HomeMy WebLinkAbout2015 CAFR
COMPREHENSIVE
ANNUAL
FINANCIAL
REPORT
FOR THE YEAR ENDED DECEMBER 31, 2015
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, 2015
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 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 1082
Schedule of Funding Progress - Other Post Employment Benefits PlanStatement 1184
Schedule of Proportionate Share of Net Pension Liability - General Employees Retirement FundStatement 1285
Schedule of Pension Contributions - General Employees Retirement FundStatement 1386
Schedule of Proportionate Share of Net Pension Liability - Public Employees Police and Fire FundStatement 1487
Schedule of Pension Contributions - Public Employees Police and Fire FundStatement 1588
Notes to Required Supplementary Information:
Budgets89
Modified Approach for City Streets and Trails Infrastructure Capital Assets89
Pension Information90
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
Combining and Individual Fund Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental FundsStatement 1693
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Nonmajor Governmental FundsStatement 1794
Nonmajor Special Revenue Funds:
Subcombining Balance Sheet - Nonmajor Special Revenue FundsStatement 1896
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue FundsStatement 1998
Nonmajor Debt Service Funds:
Subcombining Balance Sheet - Nonmajor Debt Service FundsStatement 20102
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Debt Service FundsStatement 21104
Nonmajor Capital Projects Funds:
Subcombining Balance Sheet - Nonmajor Capital Project FundsStatement 22108
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Capital Project FundsStatement 23110
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual:
EDA GeneralStatement 24112
Community CenterStatement 25113
Drainage and MappingStatement 26114
LRRWMOStatement 27115
ForestryStatement 28116
Right-of-Way Management/UtilityStatement 29117
Charitable GamblingStatement 30118
Construction Seal CoatingStatement 31119
Internal Service Funds:
Combining Statement of Net Position - Internal Service FundsStatement 32121
Combining Statement of Revenues, Expenses and Changes in Net Position -
Internal Service FundsStatement 33122
Combining Statement of Cash Flows - Internal Service FundsStatement 34123
Agency Funds:
Combining Statement of Net Position - Fiduciary FundsStatement 35125
Combining Statement of Changes in Assets and Liabilities - Fiduciary FundsStatement 36126
III. STATISTICAL SECTION
Net Position by Component - Last Ten Fiscal Years Table 1128
Changes in Net Position - Last Ten Fiscal Years Table 2130
Fund Balances - Governmental Funds - Last Ten Fiscal Years Table 3134
Changes in Fund Balances - Governmental Funds - Last Ten Fiscal Years Table 4136
Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal YearsTable 5138
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
ReferenceNo.
Property Tax Rates - Per $1,000 of Assessed Tax Capacity Value - Direct and Overlapping
Governments - Last Ten Fiscal YearsTable 6139
Property Tax Levies and Collections - Last Ten Fiscal YearsTable 7140
Principal Taxpayers - Current Year and Nine Years AgoTable 8141
Estimated Market Values and New Construction - Last Ten Fiscal YearsTable 9142
Special Assessment Levies and Collections - Last Ten Fiscal YearsTable 10143
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita -
Last Ten Fiscal YearsTable 11144
Computation of Direct and Overlapping DebtTable 12145
Computation of Legal Debt Margin - Last Ten Fiscal YearsTable 13146
Pledged-Revenue Coverage - Last Ten Fiscal YearsTable 14149
Outstanding Debt by Type - Last Ten Fiscal YearsTable 15150
Demographic and Economic Statitistics - Last Ten YearsTable 16152
Principal Employers - Current Year and Nine Years AgoTable 17153
Full Time Equivalent Employees - City Government Employees by Function/Program -
Last Ten Fiscal YearsTable 18155
Operating Indicators by Function/Program - Last Ten YearsTable 19156
Capital Asset Statistics by Function/Program - Last Ten YearsTable 20158
IV. OTHER INFORMATION
Combined Schedule of IndebtednessExhibit 1160
Schedule of Tax Capacity Rates and LeviesExhibit 2162
Schedule of Deferred Tax Levies - General Obligation BondsExhibit 3163
Schedule of Fund TransfersExhibit 4164
I. INTRODUCTORY SECTION
1
1685 CROSSTOWN BOULEVARD N.W. ANDOVER, MINNESOTA 55304 (763) 755-5100
FAX (763) 755-8923 WWW.ANDOVERMN.GOV
May 17, 2016
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, 2015, 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
2
To the Honorable Mayor and City Council
City of Andover, Minnesota
name Andover had historical interest. The historical interest, we believe, came from the Andover train station.
a
swamp, and an eyewitness, re
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
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 2016 and 2017, with an estimated population of 32,050 by 2016. The rate
of residential growth as compared to the growth in the 19 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 2015. Continual commercial growth is anticipated over the next five 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 2015. They are general
property taxes at 77% and charges for services at 8%. 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 was reinstated for the City in the amount of $74,655. Due to the unpredictability of the State, those funds were
used to help offset the growing needs of the Road and Bridge Capital Projects Fund for street improvements/replacements. The
City is not intending to rely on this funding for general operational needs. In 2015, LGA was eliminated again for the City.
For 1998 through 2000, cities with populations over 2,500 were under levy limit restrictions imposed by the State. Levy limits
severely curb the ability of cities to generate additional tax revenue needed to respond to an increasing demand for services. For
1999 and 2000, the levy limit formula was modified to allow for increases based on commercial and industrial growth. This was
a favorable change for Andover, as the City experienced a surge in commercial growth during that period. Levy limits were lifted
for 2001 but were reinstated for 2002 - 2004. The 2004 levy limits were so severe that the State did not allow cities the ability to
capture residential and commercial market value growth. Levy limits were lifted from 2005 to 2008, but reinstated for 2009 and
are still in place in some form yet today.
The City’s General Fund receives a substantial amount of revenue from licenses and permits. The past ten years are shown
below:
RevenuesChange
2006598,094$ n/a
2007475,893 (122,201)$
2008525,339 49,446
2009291,903 (233,436)
2010329,901 37,998
2011387,206 57,305
2012449,826 62,620
2013536,706 86,880
2014364,430 (172,276)
2015452,422 87,992
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. There was a slight increase in construction activity in 2015.
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
2006$780,273n/a
2007
1 ,121,642$ 341,369
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)
2015804,228(194,282)
The City analyzes user fees every year as part of the budget process and makes adjustments where appropriate. Revenue from
charges for services totaled $1,121,642 in 2007 and this increase can be linked to the number of public improvement projects
being finalized and assessed in 2007.2008 proved to be better than expected due to some residential plat activity taking place
but the decrease in 2009 was expected due to the struggling economy. 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.A reduction in the scope of
roadway projects accounted for a large part of the reduction in 2015 for engineering fees charged as compared to 2014.
In 2015, the City issued 74 new single-family building permits with a total valuation of $19,631,775 compared to 52 new single-
family building permits with a total valuation of $13,926,901 the prior year. The past ten years are shown below:
ResidentialCommercial / Industrial
PermitsValuationPermitsValuation
2006153 25,236,120$8 1,791,896$
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
201574 19,631,77516 2,513,609
Residential Development
nd
New residential development included the development of a 99 lot subdivision known as Country Oaks North 2 Addition,
which consists of 85 urban lots with city water and sewer and 14 rural lots between one and two acres with septic and well; a 18
nd
lot urban development know as Winslow Woods 2 Addition; a 10 lot urban residential development known as Hickory
ndnd
Meadows 2 Addition.
The City currently has a supply of 197 single family urban lots and 12 single family rural lots. As of spring 2016, there are 4 new
urban residential developments in various phases of the subdivision/platting approval process totaling 103 lots that have the
potential to be coming on line in 2016/2017.
Commercial Industrial Development
New institutional/commercial/industrial construction did occur in 2015. The Foundation Hill Montessori School located at 1750
th
139 Lane NW completed the construction of a 5,700 square foot addition. Renovation of the vacant bank building at 1777
Bunker Lake Blvd NW was completed with new tenants: Premier Bank and Essentials of Life Chiropractic.
EMPLOYMENT
-Hennepin School District has a significant
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 completion of development of the Andover Station
Commercial Park that additional employment opportunities will be provided to residents in the near future.
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To the Honorable Mayor and City Council
City of Andover, Minnesota
Major employers in Andover are as follows:
Number of
FirType of Business / ProductEmployees
m
Anoka-Hennepin ISD No 11Elementary and secondary education760
Fairview - Andover ClinicHealthcare300
Anoka County Sheriff's OfficeCounty government and services250
Kottkes' Bus Service, Inc.Bus transportation225
Wal-MartRetail210
YMCAYouth organization - fitness cente186
r
TargetRetail170
Anoka County Highway DepartmentCounty government and services103
Bunker Hills Regional Park/Activity CenteCounty government and services100
r
Andover County MarketRetail85
MAJOR INITIATIVES
FOR THE YEAR.
The City has many accomplishments to report for 2015. 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 310 single family rental licenses issued throughout the City in 2015.
2)In 2015, the City again saw a resurgence in new residential development including the development of 99 lots known
as Country Oaks North Second Addition, an 18 lot subdivision know as Winslow Woods Second Addition, an 18 lot
residential planned unit development known as Carson Ridge, 12 residential units known as B & D Estates, 6
residential unit subdivision known as Shadow Ponds, 16 units known as White Pine Wilderness Second Addition, 10
lot residential subdivision know as Hickory Meadows Second Addition and a 27 lot residential development known
as Catchers Creek Second Addition.
3)In 2015, the City of Andover, in cooperation with the Anoka County Highway Department, worked through the
planning of the Bunker Lake Boulevard expansion and reconstruction. Construction is set to start in 2016 and will
be financed primarily by a federal grant. A trail underpass from the City trails system to Bunker Hills Regional Park
is planned as part of the project.
4)In 2015, the City welcomed the construction of a new Acapulco restaurant on an Andover Station North commercial
parcel. The construction of the restaurant on a site adjacent to the new Wal-Mart and other Andover Station North
businesses will complete the Bunker Lake Boulevard frontage on the Andover Station North development. The
restaurant is anticipating a July 2016 opening.
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 2016-2017. Additionally,
the City EDA sold another parcel to DSTI, where 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 within the next five years.
6)In 2013, the City EDA negotiated the sale of an Andover Station North commercial/industrial parcel to Measurement
Specialties Incorporated, as global designer and manufacturer of sensors and sensor based systems. A December
2013 sale closing was completed on the lot 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 located to the City of Andover. Through 2015, the employment has exceeded 200
employees. Talks of a future expansion of the facility with TE Connectivity have already started to accommodate
the growth of the company.
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To the Honorable Mayor and City Council
City of Andover, Minnesota
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 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 2015, the City EDA sold a two acre parcel in the Andover Station North development area to Foundation Hill
6,000 sq ft expansion of the Foundation Hill Montessori School and the platting of an additional lot that Foundation
Hill will market to a compatible business.
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. Building plans were approved in 2015 and
construction of the project is expected to occur in 2016.
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. In 2015, we saw the
development of B & D Estates of which the residual EDA parcel helped add four single family residential lots to the
B & D Estates development.
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. In 2015, the old convenience store/gas
station parcel was sold to Inventure Properties Inc, for the construction of a 12,000 sq. ft. office building along with a
residual parcel that Inventure Properties can sell for a compatible use.
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 and was in
full operation starting the spring of 2015.
13) The City started working with a development group in 2015 to transform the Bunker Lake Boulevard/ Hanson
Boulevard intersection from a vacant convenience store/gas station to a new strip-mall project to include restaurants
and service businesses. Construction of the new facility is anticipated to take place spring 2016.
14) In 2015, City Staff continues to work with the State of Minnesota Board of Soil and Water Resources on a wetland
restoration of the old Woodland Creek Golf Course parcel. The City acquired the old 74 acre golf course in late
2013, subsequently a 6 acre parcel was sold to a developer and a 6 unit subdivision called Shadow Ponds was the
outcome. The remaining acreage will be a restored wetland with passive nature trails. Construction is anticipated to
take place in 2016 through 2018.
15) The City started the master planning of the City Campus site in 2015 to prepare for the facility needs for the ultimate
build out of the City. The planning will assess Public Works, Public Safety, General Government and Recreational
needs of the community.
16) Andover residents continue to have one of the highest recycling rates per person for all recyclable materials in Anoka
County. In 2014, the City completed the construction of a new Recycling Center and that facility was put into full
operation in 2015. This construction was financed by Anoka County grants in an effort to expand the current
recycling opportunities for Anoka County residents.
17) A strategic planning session was held with the City Council, a final Council Community Vision and Organization
Goals and Values document was approved at the July 7, 2015 City Council meeting. Direction provided in that
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To the Honorable Mayor and City Council
City of Andover, Minnesota
document is being integrated into various department work plans and budgets. This event was facilitated by the City
Administration Department.
18) The City Open Space Commission, appointed to assist in managing the successful $2,000,000 open space
referendum ballot in 2006, reviewed and made 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). The last parcel was purchased in 2015; Dalske
Woodlands is a 40 acre parcel of pristine woodland. Throughout 2015, the City Parks Department focused on
creating nature trails, appropriate signage and accessibility to all of the open space parcels.
19) The City's Comprehensive Annual Financial Report (CAFR) for the year ended December 31, 2014 was awarded the
document internally and recognized significant cost savings in the form of reduced financial consulting fees. This is
December 31, 2015 will also achieve this award.
20) For the fourteenth year in a row, the City of Andover was awarded the Government Finance Officers Association
Distinguished Budget Presentation Award for the City's 2015 Annual Budget. This award recognizes excellence in
ument as a policy document, an operations guide, as a financial plan and as a
communications device.
21) 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, eliminated the
need for office expansion and has expedited City research projects.
22) 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 2015 the City saw
increased growth in the number of 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, facebook, twitter 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--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.
ring
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.
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To the Honorable Mayor and City Council
City of Andover, Minnesota
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.
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
nting
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, 2015. This is the
fourteenth year in a row the City of Andover has received this award. In order to receive this award, a governmental unit must
publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan and as a
communications device. This award is valid for a period of one year only. We believe that the annual budget for the fiscal year
beginning January 1, 2016 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 2014 Comprehensive Annual Financial Report. This is the thirteenth 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 2015
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, 2015
OfficeName
Term
MayorJulie TrudeJanuary 3, 2017
Council MemberSheri BukkilaJanuary 3, 2017
Council MemberJim GoodrichJanuary 1, 2019
Council MemberValerie HolthusJanuary 1, 2019
Council MemberMichael KnightJanuary 3, 2017
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, 2015, 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.
5921!Xijuf!Cfbs!Qbslxbz-!Tu/!Qbvm-!NO-!66221!!!!!!762/537/8111!!!!!!xxx/sfeqbuidqbt/dpn
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, 2015, and the respective changes in financial position, and, where applicable, cash
flows thereof for the year then ended in accordance with accounting principles generally accepted in
the United States of America.
Emphasis of Matter
As described in Notes 8 and 19 to the financial statements, the
City of Andover, Minnesota
adopted new accounting guidance, GASB Statement No. 68, Accounting and Financial
Reporting for Pensions – an Amendment of GASB Statement No. 27 for the year ended
December
. Our opinion is not modified with respect to this matter.
31, 2015
Report on Summarized Comparative Information
We have previously audited the City of Andover, Minnesota’s 2014financial 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, 2015. In our opinion, the summarized comparative information presented
herein as of and for the year ended December 31, 2014 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, the Schedules of Proportionate Share of Net Pension Liability, the Schedules of
Pension Contributions, and Notes to Required Supplementary Information on pages 17 through 26
and 82 through 90 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
15
opinion or provide any assurance on the information because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of 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 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 April 29,
2016, 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
April 29, 2016
16
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2015
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, 2015. 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 $168,722,390 (net position). Of this amount,
$31,461,816 (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 $5,157,561 from current year activity, primarily due to the budget savings, an increase in
commercial/residential construction fees, and land sales in the tax increment district. A prior period adjustment recognizing the long-term
obligation for pension benefits as a liability reduced the increase from prior year to $1,859,629.
As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $31,320,422.
SpecialDebtCapital
GeneralRevenueServiceProjectsTotals
Nonspendable131,813$$ 1,800$ -$ -$ 133,613
Restricted - 71,794 1,217,3004,385,323 5,674,417
Committed -531,729 - 531,729
-
Assigned - 64,119 17,843,810-17,907,929
Unassigned7,136,091 -(63,357) 7,072,734
-
$ 7,267,904$669,442$ 1,217,300$ 31,320,42222,165,776$
The City’s total long-term liabilities increased by $885,015 during the current fiscal year, primarily due to the City recognizing the long-term
obligation for pension benefits as a liability for the first time.
BeginningPrior PeriodEnding
BalanceAdjustmentAdditionsReductionsBalance
Governmental activities:
Bonds payable$21,095,000$ -$ (1,765,000)-$ 19,330,000$
Other post employment benefits184,154 -29,635 (11,662)202,127
Promissory note payable 786,874 - (196,719)590,155
-
Compensated absences 628,946 -404,856 (382,607)651,195
Net pension liabilit 2,916,764- 500,882 (414,274) 3,003,372
y
Total governmental activities22,694,9742,916,764935,373(2,770,262)23,776,849
Business-type activities:
Bonds payable6,310,000 - (590,000)5,720,000
-
Other post employment benefits22,761 - 6,392 (1,591) 27,562
Compensated absences 163,529 -56,679 (59,731)160,477
Net pension liabilit 381,168- 61,846 (51,623) 391,391
y
Total business-type activities6,496,290381,168124,917 (702,945)6,299,430
Total City long-term liabilities29,191,264$$ 1,060,2903,297,932$ (3,473,207)$ 30,076,279$
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.
17
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2015
Government-wide financial statements
. The government-wide financial statements are designed to provide readers with a broad overview
of the City’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets and liabilities, with the difference between the two reported as
net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is
improving or deteriorating.
The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes
in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g.
uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and
intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their
costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public
safety, public works, sanitation, parks and recreation, recycling and economic development. The business-type activities of the City include
water, sewer and storm sewer.
The government-wide financial statements can be found on pages 29 through 31 of this report.
Fund financial statements
. A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories:
governmental funds, proprietary funds, and fiduciary funds.
Governmental funds
. Governmental funds are used to account for essentially the same functions reported as governmental activities in the
government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements
focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the
fiscal year. Such information may be useful in evaluating a government’s near-term 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 six individual major governmental funds. Information is presented separately in the governmental fund balance sheet and
e governmental fund statement of revenues, expenditures and changes in fund balances for the following major funds: General Fund and
in th
the following capital projects funds (CPF): Water Trunk, Sewer Trunk, Road and Bridge, Tax Increment Projects and Permanent
Improvement Revolving.
Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-
major governmental funds is provided in the form of combining statements elsewhere in this report.
The City adopts an annual appropriated budget for its general and special revenue funds.
A budgetary comparison statement has been provided for those funds to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 32 through 37 of this report.
Proprietary funds
. When the City charges customers for the services it provided – whether to outside customers or to other departments of
the City – these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are
reported in the statement of net position and the statement of revenues, expenses and changes in net position.
The enterprise funds are the same as the business-type activities reported in the government-wide statements but provide more detail and
additional information, such as cash flows, for proprietary funds. The City uses enterprise funds to account for its water, sanitary sewer and
storm sewer operations.
Internal service funds are used to report activities that provide supplies and services for the City’s other departments, such as the equipment
maintenance and insurance funds. The internal service funds are reported with governmental activities in the government-wide financial
statements.
The basic proprietary fund financial statements can be found on pages 38 through 43 of this report.
18
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2015
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 79 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, the modified approach for streets and trails
infrastructure and pension information. Combining and individual fund statements and schedules can be found on pages 93 through 126 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 $168,722,390 at the close of the most recent fiscal year.
The largest portion of the City’s net position ($131,505,412 or 78 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
201420152014201520142015
Current and other assets$33,051,443$ 34,997,488$7,025,499$ 7,687,414$40,076,942$42,684,902
Capital assets116,069,323115,890,92841,097,38241,227,385157,166,705157,118,313
Total assets149,120,766150,888,41648,122,88148,914,799197,243,647199,803,215
Deferred outflows of resources- 442,026- 53,704- 495,730
Long-term liabilities
outstanding22,694,974 23,776,8496,496,290 6,299,43029,191,264 30,076,279
Other liabilities1,024,431 930,767165,191 105,5021,189,622 1,036,269
Total liabilities23,719,405 24,707,6166,661,481 6,404,93230,380,886 31,112,548
Deferred inflows of resources- 412,384- 51,623- 464,007
Net position:
Net investment in capital
assets94,533,473 95,998,02734,787,38235,507,385129,320,855131,505,412
Restricted4,776,047 5,755,162 -4,776,047 5,755,162
-
Unrestricted26,091,841 24,457,2536,674,018 7,004,56332,765,859 31,461,816
Total net position$ 126,210,442125,401,361$$ 42,511,94841,461,400$ 166,862,761$ 168,722,390$
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 ($31,461,816) 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, 2015
Government-wide Activities
Governmental activities increased the City's net position by $3,725,845 and business-type activities increased net position by $1,431,716.
