HomeMy WebLinkAbout2020 CAFR1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304 . (763) 755-5100
FAX (763) 755-8923 • WWW.ANDOVERMN.GOV
Comprehensive Annual Financial Report
of the
City of Andover, Minnesota
For the Year Ended
December 31, 2020
Prepared By: Finance Department
City of Andover
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
I. INTRODUCTORY SECTION
Letter of Transmittal 2
Organization 10
Organizational Chart 11
Certificate of Achievement 12
II. FINANCIAL SECTION
Independent Auditor's Report 14
Management's Discussion and Analysis 17
Basic Financial Statements:
Government -Wide Financial Statements:
Statement of Net Position Statement 1 29
Statement of Activities Statement 2 30
Fund Financial Statements:
Balance Sheet - Governmental Funds
Statement 3
32
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds
Statement 4
34
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
Statement 5
37
Statement of Net Position - Proprietary Funds
Statement 6
38
Statement of Revenues, Expenses and Changes in Net Position -
Proprietary Funds
Statement 7
40
Statement of Cash Flows - Proprietary Funds
Statement 8
42
Notes to Financial Statements
44
Required Supplementary Information:
Budgetary Comparison Schedule - General Fund
Statement 9
78
Schedule of Changes in the Total OPEB Liability and Related Ratios
Statement 10
80
Schedule of Proportionate Share of Net Pension Liability - General Employees Retirement Fund
Statement 11
81
Schedule of Pension Contributions - General Employees Retirement Fund
Statement 12
82
Schedule of Proportionate Share of Net Pension Liability - Public Employees Police and Fire Fund
Statement 13
83
Schedule of Pension Contributions - Public Employees Police and Fire Fund
Statement 14
84
Notes to Required Supplementary Information:
Budgets
85
Modified Approach for City Streets and Trails Infrastructure Capital Assets
85
OPEB Information
86
Pension Information
86
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
Combining and Individual Fund Statements and Schedules:
Nonmajor Governmental Funds:
Combining Balance Sheet - Nonmajor Governmental Funds Statement 15 91
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Nonmajor Governmental Funds Statement 16 92
Nonmajor Special Revenue Funds:
Subcombining Balance Sheet - Nonmajor Special Revenue Funds Statement 17 94
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue Funds Statement 18 96
Nonmajor Debt Service Funds:
Subcombining Balance Sheet - Nonmajor Debt Service Funds Statement 19 100
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Debt Service Funds Statement 20 102
Nonmajor Capital Projects Funds:
Subcombining Balance Sheet - Nonmajor Capital Project Funds Statement 21 106
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Capital Project Funds Statement 22 108
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual:
EDA General
Statement 23
110
Community Center
Statement 24
1 1 1
Drainage and Mapping
Statement 25
112
LRRWMO
Statement 26
113
Forestry
Statement 27
114
Right -of -Way Management/Utility
Statement 28
115
Charitable Gambling
Statement 29
116
Construction Seal Coating
Statement 30
117
CARES Grant
Statement 31
118
Internal Service Funds:
Combining Statement of Net Position - Internal Service Funds
Statement 32
120
Combining Statement of Revenues, Expenses and Changes in Net Position -
Internal Service Funds
Statement 33
121
Combining Statement of Cash Flows - Internal Service Funds
Statement 34
122
III. STATISTICAL SECTION
Net Position by Component - Last Ten Fiscal Years
Table 1
124
Changes in Net Position - Last Ten Fiscal Years
Table 2
126
Fund Balances - Governmental Funds - Last Ten Fiscal Years
Table 3
130
Changes in Fund Balances - Governmental Funds - Last Ten Fiscal Years
Table 4
132
Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years
Table 5
134
CITY OF ANDOVER, MINNESOTA
TABLE OF CONTENTS
Page
Reference
No.
Property Tax Rates - Per $1,000 of Assessed Tax Capacity Value - Direct and Overlapping
Governments - Last Ten Fiscal Years
Table 6
135
Property Tax Levies and Collections - Last Ten Fiscal Years
Table 7
136
Principal Taxpayers - Current Year and Nine Years Ago
Table 8
137
Estimated Market Values and New Construction - Last Ten Fiscal Years
Table 9
138
Special Assessment Levies and Collections - Last Ten Fiscal Years
Table 10
139
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita -
Last Ten Fiscal Years
Table 11
140
Computation of Direct and Overlapping Debt
Table 12
141
Computation of Legal Debt Margin - Last Ten Fiscal Years
Table 13
142
Pledged -Revenue Coverage - Last Ten Fiscal Years
Table 14
145
Outstanding Debt by Type - Last Ten Fiscal Years
Table 15
146
Demographic and Economic Statitistics - Last Ten Years
Table 16
148
Principal Employers - Current Year and Nine Years Ago
Table 17
149
Full Time Equivalent Employees - City Government Employees by Function/Program -
Last Ten Fiscal Years
Table 18
151
Operating Indicators by Function/Program - Last Ten Years
Table 19
152
Capital Asset Statistics by Function/Program - Last Ten Years
Table 20
154
IV. OTHER INFORMATION
Combined Schedule of Indebtedness Exhibit 1 156
Schedule of Tax Capacity Rates and Levies Exhibit 2 158
Schedule of Deferred Tax Levies - General Obligation Bonds Exhibit 3 159
Schedule of Fund Transfers Exhibit 4 160
I. INTRODUCTORY SECTION
1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304 e (763) 755-5100
FAX (763) 755-8923 • WWW.ANDOVERMN.GOV
June 1, 2021
To the Honorable Mayor and City Council
City of Andover
1695 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:
1. Introductory
Il. Financial
III. Statistical
The Introduction includes a list of the City's principal officials as of December 31, 2020, the table of contents, the public officials,
organizational chart, and this Letter of Transmittal. The Financial Section includes: (1) independent auditor's report; (2)
management's discussion and analysis; (3) government wide and fund financial statements; (4) notes to the financial statements;
(5) required supplementary information; (6) the combining statements, individual fund statements; and (7) the supplemental
information. The Statistical Section includes tables and reports of various economic, social, financial, and fiscal data designed to
reflect trends and ratios.
Generally Accepted Accounting Principles (GAAP) requires that management provide a narrative introduction, overview, and
analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter
of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Andover's MD&A
can be found immediately following the report of the independent auditors.
REPORTING ENTITY. All City funds, departments, commissions, and other organizations for which the City of Andover is
financially accountable are presented within the Comprehensive Annual Financial Report. The Andover Firefighters' Relief
Association does not meet the established criteria for inclusion in the reporting entity, and accordingly is excluded from this report.
GENERAL INFORMATION. The city we know today as Andover was first organized in 1857 under the name "Round Lake
Township." However, in 1860 the name was changed to "Grow Township" in honor of Senator Galusha A. Grow of Pennsylvania.
Senator Grow spoke at a political campaign in Anoka that year, and the town name was changed to reflect Senator Grow because
of his strong advocacy of the Union cause. At that time, the population was 330 and included the geographical area we know today
as Ham Lake. In fact, the area of Ham Lake was considered a part of Grow Township until 1871.
In 1972, the Grow Township Board of Supervisors recognized that the town was growing at a very rapid rate. They felt a village
form of government would provide better services to the community. Board supervisors then voted in favor of proceeding with
the incorporation process. The board voted to submit a new name for the village. "Andover Village" was chosen because the name
Andover bad historical interest. The historical interest, we believe, came from the Andover train station.
To the Honorable Mayor and City Council
City of Andover, Minnesota
You may have heard the popular "train myth" about how Andover received its name. The myth states that a train tipped over in a
swamp, and an eyewitness, relaying the incident, said it "went over and over," thereby naming the city "Andover." However,
research reveals that the name Andover first appeared in an article dated March 14, 1899 in the Anoka County Union Newspaper -
before train tracks were ever built in the city.
The article stated that the Eastern Minnesota line of the Great Northern Railway was in the process of constructing railroad tracks
from the Coon Creek Cut-off to the North. The railway announced that new railroad stations with mathematical precision were to
be located five miles apart from each other. The new stations (from Coon Creek to the North, along the new railroad line) were to
be named Andover, Cedar, Bethel, Isanti, Cambridge, Stanchfield, Braham, Grasston, Cornell, and Brook Park. On July 4, 1899,
the first train passed through the Andover station. Where the railway came up with the name Andover remains unknown.
Andover Village was established in 1972 and then became the City of Andover, a city of the fourth class, in 1974. Today the City
of Andover's population exceeds 20,000, classifying it as a second-class city.
The City of Andover as it exists today consists of 23,040 acres. Andover has a population estimated at 33,000. 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 council
Financial administration
Information systems
Newsletter
Elections
Facility management
City clerk
Assessing
Engineering
Administration
Legal
Risk management
Human resources
Planning and zoning
Public Safety:
Police
Protective inspection
Animal control
Fire protection
Civil defense
Public Works:
Streets and highways Street signs Traffic signals
Snow and ice removal Central equipment maintenance Water maintenance
Street lighting
Sanitation:
Storm sewers Sanitary sewer maintenance
Parks and Recreation
Recycling
GOVERNMENT STRUCTURE. Andover is a statutory city with the City Council appointing a City Administrator. The City
Administrator has operating responsibilities for all City functions. A list of public officials and organizational chart can be found
on page 10 and 11, respectively.
ECONOMIC CONDITION AND OUTLOOK
Moderate population growth is expected to continue in 2021 and 2022, with an estimated population of 33,482 by 2021. The rate
of residential growth as compared to the growth in the 1990's and 2000's has significantly declined as the availability of
residentially zoned property decreased. The City has experienced a significant amount of commercial growth from 2000 through
current 2020. Continual commercial growth is anticipated over the next couple years, beyond that growth will slow as the amount
of undeveloped commercially zoned property also declines.
The City's General Fund has two major categories of revenue, which accounted for 83% of the total in 2020. They are general
property taxes at 74.4% and charges for services at 8.6%. 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 (EGA), market value
homestead credit (MVHC), highway maintenance aid, fire relief aid and police aid; and county grants, such as recycling and
community development.
To the Honorable Mayor and City Council
City of Andover, Minnesota
During the past several years, the State of Minnesota has made numerous changes to laws pertaining to the distribution of LGA,
Homestead and Agricultural Credit Aid (HACA) and MVHC resulting in significant reductions in intergovernmental revenue.
The City has been able to make up this loss in aid through operational efficiencies and an increased tax levy, the most substantial
increase in the local tax rate took place in 2002. The tax laws that resulted in the 2002 change also greatly reduced school district
property tax levies, resulting in no net tax increase for most residential property owners. Sweeping changes approved in 2003
resulted in the loss of approximately $590,000 in aid to Andover, that loss in aid was originally intended to be for two years (2003
& 2004) but that loss was extended to include years 2005 and 2006. The state allowed cities the ability to levy up to 60% of the
lost 2003 aid in 2004. Again, in 2008 through 2012, the State of Minnesota significantly reduced MVHC to help deal with the
state budget deficit. In 2013, the State eliminated MVHC and instituted the new market value exclusion program.
In 2014, LGA 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. In 2016, the
City received $2,706 in LGA. In 2017, 2018, 2019 and 2020, it 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:
Revenues Change
2011
$ 387,206
n/a
2012
449,826
$ 62,620
2013
536,706
86,880
2014
364,430
(172,276)
2015
452,422
87,992
2016
625,907
173,485
2017
546,378
(79,529)
2018
562,525
16,147
2019
855,831
293,306
2020
892,279
36,448
Revenue from residential building continued to modestly increase from 2011 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. From
2011 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. In 2016, there was an increase in both residential and commercial construction. In 20 t 7,
there was a decrease in single-family building pen -nits issued going from I I I permits in 2016 to 94 in 2017. The decline in single-
family building permits continued in 2018 to a total of 60, but commercial permit valuations exceeded 2017 by over $10,000,000
thus the increase in 2018. The increase in 2019 is due to single-family building permits reaching 116, nearly double that of 2018.
The growth continued in 2020 with single-family building permits topping out at 139, 23 permits greater than 2019.
The City's General Fund also receives a considerable amount of revenue from charges for services. The past ten years are shown
below:
To the Honorable Mayor and City Council
City of Andover, Minnesota
Revenues Change
2011
$ 866,584
n/a
2012
973,605
$ 107,021
2013
1,122,461
148,856
2014
998,510
(123,951)
2015
804,228
(194,282)
2016
912,219
107,991
2017
843,023
(69,196)
2018
888,947
45,924
2019
1,133,161
244,214
2020
1,070,899
(62,262)
The City analyzes user fees every year as part of the budget process and adjusts where appropriate. From 2011 to 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. The increase in 2016 pertains to plan check fees associated with the increase in construction activity and engineering fees
charged to roadway projects. The slight decline in 2017 relates to the decrease in housing permits issued as compared to 2016. The
increase in 2018 pertains to plan check fees associated with the commercial construction activity taking place. The increase in 2019
is due to single-family building permits reaching 116, nearly double of 2018. There was a lot of commercial activity as well with
the school district and city starting expansion projects. Residential growth continued in 2020 but the lack of any commercial
activity results in a decrease compared to 2019.
In 2020, the City issued 139 new single-family building permits with a total valuation of $45,464,139 compared to 116 new single-
family building permits with a total valuation of $37,258,817 the prior year. The past ten years are shown below:
New Residential
New Commercial / Industrial
Permits
Valuation
Permits
Valuation
2011
58
$ 11,803,000
24
$ 11,461,453
2012
81
15,243,007
25
5,042,964
2013
98
21,027,891
15
9,249,466
2014
52
14,816,971
14
4,285,281
2015
74
21,558,010
16
2,513,609
2016
ill
28,893,036
7
14,009,200
2017
94
27,947,716
-
-
2018
60
19,703,856
2
2,860,000
2019
116
37,258,817
1
3,381,400
2020
139
45,464,139
-
-
Residential Development
New residential Final Plat approval included 90 urban lots within the Catcher's Creek West, Catcher's Creek East, Shadowbrook
North, and Villas at Crosstown Woods 2°a Addition. Also 46 rural lots were approved in a development known as the Meadows
at Petersen Farms. The City currently has a supply of 83 urban lots and 60 rural lots (which includes the lots above).
Commercial Industrial Development
New institutional/commercial/industrial businesses moved to Andover in 2020. These business' included Margie's Kitchen &
Cocktails, Metta Coffee Company LLC, Thrivent Financial, and Tuffs Karate.
Andover High School moved forward with their phase 2 additions and remodeling. Phase 2 included an additional gymnasium, and
fitness spaces. Legacy Christian Academy completed their expansion project originally started during 2019. The expansion
included a three-story classroom addition (approximately 33,000 sq. ft.) between the existing buildings to replace temporary
classrooms.
The City of Andover completed a new Public Works Vehicle Maintenance Facility with a wash bay and an 18,000 square foot
vehicle and equipment storage building. The City of Andover Community Center expansion neared completion. The new sports
complex included an additional sheet of ice convertible to turf, team rooms, dryland training space, meeting space, restrooms, skate
rental/pro shop and a walking/jogging track. The overall expansion project also included an additional field house court, oversized
gathering area (crash space), multipurpose rooms for teens and seniors, office space and community meeting rooms. Several other
improvements occurred throughout the facility which included repairing concrete and installing new rubberized sports court
To the Honorable Mayor and City Council
City of Andover, Minnesota
flooring to field house courts 1,2 and 3, upgrading the existing ice arena's refrigeration system and transforming existing
Community Meeting Rooms into a Senior/Multipurpose space. The Andover YMCA completed their expansion with the addition
of a new gymnasium with a wood floor, new Kid's Stuff space both indoor and outdoor, more upper -level fitness floor space and
existing lobby area improvements.
EMPLOYMENT
The City of Andover's largest employers are government entities. The Anoka -Hennepin School District has a significant presence
in the community and Anoka County's Parks and Highway Departments and Sheriff s Office headquarters are in Andover. The
City of Andover is best classified as a bedroom community since most 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 soon.
Major employers in Andover are as follows:
Finn
Anoka -Hennepin ISD No 11
Wal-Mart
Fairview - Andover Clinic
Kottkes' Bus Service, Inc.
YMCA
TE Connectivity
Target
Anoka County Sheriffs Office
GAF Materials Corp
Anoka County Highway Department
MAJOR INITIATIVES
Number of
Type of Business / Product
Employees
Elementary and secondary education
662
Retail
335
Healthcare
300
Bus transportation
225
Youth organization - fitness center
220
Connector and sensor manufacturing
201
Retail
200
County government and services
171
Roofing materials -manufacturing
150
County government and services
120
FOR THE YEAR. The City has many accomplishments to report for 2020. The following list is a summary of some of the major
initiatives completed throughout the year.
1) In 2020, the City again saw new residential development which included approval of 90 urban lots within the Catcher's
Creek West, Catcher's Creek East, Shadowbrook North, and Villas at Crosstown Woods 2nd Addition. Also 46 rural
lots were approved in a development known as the Meadows at Petersen Farms. The City currently has a supply of
83 urban lots and 60 rural lots (which includes the lots above).
2) In 2020, the City issued 139 new single-family building permits with a total valuation of $45,464,138 compared to
116 new single-family building permits with a total valuation of $37,258,817 for the preceding year.
3) In 2020, the City saw commercial, industrial and institutional construction throughout the community totaling close to
$11.5 million in valuation. Many businesses came to Andover that did extensive tenant finishes, upgrades or remodels
in existing multi -tenant buildings, including as follows: Cherrywood Advanced Living, Andover Animal Hospital,
Hanson Commons, Casey's General Store, Crooked Lake Elementary, CVS Pharmacy, Hanson Builders, Verizon
Wireless, Integra Dental, Margie's Kitchen & Cocktails, and the Andover YMCA.
4) In 2020, Legacy Christian Academy, a K-12 private school, completed their school expansion project. The expansion
includes a three-story classroom addition (approximately 33,000 sq. ft.) between the existing buildings to replace
temporary classrooms.
5) Andover High School is receiving close to $30 million in additions totaling 67,000 square feet and other improvements
adding another 5,700 square feet of space in the school. Phase 1 of the additions and remodeling started in 2018 and
was completed in 2019. Part of the project is the removal of 12 portable classrooms. The school was originally
designed for 1,400 students, but today 1,700 students attend the school. Phase 2 construction taking place in 2020,
when complete in 2021will bring the school's capacity to 2,000 students.
6) The City completed the master planning concept layout of the City Campus site in 2016 to prepare for the facility
needs for the ultimate build out of the City. The master planning concept layout provides for the Public Works, Public
Safety, General Government and Recreational long-term needs of the community. In 2017, the City hired two
To the Honorable Mayor and City Council
City of Andover, Minnesota
architectural firms to start the design for a Public Works Maintenance Facility, cold storage building and to explore a
potential expansion of the Andover YMCA/Community Center. Both projects completed design in 2018. The Public
Works component (Maintenance Facility, Fleet Storage Building and Vehicle Wash Bay) was out for bid in late 2018
and a bid awarded for construction in early 2019 with a $10.5 million budget, construction was completed Summer of
2020. The Community Center Expansion design continued throughout 2018, the project (a new sports complex with
elevated walking track, additional fieldhouse court, team training space, youth center, remodeled Community Rooms,
added meeting spaces and expanded parking) was out for bid in early 2019 and a bid awarded for construction in late
Spring 2019 with a $17.9 million budget, construction was completed Fall of 2020.
7) In 2017 and 2018, the City of Andover, in cooperation with the Anoka County Highway Department, worked through
the planning of the Hanson Boulevard expansion and reconstruction. Right of Way clearing and utility work took
place in 2018 with full construction of Phase 1 in 2019, Phase 2 was completed in 2020. This project was financed
primarily by a federal grant. Trails and intersection improvements were also constructed as part of the project phases.
8) 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 with hopes of continuing to add to the critical land mass
necessary to start marketing for a redevelopment project. In late 2017 the EDA was successful in acquiring three more
4-plex properties and one additional 4-plex in 2018. In 2020, the EDA was successful in in acquiring four more 4-plex
properties and one duplex building. It is anticipated the EDA will continue to pursue the acquisition of additional
properties in the redevelopment areas from willing sellers to create the critical mass necessary for a successful mixed -
use development.
9) In 2020, to assist Andover small businesses impacted by the COVID-19 pandemic shutdowns the City of Andover
EDA successfully developed and administered a small business grant program that distributed $1.8 million in CARES
funding to Andover small businesses and non -profits.
10) Andover residents continue to have one of the highest recycling rates per person for all recyclable materials in Anoka
County. In 2014, the City added a new Recycling Center to expand the current recycling opportunities for Andover
residents. In 2020, the City continued to host monthly recycling events (on weekends), generally with a specific focus,
such as paper shredding and appliance or electronics collection.
11) 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. As part of the 2020 Budget
Development process the Council participated in a new strategic planning process updating the Council Community
Vision and Organization Goals and Values document. For the 2021 Budget development process that document was
integrated into various department work plans and budgets.
12) The City's Comprehensive Annual Financial Report for the year ended December 31, 2019 was awarded the
Government Finance Officers Association's "Excellence in Financial Reporting Award." The City completes this
document internally and recognized significant cost savings in the form of reduced financial consulting fees. This is
the eighteenth consecutive year receiving the award and it is anticipated that the City's Comprehensive Annual
Financial Report for the year ended December 31, 2020 will also achieve this award.
13) For the nineteenth year in a row, the City of Andover was awarded the Government Finance Officers Association
Distinguished Budget Presentation Award for the City's 2020 Annual Budget. This award recognizes excellence in the
preparation of the City's budget document as a policy document, an operations guide, as a financial plan and as a
communications device.
14) 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 260 single family rental licenses issued throughout the City in 2020.
15) The City continues to make significant progress on the process of digitally imaging documents retained, this includes
standard and legal documents and large construction plan documents. 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.
16) 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 2020, the City saw
To the Honorable Mayor and City Council
City of Andover, Minnesota
increased growth in the number of online and counter credit card payments for various City permits and services.
Approximately 62% of the Building Department's permits were done online.
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, or the City's webpage (www.andovermn.gov). It is important to the City that our residents are
informed and can participate in the activities of their City. The City did conduct a community survey in 2006, with the help of a
polling firm, to secure opinions and suggestions from the public. The City initiated and completed a community survey in early
2014, the City received very high marks.
RELEVANT FINANCIAL POLICIES
The City has a policy regarding General Fund reserve balances. The City plans for an unassigned fund balance in the General Fund
equivalent to 6-months of the current year's budgeted expenditures to provide working capital between semi-annual property tax
settlements. Since the property tax settlements are received by the City in July and December, the City needs sufficient cash
reserves to avoid short-term borrowing to finance operations. The City also classifies fund balances for prepaid items, inventories,
and other legal obligations. The City may also classify a portion of fund balance for special purposes.
The primary goal of the City's investment policy is to ensure the safety of the principal invested. Cash temporarily idle during the
year is invested in certificates of deposit, commercial paper, and obligations of the U.S. Treasury and government agencies. Cash
balances from all City funds are pooled into an investment fund and investment income is distributed on a pro-rata basis at the end
of each quarter. Extended maturities are utilized to take advantage of higher yields but staggered in a way to meet projected
liquidity needs.
Capital financing for major improvements is provided through improvement bonds, general obligation bonds, tax increment bonds,
or revenue bonds. Depending on the project, special assessments may be levied upon properties to share in the cost of the
improvement project. The special assessments are collected over a period of time and are used to help satisfy the improvement
bond debt or reimburse the fund used to finance the project.
The City Council has also adopted financial management policies to allow for the planning of adequate funding of services desired
by the public, to manage City finances wisely, and to carefully account for public funds. These policies are reviewed each year
when the annual budget is adopted. The financial management policies included: operating budget policies; revenue policies;
accounting, auditing, and financial reporting policies; investment policies; debt policies; capital improvement policies; and risk
management policies.
The City Council has adopted a comprehensive set of internal control procedures. The City's accounting system was developed
and is continually evaluated to assure the adequacy of internal accounting controls. Internal accounting controls are designed to
provide reasonable but not absolute assurance in the areas of safeguarding assets against loss from unauthorized use or disposition,
reliability of financial records, and convenience of access for preparing financial statements and maintaining accountability for
assets. The concept of reasonable assurance adopted by the City Council recognizes that the evaluation of cost and benefits requires
estimates and judgments by management, and the cost of a control should not exceed the benefits likely to be derived. All internal
controls are evaluated against the above criteria. It is our belief that the City's internal accounting controls adequately safeguard
the City's assets and 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, 2020. This is the
nineteenth year in a row the City of Andover has received this award. 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, 2021 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 2019 Comprehensive Annual Financial Report. This is the eighteenth time the City of Andover has received this award. To
receive this award, a government unit must publish an easily readable and efficiently organized comprehensive annual financial
To the Honorable Mayor and City Council
City of Andover, Minnesota
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 2020 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 Brezinlca, Melissa
Knutson and Brenda Fildes have my sincere appreciation for their contribution to the preparation of this report.
I also want to express our appreciation to the Mayor and members of the City Council for their interest and support in planning and
conducting the financial operations of the City in a fiscally responsible manner.
Respectfully submitted,
James Dickinson
City Administrator
CITY OF ANDOVER, MINNESOTA
ORGANIZATION
December 31, 2020
Office
Mayor
Council Member
Council Member
Council Member
Council Member
Julie Trude
Jamie Barthel
Sheri Bukkila
Valerie Holthus
Ted Butler
Name
City Administrator / City Clerk
James Dickinson
Community Development Director
Joe Janish
Director of Public Works / City Engineer
David Berkowitz
Finance Manager
Lee Brezinka
Building Official
Fred Patch
Fire Chief
Dennis Jones
Attorney
Fiscal Consultants
Hawkins & Baumgartner, P.A.
Ehlers & Associates, Inc.
Term
January 5, 2021
January 1, 2023
January 5, 2021
January 1, 2023
January 5, 2021
Appointed
Appointed
Appointed
Appointed
Appointed
Appointed
Appointed
Appointed
Is
CITY OF ANDOVER
Organizational Chart
City Council
--------------------------
Ciry Attorney
Ciry Adminisnmtor
Advisory Boards
Administrative
Building Inspections
Engineering
Finance
Fire Protection
Planning
Public Works
Police Protection
Services
Administration
Financial
Fire Protection
Planning&Zoning
Streets/Highways
Civil Defense
Engineering
Services
Administration
Services
Htunan Resources'
Assessing
Snow &Ice
Protective
Right of -Way
Inspections
Management
Removal
Newsletter
Facilities
Storm Sewer
Drainage &
Mapping
Management
Economic
Lower Rum River
Unallocated
Street Lighting
Development
Watershed Mgmt
Authority
Organization
Commurnty
Forestry
Capital Equipment
Signage
Center
Reserve
Elections
Debt Service Funds
Tratfc Signals
Trail &
Transportation
Animal Control
Uniinanced Projects
Parks &Recreation
Conshmction
Seal Coating
Information
Tax Increment
Recycling
Water Tmnk
Sys ems
Projects
Ciry Cleric
Building Fund
Water
Storm Sewer
Permanent
Sewer
Sewer T unk
Improvement
Revolving
Road & Bndge
G.O. Capital
Central Equipment
Notes
Park Dedication
Risk
Projects
Management
m
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Andover
Minnesota
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
December 31, 2019
6 K16 0�0�
Executive Director/CEO
`K
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, 2020, 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.
55 E 5" Street Suite 1400, St. Paul, MN, 55101 651.426.7000 www.redpathcpas.com
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, 2020, 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 2019 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 June 4, 2020. In our opinion, the summarized
comparative information presented herein as of and for the year ended December 31, 2019 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, the budgetary comparison schedule, and the
schedules of OPEB and pension information, as listed in the table of contents, be presented to
supplement the basic financial statements. Such information, although not a part of the basic
financial statements, is required by the Governmental Accounting Standards Board, who
considers it to be an essential part of financial reporting for placing the basic financial
statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of
inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries, the basic financial
statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information
because the limited procedures do not provide us with sufficient evidence to express an
opinion or provide any assurance.
15
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the City of Andover, Minnesota's basic financial statements. The
introductory section, combining and individual fund financial statements and schedules,
statistical section and other financial information 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, statistical and other financial information 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 13, 2021, 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 the effectiveness
of the City of Andover, Minnesota's 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 13, 2021
ff-9
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2020
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, 2020. 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 HiLyhliehts
The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most
recent fiscal year by $205,633,049 (net position). Of this amount, $46,998,078 (unrestricted net position) maybe 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 $14,562,227 from current year activity, primarily due to the budget savings, an increase in
commercial/residential construction fees and capital contributions from construction activity.
As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $42,428,360
Special
Debt
Capital
General
Revenue
Service
Projects
Totals
Nonspendable
$ 140,602
$ 2,123
$ -
$ -
$ 142,725
Restricted
-
124,381
2,099,876
2,427,190
4,651,447
Committed
-
508,062
-
-
508,062
Assigned
-
373,351
-
27,238,859
27,612,210
Unassigned
9,513,916
-
-
-
9,513,916
$ 9,654,518
$ 1,007,917
$ 2,099,876
$ 29,666,049
$ 42,428,360
The City's total long-term liabilities decreased by $584,434 during the current fiscal year, primarily due to the debt service payments.
