HomeMy WebLinkAbout2023 ACFR C i ' F
NDOVE
1685 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, 2023
Prepared By: Finance Department
City of Andover
CITY OF ANDOVER,MINNESOTA
TABLE OF CONTENTS
Page
Reference No.
1.INTRODUCTORY SECTION
Letter of Transmittal 2
Organization 9
Organizational Chart 10
Certificate of Achievement 11
11.FINANCIAL SECTION
Independent Auditor's Report 15
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-Community Center Special Revenue Fund Statement 10 82
Budgetary Comparison Schedule-CARES Grant/ARPA Funding Special Revenue Fund Statement 11 83
Schedule of Changes in the Total OPEB Liability and Related Ratios Statement 12 84
Schedule of Proportionate Share of Net Pension Liability-General Employees Retirement Fund Statement 13 85
Schedule of Pension Contributions-General Employees Retirement Fund Statement 14 86
Schedule of Proportionate Share of Net Pension Liability-Public Employees Police and Fire Fund Statement 15 87
Schedule of Pension Contributions-Public Employees Police and Fire Fund Statement 16 88
Notes to Required Supplementary Information:
Budgets 89
Modified Approach for City Streets and Trails Infrastructure Capital Assets 89
OPEB Information 90
Pension Information 90
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 17 95
Combining Statement of Revenues,Expenditures and Changes in Fund Balances-
Nonmajor Governmental Funds Statement 18 96
Nonmajor Special Revenue Funds:
Subcombining Balance Sheet-Nonmajor Special Revenue Funds Statement 19 98
Subcombining Statement of Revenues,Expenditures and Changes in
Fund Balances-Nonmajor Special Revenue Funds Statement 20 100
Nonmajor Debt Service Funds:
Subcombining Balance Sheet-Nonmajor Debt Service Funds Statement 21 104
Subcombining Statement of Revenues,Expenditures and Changes in
Fund Balances-Nonmajor Debt Service Funds Statement 22 106
Nonmajor Capital Projects Funds:
Subcombining Balance Sheet-Nonmajor Capital Project Funds Statement 23 110
Subcombining Statement of Revenues,Expenditures and Changes in
Fund Balances-Nonmajor Capital Project Funds Statement 24 112
Special Revenue Funds:
Schedules of Revenues,Expenditures and Changes in
Fund Balances-Budget and Actual:
EDA General Statement 25 114
Drainage and Mapping Statement 26 115
LRRWMO Statement 27 116
Forestry Statement 28 117
Right-of-Way Management/Utility Statement 29 118
Charitable Gambling Statement 30 119
Construction Seal Coating Statement 31 120
Internal Service Funds:
Combining Statement of Net Position-Internal Service Funds Statement 32 122
Combining Statement of Revenues,Expenses and Changes in Net Position-
Internal Service Funds Statement 33 123
Combining Statement of Cash Flows-Internal Service Funds Statement 34 124
III.STATISTICAL SECTION
Net Position by Component-Last Ten Fiscal Years Table 1 126
Changes in Net Position-Last Ten Fiscal Years Table 2 128
Fund Balances-Governmental Funds-Last Ten Fiscal Years Table 3 132
Changes in Fund Balances-Governmental Funds-Last Ten Fiscal Years Table 4 134
Assessed and Estimated Actual Value of Taxable Property-Last Ten Fiscal Years Table 5 136
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 6 137
Property Tax Levies and Collections-Last Ten Fiscal Years Table 7 138
Principal Taxpayers-Current Year and Nine Years Ago Table 8 139
Estimated Market Values and New Construction-Last Ten Fiscal Years Table 9 140
Special Assessment Levies and Collections-Last Ten Fiscal Years Table 10 141
Ratio of Net Bonded Debt to Assessed Value and Net Bonded Debt Per Capita-
Last Ten Fiscal Years Table 11 142
Computation of Direct and Overlapping Debt Table 12 143
Computation of Legal Debt Margin-Last Ten Fiscal Years Table 13 144
Pledged-Revenue Coverage-Last Ten Fiscal Years Table 14 147
Outstanding Debt by Type-Last Ten Fiscal Years Table 15 148
Demographic and Economic Statitistics-Last Ten Years Table 16 150
Principal Employers-Current Year and Nine Years Ago Table 17 151
Full Time Equivalent Employees-City Government Employees by Function/Program-
Last Ten Fiscal Years Table 18 153
Operating Indicators by Function/Program-Last Ten Years Table 19 154
Capital Asset Statistics by Function/Program-Last Ten Years Table 20 156
IV.OTHER INFORMATION
Combined Schedule of Indebtedness Exhibit 1 158
Schedule of Tax Capacity Rates and Levies Exhibit 2 160
Schedule of Deferred Tax Levies-General Obligation Bonds Exhibit 3 161
Schedule of Fund Transfers Exhibit 4 162
I. INTRODUCTORY SECTION
1
I T Y 0 F
NDOVE
V A
1685 CROSSTOWN BOULEVARD N.W. . ANDOVER, MINNESOTA 55304 . (763) 755-5100
FAX (763) 755-8923 . WWW.ANDOVERMN.GOV
May 21,2024
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:
1. Introductory
11. Financial
111. Statistical
The Introduction includes a list of the City's principal officials as of December 31,2023,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 U.S.Representative Galusha A.Grow of
Pennsylvania. Senator Grow spoke at a political campaign in Anoka that year, and the town name was changed to reflect U.S.
Representative 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.
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To the Honorable Mayor and City Council
City of Andover,Minnesota
You may have heard the popular"train myth"about how Andover received its name. The myth states that a train tipped over in a
swamp, and an eyewitness, relaying the incident, said it"went over and over,"thereby naming the city"Andover." However,
research reveals that the name Andover first appeared in an article dated March 14, 1899 in the Anoka County Union Newspaper-
before train tracks were ever built in the city.
The article stated that the Eastern Minnesota line of the Great Northern Railway was in the process of constructing railroad tracks
from the Coon Creek Cut-off to the North. The railway announced that new railroad stations with mathematical precision were to
be located five miles apart from each other. The new stations(from Coon Creek to the North,along the new railroad line)were to
be named Andover,Cedar,Bethel,Isanti,Cambridge,Stanchfield,Braham,Grasston,Cornell,and Brook Park. On July 4, 1899,
the first train passed through the Andover station. Where the railway came up with the name Andover remains unknown.
Andover Village was established in 1972 and then became the City of Andover,a city of the fourth class,in 1974. Today the City
of Andover's population exceeds 20,000,classifying it as a second-class city.
The City of Andover as it exists today consists of 23,040 acres. Andover has a population estimated at approximately 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
Community Center
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 2024 and 2025,with an estimated population of 33,272 by 2024.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 2023.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 83.1%of the total in 2023. They are general
property taxes at 73.2%and charges for services at 9.9%. In prior years,intergovernmental revenue was the second largest category
of revenue for the General Fund. Intergovernmental revenue includes state aids, such as local government aid(LGA), highway
maintenance aid,fire relief aid and police aid;and county grants,such as recycling and community development.
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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
resulting in the elimination of that revenue for the City.
The City's General Fund receives a substantial amount of revenue from licenses and permits. The past ten years are shown below:
Revenues Change
2014 $364,430 n/a
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)
2022 972,879 81,117
2023 854,739 (118,140)
There was a slight increase in construction activity in 2015. Tn 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 111 permits in 2016 to 94 in 2017.
The decline in single-family building permits continued in 2018 to a total of 60,but commercial permit valuations exceeded 2017
by over$10,000,000 thus the increase in 2018. The increase in 2019 is due to single-family building permits reaching 116,nearly
double that of 2018. The growth continued in 2020 and 2021 with single-family building permits topping out at 139 and 140,
respectively. In 2022,single-family building permits decreased to 103 but included one multi-family permit valued at$22 million,
a 150-unit apartment complex. In 2023,single-family building permits decrease to 64 but included three new commercial permits
valued at$22 million.
The City's General Fund also receives a considerable amount of revenue from charges for services. The past ten years are shown
below:
Revenues Change
2014 $ 998,510 n/a
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)
2022 1,295,430 258,501
2023 1,447,506 152,076
The City analyzes user fees every year as part of the budget process and adjusts where appropriate. 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 that 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. The increase in 2022 and 2023 is largely due to the increase in construction activity and
engineering fees charged to roadway projects.
In 2023, the City issued 64 new single-family building permits and zero multi-family building permit with a total valuation of
$21,454,268 compared to 103 new single-family building permits and one multi-family building permits with a total valuation of
$56,329,461 the prior year. The past ten years are shown below:
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To the Honorable Mayor and City Council
City of Andover,Minnesota
New Residential New Commercial/Industrial
Permits Valuation Permits Valuation
2014 52 $14,816,971 14 $ 4,285,281
2015 74 21,558,010 16 2,513,609
2016 112 39,368,036 6 3,534,200
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 - -
2022 104 56,329,461 3 6,983,400
2023 64 21,454,268 3 22,344,000
Residential Development
New residential Final Plat approvals included 145 urban lots for Fields at Winslow Cove 2nd and 31 Additions.A final plat for
Legacy at Petersen Farms provided 28 rural lots.The City currently has a supply of 183 urban lots and 34 rural lots.
Commercial Industrial Development
New institutional/conmzercial/industrial businesses moved to Andover in 2023. These business' included Heathers Mastectomy
Boutique,Inner Sanctum Spa,Adore Nails,Taco Bell,Rock Hard Landscaping,Smokey's Tobacco.White Rabbit also expanded
to a new larger location.Transform Church,Andover Christian Church,and Grace Lutheran Church remodeled and/or expanded.
Anoka County started construction on a new 911 Radio Shop.Aurora Vista Apartments opened for rent providing 150 market rate
apartment units,ranging from studios to three bedrooms.
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 Sheriffs 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:
Number of
Firm Type of Business/Product Employees
Anoka-Hennepin ISD No 11 Elementary and secondary education 816
Wal-Mart Retai 1 335
Fairview-Andover Clinic Healthcare 300
Anoka County Sheriffs Office County government and services 250
Kottkes'Bus Service,Inc. 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 2023.The following list is a surmnary of some of the major
initiatives completed throughout the year.
1) In 2023,the City secured$6.1 million in State funding to extend municipal water into the Red Oaks neighborhood,a
neighborhood where private wells were discovered to be contaminated with the chemical 1,4-dioxane while conducting
water sampling near the Waste Disposal Engineering(WDE)Closed Landfill in Andover.
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To the Honorable Mayor and City Council
City of Andover,Minnesota
2) New residential Final Plat approvals included 145 urban lots within Field of Winslow Cove 2nd and 3rd Additions.A
final plat for Fields at Winslow Cove phase 2 was submitted but not approved in 2022 for 36 urban lots.A final plat
for Legacy at Petersen Farms provided 28 rural lots.The City currently has a supply of 183 urban lots and 34 rural lots
(which includes the lots above).
3) In 2023, the City saw commercial, industrial and institutional construction throughout the community. Many
businesses came to Andover that did extensive tenant finishes,upgrades or remodels in existing multi-tenant buildings,
including as follows: Heathers Mastectomy Boutique, Inner Sanctum Spa, Adore Nails, Taco Bell, Rock Hard
Landscaping,Smokey's Tobacco.White Rabbit also expanded to a new larger location.
4) In 2023, the following churches remodeled and/or expanded: Transform Church, Constance Free Church,Andover
Christian Chinch,and Grace Lutheran Church.Anoka County started construction on a new 911 Radio Shop.Aurora
Vista Apartments opened for rent providing 150 market rate apartment units,ranging from studios to 3 bedrooms.
5) Andover Crossings,a development project that started construction in 2022 was to provide multifamily housing and
almost 5 acres of additional commercial land for future development.In this development,the City issued a building
permit for a 150-unit market rate apartment complex (Aurora Vista) and a 32-unit assisted living and memory care
facility(Westgate Senior Living). Both opened for rent in 2023 as construction of each completed. Taco Bell also
opened a new building at Andover Crossings in 2023.
6) In 2023, Legacy Christian Academy, a K-12 private school, started another school expansion project to meet
enrollment demands.The expansion includes a three-story classroom addition(approximately 33,000 sq.ft.)between
the existing buildings to replace temporary classrooms.In late 2023,Legacy Christian Academy and the City are again
in discussions for an additional expansion to meet enrollment demands.
7) 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 2023,the City continued to host monthly recycling events (on weekends),with a specific focus,such as
paper shredding and appliance or electronics collection.
8) A strategic planning session was held with the City Council on May 25,2023, and June 8, 2023,the Andover City
Council and Staff Leadership Team convened work sessions with a Facilitator for the purpose of updating its long-
term vision, organizational values, external values, and short-term goals. The outcome of those sessions was
summarized,and the Council adopted the updated"City of Andover Strategic Plan"at the June 20,2023,City Council
meeting.
9) The City's Annual Comprehensive Financial Report(ACFR)for the year ended December 31,2022,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 twenty-first consecutive year receiving the award and it is anticipated that the City's ACFR for the year ended
December 31,2023,will also achieve this award.
10) For the twenty-second year in a row,the City of Andover was awarded the Government Finance Officers Association
Distinguished Budget Presentation Award for the City's 2023 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.
11) 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 2023.
12) The City continues to make considerable 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.
13) 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 2023, the City
continues to see increased growth in the number of online and counter credit card payments for various City permits
and services. Approximately 70% of the Building Department's permits are done online, saving our customers
considerable time and travel expenses.
6
To the Honorable Mayor and City Council
City of Andover,Minnesota
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.
RELEVANT FINANCIAL POLICIES
The City has a policy regarding General Fund reserve balances. The City plans for an unassigned fund balance in the General Fund
equivalent to 6-months of the current year's budgeted expenditures to provide working capital between semi-annual property tax
settlements. Since the property tax settlements are received by the City in July and December, the City needs sufficient cash
reserves to avoid short-term borrowing to finance operations. The City also classifies fund balances for prepaid items,inventories,
and other legal obligations. The City may also classify a portion of fund balance for special purposes.
The primary goal of the City's investment policy is to ensure the safety of the principal invested. Cash temporarily idle during the
year is invested in certificates of deposit,commercial paper,and obligations of the U.S.Treasury and government agencies. Cash
balances from all City funds are pooled into an investment fund and investment income is distributed on a pro-rata basis at the end
of each quarter. Extended maturities are utilized to take advantage of higher yields but staggered in a way to meet projected
liquidity needs.
Capital financing for major improvements is provided through improvement bonds,general obligation bonds,tax increment bonds,
or revenue bonds. Depending on the project, special assessments may be levied upon properties to share in the cost of the
improvement project. The special assessments are collected over a period of time and are used to help satisfy the improvement
bond debt or reimburse the fund used to finance the project.
The City Council has also adopted financial management policies to allow for the planning of adequate funding of services desired
by the public,to manage City finances wisely, and to carefully account for public funds. These policies are reviewed each year
when the annual budget is adopted. The financial management policies included: operating budget policies; revenue policies;
accounting, auditing, and financial reporting policies; investment policies; debt policies; capital improvement policies; and risk
management policies.
The City Council has adopted a comprehensive set of internal control procedures. The City's accounting system was developed
and is continually evaluated to assure the adequacy of internal accounting controls. Internal accounting controls are designed to
provide reasonable but not absolute assurance in the areas of safeguarding assets against loss from unauthorized use or disposition,
reliability of financial records, and convenience of access for preparing financial statements and maintaining accountability for
assets. The concept of reasonable assurance adopted by the City Council recognizes that the evaluation of cost and benefits requires
estimates and judgments by management,and the cost of a control should not exceed the benefits likely to be derived. All internal
controls are evaluated against the above criteria. It is our belief that the City's internal accounting controls adequately safeguard
the City's assets and provide reasonable assurance of properly recording financial transactions.
OTHER INFORMATION
AWARDS. The Government Finance Officers Association (GFOA)of the United States and Canada presented a Distinguished
Budget Presentation Award to the City of Andover for its annual budget for the fiscal year beginning January 1,2023. This is the
twenty second 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 1,2024 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 2022 Annual Comprehensive Financial Report. This is the twenty first 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 2023 continues to
conform to the Certificate of Achievement Program requirements and have submitted it to the GFOA to determine its eligibility
for another award.
7
To the Honorable Mayor and City Council
City of Andover,Minnesota
INDEPENDENT AUDIT. State statutes require an annual audit by independent certified public accountants. Redpath and
Company,LLC.was engaged by the City to render an opinion on the City's financial statements. The auditor's report on the basic
financial statements and combining and individual fund statements and schedules is included in the financial section of this report.
ACKNOWLEDGMENTS. The preparation of this report could not have been accomplished without the efficient services and
dedication of the Finance Department staff and the consultation of the City's auditing firm. Staff members:Lee Brezinlca,Melissa
Knutson and Brenda Fildes have my sincere appreciation for their contribution to the preparation of this report.
i also want to express our appreciation to the Mayor and members of the City Council for their interest and support in planning and
conducting the financial operations of the City in a fiscally responsible manner.