Key elements of the activities are as follows:
City of Andover's Changes in Net Position
Governmental ActivitiesBusiness-Type ActivitiesTotal
201420152014201520142015
Revenues:
Program revenues:
Charges for services$3,296,147$3,902,190$4,886,443$5,166,839$8,182,590$9,069,029
Operating grants
and contributions946,540965,986 9,506- 956,046965,986
Capital grants
and contributions4,677,704863,155 990,4121,524,0885,668,1162,387,243
General revenues:
Property taxes10,863,91211,120,449 10,863,912-11,120,449
-
Tax increment353,773210,625- 353,773210,625
-
Grants and contributions
not restricted to
specific programs 87,17915,327- 87,17915,327
-
Unrestricted investments
earnings747,621348,885 115,42557,291 863,046406,176
Gain on sale of capital
assets228,639548,950- 228,639548,950
-
Total revenues21,201,51517,975,5676,001,7866,748,21827,203,30124,723,785
Expenses:
General government2,791,5072,823,408-2,791,5072,823,408
-
Public safety 4,774,0334,747,142-4,747,1424,774,033
-
Public works4,430,2952,967,957-4,430,2952,967,957
-
Parks and recreation3,229,8943,340,561-3,229,8943,340,561
-
Recycling111,76098,016- 111,76098,016
-
Economic development676,039192,265- 676,039192,265
-
Interest on long-term debt542,139454,808- 542,139454,808
-
Water -- 2,308,552 2,316,651 2,308,552 2,316,651
Sewer -- 1,951,785 2,002,623 1,951,785 2,002,623
Storm sewer -- 848,745 595,902 848,745 595,902
Total expenses16,528,776 14,651,048 5,109,082 4,915,176 21,637,858 19,566,224
Increase (decrease) in net position
before transfers4,672,7393,324,519 892,7041,833,0425,565,4435,157,561
Transfers606,793401,326(606,793)(401,326)
- -
Change in net position5,279,5323,725,845 285,9111,431,7165,565,4435,157,561
Net position - Jan. 1, previously
reported120,121,829 41,175,489125,401,36141,461,400161,297,318166,862,761
Prior period adjustment (2,916,764)- -(381,168) (3,297,932)-
Net position - Jan. 1, restated120,121,829 41,175,489122,484,59741,080,232161,297,318163,564,829
Net position - ending$ 126,210,442125,401,361$$ 42,511,94841,461,400$ 166,862,761$ 168,722,390$
20
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2015
Governmental Activities
Following are specific graphs that provide comparisons of the governmental activities revenues and expenses:
Governmental Activities - Revenues
Unrestricted
investments earnings
Charges for services
1.9%
21.7%
Tax increment
Grants and
1.2%
contributions not
restricted to specific
programs
0.1%
Gain on sale of
capital assets
3.1%
Capital grants and
contributions
4.8%
Property taxes
61.8%
Operating grants and
contributions
5.4%
Governmental Activities - Expenses
Interest on long-term
debt
3.1%
Economic
General government
development
19.3%
1.3%
Parks and recreation
Recycling
22.8%
0.7%
Public safety
32.5%
Public works
20.3%
21
CITY OF ANDOVER, MINNESOTA
December 31, 2015
Business-Type Activities
Following are graphs showing the business-type activities revenue and expense comparisons:
Business-Type Activities -Revenues
Capital grants and
contributions
22.6%
Unrestricted
investments earnings
0.8%
Charges for services
76.6%
Business-Type Activities -Expenses
Storm sewer
12.1%
Water
47.1%
Sewer
40.8%
22
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2015
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 $31,320,422. Approximately
22.6 percent of this total amount ($7,072,734) constitutes unassigned fund balance. The remainder of the fund balance ($24,247,688) is not
available for new spending because it is either 1) nonspendable ($133,613), 2) restricted ($5,674,417), 3) committed ($531,729) or 4)
assigned ($17,907,929).
Major Funds
The general fund increased by $65,770 in 2015, which was a $697,925 change from the final budget. The final budget showed a decrease in
fund balance of $632,155. The increase in fund balance is due to various departments under-spending and revenues exceeding budgets
related to residential and commercial construction activity and an increase in state fire aid and miscellaneous fire grants.
The water and sewer trunk capital projects funds fluctuate based on development activity and whether there is any cost sharing for pipe over-
nd
sizing, extra depth, etc. The addition of the following developments has increase connection fees: Catchers Creek 2 Addition, Country Oaks
ndnd
North 2 Addition, Hickory Meadows 2 Addition and Winslow Woods 2nd 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 $513,586 primarily due to the reduction in the scope of projects completed in 2015 as
compared to 2014.
The tax increment capital projects fund increased by $811,783 primarily due to the sale of land.
The permanent improvement revolving capital projects fund increased by $135,034 due to the collection of special assessments revenue.
Nonmajor Funds
The community center special revenue fund increased $104,504 due to the revenues exceeding expenditures and the transfer out.
The 2012A G.O. equipment certificates debt service fund increased by $133,385 with the collection of tax levy for future debt service
payments.
The 2012C G.O. abatement bonds debt service fund increased by $50,993 due to revenues and transfers in exceeding debt service payments.
The 2009A state aid bonds debt service fund decreased by $109,742 with the final debt service payment.
The building capital projects fund decreased by $67,345 primarily due to the promissory note payment made in 2015.
The trail and transportation capital projects fund increased by $212,437 due to a one-time transfer from the General Fund for trail projects.
The capital equipment reserve capital projects fund increased by $164,919 due to the timing of revenues and expenditures and the sale of
used equipment.
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 $233,392 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.
The unrestricted net position in the respective proprietary funds are enterprise funds of $6,910,106 (water $3,040,230, sewer $3,618,050 and
storm sewer $251,826) and internal service funds of $744,804. The enterprise funds had a net increase in net position from current year
activity of $1,404,343 (water $814,377, sewer $285,640 and storm sewer $304,326). A prior period adjustment recognizing the long-term
obligation for pension benefits as a liability reduced the increase from prior year to $1,023,175. Internal service funds had a net increase in
net position of $131,120.
23
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2015
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, 2015, amounts
to $157,118,313 (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 2015, 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, 2015, 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 $1,114,900 on
street and trail maintenance for the year ending December 31, 2015. 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 $1,150,000.
MaintenanceActualOCI
YearEstimateExpendituresRating
20061,150,000$ 1,228,981$82
20071,150,000 1,256,43381
20081,150,000 2,244,71380
20091,150,000 1,666,21681
20101,150,000 1,457,08283
20111,150,000 1,770,98083
20121,150,000 3,894,78483
20131,150,000 2,471,1236.9
20141,150,000 2,029,0266.7
20151,150,000 1,114,9006.7
24
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2015
Primary Government
BeginningEnding
BalanceAdditionsDeletionsBalance
Governmental activities:
Land and improvements10,803,419$ 231,661$ (305,107)$ 10,729,973$
Streets and trails81,059,895 1,143,658 - 82,203,553
Construction in progress52,523 38,665 (52,523) 38,665
Buildings and improvements27,249,905 36,098 - 27,286,003
Furniture and equipment570,289 13,037 - 583,326
Machinery and equipment8,698,749 74,934 (561,609) 8,212,074
Other park improvements6,946,891 313,302 (7,500) 7,252,693
Total capital assets 135,381,671 1,851,355 (926,739) 136,306,287
Less accumulated depreciation for:
Buildings and improvements9,867,895 906,866 - 10,774,761
Furniture and equipment423,407 43,966 - 467,373
Machinery and equipment5,937,203 399,247 (561,609) 5,774,841
Other park improvements3,083,843 322,041 (7,500) 3,398,384
Total accumulated depreciation19,312,348 1,672,120 (569,109) 20,415,359
Governmental activities
capital assets - net116,069,323 179,235 (357,630) 115,890,928
Business-type activities:
Land and improvements730,243 - 730,243
-
Buildings and improvements15,877,590 15,877,590-
-
Furniture and equipment 61,390 - 61,390
-
Machinery and equipment 1,252,20787,475 (30,000) 1,309,682
Collection and distribution52,439,2021,692,043 54,131,245-
Total capital assets
being depreciated70,360,6321,779,518 (30,000) 72,110,150
Less accumulated depreciation for:
Buildings and improvements 7,860,166533,154 - 8,393,320
Furniture and equipment 52,355 2,867 - 55,222
Machinery and equipment 1,111,26940,300 (30,000) 1,121,569
Collection and distribution20,239,4601,073,194 21,312,654-
Total accumulated depreciation29,263,2501,649,515 (30,000) 30,882,765
Business-type activities
capital assets - net41,097,382130,003 41,227,385-
Total capital assets$157,166,705$ 309,238$(357,630)$157,118,313
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 $26,451,827, a decrease of
$2,532,522 from 2014. General obligation abatement bonds ($15,840,000) were used to refund the 2006 and 2007 EDA lease revenue
refunding bonds. General obligation revenue bonds ($5,720,000) were used for an addition to the water treatment plant and the refunding of
portions of the water treatment plant bonds. Certificates of indebtedness ($1,915,000) financed capital equipment purchases. Capital
improvement bonds ($470,000) financed the construction of Fire Station #3 and the purchase of the Public Works building from the EDA, in
addition to, the refunding of those same bonds. Referendum bonds ($1,105,000) were used to finance land acquisitions for the preservation
of open space. The promissory note payable ($590,155) is being used to finance the purchase of land adjacent to the city hall complex.
Additional long-term debt in the amount of $811,672 is for compensated absences.
25
CITY OF ANDOVER, MINNESOTA
MANAGEMENT’S DISCUSSION AND ANALYSIS
December 31, 2015
City of Andover’s Outstanding Debt
GovernmentalBusiness-Type
ActivitiesActivitiesTotal
Bonds payable:
Abatement bonds$ -15,840,000$ 15,840,000$
G.O. revenue bonds - 5,720,0005,720,000
Certificates of indebtedness1,915,000 -1,915,000
Capital improvement bonds 470,000 -470,000
Referendum bonds1,105,000 -1,105,000
Total bonds payable19,330,000 5,720,00025,050,000
Promissory note payable 590,155 -590,155
Compensated absences 651,195 160,477811,672
Total$ 5,880,47720,571,350$ $26,451,827
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 $73,073,118. Only $18,138,481 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 Notes 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 POSITION Statement 1
December 31, 2015
Primary Government
Totals
GovernmentBusiness-Type
ActivitiesActivities2015
Assets:
Cash and investments $ 31,822,911$6,003,798$37,826,709
Cash and investments with escrow agent 151,162-151,162
Accrued interest 125,07521,651146,726
Due from other governmental units 57,5154,83362,348
Accounts receivable - net 195,7201,376,2481,571,968
Property taxes receivable:
Unremitted 118,735-118,735
Delinquent 225,000-225,000
Special assessments receivable:
Unremitted 2,3144,7217,035
Delinquent 21,314248,440269,754
Deferred 1,813,2203,2181,816,438
Inventories - at cost 239,52224,505264,027
Land held for resale 225,000-225,000
Capital assets - net:
Nondepreciable 92,972,191730,24393,702,434
Depreciable 22,918,73740,497,14263,415,879
Total assets 150,888,41648,914,799199,803,215
Deferred outflows of resources:
Related to pensions 442,02653,704495,730
Liabilities:
Interfund payable 94,457(94,457)-
Accounts payable 212,00823,700235,708
Contracts payable 35,01114,87249,883
Deposits payable 45,9752,23448,209
Due to other governmental units 24,08325,06649,149
Salaries payable 224,42638,222262,648
Unearned revenue 106,225-106,225
Accrued interest payable 188,58295,865284,447
Other post employment benefits:
Due in more than one year 202,12727,562229,689
Compensated absences:
Due within one year 97,67924,071121,750
Due in more than one year 553,516136,406689,922
Promissory note payable:
Due within one year 196,719-196,719
Due in more than one year 393,436-393,436
Bonds/notes payable:
Due within one year 1,770,000615,0002,385,000
Due in more than one year 17,560,0005,105,00022,665,000
Net pension liability:
Due in more than one year 3,003,372391,3913,394,763
Total liabilities 24,707,6166,404,93231,112,548
Deferred inflows of resources:
Related to pensions 412,38451,623464,007
Net position:
Net investment in capital assets 95,998,02735,507,385131,505,412
Restricted for:
Debt service 1,064,634-1,064,634
Tax increment purposes 4,618,734-4,618,734
Public services 71,794-71,794
Unrestricted 24,457,2537,004,56331,461,816
Total net position $126,210,442$42,511,948$168,722,390
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, 2015
Program Revenues
ChargesOperatingCapital
ForGrants andGrants and
ExpensesServicesContributionsContributions
Functions/Programs
Primary government:
Government activities:
General government $ 2,823,408$ 1,381,113$ 40,456$ -
Public safety 4,774,033624,430439,062-
Public works 2,967,957298,143416,954664,940
Parks and recreation 3,340,5611,514,900-175,144
Recycling 98,01632,97669,51423,071
Economic development 192,26550,628--
Interest on long-term debt 454,808---
Total government activities 14,651,0483,902,190965,986863,155
Business-type activities:
Water 2,316,6512,593,303-526,409
Sewer 2,002,6232,129,201-536,520
Storm sewer 595,902444,335-461,159
Total business-type activities 4,915,1765,166,839-1,524,088
Total primary government $ 19,566,224$ 9,069,029$ 965,986$ 2,387,243
The accompanying notes are an integral part of these financial statements.
30
Statement 2
Net (Expense) Revenue and Changes in Net Position
Primary Government
Totals
GovernmentalBusiness-Type
ActivitiesActivities2015
$ (1,401,839)$ -$ (1,401,839)
(3,710,541)-(3,710,541)
(1,587,920)-(1,587,920)
(1,650,517)-(1,650,517)
27,545-27,545
(141,637)-(141,637)
(454,808)-(454,808)
(8,919,717)-(8,919,717)
-803,061803,061
-663,098663,098
-309,592309,592
-1,775,7511,775,751
(8,919,717)1,775,751(7,143,966)
General revenues:
General property taxes 11,120,449-11,120,449
Tax increment collections 210,625-210,625
Grants and contributions not
restricted to specific programs 15,327-15,327
Unrestricted investment earnings 348,88557,291406,176
Gain on sale of capital assets 548,950-548,950
Transfers 401,326(401,326)-
Total general revenues, gain on sale of
capital assets and transfers 12,645,562(344,035)12,301,527
Change in net position 3,725,8451,431,7165,157,561
Net position - January 1, as previously reported125,401,36141,461,400166,862,761
Prior period adjustment (2,916,764)(381,168)(3,297,932)
Net position - January 1, as restated122,484,59741,080,232163,564,829
Net position - ending $ 126,210,442$ 42,511,948$ 168,722,390
31
CITY OF ANDOVER, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2015
With Comparative Totals For December 31, 2014
Tax
Road &Increment
Water TrunkSewer TrunkBridgeProjects
GeneralCPFCPFCPFCPF
Assets:
Cash and investments $ 7,086,248$ 2,847,897$ 6,061,248$ 5,481,958$ 4,347,644
Cash and investments with escrow agent -----
Accrued interest 22,80012,40726,42321,51018,839
Due from other governmental units 57,515----
Accounts receivable - net 87,402----
Interfund receivable 190,000----
Property taxes receivable:
Unremitted 81,339--10,937174
Delinquent 129,782--17,45135,665
Special assessments receivable:
Unremitted 371--1,943-
Delinquent 18,027--3,287-
Deferred -397,727156,024989,804-
Inventories - at cost 131,813----
Land held for resale----225,000
Total assets 7,805,2973,258,0316,243,6956,526,8904,627,322
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Interfund payable -----
Accounts payable 147,916---1,348
Contracts payable 19,806--1,254-
Deposits payable 16,8405,7415,741539-
Due to other governmental units 17,115--2,8082,240
Salaries payable 187,907----
Unearned revenue ----5,000
Total liabilities 389,5845,7415,7414,6018,588
Deferred inflows of resources:
Unavailable revenues 147,809397,727156,0241,010,542260,665
Fund balances (deficit):
Nonspendable131,813----
Restricted----4,358,069
Committed-----
Assigned-2,854,5636,081,9305,511,747-
Unassigned7,136,091----
Total fund balances 7,267,9042,854,5636,081,9305,511,7474,358,069
Total liabilities, deferred inflows of resources,
and fund balances (deficit) $ 7,805,297$ 3,258,031$ 6,243,695$ 6,526,890$ 4,627,322
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.
Deferred outflows of resources - pension related are not current 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, other post employment benefits and net pension liability, are not due and payable in the
current period and, therefore, are not reported in the funds.
Deferred inflows of resources - pension related are associated with long-term liabilities that 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
Permanent
Totals
ImprovementOtherIntra
Governmental Funds
RevolvingGovernmentalActivity
CPFFundsEliminations20152014
$ 837,513$ 4,507,529$ -$ 31,170,037$ 28,771,135
-151,162-151,162126,086
3,54816,875-122,402121,545
---57,51546,969
-108,318-195,720191,738
--(190,000)--
-26,285-118,73599,093
-42,102-225,000255,095
---2,3143,105
---21,31422,724
269,665--1,813,2202,283,051
-1,800-133,613138,563
---225,000325,000
1,110,7264,854,071(190,000)34,236,03232,384,104
-190,000(190,000)--
-57,804-207,068264,797
-13,951-35,01149,175
-17,114-45,97552,835
2761,644-24,08335,599
-24,807-212,714201,817
-101,225-106,22595,008
276406,545(190,000)631,076699,231
269,66542,102-2,284,5342,885,870
-1,800-133,613138,563
-1,316,348-5,674,4175,022,967
-531,729-531,729591,289
840,7852,618,904-17,907,92916,095,395
-(63,357)-7,072,7346,950,789
840,7854,405,424-31,320,42228,799,003
$ 1,110,726$ 4,854,071$ (190,000)$ 34,236,032$ 32,384,104
$ 31,320,422
115,890,928
442,026
2,284,534
650,347
(23,965,431)
(412,384)
$ 126,210,442
33
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTAL FUNDS
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
Tax
Road &Increment
Water TrunkSewer TrunkBridgeProjects
GeneralCPFCPFCPFCPF
Revenues:
General property taxes $ 7,634,714$ -$-$1,026,577$ -
Tax increment collections - ---213,020
Licenses and permits 452,422 --- -
Intergovernmental 749,570 --194,797 15,423
Special assessments -42,34227,195493,996 -
Charges for services 804,228 --- -
Fines 99,304 --- -
Investment income 63,70935,03475,97865,307 56,778
Miscellaneous:
Park dedication fees - --- -
Connection charges -309,87396,094- -
Rent - --- -
Other 154,890 --- -
Total revenues 9,958,837387,249199,2671,780,677285,221
Expenditures:
Current:
General government 2,511,970 --- -
Public safety 4,503,327 --- -
Public works 1,538,6292,2901,0351,103,853 -
Parks and recreation 1,151,313 --- -
Recycling 91,940 --- -
Economic development - ---109,554
Unallocated 56,720 --- -
Capital outlay:
Public safety - --- -
Public works - --316,931 -
Parks and recreation - --- -
Recycling 36,098 --- -
Debt service:
Principal retirement - --- -
Interest - --- -
Paying agent fees - --- -
Professional services - --- -
Construction/acquisition costs -109,86058,095- -
Total expenditures 9,889,997112,15059,1301,420,784109,554
Revenues over (under) expenditures 68,840275,099140,137359,893175,667
Other financing sources (uses):
Transfers in 196,930 -400,00048,902 -
Transfers out (200,000)(58,249)-- -
Bonds issued - --- -
Redemption of refunded bonds - --- -
Bond premium - --- -
Proceeds from sale of capital assets - --104,791636,116
Total other financing sources (uses) (3,070)(58,249)400,000153,693636,116
Net increase (decrease) in fund balance 65,770216,850540,137513,586811,783
Fund balance - January 1 7,202,1342,637,7135,541,7934,998,1613,546,286
Fund balance - December 31 $ 7,267,904$2,854,563$6,081,930$5,511,747$4,358,069
The accompanying notes are an integral part of these financial statements.
34
Statement 4
Permanent
Totals
ImprovementOtherIntra
Governmental Funds
RevolvingGovernmentalActivity
CPFFundsEliminations20152014
$-$2,486,858$ -$11,148,149$10,894,301
-- -213,020377,733
-- -452,422364,430
-- -959,7903,464,985
126,628- -690,161733,425
-695,681 -1,499,9091,720,972
-- -99,30494,375
9,77434,812 -341,392735,325
-170,144 -170,144156,384
-- -405,967676,826
-638,220 -638,220639,000
-418,183 (30,600)542,473564,057
136,4024,443,898 (30,600)17,160,95120,421,813
-127,851 -2,639,8212,588,950
-17,802 -4,521,1294,537,264
1,368100,375 -2,747,5504,145,404
-1,126,263 -2,277,5762,139,552
-- -91,940106,587
-71,997 -181,551665,325
-- -56,72081,183
-74,934 -74,9341,089,037
-23,028 -339,959856,511
-490,222 -490,222863,513
-- -36,0987,314
-1,961,719 -1,961,7192,336,719
-470,687 -470,687900,504
-5,009 -5,0092,775
-- --5,120
-- -167,955-
1,3684,469,887 -16,062,87020,325,758
135,034(25,989) (30,600)1,098,08196,055
-500,000 (518,302)627,530627,530
-(348,902) 548,902(58,249)(20,737)
-- --1,555,000
-- --(16,455,000)
-- --44,278
-113,150 -854,057922,408
-264,248 30,6001,423,338(13,326,521)
135,034238,259 -2,521,419(13,230,466)
705,7514,167,165 -28,799,00342,029,469
$840,785$4,405,424$ -$31,320,422$28,799,003
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, 2015
2015
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) $ 2,521,419
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. (562,952)
The net effect of various miscellaneous transactions involving capital assets is to increase
(decrease) net position (i.e., sales, trade-ins, and donations). 552,512
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds. (601,336)
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. 1,961,719
Vested post employment benefits are reported in the governmental funds when amounts are
paid. The statement of activities reports the benefits earned during the years. This amount (17,973)
is the net effect of employee benefits earned and paid during the year.