Beginning
Ending
Balance
Additions
Reductions
Balance
Governmental activities:
Bonds payable
$ 40,619,047
$ 1,310,000
$ (1,632,156)
$ 40,296,891
Other post employment benefits
290,934
47,708
(11,113)
327,529
Compensated absences
721,654
467,444
(348,329)
840,769
Net pension liability
3,077,985
544,434
(290,280)
3,332,139
Total governmental activities
44,709,620
2,369,586
(2,281,878)
44,797,328
Business -type activities:
Bonds payable
3,111,058
-
(738,316)
2,372,742
Other post employment benefits
47,362
7,766
(1,809)
53,319
Compensated absences
212,248
73,754
(50,800)
235,202
Net pension liability
396,161
60,908
(23,645)
433,424
Total business -type activities
3,766,829
142,428
(814,570)
3,094,687
Total City long-term liabilities
$ 48,476,449
$ 2,512,014
$ (3,096,448)
$ 47,892,015
Overview of the Financial Statements
The discussion and analysis are intended to serve as an introduction to the City's basic financial statements. The City's basic financial
statements comprise three components: 1) government -wide financial statements, 2) fund financial statements, and 3) notes to the financial
statements. This report also contains other supplementary information in addition to the basic financial statements themselves.
Government -wide financial statements. The government -wide financial statements are designed to provide readers with a broad overview
of the City's finances, in a manner similar to a private -sector business.
17
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2020
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 two categories: governmental funds and
proprietary 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-terin 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 seven individual major governmental funds. Information is presented separately in the governmental fund balance sheet
and in the governmental fund statement of revenues, expenditures and changes in fund balances for the following major funds: General Fund
and the following capital projects funds (CPF): Water Trunk, Sewer Trunk, Road and Bridge, 2018A G.O. Capital Improvement Plan Bonds,
2019A G.O. Abatement Bonds and Tax Increment Projects.
Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-maj oc
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, 2020
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 44 through 75 of this report.
Other information. The combining statements referred to earlier in connection with non -major governmental funds is presented immediately
following the required supplementary information on budgetary comparisons, the modified approach for streets and trails infrastructure and
pension information. Combining and individual fund statements and schedules can be found on pages 90 through 122 of this report.
Government -wide Financial Analysis
As noted earlier, the assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close
of the most recent fiscal year by $205,633,049 (net position).
The largest portion of the City's net position ($154,783,340 or 75 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 fi-om other sources, since the capital assets themselves cannot be used to liquidate
these liabilities.
CITY OF ANDOVER'S NET POSITION
Governmental Activities
Business -Type
Activities
Totals
2019
2020
2019
2020
2019
2020
Current and other assets
$ 60,002,871
$ 48,857,525
$ 10,773,602
$ 11,788,100
$ 70,776,473
$ 60,645,625
Capital assets
132,538,146
153,692,666
41,658,673
42,714,795
174,196,819
196,407,461
Total assets
192,541,017
202,550,191
52,432,275
54,502,895
244,973,292
257,053,086
Deferred outflows of resources
554,870
469,014
34,748
37,114
589,618
506,128
Long-term liabilities
outstanding
44,709,620
44,797,328
3,766,829
3,094,687
48,476,449
47,892,015
Other liabilities
4,808,958
3,449,184
87,460
56,756
4,896,418
3,505,940
Total liabilities
49,518,578
48,246,512
3,854,289
3,151,443
53,372,867
51,397,955
Deferred inflows of resources
1,036,651
504,876
82,570
23,334
1,119,221
528,210
Net position:
Net investment in capital
assets
106,637,436
114,441,287
38,547,614
40,342,053
145,185,050
154,783,340
Restricted
5,294,610
3,851,631
-
-
5,294,610
3,851,631
Unrestricted
30,608,612
35,974,899
9,982,550
11,023,179
40,591,162
46,998,078
Total net position
$ 142,540,658
$ 154,267,817
$ 48,530,164
$ 51,365,232
$ 191,070,822
$ 205,633,049
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 ($46,998,078) 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.
IN
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2020
Government -wide Activities
Governmental activities increased the City's net position by $11,727,159 and business -type activities increased net position by $2,835,068.
Ivey elements of the activities are as follows:
City of Andover's Changes in Net Position
Governmental Activities
2019 2020
Business -Type Activities
2019 2020
Total
2019 2020
Revenues:
Program revenues:
Charges for services
$ 4,175,896
$ 3,684,878
$ 5,650,560
$ 6,298,800
$ 9,826,456
$ 9,983,678
Operating grants
and contributions
1,662,842
3,453,564
-
-
1,662,842
3,453,564
Capital grants
and contributions
4,950,131
12,006,951
712,976
2,807,445
5,663,107
14,814,396
General revenues:
Property taxes
13,011,406
14,479,488
-
-
13,011,406
14,479,488
Tax increment
89,414
100,979
-
-
89,414
100,979
Grants and contributions
not restricted to
specific programs
14,053
4,129
-
-
14,053
4,129
Unrestricted investments
earnings
1,346,685
930,876
236,356
173,446
1,583,041
1,104,322
Gain on sale of capital
assets
24,550
3,000
15,818
-
40,368
3,000
Total revenues
25,274,977
34,663,865
6,615,710
9,279,691
31,890,687
43,943,556
Expenses:
General government
3,159,045
3,193,326
-
-
3,159,045
3,193,326
Public safety
5,426,472
6,002,090
-
-
5,426,472
6,002,090
Public works
5,939,704
4,964,909
-
-
5,939,704
4,964,909
Parks and recreation
3,507,705
3,997,558
-
-
3,507,705
3,997,558
Recycling
231,625
234,475
-
-
231,625
234,475
Economic development
202,182
4,240,712
-
-
202,182
4,240,712
Interest on long-term debt
917,913
1,226,839
-
-
917,913
1,226,839
Water
-
-
2,280,247
2,449,287
2,280,247
2,449,287
Sewer
-
-
2,289,555
2,454,250
2,289,555
2,454,250
Storm sewer
-
-
737,854
617,883
737,854
617,883
Total expenses
19,384,646
23,859,909
5,307,656
5,521,420
24,692,302
29,381,329
Increase (decrease) in net position
before transfers
5,890,331
10,803,956
1,308,054
3,758,271
7,198,385
14,562,227
Transfers
(327,730)
923,203
327,730
(923,203)
-
-
Change in net position
5,562,601
11,727,159
1,635,784
2,835,068
7,198,385
14,562,227
Net position - beginning
136,978,057
142,540,658
46,894,380
48,530,164
183,872,437
191,070,822
Net position - ending
$ 142,540,658
$ 154,267,817
$ 48,530,164
$ 51,365,232
$ 191,070,822
$ 205,633,049
20
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2020
Governmental Activities
Following are specific graphs that provide comparisons of the governmental activities revenues and expenses:
Governmental Activities - Revenues
Grants and
Unrestricted
Charges for services
contributions not
investments earnings
10.6%
restricted to specific
2.7%
programs
0.1%
Tax increment
0.3%
Gain on sale of capital
assets
0.1 %
Property taxes
41.8%
Capital grants and
contributions
34.6%
1r
Operating grants and
contributions
10.0%
Governmental Activities - ExDenses
Interest on long-term
debt
General government
13.4%
Recycling
Economic
1.0%
development
17.8%
Public safety
25.1 %
Parks and recreation
16.8%
Public works
20.8%
21
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2020
Business -Type Activities
Following are graphs showing the business -type activities revenue and expense comparisons:
Business -Type Activities - Revenues
Capital grants
and
contributions
30.25%
i
Unrestricted /
investments Charges for
earnings --" services
1.87% 67.88%
22
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2020
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 $42,428,360. Approximately
22.4 percent of this total amount ($9,513,916) constitutes unassigned fund balance. The remainder of the fund balance ($32,914,444) is not
available for new spending because it is either 1) nonspendable (S142,725), 2) restricted ($4,651,447), 3) committed ($508,062) or 4) assigned
($27,612,210).
Major Funds
The general fund increased by $291,067 in 2020, which was a $1,647,227 change from the final budget and $936,048 less than last years
increase in fund balance. The final budget showed a decrease in fund balance of $1,356,160. The change in fund balance is due to various
departments under -spending and revenues exceeding budgets related to residential and commercial construction activity. The change compared
to 2019 is largely due to the one-time transfer of $1,000,000 to the Road and Bridge Capital Projects Fund in 2020.
The water and sewer trunk capital projects funds fluctuate based on development activity and whether there is any cost sharing for pipe over -
sizing, extra depth, etc. The addition of the following developments has increase connection fees and special assessments: Catchers Creek East
and West Additions, Country Oaks North 4th addtion, Winslow Cove 2nd Addition, and Shadowbrook North Addition. The water trunk fund
($300,000) and sewer trunk fund ($400,000) continue to receive funds from the water and sewer enterprise funds to be set aside for future
infrastructure replacements.
The road and bridge capital projects fund increased by $3,144,304 primarily due to the one-time transfer of $1,000,000 from the General Fund
for road improvements and the advance of state aid construction monies.
The 2018A G.O. capital improvement plan bonds capital projects fund decreased due to the construction of the public works maintenance
facilty and cold storage building.
The 2019A G.O. abatement bonds capital projects fund decreased due to the construction of the community center expansion project.
The tax increment capital projects fund decreased by $2,054,600 primarily due to the purchase of five rental properties for future redevelopment.
Nonmaior Funds
The eda general special revenue fund decreased $44,808 primarily due to the construction of a monument entrance sign.
The community center special revenue fund decreased $186,532 due to covid-19 closures and planned repairs.
The 2014A G.O. equipment certificates debt service fund decreased by $366,226 due to the timing of when tax revenue is collected and when
debt service payments are made. Final payment was made and this fund was closed in 2020.
The 2020A G.O. equipment certificates debt service fund increased by $333,615 due to the timing of when tax revenue is collected and when
debt service payments are made.
The 2019A G.O. abatement bonds debt service fund increased by $586,181 due to the timing of when tax revenue is collected and when debt
service payments are made.
The building fund capital projects fund increased by $114,219 due to using other available funds for planned projects in 2020.
The 2020A G.O. equipment certificates capital projects fiord increased by $829,537 due to the timing of when bonds are sold and equipment
purchased.
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 $10,915,144 (water $5,954,799, sewer $4,074,700 and
storm sewer $885,665) and internal service funds of $1,015,847. The enterprise funds had a net increase in net position from current year
activity of $2,849,754 (water $1,588,014, sewer $308,061 and storm sewer $953,679). Internal service funds had a net decrease in net position
of $46,292.
23
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2020
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, 2020, amounts to
$196,407,461 (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 anew 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 2019, 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, 2020, the City's street and trail system was
rated at an Overall Condition Index (OCI) of 5.4.
The City's streets and trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun's ultra-
violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development trenching operations; (4) water
damage from natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the system through short-
term maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City expended $2,667,008 on street and
trail maintenance for the year ending December 31, 2020. 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.
Maintenance
Actual
OCI
Year
Estimate
Expenditures
Rating
2011
$1,150,000
$ 1,770,980
83
2012
1,150,000
3,894,784
83
2013
1,150,000
2,471,123
6.9
2014
1,150,000
2,029,026
6.7
2015
1,150,000
1,114,900
6.7
2016
1,150,000
1,585,756
6.3
2017
1,150,000
3,548,327
6.4
2018
1,150,000
2,274,146
6.4
2019
1,150,000
3,701,063
5.3
2020
1,150,000
2,667,008
5.4
24
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2020
Primary Government
Governmental activities:
Land and improvements
Streets and trails
Construction in progress
Buildings and improvements
Furniture and equipment
Machinery and equipment
Other park improvements
Total capital assets
Less accumulated depreciation for:
Buildings and improvements
Furniture and equipment
Machinery and equipment
Other park improvements
Beginning
Balance Additions
Ending
Deletions Balance
$ 11,205,798
$ 115,335
$ -
$ 11,321,133
87,716,023
1,869,973
-
89,585,996
14,087,766
168,192
(14,087,766)
168,192
27,552,688
34,325,048
(66,911)
61,810,825
969,869
184,456
(37,200)
1,117,125
8,905,807
610,669
(224,409)
9,292,067
8,200,494
277,937
(42,195)
8,436,236
158,638,445
37,551,610
(14,458,481)
181,731,574
14,373,629
1,499,645
(66,911)
15,806,363
581,925
86,181
(37,200)
630,906
6,575,481
392,292
(224,409)
6,743,364
4,569,264
331,206
(42,195)
4,858,275
Total accumulated depreciation 26,100,299 2,309,324
Governmental activities
capital assets - net
Business -type activities:
Land and improvements
Construction in progress
Buildings and improvements
Furniture and equipment
Machinery and equipment
Collection and distribution
Total capital assets
being depreciated
Less accumulated depreciation for:
Buildings and improvements
Furniture and equipment
Machinery and equipment
Collection and distribution
(370,715) 28,038,908
132,538,146 35,242,286 (14,087,766) 153,692,666
730,243 -
161,927 -
15,877,590 -
23,436 -
1,576,915 -
60,497,170 2,976,517
- 730,243
(161,927) -
- 15,877,590
- 23,436
- 1,576,915
- 63,473,687
78,967,281
2,976,517
(161,927) 81,681,871
10,359,787
420,007
- 10,779,794
23,437
-
- 23,437
969,318
91,262
- 960,580
25,956,066
1,247,199
- 27,203,265
Total accumulated depreciation 37,208,608 1,758,468 - 38,967,076
Business -type activities
capital assets - net 41.658,673 1,218,049 (161,927) 42,714,795
Total capital assets - net
$ 174,196,819 $ 36,460,335
Additional information on the City's capital assets can be found in Note 5.
$(14,249,693) $ 196,407,461
Long-term debt. At the end of the current fiscal year, the City had total long-term debt outstanding of $43,745,604, an decrease of $918,403
from 2019. General obligation abatement bonds ($27,245,000) were used to refund the 2006 and 2007 EDA lease revenue refunding bonds
and expand the existing community center. General obligation revenue bonds ($2,435,000) were used for an addition to the water treatment
plant and the refunding of portions of the water treatment plant bonds. Certificates of indebtedness ($1,444,000) financed capital equipment
purchases. Capital improvement bonds ($9,915,000) were used to construct a new vehicle maintenance facility with a washbay and a cold
storage building. Referendum bonds ($335,000) were used to finance land acquisitions for the preservation of open space.
Additional long-term debt in the amount of $1,385,633 for issuance premiums and $1,075,971 is for compensated absences.
25
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2020
City of Andover's Outstanding Debt
Bonds payable:
Abatement bonds
G.O. revenue bonds
Certificates of indebtedness
Capital improvement bonds
Referendum bonds
Governmental Business -Type
$ 27,245,000
S - $ 27,245,000
-
2,345,000 2,345,000
1,444,000
- 1,444,000
9,915,000
- 9,915,000
335,000
- 335,000
Total bonds payable 38,939,000 2,345,000 41,284,000
Issuance premiums 1,357,891 27,742 1,385,633
Compensated absences 840,769 235,202 1,075,971
Total $ 41,137,660 $ 2,607,944 $ 43,745,604
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 $102,684,785. Only $36,917,953 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, 2020
With Comparative Totals For December 31, 2019
Primary
Government
Government
Business -Type
Totals
Activities
Activities
2020
2019
Assets:
Cash and investments
$ 44,658,453
$ 10,061,918
$ 54,720,371 $
65,232,802
Cash and investments with escrow agent
126,682
-
126,682
152,233
Accrued interest
174,337
38,873
213,210
294,460
Due from other governmental units
387,061
12,867
399,928
311,426
Accounts receivable - net
296,709
1,399,633
1,696,342
1,532,686
Property taxes receivable:
Unremitted
358,031
-
358,031
93,750
Delinquent
146,271
-
146,271
118,520
Special assessments receivable:
Unremitted
5,336
3,379
8,715
3,158
Delinquent
21,161
251,702
272,863
295,780
Deferred
1,699,076
1,341
1,700,417
1,677,340
Inventories - at cost
234,408
18,387
252,795
239,318
Land held for resale
750,000
-
750,000
825,000
Capital assets - net:
Nondepreciable
101,075,321
730,243
101,805,564
113,901,757
Depreciable
52,617,345
41,984,552
94,601,897
60,295,062
Total assets
202,550,191
54,502,895
257,053,086
244,973,292
Deferred outflows of resources:
Related to other post employment benefits
15,241
2,540
17,781
12,922
Related to pensions
453,773
34,574
488,347
576,696
Total deferred outflows of resources
469,014
37,114
506,128
589,618
Liabilities:
Interfund payable
108,035
(108,035)
-
-
Accounts payable
347,296
60,110
407,406
334,396
Contracts payable
1,539,098
22,521
1,561,619
3,362,305
Deposits payable
543,081
2,234
545,315
328,738
Due to other governmental units
72,312
29,271
101,583
73,979
Salaries payable
194,166
28,325
222,491
172,751
Unearned revenue
100,857
-
100,857
58,142
Accrued interest payable
544,339
22,330
566,669
566,107
Other post employment benefits:
Due in more than one year
327,529
53,319
380,848
338,296
Compensated absences:
Due within one year
126,115
35,280
161,395
140,085
Due in more than one year
714,654
199,922
914,576
793,817
Bonds/notes payable (net of unamortized premiums):
Due within one year
1,899,000
735,000
2,634,000
2,286,000
Due in more than one year
38,397,891
1,637,742
40,035,633
41,444,105
Net pension liability:
Due in more than one year
3,332,139
433,424
3,765,563
3,474,146
Total liabilities
48,246,512
3,151,443
51,397,955
53,372,867
Deferred inflows of resources:
Related to pensions
504,876
23,334
528,210
1,119,221
Net position:
Net investment in capital assets
114,441,287
40,342,053
154,783,340
145,185,050
Restricted for:
Debt service
1,582,258
-
1,582,258
917,364
Tax increment purposes
2,132,935
2,132,935
4,262,535
Public services
136,438
-
136,438
114,711
Unrestricted
35,974,899
11,023,179
46,998,078
40,591,162
Total net position
$ 154,267,817
$ 51,365,232
$ 205,633,049 $
191,070,822
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, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Program Revenues
Charges
Operating
Capital
For
Grants and
Grants and
Expenses
Services
Contributions
Contributions
Functions/Programs
Primary government:
Government activities:
General government
$ 3,193,326
$ 757,188
$ 116,826
$ -
Public safety
6,002,090
1,154,232
971,611
161,994
Public works
4,964,909
296,533
449,343
11,067,995
Parks and recreation
3,997,559
1,301,624
-
776,962
Recycling
234,475
48,705
113,300
-
Economic development
4,240,712
126,596
1,802,484
-
Interest on long-term debt
1,226,839
-
-
-
Total government activities
23,859,909
3,684,878
3,453,564
12,006,951
Business -type activities:
Water
2,449,287
3,349,237
-
950,396
Sewer
2,454,250
2,355,039
-
851,570
Storm sewer
617,883
594,524
-
1,005,479
Total business -type activities
5,521,420
6,298,800
-
2,807,445
Total primary government
$ 29,381,329
$ 9,983,678
$ 3,453,564
$ 14,814,396
The accompanying notes are an integral part of these financial statements.
Statement 2
Net (Expense) Revenue and Changes in Net Position
Primary Government
Governmental Business -Type Totals
Activities Activities 2020 2019
$ (2,319,312) $
- $ (2,319,312)
$ (2,242,492)
(3,714,253)
- (3,714,253)
(3,884,721)
6,848,962
- 6,848,962
(604,051)
(1,918,972)
- (1,918,972)
(765,961)
(72,470)
- (72,470)
(74,633)
(2,311,632)
- (2,311,632)
(106,006)
(1,226,839)
- (1,226,839)
(917,913)
(4,714,516) - (4,714,516) (8,595,777)
(4,714,516)
1,850,346
752,359
982,120
3,584,825
3,584,825
1,850,346
752,359
982,120
3,584,825
(1,129,691)
688,335
231,182
136,363
1,055,880
(7,539,897)
General revenues:
General property taxes
14,479,488 -
14,479,488
13,011,406
Tax increment collections
100,979 -
100,979
89,414
Grants and contributions not
restricted to specific programs
4,129 -
4,129
14,053
Unrestricted investment earnings
930,876 173,446
1,104,322
1,583,041
Gain on sale of capital assets
3,000 -
3,000
40,368
Transfers
923,203 (923,203)
-
-
Total general revenues, gain on sale of
capital assets and transfers
Change in net position
Net position - beginning
Net position - ending
16,441,675
11,727,159
142,540,658
$ 154,267,817
(749,757)
2,835,068
48,530,164
$ 51,365,232
15,691,918
14,562,227
191,070,822
$ 205,633,049
14,738,282
7,198,385
183,872,437
$ 191,070,822
01
CITY OF ANDOVER, MINNESOTA
BALANCE SHEET
GOVERNMENTAL FUNDS
December 31, 2020
With Comparative Totals For December 31, 2019
2018A
G.O. Capital
Road &
Improvement
Water Trunk
Sewer Trunk
Bridge
Plan Bonds
General
CPF
CPF
CPF
CPF
Assets:
Cash and investments $
10,052,623
$ 5,880,979 $
8,049,053
$ 8,528,556
$ 293,637
Cash and investments with escrow agent
-
-
-
-
-
Accrued interest
31,430
26,391
36,270
34,369
Due from other governmental units
45,357
-
-
268,680
-
Accounts receivable - net
73,033
-
15,767
Property taxes receivable:
Umemitted
230,757
34,476
-
Delinquent
96,689
-
14,446
Special assessments receivable:
Unremitted
177
1,016
4,143
Delinquent
10,192
-
-
10,969
Deferred
-
304,827
83,203
1,215,254
Inventories - at cost
140,602
-
-
-
Land held for resale
-
-
-
-
-
Total assets $
10,680,860
$ 6,213,213 $
8.168,526
$ 10,110,893
$ 309,404
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable $
185,650
$ $
$ 33
$ 8,927
Contracts payable
24,003
62,789
260,534
Deposits payable
505,880
5,741
5,741
1,139
-
Due to other governmental units
34,333
226
-
2,060
Salaries payable
169,595
-
-
Unearned revenue
-
Total liabilities
919,461
5,967
5,741
66,021
269,461
Deferred inflows of resources:
Unavailable revenues
106,881
304,827
83,203
1,240,669
-
Fund balances (deficit):
Nonspendable
140,602
-
-
-
-
Restricted
-
39,943
Committed
-
-
-
-
Assigned
-
5,902,419
8,079,582
8,804,203
Unassigned
9,513,916
-
-
-
-
Total fund balances
9,654,518
5,902,419
8,079,582
8,804,203
39,943
Total liabilities, deferred inflows of resources,
and fund balances (deficit)
$ 10,680,860
$ 6,213,213
$ 8,168,526
$ 10,110,893
$ 309,404
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 - related other post employment benefits and pensions are not current financial resources and, therefore, are not reported in the farads
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 fiends.
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
2019A
G.O. Tax
Abatement Increment Other
Bonds Projects Governmental
Totals
Governmental Funds
2020 2019
$ 1,332,299 $ 1,424,019
$ 8,139,874
$ 43,701,040
$ 55,182,687
- -
126,682
126,682
152,233
11,756
29,833
170,049
243,723
-
73,024
387,061
296,081
3,725
204,184
296,709
161,845
-
92,798
358,031
93,750
1,257
33,879
146,271
118,520
-
-
5,336
1,936
-
21,161
22,038
95,792
1,699,076
1,675,590
-
2,123
142,725
124,950
- 750,000
-
750,000
825,000
$ 1,332,299 $ 2,190,757
$ 8,798,189
$ 47,804,141
$ 58,898353
$ 5,225
$ 6,154
$ 114,165
$ 320,154
$ 254,594
1,151,042
40,730
-
1,539,098
3,284,044
-
10,938
13,642
543,081
325,204
-
35,693
72,312
41,576
14,176
183,771
143,110
-
-
100,857
100,857
58,142
1,156,267
57,822
278,533
2,759,273
4,106,670
-
751,257
129,671
2,616,508
2,641,148
-
-
2,123
142,725
124,950
176,032
1,391,678
3,053,794
4,651,447
19,696,883
-
-
508,062
508,062
518,312
4,826,006
27,612,210
22,569,932
-
-
-
9,513,916
9,240,458
176,032
1,391,678
8,389,985
42,428,360
52,150,535
$ 1,332,299
$ 2,190,757
$ 8,798,189
$ 47,804,141
$ 58,898,353
$ 42,428,360
$ 52,150,535
153,692,666
132,538,146
469,014
554,870
2,616,508
2,641,148
907,812 939,418
(45,341,667) (45,246,808)
(504,876) (1,036,651)
$ 154,267,817 $ 142,540,658
33
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTALFUNDS
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
2018A
G.O. Capital
Road &
Improvement
Water Trunk
Sewer Trunk
Bridge
Plan Bonds
General
CPF
CPF
CPF
CPF
Revenues:
General property taxes
$ 9,303,234
$ $
$ 1,388,355
$
Tax increment collections
-
-
Licenses and permits
892,279
-
Intergovernmental
861,179
-
-
2,811,862
Special assessments
-
48,242
30,089
549,453
Charges for services
1,070,899
-
-
-
Fines
47,630
-
-
-
-
Investment income
148,974
131,533
174,256
183,155
12,717
Miscellaneous:
Park dedication fees
-
-
-
-
-
Connection charges
873,591
263,301
Rent
-
-
-
-
Other
172,062
-
-
-
2,632
Total revenues
12,496,257
1,053,356
467,646
4,932,825
15,349
Expenditures:
Current:
General government
2,906,328
-
-
-
-
Public safety
5,162,232
-
-
-
Public works
1,650,363
196,625
4,651
2,667,008
Parks and recreation
1,369,954
-
-
-
Recycling
228,124
Economic development
-
Unallocated
12,778
Capital outlay:
General government
-
Public safety
-
-
-
-
Public works
-
10,143
20,287
127,213
3,230,821
Parks and recreation
66,099
-
-
-
-
Economic development
-
Debt service:
Principal retirement
Interest
Paying agent fees
-
Construction/acquisition costs
-
7,145
-
-
-
Total expenditures
11,395,878
213,913
24,938
2,794,221
3,230,821
Revenues over (under) expenditures
1,100.379
839,443
442,708
2,138,604
(3,215,472)
Other financing sources (uses):
Transfers in
190,688
300,000
400,000
1,005,700
Transfers out
(1,000,000)
(59,740)
-
-
Bonds issued
Bond premium
Proceeds from sale of capital assets
-
Total other financing sources (uses)
(809,312)
240,260
400,000
1,005,700
Net increase (decrease) in fund balance
291,067
1,079,703
842,708
3,144,304
(3,215,472)
Fund balance - January 1
9,363,451
4,822,716
7,236,874
5,659,899
3,255,415
Fund balance - December 31
$ 9,654,518
$ 5,902,419 $
8,079,582
$ 8,804,203
$ 39,943
The accompanying notes are an integral part of these financial statements.
34
Statement 4
2019A
G.O. Tax
Abatement Increment Other Intra
Bonds Projects Governmental Activity
Totals
Governmental Funds
2020 2019
$
$
$ 3,760,148
$
S 14,451,737
$ 12,985,096
100,979
-
100,979
90,189
-
-
892,279
855,831
2,538,760
6,211,801
2,786,445
4,215
631,999
721,950
601,124
1,672,023
1,941,637
-
-
47,630
62,349
56,695
52,494
153,847
913,671
1,316,876
-
-
389,033
389,033
472,753
-
1,136,882
1,152,759
-
-
635,629
635,629
636,803
258,250
100,147
360,314
(30,600)
862,805
1,462,431
314,945
253,620
8,443,070
(30,600)
27,946,468
24,485,119
-
-
173,016
3,079,344
3,011,191
592,011
5,754,243
5,096,029
70,311
4,588,958
5,691,654
1,125,640
2,495,594
2,371,437
-
-
228,124
224,574
2,308,220
1,846,024
4,154,244
191,468
-
-
12,778
15,001
21,759
21,759
4,082
319,484
318,484
72,801
-
293,483
3,671,947
8,404,840
11,601,835
1,119,923
12,787,857
6,343,383
-
30,151
30,151
-
1,561,000
1,561,000
1,444,000
1,290,844
1,290,844
568,864
5,000
5,000
1,000
-
-
-
7,145
1,564,585
11,601,835
2,308,220
8,437,646
40,007,472
35,004,909
(11,286,890)
(2,054,600)
5,424
(30,600)
(12,061,004)
(10,519,790)
632,422
(1,538,722)
990,088
1,323,739
(569,322)
1,569,322
(59,740)
(58,110)
1,310,000
-
1,310,000
15,770,000
95,481
95,481
1,458,695
3,000
-
3,000
32,050
1,471,581
30,600
2,339,829
18,526,374
(11,286,890)
(2,054,600)
1,477,005
-
(9,722,175)
8,006,584
11,462,922
3,436,278
6,912,980
52,150,535
44,143,951
$ 176,032
$ 1,381,678
$ 8,389,985
$
$ 42,429,360
$ 52,150,535
Mil
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ii
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, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
2020 2019
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)
$ (9,722,175) $ 8,006,584
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.
