HomeMy WebLinkAbout2021 ACFR1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304 . (763) 755-5100
FAX (763) 755-8923 • WWW.ANDOVERMN.GOV
Annual Comprehensive Financial Report
of the
City of Andover, Minnesota
For the Year Ended
December 31, 2021
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 9
Organizational Chart 10
Certificate of Achievement 11
II. FINANCIAL SECTION
Independent Auditor's Report
14
Management's Discussion and Analysis
18
Basic Financial Statements:
Government -Wide Financial Statements:
Statement of Net Position
Statement 1
31
Statement of Activities
Statement 2
32
Fund Financial Statements:
Balance Sheet - Governmental Funds
Statement 3
34
Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds
Statement 4
36
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities
Statement 5
39
Statement of Net Position - Proprietary Funds
Statement 6
40
Statement of Revenues, Expenses and Changes in Net Position -
Proprietary Funds
Statement 7
42
Statement of Cash Flows - Proprietary Funds
Statement 8
44
Notes to Financial Statements
46
Required Supplementary Information:
Budgetary Comparison Schedule - General Fund
Statement 9
80
Budgetary Comparison Schedule - CARES Grant / ARPA Funding Special Revenue Fund
Statement 10
82
Schedule of Changes in the Total OPEB Liability and Related Ratios
Statement 11
83
Schedule of Proportionate Share of Net Pension Liability - General Employees Retirement Fund
Statement 12
84
Schedule of Pension Contributions - General Employees Retirement Fund
Statement 13
85
Schedule of Proportionate Share of Net Pension Liability - Public Employees Police and Fire Fund
Statement 14
86
Schedule of Pension Contributions - Public Employees Police and Fire Fund
Statement 15
87
Notes to Required Supplementary Information:
Budgets
88
Modified Approach for City Streets and Trails Infrastructure Capital Assets
88
OPEB Information
89
Pension Information
89
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 16 95
Combining Statement of Revenues, Expenditures and Changes in Fund Balances -
Nonmajor Governmental Funds Statement 17 96
Nonmajor Special Revenue Funds:
Subcombining Balance Sheet - Nonmajor Special Revenue Funds Statement 18 98
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Special Revenue Funds Statement 19 100
Nonmajor Debt Service Funds:
Subcombining Balance Sheet - Nonmajor Debt Service Funds Statement 20 104
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Debt Service Funds Statement 21 106
Nonmajor Capital Projects Funds:
Subcombining Balance Sheet - Nonmajor Capital Project Funds Statement 22 110
Subcombining Statement of Revenues, Expenditures and Changes in
Fund Balances - Nonmajor Capital Project Funds Statement 23 112
Special Revenue Funds:
Schedules of Revenues, Expenditures and Changes in
Fund Balances - Budget and Actual:
EDA General
Statement 24
114
Community Center
Statement 25
115
Drainage and Mapping
Statement 26
116
LRRWMO
Statement 27
117
Forestry
Statement 28
118
Right -of -Way Management/Utility
Statement 29
119
Charitable Gambling
Statement 30
120
Construction Seal Coating
Statement 31
121
Internal Service Funds:
Combining Statement of Net Position - Internal Service Funds
Statement 32
123
Combining Statement of Revenues, Expenses and Changes in Net Position -
Internal Service Funds
Statement 33
124
Combining Statement of Cash Flows - Internal Service Funds
Statement 34
125
III. STATISTICAL SECTION
Net Position by Component - Last Ten Fiscal Years Table 1 128
Changes in Net Position - Last Ten Fiscal Years Table 2 130
Fund Balances - Governmental Funds - Last Ten Fiscal Years Table 3 134
Changes in Fund Balances - Governmental Funds - Last Ten Fiscal Years Table 4 136
Assessed and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years Table 5 138
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
139
Property Tax Levies and Collections - Last Ten Fiscal Years
Table 7
140
Principal Taxpayers - Current Year and Nine Years Ago
Table 8
141
Estimated Market Values and New Construction - Last Ten Fiscal Years
Table 9
142
Special Assessment Levies and Collections - Last Ten Fiscal Years
Table 10
143
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita -
Last Ten Fiscal Years
Table 11
144
Computation of Direct and Overlapping Debt
Table 12
145
Computation of Legal Debt Margin - Last Ten Fiscal Years
Table 13
146
Pledged -Revenue Coverage - Last Ten Fiscal Years
Table 14
149
Outstanding Debt by Type - Last Ten Fiscal Years
Table 15
150
Demographic and Economic Statitistics - Last Ten Years
Table 16
152
Principal Employers - Current Year and Nine Years Ago
Table 17
153
Full Time Equivalent Employees - City Government Employees by Function/Program -
Last Ten Fiscal Years
Table 18
155
Operating Indicators by Function/Program - Last Ten Years
Table 19
156
Capital Asset Statistics by Function/Program - Last Ten Years
Table 20
158
IV. OTHER INFORMATION
Combined Schedule of Indebtedness Exhibit 1 160
Schedule of Tax Capacity Rates and Levies Exhibit 2 162
Schedule of Deferred Tax Levies - General Obligation Bonds Exhibit 3 163
Schedule of Fund Transfers Exhibit 4 164
I. INTRODUCTORY SECTION
1685 CROSSTOWN BOULEVARD N.W.. ANDOVER, MINNESOTA 55304 . (763) 755-5100
FAX (763) 755-8923 . WWW.ANDOVERMN.GOV
May 17, 2022
To the Honorable Mayor and City Council
City of Andover
1685 Crosstown Blvd. NW
Andover, Minnesota 55304
Dear Honorable Mayor and Council Members:
The Annual Comprehensive 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 Annual Comprehensive Financial Report is presented in three main sections:
I. Introductory
11. Financial
III. Statistical
The Introduction includes a list of the City's principal officials as of December 31, 2021, 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 Annual Comprehensive Financial Report. The Andover Firefighters' Relief
Association does not meet the established criteria for inclusion in the reporting entity, and accordingly is excluded from this report.
GENERAL INFORMATION. The city we know today as Andover was first organized in 1857 under the name "Round Lake
Township." However, in 1860 the name was changed to "Grow Township" in honor of Senator Galusha A. Grow of Pennsylvania.
Senator Grow spoke at a political campaign in Anoka that year, and the town name was changed to reflect Senator Grow because
of his strong advocacy of the Union cause. At that time, the population was 330 and included the geographical area we know today
as Ham Lake. In fact, the area of Ham Lake was considered a part of Grow Township until 1871.
In 1972, the Grow Township Board of Supervisors recognized that the town was growing at a very rapid rate. They felt a village
form of government would provide better services to the community. Board supervisors then voted in favor of proceeding with
the incorporation process. The board voted to submit a new name for the village. "Andover Village" was chosen because the name
Andover had historical interest. The historical interest, we believe, came from the Andover train station.
To the Honorable Mayor and City Council
City of Andover, Minnesota
You may have heard the popular "train myth" about how Andover received its name. The myth states that a train tipped over in a
swamp, and an eyewitness, relaying the incident, said it "went over and over," thereby naming the city "Andover." However,
research reveals that the name Andover first appeared in an article dated March 14, 1899 in the Anoka Count, 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 9 and 10, respectively.
ECONOMIC CONDITION AND OUTLOOK
Moderate population growth is expected to continue in 2022 and 2023, with an estimated population of 33,850 by 2022. 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 2021. 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 83.8% of the total in 2021. They are general
property taxes at 75.6% and charges for services at 8.2%. 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. Since 2016, the City has not received any LGA funding.
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
2012
$ 449,826
n/a
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
2021
891,762
(517)
Revenue from residential building continued to modestly increase from 2012 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
2012 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 2017,
there was a decrease in single-family building permits 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 2019.
The growth continued in 2020 and 2021 with single-family building permits topping out at 139 and 140, respectively.
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
2012
$ 973,605
n/a
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)
2021
1,036,929
(33,970)
The City analyzes user fees every year as part of the budget process and adjusts where appropriate. From 2012 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 and 2021 but the lack of any
commercial activity results in a decrease compared to 2019.
In 2021, the City issued 140 new single-family building permits with a total valuation of $43,464,138 compared to 139 new single-
family building permits with a total valuation of $45,464,138 the prior year. The past ten years are shown below:
New Residential
New Commercial / Industrial
Permits
Valuation
Permits
Valuation
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
111
28,893,036
7
14,009,200
2017
94
27,847,716
-
-
2018
60
19,703,856
2
2,860,000
2019
116
37,258,817
1
3,381,400
2020
139
45,464,139
-
-
2021
140
43,464,138
-
-
Residential Development
New residential Final Plat approvals included 91 urban lots within Andover Village, Meadows of Nightingale, and Oakview
Acres. A final plat for Fields at Winslow Cove phase 1 was submitted but not approved in 2021 for 66 urban lots. A preliminary
plat for Fields at Winslow Cove was approved that will provide 383 urban lots. The City currently has a supply of 147 urban lots
and 21 rural lots (which includes the Final Plat lots above).
Commercial Industrial Development
New institutional/commercial/industrial businesses moved to Andover in 2021. These business' included Passageway
Financial/Accounting Tax and Advisory; Therapy Associates; Minty Nails; Edina Realty; Lil Explorers Child Care; Farmers
Insurance (Jennifer Danielson Agency). Andover High School completed their phase 2 additions and remodeling. Phase 2 included
an additional gymnasium, and fitness spaces.
The Andover Community Center expansion was completed. 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 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.
To the Honorable Mayor and City Council
City of Andover, Minnesota
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:
Firm
Number of
Type of Business / Product Employees
Anoka -Hennepin ISD No 11
Elementary and secondary education
816
Wal-Mart
Retail
335
Fairview - Andover Clinic
Healthcare
300
Anoka County Sheriffs Office
County government and services
250
Kottkes' Bus Service, Tue.
Bus transportation
225
YMCA
Youth organization - fitness center
220
Target
Retail
200
TE Connectivity
Connector and sensor manufacturing
142
GAF Materials Corp
Roofing materials -manufacturing
125
Anoka County Highway Department
County government and services
120
MAJOR INITIATIVES
FOR THE YEAR. The City has many accomplishments to report for 2021. The following list is a summary of some of the major
initiatives completed throughout the year.
1) New residential Final Plat approvals included 91 urban lots within Andover Village, Meadows of Nightingale, and
Oakview Acres. A final plat for Fields at Winslow Cove phase 1 was submitted but not approved in 2021 for 66 urban
lots. A preliminary plat for Fields at Winslow Cove was approved that will provide 383 urban lots. The City currently
has a supply of 147 urban lots and 21 rural lots (which includes the lots above).
2) In 2021, the City saw commercial, industrial and institutional construction throughout the community totaling close to
$3.4 million in valuation. Many businesses came to Andover that did extensive tenant finishes, upgrades or remodels
in existing multi -tenant buildings, including as follows: Minty Nails, Tasty Taco, Arbor Oaks, Lil'Explorers, Crooked
Lake Elementary, Walmart, Edina Realty, T-Mobile, Target and Meadow Creek Church.
3) In 2021, 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. 1t.) between the existing buildings to replace
temporary classrooms.
4) 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 was completed in 2021
bringing the school's capacity to 2,000 students.
5) The City completed the roaster 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
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 and first full year of operation in
2021.
To the Honorable Mayor and City Council
City of Andover, Minnesota
6) 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 2021, the City continued to host monthly recycling events (on weekends), generally with a specific focus,
such as paper shredding and appliance or electronics collection.
7) 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 2022 Budget development process that document was
integrated into various department work plans and budgets.
8) The City's Annual Comprehensive Financial Report (ACFR) for the year ended December 31, 2020 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 nineteenth consecutive year receiving the award and it is anticipated that the City's ACFR for the year ended
December 31, 2021 will also achieve this award.
9) For the twentieth year in a row, the City of Andover was awarded the Government Finance Officers Association
Distinguished Budget Presentation Award for the City's 2021 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.
10) 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 280 single family rental licenses issued throughout the City in 2021.
11) 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.
12) 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 2021, the City saw
increased growth in the number of online and counter credit card payments for various City permits and services.
Approximately 60% 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.
To the Honorable Mayor and City Council
City of Andover, Minnesota
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, 2021. This is the
twentieth 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, 2022 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 2020 Annual Comprehensive Financial Report. This is the nineteenth time the City of Andover has received this award. To
receive this award, a government unit must publish an easily readable and efficiently organized annual comprehensive financial
report whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and
applicable legal requirements. This award is valid for a period of one year only. We believe this report for 2021 continues to
conform to the Certificate of Achievement Program requirements and have submitted it to the GFOA to determine its eligibility
for another award.
INDEPENDENT AUDIT. State statutes require an annual audit by independent certified public accountants. Redpath and
Company, Ltd. was engaged by the City to render an opinion on the City's financial statements. The auditor's report on the basic
financial statements and combining and individual fund statements and schedules is included in the financial section of this report.
ACKNOWLEDGMENTS. The preparation of this report could not have been accomplished without the efficient services and
dedication of the Finance Department staff and the consultation of the City's auditing firm. Staff members: Lee Brezinka, Melissa
Knutson and Brenda Fildes have my sincere appreciation for their contribution to the preparation of this report.
I also want to express our appreciation to the Mayor and members of the City Council for their interest and support in planning and
conducting the financial operations of the City in a fiscally responsible manner.
Respectfully submitted,
James Dickinson
City Administrator
CITY OF ANDOVER, MINNESOTA
ORGANIZATION
December 31, 2021
Office
Mayor
Council Member
Council Member
Council Member
Council Member
Sheri Bukkila
Jamie Barthel
Ted Butler
Valerie Holthus
Randy Nelson
Name
Term
January 3, 2023
January 3, 2023
January 7, 2025
January 3, 2023
January 7, 2025
City Administrator / City Clerk
James Dickinson
Appointed
Community Development Director
Joe Janish
Appointed
Director of Public Works / City Engineer
David Berkowitz
Appointed
Finance Manager
Lee Brezinka
Appointed
Building Official
Joe Heidelberger
Appointed
Fire Chief
Dennis Jones
Appointed
Attorney
Berglund, Baumgartner, Kimball & Glaser, LLC
Appointed
Fiscal Consultants
Ehlers & Associates, Inc.
Appointed
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
IN
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Presented to
City of Andover
Minnesota
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
December 31, 2020
Executive Director/CEO
w
- This page intentionally left blank -
im
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 Audit of the Financial Statements
Opinions
We have audited the 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, 2021, 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.
In our opinion, the accompanying 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, 2021, 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.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the
United States of America (GAAS) and the standards applicable to financial audits contained
in Government Auditing Standards, issued by the Comptroller General of the United States.
Our responsibilities under those standards are further described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. We are
required to be independent of the City of Andover, Minnesota and to meet our other ethical
responsibilities, in accordance with the relevant ethical requirements relating to our audit.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinions.
Report on Summarized Comparative Information
We have previously audited the City of Andover, Minnesota's 2020 financial statements, and
we expressed unmodified audit opinions on the respective financial statements of the
governmental activities, the business -type activities, each major fund, and the aggregate
55 5th Street East, Suite 1400, St. Paul, MN, 55101 www.redpathcpas.com
14
remaining fund information in our report dated May 13, 2021. In our opinion, the
summarized comparative information presented herein as of and for the year ended
December 31, 2020 is consistent, in all material respects, with the audited financial
statements from which it has been derived.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial
statements in accordance with accounting principles generally accepted in the United States
of America, and for 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.
In preparing the financial statements, management is required to evaluate whether there are
conditions or events, considered in the aggregate, that raise substantial doubt about the City
of Andover, Minnesota's ability to continue as a going concern for twelve months beyond the
financial statement date, including any currently known information that may raise
substantial doubt shortly thereafter.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinions. Reasonable assurance is a high level of assurance
but is not absolute assurance and therefore is not a guarantee that an audit conducted in
accordance with GAAS and Government Auditing Standards will always detect a material
misstatement when it exists. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control. Misstatements
are considered material if there is a substantial likelihood that, individually or in the
aggregate, they would influence the judgment made by a reasonable user based on the
financial statements.
In perforining an audit in accordance with GAAS and Governmental Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the
audit.
• Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, and design and perform audit procedures responsive to
those risks. Such procedures include examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements.
15
Obtain an understanding of internal control relevant to the audit 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 City of Andover, Minnesota's
internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the
aggregate, that raise substantial doubt about the City of Andover, Minnesota's ability
to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit, significant audit findings, and certain
internal control related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management's discussion and analysis, the budgetary comparison schedules, 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 is the responsibility of
management and, 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.
Supplementary 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
combining and individual fund statements and schedules are presented for purposes of
additional analysis and are not a required part of the basic financial statements. Such
information is the responsibility of management and was derived from and relates directly to
the underlying accounting and other records used to prepare the basic financial statements.
16
The 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 statements and
schedules are fairly stated, in all material respects, in relation to the basic financial statements
as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other
information comprises the introductory, statistical and other information sections but does
not include the basic financial statements and our auditor's report thereon. Our opinions on
the basic financial statements do not cover the other information, and we do not express an
opinion or any form of assurance thereon. In connection with our audit of the basic financial
statements, our responsibility is to read the other information and consider whether a material
inconsistency exists between the other information and the basic financial statements, or the
other information otherwise appears to be materially misstated. If, based on the work
performed, we conclude that an uncorrected material misstatement of the other information
exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
May 11, 2022 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
solely 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.
ZJpoA auj, a,&o� 1 1,4.
REDPATH AND COMPANY, LTD.
St. Paul, Minnesota
May 11, 2022
17
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2021
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, 2021. 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 8 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 $213,413,678 (net position). Of this amount, $49,854,457 (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 $7,780,629 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 $52,265,934
Special
Debt
Capital
General
Revenue
Service
Projects
Totals
Nonspendable
$ 154,736
$ 17,920
$ -
$ -
$ 172,656
Restricted
-
201,037
2,556,381
9,275,616
12,033,034
Committed
-
499,284
-
-
499,284
Assigned
-
792,224
-
29,297,006
30,089,230
Unassigned
9,471,730
-
-
-
9,471,730
$ 9,626,466
$ 1,510,465
$ 2,556,381
$ 38,572,622
$ 52,265,934
The City's total long-term liabilities increased by $4,038,596 during the current fiscal year, primarily due to the issuance of bonds.
Beginning
Ending
Balance
Additions
Reductions
Balance
Governmental activities:
Bonds payable
$ 40,296,891
$ 7,765,000
$ (1,970,156)
$ 46,091,735
Other post employment benefits
327,529
63,802
-
391,331
Compensated absences
840,769
454,889
(468,592)
827,066
Net pension liability
3,332,139
1,495,616
(2,455,236)
2,372,519
Total governmental activities
44,797,328
9,779,307
(4,893,984)
49,682,651
Business -type activities:
Bonds payable
2,372,742
-
(748,316)
1,624,426
Other post employment benefits
53,319
10,386
-
63,705
Compensated absences
235,202
67,862
(62,302)
240,762
Net pension liability
433,424
193,052
(307,409)
319,067
Total business -type activities
3,094,687
271,300
(1,118,027)
2,247,960
Total City long-term liabilities
$ 47,892,015
$10,050,607
$ (6,012,011)
$ 51,930,611
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.
18
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2021
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 Statements I and 2 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,
CARES Grant / ARPA Funding Special Revenue Fund and the following capital projects funds (CPF): Water Trunk, Sewer Trunk, Road and
Bridge, Tax Increment Projects and 2021A G.O. Street Reconstruction Bonds.
Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-maj or
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 Statements 3 through 5 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 Statements 6 through 8 of this report
In
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2021
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 directly follow the Basic Financial Statements.
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 Statements 16 through 34 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 $213,413,678 (net position).
The largest portion of the City's net position ($159,093,276 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
2020
2021
2020
2021
2020
2021
Current and other assets
$ 48,857,525
$ 58,916,111
$ 11,788,100
$ 12,684,537
$ 60,645,625
$ 71,600,648
Capital assets
153,692,666
153,798,777
42,714,795
45,141,428
196,407,461
198,940,205
Total assets
202,550,191
212,714,888
54,502,895
57,825,965
257,053,086
270,540,853
Deferred outflows of resources
469,014
1,949,896
37,114
229,221
506,128
2,179,107
Long-term liabilities
outstanding
44,797,328
49,682,651
3,094,687
2,247,960
47,892,015
51,930,611
Other liabilities
3,449,184
3,955,538
56,756
535,110
3,505,940
4,490,648
Total liabilities
48,246,512
53,638,189
3,151,443
2,783,070
51,397,955
56,421,259
Deferred inflows of resources
504,876
2,593,031
23,334
291,992
528,210
2,885,023
Net position:
Net investment in capital
assets
114,441,287
115,576,274
40,342,053
43,517,002
154,783,340
159,093,276
Restricted
3,851,631
4,465,945
-
-
3,851,631
4,465,945
Unrestricted
35,974,899
38,391,335
11,023,179
11,463,122
46,998,078
49,854,457
Total net position
$ 154,267,817
$ 158,433,554
$ 51,365,232
$ 54,980,124
$ 205,633,049
$ 213,413,678
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 ($49,854,457) 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.
