combining and Individual Fund Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental FundsStatement 1285
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Nonmajor Governmental FundsStatement 1386
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
Nonmajor Special Revenue Funds:
Subcombining Balance Sheet - Nonmajor Special Revenue FundsStatement 1488
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue FundsStatement 1590
Nonmajor Debt Service Funds:
Subcombining Balance Sheet - Nonmajor Debt Service FundsStatement 1694
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Debt Service FundsStatement 1796
Nonmajor Capital Projects Funds:
Subcombining Balance Sheet - Nonmajor Capital Project FundsStatement 18100
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Capital Project FundsStatement 19102
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual:
EDA GeneralStatement 20104
Community CenterStatement 21105
Drainage and MappingStatement 22106
LRRWMOStatement 23107
ForestryStatement 24108
Right-of-Way Management/UtilityStatement 25109
Charitable GamblingStatement 26110
Construction Seal CoatingStatement 27111
Internal Service Funds:
Combining Statement of Net Position - Internal Service FundsStatement 28113
Combining Statement of Revenues, Expenses, and Changes in Net Position -
Internal Service FundsStatement 29114
Combining Statement of Cash Flows - Internal Service FundsStatement 30115
Agency Funds:
Combining Statement of Net Position - Fiduciary FundsStatement 31117
Combining Statement of Changes in Assets and Liabilities - Fiduciary FundsStatement 32118
III. STATISTICAL SECTION
Net Position by Component - Last Ten Fiscal Years Table 1120
Changes in Net Position - Last Ten Fiscal Years Table 2122
Fund Balances - Governmental Funds - Last Ten Fiscal Years Table 3126
Changes in Fund Balances - Governmental Funds - Last Ten Fiscal Years Table 4128
Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal YearsTable 5130
Property Tax Rates - Per $1,000 of Assessed Tax Capacity Value - Direct and Overlapping
Governments - Last Ten Fiscal YearsTable 6131
Property Tax Levies and Collections - Last Nine Fiscal YearsTable 7132
Principal Taxpayers - Current Year and Nine Years AgoTable 8133
Estimated Market Values and New Construction - Last Ten Fiscal YearsTable 9134
Special Assessment Levies and Collections - Last Ten Fiscal YearsTable 10135
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita -
Last Ten Fiscal YearsTable 11136
Computation of Direct and Overlapping DebtTable 12137
Computation of Legal Debt Margin - Last Ten Fiscal YearsTable 13138
Pledged-Revenue Coverage - Last Ten Fiscal YearsTable 14141
Outstanding Debt by Type - Last Ten Fiscal YearsTable 15142
Demographic and Economic Statitistics - Last Ten YearsTable 16144
Principal Employers - Current Year and Nine Years AgoTable 17145
Full Time Equivalent Employees - City Government Employees by Function/Program -
Last Ten Fiscal YearsTable 18147
Operating Indicators by Function/Program - Last Ten YearsTable 19148
Capital Asset Statistics by Function/Program - Last Ten YearsTable 20150
IV. OTHER INFORMATION
Combined Schedule of IndebtednessExhibit 1152
Schedule of Tax Capacity Rates and LeviesExhibit 2154
Schedule of Deferred Tax Levies - General Obligation BondsExhibit 3155
Schedule of Fund TransfersExhibit 4156
I. INTRODUCTORY SECTION
1
1685 CROSSTOWN BOULEVARD N.W. ANDOVER, MINNESOTA 55304 (763) 755-5100
FAX (763) 755-8923 WWW.ANDOVERMN.GOV
May 7, 2015
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
II. Financial
III. Statistical
Introductionincludes a list of the City's principal officials as of December 31, 2014, the table of contents, the public
The
Financial Section
officials, organizational chart, and this Letter of Transmittal. The 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
Statistical Section
supplemental information. The 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
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To the Honorable Mayor and City Council
City of Andover, Minnesota
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.
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,
Anoka County Union Newspaper
research reveals that the name Andover first appeared in an article dated March 14, 1899 in the
-
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 32,000. 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:
Mayor and City councilFinancial administrationInformation systems
NewsletterElectionsFacility management
City clerkAssessingEngineering
AdministrationLegalRisk management
Human resourcesPlanning and zoning
Public Safety:
PoliceProtective inspectionAnimal control
Fire protectionCivil defense
Public Works:
Streets and highwaysStreet signsTraffic signals
Snow and ice removalCentral equipment maintenanceWater maintenance
Street lighting
Sanitation:
Storm sewersSanitary 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 2015 and 2016, with an estimated population of 32,500 by 2015. 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 2014. 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.
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To the Honorable Mayor and City Council
City of Andover, Minnesota
The City's General Fund has two major categories of revenue, which accounted for 85% of the total in 2014. They are general
property taxes at 75% and charges for services at 10%. 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.
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 $74,655. Due to the unpredictability of the State, those funds will
be used to fund one-time capital projects or help offset the growing needs of the Road and Bridge Capital Projects Fund for street
improvements/replacements. The City is not intending to rely on this funding for general operational needs.
For 1998 through 2000, cities with populations over 2,500 were under levy limit restrictions imposed by the State. Levy limits
severely curb the ability of cities to generate additional tax revenue needed to respond to an increasing demand for services. For
1999 and 2000, the levy limit formula was modified to allow for increases based on commercial and industrial growth. This was
a favorable change for Andover, as the City experienced a surge in commercial growth during the past few years. Levy limits
were lifted for 2001 but were reinstated for 2002 - 2004. The 2004 levy limits were so severe that the State did not allow cities
the ability to capture residential and commercial market value growth. Levy limits were lifted from 2005 to 2008, but reinstated
for 2009 and are still in place in some form today.
The City’s General Fund receives a substantial amount of revenue from licenses and permits. The past ten years are shown
below:
RevenuesChange
2005724,436$n/a
2006598,094 $(126,342)
2007475,893 (122,201)
2008525,339 49,44
6
2009291,903 (233,436)
2010329,901
37,998
2011387,206
57,305
2012449,826 62,62
0
2013536,706 86,88
0
2014364,430 (172,276)
Revenue from residential building continued to modestly increase from 2010 to 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. From 2010 to 2013, the home building market showed signs of improvement and some commercial
activity taking place accounted for the increase in permit revenue. In 2014, there was a decrease in both residential and
commercial activity.
The City’s General Fund also receives a considerable amount of revenue from charges for services. The past ten years are shown
below:
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To the Honorable Mayor and City Council
City of Andover, Minnesota
RevenuesChange
2005$933,365n/a
2006780,273$(153,092)
2007341,369
1 ,121,642
2008772,430(349,212)
2009701,289(71,141)
2010755,18453,895
2011866,584111,400
2012973,605107,021
2013148,856
1 ,122,461
2014998,510(123,951)
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
butthe decrease in 2009 was expected due to the struggling economy. From 2010to 2013, the home building market showed
signs of improvement and some commercial activity taking place accounted for the increase in plan review revenue. In 2014, the
decrease in both residential and commercial activity resulted in a decrease as compared to 2013.
In 2014, the City issued 52 new single-family building permits with a total valuation of $13,926,901 compared to 98 new single-
family building permits with a total valuation of $20,351,892 the prior year. The past ten years are shown below:
ResidentialCommercial / Industrial
PermitsValuationPermitsValuation
2005226 34,309,393$20 6,571,671$
2006153 25,236,1208 1,791,896
200791 18,347,8739 2,403,831
200849 11,116,40011 16,878,603
200947 9,246,34713767,430
201071 14,700,80011 1,247,106
201158 11,803,00024 11,461,453
201281 15,243,00725 5,042,964
201398 20,351,89215 9,249,466
201452 13,926,90114 4,285,281
Residential Development
New residential development included the development of a 64 lot subdivision known as Country Oaks North, a four lot
residential subdivision know as Winslow Woods, a 18 lot residential planned unit development known as Carson Ridge, and a 71
lot residential development known as Catchers Creek.
The City currently has a supply of 217 single family urban lots and 18 single family rural lots.As of spring 2015, there are 4 new
urban residential developments in various phases of the subdivision/platting approval process totaling 116 lots that have the
potential to be coming on line in 2015/2016.
Commercial Industrial Development
New institutional/commercial/industrial construction did occur in 2014. Cherrywood of Andover opened a 20 unit senior
th
housing facility located at 1889 139 Ave NW and TE Connectivity constructed 52,000 s.f. light manufacturing facility at 1711
th
139 Lane NW.
EMPLOYMENT
-Hennepin School District has a significant
arters 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:
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To the Honorable Mayor and City Council
City of Andover, Minnesota
Number of
FirmType of Business / ProductEmployees
Anoka-Hennepin ISD No 11Elementary and secondary education760
Fairview - Andover ClinicHealthcare300
Anoka County Sheriff's OfficeCounty government and service250
s
Kottkes' Bus Service, Inc.Bus transportation225
Wal-MartRetail210
YMCAYouth organization - fitness center186
TargetRetail170
Anoka County Highway DepartmentCounty government and service103
s
Bunker Hills Regional Park / Activity CenterCounty government and services100
Andover County MarketRetail85
MAJOR INITIATIVES
FOR THE YEAR.
The City has many accomplishments to report for 2014. 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 340 single family rental licenses issued throughout the City in 2014.
2)In 2014, the City saw a resurgence in new residential development including the development of a 64 lot subdivision
known as Country Oaks North, a 4 lot residential subdivision know as Winslow Woods, an 18 lot residential planned
unit development known as Carson Ridge, and a 71 lot residential development known as Catchers Creek.
3)In 2013 the City of Andover and City of Anoka, in cooperation with the Anoka County Highway Department, saw the
start of the Bunker Lake Boulevard and County Road 7 reconstruction that was financed primarily by a federal grant.
A trail was also added to this reconstruction project and was funded by a Metropolitan Council Regional Trail Grant.
The construction was completed mid-summer 2014.
4)In 2013 the City welcomed the construction of a new Pizza Ranch restaurant on an abandoned 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 and the restaurant was officially open in January 2014.
5)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 2015. In December 2014, the City
EDA closed on 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.
6)In 2013 the City EDA negotiated the sale of an Andover Station North commercial/industrial parcel to Measurement
Specialties Incorporated, a global designer and manufacturer of sensors and sensor based systems. A December 2013
sale closing was completed on the lot, and the construction of a 52,000 sq. ft. manufacturing facility took place in 2014.
A ribbon cutting was held in December 2014 by TE Connectivity Incorporated, during the construction of the facility,
Measurement Specialties Incorporated was purchased by TE Connectivity and upon opening approximately 150 jobs
were located in the City of Andover. Talks of a future expansion of the facility with TE Connectivity have already
started.
7)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. The EDA sold other portions of this development to separate developers to construct an
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To the Honorable Mayor and City Council
City of Andover, Minnesota
advanced/assisted living facility and an eight-unit townhome structure. A final fragment of the original development
was sold to a developer in 2014 to be platted into four single family lots.
8) 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 started in late 2013 and the facility was open in July 2014.
9) 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 2015. With this sale, all that remains in the Parkside at Andover Station development is one four-unit townhome
lot.
10) In 2014 the City EDA sold the final fragment of the original Parkside at Andover Station development to Povlitski
Properties LLC so the residual parcel could be added to a single family residential subdivision. It is anticipated that the
residual parcel will add four single family residential lots. Construction of the project is expected to occur in spring
2015.
11) 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 started during in the
summer of 2013, with the completion of environmental cleaning in 2014.
12) 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,
lighting and accompanying parking. The facility was open for limited activities in late summer of 2014.
13) The City secured a lease with Subway LLC in 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 bee
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.
The Most Prolific Recycling Program in 2013
14) In 2014, the City of Andover received 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 2014 the City completed 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.
15)
business community and strengthens relationships with this important element of the Andover community. This event
was coordinated through the Community Development Department.
16) 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), a third purchase in January 2014 (Aasness) and a fourth
purchase in November 2014 (Selmer/Blanchette). It is anticipated that one last parcel will be purchased in 2015.
Throughout 2014, the City Parks Department focused on creating nature trails, appropriate signage and accessibility to
the open space parcels.
17) The City's Comprehensive Annual Financial Report (CAFR) for the year ended December 31, 2013 was awarded the
document internally and recognized significant cost savings in the form of reduced financial consulting fees. This is
December 31, 2014 will also achieve this award.
18) For the thirteenth year in a row, the City of Andover was awarded the Government Finance Officers Association
Distinguished Budget Presentation Award for the City's 2014 Annual Budget. This award recognizes excellence in the
perations guide, as a financial plan and as a
communications device.
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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 2014 the City started
accepting online and counter credit card payments for various City permits and 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 initiated and completed a community survey in early
2014, the City received very high marks.
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, 2014. This is the
thirteenth year in a row the City of Andover has received this award. In order to receive this award, a governmental unit must
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To the Honorable Mayor and City Council
City of Andover, Minnesota
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
beginning January 1, 2015 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 2013 Comprehensive Annual Financial Report. This is the twelfth 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 2014
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. Redpath and
Company, 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
9
CITY OF ANDOVER, MINNESOTA
ORGANIZATION
December 31, 2014
OfficeName
Term
MayorMichael GamacheJanuary 5, 2015
Council MemberTony HowardJanuary 5, 2015
Council MemberMichael KnightJanuary 3, 2017
Council MemberSheri BukkilaJanuary 3, 2017
Council MemberJulie TrudeJanuary 5, 2015
City Administrator / City ClerkJames DickinsonAppointed
Community Development DirectorDavid CarlbergAppointed
Director of Public Works / City EngineerDavid BerkowitzAppointed
Finance ManagerLee BrezinkaAppointed
Building OfficialFred PatchAppointed
Fire ChiefJerry StreichAppointed
AttorneyHawkins & Baumgartner, P.A.Appointed
Fiscal ConsultantsEhlers & Associates, Inc.Appointed
10
CITY OF ANDOVER
Organizational Chart
11
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, 2014, 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.
4810 White Bear Parkway, St. Paul, MN, 55110 651.426.7000
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, 2014, 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.
Report on Summarized Comparative Information
We have previously audited the City of Andover, Minnesota’s 2013financial 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 7, 2014. In our opinion, the summarized comparative information presented
herein as of and for the year ended December 31, 2013 is consistent, in all material respects, with the
audited financial 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.
15
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
information section 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 information section 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,
2015, on our consideration of the City of Andover, Minnesota’s internal control over financial
reporting and on our test 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.
REDPATH AND COMPANY, LTD.
St. Paul, Minnesota
May 7, 2015
16
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2014
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, 2014. 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 $166,862,761 (Net position). Of this amount,
$32,765,859 (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 $5,565,443, primarily due to the budget savings, an increase in commercial / residential
construction and the advancement of state aid construction monies.
As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $28,799,003.
SpecialDebtCapital
GeneralRevenueServiceProjectsTotals
Nonspendable137,001$$ 1,562$ -$ -$ 138,563
Restricted - 55,210 1,073,5353,894,222 5,022,967
Committed -591,289 - 591,289
-
Assigned - 9,269 16,086,126-16,095,395
Unassigned7,065,133 (49,926) -(64,418) 6,950,789
$ 7,202,134$607,404$ 1,073,535$ 28,799,00319,915,930$
The City’s total long-term liabilities decreased by $17,747,645 during the current fiscal year, primarily due to the scheduled debt service
payments made in 2014.
BeginningEnding
BalanceAdditionsReductionsBalance
Governmental activities:
Bonds payable$38,135,000$1,555,000$ (18,595,000)$21,095,000
Other post employment benefits157,465 31,138 (4,449)184,154
Promissory note payable 983,593 -(196,719)786,874
Compensated absences 612,569 351,889(335,512)628,946
Total governmental activities39,888,6271,938,027(19,131,680)22,694,974
Business-type activities:
Bonds payable 6,875,000 -(565,000)6,310,000
Other post employment benefits21,473 3,849 (2,561) 22,761
Compensated absences 153,807 64,204 (54,484)163,527
Total business-type activities7,050,280 68,053(622,045)6,496,288
Total City long-term liabilities46,938,907$$2,006,080$ (19,753,725)$29,191,262
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
December 31, 2014
The statement of net position
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.
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
-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 servi
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, 2014
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 75 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 118 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 $166,862,761 at the close of the most recent fiscal year.
The largest portion of the City’s net position ($129,320,855 or 77 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
Governmental ActivitiesBusiness-Type ActivitiesTotals
201320142013201420132014
Current and other assets46,234,230$$33,051,443$6,628,421$ 7,025,499$52,862,651$40,076,942
Capital assets115,237,130116,069,32341,739,659 41,097,382156,976,789157,166,705
Total assets161,471,360149,120,76648,368,080 48,122,881209,839,440197,243,647
Long-term liabilities
outstanding39,888,62722,694,9747,050,280 6,496,29046,938,90729,191,264
Other liabilities1,460,904 1,024,431142,311 165,1911,603,2151,189,622
Total liabilities41,349,53123,719,4057,192,591 6,661,48148,542,12230,380,886
Net position:
Net invested in capital asset 94,533,47393,393,474 34,864,659 34,787,382 128,258,133 129,320,855
s
Restricte 4,776,0473,792,323 -3,792,3234,776,047
d
-
Unrestricte 26,091,84122,936,032 6,310,830 6,674,018 29,246,862 32,765,859
d
Total net position120,121,829$ 125,401,361$ 41,175,489$ 41,461,400$ 161,297,318$ 166,862,761$
A portion of the City's net position represents resources that are subject to external restrictions on how they may be used. The remaining
balance of unrestricted net position ($32,765,859) may be used to meet the City's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net position, both for the City as a
whole, as well as for its separate governmental and business-type activities.
19
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2014
Government-wide Activities
Governmental activities increased the City's net position by $5,279,532 and business-type activities increased net position by $285,911. Key
elements of the activities are as follows:
City of Andover's Changes in Net Position
Governmental ActivitiesBusiness-Type ActivitiesTotal
201320142013201420132014
Revenues:
Program revenues:
Charges for services3,614,230$$ 3,296,147$4,960,445$4,886,443$8,574,675$8,182,590
Operating grants
and contributions1,119,778 946,540-9,5061,119,778956,046
Capital grants
and contributions1,425,815 4,677,704-990,4121,425,8155,668,116
General revenues:
Property taxes10,608,678 10,863,912 10,608,678-10,863,912
-
Tax increment320,822 353,773-320,822353,773
-
Grants and contributions
not restricted to
specific programs12,511 87,179-12,51187,179
-
Unrestricted investments
earnings571,307 747,621(21,533)115,425549,774863,046
Total revenues17,673,141 20,972,8764,938,9126,001,78622,612,05326,974,662
Expenses:
General government3,061,867 2,791,507-3,061,8672,791,507
-
Public safety4,495,447 4,747,142-4,495,4474,747,142
-
Public works4,465,153 4,430,295-4,465,1534,430,295
-
Parks and recreation3,029,917 3,229,894-3,029,9173,229,894
-
Recycling124,515 111,760-124,515111,760
-
Economic development318,646 676,039-318,646676,039
-
Interest on long-term debt1,399,172 542,139-1,399,172542,139
-
Water- -2,275,3632,308,5522,275,3632,308,552
Sewer- -1,964,9111,951,7851,964,9111,951,785
Storm sewer- -561,807848,745561,807848,745
Total expenses16,894,717 16,528,7764,802,0815,109,08221,696,79821,637,858
Increase (decrease) in net
position before gain on the
sale of capital assets and
transfers778,424 4,444,100136,831892,704915,2555,336,804
Gain on the sale of
capital assets23,650 228,6398,000-31,650228,639
Transfers(323,654) 606,793323,654(606,793)
- -
Increase in net position478,420 5,279,532468,485285,911946,9055,565,443
Net position - beginning119,643,409 120,121,82940,707,00441,175,489160,350,413161,297,318
Net position - ending120,121,829$$ 125,401,361$41,175,489$41,461,400$ 166,862,761161,297,318$
20
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2014
Governmental Activities
Following are specific graphs that provide comparisons of the governmental activities revenues and expenses:
Governmental Activities - Revenues
Grants and
Unrestricted
contributions not
Charges for services
investments earnings
restricted for specific
15.5%
3.5%
programs
Tax increment
0.4%
1.7%
Gain (loss) on the sale
of capital assets
1.1%
Capital grants and
Property taxes
contributions
51.2%
22.1%
Operating grants and
contributions
4.5%
Governmental Activities - Expenses
Interest on long-term debt
3.3%
General government
16.9%
Economic development
4.1%
Recycling
0.7%
Parks and recreation
19.5%
Public safety
28.7%
Public works
26.8%
21
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2014
Business-Type Activities
Business-type activities increased net position by $285,911. Below are graphs showing the business-type activities revenue and expense
comparisons:
Business-Type Activities - Revenues
Operating grants
and contributions
Capital grants and
0.2%
contributions
16.5%
Unrestricted
investments
earnings
1.9%
Charges for
services
81.4%
Business-Type Activities - Expenses
Storm sewer
8.1%
Water
50.3%
Sewer
41.6%
22
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2014
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, unrestricted fund balance
may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.
At the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $28,799,003. Approximately
24.1 percent of this total amount ($6,950,789) constitutes unassigned fund balance. The remainder of the fund balance ($21,848,214) is not
available for new spending because it is either 1) nonspendable ($138,563), 2) restricted ($5,022,967), 3) committed ($591,289) or 4)
assigned ($16,095,395).
Major Funds
The general fund increased by $241,898 in 2014, which was a $673,631 change from the final budget. The final budget showed a decrease
in fund balance of $431,733. The increase in fund balance is due to various departments under-spending and revenues exceeding budgets
with an increase in service fees billed by the engineering department.