Respectfully submitted,
James Dickinson
City Administrator
8
CITY OF ANDOVER,MINNESOTA
ORGANIZATION
December 31,2023
Office Name Term
Mayor Sheri Bukkila January 7,2025
Council Member Jamie Barthel January 5,2027
Council Member Ted Butler January 7,2025
Council Member Rick Engelhardt January 5,2027
Council Member Randy Nelson January 7,2025
City Administrator/City Clerk Janes 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
9
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 Civil Defense Engineering Financial Fire Protection Planning&Zoning Streets/Highways
Services Administration Services
Hrunan Resources' Protective Right of-Way Assessing Snow&Ice
Inspections Management Removal
Newsletter Drainage& Facilities Storm Sewer
Mapping Management
Economic Lower Rum River Unallocated Sheet Lighting
Development Watershed Mgmt
Authority Organization
Commurnty Forestry Capital Equipment Signage
Center Reserve
Elections Trail& Debt Service Funds Tratfc Signals
Transportation
Animal Control Construction Uniinanced Projects Parks&Recreation
Seal Coating
Information Water Trunk Tax Increment Recycling
Sys ems Projects
Ciry Cleric Storm Sewer Building Fund Water
Sewer T unk Permanent Sewer
Improvement
Revolving
Road&B dge G.O.Capital Central Equipment
Notes
Park Dedicat on Risk
Projects Management
10
0
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Andover
Minnesota
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
December 31, 2022
O,A,r4:� P. ,01�
Executive Director/CEO
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II. FINANCIAL SECTION
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INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Andover,Minnesota
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities,the business-type activities,
each major fund,and the aggregate remaining fund information of the City of Andover,Minnesota,as of and for the
year ended December 31,2023,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 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 31,2023,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
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 2022 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 remaining fund information in our report dated May 25,2023. In our
opinion,the summarized comparative information presented herein as of and for the year ended December 31,2022
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.
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15
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 generally accepted auditing standards 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 performing an audit in accordance with generally accepted auditing standards 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.
• 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.
16
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 accompanying 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. 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 15,2024 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.
r
REDPATH AND COMPANY,LLC
St.Paul,Minnesota
May 15,2024
17
CITY OF ANDOVER,MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2023
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, 2023. 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 Hi2hli2hts
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$228,483,783(net position). Of this amount,$61,470,559(unrestricted net position)may be used to meet the government's
ongoing obligations to citizens and creditors in accordance with the City's fund designations and fiscal policies.
The City's total net position increased by $9,534,526 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$56,332,337.
Special Debt Capital
General Revenue Service Projects Totals
Nonspendable $ 400,396 $ - $ - $ 26,938 $ 427,334
Restricted - 257,140 3,819,273 2,481,392 6,557,805
Committed - 610,504 - - 610,504
Assigned - 1,448,640 - 36,139,000 37,587,640
Unassigned 11,149,054 - - - 11,149,054
$11,549,450 $ 2,316,284 $ 3,819,273 $38,647,330 $56,332,337
The City's total long-term liabilities decreased by$5,769,188 during the current fiscal year,primarily due to the decrease in net pension liability
and bonds payable.
Beginning Ending
Balance Additions Reductions Balance
Governmental activities:
Bonds payable $43,910,579 $ - $ (3,196,156) $40,714,423
Other post employment benefits 420,208 11,690 - 431,898
Compensated absences 894,134 480,035 (454,179) 919,990
Net pension liability 5,053,525 159,601 (1,820,161) 3,392,965
Total governmental activities 50,278,446 651,326 (5,470,496) 45,459,276
Business-type activities:
Bonds payable 955,000 - (770,000) 85,000
Other post employment benefits 68,406 1,903 - 70,309
Compensated absences 183,030 25,039 (50,208) 157,861
Net pension liability 571,689 18,763 (175,515) 414,937
Total business-type activities 1,678,125 45,705 (995,723) 728,107
Total City long-term liabilities $51,956,571 $ 697,031 $ (6,466,219) $46,187,383
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 31,2023
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 1 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 eight individual major governmental funds. Information is presented separately in the governmental fund balance sheet
and in the governmental fund statement of revenues,expenditures and changes in fund balances for the following major funds: General Fund,
Community Center Special Revenue Fund(SRF),CARES Grant/ARPA Funding SRF 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.
19
CITY OF ANDOVER,MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2023
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 17 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$228,483,783 (net position).
The largest portion of the City's net position (S160,090,398 or 70 percent) reflects its investment in capital assets (e.g. land, buildings,
machinery,and equipment)less any related debt used to acquire those assets that is still outstanding. It does not include any refunding debt
that has not met the refunding date of the original issue.The City uses these capital assets to provide services to citizens;consequently,these
assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt,it should be noted
that the resources needed to repay this debt must be provided from other sources,since the capital assets themselves cannot be used to liquidate
these liabilities.
CITY OF ANDOVER'S NET POSITION
Governmental Activities Business-Type Activities Totals
2022 2023 2022 2023 2022 2023
Current and other assets $ 68,180,694 $ 69,584,483 $ 13,061,669 $ 13,929,453 $ 81,242,363 $ 83,513,936
Capital assets 153,997,415 153,809,031 44,953,814 47,080,780 198,951,229 200,889,811
Total assets 222,178,109 223,393,514 58,015,483 61,010,233 280,193,592 284,403,747
Deferred outflows of resources 1,888,879 1,542,529 193,089 126,998 2,081,968 1,669,527
Long-term liabilities
outstanding 50,278,446 45,459,276 1,678,125 728,107 51,956,571 46,187,383
Other liabilities 5,053,282 3,869,326 107,158 140,188 5,160,440 4,009,514
Total liabilities 55,331,728 49,328,602 1,785,283 868,295 57,117,011 50,196,897
Deferred inflows of resources 6,171,018 7,244,637 38,274 147,957 6,209,292 7,392,594
Net position:
Net investment in capital
assets 113,896,484 113,094,608 44,098,814 46,995,780 157,995,298 160,090,388
Restricted 5,088,833 6,922,836 - - 5,088,833 6,922,836
Unrestricted 43,578,925 49,345,360 12,286,201 13,125,199 55,865,126 61,470,559
Total net position $ 162,564,242 $ 168,362,804 $ 56,385,015 $ 60,120,979 $218,949,257 $228,483,783
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($61,470,559)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.
Government-wide Activities
Governmental activities increased the City's net position by$5,798,562 and business-type activities increased net position by$3,735,964. In
2022,the City reported a substantial unrealized decline($2 million)in the fair value of its investments. In 2023,that unrealized decline was
reduced to$450,000 resulting in unrestricted investment earnings of$2,937,476 as compared to($1,425,523)for 2022. In addition,property
tax revenue increased due to a four percent tax levy increase($884,271). The increase in captial grants and contributions is largely due to when
developments are completed and those developer-funded assets are recorded. Key elements of the activities are as follows:
20
CITY OF ANDOVER,MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2023
City of Andover's Changes in Net Position
Governmental Activities Business-Type Activities Total
2022 2023 2022 2023 2022 2023
Revenues:
Program revenues:
Charges for services $ 5,993,843 $ 5,053,333 $ 6,844,161 $ 7,592,844 $ 12,838,004 $ 12,646,177
Operating grants
and contributions 3,214,092 2,793,283 3,600 - 3,217,692 2,793,283
Capital grants
and contributions 5,156,356 5,876,602 1,266,143 2,937,115 6,422,499 8,813,717
General revenues:
Property taxes 16,036,590 16,920,861 - - 16,036,590 16,920,861
Tax increment 93,862 100,058 - - 93,862 100,058
Grants and contributions
not restricted to
specific programs 4,417 3,682 - - 4,417 3,682
Unrestricted investments
earnings (1,165,410) 2,454,949 (260,113) 482,527 (1,425,523) 2,937,476
Gain on sale of capital
assets 50,113 39,991 - 15,795 50,113 55,786
Total revenues 29,383,863 33,242,759 7,853,791 11,028,281 37,237,654 44,271,040
Expenses:
General government 3,832,215 3,758,496 - - 3,832,215 3,758,496
Public safety 6,245,503 6,231,734 - - 6,245,503 6,231,734
Public works 8,393,927 10,889,133 - - 8,393,927 10,889,133
Parks and recreation 5,312,290 5,285,236 - - 51312,290 5,285,236
Recycling 180,188 184,028 - - 180,188 184,028
Economic development 677,828 306,754 - - 677,828 306,754
Interest on long-term debt 1,191,104 1,206,611 - - 1,191,104 1,206,611
Water - - 2,743,148 3,243,050 2,743,148 3,243,050
Sewer - - 2,581,604 2,868,295 2,581,604 2,868,295
Storm sewer - - 669,468 763,177 669,468 763,177
Total expenses 25,833,055 27,861,992 5,994,220 6,874,522 31,827,275 34,736,514
Increase(decrease)in net position
before transfers 3,550,808 5,380,767 1,859,571 4,153,759 5,410,379 9,534,526
Transfers 454,680 417,795 (454,680) (417,795) - -
Change in net position 4,005,488 5,798,562 1,404,891 3,735,964 5,410,379 9,534,526
Netposition-beginning 158,558,754 162,564,242 54,980,124 56,385,015 213,538,878 218,949,257
Net position-ending $ 162,564,242 $168,362,804 $ 56,385,015 $ 60,120,979 $218,949,257 $228,483,783
21
CITY OF ANDOVER,MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2023
Governmental Activities
Following are specific graphs that provide comparisons of the governmental activities revenues and expenses:
Governmental Activities-Revenues
Unrestricted Charges for services
investments earnings 15.2% Grants and
7.4% contributions not
restricted to specific
programs
Tax increment 0.0%
0.3%
Gain on sale of capital
assets
0.1%
Capital grants and
contributions
17.7%
Property taxes
50.9%
Operating grants and
contributions
8.4%
Governmental Activities-Expenses
Interest on long-term
debt
4.3% General government
Economic 13.5%
development
1.1%
Recycling
0.7%
Parks and recreation
19.0%
Public safety
22.4%
Public works
39.0%
22
CITY OF ANDOVER,MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2023
Business-Type Activities
Following are graphs showing the business-type activities revenue and expense comparisons:
Business-Type Activities-Revenues Gain on sale of
capital assets
0.14%
Capital grants and
contributions
26.63%
Unrestricted
investments
earnings
4.38% "' Charges for
services
68.85%
Business-Type Activities-Expenses
Storm sewer
11.10%
Water
47.18%
Sewer /
41.72%
23
CITY OF ANDOVER,MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2023
Financial Analvsis 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$56,332,337. Approximately
19.8 percent of this total amount($11,149,054)constitutes unassigned fund balance. The remainder of the fund balance($45,183,283)is not
available for new spending because it is either 1)nonspendable($427,334),2)restricted($6,557,805),3)committed($610,504)or 4)assigned
($37,587,640).
Major Funds
The general fund increased by$1,585,109 in 2023,which was a$2,377,026 change from the final budget and$1,247,234 greater than last years
increase in fund balance. The final budget showed a decrease in fund balance of$791,917. The change in fund balance is due to various
departments under-spending and revenues exceeding budgets related to residential and commercial construction activity. The City Council
also approved a four percent increase in the general fund levy for 2023. The major change compared to the adopted budget is largely due to
the one-time transfer of$200,000 to the Central Equipment Internal Service Fund in 2023.
The community center SRF increased by$275,868 primarily due to court and ice rental exceeding expectations and savings in operational
expenditures.
The cares grant/arpa funding SRF balance increased by$19,089 as the City allocates the use of federal funds.
The water and sewer trunk CPF's 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 increased connection fees and special assessments: Fields of Winslow Cove 2"d
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 CPF increased by$1,044,654 as special assessment revenues increase and a eight percent increase in tax levy.
The tax increment CPF increased by$15,374 primarily due to the lack of rental properties available to purchase for future redevelopment.
The 2021 A G.O. street reconstruction bonds CPF decreased by $3,759,521 as the remaining bond proceeds are spent towards street
reconstruction projects.
Nonmajor Funds
The park dedication CPF increased by$182,403 as park dedication fees are collected when developments are started. The Fields of Winslow
Cove 2"d and Legacy at Petersen Farms accounted for the majority of the park dedication fees collected in 2023.
The trail and transportation CPF increased by$108,564 as trail fees are collected when developments are started. The Fields of Winslow Cove
2"d and Legacy at Petersen Farms accounted for the majority of the trail fees collected in 2023.
The capital equipment reserve CPF increased by$1,332,863 primarily due to a one-time 2023 Public Safety Aid($1,431,312)from the State
of Minnesota to provide public safety.
The permanent improvement revolving CPF decreased by$169,169 due to the transfer of$200,000 to the 2021A G.O street reconstruction
bonds DSF for future debt service payments.
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$13,042,642(water$7,688,293,sewer$3,855,087 and
storm sewer$1,499,262)and internal service funds of$1,209,835. The enterprise funds had a net increase in net position from current year
activity of$3,722,210(water$2,400,421,sewer$657,714 and storm sewer$664,075. Internal service funds had a net increase in net position
of$439,529. Net position changes in the enterprise fiords are due to: water - increased water sales because of the drought and capital
contributions from developers;sewer&storm—capital contributions offsetting operational shortages and transfers out.
24
CITY OF ANDOVER,MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2023
Capital Asset and Debt Administration
Capital assets. The City's investment in capital assets for its governmental and business-type activities as of December 31,2023,amounts to
$200,889,811 (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.
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 2023,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 31,2023,the City's street and trail system was rated at an Overall Condition
Index(OCI)of 6.4.
The City's streets and trails are constantly deteriorating resulting from the following factors: (1)traffic using the system; (2)the sun's ultra-
violet rays drying out and breaking down the top layer of pavement;(3)utility company/private development trenching operations;(4)water
damage from natural precipitation;and(5)frost heave. The City is continuously taking actions to prolong the life of the system through short-
tenn maintenance activities such as pothole patching,crack sealing,seal coating and overlaying. The City expended$7,830,116 on street and
trail maintenance for the year ending December 31,2023. 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$3,000,000.
Maintenance Actual OCI
Year Estimate Expenditures Rating
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
2022 2,750,000 4,159,982 6.0
2023 3,000,000 7,830,116 6.4
25
CITY OF ANDOVER,MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2023
Primary Government
Beginning Ending
Balance Additions Deletions Balance
Governmental activities:
Land and improvements $ 11,205,340 $ - $ - $ 11,205,340
Streets and trails 92,163,187 975,624 - 93,138,811
Construction in progress 40,807 338,602 - 379,409
Buildings and improvements 62,336,523 348,773 - 62,685,296
Furniture and equipment 1,725,617 41,226 (253,869) 1,512,974
Machinery and equipment 10,828,729 484,219 (100,340) 11,212,608
Other park improvements 9,203,002 820,427 (177,086) 9,846,343
Total capital assets 187,503,205 3,008,871 (531,295) 189,980,781
Less accumulated depreciation for:
Buildings and improvements 19,991,849 2,074,901 - 21,966,750
Furniture and equipment 866,161 135,108 (179,827) 821,442
Machinery and equipment 7,328,154 555,049 (100,340) 7,782,863
Other park improvements 5,419,626 358,155 (177,086) 5,600,695
Total accumulated depreciation 33,505,790 3,123,213 (457,253) 36,171,750
Governmental activities
capital assets-net 153,997,415 (114,342) (74,042) 153,809,031
Business-type activities:
Land and improvements 730,243 - - 730,243
Construction in progress 35,063 283,060 (35,063) 283,060
Buildings and improvements 15,877,590 - - 15,877,590
Furniture and equipment 1,219,894 28,610 - 1,248,504
Machinery and equipment 1,658,118 294,461 (119,372) 1,833,207
Collection and distribution 68,082,270 3,548,645 - 71,630,915
Total capital assets
being depreciated 87,603,178 4,154,776 (154,435) 91,603,519
Less accumulated depreciation for:
Buildings and improvements 11,588,908 396,213 - 11,985,121
Furniture and equipment 63,844 81,344 - 145,188
Machinery and equipment 1,143,154 110,568 (119,372) 1,134,350
Collection and distribution 29,853,458 1,404,622 - 31,258,080
Total accumulated depreciation 42,649,364 1,992,747 (119,372) 44,522,739
Business-type activities
capital assets-net 44,953,814 2,162,029 (35,063) 47,080,780
Total capital assets-net $ 198,951,229 $ 2,047,687 $ (109,105) $ 200,889,811
Additional information on the City's capital assets can be found in Note 6.