20
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2021
Government -wide Activities
Governmental activities increased the City's net position by $4,165,737 and business -type activities increased net position by $3,614,892. Key
elements of the activities are as follows:
City of Andover's Changes in Net Position
Governmental Activities
2020 2021
Business -Type Activities
2020 2021
Total
2020 2021
Revenues:
Program revenues:
Charges for services
$ 3,684,878
$ 5,845,616
$ 6,298,800
$ 6,836,735
$ 9,983,678
$ 12,682,351
Operating grants
and contributions
3,453,564
1,242,650
-
-
3,453,564
1,242,650
Capital grants
and contributions
12,006,951
2,112,499
2,807,445
2,508,801
14,814,396
4,621,300
General revenues:
Property taxes
14,479,488
14,934,589
-
-
14,479,488
14,934,589
Tax increment
100,979
103,474
-
-
100,979
103,474
Grants and contributions
not restricted to
specific programs
4,129
3,578
-
-
4,129
3,578
Unrestricted investments
earnings
930,876
(71,710)
173,446
(17,603)
1,104,322
(89,313)
Gain on sale of capital
assets
3,000
18,800
-
-
3,000
18,800
Total revenues
34,663,865
24,189,496
9,279,691
9,327,933
43,943,556
33,517,429
Expenses:
General government
3,193,326
3,202,342
-
-
3,193,326
3,202,342
Public safety
6,002,090
5,814,286
-
-
6,002,090
5,814,286
Public works
4,964,909
4,726,280
-
-
4,964,909
4,726,280
Parks and recreation
3,997,558
4,676,676
-
-
3,997,558
4,676,676
Recycling
234,475
245,755
-
-
234,475
245,755
Economic development
4,240,712
293,594
-
-
4,240,712
293,594
Interest on long-term debt
1,226,839
1,184,349
-
-
1,226,839
1,184,349
Water
-
-
2,449,287
2,546,637
2,449,287
2,546,637
Sewer
-
-
2,454,250
2,435,302
2,454,250
2,435,302
Storm sewer
-
-
617,883
611,579
617,883
611,579
Total expenses
23,859,909
20,143,282
5,521,420
5,593,518
29,381,329
25,736,800
Increase (decrease) in net position
before transfers
10,803,956
4,046,214
3,758,271
3,734,415
14,562,227
7,780,629
Transfers
923,203
119,523
(923,203)
(119,523)
-
-
Change in net position
11,727,159
4,165,737
2,835,068
3,614,892
14,562,227
7,780,629
Net position - beginning
142,540,658
154,267,817
48,530,164
51,365,232
191,070,822
205,633,049
Net position - ending
$ 154,267,817
$ 158,433,554
$ 51,365,232
$ 54,980,124
$ 205,633,049
$ 213,413,678
21
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2021
Governmental Activities
Following are specific graphs that provide comparisons of the governmental activities revenues and expenses:
Governmental Activities - Revenues
Unrestricted
investments earnings
-0.3%
Charges for services
Tax increment
24.2%
0.4%
Grants and
contributions not
restricted to specific
programs
0.0%
Gain on sale of capital
assets
0.1 %
Property taxes ��uu
61.8% ""''
Capital grants and
contributions
8.7%
Operating grants and
contributions
5.1 %
Governmental Activities - Exnenses
Interest on long-term
debt
5 9% General government
Economic 15 9%
development
1.5%
Recycling
1.2%
Parks and recreation
23.2%
Public safety
28.8%
Public works
23.5%
22
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2021
Business -Type Activities
Following are graphs showing the business -type activities revenue and expense comparisons:
Business -Type Activities - Revenues
Capital grants
and
contributions
26.90%
Unrestricted
investments
earnings p
-0.19%
Charges for
services
73.29%
23
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2021
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 $ 52,265,934. Approximately
18.1 percent of this total amount ($9,471,730) constitutes unassigned fund balance. The remainder of the fund balance ($42,794,204) is not
available for new spending because it is either 1) nonspendable ($172,656), 2) restricted ($12,033,034), 3) committed ($499,284) or 4) assigned
($30,089,230).
Major Funds
The general fund decreased by $28,052 in 2021, which was a $1,365,352 change from the final budget and $319,119 less than last years increase
in fund balance. The final budget showed a decrease in fund balance of $1,393,404. The change in fund balance is due to various departments
under -spending and revenues exceeding budgets related to residential and commercial construction activity. The major change compared to
the adopted budget is largely due to the one-time transfer of $750,000 to the Road and Bridge Capital Projects Fund in 2021.
The cares grant / arpa funding special revenue fund shows a fund balance of $13,844 as the City allocates the use of federal funds.
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 West
Addition, Country Oaks North 4th Addtion, Winslow Cove 2'd Addition, Oakview Acres Addition, Meadows at Nightingale 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 $820,160 primarily due to the one-time transfer of $750,000 from the General Fund for
road improvements.
The tax increment capital projects fund increased by $24,706 primarily due to the operations of the rental properties.
The 2021A G.O. street reconstruction bonds capital projects fund increased due to the issuance of bonds in late December.
Nonmaior Funds
The community center special revenue fund increased $404,798 as the sports complex and additional fieldhouse court became usable for the
whole year.
The 2016A G.O. equipment certificates debt service fund decreased by $175,960 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 2021.
The 2021A G.O. equipment certificates debt service fund increased by $170,179 due to the riming of when tax revenue is collected and when
debt service payments are made.
The 2019A G.O. abatement bonds debt service fund increased by $362,419 due to the timing of when tax revenue is collected and when debt
service payments are made.
The park dedication capital projects fund increased by $297,391 as park dedication fees are collected when lots are sold to builders.
The building fund capital projects fund increased by $107,202 due to projects coming in under estimates in 2021.
The trail and transportation capital projects fund increased by $138,598 as trail fees are collected when lots are sold to builders.
The capital equipment reserve capital projects fund increased by $155,567 as actual expenditures were less than estimated.
The 2020A G.O. equipment certificates capital projects fund decreased by $829,537 due to the purchase of equipment to close the fund in 2021.
The 2021 A G.O. equipment certificates capital projects fund increased by $642,333 due to the issuance of bonds in late December 2021.
The 2019A G.O. abatement bonds capital projects fiord decreased by $176,032 as final checklist items were completed with this project.
24
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2021
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 $11,365,340 (water $6,039,546, sewer $4,147,100 and
storm sewer $1,178,694) and internal service funds of $963,504. The enterprise funds had a net increase in net position from current year
activity of $3,625,145 (water $1,723,149, sewer $1,030,818 and storm sewer $871,178). Internal service funds had a net decrease in net
position of $52,343.
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, 2021, amounts to
$198,940,205 (net of accumulated depreciation). This investment in capital assets includes land, buildings, infrastructure, machinery and
equipment.
The City has elected to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement
Management Program, which includes streets and trails. Under GASB Statement No. 34, eligible infrastructure capital assets are not required
to be depreciated under the following requirements:
1) The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (a) an up-to-date
inventory; (b) perform condition assessments and summarize the results using a measurement scale; and (c) estimate annual amount
to maintain and preserve at the established condition assessment level.
2) The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established and
disclosed condition assessment level.
Prior to 2013, the continuous scale was from 0 to 100 where 0 is assigned to the least acceptable physical condition and 100 is assigned to a
new street or trail. Starting in 2013, the continuous scale was from 0 to 10, where 0 is assigned to the least acceptable physical condition and
10 is assigned the physical characteristics of a new street or trail. The City's policy is to achieve an average rating of good which is 6 — 6.9
(56 — 70 old scale) for all streets and trails. In the fall of 2021, 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, 2021, the City's street and trail system was
rated at an Overall Condition Index (OCI) of 5.9.
The City's streets and trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun's ultra-
violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development trenching operations; (4) water
damage from natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the system through short-
term maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City expended $2,160,714 on street and
trail maintenance for the year ending December 31, 2021. 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 $2,500,000.
Maintenance
Actual
OCI
Year
Estimate
Expenditures
Rating
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
2021
2,500,000
2,160,714
5.9
25
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2021
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
$ 11,321,133
$ -
$ -
$ 11,321,133
89,585,996
1,471,520
-
91,057,516
168,192
15,000
(168,192)
15,000
61,810,825
234,591
(24,271)
62,021,145
1,117,125
145,600
-
1,262,725
9,292,067
1,086,360
(146,060)
10,232,367
8,436,236
283,558
(56,776)
8,663,018
181,731,574
3,236,629
(395,299)
184,572,904
15,806,363
2,079,936
(24,271)
17,862,028
630,906
107,149
-
738,055
6,743,364
445,730
(146,060)
7,043,034
4,858,275
329,511
(56,776)
5,131,010
Total accumulated depreciation 28,038,908 2,962,326
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
(227,107) 30,774,127
153,692,666 274,303 (168,192) 153,798,777
730,243
-
-
1,709,054
15,877,590
-
23,436
4,500
1,576,915
2,500
63,473,687
2,508,801
81,681,871 4,224,855
10,779,794
404,557
23,437
225
960,580
91,387
27,203,265
1,302,053
Total accumulated depreciation 38,967,076 1,798,222
Business -type activities
capital assets - net
Total capital assets - net
42,714,795 2,426,633
- 730,243
- 1,709,054
- 15,877,590
- 27,936
- 1,579,415
- 65,982,488
- 85,906,726
- 11,184,351
- 23,662
- 1,051,967
- 28,505,318
40,765,298
45,141,428
$ 196,407,461 $ 2,700,936 $ (168,192) $ 198,940,205
Additional information on the City's capital assets can be found in Note 5.
Long-term debt. At the end of the current fiscal year, the City had total long-term debt outstanding of $48,783,989, an increase of $5,038,385
from 2020. General obligation abatement bonds ($26,085,000) were used to refund the 2006 and 2007 EDA lease revenue refunding bonds
and expand the existing community center. General obligation revenue bonds ($1,610,000) were used for an addition to the water treatment
plant and the refunding of portions of the water treatment plant bonds. Certificates of indebtedness ($1,625,000) financed capital equipment
purchases. Capital improvement bonds ($9,790,000) were used to construct a new vehicle maintenance facility with a washbay and a cold
storage building. Street reconstruction bonds ($7,135,000) were used to reconstruct roadways in the City. Referendum bonds ($170,000) were
used to finance land acquisitions for the preservation of open space.
26
CITY OF ANDOVER, MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31, 2021
Additional long-term debt in the amount of $1,301,161 for issuance premiums and $1,067,828 is for compensated absences.
City of Andover's Outstanding Debt
Governmental Business -Type
Bonds payable
Abatement bonds
$ 26,085,000
$ -
$ 26,085,000
G.O. revenue bonds
-
1,610,000
1,610,000
Certificates of indebtedness
1,625,000
-
1,625,000
Capital improvement bonds
9,790,000
-
9,790,000
Street reconstruction bonds
7,135,000
-
7,135,000
Referendum bonds
170,000
-
170,000
Total bonds payable
44,805,000
1,610,000
46,415,000
Issuance premiums
1,286,735
14,426
1,301,161
Compensated absences
827,066
240,762
1,067,828
Total
S 46,918,801
S 1,865,188
S 48,783,999
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 $106,318,703. Only $42,288,182 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.
27
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28
BASIC FINANCIAL STATEMENTS
PU
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e
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET POSITION
December 31, 2021
With Comparative Totals For December 31, 2020
Statement 1
Primary
Government
Government
Business -Type
Totals
Activities
Activities
2021
2020
Assets:
Cash and investments
$ 55,577,438
$ 10,909,733
$ 66,487,171
$ 54,720,371
Cash and investments with escrow agent
-
-
-
126,682
Accrued interest
106,322
24,647
130,969
213,210
Due from other governmental units
21,985
10,040
32,025
399,928
Accounts receivable - net
185,517
1,482,443
1,667,960
1,696,342
Prepaid items
270,499
-
270,498
-
Property taxes receivable:
Unremitted
177,789
177,788
358,031
Delinquent
156,519
-
156,518
146,271
Special assessments receivable:
Unremitted
6,370
3,379
9,748
8,715
Delinquent
18,258
229,979
249,237
272,863
Deferred
1,410,955
914
1,411,869
1,700,417
Inventories - at cost
219,462
23,403
242,865
252,795
Land held for resale
765,000
-
765,000
750,000
Capital assets- net:
Nondepreciable
102,393,649
2,439,297
104,832,946
101,805,564
Depreciable
51,405,128
42,702,131
94,107,259
94,601,897
Total assets
212,714,888
57,825,965
270,540,853
257,053,086
Deferred outflows of resources:
Related to other post employment benefits
9,297
1,595
10,892
17,781
Related to pensions
1,940,589
227,626
2,168,215
488,347
Total deferred outflows of resources
1,949,886
229,221
2,179,107
506,128
Liabilities:
interftmd payable
97,782
(97,782)
-
-
Accounts payable
393,188
47,545
440,733
407,406
Contracts payable
72,451
501,199
573,650
1,561,619
Deposits payable
682,226
2,234
684,460
545,315
Due to other governmental units
48,340
32,578
80,918
101,583
Salaries payable
230,033
33,756
263,789
222,491
Unearned revenue
1,909,704
-
1,909,704
100,857
Accrued interest payable
521,814
15,580
537,394
566,669
Other post employment benefits:
Due in more than one year
391,331
63,705
455,036
380,848
Compensated absences:
Due within one year
124,060
36,114
160,174
161,395
Due in more than one year
703,006
204,648
907,654
914,576
Bonds/notes payable (net of unamortized premiums):
Due within one year
2,110,000
755,000
2,865,000
2,634,000
Due in more than one year
43,981,735
869,426
44,851,161
40,035,633
Net pension liability:
Due in more than one year
2,372,519
319,067
2,691,586
3,765,563
Total liabilities
53,638,189
2,783,070
56,421,259
51,397,955
Deferred inflows of resources:
Related to pensions
2,593,031
291,992
2,885,023
528,210
Net position:
Net investment in capital assets
115,576,274
43,517,002
159,093,276
154,783,340
Restricted for:
Debt service
2,064,237
-
2,064,237
1,582,258
Tax increment purposes
2,172,641
2,172,641
2,132,935
Public services
229,067
-
229,067
136,438
Unrestricted
39,391,335
11,463,122
49,854,457
46,998,078
Total net position
$ 158,433,554
$ 54,980,124
$ 213,413,678
$ 205,633,049
The accompanying notes are an integral part of these financial statements.
31
CITY OF ANDOVER, MINNESOTA
STATEMENT OF ACTIVITIES
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Program Revenues
Charges
Operating
Capital
For
Grants and
Grants and
Expenses
Services
Contributions
Contributions
Functions/Programs
Primary government:
Government activities:
General government
$ 3,202,342
$ 2,241,593
$ 164,376
$ -
Public safety
5,814,296
1,078,065
550,344
5,406
Public works
4,726,290
279,191
412,530
1,471,059
Parks and recreation
4,676,676
1,943,452
-
636,034
Recycling
245,755
70,003
115,400
-
Economic development
293,594
233,312
-
-
Interest on long-term debt
1,184,349
-
-
-
Total government activities
20,143,282
5,845,616
1,242,650
2,112,499
Business -type activities:
Water
2,546,637
3,806,408
-
773,791
Sewer
2,435,302
2,395,512
-
845,349
Storm sewer
611,579
634,815
-
889,661
Total business -type activities
5,593,518
6,836,735
-
2,508,801
Total primary government
$ 25,736,800
$ 12,682,351
$ 1,242,650
$ 4,621,300
The accompanying notes are an integral part of these financial statements.
32
Statement 2
Net (Expense) Revenue and Changes in Net Position
Primary Government
Governmental Business -Type Totals
Activities Activities 2021 2020
$ (796,373) $
- $ (796,373)
$ (2,319,312)
(4,180,471)
- (4,180,471)
(3,714,253)
(2,563,500)
- (2,563,500)
6,848,962
(2,097,190)
- (2,097,190)
(1,918,972)
(60,352)
- (60,352)
(72,470)
(60,282)
- (60,282)
(2,311,632)
(1,184,349)
- (1,184,349)
(1,226,839)
(10,942,517) - (10,942,517) (4,714,516)
-
2,033,562
2,033,562
1,850,346
-
805,559
805,559
752,359
-
912,897
912,897
982,120
-
3,752,018
3,752,018
3,584,825
(10,942,517)
3,752,018
(7,190,499)
(1,129,691)
General revenues:
General property taxes
14,934,589
-
14,934,589
14,479,488
Tax increment collections
103,474
-
103,474
100,979
Grants and contributions not
restricted to specific programs
3,578
-
3,578
4,129
Unrestricted investment earnings
(71,710)
(17,603)
(89,313)
1,104,322
Gain on sale of capital assets
18,800
-
18,800
3,000
Transfers
119,523
(119,523)
-
-
Total general revenues, gain on sale of
capital assets and transfers
15,108,254
(137,126)
14,971,128
15,691,919
Change in net position
4,165,737
3,614,892
7,780,629
14,562,227
Net position - beginning
154,267,817
51,365,232
205,633,049
191,070,822
Net position - ending
$ 158,433,554
$ 54,980,124
$ 213,413,678
$ 205,633,049
33
CITY OF ANDOVER, MINNESOTA
BALANCESHEET
GOVERNMENTALFUNDS
December 31, 2021
With Comparative Totals For December 31, 2020
Assets:
Cash and investments
Cash and investments with escrow agent
Accrued interest
Due from other governmental units
Accounts receivable - net
Prepaid items
Property taxes receivable:
Unremitted
Delinquent
Special assessments receivable:
Unremitted
Delinquent
Deferred
Inventories- accost
Land held for resale
CARES Grant/ Road &
ARPA Funding Water Trunk Sewer Trunk Bridge
$ 10,283,373 $ 1,818,340 $ 6,664,793 S 7,906,689 $ 9,594,200
17,535 4,521 16,825 20,861 22,403
21,985 - - - -
74,366
33,800
113,687 17,291
101,512 15,439
- - 6,370
8,714 542 - 9,002
- 225,734 10,449 1,081,357
120,936 - - -
Total assets $ 10,775,908 $ 1,822,861 $ 6,907.894 $ 7,937,999 $ 10,746,062
Liabilities, Deferred Inflows of Resources, and Fund Balances
Liabilities:
Accounts payable
Contracts payable
Deposits payable
Due to other governmental units
Salaries payable
Unearned revenue
Total liabilities
Deferred inflows of resources:
Unavailable revenues
Fund balances (deficit):
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total fund balances
Total liabilities, deferred inflows of resources,
and fund balances (deficit)
$ 234,843 1,377 $ 43,991 S 213 $ 575
5,113 - - 32,315 14,141
573,920 5,741 5,741 1,139
35,889 - - 46
189,451 - -
- 1,807,640 - - -
1,039,216 1,809,017 49,732 38,269 15,901
110,226 226,276 10,449 1,105,798
154,736
- 13,844 6,631,886 7,889,281 9,624,363
9,471,730 - - - -
9,626,466 13,844 6,631,886 7,889,281 9,624,363
$ 10,775,908 $ 1,822,861 $ 6,907,894 S 7,937,999 $ 10,746,062
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 funds.
Other long-term assets are not available to pay for current -period expenditures and, therefore, are reported as unavailable revenue in the funds.
Internal service funds are used by management to charge the cost of equipment maintenance and insurance to individual funds.
The assets and liabilities are included in the governmental activities statement of net position along with a deduction of net
revenue attributable to business -type activities.
Long-term liabilities, including bonds payable, other post employment benefits and net pension liability, are not due and payable in the
current period and, therefore, are not reported in the fiords.
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.
34
Statement 3
2021A GO
Tax Strcct
Increment Reconstruction Othcr Totals
Projects Bonds Govcrnmcutal Governmental Funds
$ 1,421,648 $ 7,196,503 $ 10,005,128 $ 54,890,674 $ 43,701,040
- - - - 126,682
3,760 18,229 104,134 170,049
- - 21,985 387,061
4,200 106,951 185,517 296,709
- 16,000 49,800 -
- 46,810 177,788 358,031
1,257 38,310 156,518 146,271
6,370 5,336
- 18,259 21,161
93,415 1,410,955 1,699,076
- 1,920 122,956 142,725
765,000 - 765,000 750,000
$ 2,195,865 $ 7,196,503 $ 10,326,763 $ 57,909,855 $ 47,804,141
$ 6,495 $
$ 74,256
$ 361,750
$ 320,154
-
20,882
72,451
1,539,098
15,898
79,787
682,226
543,081
831
11,574
48,340
72,312
-
29,268
218,719
183,771
-
102,064
1,909,704
100,857
23,224
317,831
3,293,190
2,759,273
766,257
131,725
2,350,731
2,616,508
- -
17,920
172,656
142,725
1,406,384 7,196,503
3,430,147
12,033,034
4,651,447
- -
499,284
499,284
508,062
5,929,856
30,099,230
27,612,210
- -
-
9,471,730
9,513,916
1,406,384 7,196,.503
9,977,207
52,265,934
42,428,360
$ 2,195,865 $ 7,196,503
$ 10,326,763
$ 57,909,855
$ 47,804,141
$ 52,265,934
$ 42,428,360
153,798,777
153,692,666
1,949,886
469,014
2,350,731
2,616,508
865,722 907,812
(50,204,465) (45,341,667)
(2,593,031) (504,876)
$ 158,433,554 $ 154,267,817
35
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTALFUNDS
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
CARES Grant /
Road &
ARPA Funding
Water Trunk
Sewer Trunk
Bridge
General
SRF
CPF
CPF
CPF
Revenues:
General property taxes
$ 9,527,670
$
$
$
$ 1,448,262
Tax increment collections
-
-
Licenses and permits
891,762
-
Intergovernmental
939,174
3,166
148,754
Special assessments
-
-
97,642
74,711
520,669
Charges for services
1,036,929
-
-
Fines
53,747
-
Investment income
(15,183)
13,844
(8,468)
(17,849)
(6,856)
Miscellaneous:
Park dedication fees
-
-
-
Connection charges
765,398
161,584
Rent
-
-
-
Other
167,318
-
-
-
-
Total revenues
12,601,417
17,010
854,572
218,446
2,110,829
Expenditures:
Current:
General government
3,020,339
-
-
-
-
Public safety
5,524,110
3,166
-
-
-
Public works
1,766,136
-
276,400
65,544
2,045,669
Parks and recreation
1,337,582
-
-
-
Recycling
239,606
Economic development
-
Unallocated
16,109
Capital outlay:
General government
-
Public safety
8,317
Public works
2,000
Parks and recreation
177,301
Recycling
-
Economic development
Debt service:
Principal retirement
Interest
Paying agent fees
Professional services
-
Construction/acquisition costs
-
-
-
743,203
-
Total expenditures
12,091,500
3,166
276,400
808,747
2,045,669
Revenues over (under) expenditures
509,917
13,844
578,172
(590,301)
65,160
Other financing sources (uses):
Transfers in
212,031
-
300,000
400,000
755,000
Transfers out
(750,000)
(148,705)
-
-
Bonds issued
Bond premium
Proceeds from sale of capital assets
-
-
-
Total other financing sources (uses)
(537,969)
-
151,295
400,000
755,000
Net increase (decrease) in fund balance
(28,052)
13,844
729,467
(190,301)
820,160
Fund balance - January 1
9,654,518
-
5,902,419
8,079,582
8,804,203
Fund balance - December 31
$ 9,626,466
$ 13,844
$ 6,631,886
$ 7,989,281
$ 9,624,363
The accompanying notes are an integral part of these financial statements.
36
Statement 4
2021A G.O
Tax
Street
Increment
Reconstruction
Other
Intra
Totals
Projects
Bonds
Governmental
Activity
Governmental Funds
CPF
CPF
Funds
Eliminations
2021
2020
$ -
$
$ 3,948,410
$
$ 14,924,342
$ 14,451,737
103,474
-
103,474
100,979
-
-
991,762
892,279
11,224
1,102,318
6,211,801
3,569
696,591
631,999
1,231,389
2,268,318
1,672,023
-
53,747
47,630
(24,467)
(8,073)
(67,052)
913,671
622,680
622,680
389,033
-
926,982
1,136,882
-
635,026
635,026
635,629
204,476
476,429
(30,602)
817,623
862,805
283,483
6,920,654
(30,602)
22,975,811
27,946,468
-
182,715
3,203,054
3,079,344
5,728
5,533,004
5,754,243
105,668
102,297
4,361,714
4,588,958
-
1,462,250
2,799,832
2,495,594
-
-
239,606
228,124
258,777
38,851
297,628
4,154,244
-
-
16,109
12,778
197,071
197,071
21,759
743,724
752,041
318,484
79,261
81,261
3,671,947
389,243
566,544
12,787,857
-
-
30,151
1,899,000
1,899,000
1,561,000
1,278,030
1,278,030
1,290,844
5,500
5,500
5,000
-
-
743,203
7,145
258,777
105,668
6,383,670
21,973,597
40,007,472
24,706
(105,668)
536,984
(30,600)
1,002,214
(12,061,004)
-
612,091
(1,267,691)
1,011,431
990,088
-
(548,291)
1,298,291
(148,705)
(59,740)
7,135,000
630,000
-
7,765,000
1,310,000
167,171
21,663
188,834
95,481
-
18,800
-
18,800
3,000
7,302,171
734,263
30,600
8,835,360
2,338,829
24,706
7,196,503
1,271,247
-
9,837,574
(9,722,175)
1,381,678
-
8,605,960
42,428,360
52,150,535
$ 1,406,384
$ 7,196,503
$ 9,877,207
$
$ 52,265,934
$ 42,428,360
ON
- This page intentionally left blank -
38
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, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
2021 2020
Amounts reported for governmental activities in the
statement of activities (Statement 2) are different because:
Net changes in fund balances - total governmental funds (Statement 4)
$ 9,837,574 $ (9,722,175)
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.