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 decrease in fund balance is due to the refunding of
the 2004 EDA public facility lease revenue bonds.
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. The addition of the following developments has increase connection fees: Carson Ridge, Catchers Creek, Country
thst
Oaks North, Millers Woods 4 Addition and Winslow Woods 1 Addition. The sewer trunk fund continues to receive funds from the sewer
enterprise fund to be set aside for future replacements ($400,000).
The road and bridge capital projects fund increased by $1,883,450 primarily due to the advance of state aid construction monies ($1,356,491)
and the increased collection of special assessments in 2014.
The tax increment capital projects fund increased by $888,696 primarily due to the sale of land.
The permanent improvement revolving capital projects fund decreased due to the transfer of funds ($380,961) to the 2010A G.O. PIR
refunding bonds debt service fund for final payment.
Nonmajor Funds
The community center special revenue fund increased $162,209 due to the revenues exceeding expenditures and the transfer out.
The 2011A G.O. equipment certificates debt service fund decreased by $105,901 with the final debt service payment.
The 2012A G.O. equipment certificates debt service fund increased by $136,319 with the collection of tax levy for future debt service
payments.
The 2014A G.O. equipment certificates debt service fund increased by $263,348 with the collection of tax levy for future debt service
payments.
The 2004 EDA public facility lease revenue bonds debt service fund decreased by $513,645 with the final debt service payment.
The 2009A state aid bonds debt service fund decreased by $171,835 in preparation for the final debt service payment in 2015.
The building capital projects fund decreased by $246,505 primarily due to the promissory note payment made in 2014.
The capital equipment reserve capital projects fund increased by $199,494 due to the timing of revenues and expenditures.
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.
The 2010A open space referendum bonds capital projects fund decreased by $537,727 due to the purchase of land for preservation.
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, 2014
The unrestricted net position in the respective proprietary funds are enterprise funds of $6,606,934 (water $2,795,147, sewer $3,642,961 and
storm sewer $168,826) and internal service funds of $613,684. The enterprise funds had a net increase in net position in 2014 of $301,549
(water $321,656, sewer $93,193 and storm sewer ($113,300)). Internal service funds had a net decrease in net position of $63,508.
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, 2014, amounts to
$157,166,705 (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 2014, 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, 2014, the City’s street and trail system
was rated at an Overall Condition Index (OCI) of 6.7.
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 $2,029,026 on
street and trail maintenance for the year ending December 31, 2014. 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.
MaintenanceActualOCI
YearEstimateExpendituresRating
20051,000,000$ 1,655,715$ 83
20061,150,000 1,228,981 82
20071,150,000 1,256,433 81
20081,150,000 2,244,713 80
20091,150,000 1,666,216 81
20101,150,000 1,457,082 83
20111,150,000 1,770,980 83
20121,150,000 3,894,784 83
20131,150,000 2,471,123 6.9
20141,150,000 2,029,026 6.7
24
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2014
Primary Government
BeginningEnding
BalanceAdditionsDeletionsBalance
Governmental activities:
Land and improvements10,860,866$ 628,243$ (685,690)$ 10,803,419$
Streets and trails80,264,704 795,191 - 81,059,895
Construction in progress- 52,523 - 52,523
Buildings and improvements27,212,817 37,088 - 27,249,905
Furniture and equipment513,257 57,032 - 570,289
Machinery and equipment7,298,105 1,451,592 (50,948) 8,698,749
Other park improvements6,796,575 159,816 (9,500) 6,946,891
Total capital assets 132,946,324 3,181,485 (746,138) 135,381,671
Less accumulated depreciation for:
Buildings and improvements8,963,193 904,702 - 9,867,895
Furniture and equipment381,453 41,954 - 423,407
Machinery and equipment5,593,497 386,575 (42,869) 5,937,203
Other park improvements2,771,051 322,292 (9,500) 3,083,843
Total accumulated depreciation17,709,194 1,655,523 (52,369) 19,312,348
Governmental activities
capital assets - net115,237,130 1,525,962 (693,769) 116,069,323
Business-type activities:
Land and improvements730,243 -730,243
-
Buildings and improvements15,877,590 15,877,590-
-
Furniture and equipment61,390 -61,390
-
Machinery and equipment1,252,207 -1,252,207
-
Collection and distribution51,448,790990,412 52,439,202-
Total capital assets
being depreciated69,370,220990,412 70,360,632-
Less accumulated depreciation for:
Buildings and improvements7,319,205540,961 -7,860,166
Furniture and equipment49,4872,868 -52,355
Machinery and equipment1,068,78042,489 -1,111,269
Collection and distribution19,193,0891,046,371 20,239,460-
Total accumulated depreciation27,630,5611,632,689 29,263,250-
Business-type activities
capital assets - net41,739,659(642,277) 41,097,382-
Total capital assets$156,976,789$ 883,685$(693,769)$157,166,705
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 $28,984,347, a decrease of
$17,775,622 from 2013. General obligation abatement bonds ($16,675,000) were used to refund the 2006 and 2007 EDA lease revenue
refunding bonds. General obligation revenue bonds ($6,310,000) were used for an addition to the water treatment plant and the refunding of
portions of the water treatment plant bonds. Certificates of indebtedness ($2,140,000) financed capital equipment purchases. Capital
improvement bonds ($970,000) 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. State aid bonds ($60,000) 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 ($1,250,000) were used to finance land acquisitions
for the preservation of open space. The promissory note payable ($786,874) is being used to finance the purchase of land adjacent to the city
hall complex.
25
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2014
Additional long-term debt in the amount of $792,475 is for compensated absences.
City of Andover’s Outstanding Debt
GovernmentalBusiness-Type
ActivitiesActivitiesTotal
Bonds payable:
Abatement bonds16,675,000 - 16,675,000
G.O. revenue bonds- 6,310,000 6,310,000
Certificates of indebtedness2,140,000 - 2,140,000
Capital improvement bonds970,000 - 970,000
State aid bonds60,000 - 60,000
Referendum bonds1,250,000 - 1,250,000
Total bonds payable21,095,000 6,310,000 27,405,000
Promissory note payable 786,874 - 786,874
Compensated absences628,946 163,529 792,475
Total22,510,820$ 6,473,529$ 28,984,349$
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 $62,154,368. Only $20,092,393 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.
26
BASIC FINANCIAL STATEMENTS
27
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28
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET POSITIONStatement 1
December 31, 2014
With Comparative Totals For December 31, 2013
Primary Government
GovernmenBusiness-TypeTotals
t
ActivitiesActivities20142013
Assets:
Cash and investments 29,316,485$ 5,063,579$ 34,380,064$ 30,666,459$
Cash and investments with escrow agent 126,086 - 126,086 16,922,529
Accrued interest 123,627 20,287 143,914 441,837
Due from other governmental units 46,969 5,928 52,897 94,778
Accounts receivable - net 191,738 1,715,535 1,907,273 1,634,869
Property taxes receivable:
Unremitted 99,093 - 99,093 87,789
Delinquent 255,095 - 255,095 309,444
Special assessments receivable:
Unremitted 3,105 1,082 4,187 3,102
Delinquent 22,724 193,245 215,969 82,827
Deferred 2,283,051 3,546 2,286,597 2,044,365
Inventories - at cost 258,470 22,297 280,767 229,652
Land held for resale325,000 - 325,000 345,000
Capital assets - net:
Nondepreciable 91,915,837 730,243 92,646,080 91,855,813
Depreciable 24,153,486 40,367,139 64,520,625 65,120,976
Total assets 149,120,766 48,122,881 197,243,647 209,839,440
Liabilities:
Interfund payable 67,084 (67,084) - -
Accounts payable 282,437 26,118 308,555 364,679
Contracts payable 73,175 27,726 100,901 208,557
Deposits payable 52,835 3,434 56,269 45,226
Due to other governmental units35,59931,132 66,73144,262
Salaries payable213,83238,492 252,324228,062
Unearned revenue95,008- 95,00835,138
Accrued interest payable204,461105,373 309,834677,291
Other post employment benefits:
Due in more than one year184,15422,761 206,915178,938
Compensated absences:
Due within one year94,34224,530 118,872114,956
Due in more than one year534,604138,999 673,603651,420
Promissory note payable:
Due within one year196,719- 196,719196,719
Due in more than one year590,155-590,155786,874
Bonds/notes payable:
Due within one year1,765,000590,000 2,355,00019,160,000
Due in more than one year19,330,0005,720,000 25,050,00025,850,000
Total liabilities23,719,4056,661,481 30,380,88648,542,122
Net position:
Net investment in capital assets94,533,47334,787,382 129,320,855128,258,133
Restricted for:
Debt service909,579- 909,579795,301
Capital improvements1,912- 1,9123,765
Tax increment purposes3,809,346- 3,809,3462,967,936
Public services55,210- 55,21025,321
Unrestricted26,091,8416,674,018 32,765,85929,246,862
Total net position$125,401,361$41,461,400$ 166,862,761$161,297,318
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, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
Program Revenues
ChargesOperatingCapital
ForGrants anGrants an
dd
ExpensesServicesContributionsContributions
Functions/Programs
Primary government:
Government activities:
General government 2,791,507$ 801,458$ 33,579$ -$
Public safety 4,747,142 492,665 401,659 -
Public works 4,430,295 318,018 438,357 4,518,820
Parks and recreation 3,229,894 1,545,794 - 158,884
Recycling 111,760 41,440 71,265 -
Economic development 676,039 96,772 - -
Interest on long-term debt 542,139 - 1,680 -
Total government activities 16,528,776 3,296,147 946,540 4,677,704
Business-type activities:
Water 2,308,552 2,347,763 9,506 364,978
Sewer 1,951,785 2,117,624 - 314,100
Storm sewer 848,745 421,056 - 311,334
Total business-type activities 5,109,082 4,886,443 9,506 990,412
Total primary government 21,637,858$ 8,182,590$ 956,046$ 5,668,116$
The accompanying notes are an integral part of these financial statements.
30
Statement 2
Net (Expense) Revenue and Changes in Net Position
Primary Government
GovernmentaBusiness-TypeTotals
l
ActivitiesActivities20142013
$ -(1,956,470)$ (1,956,470)$ (2,197,723)$
-(3,852,818) (3,852,818) (3,408,959)
-844,900 844,900 (2,365,611)
-(1,525,216) (1,525,216) (1,318,558)
-945 945 26,315
-(579,267) (579,267) (79,076)
-(540,459) (540,459) (1,391,282)
-(7,608,385) (7,608,385) (10,734,894)
413,695- 413,695 220,198
479,939- 479,939 100,556
(116,355)- (116,355) (162,390)
777,279- 777,279 158,364
777,279(7,608,385) (6,831,106) (10,576,530)
General revenues:
General property taxes 10,863,912 - 10,863,912 10,608,678
Tax increment collections 353,773 - 353,773 320,822
Grants and contributions not
restricted to specific programs 87,179 - 87,179 12,511
Unrestricted investment earnings 747,621 115,425 863,046 549,774
Gain on sale of capital assets 228,639 - 228,639 31,650
Transfers 606,793 (606,793) - -
Total general revenues, gain on sale of
capital assets and transfers 12,887,917(491,368)12,396,54911,523,435
Change in net position5,279,532285,9115,565,443946,905
Net position - beginning120,121,82941,175,489161,297,318160,350,413
Net position - ending$125,401,361$41,461,400$166,862,761$161,297,318
31
CITY OF ANDOVER, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2014
With Comparative Totals For December 31, 2013
Road &
Sewer TrunBridge
Water Trun
kk
GeneraCPFCPFCPF
l
Assets:
Cash and investments$6,934,196$2,630,234$5,520,753$5,000,736
Cash and investments with escrow agent-- --
Accrued interest25,30012,554 26,78121,034
Due from other governmental units46,969- --
Accounts receivable - net100,566- --
Interfund receivable260,000- --
Property taxes receivable:
Unremitted67,253- -9,280
Delinquent149,533- -20,635
Special assessments receivable:
Unremitted162666 -2,277
Delinquent17,252- -5,472
Deferred-408,629 173,3781,289,402
Inventories - at cost137,001- --
Land held for resal-- --
e
Total assets7,738,2323,052,0835,720,9126,348,836
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Interfund payable - - - -
Accounts payable 110,306 - - 11,815
Contracts payable 29,171 - - 20,004
Deposits payable 24,238 5,741 5,741 539
Due to other governmental units 26,764 - - 2,808
Salaries payable 178,834 - - -
Unearned revenue - - - -
Total liabilities 369,313 5,741 5,741 35,166
Deferred inflows of resources:
Unavailable revenues 166,785 408,629 173,378 1,315,509
Fund balances (deficit):
Nonspendable137,001 - - -
Restricted- - - -
Committed- - - -
Assigne-2,637,7135,541,7934,998,161
d
Unassigned7,065,133- --
Total fund balances7,202,1342,637,7135,541,7934,998,161
Total liabilities, deferred inflows of resources,
and fund balances (deficit)$7,738,232$3,052,083$5,720,912$6,348,836
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
Permanen
Ta
xt
IncremenImprovemenOtheIntrTotals
ttra
ProjectsRevolvinGovernmentaActivitGovernmental Funds
gly
CPFCPFFundsEliminations20142013
$ 3,534,457$ 702,280$4,448,479$-$28,771,135$ 24,976,971
- -126,086-126,086 16,922,529
13,530 3,47118,875-121,545 417,980
- ---46,969 86,431
- -91,172-191,738 196,831
- --(260,000)--
1,352 -21,208-99,093 87,789
38,060 -46,867-255,095 309,444
- ---3,105 2,192
- ---22,724 17,265
- 411,642--2,283,051 2,040,504
- -1,562-138,563 107,761
225,000 -100,000-325,000 345,000
3,812,399 1,117,3934,854,249(260,000)32,384,104 45,510,697
- -260,000
(260,000)--
173 -142,503-264,797294,235
- ---49,175 194,063
- -16,576-52,835 41,680
2,880 -3,147-35,599 16,012
- -22,983-201,817 187,887
- -95,008-95,008 35,138
3,053 -540,217(260,000)699,231 769,015
263,060 411,642146,867-2,885,870 2,712,213
- -1,562-138,563 107,761
3,546,286 -1,476,681-5,022,967 21,274,444
- -591,289-591,289 588,516
- 705,7512,211,977-16,095,395 13,481,786
- -(114,344)-6,950,789 6,576,962
3,546,286 705,7514,167,165-28,799,00342,029,469
$ 3,812,399$ 1,117,393$4,854,249$(260,000)$32,384,104$45,510,697
$28,799,003$42,029,469
116,069,323 115,237,130
2,885,870 2,712,213
546,600 594,470
(22,899,435) (40,451,453)
$125,401,361$ 120,121,829
33
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
2006 EDA Public 2007 EDA Public
Facility Lease Facility Lease
Revenue Revenue
Sewer Trun
Refunding Bonds Refunding Bonds Water Trun
kk
GeneraDSFDSFCPFCPF
l
Revenues:
General property taxes$ 7,476,294$-$-$ -$-
Tax increment collections--- --
Licenses and permits 364,430-- --
Intergovernmental 697,492-- --
Special assessments--- 37,27413,219
Charges for services 998,510-- --
Fines 94,375-- --
Investment income 144,87635,26624,245 71,236156,454
Miscellaneous:
Park dedication fees--- --
Connection charges--- 487,928188,898
Rent--- --
Other 150,401-- --
Total revenues 9,926,37835,26624,245 596,438358,571
Expenditures:
Current:
General government 2,481,929-- --
Public safety 4,498,924-- --
Public works 1,696,100-- 183,920134,943
Parks and recreation1,009,373
-- --
Recycling 106,587-- --
Economic development--- --
Unallocated 81,183-- --
Capital outlay:
Public safety--- --
Public works-----
-
Parks and recreation----
Recycling 7,314-- --
Economic development--- --
Debt service:
Principal retirement--- --
Interest--- --
Paying agent fees--- --
Professional services-1,7401,350 --
Construction/acquisition costs--- --
Total expenditures 9,881,4101,7401,350 183,920134,943
Revenues over (under) expenditures 44,96833,52622,895 412,518223,628
Other financing sources (uses):
Transfers in 196,93014,82614,311
-400,000
Transfers out--- (20,737)-
Bonds issued--- --
Redemption of refunded bonds-(9,755,000)(6,700,000) --
Bond premium--- --
Proceeds from the sale of capital assets--- --
Total other financing sources (uses) 196,930(9,740,174)(6,685,689)(20,737)400,000
(9,706,648)(6,662,794) 391,781623,628
Net increase (decrease) in fund balance241,898
Fund balance - January 1 6,960,2369,706,6486,662,794 2,245,9324,918,165
Fund balance - December 31$ 7,202,134$-$-$ 2,637,713$5,541,793
The accompanying notes are an integral part of these financial statements.
34
Statement 4
Permanen
Ta
xt
Road &IncremenImprovemenOtheIntrTotals
ttra
BridgeProjectsRevolvinGovernmentaActivitGovernmental Funds
gly
CPFCPFCPFFundsEliminations20142013
$ 1,031,647$ -$ -$2,386,360$-$10,894,301$10,682,975
- 377,733 --- 377,733375,040
- - --- 364,430536,706
2,698,473 2,431 -66,589-3,464,9851,115,047
576,993 3,559 102,380-- 733,4251,045,000
- - -722,462-1,720,9721,806,919
- - --- 94,37596,130
114,289 77,119 18,34793,493- 735,325573,256
- - -156,384- 156,384205,080
- - --- 676,826436,628
- - -639,000- 639,000639,423
- 74,282 -369,974(30,600) 564,0571,698,964
4,421,402 535,124 120,7274,434,262(30,600)20,421,81319,211,168
- - -107,021-2,588,9502,647,278
- - -38,340-4,537,2644,301,698
2,026,438-2,651101,352-4,145,4044,251,454
- - -1,130,179-2,139,5521,990,457
- - --- 106,587123,595
- 543,703 -121,622- 665,325408,210
- - --- 81,18375,517
- - -1,089,037-1,089,03719,003
517,014 - -339,497- 856,5111,190,187
- - -863,513- 863,5131,484,549
- - --- 7,31454,514
- - --- -15,098
--
-2,336,719-2,336,7191,689,000
- - -900,504- 900,5041,262,302
3,489
- --2,775-2,775
- - -2,030- 5,1202,020
- - --- -946,942
2,543,452 543,703 2,6517,032,589-20,325,75820,465,313
1,877,950 (8,579) 118,076(2,598,327)(30,600) 96,055(1,254,145)
5,500 - -603,268(607,305) 627,530627,530
- - (380,961)(256,944)637,905 (20,737)(4,242)
- - -1,555,000-1,555,000-
- - ---(16,455,000)(1,900,000)
- - -44,278- 44,278-
- 897,275 -25,133- 922,40876,184
5,500 897,275 (380,961)1,970,73530,600(13,326,521)(1,200,528)
1,883,450 888,696 (262,885)(627,592)-(13,230,466)(2,454,673)
3,114,711 2,657,590968,6364,794,757-42,029,46944,484,142
$4,998,161$ 3,546,286$ 705,751$4,167,165$-$28,799,003$42,029,469
35
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36
CITY OF ANDOVER, MINNESOTA
RECONCILIATION OF THE STATEMENT OF REVENUES, Statement 5
EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
20142013
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) (13,230,466)$ (2,454,673)$
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. 2,116,5531,160,852
The net effect of various miscellaneous transactions involving capital assets is to increase
(decrease) net position (i.e., sales, trade-ins, and donations). (328,659) (304,520)
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds. 173,657 (1,436,078)
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. 17,236,719 3,589,000
Vested post employment benefits are reported in the governmental funds when amounts are
aid. The statement of activities reports the benefits earned during the years. This amount (26,689)(14,929)
p
is the net effect of employee benefits earned and paid during the year.
Transfer out of governmental capital assets contributed to Enterprise Funds. -(946,942)
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. 341,988(127,548)
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. (47,870)57,557
Change in net position of governmental activities (page 31)$ 5,279,532$478,420
The accompanying notes are an integral part of these financial statements.
37
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2014
With Comparative Totals For December 31, 2013
SeweStorm Sewe
Wate
rrr
Assets:
Current assets:
Cash and cash equivalents 2,254,469$ 2,783,397$ 25,713$
Accrued interest 8,151 12,136 -
Due from other governmental units - 5,928 -
Accounts receivable - net 705,198 840,060 170,277
Special assessments receivable:
Unremitted 386 572 124
Delinquent 82,687 90,972 19,586
Deferre- -3,546
d
Inventories - at cost 22,297 - -
Total current assets 3,073,188 3,733,065 219,246
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 17,503,993 24,465,882 10,469,327
Total capital assets 34,403,826 24,990,486 10,966,320
Less: Allowance for depreciation (14,145,328) (10,707,488) (4,410,434)
Total noncurrent assets 20,258,498 14,282,998 6,555,886
Total assets 23,331,686 18,016,063 6,775,132
Liabilities:
Current liabilities:
Accounts payable 24,991 871 256
Contracts payable 9,568 3,535 14,623
Deposits payable 3,434 - -
Interest payable 105,373 - -
Due to other governmental units 23,541 7,591 -
Salaries payable 18,746 14,697 5,049
Bonds payable - due within one year 590,000 - -
Compensated absences payable - due within one year 12,617 7,339 4,574
Total current liabilities 788,270 34,033 24,502
Noncurrent liabilities:
Other post employment benefits - due in more than one year 8,277 14,484 -
Bonds payable - due in more than one year 5,720,000 - -
Compensated absences payable - due in more than one year 71,494 41,587 25,918
Total noncurrent liabilities 5,799,771 56,071 25,918
Total liabilities6,588,041 90,10450,420
Net position:
Net investment in capital assets13,948,49814,282,9986,555,886
Unrestricted2,795,1473,642,961168,826
Total net position$16,743,645$17,925,959$6,724,712
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
usiness-type activities.
b
Net position of business-type activities
The accompanying notes are an integral part of these financial statements.