14,528,019 14,685,621
The net effect of various miscellaneous transactions involving capital assets is to increase
(decrease) net position (i.e., sales, trade-ins, and donations).
6,633,646 830,648
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds.
(24,640) (114,694)
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.
322,156 (15,755,047)
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
(32,430) (38,964)
is the net effect of employee benefits earned and paid during the year.
Transfer out of governmental capital assets contributed to Enterprise Funds.
(7,145) (1,593,359)
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.
(126,266) (407,972)
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 differs from pension contributions:
Pension contributions $ 362,014
Pension expense (174,414)
187,600 (29,647)
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.
(31,606) (20,569)
Change in net position of governmental activities (page 31)
$ 11,727,159 $ 5,562,601
The accompanying notes are an integral part of these financial statements.
37
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31, 2020
With Comparative Totals For December 31, 2019
Water
Sewer
Storm Sewer
Assets:
Current assets:
Cash and cash equivalents
$ 5,742,474
$ 3,595,701
$ 723,743
Accrued interest
21,860
14,170
2,843
Due from other governmental units
-
12,867
-
Accounts receivable - net
583,603
631,532
184,498
Special assessments receivable:
Unremitted
1,639
1,387
353
Delinquent
115,697
105,886
30,119
Deferred
-
-
1,341
Inventories - at cost
18,387
-
Total current assets
6,483,660
4,361,543
942,897
Noncurrent assets:
Capital assets:
Land
730,243
Buildings and structures
15,877,590
-
-
Machinery and equipment
308,316
737,033
555,001
Distribution and collection system
21,319,542
28,500,532
13,653,614
Construction in progress
-
Total capital assets
38,235,691
29,237,565
14,208,615
Less: Allowance for depreciation
(19,325,715)
(13,808,728)
(5,832,633)
Total noncurrent assets
18,909,976
15,428,837
8,375,982
Total assets
25,393,636
19,790,380
9,318,879
Deferred outflows of resources:
Related to other post employment benefits
1,452
1,088
-
Related to pensions
20,633
13,941
Total deferred outflows of resources
22,085
15,029
-
Liabilities:
Current liabilities:
Accounts payable
52,788
3,825
3,497
Contracts payable
12,276
4,261
5,984
Deposits payable
2,234
-
-
Interest payable
22,330
-
Due to other governmental units
21,412
7,859
-
Salaries payable
13,819
11,224
3,282
Bonds payable - due within one year
735,000
-
-
Compensated absences payable - due within one year
18,459
10,151
6,670
Total current liabilities
878,318
37,320
19,433
Noncurrent liabilities:
Other post employment benefits - due in more than one year
30,468
22,851
-
Bonds payable - due in more than one year
1,637,742
-
-
Compensated absences payable - due in more than one year
104,599
57,524
37,799
Net pension liability - due in more than one year
258,656
174,768
-
Total noncurrent liabilities
2,031,465
255,143
37,799
Total liabilities
2,909,783
292,463
57,232
Deferred inflows of resources:
Related to pensions
13,925
9,409
-
Net position:
Net investment in capital assets
16,537,234
15,428,837
8,375,982
Unrestricted
5,954,779
4,074,700
885,665
Total net position
$ 22,492,013
$ 19,503,537
$ 9,261,647
Net position reported above
Amounts reported for business -type activities in the statement of net position are different because:
Internal service funds are used by management to charge the cost of equipment maintenance
and insurance to individual funds. This amount is the portion of net revenue attributable to
business -type activities.
Net position of business -type activities
The accompanying notes are an integral part of these financial statements.
38
Statement 6
Totals
Governmental Activities -
Totals
Internal Service Funds
2020
2019
2020
2019
$ 10,061,918
$ 9,040,561
$ 957,413
$ 1,009,554
38,873
44,954
4,288
5,783
12,867
15,345
-
-
1,399,633
1,366,213
4,628
3,379
1,222
-
251,702
273,742
1,341
1,750
-
-
18,387
29,815
91,683
84,553
11, 788,100
10,773,602
1,053,3 84
1,104, 518
730,243
730,243
-
-
15,877,590
15,877,590
1,600,350
1,600,350
63,473,688
60,497,171
-
161,927
81,681,871
78,867,281
(38,967,076)
(.37,208,608)
42,714,795
41,658,673
54,502,895
52,432,275
1,053,384
1,104,518
2,540
1,846
-
-
34,574
32,902
37,114
34,748
60,110
44,840
27,142
34,962
22,521
78,261
-
-
2,234
3,534
22,330
28,919
29,271
32,403
-
-
28,325
22,224
10,395
7,417
735,000
725,000
-
-
35,280
31,837
-
935,071
967,018
37,537
42,379
53,319
47,362
-
1,637,742
2,386,058
199,922
180,411
433,424
396,161
2,324,407
3,009,992
-
-
3,259,478
3,977,010
37,537
42,379
23,334
82,570
-
-
40,342,053
38,547,615
-
-
10,915,144
9,859,828
1,015,847
1,062,139
$ 51,257,197
$ 48,407,443
$ 1,015,847
$ 1,062,139
S 51,257,197 $ 48,407,443
108,035 122,721
$ 51,365,232 $ 48,530,164
39
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Water
Sewer
Storm Sewer
Operating revenues:
User charges
$ 3,248,856
$ 2,353,737
$ 594,124
Meters
36,948
-
-
Other
63,433
1,302
400
Total operating revenues
3,349,237
2,355,039
594,524
Operating expenses:
Personal services
548,413
375,048
204,405
Supplies
249,625
18,019
6,672
Other service charges
769,158
180,749
110,208
Disposal charges
-
1,274,975
-
Depreciation
850,293
613,240
294,935
Total operating expenses
2,417,489
2,462,031
616,220
Operating income (loss)
931,748
(106,992)
(21,696)
Nonoperating revenues (expenses):
Investment income
97,204
63,256
12,986
Gain on sale of capital assets
-
-
-
Interest expense
(41,594)
-
-
Total nonoperating revenues (expenses)
55,610
63,256
12,986
Income (loss) before contributions
and transfers
987,358
(43,736)
(8,710)
Capital contributions
957,541
851,570
1,005,479
Transfers:
Transfers in
59,740
-
-
Transfers out
(416,625)
(499,773)
(43,090)
Total transfers
(356,885)
(499,773)
(43,090)
Change in net position
1,588,014
308,061
953,679
Net position - January 1
20,903,999
19,195,476
8,307,968
Net position - December 31
$ 22,492,013
$ 19,503,537
$ 9,261,647
Net changes in net position reported above
Amounts reported for business -type activities in the statement of activities are different because:
Internal service funds are used by management to charge the cost of equipment maintenance
and insurance to individual funds. This amount is the portion of net revenue attributable to
business -type activities.
Change in net position of business -type activities
The accompanying notes are an intregral part of these financial statements.
40
Statement 7
Totals
lntra Governmental Activities -
Activity Totals Internal Service Funds
Eliminations 2020 2019 2020 2019
$ - $ 6,196,717 $ 5,561,256 $ 1,217,279 $ 1,174,617
- 36,948 28,526 - -
- 65,135 60,778 72,329 22,606
- 6,298,800 5,650,560 1,289,608 1,197,223
-
1,127,866
1,097,202
530,553
494,324
-
274,316
224,194
335,851
391,124
(30,600)
1,029,515
973,900
486,701
385,860
-
1,274,975
1,199,237
-
-
-
1,758,468
1,732,064
-
-
(30,600)
5,465,140
5,226,597
1,353,105
1,271,308
30,600
833,660
423,963
(63,497)
(74,085)
-
173,446
236,356
17,205
29,809
-
-
15,818
-
-
-
(41,594)
(57,352)
-
-
-
131,852
194,822
17,205
29,809
30,600
965,512
618,785
(46,292)
(44,276)
-
2,814,590
2,306,335
-
-
-
59,740
58,110
-
-
(30,600)
(990,088)
(1,323,739)
-
-
(30,600)
(930,348)
(1,265,629)
-
-
-
2,849,754
1,659,491
(46,292)
(44,276)
-
48,407,443
46,747,952
1,062,139
1,106,415
$ -
$ 51,257,197
$ 48,407,443
$ 1,015,847
$ 1,062,139
$ 2,849,754
$ 1,659,491
(14,696) (23,707)
$ 2,835,068 $ 1,635,784
Ell
CITY OF ANDOVER, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Cash flows from operating activities:
Receipts from customers and users
Payment to suppliers
Payment to employees
Net cash flows from operating activities
Cash flows from noncapital financing activities:
Transfers in
Transfers out
Net cash flows from noncapital financing activities
Cash flows from capital and related financing activities:
Acquisition of capital assets
Interest paid on debt
Payment of bonds
Proceeds from the sale of capital assets
Net cash flows from capital and related financing activities
Cash flows from investing activities:
Investment income
Net increase in cash and cash equivalents
Cash and cash equivalents - January I
Cash and cash equivalents - December 31
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation
Changes in assets, deferred outflows of resources,
liabilities and deferred inflows of resources:
Decrease (increase) in due from other governmental units
Decrease (increase) in accounts receivable
Decrease (increase) in special assessments
Decrease (increase) in inventory
Decrease (increase) in deferred outflows ofresources
Increase (decrease) in accounts payable
Increase (decrease) in contracts payable
Increase (decrease) in deposits payable
Increase (decrease) in due to other governmental units
Increase (decrease) in salaries payable
Increase (decrease) in other post employment benefits
Increase (decrease)in compensated absences
Increase (decrease) in net pension liability
Increase (decrease) in deferred inflows ofresources
Total adjustments
Net cash provided (used) by operating activities
Noncash investing, capital and financing activities:
Assets contributed to the Enterprise Funds
$ 3,311,988 $ 2,388,912 $ 587,250
(991,587) (1,474,914) (176,379)
(551,774) (364,456) (200,963)
1,768,627 549,542 209,908
59,740
(416,625) (499,773) (43,090)
(356,885) (499,773) (43,090)
(61,499)
(725,000)
(786,499)
-
-
100,178
66,326
13,023
725,421
116,095
179,841
5,017,053
3,479,606
543,902
$ 5,742,474
$ 3,595,701
$ 723,743
$ 931,748
$ (106,992)
$ (21,696)
850,293
613,240
294,935
-
2,478
-
(52,058)
25,210
(6,572)
14,809
6,185
(702)
11,428
-
-
(850)
(1,516)
-
10,915
1,249
3,106
5,472
154
(61,366)
(1,300)
-
681
(2,574)
(1,239)
3,079
3,307
(285)
3,404
2,553
-
12,052
7,175
3,727
15,673
21,590
-
(36,719)
(22,517)
-
836,879
656,534
231,604
$ 1,768,627
$ 549,542
$ 209,908
$ 957,541
$ 851,570
$ 1,005,479
The accompanying notes are an integral part of these financial statements.
42
Statement 8
Totals
Governmental Activities -
Totals Internal Service Funds
2020
2019
2020
2019
$ 6,288,150
$ 5,810,644
$ 1,294,236
$ 1,198,247
(2,642,880)
(2,390,467)
(837,502)
(731,277)
(1,117,193)
(1,069,347)
(527,575)
(492,955)
2,528,077
2,350,830
(70,841)
(25,985)
59,740
58,110
(959,488)
(1,293,139)
(899,748)
(1,235,029)
(186,329)
(61,499)
(63,664)
(725,000)
(718,316)
15,818
(786,499)
(952,491)
-
-
179,527
232,255
18,700
29,592
1,021,357
395,565
(52,141)
3,607
9,040,561
8,644,996
1,009,554
1,005,947
$ 10,061,918
$ 9,040,561
$ 957,413
$ 1,009,554
$ 803,060 $ 393,363 $ (63,497) $ (74,085)
1,758,468 1,732,064
2,478
16,975
-
-
(33,420)
150,868
4,628
1,024
20,292
(7,759)
-
-
11,428
(6,820)
(7,130)
28,027
(2,366)
37,467
-
15,270
(1,057)
(7,820)
17,680
(55,740)
40,102
-
(1,300)
1,300
(3,132)
3,939
-
-
6,101
3,935
2,978
1,369
5,957
6,429
-
-
22,954
13,321
37,263
(8,940)
(59,236)
(24,357)
-
1,725,017
1,957,467
(7,344)
48,100
$ 2,528,077
$ 2,350,830
$ (70,841)
$ (25,985)
$ 2,814,590
$ 2,306,335
$
$
43
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Andover was incorporated in 1974 and operates under the State of Minnesota Statutory Plan A form of government. The
governing body consists of a five -member City council elected by voters of the City.
The financial statements of the City have been prepared in conformity with generally accepted accounting principles as applied to
governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting
policies.
A. FINANCIAL REPORTING ENTITY
As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City
(the primary government) and its component units. The component units discussed below are included in the City's reporting entity
because of the significance of their operational or financial relationships with the City.
COMPONENT UNITS
In conformity with generally accepted accounting principles, the financial statements of the component units have been included
in the financial reporting entity as blended component units.
The Andover Economic Development Authority (EDA) is an entity legally separate from the City. However, for financial reporting
purposes, the EDA is reported as if it were part of the City's operations because the members of the City Council serve as EDA
Board Members and its purpose is to promote development within the City. The activity of the EDA is reported in the EDA General
Special Revenue Fund. Separate financial statements are not prepared for the EDA.
B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
The government -wide financial statements (i.e., the statement of net position and the statement of activities) report information on
all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund
activity has been removed from these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-(ype activities, which rely to a significant extent on fees and
charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or business -type activity are
offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or business -type activity.
Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or
privileges provided by a given function or business -type activity and 2) grants and contributions that are restricted to meeting the
operational or capital requirements of a particular function or business -type activity. Taxes and other items not included among
program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds
and major individual enterprise funds are reported as separate columns in the fund financial statements.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENT PRESENTATION
The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of
accounting, as are the Proprietary Fund financial statements. Revenues are recorded when earned and expenses are recorded when
a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which
they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider
have been met.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered
to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period.
For this purpose, the City considers all revenues, except reimbursement grants, to be available if they are collected within 60 days
of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year of the
end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recorded only when payment is due.
Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current fiscal
period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only
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CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as
revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received
by the City.
The City reports the following major governmental funds:
The General Fund is the City's primary operating fund. It accounts for all financial resources of the general government,
except those required to be accounted for in another fund.
The Water Trunk Capital Projects Fund (CPF) is used to account for water access fees and trunk improvements as part of
development. It is also used to reserve monies that will be needed for capital infrastructure replacements in the future.
The Sewer Trunk CPF is used to account for sewer access fees and sanitary sewer improvements.
The Road and Bridge CPF accounts for all road projects and the pavement management program, which includes annual seal
coating, crack sealing and overlays for roads.
The 2018A General Obligation (G.O.) Capital Improvement Plan Bonds CPF accounts for the construction of a new vehicle
maintenance facility with a wash bay and a cold storage building.
The 2019A G.O. Abatement Bonds CPF accounts for the addition to the Andover YMCA Community Center. The project
consists of a multi -sports complex, additional court added to the existing field house, and teen/senior meeting rooms.
The Tax Increment Projects CPF is used to account for activities in TIF districts 1-2, 1-5, 1-6 and all TIF land sales and
expenditures to reach the goals of the TIF district plans.
The City reports the following major proprietary funds:
The Water Fund accounts for the water service charges, which are used to finance the water system operating expenses.
The Server Fund accounts for the sewer service charges, which are used to finance the sanitary sewer system operating
expenses.
The Storm Sewer Fund accounts for the storm sewer utility charges, which are used to finance the storm sewer operating
expenses.
Additionally, the City reports the following fund type:
Internal Service Funds (ISF) are used to provide equipment maintenance and insurance to other departments of the City on a
cost reimbursement basis.
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.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided,
2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated
resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal
ongoing operations. The principal operating revenues of the water and sewer enterprise funds are charges to customers for sales
and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and
depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and
expenses.
When both restricted and unrestricted resources are available for an allowable use, it is the City's policy to use restricted resources
first, and then unrestricted resources as they are needed.
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CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
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:
Final Over
Budget Actual Budget
Special Revenue Funds:
Charitable Gambling $ 30,000 $ 57,368 $ 27,368
The expenditures over budget were funded by greater than anticipated revenues and/or available fund balance.
F. CASH AND INVESTMENTS
Cash balances from all funds are combined and invested to the extent available in authorized investments. Earnings from such
investments are allocated to the individual funds on the basis of applicable cash balance participation of each fund.
The City provides temporary advances to fiords 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, except for investments in external investment pools that meet GASB 79 requirements, are
stated at amortized cost. Short-term investments, such as commercial paper and banker's acceptances, are reported 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:
46
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
a. readily convertible to known amounts of cash, or
b. so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.
The City's policy considers cash equivalents to be those that meet the above criteria and have original maturities of three months
or less.
G. RECEIVABLES AND PAYABLES
During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered.
Short-term interfund loans are classified as "interfund receivables/payables." Long-term interfund loans are classified as "interfund
loan receivable/payable." Any residual balances outstanding between the governmental activities and business -type activities are
reported in the government -wide financial statements as "internal balances."
Interfund loan receivables, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable
governmental funds to indicate that they are not available for appropriation and are not expendable, available financial resources.
Property taxes and special assessments receivable have been reported net of estimated uncollectible accounts. (See Note 1 H and
I). Because utility bills are considered liens on property, no estimated uncollectible amounts are established. Uncoil ectible 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.
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.
47
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
L SPECIAL ASSESSMENT REVENUE RECOGNITION
Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement
projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent
with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in
the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or
prepayment penalties.
Once a special assessment roll is adopted, the amount attributed to each parcel is a Gen 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.
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 acquisition 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.
The City implemented GASB Statement No. 51. Accounting and Financial Reporting for Intangible Assets effective January 1,
2010 which required the City to capitalize and amortize intangible assets. Intangible assets include easements and computer
48
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
software. Pursuant to GASB Statement 51, in the case of initial capitalization of intangible assets, the City chose to capitalize
intangible assets retroactively to 1980, except for permanent easements and internally generated software. The City has already
accounted for computer software at historical cost and therefore retroactive reporting was not necessary. The City does not have
any temporary easements to record that meet the threshold of $10,000.
Property, plant and equipment of the primary government, as well as the component units, are depreciated/amortized using the
straight line method over the following estimated useful lives:
Assets
Life
Buildings and improvements
10 - 30 years
Furniture and equipment (including software)
5 - 10 years
Machinery and equipment
5 - 10 years
Other park improvements
10 - 30 years
Storm sewer
50 years
Distribution and collection systems
50 years
Temporary easements
5 - 15 years
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 2019 of the condition of the streets and trails constructed since 1974.
This condition assessment will be performed every 3 years. Each segment of City owned street or trail was assigned a physical
condition based on potential defects. An Overall Condition Index (OCI) was assigned to each segment. The index is expressed in
a continuous scale from 0 to 10, where 0 is assigned to the least acceptable physical condition and 10 is assigned to those segments
that have the characteristic of a new street or trail. The following conditions were defined:
Range Description
8 - 10
Excellent
7 - 7.9
Very good
6 - 6.9
Good
4 - 5.9
Fair
2 - 3.9
Poor
1 - 1.9
Very poor
0 - .9
Substandard
The City's policy relative to maintaining the street and trail assets is to achieve an average rating of "Good" for all segments. This
acceptable rating allows minor cracking and patching of the pavement along with minor roughness that could be noticeable to the
users of the system.
N. COMPENSATED ABSENCES
City employees earn vacation and sick pay accruing each payroll period. Unused vacation can be accrued by the employees up to
a maximum of 200 hours (240 hours if on the annual leave plan) as of the anniversary date of the individual's employment with
the City, unless a specific authorization is granted to an employee. All vacation pay is accrued when incurred in the government -
wide and proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they have
matured, for example, as a result of employee resignations and retirements.
Employees can also accrue an unlimited amount of unused sick leave. Employees with two or more years of service are entitled to
receive severance pay equal to a percentage of unused sick pay ranging from 20-50 percent based on years of service, up to a
maximum of 400 hours. The liability for severance pay is accounted for the same as accrued vacation pay.
O. LONG-TERM OBLIGATIONS
In the government -wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other
long-term obligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary
fund type statement of net position. Bond premiums and discounts are amortized over the life of the related debt.
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.
49
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
P. FUND BALANCE CLASSIFICATIONS
In the fund financial statements, governmental fiords report fund balance in classifications that disclose constraints for which
amounts in those funds can be spent. These classifications are as follows:
Nonspendable — consists of amounts that are not in spendable form, such as prepaid items.
Restricted — consists of amounts related to externally imposed constraints established by creditors, grantors or contributors;
or constraints imposed by state statutory provisions.
Committed — consists of internally imposed constraints. These constraints are established by Resolution of the City Council.
Assigned — consists of internally imposed constraints. These constraints reflect the specific purpose for which it is the City's
intended use. These constraints are established by the City Council and/or management. Pursuant to City Council Resolution,
the City's Administrator and Finance Director are authorized to establish assignments of fund balance.
Unassigned — is the residual classification for the general fund and also reflects negative residual amounts in other funds.
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
Interfimd 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.
Interfimd 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, 2019, 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
resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that
applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The
government has two items that qualify for reporting in the category. It is other post employment benefits and 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
resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that
applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has
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,
Zil
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
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, tax increment,
special assessments, certified bills and land held for resale.
V. DEFINED BENEFIT PENSION PLANS - STATEWIDE
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 to/deductions
from PERA's fiduciary net position have been determined on the same basis as they are reported by PERA except that PERA's
fiscal year end is June 30. For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit
payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair
value.
W. RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
1. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND
THE GOVERNMENT -WIDE STATEMENT OF NET POSITION
The governmental fund balance sheet includes a reconciliation between fund balance — total governmental funds and net
position — governmental activities as reported in the government -wide statement of net position. One element of that
reconciliation explains that "long-term liabilities, including bonds payable, 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." The details of this
($45,341,667) difference are as follows:
Bonds payable $ (40,296,891)
Accrued interest payable (544,339)
Other post employment benefits (327,529)
Compensated absences (840,769)
Net pension liability (3,332,139)
Net adjustment to reduce fund balance - total governmental
funds to arrive at net position - governmental activities $ (45,341,667)
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
$907,812 difference are as follows:
Internal Service Funds net position $ 1,015,847
Net revenue attributable to business -type activities (108,035)
Net adjustment to increase fund balance - total governmental
funds to arrive at net position - governmental activities $ 907,812
2. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND STATEMENT OF
REVENUES, EXPENDITURES. AND CHANGES IN FUND BALANCES AND THE GOVERNMENT -WIDE
STATEMENT OF ACTIVITIES
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between
net changes in fund balances — total governmental funds and changes in net position of governmental activities as reported in
the government -wide statement of activities. One element of that reconciliation explains that "Governmental Funds report
capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated
useful lives and reported as depreciation expense." The details of this S 14,528,019 difference are as follows:
X
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Capital outlay $ 16,830,198
Construction/acquisition costs 7,145
Depreciation expense (2,309,324)
Net adjustment to increase net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities $ 14,528,019
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 $6,633,646 difference are as
follows:
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. $ 6,633,646
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 ($24,640) difference are as follows:
Unavailable revenue - general property taxes:
At December 31, 2019 $ (117,263)
At December 31, 2020 145,014
Unavailable revenue - tax increment taxes:
At December 31, 2019 (1,257)
At December 31, 2020 1,257
Unavailable revenue - special assessments:
At December 31, 2019 (1,697,628)
At December 31, 2020 1,720,237
Unavailable revenue - land held for resale
At December 31, 2019 (825,000)
At December 31, 2020 750,000
Net adjustments to decrease net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities $ (24,640)
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 $322,156 difference
are as follows:
Debt issued or incurred:
Issuance of certificates of indebtedness $ (1,310,000)
Principal repayments:
Abatement bonds 910,000
Certificates of indebtedness 406,000
Capital improvement bonds 85,000
Referendum bonds 160,000
Amortization of bond premium 71,156
Net adjustment to increase net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities $ 322,156
52
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
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
($126,266) difference are as follows:
Compensated absences $ (119,115)
Accrued interest (7,151)
Net adjustment to decrease net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities $ (126,266)
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 (S31,606) difference are as follows:
Internal Service Funds change in net position $ (46,292)
Net revenue attributable to business -type activities 14,686
Net adjustment to increase fund balance - total governmental
funds to arrive at net position - governmental activities $ (31,606)
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 such
banks 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. Securities pledged as collateral are required to be held in
safekeeping by the City Clerk/Treasurer or in a financial institution other than that furnishing the collateral. Minnesota Statute l 18A.03
identifies allowable forms of collateral.
Custodial Credit Risk — Deposits: Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be
returned to it. As of December 31, 2020, the bank balance of the City's deposits was covered by federal depository insurance or covered
by perfected collateral pledged and held in the City's name. The City has no additional deposit policies addressing custodial credit risk.
INVESTMENTS
Subject to rating, yield, maturity and issuer requirements as prescribed by statute, Minnesota Statutes 118A.04 and 118A.05 authorize
the City to invest in United States securities, state and local securities, commercial paper, time deposits, high -risk mortgage -backed
securities, temporary general obligation bonds, repurchase agreements, Minnesota joint powers investment trust and guaranteed
investment contracts.
As of December 31, 2020, the City had the following investments and maturities:
53
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Investment Maturities (in Years)
Credit Fair Less Than
More Than
Investment Type Rating Value 1 1 - 5 6 - 10
10
Money market funds N/A $ 2,997,965 $ 2,997,965 $ - $ -
$ -
Minnesota Municipal
Money Market Fund (4M) N/A 2,314,404 2,314,404 - -
-
Certificates of deposit N/A 13,826,841 8,880,298 4,946,543 -
-
Local/State governments A/A1/A2 265,633 203,696 61,937 -
-
AAl/AA2/AA3 8,954,131 2,571,979 4,148,637 2,233,515
-
AAA 5,755,480 1,532,172 3,151,637 867,061
204,610
U.S. agencies AAA 18,443,399 7,406,500 10,401,775 635,124
-
Total investments 52,557,853 $25,907,014 $22,710,529 $ 3,735,700
$ 204,610
Deposits 2,289,200
Total cash and investments $54,847,053
The following is a reconciliation of the City's total cash and investment balances at December 31, 2020:
Government -wide statement of net position:
Cash and investments $ 54,720,371
Cash and investments with escrow agent 126,682
Total $ 54,847,053
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles.
The hierarchy is based on the valuation inputs used to measure the fair value of the asset. The hierarchy has three levels.
Level 1
investments are valued using inputs that are based on quoted prices in active markets for identical assets. Level 2 investmments are valued
using inputs that are based on quoted prices for similar assets or inputs that are observable, either directly or indirectly.
Level 3
investments are valued using inputs that are unobservable.
The City has the following recurring fair value measurements as of December 31, 2020:
54
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Investment Type
Investments at fair value:
Federal Home Loan Bank
Federal Farm Credit Bank
Federal Home Loan Mortgage Corporation
Federal National Mortgage Association
M unicip at Bonds
Brokered Certificates of Deposit
Total investments at fair value
Investments not categorized:
External investment pool:
4M
Wells Fargo Bank Money Market
Total investments not categorized
Total
Fair Value Measurement Using
12/31/2020
Level Level Level
$ 4,929,830
$ - $ 4,929,830 $ -
5,362,887
- 5,362,887 -
5,982,610
- 5,982,610 -
2,168,072
- 2,168,072 -
14,975,244
- 14,975,244 -
13,826,841
- 13,826,841 -
47,245,484
$ - $47,245,484 $ -
2,314,404
2,997,965
5,312,369
$ 52,557,853
The 4M Fund is an external investment pool investment which is regulated by Minnesota Statutes and the Board of Directors of the
League of Minnesota Cities. It is an unrated pool and the fair value of the position in the pool is the same as the value of pool shares.
The pool is managed to maintain a portfolio weighted average maturity of no greater than 60 days and seeks to maintain a constant net
asset value (NAV) per share of $1. The pool measures their investments in accordance with Government Accounting Standards Board
Statement No. 79, at amortized cost. The 4M Plus Fund requires funds to be deposited for a minimun of 14 calendar days. Withdrawals
prior to the 14-day restriction period are subject to a penalty equal to 7 days interest on the amount withdrawn.
Custodial Credit Risk - investments — For investments in securities, custodial credit risk is the risk that in the event of a failure of the
counteiparty, 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, 2020, $250,000 of the City's $52,557,853 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-tenn securities, money market mutual funds or similar investment pools.