(622,206) 14,528,019
The net effect of various miscellaneous transactions involving capital assets is to increase
(decrease) net position (i.e., sales, trade-ins, and donations).
1,471,520 6,633,646
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds.
(265,777) (24,640)
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.
(5,794,844) 322,156
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
(69,746) (32,430)
is the net effect of employee benefits earned and paid during the year.
Transfer out of governmental capital assets contributed to Enterprise Funds.
(743,203) (7,145)
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.
36,228 (126,266)
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 $ 329,695
Pension expense 28,586
358,281 187,600
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.
(42,090) (31,606)
Change in net position of governmental activities (Statement 2)
$ 4,165,737 $ 11,727,159
The accompanying notes are an integral part of these financial statements.
Q
CITY OF ANDOVER, MINNESOTA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31. 2021
With Comparative Totals For December 31, 2020
Assets:
Current assets:
Cash and cash equivalents
Accrued interest
Due from other governmental units
Accounts receivable - net
Prepaid items
Special assessments receivable
Umetnittcd
Delinquent
Deferred
Inventories - at cost
Total current assets
Noncurrent assets:
Capital assets:
Land
Buildings and structures
Machinery and equipment
Distribution and collection system
Construction in progress
Total capital assets
Less: Allowance for depreciation
Total noncurrent assets
Total assets
Deferred outflows ofresources:
Related to other post employment benefits
Related to pensions
Total deferred outflows of resources
Liabilities:
Current liabilities:
Accounts payable
Contracts payable
Deposits payable
Interest payable
Due to other governmental units
Salaries payable
Bonds payable - due within one year
Compensated absences payable - due within one year
Total current liabilities
Noncurrent liabilities:
Other post employment benefits - due in more than one year
Bonds payable - due in more than one year
Compensated absences payable - due in more than one year
Net pension liability - due in more than one year
Total noncurrent liabilities
Total liabilities
Deferred inflows ofresources:
Related to pensions
Net position:
Net investment in capital assets
Unrestricted
Total net position
$ 6,244,622
$ 3,662,687
$ 1,002,424
14,217
8,151
2,279
-
10,040
-
629,143
653,246
200,054
1,647
1,527
204
112,386
89,618
27,975
-
-
914
23,403
7,025,418
4,425,269
1,233,850
730,243
-
-
15,877,590
-
-
311,317
738,533
557,501
22,093,332
29,345,981
14,543,275
965,851
743,203
39,978,333
30,827,617
15,100,776
(20,178,291)
(14,440,362)
(6,146,645)
19,800,042
16,387,255
8,954,131
26,825,460
20,812,524
10,187,981
912
683
-
133,820
93,806
134,732
94,489
32,590
9,563
5,392
490,938
4,272
5,989
2,234
-
-
15,580
-
24,833
7,745
-
18,222
11,931
3,703
755,000
-
-
20,513
9,590
6,011
1,359,910
43,001
21,095
36,403
27,302
-
869,426
-
-
116,243
54,344
34,061
191,608
127,459
1,213,680
209,105
34,061
2,573,590
252,106
55,156
171,440
120,552
18,175,616
16,387,255
8,954,131
6,039,546
4,147,100
1,178,694
$ 24,215,162
$ 20,534,355
$ 10,132,825
Net position reported above
Amounts reported for business -type activities in the statement of netposition 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 integal part of these financial statements.
40
Statement 6
Totals
Governmental Activities -
Totals Internal Service Finds
2021
2020
2021
2020
$ 10,909,733
$ 10,061,918
$ 686.764
$ 957,413
24,647
38,873
2,188
4,288
10,040
12,867
-
-
1,482,443
1,399,633
-
-
-
220.698
3,378
3,379
-
229,979
251,702
914
1,341
-
-
23,403
18,387
96,606
91,683
12,684,537
11,788,100
1,006,256
1,053,384
730,243
730,243
-
-
15,877,590
15,877,590
1,607,351
1,600,350
65,982,488
63,473,688
1,709,054
85,906,726
91,681,871
(40,765,298)
(38,967,076)
45,141,428
42,714,795
57,825,965
54,502,895
1,006,256
1,053,384
1,595
2,540
-
227,626
34,574
229,221
37,114
47,545
60,110
31,438
27,142
501,199
22,521
-
-
2,234
2,234
15,580
22,330
32,578
29,271
-
-
33,756
28,325
11,314
10,395
755,000
735,000
-
-
36,114
35,290
1,424,006
935,071
42,752
37,537
63,705
53,319
-
-
869,426
1,637,742
204,648
199,922
319,067
433,424
1,456,846
2,324,407
2,880,852
3,259,478
42.752
37,537
291,992
23,334
43,517,002
40,342,053
-
-
11,365,340
10,915,144
963,504
1,015,847
$ 54,882,342
$ 51,257,197
$ 963,504
$ 1,015,847
$ 54,882,342 $ 51,257,197
97,782 108,035
$ 54,980,124 $ 51,365,232
:111
CITY OF ANDOVER, MINNESOTA
STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Water Sewer Storm Sewer
Operating revenues:
User charges $ 3,709,788 $ 2,395,512 $ 634,815
Meters 44,946 - -
Other 51,674 - -
Total operating revenues 3,806,408 2,395,512 634,815
Operating expenses
Personal services
604,171
397,086
175,020
Supplies
301,237
25,801
10,059
Other service charges
775,813
180,990
111,476
Disposal charges
-
1,208,563
-
Depreciation
852,576
631,634
314,012
Total operating expenses
2,533,797
2,444,074
610,567
Operating income (loss)
1,272,611
(48,562)
24,248
Nonoperating revenues (expenses):
Investment income
(8,668)
(9,694)
759
Interest expense
(25,427)
-
-
Total nonoperating revenues (expenses)
(34,095)
(9,694)
759
Income (loss) before contributions
and transfers
1,238,516
(58,256)
25,007
Capital contributions
773,791
1,588,552
889,661
Transfers:
Transfers in
148,705
-
-
Transters out
(437,863)
(499,478)
(43,490)
Total transfers
(289,158)
(499,478)
(43,490)
Change in net position
1,723,149
1,030,818
871,178
Net position - January 1
22,492,013
19,503,537
9,261,647
Net position - December 31
$ 24,215,162
$ 20,534,355
$ 10,132,825
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.
42
Statement 7
Totals
lntra Governmental Activities -
Activity Totals Internal Service Funds
Eliminations 2021 2020 2021 2020
$ - $ 6,740,115 $ 6,196,717 $ 1,321,744 $ 1,217,279
- 44,946 36,948 - -
- 51,674 65,135 80,211 72,329
- 6,836,735 6,298,800 1,401,955 1,289,608
-
1,176,277
1,127,866
546,835
530,553
-
337,097
274,316
360,128
335,851
(30,600)
1,037,679
1,029,515
542,677
486,701
-
1,208,563
1,274,975
-
-
-
1,798,222
1,758,468
-
-
(30,600)
5,557,838
5,465,140
1,449,640
1,353,105
30,600
1,278,897
833,660
(47,685)
(63,497)
-
(17,603)
173,446
(4,658)
17,205
-
(25,427)
(41,594)
-
-
-
(43,030)
131,852
(4,658)
17,205
30,600
1,235,867
965,512
(52,343)
(46,292)
-
3,252,004
2,814,590
-
-
-
148,705
59,740
-
-
(30,600)
(1,011,431)
(990,088)
-
-
(30,600)
(862,726)
(930,348)
-
-
-
3,625,145
2,849,754
(52,343)
(46,292)
-
51,257,197
48,407,443
1,015,847
1,062,139
$ -
$ 54,982,342
$ 51,257,197
$ 963,504
$ 1,015,847
$ 3,625,145
$ 2,849,754
(10,253) (14,686)
$ 3,614,892 $ 2,835,068
43
CITY OF ANDOVER, MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
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
Net cash flows from capital and related financing activities
Cash flows from investing activities:
Investment income
Net increase in cash and cash equivalents
Cash and cash equivalents - January 1
Cash and cash equivalents - December 31
Reconciliation of operating income to net cash provided
(used) by operating activities:
Operating income (loss)
Adjustments to reconcile operating income (loss)
to net cash flows from operating activities:
Depreciation
Changes in assets, deferred outflows ofresources,
liabilities and deferred inflows of resources:
Decrease (increase) in due from other governmental units
Decrease (increase) in accounts receivable
Decrease (increase) in prepaid items
Decrease (increase) in special assessments
Decrease (increase) in inventory
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
$ 3,764,171
$ 2,392,753
$ 621,979
(620,181)
(1,409,719)
(119,635)
(602,315)
(411,395)
(178,996)
2,541,675
571,639
323,348
148,705
-
-
(437,863)
(499,478)
(43,490)
(289,158)
(499,478)
(43,490)
(968,851)
(1,500)
(2,500)
(45,493)
(735,000)
(1,749,344)
(1,500)
(2,500)
(1,025)
(3,675)
1,323
502,148
66,986
278,681
5,742,474
3,595,701
723,743
$ 6,244,622
$ 3,662,687
$ 1,002,424
$ 1,272,611
$ (48,562)
$ 24,248
852,576
631,634
314,012
-
2,827
-
(45,540)
(21,714)
(15,556)
3,30.3
16,128
2,720
(5,016)
-
-
(112,647)
(79,460)
-
(20,198)
5,738
1,895
478,662
11
5
3,421
(114)
-
4,403
607
421
5,935
4,451
-
13,698
(3,741)
(4,397)
(67,048)
(47,309)
157,515
111,143
-
1,269,064
620,201
299,100
$ 2,541,675
$ 571,639
$ 323,348
$ 773,791
$ 1,588,552
$ 889,661
The accompanying notes are an integral part of these financial statements.
44
Statement 8
Totals
Governmental Activities -
Totals Internal Service Funds
2021
2020
2021
2020
$ 6,778,903
$ 6,288,150
$ 1,401,955
$ 1,294,236
(2,149,535)
(2,642,880)
(1,124,130)
(837,502)
(1,192,706)
(1,117,193)
(545,916)
(527,575)
3,436,662
2,528,077
(268,091)
(70,841)
148,705
59,740
(980,831)
(959,488)
(832,126)
(899,748)
(972,851)
(45,493)
(61,499)
(735,000)
(725,000)
(1,753,344)
(786,499)
-
(3,377)
179,527
(2,558)
18,700
847,815
1,021,357
(270,649)
(52,141)
10,061,918
9,040,561
957,413
1,009,554
$ 10,909,733
$ 10,061,918
$ 686,764
$ 957,413
$ 1,248,297 $ 803,060 $ (47,685) $ (63,497)
1,798,222 1,758,468
2,827
2,478
-
(82,810)
(33,420)
4,628
-
-
(220,698)
-
22,151
20,292
(5,016)
11,428
(4,923)
(7,130)
(192,107)
(2,366)
-
(12,565)
15,270
4,296
(7,820)
478,678
(55,740)
-
-
(1,300)
3,307
(3,132)
-
-
5,431
6,101
919
2,978
10,386
5,957
-
-
5,560
22,954
(114,357)
37,263
268,658
(59,236)
2,188,365
1,725,017
(220,406)
(7,344)
$ 3,436,662
$ 2,528,077
$ (268,091)
$ (70,841)
$ 3,252,004
$ 2,814,590
$
$
45
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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
46
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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 CARES Grant/ARPA Funding Special Revenue Fund (SRF) is used to account for money distributed to local governments
to assist with the financial strain of COVID-19.
The Water Trunk Capital Projects Fund (CPF) is used to account for water access fees and trunk improvements as part of
development. It is also used to reserve monies that will be needed for capital infrastructure replacements in the future.
The Sewer Trunk CPF is used to account for sewer access fees and sanitary sewer improvements.
The Road and Bridge CPF accounts for all road projects and the pavement management program, which includes annual seal
coating, crack sealing and overlays for roads.
The Tax Increment Projects CPF is used to account for activities in TIF districts 1-2, 1-5, 1-6 and all TIF land sales and
expenditures to reach the goals of the TIF district plans.
The 2021A G.O. Street Reconstruction Bonds CPF accounts for the bond proceeds issued to reconstruct roadways within the
City.
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, 2021
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:
Special Revenue Funds:
LRRWMO
Charitable Gambling
Final Over
Budget Actual Budget
S 29,243 $ 29,311 $ 68
30,000 47,860 17,860
The expenditures over budget were funded by greater than anticipated revenues and/or available fund balance.
F. CASH AND INVESTMENTS
Cash balances from all funds are combined and invested to the extent available in authorized investments. Earnings from such
investments are allocated to the individual funds on the basis of applicable cash balance participation of each fund.
The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fiord
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:
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CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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. Uncollectible amounts
are not material for other receivables and have not been reported.
H. PROPERTY TAX REVENUE RECOGNITION
The City levies its property tax for the subsequent year during the month of December and it is certified to Anoka County.
December 30th is the last day the City can certify a tax levy to the County Auditor for collection the following year. Such taxes
become a lien on the following January 1. Anoka County is the collecting agency for the levy and remits the collections to the City
three times a year. Taxes not collected as of December 31 each year are shown as delinquent taxes receivable.
The County Auditor prepares the tax list for all taxable property in the City, applying the applicable tax rate to the tax capacity of
individual properties, to arrive at the actual tax for each property. The County Auditor also collects all special assessments, except
for certain prepayments paid directly to the City.
The County Auditor submits a list of taxes to be collected on each parcel of property to the County Treasurer in January of each
year. The County Treasurer collects all taxes and is required to mail copies of all personal property tax statements by April 15, and
copies of all real estate tax statements by April 15, of each year. Property owners are required to pay one-half of their real estate
taxes due by May 15 and the balance by October 15.
If taxes due May 15 are not paid on time, a penalty of 3% is assessed on homesteaded property and 7% on non -homesteaded
property. An additional 1 % penalty is added each month the taxes remain unpaid, until October 15. If the taxes due May 15 are
not paid by October 15, a 2% penalty per month is added to homesteaded property and 4% per month to non -homesteaded property
until January 1.
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
49
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
delinquent taxes not collected by the City in January is fully offset by deferred inflow of resources because they are not available
to finance current expenditures.
L SPECIAL ASSESSMENT REVENUE RECOGNITION
Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement
projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent
with the tern 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.
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CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
The City implemented GASB Statement No. 51. Accounting and Financial Reporting for Intangible Assets effective January 1,
2010 which required the City to capitalize and amortize intangible assets. Intangible assets include easements and computer
software. Pursuant to GASB Statement 51, in the case of initial capitalization of intangible assets, the City chose to capitalize
intangible assets retroactively to 1980, except for permanent easements and internally generated software. The City has already
accounted for computer software at historical cost and therefore retroactive reporting was not necessary. The City does not have
any temporary easements to record that meet the threshold of $10,000.
Property, plant and equipment of the primary government, as well as the component units, are depreciated/amortized using the
straight line method over the following estimated useful lives:
Assets
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 2021 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, if material, are amortized over the life of the related debt.
X
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The
face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other
financing sources while discounts on debt issuances are reported as other financing uses.
P. FUND BALANCE CLASSIFICATIONS
In the fund financial statements, governmental funds report fund balance in classifications that disclose constraints for which
amounts in those funds can be spent. These classifications are as follows:
Nonspendable — consists of amounts that are not in spendable form, such as prepaid items.
Restricted — consists of amounts related to externally imposed constraints established by creditors, grantors or contributors;
or constraints imposed by state statutory provisions.
Committed — consists of internally imposed constraints. These constraints are established by Resolution of the City Council.
Assigned— consists of internally imposed constraints. These constraints reflect the specific purpose for which it is the City's
intended use. These constraints are established by the City Council and/or management. Pursuant to City Council Resolution,
the City's Administrator and Finance Director are authorized to establish assignments of fund balance.
Unassigned — is the residual classification for the general fund and also reflects negative residual amounts in other funds.
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
Interfrmd 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.
Interfrmd 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, 2020, 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.
52
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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,
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 govermnent-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
($50,204,465) difference are as follows:
Bonds payable $ (46,091,735)
Accrued interest payable (521,814)
Other post employment benefits (391,331)
Compensated absences (827,066)
Net pension liability (2,372,519)
Net adjustment to reduce fund balance - total governmental
funds to arrive at net position - governmental activities $ (50,204,465)
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
$865,722 difference are as follows:
Internal Service Funds net position $ 963,504
Net revenue attributable to business -type activities (97,782)
Net adjustment to increase fund balance - total governmental
funds to arrive at net position - governmental activities $ 865,722
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 governinental funds and changes in netposition 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 ($622,206) difference are as follows:
53
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Capital outlay $ 1,596,917
Construction/acquisition costs 743,203
Depreciation expense (2,962,326)
Net adjustment to increase net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities $ (622,206)
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 $1,471,520 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. $ 1,471,520
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 ($265,777) difference are as follows:
Unavailable revenue - general property taxes:
At December 31, 2020 $ (145,014)
At December 31, 2021 155,261
Unavailable revenue - tax increment taxes:
At December 31, 2020 (1,257)
At December 31, 2021 1,257
Unavailable revenue - special assessments:
At December 31, 2020 (1,720,237)
At December 31, 2021 1,429,213
Unavailable revenue - land held for resale
At December 31, 2020 (750,000)
At December 31, 2021 765,000
Net adjustments to decrease net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities $ (265,777)
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 ($5,794,844) difference
are as follows:
Debt issued or incurred:
Issuance of certificates of indebtedness $ (630,000)
Issuance of street reconstruction bonds (7,135,000)
Principal repayments
Abatement bonds 1,160,000
Certificates of indebtedness 449,000
Capital improvement bonds 125,000
Referendum bonds 165,000
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 $ (5,794,844)
54
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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
$36,228 difference are as follows:
Compensated absences $ 13,703
Accrued interest 22,525
Net adjustment to decrease net changes in fund balances - total governmental
funds to arrive at changes in net position of governmental activities $ 36,228
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 ($42,090) difference are as follows:
Internal Service Funds change in net position $ (52,343)
Net revenue attributable to business -type activities 10,253
Net adjustment to increase fund balance - total governmental
funds to arrive at net position - governmental activities $ (42,090)
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 118A.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, 2021, 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 bust and guaranteed
investment contracts.
As of December 31, 2021, the City had the following investments and maturities:
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CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Credit
Investment Type Rating
Money market funds N/A
Minnesota Municipal
Money Market Fund (4M) N/A
Certificates of deposit
Local/State governments
U.S. agencies
Total investments
N/A
Investment Maturities (in Years)
Fair Less Than More Than
Value 1 1-5 6-10 10
$13,680,518 $13,680,518 $
814,697 814,697
13,235,458 9,097,969
4,137,489 - -
A/A1/A2 61,498
-
61,498
- -
AAl/AA2/AA3 8,027,348
1,660,255
5,340,851
1,026,242 -
AAA 6,330,907
1,272,613
4,256,728
602,832 198,734
AAA 21,499,865
7,459,063
13,425,321
615,481 -
63,650,291
$33,985,115
$27,221,887
$ 2,244,555 $ 198,734
Deposits 2,836,880
Total cash and investments $66,487,171
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 investments are valued
using inputs that are based on quoted prices for similar assets or inputs that are obseivable, 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, 2021:
Fair Value Measurement Using
Investment Type 12/31/2021 Level 1 Level Level
Investments at fair value:
Federal Home Loan Bank
$ 4,585,563
Federal Farm Credit Bank
6,860,461
Federal Home Loan Mortgage Corporation
6,354,806
Federal National Mortgage Association
3,699,035
Municipal Bonds
14,419,753
Brokered Certificates of Deposit
13,235,458
Total investments at fair value
49,155,076
Investments not categorized:
External investment pool:
4M 814,697
Wells Fargo Bank Money Market 13,680,518
Total investments not categorized 14,495,215
Total $ 63,650,291
$ - $ 4,585,563 $ -
- 6,860,461 -
- 6,354,806 -
- 3.699,035 -
- 14,419,753 -
- 13,235,458 -
$ - $49,155,076 $ -
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 Govermnent Accounting Standards Board
56
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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
counterparty, the City will not be able to recover the value of its investment securities that are in the possession of an outside party. As
of December 31, 2021, $250,000 of the City's S63,650,291 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.
21) Investing operating funds primarily in shorter -term 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 amoral review of the financial condition and registration of qualified financial institutions and broker/dealers will be
conducted by the City Administrator.
Concentration of Credit Risk - More than 33% of the City's investments are in various holdings with U.S. agencies; Federal Home Loan
Bank (7.2%), Federal Farm Credit Bank (10.8%), Federal National Mortgage Association (5.8%) and Federal Home Loan Mortgage
Corporation (10.0%). The City's policy on concentration of investments is as follows:
11) 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 (LCIPs), money market funds or overnight repurchase agreements to ensure that appropriate liquidity is
maintained in order to meet ongoing obligations.
2) Maximum Maturities - To the extent possible, the City shall attempt to match its investments with anticipated cash flow
requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing, or having average
lifes, of more than five (5) years from the date of purchase or in accordance with state and local statutes and ordinances.
Reserve funds and other funds with longer -term investment horizons may be invested in securities exceeding five (5) years if
the maturity of such investments are made to coincide as nearly as practicable with the expected use of funds. The intent to
invest in securities with longer 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.