Long-term debt. At the end of the current fiscal year,the City had total long-term debt outstanding of$41,877,274,an decrease of$3,965,469
from 2022. General obligation abatement bonds ($23,065,000)were used to refund the 2006 and 2007 EDA lease revenue refunding bonds
and expand the existing community center. General obligation revenue bonds($85,000)were used for an addition to the water treatment plant
and the refunding of portions of the water treatment plant bonds. Certificates of indebtedness($825,000)financed capital equipment purchases.
Capital improvement bonds($9,370,000)were used to construct a new vehicle maintenance facility with a washbay and a cold storage building.
Street reconstruction bonds($6,310,000)were used to reconstruct roadways in the City.
Additional long-term debt in the amount of$1,144,423 for issuance premiums and$1,077,851 is for compensated absences.
26
CITY OF ANDOVER,MINNESOTA
MANAGEMENT'S DISCUSSION AND ANALYSIS
December 31,2023
City of Andover's Outstanding Debt
Governmental Business-Type
Activities Activities Total
Bonds payable:
Abatement bonds $ 23,065,000 $ - $ 23,065,000
G.O.revenue bonds - 85,000 85,000
Certificates of indebtedness 825,000 - 825,000
Capital improvement bonds 9,370,000 - 9,370,000
Street reconstruction bonds 6,310,000 - 6,310,000
Total bonds payable 39,570,000 85,000 39,655,000
Issuance premiums 1,144,423 - 1,144,423
Compensated absences 919,990 157,861 1,077,851
Total $ 41,634,413 $ 242,861 $ 41,877,274
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$143,586,754. Only$35,798,226 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 7 and 8.
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.
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28
BASIC FINANCIAL STATEMENTS
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30
CITY OF ANDOVER,MINNESOTA
STATEMENT OF NET POSITION Statement 1
December 31,2023
With Comparative Totals For December 31,2022
Primary Government
Government Business-Type Totals
Activities Activities 2023 2022
Assets:
Cash and investments $ 58,853,481 $ 11,645,050 $ 70,498,531 $ 69,060,724
Accrued interest 531,136 83,544 614,680 384,684
Due from other governmental units 260,252 19,458 279,710 238,982
Accounts receivable-net 194,113 1,727,650 1,921,763 1,868,721
Prepaid items 501,241 - 501,241 261,840
Property taxes receivable:
Unremitted 164,716 164,716 204,960
Delinquent 97,180 - 97,180 131,857
Special assessments receivable:
Unremitted 7,089 3,392 10,481 6,480
Delinquent 22,304 276,389 298,693 278,861
Deferred 2,196,049 - 2,196,049 1,669,768
Lease receivable 5,594,570 - 5,594,570 5,994,827
Inventories-at cost 307,352 173,970 481,322 300,659
Land held for resale 955,000 - 855,000 840,000
Capital assets-net:
Nondepreciable 104,723,560 1,013,303 105,736,863 104,174,640
Depreciable 49,085,471 46,067,477 95,152,948 94,776,589
Total assets 223,393,514 61,010,233 284,403,747 280,193,592
Deferred outflows of resources:
Related to other post employment benefits 17,155 2,665 19,820 21,746
Related to pensions 1,525,374 124,333 1,649,707 2,060,222
Total deferred outflows of resources 1,542,529 126,998 1,669,527 2,081,968
Liabilities:
Interfund payable 82,557 (82,557) - -
Accounts payable 507,334 109,916 617,250 432,750
Contracts payable 495,458 23,471 518,929 168,533
Deposits payable 723,391 2,234 725,625 785,956
Due to other governmental units 36,228 50,658 86,886 1,134,444
Salaries payable 237,768 34,961 272,729 275,517
Unearned revenue 1,277,029 - 1,277,029 1,861,827
Accrued interest payable 509,561 1,505 511,066 501,413
Other post employment benefits:
Due in more than one year 431,898 70,309 502,207 488,614
Compensated absences:
Due within one year 137,999 23,680 161,679 161,575
Due in more than one year 781,991 134,181 916,172 915,589
Bonds/notes payable(net of unamortized premiums):
Due within one year 3,240,000 85,000 3,325,000 3,895,000
Due in more than one year 37,474,423 - 37,474,423 40,870,579
Net pension liability:
Due in more than one year 3,392,965 414,937 3,807,902 5,625,214
Total liabilities 49,328,602 869,295 50,196,897 57,117,011
Deferred inflows of resources:
Related to leases 5,594,570 - 5,594,570 5,994,827
Related to pensions 1,650,067 147,957 1,798,024 214,465
Total deferred inflows of resources 7,244,637 147,957 7,392,594 6,209,292
Net position:
Net investment in capital assets 113,094,608 46,995,780 160,090,388 157,995,298
Restricted for:
Debt service 3,329,304 - 3,329,304 3,024,557
Tax increment purposes 1,840,834 1,840,834 1,810,878
Public services 1,752,698 - 1,752,698 253,398
Unrestricted 48,345,360 13,125,199 61,470,559 55,865,126
Total net position $ 168,362,804 $ 60,120,979 $ 228,483,793 S 218,949,257
The accompanying notes arc an integral part of these financial statements.
31
CITY OF ANDOVER,MINNESOTA
STATEMENT OF ACTIVITIES
For The Year Ended December 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Program Revenues
Charges Operating Capital
For Grants and Grants and
Expenses Services Contributions Contributions
Functions/Programs
Primary government:
Government activities:
General government $ 3,758,496 $ 1,166,194 $ 112,577 $ -
Public safety 6,231,734 1,078,354 2,019,506 -
Public works 10,889,133 361,824 546,117 4,753,171
Parks and recreation 5,285,236 2,271,023 - 1,123,431
Recycling 184,029 53,879 115,083 -
Economic development 306,754 122,059 - -
Interest on long-term debt 1,206,611 - - -
Total government activities 27,861,992 5,053,333 2,793,283 5,876,602
Business-type activities:
Water 3,243,050 4,263,197 - 1,133,432
Sewer 2,868,295 2,643,592 - 1,123,443
Storm sewer 763,177 686,055 - 680,240
Total business-type activities 6,874,522 7,592,844 - 2,937,115
Total primary government $ 34,736,514 $ 12,646,177 $ 2,793,283 $ 8,813,717
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 2023 2022
$ (2,479,725) $ - $ (2,479,725) $ (1,573,546)
(3,133,874) - (3,133,874) (4,156,517)
(5,228,021) - (5,228,021) (2,258,958)
(1,890,782) - (1,890,782) (1,778,336)
(15,066) - (15,066) (11,504)
(184,695) - (184,695) (498,799)
(1,206,611) - (1,206,611) (1,191,104)
(14,138,774) - (14,138,774) (11,468,764)
- 2,153,579 2,153,579 1,327,542
- 898,740 898,740 329,929
- 603,118 603,118 462,213
- 3,655,437 3,655,437 2,119,684
(14,138,774) 3,655,437 (10,483,337) (9,349,080)
General revenues:
General property taxes 16,920,861 - 16,920,861 16,036,590
Tax increment collections 100,058 - 100,058 93,862
Grants and contributions not
restricted to specific programs 3,682 - 3,682 4,417
Unrestricted investment earnings 2,454,949 482,527 2,937,476 (1,425,523)
Gain on sale of capital assets 39,991 15,795 55,786 50,113
Transfers 417,795 (417,795) - -
Total general revenues,gain on sale of
capital assets and transfers 19,937,336 80,527 20,017,863 14,759,459
Change in net position 5,798,562 3,735,964 9,534,526 5,410,379
Net position-beginning 162,564,242 56,385,015 218,949,257 213,538,878
Net position-ending $ 168,362,804 $ 60,120,979 $ 228,483,783 $ 218,949,257
33
CITY OF ANDOVER,MINNESOTA
BALANCESHEET
GOVERNMENTALFUNDS
December 31,2023
With Comparative Totals For December 31,2022
Community CARES Grant/
Center ARPA Funding Water Trunk Sewer Trunk
General SRF SRF CPF CPF
Assets:
Cash and investments $ 11,786,608 $ 1,443,825 $ 1,223,228 $ 8,451,638 $ 8,958,691
Accrued interest 68,481 121,036 11,247 70,293 72,230
Due from other governmental units 88,183 - - 64,762 -
Accounts receivable-net 79,240 89,976 -
Prepaid items 235,016 -
Property taxes receivable:
Umemitted 103,692 1,499
Delinquent 62,431 903
Special assessments receivable:
Unremitted 179 -
Delinquent 13,795 -
Deferred - - 230,531
Lease receivable 174,570 5,420,000 -
Inventories-at cost 165,380 -
Land held for resale - - - -
Total assets $ 12,777,575 $ 7,077,239 $ 1,234.475 $ 8,817,224 $ 9,030,921
Liabilities,Deferred Inflows of Resources,and Fund Balances
Liabilities:
Accounts payable $ 137,917 $ 167,892 $ - $ 116,274 $ 1,328
Contracts payable 19,304 - 18,071 - 67,238
Deposits payable 604,531 75,207 - 5,741 5,741
Due to other governmental units 20,587 4,309 138 -
Salaries payable 194,990 29,348 - -
Unearned revenue - - 1,168,466 - -
Total liabilities 977,329 276,756 1,186,537 122,153 74,307
Deferred inflows of resources:
Related to leases 174,570 5,420,000 - - -
Unavailable revenues 76,226 903 230,531
Total deferred inflows of resources 250,796 5,420,903 230,531
Fund balances(deficit):
Nonspendable 400396 - -
Restricted -
Committed - - - -
Assigned - 1,379,580 47,938 9,464,540 8,956,614
Unassigned 11,149.054 - - - -
Total fund balances 11,549,450 1,379,580 47,938 8,464,540 8,956,614
Total liabilities,deferred inflows of resources,
and fund balances(deficit) $ 12,777,575 $ 7,077,239 $ 1,234,475 $ 8,817,224 $ 9,030,921
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 funds.
Deferred inflows of resources-pension related are associated with long-term liabilities that are not due and payable in the current period and,
therefore,are not reported in the funds.
Net position of governmental activities
The accompanying notes are an integral part of these financial statements.
34
Statement 3
Tax
Road& Increment Other Totals
Bridge Projects Governmental Governmental Funds
CPF CPF Funds 2023 2022
$ 12,804,256 $ 1,004,725 $ 12,339,195 $ 58,012,166 $ 57,447,276
96,844 8,429 75,629 524,189 340,991
- - 107,307 260,252 230,524
500 15,915 185,631 284,008
- - 26,938 261,954 45,152
16,709 42,816 164,716 204,960
10,059 23,787 97,180 131,857
6,910 - 7,089 3,295
8,509 - 22,304 19,128
1,877,269 88,249 2,196.049 1,669,301
- - 5,594,570 5,994,827
- 165,380 134,976
- 855,000 - 855,000 840,000
$ 14,820,556 $ 1,868,654 $ 12.719,836 $ 68.346,480 $ 67,346,295
$ 54,945 $ 3,051 $ 9,917 $ 491,324 $ 284,729
362,355 19,000 9,490 495,458 161,612
1,800 4,589 25,782 723,391 783,722
10,014 1,180 - 36,228 1,102,144
- - 1,272 225,610 233,561
- - 108,563 1,277,029 1,861,827
429,114 27,820 155,024 3,249,040 4,427,595
- - - 5,594,570 5,994,827
1,895,837 855,000 112,036 3,170,533 2,660,286
1,895,837 855,000 112,036 8,765,103 8,655,113
- - 26,938 427,334 180,128
985,834 5,571,971 6,557,805 8,508,752
- - 610,504 610,504 584,224
12,495,605 6,243,363 37,587,640 35,196,270
- - - 11.149,054 9,794,213
12,495,605 985,834 12,452,776 56,332,337 54,263,587
$ 14,820,556 $ 1,868,654 $ 12,719,836 $ 68,346,480 $ 67,346,295
$ 56,332,337 $ 54,263,587
153,809,031 153,997,415
1,542,529 1,888,879
3,170,533 2,660,286
1,127,278 701,503
(45,968,837) (50,771,237)
(1,650,067) (176,191)
$ 168,362,804 $ 162,564,242
35
CITY OF ANDOVER,MINNESOTA
STATEMENT OF REVENUES,EXPENDITURES AND
CHANGES IN FUND BALANCE
GOVERNMENTALFUNDS
For The Year Ended December 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Community CARES Grant/
Center ARPA Funding Water Trunk Sewer Trunk
General SRF SRF CPF CPF
Revenues:
General property taxes $ 10,663,259 $ 154,097 $ $ $
Tax increment collections - -
Licenses and permits 854,739 - -
Intergovernmental 977,028 615,104 64,762
Special assessments - - - 6,250
Charges for services 1,447,506 1,443,266 -
Fines 70,683 - - - -
Investment income 377,355 57,713 25,049 421,328 426,211
Miscellaneous:
Park dedication fees - - - - -
Connection charges - 338,138 61,430
Rent - 635,884 - -
Other 185,646 242,754 - - -
Total revenues 14,576,216 2,533,714 640,153 830,478 487,641
Expenditures:
Current:
General government 3,291,005 - - - -
Public safety 5,800,627 - - -
Public works 2,045,172 - 9,225 410,474 1,434
Parks and recreation 1,473,574 1,781,249 - - -
Recycling 176,063 -
Economic development -
Unallocated 23,436
Capital outlay:
General government -
Public safety
Public works - - -
Parks and recreation 210,002 176,597 611,839
Economic development - - -
Debt service:
Principal retirement
Interest
Paying agent fees
Professional services - -
Construction/acquisition costs - - - 317,755 137,389
Total expenditures 13,019,879 1,957,846 621,064 728,229 138,823
Revenues over(under)expenditures 1,556,337 575,868 19,089 102,249 348,818
Other financing sources(uses):
Transfers in 228,772 - - 300,000 400,000
Transfers out (200,000) (300,000) (133,945) -
Proceeds from sale of capital assets - - -
Total other financing sources(uses) 28,772 (300,000) - 166,055 400,000
Net increase(decrease)in fund balance 1,585,109 275,868 19,089 268,304 748,818
Fund balance-January 1 9,964,341 1,103,712 28,849 8,196,236 8,207,796
Fund balance-December 31 $ 11,549,450 $ 1,379,580 $ 47,938 $ 8,464,540 $ 8,956,614
The accompanying notes are an integral part of these financial statements.
36
Statement 4
2021A G.O
Tax Sheet
Road& Increment Reconstruction Other Intra Totals
Bridge Projects Bonds Governmental Activity Governmental Funds
CPF CPF CPF Funds Eliminations 2023 2022
$ 1,717,457 $ $ $ 4,420,307 $ $ 16,955,120 $ 16,060,412
- 100,476 - 100,476 94,701
- - - 954,739 972,879
1,844,102 1,566,135 5,067,131 3,593,374
1,105,178 3,525 1,114,953 709,864
116,906 3,007,678 2,646,415
- - - 70,683 55,983
597,019 51,499 28,556 447,573 2,422,303 (1,145,770)
- - - 337,085 337,085 1,360,540
- 399,568 1,962,378
- - - 635,884 624,508
10,059 104,333 - 206,439 (30,600) 718,631 1,048,482
5,263,815 256,308 28,556 7,097,970 (30,600) 31,684,251 27,983,766
- - - 230,974 3,521,979 3,490,416
- - 61,199 5,861,826 5,765,962
3,906,822 3,788,077 118,903 10,280,107 7,648,471
- - 28,526 3,283,349 3,233,250
- - 176,063 169,169
240,934 56,257 297,191 743,191
- - 23,436 17,396
162,036 162,036 296,850
- 133,270 133,270 584,126
120,639 208,658 329,297 543,654
- 410,206 1,408,644 803,230
- - 27,618
3,125,000 3,125,000 2,1 10,000
1,260,997 1,260,997 1,291,283
6,160 6,160 5,200
5,000 5,000 -
- - - 42,788 497,932 388,924
4,027,461 240,934 3,788,077 5,849,974 30,372,287 27,118,740
1,236,354 15,374 (3,759,521) 1,247,996 (30,600) 1,311,964 865,026
8,300 - 895,300 (827,700) 1,004,672 996,481
(200,000) (358,300) 858,300 (333,945) (152,877)
86,059 - 86,059 163,823
(191,700) - 623,059 30,600 756,786 1,007,427
1,044,654 15,374 (3,759,521) 1,871,055 - 2,068,750 1,872,453
11,450,951 970,460 3,759,521 10,591,721 54,263,597 52,391,134
$ 12,495,605 $ 985,834 $ $ 12,452,776 $ $ 56,332,337 $ 54,263,587
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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 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
2023 2022
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) $ 2,068,750 $ 1,872,453
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. (592,034) (402,316)
The net effect of various miscellaneous transactions involving capital assets is to increase
(decrease)net position(i.e.,sales,trade-ins,and donations). 901,582 989,878
Revenues in the statement of activities that do not provide current financial resources are not
reported as revenues in the funds. 510,247 309,555
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. 3,196,156 2,181,156
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 (13,357) (19,352)
is the net effect of employee benefits earned and paid during the year.