38
Statement 6
Totals
Governmental Activities -
TotalsInternal Service Funds
2014201320142013
$ 5,069,5755,063,579$ 545,350$ 619,913$
20,83120,287 2,082 3,026
8,3475,928 - -
1,438,0381,715,535 - -
9101,082 - -
65,562193,245 - -
3,8613,546 - -
21,29722,297 119,907 100,594
6,628,4217,025,499 667,339 723,533
730,243730,243 - -
15,877,59015,877,590 - -
1,313,5971,313,597 - -
51,448,79052,439,202 - -
69,370,22070,360,632 - -
(27,630,561)(29,263,250) - -
41,739,65941,097,382 - -
48,368,08048,122,881 667,339 723,533
34,22526,118 17,640 36,219
14,49427,726 24,000 -
3,5463,434 - -
105,373
114,465--
31,132 28,250--
12,01530,053 10,122
38,492
565,000590,000 - -
23,07124,530 - -
813,104846,805 53,655 46,341
21,47322,761 - -
6,310,0005,720,000 - -
130,736138,999 - -
6,462,2095,881,760 - -
7,275,3136,728,565 53,655 46,341
34,864,65934,787,382 - -
6,228,1086,606,934 613,684 677,192
$ 41,092,76741,394,316$ 613,684$ 677,192$
$ 41,092,76741,394,316$
82,72267,084
$ 41,175,48941,461,400$
39
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
WaterSewerStorm Sewer
Operating revenues:
User charges 2,286,243$ 2,116,453$ 420,698$
Meters 12,592 - -
Permit fees 3,425 - -
Penalties 171 389 -
Other 45,332 782 358
Total operating revenues 2,347,763 2,117,624 421,056
Operating expenses:
Personal services 418,313 301,695 195,915
Supplies 163,797 10,446 23,572
Other service charges 588,192 143,172 392,157
Disposal charges - 999,381 -
Depreciation 891,455 505,405 235,829
Total operating expenses 2,061,757 1,960,099 847,473
Operating income (loss) 286,006 157,525 (426,417)
Nonoperating revenues (expenses):
Intergovernmental revenue 9,506 - -
Investment income 45,394 68,248 1,783
Gain on sale of capital assets - - -
Interest expense (254,715) - -
Total nonoperating revenues (expenses) (199,815) 68,248 1,783
Income (loss) before contributions
and transfers 86,191 225,773 (424,634)
Capital contributions 364,978 314,100 311,334
Transfers:
Transfers in 20,737 - -
Transfers out (150,250) (446,680) -
Total transfers (129,513) (446,680) -
Change in net position 321,656 93,193 (113,300)
Net position - January 116,421,989
17,832,7666,838,012
Net position - December 31$16,743,645$17,925,959$6,724,712
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
IntraGovernmental Activities -
Activit
yTotalsInternal Service Funds
Eliminations2014201320142013
$-$4,823,394$ 1,078,9284,907,702$ 1,070,619$
12,592- 23,395 - -
3,425- 4,200 - -
560- 4,702 - -
46,472- 20,446 123,144 82,384
4,886,443- 4,960,445 1,202,072 1,153,003
915,923- 859,072 376,250 354,288
197,815- 239,933 397,664 355,708
1,092,921(30,600) 824,695 503,962 372,878
999,381- 982,847 - -
1,632,689- 1,629,699 - -
4,838,729(30,600) 4,536,246 1,277,876 1,082,874
30,60047,714424,199(75,804)70,129
-9,506---
-115,425(21,533)12,296(1,949)
-- 8,000 - -
(254,715)- (276,458) --
-(129,784)(289,991)12,296(1,949)
30,600(82,070)134,208(63,508)68,180
-990,412946,942--
-20,7374,242--
(30,600)(627,530)(627,530)--
(30,600)(606,793)(623,288)--
-301,549457,862(63,508)68,180
-41,092,76740,634,905677,192609,012
$-$41,394,316$41,092,767$613,684$677,192
$301,549$457,862
(15,638)10,623
$285,911$468,485
41
CITY OF ANDOVER, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
WateSeweStorm Sewe
rrr
Cash flows from operating activities:
Receipts from customers and users 2,168,885$ 1,938,680$ 376,260$
Payment to suppliers (745,176) (1,156,406) (412,240)
Payment to employees (408,441) (295,075) (192,958)
Net cash flows from operating activities 1,015,268 487,199 (228,938)
Cash flows from noncapital financing activities:
Intergovernmental revenues 9,506-
-
Transfers in20,737-
-
Transfers out(150,250)(446,680)-
Net cash flows from noncapital financing activities(120,007)(446,680)-
Cash flows from capital and related financing activities:
Acquisition of capital assets-
- -
Interest paid on debt(263,807)-
-
Payment of bonds(565,000)-
-
Proceeds from the sale of capital asset-
s
- -
Net cash flows from capital and related financing activities(828,807)-
-
Cash flows from investing activities:
Investment income44,57668,4232,970
Net increase in cash and cash equivalents111,030108,942(225,968)
Cash and cash equivalents - January 12,143,4392,674,455251,681
Cash and cash equivalents - December 31$2,254,469$2,783,397$25,713
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss)$286,006$157,525$(426,417)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation891,455505,405235,829
Changes in assets and liabilities:
Decrease (increase) in due from other governmental units2,419-
-
Decrease (increase) in accounts receivable(119,334)(125,577)(32,586)
Decrease (increase) in special assessments(59,544)(55,786)(12,210)
Decrease (increase) in inventory(1,000)-
-
Increase (decrease) in accounts payable32(3,764)(4,375)
Increase (decrease) in contracts payable5,339297,864
Increase (decrease) in deposits payable(112)-
-
Increase (decrease) in due to other governmental units 2,554328-
Increase (decrease) in salaries payable4,9912,463985
Increase (decrease) in other post employment benefit 1,958(670) -
s
Increase (decrease) in compensated absences 5,551 2,199 1,972
Total adjustments 729,262 329,674 197,479
Net cash provided (used) by operating activities 1,015,268$ 487,199$ (228,938)$
Noncash investing, capital and financing activities:
Assets contributed to the Enterprise Funds$364,978$314,100$311,334
The accompanying notes are an integral part of these financial statements.
42
Statement 8
Totals
Governmental Activities -
TotalsInternal Service Funds
2014201320142013
$ 4,637,9164,483,825$ 1,202,072$ 1,153,066$
(2,313,822)(2,058,133)(915,518)(731,447)
(896,474)(855,238)(374,357)(353,170)
1,273,5291,724,545(87,803)68,449
9,506--
-
20,7374,242-
-
(596,930)(596,930)-
-
(566,687)(592,688)-
-
-(79,725)-
-
(263,807)(285,166)-
-
(565,000)(545,000)-
-
-8,000-
-
(828,807)(901,891)-
-
115,969(22,831)13,240(2,393)
(5,996)207,135(74,563)66,056
5,069,5754,862,440619,913553,857
$5,063,579$5,069,575$545,350$619,913
$17,114$393,599$(75,804)$70,129
1,632,6891,629,699-
-
2,419(4,218)-
-
(277,497)(308,579)-63
(127,540)(9,732)-
-
(1,000)15,317(19,313)(9,191)
(8,107)14,756(18,579)6,345
13,232(9,635)24,000
-
(112)39-
-
2,882(535)-(15)
8,439(320)1,8931,118
1,288(1,731)-
-
9,7225,885-
-
1,256,4151,330,946(11,999)(1,680)
$1,273,529$1,724,545$(87,803)$68,449
$990,412$946,942$-$-
43
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET POSITION Statement 9
FIDUCIARY FUNDS
Agency Funds
December 31, 2014
With Comparative Totals For December 31, 2013
20142013
Assets:
Cash and investments 251,391$ 477,364$
Liabilities:
Accounts payable 13,472 58,679
Deposits payable 237,919 418,685
Total liabilities 251,391$ 477,364$
The accompanying notes are an integral part of these financial statements.
44
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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
Governmental activities
interfund activity has been removed from these statements. , which normally are supported by taxes
business-type activities
and intergovernmental revenues, are reported separately from , 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
Direct expenses
are offset by program revenues. are those that are clearly identifiable with a specific function or business-type
Program revenues
activity. 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
general revenues
included among program revenues are reported instead as .
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
economic resources measurement focusaccrual basis
The government-wide financial statements are reported using the and the
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.
current financial resources measurement focusmodified
Governmental fund financial statements are reported using the and the
accrual basis of accounting
. Revenues are recognized as soon as they are both measurable and available. Revenues are
available
considered to be 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
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
45
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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:
General Fund
Theis 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.
2006 EDA Public Facility Lease Revenue Refunding Bonds Debt Service Fund (DSF)
The was established to refund
portions of debt associated with the construction of the Andover YMCA Community Center.
2007 EDA Public Facility Lease Revenue Refunding Bonds DSF
The was established to refund portions of debt associated
with the construction of the Andover YMCA Community Center.
Water Trunk Capital Projects Fund (CPF)
The 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.
Sewer Trunk CPF
The is used to account for sewer access fees and sanitary sewer improvements.
Road and Bridge CPF
The accounts for all road projects and the pavement management program, which includes annual
seal coating, crack sealing and overlays for roads.
Tax Increment Projects CPF
The is used to account for activities in TIF districts 1-1, 1-2, 1-3, 1-4, 1-5 and all TIF land
sales and expenditures to reach the goals of the TIF district plans.
Permanent Improvement Revolving CPF
The serves as a long-term funding source for large capital improvement
expenditures.
The City reports the following major proprietary funds:
Water Fund
The accounts for the water service charges, which are used to finance the water system operating expenses.
Sewer Fund
The accounts for the sewer service charges, which are used to finance the sanitary sewer system operating
expenses.
Storm Sewer Fund
The 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.
Agency Funds
The 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
other funds of the City. Elimination of these charges would distort the direct costs and program revenues reported for the
various functions concerned.
program revenues
Amounts reported as 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.
46
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
general revenues
Internally dedicated resources are reported as rather than as program revenues. Likewise, general revenues
include all taxes.
operatingnonoperating
Proprietary funds distinguish revenues and expenses from 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:
FinalOver
BudgetActualBudget
Special Revenue Funds:
Community Center$ 907,167$1,058,467$ 151,300
The expenditures over budget were funded by greater than anticipated revenues and/or available fund balance.
47
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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 2a7, 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, 2014 are planned to be eliminated in 2015. 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.
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,
tate tax statements by April 15, of each year. Property owners are required to pay one-half of their real
and copies of all real es
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.
48
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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.
I. 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.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
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.
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.
49
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
K. 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, 2014, no interest was capitalized in connection with construction in progress.
Accounting and Financial Reporting for Intangible Assets
The City implemented GASB Statement No. 51. 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:
AssetsLife
Buildins and imrovement10 - 30 ears
gpsy
Furniture and equipment ( including software)5 - 10 years
Machinery and equipment5 - 10 years
Other park improvements10 - 30 years
Storm sewer50 years
Distribution and collection systems50 years
Temporary easements5 - 15 years
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 2014 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:
50
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
RangeDescription
8 - 10Excellent
7 - 7.9Very good
6 - 6.9Good
4 - 5.9Fair
2 - 3.9Poor
1 - 1.9Very poor
0 - .9Substandard
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 (240 hours if on the annual leave plan) 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.
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.
51
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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, 2013, 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
deferred inflows of resources
, represents an acquisition of net position
resources. This separate financial statement element,
not
be recognized as an inflow of resources (revenue) until that time. The
that applies to a future period(s) and so will
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.
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
fund balance – total governmental funds net
The governmental fund balance sheet includes a reconciliation between and
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 ($22,899,435)
difference are as follows:
52
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Bonds payable$(21,095,000)
Promissory note payable (786,874)
Accrued interest aable 204,461
py()
Other post employment benefits (184,154)
Compensated absences (628,946)
Net adjustment to reduce fund balance - total governmental
funds to arrive at net position - governmental activities(22,899,435)$
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
$546,600 difference are as follows:
Internal Service Funds net position$ 613,684
Net revenue attributable to business-type activities (67,084)
Net adjustment to increase fund balance - total governmental
funds to arrive at net position - governmental activities$ 546,600
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
net changes in fund balances – total governmental fundschanges in net position of governmental activities
between and 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 $1,160,852 difference are as
follows:
Capital outla$2,816,375
y
Depreciation expense(1,655,523)
Net adjustment to increase net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities 1,160,852$
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 ($328,659) difference
are as follows:
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.(693,769)$
Donations of capital assets increase net assets in the statement of activities,
but do not appear in the governmental funds because they are not financial
resources.365,110
Net adjustment to decrease net changes in fund balances - total governmental
funds to arrive at changes in net assets of governmental activities.$ (328,659)
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 $173,657 difference are as follows:
53
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Unavailable revenue - general property taxes:
At December 31, 2013(247,424)$
At December 31, 2014217,035
Unavailable revenue - tax increment taxes:
At December 31, 2013(62,020)
At December 31, 201438,060
Unavailable revenue - special assessments:
At December 31, 2013(2,057,769)
At December 31, 20142,305,775
Unavailable revenue - land held for resale:
At December 31, 2013(345,000)
At December 31, 2014325,000
Net adjustments to decrease net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities173,657$
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
$17,236,719 difference are as follows:
Debt issued or incurred:
Issuance of equipment certificates(1,555,000)$
Principal repayments:
Revenue bonds16,925,000
Capital improvement bonds500,000
Abatement bonds 320,000
Permanent improvement revolving bonds385,000
Referendum bonds 140,000
Certificates of indebtedness95,000
State aid bonds230,000
Promissory note payable 196,719
Net adjustment to increase net changes in fund balances - total governmental
funds to arrive at changes in net assets of governmental activities17,236,719$
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 $341,988 difference are as follows:
Compensated absences$ (16,377)
t 358,365
Accrued interes
Net adjustment to decrease net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities$ 341,988
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 ($47,870) difference are as follows:
54
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Internal Service Funds change in net position$ (63,508)
Net revenue attributable to business-type activities 15,638
justment to increase fund balance - total governmental
Net ad
funds to arrive at net position - governmental activities$ (47,870)
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:
United States government treasury bills, treasury notes, treasury bonds;
a)
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;
Unrated general obligation securities of a local government with taxing powers may be pledged as collateral against funds
d)
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
f)Time deposits that are fully insured by the Federal Deposits Insurance Corporation.
: Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be
Custodial Credit Risk – Deposits
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, 2014, 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:
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
55
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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, 2014, the City had the following investments and maturities:
Investment Maturities (in Years)
CreditFairLess ThanMore Than
Investment TypeRatingValue11 - 56 - 110
0
Money market fundsN/A2,762,646$ 2,762,64$6$ -
$ -$ -
Minnesota Municipal
Money Market FunN/A 4,993
d
4,993 - - -
Certificates of depositN/A9,240,240 5,473,903 3,273,464 492,873
-
Local/State governments A/A1/A21,099,215 - 765,586 228,432 105,197
AA1/AA2/AA38,487,873 2,135,473 2,212,240 638,189
3,501,971
AAA4,855,228 1,099,336 2,569,890 800,278385,724
U.S. agenciesAAA3,979,226 439,332 2,570,531 394,610 574,753
FNMA REMICN/A 14,757 14,757 -
- -
N/A 554,852 554,852 -
U.S. agencie
s
- -
Total investment 11,915,68330,999,03$13,251,051$4,128,433$ 1,703,863$
s0
Deposits3,758,511
Total cash and investments34,757,541$
The following is a reconciliation of the City’s total cash and investment balances at December 31, 2014:
Government-wide statement of net position:
Cash and investments34,380,064$
Cash and investments with escrow agent126,086
Fiduciary funds statement of net position251,391
Total34,757,541$
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.
56
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
As of December 31, 2014, $250,000 of the City’s $30,999,030 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:
Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby
1)
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 15C3-1.
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 14% of the City’s investments are in various holdings with U.S. agencies; Federal Home
Loan Bank (1.6%), Federal Farm Credit Bank (3.0%), Federal National Mortgage Association (5.0%), Federal Home Loan
Mortgage Corporation (3.4%) and U.S. Treasury (1.8%). 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.
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.
57
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Note 3 RECEIVABLES
Significant receivables balances not expected to be collected within one year of December 31, 2014 are as follows:
DelinquentDelinquentSpecial
PropertyTaxAssessment
TaxesIncrementReceivableTotal
Major Funds:
General Fund$ -118,131$ 17,252$ 135,383$
Water Trunk CPF- - 395,643
3 95,643
Sewer Trunk CPF - 153,438-
1 53,438
Road and Bridge CPF 16,302 944,629-
9 60,931
Tax Increment Projects CPF - 22,836 - 22,836
Permanent Improvement Revolving CPF- 328,89-0
3 28,890
Nonmajor Funds 37,025 - - 37,025
Total$ 171,458$ 22,836$ 2,034,1461,839,85$
2
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:
PropertyTaxSpecialLand Held
TaxesIncrementAssessmentsfor ResaleTotal
Major Funds:
General Fund$ 149,533$ -$ 17,252$ 166,785-$
Water Trunk CPF - - 408,629 408,629-
Sewer Trunk CPF - - 173,378 173,378-
Road and Bridge CPF 20,635 1,294,87-4 1,315,509-
Tax Increment Projects CPF - 38,060 225,000- 263,060
Permanent Improvement Revolving CPF- - 411,64 2 411,64- 2
Nonmaor Fund -46,867 - 100,000 146,867
js
$
Total217,035$ 38,060$ 2,305,775$ 325,000$ 2,885,87
0
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
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, 2014 was as follows:
58
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
BeginningEnding
Primary Government
BalanceAdditionsDeletionsBalance
Governmental activities:
Capital assets not being depreciated:
Land and improvements$10,860,866$628,243$(685,690)$10,803,419
Streets and trails80,264,704795,191 81,059,895-
Construction in progress -52,523-52,523
Total capital assets not being depreciated 1,475,95791,125,570 (685,690) 91,915,837
Capital assets being depreciated:
Buildings and improvements27,212,817 37,088 - 27,249,905
Furniture and equipment (including software)513,257 57,032 - 570,289
Machinery and equipment7,298,105 1,451,592 (50,948) 8,698,749
Other park improvements6,796,575 159,816 (9,500) 6,946,891
Total capital assets being depreciated 1,705,52841,820,754 (60,448) 43,465,834
Less accumulated depreciation for:
Buildings and improvements8,963,193 904,702 - 9,867,895
Furniture and equipment381,453 41,954 - 423,407
Machinery and equipment5,593,497 386,575 (42,869) 5,937,203
Other park improvements2,771,051 322,292 (9,500) 3,083,843
Total accumulated depreciation17,709,194 1,655,523 (52,369) 19,312,348
Total capital assets being depreciated - net24,111,560 50,005 (8,079) 24,153,486
Governmental activities capital assets - net115,237,130$ 1,525,962$ (693,769)$ 116,069,323$
BeginningEnding
Primary Government
BalanceAdditionsDeletionsBalance
Business-te activities:
yp
Capital assets not being depreciated:
Land and improvements730,243$ -$ 730,243
$ $ -
Capital assets being depreciated:
15,877,590-
Buildings and improvements15,877,59
0
-
Furniture and equipment (including software) 61,390 61,390
- -
Machinery and equipment 1,252,207 - 1,252,207
-
Collection and distribution 51,448,790 990,412 52,439,202-
Total capital assets being depreciated 68,639,977 990,412 69,630,389-
Less accumulated depreciation for:
Buildings and improvements 7,319,205 540,961 - 7,860,166
Furniture and equipment 49,487 2,868 52,355
-
Machinery and equipment 1,068,780 42,489 - 1,111,269
Collection and distribution 19,193,089 1,046,371 20,239,460-
Total accumulated dereciation 27,630,561 1,632,689 29,263,250-
p
Total capital assets being depreciated - net 41,009,416 (642,277) 40,367,139-
Business-type activities capital assets - net$ 41,739,659$ (642,277)$ 41,097,382-$
59
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Depreciation/amortization expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government84,355$
Public safety254,943
Public works248,947
Parks and recreation1,052,437
Recycling 4,127
Economic development10,714
Total depreciation/amortization expense - governmental activities1,655,523$
Business-type activities:
Water$891,455
Sewer505,405
Storm sewer235,829
Total depreciation/amortization expense - business-type activities1,632,689$
CONSTRUCTION COMMITMENTS
At December 31, 2014, the City did not have any construction commitments.
Note 6 LONG-TERM 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.