57
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 3 RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31, 2021 are as follows:
Delinquent Delinquent Special
Property Tax Assessment
Taxes Increment Receivable Total
Major Funds
General Fund
$ 63,953 $
- $ 8,714
S 72,667
Water Trunk CPF
-
- 223,451
223,451
Road and Bridge CPF
9,727
- 877,520
887,247
Tax Increment Projects CPF
-
1,257 -
1,257
Nonmajor Funds
24,133
- 90,904
115,037
Total
$ 97,813 $
1,257 $ 1,200,589
S 1,299,659
Note 4 UNAVAILABLE REVENUES
Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available
to liquidate liabilities of the current period. At the end of the current fiscal year, the various components of unavailable revenue reported in
the governmental funds were as follows:
Property Tax Special Land Held
Taxes Increment Assessments for Resale Total
Major Funds
General Fund
$ 101,512 $
- $ 8,714
$ - $ 110,226
Water Trunk CPF
-
- 226,276
- 226,276
Sewer Trunk CPF
-
- 10,449
- 10,449
Road and Bridge CPF
15,439
- 1,090,359
- 1,105,798
Tax Increment Projects CPF
-
1,257 -
765,000 766,257
Nonmajor Funds
39,310
- 93,415
- 131,725
Total
$ 155,261 $
1,257 $ 1,429,213
$ 765,000 $ 2,350,731
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, 2021 was as follows:
58
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Beginning
Ending
Primary Government
Balance
Additions
Deletions Balance
Governmental activities:
Capital assets not being depreciated:
Land and improvements
$ 11,321,133
$ -
$ - $ 11,321,133
Streets and trails
89,585,996
1,471,520
- 91,057,516
Construction in progress
168,192
15,000
(168,192) 15,000
Total capital assets not being depreciated
101,075,321
1,486,520
(168,192) 102,393,649
Capital assets being depreciated:
Buildings and improvements
61,810,825
234,591
(24,271)
62,021,145
Furniture and equipment (including software)
1,117,125
145,600
-
1,262,725
Machinery and equipment
9,292,067
1,086,360
(146,060)
10,232,367
Other park improvements
8,436,236
283,558
(56,776)
8,663,018
Total capital assets being depreciated
80,656,253
1,750,109
(227,107)
82,179,255
Less accumulated depreciation for:
Buildings and improvements
15,806,363
2,079,936
(24,271)
17,862,028
Furniture and equipment
630,906
107,149
-
738,055
Machinery and equipment
6,743,364
445,730
(146,060)
7,043,034
Other park improvements
4,858,275
329,511
(56,776)
5,131,010
Total accumulated depreciation
28,038,908
2,962,326
(227,107)
30,774,127
Total capital assets being depreciated - net
52,617,345
(1,212,217)
-
51,405,128
Governmental activities capital assets - net
$ 153,692,666
$ 274,303
$ (168,192)
$ 153,798,777
Beginning
Ending
Primary Government
Balance
Additions
Deletions
Balance
Business -type activities:
Capital assets not being depreciated:
Land and improvements
$ 730,243
$ -
$ -
$ 730,243
Construction in progress
-
1,709,054
-
1,709,054
Total capital assets not being depreciated
730,243
1,709,054
-
2,439,297
Capital assets being depreciated:
Buildings and improvements
15,877,590
-
-
15,877,590
Furniture and equipment (including software)
23,436
4,500
-
27,936
Machinery and equipment
1,576,915
2,500
-
1,579,415
Collection and distribution
63,473,687
2,508,801
-
65,982,488
Total capital assets being depreciated
80,951,628
2,515,801
-
83,467,429
Less accumulated depreciation for:
Buildings and improvements
10,779,794
404,557
-
11,184,351
Furniture and equipment
23,437
225
-
23,662
Machinery and equipment
960,580
91,387
-
1,051,967
Collection and distribution
27,203,265
1,302,053
-
28,505,318
Total accumulated depreciation
38,967,076
1,798,222
-
40,765,298
Total capital assets being depreciated - net
41,984,552
717,579
-
42,702,131
Business -type activities capital assets - net
$ 42,714,795
$ 2,426,633
$ -
$ 45,141,428
M
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Depreciation/amortization expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government
Public safety
Public works
Parks and recreation
Recycling
Economic development
$ 112,121
339,159
574,471
1,918,747
6,862
10,966
Total depreciation/amortization expense - governmental activities $ 2,962,326
Business -type activities:
Water
Sewer
Storm sewer
$ 852,576
631,634
314,012
Total depreciation/amortization expense - business -type activities $ 1,798,222
CONSTRUCTION COMMITMENTS
At December 31, 2021, the City had the following construction project contracts in progress:
Project # Project
21-18 Advanced Metering Infrastructure
21-21 Coon Creek Lift Station #11
Contract Remaining
$ 1,178,440 $ 233,923
687,440 41,145
$ 1,865,880 $ 275,068
60
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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.
Issue
Maturity
Interest
Original
Payable
Date
Date
Rate
Issue
12/31/21
GOVERNMENTAL ACTIVITIES:
Abatement Bonds:
2012CG.O. Abatement Bonds
12/27/2012
2/1/2031
1.00-3.00%
$ 17,315,000
$ 10,550,000
2019A G.O. Abatement Bonds
8/1/2019
2/1/2040
3.00-5.00%
15,770,000
15,535,000
Total abatement bonds
33,085,000
26,085,000
Certificates of Indebtedness:
2020A G.O. Equipment Certificates
3/19/2020
2/1/2024
4.00%
1,310,000
995,000
2021A G.O. Equipment Certificates
12/28/2021
2/1/2026
2.00%
630,000
630,000
Total certificates of indebtedness
1,940,000
1,625,000
Capital Improvement Bonds:
2018A G.O. Capital Improvement Plan Bonds 12/27/2018
Street Reconstruction Bonds:
2021A G.O. Street Reconstruction Bonds 12/28/2021
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:
2/1/2044 3.00-5.00% 10,000,000 9,790,000
2/l/2030 1.00-2.00% 7,135,000 7,135,000
2/1/2022 2.00-3.12% 1,660,000 170,000
53,820,000 44,805,000
- 1,286,735
- 827,066
53,820,000 46,918,801
2009A G.O. Water Revenue Bonds 3/26/2009 2/1/2024 2.00-4.25% 1,025,000 245,000
2016B G.O. Water Revenue Refunding Bonds 12/7/2016 2/1/2023 2.00% 3,925,000 1,365,000
Total general obligation revenue bonds 4,950,000 1,610,000
Issuance premiums - 14,426
Compensated absences payable - 240,762
Total business -type activities indebtedness 4,950,000 1,865,188
Total City indebtedness $ 58,770,000 $ 48,783,989
For the governmental activities, compensated absences are generally liquidated by the General and Special Revenue Funds.
61
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Annual debt service requirements to maturity for general obligation bonds are as follows:
Governmental Activities
Abatement Bonds
Certificates of Indebtedness
Capital Improvement Bonds
Principal
Interest
Principal
Interest
Principal
Interest
2022
$ 1,490,000
$
833,706
$ 320,000
$ 40,855
$ 130,000
$ 344,506
2023
1,530,000
786,181
480,000
31,500
290,000
334,006
2024
1,585,000
735,650
500,000
14,950
300,000
319,256
2025
1,635,000
681,256
160,000
4,900
315,000
303,881
2026
1,690,000
622,925
165,000
1,650
335,000
287,631
2027-2031
9,430,000
2,146,272
-
-
1,890,000
1,226,631
2032-2036
4,560,000
974,700
-
-
2,195,000
915,481
2037-2041
4,165,000
254,625
-
-
2,570,000
533,491
2042-2044
-
-
-
-
1,765,000
94,063
Total
$ 26,085,000
$
7,035,315
$ 1,625,000
$ 93,855
$ 9,790,000
$ 4,359,946
Governmental Activities
Business -Type
Activities
Street Reconstruction Bonds
Referendum Bonds
G.O. Revenue Bonds
Principal
Interest
Principal
Interest
Principal
Interest
2022
$ -
$
69,556
$ 170,000
$ 2,656
$ 755,000
$ 29,042
2023
825,000
109,310
-
-
770,000
12,153
2024
855,000
92,510
-
-
85,000
1,806
2025
870,000
75,260
-
-
-
-
2026
885,000
57,710
-
-
-
-
2027-2031
3,700,000
87,980
-
-
-
-
$ 7,135,000
$
492,326
$ 170,000
$ 2,656
$ 1,610,000
$ 43,001
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, 2021, was as follows:
Governmental activities:
Bonds payable:
Abatement bonds
Certificates of indebtedness
Capital improvement bonds
Street reconstruction 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
$ 27,245,000
$ -
$ (1,160,000)
$ 26,085,000 $
1,490,000
1,444,000
630,000
(449,000)
1,625,000
320,000
9,915,000
-
(125,000)
9,790,000
130,000
-
7,135,000
-
7,135,000
-
335,000
-
(165,000)
170,000
170,000
38,939,000
7,765,000
(1,899,000)
44,805,000
2,110,000
1,357,891
-
(71,156)
1,286,735
-
840,769
454,889
(468,592)
827,066
124,060
$ 41,137,660
$ 8,219,889
S (2,438,748)
S 46,918,801 S
2,234,060
62
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Business -type activities:
Bonds payable:
G.O. revenue bonds
Issuance premiums
Compensated absences
Total business -type activities
longterm liabilities
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
$ 2,345,000
27,742
$ (735,000) $ 1,610,000 $ 755,000
(13,316) 14,426 -
235,202 67,862 (62,302) 240,762 36,114
$ 2,607,944 $ 67,862 $ (810,618) $ 1,865,188 $ 791,114
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 improvenient 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 street reconstruction bonds are used to finance the reconstruction of roadways in the City. The bonds are general obligations
of the City for which it pledges its fall 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 20 t 2. 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 $12,108,315, payable through February 2031. For the current
year, principal and interest paid and total property tax revenues were $1,212,631 and $973,566, 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 $21,012,000, payable through February
2040. For the current year, principal and interest paid and total property tax revenues were $819,275 and $976,729, 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 $1,055,700, payable
through February 2024. For the current year, principal and interest paid and total property tax revenues were $361,100 and $406,125,
respectively.
63
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
2021A G.O. Equipment Certificates. The City has pledged future property tax revenue to repay the $630,000 bonds issued in December
2021. 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 $663,155, payable
through February 2026. For the current year, total property tax revenues were $169,420.
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 $14,148,946, payable through February 2044. For the current year,
principal and interest paid and total property tax revenues were $475,881 and $456,233, respectively.
2021A G.O. Street Reconstruction Bonds. The City has pledged future property tax revenue to repay the $7,135,000 bonds issued in
December 2021. Proceeds from the bonds were used to finance the reconstruction of roadways in 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
$7,627,326, payable through February 2030.
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 $172,656, payable through February 2022. For the current year, principal and interest paid and total property
tax revenues were $172,870 and $151,439 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 $260,551. The principal and interest paid for the current year and total customer net revenues were $86,592 and $1,836,029,
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 $1,392,450. The
principal and interest paid for the current year and total customer net revenues were $693,900 and $1,836,029, 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 2021 and 2020 is computed as follows:
December 31,
2021 2020
Estimated taxable market value $ 3,543,956,781
Debt limit (3% of market value) 106,318,703
Amount of debt applicable to debt limit
Total bonded debt
$ 46,415,000
Less: Nonapplicable debt
G.O. water revenue bonds
(1,610,000)
Less: Cash and investments in related
debt service funds
(2,516,818)
Total debt applicable to debt limit
42,288,182
Legal debt margin
$ 64,030,521
$ 3,422,826,162
102,684,785
$ 41,284,000
(2,345,000)
(2,021,047)
36,917,953
$ 65,766,832
64
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 8 DEFINED BENEFIT PENSION PLANS - PERA
A. PLAN DESCRIPTION
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.
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. 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. 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. 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. 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.
65
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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 2021 and the City
was required to contribute 7.5%. The City's contributions to the GERF for the year ended December 31, 2021 were $335,268.
The City's contributions were equal to the required contributions as set by state statute.
2. PEPFF Contributions
Police and Fire members were required to contribute 11.8% of their annual covered salary in fiscal year 2021 and the City
was required to contribute 17.70%. The City's contributions to the PEPFF for the year ended December 31, 2021 were
$35,706. 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, 2021, the City reported a liability of $2,566,539 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 $78,332. The net pension liability was measured as of June 30, 2021 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, 2020 through June 30, 2021, relative to the total employer contributions received from all of PERA's
participating employers. The City's proportionate share was 0.0601% at the end of the measurement period and 0.0583% for
the beginning of the period.
City's proportionate share of the net pension liability $ 2,566,539
State of Minnesota's proportionate share of the net pension
liability associated with the City 78,332
Total $ 2,644,871
For the year ended December 31, 2021 the City recognized pension expense of $20,539 for its proportionate share of the
GERF's pension expense. In addition, the City recognized an additional $6,320 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, 2021, 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:
Differences between expected and actual economic experience
Changes in actuarial assumptions
Difference between projected and actual investment earnings
Changes in proportion
Contributions paid to PERA subsequent to the measurement date
Total
Deferred Deferred
Outflows Inflows
of R e-oure.es of Resource. -
$ 16,004 $ 78,543
1,567,076 57,044
- 2,224,979
93,703 9,649
169,998 -
$ 1,846,781 $ 2,370,215
66
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
The $169,998 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, 2022.
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
2022
$ (88,003)
2023
(4,091)
2024
4,917
2025
(606,255)
2026
-
Thereafter
-
2. PEPFF Pension Costs
At December 31, 2021, the City reported a liability of $125,047 for its proportionate share of the PEPFF's net pension liability.
The net pension liability was measured as of June 30, 2021 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, 2020 through June 30, 2021 relative to the total employer contributions received from all of PERA's participating
employers. The City's proportionate share was 0.0162% at the end of the measurement period and 0.0205% for the beginning
of the period.
The State of Minnesota also contributed $18 million to PEPFF during the plan fiscal year ended June 30, 2021. The
contribution consisted of $9 million in direct state aid that does meet the definition of a special funding situation and $9 million
in supplemental state aid that does not meet the definition of a special funding situation. The direct state aid was paid on
October 1, 2020. Thereafter, by October 1 of each year, the state will pay $9 million to the PEPFF until full funding is reached
or July 1, 2048, whichever is earlier. The $9 million in supplemental 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.
Strong asset returns for the fiscal year ended 2021 will accelerate the phasing out of these state contributions, although we do
not anticipate them to be phased out during the fiscal year ending 2022.
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 $9
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, 2021, the City recognized pension expense of ($45,139) for its proportionate share of the Police
and Fire Plan's pension expense. The City recognized an additional $1,022 as pension expense (and grant revenue) for its
proportionate share of the State of Minnesota's contribution of $9 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 supplemental state aid. The City also recognized $1,458 for the year ended December
31, 2021 as revenue and an 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, 2021, the City reported its proportionate share of the PEPFF's deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
67
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Differences between expected and actual economic experience
Changes in actuarial assumptions
Difference between projected and actual investment earnings
Changes in prop ortion
Contributions paid to PERA subsequent to the measurement date
Total
Deferred Deferred
Outflows Inflows
of Resources of R e no roes
$ 22,939 $ -
183,786 26,579
- 236,038
96,640 252,191
18,069 -
$ 321,434 $ 514,808
$18,069 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, 2022. Other
amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as
follows:
Year Ended
December 31,
2022
2023
2024
2025
2026
Thereafter
Pension Expense
Amount
E. ACTUARIAL ASSUMPTIONS
(44,514)
(116,324)
(38,875)
(44,187)
32,457
The total pension liability in the June 30, 2021 actuarial valuation was determined using an individual entry -age normal actuarial
cost method and the following actuarial assumptions:
The long-term investment rate of return is based on a review of inflation and investment return assumptions from a number of
national investment consulting firms. The review provided a range of investment return rates deemed to be reasonable by the
actuary. An investment return of 6.50% was deemed to be within that range of reasonableness for financial reporting purposes.
Salary growth assumptions in the GERF range in annual increments from 10.25% after one year of service to 3.0% after 29 years
of service and 6.0% per year thereafter. In the PEPFF, salary growth assumptions range from 11.75% after one year of service to
3.0% after 24 years of sen-ice.
Mortality rates for GERF were based on the Pub-2010 General Employee Mortality Table. Mortality rates for PEPFF were based
on the Pub-2010 Public Safety Employee Mortality tables. The tables are adjusted slightly to fit PERA's experience. Cost of living
benefit increases after retirement are assumed to be 1.25% per year for GERF and 1.0% per year for PEPFF.
Actuarial assumptions for GERF are reviewed every four years. The most recent four-year experience study for 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 and adopted by the Board and became
effective with the July 1, 2021 actuarial valuation.
The following changes in actuarial assumptions and plan provisions occurred in 2021:
General Employees Fund
Changes in Actuarial Assumptions:
• The investment return and single discount rates were changed from 7.50% to 6.50% for financial reporting purposes.
• The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020.
68
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Police and Fire Fund
Changes in Actuarial Assumptions:
• The investment return and single discount rates were changed from 7.50% to 6.50% for financial reporting purposes.
• The inflation assumption was changed from 2.50% to 2.25%.
• The payroll growth assumption was changed from 3.25% to 3.00%.
• The base mortality tables for healthy annuitants, disabled annuitants and employees were changed from RP-2014 tables
to Pub-2010 Public Safety Mortality tables. The mortality improvement scale was changed from MP-2019 to MN-2020.
• Assumed salary increase and retirement rates were modified as recommended in the July 14, 2020 experience study. The
changes result in a decrease in gross salary increase rates, slightly more unreduced retirements and fewer assumed early
retirements.
• Assumed rates of withdrawal were changed from select and ultimate rates to service -based rates. The changes result in
more assumed terminations.
• Assumed rates of disability were increased for ages 25-44 and decreased for ages over 49. Overall, proposed rates result
in more projected disabilities.
• Assumed percent married for active female members was changed from 60% to 70%.
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-T erm Expected
Asset Class Allocation Real Rate of Return
Domestic equity
International equity
Fixed income
Private markets
Total
F. DISCOUNT RATE
33.5% 5.10%
16.5% 5.30%
25.0% 0.75%
25.0% 5.90%
100%
The discount rate used to measure the total pension liability in 2021 was 6.5%. 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 these assumptions, 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 determine the total pension liability.
G. PENSION LIABILITY SENSITIVITY
The following presents the City's proportionate share of the net pension liability, 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:
Proportionate share of the
GERF net pension liability
Proportionate share of the
PEPFF net pension liability
1% Decrease in 1% Increase in
Discount Rate Discount Rate Discount Rate
(5.5%) (6.5%) (7.5%)
S 5,234,430 $ 2,566,539 S 377,372
397,003 125,047 (97,889)
69
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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.
I. PENSION EXPENSE
Pension expense recognized by the City for the fiscal year ended December 31, 2021 is as follows:
GERF $ 26,859
PEPFF (44,1 17)
Total $ (17,258)
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.
l . 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 perfonnance 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:
70
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Year
Ending City State Total
12/31/2019 $ - $ 181,102 $ 181,102
12/31/2020 55,000 194,699 249,699
12/31/2021 - 202,747 202,747
Note 10 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 2020, participants consisted of:
Retirees and beneficiaries currently
purchasing health insurance through the City 0
Active employees 49
Total 49
Participating employers 1
D. TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY
The City's total OPEB liability of $455,036 was measured as of December 31, 2020 and was determined by an actuarial valuation
using the alternative measurement method as of December 31, 2020. Changes in the total OPEB liability during 2021 were:
71
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Balance - beginning of year
$ 380,848
Changes for the year:
Service Cost
21,330
Interest
11,060
Changes of benefit terms
-
Differences between expected and actual experience
62,605
Changes in assumptions
(20,807)
Benefit payments
-
Net Changes
74,188
Balance - end of year $ 455,036
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, 2020 actuarial valuation was detennined using the following actuarial assumptions
and other inputs, applied to all periods included in the measurement, unless otherwise specified:
Inflation 2.25 %
Salary increases 3.00%
Discount rate 2.00%
Investment rate of return 2.00%
Healthcare cost trend rates 6.30% for FY2021, gradually decreasing over several decades to an ultimate rate
of 3.80% 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-2019, 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 (1.00%) or 1 % higher (3.00%) than the current rate:
Total OPEB liability
1 % Decrease in 1 % Increase in
Discount Rate Discount Rate Discount Rate
(1.00%) (2.00%) (3.00%)
486,521 $ 455,036 $ 424,779
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 l % lower or 1 % higher than the current rate:
72
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
l % Decrease in
1 % Increase in
Healthcare Cost
Healthcare Cost Healthcare Cost
Trend Rate
Trend Rate Trend Rate
Total OPEB liability $ 411,673
$ 455,036 $ 505,105
H. OPEB EXPENSE AND DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES RELATED TO OPEB
For the year ended December 31, 2021, the City recognized $81,077 of OPEB expense. At December 31, 2021, 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 $ 10,892 S -
$10,892 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, 2022.
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
$
115,213
Admin allocation
General Fund
Sewer Fund
76,828
Admin allocation
General Fund
Storm Sewer Fund
19,990
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
750,000
Road improvements
Road & Bridge CPF
Nonmajor Fund
5,000
Roadway degredation
Water Fund
Water Trunk Fund CPF
148,705
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
202,604
Debt service allocation
Nonmajor Fund
Nonmajor Fund
40,687
Close Fund
Nonmajor Fund
Nonmajor Fund
300,000
Debt service allocation
$
2,427,827
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
73
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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
93,960
Captured net tax capacity -
retained by the City
$ 87,821
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:
73,544
Captured net tax capacity -
retained by the City
$ 51,546
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
74
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
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,
2021.
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 $67,706. At December 31, 2021, the principal amount outstanding on the note was $255,717.
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, 2021. Future scheduled
tax levies for all bonds outstanding at December 31, 2021 totaled $56,984,888.
75
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 15 FUND BALANCE
A. CLASSIFICATIONS
At December 31, 2021, a summary of the governmental fund balance classifications are as follows:
2021A G.O.
Tax
Strut
CARES Grant/
Water
Sewer
Road &
Increment
Reconstruction
Other
ARPA Funding
Trunk
Trunk
Bridge
Projects
Bonds
Governmental
General
SRF
CPF
CPF
OF
CPF
CPF
Funds
Total
Nonspendable:
Prepaid items
$ 33,800
$
S
$
$
$
S
$ 16,000
$ 49,800
Inventory
120,936
-
-
-
-
-
-
1,920
122,856
Total nonspendable
154,736
17,920
172,656
Restricted for:
Debt service
-
-
-
-
-
-
-
2,556,381
2,556,381
Street rehabilitation
7,196,503
-
7,196,503
Tax inercmcnt
-
-
-
-
-
1,406,384
-
-
1,406,384
Capital improvements
-
-
-
-
-
-
-
672,729
672,729
Public services
201,037
201,037
Total restricted
1,406,384
7.196,503
3,430,147
12,033,034
Committed to:
Economic development
-
-
-
-
-
-
-
143,524
143,524
City's mapping system
-
-
-
-
-
-
-
178,852
178,852
Surface water mgmt
-
-
-
-
-
-
-
85,784
85,784
Public right of ways mgmt
-
-
-
-
-
-
-
85,967
85,967
Seal coating new dev.
-
-
-
-
-
-
-
5,157
5,157
Total committed
499,284
499,284
Assigned to:
Water system
-
13,844
6,63L886
-
-
-
-
-
6,645,730
Sanitary sewer system
-
-
-
7,889,281
-
-
-
-
7,889,281
Street rehabilitation
-
-
-
-
9,624,363
-
-
-
9,624,363
Development purposes
-
-
-
-
-
-
-
1,204,389
1,204,389
Community center
-
-
-
-
-
-
-
760,960
760,960
Forest resources programs
-
-
-
-
-
-
-
5,390
5,390
Public services
-
-
-
-
-
-
-
12,030
12,030
Park improvements
-
-
-
-
-
-
-
1,018,691
1,018,691
Facilities management
-
-
-
-
-
-
-
751,054
751,054
Pedestrian trails
-
-
-
-
-
-
-
249.245
249,245
Capital improvements
-
-
-
-
-
-
-
1,928,097
1,928,097
Total assigned
-
13.844
6,631,896
7,899,281
9,624,363
-
-
5,929,856
30,089,230
Unassigned
9,471,730
9,471,730
Total
$ 9,626,466
S 13,844
$ 6,631,886
$ 7,889,281
$ 9,624,363
$ L406,384
$ 7.196,503
$ 9,877,207
$ 52,265,934
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, 2021, the unassigned fund balance of the General Fund targeted
for cash -flow needs was 71 % of the subsequent year's budgeted expenditures.