Transfer out of governmental capital assets contributed to Enterprise Funds. (497,932) (388,924)
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. (42,626) (38,045)
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. (157,999) (334,698)
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. 425,775 (164,219)
Change in net position of governmental activities(Statement 2) $ 5,798,562 $ 4,005,488
The accompanying notes are an integral part of these financial statements.
39
CITY OF ANDOVER,MINNESOTA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
December 31.2023
With Comparative Totals For December 31,2022
Water Sewer Storm Sewer
Assets:
Current assets:
Cash and cash equivalents $ 7,068,085 $ 3,258,081 $ 1,318,884
Accrued interest 48,433 24,796 10,315
Due from other governmental units 1,229 18,229 -
Accounts receivable-net 771,582 738,441 217,627
Prepaid items - - -
Special assessments receivable
Umetnittcd 1,714 1,250 428
Delinquent 134,495 108,784 33,110
Deferred - - -
Inventories-at cost 173,970
Total current assets 8,199,508 4,149,581 1,580,364
Noncurrent assets:
Capital assets:
Land 730,243
Buildings and structures 15,877,590 - -
Machinery and equipment 1,487,098 880,945 713,768
Distribution and collection system 23,769,506 32,126,670 15,734,739
Construction in progress 283,060
Total capital assets 42,147,497 33,007,515 16,448,507
Less: Allowance for depreciation (21,985,156) (15,778,986) (6,758,597)
Total noncurrent assets 20,162,341 17,228,529 9,689,910
Total assets 28,361,849 21,378,110 11,270,274
Deferred outflows ofresources:
Related to other post employment benefits 1,697 978 -
Related to pensions 74,473 49,860
Total deferred outflows ofresources 76,160 50,838
Liabilities:
Current liabilities:
Accounts payable 70,722 20,326 18,868
Contracts payable 1,861 2,085 19,525
Deposits payable 2,234 - -
Interest payable 1,505 -
Due to other governmental units 42,611 8,047 -
Salaries payable 19,903 8,909 6,149
Bonds payable-due within one year 85,000 - -
Compensated absences payable-due within one year 11,064 7,132 5,484
Total current liabilities 234,900 46,499 50,026
Noncurrent liabilities:
Other post employment benefits-due in more than one year 40,177 30,132 -
Bonds payable-due in more than one year - - -
Compensated absences payable-due in more than one year 62,693 40,412 31,076
Net pension liability-due in more than one year 236,441 178,496
Total noncurrent liabilities 339,311 249,040 31,076
Total liabilities 574,211 295,539 81,102
Deferred inflows ofresources:
Related to pensions 98,164 49,793
Net position:
Net investment in capital assets 20,077,341 17,228,529 9,689,910
Unrestricted 7,688,293 3,855,087 1,499,262
Total net positiou $ 27,765,634 $ 21,083,616 $ 11,189,172
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
2023 2022 2023 2022
$ 11,645,050 $ 11,136,922 $ 841.315 $ 476,526
83,544 40,728 6,947 2,965
19,458 8,458 - -
1,727,650 1,584,713 8,482 -
- - 239.287 216,688
3,392 3,185 - -
276,389 259,733
- 467 - -
173,970 27,463 141,972 138,220
13,929,453 13,061,669 1,238,003 834,399
730,243 730,243 - -
15,877,590 15,877,590
3,081,711 2,878,012
71,630,915 68,082,270
283,060 35,063
91,603,519 97,603,178
(44,522,739) (42,649,364)
47,080,780 44,953,814
61,010,233 58,015,483 1,238,003 834,399
2,665 2,924 -
124,333 190,165
126,998 193,089
109,916 95,803 16,010 52,218
23,471 6,921 - -
2,234 2,234
1,505 8,622
50,658 32,300 - -
34,961 30,081 12,158 11,875
85,000 770,000 - -
23,680 27,455
331,425 973,416 28,168 64,093
70,309 68,406 - -
- 85,000
134,181 155,575
414,937 571,689
619,427 880,670
950,852 1,854,086 28.168 64,093
147,957 38,274
46,995,780 44,098,814 - -
13,042,642 12,217,398 1,209,835 770,306
$ 60,038,422 $ 56,316,212 $ 1,209,835 $ 770,306
$ 60,038,422 $ 56,316,212
82,557 68,803
$ 60,120,979 $ 56,385,015
41
CITY OF ANDOVER,MINNESOTA
STATEMENT OF REVENUES,EXPENSES AND
CHANGES IN NET POSITION
PROPRIETARY FUNDS
For The Year Ended December 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Water Sewer Storm Sewer
Operating revenues:
User charges $ 4,171,854 $ 2,643,592 $ 686,055
Meters 36,544 - -
Other 54,799 - -
Total operating revenues 4,263,197 2,643,592 686,055
Operating expenses:
Personal services 690,134 349,339 243,973
Supplies 514,545 19,294 16,004
Other service charges 1,105,216 187,796 156,262
Disposal charges - 1,638,530 -
Depreciation 955,535 687,763 349,449
Total operating expenses 3,265,430 2,882,722 765,688
Operating income(loss) 997,767 (239,130) (79,633)
Nonoperating revenues(expenses):
Intergovernmental revenue - - -
Investment income 271,922 151,519 59,086
Gain on sale of capital assets 15,795 - -
Interest expense (5,036) - -
Total nonoperating revenues(expenses) 282,681 151,519 59,086
Income(loss)before contributions
and transfers 1,280,448 (87,611) (20,547)
Capital contributions 1,451,187 1,260,832 723,028
Transfers:
Transfers in 133,945 - -
Transfers out (465,159) (515,507) (38,406)
Total transfers (331,214) (515,507) (38,406)
Change in net position 2,400,421 657,714 664,075
Net position-January 1 25,365,213 20,425,902 10,525,097
Net position-December 31 $ 27,765,634 $ 21,083,616 $ 11,189,172
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 2023 2022 2023 2022
$ - $ 7,501,501 $ 6,726,845 $ 1,827,850 $ 1,453,013
- 36,544 49,416 - -
- 54,799 67,900 29,370 60,717
- 7,592,844 6,844,161 1,857,220 1,513,730
- 1,283,446 1,163,524 623,610 605,647
- 549,843 391,273 433,791 456,270
(30,600) 1,418,674 1,149,458 637,936 625,371
- 1,638,530 1,364,778 - -
- 1,992,747 1,888,549 - -
(30,600) 6,883,240 5,957,582 1,695,337 1,687,288
30,600 709,604 886,579 161,883 (173,558)
- - 3,600 - -
- 482,527 (260,113) 32,646 (19,640)
- 15,795 - - -
- (5,036) (7,659) - -
- 493,286 (264,172) 32,646 (19,640)
30,600 1,202,890 622,407 194,529 (193,198)
- 3,435,047 1,655,067 - -
- 133,945 152,877 245,000 -
(30,600) (1,049,672) (996,481) - -
(30,600) (915,727) (843,604) 245,000 -
- 3,722,210 1,433,870 439,529 (193,198)
- 56,316,212 54,882,342 770,306 963,504
$ - $ 60,038,422 $ 56,316,212 $ 1,209,835 $ 770,306
$ 3,722,210 $ 1,433,870
13,754 (28,979)
$ 3,735,964 $ 1,404,891
43
CITY OF ANDOVER,MINNESOTA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
For The Year Ended December 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Water Sewer Storm Sewer
Cash flows from operating activities:
Receipts from customers and users $ 4,175,070 $ 2,569,384 $ 678,057
Payment to suppliers (1,767,609) (1,828,876) (138,649)
Payment to employees (705,638) (336,927) (240,245)
Net cash flows from operating activities 1,701,823 403,581 299,164
Cash flows from noncapital financing activities:
Intergovernmental revenues - - -
Transfers in 133,945
Transfers out (465,159) (515,507) (38,406)
Net cash flows from noncapital financing activities (331,214) (515,507) (38,406)
Cash flows from capital and related financing activities:
Acquisition of capital assets (122,794) (349,092) (212,780)
Interest paid on debt (12,153)
Payment of bonds (770,000)
Proceeds from the sale of capital assets 15,795
Net cash flows from capital and related financing activities (889,152) (349,092) (212,780)
Cash flows from investing activities:
Investment income 246,312 139,914 53,485
Net increase in cash and cash equivalents 727,769 (321,104) 101,463
Cash and cash equivalents-January 1 6,340,316 3,579,185 1,217,421
Cash and cash equivalents-December 31 $ 7,068,085 $ 3,258,081 $ 1,318,884
Reconciliation of operating income to net cash provided
(used)by operating activities:
Operating income(loss) $ 997,767 $ (239,130) $ (79,633)
Adjustments to reconcile operating income(loss)
to net cash flows from operating activities:
Depreciation 955,535 687,763 349,449
Changes in assets,deferred outflows of resources,
liabilities and deferred inflows ofresources:
Decrease(increase)in due from other governmental units (1,229) (9,771) -
Decrease(increase)in accounts receivable (77,488) (58,290) (7,159)
Decrease(increase)in prepaid items -
Decrease(increase)in special assessments (9,410) (6,147) (839)
Decrease(increase)in inventory (146,507) - -
Decrease(increase)in deferred outflows ofresources 39,058 27,033 -
Increase(decrease)in accounts payable (19,739) 16,813 17,039
Increase(decrease)in contracts payable (12) (17) 16,579
Increase(decrease)in due to other governmental units 18,410 (52) -
Increase(decrease)in salaries payable 3,434 (567) 2,013
Increase(decrease)in other post employment benefits 1,088 815 -
Increase(decrease)in compensated absences (31,238) 4,354 1,715
Increase(decrease)in net pension liability (92,735) (64,017) -
Increase(decrease)in deferred inflows ofresources 64,889 44,794 -
Total adjustments 704,056 642,711 378,797
Net cash provided(used)by operating activities $ 1,701,823 $ 403,581 $ 299,164
Noncash investing,capital and financing activities:
Assets contributed to the Enterprise Funds $ 1,451,187 $ 1,260,832 $ 723,028
The accompanying notes arc an integral part of these financial statements.
44
Statement 8
Totals
Governmental Activities-
Totals Internal Service Funds
2023 2022 2023 2022
$ 7,422,511 $ 6,714,359 $ 1,848,738 $ 1,513,730
(3,735,133) (3,386,467) (1,134,296) (1,098,465)
(1,282,810) (1,185,194) (623,327) (605,086)
2,404,568 2,142,698 91,125 (189,821)
- 3,600 -
133,945 152,877 -
(1,019,072) (965,881) 245,000
(885,127) (809,404) 245,000
(684,666) (45,868) -
(12,153) (29,043)
(770,000) (755,000)
15,795
(1,451,024) (829,911) -
439,711 (276,194) 28,664 (20,417)
508,128 227,189 364,789 (210,238)
11,136,922 10,909,733 476,526 686,764
$ 11,645,050 $ 11,136,922 $ 841,315 $ 476,526
$ 679,004 $ 855,979 $ 161,883 $ (173,558)
1,992,747 1,888,549 -
(11,000) 1,582
(142,937) (102,270) (8,482) -
(22,599) 4,010
(16,396) (29,114) -
(146,507) (4,060) (3,752) (41,614)
66,091 36,132 -
14,113 48,258 (36,208) 20,780
16,550 (494,278) -
18,358 (278) - -
4,880 (3,675) 283 561
1,903 4,701 - -
(25,169) (57,732)
(156,752) 252,622
109,683 (253,718)
1,725,564 1,286,719 (70,758) (16,263)
$ 2,404,568 $ 2,142,698 $ 91,125 $ (189,821)
$ 3,435,047 $ 1,655,067 $ $ -
45
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
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-type 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 ofaccounting. 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 31,2023
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 fiends:
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 Community Center Special Revenue Fund(SRF)is used to account for the operations of the Andover YMCA/Community
Center,particularly the sports complex,ice arena,field house and concessions. The aquatics portion of the Community Center
is under the operations of the YMCA. The primary revenue sources are charges for services and rent.
The CARES Grant/ARPA Funding 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 Sewer 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 stonn 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 farad'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.
47
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
D. BUDGETS
Budgets are legally adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are
legally adopted for the General and Special Revenue Funds. Budgeted expenditure appropriations lapse at year-end.
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are
recorded in order to reserve that portion of the appropriation,is not employed by the City because it is at present not considered
necessary to assure effective budgetary control or to facilitate effective cash management.
E. LEGAL COMPLIANCE-BUDGETS
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
1. The City Administrator submits to the City Council a proposed operating budget for the fiscal year commencing the
following January 1. The budget includes proposed expenditures and the means of financing them.
2. Public hearings are conducted to obtain taxpayer comments.
3. The budget is legally enacted through City Council action.
4. Expenditures may legally exceed budgeted appropriations at the fund level through City Council action. Also,the City
Council may authorize transfers of budgeted amounts between departments within any fund.
5. Formal budgetary integration is employed as a management control device during the year for the General Fund and
Special Revenue Funds. Budgetary control for Capital Projects Funds is accomplished through the use of project controls.
6. The legal level of budgetary control is at the department level for the General Fund and at the fund level for the Special
Revenue Funds. Also inherent in this controlling function is the management philosophy that the existence of a particular
item or appropriation in the approved budget does not automatically mean that it will be spent. The budget process has
flexibility in that,where need has been properly demonstrated,an adjustment can be made within the department budget
by the City Administrator or between departments by the City Council.
7. The City Council made supplemental budget appropriations throughout the year. Individual amendments were not
material in relation to the original appropriations which were adjusted.
The following is a listing of Special Revenue Funds whose expenditures exceed budget appropriations:
Final Over
Budget Actual Budget
Special Revenue Funds:
Charitable Gambling $ 38,000 $ 87,848 $ 49,848
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 fund
shown as interfund receivables in the advancing fund,and an interfund payable in the fund with the deficit,until adequate resources
are received. These interfund balances are eliminated on the government-wide financial statements.
Investments are stated at fair value, except for investments in external investment pools that meet GASB 79 requirements, are
stated at amortized cost. Short-term investments, such as commercial paper and banker's acceptances, are reported at amortized
cost.
For purposes of the Statement of Cash Flows of Proprietary Fund Types,cash equivalents are defined as short-term,highly liquid
investments that are both:
48
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
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 I%penalty is added each month the taxes remain unpaid,until October 15. If the taxes due May 15 are
not paid by October 15,a 2%penalty per month is added to homesteaded property and 4%per month to non-homesteaded property
until January 1.
If the taxes are not paid by January 1,further penalties are added. Penalties and interest apply to both taxes and special assessments.
There are some exceptions to the above penalties,but they are not material.
Within 30 days after the tax settlement date,the County Treasurer is required to pay 70%of the estimated collections of taxes and
special assessments to the City Treasurer. The County Treasurer must pay the balance to the City Treasurer within 60 days after
settlement,provided that after 45 days interest accrues at the rate of 8%per annum.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes property tax revenue in the period for which the taxes were levied. Uncollectible property taxes are not
material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
The City recognizes property tax revenue when it becomes both measurable and available to finance expenditures of the current
period. In practice,current and delinquent taxes and State credits received by the City in July,December and January are recognized
as revenue for the current year. Taxes collected by the County by December 31 (remitted to the City the following January)and
taxes and credits not received at the year-end are classified as delinquent and due from County taxes receivable. The portion of
delinquent taxes not collected by the City in January is fully offset by deferred inflow of resources because they are not available
to finance current expenditures.
49
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
I. SPECIAL ASSESSMENT REVENUE RECOGNITION
Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement
projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent
with the term of the related bond issue. Collection of annual installments(including interest)is handled by the County Auditor in
the same manner as property taxes. Property owners are allowed to(and often do)prepay future installments without interest or
prepayment penalties.
Once a special assessment roll is adopted,the amount attributed to each parcel is a lien upon that property until full payment is
made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go
delinquent,the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit properties are allocated first to the County's
costs of administering all tax forfeit properties. Pursuant to State Statutes,a property shall be subject to a tax forfeit sale after three
years unless it is homesteaded,agricultural or seasonal recreational land in which event the property is subject to such sale after
five years.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The City recognizes special assessment revenue in the period that the assessment roll was adopted by the City Council.
Uncollectible special assessments are not material and have not been reported.
GOVERNMENTAL FUND FINANCIAL STATEMENTS
The City recognizes revenue from special assessments when it becomes measurable and available to finance expenditures of the
current fiscal period. In practice,current and delinquent special assessments received by the City are recognized as revenue for the
current year. Special assessments that are collected by the County by December 31 (remitted to the City the following January)
are also recognized as revenue for the current year. All remaining delinquent,deferred and special deferred assessments receivable
in governmental funding are completely offset by deferred inflow of resources.
J. INVENTORIES
Inventories of the Governmental Funds and the Proprietary Funds are stated at cost,which approximates market,using the first-in,
first-out(FIFO)method.