60
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
IssueMaturityInterestOriginalPayable
DateDateRateIssue12/31/14
GOVERNMENTAL ACTIVITIES:
Abatement Bonds:
2012C G.O. Abatement Bonds12/27/20122/1/20311.00-3.00%17,315,000$$16,675,000
Certificates of Indebtedness:
2012A G.O. Equipment Certificates3/22/20122/1/20172.00%585,000 585,000
2014A G.O. Equipment Certificates5/29/20142/1/20201.50-2.00%1,555,000 1,555,000
Total certificates of indebtedness2,140,000 2,140,000
Capital Improvement Bonds:
2012B G.O. Capital Improvement Ref Bonds3/22/20122/1/20162.00%1,570,000 970,000
State Aid Bonds:
2009A G.O. State Aid Street Refunding Bonds3/26/20092/1/20152.25-2.80%955,000 60,000
Referendum Bonds:
2010A G.O. Open Space Referendum Bonds2/18/20102/1/20222.00-3.12%1,660,000 1,250,000
Total - bonded indebtedness23,640,000 21,095,000
Promissory note payable 12/17/201311/15/2018n/a983,593 786,874
Compensated absences payable - 628,946
Total governmental activities indebtedness24,623,593 22,510,820
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2007B G.O. Water Revenue Refunding Bonds3/13/20072/1/20234.00-4.25%6,570,000 5,580,000
2009A G.O. Water Revenue Bonds3/26/20092/1/20242.00-4.25%1,025,000 730,000
Total general obligation revenue bonds7,595,000 6,310,000
Compensated absences payable - 163,529
Total business-type activities indebtedness7,595,000 6,473,529
Total City indebtedness$32,218,593$28,984,349
61
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Annual debt service requirements to maturity for general obligation bonds are as follows:
Governmental Activities
Abatement BondsCertificates of IndebtednessCapital Improvement Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
2015835,000$ 379,906$ 225,000$ 43,626$ 500,000$ 14,400$
2016845,000 371,506 310,000 34,550 470,000 4,700
2017855,000 358,731 795,000 24,150
- -
2018 870,000 341,481265,00013,550
- -
2019 885,000 323,931270,000 8,200
- -
2020-20244,725,000 1,339,825275,000 2,750
- -
2025-20295,300,000 740,703
- - - -
2030-20322,360,000 71,400
- - - -
Total16,675,000$$ 3,927,483$2,140,000$126,826$ 970,000$19,100
Governmental ActivitiesBusiness-Type Activities
State Aid BondsReferendum BondsG.O. Revenue Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
2015$ 60,000$ 840$145,000$31,915$ 590,000$241,486
2016 - -145,00028,942 615,000 218,101
2017 - -150,00025,657 635,000 193,751
2018 - -155,00021,841 665,000 168,339
2019 - -160,00017,507 685,000 141,776
2020-2024 --495,00023,3543,120,000 274,856
$ 60,000$840$1,250,000$149,216$6,310,000$1,238,309
Annual debt service requirements to maturity for the promissory note payable is as follows:
Governmental Activities
Promissory Note Payable
PrincipalInterest
2015$196,719-
2016196,718
-
2017196,718
-
2018196,719
-
Total$786,874$-
It is not practical to determine the specific year for payment of long-term accrued compensated absences.
CHANGE IN LONG-TERM LIABILITIES
Long-term liability activity for the year ended December 31, 2014, was as follows:
62
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
BeginningEndingDue Within
BalanceAdditionsReductionsBalanceOne Year
Governmental activities:
Bonds payable:
Revenue bonds$ -16,925,000$ (16,925,000)$$ -$-
Abatement bonds16,995,000-(320,000)16,675,000835,000
Certificates of indebtedness680,0001,555,000(95,000)2,140,000225,000
Capital improvement bonds1,470,000-(500,000) 970,000500,000
Permanent improvement revolving bonds385,000-(385,000)
- -
State aid bonds290,000-(230,000) 60,00060,000
Referendum bonds1,390,000-(140,000)1,250,000145,000
Total bonds payable38,135,0001,555,000(18,595,000)21,095,0001,765,000
Promissory note payable 983,593-(196,719) 786,874196,719
Compensated absences612,569351,889(335,512) 628,94694,342
Total governmental activities
long-term liabilities$ 1,906,88939,731,162$$(19,127,231)$22,510,820$2,056,061
Business-type activities:
Bonds payable:
G.O. revenue bonds$6,875,000$-$(565,000)$6,310,000$590,000
Compensated absences153,80764,206(54,484) 163,52924,530
Total business-type activities
long-term liabilities$7,028,807$64,206$(619,484)$6,473,529$614,530
For the governmental activities, bonds and the promissory note payable can be summarized in the following categories:
revenue bonds
The 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.
abatement bonds
The were 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.
certificates of indebtedness
The 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.
capital improvement bonds
The 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.
permanent improvement revolving bonds
The 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
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.
state aid bonds
The 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.
63
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
referendum bonds
The 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.
promissory note payable
The 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.
compensated absences
For the governmental activities, are generally liquidated through the General Fund.
G.O. revenue bonds
For the business-type activities, the 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
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 refunded 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 bonds is $20,602,483, payable through February 2031. For
the current year, principal and interest paid and total property tax revenues were $705,681 and $741,093, 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 $613,250,
payable through February 2017. For the current year, interest paid and total property tax revenues were $11,700 and $140,196,
respectively.
2014A G.O. Equipment Certificates.
The City has pledged future property tax revenue to repay the $1,555,000 bonds issued in May
2014. 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 $1,653,576,
payable through February 2020. For the current year, property tax revenues were $260,363.
2012B 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 bonds is $989,100,
payable through February 2016. For the current year, interest paid and total property tax revenues were $524,400 and $561,799,
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 $60,840, payable through February 2015. For the
current year, principal and interest paid and MSA revenues were $234,785 and $61,680, 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 finance 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 $1,399,216, payable through February 2022. For the current year, principal and interest paid
and total property tax revenues were $174,765 and $187,700, respectively.
2007B 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 $6,669,444. The
principal and interest paid for the current year and total customer net revenues were $741,646 and $1,047,948, 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 $878,865. The principal and interest paid for the current year and total customer net revenues were $87,160 and
$1,047,948, respectively.
64
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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 was responsible for the debt service of the refunded bonds until
the crossover date.
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.
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 was responsible for the debt service of the refunded bonds until
the crossover date.
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 2014 and 2013 is computed as follows:
December 31,
20142013
Estimated taxable market value$2,071,812,281$2,123,596,358
Debt limit (3% of market value) 62,154,36863,707,891
Amount of debt applicable to debt limit:
Total bonded debt$ 27,405,000$45,010,000
Less: Nonapplicable debt
G.O. water revenue bonds (6,310,000)(6,875,000)
Permanent improvement revolving bonds -(385,000)
State aid bonds (60,000)(290,000)
Less: Cash and investments in related
debt service funds (942,607)(17,415,812)
Total debt applicable to debt limit 20,092,39320,044,188
Legal debt margin$ 42,061,975$43,663,703
Note 8 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A. PLAN DESCRIPTION
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.
Minnesota Statutes
These plans are established and administered in accordance with , Chapters 353 and 356.
65
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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.
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 at 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 2014. PEPFF members are required to contribute 10.20% of their annual
covered salary in 2014. In 2014, 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 15.3% for PEPFF members. The City’s
contributions to the Public Employees Retirement Fund for the years ending December 31, 2014, 2013 and 2012 were
$262,577, $256,560 and $245,654 respectively. The City’s contributions to the Public Employees Police and Fire Fund for the
years ending December 31, 2014, 2013 and 2012 were $29,081, $26,588 and $26,108, respectively. The City’s contributions
were equal to the contractually required contributions for each year as set by state statute. Contribution rates will increase on
January 1, 2015 in the Coordinated Plan (6.5% for members and 7.5% for employers) and the PEPFF (10.8% for members and
16.2% for employers).
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
Minnesota Statutes
October 9, 1979 and operates under the provisions of Section 424A. It is governed by a board of six
66
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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.
Twenty-Year Service Pension – In order to be entitled to a pension benefit, a firefighter must have completed a
1.
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.
Deferred Pension – If the retired or terminated member has not attained age 50 and is otherwise eligible for the
2.
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.
Death Benefit – In the event of death of an active member or deferred pensioner, the member’s individual account
4.
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
EndingCityStateTotal
12/31/201250,000$ $107,440$ 157,440
12/31/201350,000 153,555 203,555
12/31/201455,000 151,491 206,491
Note 9 OTHER POST EMPLOYMENT BENEFITS (OPEB)
Accounting
In 2008, the City prospectively implemented the requirement of a new accounting pronouncement, GASB Statement No. 45,
and Financial Reporting by Employers for Post Employment Benefits Other than Pensions.
A.PLAN DESCRIPTION
In addition to providing the pension benefits described in Note 8, the City provides post employment health care benefits (as
plan
defined in paragraph B) for retired employees through a single employer defined benefit plan. The term 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
67
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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 2014, participants consisted of:
Retirees and beneficiaries currently
purchasing health insurance through the City2
Active employees55
Total57
Participating employers1
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, 2014, was calculated as follows:
68
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Annual required contribution (ARC)$38,177
Amortization of net OPEB obligation(10,348)
Interest on net OPEB obligation7,158
Annual OPEB cost34,987
Contributions made during the year(7,010)
Increase (decrease) in net OPEB obligation27,977
Net OPEB obligation - beginning of year178,938
Net OPEB obligation - end of yea$206,915
r
The City had an actuarial valuation performed for the plan as of January 1, 2014 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, 2014. The
City’s annual OPEB cost (expense) of $38,177 was equal to the ARC for the fiscal year, as the transition liability was set at
zero as of December 31, 2007. The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and
the net OPEB obligation for 2012, 2013 and 2014 are as follows:
Percentage of
AnnualEmployerAnnual OPEBNet OPEB
Fiscal Year EndedOPEB CostContributionsCost ContributedObligation
December 31, 201236,650$ 17,322$ 47.3%165,740$
December 31, 201337,266 24,068 64.6%178,938
December 31, 201434,987 7,010 20.0%206,915
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:
Unfunded
ActuarialUAAL as a
ActuarialActuarialAccruedPercentage of
ActuarialValue ofAccruedLiabilityFundCoveredCovered
Valuation DateAssetsLiability *( UAAL )RatioPayrollPayroll
( a )( b )( b-a )( a/b )( c )(( b-a ) / c )
January 1, 2014-$ 247,646$ 247,646$ 0.00%5,728,317$ 4.32%
*using the Projected Unit Credit actuarial method
G.ACTUARIAL METHODS AND ASSUMPTIONS
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.
69
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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 12/31/2014 was
30 years. The actuarial value of assets was $0.
In the January 1, 2014 actuarial valuation, the Projected Unit Credit Actuarial cost method was used. The following actuarial
assumptions were used:
1. Discount rate – 4.0%
2. Inflation rate – 3.0%
3. Monthly rates – life expectancies were based on mortality tables at the National Center for Health Statistics
4. Retirement age – latest of age 62, plan eligibility or current age
5. Participation rate – 75% of future retirees employees expected to retire in the future will elect coverage at retirement
and continue coverage to age 65; 100% of current retirees will continue their coverage until age 65
6. Spouse participation – spouse continue coverage until age 65
7. Health care cost rate – 7.5% reduced by 0.5% each year to arrive at an ultimate health care cost trend 5.0%.
Note 10 INTERFUND RECEIVABLES/PAYABLES, LOANS AND TRANSFERS
Individual fund interfund receivable and payable balances at December 31, 2014 are as follows:
FundReceivablePayable
Governmental Funds:
Major Funds:
General Fund260,000$ -$
Nonmajor Governmental Funds- 260,000
Total governmental funds260,000$ 260,000$
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:
Transfer InTransfer OutAmountPurpose
General FundWater Fund$150,250Admin allocation
General FundSewer Fund Admin allocation46,680
2006 EDA Public Fac Lease Rev Ref Bonds DSFNonmajor Fund Debt service allocation14,826
2007 EDA Public Fac Lease Rev Ref Bonds DSFNonmajor Fund Debt service allocation14,311
Water FundWater Trunk Fund CPF Debt service allocation20,737
Sewer Trunk CPFSewer Fund400,000Replacement reserve
Road & Bridge CPF Nonmajor Fund Roadway degredation 5,500
Nonmajor FundPerm Improv Revolving Fund CPF380,961Debt service allocation
Nonmajor FundNonmajor Fund212,356Debt service allocation
Nonmajor FundNonmajor Fund Close debt service fund9,951
$1,255,572
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:
70
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Transfer InTransfer Out
Governmental Activities30,600
$ $ -
Business-Type Activities- 30,600
Total30,600$ 30,600$
Note 11 TAX INCREMENT DISTRICTS
The City is the administering authority for the following tax increment finance districts:
1.Name of District:Andover Redevelopment District 1-2
Type of District:Redevelopment
Authorizing Law:M.S. Section 472
Established:1986
Duration of District:Through 2014
Original net tax capacity:$4,542
Current net tax capacity:181,170
Captured net tax capacity - retained by the City$176,628
2.Name of District:Tax Increment Financing District 1-3
(Farmstead Project)
Type of District:Redevelopment
Authorizing Law:M.S. Section 469
Established:1997
Duration of District:Through 2025
Original net tax capacity:$7,314
Current net tax capacity:140,847
Captured net tax capacity - retained by the City$133,533
3.Name of District:Tax Increment Financing District 1-4
Type of District:Redevelopment
Authorizing Law:M.S. Section 469
Established:2005
Duration of District:Through 2031
Original net tax capacity:$ 66,921
Current net tax capacity: 70,868
Captured net tax capacity - retained by the City$ 3,947
4.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:$ 6,139
Current net tax capacity: 19,464
Captured net tax capacity - retained by the City$ 13,325
71
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Note 12 DEFICIT FUND BALANCES
The City has deficit fund balances at December 31, 2014 as follows:
FunAmount
d
Nonmajor Special Revenue Funds:
Community Center48,364$
Nonmajor Capital Projects Funds:
Storm Sewer Project64,418
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.
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 is not aware of any existing or pending lawsuits, claims or other actions in which the City is a defendant.
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, 2014.
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.
72
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
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, 2014. Future
scheduled tax levies for all bonds outstanding at December 31, 2014 totaled $21,938,728.
Note 15 FUND BALANCE
ACLASSIFICATIONS
.
At December 31, 2014, a summary of the governmental fund balance classifications are as follows:
73
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
TaxPermanent
WaterSewerRoad &IncrementImprovementOther
TrunkTrunkBridgeProjectsRevolvingGovernmental
GeneralCPFCPFCPFCPFCPFFundsTotal
Nonspendable:
Inventory137,001$ -$ 1,562$ 138,563
$ $ -$ -$ -$ -
Restricted for:
Debt service - 1,073,535- 1,073,535
- - - -
Tax increment - 3,546,286
- - -3,546,286 - -
Public services - 55,210 55,210
- - - - -
Equipment purchases - 112,513 112,513
- - - - -
Open space referendum - - 235,423 235,423
- - - -
Total restricted - 1,476,681- 5,022,967
- - -3,546,286
Committed to:
Economic development - - 380,792 380,792
- - - -
City's mapping system - - 154,838 154,838
- - - -
Surface water management - 2,295 2,295
- - - - -
Public right of ways management - - 49,998 49,998
- - - -
Seal coating new developments - 3,366 3,366
- - - - -
Total committed - - 591,289 591,289
- - - -
Assigned to:
Water system 2,637,713- 2,637,713
- - - - -
Sanitary sewer system - 5,541,793- 5,541,793
- - - -
Street rehabilitation - 4,998,161- 4,998,161
- - - -
Development purposes - 705,751
- - - - 705,751 -
Forest resources programs - 7,243 7,243
- - - - -
Public services - 2,026 2,026
- - - - -
Park improvements - - 334,566 334,566
- - - -
Facilities management - - 846,411 846,411
- - - -
Pedestrian trails - - 134,963 134,963
- - - -
Capital improvements - - 886,768 886,768
- - - -
Total assigned 2,637,713- 5,541,793 4,998,161 2,211,977 16,095,395
-705,751
Unassigned 7,065,133 - (114,344) 6,950,789
- - - -
Total$ 7,202,134$ 2,637,713$ 5,541,793$ 4,998,161$ 3,546,286$ 4,167,165$ 28,799,003
$ 705,751
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, 2014, 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, 2014, the following revenue bonds were outstanding:
74
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2014
Date ofOriginalOutstanding
ProjectIssueIssueRetired12/31/2014
Presbyterian Homes of Andover, Inc.11/1/200313,145,000$ (3,055,077)$ $10,089,923
Note 17 OPERATING LEASES
The City received revenue from agreements for the lease of space for antennas placed on the water tower and an emergency siren pole.
The City also has leases with the Greater Minneapolis YMCA and Subway Real Estate, LLC for building space at the Andover YMCA
Community Center. Terms of each lease are as follows:
2014
LeaseAnnual LeaseExpirationRenewal
LocationLesseeAmountAdjustment FactorDateOptions
City Hall water towerSprint Nextel$ Greater of CPI or 4%12/31/20173 - 5 year terms29,807
City Hall water towerT-Mobile USA, Inc
24,310Greater of CPI or 4%12/31/20163 - 5 year terms
City Hall water towerVerizon 3% annually5/31/20243 - 5 year terms14,700
Emergency Siren PoleT-Mobile USA, Inc $1,000 annual increas8,000e9/22/20183 - 5 year terms
Andover YMCA Comm CtrGreater Minneapolis YMCA635,000None8/1/2035N/A
Rose Park water towerSprint Nextel
15,9273% annually7/31/20155 - 5 year terms
Rose Park water towerVerizon 3% annually5/31/20243 - 5 year terms12,600
Andover YMCA Comm CtrSubway Real Estate, LLC17,653 $600 annual increase10/2/20153 - 3 year terms
Future minimum lease payments are unavailable at this time due to changing variables: CPI and the completion of the capital campaign
for the community center.
Note 18 RECENTLY ISSUED ACCOUNTING STANDARDS
The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for
these financial statements:
Statement No. 68Accounting and Financial Reporting of Pensions – an amendment of GASB Statement No. 27.
The provisions of
this Statement are effective for financial statements for periods beginning after June 15, 2014. Statement No. 68 requires
governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first
time.
Statement No. 71Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB
Statement No. 68.
The provisions of this Statement should be applied simultaneously with the provisions of Statement 68.
Statement No. 72Fair Value Measurement and Application.
The provisions of this Statement are effective for financial statements
for periods beginning after June 15, 2015.
The effect these standards may have on future financial statements is not determinable at this time, but it is expected that Statements No.
68 and 71 will have a material impact.
75
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76
REQUIRED SUPPLEMENTARY INFORMATION
77
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
Variance with
Final Budget -
Budgeted Amounts2014Positive2013
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes 7,501,816$ 7,501,816$ 7,476,294$ (25,522)$ 7,376,284$
Licenses and permits 307,355 307,355 364,430 57,075 536,706
Intergovernmental 609,541 609,541 697,492 87,951 710,071
Charges for services 685,900 685,900 998,510 312,610 1,122,461
Fines 100,750 100,750 94,375 (6,375) 96,130
Investment income 75,000 75,000 144,876 69,876 (17,096)
Miscellaneous 91,850 91,850 150,401 58,551 140,983
Total revenues 9,372,212 9,372,212 9,926,378 554,166 9,965,539
Expenditures:
Current:
General government:
Mayor and City council 86,840 86,840 84,650 2,190 83,595
Administration 176,265 176,265 169,219 7,046 147,503
Newsletter 26,000 26,000 20,974 5,026 17,678
Human resources 39,229 39,229 18,039 21,190 17,906
Legal 178,300 178,300 177,427 873 173,244
City clerk 129,400 129,400 128,859 541 108,311
Elections 55,336 55,336 41,506 13,830 11,353
Financial administration 235,459 235,459
230,639 4,820215,215
Assessing 150,000150,000145,051 4,949144,561
Information systems 170,629176,629146,985 29,644135,981
Planning and zoning 401,360401,360387,309 14,051349,488
Engineering 465,656465,656460,871 4,785452,788
Facility management 557,905562,905470,400 92,505451,255
Total general government 2,672,3792,683,3792,481,929 201,4502,308,878
Public safety:
Police 2,818,1322,818,1322,818,1322,740,899
-
Fire protection 1,127,3891,127,3891,264,021 (136,632)1,114,759
Protective inspection 411,295401,295390,908 10,387423,495
Civil defense 17,12817,12821,837 (4,709)13,930
Animal control9,9509,9504,0265,9246,037
Total public safety4,383,8944,373,8944,498,924 (125,030)4,299,120
Public works:
Streets and highways 604,078604,078600,315 3,763572,754
Snow and ice removal 517,949517,949637,153 (119,204)630,798
Street signs 197,274197,274187,936 9,338162,859
Traffic signals 35,00035,00034,902 9826,241
Street lighting 246,400246,400235,794 10,606242,033
Total public works$ 1,600,701$1,600,701$1,696,100$ (95,399)$1,634,685
(Continued)
78
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND (Continued)
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
Variance with
Final Budget -
Budgeted Amounts2014Positive2013
OriginalFinalActual(Negative)Actual
Expenditures:
Current: (continued)
Parks and recreation 1,118,926$ 1,122,426$ 1,009,373$ 113,053$ 946,545$
Recycling 131,147 131,147 106,587 24,560 123,595
Unallocated 89,328 89,328 81,183 8,145 75,517
Total current 9,996,375 10,000,875 9,874,096 126,779 9,388,340
Capital outlay:
12,220
Public safety - - - -
Recycling7,314 (7,314)54,514
- -
Total capital outlay7,314 (7,314)66,734
- -
Total expenditures 9,996,37510,000,8759,881,410 119,4659,455,074
Revenues over (under) expenditures (624,163)(628,663)44,968 673,631510,465
Other financing sources (uses):
Transfers in 196,930196,930196,930196,930
-
Transfers out(135,000)
- - - -
Total other financing sources (uses) 196,930196,930196,93061,930
-
Net increase (decrease) in fund balance (427,233)$ $(431,733)241,898$ 673,631572,395
Fund balance - January 16,960,2366,387,841
Fund balance - December 31$7,202,134$6,960,236
79
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
SCHEDULE OF FUNDING PROGRESS -
OTHER POST EMPLOYMENT BENEFITS PLAN
For The Year Ended December 31, 2014
Unfunded
ActuarialUAAL as
a
ActuarialActuarialAccruePercentage of
d
ActuarialValue ofAccrueLiabilitFundCovereCovere
dydd
Valuation DateAssetsLiabilit( UAAL )RatioPayrollPayroll
y
( a )( b )( b-a )( a/b )( c )(( b-a ) / c )
January 1, 2008$ 324,387$324,3870.00%5,400,000$ 6.01%
$ -
January 1, 2011 273,046273,0460.00%5,298,367 5.15%
-
January 1, 2014 247,646247,6460.00%5,728,317 4.32%
-
80
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2014
Note A BUDGETS
The General Fund budget is legally adopted on a basis consistent
America. The legal level of budgetary control is at the depart
Fund departments whose expenditures exceed budget appropriations
FinalOver
BudgetActualBudget
General Fund:
Current:
Public safety
Fire protection $ 1,127,389$ 1,264,021$ 136,632
Civil defense17,12821,8374,709
Public works
Snow and ice removal 517,949637,153119,204
Capital outlay:
Recycling-7,3147,314
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.
nts. This
acceptable rating allows minor cracking and patching of the pave
the system.