76
CITY OF ANDOVER, MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31, 2021
Note 16 CONDUIT DEBT OBLIGATION
Conduit debt obligations are certain limited -obligation revenue bonds or similar debt instruments issued for the express purpose of providing
capital financing for a specific third party. The City has issued various revenue bonds to provide funding to private -sector entities for projects
deemed to be in the public interest. Although these bonds bear the name of the City, the City has no obligation for such debt beyond the
resources provided by related leases or loans and has not made any commitments to pay the debt. Accordingly, the bonds are not reported
as liabilities in the financial statements of the City.
As of December 31, 2021, the following revenue bonds were outstanding:
Presbyterian Homes of Andover, Inc.
YMCA of the Greater Twin Cities
Note 17 OPERATING LEASES
Date of Original
Issue Issue
ll/l/2003 $ 13,145,000
12/1/2019 6,650,000
Outstanding
Retired 12/31/2021
$ (5,471,293) $ 7,673,707
(1,205,000) 5,445,000
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 for building space at the Andover YMCA Community Center and various tenants
in five residential 4-plexes and twin homes. Terms of each lease are as follows:
2021 Lease
Annual Lease
Expiration
Renewal
Location
Lessee
Amount
Adjustment Factor
Date
Options
City Hall water tower
T-Mobile USA, Inc
$ 47,486
3% annually
12/31/2026
3 - 5 year terms
City Hall water tower
Verizon
30,617
3% annually
5/31/2024
3 - 5 year terms
Emergency Siren Pole
T-Mobile USA, Inc
15,000
$1,000 annual increase
9/22/2023
1 - 5 year term
Andover YMCA Comm Ctr
Greater Minneapolis YMCA
633,808
None
8/l/2035
N/A
Rose Park water tower
Verizon
26,243
3% annually
5/31/2024
2 - 5 year terms
16 Rental Housing Units
Various Tenants
203,071
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. 92 Omnibus 2020. The provisions of this Statement are effective for reporting periods beginning after June 15, 2021.
Statement No. 93 Replacement of77iterbank 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.
Statement No. 99 Omnibus 2022. 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.
77
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78
REQUIRED SUPPLEMENTARY INFORMATION
"7
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
Statement 9
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Variance with
Final Budget -
Budgeted Amounts
2021
Positive
2020
Original
Final
Actual
(Negative)
Actual
Revenues:
General property taxes
$ 9,594,493 $
9,594,493
$ 9,527,670
$ (66,823)
$ 9,303,234
Licenses and permits
436,450
436,450
891,762
455,312
892,279
Intergovernmental
813,298
938,041
939,174
1,133
861,179
Charges for services
752,360
752,360
1,036,929
284,569
1,070,899
Fines
50,250
50,250
53,747
3,497
47,630
Investment income
75,000
75,000
(15,183)
(90,183)
148,974
Miscellaneous
138,850
138,850
167,318
28,468
172,062
Total revenues
11,860,701
11,985,444
12,601,417
615,973
12,496,257
Expenditures:
Current:
General government:
Mayor and City council
108,015
108,015
95,659
12,356
95,519
Administration
236,244
236,244
229,314
6,930
187,757
Newsletter
25,000
25,000
22,945
2,055
22,156
Human resources
35,202
35,202
20,836
14,366
16,180
Legal
206,941
206,941
199,809
7,132
195,721
City clerk
176,206
176,206
175,177
1,029
166,221
Elections
74,212
74,212
20,260
53,952
91,643
Financial administration
320,768
320,768
307,009
13,759
294,502
Assessing
161,000
161,000
128,829
32,171
154,483
Information systems
213,738
213,738
185,642
28,096
187,703
Planning and zoning
504,204
504,204
491,395
12,809
453,133
Engineering
631,401
631,401
594,717
36,684
566,224
Facility management
683,197
713,197
548,747
164,450
475,086
Total general government
3,376,128
3,406,128
3,020,339
385,789
2,906,328
Public safety
Police
3,287,046
3,287,046
3,287,046
-
3,114,623
Fire protection
1,562,026
1,701,652
1,698,558
3,094
1,508,852
Protective inspection
533,561
533,561
519,787
13,774
519,183
Civil defense
26,844
26,844
15,202
11,642
17,227
Animal control
5,950
5,950
3,517
2,433
2,347
Total public safety
5,415,427
5,555,053
5,524,110
30,943
5,162,232
Public works:
Streets and highways
773,241
787,241
803,391
(16,150)
686,979
Snow and ice removal
675,888
675,888
540,226
135,662
496,668
Sheet signs
240,842
239,842
195,783
44,059
257,280
Traffic signals
40,000
40,000
33,362
6,638
23,044
Street lighting
220,900
220,900
193,374
27,526
186,392
Total public works
$ 1,950,871
$ 1,963,871
$ 1,766,136
$ 197,735
$ 1,650,363
(Continued)
80
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Expenditures:
Current: (continued)
Parks and recreation
Recycling
Unallocated
Total current
Capital outlay:
Public safety
Public works
Parks and recreation
Total capital outlay
Total expenditures
Revenues over (under) expenditures
Other financing sources (uses):
Transfers in
Transfers out
Total other financing sources (uses)
Net increase (decrease) in fund balance
Fund balance - January 1
Fund balance - December 31
Statement 9
(Continued)
Variance with
Final Budget -
Budgeted
Amounts
2021
Positive
2020
Original
Final
Actual
(Negative)
Actual
$ 1,395,023
$ 1,388,023
$ 1,337,582
$ 50,441
$ 1,369,954
233,759
233,759
239,606
(5,847)
228,124
95,928
95,928
16,109
79,819
12,778
12,467,136
12,642,762
11,903,882
738,880
11,329,779
-
10,117
8,317
1,800
-
-
2,000
2,000
-
-
135,000
186,000
177,301
8,699
66,099
135,000
198,117
187,618
10,499
66,099
12,602,136
12,840,879
12,091,500
749,379
11,395,878
(741,435)
(855,435)
509,917
1,365,352
1,100,379
212,031 212,031 212,031
- (750,000) (750,000)
212,031 (537,969) (537,969)
$ (529,404) $ (1,393,404) (28,052)
See accompanying notes to the required supplementary information.
9,654,518
$ 9,626,466
$ 1,365,352
190,688
(1,000,000)
(809,312)
291,067
9,363,451
$ 9,654,518
81
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE - CARES GRANT / ARPA FUNDING SPECIAL REVENUE FUND
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Variance with
Final Budget -
Budgeted Amounts
2021
Positive
2020
Original Final
Actual
(Negative)
Actual
Revenues:
Intergovernmental
$ - $ 3,200
S 3,166
S (34)
$ 2,465,736
Investment income
- 11,689
13,844
2,155
262
Total revenues
- 14,889
17,010
2,121
2,465,998
Expenditures:
Current:
Public safety
- 3,200
3,166
34
501,520
Economic development
- -
-
-
1,802,484
Capital outlay:
Public safety
- -
-
-
161,994
Total expenditures
- 3,200
3,166
34
2,465,998
Net increase (decrease) in fund balance
$ - $ 11,689
13,844
$ 2,155
-
Fund balance (deficit) - January 1
-
-
Fund balance (deficit) - December 31
$ 13,844
$ -
82
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 11
2018
2019
2020
2021
$ 14,090
$ 16,135
$ 17,068
$ 21,330
10,482
10,008
12,944
11,060
-
28,866
-
62,605
11,969
3,219
25,462
(20,807)
(5,813)
(12,311)
(12,922)
-
30,728
45,917
42,552
74,188
261,651
292,379
338,296
380,848
$ 292,379
$ 338,296
$ 380,848
$ 455,036
$ 4,469,146
$ 4,620,961
$ 4,562,782
$ 4,848,511
6.5%
7.3%
8.3%
9.4%
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.
83
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
2021
2015
2016
2017
2018
2019
2020
2021
Statement 12
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
80.5°+0
80.2%
0.0583%
3,495,351
107,788
3,603,139
4,156,037
86.7°/,,
79.1%
0.0601%
2,566,539
78,332
2,644,871
4,324,969
61.2°/,,
87.0%
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.
84
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
December 31, 2021
335,268
335,268
-
4,470,240
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 13
Contributions as a
Percentage of
Covered
Payroll (b/c)
7.5%
7.5%
7.5%
7.5%
7.5%
7.5%
7.5%
85
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 14
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
June 30
December 31
Liability
Liability (a)
Payroll (b)
Covered Payroll (a/b)
Pension Liability
2015
2015
0.0210%
$ 238,609
$ 194,274
122.8%
86.6%
2016
2016
0.0280%
1,123,689
283,389
396.5%
63.9%
2017
2017
0.0280%
378,033
287,895
131.3%
85.4%
2018
2018
0.0267%
284,595
281,901
101.0%
88.8%
2019
2019
0.0272%
289,571
287,498
100.7%
89.3%
2020
2020
0.0205%
270,212
232,475
116.2%
87.2%
2021
2021
0.0162%
125,047
190,876
65.5%
93.7%
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.
86
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
December 31, 2021
35,706
35,706
-
201,729
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 15
Contributions as a
Percentage of
Covered
Payroll (b/c)
16.2%
16.2%
16.2%
16.2%
16.9%
17.7%
17.7%
87
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2021
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 Works:
Street and highways S 787,241 $ 803,391 $ 16,150
Recycling 233,759 239,606 5,847
Note B MODIFIED APPROACH FOR CITY STREETS AND TRAILS INFRASTRUCTURE CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City is required to account for and report infrastructure capital assets. The City defines
infrastructure as the basic physical assets including the street and trail system; water treatment and distribution system; wastewater
collection system; park and recreation lands and improvement system; storm water conveyance system; and building combined with site
amenities such as parking and landscape areas used by the City in the conduct of its business. Each major infrastructure can be divided
into subsystems. For example, the street and trail system can be divided into pavement widths, curb type and sidewalk. City owned streets
could further be classified as collector or local. Subsystem detail is not presented in these basic financial statements; however, the City
maintains detailed information on these subsystems.
The City has elected to use the modified approach as defined in GASB Statement No. 34 for infrastructure reporting for its Pavement
Management Program. Under GASB Statement No. 34, eligible infrastructure capital assets are not required to be depreciated under the
following requirements:
1) The City manages the eligible infrastructure capital assets using an asset management system with characteristics of (1) an up to -
date inventory; (2) perform condition assessments and summarize the results using a measurement scale; and (3) estimate annual
amount to maintain and preserve at the established condition assessment level.
2) The City documents that the eligible infrastructure capital assets are being preserved approximately at or above the established
and disclosed condition assessment level.
The City's policy relative to maintaining the street and trail assets is to achieve an average rating of "Good" for all segments. This
acceptable rating allows minor cracking and patching of the pavement along with minor roughness that could be noticeable to the users of
the system.
In the fall of 2021, the City conducted a physical condition assessment of the streets and trails constructed since 1974. This assessment
will be performed every three years. Each street and trail segment was assigned a physical condition based on potential defects. An Overall
Condition Index (OCI) was assigned to each street and trail and expressed in a continuous scale. Prior to 2013, the continuous scale was
from 0 to 100 where 0 is assigned to the least acceptable physical condition and 100 is assigned to a new street or trail. Starting in 2013,
the continuous scale was from 0 to 10, where 0 is assigned to the least acceptable physical condition and 10 is assigned the physical
characteristics of a new street or trail. The following conditions were defined:
Prior to 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
88
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2021
As of December 31, 2021, the City's street and trail system was rated at an OCI index of 5.9 on the average with detail condition as follows:
% of Street
Condition and Trails
Excellent to Good 68.6%
Fair 22.7%
Poor to Substandard 8.7%
The City's streets and trails are constantly deteriorating resulting from the following factors: (1) traffic using the system; (2) the sun's ultra-
violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development trenching operations; (4)
water damage from natural precipitation; and (5) frost heave. The City is continuously taking actions to prolong the life of the system
through short-term maintenance activities such as pothole patching, crack sealing, seal coating and overlaying. The City expended
$2,160,714 on street and trail maintenance for the year ending December 31, 2021. 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 $2,500,000.
Maintenance
Actual
OCI
Year
Estimate
Expenditures
Rating
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
2021
2,500,000
2,160,714
5.9
The City has an on -going street and trail rehabilitation program funded in the Capital Improvement Program that is intended to improve
the condition rating of the City streets and trails. The rehabilitation program is formulated based on the deficiencies identified as a part of
its Pavement Management Program.
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
2021 Changes in Actuarial Assumptions:
• The investment return and single discount rates were changed from 7.50% to 6.50% for financial reporting purposes.
• The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020.
2020 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 assruned
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.
89
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2021
• 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
2021 Changes in Actuarial Assumptions:
• The investment return and single discount rates were changed from 7.50% to 6.50% for financial reporting purposes.
• The inflation assumption was changed from 2.50% to 2.25%.
• The payroll growth assumption was changed from 3.25% to 3.00%.
• The base mortality tables for healthy annuitants, disabled annuitants and employees were changed from RP-2014 tables to
Pub-2010 Public Safety Mortality tables. The mortality improvement scale was changed from MP-2019 to MN-2020.
• Assumed salary increase and retirement rates were modified as recommended in the July 14, 2020 experience study. The
changes result in a decrease in gross salary increase rates, slightly more unreduced retirements and fewer assumed early
retirements.
• Assumed rates of withdrawal were changed from select and ultimate rates to service -based rates. The changes result in more
assumed terminations.
• Assumed rates of disability were increased for ages 25-44 and decreased for ages over 49. Overall, proposed rates result in
more projected disabilities.
• Assumed percent married for active female members was changed from 60% to 70%.
2020 Changes in Actuarial Assumptions:
• The mortality projection scale was changed from MP-2018 to MP-2019.
M
CITY OF ANDOVER, MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2021
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:
• 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.
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61A
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
93
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.
94
CITY OF ANDOVER, MINNESOTA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
December 31, 2021
With Comparative Totals For December 31, 2020
Statement 16
Totals
Special
Debt
Capital
Nonmajor Governmental Funds
Revenue
Service
Projects
2021
2020
Assets:
Cash and investments
$ 1,635,269
$ 2,516,818
$ 5,853,041
$ 10,005,128 $
8,139,874
Cash and investments with escrow agent
-
-
-
-
126,682
Accrued interest
3,179
2,601
12,449
18,229
29,833
Due from other governmental units
-
-
-
-
73,024
Accounts receivable - net
106,951
-
-
106,951
204,184
Prepaid items
16,000
-
-
16,000
-
Property taxes receivable:
Unremitted
2,444
36,962
7,404
46,810
92,798
Delinquent
2,028
29,670
6,612
38,310
33,879
Special assessments receivable:
Deterred
-
-
93,415
93,415
95,792
Inventories - at cost
1,920
-
-
1,920
2,123
Total assets
$ 1,767,791
$ 2,586,051
$ 5,972,921
$ 10,326,763 $
8,798,189
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable
$ 70,051
$ -
$ 4,205
$ 74,256 $
114,165
Contracts payable
-
-
20,882
20,882
-
Deposits payable
63,675
-
16,112
79,787
13,642
Due to other governmental units
4,084
-
7,490
11,574
35,693
Salaries payable
29,268
-
-
29,268
14,176
Unearned revenue
102,064
-
-
102,064
100,857
Total liabilities
269,142
-
48,689
317,831
278,533
Deferred inflows of resources:
Unavailable revenues
2,028
29,670
100,027
131,725
129,671
Fund balance (deficit)
Nonspendable
17,920 -
-
17,920
2,123
Restricted
201,037 2,556,391
672,729
3,430,147
3,053,794
Committed
499,284 -
-
499,284
508,062
Assigned
778,380 -
5,151,476
5,929,856
4,826,006
Total fund balance (deficit)
1,496,621 2,556,381
5,824,205
9,877,207
8,389,985
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
$ 1,767,791 $ 2,586,051
$ 5,972,921
$ 10,326,763
$ 8,798,189
95
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
Statement 17
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
Totals
Special
Debt
Capital
Nonmajor Governmental Funds
Revenue
Service
Projects
2021
2020
Revenues:
General property taxes
$ 194,718 $
3,133,512
$ 620,180
$ 3,948,410
$ 3,760,148
Intergovernmental
-
-
11,224
11,224
2,538,760
Special assessments
-
3,569
3,569
4,215
Charges for services
1,231,399
-
1,231,389
601,124
Investment income
1,603
(1,694)
(7,982)
(8,073)
153,847
Miscellaneous:
Park dedication fees
-
622,680
622,680
389,033
Rent
635,026
-
635,026
635,629
Other
275,896
-
200,533
476,429
360,314
Total revenues
2,338,632
3,131,818
1,450,204
6,920,654
8,443,070
Expenditures:
Current:
General government
47,860
-
134,855
182,715
173,016
Public safety
-
5,728
5,728
592,011
Public works
82,382
19,915
102,297
70,311
Parks and recreation
1,375,835
86,415
1,462,250
1,125,640
Economic development
38,851
-
38,851
1,846,024
Capital outlay:
General government
-
197,071
197,071
21,759
Public safety
743,724
743,724
318,484
Public works
79,261
79,261
283,483
Parks and recreation
389,243
389,243
1,119,923
Economic development
-
-
-
30,151
Debt service:
Principal retirement
1,899,000
1,899,000
1,561,000
Interest
1,278,030
1,278,030
1,290,844
Paying agent fees
-
5,500
-
5,500
5,000
Total expenditures
1,544,928
3,182,530
1,656,212
6,383,670
8,437,646
Revenues over (under) expenditures
793,704
(50,712)
(206,008)
536,984
5,424
Other financing sources (uses)
Transfers in
547,904
64,187
612,091
632,422
Transfers out
(305,000)
(40,687)
(202,604)
(548,291)
(569,322)
Bonds issued
630,000
630,000
1,310,000
Bond premium
21,663
21,663
95,481
Proceeds from sale of capital assets
-
18,800
18,800
3,000
Total other financing sources (uses)
(305,000)
507,217
532,046
734,263
1,471,581
Net increase (decrease) in fund balance
488,704
456,505
326,038
1,271,247
1,477,005
Fund balance - January 1
1,007,917
2,099,876
5,498,167
8,605,960
6,912,980
Fund balance - December 31
$ 1,496,621
$ 2,556,381
$ 5,824,205
$ 9,877,207
$ 8,389,985
Reconciliation of beginning fund balance to prior year ending funding balance:
Prior year ending fund balance reported above $ 8,389,985
Plus prior year ending fund balance for:
2018A G.O. Capital Improvement Plan Bonds CPF 39,943
2019A G.O. Abatement Bonds CPF 176,032
Current year beginning fund balance $ 8,605,960
96
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.
drA
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31, 2021
With Comparative Totals For December 31, 2020
Drainage
EDA
Community
and
General
Center
Mapping
LRRWMO
Assets:
Cash and investments
$
126,815
$ 832,321
$
179,071
$
85,328
Cash and investments with escrow agent
-
-
-
-
Accrued interest
285
1,241
460
198
Accounts receivable - net
20,346
86,605
-
-
Prepaid items
-
-
-
-
Property taxes receivable:
Unremitted
-
1,851
-
593
Delinquent
-
1,653
-
375
Inventories - at cost
-
1,920
-
-
Total assets
$
147,446
$ 925,591
$
179,531
$
96,494
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable
$
3,922
$ 65,099
$
414
$
49
Deposits payable
-
63,675
-
-
Due to other governmental units
-
4,084
-
-
Salaries payable
-
28,200
265
286
Unearned revenue
-
-
-
-
Total liabilities
3,922
161,058
679
335
Deferred inflows of resources:
Unavailable revenues
-
1,653
-
375
Fund balance (deficit):
Nonspendable
-
1,920
-
-
Restricted
-
-
-
-
Committed
143,524
-
178,852
85,784
Assigned
-
760,960
-
-
Total fund balance (deficit)
143,524
762,880
178,852
95,784
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
$
147,446
$ 925,591
$
179,531
$
86,494
98
Statement 18
Right -of -Way
Totals
Management/
Charitable
Construction
Nonmajor Special Revenue Funds
Forestry Utility
Gambling
Seal Coating
2021
2020
$ 5,390 $ 86,833
$ 212,560
$ 106,951
$ 1,635,269 $
868,733
- -
-
-
-
126,682
- 218
507
270
3,179
4,274
- -
-
-
106,951
204,184
- -
16,000
-
16,000
-
- -
-
-
2,444
1,153
- -
-
-
2,028
466
- -
-
-
1,920
2,123
$ 5,390 $ 87,051
$ 229,067
$ 107,221
$ 1,767,791 $
1,207,615
$ - $ 567 $ - $ - $ 70,051 $ 81,806
- - - - 63,675 1,865
- - - - 4,084 528
- 517 - - 29,268 14,176
- - - 102,064 102,064 100,857
- 1,084 - 102,064 269,142 199,232
- - - - 2,028 466
- - 16,000 - 17,920 2,123
- - 201,037 - 201,037 124,381
- 85,967 - 5,157 499,284 508,062
5,390 - 12,030 - 778,380 373,351
5,390 85,967 229,067 5,157 1,496,621 1,007,917
$ 5,390 $ 87,051 $ 229,067 $ 107,221 $ 1,767,791 $ 1,207,615
01*1
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
Drainage
EDA
Community
and
General
Center
Mapping
LRRWMO
Revenues:
General property taxes
S -
$ 154,534
S - $
40,184
Intergovernmental
-
-
-
-
Charges for services
27,527
1,154,184
4,137
-
Investment income
(440)
2,817
(648)
10
Miscellaneous:
Rent
-
635,026
-
-
Other
1,308
134,072
-
-
Total revenues
28,395
2,080,633
3,489
40,194
Expenditures:
Current:
General government
-
-
-
-
Public safety
-
-
-
-
Public works
-
-
16,920
29,311
Parks and recreation
-
1,375,835
-
-
Economic development
38,851
-
-
-
Capital outlay:
Public safety
-
-
-
-
Parks and recreation
-
-
-
-
Economic development
-
-
-
-
Total expenditures
38,851
1,375,835
16,920
29,311
Revenues over (under) expenditures
(10,456)
704,798
(13,431)
10,883
Other financing sources (uses):
Transfers out
-
(300,000)
-
-
Net increase (decrease) in fund balance
(10,456)
404,798
(13,431)
10,883
Fund balance (deficit) - January 1
153,980
358,082
192,283
74,901
Fund balance (deficit) - December 31
S 143,524
$ 762,880
$ 178,852 $
95,784
100
Statement 19
Right -of -Way
Management/ Charitable Construction
Forestry Utility Gambling Seal Coating
Totals
Nonmajor Special Revenue Funds
2021 2020
194,718 $ 39,963
- - - - - 2,465,736
- 36,164 - 9,377 1,231,389 601,124
55 (166) (27) 2 1,603 22,350
- - - - 635,026 635,629
- - 140,516 - 275,896 186,809
55 35,998 140,489 9,379 2,338,632 3,951,611
- 47,860 - 47,860 57,368
- - - - 501,520
26,774 - 9,377 82,382 70,311
- - - 1,375,835 1,053,500
- - - 38,851 1,846,024
- - - - - 161,994
- - - - - 100,000
- - - - - 30,151
- 26,774 47,860 9,377 1,544,928 3,820,868
55 9,224 92,629 2 793,704 130,743
- (5,000) - - (305,000) (305,700)
55 4,224 92,629 2 488,704 (174,957)
5,335 81,743 136,438 5,155 1,007,917 1,182,874
$ 5,390 $ 85,967 $ 229,067 $ 5,157 $ 1,496,621 $ 1,007,917
WISI
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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 - 2016A, 2020A and 2021A) 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.
ilex
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31, 2021
With Comparative Totals For December 31, 2020
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
2020A
2021A
2018A
2012C
$ 370,897
$ 167,919
$ 366,180
$ 420,871
523
251
459
-
4,799
2,009
5,391
11,498
3,893
1,629
4,373
9,326
$ 380,112
$ 171,808
$ 376,403
$ 441,695
$ 3,893 $ 1,629 4,373 $ 9,326
376,219 170,179 372,030 432,369
$ 380,112 $ 171,808 $ 376,403 $ 441,695
104
Statement 20
G.O. Open Space
Abatement Referendum Totals
Bonds Bonds Nonmajor Debt Service Funds
$ 935,690
$ 255,261
$ 2,516,818
$ 2,021,047
1,368
-
2,601
3,157
11,542
1,723
36,962
75,672
9,361
1,088
29,670
26,721
$ 957,961
$ 258,072
$ 2,586,051
$ 2,126,597
$ 9,361 $ 1,088 $ 29,670 $ 26,721
948,600 256,984 2,556,381 2,099,876
$ 957,961 $ 258,072 $ 2,586,051 $ 2,126,597
ifflo
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Elided December 31, 2020
G.O.
