HomeMy WebLinkAbout2016 CAFR
COMPREHENSIVE
ANNUAL
FINANCIAL
REPORT
FOR THE YEAR ENDED DECEMBER 31, 2016
MINNESOTA
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I. INTRODUCTORY SECTION
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1685 CROSSTOWN BOULEVARD N.W. ANDOVER, MINNESOTA 55304 (763) 755-5100
FAX (763) 755-8923 WWW.ANDOVERMN.GOV
May16, 2017
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
The Introductionincludes a list of the City's principal officials as of December 31, 2016, the table of contents, the public officials,
organizational chart, and this Letter of Transmittal. The Financial Sectionincludes: (1) independent auditor's report; (2)
financial statements; (4) notes to the financial statements;
(5) required supplementary information; (6) the combining statements, individual fund statements; and, (7) the supplemental
information. The Statistical Sectionincludes 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 sta
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
elief
Association does not meet the established criteria for inclusion in the reporting entity, and accordingly isexcluded from this report.
GENERAL INFORMATION.
Senator Grow spoke at a political campaignin 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 Lakewas 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
ame
Andover had historical interest. The historical interest, we believe, came from the Andover train station.
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Anoka County Union Newspaper -
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CITY OF ANDOVER, MINNESOTA
ORGANIZATION
December 31, 2016
OfficeNameTerm
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 DirectorJoe JanishAppointed
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
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CITY OF ANDOVER
Organizational Chart
City Council
City AttorneyCity AdministratorAdvisory Boards
AdministrativeBuilding InspectionsEngineeringFinanceFire ProtectionPlanningPublic WorksPolice Protection
Services
AdministrationCivil DefenseEngineeringFinancialFire ProtectionPlanning & ZoningStreets/Highways
ServicesAdministrationServices
Human ResourcesProtectiveRight-of-WayAssessingSnow & Ice
InspectionsManagementRemoval
NewsletterDrainage &FacilitiesStorm Sewer
MappingManagement
EconomicLower Rum RiverUnallocatedStreet Lighting
DevelopmentWatershed Mgmt
AuthorityOrganization
CommunityForestryCapital EquipmentSignage
CenterReserve
ElectionsTrail &Debt Service FundsTraffic Signals
Transportation
Animal ControlConstructionUnfinanced ProjectsParks & Recreation
Seal Coating
InformationWater TrunkTax IncrementRecycling
SystemsProjects
Storm SewerBuilding FundWater
City Clerk
Sewer TrunkPermanentSewer
Improvement
Revolving
Road & BridgeG.O. CapitalCentral Equipment
Notes
Park DedicationRisk
ProjectsManagement
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II. FINANCIAL SECTION
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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, 2016, 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.
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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, 2016, and the respective changes in financial
position, and, where applicable, cash flows thereof for the year then ended in accordance
with accounting principles generally accepted in the United States of America.
Report on Summarized Comparative Information
We have previously audited the City of Andover, Minnesota’s 2015 financial statements, and
we expressed an unmodified audit opinion on the respective financial statements of the
governmental activities, the business-type activities, each major fund, and the aggregate
remaining fund information in our report dated April 29, 2016. In our opinion, the
summarized comparative information presented herein as of and for the year ended
December 31, 2015 is consistent, in all material respects, with the audited financial
statements from which it has been derived.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, budgetary comparison information, OPEB Schedule
of Funding Progress, pension information, and Notes to Required Supplementary Information
on pages 17 through 26 and 84 through 93 be presented to supplement the basic financial
statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board, who considers it to be an
essential part of financial reporting for placing the basic financial statements in an
appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of
management about the methods of preparing the information and comparing the information
for consistency with management’s responses to our inquiries, the basic financial statements,
and other knowledge we obtained during our audit of the basic financial statements. We do
not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
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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 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 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 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
May 4, 2017, on our consideration of the City of Andover, Minnesota’s internal control over
financial reporting and on our tests of its compliance with certain provisions of laws,
regulations, contracts, and grant agreements and other matters. The purpose of that report is
to describe the scope of our testing of internal control over financial reporting and
compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the City of
Andover, Minnesota’s internal control over financial reporting and compliance.
REDPATH AND COMPANY, LTD.
St. Paul, Minnesota
May 4, 2017
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BASIC FINANCIAL STATEMENTS
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Governmental activities
business-type activities
Direct expenses
Program revenues
general revenues
economic resources measurement focusaccrual basis
of accounting
current financial resources measurement focusmodified
accrual basis of accounting
available
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General Fund
Water Trunk Capital Projects Fund (CPF)
Sewer Trunk CPF
Road and Bridge CPF
Tax Increment Projects CPF
Permanent Improvement Revolving CPF
Water Fund
Sewer Fund
Storm Sewer Fund
Internal Service Funds (ISF)
Agency Funds
program revenues
general revenues
operating nonoperating
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Accounting and Financial Reporting for Intangible Assets
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Nonspendable
Restricted
Committed
Assigned
Unassigned
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deferred outflows of resources
not
deferred inflows of resources
not
Pensions.
fund balance – total governmental funds net
position – governmental activities
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net changes in fund balances – total governmental fundschanges in net position of governmental activities
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abatement bonds
certificates of indebtedness
capital improvement bonds
referendum bonds
promissory note payable
compensated absences
G.O. revenue bonds
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2012C G.O. Abatement Bonds
2012A G.O. Equipment Certificates.
2014A G.O. Equipment Certificates.
2016A G.O. Equipment Certificates.
2010A G.O. Open Space Referendum Bonds.
2007B G.O. Water Revenue Refunding Bonds.
2009A G.O. Water Revenue Bonds.
2016B G.O. Water Revenue Refunding Bonds.
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Minnesota Statutes
Minnesota Statutes
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Accounting
and Financial Reporting by Employers for Post Employment Benefits Other than Pensions.
plan
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Accounting 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
Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions
Blending Requirements for Certain Component Units.
Irrevocable Split-Interest Agreements.
Pension Issues – an amendment of GASB Statement No. 67, No. 68 and No. 73.
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Certain Asset Retirement Obligations.
Fiduciary Activities.
Omnibus 2017.
Accounting and Financial Reporting for Pensions
– an Amendment of GASB Statement No. 27.
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REQUIRED SUPPLEMENTARY INFORMATION
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COMBINING AND INDIVIDUAL FUND STATEMENTSAND SCHEDULES
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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.
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NONMAJOR SPECIAL REVENUE FUNDS
The City of Andover had the following Special Revenue Funds during the year:
EDA General - This fund was established to account for activities designed to promote quality economic
development within the community.
Community Center - This fund is used to account for the operations of the Andover YMCA/Community Center,
operations of the YMCA.
Drainage and Mapping - This fund accounts for resources necessary to maintain existing maps and developing new
maps and mapping systems for the City.
LRRWMO - iver 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.
Charitable Gambling - This fund accounts for the 10% of net profits received from gambling activities by local non-
profit organizations. According to state statute, all expenditures from this fund must be for public services and
police, fire and other emergency or public safety-related services, equipment, and training, excluding pension
obligations.
Construction Seal Coating - This fund accounts for the contributions associated with land development to be used for
the respective developments first application of crack seal and seal coat.
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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.
Park Dedication - This fund was established to account for contributions associated with land development to be
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
Capital Equipment Reserve - This fund is used to account for the capital equipment/projects levy and the various
capital expenditures it will be used for.
Equipment Certificates 2014A & 2016A - These funds were 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.
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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.
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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.
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Fund Balance Reporting
and Governmental Fund Type Definitions.
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IV.OTHER FINANCIAL INFORMATION
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