Credit Risk - The City has a formal investment policy that states the City will minimize the credit risk, the risk of loss due to the failure
of the security issuer or backer, by:
1) Limiting investments to the safest types of securities.
2) Pre -qualifying the financial institutions, broker/dealers, intermediaries and advisers with which the City will do business.
A list will be maintained of financial institutions authorized to provide investment services. In addition, a list also will be
maintained of approved security broker/dealers selected by creditworthiness. These may include "primary" dealers or regional
dealers that qualify under Securities and Exchange Commission (SEC) Rule 15C3-1.
All financial institutions and broker/dealers who desire to become qualified for investment transactions must supply: audited
financial statements, proof of National Association of Securities Dealers (NASD) certification, proof of state registration,
completed broker/dealer questionnaire, and certification of having read and understood and agreeing to comply with the City's
investment policy.
An annual review of the financial condition and registration of qualified financial institutions and broker/dealers will be
conducted by the City Administrator.
55
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Concentration of Credit Risk - More than 35% of the City's investments are in various holdings with U.S. agencies; Federal Home Loan
Bank (9.4%), Federal Farm Credit Bank (10.2%), Federal National Mortgage Association (4.1%) and Federal Home Loan Mortgage
Corporation (11.4%). The City's policy on concentration of investments is as follows:
1) Diversification - The investments shall be diversified by:
a) investments to avoid over concentration in securities from a specific issuer or business sector (excluding U.S.
Treasury securities),
b) limiting investment in securities that have higher credit risks,
c) investing in securities with varying maturities, and
d) continuously investing a portion of the portfolio in readily available funds such as local government investment
pools (LGIPs), money market funds or overnight repurchase agreements to ensure that appropriate liquidity is
maintained in order to meet ongoing obligations.
21) 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-tenrr 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 maturities 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 receivable balances not expected to be collected within one year of December 31, 2020 are as follows:
Delinquent Delinquent Special
Property Tax Assessment
Taxes Increment Receivable Total
Major Funds:
General Fund $ 46,411 $ - $ 10,192 $ 56,603
Water Trunk CPF - - 284,195 284,195
Sewer Trunk CPF - - 57,210 57,210
Road and Bridge CPF 6,934 - 1,034,206 1,041,140
Tax Increment Projects CPF - 1,257 - 1,257
Nonmajor Funds 16,263 - 93,416 109,679
Total $ 69,608 $ 1,257 $ 1,479,219 $ 1,550,084
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:
56
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Property
Tax Special Land Held
Taxes
Increment Assessments for Resale
Total
Major Funds:
General Fund
$ 96,689
$ - $ 10,192 $ -
$ 106,881
Water Trunk CPF
-
- 304,827 -
304,827
Sewer Trunk CPF
-
- 83,203 -
83,203
Road and Bridge CPF
14,446
- 1,226,223 -
1,240,669
Tax Increment Projects CPF
-
1,257 - 750,000
751,257
Nonmajor Funds 33,879 - 95,792 - 129,671
Total $ 145,014 $ 1,257 $ 1,720,237 $ 750,000 $ 2,616,508
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, 2020 was as follows:
Primary Government
Governmental activities:
Capital assets not being depreciated:
Land and improvements
Streets and trails
Construction in progress
Total capital assets not being depreciated
Capital assets being depreciated:
Buildings and improvements
Furniture and equipment (including software)
Machinery and equipment
Other park improvements
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings and improvements
Furniture and equipment
Machinery and equipment
Other park improvements
Total accumulated depreciation
Total capital assets being depreciated - net
Governmental activities capital assets - net
Beginning
Ending
Balance
Additions
Deletions
Balance
$ 11,205,798
$ 115,335
$ -
$ 11,321,133
87,716,023
1,869,973
-
89,585,996
14,087,766
168,192
(14,087,766)
168,192
113,009,587
2,153,500
(14,087,766)
101,075,321
27,552,688
34,325,048
(66,911)
61,810,825
969,869
184,456
(37,200)
1,117,125
8,905,807
610,669
(224,409)
9,292,067
8,200,494
277,937
(42,195)
8,436,236
45,628,858
35,398,110
(370,715)
80,656,253
14,373,629
1,499,645
(66,911)
15,806,363
581,925
86,181
(37,200)
630,906
6,575,481
392,292
(224,409)
6,743,364
4,569,264
331,206
(42,195)
4,858,275
26,100,299
2,309,324
(370,715)
28,038,908
19,528,559
33,088,786
-
52,617,345
$ 132,538,146 $ 35,242,286 $ (14,087,766) $ 153,692,666
57
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Primary Government
Business -type activities:
Capital assets not being depreciated:
Land and improvements
Construction in progress
Total capital assets not being depreciated
Capital assets being depreciated:
Buildings and improvements
Furniture and equipment (including software)
Machinery and equipment
Collection and distribution
Total capital assets being depreciated
Less accumulated depreciation for:
Buildings and improvements
Furniture and equipment
Machinery and equipment
Collection and distribution
Total accumulated depreciation
Total capital assets being depreciated - net
Business -type activities capital assets - net
Beginning
Ending
Balance
Additions
Deletions Balance
$ 730,243
S -
$ - S 730,243
161,927
-
(161,927) -
892,170
-
(161,927) 730,243
15,877,590
-
- 15,877,590
23,436
-
- 23,436
1,576,915
-
- 1,576,915
60,497,170
2,976,517
- 63,473,687
77,975,111
2,976,517
- 80,951,628
10,359,787
420,007
- 10,779,794
23,437
-
- 23,437
869,318
91,262
- 960,580
25,956,066
1,247,199
- 27,203,265
37,208,608
1,758,468
- 38,967,076
40,766,503
1,218,049
- 41,984,552
$ 41,658,673 $ 1,218,049 $ (161,927) $ 42,714,795
Depreciation/amortization expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government
$ 98,146
Public safety
298,242
Public works
392,464
Parks and recreation
1,502,142
Recycling
6,862
Economic development
11,468
Total depreciation/amortization expense - governmental activities $ 2,309,324
Business -type activities:
Water $ 850,293
Sewer 613,240
Storm sewer 294,935
Total depreciation/amortization expense - business -type activities $ 1,758,468
CONSTRUCTION COMMITMENTS
At December 31, 2020, the City did not have any construction commitments.
58
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Note 6 LONG-TERM DEBT
The City issues general obligation bonds, equipment certificates and promissory notes to provide funds for the acquisition and construction
of major capital facilities. The reporting entity's long-term debt is segregated between the amounts to be repaid from governmental activities
and amounts to be repaid from business -type activities.
GOVERNMENTAL ACTIVITIES:
Abatement Bonds:
2012C G.O. Abatement Bonds
2019A G.O. Abatement Bonds
Total abatement bonds
Certificates of indebtedness:
2016A G.O. Equipment Certificates
2020A C.O. Equipment Certificates
Total certificates of indebtedness
Issue Maturity Interest Original Payable
Date Date Rate Issue 12/31/20
12/27/2012
2/1/2031
1.00-3.00%
$ 17,315,000
$ 11,475,000
8/1/2019
2/l/2040
3.00-5.00%
15,770,000
15,770,000
33,085,000
27,245,000
2/19/2016
2/1/2021
190%
520,000
134,000
3/19/2020
2/1/2024
4.00%
1,310,000
1,310,000
1,830,000
1,444,000
Capital Improvement Bonds:
2018A G.O. Capital Improvement Plan Bonds 12/27/2018
Referendum Bonds:
2010A G.O. Open Space Referendum Bonds 2/18/2010
Total - bonded indebtedness
Issuance premiums
Compensated absences payable
Total governmental activities indebtedness
BUSINESS -TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2009A G.O. Water Revenue Bonds 3/26/2009
2016B G.O. Water Revenue Refunding Bonds 12/7/2016
Total general obligation revenue bonds
Issuance premiums
2/ l /2044
3.00-5.00% 10,000,000 9,915,000
2/1/2022 2.00-3.12% 1,660,000 335,000
46,575,000 38,939,000
- 1,357,891
- 840,769
46,575,000 41,137,660
2/l/2024 2.00-4.25% 1,025,000 320,000
2/l/2023 2.00% 3,925,000 2,025,000
4,950,000 2,345,000
- 27,742
Compensated absences payable - 235,202
Total business -type activities indebtedness 4,950,000 2,607,944
Total City indebtedness $ 51,525,000 $ 43,745,604
For the governmental activities, compensated absences are generally liquidated by the General and Special Revenue Funds.
Annual debt service requirements to maturity for general obligation bonds are as follows:
M
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Governmental Activities
Abatement Bonds
Certificates of Indebtedness
Capital Improvement Bonds
Principal
Interest
Principal
Interest
Principal
Interest
2021
$ 1,160,000
$ 871,906
$ 449,000
$ 47,373
$ 125,000
$ 350,881
2022
1,490,000
833,706
320,000
33,400
130,000
344,506
2023
1,530,000
786,181
330,000
20,400
290,000
334,006
2024
1,585,000
735,650
345,000
6,900
300,000
319,256
2025
1,635,000
681,256
-
-
315,000
303,881
2026-2030
9,095,000
2,472,947
-
-
1,825,000
1,292,706
2031-2035
5,620,000
1,131,525
-
-
2,130,000
981,500
2036-2040
5,130,000
394,050
-
-
2,485,000
617,628
2041-2044
-
-
-
-
2,315,000
165,462
Total
$ 27,245,000
$ 7,907,221
$ 1,444,000
$ 108,073
$ 9,915,000
$ 4,709,826
Governmental Activities
Business -Type Activities
Referendum Bonds
G.O. Revenue Bonds
Principal
Interest
Principal
Interest
2021
$ 165,000
$ 7,870
$ 735,000
$ 45,492
2022
170,000
2,656
755,000
29,042
2023
-
-
770,000
12,153
2024
-
-
85,000
1,806
$ 335,000
$ 10,526
$ 2,345,000
$ 88,493
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, 2020, was as follows:
Governmental activities:
Bonds payable:
Abatement bonds
Certificates of indebtedness
Capital improvement bonds
Referendum bonds
Total bonds payable
Issuance premiums
Compensated absences
Total governmental activities
long-term liabilities
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
$ 28,155,000
$ - $ (910,000)
$ 27,245,000
$ 1,160,000
540,000
1,310,000 (406,000)
1,444,000
449,000
10,000,000
- (95,000)
9,915,000
125,000
495,000
- (160,000)
335,000
165,000
39,190,000
1,310,000 (1,561,000)
38,939,000
1,899,000
1,429,047
- (71,156)
1,357,891
-
721,654
467,444 (348,329)
840,769
126,115
$ 41,340,701 $ 1,777,444 $ (1,980,485) $ 41,137,660 $ 2,025,115
60
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Business -type activities:
Bonds payable:
G.O. revenue bonds $ 3,070,000 $ - $ (725,000) $ 2,345,000 $ 735,000
Issuance premiums 41,058 - (13,316) 27,742 -
Compensated absences 212,248 73,754 (50,800) 235,202 35,280
Total business -type activities
longterm liabilities $ 3,323,306 $ 73,754 $ (789,116) $ 2,607,944 $ 770,280
For the governmental activities, bonds can be summarized in the following categories:
The abatement bonds were used to purchase the 132,000 square foot building from the EDA and expand the building. The bonds
are general obligations of the City for which it pledges its full faith, credit and taxing powers to the payment of principal and interest
on the bonds.
The certificates of indebtedness are used to finance the purchase of capital equipment. The certificates are general obligations of
the City for which it pledges its full faith, credit and taxing powers to the payment of principal and interest on the certificates.
The capital improvement bonds are used to finance the construction of the public works maintenance facility with a wash bay and
a cold storage building. The bonds are general obligations of the City for which it pledges its full faith, credit and taxing powers to
the payment of principal and interest on the bonds.
The referendum bonds were used to finance various land acquisitions for open space preservation within the City. The bonds are
general obligations of the City for which it pledges its full faith, credit and taxing powers to the payment of principal and interest
on the certificates.
For the business -type activities, the G.O. revenue bonds were used to finance the construction of a water treatment plant. The bonds are
payable from net revenues of the water system and are general obligations of the City for which its full faith, credit and taxing powers
are pledged.
REVENUESPLEDGED
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 $13,320,946, payable through February 2031. For the current
year, principal and interest paid and total property tax revenues were $1,215,981 and $972,704, respectively.
2019A 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 $15,770,000 bonds issued in August 2019. Proceeds from this bond were used to finance
the expansion of the community center. Total principal and interest remaining on the bonds is $21,831,275, payable through February
2040. For the current year, principal and interest paid and total property tax revenues were $590,150 and $996,913, respectively.
2016A G.O. Equipment Certificates. The City has pledged future property tax revenue to repay the $520,000 bonds issued in February
2016. 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 $135,273, payable
through February 2021. For the current year, principal and interest paid and total property tax revenues were $134,791 and $142,775,
respectively.
2020A G.O. Equipment Certificates. The City has pledged future property tax revenue to repay the $1,310,000 bonds issued in March
2020. 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 $1,416,800, payable
61
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
through February 2024. For the current year, principal and interest paid and total property tax revenues were $19,213 and $348,540,
respectively
2018A G.O. Capital Improvement Plan Bonds, The City has pledged future property tax revenue to repay the $10,000,000 bonds issued
in December 2018. Proceeds from the bonds were used to finance the construction of a public works maintenance facility with a wash
bay and a cold storage building. 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 S14,624,826, payable through February 2044. For the current year,
principal and interest paid and total property tax revenues were $441,131 and S431,794, 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 $345,526, payable through February 2022. For the current year, principal and interest paid and total property
tax revenues were $172,828 and $184,240 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 $347,143. The principal and interest paid for the current year and total customer net revenues were $89,499 and $1,425,156,
respectively.
2016B G.O. Water Revenue Refunding Bonds. The City has pledged future water customer revenues, net of operating expenses, to repay
the $3,925,000 bonds issued in December 2016. Proceeds of the bonds refunded the Series 2007B 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 $2,086,350. The
principal and interest paid for the current year and total customer net revenues were $697,000 and $1,425,156, 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 2020 and 2019 is computed as follows:
December 31,
2(12(1 2019
Estimated taxable market value
$ 3,422,826,162
Debt limit (3% of market value)
102,684,785
Amount of debt applicable to debt limit:
Total bonded debt
$ 41,284,000
Less: Nonapplicable debt
G.O. water revenue bonds
(2,345,000)
Less: Cash and investments in related
debt service funds
(2,021,047)
Total debt applicable to debt limit
36,917,953
Legal debt margin
$ 65,766,832
Note 8 DEFINED BENEFIT PENSION PLANS - PERA
A. PLAN DESCRIPTION
$ 3,121,797,779
93,653,933
$ 42,260,000
(3,070,000)
(1,418,3�76)
37,771,624
$ 55,882,309
The City participates in the following cost -sharing multiple -employer defined benefit pension plans administered by the Public
Employees Retirement Association of Minnesota (PERA). PERA's defined benefit pension plans are established and administered
in accordance with Minnesota Statutes, Chapters 353 and 356. PERA's defined benefit pension plans are tax qualified plans under
Section 401(a) of the Internal Revenue Code.
62
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
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
GERF. GERF members belong to the Coordinated Plan. Coordinated Plan members are covered by Social Security.
2. Public Employees Police and Fire Plan (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.
B. 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. 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 Plan members. Members
hired prior to July 1, 1989, receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for members hired
after June 30, 1989. Under Method 1, the accrual rate for Coordinated Plan members is 1.2% of average salary for each of
the first ten years of service and 1.7% of average salary for each additional year. Under Method 2, the accrual rate for
Coordinated members is 1.7% of average salary for all years 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.
Benefit increases are provided to benefit recipients each January. Beginning in 2019, the postretirement increase is equal to
50% of the cost -of -living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1 % and a maximum
of 1.5%. Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before the effective
date of the increase will receive the full increase. For recipients receiving the annuity or benefit for at least one month but
less than a full year as of the June 30 before the effective date of the increase will receive a reduced prorated increase. For
members retiring on January 1, 2024, or later, the increase will be delayed until normal retirement age (age 65 if hired prior
to July 1, 1989, or age 66 for individuals hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt from
the delay to normal retirement.
2. PEPFF
Benefits for 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 members who were first hired prior to July 1, 1989, a full annuity is
available when age plus years of service equal at least 90.
Benefit increases are provided to benefit recipients each January. Beginning in 2019, the postretirement increase will be fixed
at 1 %. Recipients that have been receiving the annuity or benefit for at least 36 months as of June 30 before the effective date
of the increase will receive the full increase. For recipients receiving the annuity or benefit for at least 25 months but less than
36 months as of the June 30 before the effective date of the increase will receive a reduced prorated increase.
C. 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
Coordinated Plan members were required to contribute 6.5% of their annual covered salary in fiscal year 2020 and the City
was required to contribute 7.5% for Coordinated Plan members. The City's contributions to the GERF for the year ended
December 31, 2020 were $317,872. The City's contributions were equal to the required contributions as set by state statute.
63
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
2. PEPFF Contributions
Police and Fire member's contribution rates increased from 11.3% of pay to 11.8% and employer rates increased from 16.95%
to 17.70% on January 1, 2020. The City's contributions to the PEPFF for the year ended December 31, 2020 were $34,168.
The City's contributions were equal to the required contributions as set by state statute.
D. PENSION COSTS
1. GERF Pension Costs
At December 31, 2020, the City reported a liability of $3,495,351 for its proportionate share of the GERF's net pension
liability. The City's net pension liability reflected a reduction due to the State of Minnesota's contribution of $16 million.
The State of Minnesota is considered a non -employer contributing entity and the state's contribution meets the definition of a
special funding situation. The State of Minnesota's proportionate share of the net pension liability associated with the City
totaled $107,788. The net pension liability was measured as of June 30, 2020 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 proportionate share 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, 2019 through June 30, 2020, relative to the total employer contributions received from all of PERA's
participating employers. The City's proportionate share was 0.0583% at the end of the measurement period and 0.0576% for
the beginning of the period.
City's proportionate share of the net pension liability $ 3,495,351
State of Minnesota's proportionate share of the net pension
liability associated with the City 107,788
Total $ 3,603,139
For the year ended December 31, 2020 the City recognized pension expense of $138,736 for its proportionate share of the
GERF's pension expense. In addition, the City recognized an additional $9,381 of pension expense (and grant revenue) for
its proportionate share of the State of Minnesota's contribution of $16 million to the GERF.
At December 31, 2020, 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:
Deferred
Deferred
Outflows
Inflows
of Resources
of Resources
Differences between expected and actual economic experience
$ 31,876
$ 13,225
Changes in actuarial assumptions
-
129,816
Net collective difference between projected and actual investment earnings
58,941
-
Changes in proportion
28,899
45,129
Contributions paid to PERA subsequent to the measurement date
159,103
-
Total
$ 278,819 $ 188,170
The $159,103 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, 2021.
Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension
expense as follows:
64
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Year Ended
December 31,
2021
2022
2023
2024
Thereafter
2. PEPFF Pension Costs
Pension Expense
Amount
(219,557)
(9,432)
76,088
84,447
$ (68,454)
At December 31, 2020, the City reported a liability of $270,212 for its proportionate share of the PEPFF's netpension liability.
The net pension liability was measured as of June 30, 2020 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 proportionate share 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, 2019 through June 30, 2020 relative to the total employer contributions received from all of PERA's participating
employers. The City's proportionate share was 0.0205% at the end of the measurement period and 0.0272% for the beginning
of the period.
The State of Minnesota also contributed $13.5 million to PEPFF during the plan fiscal year ended June 30, 2020. The
contribution consisted of $4.5 million in direct state aid that does meet the definition of a special funding situation and $9.0
mullion in fire state aid that does not meet the definition of a special funding situation. The $4.5 million direct state aid was
paid on October 1, 2019. Thereafter, by October 1 of each year, the state will pay $9 million to the Police and Fire Fund until
full funding is reached or July 1, 2048, whichever is earlier. The $9 million in fire state aid will continue until the fund is 90%
funded, or until the State Patrol Plan (administered by the Minnesota State Retirement System) is 90% funded, whichever
occurs later.
As a result, the State of Minnesota is included as a non -employer contributing entity in the PEPFF Schedule of Employer
Allocations and Schedule of Pension Amounts by Employer, Current Reporting Period Only (pension allocation schedules)
for the $4.5 million in direct state aid. PEPFF employers need to recognize their proportionate share of the State of
Minnesota's pension expense (and grant revenue) under GASB 68 special funding situation accounting and financial reporting
requirements. For the year ended December 31, 2020, the City recognized pension expense of $3,902 for its proportionate
share of the Police and Fire Plan's pension expense. In addition, the City recognized an additional $1,960 as pension expense
(and grant revenue) for its proportionate share of the State of Minnesota's contribution of $4.5 million to the PEPFF.
The State of Minnesota is not included as a non -employer contributing entity in the Police and Fire Pension Plan pension
allocation schedules for the $9 million in fire state aid. The City also recognized $1,845 for the year ended December 31,
2020 as revenue and offsetting reduction of net pension liability for its proportionate share of the State of Minnesota's on -
behalf contributions to the Police and Fire Fund.
At December 31, 2020, 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:
Deferred
Deferred
Outflows
Inflows
of Resources
of Resources
Differences between expected and actual economic experience
$ 11,218
$ 6,546
Changes in actuarial assumptions
46,197
134,874
Net collective difference between projected and actual investment earnings
17,253
-
Changes in proportion
118,712
198,620
Contributions paid to PERA subsequent to the measurement date
16,148
-
Total
$ 209,528
$ 340,040
65
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
$16,148 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, 2021. Other
amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as
follows:
Year Ended Pension Expense
December 31, Amount
2021
$ (27,839)
2022
(59,476)
2023
(46,042)
2024
(1,713)
2025
(11,590)
Thereafter
-
$ (146,660)
E. ACTUARIAL ASSUMPTIONS
The total pension liability in the June 30, 2020 actuarial valuation was determined using an individual entry -age normal actuarial
cost method and the following actuarial assumptions:
Inflation 2.50 percent per year
Active Member Payroll Growth 3.25 percent per year
Investment Rate of Return 7.50 percent
Salary increases were based on a service -related table. Mortality rates for active members, retirees, survivors, and disabilitants for
all plans were based on RP 2014 tables for males or females, as appropriate, with slight adjustments to fit PERA's experience.
Cost of living benefit increases after retirement for retirees are assumed to be 1.25% per year for GERF and 1.0% per year for
PEPFF.
Actuarial assumptions used in the June 30, 2020 valuation were based on the results of actuarial experience studies. The most
recent four-year experience study GERF was completed in 2019. The assumption changes were adopted by the Board and become
effective with the July 1, 2020 actuarial valuation. The most recent four-year experience study for PEPFF was completed in 2020.
The following changes in actuarial assumptions and plan provisions occurred in 2020:
General Employees Fund
Changes in Actuarial Assumptions:
• The price inflation assumption was decreased from 2.50% to 2.25%.
• The payroll growth assumption was decreased from 3.25% to 3.00%.
• As recommended in the June 30, 2019 experience study, assumed salary increase rates were decreased 0.25% and
assumed rates of retirement were changed resulting in more unreduced (normal) retirements and slightly fewer Rule of
90 and early retirements. Assumed rates of termination and disability were also changed.
• The base mortality tables were changed from RP-2014 to Pub-2010 tables, with adjustments.
• The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019.
• The assumed spouse age difference was changed from two years older for females to one year older.
• The assumed number of married male new retirees electing the 100% Joint & Survivor option changed from 35% to 45%.
The assumed number of married female new retirees electing 100% Joint & Survivor option changed from 15% to 30%.
The corresponding number of married new retirees electing the Life annuity option was adjusted accordingly.
Changes in Plan Provisions:
• Augmentation for current privatized members was reduced to 2.0% for the period July 1, 2020 through December 31,
2023 and 0.0% after. Augmentation was eliminated for privatizations occurring after June 30, 2020.
66
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Police and Fire Fund
Changes in Actuarial Assumptions:
• The mortality projection scale was changed from MP-2018 to MP-2019.
The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness on a regular
basis of the long-term expected rate of return using a building-block method in which best -estimate ranges of expected future rates
of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by
weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of
geometric real rates of return for each major asset class are summarized in the following table:
Target Long -Term Expected
Asset Class Allocation Real Rate of Return
Domestic Equity
International Stocks
Bonds (Fixed Income)
Alternative Assets (Private Markets)
Cash
Total
F. DISCOUNT RATE
35.5%
5.10%
17.5%
5.30%
20.0%
0.75%
25.0%
5.90%
2.0%
0.00%
100%
The discount rate used to measure the total pension liability in 2020 was 7.5%. The projection of cash flows used to determine the
discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based
on that assumption, the fiduciary net position of the GERF and the PEPFF was projected to be available to make all projected future
benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was
applied to all periods of projected benefit payments to detennine the total pension liability.
G. 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:
1% Decrease in 1% Increase in
Discount Rate Discount Rate Discount Rate
(6.5%) (7.5%) (8.5%)
City's proportionate share of the
GERF net pension liability $ 5,601,836 $ 3,495,351 $ 1,757,671
City's proportionate share of the
PEPFF net pension liability 538,571 270,212 48,192
H. 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 at www.mnpera.org.
1. PENSION EXPENSE
Pension expense recognized by the City for the fiscal year ended December 31, 2020 is as follows:
67
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
GERF $ 148,117
PEPFF 5,862
Total $ 153,979
For the governmental activities, pension liabilities are generally liquidated by the General and Special Revenue Funds.
Note 9. DEFINED CONTRIBUTION LUMP SUM SERVICE PENSION PLAN — VOLUNTEER FIREFIGHTERS RELIEF
ASSOCIATION
PLAN DESCRIPTION
Members of the City's volunteer fire department are members of the Andover Firefighters' Relief Association. The Association is the
administrator of a single -employer defined contribution plan available to firefighters that was established October 9, 1979 and operates
under the provisions of Minnesota Statutes Section 424A. It is governed by a board of six members elected by the members of the
Association for three-year terms. The City's Mayor, Finance Manager and Fire Chief are ex-officio members of the Board of Trustees.
The Association provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible
members.
1. Twenty -Year Service Pension — In order to be entitled to a pension benefit, a firefighter must have completed a minimum of five
years of service with the Department and five years membership in the Association and attain the age of 50 years. The firefighter
will then be 40%vested. This percentage increases 4% per year until the twentieth year when 100% vesting will occur. Because
this is a defined contribution plan, the amount of the retirement benefit is not predetermined, but rather is based on the individual
member's allocable portion of contributions made during the participation period.
2. Deferred Pension — If the retired or terminated member has not attained age 50 and is otherwise eligible for the pension benefit,
the balance of the member's account will be credited with earned interest at the rate permitted by Minnesota Statutes Section
424.A02, Subd.7.
3. Disability Benefit — if a member of the Association becomes totally and permanently disabled due to injury, disability, sickness
or dismemberment as a result of performance of duty, a disability payment will be made after one hundred days of disability.
4. Death Benefit — In the event of death of an active member or deferred pensioner, the member's individual account balance will
be paid to the surviving spouse, surviving children or the estate of the member after approval by the Board.
The Association issues a publicly available financial report that includes financial statements and required supplementary information.
That report may be obtained by writing to Andover Firefighters' Relief Association, 13875 Crosstown Boulevard NW, Andover,
Minnesota 55304.
FUNDING POLICY
The State of Minnesota contributes amortization aid, or two percent fire aid, in accordance with state statute requirements. Plan members
are not required to contribute to the plan. The state legislature may amend contribution requirements of the City and State. The City is
allowed to make voluntary contributions of other public funds pursuant to Minnesota Statutes Section 424A. The City receives the State
aid contribution and is required by state statutes to pass this through as payment to the Association. This transaction is recorded as
revenue and expenditure in the City's financial statements. Contributions for the last three years are as follows:
Year
Ending City State Total
12/31/2018 S 55,000 S 176,391 $ 231,391
12/31/2019 - 191,102 181,102
12/31/2020 55,000 194,699 249,699
68
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Note Hl OTHER POST EMPLOYMENT BENEFITS (OPEB)
A. PLAN DESCRIPTION
In addition to providing the pension benefits described in Note 8, the City provides post -employment health care benefits (as
defined in paragraph B) for retired employees through a single employer defined benefit plan. The term plan refers to the City's
requirement by State Statute to provide retirees with access to health insurance. The OPEB plan is administered by the City. The
authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a, and 299A.465. The benefits,
benefit levels, employee contributions and employer contributions are governed by the City and can be amended by the City through
its personnel manual and collective bargaining agreements with employee groups. The Plan is not accounted for as a trust fund, as
an irrevocable trust has not been established to account for the plan. The Plan does not issue a separate report.