G.O.
G.O.
G.O.
Capital
Equipment
Equipment
Equipment
Improvement
Certificate
Certificate
Certificate
Plan Bonds
2016A
2020A
2021A
2018A
Revenues:
General property taxes
S -
S 406,125
S 169,420
S 456,233
Investment income
-
(1,321)
759
(567 )
Total revenues
-
404,804
170,179
455,666
Expenditures:
Debt service:
Principal retirement
134,000
315,000
-
125,000
Interest
1,273
46,100
-
350,881
Paying agent fees
-
1,100
-
1,100
Total expenditures
135,273
362,200
-
476,981
Revenues over (under) expenditures
(135,273)
42,604
170,179
(21,315)
Other financing sources (uses):
Transfers in - - - 45,300
Transfers out (40,687) - - -
Total other financing sources (uses) (40,687) - - 45,300
Net increase (decrease) in fund balance (175,960) 42,604 170,179 23,985
Fund balance - January 1 175,960 333,615 - 348,045
Fund balance - December 31 S - $ 376,219 S 170,179 $ 372,030
106
Statement 21
G.O. G.O. Open Space
Abatement Abatement Referendum Totals
Bonds Bonds Bonds Nonmajor Debt Service Funds
$ 973,566
$ 976,729
$ 151,439
S 3,133,512
S 3,076,966
(2,004)
3,461
(2,022)
(1,694)
11,680
971,562
980,190
149,417
3,131,819
3,088,646
925,000
235,000
165,000
1,899,000
1,561,000
287,631
584,275
7,870
1,278,030
1,290,844
1,100
1,100
1,100
5,500
5,000
1,213,731
820,375
173,970
3,182,530
2,856,844
(242,169)
159,815
(24,553)
(50,712)
231,802
300,000 202,604 - 547,904 520,446
- - - (40,687) (88,476)
300,000 202,604 - 507,217 431,970
57,831 362,419 (24,553) 456,505 663,772
374,538 586,181 281,537 2,099,976 1,436,104
$ 432,369 $ 948,600 $ 256,984 S 2,556,391 $ 2,099,876
i M M
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iDU
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.
Equipment Certificates 2021A - This fund was established to account for the purchase of capital equipment that was
financed through the issuance of capital notes.
2018A G.O. Capital Improvement Plan Bonds — This fund accounts for the construction of a new vehicle maintenance
facility with a wash bay and a cold storage building.
2019A G.O. Abatement Bonds CPF — This fund 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.
Permanent Improvement Revolving - This fund serves as a long-term funding source for large capital improvement
expenditures.
`[oil]
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31, 2021
With Comparative Totals For December 31, 2020
Capital
Park
Building
Trail &
Equipment
Dedication
Fund
Transportation
Reserve
Assets:
Cash and investments
$
1,026,465
$
745,160
$
248,645
$
1,936,723
Accrued interest
2,466
1,659
600
4,648
Due from other governmental units
-
-
-
-
Property taxes receivable:
Unremitted
182
4,235
-
2,987
Delinquent
163
3,782
-
2,667
Special assessments receivable:
Deferred
-
-
-
-
Total assets
$
1,029,276
$
754,836
$
249,245
$
1,947,025
Liabilities, Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable
$
2,932
$
-
$
-
$
149
Contracts payable
-
-
-
-
Deposits payable
-
-
-
16,112
Due to other government units
7,490
-
-
-
Total liabilities
10,422
-
-
16,261
Deferred inflows of resources:
Unavailable revenues
163
3,782
-
2,667
Fund balance (deficit):
Restricted
-
-
-
-
Assigned
1,018,691
751,054
249,245
1,928,097
Total fund balance (deficit)
1,018,691
751,054
249,245
1,928,097
Total liabilities, deferred inflows of
resources, and fund balances (deficit)
$
1,029,276
$
754,836
$
249,245
$
1,947,025
110
Statement 22
2018A
Equipment
G.O. Capital
2019A G.O.
Permanent
Totals
Certificates
Improvement
Abatement
Improvement
Nonmajor Capital Projects Funds
2021A
Plan Bonds
Bonds
Revolving
2021
2020
$ 642,333
$ 31,520
$ 20,882
$ 1,201,313
$ 5,853,041 $
5,250,094
-
-
-
3,076
12,449
22,402
-
-
-
-
-
73,024
-
-
-
-
7,404
15,973
-
-
-
-
6,612
6,692
-
-
-
93,415
93,415
95,792
$ 642,333
$ 31,520
$ 20,882
$ 1,297,804
$ 5,972,921 $
5,463,977
$ - $ 1,124 $ - $ - $ 4,205 $ 32,359
- - 20,882 - 20,882 -
- - - - 16,112 11,777
- - - - 7,490 35,165
- 1,124 20,882 - 48,689 79,301
- - - 93,415 100,027 102,484
642,333 30,396 - - 672,729 829,537
- - - 1,204,389 5,151,476 4,452,655
642,333 30,396 - 1,204,389 5,824,205 5,282,192
$ 642,333 $ 31,520 $ 20,882 $ 1,297,804 $ 5,972,921 $ 5,463,977
ism
CITY OF ANDOVER, MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
Capital
Park
Building
Trail &
Equipment
Dedication
Fund
Transportation
Reserve
Revenues:
General property taxes
S 15,270
$ 354,724
S -
$ 250,186
Intergovernmental
-
11,224
-
-
Special assessments
-
-
-
-
Investment income
546
2,463
715
(3,281)
Miscellaneous:
Park dedication fees
622,680
-
-
-
Other
26,475
-
138,510
30,118
Total revenues
664,971
368,411
139,225
277,023
Expenditures:
Current:
General government
-
118,709
-
16,146
Public safety
-
-
-
5,728
Public works
-
-
-
-
Parks and recreation
25,021
-
627
667
Capital outlay:
General government
-
183,187
-
13,884
Public safety
-
-
-
59,764
Public works
-
-
-
63,043
Parks and recreation
139,955
-
-
4,524
Total expenditures
164,976
301,896
627
163,756
Revenues over (under) expenditures
499,995
66,515
138,598
113,267
Other financing sources (uses):
Transfers in
-
40,687
-
23,500
Transfers out
(202,604)
-
-
-
Bonds issued
-
-
-
-
Bond premium
-
-
-
-
Proceeds from sale of capital assets
-
-
-
18,800
Total other financing sources (uses)
(202,604)
40,687
-
42,300
Net increase (decrease) in fund balance
297,391
107,202
138,598
155,567
Fund balance (deficit) - January 1
721,300
643,852
110,647
1,772,530
Fund balance (deficit) - December 31
$ 1,018,691
$ 751,054
S 249,245
$ 1,928,097
Reconciliation of beginning fund balance to prior year ending funding balance:
Prior year ending fund balance reported above
Plus prior year ending fund balance for:
2018A G.O. Capital Improvement Plan Bonds
2019A G.O. Abatement Bonds
Current year beginning fund balance
112
Statement 23
2018A
Equipment Equipment
G.O. Capital
2019A G.O.
Permanent
Totals
Certificates Certificates
Improvement
Abatement
Improvement
Nonmajor Capital Projects Funds
2020A 2021A
Plan Bonds
Bonds
Revolving
2021
2020
$ -
$ 620,180 $
643,219
- -
-
-
-
11,224
73,024
- -
-
-
3,569
3,569
4,215
(11,394) -
1,038
5,437
(3,506)
(7,982)
119,817
- -
-
-
-
622,680
389,033
- -
-
5,430
-
200,533
173,505
(11,394) -
1,038
10,867
63
1,450,204
1,402,813
-
-
-
-
-
134,855
115,648
-
-
-
-
-
5,728
90,491
-
9,330
10,585
-
-
19,915
-
-
-
-
60,100
-
86,415
72,140
-
-
-
-
-
197,071
21,759
683,960
-
-
-
-
743,724
156,490
16,218
-
-
-
-
79,261
283,483
117,965
-
-
126,799
-
389,243
1,019,923
819,143
9,330
10,585
186,899
-
1,656,212
1,759,934
(929,537)
(9,330)
(9,547)
(176,032)
63
(206,008)
(357,121)
-
-
-
-
-
64,187
111,976
-
-
-
-
-
(202,604)
(175,146)
-
630,000
-
-
-
630,000
1,310,000
-
21,663
-
-
-
21,663
95,481
-
-
-
-
-
18,800
3,000
-
651,663
-
-
-
532,046
1,345,311
(829,537)
642,333
(9,547)
(176,032)
63
326,038
988,190
829,537
-
39,943
176,032
1,204,326
5,498,167
4,294,002
$ -
$ 642,333
$ 30,396
$ -
$ 1,204,389
$ 5,824,205
$ 5,282,192
$ 5,282,192
39,943
176,032
$ 5,498,167
MR]
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - EDA GENERAL Statement 24
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Variance with
Final Budget -
Budgeted
Amounts
2021
Positive
2020
Original
Final
Actual
(Negative)
Actual
Revenues:
Charges for services
$ 7,000
$ 7,000
S 27,527
$ 20,527
$ 26,005
Investment income
2,000
2,000
(440)
(2,440)
2,435
Miscellaneous
-
-
1,308
1,308
443
Total revenues
9,000
9,000
28,395
19,395
28,883
Expenditures:
Current:
Economic development
102,178
102,178
38,851
63,327
43,540
Capital outlay:
Economic development
-
-
-
-
30,151
Total expenditures
102,178
102,178
38,851
63,327
73,691
Net increase (decrease) in fund balance
$ (93,178)
$ (93,178)
(10,456)
$ 82,722
(44,808)
Fund balance (deficit) - January 1
153,980
198,788
Fund balance (deficit) - December 31
$ 143,524
$ 153,980
114
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - COMMUNITY CENTER
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Revenues:
General property taxes
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 25
Variance with
Final Budget -
Budgeted
Amounts
2021
Positive
2020
Original
Final
Actual
(Negative)
Actual
$ 155,000
$ 155,000
$ 154,534
$ (466)
$ -
1,089,000
1,089,000
1,154,184
65,184
513,765
-
-
2,817
2,817
6,793
638,000
638,000
635,026
(2,974)
635,629
140,000
140,000
134,072
(5,928)
110,781
2,022,000
2,022,000
2,080,633
58,633
1,266,968
1,652,425
1,642,425
1,375,935
266,590
1,053,500
-
-
-
-
100,000
1,652,425
1,642,425
1,375,835
266,590
1,153,500
369,575
379,575
704,798
325,223
113,468
(300,000) (300,000) (300,000)
$ 69,575 $ 79,575 404,798
358,082
$ 762,880
$ 325,223
(300,000)
(186,532)
544,614
$ 358,082
115
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, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
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 26
Variance with
Final Budget -
Budgeted
Amounts
2021
Positive
2020
Original
Final
Actual
(Negative)
Actual
$ 9,000
$ 9,000
$ 4,137
$ (4,863)
$ 21,853
1,200
1,200
(648)
(1,848)
4,148
10,200
10,200
3,489
(6,711)
26,001
26,000
26,000
16,920
9,080
17,447
$ (15,800)
$ (15,800)
(13,431)
$ 2,369
8,554
192,283
$ 178,852
183,729
$ 192,283
116
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - LRRWMO Statement 27
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Variance with
Final Budget -
Budgeted
Amounts
2021
Positive
2020
Original
Final
Actual
(Negative)
Actual
Revenues:
General property taxes
$ 40,000
$ 40,000
$ 40,184
$ 184
$ 39,963
Investment income
200
200
10
(190)
1,336
Total revenues
40,200
40,200
40,194
(6)
41,299
Expenditures:
Current:
Public works
29,243
29,243
29,311
(68)
28,698
Net increase (decrease) in fund balance
$ 10,957
$ 10,957
10,883
$ (74)
12,601
Fund balance (deficit) - January 1
74,901
62,300
Fund balance (deficit) - December 31
$ 85,784
$ 74,901
117
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - FORESTRY Statement 28
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Variance with
Final Budget -
Budgeted Amounts 2021 Positive 2020
Original Final Actual (Negative) Actual
Revenues:
Intergovernmental
$ 12,500
$ 12,500 S
-
$ (12,500) $
-
Investment income
50
50
55
5
98
Total revenues
12,550
12,550
55
(12,495)
98
Expenditures:
Current:
Public works
15,000
15,000
-
15,000
-
Net increase (decrease) in fund balance
$ (2,450)
$ (2,450)
55
$ 2,505
98
Fund balance (deficit) - January 1
5,335
5,237
Fund balance (deficit) - December 31
$
5,390
$
5,335
118
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - RIGHT-OF-WAY MANAGEMENT/UTILITY Statement 29
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Variance with
Final Budget -
Budgeted Amounts 2021 Positive 2020
Original Final Actual (Negative) Actual
Revenues:
Charges for services
$ 24,000 $
24,000
S 36,164
$ 12,164 $
39,501
Investment income
500
500
(166)
(666)
1,687
Total revenues
24,500
24,500
35,998
11,498
41,188
Expenditures:
Current:
Public works
31,582
31,582
26,774
4,808
24,166
Revenue over (under) expenditures
(7,082)
(7,082)
9,224
16,306
17,022
Other financing sources (uses
Transfers out (5,000) (5,000) (5,000) -
Net increase (decrease) in fund balance $ (12,082) $ (12,082) 4,224 $ 16,306
Fund balance (deficit) - January 1 81,743
Fund balance (deficit) - December 31 $ 85,967
(5,700)
11,322
70,421
$ 81,743
119
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, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
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 30
Variance with
Final Budget -
Budgeted
Amounts
2021
Positive
2020
Original
Final
Actual
(Negative)
Actual
$ 750
$ 750
$ (27)
$ (777)
$ 3,510
30,000
30,000
140,516
110,516
75,585
30,750
30,750
140,489
109,739
79,095
30,000
30,000
47,860
(17,860)
57,368
$ 750
$ 750
92,629
$ 91,879
21,727
136,438
$ 229,067
114,711
$ 136,438
120
CITY OF ANDOVER, MINNESOTA
SPECIAL REVENUE FUND - CONSTRUCTION SEAL COATING
Statement 31
SCHEDULE OF REVENUES, EXPENDITURES AND
CHANGES 1N FUND BALANCES - BUDGET AND ACTUAL
For The Year Ended December 31, 2021
With Comparative Actual Amounts For The Year Ended December 31, 2020
Variance with
Final Budget -
Budgeted Amounts
2021
Positive
2020
Original Final
Actual
(Negative)
Actual
Revenues:
Charges for services $ 10,000 $ 10,000
S 9,377
$ (623)
$ -
Investment income 500 500
2
(498)
2,081
Total revenues 10,500 10,500
9,379
(1,121)
2,081
Expenditures:
Current:
Public works 10,000 10,000
9,377
623
-
Net increase (decrease) in fund balance $ 500 $ 500
2
$ (498)
2,081
Fund balance (deficit) - January 1
5,155
3,074
Fund balance (deficit) - December 31
$ 5,157
$ 5,155
121
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.
WA
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
December 31, 2021
With Comparative Totals for December 31, 2020
Central
Equipment Risk
Maintenance Management
Statement 32
Totals
2021 2020
Assets:
Current assets:
Cash and cash equivalents
$ 267,232
$ 419,532
$ 686,764
$ 957,413
Accrued interest
842
1,346
2,188
4,288
Prepaid items
-
220,698
220,698
-
Inventories - at cost
96,606
-
96,606
91,683
Total assets
364,680
641,576
1,006,256
1,053,384
Liabilities:
Current liabilities:
Accounts payable
30,074
1,364
31,438
27,142
Salaries payable
10,725
589
11,314
10,395
Total liabilities
40,799
1,953
42,752
37,537
Net position:
Unrestricted
$ 323,881
$ 639,623
$ 963,504
$ 1,015,847
123
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
Statement 33
Central
Equipment
Risk
Totals
Maintenance
Management
2021
2020
Operating revenues:
User charges
S 812,364
$ 509,380
$ 1,321,744 $
1,217,279
Other
6,385
73,826
80,211
72,329
Total operating revenues
818,749
583,206
1,401,955
1,289,608
Operating expenses:
Personal services
351,736
195,099
546,835
530,553
Supplies
331,833
28,295
360,128
335,851
Other service charges
180,845
361,832
542,677
486,701
Total operating expenses
864,414
585,226
1,449,640
1,353,105
Operating income (loss)
(45,665)
(2,020)
(47,685)
(63,497)
Nonoperating revenues (expenses):
Investment income
(1,307)
(3,351)
(4,658)
17,205
Change in net position
(46,972)
(5,371)
(52,343)
(46,292)
Net position - January 1
370,853
644,994
1,015,847
1,062,139
Net position - December 31
$ 323,881
$ 639,623
$ 963,504 $
1,015,847
124
CITY OF ANDOVER, MINNESOTA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
For The Year Ended December 31, 2021
With Comparative Totals For The Year Ended December 31, 2020
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 prepaid items
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
2021 2020
$ 818,749
$ 583,206
$ 1,401,955
$ 1,294,236
(514,419)
(609,711)
(1,124,130)
(837,502)
(350,891)
(195,025)
(545,916)
(527,575)
(46,561)
(221,530)
(269,091)
(70,841)
(498)
(2,060)
(2,558)
18,700
(47,059)
(223,590)
(270,649)
(52,141)
314,291
643,122
957,413
1,009,554
$ 267,232
$ 419,532
$ 686,764
$ 957,413
$ (45,665) $ (2,020) $ (47,685) $ (63,497)
4,628
(220,698)
(220,698)
-
(4,923)
(4,923)
(7,130)
3,182
1, ] 14
4,296
(7,820)
845
74
919
2,978
(896)
(219,510)
(220,406)
(7,344)
$ (46,561)
$ (221,530)
$ (268,091)
$ (70,841)
125
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iPJR
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 128
These tables contain trend information to help the reader understand how the City's financial performance
and well-being have changed over time.
Revenue Capacity 138
These tables contain information to help the reader assess the City's most significant local revenue source,
the property tax.
Debt Capacity 144
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 152
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 155
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.
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
$ 89,592,661
$ 93,393,474
$ 94,533,473
$ 95,998,027
4,461,020
3,792,323
4,776,047
5,755,162
25,589,728
22,936,032
23,175,077
24,457,253
119,643,409
120,121,829
122,484,597
126,210,442
34,922,691
34,864,659
34,787,392
35,507,385
5,784,313
6,310,830
6,292,850
7,004,563
40,707,004
41,175,489
41,080,232
42,511,948
Primary Government
Net investment in capital assets 124,515,352 128,258,133 129,320,855 131,505,412
Restricted 4,461,020 3,792,323 4,776,047 5,755,162
Unrestricted 31,374,041 29,246,862 29,467,927 31,461,816
Total primary government net position $ 160,350,413 $ 161,297,318 $ 163,564,829 $ 168,722,390
GASB 68 was implemented in 2015. Net position was restated for 2014 to reflect the reporting of net pension liability and pension
related deferred outflows and inflows of resources. Net position for years prior to 2014 were not restated.