In the fall of 2014, 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, 2014
Prior to
20132013
RatingRating
ConditionScaleScale
Excellent86 - 1008 - 10
Very Good71 - 857 - 7.9
Good56 - 706 - 6.9
Fair41 - 554 - 5.9
Poor26 - 402 - 3.9
Very Poor11 - 251 - 1.9
Substandard0 - 100 - .9
As of December 31, 20146.7 on the average with detail condition as
follows:
% of Street
Conditionand Trails
Excellent to Good89.0%
Fair11.0%
Poor to Substandard0.0%
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
$2,029,026 on street and trail maintenance for the year ending December 31, 2014. 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 $1,150,000.
MaintenanceActualOCI
YearEstimateExpendituresRating
2005$ 1,655,71583
$1 ,000,000
20061,150,0001,228,98182
20071,150,0001,256,43381
20081,150,0002,244,71380
20091,150,0001,666,21681
20101,150,0001,457,08283
20111,150,0001,770,98083
20121,150,0003,894,78483
20131,150,0002,471,1236.9
20141,150,0002,029,0266.7
The City has an on-going street and trail rehabilitation program funded in the Capital Improvement Program that is intended to improve
the condition rating of the City streets and trails. The rehabilitation program is formulated based on the deficiencies identified as a part
of its Pavement Management Program.
82
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
83
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
A Special Revenue Fund is used to account for the proceeds of sp
expenditures for specified purposes. Revenues for these funds c
fees, gifts and grants or contributions from other governmental
restricted by statute, local ordinance or grant agreements. The
outlay as legal restrictions mandate.
DEBT SERVICE FUNDS
A Debt Service Fund accounts for the accumulation of resources f
interest and other related costs.
CAPITAL PROJECTS FUNDS
A Capital Projects Fund is used to account for acquisition or co
with governmental fund resources, general obligation debt, speci
other resources that are not part of Proprietary Funds or Trust
84
CITY OF ANDOVER, MINNESOTA
COMBINING BALANCE SHEETStatement 12
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2014
With Comparative Totals For December 31, 2013
Totals
SpecialDebtCapitalNonmajor Governmental Funds
RevenueServiceProjects20142013
Assets:
Cash and investments 761,440$ 1,052,349$ 2,634,690$ 4,448,479$ 4,693,989$
Cash and investments with escrow agent 126,086 126,086
- - 823,578
Accrued interest3,4792,88212,514 18,87524,265
Accounts receivable - net91,172 91,172
- - 107,642
Property taxes receivable:
Unremitted45518,3042,449 21,20817,697
Delinquent91840,5055,444 46,86752,640
Inventories - at cost1,562 1,5621,316
- -
Land held for resale 100,000
- - 100,000 100,000
Total assets985,112 4,854,249
1,114,040 2,755,097 5,821,127
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Interfund payable190,00070,000 260,000
- 630,000
Accounts payable49,07693,427 142,503
- 104,121
Contracts payable64,248
- - - -
Deposits payable16,576 16,57614,140
- -
Due to other governmental units3,147 3,1472,517
- -
Salaries payable22,983 22,98323,566
- -
Unearned revenue95,008 95,00835,138
- -
Total liabilities376,790 540,217
- 163,427 873,730
Deferred inflows of resources:
Unavailable revenues91840,505 146,867
105,444 152,640
Fund balance (deficit):
Nonspendable1,562 1,5621,316
- -
Restricte55,210 1,476,681
d
1,073,535 347,936 2,247,412
Committe591,289 591,289
d
- - 588,516
Assigne9,269 2,211,977
d
- 2,202,708 2,234,342
Unassigne(49,926)(64,418) (114,344)(276,829)
d
-
Total fund balance (deficit)607,404 4,167,165
1,073,535 2,486,226 4,794,757
Total liabilities, deferred inflows o
f
resources, and fund balances (deficit) 985,112$ 1,114,040$ 2,755,097$ 4,854,249$ 5,821,127$
85
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 13
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2014
With Comparative Totals For The Year Ended December 31, 2013
Totals
Special DebtCapitalNonmajor Governmental Funds
RevenueServiceProjects20142013
Revenues:
General property taxes 40,066$ 2,074,115$ 272,179$ 2,386,360$ 2,274,515$
Intergovernmental 4,909 61,680 247,71866,589
-
Charges for services 722,462 722,462684,458
- -
Investment income 12,5921,29479,607 93,493(46,511)
Miscellaneous:
Park dedication fees156,384 156,384205,080
- -
Rent 639,000 639,000639,423
- -
Other 261,330108,644 369,974308,337
-
Total revenues 1,680,3592,137,089616,814 4,434,2624,313,020
Expenditures:
Current:
General government 3,690103,331 107,021338,400
-
Public safety38,340 38,3402,578
- -
Public works 93,1798,173 101,35287,138
-
Parks and recreation 1,028,693101,486 1,130,1791,043,912
-
Economic development 78,21343,409 121,622133,248
-
Capital outlay:
Public safety1,089,037 1,089,0376,783
- -
Public works339,497 339,497668,205
- -
Parks and recreation 29,774833,739 863,5131,195,093
-
Economic development15,098
- - - -
Debt service:
Principal retirement2,140,000196,7192,336,7191,689,000
-
Interest-900,504 900,5041,262,302
-
Paying agent fees2,775 2,7753,489
- -
Professional service2,030 2,0301,616
- -
Total expenditures 1,233,5493,045,3092,753,731 7,032,5896,446,862
Revenues over (under) expenditures 446,810(908,220)(2,136,917) (2,598,327)(2,133,842)
Other financing sources (uses):
Transfers in593,3179,951 603,2681,340,283
-
Transfers out (246,993)(9,951) (256,944)(529,633)
-
Bonds issued1,555,000 1,555,000
- - -
Redemption of refunded bonds
- - - -(1,900,000)
Bond premium44,278 44,278
- - -
Proceeds from sale of capital assets25,133 25,13327,150
- -
Total other financing sources (uses) (246,993) 583,3661,634,362 1,970,735(1,062,200)
Net increase (decrease) in fund balance 199,817 (324,854)(502,555) (627,592)(3,196,042)
Fund balance - January 1 407,5871,398,3892,988,781 4,794,7577,990,799
Fund balance - December 31$ 607,404$1,073,535$2,486,226$ 4,167,165$4,794,757
86
NONMAJOR SPECIAL REVENUE FUNDS
The City of Andover had the following Special Revenue Funds duri
EDA General - This fund was established to account for activities designed
development within the community.
Community Center - This fund is used to account for the operations of the Andove
operations of the YMCA.
Drainage and Mapping - This fund accounts for resources necessary to maintain existi
maps and mapping systems for the City.
LRRWMO -
Management Organization (LRRWMO).
Forestry - This fund was established to account for the protection of fo
plans to ensure preservation or restoration of these resources.
Right-of-Way Management/Utility - This fund is used to account for activity associated with the
public right-of-ways.
Charitable Gambling - This fund accounts for the 10% of net profits received from g
profit organizations. According to state statute, all expenditu
police, fire and other emergency or public safety-related servic
obligations.
Construction Seal Coating - This fund accounts for the contributions associated with land
the respective developments first application of crack seal and
87
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2014
With Comparative Totals For December 31, 2013
Drainage
EDACommunitand
y
GeneralCenteMappingLRRWMO
r
Assets:
Cash and investments 370,171$ 21,670$ 154,088$ 2,605$
126,086
Cash and investments with escrow agent - - -
Accrued interest1,818 750
- -
Accounts receivable12,42378,749
- -
Property taxes receivable:
Unremitted455
- - -
Delinquent918
- - -
Inventories - at cost1,562
- - -
Total assets384,412228,067154,8383,978
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Interfund payable190,000
- - -
Accounts payable1,54447,532
- -
Contracts payable
- - - -
Deposits payable16,576
- - -
Due to other governmental units3,147
- - -
Salaries payable2,07619,176765
-
Unearned revenue
- - - -
Total liabilities3,620276,431765
-
Deferred inflows of resources:
Unavailable revenues918
- - -
Fund balance (deficit):
Nonspendable1,562
- - -
Restricte
d
- - - -
Committe380,792 2,295154,838
d
-
Assigne
d
- - - -
Unassigne(49,926)
d
- - -
Total fund balance (deficit)380,792(48,364)154,8382,295
Total liabilities, deferred inflows o
f
resources, and fund balances (deficit)$384,412$228,067$154,838$3,978
88
Statement 14
Right-of-WaTotals
y
ManagementCharitableConstructionNonmajor Special Revenue Funds
/
ForestrUtilitGamblinSeal Coating20142013
yyg
$ 7,243$ 50,771$ 56,993$97,899$761,440$ 662,166
126,086 101,008
- - - -
193 2434753,479 3,308
-
91,172 107,642
- - - -
455 362
- - - -
918 1,029
- - - -
1,562 1,316
- - - -
7,243 50,964 57,23698,374985,112 876,831
190,000 340,000
- - - -
49,076 50,146
- - - -
2,748
- - - - -
16,576 14,140
- - - -
3,147 2,477
- - - -
96622,983 23,566
- - -
95,00895,008 35,138
- - -
96695,008376,790 468,215
- -
918 1,029
- - - -
1,562 1,316
- - - -
- 55,21055,210 25,321
- -
49,9983,366591,289 588,516
- -
7,243 2,0269,269 4,323
- -
(49,926) (211,889)
- - - -
7,243 49,998 57,2363,366607,404 407,587
$ 7,243$ 50,964$ 57,236$98,374$985,112$ 876,831
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, 2014
With Comparative Totals For The Year Ended December 31, 2013
Drainage
EDACommunitand
y
GeneralCenteMappingLRRWMO
r
Revenues:
$40,066
General property taxes $ -$ -$ -
Intergovernmental
- - - -
Charges for services36,622616,835 28,097
-
Investment income10,677(6,582) 4,157(281)
Miscellaneous:
Rent639,000
- - -
Othe 212,9165,868
r
- -
Total revenues53,1671,462,169 32,25439,785
Expenditures:
Current:
General government
- - - -
Public works 9,86941,579
- -
Parks and recreation1,028,693
- - -
Economic development78,213
- - -
Capital outlay:
Parks and recreation29,774
- - -
Economic development
- - - -
Total expenditures78,2131,058,467 9,86941,579
Revenues over (under) expenditures(25,046)403,702 22,385(1,794)
Other financing sources (uses):
Transfers out(241,493)
- - -
Net increase (decrease) in fund balance(25,046)162,209 22,385(1,794)
Fund balance (deficit) - January 1405,838(210,573) 132,4534,089
Fund balance (deficit) - December 31$380,792$(48,364)$ 154,838$2,295
90
Statement 15
Right-of-WaTotals
y
ManagementCharitableConstructionNonmajor Special Revenue Funds
/
ForestrUtilitGamblinSeal Coating20142013
yyg
$40,066$ 39,913
$ -$ -$ -$ -
4,9094,9099,828
- - -
38,3202,588722,462 684,458
- -
146 9751,2622,23812,592(9,240)
639,000 639,423
- - - -
8,96733,579261,330 192,517
- -
14,022 39,29534,8414,8261,680,359 1,556,899
3,6903,6903,736
- - -
10,338 28,8052,58893,179 87,102
-
1,028,693 971,108
- - - -
78,213 133,248
- - - -
29,774
- - - - -
15,098
- - - - -
10,338 28,8053,6902,5881,233,549 1,210,292
3,684 10,49031,1512,238446,810 346,607
(5,500)(246,993) (380,948)
- - -
3,684 4,99031,1512,238199,817 (34,341)
3,559 45,00826,0851,128407,587 441,928
$ 7,243$ 49,998$57,236$3,366$607,404$ 407,587
91
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92
NONMAJOR DEBT SERVICE FUNDS
The City's Debt Service Funds account for eight types of bonded
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, 2012A and 2014A) are repaid primarily from
general property taxes.
Capital Improvement Bonds - (G.O. Capital Improvement Refunding Bonds 2012B) are repaid primarily from
general property taxes
Revenue Bonds - (EDA Public Facility Lease Revenue Bonds 2004) are repaid fro
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
properties.
State Aid Bonds - (State Aid Refunding Bonds of 2009A) are used to finance MSA
construction and improvements. These bonds are repaid from a po
Referendum Bonds (Open Space Referendum Bonds of 2010A) are used to finance the
as open space.
93
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2014
With Comparative Totals For December 31, 2013
G.O. Capital
G.O.G.O.ImprovemenG.O.
t
EquipmentEquipmentRefundingAbatemen
t
CertificateCertificateBondsBonds
2012A2014A2012B2012C
Assets:
Cash and investments$370,273$260,267$50,528$ 56,519
Cash and investments with escrow agent - - - -
Accrued interest1,518745
- -
Property taxes receivable:
Unremitted1,2582,3365,040 8,290
Delinquent3,0645,69112,280 16,100
Total assets376,11367,848 80,909
269,039
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Interfund payable
- - - -
Accounts payable
- - - -
Total liabilities
- - - -
Deferred inflows of resources:
Unavailable revenues3,0645,69112,280 16,100
Fund balance (deficit):
Restricte55,568 64,809
d
373,049 263,348
Total liabilities, deferred inflows o
f
resources, and fund balances (deficit)$ 269,039376,113$ 67,848$ 80,909$
94
Statement 16
State AiOpen Space
d
RefundingReferenduTotals
m
BondsBondsNonmajor Debt Service Funds
2009A2010A20142013
$ 109,742$ 205,020$ 1,052,349$880,426
- - - 722,570
619 2,8821,919
-
1,380 18,30415,090
-
3,370 40,50545,296
-
109,742 210,389 1,114,040
1,665,301
- - - 220,000
1,616
- - -
- - - 221,616
3,370 40,50545,296
-
109,742 207,019 1,073,535
1,398,389
$ 109,742$ 210,389$ 1,114,040$1,665,301
95
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2014
With Comparative Totals For The Year Ended December 31, 2013
G.O. Capital
G.O.G.O.G.O.Improvemen
t
EquipmentEquipmentEquipmentRefunding
CertificateCertificateCertificateBonds
2011A2012A2014A2012B
Revenues:
$140,196$260,363$ 561,799
General property taxes $ -
Intergovernmental
- - - -
Investment income8,273 2,985(7,171)
-
Total revenues 554,628
- 148,469 263,348
Expenditures:
Debt service:
Principal retirement95,000 500,000
- -
Interest95011,70024,400
-
Paying agent fees450450
- -
Professional services
- - - -
Total expenditures95,95012,150 524,850
-
Revenues over (under) expenditures(95,950)29,778
136,319 263,348
Other financing sources (uses):
Transfers in
- - - -
Transfers out(9,951)
- - -
Redemption of refunded bonds
- - - -
Total other financing sources (uses)(9,951)
- - -
Net increase (decrease) in fund balance(105,901)29,778
136,319 263,348
Fund balance - January 1105,90125,790
236,730 -
Fund balance - December 31$373,049$263,348$55,568
$ -
96
Statement 17
EDA PublicG.O.
Facility LeasG.O.PIR FundOpen Space
e
RevenueAbatemenRefundingStateReferenduTotals
tm
BondsBondsBondsAid BondsBondsNonmajor Debt Service Funds
20042012C2010A2009A2010A20142013
$ 182,964$ 741,093$187,700$2,074,115$ 1,962,018
$ -$ -
61,68061,680 237,890
- - - -
(1,562) (5,266)1,2702,7651,294 (16,269)
-
181,402 735,82762,950 2,183,639
- 190,465 2,137,089
470,000 320,000 385,000 1,689,000
230,000 140,000 2,140,000
434,373 385,681 3,8504,78534,765 1,262,302
900,504
1,000 4254502,775 3,489
- -
2,0302,030 1,616
- - - -
907,403 706,106 388,850 2,956,407
234,785 175,215 3,045,309
(726,001) 29,721 (388,850)(171,835)15,250(908,220) (772,768)
212,356 380,961 756,598
- - - 593,317
(9,951) (48,685)
- - - - -
- - - - - -(1,900,000)
212,356 380,961 (1,192,087)
- - - 583,366
(513,645) 29,721 (7,889)(171,835)15,250(324,854) (1,964,855)
513,645 35,088 7,889 3,363,244
281,577 191,769 1,398,389
$ -$ 64,809$109,742$207,019$1,073,535$ 1,398,389
$ -
97
- This page intentionally left blank -
98
NONMAJOR CAPITAL PROJECT FUNDS
The City of Andover had the following Capital Projects Funds dur
Storm Sewer Project - This fund was established to account for storm sewer fees and
development and ongoing maintenance.
Park Dedication - This fund was established to account for contributions associ
Building Fund - This fund was established to account for miscellaneous buildi
Trail and Transportation - This fund is used to account for contributions associated wit
Capital Equipment Reserve - This fund is used to account for the capital equipment/projec
capital expenditures it will be used for.
Equipment Certificates 2012A - This fund was established to account for the purchase of capi
financed through the issuance of capital notes.
Equipment Certificates 2014A - This fund was established to account for the purchase of capi
financed through the issuance of capital notes.
Open Space Referendum Bonds 2010A - This fund was established to account for the purchase of vari
acquisitions for open space preservation within the City.