Transfer out of governmental capital assets contributed to Enterprise Funds. (167,955)
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. (6,370)
Governmental funds report pension contributions for defined benefit plans as expenditures,
however, pension expense is reported in the Statement of Activities. This is the amount by
which pension expense exceeded pension contributions:
Pension contributions
275,096
Pension expense (56,966)
(332,062)
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. 103,747
Change in net position of governmental activities (page 31) $ 3,725,845
The accompanying notes are an integral part of these financial statements.
37
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2015
With Comparative Totals For December 31, 2014
WateSeweStorm Sewe
rrr
Assets:
Current assets:
Cash and cash equivalents 2,860,495$ 3,025,270$ 118,033$
Accrued interest 9,591 11,764 296
Due from other governmental units - 4,833 -
Accounts receivable - net 531,978 696,943 147,327
Special assessments receivable:
Unremitted 2,018 2,378 325
Delinquent 105,801 117,849 24,790
Deferre -- 3,218
d
Inventories - at cost 24,505 - -
Total current assets 3,534,388 3,859,037 293,989
Noncurrent assets:
Capital assets:
Land 730,243 - -
Buildings and structures 15,877,590 - -
Machinery and equipment 294,863 576,353 499,856
Distribution and collection system 18,140,262 25,060,497 10,930,486
Total capital assets 35,042,958 25,636,850 11,430,342
Less: Allowance for depreciation (15,038,785) (11,190,850) (4,653,130)
Total noncurrent assets 20,004,173 14,446,000 6,777,212
Total assets 23,538,561 18,305,037 7,071,201
Deferred outflows of resources:
Related to pensions 32,916 20,788 -
Liabilities:
Current liabilities:
Accounts payable 14,197 8,433 1,070
Contracts payable 6,359 3,521 4,992
Deposits payable 2,234 - -
Interest payable 95,865 - -
Due to other governmental units 17,451 7,615 -
Salaries payable 18,047 11,190 8,985
Bonds payable - due within one year 615,000 - -
Compensated absences payable - due within one year 13,486 6,518 4,067
Total current liabilities 782,639 37,277 19,114
Noncurrent liabilities:
Other post employment benefits - due in more than one year 11,484 16,078 -
Bonds payable - due in more than one year 5,105,000 - -
Compensated absences payable - due in more than one year 76,423 36,934 23,049
Net pension liability - due in more than one year239,888151,503 -
Total noncurrent liabilities5,432,795204,515 23,049
Total liabilities6,215,434241,792 42,163
Deferred inflows of resources:
Related to pensions31,64019,983 -
Net position:
Net investment in capital assets14,284,17314,446,000 6,777,212
Unrestricted3,040,2303,618,050 251,826
Total net position$17,324,403$18,064,050$ 7,029,038
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
201520152014
$ 652,8746,003,798$ 545,350$
2,67321,651 2,082
-4,833 -
-1,376,248 -
-4,721 -
-248,440 -
-3,218 -
105,90924,505 119,907
761,4567,687,414 667,339
-730,243 -
-15,877,590 -
-1,371,072 -
-54,131,245 -
-72,110,150 -
-(30,882,765) -
-41,227,385 -
761,45648,914,799 667,339
-53,704 -
4,94023,700 17,640
-14,872 24,000
-2,234 -
-95,865 -
-25,066 -
11,71238,222 12,015
-615,000 -
24,071 --
839,030 16,65253,655
27,562 --
5,105,000 --
136,406 --
391,391 --
5,660,359--
6,499,389 16,65253,655
51,623 --
35,507,385 --
6,910,106 744,804613,684
$ 42,417,491$ 744,804$613,684
$ 42,417,491
94,457
$ 42,511,948
39
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
WateSeweStorm Sewe
rrr
Operating revenues:
User charges 2,524,089$ 2,129,201$ 442,567$
Meters 16,055-
-
Permit fees4,650-
-
Other48,5091,768
-
Total operating revenues2,593,3032,129,201444,335
Operating expenses:
Personal services421,575316,472213,115
Supplies179,46419,75617,194
Other service charges622,073167,753129,167
Disposal charges1,005,087-
-
Depreciation893,457513,362242,696
Total operating expenses2,116,5692,022,430602,172
Operating income (loss)476,734106,771(157,837)
Nonoperating revenues (expenses):
Investment income25,35330,9341,004
Interest expense(231,978)-
-
Total nonoperating revenues (expenses)(206,625)30,9341,004
Income (loss) before contributions
and transfers270,109137,705(156,833)
Capital contributions636,269594,615461,159
Transfers:
Transfers in58,249-
-
Transfers out(150,250)(446,680)-
Total transfers(92,001)(446,680)-
Change in net position814,377285,640304,326
Net position - January 1, as previously reporte 17,925,95916,743,645 6,724,712
d
Prior period adjustment (233,619) (147,549) -
Net position - January 1, as restated 16,510,026 17,778,410 6,724,712
Net position - December 31 17,324,403$ 18,064,050$ 7,029,038$
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
usiness-type activities.
b
Change in net position of business-type activities
The accompanying notes are an intregral part of these financial statements.
40
Statement 7
Totals
Governmental Activities -
Intra
TotalsInternal Service Funds
Activity
Eliminations201520152014
$ -$ 5,095,857$1,112,578$1,078,928
- 16,055
- -
- 4,650
- -
- 50,27797,856123,144
- 5,166,8391,210,4341,202,072
- 951,162421,664376,250
- 216,414297,248397,664
(30,600) 888,393367,895503,962
- 1,005,087
- -
- 1,649,515
- -
(30,600) 4,710,5711,086,8071,277,876
30,600 456,268123,627(75,804)
- 57,2917,49312,296
- (231,978)
- -
- (174,687)7,49312,296
30,600 281,581131,120(63,508)
- 1,692,043
- -
- 58,249
- -
(30,600) (627,530)
- -
(30,600) (569,281)
- -
- 1,404,343131,120(63,508)
- 41,394,316613,684677,192
- (381,168)
- -
- 41,013,148613,684677,192
$ -$ 42,417,491$744,804$613,684
$ 1,404,343
27,373
$1,431,716
41
CITY OF ANDOVER, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
WaterSewerStorm Sewer
Cash flows from operating activities:
Receipts from customers and users 2,741,777$ 2,244,730$ 462,208$
Payment to suppliers (825,038) (1,185,024) (155,178)
Payment to employees (408,276) (320,710) (212,555)
Net cash flows from operating activities 1,508,463 738,996 94,475
Cash flows from noncapital financing activities:
Intergovernmental revenues - - -
Transfers in -58,249 -
Transfers out (446,680)(150,250) -
Net cash flows from noncapital financing activities (92,001) (446,680) -
Cash flows from capital and related financing activities:
Acquisition of capital assets (2,863) (81,749) (2,863)
Interest paid on debt (241,486) - -
Payment of bonds (590,000) - -
Net cash flows from capital and related financing activities (834,349) (81,749) (2,863)
Cash flows from investing activities:
Investment income 23,913 31,306 708
Net increase in cash and cash equivalents 606,026 241,873 92,320
Cash and cash equivalents - January 1 2,254,469 2,783,397 25,713
Cash and cash equivalents - December 31 2,860,495$ 3,025,270$ 118,033$
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss) 476,734$ 106,771$ (157,837)$
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation 893,457 513,362 242,696
Changes in assets, deferred outflows of resources,
liabilities and deferred inflows of resources:
Decrease (increase) in due from other governmental units - 1,095 -
Decrease (increase) in accounts receivable 173,220 143,117 22,950
Decrease (increase) in special assessments (24,746) (28,683) (5,077)
Decrease (increase) in inventory (2,208) - -
Decrease (increase) in deferred outflows of resources (32,916) (20,788) -
Increase (decrease) in accounts payable (10,794) 7,562 814
Increase (decrease) in contracts payable (3,209) (14) (9,631)
Increase (decrease) in deposits payable (1,200) - -
Increase (decrease) in due to other governmental units (6,090) 24-
Increase (decrease) in salaries payable (699) (3,507) 3,936
Increase (decrease) in other post employment benefits 3,207 1,594 -
Increase (decrease) in compensated absences 5,798 (5,474) (3,376)
Increase (decrease) in net pension liability 3,9546,269 -
Increase (decrease) in deferred inflows of resources 31,640 19,983 -
Total adjustments 1,031,729 632,225 252,312
Net cash provided (used) by operating activities 1,508,463$ 738,996$ 94,475$
Noncash investing, capital and financing activities:
Assets contributed to the Enterprise Funds 636,269$ 594,615$ 461,159$
The accompanying notes are an integral part of these financial statements.
42
Statement 8
Totals
Governmental Activities -
TotalsInternal Service Funds
2015201420152014
$ 4,483,8255,448,715$ 1,210,434$ 1,202,072$
(2,313,822)(2,165,240) (687,845) (915,518)
(896,474)(941,541) (421,967) (374,357)
1,273,5292,341,934 100,622 (87,803)
9,506- - -
20,73758,249 - -
(596,930)(596,930) - -
(566,687)(538,681) - -
-(87,475) - -
(263,807)(241,486) - -
(565,000)(590,000) - -
(828,807)(918,961) - -
115,96955,927 6,902 13,240
(5,996)940,219 107,524 (74,563)
5,069,5755,063,579 545,350 619,913
$ 5,063,5796,003,798$ 652,874$ 545,350$
$ 17,114425,668$ 123,627$ (75,804)$
1,632,6891,649,515 - -
2,4191,095 - -
(277,497)339,287 - -
(58,506) (127,540) - -
(2,208) (1,000) 13,998 (19,313)
(53,704) - - -
(2,418) (8,107) (12,700)(18,579)
(12,854) 13,232 (24,000) 24,000
(1,200) (112) - -
(6,066) 2,882 - -
(270) 8,439 (303) 1,893
4,801 1,288 - -
(3,052) 9,722 - -
10,223 - - -
51,623 - - -
1,916,266 1,256,415 (23,005) (11,999)
$ 2,341,934$ 1,273,529$ 100,622$(87,803)
$ 1,692,043$ 990,412$ -$-
43
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET POSITION Statement 9
FIDUCIARY FUNDS
December 31, 2015
With Comparative Totals For December 31, 2014
20152014
Assets:
Cash and investments $ 287,408$ 251,391
Liabilities:
Accounts payable 10,89713,472
Deposits payable 276,511237,919
Total liabilities $ 287,408$ 251,391
The accompanying notes are an integral part of these financial statements.
44
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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
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, 2015
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
The is the City
except those required to be accounted for in another fund.
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, 1-6 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.
general revenues
Internally dedicated resources are reported as rather than as program revenues. Likewise, general revenues
include all taxes.
operating nonoperating
Proprietary funds distinguish revenues and expenses from items. Operating revenues and expenses
ongoing operations. The principal operating revenues of the water and sewer enterprise funds are charges to customers for
46
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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
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$ 1,004,855$ 1,045,347$ 40,492
Construction Seal Coating5,00011,0476,047
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, 2015
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
banketed 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.
e 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 loan-term interfund receivables
and payables at December 31, 2015 are planned to be eliminated in 2016. Long-term interfund loans are classified as
ual balances outstanding between the governmental activities and business-type
activities are reported in the government-
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,
and copies of all real estate tax statements by April 15, of each year. Property owners are required to pay one-half of their real
estate taxes due by May 15 and the balance by October 15.
If taxes due May 15 are not paid on time, a penalty of 3% is assessed on homesteaded property and 7% on non-homesteaded
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 non-homesteaded
property until January 1.
48
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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) 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, 2015
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, 2015, 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
Buildings and improvements10 - 30 years
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 2015 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, 2015
RangeDescription
8 - 10Excellent
7 - 7.9Very good
6 - 6.9Good
4 - 5.9Fair
2 - 3.9Poor
1 - 1.9Very poor
0 - .9Substandard
nts.
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)
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
Resolution, the Cityare 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, 2015
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, 2014, from which the summarized information was derived.
U. DEFERRED OUTFLOWS/INFLOWS OF RESOURCES
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of
deferred outflows of resources
resources. This separate financial statement element, , represents a consumption of net position
not
that applies to a future period(s) and so will be recognized as an outflow of resources (expense/expenditure) until then. The
government has one item that qualifies for reporting in the category. It is the pension related deferred outflows of resources
reported in the government-wide Statement of Net Position and the proprietary funds Statement of Net Position.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of
deferred inflows of resources
resources. This separate financial statement element, , represents an acquisition of net position
not
that applies to a future period(s) and so will be recognized as an inflow of resources (revenue) until that time. The
government has pension related deferred inflows of resources reported in the government-wide Statement of Net Position and
the proprietary funds Statement of Net Position. The government also has a 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 funds balance sheet. The governmental funds report unavailable revenues from the following
sources: property taxes, special assessments, certified bills, due from other governmental units, and loans receivable.
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, other post employment benefits and net
52
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
pension liability, are not due and payable in the current period and therefore are not reported in the funds.” The details of
this ($23,965,431) difference are as follows:
Bonds payable$(19,330,000)
Promissory note payable (590,155)
Accrued interest payable(188,582)
Other post employment benefits(202,127)
Compensated absences(651,195)
Net pension liability(3,003,372)
Net adjustment to reduce fund balance - total governmental
funds to arrive at net position - governmental activities(23,965,431)$
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
activities statement of net position along with a deduction of net revenue attributable to business-type activities.” The
details of this $650,647 difference are as follows:
Internal Service Funds net position$744,804
Net revenue attributable to business-type activities(94,457)
Net adjustment to increase fund balance - total governmental
funds to arrive at net position - governmental activities$650,347
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 ($562,952) difference are as
follows:
Capital outlay$941,213
Construction/acquisition costs167,955
Depreciation expense(1,672,120)
Net adjustment to increase net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities (562,952)$
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 position.” The details of this $552,512 difference
are as follows:
In the statement of activities, only the gain on the sale of capital assets is
reported. However, in the governmental funds, the proceeds from the sale
increase financial resources. Thus, the change in net position differs from the
change in fund balance by the cost of the capital assets sold.(305,107)$
Donations of capital assets increase net position in the statement of activities,
but do not appear in the governmental funds because they are not financial
resources.857,619
Net adjustment to decrease net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities.552,512$
53
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Another element of that reconciliation states “Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the funds.” The details of this ($601,336) difference are as follows:
Unavailable revenue - general property taxes:
At December 31, 2014(217,035)$
At December 31, 2015189,335
Unavailable revenue - tax increment taxes:
At December 31, 2014(38,060)
At December 31, 201535,665
Unavailable revenue - special assessments:
At December 31, 2014(2,305,775)
At December 31, 20151,834,534
Unavailable revenue - land held for resale:
At December 31, 2014(325,000)
At December 31, 2015225,000
Net adjustments to decrease net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities(601,336)$
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
$1,961,719 difference are as follows:
Principal repayments:
Capital improvement bonds500,000$
Abatement bonds 835,000
Referendum bonds 145,000
Certificates of indebtedness225,000
State aid bonds60,000
Promissory note payable 196,719
Net adjustment to increase net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities1,961,719$
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 ($6,370) difference are as follows:
Compensated absences$(22,249)
Accrued interest 15,879
Net adjustment to decrease net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities$ (6,370)
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 $103,747 difference are as follows:
Internal Service Funds change in net position$ 131,120
Net revenue attributable to business-type activities (27,373)
Net adjustment to increase fund balance - total governmental
funds to arrive at net position - governmental activities$ 103,747
54
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Note 2 DEPOSITS AND INVESTMENTS
DEPOSITS
In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of
which are members of the Federal Reserve System.
Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral
pledged must equal 110% of the deposits not covered by insurance or bonds.
Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Clerk/Treasurer or in a financial
institution other than that furnishing the collateral. Authorized collateral includes the following:
a) United States government treasury bills, treasury notes, treasury bonds;
b) Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service
available to the government entity;
c)
bond rating service, or revenue obligation securities of any state or local government with
or better by a national bond rating service;
d) Unrated general obligation securities of a local government with taxing powers may be pledged as collateral against funds
deposited by that same local government entity;
e) Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence
f) Time deposits that are fully insured by the Federal Deposits Insurance Corporation.
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, 2015, the bank balance of
depository insurance or covered by perfected collateral pledged and h
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)
by a national bond rating service;
2) any security which is a revenue obligation of a
better by a national bond rating service; and
3) a general obligation of the Minnesota housing finance agency which is a moral obligation of the State of Minnesota and is
er 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.
55
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
f)Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization
exceeding $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York;
certain Minnesota securities broker-dealers; or, a bank qualified as a depositor.
g)General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469.178,
subdivision 5; or 475.61, subdivision 6.
As of December 31, 2015, the City had the following investments and maturities:
Investment Maturities (in Years)
CreditFaiLess ThanMore Than
r
Investment Type
RatingValue11 - 56 - 1010
Money market fundsN/A2,919,557$ $2,919,557$ -
$ -$ -
Minnesota Municipal
Money Market FundN/A 4,9934,993
- - -
Certificates of depositN/A12,965,387 9,627,6713,337,716
- -
Local/State governments A/A1/A2786,538 481,719 103,657-
201,162
AA1/AA2/AA39,471,290 1,681,736 1,696,593506,081
5,586,880
AAA4,154,969 739,8032,853,351 311,815250,000
U.S. agenciesAAA3,206,730 130,4622,462,716 398,178215,374
FNMA REMICN/A 8,367- 8,367
- -
U.S. agenciesN/A1,145,264 1,145,264-
- -
Total investments 15,305,38434,663,095$$15,876,013$ 2,406,586$1,075,112
Deposits 3,602,184
Total cash and investments$38,265,279
The following is a reconciliation of the City’s total cash and investment balances at December 31, 2015:
Government-wide statement of net position:
Cash and investments37,826,709$
Cash and investments with escrow agent151,162
Fiduciary funds statement of net position287,408
Total38,265,279$
The Minnesota Municipal Money Market Fund is regulated by Minnesota Statutes and the Board of Directors of the League of
Minnesota Cities and is an external investment pool not registered with the Securities Exchange Commission (SEC) that follows the
same regulatory rules of the SEC under rule 2a7. The fair value of the position in the pool is the same as the value of the pool
shares.
Custodial Credit Risk - Investments – For investments in securities, custodial credit risk is the risk that in the event of a failure of the
counterparty, the City will not be able to recover the value of its investment securities that are in the possession of an outside party.
As of December 31, 2015, $250,000 of the City’s $34,663,095 investments was uninsured and unregistered, with securities held in
the City’s name.
Interest Rate Risk - The City has a formal investment policy that states the City will minimize the risk that the market value of
securities in the portfolio will fall due to the changes in general interest rates, by:
1)Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby
avoiding the need to sell securities on the open market prior to maturity.
2) Investing operating funds primarily in shorter-term securities, money market mutual funds or similar investment pools.
56
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
FNMA REMIC
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
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
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 12
Loan Bank (1.4%), Federal Farm Credit Bank (3.3%), Federal National Mortgage Association (1.9%), Federal Home Loan
Mortgage Corporation (2.3%) and U.S. Treasury (3.9
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.