B. BENEFITS PROVIDED
Retirees
The City is required by State Statute to allow retirees to continue participation in the City's group health insurance plan if the
individual terminates service with the City through service retirement or disability retirement. Employees who satisfy the Rule of
90 or attain age 55 and have completed 10 years of service at termination can immediately commence medical benefits. Retirees
may obtain dependent coverage while the participating retiree is under age 65. Covered spouses may continue coverage after the
retiree's death. The surviving spouse of an active employee may continue coverage in the group health insurance plan after the
employee's death.
All health care coverage is provided through the City's group health insurance plan. The retiree is required to pay 100% of their
premium cost for the City -sponsored group health insurance plan. The premium is a blended rate determined by the entire active
and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees, the retirees are
receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active employees. Upon a retiree
reaching age 65 years of age, Medicare becomes the primary insurer and the City's plan becomes secondary.
C. PARTICIPANTS
As of the actuarial valuation dated December 2018, participants consisted of:
Retirees and beneficiaries currently
purchasing health insurance through the City 2
Active employees 48
Total 50
Participating employers 1
D. TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY
The City's total OPEB liability of $380,848 was measured as of December 31, 2019 and was determined by an actuarial valuation
using the alternative measurement method as of December 31, 2018. Changes in the total OPEB liability during 2020 were:
69
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Balance - beginning of year
$ 338,296
Changes for the year:
Service Cost
17,068
Interest
12,944
Changes of benefit terms
-
Differences between expected and actual experience
-
Changes in assumptions
25,462
Benefit payments
(12,922)
Net Changes
42,552
Balance - end of year
$ 380,848
For governmental activities, OPEB liabilities are generally liquidated by the General and Special Revenue Funds.
E. ACTUAL ASSUMPTIONS AND OTHER INPUTS
The total OPEB liability in the December 31, 2019 actuarial valuation was detennined using the following actuarial assumptions
and other inputs, applied to all periods included in the measurement, unless otherwise specified:
Inflation 2.50%
Salary increases 2.75%
Discount rate 2.75%
Investment rate of return 2.75%
Healthcare cost trend rates 6.40% for FY2019, gradually decreasing over several decades to an ultimate rate
of 4.00% in FY2075 and later years.
Retirees' share of benefit -related costs 100%
Since the plan is funded on a pay-as-you-go basis, both the discount rate and the investment rate of return was based an index rate
for 20-year tax-exempt municipal bonds (Fidelity 20-Year Municipal G.O. AA index).
Mortality rates were based on the RP-2014 mortality tables with projected mortality improvements based on scale MP-2017, and
other adjustments.
Based on past experience of the plan, 75% of future retirees are assumed to continue medical coverage until age 65. 50% of
police/fire employees are assumed to retire at age 55, the balance at 65. 50% of other City employees are assumed to retire at age
62, the balance at age 65.
F. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE DISCOUNT RATE
The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were
calculated using a discount rate that is 1 % lower (1.75%) or 1 % higher (3.75%) than the current rate:
Total OPEB liability
1 % Decrease in 1 % Increase in
Discount Rate Discount Rate Discount Rate
(1.75%) (2.75%) (3.75%)
408,569 $ 380,848 $ 354,351
G. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE HEALTHCARE COST TREND RATES
The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be if it were
calculated using healthcare cost trend rates that are 1 % lower or 1 % higher than the current rate:
70
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
l % Decrease in
1 % Increase in
Healthcare Cost
Healthcare Cost Healthcare Cost
Trend Rate
Trend Rate Trend Rate
Total OPEB liability $ 339,202
$ 380,848 $ 429,582
H. OPEB EXPENSE AND DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES RELATED TO OPEB
For the year ended December 31, 2020, the City recognized $37,693 of OPEB expense. At December 31, 2020, the City reported
deferred outflows and inflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions between measurement
date and reporting date $ 17,781 S -
$17,781 reported as deferred outflows of resources related to OPEB resulting from City contributions subsequent to the
measurement date will be recognized as a reduction of the OPEB liability in the year ended December 31, 2021.
Note 11 INTERFUND RECEIVABLES/PAYABLES. LOANS AND TRANSFERS
The City made the following interfund transfers during the year:
Transfer In
Transfer Out
Amount
Purpose
General Fund
Water Fund
$
93,975
Admin allocation
General Fund
Sewer Fund
77,123
Admin allocation
General Fund
Storm Sewer Fund
19,590
Admin allocation
Water Trunk CPF
Water Fund
300,000
Replacement reserve
Sewer Trunk CPF
Sewer Fund
400,000
Replacement reserve
Road & Bridge CPF
General Fund
1,000,000
Road improvements
Road & Bridge CPF
Nonmajor Fund
5,700
Roadway degredation
Water Fund
Water Trunk Fund CPF
59,740
Debt service allocation
Nonmajor Fund
Water Fund
22,650
Debt service allocation
Nonmajor Fund
Sewer Fund
22,650
Debt service allocation
Nonmajor Fund
Storm Sewer Fund
23,500
Debt service allocation
Nonmajor Fund
Nonmajor Fund
175,146
Debt service allocation
Nonmajor Fund
Nonmajor Fund
88,476
Close Fund
Nonmajor Fund
Nonmajor Fund
300,000
Debt service allocation
$
2,588,550
Additionally, computer service
fees paid by the Water, Sewer and Storm Sewer
Enterprise Funds to the General Fund have been reclassified
as transfers on the Government
-Wide Statement of Activities
as follows:
Transfer In
Transfer Out
Governmental Activities
$ 30,600
$ -
Business -Type Activities
-
30,600
Total
$ 30,600
$ 30,600
71
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Note 12 TAX INCREMENT DISTRICTS
The City is the administering authority for the following tax increment finance districts:
Name of District:
Type of District:
Authorizing Law:
Established:
Duration of District:
Original net tax capacity:
Current net tax capacity:
Tax Increment Financing District 1-5
Redevelopment
M.S. Section 469
2012
Through 2039
$ 6,139
92,299
Cap turgid net tax capacity -
retained by the City
$ 86,160
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:
67,456
Captured net tax capacity -
retained by the City
$ 45,458
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
72
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
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,
2020.
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 claim or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they
are not aware of any instances of noncompliance that would have a material effect on the financial statements.
E. TAX ABATEMENTS - PAY-AS-YOU-GO TAX INCREMENT
The City provides tax abatements pursuant to Minnesota Statutes 469.174 to 469.1794 (Tax Increment Financing) through a pay-
as-you-go note program. Tax increment financing (TIF) can be used to encourage private development, redevelopment, renovation
and renewal, growth in low -to -moderate -income housing, and economic development within the City. TIF captures the increase
in tax capacity and property taxes from development or redevelopment to provide funding for the related project.
The City has one tax increment pay-as-you-go agreement. The agreement is not a general obligation of the City and is payable
solely from available tax increment. Accordingly, this agreement is not reflected in the financial statements of the City. Details of
the pay-as-you-go are as follows:
TIF District 41-5, Arbor Oaks Project:
Issued in 2012 in the principal sum of $540,000 with an interest rate of 5.00% per annum. Principal and interest shall be paid
on August 1, 2014 and each February and August thereafter to and including February 1, 2029. Payments are payable solely
from available tax increment derived from the developed/redeveloped property and paid to the City. The pay-as-you-go note
provides for payment to the developer equal to 90% of all tax increment received in the prior six months. The payment
reimburses the developer for street, utilities, right-of-way, land acquisition, and other public improvements. Principal and
interest payments will be completed February 1, 2029. The City shall have no obligation to pay any unpaid balance of principal
or accrued interest that may remain after the final payment on February 1, 2029. The current year abatement (TIF note
payments) amounted to $68,648. At December 31, 2020, the principal amount outstanding on the note was $308,644.
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 leery 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, 2020. Future scheduled
tax levies for all bonds outstanding at December 31, 2020 totaled $51,184,812.
73
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
Note 15 FUND BALANCE
A. CLASSIFICATIONS
At December 31, 2020, a summary of the governmental fund balance classifications are as follows:
20t8A G.O.
Capital
2019A G.O.
Tax
Water
Sewer
Road &
improvement
Abatement
increment
Other
Trunk
Trunk
Bridge
Plan Bonds
Bonds
Projects
Governmental
General
CPF
CPF
CPF
CPF
CPF
CPF
Funds
Total
Nonspendable:
Inventory
$ 140,602
$
$
$
$
$
$
S 2,123
$ 142,725
Restricted for:
Debt service
-
-
-
-
-
-
-
2,099,876
2,099,876
Capital improvements
-
-
-
-
39,943
176,032
-
829,537
1,045,512
Tax increment
-
-
-
-
-
-
1,381,678
-
1,381,678
Public services
124,381
124,381
Total restricted
39,943
176,032
1,381,678
3.053,794
4,651,447
Committed to:
Economic development
-
-
-
-
-
-
-
153,980
153,980
City's mapping system
-
-
-
-
-
-
-
192,283
192,283
Surface water mgmt.
-
-
-
-
-
-
-
74,901
74,901
Public right of ways mgmt.
-
-
-
-
-
-
-
81,743
81,743
Seal coating new dev.
5,155
5,155
Total committed
508,062
508,062
Assigned to:
Water system
-
5,902,419
-
-
-
-
-
-
5,902,419
sanitary sewer system
-
-
9,079,582
-
-
-
-
-
8,079,582
Street rehabilitation
-
-
-
8,804,203
-
-
-
-
8,804,203
Development purposes
-
-
-
-
-
-
-
1,204,326
t,204,326
Community center
-
-
-
-
-
-
-
355,959
355,959
Forest resources programs
-
-
-
-
-
-
-
5,335
5,335
Public services
-
-
-
-
-
-
-
12,057
12,057
Park improvements
-
-
-
-
-
-
-
721,300
721,300
Facilities management
-
-
-
-
-
-
-
641852
643,852
Pedestrian trails
-
-
-
-
-
-
-
11047
110,647
Capital improvements
14772,530
1,772,530
Total assigned
5,902.419
8,079,582
8,8044203
44826,006
27,612,210
Unassigned
9,5134916
9,513,916
Total
$ 9,6544518
$ 5,902,419
$ 8,079,582
$ 8,8044203
$ 39,943
$ 176,032
$ 1,381,678
S 84389,985
$ 42,428,360
B. MINIMUM UNASSIGNED FUND BALANCE POLICY
The City Council has formally adopted a policy regarding the minimum unassigned fund balance for the General Fund. The most
significant revenue source of the General Fund is property taxes. This revenue source is received in two installments during the
year- July and December. As such, it is the City's goal to begin each fiscal year with sufficient working capital to fund operations
between each semi-annual receipt of property taxes.
The policy established a year-end targeted unassigned fund balance amount for cash -flow timing needs in the range of 51-53% of
the subsequent year's budgeted expenditures. At December 31, 2020, the unassigned fund balance of the General Fund targeted
for cash -flow needs was 76% of the subsequent year's budgeted expenditures.
Note 16 CONDUIT DEBT OBLIGATION
Conduit debt obligations are certain limited -obligation revenue bonds or similar debt instruments issued for the express purpose of providing
capital financing for a specific third party. The City has issued various revenue bonds to provide finding 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.
74
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2020
As of December 31, 2020, the following revenue bonds were outstanding
Date of
Original
Outstanding
Project Issue
Issue
Retired 12/31/2020
Presbyterian Homes of Andover, Inc. 11/l/2003
$13,145,000
$ (5,058,614) $ 8,086,386
YMCA of the Greater Twin Cities 12/l/2019
6,650,000
(590,000) 6,060,000
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, Subway Real Estate, LLC for building space at the Andover YMCA Community
Center and various tenants in three residential 4-plexes. Terms of each lease are as follows:
Location
Lessee
2020
Lease Annual Lease Expiration Renewal
Amount Adjustment Factor Date Options
City Hall water tower
Sprint Nextel
$ 31,827
3% annually
12/31/2022
3 - 5 year terms
City Hall water tower
T-Mobile USA, Inc
27,537
3% annually
12/31/2026
3 - 5 year terms
City Hall water tower
Verizon
29,725
3% annually
5/31/2024
3 - 5 year terms
Emergency Siren Pole
T-Mobile USA, Inc
14,000
$1,000 annual increase
9/22/2023
1 - 5 year term
Andover YMCA Comm Ctr
Greater Minneapolis YMCA
635,000
None
8/1/2035
N/A
Rose Park water tower
Sprint Nextel
19,018
3% annually
3/14/2021
N/A
Rose Park water tower
Verizon
25,478
3% annually
5/31 /2024
3 - 5 year terms
Andover YMCA Comm Ctr
Subway Real Estate, LLC
7,815
None
10/2/2021
1 - 3 year term
16 Rental Housing Units
Various Tenants
96,900
None
Monthly
N/A
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 Board (GASB) recently approved the following statements which were not implemented for these
financial statements:
Statement No. 87 Leases. The provisions of this Statement are effective for reporting periods beginning after June 15, 2021.
Statement No. 91 Conduit Debt Obligations. The provisions of this Statement are effective for reporting periods beginning after
December 15, 2021.
Statement No. 92 Omnibus 2020. The provisions of this Statement are effective for reporting periods beginning after June 15, 2021.
Statement No. 93 Replacement oflnterbank Offered Rates. The provisions of this Statement contain multiple effective dates, the first
being for reporting periods beginning after June 15, 2020.
Statement No. 94 Public -Private and Public -Public Partnerships and Availability Payment Arrangements. The provisions of this
Statement are effective for reporting periods beginning after June 15, 2022.
Statement No. 96 Subscription -Based Information Technology Arrangements. The provisions of this Statement are effective for
reporting periods beginning after June 15, 2022.
The effect these standards may have on future financial statements is not determinable at this time, but it is expected that Statement No. 87
may have a material impact.
75
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ILO
REQUIRED SUPPLEMENTARY INFORMATION
77
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
Statement 9
BUDGETARY COMPARISON SCHEDULE
- GENERAL FUND
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Variance with
Final Budget -
Budgeted Amounts
2020
Positive
2019
Original
Final
Actual
(Negative)
Actual
Revenues:
General property taxes
$ 9,392,032 $
9,392,032
$ 9,303,234
$ (88,798)
$ 8,864,720
Licenses and permits
410,900
410,900
892,279
481,379
855,831
Intergovernmental
780,806
839,694
861,179
21,485
822,128
Charges for services
736,210
736,210
1,070,899
334,689
1,133,161
Fines
75,250
75,250
47,630
(27,620)
62,349
Investment income
75,000
75,000
148,974
73,974
208,958
Miscellaneous
133,850
133,850
172,062
38,212
184,558
Total revenues
11,604,048
11,662,936
12,496,257
833,321
12,131,705
Expenditures:
Current:
General government:
Mayor and City council
108,315
108,315
95,519
12,796
99,001
Administration
227,334
227,334
187,757
39,577
211,898
Newsletter
25,000
25,000
22,156
2,844
25,022
Human resources
34,100
34,100
16,180
17,920
15,843
Legal
200,941
200,941
195,721
5,220
191,782
City clerk
170,000
170,000
166,221
3,779
160,184
Elections
69,994
99,182
91,643
7,539
20,452
Financial administration
308,356
308,356
294,502
13,854
280,198
Assessing
159,000
159,000
154,483
4,517
149,033
Information systems
194,725
194,725
187,703
7,022
169,828
Planning and zoning
490,296
490,296
453,133
37,163
412,282
Engineering
605,481
605,481
566,224
39,257
561,643
Facility management
674,134
640,134
475,086
165,048
543,318
Total general government
3,267,676
3,262,864
2,906,328
356,536
2,840,484
Public safety
Police
3,245,518
3,245,518
3,114,623
130,895
3,183,610
Fire protection
1,517,670
1,522,370
1,508,852
13,518
1,391,251
Protective inspection
490,410
507,910
519,183
(11,273)
493,955
Civil defense
29,936
29,936
17,227
12,709
18,609
Animal control
5,950
5,950
2,347
3,603
4,367
Total public safety
5,289,484
5,311,684
5,162,232
149,452
5,091,792
Public works:
Streets and highways
738,070
733,070
686,979
46,091
609,570
Snow and ice removal
631,937
631,937
496,668
135,269
703,647
Sheet signs
235,124
235,124
257,280
(22,156)
202,995
Traffic signals
40,000
40,000
23,044
16,956
26,421
Street lighting
220,900
220,900
186,392
34,508
178,320
Total public works
$ 1,866,031
$ 1,861,031
$ 1,650,363
$ 210,668
$ 1,720,953
(Continued)
78
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Expenditures:
Current: (continued)
Parks and recreation
Recycling
Unallocated
Total current
Capital outlay:
General government
Public works
Parks and recreation
Total capital outlay
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Proceeds from the sale of capital assets
Total other financing sources (uses)
Net increase (decrease) in fund balance
Fund balance - January 1
Fund balance - December 31
Statement 9
(Continued)
Variance with
Final Budget -
Budgeted
Amounts
2020
Positive
2019
Original
Final
Actual
(Negative)
Actual
$ 1,322,806
$ 1,414,306
$ 1,369,954
$ 44,352
$ 1,182,928
193,971
193,971
228,124
(34,153)
224,574
95,928
95,928
12,778
83,150
15,001
12,035,896
12,139,784
11,329,779
810,005
11,075,732
-
-
-
-
4,082
-
-
-
-
5,880
120,000
70,000
66,099
3,901
14,404
120,000
70,000
66,099
3,901
24,366
12,155,896
12,209,784
11,395,878
813,906
11,100,098
(551,848)
(546,848)
1,100,379
1,647,227
1,031,607
190,688 190,688 190,688
- (1,000,000) (1,000,000)
190,688 (809,312) (809,312)
$ (361,160) $ (1,356,160) 291,067
See accompanying notes to the required supplementary information.
9,363,451
$ 9,654,518
$ 1,647,227
188,008
7,500
195,508
1,227,115
8,136,336
$ 9,363,451
79
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS
For the Last Ten Years
Total OPEB liability:
Service cost
Interest
Changes of benefit terms
Differences between expected and actual experience
Changes in assumptions
Benefit payments
Net change in total OPEB liability
Total OPEB liability - beginning
Total OPEB liability - ending
Covered -employee payroll
Total OPEB liability as a percentage of covered -employee payroll
Statement 10
2018
2019
2020
$ 14,090
$ 16,135
$ 17,068
10,482
10,008
12,944
-
28,866
-
11,969
3,219
25,462
(5,813)
(12,311)
(12,922)
30,728
45,917
42,552
261,651
292,379
338,296
$ 292,379
$ 338,296
$ 380,848
$ 4,469,146
$ 4,620,961
$ 4,562,782
6.5%
7.3%
8.3%
See accompanying notes to the required supplementary information.
The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2018 and is intended to
show a ten year trend. Additional years will be added as they become available.
80
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY*
GENERAL EMPLOYEES RETIREMENT FUND
For the Last Ten Years
Measurement Fiscal Year
Date Ending
June 30 December 31
2015
2016
2017
2018
2019
2020
2015
2016
2017
2018
2019
2020
Statement I I
City's
States
Proportionate Share
City's
Proportionate
of the Net Pension
Proportionate
City's
City's
Share (Amount)
Liability and the
Share of the
Proportionate
Proportionate
of the Net
State's Proportionate
Net Pension
Plan Fiduciary
Share
Share (Amount)
Pension
Share of the Net
Liability as a
Net Position as
(Percentage) of
of the Net
Liability
Pension Liability
Percentage of its
a Percentage
the Net Pension
Pension
Associated with
Associated with
Covered
Covered
of the Total
Liability
Liability (a)
City (b)
City (a + b)
Payroll (c)
Payroll (a+blc)
Pension Liability
0.0609%
$ 3,156,154
$ -
$ 3,156,154
$ 3,578,755
88.2%
78.2%
0.0590%
4,790,507
62,597
4,853,104
3,623,880
133.9%
68.9%
0.0594%
3,792,057
47,673
3,839,730
3,825,146
100.4%
75.9%
0.0587%
3,256,435
106,772
3,363,207
3,944,067
85.311,,
79.5%
0.0576%
3,184,575
98,996
3,283,571
4,076,586
80.50/,,
80.2%
0.0583%
3,495,351
107,788
3,603,139
4,156,037
86.7°/,,
79.1%
See accompanying notes to the required supplementary information.
* 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.
81
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PENSION CONTRIBUTIONS*
GENERAL EMPLOYEES RETIREMENT FUND
For the Last Ten Years
Statutorily
Contributions in
Contribution
Required
Relation to the
Deficiency
Covered
Fiscal Year
Contribution
Statutorily Required
(Excess)
Payroll
Ending
(a)
Contribution (b)
(a-b)
(c)
December 31, 2015
$ 268,490
S 268,490
S -
S 3,579,867
December 31, 2016
283,158
283,158
-
3,775,440
December 31, 2017
284,139
284,139
-
3,788,520
December 31, 2018
301,507
301,507
-
4,020,093
December 31, 2019
310,033
310,033
-
4,133,993
December 31, 2020
317,872
317,872
-
4,238,286
See accompanying notes to the required supplementary information.
* 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.
Statement 12
Contributions as a
Percentage of
Covered
Payroll (b/c)
7.5%
7.5%
7.5%
7.5%
7.5%
7.5%
82
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY*
PUBLIC EMPLOYEES POLICE AND FIRE FUND
For the Last Ten Years
Statement 13
Proportionate
Proportionate Share
Plan Fiduciary
Proportion
Share (Amount)
of the Net Pension
Net Position as
(Percentage) of
of the Net
Liability as a
a Percentage
Measurement
Fiscal Year
the Net Pension
Pension
Covered
Percentage of its
of the Total
Date
Ending
Liability
Liability (a)
Payroll (b)
Covered Payroll (a/b)
Pension Liability
June 30, 2015
December 31, 2015
0.0210%
$ 238,609
$ 194,274
122.8%
86.6%
June 30, 2016
December 31, 2016
0.0280%
1,123,689
283,389
396.5%
63.9%
June 30, 2017
December 31, 2017
0.0280%
378,033
287,895
131.3%
85.4%
June 30, 2018
December 31, 2018
0.0267%
284,595
281,901
101.0%
88.8%
June 30, 2019
December 31, 2019
0.0272%
289,571
287,498
100.7%
89.3%
June 30, 2020
December 31, 2020
0.0205%
270,212
232,475
116.2%
87.2%
See accompanying notes to the required supplementary information.
* 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.
83
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF PENSION CONTRIBUTIONS*
PUBLIC EMPLOYEES POLICE AND FIRE FUND
For the Last Ten Years
Statutorily
Contributions in
Contribution
Required
Relation to the
Deficiency
Covered
Fiscal Year
Contribution
Statutorily Required
(Excess)
Payroll
Ending
(a)
Contribution (b)
(a-b)
(c)
December 31, 2015
$ 38,121
$ 38,121
$ -
S 235,315
December 31, 2016
45,909
45,909
-
283,389
December 31, 2017
45,604
45,604
-
281,506
December 31, 2018
46,365
46,365
-
286,204
December 31, 2019
46,269
46,269
-
272,993
December 31, 2020
34,168
34,168
-
193,040
See accompanying notes to the required supplementary information.
* 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.
Statement 14
Contributions as a
Percentage of
Covered
Payroll (b/c)
16.2%
16.2%
16.2%
16.2%
16.9%
17.7%
84
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2020
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.
Final
Over
Budget
Actual
Budget
General Fund:
Current:
Public Safety:
Protective inspection
$ 507,910
$ 519,183
$ 11,273
Public Works:
Street signs
235,124
257,280
22,156
Recycling
193,971
228,124
34,153
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:
l ) 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.
21) 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 2019, 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:
85
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2020
Prior to 2013
Current
Condition
Rating
Scale
Rating Scale
Excellent
86 -
100
8 - 10
Very Good
71
- 85
7 - 7.9
Good
56
- 70
6 - 6.9
Fair
41
- 55
4 - 5.9
Poor
26
- 40
2 - 3.9
Very Poor
11
- 25
1 - 1.9
Substandard
0 -
10
0 - .9
As of December 31, 2020, the City's street and trail system was rated at an OCI index of 5.4 on the average with detail condition as follows:
% of Street
Condition and Trails
Excellent to Good 59.5%
Fair 31.0%
Poor to Substandard 9.5%
The City's streets and trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun's ultra-
violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development trenching operations; (4)
water damage from natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the system
through short-term maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City expended
$2,667,008 on street and trail maintenance for the year ending December 31, 2020. These expenditures delayed deterioration; however,
the overall condition of the system was not improved through these maintenance expenditures. The City has estimated that the amount of
annual expenditures required to maintain the City's street and trail system at the average OCI rating of good is approximately $1,150,000.
Maintenance
Actual
OCi
Year
Estimate
Expenditures
Rating
2011
$1,150,000
$ 1,770,980
83
2012
1,150,000
3,894,784
83
2013
1,150,000
2,471,123
6.9
2014
1,150,000
2,029,026
6.7
2015
1,150,000
1,114,900
6.7
2016
1,150,000
1,585,756
6.3
2017
1,150,000
3,548,327
6.4
2018
1,150,000
2,274,146
6A
2019
1,150,000
3,701,063
5.3
2020
1,150,000
2,667,008
5A
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 OPEB INFORMATION
No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75 to pay related benefits. There are no
factors that affect trends in the amounts reported, such as changes in benefit terms or assumptions.
Note D PENSION INFORMATION
PERA — General Employees Retirement Fund
2020 Changes in Actuarial Assumptions:
86
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2020
• The price inflation assumption was decreased from 2.50% to 2.25%.
• The payroll growth assumption was decreased from 3.25% to 3.00%.
• As recommended in the June 30, 2019 experience study, assumed salary increase rates were decreased 0.25% and assumed
rates of retirement were changed resulting in more unreduced (normal) retirements and slightly fewer Rule of 90 and early
retirements. Assumed rates of termination and disability were also changed.
• The base mortality tables were changed from RP-2014 to Pub-2010 tables, with adjustments.
• The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019.
• The assumed spouse age difference was changed from two years older for females to one year older.
• The assumed number of married male new retirees electing the 100% Joint & Survivor option changed from 35% to 45%.
The assumed number of married female new retirees electing 100% Joint & Survivor option changed from 15% to 30%.
The corresponding number of married new retirees electing the Life annuity option was adjusted accordingly.
2020 Changes in Plan Provisions:
• Augmentation for current privatized members was reduced to 2.0% for the period July 1, 2020 through December 31, 2023
and 0.0% after. Augmentation was eliminated for privatizations occurring after June 30, 2020.
2019 Changes in Actuarial Assumptions:
• The mortality projection scale was changed from MP-2017 to MP-2018.
2019 Changes in Plan Provisions:
• The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per
year. The State's special funding contribution was changed prospectively, requiring $16.0 million due per year through
2031.
2018 Changes in Actuarial Assumptions:
• The mortality projection scale was changed from MP-2015 to MP-2017.
• The assumed benefit increase was changed from 1.0 percent per year through 2044 and 2.5 percent per year thereafter to
1.25 percent per year.
2017 Changes in Actuarial Assumptions:
• The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested
and non -vested members. The revised CSA loads are now 0.0 percent for active member liability, 15.0 percent for vested
deferred member liability and 3.0 percent for non -vested deferred member liability.
• The assumed post -retirement benefit increase rate was changed from 1.0% per year for all years to 1.0% per year through
2044 and 2.5 percent per year thereafter.
2016 Changes in Actuarial Assumptions:
• The assumed post -retirement benefit increase rate was changed from 1.0% per year through 2035 and 2.5% per year
thereafter to 1.0% per year for all future years.
• The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was changed from 7.9% to 7.5%.
• Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases,
payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.5% for inflation.
PERA - Public Employees Police and Fire
2020 Changes in Actuarial Assumptions:
• The mortality projection scale was changed from MP-2018 to MP-2019.
2019 Changes in Actuarial Assumptions:
• The mortality projection scale was changed from MP-2017 to MP-2018.
2019 Changes in Plan Provisions:
• There have been no changes since the prior valuation.
2018 Changes in Actuarial Assumptions:
• The mortality projection scale was changed from MP-2016 to MP-2017.
2017 Changes in Actuarial Assumptions:
87
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2020
• The single discount rate was changed from 5.6 percent to 7.5 percent.
• Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed
rates that average 0.34 percent lower than the previous rates.
• Assumed rates of retirement were changed, resulting in fewer retirements.
• The Combined Service Annuity (CSA) load was 30 percent for vested and non -vested deferred members. The CSA has
been changed to 33 percent for vested members and 2 percent for non -vested members.
• The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014 fully
generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality improvement scale
was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed from the RP-
2000 disabled mortality table to the mortality tables assumed for healthy retirees.
• Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates beyond the select period
of three years were adjusted, resulting in more expected terminations overall.
• Assumed percentage of married female members was decreased from 65 percent to 60 percent.
• Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years
younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older
than females.
• The assumed percentage of female members electing Joint and Survivor annuities was increased.
• The assumed post -retirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year
through 2064 and 2.5 percent thereafter.
2016 Changes in Actuarial Assumptions:
• The assumed post -retirement benefit increase rate was changed from 1.0% per year through 2037 and 2.5% per year
thereafter to 1.0% per year for all future years.