Inventories of Governmental Funds are recorded as expenditures when consumed rather than when purchased.
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. LEASE RECEIVABLE
The City's lease receivable is measured at the present value of lease payments expected to be received during the lease term. Under
the lease agreement,the City may receive variable lease payments that are dependent upon the lessee's revenue/the lessee's usage
levels.
A deferred inflow of resources is recorded for the lease. The deferred inflow of resources is recorded at the commencement of the
lease in an amount equal to the initial recording of the lease receivable and is recognized as revenue over the lease term.
M. 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.
N. 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.
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CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are
recorded at acquisition value at the date of donation. The City has chosen the modified approach for reporting street and trail
system capital assets.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not
capitalized.
The City implemented GASB Statement No. 51.Accounting and Financial Reporting for Intangible Assets effective January 1,
2010 which required the City to capitalize and amortize intangible assets. Intangible assets include easements and computer
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 2023 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(OCT)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.
O. 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.
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CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
P. 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.
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.
Q. 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.
R. INTERFUND TRANSACTIONS
Interfund services provided and used are accounted for as revenues, expenditures or expenses. Transactions that constitute
reimbursements to a fund for expenditures/expenses initially made from it that are properly applicable to another fund,are recorded
as expenditures/expenses in the reimbursing fund and as reductions of expenditures/expenses in the fund that is reimbursed.
Interfund loans are reported as an interfund loan receivable or payable which offsets the movement of cash between funds. All
other interfund transactions are reported as transfers.
S. 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.
T. RECLASSIFICATIONS
Certain amounts presented in prior year data have been reclassified in order to be consistent with the current year's presentation.
U. 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 31,2022,from which the summarized information was derived.
V. 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, represent a consumption of net assets that
52
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The
government has two items that qualify for reporting in the category. It is other post employment benefits and the pension related
deferred outflows of resources reported in the government-wide Statement of Net Position and the proprietary funds Statement of
Net Position.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of
resources. This separate financial statement element, deferred inflows of resources, represent an acquisition of net assets 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 and lease related deferred inflows reported in the government-wide Statement of Net Position and
governmental funds Balance Sheet. 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.
W. 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.
X. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
1. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND
THE GOVERNMENT-WIDE STATEMENT OF NET POSITION
The governmental fund balance sheet includes a reconciliation between fund balance— total governmental funds and net
position — governmental activities as reported in the government-wide statement of net position. One element of that
reconciliation explains that"long-term liabilities,including bonds payable, other post employment benefits and net pension
liability, are not due and payable in the current period and therefore are not reported in the funds." The details of this
($45,968,837)difference are as follows:
Bonds payable $(40,714,423)
Accrued interest payable (509,561)
Other post employment benefits (431,899)
Compensated absences (919,990)
Net pension liability (3,392,965)
Net adjustment to reduce fund balance-total governmental
funds to arrive at net position-governmental activities $(45,968,837)
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
$1,127,278 difference are as follows:
Internal Service Funds net position $ 1,209,835
Net revenue attributable to business-type activities (82,557)
Net adjustment to increase fund balance-total governmental
funds to arrive at net position-governmental activities $ 1,127,278
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
53
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
The governmental fund statement of revenues,expenditures,and changes in fund balances includes a reconciliation between
net changes in fund balances—total governmental funds and changes in net position ofgovernmental 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($592,034)difference are as follows:
Capital outlay $ 2,033,247
Construction/acquisition costs 497,932
Depreciation expense (3,123,213)
Net adjustment to increase net changes in fund balances-total governmental
funds to arrive at changes in net position of governmental activities $ (592,034)
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 $901,582 difference are as
follows:
In the statement of activities,only the gain on the sale of capital assets is reported.
However,in the governmental funds,the proceeds from the sale increase financial
resources. Thus,the change in net position differs from the change in fund balance
by the cost of the capital assets sold. $ (74,042)
Donations of capital assets increase net position in the statement of activities,but do
do not appear in the governmental funds because they are not financial resources. $ 975,624
Net adjustment to decrease net changes in ftmd balances-total governmental
funds to arrive at changes in net position of governmental activities. $ 901,582
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$510,247 difference are as follows:
Unavailable revenue-general property taxes:
At December 31,2022 $ (131,439)
At December 31,2023 97,180
Unavailable revenue-tax increment taxes:
At December 31,2022 (418)
At December 31,2023 -
Unavailable revenue-special assessments:
At December 31,2022 (1,688,429)
At December 31,2023 2,218,353
Unavailable revenue-land held for resale:
At December 31,2022 (840,000)
At December 31,2023 855,000
Net adjustments to decrease net changes in fimd balances-total governmental
funds to arrive at changes in net position of governmental activities $ 510,247
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$3,196,156 difference
are as follows:
54
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Principal repayments:
Abatement bonds $ 1,530,000
Certificates of indebtedness 480,000
Capital improvement bonds 290,000
Street reconstruction bonds 825,000
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 $ 3,196,156
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
($42,626)difference are as follows:
Compensated absences $ (25,856)
Accrued interest (16,770)
Net adjustment to decrease net changes in fund balances-total governmental
funds to arrive at changes in net position of governmental activities $ (42,626)
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$425,775 difference are as follows:
Internal Service Funds change in net position $ 439,529
Net revenue attributable to business-type activities (13,754)
Net adjustment to increase fund balance-total governmental
funds to arrive at net position-governmental activities $ 425,775
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 31,2023,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,temporary general obligation
bonds,repurchase agreements,Minnesota joint powers investment trust and guaranteed investment contracts.
As of December 31,2023,the City had the following investments and maturities:
55
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Investment Maturities(in Years)
Credit Fair Less Than More Than
Investment Type Rating Value l 1 -5 6- 10 10
Money market funds N/A $ 9,967,535 $ 9,967,535 -
Minnesota Municipal
Money Market Fund(4M) N/A 1,926,665 1,926,665 - - -
Certificates of deposit N/A 16,126,277 9,420,421 6,705,856 - -
Local/State governments AAl/AA2/AA3 7,838,419 2,440,400 5,398,019 - -
AAA 7,589,078 1,293,491 5,815,386 480,201 -
U.S.agencies AAA 25,045,756 10,255,178 14,514,074 276,504 -
Total investments 68,493,730 $35,303,690 $32,433,335 $ 756,705 $ -
Deposits 2,004,801
Total cash and investments $70,498,531
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 observable, either directly or indirectly. Level 3
investments are valued using inputs that are unobservable.
The City has the following recurring fair value measurements as of December 31,2023:
Fair Value Measurement Using
Investment Type 12/31/2023 Level 1 Level 2 Level 3
Investments at fair value:
Federal Home Loan Bank $ 15,501,375 $ - $ 15,501,375 $ -
Federal Farm Credit Bank 6,664,590 - 6,664,590 -
Federal Home Loan Mortgage Corporation 1,425,668 - 1,425,668 -
Federal National Mortgage Association 1,454,123 - 1,454,123 -
Municipal Bonds 15,427,497 - 15,427,497 -
Brokered Certificates of Deposit 16,126,277 - 16,126,277 -
Total investments at fair value 56,599,530 $ - $ 56,599,530 $ -
Investments not categorized:
External investment pool:
4M 1,926,665
Money Market 9,967,535
Total investments not categorized 11,894,200
Total $ 68,493,730
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 St. The pool measures their investments in accordance with Government Accounting Standards Board
Statement No.79,at amortized cost.The 4M Plus Fund requires funds to be deposited for a minimum 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.
56
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
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.
Interest Rate Risk-The City has a formal investment policy that states the City will minimize the risk that the market value of securities
in the portfolio will fall due to the changes in general interest rates,by:
1) Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby
avoiding the need to sell securities on the open market prior to maturity.
2) Investing operating funds primarily in shorter-term securities,money market mutual funds or similar investment pools.
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 Conmussion(SEC)Rule 15C3-1.
All financial institutions and broker/dealers who desire to become qualified for investment transactions must supply:audited
financial statements, proof of National Association of Securities Dealers (NASD) certification,proof of state registration,
completed broker/dealer questionnaire,and certification of having read and understood and agreeing to comply with the City's
investment policy.
An annual review of the financial condition and registration of qualified financial institutions and broker/dealers will be
conducted by the City Administrator.
Concentration of Credit Risk-More than 36%of the City's investments are in various holdings with U.S.agencies;Federal Home Loan
Bank(22.6%),Federal Farm Credit Bank(9.7%),Federal National Mortgage Association(2.1%) and Federal Horne Loan Mortgage
Corporation(2.1%). The City's policy on concentration of investments is as follows:
1) Diversification-The investments shall be diversified by:
a) investments to avoid over concentration in securities from a specific issuer or business sector (excluding U.S.
Treasury securities),
b) limiting investment in securities that have higher credit risks,
c) investing in securities with varying maturities,and
d) continuously investing a portion of the portfolio in readily available funds such as local government investment
pools (LGIPs), money market funds or overnight repurchase agreements to ensure that appropriate liquidity is
maintained in order to meet ongoing obligations.
2) Maximum Maturities - To the extent possible, the City shall attempt to match its investments with anticipated cash flow
requirements. Unless matched to a specific cash flow,the City will not directly invest in securities maturing,or having average
lifes,of more than five(5)years from the date of purchase or in accordance with state and local statutes and ordinances.
Reserve funds and other funds with longer-term investment horizons may be invested in securities exceeding five(5)years if
the maturity of such investments are made to coincide as nearly as practicable with the expected use of funds. The intent to
invest in securities with longer maturities shall be disclosed in writing to the legislative body.
Because of inherent difficulties in accurately forecasting cash flow requirements, a portion of the portfolio should be
continuously invested in readily available funds such as local government investment pools,money market funds,or overnight
repurchase agreements to ensure that appropriate liquidity is maintained to meet ongoing obligations.
Note 3 RECEIVABLES
Significant receivable balances not expected to be collected within one year of December 31,2023 are as follows:
57
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Delinquent Special
Property Assessment Lease
Taxes Receivable Receivable Total
Major Funds:
General Fund $ 13,735 $ 13,795 $ 131,182 $ 158,712
Community Center SRF 199 - 5,040,000 5,040,199
Water Trunk CPF - 226,408 - 226,408
Road and Bridge CPF 2,213 1,533,664 - 1,535,877
Nonmajor Funds 5,233 85,440 - 90,673
Total $ 21,380 $ 1,859,307 $ 5,171,182 $ 7,051,969
Note 4 LEASE RECEIVABLE
The City leases a portion of the Community Center to the YMCA for the purpose of operating an aquatic and fitness center and other related
programming. This lease is non-cancelable for a period of 11 years,with six renewal periods of 10 years at the lessee's option. The City
considers the likelihood of these options being exercised to be greater than 50%. However,future lease payments cannot be estimated at this
time. The agreement calls for variable annual lease payments between$624,508-$634,868 through February 1,2034. The lease payment
schedule is tied directly to the debt service schedule of the corresponding bonds that built the community center;therefore,the present value
of future minimum lease payments equals the principal amount outstanding as stated in the lease agreement.
The City leases a portion of its water tower for a cellular antenna site. This lease is non-cancelable through December 31,2026,with three
renewal periods of 5 years at the lessee's option. The City considers the likelihood of these options being exercised to be less than 50%. The
agreement calls for monthly payments of$2,507 with increases of 3%each year. The lease receivable is measured at the present value of
the future minimum lease payments expected to be received during the lease term at a discount rate of 3.00%which is based on the rate
available to finance acquisitions over the same time periods.
The City leases a portion of an emergency siren tower for a cellular antenna site. This lease is non-cancelable for a period of 9 months,with
three renewal periods of 5 years at the lessee's option. The City considers the likelihood that one renewal period being exercised to be greater
than 50%. The agreement calls for annual payments of$16,250 with increases of$1,000 each year. The lease receivable is measured at the
present value of the future minimum lease payments expected to be received during the lease term at a discount rate of 3.00%which is based
on the rate available to finance acquisitions over the same time periods.
At December 31,2023,the City recorded$5,594,570 in lease receivable and deferred inflows of resources; and the City recognized lease
revenue of$672,476 during the year,which included interest revenue of$272,219.
Note 5 UNAVAILABLE REVENUES
Governmental fiords 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 Special Land Held
Taxes Assessments for Resale Total
Major Funds:
General Fund $ 62,431 $ 13,795 $ - $ 76,226
Community Center SRF 903 - - 903
Water Trunk CPF - 230,531 - 230,531
Road and Bridge CPF 10,059 1,885,778 - 1,895,837
Tax Increment Projects CPF - - 855,000 855,000
Nonmajor Funds 23,787 88,249 - 112,036
Total S 97,180 $2,218,353 $ 855,000 $3,170,533
58
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Note 6 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 31,2023 was as follows:
Beginning Ending
Primary Government Balance Additions Deletions Balance
Governmental activities:
Capital assets not being depreciated:
Land and improvements $ 11,205,340 $ - $ - $ 11,205,340
Streets and trails 92,163,187 975,624 - 93,138,811
Construction in progress 40,807 338,602 - 379,409
Total capital assets not being depreciated 103,409,334 1,314,226 - 104,723,560
Capital assets being depreciated:
Buildings and improvements 62,336,523 348,773 - 62,685,296
Furniture and equipment(including software) 1,725,617 41,226 (253,869) 1,512,974
Machinery and equipment 10,828,729 484,219 (100,340) 11,212,608
Other park improvements 9,203,002 820,427 (177,086) 9,846,343
Total capital assets being depreciated 84,093,871 1,694,645 (531,295) 85,257,221
Less accumulated depreciation for:
Buildings and improvements 19,891,849 2,074,901 - 21,966,750
Furniture and equipment 866,161 135,108 (179,827) 821,442
Machinery and equipment 7,328,154 555,049 (100,340) 7,782,863
Other park improvements 5,419,626 358,155 (177,086) 5,600,695
Total accumulated depreciation 33,505,790 3,123,213 (457,253) 36,171,750
Total capital assets being depreciated-net 50,588,081 (1,428,568) (74,042) 49,085,471
Governmental activities capital assets-net $ 153,997,415 $ (114,342) $ (74,042) $ 153,809,031
59
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Beginning Ending
Balance Additions Deletions Balance
Business-type activities:
Capital assets not being depreciated:
Land and improvements $ 730,243 $ - $ - $ 730,243
Construction in progress 35,063 283,060 (35,063) 283,060
Total capital assets not being depreciated 765,306 283,060 (35,063) 1,013,303
Capital assets being depreciated:
Buildings and improvements 15,877,590 - - 15,877,590
Furniture and equipment(including software) 1,219,894 28,610 - 1,248,504
Machinery and equipment 1,658,118 294,461 (119,372) 1,833,207
Collection and distribution 68,082,270 3,548,645 - 71,630,915
Total capital assets being depreciated 86,837,872 3,871,716 (119,372) 90,590,216
Less accumulated depreciation for:
Buildings and improvements 11,588,908 396,213 - 11,985,121
Furniture and equipment 63,844 81,344 - 145,188
Machinery and equipment 1,143,154 110,568 (119,372) 1,134,350
Collection and distribution 29,853,458 1,404,622 - 31,258,080
Total accumulated depreciation 42,649,364 1,992,747 (119,372) 44,522,739
Total capital assets being depreciated-net 44,188,508 1,878,969 - 46,067,477
Business-type activities capital assets-net $ 44,953,814 $ 2,162,029 $ (35,063) $ 47,080,780
Depreciation/amortization expense was charged to functions/programs of the primary government as follows:
Governmental activities:
General government $ 132,698
Public safety 356,259
Public works 614,939
Parks and recreation 2,002,892
Recycling 6,862
Economic development 9,563
Total depreciation/amortization expense-governmental activities $ 3,123,213
Business-type activities:
Water $ 955,535
Sewer 687,763
Storm sewer 349,449
Total depreciation/amortization expense-business-type activities $ 1,992,747
CONSTRUCTION COMMITMENTS
At December 31,2023,the City had the following construction projects in progress:
Contract Remaining
Project# Project Amount Commitment
22-44 Replace dehumidification unit $ 445,070 $ 423,929
60
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Note 7 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 12/31/23
GOVERNMENTAL ACTIVITIES:
Abatement Bonds:
2012C G.O.Abatement Bonds 12/27/2012 2/1/2031 1.00-3.00% $ 17,315,000 $ 8,645,000
2019A G.O.Abatement Bonds 8/1/2019 2/l/2040 3.00-5.00% 15,770,000 14,420,000
Total abatement bonds 33,085,000 23,065,000
Certificates of Indebtedness:
2020A G.O.Equipment Certificates 3/19/2020 2/l/2024 4.00% 1,310,000 345,000
2021A G.O.Equipment Certificates 12/28/2021 2/l/2026 2.00% 630,000 480,000
Total certificates of indebtedness 1,940,000 825,000
Capital Improvement Bonds:
2018A G.O.Capital Improvement Plan Bonds 12/27/2018 2/l/2044 3.00-5.00% 10,000,000 9,370,000
Street Reconstruction Bonds:
2021A G.O.Street Reconstruction Bonds 12/28/2021 2/1/2030 1.00-2.00% 7,135,000 6,310,000
Total-bonded indebtedness 52,160,000 39,570,000
Issuance premiums - 1,144,423
Compensated absences payable - 919,990
Total governmental activities indebtedness 52,160,000 41,634,413
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2009A G.O.Water Revenue Bonds 3/26/2009 2/1/2024 2.00-4.25% 1,025,000 85,000
Compensated absences payable - 157,861
Total business-type activities indebtedness 1,025,000 242,861
Total City indebtedness $ 53,185,000 $41,877,274
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 31,2023
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
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 1,750,000 561,025 - - 350,000 270,506
2028 1,810,000 495,422 - - 370,000 256,206
2029-2033 7,615,000 1,561,350 - - 2,010,000 1,105,981
2034-2038 4,835,000 692,925 - - 2,330,000 773,938
2039-2043 2,145,000 64,875 - - 2,750,000 352,360
2044 - - - - 610,000 10,675
Total $23,065,000 $ 5,415,428 $ 825,000 $ 21,500 $ 9,370,000 $ 3,680,434
Governmental Activities Business-Type Activities
Street Reconstruction Bonds G.O.Revenue Bonds
Principal Interest Principal Interest
2024 $ 855,000 $ 92,510 $ 85,000 $ 1,806
2025 870,000 75,260 - -
2026 885,000 57,710 - -
2027 905,000 39,810 - -
2028 925,000 26,135 - -
2029-2031 1,870,000 22,035 - -
$ 6,310,000 $ 313,460 $ 85,000 $ 1,806
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 31,2023,was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Governmental activities:
Bonds payable:
Abatement bonds $24,595,000 $ - $ (1,530,000) $23,065,000 $ 1,585,000
Certificates of indebtedness 1,305,000 - (480,000) 825,000 500,000
Capital improvement bonds 9,660,000 - (290,000) 9,370,000 300,000
Street reconstruction bonds 7,135,000 - (825,000) 6,310,000 855,000
Total bonds payable 42,695,000 - (3,125,000) 39,570,000 3,240,000
Issuance premiums 1,215,579 - (71,156) 1,144,423 -
Compensated absences 994,134 480,035 (454,179) 919,990 137,999
Total governmental activities
long-term liabilities $44,804,713 $ 480,035 $ (3,650,335) $41,634,413 $ 3,377,999
62
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Business-type activities:
Bonds payable:
G.O.revenue bonds $ 855,000 $ - $ (770,000) $ 85,000 $ 85,000
Compensated absences 183,030 25,039 (50,208) 157,861 23,680
Total business-type activities
longterm liabilities $ 1,038,030 $ 25,039 $ (820,208) $ 242,861 $ 108,680
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 FDA and expand the building.The bonds
are general obligations of the City for which it pledges its frill faith,credit and taxing powers to the payment of principal and interest
on the bonds.