Note 3 RECEIVABLES
Significant receivables balances not expected to be collected within one year of December 31, 2015 are as follows:
57
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
DelinquentDelinquentSpecial
PropertTaxAssessment
y
TaxesIncrementReceivableTotal
Major Funds:
General Fund64,891$ -$ 18,027$ 82,918$
Water Trunk CPF- - 381,702 381,702
Sewer Trunk CPF- - 134,713 134,713
Road and Bridge CPF8,725 - 851,197 859,922
Tax Increment Projects CPF- 32,812 - 32,812
Permanent Improvement Revolving CPF- - 195,934 195,934
Nonmajor Funds21,051 - 21,051
-
Total$ 94,667$ 32,812$ 1,709,0521,581,573$
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 Fund129,782$ -$ 18,027$
$ $ - 147,809
Water Trunk CPF- - 397,727 - 397,727
Sewer Trunk CPF- - 156,024 - 156,024
Road and Bridge CPF17,451 - 993,091 - 1,010,542
Tax Increment Projects CPF- 35,665 - 225,000 260,665
Permanent Improvement Revolving CPF- - 269,665 - 269,665
Nonmajor Funds42,102 - 42,102
- -
Total$ 189,335$ 35,665$ 225,0001,834,534$$2,284,534
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, 2015 was as follows:
58
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
BeginningEnding
Primary GovernmentBalanceAdditionsDeletionsBalance
Governmental activities:
Capital assets not being depreciated:
Land and improvements$ 10,803,419$ 231,661$ (305,107)$ 10,729,973
Streets and trails81,059,8951,143,658 82,203,553-
Construction in progress52,52338,665(52,523)38,665
Total capital assets not being depreciated91,915,8371,413,984(357,630)92,972,191
Capital assets being depreciated:
Buildings and improvements27,249,90536,098 27,286,003-
Furniture and equipment (including software)570,28913,037-583,326
Machinery and equipment8,698,74974,934(561,609)8,212,074
Other park improvements6,946,891313,302(7,500)7,252,693
Total capital assets being depreciated43,465,834437,371(569,109)43,334,096
Less accumulated depreciation for:
Buildings and improvements9,867,895906,866 10,774,761-
Furniture and equipment423,40743,966-467,373
Machinery and equipment5,937,203399,247(561,609)5,774,841
Other park improvements3,083,843322,041(7,500)3,398,384
Total accumulated depreciation19,312,3481,672,120(569,109)20,415,359
Total capital assets being depreciated - net24,153,486(1,234,749) 22,918,737-
Governmental activities capital assets - net$ 116,069,323$ 179,235$ (357,630)$115,890,928
BeginningEnding
Primary GovernmentBalanceAdditionsDeletionsBalance
Business-type activities:
Capital assets not being depreciated:
Land and improvements$ 730,243$ 730,243
$ -$ -
Capital assets being depreciated:
Buildings and improvements15,877,590- 15,877,590-
Furniture and equipment (including software)61,390--61,390
Machinery and equipment1,252,20787,475(30,000)1,309,682
Collection and distribution52,439,2021,692,043 54,131,245-
Total capital assets being depreciated69,630,3891,779,518(30,000)71,379,907
Less accumulated depreciation for:
Buildings and improvements7,860,166533,154 8,393,320-
Furniture and equipment52,3552,867-55,222
Machinery and equipment1,111,26940,300(30,000)1,121,569
Collection and distribution20,239,4601,073,194 21,312,654-
Total accumulated depreciation29,263,2501,649,515(30,000)30,882,765
Total capital assets being depreciated - net40,367,139130,003 40,497,142-
Business-type activities capital assets - net$ 41,097,382$ 130,003$
$ -41,227,385
59
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Depreciation/amortization expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government$ 85,569
Public safety275,863
Public works242,537
Parks and recreation1,051,760
Recycling 5,677
Economic development10,714
Total depreciation/amortization expense - governmental activities$ 1,672,120
Business-type activities:
Water$ 893,457
Sewer513,362
Storm sewer242,696
Total depreciation/amortization expense - business-type activities$ 1,649,515
CONSTRUCTION COMMITMENTS
At December 31, 2015, 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
-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, 2015
IssueMaturityInterestOriginalPayable
DateDateRateIssue12/31/15
GOVERNMENTAL ACTIVITIES:
Abatement Bonds:
2012C G.O. Abatement Bonds12/27/20122/1/20311.00-3.00%17,315,000$$15,840,000
Certificates of Indebtedness:
2012A G.O. Equipment Certificates3/22/20122/1/20172.00%585,000585,000
2014A G.O. Equipment Certificates5/29/20142/1/20201.50-2.00%1,555,0001,330,000
Total certificates of indebtedness2,140,0001,915,000
Capital Improvement Bonds:
2012B G.O. Capital Improvement Ref Bonds3/22/20122/1/20162.00%1,570,000470,000
Referendum Bonds:
2010A G.O. Open Space Referendum Bonds2/18/20102/1/20222.00-3.12%1,660,0001,105,000
Total - bonded indebtedness22,685,00019,330,000
Promissory note payable 12/17/201311/15/2018n/a983,593590,155
Compensated absences payable-651,195
Total governmental activities indebtedness23,668,59320,571,350
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2007B G.O. Water Revenue Refunding Bonds3/13/20072/1/20234.00-4.25%6,570,0005,055,000
2009A G.O. Water Revenue Bonds3/26/20092/1/20242.00-4.25%1,025,000665,000
Total general obligation revenue bonds7,595,0005,720,000
Compensated absences payable-160,477
Total business-type activities indebtedness7,595,0005,880,477
Total City indebtedness$31,263,593$26,451,827
61
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Annual debt service requirements to maturity for general obligation bonds are as follows:
Governmental Activities
Abatement BondsCertificates of IndebtednessCapital Improvement Bonds
PrincipalInterestPrincipalInterestPrincipalInterest
2016845,000$ 371,506$ 310,000$ 34,550$ 470,000$ 4,700$
2017855,000 358,731 795,000 24,150
- -
2018 870,000 341,481265,00013,550
- -
2019 885,000 323,931270,000 8,200
- -
2020 910,000 305,981275,000 2,750
2021-20254,820,000 1,238,200
- - - -
2026-20305,455,000 589,747
- - - -
20311,200,000 18,000
- - - -
Total15,840,000$$ 3,547,577$1,915,000$83,200$ 470,000$4,700
Governmental ActivitiesBusiness-Type Activities
Referendum BondsG.O. Revenue Bonds
PrincipalInterestPrincipalInterest
2016$ 145,000$ 28,942$ 615,000$218,101
2017 150,000 25,657 635,000 193,751
2018 155,000 21,841 665,000 168,339
2019 160,000 17,507 685,000 141,776
2020 160,000 12,828 715,000 114,045
2021-2025335,000 10,5262,405,000 160,811
$1,105,000$ 117,301$5,720,000$996,823
Annual debt service requirements to maturity for the promissory note payable is as follows:
Governmental Activities
Promissory Note Payable
PrincipalInterest
2016196,719$ -
2017196,718
-
2018 196,718
-
Total$ 590,155$ -
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, 2015, was as follows:
62
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
BeginningEndingDue Within
BalanceAdditionsReductionsBalanceOne Year
Governmental activities:
Bonds payable:
Abatement bonds$16,675,000$ (835,000)$15,840,000$ 845,000
$ -
Certificates of indebtedness2,140,000-(225,000)1,915,000310,000
Capital improvement bonds970,000-(500,000)470,000470,000
State aid bonds60,000-(60,000)--
Referendum bonds1,250,000-(145,000)1,105,000145,000
Total bonds payable21,095,000- (1,765,000)19,330,0001,770,000
Promissory note payable 786,874-(196,719)590,155196,719
Compensated absences628,946404,856(382,607)651,19597,679
Total governmental activities
long-term liabilities$22,510,820$ 404,856$ (2,344,326)$20,571,350$ 2,064,398
Business-type activities:
Bonds payable:
G.O. revenue bonds$ 6,310,000$ (590,000)$ 5,720,000$ 615,000
$ -
Compensated absences163,52956,679(59,731)160,47724,071
Total business-type activities
long-term liabilities$ 6,473,529$ 56,679$ (649,731)$ 5,880,477$ 639,071
For the governmental activities, bonds and the promissory note payable can be summarized in the following categories:
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.
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.
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.
63
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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 $19,387,577, payable through February 2031. For
the current year, principal and interest paid and total property tax revenues were $1,214,906 and $974,822, 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 $601,550,
payable through February 2017. For the current year, interest paid and total property tax revenues were $11,700 and $139,881,
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 $1,396,650,
payable through February 2020. For the current year, principal and interest paid and total property tax revenues were $256,926 and
$295,803, respectively.
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 $474,700,
payable through February 2016. For the current year, principal and interest paid and total property tax revenues were $514,400 and
$539,660, 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 $1,222,301, payable through February 2022. For the current year, principal and interest paid
and total property tax revenues were $176,915 and $184,484, 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 $5,928,398. The
principal and interest paid for the current year and total customer net revenues were $741,046 and $1,278,190, 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 $788,425. The principal and interest paid for the current year and total customer net revenues were $90,440 and
$1,278,190, respectively.
Note 7 LEGAL DEBT MARGIN
The City is subject to a statutory limitation by the State of Minnesota for bonded indebtedness payable principally from property taxes.
The City's legal debt margin for 2015 and 2014 is computed as follows:
64
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
December 31,
20152014
Estimated taxable market value$ 2,435,770,612$ 2,071,812,281
Debt limit (3% of market value)73,073,11862,154,368
Amount of debt applicable to debt limit:
Total bonded debt$ 25,050,000$ 27,405,000
Less: Nonapplicable debt
G.O. water revenue bonds(5,720,000)(6,310,000)
State aid bonds-(60,000)
Less: Cash and investments in related
debt service funds(1,191,519)(942,607)
Total debt applicable to debt limit18,138,48120,092,393
Legal debt margin$ 54,934,637$ 42,061,975
Note 8 DEFINED BENEFIT PENSION PLANS - STATEWIDE
A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Pensions.
For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense,
information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions
iduciary net position have been determined on the same basis as they are reported by PERA
id
dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms.
Investments are reported at fair value.
B.PLAN DESCRIPTION
The City participates in the following cost-sharing multiple-employer defined benefit pension plans administered by the Public
qualified plans under Section 401 (a) of the Internal Revenue Code.
1. General Employees Retirement Fund (GERF)
All full-time (with exception of employees covered by PEPFF) and certain part-time employees of the City are covered by
the General Employees Retirement Fund (GERF). GERF members belong to either the Coordinated Plan or the Basic
Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. The Basic Plan was
closed to new members in 1967. All new members must participate in the Coordinated Plan.
2. Public Employees Police and Fire Fund (PEPFF)
The PEPFF, originally established for police officers and firefighters not covered by a local relief association, now covers
all police officers and firefighters hired since 1980. Effective July 1, 1999, the PEPFF also covers police officers and
firefighters belonging to a local relief association that elected to merge with and transfer assets and administration to
PERA.
C.BENEFITS PROVIDED
PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be
modified by the state legislature.
65
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan.
Members in plans that are at least 90 percent funded for two consecutive years are given 2.5% increases. Members in plans
that have not exceeded 90% funded, or have fallen below 80%, are given 1% increases.
The benefit provisions stated in the following paragraphs of this section are current provisions and apply to active plan
participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the
provisions in effect at the time they last terminated their public service.
1.GERF Benefits
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 ten years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member
is 1.2 percent of average salary for each of the first ten 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 members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal
90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for
unreduced Social Security benefits capped at 66.
2.PEPFF Benefits
Benefits for the PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from
50% after five years up to 100% after ten years of credited service. Benefits for PEPFF members first hired after June 30,
2014, vest on a prorated basis from 50% after ten years up to 100% after twenty years of credited service. The annuity
accrual rate is 3% of average salary for each year of service. For PEPFF who were first hired prior to July 1, 1989, a full
annuity is available when age plus years of service equal at least 90.
D.CONTRIBUTIONS
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be
modified by the state legislature.
1.GERF Contributions
Basic Plan members and Coordinated Plan members were required to contribute 9.1% and 6.50%, respectively, of their
annual covered salary in calendar year 2015. The City was required to contribute 11.78% of pay for Basic Plan members
and 7.50% for Coordinated Plan members in calendar year 2015. The City’s contributions to the GERF for the year ended
December 31, 2015, were $268,490. The City’s contributions were equal to the required contributions as set by state
statute.
2.PEPFF Contributions
Plan members were required to contribute 10.8% of their annual covered salary in calendar year 2015. The City was
required to contribute 16.20% of pay for PEPFF members in calendar year 2015. The City’s contributions to the PEPFF
for the year ended December 31, 2015, were $38,121. The City’s contributions were equal to the required contributions as
set by state statute.
E.PENSION COSTS
1.GERF Pension Costs
for its proportionate share of the GERF’s net pension
At December 31, 2015, the City reported a liability of $3,156,154
liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the
net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension
liability was based on the City’s contributions received by PERA during the measurement period for employer payroll
paid dates from July 1, 2014, through June 30, 2015, relative to the total employer contributions received from all of
66
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
PERA’s participating employers. At June 30, 2015, the City’s proportion was 0.0609% which was a decrease of 0.0073%
from its proportion measured as of June 30, 2014.
For the year ended December 31, 2015, the City recognized pension expense of $333,926 for its proportionate share of the
GERF’s pension expense.
At December 31, 2015, the City reported its proportionate share of the GERF’s deferred outflows of resources and
deferred inflows of resources related to pensions from the following sources:
$134,323 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to
the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2016.
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension
expense as follows:
2.PEPFF Pension Costs
At December 31, 2015, the City reported a liability of $238,609 for its proportionate share of the PEPFF’s net pension
liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the
net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension
liability was based on the City’s contributions received by PERA during the measurement period for employer payroll
paid dates from July 1, 2014, through June 30, 2015, relative to the total employer contributions received from all of
PERA’s participating employers. At June 30, 2015, the City’s proportion was 0.0210% which was a decrease of 0.0010%
from its proportion measured as of June 30, 2014.
For the year ended December 31, 2015, the City recognized pension expense of $39,683 for its proportionate share of the
PEPFF’s pension expense. The City also recognized $1,890 for the year ended December 31, 2015, as pension expense
(and grant revenue) for its proportionate share of the State of Minnesota’s on-behalf contributions to the PEPFF.
Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the PEPFF each year,
starting in fiscal year 2014.
At December 31, 2015, the City reported its proportionate share of the PEPFF’s deferred outflows of resources and
deferred inflows of resources related to pensions from the following sources:
67
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
$21,055 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the
measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2016.
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension
expense as follows:
F.ACTUARIAL ASSUMPTIONS
The total pension liability in the June 30, 2015, actuarial valuation was determined using the following actuarial assumptions:
Inflation 2.75% per year
Active Member Payroll Growth 3.50% per year
Investment Rate of Return 7.90%
Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors and disabilitants
were based on RP-2000 tables for males or females, as appropriate, with slight adjustments. Cost of living benefit increases for
st
retirees are assumed to be 1% effective every January 1 until 2034, and 2.5% thereafter.
Actuarial assumptions used in the June 30, 2015, valuation were based on the results of actuarial experience studies. The
experience study in the GERF was for the period July 1, 2004, through June 30, 2008, with an update of economic assumptions
in 2014. The experience study for PEPFF was for the period July 1, 2004, through June 30, 2009.
There are no changes in actuarial assumptions in 2015.
The long-term expected rate of return on pension plan investments is 7.9%. The State Board of Investment, which manages the
investments of PERA, prepares an analysis of the reasonableness of the long-term expected rate of return on a regular basis
using a building-block method in which best-estimate ranges of expected future rates of return are developed for each major
asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates
of return by the target asset allocation percentages. The target allocation and best estimates of arithmetic real rates of return for
each major asset class are summarized in the following table:
68
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
G.DISCOUNT RATE
The discount rate used to measure the total pension liability was 7.9%. The projection of cash flows used to determine the
discount rate assumed that employee and employer contributions will be made at the rate specified in statute. Based on that
assumption, each of the pension plan’s fiduciary net position was projected to be available to make all projected future benefit
payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total pension liability.
H.PENSION LIABILITY SENSITIVITY
The following presents the City’s proportionate share of the net pension liability for all plans it participates in, calculated using
the discount rate disclosed in the preceding paragraph, as well as what the City’s proportionate share of the net pension liability
would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current
discount rate:
I.PENSION PLAN FIDUCIARY NET POSITION
Detailed information about each pension plan’s fiduciary net position is available in a separately-issued PERA financial report
that includes financial statements and required supplementary information. That report may be obtained on the Internet at
www.mnpera.org.
J.PENSION EXPENSE
Pension expense recognized by the City for the fiscal year ended December 31, 2015 is as follows:
69
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
K. DEFINED CONTRIBUTION LUMP SUM SERVICE PENSION PLAN VOLUNTEER FIREFIGHTERS RELIEF
ASSOCIATION
PLAN DESCRIPTION
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
members elected by the members of the Association for three-Mayor,Finance Manager and Fire Chief
are ex-officio members of the Board of Trustees.
The Association provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of
eligible members.
1. Twenty-Year Service Pension In order to be entitled to a pension benefit, a firefighter must have completed a
minimum of five years of service with the Department and five years membership in the Association and attain the
age of 50 years. The firefighter will then be 40% vested. This percentage increases 4% per year until the twentieth
year when 100% vesting will occur. Because this is a defined contribution plan, the amount of the retirement benefit
is not predetermined, but rather is b
the participation period.
2. Deferred Pension If the retired or terminated member has not attained age 50 and is otherwise eligible for the
Minnesota Statutes
Section 424.A02, Subd.7.
3. Disability Benefit If a member of the Association becomes totally and permanently disabled due to injury,
disability, sickness or dismemberment as a result of performance of duty, a disability payment will be made after one
hundred days of disability.
4. Death Benefit
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
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
Associatio
last three years are as follows:
Year
EndingCityStateTotal
12/31/201350,000$ $ 153,555
$ 203,555
12/31/201455,000151,491206,491
12/31/201555,000165,332220,332
70
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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
requirement by State Statute to provide retirees with access to health insurance. The OPEB plan is administered by the
City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a, and 299A.465.
The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended
by the City through its personnel manual and collective bargaining agreements with employee groups. The Plan is not
accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan. The Plan does not issue a
separate report.
B.BENEFITS PROVIDED
Retirees
f 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 afte
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.
becomes secondary.
C.PARTICIPANTS
As of the actuarial valuation dated January 2014, participants consisted of:
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
(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
71
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
any unfunded actuarial liabilities (or funding excess) over period not to exceed 30 years. The net OPEB obligation as of
December 31, 2015, was calculated as follows:
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, 2015. The
City’s annual OPEB cost (expense) of $39,716 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 2013, 2014 and 2015 are as follows:
For the governmental activities, other post employment benefits are generally liquidated through the General Fund.
F.FUNDED STATUS AND FUNDING PROGRESS
The City currently has no assets that have been irrevocably deposited in a trust for future health benefits; therefore, the actuarial
value of assets is zero. The funded status of the plan was as follows:
G.ACTUARIAL METHODS AND ASSUMPTIONS
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
72
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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.
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 pl
being amortized as a level dollar amount over 30 years on an open basis. The remaining amortized period at 12/31/2015 was
29 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, 2015 are as follows:
Fund
ReceivablePayable
Governmental Funds:
Major Funds:
General Fund
$ 1 90,000$ -
Nonmajor Governmental Funds-190,000
Total governmental funds
$ 1 90,000$ 1 90,000
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 Fund46,680 Admin allocation
Sewer Trunk CPFSewer Fund400,000Replacement reserve
Road & Bridge CPF Nonmajor Fund48,902 Close debt service fund
Water FundWater Trunk Fund CPF58,249 Debt service allocation
Nonmajor FundGeneral Fund200,000Trail funding
Nonmajor FundNonmajor Fund300,000Debt service allocation
$ 1,204,081
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:
73
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Transfer InTransfer Out
Governmental Activities$ 30,600
$ -
Business-Type Activities-30,600
Total$ 30,600$ 30,600
Note 11 TAX INCREMENT DISTRICTS
The City is the administering authority for the following tax increment finance districts:
1.Name of District:Tax Increment Financing District 1-3
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:146,617
Captured net tax capacity - retained by the City$ 139,303
2.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:$ 66,924
Current net tax capacity:71,818
Captured net tax capacity - retained by the City$ 4,894
3.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:72,878
Captured net tax capacity - retained by the City$ 66,739
4.Name of District:Tax Increment Financing District 1-6
Type of District:Redevelopment
Authorizing Law:M.S. Section 469
Established:2014
Duration of District:Through 2024
Original net tax capacity:$ 21,998
Current net tax capacity:21,998
Captured net tax capacity - retained by the City
$ -
74
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Note 12 DEFICIT FUND BALANCES
The City has deficit fund balances at December 31, 2015 as follows:
Fund
Amount
Nonmajor Capital Projects Funds:
Storm Sewer Project63,357$
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, 2015.
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.
75
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
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 was 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, 2015. Future
scheduled tax levies for all bonds outstanding at December 31, 2015 totaled $20,138,786.
Note 15 FUND BALANCE
ACLASSIFICATIONS
.
At December 31, 2015, a summary of the governmental fund balance classifications are as follows:
76
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
TaxPermanent
WaterSewerRoad &IncrementImprovementOther
TrunkTrunkBridgeProjectsRevolvingGovernmental
GeneralCPFCPFCPFCPFCPFFundsTotal
Nonspendable:
Inventory$ 131,813$ 1,800$ 133,613
$ -$ -$ -$ -$ -
Restricted for:
Debt service----- 1,217,300-1,217,300
Tax increment--- 4,358,069---4,358,069
Public services------71,79471,794
Equipment purchases------25,22325,223
Open space referendum------2,0312,031
Total restricted--- 4,358,069- 1,316,348-5,674,417
Committed to:
Economic development------334,451334,451
City's mapping system------144,771144,771
Surface water management------1,3851,385
Public right of ways management------47,90947,909
Seal coating new developments------3,2133,213
Total committed------531,729531,729
Assigned to:
Water system 2,854,563------2,854,563
Sanitary sewer system- 6,081,930-----6,081,930
Street rehabilitation-- 5,511,747----5,511,747
Development purposes---- 840,785--840,785
Community center ------54,34054,340
Forest resources programs------6,8316,831
Public services------2,9482,948
Park improvements------376,632376,632
Facilities management------779,066779,066
Pedestrian trails------347,400347,400
Capital improvements----- 1,051,687-1,051,687
Total assigned 2,854,563-6,081,9305,511,747 840,785-2,618,90417,907,929
Unassigned7,136,091-----(63,357)7,072,734
Total$ 7,267,904$ 2,854,563$ 6,081,930$ 5,511,747$ 4,358,069$ 4,405,424$ 31,320,422
$ 840,785
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
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%
5, the unassigned fund balance of the General Fund
targeted for cash-flow needs was 67
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, 2015, the following revenue bonds were outstanding:
77
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Date ofOriginalOutstanding
ProjectIssueIssueRetired12/31/2015
Presbyterian Homes of Andover, Inc.11/1/200313,145,000$ (3,353,910)$ $ 9,791,090
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:
2015
LeaseAnnual LeaseExpirationRenewal
DateOptions
LocationLesseeAmountAdjustment Factor
City Hall water towerSprint Nextel30,999$ Greater of CPI or 4%12/31/2017Final
City Hall water towerT-Mobile USA, Inc25,282 Greater of CPI or 4%12/31/2016Final
City Hall water towerVerizon25,641 3% annuall5/31/20243 - 5 year terms
y
Emergency Siren PoleT-Mobile USA, Inc9,000 $1,000 annual increase9/22/20183 - 5 year terms
Andover YMCA Comm CtrGreater Minneapolis YMCA635,000None8/1/2035N/A
Rose Park water towerSprint Nextel 3% annuall16,405y7/31/20204 - 5 year terms
Rose Park water towerVerizon 3% annuall21,978y5/31/20243 - 5 year terms
Andover YMCA Comm CtrSubway Real Estate, LLC17,958 $600 annual increase10/2/20182 - 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. 72Fair Value Measurement and Application.