• The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was changed from 7.9% to 5.6%.
• The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth
and 2.5% for inflation.
88
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
89
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.
'6Z1]
CITY OF ANDOVER, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2020
With Comparative Totals For December 31, 2019
Statement 15
Totals
Special
Debt
Capital
Nonmajor Governmental Funds
Revenue
Service
Projects
2020
2019
Assets:
Cash and investments
$ 868,733
$ 2,021,047
$ 5,250,094
$ 8,139,874 $
6,809,768
Cash and investments with escrow agent
126,682
-
-
126,682
152,233
Accrued interest
4,274
3,157
22,402
29,833
30,261
Due from other governmental units
-
-
73,024
73,024
-
Accounts receivable - net
204,184
-
-
204,184
85,092
Property taxes receivable:
Unremitted
1,153
75,672 15,973
92,798
20,475
Delinquent
466
26,721 6,692
33,879
24,694
Special assessments receivable:
Deferred
-
- 95,792
95,792
98,260
Inventories - at cost
2,123
- -
2,123
1,957
Total assets
$ 1,207,615
$ 2,126,597 $ 5,463,977
$ 8,798,189
$ 7,222,740
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable
$ 81,806 $ -
$ 32,359
$ 114,165
$ 77,438
Deposits payable
1,865 -
11,777
13,642
19,623
Due to other governmental units
528 -
35,165
35,693
17,990
Salaries payable
14,176 -
-
14,176
13,613
Unearned revenue
100,857 -
-
100,857
58,142
Total liabilities
199,232 -
79,301
278,533
186,806
Deferred inflows of resources:
Unavailable revenues
466 26,721
102,484
129,671
122,954
Fund balance (deficit)
Nonspendable
2,123
- -
2,123
1,957
Restricted
124,391
2,099,976 829,537
3,053,794
1,542,268
Committed
508,062
- -
508,062
518,312
Assigned
373,351
- 4,452,655
4,826,006
4,850,443
Total fund balance (deficit)
1,007,917
2,099,976 5,282,192
8,389,985
6,912,980
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
$ 1,207,615
$ 2,126,597 $ 5,463,977
$ 8,798,189
$ 7,222,740
M
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 16
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2020
With Comparative Totals For The Year Ended December 31, 2019
Totals
Special
Debt
Capital
Nonmajor Governmental Funds
Revenue
Service
Projects
2020
2019
Revenues:
General property taxes
$ 39,963
$ 3,076,966
$ 643,219
$ 3,760,148 $
2,776,349
Intergovernmental
2,465,736
-
73,024
2,538,760
2,905
Special assessments
-
-
4,215
4,215
136,450
Charges for services
601,124
-
-
601,124
808,476
Investment income
22,350
11,680
119,817
153,847
155,638
Miscellaneous:
Park dedication fees
-
-
389,033
389,033
472,753
Rent
635,629
-
-
635,629
636,803
Other
186,809
-
173,505
360,314
476,502
Total revenues
3,951,611
3,088,646
1,402,813
8,443,070
5,465,876
Expenditures:
Current:
General government
57,368
-
115,648
173,016
170,707
Public safety
501,520
-
90,491
592,011
4,237
Public works
70,311
-
-
70,311
77,028
Parks and recreation
1,053,500
-
72,140
1,125,640
1,060,073
Economic development
1,846,024
-
-
1,846,024
62,147
Capital outlay:
General government
-
-
21,759
21,759
-
Public safety
161,994
-
156,490
318,484
72,801
Public works
-
-
283,483
283,483
538,461
Parks and recreation
100,000
-
1,019,923
1,119,923
90,431
Economic development
30,151
-
-
30,151
-
Debt service:
Principal retirement
-
1,561,000
-
1,561,000
1,444,000
Interest
-
1,290,844
-
1,290,844
568,864
Paying agent fees
-
5,000
-
5,000
1,000
Total expenditures
3,820,868
2,856,844
1,759,934
8,437,646
4,089,749
Revenues over (under) expenditures
130,743
231,802
(357,121)
5,424
1,376,127
Other financing sources (uses):
Transfers in
-
520,446
111,976
632,422
547,602
Transfers out
(305,700)
(88,476)
(175,146)
(569,322)
(305,800)
Bonds issued
-
-
1,310,000
1,310,000
-
Bond premium
-
-
95,481
95,481
-
Proceeds from sale of capital assets
-
-
3,000
3,000
24,550
Total other financing sources (uses)
(305,700)
431,970
1,345,311
1,471,581
266,352
Net increase (decrease) in fund balance
(174,957)
663,772
988,190
1,477,005
1,642,479
Fund balance - January 1
1,182,874
1,436,104
4,294,002
6,912,980
5,270,501
Fund balance - December 31
$ 1,007,917
$ 2,099,876
$ 5,282,192
$ 8,389,985
$ 6,912,980
92
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,
particularly the ice arena, field house and concessions. The aquatic's portion of the Community Center is under the
operations of the YMCA.
Drainage and Mapper - This fund accounts for resources necessary to maintain existing maps and developing new
maps and mapping systems for the City.
LRRWMO - This fund is used to account for the City's involvement with the Lower Rum River Watershed
Management Organization (LRRWMO).
Fores - This fund was established to account for the protection of forest resources and the development of control
plans to ensure preservation or restoration of these resources.
Right -of -Way Management/Utility - This fund is used to account for activity associated with the management of the
public right-of-ways.
Charitable Gambling - This fund accounts for the 10% of net profits received from gambling activities by local non-
profit organizations. According to state statute, all expenditures from this fund must be for public services and police,
fire and other emergency or public safety -related services, equipment, and training, excluding pension obligations.
Construction Seal Coatini4 - 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.
CARES Grant - This fund accounts for the money distributed to local governments to assist with the financial strain
of COVID-19.
93
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2020
With Comparative Totals For December 31, 2019
Drainage
EDA
Community
and
General
Center
Mapping
LRRWMO
Assets:
Cash and investments
$
143,280
S
110,545
$
191,434
S
74,096
Cash and investments with escrow agent
-
126,682
-
-
Accrued interest
583
1,112
871
281
Accounts receivable - net
14,277
189,907
-
-
Property taxes receivable:
Unremitted
-
-
-
1,153
Delinquent
-
-
-
466
Inventories - at cost
-
2,123
-
-
Total assets
$
158,140
S
430,369
$
192,305
$
75,996
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable
$
4,160
$
56,435
$
22
$
230
Deposits payable
-
1,865
-
-
Due to other governmental units
-
528
-
-
Salaries payable
-
13,459
-
399
Unearned revenue
-
-
-
-
Total liabilities
4,160
72,287
22
629
Deferred inflows of resources:
Unavailable revenues
-
-
-
466
Fund balance (deficit):
Nonspendable
-
2,123
-
-
Restricted
-
-
-
-
Committed
153,980
-
192,283
74,901
Assigned
-
355,959
-
-
Total fund balance (deficit)
153,980
358,082
192,283
74,901
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
S
158,140
$
430,369
$
192,305
$
75,996
94
Statement 17
Right -of -Way
Totals
Management/
Charitable
Construction
Nonmajor Special Revenue Funds
Forestry Utility
Gambling
Seal Coating
2020
2019
$ 5,335 $ 81,740
$ 156,693
$ 105,610
$ 868,733 $
1,106,717
- -
-
-
126,682
152,233
- 352
673
402
4,274
6,061
- -
-
-
204,184
85,092
- -
-
-
1,153
407
- -
-
-
466
452
- -
-
-
2,123
1,957
$ 5,335 $ 82,092
$ 157,366
$ 106,012
$ 1,207,615 $
1,352,919
$ - $ 31 $ 20,928 $ - $ 81,806 $ 60,225
- - - - 1,865 19,623
- - - - 528 17,990
- 318 - - 14,176 13,613
- - - 100,857 100,857 58,142
- 349 20,928 100,857 199,232 169,593
466 451)
- - - - 2,123 1,957
- - 124,381 - 124,381 106,164
- 81,743 - 5,155 508,062 518,312
5,335 - 12,057 - 373,351 556,441
5,335 81,743 136,438 5,155 1,007,917 1,182,874
$ 5,335 $ 82,092 $ 157,366 $ 106,012 $ 1,207,615 $ 1,352,919
Nb7
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2020
With Comparative Totals For The Year Ended December 31, 2019
Drainage
EDA
Community
and
General
Center
Mapping
LRRWMO
Revenues:
General property taxes
$ -
$ -
$ - $
39,963
Intergovernmental
-
-
-
-
Charges for services
26,005
513,765
21,853
-
Investment income
2,435
6,793
4,148
1,336
Miscellaneous:
Rent
-
635,629
-
-
Other
443
110,781
-
-
Total revenues
28,883
1,266,968
26,001
41,299
Expenditures:
Current:
General government
-
-
-
-
Public safety
-
-
-
-
Public works
-
-
17,447
28,698
Parks and recreation
-
1,053,500
-
-
Economic development
43,540
-
-
-
Capital outlay:
Public safety
-
-
-
-
Parks and recreation
-
100,000
-
-
Economic development
30,151
-
-
-
Total expenditures
73,691
1,153,500
17,447
28,698
Revenues over (under) expenditures
(44,808)
113,468
8,554
12,601
Other financing sources (uses):
Transfers out
-
(300,000)
-
-
Net increase (decrease) in fiord balance
(44,809)
(186,532)
9,554
12,601
Fund balance (deficit) - January 1
198,788
544,614
183,729
62,300
Fund balance (deficit) - December 31
$ 153,980
$ 358,082
$ 192,283 $
74,901
96
Statement 18
Right -of -Way
Totals
Management/
Charitable
Construction
CARES
Nonmajor Special Revenue Funds
Forestry Utility
Gambling
Seal Coating
Grant
2020
2019
$ -
$ -
$ 39,963 S
39,857
- -
-
-
2,465,736
2,465,736
-
- 39,501
-
-
-
601,124
808,476
98 1,687
3,510
2,081
262
22,350
37,280
- -
-
-
-
635,629
636,803
- -
75,585
-
-
186,809
226,670
98 41,188
79,095
2,081
2,465,998
3,951,611
1,749,086
-
-
57,368
-
-
57,368
63,187
-
-
-
-
501,520
501,520
-
-
24,166
-
-
-
70,311
77,028
-
-
-
-
-
1,053,500
1,045,404
-
-
-
-
1,802,484
1,846,024
62,147
-
-
-
-
161,994
161,994
-
-
-
-
-
-
100,000
2,000
-
-
-
-
-
30,151
-
-
24,166
57,368
-
2,465,998
3,820,868
1,249,766
98
17,022
21,727
2,081
-
130,743
499,320
-
(5,700)
-
-
-
(305,700)
(305,800)
98
11,322
21,727
2,081
-
(174,957)
193,520
5,237
70,421
114,711
3,074
-
1,182,874
989,354
$ 5,335
$ 81,743 $
136,438 $
5,155
$ -
$ 1,007,917
$ 1,182,874
:syl
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98
NONMAJOR DEBT SERVICE FUNDS
The City's Debt Service Funds account for four types of bonded indebtedness:
• Certificates of Indebtedness
• Capital Improvement Bonds
• Abatement Bonds
• Referendum Bonds
Certificates of Indebtedness - (G.O. Equipment Certificates - 2014A, 2016A and 2020A) are repaid primarily from
general property taxes.
Capital Improvement Plan Bonds — (G.O. Capital Improvement Plan Bonds of 2018A) are repaid primarily from
general property taxes.
Abatement Bonds - (G.O. Abatement Bonds of 2012C and 2019A) are repaid from annual lease payments from the
YMCA, Community Center operations and general property tax.
Referendum Bonds — (Open Space Referendum Bonds of 2010A) are used to finance the purchase of land to remain
as open space.
4*]
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2020
With Comparative Totals For December 31, 2019
Assets:
Cash and investments
Accrued interest
Property taxes receivable:
Unremitted
Delinquent
Total assets
Deferred Inflows of Resources and Fund Balances
Deferred inflows of resources:
Unavailable revenues
Fund balance (deficit):
Restricted
Total deferred inflows of resources, and
and fund balances (deficit)
G.O.
G.O. G.O. Capital G.O.
Equipment Equipment Improvement Abatement
Certificate Certificate Plan Bonds Bonds
$ 172,429 $ 324,171 $ 336,638 $ 350,478
- 823 726 -
3,531 8,621 10,681 24,060
- 3,214 3,981 8,969
$ 175,960 $ 336,829 $ 352,026 $ 383,507
$ - $ 3,214 3,981 $ 8,969
175,960 333,615 348,045 374,538
$ 175,960 $ 336,829 $ 352,026 $ 383,507
100
Statement 19
G.O. Open Space
Abatement Referendum
Bonds Bonds
Totals
Nonmajor Debt Service Funds
$ 560,822
$ 276,509
$ 2,021,047
$ 1,418,376
700
908
3,157
2,246
24,659
4,120
75,672
15,482
9,192
1,365
26,721
18,448
$ 595,373
$ 282,902
$ 2,126,597
$ 1,454,552
$ 9,192 $ 1,365 $ 26,721 $ 18,448
586,181 281,537 2,099,876 1,436,104
$ 595,373 $ 282,902 $ 2,126,597 $ 1,454,552
MCI
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2020
With Comparative Totals For The Year Ended December 31, 2019
G.O.
G.O.
G.O.
G.O.
Capital
Equipment
Equipment
Equipment
Improvement
Certificate
Certificate
Certificate
Plan Bonds
2014A
2016A
2020A
2018A
Revenues:
General property taxes
S -
S 142,775
S 348,540
S 431,794
Investment income
-
(296)
4,288
3,698
Total revenues
-
142,479
352,828
435,492
Expenditures:
Debt service:
Principal retirement
275,000
131,000
-
95,000
Interest
2,750
3,791
19,213
356,131
Paying agent fees
-
600
-
1,100
Total expenditures
277,750
135,391
19,213
442,231
Revenues over (under) expenditures
(277,750)
7,088
333,615
(6,739)
Other financing sources (uses):
Transfers in - - - 45,300
Transfers out (88,476) - - -
Total other financing sources (uses) (88,476) - - 45,300
Net increase (decrease) in fund balance (366,226) 7,088 333,615 38,561
Fund balance - January 1 366,226 168,872 - 309,484
Fund balance - December 31 S - $ 175,960 S 333,615 $ 348,045
102
Statement 20
G.O. G.O. Open Space
Abatement Abatement Referendum Totals
Bonds Bonds Bonds Nonmajor Debt Service Funds
$ 972,704
$ 996,913
$ 184,240
S 3,076,966
S 2,097,563
(4,770)
5,372
3,388
11,680
7,066
967,934
1,002,285
187,628
3,088,646
2,104,629
910,000
-
160,000
1,561,000
1,444,000
305,981
590,150
12,828
1,290,844
568,864
1,100
1,100
1,100
5,000
1,000
1,217,081
591,250
173,928
2,856,844
2,013,864
(249,147)
411,035
13,700
231,802
90,765
300,000
175,146
-
520,446
300,000
-
-
-
(88,476)
-
300,000
175,146
-
431,970
300,000
50,853
586,181
13,700
663,772
390,765
323,685
-
267,837
1,436,104
1,045,339
$ 374,538
$ 586,181
$ 281,537
S 2,099,876
$ 1,436,104
- This page intentionally left blank -
NONMAJOR CAPITAL PROJECTS FUNDS
The City of Andover had the following Capital Projects Funds during the year:
Park Dedication - This fund was established to account for contributions associated with land development to be used
for constructing and upgrading the City's park system.
Building Fund - This fund was established to account for miscellaneous building improvements for all facilities.
Trail and Transportation - This fund is used to account for contributions associated with land development to be used
for constructing and upgrading the City's trail system.
Capital Equipment Reserve - This fund is used to account for the capital equipment/projects levy and the various
capital expenditures it will be used for.
Equipment Certificates 2020A - This fund was established to account for the purchase of capital equipment that was
financed through the issuance of capital notes.
Permanent Improvement Revolving - This fund serves as a long-term funding source for large capital improvement
expenditures.
` 119
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2020
With Comparative Totals For December 31, 2019
Capital
Park
Building
Trail &
Equipment
Dedication
Fund
Transportation
Reserve
Assets:
Cash and investments
$
645,174
$
633,210
$
110,134
$
1,806,084
Accrued interest
2,866
1,840
513
7,727
Due from other governmental units
73,024
-
-
-
Property taxes receivable:
Unremitted
366
8,802
-
6,805
Delinquent
153
3,688
-
2,851
Special assessments receivable:
Deferred
-
-
-
-
Total assets
$
721,583
$
647,540
$
110,647
$
1,823,467
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable
$
130
$
-
$
-
$
1,144
Deposits payable
-
-
-
11,777
Due to other government units
-
-
-
35,165
Total liabilities
130
-
-
48,086
Deferred inflows of resources:
Unavailable revenues
153
3,688
-
2,851
Fund balance (deficit):
Restricted
-
-
-
-
Assigned
721,300
643,852
110,647
1,772,530
Total fund balance (deficit)
721,300
643,852
110,647
1,772,530
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
$
721,583
$
647,540
$
110,647
$
1,823,467
106
Statement 21
Equipment
Permanent
Totals
Certificates
Improvement
Nonmajor Capital Projects Funds
2020A
Revolving
2020
2019
$ 856,642
$ 1,198,850
$ 5,250,094 S
4,284,675
3,980
5,476
22,402
21,954
-
-
73,024
-
-
-
15,973
4,586
-
-
6,692
5,794
-
95,792
95,792
98,260
$ 860,622
$ 1,300,118
$ 5,463,977 S
4,415,269
$ 31,085 $ - $ 32,359 $ 17,213
- - 11,777 -
- - 35,165 -
31,085 - 79,301 17,213
- 95,792 102,484 104,054
829,537 - 829,537 -
- 1,204,326 4,452,655 4,294,002
829,537 1,204,326 5,282,192 4,294,002
$ 860,622 $ 1,300,118 $ 5,463,977 $ 4,415,269
`D]FA
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For The Year Ended December 31, 2020
With Comparative Totals For The Year Ended December 31, 2019
Revenues:
General property taxes
Intergovernmental
Special assessments
Investment income
Miscellaneous:
Park dedication fees
Other
Total revenues
Expenditures:
Current:
General government
Public safety
Parks and recreation
Capital outlay:
General government
Public safety
Public works
Parks and recreation
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Capital
Park
Building
Trail &
Equipment
Dedication
Fund
Transportation
Reserve
$ 14,722
S 354,450
$ -
$ 274,047
73,024
-
-
-
12,873
11,501
2,801
37,894
389,033
-
-
-
12,739
-
116,880
43,886
502,391
365,951
119,681
355,827
- 66,730 - 48,918
- - - 52,275
8,955 - 10,695 52,490
- - - 21,759
- - - 58,068
- - - 703
336,246 273,478 90,209 134,634
345,201 340,208 100,904 368,847
157,190 25,743 18,777 (13,020)
Transfers in - 88,476 - 23,500
Transfers out (175,146) - - -
Bonds issued - - - -
Bond premium - - - -
Proceeds from sale of capital assets - - - 3,000
Total other financing sources (uses)
(175,146)
88,476
- 26,500
Net increase (decrease) in fund balance
(17,956)
114,219
18,777 13,480
Fund balance (deficit) - January 1
739,256
529,633
91,870 1,759,050
Fund balance (deficit) - December 31
$ 721,300
$ 643,852
$ 110,647 $ 1,772,530
108
Statement 22
Equipment Permanent
Totals
Certificates Improvement Nonmajor Capital Projects Funds
2020A Revolving 2020 2019
$ 643,219 $ 638,929
- - 73,024 2,905
- 4,215 4,215 136,450
28,830 25,919 119,817 111,292
- - 389,033 472,753
- - 173,505 249,832
28,830
30,133
1,402,813
1,612,161
-
-
115,648
107,520
38,216
-
90,491
4,237
-
-
72,140
14,669
-
-
21,759
-
98,422
-
156,490
72,801
282,780
-
283,483
538,461
185,356
-
1,019,923
88,431
604,774
-
1,759,934
826,119
(575,944)
30,133
(357,121)
786,042
-
-
111,976
247,602
-
-
(175,146)
-
1,310,000
-
1,310,000
-
95,481
-
95,481
-
-
-
3,000
24,550
1,405,481
-
1,345,311
272,152
829,537
30,133
988,190
1,058,194
-
1,174,193
4,294,002
3,235,809
$ 829,537
$ 1,204,326
$ 5,282,192
$ 4,294,002
iM
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - EDA GENERAL Statement 23
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Variance with
Final Budget -
Budgeted
Amounts
2020
Positive
2019
Original
Final
Actual
(Negative)
Actual
Revenues:
Charges for services
$ 7,000
$ 7,000
S 26,005
$ 19,005
$ 7,096
Investment income
2,000
2,000
2,435
435
6,231
Miscellaneous
-
-
443
443
177
Total revenues
9,000
9,000
28,883
19,883
13,504
Expenditures:
Current:
Economic development
102,078
71,927
43,540
28,387
62,147
Capital outlay:
Economic development
-
30,151
30,151
-
-
Total expenditures
102,078
102,078
73,691
28,387
62,147
Net increase (decrease) in fund balance
$ (93,078)
$ (93,078)
(44,808)
$ 48,270
(48,643)
Fund balance (deficit) - January 1
198,788
247,431
Fund balance (deficit) - December 31
$ 153,980
$ 198,788
110
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - COMMUNITY CENTER
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Revenues:
Charges for services
Investment income
Miscellaneous:
Rent
Other
Total revenues
Expenditures:
Current:
Parks and recreation
Capital outlay:
Parks and recreation
Total expenditures
Revenue over (under) expenditures
Other financing sources (uses)
Transfers out
Net increase (decrease) in fund balance
Fund balance (deficit) - January 1
Fund balance (deficit) - December 31
Statement 24
Variance with
Final Budget -
Budgeted
Amounts
2020
Positive
2019
Original
Final
Actual
(Negative)
Actual
$ 752,300
$ 752,300
$ 513,765
$ (238,535)
$ 722,177
-
-
6,793
6,793
16,107
638,000
638,000
635,629
(2,371)
636,803
140,000
140,000
110,781
(29,219)
131,386
1,530,300
1,530,300
1,266,968
(263,332)
1,506,473
1,315,471
1,315,471
1,053,500
261,971
1,045,404
130,000
130,000
100,000
30,000
2,000
1,445,471
1,445,471
1,153,500
291,971
1,047,404
84,829
84,829
113,468
28,639
459,069
(300,000) (300,000) (300,000) -
$ (215,171) $ (215,171) (186,532) $ 28,639
544,614
$ 358,082
(300,000)
159,069
385,545
$ 544,614
HE
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - DRAINAGE AND MAPPING
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Revenues:
Charges for services
Investment income
Total Revenues
Expenditures:
Current:
Public works
Net increase (decrease) in fund balance
Fund balance (deficit) - January 1
Fund balance (deficit) - December 31
Statement 25
Variance with
Final Budget -
Budgeted
Amounts
2020
Positive
2019
Original
Final
Actual
(Negative)
Actual
$ 8,000
$ 8,000
$ 21,853
$ 13,853
$ 31,951
1,200
1,200
4,148
2,948
5,414
9,200
9,200
26,001
16,801
37,365
24,500
24,500
17,447
7,053
12,198
$ (15,300)
$ (15,300)
8,554
$ 23,854
25,167
183,729
$ 192,283
158,562
$ 183,729
112
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - LRRWMO Statement 26
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Variance with
Final Budget -
Budgeted
Amounts
2020
Positive
2019
Original
Final
Actual
(Negative)
Actual
Revenues:
General property taxes
$ 40,000
$ 40,000
$ 39,963
$ (37)
$ 39,857
Investment income
200
200
1,336
1,136
1,897
Total revenues
40,200
40,200
41,299
1,099
41,754
Expenditures:
Current:
Public works
28,840
28,840
28,698
142
23,765
Net increase (decrease) in fund balance
$ 11,360
$ 11,360
12,601
$ 1,241
17,989
Fund balance (deficit) - January 1
62,300
44,311
Fund balance (deficit) - December 31
$ 74,901
$ 62,300
113
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - FORESTRY Statement 27
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Variance with
Final Budget -
Budgeted Amounts 2020 Positive 2019
Original Final Actual (Negative) Actual
Revenues:
Intergovernmental
$ 12,500
$ 12,500 S
-
$ (12,500) $
-
Investment income
50
50
98
48
105
Total revenues
12,550
12,550
98
(12,452)
105
Expenditures:
Current:
Public works
15,000
15,000
-
15,000
-
Net increase (decrease) in fund balance
$ (2,450)
$ (2,450)
98
$ 2,548
105
Fund balance (deficit) - January 1
5,237
5,132
Fund balance (deficit) - December 31
$
5,335
$
5,237
114
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - RIGHT-OF-WAY MANAGEMENT/UTILITY Statement 28
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Variance with
Final Budget -
Budgeted Amounts 2020 Positive 2019
Original Final Actual (Negative) Actual
Revenues:
Charges for services
$ 20,000 $
20,000 S
39,501
$ 19,501
$ 37,807
Investment income
500
500
1,687
1,187
1,889
Total revenues
20,500
20,500
41,188
20,688
39,696
Expenditures:
Current:
Public works
26,144
26,144
24,166
1,978
21,997
Revenue over (under) expenditures
(5,644)
(5,644)
17,022
22,666
17,699
Other financing sources (uses
Transfers out (5,700) (5,700) (5,700) -
Net increase (decrease) in fund balance $ (11,344) $ (11,344) 11,322 $ 22,666
Fund balance (deficit) - January 1 70,421
Fund balance (deficit) - December 31 $ 81,743
(5,800)
11,899
58,522
$ 70,421
115
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CHARITABLE GAMBLING
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Revenues:
Investment income
Miscellaneous
Total revenues
Expenditures:
Current:
General government
Net increase (decrease) in fund balance
Fund balance (deficit) - January 1
Fund balance (deficit) - December 31
Statement 29
Variance with
Final Budget -
Budgeted
Amounts
2020
Positive
2019
Original
Final
Actual
(Negative)
Actual
$ 750
$ 750
$ 3,510
$ 2,760
$ 2,731
30,000
30,000
75,585
45,585
95,107
30,750
30,750
79,095
48,345
97,838
30,000
30,000
57,368
(27,368)
63,187
$ 750
$ 750
21,727
$ 20,977
34,651
114,711
$ 136,438
80,060
$ 114,711
116
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CONSTRUCTION SEAL COATING
Statement 30
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Variance with
Final Budget -
Budgeted Amounts
2020
Positive
2019
Original Final
Actual
(Negative)
Actual
Revenues:
Charges for services $ 10,000 $ 10,000
S -
$ (10,000)
$ 9,445
Investment income 500 500
2,081
1,581
2,906
Total revenues 10,500 10,500
2,081
(8,419)
12,351
Expenditures:
Current:
Public works 10,000 10,000
Net increase (decrease) in fund balance $ 500 $ 500
Fund balance (deficit) - January 1
Fund balance (deficit) - December 31
- 10,000 19,068
2,081 $ 1,581 (6,717)
3,074 9,791
$ 5,155 $ 3,074
117
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CARES GRANT Statement 31
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2020
With Comparative Actual Amounts For The Year Ended December 31, 2019
Variance with
Final Budget -
Budgeted Amounts
2020
Positive 2019
Original Final
Actual
(Negative) Actual
Revenues:
Intergovernmental
$ - $ 2,465,736
S 2,465,736-
Investment income
- 264
262
(2) -
Total revenues
- 2,466,000
2,465,998
(2) -
Expenditures:
Current:
Public safety
- 501,572
501,520
52 -
Economic development
- 1,802,494
1,802,484
- -
Capital outlay:
Public safety
- 161,944
161,994
(50) -
Total expenditures
- 2,466,000
2,465,998
2 -
Net increase (decrease) in fund balance
$ - $ -
-
Fund balance (deficit) - January 1
-
-
Fund balance (deficit) - December 31
$
118
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.