The certificates of indebtedness are used to finance the purchase of capital equipment. The certificates are general obligations of
the City for which it pledges its full faith,credit and taxing powers to the payment of principal and interest on the certificates.
The capital improvement bonds are used to finance the construction of the public works maintenance facility with a wash bay and
a cold storage building.The bonds are general obligations of the City for which it pledges its full faith,credit and taxing powers to
the payment of principal and interest on the bonds.
The 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 full faith,credit and taxing powers to the payment of principal and interest on the bonds.
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.
REVENUES PLEDGED
2012C G.O. Abatement Bonds. The City has pledged future lease revenue, operating revenues (net of operating expenses) and, if
necessary,a debt service tax levy to repay the$17,315,000 bonds issued in December 2012. Proceeds from this bond refunded the 2004
EDA Public Facility Lease Revenue Bonds.Lease revenues were projected to produce 100%of the debt service requirements over the
life of the bonds. Total principal and interest remaining on the bonds is$9,685,103,payable through February 2031. For the current
year,principal and interest paid and total property tax revenues were S1,209,281 and S963,095,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$18,795,325,payable through February
2040. For the current year,principal and interest paid and total property tax revenues were$1,106,900 and$1,021,726,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$351,900,payable
through February 2024. For the current year,principal and interest paid and total property tax revenues were$350,400 and$374,158,
respectively.
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$494,600,payable
through February 2026.For the current year,principal and interest paid and total property tax revenues were$161,100 and$173,575,
respectively.
2018A G.O. Capital Improvement Plan Bonds. The City has pledged future property tax revenue to repay the$10,000,000 bonds issued
in December 2018. Proceeds from the bonds were used to finance the construction of a public works maintenance facility with a wash
63
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
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 $13,050,434, payable through February 2044. For the current year,
principal and interest paid and total property tax revenues were$624,006 and$608,592,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
$6,623,460, payable through February 2030. For the current year, principal and interest paid and total property tax revenues were
$934,310 and$599,724,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$86,806. The principal and interest paid for the current year and total customer net revenues were$85,252 and$1,621,088,
respectively.
Note 8 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 2023 and 2022 is computed as follows:
December 31,
2023 2022
Estimated taxable market value $4,786,225,134 $3,827,552,964
Debt limit(3%of market value) 143,586,754 114,826,589
Amount of debt applicable to debt limit:
Total bonded debt $ 39,655,000 $ 43,550,000
Less: Nonapplicable debt
G.O.water revenue bonds (85,000) (855,000)
Less: Cash and investments in related
debt service funds (3,771,774) (3,435,767)
Total debt applicable to debt limit 35,798,226 39,259,233
Legal debt margin $ 107,788,528 $ 75,567356
Note 9 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 hued 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.
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CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
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 compote 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%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% 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, 1999,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. In 2023,legislation
repealed the statute delaying increases for members retiring before full retirement age.
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.
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 2023 and the City
was required to contribute 7.5%. The City's contributions to the GERF for the year ended December 31,2023 were$368,657.
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 2023 and the City
was required to contribute 17.70%. The City's contributions to the PEPFF for the year ended December 31, 2023 were
$54,869. 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, 2023, the City reported a liability of$3,383,092 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 S 16 million.
65
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
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$93,308.
The net pension liability was measured as of June 30,2023, 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 1,2022 through June 30, 2023,relative to the total employer contributions received from all of PERA's participating
employers. The City's proportionate share was 0.0605%at the end of the measurement period and 0.0613%for the beginning
of the period.
City's proportionate share of the net pension liability $ 3,383,092
State of Minnesota's proportionate share of the net pension
liability associated with the City 93,308
Total $ 3,476,400
For the year ended December 31, 2023 the City recognized pension expense of$544,830 for its proportionate share of the
GERF's pension expense. In addition,the City recognized an additional$419 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 31,2023,the City reported its proportionate share of the GERF's deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and actual economic experience $ 111,102 $ 23,152
Changes in actuarial assumptions 544,198 927,276
Difference between projected and actual investment earnings - 121,716
Changes in proportion 5L561 29,608
Contributions paid to PERA subsequent to the measurement date 182,410 -
Total $ 889,271 $ 1,101,752
The$182,410 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, 2024.
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
2024 $ 110,277
2025 (500,895)
2026 69,118
2027 (73,391)
2028 -
Thereafter -
2. PEPFF Pension Costs
At December 31,2023,the City reported a liability of$424,810 for its proportionate share of the PEPFF's net pension liability.
The net pension liability was measured as of June 30,2023 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
66
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
July 1, 2022 through June 30, 2023 relative to the total employer contributions received from all of PERA's participating
employers. The City's proportionate share was 0.0246%at the end of the measurement period and 0.0177%for the beginning
of the period.
The State of Minnesota also contributed $18 million to PEPFF during the plan fiscal year ended June 30, 2023. The
contribution consisted of$9 million in direct state aid that meets 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$9 million direct state aid was paid
on October 1,2022. 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. The State of Minnesota's proportionate share of the net pension liability associated with the City totaled$17,118.
City's proportionate share of the net pension liability $ 424,810
State of Minnesota's proportionate share of the net pension
liability associated with the City 17,118
Total $ 441,928
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 31,2023,the City recognized pension expense of$57,673 for its proportionate share of the Police
and Fire Plan's pension expense. The City recognized an additional($1,031) 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 mullion in supplemental state aid. The City also recognized$2,214 for the year ended December
31,2023 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 31,2023,the City reported its proportionate share of the PEPFF's deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows Inflows
of Resources of Resources
Differences between expected and actual economic experience $ 118,997 $ -
Changes in actuarial assumptions 504,699 598,040
Difference between projected and actual investment earnings - 34,653
Changes in proportion 111,771 63,579
Contributions paid to PERA subsequent to the measurement date 24,969 -
Total $ 760,436 $ 696,272
$24,969 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 31,2024. Other
amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as
follows:
67
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Year Ended Pension Expense
December 31, Amount
2024 $ 14,918
2025 (846)
2026 118,925
2027 (4,448)
2028 (89,354)
Thereafter -
The net pension liability will be liquidated by the general,water and sewer funds.
E. ACTUARIAL ASSUMPTIONS
The total pension liability in the June 30,2023 actuarial valuation was determined using an individual entry-age normal actuarial
cost method and the following actuarial assumptions:
Inflation 2.25%per year
Investment Rate of Return 7.00%
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 7.00%was deemed to be within that range of reasonableness for financial reporting purposes.
Benefit increases after retirement are assumed to be 1.25%for the GERF and 1.00%for the PEPFF.
Salary growth assumptions in the GERF range in annual increments from 10.25%after one year of service to 3.0%after 27 years
of service. In the PEPFF,salary growth assumptions range from 11.75%after one year of service to 3.0%after 24 years of service.
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.
Actuarial assumptions for GERF are reviewed every four years. The most recent four-year experience study for GERF was
completed in 2022. The assumption changes were adopted by the Board and become effective with the July 1, 2023 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 2023:
General Employees Fund
Changes in Actuarial Assumptions:
• The investment return assumption and single discount rate were changed from 6.50%to 7.00%.
Changes in Plan Provisions:
• An additional one-time direct state aid contribution of$170.1 million was contributed to the Plan on October 1, 2023.
• The vesting period of those hired after June 30,2010,was changed from five years of allowable service to three years of
allowable service.
• The benefit increase delay for early retirements on or after January 1,2024,was eliminated.
• A one-time,non-compounding benefit increase of 2.50%minus the actual 2024 adjustment will be payable in a lump
sum for calendar year 2024 by March 31,2024.
Police and Fire Fund
Changes in Actuarial Assumptions:
• The investment return assumption was changed from 6.50%to 7.00%.
• The single discount rate changed from 5.40%to 7.00%.
68
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Changes in Plan Provisions:
• An additional one-time direct state aid contribution of$19.4 million was contributed to the Plan on October 1,2023.
• Vesting requirement for new hires after June 30,2014,was changed from a graded 20-year vesting schedule to a graded
10-year vesting schedule,with 50%vesting after five years,increasing incrementally to 100%after 10 years.
• A one-time,non-compounding benefit increase of 3.00%will be payable in a lump sum for calendar year 2024 by March
31,2024.
• Psychological treatment is required effective July 1, 2023, prior to approval for a duty disability benefit for a
psychological condition relating to the member's occupation.
• The total and permanent duty disability benefit was increased,effective July 1,2023.
The State Board of Investment,which manages the investments of PERA,prepares an analysis of the reasonableness on a regular
basis of the long-term expected rate of return using a building-block method in which best-estimate ranges of expected future rates
of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by
weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of
geometric real rates of return for each major asset class are summarized in the following table:
Target Long-Term Expected
Asset Class Allocation Real Rate of Return
Domestic equity 33.5% 5.10%
International equity 16.5% 5.30%
Fixed income 25.0% 0.75%
Private markets 25.0% 5.90%
Total 100%
F. DISCOUNT RATE
The discount rate used to measure the total pension liability in 2023 was 7.00%. 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 GEFR and PEPFF were projected to be available to make all projected
fixture 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 one percentage point lower(6.00%)or one percentage point higher(8.00%)than the current discount rate:
1%Decrease in 1%Increase in
Discount Rate Discount Rate Discount Rate
Proportionate share of the
GERF net pension liability $ 5,984,962 $ 3,383,092 $ 1,242,956
Proportionate share of the
PEPFF net pension liability 842,874 424,810 81,106
H. PENSION PLAN FIDUCIARY NET POSITION
Detailed information about each pension plan's fiduciary net position is available in a separately issued PERA financial reportthat
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 31,2023 is as follows:
69
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
GERF $ 545,249
PEPFF 56,642
Total $ 601,891
For the governmental activities,pension liabilities are generally liquidated by the General and Special Revenue Funds.
Note 10 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 tbree-year terms. The City's Mayor,Finance Manager and Fire Chief are ex-officio members of the Board of Trustees.
The Association provides retirement benefits as well as disability benefits to members,and benefits to survivors upon death of eligible
members.
1. Twenty-Year Service Pension—In order to be entitled to a pension benefit,a firefighter must have completed a minimum of five
years of service with the Department and five years membership in the Association and attain the age of 50 years. The firefighter
will then be 40%vested. This percentage increases 4%per year until the twentieth year when 100%vesting will occur. Because
this is a defined contribution plan,the amount of the retirement benefit is not predetermined,but rather is based on the individual
member's allocable portion of contributions made during the participation period.
2. Deferred Pension—If the retired or terminated member has not attained age 50 and is otherwise eligible for the pension benefit,
the balance of the member's account will be credited with earned interest at the rate permitted by Minnesota Statutes Section
424.A02,Subd.7.
3. Disability Benefit—If a member of the Association becomes totally and permanently disabled due to injury,disability,sickness
or dismemberment as a result of performance of duty,a disability payment will be made after one hundred days of disability.
4. Death Benefit—in the event of death of an active member or deferred pensioner,the member's individual account balance will
be paid to the surviving spouse,surviving children or the estate of the member after approval by the Board.
The Association issues a publicly available financial report that includes financial statements and required supplementary information.
That report may be obtained by writing to Andover Firefighters' Relief Association, 13875 Crosstown Boulevard NW, Andover,
Minnesota 55304.
FUNDING POLICY
The State of Minnesota contributes amortization aid,or two percent fire aid,in accordance with state statute requirements. Plan members
are not required to contribute to the plan. The state legislature may amend contribution requirements of the City and State. The City is
allowed to make voluntary contributions of other public funds pursuant to Minnesota Statutes Section 424A. The City receives the State
aid contribution and is required by state statutes to pass this through as payment to the Association. This transaction is recorded as
revenue and expenditure in the City's financial statements.Contributions for the last three years are as follows:
Year
Ending City State Total
12/31/2021 S - $ 202,747 $ 202,747
12/31/2022 41,000 219,669 260,669
12/31/2023 - 249,917 249,917
70
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Note 11 OTHER POST EMPLOYMENT BENEFITS(OPEB)
A. PLAN DESCRIPTION
In addition to providing the pension benefits described in Note 9, 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 2022,participants consisted of:
Retirees and beneficiaries currently
purchasing health insurance through the City 1
Active employees 50
Total 51
Participating employers 1
D. TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY
The City's total OPEB liability of$502,207 was measured as of December 31,2022 and was determined by an actuarial valuation
using the alternative measurement method as of December 31,2022. Changes in the total OPEB liability during 2023 were:
71
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Balance-beginning of year $ 488,614
Changes for the year:
Service Cost 31,576
Interest 9,371
Changes of benefit terms -
Differences between expected and actual experience 65,589
Changes in assumptions (71,197)
Benefit payments (21,746)
Net Changes 13,593
Balance-end of year $ 502,207
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 31,2022 actuarial valuation was determined using the following actuarial assumptions
and other inputs,applied to all periods included in the measurement,unless otherwise specified:
Inflation 2.50%
Salary increases 3.25%
Discount rate 4.05%
Investment rate of return 2.00%
Healthcare cost trend rates 6.30%for FY2021,gradually decreasing over several decades to an ultimate rate
of 3.90%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 one%lower(3.05%)or one%higher(5.05%)than the current rate:
1%Decrease in 1%Increase in
Discount Rate Discount Rate Discount Rate
(3.05%) (4.05%) (5.05%)
Total OPEB liability $ 535,138 $ 502,207 $ 470,918
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 one%lower or one%higher than the current rate:
72
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
1%Decrease in 1%Increase in
Healthcare Cost Healthcare Cost Healthcare Cost
Trend Rate Trend Rate Trend Rate
Total OPEB liability $ 461,228 $ 502,207 $ 548,596
H. OPEB EXPENSE AND DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES RELATED TO OPEB
For the year ended December 31,2023,the City recognized$15,519 of OPEB expense. At December 31,2023,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 $ 19,820 $ -
$19,820 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 31,2024.