The provisions of this Statement are effective for financial statements
for periods beginning after June 15, 2015.
Statement No. 73Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB
Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68.
The provisions in Statement 73 are effective
for fiscal years beginning after June 15, 2015 – except those provisions that address employers and governmental non-employer
contributing entities for pensions that are not within the scope of Statement 68, which are effective for fiscal years beginning after
June 15, 2016.
Statement No. 75Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.
The provisions in
Statement 75 are effective for fiscal years beginning after June 15, 2017.
Statement No. 77Tax Abatement Disclosures.
The provisions of this Statement are effective for reporting periods beginning after
December 31, 2015.
Statement No. 80Blending Requirements for Certain Component Units.
The provisions of this Statement are effective for
reporting periods beginning after June 15, 2016.
Statement No. 81Irrevocable Split-Interest Agreements.
The provisions of this Statement are effective for reporting periods
beginning after December 15, 2016.
The effect these standards may have on future financial statements is not determinable at this time, but it is expected that Statement No.
75 will have a material impact.
78
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2015
Note 19 CHANGE IN ACCOUNTING PRINCIPLE
Accounting and Financial Reporting for
For the year ended December 31, 2015, the City implemented GASB Statement No. 68,
Pensions – an Amendment of GASB Statement No. 27.
GASB 68 addresses accounting and financial reporting for pension plans that are
provided to employees of state and local governments. The standard requires the City to record its share of the net pension liability of
defined benefit plans, as well as any corresponding deferred inflows and outflows of resources. See Note 8 for further information.
The standard required retroactive implementation which resulted in a restatement of net position as of December 31, 2014. Certain
amounts necessary to fully restate 2014 financial information are not determinable, therefore, prior year comparative amounts have not
been restated. Details of the prior period adjustment are as follows:
Note 20 SUBSEQUENT EVENTS
th
The City of Andover sold $520,000 of General Obligation Equipment Certificates, Series 2016A on February 19, 2016 to finance the
purchase of public safety and public works equipment. The rates of the bonds are 1.90% with a true interest cost of 1.90%. Principal
payments are due in 2018 – 2021.
79
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80
REQUIRED SUPPLEMENTARY INFORMATION
81
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
Variance with
Final Budget -
Budgeted Amounts2015Positive2014
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes 7,706,892$ 7,706,892$ 7,634,714$ (72,178)$ 7,476,294$
Licenses and permits 316,588 316,588 452,422 135,834 364,430
Intergovernmental 633,015 633,015 749,570 116,555 697,492
Charges for services 748,550 748,550 804,228 55,678 998,510
Fines 100,750 100,750 99,304 (1,446) 94,375
Investment income 75,000 75,000 63,709 (11,291) 144,876
Miscellaneous 98,850 98,850 154,890 56,040 150,401
Total revenues 9,679,645 9,679,645 9,958,837 279,192 9,926,378
Expenditures:
Current:
General government:
Mayor and City council 87,154 87,154 85,061 2,093 84,650
Administration 180,888 180,888 172,296 8,592 169,219
Newsletter 26,000 26,000 21,042 4,958 20,974
Human resources 40,156 34,643 15,909 18,734 18,039
Legal 182,000 182,000 180,313 1,687 177,427
City clerk 135,359 135,359 134,776 583 128,859
Elections 57,492 32,492 14,496 17,996 41,506
Financial administration 239,981 245,494
240,317 5,177230,639
Assessing 150,000150,000146,315 3,685145,051
Information systems 172,239172,239131,745 40,494146,985
Planning and zoning 412,937412,937406,045 6,892387,309
Engineering 470,631470,631464,842 5,789460,871
Facility management 579,802564,802498,813 65,989470,400
Total general government 2,734,6392,694,6392,511,970 182,6692,481,929
Public safety:
Police2,918,3082,918,3082,918,308 -2,818,132
Fire protection 1,192,3301,182,3301,165,221 17,1091,264,021
Protective inspection 423,161423,161391,948 31,213390,908
Civil defense 29,18939,18924,352 14,83721,837
Animal control9,9509,9503,498 6,4524,026
Total public safety 4,572,9384,572,9384,503,327 69,6114,498,924
Public works:
Streets and highways 625,664625,664629,724 (4,060)600,315
Snow and ice removal 539,770533,770442,077 91,693637,153
Street signs 203,533203,533204,494 (961)187,936
Traffic signals 35,00035,00030,169 4,83134,902
Street lighting 252,400252,400232,165 20,235235,794
Total public works$ 1,656,367$1,650,367$1,538,629$ 111,738$1,696,100
(Continued)
82
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND (Continued)
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
Variance with
Final Budget -
Budgeted Amounts2015Positive2014
OriginalFinalActual(Negative)Actual
Expenditures:
Current: (continued)
Parks and recreation 1,169,338$ 1,185,338$ 1,151,313$ 34,025$ 1,009,373$
Recycling 135,120 99,022 91,940 7,082 106,587
Unallocated 70,328 70,328 56,720 13,608 81,183
Total current 10,338,730 10,272,632 9,853,899 418,733 9,874,096
Capital outlay:
36,09836,0987,314
Recycling - -
Total expenditures 10,338,73010,308,7309,889,997 418,7339,881,410
Revenues over (under) expenditures (659,085)(629,085)68,840 697,92544,968
Other financing sources (uses):
Transfers in 196,930196,930196,930196,930
-
Transfers out(200,000)(200,000)
- - -
Total other financing sources (uses) 196,930(3,070)(3,070)196,930
-
Net increase (decrease) in fund balance (462,155)$ $(632,155)65,770$ 697,925241,898
Fund balance - January 17,202,1346,960,236
Fund balance - December 31$7,267,904$7,202,134
83
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
SCHEDULE OF FUNDING PROGRESS -
OTHER POST EMPLOYMENT BENEFITS PLAN
For The Year Ended December 31, 2015
Unfunded
ActuarialUAAL as
a
ActuarialActuarialAccruePercentage of
d
ActuarialValue ofAccrueLiabilitFundCovereCovere
dydd
Valuation DateAssetsLiabilit( UAAL )RatioPayrollPayroll
y
( a )( b )( b-a )( a/b )( c )(( b-a ) / c )
January 1, 2008$ 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%
-
84
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 12
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY*
GENERAL EMPLOYEES RETIREMENT FUND
For The Year Ended December 31, 2015
Proportionate Share
Proportionateof the Net PensionPlan Fiduciary
ProportionShare (Amount)Liability as aNet Position as
(Percentage) ofof the NetCovered-Percentage of itsa Percentage
Measurement Fiscal Yearthe Net PensionPensionEmployeeCovered-Employeeof the Total
DateEndingLiabilityLiability (a)Payroll (b)Payroll (a/b)Pension Liability
June 30, 2015December 31, 20150.0609%$3,156,154$3,578,75588.2%78.2%
* The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
85
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 13
SCHEDULE OF PENSION CONTRIBUTIONS*
GENERAL EMPLOYEES RETIREMENT FUND
For The Year Ended December 31, 2015
StatutorilyContributions inContributionCovered-Contributions as a
Required Relation to theDeficiencEmployeePercentage of
y
Fiscal YeaContributionStatutorily Required(Excess)PayrollCovered-Employee
r
Ending(a)Contribution (b)(a-b)(c)Payroll (b/c)
December 31, 2015$ 268,490$268,490$-$ 3,579,8677.5%
* The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
86
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATIONStatement 1
4
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY*
PUBLIC EMPLOYEES POLICE AND FIRE FUND
For The Year Ended December 31, 2015
Proportionate Shar
e
Proportionateof the Net PensioPlan Fiduciar
ny
ProportioShare (AmountLiability as Net Position as
n)a
(Percentage) o
fof the NetCovered-Percentage of itsa Percentage
Measurement Fiscal Yeathe Net PensioPensioEmployeCovered-Employeof the Tota
rnneel
DateEndinLiabilitLiability (aPayroll (bPayroll (a/b)Pension Liabilit
gy))y
June 30, 2015December 31, 20150.0210%$238,609$194,274122.8%86.6%
* The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become availabl
e
87
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 15
SCHEDULE OF PENSION CONTRIBUTIONS*
PUBLIC EMPLOYEES POLICE AND FIRE FUND
For The Year Ended December 31, 2015
StatutorilyContributions inContributionCovered-Contributions as a
Required Relation to theDeficiencEmployeePercentage of
y
Fiscal YeaContributionStatutorily Required(Excess)PayrollCovered-Employee
r
Ending(a)Contribution (b)(a-b)(c)Payroll (b/c)
December 31, 2015$ 38,121$38,121$-$ 235,31516.2%
* The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
88
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2015
Note A BUDGETS
The General Fund budget is legally adopted on a basis consistent with accounting principles generally accepted in the United States of
America. The legal level of budgetary control is at the departmental level for the General Fund. The following is a listing of General
Fund departments whose expenditures exceed budget appropriations.
FinalOver
BudgetActualBudget
General Fund:
Current:
Public works
Streets and highways$ 625,664$629,724$ 4,060
Street signs 203,533 204,494 961
Note B MODIFIED APPROACH FOR CITY STREETS AND TRAILS INFRASTRUCTURE CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City is required to account for and report infrastructure capital assets. The City defines
infrastructure as the basic physical assets including the street and trail system; water treatment and distribution system; wastewater
collection system; park and recreation lands and improvement system; storm water conveyance system; and building combined with site
amenities such as parking and landscape areas used by the City in the conduct of its business. Each major infrastructure can be divided
into subsystems. For example, the street and trail system can be divided into pavement widths, curb type and sidewalk. City owned
streets could further be classified as collector or local. Subsystem detail is not presented in these basic financial statements; however, the
City maintains detailed information on these subsystems.
The City has elected to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement
Management Program. Under GASB Statement No. 34, eligible infrastructure capital assets are not required to be depreciated under the
following requirements:
1)The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (1) an up
to-date inventory; (2) perform condition assessments and summarize the results using a measurement scale; and (3) estimate
annual amount to maintain and preserve at the established condition assessment level.
2) The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established
and disclosed condition assessment level.
The City’s policy relative to maintaining the street and trail assets is to achieve an average rating of “Good” for all segments. This
acceptable rating allows minor cracking and patching of the pavement along with minor roughness that could be noticeable to the users of
the system.
In the fall of 2015, 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:
Prior to 2013Current
ConditionRating ScaleRating Scale
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
89
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2015
As of December 31, 2015, the City’s street and trail system was rated at an OCI index of 6.7 on the average with detail condition as
follows:
% of Street
Conditionand Trails
Excellent to Good78.0%
Fair21.0%
Poor to Substandard1.0%
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
$1,114,900 on street and trail maintenance for the year ending December 31, 2015. These expenditures delayed deterioration; however,
the overall condition of the system was not improved through these maintenance expenditures. The City has estimated that the amount of
annual expenditures required to maintain the City’s street and trail system at the average OCI rating of good is approximately $1,150,000.
MaintenanceActualOCI
YeaEstimateExpendituresRating
r
20061,150,000$ 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
20151,150,000 1,114,900 6.7
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.
Note C PENSION INFORMATION
PERA – General Employees Retirement Fund
There are no factors that affect trends in the amounts reported, such as change of benefit terms or assumptions. With only one year
reported in the RSI, there is no additional information to include in the notes. Details can be obtained from the financial reports of
PERA.
PERA – Public Employees Police and Fire
There are no factors that affect trends in the amounts reported, such as change of benefit terms or assumptions. With only one year
reported in the RSI, there is no additional information to include in the notes. Details can be obtained from the financial reports of
PERA.
90
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
91
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
A Special Revenue Fund is used to account for the proceeds of specific revenue sources that are legally restricted to
expenditures for specified purposes. Revenues for these funds can come from a variety of sources, such as taxes,
fees, gifts and grants or contributions from other governmental entities. Expenditures from these funds are normally
restricted by statute, local ordinance or grant agreements. The funds may be used for either operations or capital
outlay as legal restrictions mandate.
DEBT SERVICE FUNDS
A Debt Service Fund accounts for the accumulation of resources for, and the payment of general long-term principal,
interest and other related costs.
CAPITAL PROJECTS FUNDS
A Capital Projects Fund is used to account for acquisition or construction of major capital facilities financed mainly
with governmental fund resources, general obligation debt, special assessments, special assessment debt, grants or
other resources that are not part of Proprietary Funds or Trust Funds.
92
CITY OF ANDOVER, MINNESOTA
COMBINING BALANCE SHEETStatement 16
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2015
With Comparative Totals For December 31, 2014
Totals
SpecialDebtCapitalNonmajor Governmental Funds
RevenueServiceProjects20152014
Assets:
Cash and investments 725,949$ 1,191,519$ 2,590,061$ 4,507,529$ 4,448,479$
Cash and investments with escrow agent 151,162 151,162
- - 126,086
Accrued interest3,1083,32110,446 16,87518,875
Accounts receivable - net108,318 108,31891,172
- -
Property taxes receivable:
Unremitted49822,4603,327 26,28521,208
Delinquent87735,9165,309 42,10246,867
Inventories - at cost1,800 1,8001,562
- -
Land held for resale
- - - - 100,000
Total assets991,712 4,854,071
1,253,216 2,609,143 4,854,249
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Interfund payable120,00070,000 190,000
- 260,000
Accounts payable53,5564,248 57,804
- 142,503
Contracts payable3,04710,904 13,951
- -
Deposits payable17,114 17,11416,576
- -
Due to other governmental units1,644 1,6443,147
- -
Salaries payable24,807 24,80722,983
- -
Unearned revenue101,225 101,22595,008
- -
Total liabilities321,39385,152 406,545
- 540,217
Deferred inflows of resources:
Unavailable revenues87735,9165,309 42,102
146,867
Fund balance (deficit):
Nonspendable1,800 1,8001,562
- -
Restricte71,79427,254 1,316,348
d
1,217,300 1,476,681
Committe531,729 531,729
d
- - 591,289
Assigne64,119 2,618,904
d
- 2,554,785 2,211,977
Unassigne(63,357) (63,357)(114,344)
d
- -
Total fund balance (deficit)669,442 4,405,424
1,217,300 2,518,682 4,167,165
Total liabilities, deferred inflows o
f
resources, and fund balances (deficit) 991,712$ 1,253,216$ 2,609,143$ 4,854,071$ 4,854,249$
93
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 17
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2015
With Comparative Totals For The Year Ended December 31, 2014
Totals
Special DebtCapitalNonmajor Governmental Funds
RevenueServiceProjects20152014
Revenues:
General property taxes 39,927$ 2,134,650$ 312,281$ 2,486,858$ 2,386,360$
66,589
Intergovernmental - - - -
Charges for services 695,681 695,681722,462
- -
Investment income 7,533(1,287)28,566 34,81293,493
Miscellaneous:
Park dedication fees170,144 170,144156,384
- -
Rent 638,220 638,220639,000
- -
Other 216,176202,007 418,183369,974
-
Total revenues 1,597,5372,133,363712,998 4,443,8984,434,262
Expenditures:
Current:
General government 23,872103,979 127,851107,021
-
Public safety17,802 17,80238,340
- -
Public works 94,2836,092 100,375101,352
-
Parks and recreation 1,045,34780,916 1,126,2631,130,179
-
Economic development 71,997 71,997121,622
- -
Capital outlay:
Public safety74,934 74,9341,089,037
- -
Public works23,028 23,028339,497
- -
Parks and recreation490,222 490,222863,513
- -
Debt service:
Principal retirement1,765,000196,719 1,961,7192,336,719
-
Interest470,687 470,687900,504
- -
Paying agent fees5,009 5,0092,775
- -
Professional service2,030
- - - -
Total expenditures1,235,4992,240,696993,692 4,469,8877,032,589
Revenues over (under) expenditures 362,038(107,333)(280,694) (25,989)(2,598,327)
Other financing sources (uses):
Transfers in300,000200,000 500,000603,268
-
Transfers out (300,000)(48,902) (348,902)(256,944)
-
Bonds issued1,555,000
- - - -
Bond premium44,278
- - - -
Proceeds from sale of capital assets113,150 113,15025,133
- -
Total other financing sources (uses) (300,000) 251,098313,150 264,2481,970,735
Net increase (decrease) in fund balance 62,038 143,76532,456 238,259(627,592)
Fund balance - January 1 607,4041,073,5352,486,226 4,167,1654,794,757
Fund balance - December 31$ 669,442$1,217,300$2,518,682$ 4,405,424$4,167,165
94
NONMAJOR SPECIAL REVENUE FUNDS
The City of Andover had the following Special Revenue Funds during the year:
EDA General - This fund was established to account for activities designed to promote quality economic
development within the community.
- This fund is used to account for the operations of the Andover YMCA/Community Center,
Community Center
particularly the ice arena, field house and concessions. The aquatic’s portion of the Community Center is under the
operations of the YMCA.
- This fund accounts for resources necessary to maintain existing maps and developing new
Drainage and Mapping
maps and mapping systems for the City.
LRRWMO - This fund is used to account for the City’s involvement with the Lower Rum River Watershed
Management Organization (LRRWMO).
Forestry - This fund was established to account for the protection of forest resources and the development of control
plans to ensure preservation or restoration of these resources.
Right-of-Way Management/Utility - This fund is used to account for activity associated with the management of the
public right-of-ways.
- This fund accounts for the 10% of net profits received from gambling activities by local non-
Charitable Gambling
profit organizations. According to state statute, all expenditures from this fund must be for public services and
police, fire and other emergency or public safety-related services, equipment, and training, excluding pension
obligations.
Construction Seal Coating - This fund accounts for the contributions associated with land development to be used
for the respective developments first application of crack seal and seal coat.
95
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2015
With Comparative Totals For December 31, 2014
Drainage
EDACommunitand
y
GeneralCenteMappingLRRWMO
r
Assets:
Cash and investments 321,564$ 12,032$ 144,128$ 1,673$
151,162
Cash and investments with escrow agent - - -
Accrued interest1,418 643
- -
Accounts receivable - net14,59193,727
- -
Property taxes receivable:
Unremitted498
- - -
Delinquent877
- - -
Inventories - at cost1,800
- - -
Total assets337,573258,721144,7713,048
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Interfund payable120,000
- - -
Accounts payable1,02539,838
- -
Contracts payable3,047
- - -
Deposits payable17,114
- - -
Due to other governmental units1,644
- - -
Salaries payable2,09720,938786
-
Unearned revenue
- - - -
Total liabilities3,122202,581786
-
Deferred inflows of resources:
Unavailable revenues877
- - -
Fund balance (deficit):
Nonspendable1,800
- - -
Restricte
d
- - - -
Committe334,451 1,385144,771
d
-
Assigne54,340
d
- - -
Unassigne
d
- - - -
Total fund balance (deficit)334,45156,140144,7711,385
Total liabilities, deferred inflows o
f
resources, and fund balances (deficit)$337,573$258,721$144,771$3,048
96
Statement 18
Right-of-WaTotals
y
ManagementCharitableConstructionNonmajor Special Revenue Funds
/
ForestrUtilitGamblinSeal Coating20152014
yyg
$ 6,831$ 48,684$ 79,510$111,527$725,949$ 761,440
151,162 126,086
- - - -
211 3125243,108 3,479
-
108,318 91,172
- - - -
498 455
- - - -
877 918
- - - -
1,800 1,562
- - - -
6,831 48,895 79,822112,051991,712 985,112
120,000 190,000
- - - -
5,0807,61353,556 49,076
- -
3,047
- - - - -
17,114 16,576
- - - -
1,644 3,147
- - - -
98624,807 22,983
- - -
101,225101,225 95,008
- - -
986 5,080108,838321,393 376,790
-
877 918
- - - -
1,800 1,562
- - - -
71,79471,794 55,210
- - -
47,9093,213531,729 591,289
- -
6,831 2,94864,119 9,269
- -
(49,926)
- - - - -
6,831 47,909 74,7423,213669,442 607,404
$ 6,831$ 48,895$ 79,822$112,051$991,712$ 985,112
97
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2015
With Comparative Totals For The Year Ended December 31, 2014
Drainage
EDACommunitand
y
GeneralCenteMappingLRRWMO
r
Revenues:
$39,927
General property taxes $ -$ -$ -
Intergovernmental
- - - -
Charges for services20,895637,921 317
-
Investment income3,831(1,079) 1,768(204)
Miscellaneous:
Rent638,220
- - -
Othe 174,789930
r
- -
Total revenues25,6561,449,851 2,08539,723
Expenditures:
Current:
General government - - - -
Public works 12,15240,633
- -
Parks and recreation1,045,347
- - -
Economic development71,997
- - -
Capital outlay:
Parks and recreation
- - - -
Total expenditures71,9971,045,347 12,15240,633
Revenues over (under) expenditures(46,341)404,504 (10,067)(910)
Other financing sources (uses):
Transfers out(300,000)
- - -
Net increase (decrease) in fund balance(46,341)104,504 (10,067)(910)
Fund balance (deficit) - January 1380,792(48,364) 154,8382,295
Fund balance (deficit) - December 31$334,451$56,140$ 144,771$1,385
98
Statement 19
Right-of-WaTotals
y
ManagementCharitableConstructionNonmajor Special Revenue Funds
/
ForestrUtilitGamblinSeal Coating20152014
yyg
$39,927$ 40,066
$ -$ -$ -$ -
4,909
- - - - -
27,1359,413695,681 722,462
- -
88 7279211,4817,533 12,592
638,220 639,000
- - - -
40,457216,176 261,330
- - -
88 27,86241,37810,8941,597,537 1,680,359
23,87223,8723,690
- - -
500 29,95111,04794,283 93,179
-
1,045,347 1,028,693
- - - -
71,997 78,213
- - - -
29,774
- - - - -
500 29,95123,87211,0471,235,499 1,233,549
(412) (2,089)17,506(153)362,038 446,810
(300,000) (246,993)
- - - -
(412) (2,089)17,506(153)62,038 199,817
7,243 49,99857,2363,366607,404 407,587
$ 6,831$ 47,909$74,742$3,213$669,442$ 607,404
99
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100
NONMAJOR DEBT SERVICE FUNDS
The City's Debt Service Funds account for eight types of bonded indebtedness:
Certificates of Indebtedness
Capital Improvement Bonds
Revenue Bonds
Abatement Bonds
Permanent Improvement Revolving Bonds
State Aid Bonds
Referendum Bonds
Certificates of Indebtedness - (G.O. Equipment Certificates - 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
Abatement Bonds - (G.O. Abatement Bonds of 2012C) are repaid from annual lease payments from the YMCA,
Community Center operations and general property tax.