M11
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
December 31, 2020
With Comparative Totals for December 31, 2019
Assets:
Current assets:
Cash and cash equivalents
Accrued interest
Accounts receivable
Inventories - at cost
Total assets
Liabilities:
Current liabilities:
Accounts payable
Salaries payable
Total liabilities
Net position:
Unrestricted
Central
Equipment
Risk
Management
Statement 32
Totals
2020 2019
$ 314,291 $ 643,122 $ 957,413 $ 1,009,554
1,651 2,637 4,288 5,783
- - - 4,628
91,683 - 91,683 84,553
407,625 645,759 1,053,384 1,104,518
26,892 250 27,142 34,962
9,880 515 10,395 7,417
36,772 765 37,537 42,379
$ 370,853 $ 644,994 $ 1,015,847 $ 1,062,139
120
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2020
With Comparative Totals For The Year Ended December 31, 2019
Statement 33
Central
Equipment
Risk
Totals
Maintenance
Management
2020
2019
Operating revenues:
User charges
S 733,944
$ 483,335
$ 1,217,279 $
1,174,617
Other
10,962
61,367
72,329
22,606
Total operating revenues
744,906
544,702
1,289,608
1,197,223
Operating expenses:
Personal services
339,196
191,357
530,553
494,324
Supplies
303,348
32,503
335,851
391,124
Other service charges
159,156
327,545
486,701
385,860
Total operating expenses
801,700
551,405
1,353,105
1,271,308
Operating income (loss)
(56,794)
(6,703)
(63,497)
(74,085)
Nonoperating revenues (expenses):
Investment income
7,040
10,165
17,205
29,809
Change in net position
(49,754)
3,462
(46,292)
(44,276)
Net position - January 1
420,607
641,532
1,062,139
1,106,415
Net position - December 31
$ 370,853
$ 644,994
$ 1,015,847 $
1,062,139
121
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2020
With Comparative Totals For The Year Ended December 31, 2019
Cash flows from operating activities:
Receipts from customers and users
Payment to suppliers
Payment to employees
Net cash flows from operating activities
Cash flows from investing activities:
Investment income
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents - January 1
Cash and cash equivalents - December 31
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Changes in assets and liabilities:
Decrease (increase) in accounts receivable
Decrease (increase) in inventory
Increase (decrease) in accounts payable
Increase (decrease) in salaries payable
Total adjustments
Net cash provided (used) by operating activities
Central
Equipment Risk
Maintenance Management
Statement 34
Totals
2020 2019
$ 744,906
$ 549,330
$ 1,294,236
$ 1,198,247
(466,217)
(371,285)
(837,502)
(731,277)
(336,356)
(191,219)
(527,575)
(492,955)
(57,667)
(13,174)
(70,841)
(25,985)
7,773
10,927
18,700
29,592
(49,894)
(2,247)
(52,141)
3,607
364,185
645,369
1,009,554
1,005,947
$ 314,291
$ 643,122
$ 957,413
$ 1,009,554
$ (56,794) $ (6,703) $ (63,497) $ (74,085)
4,628
4,628
1,024
(7,130)
-
(7,130)
28,027
3,417
(11,237)
(7,820)
17,680
2,840
138
2,978
1,369
(873)
(6,471)
(7,344)
48,100
$ (57,667)
$ (13,174)
$ (70,841)
$ (25,985)
122
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 infonmation in the financial statements, note disclosures, and required supplementary information
says about the City's overall financial health.
Contents
Page
Financial Trends 124
These tables contain trend information to help the reader understand how the City's financial performance
and well-being have changed over time.
Revenue Capacity 134
These tables contain information to help the reader assess the City's most significant local revenue source,
the property tax.
Debt Capacity 140
These tables present information to help the reader assess the affordability of the City's current levels of
outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information 148
These tables offer demographic and economic indicators to help the reader understand the environment
within which the City of Andover's financial activities take place.
Operating Information 151
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.
123
CITY OF ANDOVER, MINNESOTA
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
Governmental Activities
Net investment in capital assets
Restricted
Unrestricted
Total governmental activities net position
Business -Type Activities
Net investment in capital assets
Unrestricted
Total business -type activities net position
Primary Government
Net investment in capital assets
Restricted
Unrestricted
Total primary government net position
2011 2012 2013 2014
S 90,859,970
S 89,592,661
S 93,393,474
$ 94,533,473
3,107,253
4,461,020
3,792,323
4,776,047
23,353,009
25,589,728
22,936,032
23,175,077
117,320,232
119,643,409
120,121, 829
122,484,597
36,031,319 34,922,691 34,864,659 34,787,382
41,131,947 40,707,004 41,175,489 41,080,232
126,891,289
124,515,352
128,258,133
129,320,855
3,107,253
4,461,020
3,792,323
4,776,047
28,453,637
31,374,041
29,246,862
29,467,927
$ 158,452,179
$ 160,350,413
$ 161,297,318
$ 163,564,829
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.
124
Table 1
2015 2016 2017 2018 2019 2020
5,755,162
5,787,072
4,935,375
5,081,230
5,294,610
3,851,631
24,457,253
26,085,240
27,673,920
28,319,303
30,608,612
35,974,899
126,210,442
131,412,150
134,211,942
136,978,057
142,540,658
154,267,817
131,505,412
137,071,653
138,777,464
140,646,223
145,185,050
154,783,340
5,755,162
5,787,072
4,935,375
5,081,230
5,294,610
3,851,631
31,461,816
33,737,579
36,120,862
38,144,984
40,591,162
46,998,078
$ 168,722,390
$ 176,596,304
$ 179,833,701
$ 183,872,437
$ 191,070,822
$ 205,633,049
iPR
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
2011
2012
2013
2014
Expenses
Governmental activities:
General government
$ 2,406,750
$ 2,453,801
$ 3,061,867
$ 2,791,507
Public safety
4,214,316
4,325,531
4,495,447
4,747,142
Public works
4,029,164
5,623,942
4,465,153
4,430,295
Parks and recreation
2,945,742
3,102,534
3,029,917
3,229,894
Recycling
109,293
94,319
124,515
111,760
Economic development
777,298
1,396,466
318,646
676,039
Interest on long-term debt
1,796,782
2,497,344
1,399,172
542,139
Total governmental activities expenses
16,279,345
19,493,937
16,894,717
16,528,776
Business -type activities
Water
2,655,926
2,782,948
2,275,363
2,308,552
Sewer
1,914,113
1,842,473
1,964,911
1,951,785
Storm sewer
614,958
531,103
561,807
848,745
Total business -type activities expenses
5,184,997
5,156,524
4,802,081
5,109,082
Total primary government expenses
$ 21,464,342
$ 24,650,461
$ 21,696,798
$ 21,637,858
Program Revenues
Governmental activities:
Charges for services:
General government
$ 532,764
$ 690,875
$ 843,304
$ 801,458
Public safety
540,089
607,715
704,119
492,665
Public works
309,066
308,583
321,114
318,018
Parks and recreation
1,498,847
1,495,872
1,463,579
1,545,794
Recycling
48,339
39,530
42,544
41,440
Economic development
235,134
170,391
239,570
96,772
Operating grants and contributions
977,553
1,358,424
1,119,778
946,540
Capital grants and contributions
1,356,091
2,774,126
1,425,815
4,677,704
Total governmental activities program revenue
5,497,883
7,445,516
6,159,823
9,920,391
Business -type activities:
Charges for services:
Water
2,119,954
2,572,560
2,495,561
2,347,763
Sewer
1,990,218
2,063,177
2,065,467
2,117,624
Storm sewer
358,708
379,262
399,417
421,056
Operating grants and contributions
-
-
-
9,506
Capital grants and contributions
-
-
-
990,412
Total business -type activities program revenue
4,468,880
5,014,999
4,960,445
5,886,361
Total primary government program revenues
9,966,763
12,460,515
11,120,268
14,806,752
Net (Expense)/Revenue
Governmental activities
(10,781,462)
(12,048,421)
(10,734,894)
(7,608,385)
Business -type activities
(716,117)
(141,525)
158,364
777,279
Total primary government net expense
$ (11,497,579)
$ (12,189,946)
$ (10,576,530)
$ (6,831,106)
126
Table 2
$ 2,823,408
$ 2,904,102
$ 2,937,380
$ 3,209,512
$ 3,159,045
$ 3,193,326
4,774,033
5,140,347
5,167,930
5,263,071
5,426,472
6,002,090
2,967,957
3,905,703
5,428,350
4,257,014
5,939,704
4,964,909
3,340,561
3,321,814
3,385,001
3,321,793
3,507,705
3,997,558
98,016
133,614
169,100
206,335
231,625
234,475
192,265
411,958
1,098,300
249,669
202,182
4,240,712
454,808
437,513
403,200
377,314
917,913
1,226,839
14,651,048
16,255,051
18,589,261
16,884,708
19,384,646
23,859,909
2,316,651
2,454,931
2,263,748
2,306,013
2,280,247
2,449,287
2,002,623
2,128,814
2,190,453
2,175,331
2,289,555
2,454,250
595,902
546,526
684,708
614,816
737,854
617,883
4,915,176
5,130,271
5,138,909
5,096,160
5,307,656
5,521,420
$ 19,566,224
$ 21,385,322
$ 23,728,170
$ 21,980,868
$ 24,692,302
$ 29,381,329
$ 1,381,113
$ 2,124,665
$ 925,639
$ 647,452
$ 909,139
$ 757,188
624,430
832,412
680,729
721,078
1,091,260
1,154,232
298,143
661,788
334,273
331,620
357,231
296,533
1,514,900
1,521,585
1,465,562
1,504,647
1,677,991
1,301,624
32,976
42,768
43,062
49,453
44,099
48,705
50,628
174,754
461,294
87,891
96,176
126,596
965,986
992,194
1,186,721
1,407,217
1,662,842
3,453,564
863,155
2,703,429
3,414,161
1,608,129
4,950,131
12,006,951
5,731,331
9,053,595
8,511,441
6,357,487
10,788,869
19,145,393
2,593,303
2,575,920
2,716,239
3,061,920
2,756,944
3,349,237
2,129,201
2,144,794
2,301,077
2,325,456
2,329,462
2,355,039
444,335
464,928
499,974
537,422
564,154
594,524
-
2,681
-
-
-
-
1,524,088
2,670,641
481,343
504,267
712,976
2,807,445
6,690,927
7,858,964
5,998,633
6,429,065
6,363,536
9,106,245
12,422,258
16,912,559
14,510,074
12,786,552
17,152,405
28,251,638
(8,919,717)
(7,201,456)
(10,077,820)
(10,527,221)
(8,595,777)
(4,714,516)
1,775,751
2,728,693
859,724
1,332,905
1,055,880
3,584,825
$ (7,143,966)
$ (4,472,763)
$ (9,218,096)
$ (9,194,316)
$ (7,539,897)
$ (1,129,691)
(Continued)
iPJrA
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes:
General property taxes
Tax increment collections
Grants and contributions not restricted to
specific programs
Unrestricted investment earnings
Gain on sale of capital assets
Transfers
Total governmental activities
Business -type activities:
Unrestricted investment earnings
Gain on sale of capital assets
Transfers
Total business -type activities
Total primary government
Change in Net Position
$ 10,292,674
$ 10,594,940
$ 10,608,678
$ 10,863,912
2,005,056
2,033,932
320,822
353,773
86,802
14,360
12,511
87,179
1,399,987
1,201,995
571,307
747,621
91,693
16,625
23,650
228,639
(417,051)
509,746
(323,654)
606,793
13,459,161
14,371,598
11,213,314
12,887,917
370,641
226,328
(21,533)
115,425
7,500
-
8,000
-
417,051
(509,746)
323,654
(606,793)
795,192
(283,418)
310,121
(491,368)
$ 14,254,353
$ 14,088,180
$ 11,523,435
$ 12,396,549
Governmental activities $ 2,677,699 $ 2,323,177 $ 478,420 $ 5,279,532
Business -type activities 79,075 (424,943) 468,485 285,911
Total primary government $ 2,756,774 $ 1,898,234 $ 946,905 $ 5,565,443
GASB 68 was implemented in 2015. Expenses for years prior to 2015 were not restated.
128
Table 2
(Continued)
$ 11,120,449
$
11,770,304
$
11,874,354
$
12,423,060
$
13,011,406
$
14,479,488
210,625
69,772
74,771
82,874
89,414
100,979
15,327
16,260
13,638
12,917
14,053
4,129
348,885
399,021
373,585
560,133
1,346,685
930,876
548,950
20,360
20,489
36,431
24,550
3,000
401,326
127,447
520,775
177,921
(327,730)
923,203
12,645,562
12,403,164
12,877,612
13,293,336
14,158,378
16,441,675
57,291
68,768
65,801
117,637
236,356
173,446
-
2,192
32,855
-
15,818
-
(401,326)
(127,447)
(520,775)
(177,921)
327,730
(923,203)
(344,035)
(56,487)
(422,119)
(60,284)
579,904
(749,757)
$ 12,301,527
$
12,346,677
$
12,455,493
$
13,233,052
$
14,738,282
$
15,691,918
$ 3,725,845
$
5,201,708
$
2,799,792
$
2,766,115
$
5,562,601
$
11,727,159
1,431,716
2,672,206
437,605
1,272,621
1,635,784
2,835,068
$ 5,157,561
$
7,873,914
$
3,237,397
$
4,038,736
$
7,198,385
$
14,562,227
129
CITY OF ANDOVER, MINNESOTA
FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2011
2012
2013
2014
General Fund
Nonspendable
$ 2221,641
$ 160,177
$ 106,445
$ 137,001
Unassigned
5,665,496
6,227,664
6,853,791
7,065,133
Total general fund
5,888,137
6,387,841
6,960,236
7,202,134
All Other Governmental Funds
Nonspendable
16,074
1,471
1,316
1,562
Restricted
19,741,214
21,307,923
21,274,444
5,022,967
Committed
650,766
681,413
588,516
591,289
Assigned
14,451,306
16,420,228
13,481,786
16,095,395
Unassigned
(517,251)
(314,734)
(276,829)
(114,344)
Total all other governmental funds
34,342,109
38,096,301
35,069,233
21,596,869
Total governmental funds
$ 40,230,246
$ 44,484,142
$ 42,029,469
$ 28,799,003
In 2011, the City adopted the provisions of Governmental Accounting Standards Board Statement No. 54, Fund Balance Reporting
and Governmental Fund Type Definitions.
130
Table 3
2015 2016 2017 2018 2019 2020
$ 131,813
$ 146,417
$ 117,253
$ 112,971
$ 122,993
$ 140,602
7,136,091
7,650,328
7,672,363
8,023,365
9,240,458
9,513,916
7,267,904
7,796,745
7,789,616
8,136,336
9,363,451
9,654,518
1,800
2,027
2,041
2,386
1,957
2,123
5,674,417
5,852,444
4,550,557
14,225,839
19,696,883
4,651,447
531,729
513,916
530,505
518,617
518,312
508,062
17,907,929
19,109,145
20,855,184
21,327,036
22,569,932
27,612,210
(63,357)
(64,193)
(65,185)
(66,263)
-
-
24,052,518
25,413,339
25,873,102
36,007,615
42,787,084
32,773,842
$ 31,320,422
$ 33,210,084
$ 33,662,718
$ 44,143,951
$ 52,150,535
$ 42,428,360
191
CITY OF ANDOVER, MINNESOTA
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2011
2012
2013
2014
Revenues
General property taxes
$ 10,279,967
$ 10,638,117
$ 10,682,975
$ 10,894,301
Tax increment collections
1,976,800
2,035,663
375,040
377,733
Licenses and permits
387,206
449,826
536,706
364,430
Intergovernmental
1,876,685
3,493,528
1,115,047
3,464,985
Special assessments
891,942
792,460
1,045,000
733,425
Charges for services
1,732,791
1,874,321
1,806,919
1,720,972
Fines
99,777
97,571
96,130
94,375
Investment income
1,386,698
1,191,438
573,256
735,325
Miscellaneous:
Park dedication fees
51,706
47,700
205,080
156,384
Connection charges
27,165
170,202
436,628
676,826
Rent
641,859
639,983
639,423
639,000
Other
332,992
645,897
1,698,964
564,057
Total revenues
19,685,588
22,076,706
19,211,168
20,421,813
Expenditures
General government
2,298,571
2,280,373
2,647,278
2,588,950
Public safety
3,965,541
4,092,073
4,301,698
4,537,264
Public works
3,788,636
5,415,924
4,251,454
4,145,404
Parks and recreation
1,926,220
2,001,624
1,990,457
2,139,552
Recycling
109,911
94,328
123,595
106,587
Economic development
966,687
1,537,611
408,210
665,325
Unallocated
30,631
63,371
75,517
81,183
Capital outlay
985,399
723,017
2,763,351
2,816,375
Debt service:
Principal retirement
4,100,000
1,842,000
1,689,000
2,336,719
Interest
1,855,538
1,768,748
1,262,302
900,504
Other
10,430
225,378
5,509
7,895
Construction/acquisition costs
1,044,581
110,650
946,942
-
Total expenditures
21,082,145
20,155,097
20,465,313
20,325,758
Revenues over (under) expenditures
(1,396,557)
1,921,609
(1,254,145)
96,055
Other Financing Sources (Uses)
Transfers in
627,530
627,530
627,530
627,530
Transfers out
-
(7,134)
(4,242)
(20,737)
Bonds issued
265,000
585,000
-
1,555,000
Refunding bonds issued
-
18,885,000
-
-
Redemption of refunded bonds
-
(17,907,898)
(1,900,000)
(16,455,000)
Bond premium
-
133,164
-
44,278
Proceeds from the sale of capital assets
514,819
16,625
76,184
922,408
Total other financing sources (uses)
1,407,349
2,332,287
(1,200,528)
(13,326,521)
Net increase (decrease) in fund balance
$ 10,792
$ 4,253,896
$ (2,454,673)
$ (13,230,466)
Debt service as a percentage of
noncapital expenditures
31.26%
18.69%
17.61%
18.49%
132
Table 4
2015
2016
2017
2018
2019
2020
$ 11,148,149
$ 11,809,352
$ 11,923,097
$ 12,433,651
$ 12,985,096
$ 14,451,737
213,020
91,808
82,448
86,794
90,189
100,979
452,422
625,907
546,378
562,525
855,831
892,279
959,790
1,564,848
3,150,578
1,641,806
2,786,445
6,211,801
690,161
818,065
832,528
554,471
721,950
631,999
1,499,909
1,613,941
1,574,242
1,656,254
1,941,637
1,672,023
99,304
88,600
75,287
73,719
62,349
47,630
341,392
389,114
362,974
543,672
1,316,876
913,671
170,144
431,784
95,198
75,798
472,753
389,033
405,967
445,698
412,691
444,989
1,152,759
1,136,882
638,220
656,604
641,691
637,150
636,803
635,629
542,473
1,189,179
428,186
525,667
1,462,431
862,805
17,160,951
19,724,900
20,125,298
19,236,496
24,485,119
27,946,468
2,639,821
2,686,308
2,754,189
3,115,956
3,011,191
3,079,344
4,521,129
4,709,083
4,822,435
4,956,350
5,096,029
5,754,243
2,747,550
3,694,911
5,208,862
4,298,845
5,691,654
4,588,958
2,277,576
2,226,454
2,253,370
2,214,415
2,371,437
2,495,594
91,940
124,860
169,956
199,182
224,574
228,124
181,551
401,244
1,087,586
538,955
191,468
4,154,244
56,720
33,077
14,875
11,940
15,001
12,778
941,213
2,220,253
1,484,422
2,102,030
14,825,106
16,830,198
1,961,719
1,966,719
1,996,719
1,612,717
1,444,000
1,561,000
470,687
444,144
418,419
385,555
568,864
1,290,844
5,009
1,325
3,095
3,095
1,000
5,000
167,955
414,987
52,527
164,399
1,564,585
7,145
16,062,870
18,923,365
20,266,455
19,603,439
35,004,909
40,007,472
1,098,081
801,535
(141,157)
(366,943)
(10,519,790)
(12,061,004)
627,530
627,530
627,530
643,729
1,323,739
990,088
(58,249)
(85,096)
(54,228)
(114,850)
(58,110)
(59,740)
-
520,000
-
10,000,000
15,770,000
1,310,000
-
-
-
254,260
1,458,695
95,481
854,057
25,693
20,489
65,037
32,050
3,000
1,423,338
1,088,127
593,791
10,848,176
18,526,374
2,338,829
$ 2,521,419
$ 1,889,662
$ 452,634
$ 10,481,233
$ 8,006,584
$ (9,722,175)
16.27%
14.80%
12.89%
11.53%
10.81%
12.31%
133
CITY OF ANDOVER, MINNESOTA
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
Last Ten Fiscal Years
Real Property
Personal Property
Total
Total
Taxable
Net Tax
Taxable
Net Tax
Taxable
Net Tax
Direct
Year
Market Value
Capacity
Market Value
Capacity
Market Value
Capacity
Tax Rate
2011
$ 2,444,519,600
$ 25,667,544
$ 25,425,400
$ 506,806
$ 2,469,945,000
$ 26,174,350
38.731%
2012
2,176,836,156
22,945,277
25,299,200
504,304
2,202,135,356
23,449,581
42.539%
2013
2,097,459,658
22,048,362
26,136,700
520,656
2,123,596,358
22,569,018
41.170%
2014
2,045,873,681
21,462,221
25,938,600
516,101
2,071,812,281
21,978,322
43.657%
2015
2,411,059,312
25,213,801
24,711,300
491,549
2,435,770,612
25,705,350
37.460%
2016
2,513,05 1 ,767
26,316,855
26,635,100
530,418
2,539,686,867
26,847,273
38.667%
2017
2,605,298,959
27,358,838
28,181,200
561,340
2,633,480,159
27,920,178
37.738%
2018
2,929,062,970
30,682,357
30,348,500
604,686
2,959,411,470
31,287,043
34.952%
2019
3,089,514,579
32,331,885
32,283,200
643,380
3,121,797,779
32,975,265
35.621%
2020
3,392,964,562
35,504,632
29,861,600
594,907
3,422,826,162
36,099,539
35.942%
Source: Anoka County Property Tax Division
Table 5
Net Tax Capacity
as a Percentage
1.06%
1.06%
1.06%
1.06%
1.06%
1.06%
1.06%
1.06%
1.06%
1.05%
134
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX RATES - PER $1,000 OF ASSESSED TAX CAPACITY VALUE
DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
Table 6
Direct City
General
Debt
Lower
Taxes
Oper
Service
Rum
Overlapping
Governments
Payable
Levy
Levy
Watershed
Total
School
County
Other
Total
Total
2012
35.138%
6.952%
0.449%
42.539%
21.447%
41.056%
3.626%
66.129%
108.668%
2013
33.676%
6.989%
0.449%
41.114%
26.751%
44.328%
3.912%
74.991%
116.105%
2014
35.486%
7.711%
0.460%
43.657%
28.265%
43.239%
4.354%
75.858%
119.515%
2015
30.441%
6.628%
0.391%
37.460%
22.482%
38.123%
4.104%
64.709%
102.169%
2016
31.898%
6.381%
0.388%
38.667%
20.885%
38.894%
4.949%
64.728%
103.395%
2017
33.128%
4.246%
0.364%
37.738%
18.590%
36.841%
3.952%
59.383%
97.121%
2018
30.607%
4.020%
0.325%
34.952%
18.392%
35.334%
3.906%
57.632%
92.584%
2019
29.830%
5.480%
0.311 %
35.621 %
16.330%
34.473%
3.478%
54.281 %
89.902%
2020
28.390%
7.266%
0.286%
35.942%
16.893%
33.361%
3.157%
53.411%
89.353%
2021
28.367%
7.207%
0.271%
35.845%
17,801%
30.935%
3.146%
51,882%
87.727%
Source: Anoka County Property Tax Division
135
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Table 7
Collected Within the Fiscal Year of Levy
Total
Market Value
Collections In
Total Collections to Date
Tax
Tax
Homestead
Total
Percentage
Subsequent
Percentage
Year
Levy
Levy
Credit
Collected
of Levy
Years
Amount
of Levy
2011
$ 10,856,299
$ 10,119,681
$ 853 *
$ 10,120,534
93.22%
$ 145,144
$ 10,265,678
94.56%
2012
10,631,299
10,460,838
2,354
10,463,192
98.42%
128,881
10,592,073
99.63%
2013
10,631,299
10,535,521
1,246
10,536,767
99.11%
94,532
10,631,299
100.00%
2014
10,843,925
10,776,635
-
10,776,635
99.38%
67,290
10,843,925
100.00%
2015
11,143,925
11,054,157
-
11,054,157
99.19%
56,677
11,110,833
99.70%
2016
11,593,925
11,525,770
3,461
11,529,231
99.44%
22,711
11,551,942
99.64%
2017
11,938,555
11,858,376
3,545
11,861,921
99.36%
11,773
11,873,694
99.46%
2018
12,416,357
12,342,648
2,824
12,345,471
99.43%
28,923
12,374,394
99.66%
2019
13,103,487
12,974,413
3,960
12,978,373
99.05%
52,338
13,030,711
99.44%
2020
14,479,586
14,391,252
4,128
14,395,381
99.42%
F
Not Available
* Included in the total tax lcvy is approximately $400,000 ofmarket value homestead credit (MVHC) that the City will not be receiving. Duc to State legislative
actions to deal with the State budget deficit, the MVHC program was significantly reduced for the City.
136
CITY OF ANDOVER, MINNESOTA
PRINCIPAL TAXPAYERS
Current Year and Nine Years Ago
2020 2011
Net
Percentage of
Net
Tax
Total City
Tax
Taxpayers
Capacity
Rank
Tax Capacity
Capacity
Minnegasco, Inc.
$ 317,604
1
0.88%
$ 201,860
Connexus Energy
222,898
2
0.62%
217,170
Presbyterian Homes of Andover
209,904
3
0.58%
151,809
Wal-Mart
173,938
4
0.48%
Target Corporation
161,826
5
0.45%
191,460
Great River Energy
161,208
6
0.45%
153,136
Andover Limited Partnership
143,250
7
0.40%
159,029
Andover Station 2016 LLC
123,650
8
0.34%
104,250
DST Properties LLC
108,864
9
0.30%
Estates of Arbor Oaks LLC
90,023
10
0.25%
Fairbanks Properties LLC
79,260
Columbia Park Properties
73,606
Maxwell Kearns, Inc.
68,538
Total
$ 1,713,165
4.75%
$ 1,400,117
Net Tax Capacity
$ 36,099,539
$ 26,174,350
Source: Anoka County Property Tax Division
Rank
3
5
4
7
8
9
10
Table 8
Percentage of
Total City
Tax Capacity
0.77%
0.83%
0.58%
0.73%
0.59%
0.61 %
0.40%
0.30%
0.28%
0.26%
5.35%
137
CITY OF ANDOVER, MINNESOTA
ESTIMATED MARKET VALUES AND NEW CONSTRUCTION
Last Ten Fiscal Years
Table 9
Estimated Market Values
New
Construction
Commercial /
Commercial / Industrial
Residential
Year
Industrial (1)
Residential
Total
Pernlits
Value
Permits
Value
2011
$ 199,728,200
$ 2,305,897,900
$ 2,505,626,100
24
$ 11,461,453
58
$ 11,803,000
2012
192,112,500
2,206,195,400
2,398,307,900
25
5,042,964
81
15,243,007
2013
174,971,400
2,141,898,900
2,316,870,300
15
9,249,466
98
20,351,892
2014
166,531,500
2,103,536,600
2,270,068,100
14
4,285,281
52
13,926,901
2015
173,717,700
2,437,681,500
2,611,399,200
16
2,513,609
74
19,631,775
2016
184,083,400
2,530,046,700
2,714,130,100
7
14,009,200
HI
28,893,036
2017
196,837,900
2,610,055,500
2,806,893,400
-
94
27,847,717
2018
207,569,200
2,908,606,300
3,116,175,500
2
2,860,000
60
19,703,857
2019
214,417,500
3,057,490,800
3,271,908,300
2
3,901,376
116
37,258,817
2020
228,402,926
3,332,915,773
3,561,318,699
-
139
45,464,139
Note: (1) Also includes agricultural, public utility, railroad operating property, and personal property.
138
CITY OF ANDOVER, MINNESOTA
SPECIAL ASSESSMENT LEVIES AND COLLECTIONS
Last Ten Fiscal Years
Table 10
Total
Delinquent
Collections
Assessments
Current
Current
Percent of
Delinquent
Total
as a Percent of
Outstanding
as a Percent of
Assessments
Assessments
Assessments
Assessment
Assessment
Current
Delinquent
Current
Year
Due (1)
Collected
Collected
Collections
Collections
Assessments Due
Assessments
Assessments Due
2011
$ 308,794
$ 304,164
98.50%
$ 5,112
$ 309,276
100.16%
$ 267,016
86.47%
2012
348,129
376,601
108.18%
25,087
401,688
115.38%
237,175
68.13%
2013
338,411
387,584
114.53%
168,941
556,525
164.45%
82,826
24.47%
2014
326,597
387,651
118.69%
3,788
391,439
119.85%
215,970
66.13%
2015
334,054
514,868
154.13%
4,003
518,871
155.33%
269,754
80.75%
2016
267,704
510,275
190.61%
2,153
512,429
191.42%
268,716
100.38%
2017
265,163
513,140
193.52%
212
513,352
193.60%
272,101
102.62%
2018
305,249
555,684
182.04%
412
556,096
182.18%
283,528
92.88%
2019
272,670
532,268
195.21 %
1,579
533,847
195.79%
295,781
108.48%
2020
272,526
524,787
192.56%
5,684
530,471
194.65%
272,865
100.12%
Note: (1) Only includes assessments certified to Anoka County.