99
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2014
With Comparative Totals For December 31, 2013
Stor
m
SeweParkBuildingTrail &
r
ProjectDedicationFundTransportation
Assets:
Cash and investments$5,582$332,670$841,654$134,337
Accrued interest-1,3434,757626
Property taxes receivable:
Unremitted-553 --
Delinquent-1,229 --
Land held for resale--100,000-
Total assets5,582335,795946,411134,963
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Interfund payables70,000- --
Accounts payable-- --
Contracts payable-- --
Due to other government units-- --
Total liabilities70,000- --
Deferred inflows of resources:
Unavailable revenues-1,229100,000-
Fund balance (deficit):
Restricte -- - -
d
Assigne 334,566- 846,411 134,963
d
Unassigne -(64,418) - -
d
Total fund balance (deficit) (64,418) 334,566 846,411 134,963
Total liabilities, deferred inflows o
f
resources, and fund balances (deficit)$5,582$ 946,411335,795$ 134,963$
100
Statement 18
Open Space
CapitalEquipmentReferenduTotals
m
EquipmentCertificatesBondsNonmajor Capital Projects Funds
Reserve2014A2010A20142013
$ 881,256$ 205,680$ 233,511$2,634,690$3,151,397
3,876 - 1,91212,51419,038
1,896 - -2,4492,245
4,215 - -5,4446,315
- - -100,000100,000
891,243 205,680 235,4232,755,0973,278,995
- - -70,00070,000
260 93,167 -93,42752,359
- - --61,500
- - --40
260 93,167 -163,427183,899
4,215 - -105,444106,315
- 112,513 235,423347,936823,702
886,768 - -2,202,7082,230,019
- - -(64,418)(64,940)
886,768 112,513 235,4232,486,2262,988,781
$ 891,243$ 205,680$ 235,423$2,755,097$3,278,995
101
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For The Year Ended December 31, 2014
With Comparative Totals For The Year Ended December 31, 2013
Stor
m
SeweParkBuildingTrail &
r
ProjectDedicationFundTransportation
Revenues:
General property taxes$61,460
$ -$ -$ -
Investment income(1,551)8,84628,4953,526
Miscellaneous:
Park dedication fees
- 156,384 - -
Other2,073 28,534
- -
Total revenues52228,495 32,060
226,690
Expenditures:
Current:
General government44,823
- - -
Public safety
- - - -
Public works3,775
- - -
Parks and recreation44,784
- - -
Economic developmen43,409
t
- - -
Capital outlay:
Public safety - - - -
Public works - - - -
Parks and recreation - 190,491 - -
Debt service:
Principal retirement
- - 196,719 -
Total expenditures3,775
- 235,275 284,951
Revenues over (under) expenditures522(8,585)(256,456) 28,285
Other financing sources (uses):
Transfers in9,951
- - -
Transfers out
- - - -
Bonds issued
- - - -
Bond premium
- - - -
Proceeds from sale of capital assets
- - - -
Total other financing sources (uses)9,951
- - -
Net increase (decrease) in fund balance522(8,585)(246,505) 28,285
Fund balance (deficit) - January 1(64,940) 106,678
343,151 1,092,916
Fund balance (deficit) - December 31$(64,418)$334,566$846,411$ 134,963
102
Statement 19
Open Space
CapitalEquipmentEquipmentReferenduTotals
m
EquipmentCertificatesCertificatesBondsNonmajor Capital Projects Funds
Reserve2012A2014A2010A20142013
210,719$272,179$272,584
$ $ -$ -$ -
21,935 6,34712,00979,607(21,002)
-
- - - - 156,384 205,080
78,037
- - - 108,644 115,820
310,691 6,34712,009
- 616,814 572,482
58,508
- - - 103,331 334,664
3,300 35,04038,3402,578
- -
4,3988,173 36
- - -
48,2768,42672,804
- - 101,486
43,409
- - - - -
6,783
- -1,089,037 - 1,089,037
33,628 305,869
- - 339,497 668,205
21,848 16,924 63,166
541,310 833,739 1,195,093
- - - - 196,719 -
136,330 50,552 1,493,112
549,736 2,753,731 2,280,163
174,361 (50,552) (1,486,765)(537,727)(2,136,917)(1,707,681)
9,951
- - - - 583,685
(100,000)
- - - - -
- -1,555,000 - 1,555,000 -
44,27844,278
- - - -
25,13325,13327,150
- - -
25,133
-1,599,278 - 1,634,362 510,835
199,494 (50,552) 112,513(537,727)(502,555)(1,196,846)
687,274 50,552
- 773,150 2,988,781 4,185,627
$ 886,768$ 112,513$235,423$2,486,226$2,988,781
$ -
103
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - EDA GENERAL Statement 20
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
Variance with
Final Budget -
Budgeted Amounts2014Positive2013
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services 30,000$ $30,000$36,622$ 6,622$37,306
Investment income 5,0005,00010,677 5,677(2,996)
Miscellaneous5,868 5,8686,620
- -
Total revenues 35,00035,00053,167 18,16740,930
Expenditures:
Current:
Economic development 148,628148,62878,213 70,415133,248
Capital outlay:
Economic development15,098
- - - -
Total expenditures 148,628148,62878,213 70,415148,346
Net increase (decrease) in fund balance (113,628)$ $(113,628)(25,046)$ 88,582(107,416)
Fund balance (deficit) - January 1405,838513,254
Fund balance (deficit) - December 31$380,792$405,838
104
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - COMMUNITY CENTER Statement 21
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
Variance with
Final Budget -
Budgeted Amounts2014Positive2013
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services 548,500$ $548,500$616,835$ 68,335$587,356
Investment income(6,582) (6,582)(5,510)
- -
Miscellaneous:
Rent 635,000635,000639,000 4,000639,423
Othe 163,600163,600 212,916 49,316 160,304
r
Total revenues 1,347,100 1,347,100 1,462,169 115,069 1,381,573
Expenditures:
Current:
Parks and recreation 907,167 907,167 1,028,693 (121,526) 971,108
Capital outlay:
29,774 (29,774)
Parks and recreation - - -
Total expenditures 907,167907,1671,058,467 (151,300)971,108
Revenue over (under) expenditures 439,933439,933403,702 (36,231)410,465
Other financing sources (uses)
Transfers out (371,598)(371,598)(241,493) 130,105(371,598)
Net increase (decrease) in fund balance$ 68,335$68,335162,209$ 93,87438,867
Fund balance (deficit) - January 1(210,573)(249,440)
Fund balance (deficit) - December 31$(48,364)$(210,573)
105
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - DRAINAGE AND MAPPING Statement 22
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
Variance with
Final Budget -
Budgeted Amounts2014Positive2013
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services 8,000$ $8,000$28,097$ 20,097$34,634
Investment income 1,2001,2004,157 2,957(345)
Total Revenues 9,2009,20032,254 23,05434,289
Expenditures:
Current:
Public works 11,80511,8059,869 1,9367,897
Net increase (decrease) in fund balance$ (2,605)$(2,605)22,385$ 24,99026,392
Fund balance (deficit) - January 1132,453106,061
Fund balance (deficit) - December 31$154,838$132,453
106
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - LRRWMOStatement 23
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
Variance with
Final Budget -
Budgeted Amounts2014Positive2013
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes 40,000$ $40,000$40,066$ 66$39,913
Investment income100100(281) (381)(131)
Total revenues 40,10040,10039,785 (315)39,782
Expenditures:
Current:
Public works 42,49442,49441,579 91539,428
Net increase (decrease) in fund balance$ (2,394)$(2,394)(1,794)$ 600354
Fund balance (deficit) - January 14,0893,735
Fund balance (deficit) - December 31$2,295$4,089
107
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - FORESTRYStatement 24
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
Variance with
Final Budget -
Budgeted Amounts2014Positive2013
OriginalFinalActual(Negative)Actual
Revenues:
Intergovernmental 12,500$ $12,500$4,909$ (7,591)$9,828
Investment income100100146 4614
Miscellaneous 6,5006,5008,967 2,4674,753
Total revenues 19,10019,10014,022 (5,078)14,595
Expenditures:
Current:
Public works 19,00019,00010,338 8,66212,166
Net increase (decrease) in fund balance$100$1003,684$ 3,5842,429
Fund balance (deficit) - January 13,5591,130
Fund balance (deficit) - December 31$7,243$3,559
108
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - RIGHT-OF-WAY MANAGEMENT/UTILITY Statement 25
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
Variance with
Final Budget -
Budgeted Amounts2014Positive2013
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services 10,000$ $10,000$38,320$ 28,320$25,162
Investment income500500975 475(385)
Total revenues 10,50010,50039,295 28,79524,777
Expenditures:
Current:
Public works 29,64329,64328,805 83827,466
Revenue over (under) expenditures (19,143)(19,143)10,490 29,633(2,689)
Other financing sources (uses):
Transfers out (5,500)(5,500)(5,500)(9,350)
-
Net increase (decrease) in fund balance$ (24,643)$(24,643)4,990$ 29,633(12,039)
Fund balance (deficit) - January 145,00857,047
Fund balance (deficit) - December 31$49,998$45,008
109
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CHARITABLE GAMBLING Statement 26
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
Variance with
Final Budget -
Budgeted Amounts2014Positive2013
OriginalFinalActual(Negative)Actual
Revenues:
$1,262$ 1,262$156
Investment income $ -$ -
Miscellaneous 7,0007,00033,579 26,57920,840
Total revenues 7,0007,00034,841 27,84120,996
Expenditures:
Current:
General government 6,0006,0003,690 2,3103,736
Net increase (decrease) in fund balance$ 1,000$1,00031,151$ 30,15117,260
Fund balance (deficit) - January 126,0858,825
Fund balance (deficit) - December 31$57,236$26,085
110
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CONSTRUCTION SEAL COATING Statement 27
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2014
With Comparative Actual Amounts For The Year Ended December 31, 2013
Variance with
Final Budget -
Budgeted Amounts2014Positive2013
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services 5,000$ $5,000$2,588$ (2,412)
$ -
Investment income3003002,238 1,938(43)
Total revenues 5,3005,3004,826 (474)(43)
Expenditures:
Current:
Public works 5,0005,0002,588 2,412145
Net increase (decrease) in fund balance$300$3002,238$ 1,938(188)
Fund balance (deficit) - January 11,1281,316
Fund balance (deficit) - December 31$3,366$1,128
111
INTERNAL SERVICE FUNDS
Internal Service Funds are used to account for the financing of
agency to other departments or agencies of the government and to
basis. The City of Andover had the following Internal Service F
Central Equipment Maintenance This fund accounts for the maintenance of the equipment for the
Risk Management This fund accounts for the expenditures in payment of insurance
safety training and administrative expense.
112
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET POSITION Statement 28
INTERNAL SERVICE FUNDS
December 31, 2014
With Comparative Totals for December 31, 2013
Central
EquipmentRisTotals
k
MaintenanceManagemen20142013
t
Assets:
Current assets:
Cash and cash equivalents 229,988$ 315,362$ 545,350$ 619,913$
Accrued interest 1,022 1,060 2,082 3,026
Inventories - at cost 119,907119,907100,594
-
Total assets350,917316,422667,339723,533
Liabilities:
Current liabilities:
Accounts payable16,89174917,64036,219
Contracts payable24,00024,000
- -
Salaries payable11,33468112,01510,122
Total liabilities28,22525,43053,65546,341
Net position:
Unrestricted$322,692$290,992$613,684$677,192
113
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES AND Statement 29
CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2014
With Comparative Totals For The Year Ended December 31, 2013
Central
EquipmentRisTotals
k
MaintenanceManagemen20142013
t
Operating revenues:
User charges$699,603$379,325$1,078,928$1,070,619
Other5,250117,894123,14482,384
Total operating revenues704,853497,2191,202,0721,153,003
Operating expenses:
Personal services233,649142,601376,250354,288
Supplies367,55130,113397,664355,708
Other service charges148,110355,852503,962372,878
Total operating expenses749,310528,5661,277,8761,082,874
Operating income (loss)(44,457)(31,347)(75,804)70,129
Nonoperating revenues (expenses):
Investment income7,1565,140 12,296(1,949)
Change in net position(37,301)(26,207)(63,508)68,180
Net position - January 1359,993317,199677,192609,012
Net position - December 31$322,692$290,992$613,684$677,192
114
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF CASH FLOWSStatement 30
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2014
With Comparative Totals For The Year Ended December 31, 2013
Central
Totals
EquipmentRisk
MaintenanceManagemen20142013
t
Cash flows from operating activities:
Receipts from customers and users$704,853$497,219$ 1,202,072$1,153,066
Payment to suppliers(554,092)(361,426) (915,518)(731,447)
Payment to employees(231,825)(142,532) (374,357)(353,170)
Net cash flows from operating activities(81,064)(6,739) (87,803)68,449
Cash flows from investing activities:
Investment income7,8095,431 13,240(2,393)
Net increase in cash and cash equivalents(73,255)(1,308) (74,563)66,056
Cash and cash equivalents - January 1303,243316,670 619,913553,857
Cash and cash equivalents - December 31$229,988$315,362$ 545,350$619,913
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss)$(44,457)$(31,347)$ (75,804)$70,129
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Changes in assets and liabilities:
Decrease (increase) in accounts receivable-- -63
Decrease (increase) in inventory(19,313)- (19,313)(9,191)
Increase (decrease) in accounts payable(19,118)539 (18,579)6,345
Increase (decrease) in contracts payable-24,000 24,000
-
Increase (decrease) in due to other governmental units-- -(15)
Increase (decrease) in salaries payable1,82469 1,8931,118
Total adjustments(36,607)24,608 (11,999)(1,680)
Net cash provided by operating activities$(81,064)$(6,739)$ (87,803)$68,449
115
AGENCY FUNDS
Agency Funds are used to account for assets held by the City in
private organizations and/or other governmental units. The City
the year:
General Escrow This fund is used to account for distribution of funds for insu
General Agency This fund is used to account for the collection and distributio
land development activities.
116
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET POSITION Statement 31
FIDUCIARY FUNDS
December 31, 2014
GeneralGeneral
EscroAgencTotal
wy
Assets:
Cash and investments 54,727$ 196,664$ 251,391$
Liabilities:
Accounts payable 97 13,375 13,472
Deposits payable 54,630 183,289 237,919
Total liabilities 54,727$ 196,664$ 251,391$
117
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Statement 32
FIDUCIARY FUNDS
December 31, 2014
BalanceBalance
January 1,December 31,
2014AdditionsDeletions2014
General Escrow Fun
d
Assets:
Cash and investments 45,074$ 62,669$ (53,016)$ 54,727$
Liabilities:
Accounts payable 124 26,260 (26,287) 97
Deposits payable 44,950 36,409 (26,729) 54,630
Total liabilities 45,074$ 62,669$ (53,016)$ 54,727$
General Agency Fun
d
Assets:
Cash and investments 432,290$ 1,111,505$ (1,347,131)$ 196,664$
Liabilities:
Accounts payable 58,555 578,487 (623,667) 13,375
Deposits payable 373,735 533,018 (723,464) 183,289
Total liabilities 432,290$ 1,111,505$ (1,347,131)$ 196,664$
Total Fiduciary Funds
Assets:
Cash and investments 477,364$ 1,174,174$ (1,400,147)$ 251,391$
Liabilities:
Accounts payable 58,679 604,747 (649,954) 13,472
Deposits payable 418,685 569,427 (750,193) 237,919
Total liabilities 477,364$ 1,174,174$ (1,400,147)$ 251,391$
118
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 120
These tables contain trend information to help the reader understand how the City’s financial performance
and well-being have changed over time.
Revenue Capacity130
These tables contain information to help the reader assess the City’s most significant local revenue source,
the property tax.
Debt Capacity136
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.
144
Demographic and Economic Information
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 Information147
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.
119
CITY OF ANDOVER, MINNESOTA
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
2005200620072008
Governmental Activities
Net investment in capital assets67,652,236$ 64,114,553$ 77,285,905$ 79,644,769$
Restricted6,565,168 14,838,788 7,763,716 8,345,185
Unrestricted19,740,176 19,808,248 21,294,876 19,904,063
Total governmental activities net position93,957,580 98,761,589 106,344,497 107,894,017
Business-Type Activities
Net investment in capital assets35,588,013 38,249,916 38,580,630 37,606,052
Unrestricted3,032,746 3,451,261 3,659,887 4,005,471
Total business-type activities net position38,620,759 41,701,177 42,240,517 41,611,523
Primary Government
Net investment in capital assets103,240,249 102,468,182 115,866,535 117,250,821
Restricted6,565,168 14,838,788 7,763,716 8,345,185
Unrestricted22,772,922 23,259,509 24,954,763 23,909,534
Total primary government net position132,578,339$ 140,566,479$ 148,585,014$ 149,505,540$
120
Table 1
200920102011201220132014
$ 83,394,872$ 87,206,607$ 90,859,970$ 89,592,661$ 93,393,474$ 94,533,473
8,252,691 6,364,714 3,107,253 4,461,020 3,792,323 4,776,047
19,442,008 21,071,212 23,353,009 25,589,728 22,936,032 26,091,841
111,089,571 114,642,533 117,320,232 119,643,409 120,121,829 125,401,361
36,939,962 36,140,050 36,031,319 34,922,691 34,864,659 34,787,382
4,875,384 4,912,822 5,100,628 5,784,313 6,310,830 6,674,018
41,815,346 41,052,872 41,131,947 40,707,004 41,175,489 41,461,400
120,334,834 123,346,657 126,891,289 124,515,352 128,258,133 129,320,855
8,252,691 6,364,714 3,107,253 4,461,020 3,792,323 4,776,047
24,317,392 25,984,034 28,453,637 31,374,041 29,246,862 32,765,859
$ 152,904,917$ 155,695,405$ 158,452,179$ 160,350,413$ 161,297,318$ 166,862,761
121
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
2005200620072008
Expenses
Governmental activities:
General government2,432,433$ 2,637,584$ 2,509,011$ 2,505,105$
Public safety3,353,798 3,443,285 3,851,086 4,035,884
Public works3,937,423 3,031,459 3,783,509 5,144,197
Parks and recreation1,575,582 2,442,305 2,954,753 2,963,218
Recycling118,599 91,378 94,929 85,397
Economic development459,635 626,103 2,265,605 540,285
Interest on long-term debt1,797,469 1,668,444 2,303,567 2,219,130
Total governmental activities expenses13,674,939 13,940,558 17,762,460 17,493,216
Business-type activities:
Water2,160,502 2,232,144 2,587,847 2,563,781
Sewer1,555,010 1,585,548 1,631,224 1,794,891
Storm sewer400,114 408,003 537,151 521,975
Total business-type activities expenses4,115,626 4,225,695 4,756,222 4,880,647
Total primary government expenses17,790,565 18,166,253 22,518,682 22,373,863
Program Revenues
Governmental activities:
Charges for services:
General government709,538 471,573 785,600 647,081
Public safety1,001,912 804,447 662,299 721,289
Public works379,890 325,672 408,656 427,043
Parks and recreation461,679 749,407 859,531 1,049,032
Recycling32,810 35,379 33,158 35,897
218,605182,535
199,840
Economic development -
Operating grants and contributions 2,535,140 959,2861,129,099 917,618
Capital grants and contributions 3,934,686 4,920,694 8,794,164 1,069,607
Total governmental activities program revenue9,055,655 8,485,063 12,855,042 5,067,407
Business-type activities:
Charges for services:
Water 1,510,119 1,768,388 2,025,452 1,987,432
Sewer 1,550,745 1,691,728 1,771,670 1,869,327
Storm sewer 248,753 287,397 288,372 297,125
Operating grants and contributions
- - - -
Capital grants and contributions 823,797 2,761,282 158,113 142,133
Total business-type activities program revenue4,133,414 6,508,795 4,243,607 4,296,017
Total primary government program revenues 13,189,069 14,993,858 17,098,649 9,363,424
Net (Expense)/Revenue
Governmental activities (4,619,284) (5,455,495) (4,907,418) (12,425,809)
Business-type activities 17,788 2,283,100 (512,615) (584,630)
Total primary government net expense$ (4,601,496)$ (3,172,395)$ (5,420,033)$ (13,010,439)
122
Table 2
200920102011201220132014
$ 2,398,0072,413,916$ 2,406,750$ 2,453,801$ 3,061,867$ 2,791,507$
4,157,0504,237,401 4,214,316 4,325,531 4,495,447 4,747,142
3,445,4033,776,367 4,029,164 5,623,942 4,465,153 4,430,295
3,447,7302,880,595 2,945,742 3,102,534 3,029,917 3,229,894
108,78586,949 109,293 94,319 124,515 111,760
481,632 654,961 777,298 1,396,466 318,646 676,039
2,146,960 1,936,731 1,796,782 2,497,344 1,399,172 542,139
16,023,820 16,148,667 16,279,345 19,493,937 16,894,717 16,528,776
2,594,713 2,585,469 2,655,926 2,782,948 2,275,363 2,308,552
1,831,505 1,915,072 1,914,113 1,842,473 1,964,911 1,951,785
536,619 532,168 614,958 531,103 561,807 848,745
4,962,837 5,032,709 5,184,997 5,156,524 4,802,081 5,109,082
20,986,657 21,181,376 21,464,342 24,650,461 21,696,798 21,637,858
483,639 454,419 532,764 690,875 843,304 801,458
412,113479,516 540,089 607,715704,119492,665
316,451 337,360 309,066 308,583 321,114 318,018
1,495,779 1,432,672 1,498,847 1,495,872 1,463,579 1,545,794
29,479 40,504 48,339 39,530 42,544 41,440
185,539 211,121 235,134 170,391 239,570 96,772
966,635 1,214,066 977,553 1,358,424 1,119,778 946,540
1,631,929 1,461,834 1,356,091 2,774,126 1,425,815 4,677,704
5,521,564 5,631,492 5,497,883 7,445,516 6,159,823 8,920,391
2,127,676 2,077,305 2,119,954 2,572,560 2,495,561 2,347,763
1,967,997 1,964,117 1,990,218 2,063,177 2,065,467 2,117,624
325,392 338,823 358,708 379,262 399,417 421,056
9,380 9,506
- - - -
793,589 990,412
- - - -
5,214,654 4,389,625 4,468,880 5,014,999 4,960,445 5,886,361
10,736,218 10,021,117 9,966,763 12,460,51511,120,268
14,806,752
(10,502,256)(10,517,175)(10,781,462) (12,048,421) (10,734,894) (7,608,385)
251,817 (643,084) (716,117) (141,525) 158,364 777,279
$ (10,250,439)$ (11,160,259)$ (11,497,579)$ (12,189,946)$ (10,576,530)$ (6,831,106)
123
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
2005200620072008
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes:
General property taxes7,066,852$ 8,084,559$ 8,897,755$ 9,752,701$
Tax increment collections1,285,195 1,562,131 1,661,204 1,783,270
Grants and contributions not restricted to
specific programs86,906 77,642 486,626 274,402
Unrestricted investment earnings690,648 1,019,304 1,967,583 1,514,012
Gain on sale of capital assets251,504 219,910 191,735 234,070
Transfers(438,426) (704,042) (714,577) 416,874
Total governmental activities8,942,679 10,259,504 12,490,326 13,975,329
Business-type activities:
Unrestricted investment earnings47,620 87,376 337,378 372,510
5,900
Gain on sale of capital assets - - -
Transfers 438,426 704,042 714,577 (416,874)
Total business-type activities 486,046 797,318 1,051,955 (44,364)
Total primary government 9,428,725 11,056,822 13,542,281 13,930,965
Change in Net Position
Governmental activities 4,323,395 4,804,009 7,582,908 1,549,520
Business-type activities 503,834 3,080,418 539,340 (628,994)
Total primary government$ 4,827,229$ 7,884,427$ 8,122,248$ 920,526
124
Table 2
cont
200920102011201220132014
$ 10,336,53610,175,519$ 10,292,674$ 10,594,940$ 10,608,678$ 10,863,912$
2,074,5891,930,669 2,005,056 2,033,932 320,822 353,773
131,084 86,80284,875 14,360 12,511 87,179
1,114,4511,032,507 1,399,987 1,201,995 571,307 747,621
22,5006,144 91,693 16,625 23,650 228,639
421,887 437,186 (417,051) 509,746 (323,654) 606,793
13,697,810 14,070,137 13,459,161 14,371,598 11,213,314 12,887,917
373,893 317,796 370,641 226,328 (21,533) 115,425
7,500 8,000
- - - -
(421,887) (437,186) 417,051 (509,746) 323,654 (606,793)
(47,994) (119,390) 795,192 (283,418) 310,121 (491,368)
13,649,816 13,950,747 14,254,353 14,088,180 11,523,435 12,396,549
3,195,554 3,552,962 2,677,699 2,323,177 478,420 5,279,532
203,823 (762,474) 79,075 (424,943) 468,485 285,911
$3,399,377$ 5,565,443
$ 2,790,488$ 2,756,774$1,898,234$946,905
125
CITY OF ANDOVER, MINNESOTA
FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2005200620072008
General Fund
Reserved126,320$ 144,496$ 208,216$ 193,805$
Unreserved3,076,157 3,248,317 3,682,244 3,981,230
Nonspendable- - -
-
Unassigned- - -
-
Total general fund3,202,477 3,392,813 3,890,460 4,175,035
All Other Governmental Funds
(1)(2)
Reserved3,267,027 12,022,454 22,106,660 20,754,303
Unreserved reported in:
Special revenue funds 1,264,369 1,246,388 1,204,453 941,259
Capital project funds 14,526,468 14,379,760 11,955,138 13,416,129
Nonspendable - - -
-
Restricted - - -
-
Committed - - -
-
Assigned - - -
-
Unassigned - - -
-
Total all other governmental funds 19,057,864 27,648,602 35,266,251 35,111,691
Total governmental funds$ 22,260,341$ 31,041,415$ 39,156,711$ 39,286,726
(1)
Note
:
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.