128
Table 1
$ 99,539,838
$ 101,602,647
$ 103,577,524
$ 106,637,436
$ 114,441,287
$ 115,576,274
5,787,072
4,935,375
5,081,230
5,294,610
3,851,631
4,465,945
26,085,240
27,673,920
28,319,303
30,608,612
35,974,899
38,391,335
131,412,150
134,211,942
136,978,057
142,540,658
154,267,817
158,433,554
37,531,815
37,174,817
37,068,699
38,547,614
40,342,053
43,517,002
7,652,339
8,446,942
9,825,681
9,982,550
11,023,179
11,463,122
45,184,154
45,621,759
46,894,380
48,530,164
51,365,232
54,980,124
137,071,653
138,777,464
140,646,223
145,185,050
154,783,340
159,093,276
5,787,072
4,935,375
5,081,230
5,294,610
3,851,631
4,465,945
33,737,579
36,120,862
38,144,984
40,591,162
46,998,078
49,854,457
$ 176,596,304
$ 179,833,701
$ 183,872,437
$ 191,070,822
$ 205,633,049
$ 213,413,678
129
CITY OF ANDOVER, MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
2012
2013
2014
2015
Expenses
Governmental activities:
General government
$ 2,453,801
$ 3,061,867
$ 2,791,507
$ 2,823,408
Public safety
4,325,531
4,495,447
4,747,142
4,774,033
Public works
5,623,942
4,465,153
4,430,295
2,967,957
Parks and recreation
3,102,534
3,029,917
3,229,894
3,340,561
Recycling
94,319
124,515
111,760
98,016
Economic development
1,396,466
318,646
676,039
192,265
Interest on long-term debt
2,497,344
1,399,172
542,139
454,808
Total governmental activities expenses
19,493,937
16,894,717
16,528,776
14,651,048
Business -type activities
Water
2,782,948
2,275,363
2,308,552
2,316,651
Sewer
1,842,473
1,964,911
1,951,785
2,002,623
Storm sewer
531,103
561,807
848,745
595,902
Total business -type activities expenses
5,156,524
4,802,081
5,109,082
4,915,176
Total primary government expenses
$ 24,650,461
$ 21,696,798
$ 21,637,858
$ 19,566,224
Program Revenues
Governmental activities:
Charges for services:
General government
$ 690,875
$ 843,304
$ 801,458
$ 1,381,113
Public safety
607,715
704,119
492,665
624,430
Public works
308,583
321,114
318,018
298,143
Parks and recreation
1,495,872
1,463,579
1,545,794
1,514,900
Recycling
39,530
42,544
41,440
32,976
Economic development
170,391
239,570
96,772
50,628
Operating grants and contributions
1,358,424
1,119,778
946,540
965,986
Capital grants and contributions
2,774,126
1,425,815
4,677,704
863,155
Total governmental activities program revenue
7,445,516
6,159,823
8,920,391
5,731,331
Business -type activities:
Charges for services:
Water
2,572,560
2,495,561
2,347,763
2,593,303
Sewer
2,063,177
2,065,467
2,117,624
2,129,201
Storm sewer
379,262
399,417
421,056
444,335
Operating grants and contributions
-
-
9,506
-
Capital grants and contributions
-
-
990,412
1,524,088
Total business -type activities program revenue
5,014,999
4,960,445
5,886,361
6,690,927
Total primary government program revenues
12,460,515
11,120,268
14,806,752
12,422,258
Net (Expense)/Revenue
Governmental activities
(12,048,421)
(10,734,894)
(7,608,385)
(8,919,717)
Business -type activities
(141,525)
158,364
777,279
1,775,751
Total primary government net expense
$ (12,189,946)
$ (10,576,530)
$ (6,831,106)
$ (7,143,966)
130
Table 2
$ 2,904,102
$ 2,937,380
$ 3,209,512
$ 3,159,045
$ 3,193,326
$ 3,202,342
5,140,347
5,167,930
5,263,071
5,426,472
6,002,090
5,814,286
3,905,703
5,428,350
4,257,014
5,939,704
4,964,909
4,726,280
3,321,814
3,385,001
3,321,793
3,507,705
3,997,558
4,676,676
133,614
169,100
206,335
231,625
234,475
245,755
411,958
1,098,300
249,669
202,182
4,240,712
293,594
437,513
403,200
377,314
917,913
1,226,839
1,184,349
16,255,051
18,589,261
16,884,708
19,384,646
23,859,909
20,143,282
2,454,931
2,263,748
2,306,013
2,280,247
2,449,287
2,546,637
2,128,814
2,190,453
2,175,331
2,289,555
2,454,250
2,435,302
546,526
684,708
614,916
737,854
617,883
611,579
5,130,271
5,138,909
5,096,160
5,307,656
5,521,420
5,593,518
$ 21,385,322
$ 23,728,170
$ 21,980,868
$ 24,692,302
$ 29,381,329
$ 25,736,800
$ 2,124,665
$ 925,639
$ 647,452
$ 909,139
$ 757,188
$ 2,241,593
832,412
680,729
721,078
1,091,260
1,154,232
1,078,065
661,788
334,273
331,620
357,231
296,533
279,191
1,521,585
1,465,562
1,504,647
1,677,991
1,301,624
1,943,452
42,768
43,062
49,453
44,099
48,705
70,003
174,754
461,294
87,891
96,176
126,596
233,312
992,194
1,186,721
1,407,217
1,662,842
3,453,564
1,242,650
2,703,429
3,414,161
1,608,129
4,950,131
12,006,951
2,112,499
9,053,595
8,511,441
6,357,487
10,788,869
19,145,393
9,200,765
2,575,920
2,716,239
3,061,920
2,756,944
3,349,237
3,806,408
2,144,794
2,301,077
2,325,456
2,329,462
2,355,039
2,395,512
464,928
499,974
537,422
564,154
594,524
634,815
2,681
-
-
-
-
-
2,670,641
481,343
504,267
712,976
2,807,445
2,508,801
7,858,964
5,998,633
6,429,065
6,363,536
9,106,245
9,345,536
16,912,559
14,510,074
12,786,552
17,152,405
28,251,638
18,546,301
(7,201,456)
(10,077,820)
(10,527,221)
(8,595,777)
(4,714,516)
(10,942,517)
2,728,693
859,724
1,332,905
1,055,880
3,584,825
3,752,018
$ (4,472,763)
$ (9,219,096)
$ (9,194,316)
$ (7,539,897)
$ (1,129,691)
$ (7,190,499)
(Continued)
191
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
$ 10,594,940
$ 10,608,678
$ 10,863,912
$ 11,120,449
2,033,932
320,822
353,773
210,625
14,360
12,511
87,179
15,327
1,201,995
571,307
747,621
348,885
16,625
23,650
228,639
548,950
509,746
(323,654)
606,793
401,326
14,371,598
11,213,314
12,887,917
12,645,562
226,328
(21,533)
115,425
57,291
-
8,000
-
-
(509,746)
323,654
(606,793)
(401,326)
(283,418)
310,121
(491,368)
(344,035)
$ 14,088,180
$ 11,523,435
$ 12,396,549
$ 12,301,527
Governmental activities $ 2,323,177 $ 478,420 $ 5,279,532 $ 3,725,845
Business -type activities (424,943) 468,485 285,911 1,431,716
Total primary government $ 1,898,234 $ 946,905 $ 5,565,443 $ 5,157,561
GASB 68 was implemented in 2015. Expenses for years prior to 2015 were not restated.
132
Table 2
(Continued)
$ 11,770,304
$
11,874,354
$
12,423,060
$
13,011,406
$
14,479,488
$
14,934,589
69,772
74,771
82,874
89,414
100,979
103,474
16,260
13,638
12,917
14,053
4,129
3,578
399,021
373,585
560,133
1,346,685
930,876
(71,710)
20,360
20,489
36,431
24,550
3,000
18,800
127,447
520,775
177,921
(327,730)
923,203
119,523
12,403,164
12,877,612
13,293,336
14,158,378
16,441,675
15,108,254
68,768
65,801
117,637
236,356
173,446
(17,603)
2,192
32,855
-
15,818
-
-
(127,447)
(520,775)
(177,921)
327,730
(923,203)
(119,523)
(56,487)
(422,119)
(60,284)
579,904
(749,757)
(137,126)
$ 12,346,677
$
12,455,493
$
13,233,052
$
14,738,282
$
15,691,918
$
14,971,128
$ 5,201,708
$
2,799,792
$
2,766,115
$
5,562,601
$
11,727,159
$
4,165,737
2,672,206
437,605
1,272,621
1,635,784
2,835,068
3,614,892
$ 7,873,914
$
3,237,397
$
4,038,736
$
7,198,385
$
14,562,227
$
7,780,629
133
CITY OF ANDOVER, MINNESOTA
FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2012
2013
2014
2015
General Fund
Nonspendable
$ 160,177
$ 106,445
$ 137,001
$ 131,813
Unassigned
6,227,664
6,853,791
7,065,133
7,136,091
Total general fund
6,387,841
6,960,236
7,202,134
7,267,904
All Other Governmental Funds
Nonspendable
1,471
1,316
1,562
1,800
Restricted
21,307,923
21,274,444
5,022,967
5,674,417
Committed
681,413
588,516
591,289
531,729
Assigned
16,420,228
13,481,786
16,095,395
17,907,929
Unassigned
(314,734)
(276,829)
(114,344)
(63,357)
Total all other governmental funds
38,096,301
35,069,233
21,596,869
24,052,518
Total governmental funds
$ 44,484,142
$ 42,029,469
$ 28,799,003
$ 31,320,422
134
Table 3
$ 146,417
$ 117,253
$ 112,971
$ 122,993
$ 140,602
$ 154,736
7,650,328
7,672,363
8,023,365
9,240,458
9,513,916
9,471,730
7,796,745
7,789,616
8,136,336
9,363,451
9,654,518
9,626,466
2,027
2,041
2,386
1,957
2,123
17,920
5,852,444
4,550,557
14,225,839
19,696,883
4,651,447
12,033,034
513,916
530,505
518,617
518,312
508,062
499,284
19,109,145
20,855,184
21,327,036
22,569,932
27,612,210
30,089,230
(64,193)
(65,185)
(66,263)
-
-
-
25,413,339
25,973,102
36,007,615
42,787,084
32,773,842
42,639,468
$ 33,210,084
$ 33,662,718
$ 44,143,951
$ 52,150,535
$ 42,428,360
$ 52,265,934
ini
CITY OF ANDOVER, MINNESOTA
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2012
2013
2014
2015
Revenues
General property taxes
$ 10,638,117
$ 10,682,975
S 10,894,301
$ 11,148,149
Tax increment collections
2,035,663
375,040
377,733
213,020
Licenses and permits
449,826
536,706
364,430
452,422
Intergovernmental
3,493,528
1,115,047
3,464,985
959,790
Special assessments
792,460
1,045,000
733,425
690,161
Charges for services
1,874,321
1,806,919
1,720,972
1,499,909
Fines
97,571
96,130
94,375
99,304
Investment income
1,191,438
573,256
735,325
341,392
Miscellaneous:
Park dedication fees
47,700
205,080
156,384
170,144
Connection charges
170,202
436,628
676,826
405,967
Rent
639,983
639,423
639,000
638,220
Other
645,897
1,698,964
564,057
542,473
Total revenues
22,076,706
19,211,168
20,421,813
17,160,951
Expenditures
General government
2,280,373
2,647,278
2,588,950
2,639,821
Public safety
4,092,073
4,301,698
4,537,264
4,521,129
Public works
5,415,924
4,251,454
4,145,404
2,747,550
Parks and recreation
2,001,624
1,990,457
2,139,552
2,277,576
Recycling
94,328
123,595
106,587
91,940
Economic development
1,537,611
408,210
665,325
181,551
Unallocated
63,371
75,517
81,183
56,720
Capital outlay
723,017
2,763,351
2,816,375
941,213
Debt service:
Principal retirement
1,842,000
1,689,000
2,336,719
1,961,719
Interest
1,768,748
1,262,302
900,504
470,687
Other
225,378
5,509
7,895
5,009
Construction/acquisition costs
110,650
946,942
-
167,955
Total expenditures
20,155,097
20,465,313
20,325,758
16,062,870
Revenues over (under) expenditures
1,921,609
(1,254,145)
96,055
1,098,081
Other Financing Sources (Uses)
Transfers in
627,530
627,530
627,530
627,530
Transfers out
(7,134)
(4,242)
(20,737)
(58,249)
Bonds issued
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
16,625
76,184
922,408
854,057
Total other financing sources (uses)
2,332,287
(1,200,528)
(13,326,521)
1,423,338
Net increase (decrease) in fund balance
$ 4,253,896
$ (2,454,673)
$ (13,230,466)
$ 2,521,419
Debt service as a percentage of
noneapital expenditures
18.69%
17.61%
18.49%
16.27%
136
Table 4
2016
2017
2018
2019
2020
2021
$ 11,809,352
$ 11,923,097
$ 12,433,651
$ 12,985,096
$ 14,451,737
$ 14,924,342
91,808
82,448
86,794
90,189
100,979
103,474
625,907
546,378
562,525
855,831
892,279
891,762
1,564,848
3,150,578
1,641,806
2,786,445
6,211,801
1,102,318
819,065
832,528
554,471
721,950
631,999
696,591
1,613,941
1,574,242
1,656,254
1,941,637
1,672,023
2,268,318
99,600
75,287
73,719
62,349
47,630
53,747
389,114
362,974
543,672
1,316,876
913,671
(67,052)
431,784
95,198
75,798
472,753
389,033
622,680
445,698
412,691
444,989
1,152,759
1,136,882
926,982
656,604
641,691
637,150
636,803
635,629
635,026
1,189,179
428,186
525,667
1,462,431
862,805
817,623
19,724,900
20,125,298
19,236,496
24,485,119
27,946,468
22,975,811
2,686,308
2,754,189
3,115,956
3,011,191
3,079,344
3,203,054
4,709,083
4,822,435
4,956,350
5,096,029
5,754,243
5,533,004
3,694,911
5,208,862
4,298,845
5,691,654
4,588,958
4,361,714
2,226,454
2,253,370
2,214,415
2,371,437
2,495,594
2,799,832
124,860
169,956
199,182
224,574
228,124
239,606
401,244
1,087,586
538,955
191,468
4,154,244
297,628
33,077
14,875
11,940
15,001
12,778
16,109
2,220,253
1,484,422
2,102,030
14,825,106
16,830,198
1,596,917
1,966,719
1,996,719
1,612,717
1,444,000
1,561,000
1,899,000
444,144
418,419
385,555
568,864
1,290,844
1,278,030
1,325
3,095
3,095
1,000
5,000
5,500
414,987
52,527
164,399
1,564,585
7,145
743,203
18,923,365
20,266,455
19,603,439
35,004,909
40,007,472
21,973,597
801,535
(141,157)
(366,943)
(10,519,790)
(12,061,004)
1,002,214
627,530
627,530
643,729
1,323,739
990,088
1,011,431
(85,096)
(54,228)
(114,850)
(58,110)
(59,740)
(148,705)
520,000
-
10,000,000
15,770,000
1,310,000
7,765,000
-
-
254,260
1,458,695
95,481
188,834
25,693
20,489
65,037
32,050
3,000
18,800
1,088,127
593,791
10,848,176
18,526,374
2,338,829
8,835,360
$ 1,889,662
$ 452,634
$ 10,481,233
$ 8,006,584
$ (9,722,175)
$ 9,837,574
14.80%
12.89%
11.53%
10.81%
12.31%
16.18%
CITY OF ANDOVER, MINNESOTA
ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY Table 5
Last Ten Fiscal Years
Real Property
Personal Property
Total
Total
Net Tax Capacity
Taxable
Net Tax
Taxable
Net Tax
Taxable
Net Tax
Direct
as a Percentage
Year
Market Value
Capacity
Market Value
Capacity
Market Value
Capacity
Tax Rate
ofMarket Value
2012
S 2,176,836,156
$ 22,945,277
$ 25,299,200
$ 504,304
$ 2,202,135,356
$ 23,449,581
42.539%
1.06%
2013
2,097,459,658
22,048,362
26,136,700
520,656
2,123,596,358
22,569,018
41.170%
1.06%
2014
2,045,873,681
21,462,221
25,938,600
516,101
2,071,812,281
21,978,322
43.657%
1.06%
2015
2,411,059,312
25,213,801
24,711,300
491,549
2,435,770,612
25,705,350
37.460%
1.06%
2016
2,513,051,767
26,316,855
26,635,100
530,418
2,539,686,867
26,847,273
38.667%
1.06%
2017
2,605,298,959
27,358,838
28,181,200
561,340
2,633,480,159
27,920,178
37.738%
1.06%
2018
2,929,062,970
30,682,357
30,348,500
604,686
2,959,411,470
31,287,043
34.952%
1.06%
2019
3,089,514,579
32,331,885
32,283,200
643,390
3,121,797,779
32,975,265
35.621%
1.06%
2020
3,392,964,562
35,504,632
29,861,600
594,907
3,422,826,162
36,099,539
35.942%
1.05%
2020
3,392,964,562
35,504,632
29,961,600
594,907
3,422,826,162
36,099,539
35.942%
1.05%
2021
3,510,521,981
36,700,449
33,434,800
666,326
3,543,956,781
37,366,775
35.845%
1.05%
Source: Anoka County Property Tax Division
138
CITY OF ANDOVER, MINNESOTA
PROPERTY TAX RATES - PER $1,000 OF ASSESSED TAX CAPACITY VALUE
DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
Direct City
General
Debt
Lower
Taxes
Oper
Service
Rum
Payable
Levy
Levy
Watershed
Total
2013
33.676%
6.989%
0.449%
41.114%
2014
35.486%
7.711%
0.460%
43.657%
2015
30.441%
6.628%
0.391%
37.460%
2016
31.898%
6.381%
0.388%
38.667%
2017
33.128%
4.246%
0.364%
37.738%
2019
30.607%
4.020%
0.325%
34.952%
2019
29.830%
5.480%
0.311%
35.621%
2020
29.390%
7.266%
0.286%
35.942%
2021
28.367%
7.207%
0.271 %
35.845%
2022
27.590%
8.403%
0.250%
36.243%
Source: Anoka County Property Tax Division
Table 6
Overlapping
Governments
School
County
Other
Total
Total
26.751%
44.328%
3.912%
74.991%
116.105%
28.265%
43.239%
4.354%
75.858%
119.515%
22.482%
38.123%
4.104%
64.709%
102.169%
20.885%
38.894%
4.949%
64.728%
103.395%
18.590%
36.841%
3.952%
59.383%
97.121%
18.392%
35.334%
3.906%
57.632%
92.584%
16.330%
34.473%
3.478%
54.281%
89.902%
16.893%
33.361%
3.157%
53.411%
89.353%
17.801 %
30.935%
3.146%
51.882%
87.727%
16.319%
29.254%
3.091%
48.664%
84.907%
139
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
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%
67,725
11,121,881
99.80%
2016
11,593,925
11,525,770
3,461
11,529,231
99.44%
22,838
11,552,069
99.64%
2017
11,938,555
11,858,376
3,545
11,861,921
99.36%
13,055
11,874,976
99.47%
2018
12,416,357
12,342,648
2,824
12,345,471
99.43%
30,713
12,376,185
99.68%
2019
13,103,487
12,974,413
3,960
12,978,373
99.05%
57,390
13,035,764
99.48%
2020
14,479,586
14,391,252
4,128
14,395,381
99.42%
51,342
14,446,723
99.77%
2021
14,913,945
14,853,700
3,578
14,857,278
99.62%
F
Not Available
140
CITY OF ANDOVER, MINNESOTA
PRINCIPAL TAXPAYERS
Current Year and Nine Years Ago
Net
Tax
Taxpayers
Capacity
Minnegasco, Inc.
$ 304,238
Presbyterian Homes of Andover
251,795
Connexus Energy
245,398
Wal-Mart
186,388
Arbor Oaks Senior Living Realty
181,781
Target Corporation
166,692
Andover Limited Partnership
147,260
Great River Energy
142,857
Andover Station 2016 LLC
120,860
PC Arbor Oaks LLC
120.330
Fairbanks Properties LLC
Columbia Park Properties
Maxwell Kearns, Inc.
Total $ 1,867,599
Net Tax Capacity $ 37,366,775
Source: Anoka County Property Tax Division
2021 2012
Percentage of
Total City
Rank
Tax Capacity
1
0.81%
2
0.67%
3
0.66%
4
0.50%
5
0.49%
6
0.45%
7
0.39%
8
0.38%
9
0.32%
10
0.32%
4.99%
Table 8
Net Percentage of
Tax Total City
Capacity Rank Tax Capacity
$ 202,794 2 0.86%
148,018 6 0.63%
210,348 1 0.90%
196,590
3
0.80%
155,320
5
0.66%
164,329
4
0.70%
113,130
7
0.48%
77,342
8
0.33%
72,036
9
0.31%
67,272
10
0.29%
$ 1,397,178 5.96%
$ 23,449,581
141
CITY OF ANDOVER, MINNESOTA
ESTIMATED MARKET VALUES AND NEW CONSTRUCTION
Last Ten Fiscal Years
Table 9
Estimated Market Values
New Construction
Commercial /
Connnercial / Industrial
Residential
Year
Industrial(1)
Residential
Total
Permits
Value
Permits
Value
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
111
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
2021
235,287,000
3,450,673,800
3,685,960,800
141
43,949,250
Note: (1) Also includes agricultural, public utility, railroad operating property, and personal property.
142
CITY OF ANDOVER, MINNESOTA
SPECIAL ASSESSMENT LEVIES AND COLLECTIONS Table 10
Last Ten Fiscal Years
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
2012
$ 348,129
$ 376,601
108.18%
$ 25,087
$ 401,688
115.39%
$ 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%
2021
270,334
504,303
186.55%
8,024
512,328
189.52%
248,237
91.83%
Note: (1) Only includes assessments certified to Anoka County.
143
CITY OF ANDOVER, MINNESOTA
RATIO OF NET BONDED DEBT
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
Fiscal
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Population (1)
31,125
31,392
31,574
31,704
32,335
32,470
32,728
32,882
33,448
33,650
General Bonded Debt Outstanding (2)
Gross Amount Net
Estimated Bonded Restricted For Bonded
$ 2,398,307,900
2,316,870,300
2,270,068,100
2,611,399,200
2,714,130,100
2,806,893,400
3,116,175,500
3,271,908,300
3,561,318,700
3,685,960,800
Notes: (1) Source: Metropolitan Council
(2) Only includes debt supported by tax levy.
$ 40,444,000
$ (18,497,679)
$ 21,946,321
37,460,000
(17,415,812)
20,044,188
21,035,000
(942,607)
20,092,393
19,330,000
(1,064,634)
18,265,366
18,080,000
(1,163,486)
16,916,514
16,280,000
(800,214)
15,479,786
24,864,000
(899,986)
23,964,014
40,619,047
(917,364)
39,701,683
40,296,891
(1,582,258)
38,714,633
46,091,735
(2,064,237)
44,027,498
Table 11
Percentage
Net Bonded
of Estimated
Debt
Market Value
Per Capita
0.92%
$ 705.10
0.87%
638.51
0.89%
636.36
0.70%
576.12
0.62%
523.16
0.55%
476.74
0.77%
732.22
1.21%
1,207.40
1.09%
1,157.46
1.19%
1,308.40
144
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT
December 31, 2021
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
$ 46,091,735
100.0000%
$ 46,091,735
49,315,000
(1)
9.1237%
4,499,353
251,620,000
(1)
12.8635%
32,367,139
85,080,000
(1)
6.2198%
5,291,806
18,860,000
(1)
9.1237%
1,720,730
193,320,000
(1)
0.8470%
1,637,420
45,516,448
$ 91,608,183
(2) Overlapping governments are those that coincide with the geographical boundaries of the city. This schedule estimates
the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City.
This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden
borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a
resident, and therefore responsible for repaying the debt of each overlapping government.