139
CITY OF ANDOVER, MINNESOTA
RATIO OF NET BONDED DEBT
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
Table I
General Bonded Debt Outstanding
(2)
Gross
Amount
Net
Percentage
Net Bonded
Fiscal
Estimated
Bonded
Restricted For
Bonded
of Estimated
Debt
Year
Population (4)
Market Value
Debt
Debt Service
Debt
Market Value
Per Capita
2011
30,847
$ 2,505,626,100 $
39,096,000
$ (17,779,964) $
21,316,036
0.85%
$ 691.02
2012
31,125
2,398,307,900
40.444,000
(18,497,679)
21,946,321
0.92%
705.10
2013
31,392
2,316,870,300
37,460,000
(17,415,812)
20,044,188
0.87%
638.51
2014
31,574
2,270,068,100
21,035,000
(942,607)
20,092,393
0.89%
636.36
2015
31,704
2,611,399,200
19,330,000
(1,064,634)
18,265,366
0.70%
576.12
2016
32,335
2,714,130,100
18,080,000
(1,163,486)
16,916,514
0.62%
523.16
2017
32,470
2,806,893,400
16,280,000
(800,214)
15,479,786
0.55%
476.74
2018
32,728
3,116,175,500
24,864,000
(899,986)
23,964,014
0.77%
732.22
2019
32,882
3,271,908,300
40,619,047
(917,364)
39,701,683
1.21%
1,207.40
2020
33,182
3,561,318,700
40,296,891
(1,582,258)
38,714.633
1.09%
1,166.74
Notes: (1) Source: Metropolitan Council
(2) Only includes debt supported by tax levy.
140
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
December 31, 2020
Direct:
City of Andover
Overlapping:
Anoka County
ISD No. 11 Anoka -Hennepin
ISD No. 15 St. Francis
Anoka County Regional Railroad Authority
Metropolitan Council
Total overlapping debt
Total overlapping and direct debt
Notes: (1) Information obtained from Anoka County.
Table 12
Gross General
Obligation
Percentage
Net Amount
Bonded Debt
Applicable
Applicable
Outstanding
to City (2)
to City
$ 40,296,891
100.0000%
$ 40,296,891
59,945,000 (1)
9.2465%
5,542,814
165,375,000 (1)
12.9889%
21,480,393
88,240,000 (1)
6.3918%
5,640,124
20,280,000 (1)
9.2465%
1,875,190
221,800,000 (1)
0.8568%
1,900,382
36,438,903
$ 76,735,794
(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.
141
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF LEGAL DEBT MARGIN
Last Ten Fiscal Years
2011 2012 2013 2014
Estimated Taxable Market Value
$ 2,469,945,000
$ 2,202,135,356
$ 2,123,596,358
$ 2,071,812,281
Debt limitation:
Debt limit percent
3%
3%
3%
3%
Debt limit in dollars
74,098,350
66,064,061
63,707,891
62,154,368
Debt applicable to limit:
Total bonded debt
55,361,000
49,144,000
45,010,000
27,405,000
Less: Nonapplicable debt
G.O. water revenue bonds
(14,400,000)
(7,420,000)
(6,875,000)
(6,310,000)
Permanent improvement
revolving bonds
(1,125,000)
(760,000)
(385,000)
-
State aid bonds
(740,000)
(520,000)
(290,000)
(60,000)
Less: Cash and investments in
related debt service funds
(17,779,964)
(18,497,679)
(17,415,812)
(942,607)
Total debt applicable to limitation
21,316,036
21,946,321
20,044,188
20,092,393
Legal debt margin
$ 52,782,314
$ 44,117,740
$ 43,663,703
$ 42,061,975
Total debt applicable to the limit as
a percentage of debt limit
28.77%
33.22%
31.46%
32.33%
142
Table 13
2015 2016 2017 2018 2019 2020
$ 2,435,770,612
$ 2,539,686,867
$ 2,633,480,159
$ 2,959,411,470
$ 3,121,797,779
$ 3,422,826,162
3%
3%
3%
3%
3%
3%
73,073,118
76,190,606
79,004,405
88,782,344
93,653,933
102,684,785
25,050,000
27,110,000
20,740,000
28,639,000
42,260,000
41,284,000
(5,720,000)
(9,030,000)
(4,460,000)
(3,775,000)
(3,070,000)
(2,345,000)
(1,191,519)
(1,299,334)
(943,862)
(1,032,604)
(1,418,376)
(2,021,047)
18,138,481
16,780,666
15,336,138
23,831,396
37,771,624
36,917,953
$ 54,934,637
$ 59,409,940
$ 63,668,267
$ 64,950,948
$ 55,882,309
$ 65,766,832
24.82%
22.02%
19.41%
26.84%
40.33%
35.95%
143
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144
CITY OF ANDOVER, MINNESOTA
PLEDGED -REVENUE COVERAGE
Last Ten Fiscal Years
Table 14
Water Revenue Bonds
Water Enterprise
Fund
Fiscal
Operating
Less: Operating
Transfers
Net Available
Debt Service
Year
Revenues
Expenses (1)
In (2)
Revenue
Principal
Interest
Coverage
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
59,249
1,278,190
590,000
231,978
1.56
2016
2,575,920
1,535,224
85,096
1,125,792
615,000
208,122
1.37
2017
2,716,239
1,441,224
54,228
1,329,243
645,000
71,819
1.85
2019
3,061,920
1,448,248
114,850
1,728,522
685,000
85,770
2.24
2019
2,756,944
1,912,710
58,110
902,344
705,000
70,669
1.16
2020
3,349,237
1,983,821
59,740
1,425,156
725,000
54,910
1.83
2004 EDA Public Facility Lease Revenue Bond (3) & 2012 Abatement Bonds
Community
Center Special Revenue Fund
Debt Service
Fiscal
Operating
Less: Operating
Net Available
General Property
Debt Service
Year
Revenue
Expenses
Revenue
Tax Revenue
Principal
Interest
Coverage
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
2016
1,428,771
1,048,452
380,319
979,038
845,000
371,506
1.12
2017
1,445,784
1,041,714
404,070
973,161
855,000
358,731
1.13
2018
1,490,157
1,045,141
445,016
970,085
870,000
341,481
1.17
2019
1,506,473
1,047,404
459,069
960,618
885,000
323,931
1.17
2020
1,266,968
1,153,500
113,468
972,704
910,000
305,981
0.89
Special Assessment and Permanent Improvement Revolving Bonds
Fiscal Special Assessment
Year Revenue
2011 $
552,356
2012
268,116
2013
599,889
2014
102,380
2015
126,628
2016
78,189
2017
229
2018
28,848
2019
136,450
2020
4,215
Debt Service
Principal Interest Coverage
$ 955,000 $ 36,250 0.56
365,000 18,850 0.70
375,000 11,450 1.55
lu5 nnn I e5n n ?r,
No outstanding debt
No outstanding
debt
No outstanding
debt
No outstanding
debt
No outstanding
debt
No 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.
145
CITY OF ANDOVER, MINNESOTA
OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
Cite of Andover's Outstanding Debt
Governmental activities
Revenue bonds
Abatement bonds
Certificates of indebtedness
Capital improvement bonds
Permanent improvement
revolving bonds
State aid bonds
Referendum bonds
Promissory note payable
Issuance premiums
Total governmental activities
Business -type activities
G.O. revenue bonds
Issuance premiums
Total business -type activities
Total outstanding debt
Total outstanding debt as a
percentage of personal income
Total outstanding debt per capita
2011 2012 2013 2014
$ 34,675,000
$ 17,375,000
$ 16,925,000
$ -
-
17,315,000
16,995,000
16,675,000
561,000
774,000
680,000
2,140,000
2,200,000
3,455,000
1,470,000
970,000
1,125,000
760,000
385,000
-
740,000
520,000
290,000
60,000
1,660,000
1,525,000
1,390,000
1,250,000
-
-
983,593
786,874
40,961,000
41,724,000
39,118,593
21,881,874
14,400,000
7,420,000
6,875,000
6,310,000
14,400,000
7,420,000
6,875,000
6,310,000
$ 55,361,000
$ 49,144,000
$ 45,993,593
$ 28,191,874
6.17%
5.28%
4.84%
2.91 %
$ 11,795
$ 1,579
$ 1,465
$ 893
146
Table 15
2015 2016 2017 2018 2019 2020
$ -
$ -
$ -
$ -
$ -
$ -
15,840,000
14,995,000
14,140,000
13,270,000
28,155,000
27,245,000
1,915,000
2,125,000
1,330,000
939,000
540,000
144,000
470,000
-
-
10,000,000
10,000,000
9,915,000
1,105,000
960,000
810,000
655,000
495,000
335,000
590,155
393,436
196,717
-
-
-
-
-
-
-
1,429,047
1,357,891
19,920,155
18,473,436
16,476,717
24,864,000
40,619,047
38,996,891
5,720,000
9,030,000
4,460,000
3,775,000
3,070,000
2,345,000
-
81,006
67,690
54,374
41,058
27,742
5,720,000
9,111,006
4,527,690
3,829,374
3,111,058
2,372,742
$ 25,640,155
$ 27,584,442
$ 21,004,407
$ 28,693,374
$ 43,730,105
$ 41,369,633
2.57%
2.68%
1.96%
2.55%
3.71 %
3.37%
$ 809
$ 853
$ 647
$ 877
$ 1,330
$ 1,247
iEVA
CITY OF ANDOVER, MINNESOTA
DEMOGRAPHIC AND ECONOMIC STATISTICS Table 16
Last Ten Years
City
of Andover
Anoka County
Personal
Personal
Per Capita
Unemployment
Year
Population (1)
Income (2)
Population (3)
Income (2)
Income (3)
Percentage
2011
30,847
$ 896,999,913
330,844
$ 9,620,612,676
$ 29,079
5.8%
2012
31,125
930,450,750
336,414
10,056,760,116
29,894
5.9%
2013
31,692
960,235,908
339,534
10,287,540,666
30,299
5.0%
2014
31,874
976,842,478
341,864
10,477,106,008
30,647
4.2%
2015
31,704
997,851,696
342,500
10,779,845,000
31,474
3.6%
2016
32,335
1,027,444,625
345,957
10,992,783,675
31,775
3.8%
2017
32,470
1,073,165,970
348,357
11,513,547,207
33,051
3.5%
2018
32,728
1,089,842,400
350,357
11,666,888,100
33,300
2.8%
2019
32,882
1,177,372,892
356,921
12,779,913,326
35,806
3.1%
2020
33,182
1,227,003,996
358,921
13,272,180,738
36,978
6.0%
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
148
CITY OF ANDOVER, MINNESOTA
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
TaXDaver
Anoka Hennepin I.S.D. No. 11
W almart
Fairview Andover Clinic
Kottkes' Bus Service, Inc.
YMCA
TE Connectivity
Target
Anoka County Sheriffs Office
GAF Materials Corp
Anoka County Highway Department
Bunker Hills Regional Park/Activity Center
Meadow Creek Christian School
Andover County Market
Presbyterian Homes
Total
2020
Percentage
of Total City
Employees
Rank
Employment
662 (1)
1
25.6%
335
2
13.0%
300
3
11.6%
225
4
8.7%
220
5
8.5%
201
6
7.8%
200
7
7.7%
171
8
6.7%
150
9
5.8%
120
10
4.6%
2,584 100.0%
Source: Minnesota Department of Employment and Economic Development
(1) Number of district employees that work in school buildings located within the City.
Table 17
2011
Percentage
of Total City
Employees
Rank
Employment
906
1
37.0%
300
2
12.2°/,
225
4
9.2%
170
6
6.9%
250
3
10.2%
103
8
4.2%
180
5
7.3%
127
7
5.2%
100
9
4.1%
90
10
3.7%
2,451 100.0%
149
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150
CITY OF ANDOVER, MINNESOTA
FULL TIME EQUIVALENT EMPLOYEES Table 18
CITY GOVERNMENT EMPLOYEES BY FIJNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Governmental:
Administration
0.91
1.15
1.15
1.05
1.05
1.18
1.13
1.13
1.15
1.10
Human resources
0.02
0.02
0.02
0.03
0.03
0.03
0.03
0.03
0.03
0.08
City clerk
1.34
1.34
1.34
1.84
1.84
1.89
1.89
1.89
1.89
1.89
Elections
0.10
0.10
0.10
0.10
0.10
0.10
0.15
0.15
0.15
0.15
Financial administration
1.84
1.85
1.85
1.91
1.91
1.97
1.94
1.94
1.94
2.01
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
3.76
3.70
3.70
3.90
3.90
4.00
4.03
4.03
4.05
4.05
Engineering
4.16
4.33
4.33
4.20
4.20
4.40
4.48
4.48
4.48
4.46
Facility Management
0.21
0.07
0.22
0.22
0.22
0.16
1.05
1.05
0.96
0.87
EDA general
0.78
0.85
0.85
0.35
0.35
0.10
0.05
0.05
-
-
LRRWMO
0.24
0.20
0.20
0.15
0.15
0.07
0.07
0.07
0.07
0.09
Risk management
0.10
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
3.21
3.21
3.21
3.21
4.10
Protective inspection
3.66
3.93
3.93
3.93
3.93
4.05
4.03
4.03
4.03
4.40
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
5.59
5.46
4.97
4.88
5.34
5.68
5.37
5.19
5.22
5.15
Snow and ice
2.57
2.03
3A4
3.95
1.98
2.23
1.83
2.83
3.79
2.55
Street signs
1.46
1.43
1.34
1.30
1.70
1.42
1.57
1.52
1.46
1.51
Natural Resource Preservation
-
-
-
-
-
0.03
0.01
0.01
-
0.02
ROW management/utility
0.16
0.20
0.20
0.20
0.20
0.08
0.09
0.08
0.08
0.08
Water
4.70
4.74
4.56
4.52
4.39
4.87
4.55
4.52
4.86
4.57
Sewer
3.23
3.17
3.49
3.06
3.36
2.91
2.82
3.08
2.80
3.33
Storm sewer
2.87
2.54
2.23
2.25
2.50
2.39
2.94
238
2.08
2.40
Central equipment
2.91
2.91
2.91
2.81
3.10
3.07
3.31
3.25
3.19
3.34
Park & Recreation:
Park and recreation
6.69
6.77
7.14
7.33
8.77
8.58
8.65
8.30
7.80
8.41
Community center
3.04
3.25
3.10
3.10
3.10
3.16
3.22
3.22
3.32
3.32
Recycling
0.96
1.30
0.77
0.76
0.72
0.79
1.03
1.00
0.88
0.81
55.36
55.50
56.00
56.00
57.00
57.43
58.50
58.50
58.50
59.75
Source: City Finance Department
Note: Employees are allocated to various departments based on the functions that they perform.
151
CITY OF ANDOVER, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Years
Function/Program
2011
2012
2013
2014
2015
General government:
Registered voters
n/a
18,366
n/a
19,772
n/a
Number of precincts
n/a
10
n/a
10
n/a
Public safety:
Police:
Number of calls for services
11,650
10,963
10,659
10,319
10,400
Number of traffic citations
2,000
2,202
2,480
2,536
2,066
Number of patrol hours
29,200
29,200
29,200
29,200
29,200
Fire:
Fire responses
265
320
308
257
262
Emergency medical responses
764
816
863
838
336
Protective inspections:
Inspections
3,074
3,872
3,766
2,840
3,100
Residential permits
58
81
98
52
74
Other permits
1,755
1,714
1,716
1,898
2,744
Public works:
Streets and highways:
Asphalt streets maintained (miles)
191
191
192
195
200
Gravel roads maintained (miles)
7
7
7
7
6
Cul-de-sacs and dead ends maintained
338
338
328
332
345
Parks and recreation:
Number of City parks
50
49
50
51
52
Total acreage mowed
302
302
318
332
332
Ballfields maintained
28
28
28
28
29
Number of playgrounds
38
38
39
38
38
Soccer fields maintained
21
17
20
16
16
Trail maintained (miles)
35
33
35
33
33
Community center bookings (hrs):
Fieldhouse
11,461
11,426
11,831
12,182
11,919
Ice arena
2,575
2,905
2,543
2,593
2,643
Water:
New connections
78
38
108
43
57
Total customers
6,229
6,267
6,375
6,418
6,475
Annual consumption
(thousands of gallons)
854,672
1,050,378
947,201
827,574
885,886
Sanitary Sewer:
New connections
77
38
108
43
57
Total customers
7,135
7,173
7,281
7,324
7,381
Storm Sewer:
Total customers
10,126
10,164
10,583
10,626
10,700
Storm sewer lines maintained (miles)
69
69
73
75
76
Source: Various City Departments
152
Table 19
2016 2017 2018 2019 2020
22,051 n/a 20,433 n/a 23,545
10 n/a 10 n/a 10
14,736
15,636
14,724
18,164
15,351
1,614
1,491
1,585
1,246
936
29,200
29,200
29,200
29,200
29,200
378
350
365
472
375
594
500
740
790
667
3,562
2,785
2,844
3,574
4,791
111
95
58
116
139
2,536
2,653
2,396
2,758
2,983
204
190
194
195
202
6
6
7
7
7
348
350
353
357
358
53
53
53
53
53
332
332
336
336
338
27
27
27
27
27
41
41
42
42
42
18
18
20
20
20
34
34
37
39
40
12,701
12,900
13,796
13,891
7,771
2,606
2,702
3,288
3,156
2,585
97
91
62
90
75
6,572
6,663
6,725
6,815
6,890
950,307
873,457
975,387
829,721
1,024,844
101
92
58
36
87
7,482
7,574
7,632
7,668
7,755
10,812
10,948
10,971
11,118
11,153
77
78
78
80
81
153
CITY OF ANDOVER, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Years
Table 20
Function/Program 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Public Safety:
Fire:
Stations 3 3 3 3 3 3 3 3 3 3
Fire vehicles 21 21 20 21 19 20 18 19 17 16
Protective inspections:
Vehicles 4 4 4 4 4 4 4 4 5 5
Streets (miles)
191
191
192
195
200
204
190
194
195
202
Street lights
1,225
1,231
1,231
1,240
1,248
1,260
1,268
1,282
1,301
1,326
Traffic signals
24
24
24
24
25
25
26
26
27
27
Parks and Recreation:
Parks
50
49
50
51
52
53
53
53
53
53
Ball fields
28
28
28
28
29
27
27
27
27
27
Soccer fields
21
17
20
16
16
18
18
20
20
20
Playgrounds
38
38
39
38
38
41
41
42
42
42
Trails (miles)
35
33
35
33
33
34
34
37
39
40
Community centers
1
1
1
1
1
1
1
1
1
1
Water:
Water treatment plants
1
1
1
1
1
1
1
1
I
1
Storage facilities
2
2
2
2
2
2
2
2
2
2
Water main (miles)
109
111
112
115
116
118
119
120
121
122
Connections
6,229
6,267
6,375
6,418
6,475
6,635
6,663
6,725
6,815
6,890
Sanitary sewer:
Sewermain (miles)
93
93
94
95
96
96
98
99
100
101
Connections
7,135
7,173
7,281
7,324
7,381
7,482
7,574
7,632
7,668
7,755
Number of lift stations
9
9
9
9
9
9
9
9
10
10
Storm sewer:
Storm sewer lines (miles)
69
69
73
75
76
77
78
78
80
81
154
IV. OTHER FINANCIAL INFORMATION
155
CITY OF ANDOVER, MINNESOTA
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2020
Authorized
Issue
Maturity
Interest
and
Date
Date
Rate
issue
GOVERNMENTAL ACTIVITIES:
Abatement Bonds:
2012C G.O. Abatement Bonds
12/27/2012
2/1/2031
1.00-3.00%
S 17,315,000
2019A G.O. Abatement Bonds
8/1/2019
2/l/2040
3.00-5.00%
15,770,000
33,085,000
Certificates of Indebtedness:
2014A G.O. Equipment Certificates
5/29/2014
2/l/2020
1.50-2.00%
1,555,000
2016A G.O. Equipment Certificates
2/19/2016
2/1/2021
1.90%
520,000
2020A G.O. Equipment Certificates
3/19/2020
2/l/2024
4.00%
1,310,000
Total certificates of indebtedness
3,385,000
Capital Improvement Bonds:
2018A G.O. Capital Improvement Plan Bonds
12/27/2018
2/l/2044
3.00-5.00%
10,000,000
Referendum Bonds:
2010A G.O. Open Space Referendum Bonds
2/18/2010
2/l/2022
2.00 - 3.12%
1,660,000
Total bonded indebtedness
48,130,000
Issuance premiums
-
Compensated absences payable
-
Total governmental activities indebtedness
48,130,000
BUSINESS -TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2009A G.O. Water Revenue Bonds
3/26/2009
2/l/2024
2.00-4.25%
1,025,000
2016B G.O. Water Revenue Refunding Bonds
12/7/2016
2/l/2023
2.00%
3,925,000
Total general obligation revenue bonds
4,950,000
Issuance premiums
-
Compensated absences payable
-
Total business -type activities indebtedness
4,950,000
Total City indebtedness
$ 53,080,000
156
Exhibit 1
Principal Payments
Prior
Current
Outstanding
2021 Payment
Years
Year
12/31/20
Principal
Interest
Total
$ 4,930,000
$ 910,000
$ 11,475,000
$ 925,000
$ 287,631
$ 1,212,631
-
-
15,770,000
235,000
584,275
819,275
4,930,000
910,000
27,245,000
1,160,000
871,906
2,031,906
1,280,000
275,000
-
-
-
-
255,000
131,000
134,000
134,000
1,273
135,273
-
-
1,310,000
315,000
46,100
361,100
1,535,000
406,000
1,444,000
449,000
47,373
496,373
-
85,000
9,915,000
125,000
350,881
475,881
1,165,000
160,000
335,000
165,000
7,870
172,870
7,630,000
1,561,000
38,939,000
1,899,000
1,278,030
3,177,030
-
-
1,357,891
-
-
-
-
-
840,769
-
-
-
7,630,000
1,561,000
41,137,660
1,899,000
1,278,030
3,177,030
630,000
75,000
320,000
75,000
11,592
86,592
1,250,000
650,000
2,025,000
660,000
33,900
693,900
1,880,000
725,000
2,345,000
735,000
45,492
780,492
-
-
27,742
-
-
-
-
-
235,202
-
-
-
1,880,000
725,000
2,607,944
735,000
45,492
780,492
$ 9,510,000
$ 2,286,000
$ 43,745,604
$ 2,634,000
$ 1,323,522
$ 3,957,522
157
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF TAX CAPACITY RATES AND LEVIES
Exhibit 2
Taxes Payable
2021
2020
Tax capacity values
$ 37,489,817
$
36,099,539
Captured tax increment value
(119,365)
(114,064)
Fiscal disparities - contribution
(1,348,420)
(1,310,143)
Local taxable value
36,022,032
34,675,332
Fiscal disparities - distribution
5,475,223
5,355,244
Adjusted tax capacity
S 41,497,255
S
40,030,576
2021
2020
Certified
Tax Capacity
Certified
Tax Capacity
Levy
Rate
Levy
Rate
General Revenue Levy:
General Fund
$ 9,516,493
$
9,314,032
Community Center Operations Levy
155,000
-
Capital Equipment/Projects
250,000
275,000
Facility Maintenance Reserve
355,000
355,000
Parks Projects
15,000
15,000
Road and Bridge
1,342,456
1,287,469
Pedestrian Trail Maintenance
106,121
104,040
Total General Revenue Levy
11,740,070
28.367%
11,350,541
28.390%
Debt Service Levy:
2012C G.O. Abatement Bonds
973,263
976,780
2016A G.O. Equipment Certificate
-
143,373
2018A G.O. Capital Improvement Plan Bonds
456,344
433,603
2019A G.O. Abatement Bonds
976,966
1,001,090
2020A G.O. Equipment Certificate
406,224
350,000
2021A G.O. Equipment Certificate
170,000
-
Total Debt Service Levy
2,982,797
7.207%
2,904,846
7.266%
Lower Rum River Watershed
40,000
0.271%
40,000
0.286%
Total
14,762,867
35.845%
14,295,387
35.942%
Voter -Approved Open Space Referendum - MV
151,078
0.00418%
184,199
0.00526%
$ 14,913,945
S
14,479,586
158
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIES
GENERAL OBLIGATION BONDS
December 31, 2020
Exhibit 3
Capital
Open Space
Abatement
Abatement
Certificates of
Certificates of
Improvement
Referendum
Total
Taxes
Bonds
Bonds
Indebtedness
Indebtedness
Plan Bonds
Bonds
Deferred Tax
Payable
2012C
2019A
2020A
2021A
2018A
2010A
Levies
2021
$ 973,263
$ 976,966
$ 406,224
$ 170,000
$ 456,344
$ 151,078
$ 3,133,875
2022
1,280,455
1,177,208
374,850
-
662,819
-
3,495,332
2023
1,285,285
1,178,783
376,740
-
658,094
-
3,498,902
2024
1,283,015
1,178,783
-
-
658,094
-
3,119,892
2025
1,282,883
1,177,208
-
-
662,557
-
3,122,648
2026
1,280,744
1,179,308
-
-
660,719
-
3,120,771
2027
1,281,781
1,174,320
-
-
663,344
-
3,119,445
2028
1,291,027
1,178,258
-
-
662,189
-
3,131,474
2029
1,292,340
1,177,628
-
-
660,719
-
3,130,687
2030
1,297,800
1,175,738
-
-
658,934
-
3,132,472
2031
-
1,177,838
-
-
662,084
-
1,839,922
2032
-
1,176,998
-
-
659,512
-
1,836,510
2033
-
1,175,370
-
-
661,874
-
1,837,244
2034
-
1,178,205
-
-
658,514
-
1,836,719
2035
-
1,174,845
-
-
659,499
-
1,834,343
2036
-
1,175,948
-
-
659,380
-
1,835,328
2037
-
1,176,105
-
-
658,750
-
1,834,855
2038
-
1,175,318
-
-
662,858
-
1,838,176
2039
-
1,178,835
-
-
660,358
-
1,839,193
2040
-
-
-
-
662,576
-
662,576
2041
-
-
-
-
663,364
-
663,364
2042
-
-
-
-
659,166
-
658,166
2043
-
-
-
-
662,918
-
662,918
$ 12,548,593 $ 22,163,662 $ 1,157,814 $ 170,000 $ 14,993,665 $ 151,078 $ 51,184,812
159
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERS
December 31, 2020
Exhibit 4
Transfer
Transfer
In
Out
General Fund
Water EF
$ 93,975
$ -
General Fund Admin Allocation
Sewer EF
77,123
-
General Fund Admin Allocation
Storm Sewer EF
19,590
-
General Fund Admin Allocation
Road and Bridge CPF
1,000,000
Road improvements
Total General Fund
190,688
1,000,000
Special Revenue Funds (SRF)
Community Center SRF
2012C GO Abatement Bonds DSF
300,000
Debt Service Allocation
Right of Way Management/ Utility SRF
Road and Bridge CPF
5,700
Roadway Degredation
Total Special Revenue Funds
305,700
Debt Service Funds (DSF)
2012C GO Abatement Bonds DST
Comtmnity Center SRF
300,000
Debt Service Allocation
2014A GO Equipment Certificate DSF
Building Fund CPF
88,476
Close Debt Service Fund
2019A GO Abatement Bonds DSF
Park Dedication CPF
175,146
Debt Service Allocation
Total Debt Service Funds
475,146
88,476
Cauital Proiects Funds (CPF)
Water Trunk CPF
Water EF
300,000
-
Replacement Reserve
Water EF
59,740
Debt Service Allocation
300,000
59,740
Sewer Trunk CPF
Sewer EF
400,000
Replacement Reserve
Road and Bridge CPF
General Fund
1,000,000
-
Road improvements
Right of Way Management/ Utility SRF
5,700
Roadway Degredation
1,005,700
Park Dedication CPF
2019A GO Abatement Bonds DSF
175,146
Debt Service Allocation
Building Fund CPF
2014A GO Equipment Certificate DST
88,476
Close Debt Service Fund
Capital Equipment Reserve CPF
Storm Sewer EF
23,500
Debt Service Allocation
2018A GO Capital Improvement Plan Bonds CPF
Water EF
22,650
-
Allocation to Public Works Expansion
Sewer EF
22,650
Allocation to Public Works Expansion
45,300
Total Capital Projects Funds
1,862,976
234,886
Enterprise Funds (EF)
Water EF
Water Trunk CPF
59,740
-
Debt Service Allocation
General Fund
-
93,975
General Fund Admin Allocation
Water Trunk CPF
-
300,000
Replacement Reserve
2018A GO Capital improvement Plan Bonds CPF
22,650
Allocation to Public Works Expansion
59,740
416,625
Sewer EF
General Fund
-
77,123
General Fund Admin Allocation
Sewer Trunk CPF
-
400,000
Replacement Reserve
2018A GO Capital Improvement Plan Bonds CPF
22,650
Allocation to Public Works Expansion
499,773
Storm Sewer EF
General Fund
-
19,590
General Fund Admin Allocation
Capital Equipment Reserve CPF
23,500
Debt Service Allocation
43,090
Total Enterprise Funds
59,740
959,488
Total All Funds
S 2,588,550
S 2,588,550
160