(2)
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.
Fund Balance Reporting
In 2011, the City adopted the provisions of Governmental Accounting Standards Board Statement No. 54,
and Governmental Fund Type Definitions.
126
Table 3
200920102011201220132014
$ 207,515$ 206,666
$ - $ - $ - $ -
4,120,897 4,904,239
- - - -
222,641 160,177 106,445 137,001
- -
5,665,496 6,227,664 6,853,791 7,065,133
- -
4,328,412 5,110,905 5,888,137 6,387,841 6,960,236 7,202,134
20,756,195 19,258,490
- - - -
1,233,202 1,135,919
- - - -
14,170,266 14,714,140
- - - -
16,074 1,471 1,316 1,562
- -
21,307,923 21,274,444 5,022,967
- - 19,741,214
650,766 681,413 588,516 591,289
- -
16,420,228 13,481,786 16,095,395
- - 14,451,306
(517,251) (314,734) (276,829) (114,344)
- -
36,159,663 35,108,549 34,342,109 38,096,301 35,069,233 21,596,869
$ 40,488,075$ 40,219,454$ 40,230,246$ 44,484,142$ 42,029,469$ 28,799,003
127
CITY OF ANDOVER, MINNESOTA
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2005200620072008
Revenues
General property taxes7,033,613$ 8,057,592$ 8,833,249$ 9,695,103$
Tax increment collections1,285,639 1,546,394 1,659,222 1,762,119
Licenses and permits724,436 598,094 475,893 525,339
Intergovernmental2,663,683 2,661,726 1,644,914 1,175,205
Special assessments2,045,969 1,289,590 3,342,039 1,638,006
Charges for services1,692,316 1,770,156 2,035,735 1,724,052
Fines90,530 91,490 101,445 104,930
Investment income684,173 1,014,801 1,962,379 1,508,265
Miscellaneous:
Park dedication fees286,316 626,567 113,013 133,585
Connection charges1,311,426 372,133 829,624 254,903
Rent-
- - -
Other 578,389 395,789 621,798 800,857
Total revenues 18,396,490 18,424,332 21,619,311 19,322,364
Expenditures
General government 2,349,965 2,343,332 2,399,297 2,366,574
Public safety 3,093,298 3,268,236 3,580,240 3,796,965
Public works 3,650,351 2,817,475 3,491,353 4,843,288
Parks and recreation 1,309,987 1,599,885 1,825,706 1,953,822
Recycling 116,506 90,590 94,669 86,631
Economic development 426,708 626,103 2,265,605 538,293
Unallocated9,798 8,454 6,915 17,999
Capital outlay 1,616,709 987,0752,803,4851,460,662
Debt service:
Principal retirement 8,487,000 5,254,000 3,275,000 3,460,000
Interest 2,042,003 1,683,599 2,089,857 2,253,223
Other 13,226 253,134 167,187 15,645
Construction/acquisition costs 11,146,387 4,579,910 360,742
-
Total expenditures 34,261,938 23,511,793 22,360,056 20,793,102
Revenues over (under) expenditures (15,865,448) (5,087,461) (740,745) (1,470,738)
Other Financing Sources (Uses)
Transfers in 224,000 522,000 578,925 580,343
Transfers out - (167,424) (57,671) (163,469)
Bonds issued 4,210,000 2,910,000 760,000 630,000
Refunding bonds issued 10,000,000- 6,865,000
-
Redemption of refunded bonds -
- - -
Bond premium - 3,401
- -
Bond discount (28,961)
- - -
Proceeds from the sale of capital assets 219,887 603,959 706,386 553,879
Total other financing sources (uses) 4,624,926 13,868,535 8,856,041 1,600,753
Net increase (decrease) in fund balance$ (11,240,522)$ 8,781,074$ 8,115,296$ 130,015
Debt service as a percentage of
noncapital expenditures48.97%38.66%27.95%29.55%
128
Table 4
200920102011201220132014
$ 10,168,143$ 10,267,085$ 10,279,967$ 10,638,117$ 10,682,975$ 10,894,301
1,951,343 2,015,123 1,976,800 2,035,663 375,040 377,733
291,903 329,901 387,206 449,826 536,706 364,430
1,654,614 1,989,420 1,876,685 3,493,528 1,115,047 3,464,985
1,421,591 1,725,695 891,942 792,460 1,045,000 733,425
1,579,659 1,604,681 1,732,791 1,874,321 1,806,919 1,720,972
110,779 104,780 99,777 97,571 96,130 94,375
1,029,683 1,107,335 1,386,698 1,191,438 573,256 735,325
41,216 32,649 51,706 47,700 205,080 156,384
20,119 48,086 27,165 170,202 436,628 676,826
637,305 638,037 641,859 639,983 639,423 639,000
381,548 396,186 332,992 645,897 1,698,964 564,057
19,287,903 20,258,978 19,685,588 22,076,706 19,211,168 20,421,813
2,242,662 2,255,793 2,298,571 2,280,373 2,647,278 2,588,950
4,015,4103,920,073 3,965,541 4,092,073 4,301,698 4,537,264
3,545,1323,204,4443,788,636 5,415,924 4,251,454 4,145,404
1,891,125 2,433,495 1,926,220 2,001,624 1,990,457 2,139,552
85,527 109,034 109,911 94,328 123,595 106,587
477,648 650,977 966,687 1,537,611 408,210 665,325
19,540 24,953 30,631 63,371 75,517 81,183
1,519,944 1,324,881 985,399 723,017 2,763,351 2,816,375
3,865,000 5,779,000 4,100,000 1,842,000 1,689,000 2,336,719
2,178,233 2,030,267 1,855,538 1,768,748 1,262,302 900,504
39,265 29,939 10,430 225,378 5,509 7,895
101,153 1,044,581 110,650 946,942 -
-
19,879,486 21,864,009 21,082,145 20,155,097 20,465,313 20,325,758
(591,583) (1,605,031) (1,396,557) 1,921,609 (1,254,145) 96,055
587,530 627,530 627,530 627,530 627,530 627,530
(165,643) (89,191) (7,134)(4,242) (20,737)
-
385,000 1,660,000 265,000 585,000-1,555,000
955,000 1,480,000 18,885,000 - -
-
(2,416,834) (17,907,898) (1,900,000) (16,455,000)
- -
18,781 31,688 133,164 - 44,278
-
- - -
- - -
12,264 43,217 514,819 16,625 76,184 922,408
1,792,932 1,336,410 1,407,349 2,332,287 (1,200,528) (13,326,521)
$ 1,201,349$ (268,621)$ 10,792$ 4,253,896$ (2,454,673)$ (13,230,466)
32.92%38.21%31.26%18.69%17.61%18.49%
129
CITY OF ANDOVER, MINNESOTA
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTYTable 5
Last Ten Fiscal Years
Real PropertyPersonal PropertyTotalTotalNet Tax Capacity
TaxableNet TaxTaxableNet TaxTaxableNet TaxDirectas a Percentage
YearMarket ValueCapacityMarket ValueCapacityMarket ValueCapacityTax Rateof Market Value
20052,222,567,900$ 23,027,376$ 21,718,900$ 433,669$ 2,244,286,800$ 23,461,045$ 31.415%1.05%
20062,521,587,700 26,204,279 22,003,500 2,543,591,200 26,643,63531.894%1.05%
439,356
20072,778,464,100 28,897,916 21,998,500 2,800,462,600 29,337,16231.327%1.05%
439,246
20082,948,801,500 30,749,076 20,837,800 2,969,639,300 31,165,07631.603%1.05%
416,000
20092,961,410,400 31,023,349 21,185,200 2,982,595,600 31,446,28032.484%1.05%
422,931
20102,685,802,600 28,233,178 24,712,000 2,710,514,600 28,726,61936.814%1.06%
493,441
20112,444,519,600 25,667,544 25,425,400 2,469,945,000 26,174,35038.731%1.06%
506,806
20122,176,836,156 22,945,277 25,299,200 2,202,135,356 23,449,58142.539%1.06%
504,304
20132,097,459,658 22,048,362 26,136,700 2,123,596,358 22,569,01841.170%1.06%
520,656
20142,045,873,681 21,462,221 25,938,600 2,071,812,281 21,978,32243.657%1.06%
516,101
Source
: Anoka County Property Tax Division
130
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX RATES - PER $1,000 OF ASSESSED TAX CAPACITY VALUE Table 6
DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
Direct City
GeneralDebtLower
TaxesOperServiceRumOverlapping Governments
PayableLevyLevyWatershedTotalSchoolCountyOtherTotalTotal
200624.790%6.757%0.347%31.894%20.046%32.096%3.755%55.897%87.791%
200724.948%6.055%0.324%31.327%19.337%30.675%3.671%53.683%85.010%
200824.962%6.333%0.308%31.603%16.962%31.041%4.604%52.607%84.210%
200925.755%6.426%0.303%32.484%18.247%32.051%3.251%53.549%86.033%
201030.507%5.977%0.330%36.814%20.236%35.273%3.436%58.945%95.759%
201131.914%6.461%0.356%38.731%24.023%39.884%4.872%68.779%107.510%
201235.138%6.952%0.449%42.539%21.447%41.056%3.626%66.129%108.668%
201333.676%6.989%0.449%41.114%26.751%44.328%3.912%74.991%116.105%
201435.486%7.711%0.460%43.657%28.265%43.239%4.354%75.858%119.515%
201530.441%6.628%0.391%37.460%22.482%38.123%4.104%64.709%102.169%
Source
: Anoka County Property Tax Division
131
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONSTable 7
Last Nine Fiscal Years
Collected Within the Fiscal Year of Levy
TotalMarket ValueCollections InTotal Collections to Date
TaxTaxTotalPercentageSubsequentPercentageHomestead
YearLevyLevyCollectedof LevyYearsAmountof LevyCredit
20068,550,919$ 7,977,278$ 1,700$ *7,978,978$ 93.31%108,580$ 8,087,558$ 94.58%
20079,316,427 8,738,606 410,519 9,149,125 98.20%150,688 9,299,813 99.82%
200810,153,718 9,554,131 198,214 *9,752,345 96.05%182,017 9,934,362 97.84%
200910,593,520 9,992,240 54,629 *10,046,869 94.84%146,265 10,193,134 96.22%
201010,856,299 10,125,752 3,905 *10,129,657 93.31%164,307 10,293,964 94.82%
201110,856,299 10,119,681 853 *10,120,534 93.22%118,455 10,238,990 94.31%
201210,631,299 10,460,838 2,354 10,463,192 98.42%98,259 10,561,451 99.34%
201310,631,299 10,535,521 1,246 10,536,767 99.11%66,610 10,603,377 99.74%
201410,843,925 10,776,635 10,776,63599.38% 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.
132
CITY OF ANDOVER, MINNESOTA
PRINCIPAL TAXPAYERSTable 8
Current Year and Nine Years Ago
20142005
NetPercentage ofNetPercentage of
TaxTotal CityTaxTotal City
TaxpayersCapacityRankTax CapacityCapacityRankTax Capacity
Minnegasco, Inc.$211,24410.96%$134,5340.57%
4
Great River Energy194,03820.88%
-
Connexus Energy193,14030.88%221,0060.94%
1
Target Corporation160,04840.73%
-
Presbyterian Homes of Andover140,84750.64%147,7890.63%
3
Andover Limited Partnership117,52860.53%149,6860.64%
2
Andover Station LLC97,18270.44%103,2660.44%
6
DST Properties LLC81,67880.37%
-
Fairbanks Properties LLC65,92690.30%
-
Columbia Park Properties59,878100.27%59,6100.25%
1 0
116 LLC-120,4780.51%
5
United Power Association-84,5260.36%
7
Grey Oaks Inc.-64,4210.27%
8
Rademacher Family Ltd Partnership-59,9180.26%
9
Total$1,321,5096.00%$1,145,2344.87%
Net Tax Capacity$21,978,322$23,461,045
Source: Anoka County Property Tax Division
133
CITY OF ANDOVER, MINNESOTA
ESTIMATED MARKET VALUES AND NEW CONSTRUCTION Table 9
Last Ten Fiscal Years
Estimated Market ValuesNew Construction
Commercial / IndustrialResidential
Commercial
/
YeaIndustrial (1)ResidentiaTotaPermitsValuPermitsValu
rllee
2005168,684,200$ 2,174,640,000$ 2,343,324,200$ 20 6,571,671$34,309,393
$ 2 26
2006191,931,800 2,433,776,200 2,625,708,00025,236,120
8 1,791,896 1 53
2007211,760,900 2,663,389,900 2,875,150,800
9 2,403,831 9 118,347,873
2008233,801,700 2,813,037,200 3,046,838,900
11 16,878,603 4 911,116,400
2009248,129,500 2,807,144,500 3,055,274,000767,4309,246,347
11 4 7
2010229,977,800 2,526,288,900 2,756,266,7001,247,106
11 7 114,700,800
2011199,728,200 2,305,897,900 2,505,626,100
24 11,461,453 5 811,803,000
2012192,112,500 2,206,195,400 2,398,307,9005,042,964
25 8 115,243,007
2013174,971,400 2,141,898,900 2,316,870,3009,249,466
15 9 820,351,892
2014166,531,500 2,103,536,600 2,270,068,1004,285,281
14 5 213,926,901
Note: (1) Also includes agricultural, public utility, railroad operating property, and personal property.
134
CITY OF ANDOVER, MINNESOTA
SPECIAL ASSESSMENT LEVIES AND COLLECTIONSTable 10
Last Ten Fiscal Years
TotalDelinquent
CollectionsAssessments
CurrentCurrentPercent ofDelinquentTotalas a Percent ofOutstandingas a Percent of
AssessmentsAssessmentsAssessmentsAssessmentAssessmentCurrentDelinquentCurrent
YearDue (1)CollectedCollectedCollectionsCollectionsAssessments DueAssessmentsAssessments Due
98.34%$ 4,002100.58%$ 22,21712.45%
2005$ 178,434$ 1 75,471$ 1 79,473
85.41% 4,79087.53% 51,72122.95%
2006 225,365 1 92,477 1 97,267
87.14% 12,46094.75% 76,42046.65%
2007 163,817 1 42,750 1 55,210
90.20% 1,47990.60% 174,81047.74%
2008 366,203 3 30,304 3 31,783
104.16% 36,693115.65% 202,99963.55%
2009 319,448 3 32,739 3 69,432
96.54% 61,247115.36% 218,86067.27%
2010 325,361 3 14,097 3 75,344
98.50% 5,112100.16% 267,01686.47%
2011 308,794 3 04,164 3 09,276
108.18% 25,087115.38% 237,17568.13%
2012 348,129 3 76,601 4 01,688
114.53%168,941 164.45% 82,82624.47%
2013 338,411 3 87,584 5 56,525
118.69% 3,788119.85% 215,97066.13%
2014 326,597 3 87,651 3 91,439
Note
: (1) Only includes assessments certified to Anoka County.
135
CITY OF ANDOVER, MINNESOTA
RATIO OF NET BONDED DEBTTable 11
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
General Bonded Debt Outstanding (2)
Less Debt
GrossService FundNetPercentageNet Bonded
FiscalEstimatedBondedCash andBondedof EstimatedDebt
YearPopulation (1)Market ValueDebtInvestmentsDebtMarket ValuePer Capita
200530,080 2,343,324,500$ 24,389,000$ (1,041,140)$ 23,347,860
$ 1.00%$ 7 76.19
200630,222 2,625,708,000 33,850,000 (10,739,510) 23,110,490
0.88% 764.69
200730,263 2,875,150,800 40,880,000 (17,822,418) 23,057,582
0.80% 761.91
200831,023 3,046,838,900 40,565,000 (17,939,959) 22,625,041
0.74% 729.30
200931,298 3,055,274,000 39,690,000 (17,973,588) 21,716,412
0.71% 693.86
201030,598 2,756,266,700 40,026,000 (17,768,743) 22,257,257
0.81% 727.41
201130,847 2,505,626,100 39,096,000 (17,779,964) 21,316,036
0.85% 691.02
201231,125 2,398,307,900 40,444,000 (18,497,679) 21,946,321
0.92% 705.10
201331,692 2,316,870,300 37,460,000 (17,415,812) 20,044,188
0.87% 632.47
201432,000 2,270,068,100 21,035,000 (942,607) 20,092,393
0.89% 627.89
Notes:
(1) Source: Metropolitan Council
(2) Only includes debt supported by tax levy.
136
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT Table 12
December 31, 2014
Gross General
ObligationPercentageNet Amount
Bonded DebtApplicableApplicable
Outstandingto City (2)to City
Direct:
City of Andover21,881,874$ 100.0000%21,881,874$
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$ 45,613,772
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.
137
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF LEGAL DEBT MARGIN
Last Ten Fiscal Years
2005200620072008
Estimated Taxable Market Value2,343,324,200$ 2,625,708,000$ 2,800,462,600$ 2,969,639,300$
Debt limitation:
Debt limit percent2%2%2%3%
Debt limit in dollars46,866,484 52,514,160 56,009,252 89,089,179
Debt applicable to limit:
Total bonded debt 52,344,000 59,665,000 70,240,000 67,050,000
Less: Nonapplicable debt
G.O. water revenue bonds (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 (7,065,000) (4,715,000) (4,010,000) (3,275,000)
Permanent improvement
revolving bonds (5,975,000) (6,660,000) (4,835,000) (3,755,000)
State aid bonds (2,205,000) (2,065,000) (1,915,000) (1,760,000)
Less: Cash and investments in
related debt service funds (1,041,140) (10,739,510) (17,822,418) (17,939,959)
Total debt applicable to limitation23,347,860 23,110,490 23,057,582 22,625,041
Legal debt margin$ 23,518,624$ 29,403,670$ 32,951,670$ 66,464,138
Total debt applicable to the limit as
a percentage of debt limit49.82%44.01%41.17%25.40%
138
Table 13
200920102011201220132014
$ 2,710,514,8002,982,595,600$ 2,469,945,000$ 2,202,135,356$ 2,123,596,358$ 2,071,812,281$
3%3%3%3%3%3%
81,315,44489,477,868 74,098,350 66,064,061 63,707,891 62,154,368
59,671,00065,175,000 55,361,000 49,144,000 45,010,000 27,405,000
(14,875,000)(15,330,000) (14,400,000) (7,420,000) (6,875,000) (6,310,000)
(600,000)(2,450,000) - - - -
(1,735,000)(2,515,000) - - - -
(1,480,000)(2,635,000) (1,125,000) (760,000) (385,000) -
(955,000)(2,555,000) (740,000) (520,000) (290,000) (60,000)
(17,768,743)(17,973,588) (17,779,964) (18,497,679) (17,415,812) (942,607)
22,257,25721,716,412 21,316,036 21,946,321 20,044,188 20,092,393
$ 59,058,18767,761,456$ 52,782,314$ 44,117,740$ 43,663,703$ 42,061,975$
24.27%27.37%28.77%33.22%31.46%32.33%
139
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140
CITY OF ANDOVER, MINNESOTA
PLEDGED-REVENUE COVERAGETable 14
Last Ten Fiscal Years
Water Revenue Bonds
Water Enterprise Fund
FiscalOperatingLess: OperatingTransfersNet Available
Debt Service
YearRevenuesExpenses (1)In (2)RevenuePrincipalInterestCoverage
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 7,134 987,277 490,000 214,933
1 .40
2013 2,495,561 1,285,188 4,242 1,214,615 545,000 276,458
1 .48
2014 2,347,763 1,320,552 20,737 1,047,948 565,000 254,715
1 .28
2004 EDA Public Facility Lease Revenue Bond (3) & 2012 Abatement Bonds
Debt Service
Community Center Special Revenue Fund
FiscalOperatingLess: OperatingNet AvailableGeneral PropertyDebt Service
YearRevenueExpensesRevenueTax RevenuePrincipalInterestCoverage
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 1,029,949 425,000 878,534
1 .11
2014 1,462,169 1,058,467 403,702 924,057 790,000 820,054
0 .82
Special Assessment and Permanent Improvement Revolving Bonds
FiscalSpecial AssessmentDebt Service
YearRevenuePrincipalInterestCoverage
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
2014 102,380 385,000 3,850 0.26
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.