State Aid Bonds - (State Aid Refunding Bonds of 2009A) are used to finance MSA eligible cost for road
construction and improvements. These bonds are repaid from a portion of state aid allotments received by the City.
– (Open Space Referendum Bonds of 2010A) are used to finance the purchase of land to remain
Referendum Bonds
as open space.
101
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2015
With Comparative Totals For December 31, 2014
G.O. Capital
G.O.G.O.ImprovemenG.O.
t
EquipmentEquipmentRefundingAbatemen
t
CertificateCertificateBondsBonds
2012A2014A2012B2012C
Assets:
Cash and investments$503,012$299,464$70,866$ 105,509
Accrued interest1,945779
- -
Property taxes receivable:
Unremitted1,4773,1235,698 10,293
Delinquent 2,343 4,954 9,038 16,326
Total assets 508,77785,602 132,128
308,320
Deferred Inflows of Resources and Fund Balances
Deferred inflows of resources:
Unavailable revenues2,3434,9549,038 16,326
Fund balance (deficit):
Restricte76,564 115,802
d
506,434 303,366
Total deferred inflows of resources, an
d
and fund balances (deficit)$508,777$308,320$85,602$ 132,128
102
Statement 20
Open Space
ReferenduTotals
m
BondsNonmajor Debt Service Funds
2010A20152014
$ 1,191,519212,668$ 1,052,349$
3,321597 2,882
22,4601,869 18,304
35,9163,255 40,505
1,253,216218,389 1,114,040
35,9163,255 40,505
1,217,300215,134 1,073,535
$ 1,253,216218,389$ 1,114,040$
103
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2015
With Comparative Totals For The Year Ended December 31, 2014
G.O. Capital
G.O.G.O.ImprovemenG.O.
t
EquipmentEquipmentRefundingAbatemen
t
CertificateCertificateBondsBonds
2012A2014A2012B2012C
Revenues:
General property taxes$139,881$295,803$539,660$ 974,822
Intergovernmental
- - - -
Investment income5,7381,351(3,730)(5,810)
Total revenues145,619 969,012
297,154 535,930
Expenditures:
Debt service:
Principal retirement 835,000
- 225,000 500,000
Interest11,70031,92614,400 379,906
Paying agent fees534210 5343,113
Professional services
- - - -
Total expenditures12,234 1,218,019
257,136 514,934
Revenues over (under) expenditures133,38540,01820,996 (249,007)
Other financing sources (uses):
Transfers in 300,000
- - -
Transfers out
- - - -
Total other financing sources (uses) 300,000
- - -
Net increase (decrease) in fund balance133,38540,01820,99650,993
Fund balance - January 1373,04955,56864,809
263,348
Fund balance - December 31$506,434$303,366$76,564$ 115,802
104
Statement 21
Open Space
StateReferenduTotals
m
Aid BondsBondsNonmajor Debt Service Funds
2009A2010A20152014
$ 184,484$ 2,134,650$2,074,115
$ -
61,680
- - -
1,164 (1,287)1,294
-
185,648 2,133,363
- 2,137,089
60,000 145,000 1,765,000
2,140,000
840 31,915 470,687
900,504
618 5,0092,775
-
2,030
- - -
60,840 177,533 2,240,696
3,045,309
(60,840) 8,115 (107,333)(908,220)
300,000
- - 593,317
(48,902) (48,902)(9,951)
-
(48,902) 251,098
- 583,366
(109,742) 8,115 143,765(324,854)
109,742 207,019 1,073,535
1,398,389
$ 215,134$ 1,217,300$1,073,535
$ -
105
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106
NONMAJOR CAPITAL PROJECTS FUNDS
The City of Andover had the following Capital Projects Funds during the year:
Storm Sewer Project - This fund was established to account for storm sewer fees and improvements as part of
development and ongoing maintenance.
- This fund was established to account for contributions associated with land development to be
Park Dedication
used for constructing and upgrading the City’s park system.
Building Fund - This fund was established to account for miscellaneous building improvements for all facilities.
Trail and Transportation - This fund is used to account for contributions associated with land development to be
used for constructing and upgrading the City’s trail system.
- This fund is used to account for the capital equipment/projects levy and the various
Capital Equipment Reserve
capital expenditures it will be used for.
Equipment Certificates 2014A - This fund was established to account for the purchase of capital equipment that was
financed through the issuance of capital notes.
Open Space Referendum Bonds 2010A - This fund was established to account for the purchase of various land
acquisitions for open space preservation within the City.
107
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2015
With Comparative Totals For December 31, 2014
Stor
m
SeweParkBuildingTrail &
r
ProjectDedicationFundTransportation
Assets:
Cash and investments$6,643$378,878$775,138$350,884
Accrued interest-1,4943,928749
Property taxes receivable:
Unremitted-660 --
Delinquent-1,053 --
Land held for resale-- --
Total assets6,643382,085779,066351,633
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Interfund payable70,000- --
Accounts payable-- -4,233
Contracts payable-4,400 --
Total liabilities70,0004,400 -4,233
Deferred inflows of resources:
Unavailable revenues-1,053 --
Fund balance (deficit):
Restricte -- - -
d
Assigne 376,632- 779,066 347,400
d
Unassigne -(63,357) - -
d
Total fund balance (deficit) (63,357) 376,632 779,066 347,400
Total liabilities, deferred inflows o
f
resources, and fund balances (deficit)$6,643$ 779,066382,085$ 351,633$
108
Statement 22
Open Space
CapitalEquipmentReferenduTotals
m
EquipmentCertificatesBondsNonmajor Capital Projects Funds
Reserve2014A2010A20152014
$ 1,051,264$ 25,223$ 2,031$2,590,061$2,634,690
4,275 - -10,44612,514
2,667 - -3,3272,449
4,256 - -5,3095,444
- - --100,000
1,062,462 25,223 2,0312,609,1432,755,097
- - -70,00070,000
15 - -4,24893,427
6,504 - -10,904-
6,519 - -85,152163,427
4,256 - -5,309105,444
- 25,223 2,03127,254347,936
1,051,687 - -2,554,7852,202,708
- - -(63,357)(64,418)
1,051,687 25,223 2,0312,518,6822,486,226
$ 1,062,462$ 25,223$ 2,031$2,609,143$2,755,097
109
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For The Year Ended December 31, 2015
With Comparative Totals For The Year Ended December 31, 2014
Stor
m
SeweParkBuildingTrail &
r
ProjectDedicationFundTransportation
Revenues:
General property taxes$61,918
$ -$ -$ -
Investment income(807)4,58410,8432,124
Miscellaneous:
Park dedication fees
- 170,144 - -
Other1,86821,289 39,433
135,003
Total revenues1,061 41,557
257,935 145,846
Expenditures:
Current:
General government16,472
- - -
Public safety
- - - -
Public works6,092
- - -
Parks and recreation43,811
- - -
Economic developmen
t
- - - -
Capital outlay:
Public safety - - - -
23,028
Public works - - -
Parks and recreation - 172,058 - -
Debt service:
Principal retirement
- - 196,719 -
Total expenditures 29,120
- 215,869 213,191
Revenues over (under) expenditures1,06142,066(67,345) 12,437
Other financing sources (uses):
Transfers in 200,000
- - -
Bonds issued
- - - -
Bond premium
- - - -
Proceeds from sale of capital assets
- - - -
Total other financing sources (uses) 200,000
- - -
Net increase (decrease) in fund balance1,06142,066(67,345) 212,437
Fund balance (deficit) - January 1(64,418) 134,963
334,566 846,411
Fund balance (deficit) - December 31$(63,357)$376,632$779,066$ 347,400
110
Statement 23
Open Space
CapitalEquipmentReferenduTotals
m
EquipmentCertificatesBondsNonmajor Capital Projects Funds
Reserve2014A2010A20152014
250,363$312,281$272,179
$ $ -$ -
12,872 681 (1,731)28,56679,607
- - - 170,144 156,384
4,414
- - 202,007 108,644
267,649 681 (1,731)
712,998 616,814
87,507
- - 103,979 103,331
17,80217,80238,340
- -
6,0928,173
- - -
37,10580,916
- - 101,486
43,409
- - - -
74,93474,934
- - 1,089,037
23,028
- - - 339,497
73,466 13,037 231,661
490,222 833,739
- - - 196,719 196,719
215,880 87,971 231,661
993,692 2,753,731
51,769 (87,290) (233,392)(280,694)(2,136,917)
9,951
- - - 200,000
- - - - 1,555,000
-44,278
- - -
113,15025,133
- - 113,150
113,150
- - 313,150 1,634,362
164,919 (87,290) (233,392)32,456(502,555)
886,768 112,513 235,423
2,486,226 2,988,781
$ 1,051,687$ 25,223$ 2,031$2,518,682$2,486,226
111
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - EDA GENERAL Statement 24
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
Variance with
Final Budget -
Budgeted Amounts2015Positive2014
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services 15,600$ $15,600$20,895$ 5,295$36,622
Investment income 5,0005,0003,831 (1,169)10,677
Miscellaneous930 9305,868
- -
Total revenues 20,60020,60025,656 5,05653,167
Expenditures:
Current:
Economic development 164,949164,94971,997 92,95278,213
Net increase (decrease) in fund balance (144,349)$ $(144,349)(46,341)$ 98,008(25,046)
Fund balance (deficit) - January 1380,792405,838
Fund balance (deficit) - December 31$334,451$380,792
112
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - COMMUNITY CENTER Statement 25
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
Variance with
Final Budget -
Budgeted Amounts2015Positive2014
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services 577,200$ $577,200$637,921$ 60,721$616,835
Investment income(1,079) (1,079)(6,582)
- -
Miscellaneous:
Rent 635,000635,000638,220 3,220639,000
Othe 169,400169,400 174,789 5,389 212,916
r
Total revenues 1,381,600 1,381,600 1,449,851 68,251 1,462,169
Expenditures:
Current:
Parks and recreation 995,355 990,855 1,045,347 (54,492) 1,028,693
Capital outlay:
Parks and recreation 14,000 14,000 14,00029,774
-
Total expenditures 1,009,3551,004,8551,045,347 (40,492)1,058,467
Revenue over (under) expenditures 372,245376,745404,504 27,759403,702
Other financing sources (uses)
Transfers out (371,598)(371,598)(300,000) 71,598(241,493)
Net increase (decrease) in fund balance$647$5,147104,504$ 99,357162,209
Fund balance (deficit) - January 1(48,364)(210,573)
Fund balance (deficit) - December 31$56,140$(48,364)
113
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - DRAINAGE AND MAPPING Statement 26
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
Variance with
Final Budget -
Budgeted Amounts2015Positive2014
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services 8,000$ $8,000$317$ (7,683)$28,097
Investment income 1,2001,2001,768 5684,157
Total Revenues 9,2009,2002,085 (7,115)32,254
Expenditures:
Current:
Public works 16,30016,30012,152 4,1489,869
Net increase (decrease) in fund balance$ (7,100)$(7,100)(10,067)$ (2,967)22,385
Fund balance (deficit) - January 1154,838132,453
Fund balance (deficit) - December 31$144,771$154,838
114
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - LRRWMOStatement 27
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
Variance with
Final Budget -
Budgeted Amounts2015Positive2014
OriginalFinalActual(Negative)Actual
Revenues:
General property taxes 40,000$ $40,000$39,927$ (73)$40,066
Investment income100100(204) (304)(281)
Total revenues 40,10040,10039,723 (377)39,785
Expenditures:
Current:
Public works 41,08341,08340,633 45041,579
Net increase (decrease) in fund balance$(983)$(983)(910)$ 73(1,794)
Fund balance (deficit) - January 12,2954,089
Fund balance (deficit) - December 31$1,385$2,295
115
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - FORESTRYStatement 28
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
Variance with
Final Budget -
Budgeted Amounts2015Positive2014
OriginalFinalActual(Negative)Actual
Revenues:
Intergovernmental 12,500$ $12,500$ (12,500)$4,909
$ -
Investment income10010088 (12)146
Miscellaneous 6,5006,500 (6,500)8,967
-
Total revenues 19,10019,10088 (19,012)14,022
Expenditures:
Current:
Public works 19,00019,000500 18,50010,338
Net increase (decrease) in fund balance$100$100(412)$ (512)3,684
Fund balance (deficit) - January 17,2433,559
Fund balance (deficit) - December 31$6,831$7,243
116
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - RIGHT-OF-WAY MANAGEMENT/UTILITY Statement 29
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
Variance with
Final Budget -
Budgeted Amounts2015Positive2014
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services 12,000$ $12,000$27,135$ 15,135$38,320
Investment income500500727 227975
Total revenues 12,50012,50027,862 15,36239,295
Expenditures:
Current:
Public works 32,58932,58929,951 2,63828,805
Revenue over (under) expenditures (20,089)(20,089)(2,089) 18,00010,490
Other financing sources (uses):
Transfers out(5,500)
- - - -
Net increase (decrease) in fund balance$ (20,089)$(20,089)(2,089)$ 18,0004,990
Fund balance (deficit) - January 149,99845,008
Fund balance (deficit) - December 31$47,909$49,998
117
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CHARITABLE GAMBLING Statement 30
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
Variance with
Final Budget -
Budgeted Amounts2015Positive2014
OriginalFinalActual(Negative)Actual
Revenues:
Investment income 300$$300$921$ 621$1,262
Miscellaneous 10,00010,00040,457 30,45733,579
Total revenues 10,30010,30041,378 31,07834,841
Expenditures:
Current:
General government 26,00026,00023,872 2,1283,690
Net increase (decrease) in fund balance$ (15,700)$(15,700)17,506$ 33,20631,151
Fund balance (deficit) - January 157,23626,085
Fund balance (deficit) - December 31$74,742$57,236
118
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CONSTRUCTION SEAL COATING Statement 31
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2015
With Comparative Actual Amounts For The Year Ended December 31, 2014
Variance with
Final Budget -
Budgeted Amounts2015Positive2014
OriginalFinalActual(Negative)Actual
Revenues:
Charges for services 5,000$ $5,000$9,413$ 4,413$2,588
Investment income3003001,481 1,1812,238
Total revenues 5,3005,30010,894 5,5944,826
Expenditures:
Current:
Public works 5,0005,00011,047 (6,047)2,588
Net increase (decrease) in fund balance$300$300(153)$ (453)2,238
Fund balance (deficit) - January 13,3661,128
Fund balance (deficit) - December 31$3,213$3,366
119
INTERNAL SERVICE FUNDS
Internal Service Funds are used to account for the financing of goods or services provided by one department or
agency to other departments or agencies of the government and to other government units, on a cost reimbursement
basis. The City of Andover had the following Internal Service Funds during the year:
Central Equipment Maintenance This fund accounts for the maintenance of the equipment for the City.
Risk Management This fund accounts for the expenditures in payment of insurance deductibles, loss reduction,
safety training and administrative expense.
120
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET POSITION Statement 32
INTERNAL SERVICE FUNDS
December 31, 2015
With Comparative Totals for December 31, 2014
Central
EquipmentRisTotals
k
MaintenanceManagemen20152014
t
Assets:
Current assets:
Cash and cash equivalents 320,611$ 332,263$ 652,874$ 545,350$
Accrued interest 1,548 1,125 2,673 2,082
Inventories - at cost 105,909105,909119,907
-
Total assets428,068333,388761,456667,339
Liabilities:
Current liabilities:
Accounts payable4,87664 4,94017,640
Contracts payable24,000
- - -
Salaries payable11,01369911,71212,015
Total liabilities15,88976316,65253,655
Net position:
Unrestricted$412,179$332,625$744,804$613,684
121
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES AND Statement 33
CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2015
With Comparative Totals For The Year Ended December 31, 2014
Central
EquipmentRisTotals
k
MaintenanceManagemen20152014
t
Operating revenues:
User charges$720,592$391,986$1,112,578$1,078,928
Other91096,946 97,856123,144
Total operating revenues721,502488,9321,210,4341,202,072
Operating expenses:
Personal services253,142168,522421,664376,250
Supplies275,67421,574297,248397,664
Other service charges108,048259,847367,895503,962
Total operating expenses636,864449,9431,086,8071,277,876
Operating income (loss)84,63838,989123,627(75,804)
Nonoperating revenues (expenses):
Investment income4,8492,644 7,49312,296
Change in net position89,48741,633131,120(63,508)
Net position - January 1322,692290,992613,684677,192
Net position - December 31$412,179$332,625$744,804$613,684
122
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF CASH FLOWSStatement 34
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2015
With Comparative Totals For The Year Ended December 31, 2014
Central
Totals
EquipmentRisk
MaintenanceManagemen20152014
t
Cash flows from operating activities:
Receipts from customers and users$721,502$488,932$ 1,210,434$1,202,072
Payment to suppliers(381,739)(306,106) (687,845)(915,518)
Payment to employees(253,463)(168,504) (421,967)(374,357)
Net cash flows from operating activities86,30014,322 100,622(87,803)
Cash flows from investing activities:
Investment income4,3232,579 6,90213,240
Net increase (decrease) in cash and cash equivalents90,62316,901107,524(74,563)
Cash and cash equivalents - January 1229,988315,362 545,350619,913
Cash and cash equivalents - December 31$320,611$332,263$ 652,874$545,350
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss)$84,638$38,989$ 123,627$(75,804)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Changes in assets and liabilities:
Decrease (increase) in inventory13,998- 13,998(19,313)
Increase (decrease) in accounts payable(12,015)(685) (12,700)(18,579)
Increase (decrease) in contracts payable-(24,000) (24,000)24,000
Increase (decrease) in salaries payable(321)18 (303)1,893
Total adjustments1,662(24,667) (23,005)(11,999)
Net cash provided (used) by operating activities$86,300$14,322$ 100,622$(87,803)
123
AGENCY FUNDS
Agency Funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals,
private organizations and/or other governmental units. The City of Andover had the following Agency Funds during
the year:
General Escrow This fund is used to account for distribution of funds for insurance premiums of retirees.
General Agency This fund is used to account for the collection and distribution of funds relating to building and
land development activities.
124
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET POSITION Statement 35
FIDUCIARY FUNDS
December 31, 2015
GeneralGeneral
EscroAgencTotal
wy
Assets:
Cash and investments 37,890$ 249,518$ 287,408$
Liabilities:
Accounts payable 16 10,881 10,897
Deposits payable 37,874 238,637 276,511
Total liabilities 37,890$ 249,518$ 287,408$
125
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES Statement 36
FIDUCIARY FUNDS
December 31, 2015
BalanceBalance
January 1,December 31,
2015AdditionsDeletions2015
General Escrow Fun
d
Assets:
Cash and investments 54,727$ 23,422$ (40,259)$ 37,890$
Liabilities:
Accounts payable 97 19,751 (19,832) 16
Deposits payable 54,630 3,671 (20,427) 37,874
Total liabilities 54,727$ 23,422$ (40,259)$ 37,890$
General Agency Fun
d
Assets:
Cash and investments 196,664$ 1,319,509$ (1,266,655)$ 249,518$
Liabilities:
Accounts payable 13,375 530,603 (533,097) 10,881
Deposits payable 183,289 788,906 (733,558) 238,637
Total liabilities 196,664$ 1,319,509$ (1,266,655)$ 249,518$
Total Fiduciary Funds
Assets:
Cash and investments 251,391$ 1,342,931$ (1,306,914)$ 287,408$
Liabilities:
Accounts payable 13,472 550,354 (552,929) 10,897
Deposits payable 237,919 792,577 (753,985) 276,511
Total liabilities 251,391$ 1,342,931$ (1,306,914)$ 287,408$
126
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 128
These tables contain trend information to help the reader understand how the City’s financial performance
and well-being have changed over time.
Revenue Capacity138
These tables contain information to help the reader assess the City’s most significant local revenue source,
the property tax.
Debt Capacity144
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.
152
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 Information155
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.