Note 12 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 $ 127,509 Admin allocation
General Fund Sewer Fund 77,857 Admin allocation
General Fund Storm Sewer Fund 23,406 Admin allocation
Water Trunk CPF Water Fund 300,000 Replacement reserve
Sewer Trunk CPF Sewer Fund 400,000 Replacement reserve
Road&Bridge CPF Nonmajor Fund 8,300 Roadway degredation
Water Fund Water Trunk Fund CPF 133,945 Debt service allocation
Nonmajor Fund General Fund 200,000 Offset PY Increased Costs
Nonmajor Fund Community Center SRF 300,000 Debt service allocation
Nonmajor Fund Road&Bridge CPF 200,000 Debt service allocation
Nonmajor Fund Water Fund 22,650 Debt service allocation
Nonmajor Fund Sewer Fund 22,650 Debt service allocation
Nonmajor Fund Water Fund 15,000 Offset PY Increased Costs
Nonmajor Fund Sewer Fund 15,000 Offset PY Increased Costs
Nonmajor Fund Storm Sewer Fund 15,000 Offset PY Increased Costs
Nonmajor Fund Nonmajor Fund 200,000 Debt service allocation
Nonmajor Fund Nonmajor Fund 150,000 Debt service allocation
$ 2,211,317
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 S 30,600 $ 30,600
73
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Note 13 TAX INCREMENT DISTRICTS
The City is the administering authority for the following tax increment finance districts:
1 . Name of District: Tax Increment Financing District 1-5
Type of District: Redevelopment
Authorizing Law: M.S. Section469
Established: 2012
Duration of District: Through 2039
Original net tax capacity: $ 6,139
Current net tax capacity: 104,415
Captured net tax capacity -retained by the City $ 98,276
2 . Name of District: Tax Increment Financing District 1-6
Type of District: Redevelopment
Authorizing Law: M.S. Section469
Established: 2014
Duration of District: Through 2024
Original net tax capacity: $ 21,998
Current net tax capacity: 89,938
Captured net tax capacity -retained by the City S 67,940
Note 14 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
74
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the
applicable fund. However,in the opinion of management,any such disallowed claims will not have a material effect on any of the
financial statements of the individual fund types included herein or on the overall financial position of the City at December 31,
2023.
D. TAX INCREMENT DISTRICTS
The City's tax increment districts are subject to review by the State of Minnesota Office of the State Auditor (OSA). Any
disallowed claims or misuse of tax increments could become a liability of the applicable fund. Management has indicated that they
are not aware of any instances of noncompliance that would have a material effect on the financial statements.
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#1-5,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$62,903. At December 31,2023,the principal amount outstanding on the note was S 148,454.
Note 15 DEFERRED AD VALOREM TAX LEVIES-BONDED DEBT
General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment bond issues sold by the City
are partially financed by ad valorem tax levies in addition to special assessments levied against the benefiting properties. When a bond issue
to be financed partially or completely by ad valorem tax levies is sold, specific annual amounts of such tax levies are stated in the bond
resolution and the County Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject
to cancellation when and if the City has provided alternative sources of financing. The City Council is required to levy any additional taxes
found necessary for full payment of principal and interest.
These future scheduled tax levies are not shown as assets in the accompanying financial statements at December 31,2023. Future scheduled
tax levies for all bonds outstanding at December 31,2023 totaled$48,176,530.
75
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Note 16 FUND BALANCE
A. CLASSIFICATIONS
At December 31,2023,a summary of the governmental fund balance classifications are as follows:
Water
CARES and Tax
Community Grant/ARPA Sewer Road& Increment Other
Center Funding Trunk Bridge Projects Governmental
General SRF SRF CPF CPF CPF Funds Total
Nonspendable:
Prepaid items S 235,016 $ S $ S $ $ 26,938 $ 261,954
Inventory 165,380 165,380
Total nonspendable 400,396 26,938 427,334
Restricted for:
Debt service 3,819.273 3,819,273
Tax increment 985.834 985,834
Public services 1,752,698 1,752,698
Total restricted 985,834 5,571,971 6,557,805
Committed to:
Economic development 168,503 168,503
City's mapping system 197,827 197,827
Surface water mgmt. 102,403 102,403
Public right of ways mgmt. 139,969 139,969
Seal coating new dev. 1,802 1,802
Total committed 610,504 610,504
Assigned to:
Water system 8,464,540 8,464,540
Sanitary sewer system 8,956,614 8,956,614
Street rehabilitation 12,495,605 12,495,605
Development purposes 613,671 613,671
Community center 1,379,580 1,379,580
Forest resources programs 2,994 2,994
Public services 18,128 18,128
Park improvements 2,148,951 2,148,951
Facilities management 757,912 757,912
Pedestrian trails 47,939 1,135,052 1,182,990
Capital improvements 1,566.655 1,566,655
Total assigned 1,379,580 47,938 17,421,154 12,495,605 6,243,363 37,587,640
Unassigned 11,149,054 11,149,054
Total S 11,549,450 $ 1,379.580 S 47,938 $ 17,421,154 S 12,495,605 $ 985,834 $ 12,452,776 $ 56,332,337
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, 2023,the unassigned fund balance of the General Fund targeted
for cash-flow needs was 74%of the subsequent year's budgeted expenditures.
76
CITY OF ANDOVER,MINNESOTA
NOTES TO FINANCIAL STATEMENTS
December 31,2023
Note 17 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 31,2023,the following revenue bonds were outstanding:
Date of Original Outstanding
Project Issue Issue Retired 12/31/2023
Presbyterian Homes of Andover,Inc. l l/l/2003 $13,145,000 S (6,381,745) $ 6,763,255
YMCA of the Greater Twin Cities 12/1/2019 6,650,000 (2,470,000) 4,180,000
Note 18 RECENTLY ISSUED ACCOUNTING STANDARDS
The Governmental Accounting Standards Boards(GASB)recently approved the following statements which were not implemented for these
financial statements:
Statement No.99 Omnibus 2022.The provisions of this Statement contain multiple effective dates,the first being for reporting periods
beginning after June 15,2023.
Statement No. 100 Accounting Changes and Error Corrections—an amendment of GASB Statement No. 62. The provisions of this
Statement are effective for reporting periods beginning after June 15,2023.
Statement No. 101 Compensated Absences. The provisions of this Statement are effective for reporting periods beginning after June
15,2023.
Statement No.102 Certain Risk Disclosures. The provisions of this Statement are effective for reporting periods beginning after June
15,2024.
The effect these standards may have on future financial statements is not determinable at this time.
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78
REQUIRED SUPPLEMENTARY INFORMATION
79
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE-GENERAL FUND
For The Year Ended December 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Variance with
Final Budget-
Budgeted Amounts 2023 Positive 2022
Original Final Actual (Negative) Actual
Revenues:
General property taxes $ 10,814,789 $ 10,814,789 $ 10,663,259 $ (151,530) $ 9,974,141
Licenses and permits 573,000 573,000 854,739 281,739 972,879
Intergovernmental 839,907 922,507 977,028 54,521 963,289
Charges for services 839,110 839,110 1,447,506 608,396 1,295,430
Fines 45,500 45,500 70,683 25,183 55,983
Investment income 75,000 75,000 377,355 302,355 (189,494)
Miscellaneous 148,300 153,250 185,646 32,396 188,395
Total revenues 13,335,606 13,423,156 14,576,216 1,153,060 13,260,623
Expenditures:
Current:
General government:
Mayor and City council 110,104 110,104 99,860 10,244 95,366
Administration 297,277 297,277 278,092 19,185 245,223
Newsletter 30,000 30,000 27,733 2,267 24,631
Human resources 35,458 35,458 21,172 14,286 19,906
Legal 219,221 211,221 207,922 3,299 206,399
City clerk 196,235 196,235 193,217 3,018 184,317
Elections 85,140 85,140 28,002 57,138 75,115
Financial administration 355,854 355,854 335,992 19,862 320,730
Assessing 161,000 161,000 136,705 24,295 131,097
Information systems 242,922 242,922 235,842 7,080 226,589
Planning and zoning 567,673 567,673 473,193 94,480 490,576
Engineering 741,037 739,237 703,515 35,722 649,664
Facility management 770,939 767,939 549,760 218,179 552,985
Total general government 3,812,860 3,800,060 3,291,005 509,055 3,222,598
Public safety:
Police 3,347,315 3,347,315 3,347,315 - 3,261,423
Fire protection 1,992,865 2,050,415 1,926,998 123,417 1,961,913
Protective inspection 559,182 559,182 501,561 57,621 464,559
Civil defense 33,555 33,555 19,958 13,597 12,295
Animal control 10,950 10,950 4,795 6,155 5,164
Total public safety 5,943,867 6,001,417 5,800,627 200,790 5,705,354
Public works:
Streets and highways 915,356 923,356 892,518 30,838 788,330
Snow and ice removal 774,897 774,897 771,857 3,040 752,396
Sheet signs 212,254 212,254 169,472 42,782 194,276
Traffic signals 44,000 44,000 29,471 14,529 28,151
Street lighting 222,900 222,900 181,854 41,046 194,169
Total public works $ 2,169,407 $ 2,177,407 $ 2,045,172 $ 132,235 $ 1,957,322
(Continued)
80
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 9
BUDGETARY COMPARISON SCHEDULE-GENERAL FUND (Continued)
For The Year Ended December 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Variance with
Final Budget-
Budgeted Amounts 2023 Positive 2022
Original Final Actual (Negative) Actual
Expenditures:
Current:(continued)
Parks and recreation $ 1,503,352 $ 1,486,350 $ 1,473,574 $ 12,776 $ 1,362,086
Recycling 238,007 238,007 176,063 61,944 169,169
Unallocated 90,600 120,600 23,436 97,164 17,396
Total current 13,758,093 13,823,841 12,809,877 1,013,964 12,433,925
Capital outlay:
Parks and recreation 148,000 210,002 210,002 - 135,904
Total expenditures 13,906,093 14,033,843 13,019,879 1,013,964 12,569,829
Revenues over(under)expenditures (570,487) (610,687) 1,556,337 2,167,024 690,794
Other financing sources(uses):
Transfers in 228,772 228,772 228,772 - 197,081
Transfers out - (200,000) (200,000) - (550,000)
Total other financing sources(uses) 228,772 28,772 28,772 - (352,919)
Net increase(decrease)in fund balance $ (341,715) $ (581,915) 1,585,109 $ 2,167,024 337,875
Fund balance-January 1 9,964,341 9,626,466
Fund balance-December 31 $ 11,549,450 $ 9,964,341
See accompanying notes to the required supplementary information.
81
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 10
BUDGETARY COMPARISON SCHEDULE-COMMUNITY CENTER SPECIAL REVENUE FUND
For The Year Ended December 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Variance with
Final Budget-
Budgeted Amounts 2023 Positive 2022
Original Final Actual (Negative) Actual
Revenues:
General property taxes S 155,000 $ 155,000 S 154,097 $ (903) $ 154,614
Charges for services 1,181,000 1,181,000 1,443,266 262,266 1,238,744
Investment income 3,000 3,000 57,713 54,713 (21,173)
Miscellaneous:
Rent 638,000 638,000 635,884 (2,116) 624,508
Other 322,068 389,268 242,754 (146,514) 239,090
Total revenues 2,299,068 2,366,269 2,533,714 167,446 2,235,783
Expenditures:
Current:
Parks and recreation 1,929,391 1,895,591 1,781,249 114,342 1,682,793
Capital outlay:
Parks and recreation 360,000 374,601 176,597 198,004 37,358
Total expenditures 2,188,391 2,270,192 1,957,846 312,346 1,720,151
Revenue over(under)expenditures 110,677 96,076 575,868 479,792 515,632
Other financing sources(uses)
Transfers out (300,000) (300,000) (300,000) - (300,000)
Net increase(decrease)in fund balance $ (189,323) $ (203,924) 275,868 $ 479,792 215,632
Fund balance(deficit)-January 1 1,103,712 888,080
Fund balance(deficit)-December 31 $ 1,379,580 $ 1,103,712
82
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 11
BUDGETARY COMPARISON SCHEDULE-CARES GRANT/ARPA FUNDING SPECIAL REVENUE FUND
For The Year Ended December 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Variance with
Final Budget-
Budgeted Amounts 2023 Positive 2022
Original Final Actual (Negative) Actual
Revenues:
Intergovernmental $ 1,663,448 S 1,663,448 $ 615,104 $ (1,048,344) $ 1,834,877
Investment income - - 25,049 25,049 15,005
Total revenues 1,663,448 1,663,448 640,153 (1,023,295) 1,849,882
Expenditures:
Current:
Public safety - - - - 345
Public works 281,292 281,292 9,225 272,067 1,361,295
Parks and recreation - - - - 8,307
Capital outlay:
Public safety - - - - 200,000
Public works 400,000 400,000 - 400,000 -
Parks and recreation 996,000 996,000 611,839 384,161 40,807
Construction/acquisition costs - - - - 224,123
Total expenditures 1,677,292 1,677,292 621,064 1,056,228 1,834,877
Net increase(decrease)in fund balance $ (13,844) $ (13,844) 19,089 $ 32,933 15,005
Fund balance(deficit)-January 1 28,849 13,844
Fund balance(deficit)-December 31 $ 47,938 $ 28,849
83
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 12
SCHEDULE OF CHANGES IN THE TOTAL OPEB LIABILITY AND RELATED RATIOS
For the Last Ten Years
2018 2019 2020 2021 2022 2023
Total OPEB liability:
Service cost $ 14,090 $ 16,135 $ 17,068 $ 21,330 $ 29,835 $ 31,576
Interest 10,482 10,008 12,944 11,060 9,589 9,371
Changes of benefit terms - - - - - -
Differences between expected
and actual experience - 28,866 - 62,605 - 65,589
Changes in assumptions 11,969 3,219 25,462 (20,807) 5,046 (71,197)
Benefit payments (5,813) (12,311) (12,922) - (10,892) (21,746)
Net change in total OPEB liability 30,728 45,917 42,552 74,188 33,578 13,593
Total OPEB liability-beginning 261,651 292,379 338,296 380,848 455,036 488,614
Total OPEB liability-ending $ 292,379 $ 338,296 $ 380,848 $ 455,036 $ 488,614 $ 502,207
Covered-employee payroll $ 4,469,146 $ 4,620,961 $ 4,562,782 $ 4,848,511 $ 5,665,943 $ 5,309,998
Total OPEB liability as a percentage of
covered-employee payroll 6.5% 7.3% 8.3% 9.4% 8.6% 9.5%
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.
84
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 13
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY*
GENERAL EMPLOYEES RETIREMENT FUND
For the Last Ten Years
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 Plan Fiduciary
Proportionate Proportionate of the Net State's Proportionate Net Pension Net Position
Share Share(Amount) Pension Share of the Net Liability as a as a Percentage
deasurement Fiscal Year (Percentage)of of the Net Liability Pension Liability Percentage of its of the Total
Date Ending the Net Pension Pension Associated with Associated with Covered Covered Pension
June 30 December 31 Liability Liability(a) City(b) City(a+b) Payroll(c) Payroll(a+b/c) Liability
2015 2015 0.0609% $3,156,154 $ - $ 3,156,154 $3,578,755 88.2% 78.2%
2016 2016 0.0590% 4,790,507 62,597 4,853,104 3,623,880 133.9% 68.9%
2017 2017 0.0594% 3,792,057 47,673 3,839,730 3,825,146 100.4% 75.9%
2018 2018 0.0587% 3,256,435 106,772 3,363,207 3,944,067 95.3% 79.5%
2019 2019 0.0576% 3,184,575 98,996 3,283,571 4,076,596 90.5% 90.2%
2020 2020 0.0583% 3,495,351 107,799 3,603,139 4,156,037 86.7% 79.1%
2021 2021 0.0601% 2,566,539 78,332 2,644,871 4,324,969 61.2% 87.0%
2022 2022 0.0613% 4,854,980 142,340 4,997,320 4,591,680 108.8% 76.7%
2023 2023 0.0605% 3,383,092 93,308 3,476,400 4,813,586 72.2% 83.1%
See accompanying notes to the required supplementary information.
*The schedule is provided prospectively beginning with the City's fiscal year ended December 31,2015 and is intended to
show a ten year trend. Additional years will be reported as they become available.