141
CITY OF ANDOVER, MINNESOTA
OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
2005200620072008
City of Andover's Outstanding Debt
Governmental activities
Revenue bonds19,580,000$ 29,395,000$ 36,075,000$ 35,885,000$
- -
Abatement bonds - -
Special assessment bonds 3,560,000 3,560,000 3,560,000 3,015,000
Tax increment bonds 7,065,000 4,715,000 4,010,000 3,275,000
Certificates of indebtedness 699,000 580,000 1,280,000 1,525,000
Capital improvement bonds 4,110,000 3,875,000 3,525,000 3,155,000
Permanent improvement
revolving bonds 5,975,000 6,660,000 4,835,000 3,755,000
State aid bonds 2,205,000 2,065,000 1,915,000 1,760,000
Referendum bonds - -
- -
Promissory note payable - -
- -
Total governmental activities43,194,000 50,850,000 55,200,000 52,370,000
Business-type activities
G.O. revenue bonds 9,150,000 8,815,000 15,040,000 14,680,000
Total outstanding debt$52,344,000$ 59,665,000$ 70,240,000$67,050,000
Total outstanding debt as a
percentage of personal income6.35%6.98%7.99%7.62%
Total outstanding debt per capita$ 1,740$ 1,969$ 2,321$ 2,161
142
Table 15
200920102011201220132014
$ 35,090,00035,495,000$ 34,675,000$ 17,375,000$ 16,925,000$ -$
-- - 17,315,000 16,995,000 16,675,000
2,450,000 600,000 - - - -
2,515,000 1,735,000 - - - -
1,420,000 781,000 561,000 774,000 680,000 2,140,000
2,775,000 2,495,000 2,200,000 3,455,000 1,470,000 970,000
2,635,000 1,480,000 1,125,000 760,000 385,000 -
2,555,000 955,000 740,000 520,000 290,000 60,000
- 1,660,000 1,660,000 1,525,000 1,390,000 1,250,000
- - - - 983,593 786,874
49,845,000 44,796,000 40,961,000 41,724,000 39,118,593 21,881,874
15,330,000 14,875,000 14,400,000 7,420,000 6,875,000 6,310,000
$ 65,175,000$ 59,671,000$ 55,361,000$ 49,144,000$ 45,993,593$ 28,191,874
7.10%6.65%6.17%5.28%4.99%3.03%
$ 2,082$ 1,950$ 1,795$ 1,579$ 1,451$ 881
143
CITY OF ANDOVER, MINNESOT
A
DEMOGRAPHIC AND ECONOMIC STATISTICTable 16
S
Last Ten Years
City of AndoverAnoka County
PersonalPersonalPer CapitaUnemploymen
t
YeaPopulation (1)Income (2)Population (3)Income (2)Income (3)Percentage
r
200530,080 824,041,600$8,788,398,1853.8%
$ 320,803$ 2 7,395
200630,222 852,774,1749,227,100,0854.0%
327,005 2 8,217
200730,263 879,549,0039,482,028,2654.6%
326,252 2 9,064
200831,023 880,029,4419,278,562,0305.5%
327,090 2 8,367
200931,298 917,375,6789,719,000,0028.5%
331,582 2 9,311
201030,598 897,408,7429,834,248,3327.1%
335,308 2 9,329
201130,847 896,999,9139,620,612,6765.8%
330,844 2 9,079
201231,125 930,450,750 29,89410,056,760,116 5.9%
336,414
201331,692 960,235,908 30,29910,287,540,666 5.1%
339,534
201432,000 980,704,000 30,64710,496,597,500 4.3%
342,500
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
144
CITY OF ANDOVER, MINNESOTA
PRINCIPAL EMPLOYERSTable 17
Current Year and Nine Years Ago
20142005
PercentagePercentage
of Total Cityof Total City
TaxpayerEmployeesRankEmploymentEmployeesRankEmployment
31.8%33.2%
Anoka Hennepin I.S.D. No. 11760
(1)
1 6 12 1
Fairview Andover Clinic 30012.6%
2 -
Anoka County Sheriff's Office 25010.5%
3 -
Kottkes' Bus Service, Inc. 2259.4%10.9%
4 2 00 4
Wal-Mart 2108.8%
5 -
YMCA 1867.8%
6 -
Target 1707.1%11.9%
7 2 20 3
Anoka County Highway Department 1034.3%6.6%
8 1 21 5
Bunker Hills Regional Park/Activity Center 1004.2%13.6%
9 2 50 2
Andover County Market 853.6%
1 0 -
Festival Foods5.7%
- 1 05 6
Columbia Park Medical Group5.3%
- 9 8 7
Meadow Creek Christian School4.0%
- 7 4 9
Farmstead at Andover5.1%
- 9 4 8
Ed Fields & Sons, Inc.3.8%
- 7 0 1 0
Total 2,389100.0%100.0%
1 ,844
Source: Minnesota Department of Employment and Economic Development
(1) Number of district employees that work in school buildings located within the City.
145
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146
CITY OF ANDOVER, MINNESOTA
FULL TIME EQUIVALENT EMPLOYEESTable 18
CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program2005200620072008200920102011201220132014
Governmental:
Administration 1 .47 1 .30 1 .45 1 .15 1 .15 1 .15 0 .91 1 .15 1 .15 1 .30
Human resources
0 .06 0 .07 0 .02 0 .01 0 .02 0 .02 0 .02 0 .02 0 .02 0 .02
City clerk
1 .84 1 .84 1 .91 1 .43 1 .29 1 .34 1 .34 1 .34 1 .34 1 .34
Elections
0 .10 0 .10 0 .10 0 .08 0 .10 0 .10 0 .10 0 .10 0 .10 0 .10
Financial administration
2 .99 3 .95 2 .35 1 .97 1 .85 1 .85 1 .84 1 .85 1 .85 1 .94
Information systems
0 .91 0 .91 0 .91 0 .91 0 .91 0 .91 0 .91 0 .91 0 .91 0 .91
Planning and zoning
4 .57 4 .75 4 .75 4 .25 3 .70 3 .70 3 .76 3 .70 3 .70 3 .90
Engineering
4 .67 4 .57 4 .78 4 .41 4 .28 4 .33 4 .16 4 .33 4 .33 4 .43
Facility Management
- - - - 0 .33 0 .20 0 .21 0.07 0 .22 0 .22
EDA general0.35
1 .21 0 .70 0 .70 0 .85 0 .90 0 .85 0 .78 0 .85 0 .85
LRRWMO
0 .21 0 .21 0 .21 0 .21 0 .20 0 .20 0 .24 0 .20 0 .20 0 .15
Risk management
0 .13 0 .18 0 .10 0 .10 0 .10 0 .10 0 .10 0 .10 0 .10 0 .10
Public Safety:
Fire
3 .25 3 .10 3 .10 3 .10 3 .10 3 .10 3 .10 3 .10 3 .10 3 .10
Protective inspection
5 .58 6 .03 6 .08 5 .78 3 .93 3 .93 3 .66 3 .93 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 .35 6 .12 6 .20 6 .00 5 .05 5 .10 5 .59 5 .46 4 .97 4 .87
Snow and ice
3 .92 3 .27 3 .49 3 .21 2 .45 2 .45 2 .57 2 .03 3 .44 2 .71
Street signs
1 .20 1 .35 1 .44 1 .41 1 .31 1 .41 1 .46 1.43 1 .34 1 .34
Forestry-
0 .10 0 .10 - - - - - - -
ROW management / utility
0 .85 0 .85 0 .60 0 .65 0 .50 0 .20 0 .16 0 .20 0 .20 0 .20
Water
5 .04 5 .57 4 .78 4 .84 4 .63 4 .63 4 .70 4 .74 4 .56 4 .73
Sewer
3 .15 2 .97 3 .18 3 .24 3 .38 3 .38 3 .23 3 .17 3 .49 3 .61
Storm sewer
1 .60 2 .01 1 .95 2 .20 2 .55 2 .55 2 .87 2 .54 2 .23 2 .32
Central equipment
2 .91 2 .92 2 .96 2 .96 2 .87 2 .90 2 .91 2 .91 2 .91 2 .91
Park & Recreation:
Park and recreation
6 .85 7 .33 7 .05 6 .85 6 .66 6 .71 6 .69 6 .77 7 .14 7 .61
Community center
2 .10 2 .12 2 .12 2 .23 2 .96 3 .11 3 .04 3 .25 3 .10 3 .10
Recycling
1 .26 0 .93 0 .88 0 .86 1 .23 1 .23 0 .96 1 .30 1.27 1 .26
6 1.37 6 3.30 6 1.16 5 8.75 5 5.50 5 5.50 5 5.36 5 5.50 5 6.50 5 6.50
Source:City Finance Department
Note: Employees are allocated to various departments based on the functions that they perform.
147
CITY OF ANDOVER, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Years
Function/Program20052006200720082009
General government:
n/a
Registered votersn/a 17,500n/a 1 7,830
Number of precinctsn/an/an/a
10 1 0
Public safety:
Police:
Number of calls for services
1 2,861 14,500 1 2,150 11,617 11,075
Number of traffic citations
1,795 1 ,850 1,710 2 ,475 2,848
Number of patrol hours
30,856 3 0,858 30,240 3 0,240 30,240
Fire:
Fire responses
3 25 460 3 66 326 3 05
Emergency medical responses
5 94 690 7 36 797 7 54
Protective inspections:
Inspections
6,536 8 ,117 5,456 5 ,020 3,716
Residential permits
2 26 153 9 1 49 4 2
Other permits
2,473 3 ,128 2,095 1 ,862 1,543
Public works:
Streets and highways:
Asphalt streets maintained (miles)
1 78 182 1 89 189 1 89
Gravel roads maintained (miles)
8 7 8 8 8
Cul-de-sacs and dead ends maintained
3 20 324 3 30 336 3 38
Parks and recreation:
Number of City parks
5 8 63 6 5 66 6 6
Total acreage mowed
2 65 273 2 97 297 2 93
Ballfields maintained
2 5 25 2 7 28 2 8
Number of playgrounds
33
3 6 3 7 37 3 7
Soccer fields maintained
2 0 19 1 6 19 1 9
Trail maintained (miles)
2 6 29 35 35 3 5
Community center bookings (hrs):
Fieldhouse
1,405 7 ,450 8,514 8 ,282 9,718
Ice arena
2,002 2 ,405 2,497 2 ,393 2,640
Water:
New connections
2 47 197 6 3 33 1 45
Total customers
5,657 5 ,854 5,917 5 ,950 6,095
Annual consumption
(thousands of gallons)
856,671 9 11,712 1 ,046,789 9 93,626 1 ,000,971
Sanitary Sewer:
New connections
2 29 186 1 20 23 1 83
Total customers
6,528 6 ,717 6,777 6 ,800 6,983
Storm Sewer:
Total customers
9,516 9 ,744 9,785 9 ,800 9,950
Storm sewer lines maintained (miles)
4 3 47 6 5 66 6 9
Sourc
e: Various City Departments
148
Table 19
20102011201220132014
1 8,713n/a 18,366n/a 19,772
n/an/a
1 0 1 0 1 0
1 1,441 11,650 1 0,963 10,659 10,319
1,926 2 ,000 2,202 2 ,480 2,536
30,240 2 9,200 29,200 2 9,200 29,200
3 23 265 3 20 308 2 57
7 22 764 8 16 863 8 38
2,860 3 ,074 3,872 3 ,766 2,840
7 1 58 8 1 98 5 2
1,773 1 ,755 1,714 1 ,716 1,898
1 90 191 1 91 192 1 95
8 7 7 7 7
3 38 338 3 38 3 28 332
47 5 0 49 5 0 51
293 3 02 302 3 18 232
28 2 8 28 2 8 28
38 3 8 38 3 9 38
19
21 17 2 0 1 6
3 5 35 3 3 35 3 3
12,182
11,099 1 1,461 11,426 11,831
2,583 2 ,575 2,805 2 ,543 2,608
5 6 78 3 8 108 4 3
6,151 6 ,229 6,267 6 ,375 6,418
905,561 8 54,672 1 ,050,378 9 47,201 827,574
7 5 77 3 8 108 4 3
7,058 7 ,135 7,173 7 ,281 7,324
10,042 1 0,126 10,164 1 0,583 10,626
6 9 69 6 9 73 7 5
149
CITY OF ANDOVER, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAMTable 20
Last Ten Years
Function/Program2005200620072008200920102011201220132014
Public Safety:
Fire:
Stations 3 3 3 3 3 3 3 3 3 3
Fire vehicles
18 18 20 20 21 22 21 21 20 21
Protective inspections:
Vehicles
3 3 3 3 3 3 4 4 4 4
Public Works:
Streets and Highways:
Streets (miles)
186 189 189 189 189 190 191 191 192 195
Street lights
7,551 8,101 1,204 1,212 1,215 1,218 1,225 1,231 1,231 1,258
Traffic signals
20 20 22 23 23 24 24 24 24 24
Parks and Recreation:
Parks
58 63 65 66 66 47 50 49 50 51
Ball fields
25 28 27 28 28 28 28 28 28 28
Soccer fields
16 16 16 19 19 19 21 17 20 16
Playgrounds37
33 36 37 37 38 38 38 39 38
Trails (miles)
26 29 35 35 35 35 35 33 35 33
Community centers
1 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 2 2 2 2 2
Water main (miles)
79 84 108 108 108 108 109 111 112 115
Connections
5,450 5,760 5,917 5,950 6,095 6,151 6,229 6,267 6,375 6,418
Sanitary sewer:
Sewer main (miles)
82 87 91 91 91 93 93 93 94 95
Connections
6,250 6,560 6,777 6,800 6,983 7,058 7,135 7,173 7,281 7,324
Number of lift stations9
8 9 9 9 9 9 9 9 9
Storm sewer:
Storm sewer lines (miles)
43 47 65 66 69 69 69 69 73 75
150
IV. OTHER FINANCIAL INFORMATION
151
CITY OF ANDOVER, MINNESOTA
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2014
Authorized
IssueMaturitInterestand
y
DateDateRateIssue
GOVERNMENTAL ACTIVITIES:
Revenue Bonds:
2004 EDA Pub Fac Lease Revenue Bonds4/23/20042/1/20142.21-5.40%19,580,000$
Abatement Bonds:
2012C G.O. Abatement Bonds12/27/20122/1/20311.00-3.00%17,315,000
Certificates of Indebtedness:
2011A G.O. Equipment Certificates3/1/20112/1/20142.00%265,000
2012A G.O. Equipment Certificates3/22/20122/1/20172.00%585,000
2014A G.O. Equipment Certificates5/29/20142/1/20201.50-2.00%1,555,000
Total certificates of indebtedness2,405,000
Capital Improvement Bonds:
2012B G.O. Capital Improvement Refunding Bonds 3/22/20122/1/20162.00%1,570,000
Permanent Improvement Revolving Bonds:
2010A Perm Improv Revolving Refunding Bonds2/18/20102/1/20142.00%1,480,000
State Aid Bonds:
2009A State Aid Street Refunding Bonds3/26/20092/1/20152.25-2.80%955,000
Referendum Bonds:
2010A G.O. Open Space Referendum Bonds2/18/20102/1/20222.00 - 3.12%1,660,000
Total bonded indebtedness44,965,000
Promissory note payable12/17/201311/15/2018n/a983,593
Compensated absences payable
-
Total governmental activities indebtedness45,948,593
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2007B G.O. Water Revenue Refunding Bonds3/13/20072/1/20234.00-4.25%6,570,000
2009A G.O. Water Revenue Bonds3/26/20092/1/20242.00-4.25%1,025,000
Total general obligation revenue bonds7,595,000
Compensated absences payable
-
Total business-type activities indebtedness7,595,000
Total City indebtedness$53,543,593
152
Exhibit 1
Principal Payments
PriorCurrentOutstanding2015 Payment
YearsYea12/31/14PrincipalInterestTotal
r
$ 2,655,000$16,925,000$-
$ -$ -$ -
320,000 320,000 16,675,000835,000379,906 1,214,906
170,000 95,000
- - - -
585,00011,700 11,700
- - -
1,555,000225,00031,926 256,926
- -
170,000 95,000 2,140,000225,00043,626 268,626
100,000 500,000 970,000500,00014,400 514,400
1,095,000 385,000
- - - -
665,000 230,000 60,00060,000840 60,840
270,000 140,000 1,250,000145,00031,915 176,915
5,275,000 18,595,000 21,095,0001,765,000470,687 2,235,687
196,719 786,874196,719 196,719
- -
628,946
- - - - -
5,275,000 18,791,719 22,510,8201,961,719470,687 2,432,406
485,000 505,000 5,580,000525,000216,046 741,046
235,000 60,000730,00065,00025,440 90,440
720,000 565,000 6,310,000590,000241,486 831,486
163,529
- - - - -
720,000 565,000 6,473,529590,000241,486 831,486
$ 5,995,000$19,356,719$28,984,349$2,551,719$712,173$ 3,263,892
153
CITY OF ANDOVER, MINNESOT
A
SCHEDULE OF TAX CAPACITY RATES AND LEVIESExhibit 2
Taxes Payable
20152014
Tax capacity value$25,705,350$21,978,322
s
Captured tax increment value(210,936) (327,433)
Fiscal disparities - contribution(998,390)(1,035,107)
Local taxable value24,496,02420,615,782
Fiscal disparities - distribution4,257,801 4,202,605
Adjusted tax capacit$28,753,825$24,818,387
y
20152014
Tax CapacitCertifieTax Capacit
Certifiedydy
LevRateLevRate
yy
General Revenue Levy:
General Fund7,630,892$ 7,435,891$
Capital Equipment/Projects250,000 210,000
Parks Projects61,500 61,500
Road and Bridge967,197 967,197
Pedestrian Trail Maintenance58,271 58,271
Total General Revenue Lev 30.441%8,732,8598,967,860 35.486%
y
Debt Service Levy:
181,803
2004 EDA Public Facility Revenue Bonds -
2012A G.O. Equipment Certificate140,000 140,000
2012B G.O. Capital Improv Refund Bonds540,120 561,015
2012C G.O. Abatement Bonds975,652 740,965
2014A G.O. Equipment Certificate296,055 260,000
Total Debt Service Lev 6.628%1,883,7831,951,827 7.711%
y
Lower Rum River Watershe 0.391%40,00040,000 0.460%
d
Total10,959,687 37.460%10,656,642 43.657%
Voter-Approved Open Space Referendum - MV184,238 0.00718%187,283 0.00841%
$ 10,843,92511,143,925$
154
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIES Exhibit 3
GENERAL OBLIGATION BONDS
December 31, 2014
Capital Open Space
Certificates ofCertificates ofImprovementAbatementReferendumTotal
TaxesIndebtednessIndebtednessRefunding BondsBondsBondsDeferred Tax
Payable2012A2014A2012B2012C2010ALevies
2015$ 140,000$ 296,055$ 540,120$ 975,652184,238$ 2,136,065
2016-295,260-1,281,190187,8401,764,290
2017-294,945-1,278,670188,7771,762,392
2018-294,525-1,286,335183,9891,764,849
2019---1,282,975184,1991,467,174
2020---1,284,550184,0781,468,628
2021---1,280,455-1,280,455
2022---1,285,285-1,285,285
2023---1,283,015-1,283,015
2024---1,282,883-1,282,883
2025---1,280,744-1,280,744
2026---1,281,781-1,281,781
2027---1,291,027-1,291,027
2028---1,292,340-1,292,340
2029---1,297,800-1,297,800
$ 140,000$ 1,180,785$ 540,120$ 18,964,702$ 1,113,121$ 21,938,728
155
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERSExhibit 4
December 31, 2014
TransferTransfer
InOut
General Fund
Water EF$ 150,250
$ -General Fund Admin Allocation
Sewer EF 46,680
-General Fund Admin Allocation
Total General Fund196,930
-
ecial Revenue Funds (SRF)
Sp
Community Center SRF
212,356Debt Service Allocation
2004 EDA Public Facility Lease Revenue Bond DSF -
2006 EDA Public Facility Lease Revenue Refunding Bond DSF 14,826Debt Service Allocation
-
2007 EDA Public Facility Lease Revenue Refunding Bond DSF 14,311Debt Service Allocation
-
241,493
-
Right of Way Management / Utility SRF
Road and Bridge CPF 5,500Roadway Degredation
-
ecial Revenue Funds246,993
Total Sp
-
Debt Service Funds (DSF)
2004 EDA Public Facility Lease Revenue Bonds DSF
Community Center SRF212,356
-Debt Service Allocation
2006 EDA Public Facility Lease Revenue Refunding Bond DSF
Community Center SRF 14,826
-Debt Service Allocation
2007 EDA Public Facility Lease Revenue Refunding Bond DSF
Community Center SRF 14,311
-Debt Service Allocation
2010A PIR Refunding Bonds DSF
PIR CPF 380,961
-Debt Service Allocation
2011A G.O. Capital Note DSF
Building CPF 9,951Close Debt Service Fund
-
Total Debt Service Funds622,4549,951
Caital Proects Funds (CPF)
pj
Water Trunk CPF
20,737Debt Service Allocation
Water EF -
Sewer Trunk CPF
Sewer EF 400,000
-Replacement Reserve
Road and Bridge CPF
Right of Way Management / Utility SRF 5,500
-Roadway Degredation
Building CPF
2011A G.O. Capital Note DSF 9,951
-Close Debt Service Fund
PIR CPF
2010A PIR Refunding Bonds DSF 380,961Debt Service Allocation
-
Total Caital Proects Funds415,451401,698
pj
Enterrise Funds (EF)
p
Water EF
Water Trunk CPF20,737
-Debt Service Allocation
General Fund 150,250General Fund Admin Allocation
-
20,737 150,250
Sewer EF
General Fund 46,680General Fund Admin Allocation
-
Sewer Trunk CPF 400,000Replacement Reserve
-
446,680
-
Total Enterrise Funds20,737596,930
p
Total All Funds$1,255,572$1,255,572
156