127
CITY OF ANDOVER, MINNESOTA
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
2006200720082009
Governmental Activities
Net investment in capital assets64,114,553$ 77,285,905$ 79,644,769$ 83,394,872$
Restricted14,838,788 7,763,716 8,345,185 8,252,691
Unrestricted19,808,248 21,294,876 19,904,063 19,442,008
Total governmental activities net position98,761,589 106,344,497 107,894,017 111,089,571
Business-Type Activities
Net investment in capital assets38,249,916 38,580,630 37,606,052 36,939,962
Unrestricted3,451,261 3,659,887 4,005,471 4,875,384
Total business-type activities net position41,701,177 42,240,517 41,611,523 41,815,346
Primary Government
Net investment in capital assets102,468,182 115,866,535 117,250,821 120,334,834
Restricted14,838,788 7,763,716 8,345,185 8,252,691
Unrestricted23,259,509 24,954,763 23,909,534 24,317,392
Total primary government net position140,566,479$ 148,585,014$ 149,505,540$ 152,904,917$
GASB 68 was implemented in 2015. Net position was restated for 2014 to reflect the reporting of net pension liability and pension
related deferred outflows and inflows of resources. Net position for years prior to 2014 were not restated.
128
Table 1
201020112012201320142015
$ 87,206,607$ 90,859,970$ 89,592,661$ 93,393,474$ 94,533,473$ 95,998,027
6,364,714 3,107,253 4,461,020 3,792,323 4,776,047 5,755,162
21,071,212 23,353,009 25,589,728 22,936,032 23,175,077 24,457,253
114,642,533 117,320,232 119,643,409 120,121,829 122,484,597 126,210,442
36,140,050 36,031,319 34,922,691 34,864,659 34,787,382 35,507,385
4,912,822 5,100,628 5,784,313 6,310,830 6,292,850 7,004,563
41,052,872 41,131,947 40,707,004 41,175,489 41,080,232 42,511,948
123,346,657 126,891,289 124,515,352 128,258,133 129,320,855 131,505,412
6,364,714 3,107,253 4,461,020 3,792,323 4,776,047 5,755,162
25,984,034 28,453,637 31,374,041 29,246,862 29,467,927 31,461,816
$ 155,695,405$ 158,452,179$ 160,350,413$ 161,297,318$ 163,564,829$ 168,722,390
129
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
2006200720082009
Expenses
Governmental activities:
General government2,637,584$ 2,509,011$ 2,505,105$ 2,413,916$
Public safety3,443,285 3,851,086 4,035,884 4,237,401
Public works3,031,459 3,783,509 5,144,197 3,776,367
Parks and recreation2,442,305 2,954,753 2,963,218 2,880,595
Recycling91,378 94,929 85,397 86,949
Economic development626,103 2,265,605 540,285 481,632
Interest on long-term debt1,668,444 2,303,567 2,219,130 2,146,960
Total governmental activities expenses13,940,558 17,762,460 17,493,216 16,023,820
Business-type activities:
Water2,232,144 2,587,847 2,563,781 2,594,713
Sewer1,585,548 1,631,224 1,794,891 1,831,505
Storm sewer408,003 537,151 521,975 536,619
Total business-type activities expenses4,225,695 4,756,222 4,880,647 4,962,837
Total primary government expenses18,166,253 22,518,682 22,373,863 20,986,657
Program Revenues
Governmental activities:
Charges for services:
General government471,573 785,600 647,081 483,639
Public safety804,447 662,299 721,289 412,113
Public works325,672 408,656 427,043 316,451
Parks and recreation749,407 859,531 1,049,032 1,495,779
Recycling35,379 33,158 35,897 29,479
Economic development218,605 182,535 199,840
185,539
Operating grants and contributions 959,2861,129,099 917,618 966,635
Capital grants and contributions 4,920,694 8,794,164 1,069,607 1,631,929
Total governmental activities program revenue8,485,063 12,855,042 5,067,407 5,521,564
Business-type activities:
Charges for services:
Water 1,768,388 2,025,452 1,987,432 2,127,676
Sewer 1,691,728 1,771,670 1,869,327 1,967,997
Storm sewer 287,397 288,372 297,125 325,392
Operating grants and contributions
- - - -
Capital grants and contributions 2,761,282 158,113 142,133 793,589
Total business-type activities program revenue6,508,795 4,243,607 4,296,017 5,214,654
Total primary government program revenues 14,993,858 17,098,649 9,363,424 10,736,218
Net (Expense)/Revenue
Governmental activities (5,455,495) (4,907,418) (12,425,809) (10,502,256)
Business-type activities 2,283,100 (512,615) (584,630) 251,817
Total primary government net expense$ (3,172,395)$ (5,420,033)$ (13,010,439)$ (10,250,439)
130
Table 2
201020112012201320142015
$ 2,406,7502,398,007$ 2,453,801$ 3,061,867$ 2,791,507$ 2,823,408$
4,214,3164,157,050 4,325,531 4,495,447 4,747,142 4,774,033
4,029,1643,445,403 5,623,942 4,465,153 4,430,295 2,967,957
2,945,7423,447,730 3,102,534 3,029,917 3,229,894 3,340,561
108,785 109,293 94,319 124,515 111,760 98,016
654,961 777,298 1,396,466 318,646 676,039 192,265
1,936,731 1,796,782 2,497,344 1,399,172 542,139 454,808
16,148,667 16,279,345 19,493,937 16,894,717 16,528,776 14,651,048
2,585,469 2,655,926 2,782,948 2,275,363 2,308,552 2,316,651
1,915,072 1,914,113 1,842,473 1,964,911 1,951,785 2,002,623
532,168 614,958 531,103 561,807 848,745 595,902
5,032,709 5,184,997 5,156,524 4,802,081 5,109,082 4,915,176
21,181,376 21,464,342 24,650,461 21,696,798 21,637,858 19,566,224
454,419 532,764 690,875 843,304 801,458 1,381,113
479,516540,089 607,715704,119492,665 624,430
337,360 309,066 308,583 321,114 318,018 298,143
1,432,672 1,498,847 1,495,872 1,463,579 1,545,794 1,514,900
40,504 48,339 39,530 42,544 41,440 32,976
211,121 235,134 170,391 239,570 96,772 50,628
1,214,066 977,553 1,358,424 1,119,778 946,540 965,986
1,461,834 1,356,091 2,774,126 1,425,815 4,677,704 863,155
5,631,492 5,497,883 7,445,516 6,159,823 8,920,391 5,731,331
2,077,305 2,119,954 2,572,560 2,495,561 2,347,763 2,593,303
1,964,117 1,990,218 2,063,177 2,065,467 2,117,624 2,129,201
338,823 358,708 379,262 399,417 421,056 444,335
9,380 9,506
- - - -
990,412 1,524,088
- - - -
4,389,625 4,468,880 5,014,999 4,960,445 5,886,361 6,690,927
10,021,117 9,966,763 12,460,515 11,120,26814,806,752
12,422,258
(10,517,175)(10,781,462) (12,048,421) (10,734,894) (7,608,385) (8,919,717)
(643,084) (716,117) (141,525) 158,364 777,279 1,775,751
$ (11,160,259)$ (11,497,579)$ (12,189,946)$ (10,576,530)$ (6,831,106)$ (7,143,966)
(Continued)
131
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
2006200720082009
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes:
General property taxes8,084,559$ 8,897,755$ 9,752,701$ 10,175,519$
Tax increment collections1,562,131 1,661,204 1,783,270 1,930,669
Grants and contributions not restricted to
specific programs77,642 486,626 274,402 131,084
Unrestricted investment earnings1,019,304 1,967,583 1,514,012 1,032,507
Gain on sale of capital assets219,910 191,735 234,070 6,144
Transfers(704,042) (714,577) 416,874 421,887
Total governmental activities10,259,504 12,490,326 13,975,329 13,697,810
Business-type activities:
Unrestricted investment earnings87,376 337,378 372,510 373,893
Gain on sale of capital assets5,900
- - -
Transfers 704,042 714,577 (416,874) (421,887)
Total business-type activities 797,318 1,051,955 (44,364) (47,994)
Total primary government 11,056,822 13,542,281 13,930,965 13,649,816
Change in Net Position
Governmental activities 4,804,009 7,582,908 1,549,520 3,195,554
Business-type activities 3,080,418 539,340 (628,994) 203,823
Total primary government$ 7,884,427$ 8,122,248$ 920,526$ 3,399,377
GASB 68 was implemented in 2015. Expenses for years prior to 2015 were not restated.
132
Table 2
(Continued)
201020112012201320142015
$ 10,292,67410,336,536$ 10,594,940$ 10,608,678$ 10,863,912$ 11,120,449$
2,005,0562,074,589 2,033,932 320,822 353,773 210,625
86,80284,875 14,360 12,511 87,179 15,327
1,399,9871,114,451 1,201,995 571,307 747,621 348,885
91,69322,500 16,625 23,650 228,639 548,950
437,186 509,746(417,051) (323,654) 606,793 401,326
13,459,16114,070,137 14,371,598 11,213,314 12,887,917 12,645,562
317,796 370,641 226,328 (21,533) 115,425 57,291
7,500 8,000
- - - -
(437,186) 417,051 (509,746) 323,654 (606,793) (401,326)
(119,390) 795,192 (283,418) 310,121 (491,368) (344,035)
13,950,747 14,254,353 14,088,180 11,523,435 12,396,549 12,301,527
3,552,962 2,677,699 2,323,177 478,420 5,279,532 3,725,845
(762,474) 79,075 (424,943) 468,485 285,911 1,431,716
$2,790,488$ 5,565,443$ 5,157,561
$ 2,756,774$1,898,234$946,905
133
CITY OF ANDOVER, MINNESOTA
FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2006200720082009
General Fund
Reserved144,496$ 208,216$ 193,805$ 207,515$
Unreserved3,248,317 3,682,244 3,981,230 4,120,897
Nonspendable- -
- -
Unassigned - -
- -
Total general fund 3,392,813 3,890,460 4,175,035 4,328,412
All Other Governmental Funds
(1)(2)
Reserved 12,022,454 22,106,660 20,756,19520,754,303
Unreserved reported in:
Special revenue funds 1,246,3881,204,453 941,259 1,233,202
Capital project funds 14,379,760 11,955,138 13,416,129 14,170,266
Nonspendable - -
- -
Restricted - -
- -
Committed - -
- -
Assigned - -
- -
Unassigned - -
- -
Total all other governmental funds 27,648,602 35,266,251 35,111,691 36,159,663
Total governmental funds$ 31,041,415$ 39,156,711$ 39,286,726$ 40,488,075
(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.
134
Table 3
201020112012201320142015
$ 206,666
$ - $ - $ - $ - $ -
4,904,239
- - - - -
222,641 160,177 106,445 137,001 131,813
-
5,665,496 6,227,664 6,853,791 7,065,133 7,136,091
-
5,110,905 5,888,137 6,387,841 6,960,236 7,202,134 7,267,904
19,258,490
- - - - -
1,135,919
- - - - -
14,714,140
- - - - -
16,074 1,471 1,316 1,562 1,800
-
21,307,923 21,274,444 5,022,967 5,674,417
- 19,741,214
650,766 681,413 588,516 591,289 531,729
-
16,420,228 13,481,786 16,095,395 17,907,929
- 14,451,306
(517,251) (314,734) (276,829) (114,344) (63,357)
-
35,108,549 34,342,109 38,096,301 35,069,233 21,596,869 24,052,518
$ 40,219,454$ 40,230,246$ 44,484,142$ 42,029,469$ 28,799,003$ 31,320,422
135
CITY OF ANDOVER, MINNESOTA
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2006200720082009
Revenues
General property taxes8,057,592$ 8,833,249$ 9,695,103$ 10,168,143$
Tax increment collections1,546,394 1,659,222 1,762,119 1,951,343
Licenses and permits598,094 475,893 525,339 291,903
Intergovernmental2,661,726 1,644,914 1,175,205 1,654,614
Special assessments1,289,590 3,342,039 1,638,006 1,421,591
Charges for services1,770,156 2,035,735 1,724,052 1,579,659
Fines91,490 101,445 104,930 110,779
Investment income1,014,801 1,962,379 1,508,265 1,029,683
Miscellaneous:
Park dedication fees626,567 113,013 133,585 41,216
Connection charges372,133 829,624 254,903 20,119
637,305
Rent - - -
Other 395,789 621,798 800,857 381,548
Total revenues 18,424,332 21,619,311 19,322,364 19,287,903
Expenditures
General government 2,343,332 2,399,297 2,366,574 2,242,662
Public safety 3,268,236 3,580,240 3,796,965 4,015,410
Public works 2,817,475 3,491,353 4,843,288 3,545,132
Parks and recreation 1,599,885 1,825,706 1,953,822 1,891,125
Recycling 90,590 94,669 86,631 85,527
Economic development 626,103 2,265,605 538,293 477,648
Unallocated8,454 6,915 17,999 19,540
Capital outlay 987,075 2,803,485 1,460,662 1,519,944
Debt service:
Principal retirement 5,254,000 3,275,000 3,460,000 3,865,000
Interest 1,683,599 2,089,8572,253,2232,178,233
Other 253,134 167,187 15,645 39,265
Construction/acquisition costs 4,579,910 360,742
- -
Total expenditures 23,511,793 22,360,056 20,793,102 19,879,486
Revenues over (under) expenditures (5,087,461) (740,745) (1,470,738) (591,583)
Other Financing Sources (Uses)
Transfers in 522,000 578,925 580,343 587,530
Transfers out (167,424) (57,671) (163,469) (165,643)
Bonds issued 2,910,000 760,000 630,000 385,000
Refunding bonds issued 10,000,000 6,865,000 955,000
-
Redemption of refunded bonds
- - - -
Bond premium 3,401 18,781
- -
Proceeds from the sale of capital assets 603,959 706,386 553,879 12,264
Total other financing sources (uses) 13,868,535 8,856,041 1,600,753 1,792,932
Net increase (decrease) in fund balance$ 8,781,074$ 8,115,296$ 130,015$ 1,201,349
Debt service as a percentage of
noncapital expenditures38.66%27.95%29.55%32.92%
136
Table 4
201020112012201320142015
$ 10,267,085$ 10,279,967$ 10,638,117$ 10,682,975$ 10,894,301$ 11,148,149
2,015,123 1,976,800 2,035,663 375,040 377,733 213,020
329,901 387,206 449,826 536,706 364,430 452,422
1,989,420 1,876,685 3,493,528 1,115,047 3,464,985 959,790
1,725,695 891,942 792,460 1,045,000 733,425 690,161
1,604,681 1,732,791 1,874,321 1,806,919 1,720,972 1,499,909
104,780 99,777 97,571 96,130 94,375 99,304
1,107,335 1,386,698 1,191,438 573,256 735,325 341,392
32,649 51,706 47,700 205,080 156,384 170,144
48,086 27,165 170,202 436,628 676,826 405,967
638,037 641,859 639,983 639,423 639,000 638,220
396,186 332,992 645,897 1,698,964 564,057 542,473
20,258,978 19,685,588 22,076,706 19,211,168 20,421,813 17,160,951
2,255,793 2,298,571 2,280,373 2,647,278 2,588,950 2,639,821
3,920,0733,965,541 4,092,073 4,301,698 4,537,264 4,521,129
3,204,444 3,788,636 5,415,924 4,251,454 4,145,404 2,747,550
2,433,495 1,926,220 2,001,6241,990,4572,139,552 2,277,576
109,034 109,911 94,328 123,595 106,587 91,940
650,977 966,687 1,537,611 408,210 665,325 181,551
24,953 30,631 63,371 75,517 81,183 56,720
1,324,881 985,399 723,017 2,763,351 2,816,375 941,213
5,779,000 4,100,000 1,842,000 1,689,000 2,336,719 1,961,719
2,030,267 1,855,538 1,768,748 1,262,302 900,504 470,687
29,939 10,430 225,378 5,509 7,895 5,009
101,153 1,044,581 110,650 946,942 - 167,955
21,864,009 21,082,145 20,155,097 20,465,313 20,325,758 16,062,870
(1,605,031) (1,396,557) 1,921,609 (1,254,145) 96,055 1,098,081
627,530 627,530 627,530 627,530 627,530 627,530
(89,191) (7,134) (4,242)(20,737) (58,249)
-
1,660,000 265,000 585,000 - 1,555,000 -
1,480,000 18,885,000 - --
-
(2,416,834) (17,907,898) (1,900,000) (16,455,000) -
-
31,688 133,164 - 44,278 -
-
43,217 514,819 16,625 76,184 922,408 854,057
1,336,410 1,407,349 2,332,287 (1,200,528) (13,326,521) 1,423,338
$ (268,621)$ 10,792$ 4,253,896$ (2,454,673)$ (13,230,466)$ 2,521,419
38.21%31.26%18.69%17.61%18.49%16.27%
137
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
20062,521,587,700$ 26,204,279$ 22,003,500$ 439,356$ 2,543,591,200$ 26,643,635$ 31.894%1.05%
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
20152,411,059,312 25,213,801 24,711,300 2,435,770,612 25,705,35037.460%1.06%
491,549
Source
: Anoka County Property Tax Division
138
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX RATES - PER $1,000 OF ASSESSED TAX CAPACITY VALUE Table 6
DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
Direct City
GeneralDebtLower
TaxesOperServiceRumOverlapping Governments
PayableLevyLevyWatershedTotalSchoolCountyOtherTotalTotal
200724.948%6.055%0.324%31.327%19.337%30.675%3.671%53.683%85.010%
200824.962%6.333%0.308%31.603%16.962%31.041%4.604%52.607%84.210%
200925.755%6.426%0.303%32.484%18.247%32.051%3.251%53.549%86.033%
201030.507%5.977%0.330%36.814%20.236%35.273%3.436%58.945%95.759%
201131.914%6.461%0.356%38.731%24.023%39.884%4.872%68.779%107.510%
201235.138%6.952%0.449%42.539%21.447%41.056%3.626%66.129%108.668%
201333.676%6.989%0.449%41.114%26.751%44.328%3.912%74.991%116.105%
201435.486%7.711%0.460%43.657%28.265%43.239%4.354%75.858%119.515%
201530.441%6.628%0.391%37.460%22.482%38.123%4.104%64.709%102.169%
201631.898%6.381%0.388%38.667%20.885%38.894%4.949%64.728%103.395%
Source
: Anoka County Property Tax Division
139
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONSTable 7
Last Ten Fiscal Years
Collected Within the Fiscal Year of Levy
TotalMarket ValueCollections InTotal Collections to Date
TaxTaxTotalPercentageSubsequentPercentageHomestead
YearLevyLevyCollectedof LevyYearsAmountof LevyCredit
20068,550,919$ 7,977,278$ 1,700$ *7,978,978$ 93.31%108,615$ 8,087,593$ 94.58%
20079,316,427 8,738,606 410,519 9,149,125 98.20%152,191 9,301,316 99.84%
200810,153,718 9,554,131 198,214 *9,752,345 96.05%182,692 9,935,037 97.85%
200910,593,520 9,992,240 54,629 *10,046,869 94.84%147,713 10,194,582 96.23%
201010,856,299 10,125,752 3,905 *10,129,657 93.31%171,005 10,300,662 94.88%
201110,856,299 10,119,681 853 *10,120,534 93.22%131,518 10,252,052 94.43%
201210,631,299 10,460,838 2,354 10,463,192 98.42%105,764 10,568,956 99.41%
201310,631,299 10,535,521 1,246 10,536,767 99.11%74,351 10,611,118 99.81%
201410,843,925 10,776,635 10,776,63599.38%54,570 99.88%10,831,205
-
201511,143,925 11,054,157 11,054,15799.19% 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.
140
CITY OF ANDOVER, MINNESOTA
PRINCIPAL TAXPAYERSTable 8
Current Year and Nine Years Ago
20152006
NetPercentage ofNetPercentage of
TaxTotal CityTaxTotal City
TaxpayersCapacityRankTax CapacityCapacityRankTax Capacity
Minnegasco, Inc.$211,24410.96%$138,0400.52%
5
Great River Energy194,03820.88%
-
Connexus Energy193,14030.88%222,1280.83%
1
Target Corporation160,04840.73%212,3120.80%
2
Presbyterian Homes of Andover140,84750.64%155,6800.58%
4
Andover Limited Partnership117,52860.53%158,5540.60%
3
Andover Station LLC97,18270.44%99,6240.37%
7
DST Properties LLC81,67880.37%
-
Fairbanks Properties LLC65,92690.30%
-
Columbia Park Properties59,878100.27%
-
116 LLC-128,3380.48%
6
United Power Association-84,7600.32%
8
Grey Oaks Inc.-73,6920.28%
9
Rademacher Family Ltd Partnership-64,4400.24%
10
Total$1,321,5096.00%$1,337,5685.02%
Net Tax Capacity$21,978,322$26,643,635
Source: Anoka County Property Tax Division
141
CITY OF ANDOVER, MINNESOTA
ESTIMATED MARKET VALUES AND NEW CONSTRUCTION Table 9
Last Ten Fiscal Years
Estimated Market ValuesNew Construction
Commercial / IndustrialResidential
Commercial
/
YeaIndustrial (1)ResidentiaTotaPermitsValuPermitsValu
rllee
2006191,931,800$ 2,433,776,200$ 2,625,708,000$ 8 1,791,896$25,236,120
$ 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
2015173,717,700 2,435,950,500 2,609,668,2002,513,609
16 7 419,631,775
Note: (1) Also includes agricultural, public utility, railroad operating property, and personal property.
142
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
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
154.13% 4,003155.33% 269,75480.75%
2015 334,054 5 14,868 5 18,871
Note
: (1) Only includes assessments certified to Anoka County.