145
CITY OF ANDOVER, MINNESOTA
COMPUTATION OF LEGAL DEBT MARGIN
Last Ten Fiscal Years
2012 2013 2014 2015
Estimated Taxable Market Value
$ 2,202,135,356
$ 2,123,596,358
$ 2,071,812,281
$ 2,435,770,612
Debt limitation:
Debt limit percent
3 %
3 %
3 %
3 %
Debt limit in dollars
66,064,061
63,707,891
62,154,368
73,073,118
Debt applicable to limit:
Total bonded debt
49,144,000
45,010,000
27,405,000
25,050,000
Less: Nonapplicable debt
G.O. water revenue bonds
(7,420,000)
(6,875,000)
(6,310,000)
(5,720,000)
Permanent improvement
revolving bonds
(760,000)
(385,000)
-
-
State aid bonds
(520,000)
(290,000)
(60,000)
-
Less: Cash and investments in
related debt service funds
(18,497,679)
(17,415,812)
(942,607)
(1,191,519)
Total debt applicable to limitation
21,946,321
20,044,188
20,092,393
18,138,481
Legal debt margin
$ 44,117,740
$ 43,663,703
$ 42,061,975
$ 54,934,637
Total debt applicable to the limit as
a percentage of debt limit
33.22%
31.46%
32.33%
24.82%
146
Table 13
2016 2017 2018 2019 2020 2021
$ 2,539,686,867
$ 2,633,480,159
$ 2,959,411,470
$ 3,121,797,779
$ 3,422,826,162
$ 3,543,956,781
3%
3%
3%
3%
3%
3%
76,190,606
79,004,405
88,782,344
93,653,933
102,684,785
106,318,703
27,110,000
20,740,000
28,639,000
42,260,000
41,284,000
46,415,000
(9,030,000)
(4,460,000)
(3,775,000)
(3,070,000)
(2,345,000)
(1,610,000)
(1,299,334)
(943,862)
(1,032,604)
(1,418,376)
(2,021,047)
(2,516,818)
16,780,666
15,336,138
23,831,396
37,771,624
36,917,953
42,288,182
$ 59,409,940
$ 63,668,267
$ 64,950,948
$ 55,882,309
$ 65,766,832
$ 64,030,521
22.02%
19.41%
26.84%
40.33%
35.95%
39.77%
147
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148
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
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
71,818
1.85
2018
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
70,668
1.16
2020
3,349,237
1,983,821
59,740
1,425,156
725,000
54,910
1.83
2021
3,806,408
2,119,084
148,705
1,836,029
735,000
38,743
2.37
2004 FDA Public Facility Lease Revenue Bond (3) & 2012 and 2019 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
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
1,969,617
910,000
896,131
1.15
2021
2,080,633
1,375,835
704,798
1,950,295
1,160,000
871,906
1.31
Special Assessment and Permanent Improvement Revolviniz Bonds
Fiscal Special Assessment
Year Revenue
2012 $
268,116
2013
598,889
2014
102,380
2015
126,628
2016
78,189
2017
228
2018
28,848
2019
136,450
2020
4,2 55
2021
3,569
Debt Service
Principal Interest Coverage
$ 365,000 $ 18,850 0.70
375,000 11,450 1.55
395.000 3.850 0.26
No outstanding debt
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.
149
CITY OF ANDOVER, MINNESOTA
OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
2012
2013
2014
2015
Cite of Andover's Outstanding Debt
Governmental activities
Revenue bonds
$ 17,375,000
S 16,925,000
$ -
$ -
Abatement bonds
17,315,000
16,995,000
16,675,000
15,840,000
Certificates of indebtedness
774,000
680,000
2,140,000
1,915,000
Capital improvement bonds
3,455,000
1,470,000
970,000
470,000
Permanent improvement
revolving bonds
760,000
385,000
-
-
State aid bonds
520,000
290,000
60,000
-
Street reconstruction bonds
-
-
-
-
Referendum bonds
1,525,000
1,390,000
1,250,000
1,105,000
Promissory note payable
-
983,593
786,874
590,155
Issuance premiums
-
-
-
-
Total governmental activities
41,724,000
39,118,593
21,881,874
19,920,155
Business -type activities
G.O. revenue bonds
7,420,000
6,875,000
6,310,000
5,720,000
Issuance premiums
-
-
-
-
Total business -type activities
7,420,000
6,875,000
6,310,000
5,720,000
Total outstanding debt
$ 49,144,000
S 45,993,593
$ 28,191,874
$ 25,640,155
Total outstanding debt as a
percentage of personal income
5.28%
4.84%
2.91 %
2.57%
Total outstanding debt per capita
$ 1,579
S 1,465
$ 893
$ 809
150
Table 1.5
2016 2017 2018 2019 2020 2021
14,995,000
14,140,000
13,270,000
28,155,000
27,245,000
26,085,000
2,125,000
1,330,000
939,000
540,000
1,444,000
1,625,000
-
-
10,000,000
10,000,000
9,915,000
9,790,000
-
-
-
-
-
7,135,000
960,000
810,000
655,000
495,000
335,000
170,000
393,436
196,717
-
-
-
-
-
-
-
1,429,047
1,357,891
1,286,735
19,473,436
16,476,717
24,864,000
40,619,047
40,296,891
46,091,735
9,030,000
4,460,000
3,775,000
3,070,000
2,345,000
1,610,000
81,006
67,690
54,374
41,058
27,742
14,426
9,111,006
4,527,690
3,829,374
3,111,058
2,372,742
1,624,426
$ 27,584,442
$ 21,004,407
$ 28,693,374
$ 43,730,105
$ 42,669,633
$ 47,716,161
2.68%
1.96%
2.55%
3.71%
3.45%
3.75%
$ 853
$ 647
$ 877
$ 1,330
$ 1,276
$ 1,418
151
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
2012
31,125
$ 930,450,750
336,414
S 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
33,448
1,236,840,144
358,921
13,272,180,738
36,978
6.0%
2021
33,650
1,272,205,550
367,018
13,875,849,526
37,807
3.6%
Notes: (1) Estimates from Metropolitan Council
(2) The personal income is calculated by taking the per capita income of Anoka County and multiplying it
by the population for both the City and County.
(3) Information from U.S. Census Bureau
152
CITY OF ANDOVER, MINNESOTA
PRINCIPAL EMPLOYERS
Current Year and Nine Years Ago
Taxpayer
Anoka Hennepin I.S.D. No. 11
Walmart
Fairview Andover Clinic
Anoka County Sheriffs Office
Kottkes' Bus Service, Inc.
YMCA
Target
TE Connectivity
GAF Materials Corp
Anoka County Highway Department
Banker Hills Regional Park/Activity Center
Meadow Creek Christian School
Andover County Market
2021 2012
Percentage
of Total City
Employees
Rank
Employment
816 (1)
1
29.9%
335
2
12.3%
300
3
11.0%
250
4
9.1%
225
5
8.2%
220
6
8.0%
200
7
7.3%
142
8
5.2%
125
9
4.6%
120
10
4.4%
Total 2,733 100.0%
Source: Minnesota Department of Employment and Economic Development
(1) Number of district employees that work in school buildings located within the City.
Table 17
Percentage
of Total City
Employees
Rank
Employment
900
1
37.0%
300
2
12.3%
179
6
7.3%
190
3
7.8%
193
4
7.6%
170
7
7.0%
103
9
4.3%
190
5
7.4%
127
8
5.2%
100
10
4.1%
2,431 100.0%
153
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154
CITY OF ANDOVER, MINNESOTA
FULL TIME EQUIVALENT EMPLOYEES
Table 18
CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Governmental:
Administration
1.15
1.15
1.05
1.05
1.18
1.13
1.13
1.15
1.10
1.10
Human resources
0.02
0.02
0.03
0.03
0.03
0.03
0.03
0.03
0.08
0.08
City clerk
1.34
1.34
1.84
1.84
1.89
1.89
1.89
1.89
1.89
1.89
Elections
0.10
0.10
0.10
0.10
0.10
0.15
0.15
0.15
0.15
0.15
Financial administration
1.85
1.85
1.91
1.91
1.97
1.94
1.94
1.94
2.01
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
3.70
3.70
3.90
3.90
4.00
4.03
4.03
4.05
4.05
4.05
Engineering
4.33
4.33
4.20
4.20
4.40
4.48
4.49
4.48
4.46
4.56
Facility Management
0.07
0.22
0.22
0.22
0.16
1.05
1.05
0.96
0.87
0.87
EDA general
0.85
0.85
0.35
0.35
0.10
0.05
0.05
-
-
-
LRRWMO
0.20
0.20
0.15
0.15
0.07
0.07
0.07
0.07
0.09
0.10
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
3.21
3.21
3.21
3.21
4.35
4.35
Protective inspection
3.93
3.93
3.93
3.93
4.05
4.03
4.03
4.03
3.93
4.40
Emergency management
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.05
0.03
Public Works:
Streets and highways
5.46
4.97
4.88
5.34
5.68
5.37
5.19
5.22
5.65
5.20
Snow and ice
2.03
3.44
3.95
1.98
2.23
1.83
2.83
3.79
1.82
2.55
Street signs
1.43
1 34
1.30
1.70
1.42
1.57
1.52
1.46
1.58
1.51
Natural Resource Preservation
-
-
-
-
0.03
0.01
0.01
-
-
0.02
Drainage and mapping
-
-
-
-
-
-
-
-
-
0.10
ROW management/utility
0.20
0.20
0.20
0.20
0.08
0.08
0.08
0.08
0.08
0.17
Water
4.74
4.56
4.52
4.39
4.87
4.55
4.52
4.86
5.02
4.79
Sewer
3.17
3.49
3.06
3.36
2.91
2.82
3.08
2.80
3.23
3.55
Storm sewer
2.54
2.23
2.25
2.50
2.39
2.94
2.38
2.08
1.90
2.60
Central equipment
2.91
2.91
2.81
3.10
3.07
3.31
3.25
3.19
3.39
3.34
Park & Recreation:
Park and recreation
6.77
T 14
7.33
8.77
8.58
8.65
8.30
7.80
8.56
8.44
Community center
3.25
3.10
3.10
3.10
3.16
3.22
3.22
3.32
3.32
4.32
Recycling
1.30
0.77
0.76
0.72
0.79
1.03
1.00
0.88
0.91
0.81
55.50
56A0
56.00
57.00
57.43
5850
58.50
58.50
59.50
62.00
Source: City Finance Deparhoent
Note: Employees are allocated to various departments based on the functions that they perform.
155
CITY OF ANDOVER, MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Years
Function/Program
2012
2013
2014
2015
2016
General government:
Registered voters
18,366
n/a
19,772
n/a
22,051
Number of precincts
10
n/a
10
n/a
10
Public safety:
Police:
Number of calls for services
10,963
10,659
10,319
10,400
14,736
Number of traffic citations
2,202
2,480
2,536
2,066
1,614
Number of patrol hours
29,200
29,200
29,200
29,200
29,200
Fire:
Fire responses
320
308
257
262
378
Emergency medical responses
816
863
838
336
594
Protective inspections:
Inspections
3,872
3,766
2,840
3,100
3,562
Residential permits
81
98
52
74
111
Other permits
1,714
1,716
1,898
2,744
2,536
Public works:
Streets and highways:
Asphalt streets maintained (miles)
191
192
195
200
204
Gravel roads maintained (miles)
7
7
7
6
6
Cul-de-sacs and dead ends maintained
338
328
332
345
348
Parks and recreation:
Number of City parks
49
50
51
52
53
Total acreage mowed
302
318
332
332
332
Ballfields maintained
28
28
28
29
27
Number of playgrounds
38
39
38
38
41
Soccer fields maintained
17
20
16
16
18
Trail maintained (miles)
33
35
33
33
34
Community center bookings (hrs):
Fieldhouse
11,426
11,831
12,182
11,919
12,701
Ice arena
2,805
2,543
2,593
2,643
2,606
Water:
New connections
38
108
43
57
97
Total customers
6,267
6,375
6,418
6,475
6,572
Annual consumption
(thousands of gallons)
1,050,378
947,201
827,574
885,886
850,307
Sanitary Sewer:
New connections
38
108
43
57
101
Total customers
7,173
7,281
7,324
7,381
7,482
Storm Sewer:
Total customers
10,164
10,583
10,626
10,700
10,812
Storm sewer lines maintained (miles)
69
73
75
76
77
Source: Various City Departments
156
Table 19
2017 2018 2019 2020 2021
n/a 20,433 n/a 23,545 n/a
n/a 10 n/a 10 n/a
15,636
14,724
18,164
14,080
13,114
1,491
1,585
1,246
908
884
29,200
29,200
29,200
29,200
29,200
350
365
472
375
404
500
740
790
667
1,340
2,785
2,844
3,574
4,791
5,100
95
58
116
139
140
2,653
2,396
2,758
2,983
3,427
190
194
195
202
205
6
7
7
7
7
350
353
357
358
363
53
53
53
53
53
332
336
336
338
340
27
27
27
27
27
41
42
42
42
42
18
20
20
20
20
34
37
39
40
41
12,900
13,796
13,891
7,771
16,200
2,702
3,288
3,156
2,585
4,650
91
62
90
187
118
6,663
6,725
6,815
6,912
7,030
873,457
975,387
829,721
1,024,844
1,144,573
92
58
36
123
37
7,574
7,632
7,668
7,755
7,792
10,948
10,971
11,118
11,249
11,304
78
78
80
81
85
157
CITY OF ANDOVER, MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Years
Table 20
Function/Program 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Public Safety:
Fire:
Stations 3 3 3 3 3 3 3 3 3 3
Fire vehicles 21 20 21 19 20 18 19 17 16 17
Protective inspections:
Vehicles 4 4 4 4 4 4 4 5 5 5
Streets (miles)
191
192
195
200
204
190
194
195
202
205
Street lights
1,231
1,231
1,240
1,248
1,260
1,268
1,282
1,301
1,326
1,348
Traffic signals
24
24
24
25
25
26
26
27
27
27
Parks and Recreation:
Parks
49
50
51
52
53
53
53
53
53
53
Ball fields
28
28
28
29
27
27
27
27
27
27
Soccer fields
17
20
16
16
18
18
20
20
20
20
Playgrounds
38
39
38
38
41
41
42
42
42
42
Trails (miles)
33
35
33
33
34
34
37
39
40
41
Community centers
1
1
1
1
1
1
1
1
1
1
Water:
Water treatment plants
1
1
1
1
1
1
1
1
1
1
Storage facilities
2
2
2
2
2
2
2
2
2
2
Water main (miles)
111
112
115
116
118
119
120
121
122
123
Connections
6,267
6,375
6,418
6,475
6,635
6,663
6,725
6,815
6,912
7,030
Sanitary sewer:
Sewer main (miles)
93
94
95
96
96
98
99
100
101
103
Connections
7,173
7,281
7,324
7,381
7,482
7,574
7,632
7,668
7,755
7,792
Number of lift stations
9
9
9
9
9
9
9
10
10
11
Storm sewer:
Storm sewer lines (miles)
69
73
75
76
77
78
78
80
81
85
158
IV. OTHER FINANCIAL INFORMATION
159
CITY OF ANDOVER, MINNESOTA
COMBINED SCHEDULE OF INDEBTEDNESS
December 31, 2021
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%
$ 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:
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
2021A G.O. Equipment Certificates
12/28/2021
2/l/2026
2.00%
630,000
Total certificates of indebtedness
2,460,000
Capital Improvement Bonds:
2018A G.O. Capital Improvement Plan Bonds
12/27/2018
2/l/2044
3.00-5.00%
10,000,000
Street Reconstruction Bonds:
202IA G.O. Street Reconstruction Bonds
12/28/2021
2/l/2030
1.00-2.00%
7,135,000
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
54,340,000
Issuance premiums
-
Compensated absences payable
-
Total governmental activities indebtedness
54,340,000
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
$ 59,290,000
160
Exhibit 1
Principal Payments
Prior
Current
Outstanding
2022 Payment
Years
Year
12/31/21
Principal
Interest
Total
$ 5,840,000
$ 925,000
$ 10,550,000
$ 945,000
$ 268,931
$ 1,213,931
-
235,000
15,535,000
545,000
564,775
1,109,775
5,840,000
1,160,000
26,085,000
1,490,000
833,706
2,323,706
396,000
134,000
-
-
-
-
-
315,000
995,000
320,000
33,400
353,400
-
-
630,000
-
7,455
7,455
396,000
449,000
1,625,000
320,000
40,855
360,855
85,000
125,000
9,790,000
130,000
344,506
474,506
-
-
7,135,000
-
69,556
69,556
1,325,000
165,000
170,000
170,000
2,656
172,656
7,636,000
1,899,000
44,805,000
2,110,000
1,291,279
3,401,279
-
-
1,286,735
-
-
-
-
-
827,066
-
-
-
7,636,000
1,899,000
46,918,801
2,110,000
1,291,279
3,401,279
705,000
75,000
245,000
80,000
8,492
88,492
1,900,000
660,000
1,365,000
675,000
20,550
695,550
2,605,000
735,000
1,610,000
755,000
29,042
784,042
-
-
14,426
-
-
-
-
-
240,762
-
-
-
2,605,000
735,000
1,865,188
755,000
29,042
784,042
$ 10,241,000
$ 2,634,000
$ 48,783,989
$ 2,865,000
$ 1,320,321
$ 4,185,321
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF TAX CAPACITY RATES AND LEVIES
Exhibit 2
Taxes Payable
2022
2021
Tax capacity values
$ 40,210,548
$ 37,366,775
Captured tax increment value
(122,976)
(119,819)
Fiscal disparities - contribution
(1,414,808)
(1,348,420)
Local taxable value
38,672,764
35,898,536
Fiscal disparities - distribution
6,037,850
5,475,223
Adjusted tax capacity
S 44,710,614
S 41,373,759
2022
2021
Certified Tax Capacity
Certified Tax Capacity
Levy Rate
Levy Rate
General Revenue Levy:
General Fund
$ 9,998,370
$ 9,516,493
Community Center Operations Levy
155,000
155,000
Capital Equipment/Projects
275,000
250,000
Facility Maintenance Reserve
355,000
355,000
Parks Projects
15,000
15,000
Road and Bridge
1,409,579
1,342,456
Pedestrian Trail Maintenance
108,243
106,121
Total General Revenue Levy
12,316,192
27.590%
11,740,070
28.367%
Debt Service Levy:
2012C G.O. Abatement Bonds
974,628
973,263
2018A G.O. Capital Improvement Plan Bonds
617,519
456,344
2019A G.O. Abatement Bonds
1,014,065
976,966
2020A G.O. Equipment Certificate
374,850
406,224
2021A G.O. Equipment Certificate
170,000
170,000
2021A G.O. Street Recon
600,000
-
Total Debt Service Levy
3,751,062
8.403%
2,982,797
7.207%
Lower Rum River Watershed
40,000
0.250%
40,000
0.271%
Total
16,107,254
36.243%
14,762,867
35.845%
Voter -Approved Open Space Referendum - MV
-
0.00000%
151,078
0.00418%
$ 16,107,254
$ 14,913,945
162
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIES
GENERAL OBLIGATION BONDS
December 31, 2021
Exhibit 3
Capital
Street
Abatement
Abatement
Certificates of
Certificates of
Improvement
Reconstruction
Total
Taxes
Bonds
Bonds
Indebtedness
Indebtedness
Plan Bonds
Bonds
Deferred Tax
Payable
2012C
2019A
2020A
2021A
2018A
2021A
Levies
2022
$ 974,628
$ 1,014,065
$ 374,850
$ 170,000
$ 617,519
$ 600,000
$ 3,751,062
2023
1,269,745
1,178,782
376,740
174,773
658,094
1,003,863
4,661,997
2024
1,273,650
1,178,782
-
174,825
658,094
1,001,658
4,287,009
2025
1,269,824
1,177,207
-
176,715
662,557
999,138
4,285,441
2026
1,268,689
1,179,307
-
-
660,719
1,001,553
4,110,268
2027
1,265,513
1,174,320
-
-
663,344
1,003,548
4,106,725
2028
1,265,404
1,178,257
-
-
662,189
999,086
4,104,936
2029
1,273,309
1,177,627
-
-
660,719
998,844
4,110,499
2030
1,274,070
1,175,737
-
-
658,934
-
3,108,741
2031
1,278,900
1,177,837
-
-
662,084
-
3,118,821
2032
-
1,176,997
-
-
659,512
-
1,836,509
2033
-
1,175,370
-
-
661,874
-
1,837,244
2034
-
1,178,205
-
-
658,514
-
1,836,719
2035
-
1,174,845
-
-
659,498
-
1,834,343
2036
-
1,175,947
-
-
659,380
-
1,835,327
2037
-
1,176,105
-
-
658,750
-
1,834,855
2038
-
1,175,317
-
-
662,858
-
1,838,175
2039
-
1,178,835
-
-
660,358
-
1,839,193
2040
-
-
-
-
662,576
-
662,576
2041
-
-
-
-
663,364
-
663,364
2042
-
-
-
-
658,166
-
658,166
2043
-
-
-
-
662,918
-
662,918
$12,413,732 $ 21,023,542 $ 751,590 $ 696,313 $ 14,492,021 $ 7,607,690 $ 56,984,888
163
CITY OF ANDOVER, MINNESOTA
SCHEDULE OF FUND TRANSFERS
Decernber31,2021
Exhibit 4
Transfer
Transfer
In
Out
General Fund
Water EF
$ 115,213
$ -
General Fund Admin Allocation
Sewer EF
76,828
-
General Fund Admin Allocation
Storm Sewer EF
19,990
-
General Fund Admin Allocation
Road and Bridge CPF
750,000
Road improvements
Total General Fund
212,031
750,000
Special Revenue Funds (SRF)
Community Center SRF
2012C GO Abatement Bonds DST
300,000
Debt Service Allocation
Right of Way Management / Utility SRF
Road and Bridge CPF
51000
Roadway Depredation
Total Special Revenue Funds
305,000
Debt Service Funds (DSF)
2012C GO Abatement Bonds DST
Community Center SRF
300,000
Debt Service Allocation
2016A GO Equipment Certificate DST
Building Fund CPF
40,687
Close Debt Service Fetid
2019A GO Abatement Bonds DST
Park Dedication CPF
202,604
Debt Service Allocation
Total Debt Service Funds
502,604
40,687
Canital Projects Funds (CPF)
Water Trunk CPF
Water EF
300,000
-
Replacement Reserve
Water EF
148,705
Debt Service Allocation
300,000
148,705
Sewer Trunk CPF
Sewer EF
400,000
Replacement Reserve
Road and Bridge CPF
General Fund
750,000
Road improvements
Right of Way Management / Utility SRF
5,000
Roadway Degredation
755.000
Park Dedication CPF
2019A GO Abatement Bonds DST
202,604
Debt Service Allocation
Building Fund CPF
2014A GO Equipment Certificate DST
40,687
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
Debt Service Allocation
Sewer EF
22,650
Debt Service Allocation
45,300
Total Capital Projects Funds
1,564,487
351,309
Enterprise Funds (EF)
Water EF
Water Trunk CPF
148,705
-
Debt Service Allocation
General Fund
-
115,213
General Fund Admin Allocation
Water Trunk CPF
300,000
Replacement Reserve
2018A GO Capital Improvement Plan Bonds CPF
22,650
Debt Service Allocation
148,705
437,863
Scwcr EF
General Fund
-
76,828
General Fund Admin Allocation
Sewer Trunk CPF
400,000
Replacement Reserve
2018A GO Capital Improvement Plan Bonds CPF
22,650
Debt Service Allocation
499,478
Storm Sewer EF
General Fund
19,990
General Fund Admin Allocation
Capital Equipment Reserve CPF
23,500
Debt Service Allocation
43,490
Total Enterprise Funds
148,705
980,831
Total All Funds
$ 2,427,827
$ 2,427,827
164