143
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
200630,222 2,625,708,000$ 33,850,000$ (10,739,510)$ 23,110,490
$ 0.88%$ 7 64.69
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
201431,874 2,270,068,100 21,035,000 (942,607) 20,092,393
0.89% 630.37
201532,050 2,611,399,200 19,330,000 (1,191,519) 18,138,481
0.69% 565.94
Notes:
(1) Source: Metropolitan Council
(2) Only includes debt supported by tax levy.
144
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT Table 12
December 31, 2015
Gross General
ObligationPercentageNet Amount
Bonded DebtApplicableApplicable
Outstandingto City (2)to City
Direct:
City of Andover19,920,155$ 100.0000%19,920,155$
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$ 43,652,053
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.
145
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF LEGAL DEBT MARGIN
Last Ten Fiscal Years
2006200720082009
Estimated Taxable Market Value2,625,708,000$ 2,800,462,600$ 2,969,639,300$ 2,982,595,600$
Debt limitation:
Debt limit percent2%2%3%3%
Debt limit in dollars52,514,160 56,009,252 89,089,179 89,477,868
Debt applicable to limit:
Total bonded debt 59,665,000 70,240,000 67,050,000 65,175,000
Less: Nonapplicable debt
G.O. water revenue bonds (8,815,000) (15,040,000) (14,680,000) (15,330,000)
Special assessment bonds (3,560,000) (3,560,000) (3,015,000) (2,450,000)
Tax increment bonds (4,715,000) (4,010,000) (3,275,000) (2,515,000)
Permanent improvement
revolving bonds (6,660,000) (4,835,000) (3,755,000) (2,635,000)
State aid bonds (2,065,000) (1,915,000) (1,760,000) (2,555,000)
Less: Cash and investments in
related debt service funds (10,739,510) (17,822,418) (17,939,959) (17,973,588)
Total debt applicable to limitation23,110,490 23,057,582 22,625,041 21,716,412
Legal debt margin$ 29,403,670$ 32,951,670$ 66,464,138$ 67,761,456
Total debt applicable to the limit as
a percentage of debt limit44.01%41.17%25.40%24.27%
146
Table 13
201020112012201320142015
$ 2,469,945,0002,710,514,800$ 2,202,135,356$ 2,123,596,358$ 2,071,812,281$ 2,435,770,612$
3%3%3%3%3%3%
74,098,35081,315,444 66,064,061 63,707,891 62,154,368 73,073,118
55,361,00059,671,000 49,144,000 45,010,000 27,405,000 25,050,000
(14,400,000)(14,875,000) (7,420,000) (6,875,000) (6,310,000) (5,720,000)
-(600,000) - - - -
-(1,735,000) - - - -
(1,125,000)(1,480,000) (760,000) (385,000) - -
(740,000)(955,000) (520,000) (290,000) (60,000) -
(17,779,964)(17,768,743) (18,497,679) (17,415,812) (942,607) (1,191,519)
21,316,03622,257,257 21,946,321 20,044,188 20,092,393 18,138,481
$ 52,782,31459,058,187$ 44,117,740$ 43,663,703$ 42,061,975$ 54,934,637$
27.37%28.77%33.22%31.46%32.33%24.82%
147
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148
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
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
2015 2,593,303 1,373,362 58,249 1,278,190 590,000 231,978
1 .56
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
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
2015 1,449,851 1,045,347 404,504 974,822 835,000 379,906
1 .14
Special Assessment and Permanent Improvement Revolving Bonds
FiscalSpecial AssessmentDebt Service
YearRevenuePrincipalInterestCoverage
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
2015 126,628No outstanding debt
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.
149
CITY OF ANDOVER, MINNESOTA
OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
2006200720082009
City of Andover's Outstanding Debt
Governmental activities
Revenue bonds29,395,000$ 36,075,000$ 35,885,000$ 35,495,000$
Abatement bonds- - -
-
Special assessment bonds 3,560,000 3,560,000 3,015,000 2,450,000
Tax increment bonds 4,715,000 4,010,000 3,275,000 2,515,000
Certificates of indebtedness 580,000 1,280,000 1,525,000 1,420,000
Capital improvement bonds 3,875,000 3,525,000 3,155,000 2,775,000
Permanent improvement
revolving bonds 6,660,000 4,835,000 3,755,000 2,635,000
State aid bonds 2,065,000 1,915,000 1,760,000 2,555,000
Referendum bonds - - -
-
Promissory note payable - - -
-
Total governmental activities 50,850,000 55,200,000 52,370,000 49,845,000
Business-type activities
G.O. revenue bonds 8,815,000 15,040,000 14,680,000 15,330,000
Total outstanding debt$ 59,665,000$ 70,240,000$67,050,000$ 65,175,000
Total outstanding debt as a
percentage of personal income6.98%7.99%7.62%7.10%
Total outstanding debt per capita$ 1,969$ 2,321$ 2,161$ 2,082
150
Table 15
201020112012201320142015
$ 34,675,00035,090,000$ 17,375,000$ 16,925,000$ -$ -$
-- 17,315,000 16,995,000 16,675,000 15,840,000
-600,000 - - - -
-1,735,000 - - - -
561,000781,000 774,000 680,000 2,140,000 1,915,000
2,200,0002,495,000 3,455,000 1,470,000 970,000 470,000
1,480,000 1,125,000 760,000 385,000 - -
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 1,105,000
- - - 983,593 786,874 590,155
44,796,000 40,961,000 41,724,000 39,118,593 21,881,874 19,920,155
14,875,000 14,400,000 7,420,000 6,875,000 6,310,000 5,720,000
$ 59,671,000$ 55,361,000$ 49,144,000$ 45,993,593$ 28,191,874$ 25,640,155
6.65%6.17%5.28%4.79%2.89%2.54%
$ 1,950$ 1,795$ 1,579$ 1,451$ 884$ 800
151
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
200630,222 852,774,174$9,227,100,0854.0%
$ 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
201431,874 976,842,478 30,64710,477,106,008 4.3%
341,864
201532,050 1,008,741,700 342,500 10,779,845,000 31,474 3.6%
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
152
CITY OF ANDOVER, MINNESOTA
PRINCIPAL EMPLOYERSTable 17
Current Year and Nine Years Ago
20152006
PercentagePercentage
of Total Cityof Total City
TaxpayerEmployeesRankEmploymentEmployeesRankEmployment
31.8%33.9%
Anoka Hennepin I.S.D. No. 11760
(1)
1 6 22 1
Fairview Andover Clinic 30012.6%
2 -
Anoka County Sheriff's Office 25010.4%
3 -
Kottkes' Bus Service, Inc. 2259.4%10.9%
4 2 00 3
Wal-Mart 2108.8%
5 -
YMCA 1867.8%
6 -
Target 1707.1%9.9%
7 1 82 4
Anoka County Highway Department 1034.3%5.7%
8 1 05 6
Bunker Hills Regional Park/Activity Center 1004.2%13.3%
9 2 45 2
Andover County Market 853.6%
1 0 -
Festival Foods5.6%
- 1 02 7
Columbia Park Medical Group6.3%
- 1 15 5
Meadow Creek Christian School5.0%
- 9 2 8
Tanners Steakhouse & Bar4.5%
- 8 3 1 0
City of Andover4.9%
- 9 0 9
Total 2,389100.0%100.0%
1 ,836
Source: Minnesota Department of Employment and Economic Development
(1) Number of district employees that work in school buildings located within the City.
153
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154
CITY OF ANDOVER, MINNESOTA
FULL TIME EQUIVALENT EMPLOYEESTable 18
CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program2006200720082009201020112012201320142015
Governmental:
Administration 1 .30 1 .45 1 .15 1 .15 1 .15 0 .91 1 .15 1 .15 1 .05 1 .05
Human resources
0 .07 0 .02 0 .01 0 .02 0 .02 0 .02 0 .02 0 .02 0 .03 0 .03
City clerk
1 .84 1 .91 1 .43 1 .29 1 .34 1 .34 1 .34 1 .34 1 .84 1 .84
Elections
0 .10 0 .10 0 .08 0 .10 0 .10 0 .10 0 .10 0 .10 0 .10 0 .10
Financial administration
3 .95 2 .35 1 .97 1 .85 1 .85 1 .84 1 .85 1 .85 1 .91 1 .91
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 .75 4 .75 4 .25 3 .70 3 .70 3 .76 3 .70 3 .70 3 .90 3 .90
Engineering
4 .57 4 .78 4 .41 4 .28 4 .33 4 .16 4 .33 4 .33 4 .20 4 .20
Facility Management 0.22
- - - 0 .33 0 .20 0 .21 0 .07 0.22 0.22
EDA general
0 .70 0 .70 0 .85 0 .90 0 .85 0 .78 0 .85 0 .85 0 .35 0 .35
LRRWMO
0 .21 0 .21 0 .21 0 .20 0 .20 0 .24 0 .20 0 .20 0 .15 0 .15
Risk management
0 .18 0 .10 0 .10 0 .10 0 .10 0 .10 0 .10 0 .10 0 .10 0 .10
Public Safety:
Fire
3 .10 3 .10 3 .10 3 .10 3 .10 3 .10 3 .10 3 .10 3 .10 3 .10
Protective inspection
6 .03 6 .08 5 .78 3 .93 3 .93 3 .66 3 .93 3 .93 3 .93 3 .93
Emergency management
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
6 .12 6 .20 6 .00 5 .05 5 .10 5 .59 5 .46 4 .97 4 .88 5 .20
Snow and ice
3 .27 3 .49 3 .21 2 .45 2 .45 2 .57 2 .03 3 .44 3 .95 2 .65
Street signs 1.41
1 .35 1 .44 1 .41 1 .31 1 .41 1 .46 1 .43 1.34 1.30
Forestry
0 .10 - - - - - - - - -
ROW management/utility
0 .85 0 .60 0 .65 0 .50 0 .20 0 .16 0 .20 0 .20 0 .20 0 .20
Water
5 .57 4 .78 4 .84 4 .63 4 .63 4 .70 4 .74 4 .56 4 .52 4 .63
Sewer
2 .97 3 .18 3 .24 3 .38 3 .38 3 .23 3 .17 3 .49 3 .06 3 .38
Storm sewer
2 .01 1 .95 2 .20 2 .55 2 .55 2 .87 2 .54 2 .23 2 .25 2 .45
Central equipment
2 .92 2 .96 2 .96 2 .87 2 .90 2 .91 2 .91 2 .91 2 .81 2 .90
Park & Recreation:
Park and recreation
7 .33 7 .05 6 .85 6 .66 6 .71 6 .69 6 .77 7 .14 7 .33 8 .51
Community center
2 .12 2 .12 2 .23 2 .96 3 .11 3 .04 3 .25 3 .10 3 .10 3 .10
Recycling
0 .93 0 .88 0 .86 1 .23 1 .23 0 .96 1 .30 0 .77 0.76 1.23
63.30
6 1.16 5 8.75 5 5.50 5 5.50 5 5.36 5 5.50 5 6.00 5 6.00 5 7.50
Source:City Finance Department
Note: Employees are allocated to various departments based on the functions that they perform.
155
CITY OF ANDOVER, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Years
Function/Program20062007200820092010
General government:
Registered voters 17,500n/a 17,830n/a 1 8,713
Number of precinctsn/an/a
10 1 0 1 0
Public safety:
Police:
Number of calls for services
1 4,500 12,150 1 1,617 11,075 1 1,441
Number of traffic citations
1,850 1 ,710 2,475 2 ,848 1,926
Number of patrol hours
30,858 3 0,240 30,240 3 0,240 30,240
Fire:
Fire responses
4 60 366 3 26 305 3 23
Emergency medical responses
6 90 736 7 97 754 7 22
Protective inspections:
Inspections
8,117 5 ,456 5,020 3 ,716 2,860
Residential permits
1 53 91 4 9 42 7 1
Other permits
3,128 2 ,095 1,862 1 ,543 1,773
Public works:
Streets and highways:
Asphalt streets maintained (miles)
1 82 189 1 89 189 1 90
Gravel roads maintained (miles)
7 8 8 8 8
Cul-de-sacs and dead ends maintained
3 24 330 3 36 338 3 38
Parks and recreation:
Number of City parks
6 3 65 6 6 66 4 7
Total acreage mowed
2 73 297 2 97 293 2 93
Ballfields maintained
25 27 2 8 28 28
Number of playgrounds
3 6 3 7 3 7 37 3 8
Soccer fields maintained 19
1 9 16 19 1 9
Trail maintained (miles)
2 9 35 3 5 35 3 5
Community center bookings (hrs):
Fieldhouse
7,450 8 ,514 8,282 9 ,718 11,099
Ice arena
2,405 2 ,497 2,393 2 ,640 2,583
Water:
New connections
1 97 63 3 3 145 5 6
Total customers
5,854 5 ,917 5,950 6 ,095 6,151
Annual consumption
(thousands of gallons)
911,712 1,046,789 993,626 1,000,971 905,561
Sanitary Sewer:
New connections
1 86 120 2 3 183 7 5
Total customers
6,717 6 ,777 6,800 6 ,983 7,058
Storm Sewer:
Total customers
9,744 9 ,785 9,800 9 ,950 10,042
Storm sewer lines maintained (miles)
4 7 65 6 6 69 6 9
Sourc
e: Various City Departments
156
Table 19
20112012201320142015
n/a
n/a 1 8,366n/a 1 9,772
n/an/an/a
1 0 1 0
1 1,650 10,963 1 0,659 10,319 1 0,400
2 ,000 2,202 2 ,480 2 ,536 2,016
29,200 2 9,200 29,200 2 9,200 29,200
2 65 320 3 08 257 2 62
7 64 816 8 63 838 3 36
3,074 3 ,872 3,766 2 ,840 3,100
5 8 81 9 8 52 7 4
1,755 1 ,714 1,716 1 ,898 2,744
1 91 191 1 92 195 2 00
7 7 7 7 6
3 38 338 3 28 332 3 45
5 0 4 9 50 5 1 52
302 3 02 318 3 32 332
28 2 8 28 2 8 29
38 3 8 39 3 8 38
20
21 1 7 16 1 6
3 5 33 3 5 33 1 6
11,426
11,831 1 2,182 11,919
11,461
2,575 2 ,805 2,543 2 ,593 2,643
7 8 38 1 08 43 5 7
6,229 6 ,267 6,375 6 ,418 6,475
854,672 1,050,378 947,201 8 27,574 885,886
7 7 38 1 08 43 5 7
7,135 7 ,173 7,281 7 ,324 7,381
10,126 1 0,164 10,583 1 0,626 10,700
6 9 69 7 3 75 7 6
157
CITY OF ANDOVER, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAMTable 20
Last Ten Years
Function/Program2006200720082009201020112012201320142015
Public Safety:
Fire:
Stations 3 3 3 3 3 3 3 3 3 3
Fire vehicles
18 20 20 21 22 21 21 20 21 19
Protective inspections:
Vehicles
3 3 3 3 3 4 4 4 4 4
Public Works:
Streets and Highways:
Streets (miles)
189 189 189 189 190 191 191 192 195 200
Street lights
8,101 1,204 1,212 1,215 1,218 1,225 1,231 1,231 1,240 1,248
Traffic signals
20 22 23 23 24 24 24 24 24 25
Parks and Recreation:
Parks
63 65 66 66 47 50 49 50 51 52
Ball fields
28 27 28 28 28 28 28 28 28 29
Soccer fields
16 16 19 19 19 21 17 20 16 16
Playgrounds 36
37 37 37 38 38 38 39 38 38
Trails (miles)
29 35 35 35 35 35 33 35 33 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 2 2 2 2 2 2
Water main (miles)
84 108 108 108 108 109 111 112 115 116
Connections
5,760 5,917 5,950 6,095 6,151 6,229 6,267 6,375 6,418 6,475
Sanitary sewer:
Sewer main (miles)
87 91 91 91 93 93 93 94 95 96
Connections
6,560 6,777 6,800 6,983 7,058 7,135 7,173 7,281 7,324 7,381
Number of lift stations 9
9 9 9 9 9 9 9 9 9
Storm sewer:
Storm sewer lines (miles)
47 65 66 69 69 69 69 73 75 76
158
IV. OTHER FINANCIAL INFORMATION
159
CITY OF ANDOVER, MINNESOTA
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2015
Authorized
IssueMaturitInterestand
y
DateDateRateIssue
GOVERNMENTAL ACTIVITIES:
Abatement Bonds:
2012C G.O. Abatement Bonds12/27/20122/1/20311.00-3.00%17,315,000$
Certificates of Indebtedness:
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 indebtedness2,140,000
Capital Improvement Bonds:
2012B G.O. Capital Improvement Refunding Bonds 3/22/20122/1/20162.00%1,570,000
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 indebtedness23,640,000
Promissory note payable12/17/201311/15/2018n/a983,593
Compensated absences payable
-
Total governmental activities indebtedness24,623,593
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$32,218,593
160
Exhibit 1
Principal Payments
PriorCurrentOutstanding2016 Payment
YearsYea12/31/15PrincipalInterestTotal
r
$ 640,000$ 835,000$15,840,000$845,000$371,506$ 1,216,506
585,00050,00011,200 61,200
- -
225,000 1,330,000260,00023,350 283,350
-
225,000 1,915,000310,00034,550 344,550
-
600,000 500,000 470,000470,0004,700 474,700
895,000 60,000
- - - -
410,000 145,000 1,105,000145,00028,942 173,942
2,545,000 1,765,000 19,330,0001,770,000439,698 2,209,698
196,719 196,719 590,155196,719 196,719
-
651,195
- - - - -
2,741,719 1,961,719 20,571,3501,966,719439,698 2,406,417
990,000 525,000 5,055,000550,000194,545 744,545
295,000 65,000 665,00065,00023,555 88,555
1,285,000 590,000 5,720,000615,000218,100 833,100
160,477
- - - - -
1,285,000 590,000 5,880,477615,000218,100 833,100
$ 4,026,719$ 2,551,719$26,451,827$2,581,719$657,798$ 3,239,517
161
CITY OF ANDOVER, MINNESOT
A
SCHEDULE OF TAX CAPACITY RATES AND LEVIESExhibit 2
Taxes Payable
20162015
Tax capacity value$26,870,365$25,705,350
s
Captured tax increment value(248,400) (210,936)
Fiscal disparities - contribution(1,055,278) (998,390)
Local taxable value25,566,68724,496,024
Fiscal disparities - distribution4,264,789 4,257,801
Adjusted tax capacit$29,831,476$28,753,825
y
20162015
Tax CapacitCertifieTax Capacit
Certifiedydy
LevRateLevRate
yy
General Revenue Levy:
General Fund8,037,528$ 7,630,892$
Capital Equipment/Projects250,000 250,000
Parks Projects15,000 61,500
Road and Bridge1,089,146 967,197
Pedestrian Trail Maintenance61,838 58,271
Total General Revenue Lev 31.898%8,967,8609,453,512 30.441%
y
Debt Service Levy:
2012A G.O. Equipment Certificate142,885 140,000
2012B G.O. Capital Improv Refund Bonds498,435 540,120
2012C G.O. Abatement Bonds977,332 975,652
2014A G.O. Equipment Certificate295,470 296,055
Total Debt Service Lev 6.381%1,951,8271,914,122 6.628%
y
0.388%40,00040,000 0.391%
Lower Rum River Watershed
Total11,407,634 38.667%10,959,687 37.460%
Voter-Approved Open Space Referendum - MV186,291 0.00699%184,238 0.00718%
$ 11,143,92511,593,925$
162
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIES Exhibit 3
GENERAL OBLIGATION BONDS
December 31, 2015
CapitalOpen Space
Certificates ofCertificates ofImprovementAbatementReferendumTotal
TaxesIndebtednessIndebtednessRefunding BondsBondsBondsDeferred Tax
Payable2012A2014A2012B2012C2010ALevies
2016$ 142,885$ 295,470$ 498,435$ 977,332$ 186,291$ 2,100,413
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
$ 142,885$ 884,940$ 498,435$ 17,685,192$ 927,334$ 20,138,786
163
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERSExhibit 4
December 31, 2015
Transfe
Transferr
IOu
nt
General Fund
Water E150,250
Fn
$ $ -General Fund Admin Allocatio
Sewer E46,680
Fn
-General Fund Admin Allocatio
Trail and Transportation CP200,000Fund trail proect
Fjs
-
Total General Fund196,930200,000
Special Revenue Funds (SRF)
Communit Center SR
yF
2012C GO Abatement Bonds DS300,000Debt Service Allocatio
Fn
-
Debt Service Funds (DSF)
2009A GO State Aid Road Refundin Bonds DS
gF
Road and Bride CP48,902Close Debt Service Fun
gFd
-
2012C GO Abatement Bonds DS
F
Communit Center SR300,000
yFn
-Debt Service Allocatio
Total Debt Service Funds300,00048,902
Capital Proects Funds (CPF
j)
Water Trunk CP
F
Water E58,249Debt Service Allocatio
Fn
-
Sewer Trunk CP
F
Sewer E400,000
Fe
-Replacement Reserv
Road and Bride CP
gF
2009A GO State Aid Road Refundin Bonds DS48,902
gFd
-Close Debt Service Fun
Trail and Transportation CP
F
General Fun200,000ect
djs
-Fund trail pro
Total Capital Proects Funds648,90258,249
j
Enterprise Funds (EF)
Water E
F
Water Trunk CP58,249
Fn
-Debt Service Allocatio
General Fun150,250General Fund Admin Allocatio
dn
-
150,25058,249
Sewer E
F
General Fun46,680General Fund Admin Allocatio
dn
-
Sewer Trunk CP400,000Replacement Reserv
Fe
-
446,680
-
Total Enterprise Funds58,249596,930
Total All Funds$1,204,081$1,204,081
164