85
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 14
SCHEDULE OF PENSION CONTRIBUTIONS*
GENERAL EMPLOYEES RETIREMENT FUND
For the Last Ten Years
Statutorily Contributions in Contribution Contributions as a
Required Relation to the Deficiency Covered Percentage of
Fiscal Year Contribution Statutorily Required (Excess) Payroll Covered
Ending (a) Contribution(b) (a-b) (c) Payroll(b/c)
December 31,2015 $ 268,490 S 268,490 S - S 3,579,867 7.5%
December 31,2016 283,158 283,158 - 3,775,440 7.5%
December 31,2017 284,139 284,139 - 3,788,520 7.5%
December 31,2018 301,507 301,507 - 4,020,093 7.5%
December 31,2019 310,033 310,033 - 4,133,993 7.5%
December 31,2020 317,872 317,872 - 4,238,286 7.5%
December 31,2021 335,268 335,268 - 4,470,240 7.5%
December 31,2022 349,150 349,150 - 4,655,333 7.5%
December 31,2023 368,657 368,657 - 4,915,427 7.5%
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 Statement 15
SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY*
PUBLIC EMPLOYEES POLICE AND FIRE FUND
For the Last Ten Years
City's
State's Proportionate Share City's
Proportionate of the Net Pension Proportionate
City's City's Share(Amount) Liability and the Share of the Plan Fiduciary
Proportionate Proportionate of the Net State's Proportionate Net Pension Net Position
Share Share(Amount) Pension Share of the Net Liability as a as a Percentage
Ieasurement Fiscal Year (Percentage)of of the Net Liability Pension Liability Percentage of its of the Total
Date Ending the Net Pension Pension Associated with Associated with Covered Covered Pension
June 30 December 31 Liability Liability(a) City(b) City(a+b) Payroll c Payroll(a+b/c) Liability
2015 2015 0.0210% $ 238,609 $ $ 238,609 $194,274 122.8% 86.6%
2016 2016 0.0280% 1,123,689 1,123,689 283,389 396.5% 63.9%
2017 2017 0.0280% 378,033 378,033 287,895 131.3% 85.4%
2018 2018 0.0267% 284,595 284,595 281,901 101.0% 88.8%
2019 2019 0.0272% 289,571 289,571 287,498 100.7% 89.3%
2020 2020 0.0205% 270,212 6,371 276,583 232,475 119.0% 87.2%
2021 2021 0.0162% 125,047 5,612 130,659 190,876 68.5% 93.7%
2022 2022 0.0177% 770,234 33,697 803,931 214,865 374.2% 70.5%
2023 2023 0.0246% 424,810 17,118 441,928 322,961 136.8% 86.5%
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.
87
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION Statement 16
SCHEDULE OF PENSION CONTRIBUTIONS*
PUBLIC EMPLOYEES POLICE AND FIRE FUND
For the Last Ten Years
Statutorily Contributions in Contribution Contributions as a
Required Relation to the Deficiency Covered Percentage of
Fiscal Year Contribution Statutorily Required (Excess) Payroll Covered
Ending (a) Contribution(b) (a-b) (c) Payroll(b/c)
December 31,2015 $ 38,121 $ 38,121 $ - S 235,315 16.2%
December 31,2016 45,909 45,909 - 283,389 16.2%
December 31,2017 45,604 45,604 - 281,506 16.2%
December 31,2018 46,365 46,365 - 286,204 16.2%
December 31,2019 46,269 46,269 - 272,993 16.9%
December 31,2020 34,168 34,168 - 193,040 17.7%
December 31,2021 35,706 35,706 - 201,729 17.7%
December 31,2022 47,226 47,226 - 266,814 17.7%
December 31,2023 54,869 54,869 - 309,994 17.7%
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.
88
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31,2023
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 weren't any General Fund departments
whose expenditures exceed budget appropriations.
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 2023,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 aphysical condition based on potential defects. An Overall
Condition Index (OCT)was assigned to each street and trail and expressed in a continuous scale. The continuous scale is 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:
Rating
Condition Scale
Excellent 8- 10
Very Good 7-7.9
Good 6-6.9
Fair 4-5.9
Poor 2-3.9
Very Poor 1 - 1.9
Substandard 0-.9
As of December 31,2023,the City's street and trail system was rated at an OCI index of 6.4 on the average with detail condition as follows:
%of Street
Condition and Trails
Excellent to Good 76.7%
Fair 15.8%
Poor to Substandard 7.5%
89
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31,2023
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
$7,830,116 on street and trail maintenance for the year ending December 31,2023. 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$3,000,000.
Maintenance Actual OCI
Year Estimate Expenditures Rating
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 5A
2021 2,500,000 2,160,714 59
2022 2,750,000 4,159,982 6.0
2023 3,000,000 7,830,116 6.4
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
2023 Changes in Actuarial Assumptions:
• The investment return assumption and single discount rate were changed from 6.50%to 7.00%.
2023 Changes in Plan Provisions:
• An additional one-time direct state aid contribution of$170.1 million was contributed to the Plan on October 1,2023.
• The vesting period of those hired after June 30,2010,was changed from five years of allowable service to three years of
allowable service.
• The benefit increase delay for early retirements on or after January 1,2024,was eliminated.
• A one-time,non-coinpounding benefit increase of 2.50%minus the actual 2024 adjustment will be payable in a lump sum
for calendar year 2024 by March 31,2024.
2022 Changes in Actuarial Assumptions:
• The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021.
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%.
90
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31,2023
• As recommended in the June 30,2019 experience study,assumed salary increase rates were decreased 0.25%and assumed
rates of retirement were changed resulting in more unreduced(normal)retirements and slightly fewer Rule of 90 and early
retirements. Assumed rates of termination and disability were also changed.
• The base mortality tables were changed from RP-2014 to Pub-2010 tables,with adjustments.
• The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019.
• The assumed spouse age difference was changed from two years older for females to one year older.
• The assumed number of married male new retirees electing the 100%Joint&Survivor option changed from 35%to 45%.
The assumed number of married female new retirees electing 100%Joint& Survivor option changed from 15%to 30%.
The corresponding number of married new retirees electing the Life annuity option was adjusted accordingly.
2020 Changes in Plan Provisions:
• Augmentation for current privatized members was reduced to 2.0%for the period July 1,2020 through December 31,2023
and 0.0%after. Augmentation was eliminated for privatizations occurring after June 30,2020.
2019 Changes in Actuarial Assumptions:
• The mortality projection scale was changed from MP-2017 to MP-201 S.
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
2023 Changes in Actuarial Assumptions:
• The investment return assumption and single discount rate were changed from 6.50%to 7.00%.
• The single discount rate changed from 5.40%to 7.00%.
2023 Changes in Plan Provisions:
• An additional one-time direct state aid contribution of$19.4 million was contributed to the Plan on October 1,2023.
• Vesting requirement for new hues after June 30,2014,was changed from a graded 20-year vesting schedule to a graded 10-
year vesting schedule,with 50%vesting after five years,increasing incrementally to 100%after 10 years.
• A one-time,non-compounding benefit increase of 3.00%will be payable in a lump sum for calendar year 2024 by March
31,2024.
• Psychological treatment is required effective July 1,2023,prior to approval for a duty disability benefit for a psychological
condition relating to the member's occupation.
• The total and permanent duty disability benefit was increased,effective July 1,2023.
91
CITY OF ANDOVER,MINNESOTA
REQUIRED SUPPLEMENTARY INFORMATION
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31,2023
2022 Changes in Actuarial Assumptions:
• The single discount rate was changed from 6.50%to 5.40%.
• The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021.
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.
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 Tally 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.
92
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 Statement 17
NONMAJOR GOVERNMENTAL FUNDS
December 31,2023
With Comparative Totals For December 31,2022
Totals
Special Debt Capital Nonmajor Governmental Funds
Revenue Service Projects 2023 2022
Assets:
Cash and investments $ 978,233 $ 3,771,774 $ 7,589,188 $ 12,339,195 $10,529,692
Accrued interest 7,432 16,422 51,775 75,629 39,077
Due from other governmental units 1,432 - 105,875 107,307 107,512
Accounts receivable-net 15,915 - - 15,915 21,850
Prepaid items - - 26,938 26,938 10,000
Property taxes receivable:
Unremitted 506 36,077 6,233 42,816 56,056
Delinquent 320 19,592 3,875 23,787 32,399
Special assessments receivable:
Deferred - - 88,249 88,249 90,904
Total assets $ 1,003,838 $ 3,843,865 $ 7,872,133 $ 12,719,836 $10,887,490
Liabilities,Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable $ 4,917 $ 5,000 $ - $ 9,917 $ 21,996
Contracts payable - - 9,490 9,490 -
Deposits payable - - 25,782 25,782 24,465
Due to other governmental units - - - - 56,577
Salaries payable 1,272 - - 1,272 1,171
Unearned revenue 108,563 - - 108,563 78,257
Total liabilities 114,752 5,000 35,272 155,024 182,466
Deferred inflows of resources:
Unavailable revenues 320 19,592 92,124 112,036 123,303
Fund balance(deficit):
Nonspendable - - 26,938 26,938 10,000
Restricted 257,140 3,819,273 1,495,558 5,571,971 3,778,771
Committed 610,504 - - 610,504 584,224
Assigned 21,122 - 6,222,241 6,243,363 6,208,726
Total fund balance(deficit) 888,766 3,819,273 7,744,737 12,452,776 10,581,721
Total liabilities,deferred inflows of
resources,and fund balances(deficit) $ 1,003,838 $ 3,843,865 $ 7,872,133 $ 12,719,836 $ 10,887,490
95
CITY OF ANDOVER,MINNESOTA
COMBINING STATEMENT OF REVENUES,EXPENDITURES AND Statement 18
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
For The Year Ended December 31,2023
With Comparative Totals For The Year Ended December 31,2022
Totals
Special Debt Capital Nonmajor Governmental Funds
Revenue Service Projects 2023 2022
Revenues:
General property taxes $ 39,533 $ 3,740,870 $ 639,904 $ 4,420,307 $ 4,419,877
Intergovernmental 1,432 - 1,564,703 1,566,135 166,779
Special assessments - - 3,525 3,525 3,525
Charges for services 116,906 - - 116,906 112,241
Investment income 42,856 89,027 315,690 447,573 (231,979)
Miscellaneous:
Park dedication fees - - 337,085 337,085 1,360,540
Other 97,881 - 108,558 206,439 495,968
Total revenues 298,608 3,829,897 2,969,465 7,097,970 6,326,951
Expenditures:
Current:
General government 87,848 - 143,126 230,974 267,818
Public safety - - 61,199 61,199 60,263
Public works 98,307 - 20,596 118,903 91,708
Parks and recreation - - 28,526 28,526 180,064
Economic development 56,257 - - 56,257 87,035
Capital outlay:
General government - - 162,036 162,036 296,850
Public safety - - 133,270 133,270 384,126
Public works - - 208,658 208,658 543,654
Parks and recreation - - 410,206 410,206 589,161
Economic development - - - - 27,618
Debt service:
Principal retirement - 31125,000 - 3,125,000 2,110,000
Interest - 1,260,997 - 1,260,997 1,291,283
Paying agent fees - 6,160 - 6,160 5,200
Professional service - 5,000 - 5,000 -
Construction/acquisition costs - - 42,788 42,788 -
Total expenditures 242,412 4,397,157 1,210,405 5,849,974 5,934,780
Revenues over(under)expenditures 56,196 (567,260) 1,759,060 1,247,996 392,171
Other financing sources(uses):
Transfers in - 895,300 - 895,300 1,736,271
Transfers out (8,300) - (350,000) (358,300) (824,871)
Proceeds from sale of capital assets - - 86,059 86,059 163,823
Total other financing sources(uses) (8,300) 895,300 (263,941) 623,059 1,075,223
Net increase(decrease)in fund balance 47,896 328,040 1,495,119 1,871,055 1,467,394
Fund balance-January 1 840,870 3,491,233 6,249,618 10,581,721 9,114,327
Fund balance-December 31 $ 888,766 $ 3,819,273 $ 7,744,737 $ 12,452,776 $ 10,581,721
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.
Drainage and Mapping- 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 Coating-This fund accounts for the contributions associated with land development to be used for
the respective developments first application of crack seal and seal coat.
97
CITY OF ANDOVER,MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR SPECIAL REVENUE FUNDS
December 31,2023
With Comparative Totals For December 31,2022
Drainage
EDA and
General Mapping LRRWMO Forestry
Assets:
Cash and investments $ 156,108 S 196,452 $ 101,648 S 1,562
Accrued interest 1,268 1,619 722 -
Due from other governmental units - - - 1,432
Accounts receivable-net 15,915 - - -
Prepaid items - - - -
Property taxes receivable:
Unremitted - - 506 -
Delinquent - - 320 -
Total assets $ 173,291 S 198,071 $ 103,196 $ 2,994
Liabilities,Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable $ 4,749 $ - $ 168 $ -
Due to other governmental units - - - -
Salaries payable 39 244 305 -
Unearned revenue - - - -
Total liabilities 4,788 244 473 -
Deferred inflows of resources:
Unavailable revenues - - 320 -
Fund balance(deficit):
Nonspendable - - - -
Restricted - - - -
Committed 168,503 197,827 102,403 -
Assigned - - - 2,994
Total fund balance(deficit) 168,503 197,827 102,403 2,994
Total liabilities,deferred inflows of
resources,and fund balances(deficit) $ 173,291 $ 198,071 $ 103,196 $ 2,994
98
Statement 19
Right-of-Way Totals
Management/ Charitable Construction Nonmajor Special Revenue Funds
Utility Gambling Seal Coating 2023 2022
$ 139,605 $ 273,147 $ 109,711 $ 978,233 $ 943,190
1,048 2,121 654 7,432 4,024
- - - 1,432 5,950
- - - 15,915 15,921
- - - - 10,000
- - - 506 551
- - - 320 449
$ 140,653 $ 275,268 $ 110,365 $ 1,003,838 $ 980,085
$ - $ - $ - $ 4,917 $ 7,730
- - - - 51,608
684 - - 1,272 1,171
- - 108,563 108,563 78,257
684 - 108,563 114,752 138,766
- - - 320 449
- - - - 10,000
- 257,140 - 257,140 237,411
139,969 - 1,802 610,504 584,224
- 18,128 - 21,122 9,235
139,969 275,268 1,802 888,766 840,870
$ 140,653 $ 275,268 $ 110,365 $ 1,003,838 $ 980,085
99
CITY OF ANDOVER,MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
NONMAJOR SPECIAL REVENUE FUNDS
For The Year Ended December 31,2023
With Comparative Totals For The Year Ended December 31,2022
Drainage
EDA and
General Mapping LRRWMO Forestry
Revenues:
General property taxes S - $ - S 39,533 S -
Intergovernmental - - - 1,432
Charges for services 17,422 20,304 - -
Investment income 10,195 9,369 4,284 246
Miscellaneous:
Other 304 - - -
Total revenues 27,921 29,673 43,817 1,678
Expenditures:
Current:
General government - - - -
Public works - 14,448 42,301 1,932
Economic development 56,257 - - -
Capital outlay:
Economic development - - - -
Total expenditures 56,257 14,448 42,301 1,932
Revenues over(under)expenditures (28,336) 15,225 1,516 (254)
Other financing sources(uses):
Transfers in - - - -
Transfers out - - - -
Total other financing sources(uses) - - - -
Net increase(decrease)in fund balance (28,336) 15,225 1,516 (254)
Fund balance(deficit)-January 1 196,839 182,602 100,887 3,248
Fund balance(deficit)-December 31 S 168,503 $ 197,827 $ 102,403 $ 2,994
100
Statement 20
Right-of-Way Totals
Management/ Charitable Construction Nonmajor Special Revenue Funds
Utility Gambling Seal Coating 2023 2022
$ 39,533 S 39,873
- - - 1,432 5,950
65,723 - 13,457 116,906 112,241
5,150 12,141 1,471 42,856 (20,540)
- 97,577 - 97,881 112,870
70,873 109,718 14,928 298,608 250,394
- 87,849 - 87,848 81,543
25,048 - 14,578 98,307 89,669
- - - 56,257 87,035
- - - - 27,618
25,048 87,848 14,578 242,412 285,865
45,825 21,870 350 56,196 (35,471)
- - - - 150,000
(9,300) - - (8,300) (7,400)
(9,300) - - (8,300) 142,600
37,525 21,870 350 47,896 107,129
102,444 253,398 1,452 840,870 733,741
$ 139,969 $ 275,268 $ 1,802 $ 888,766 $ 840,870
101
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102
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 - 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.
Street Reconstruction Bonds — (G.O. Street Reconstruction Bonds of 2021A) are repaid primarily from general
property taxes.
103
CITY OF ANDOVER,MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR DEBT SERVICE FUNDS
December 31,2023
With Comparative Totals For December 31,2022
G.O.
G.O. G.O. Capital G.O.
Equipment Equipment Improvement Abatement
Certificate Certificate Plan Bonds Bonds
2020A 2021A 2018A 2012C
Assets:
Cash and investments $ 418,050 $ 172,212 $ 583,418 $ 529,495
Accrued interest - 841 2,780 1,165
Property taxes receivable:
Unremitted 3,609 1,675 5,869 9,288
Delinquent 1,960 909 3,187 5,044
Total assets $ 423,619 $ 175,637 $ 595,254 $ 544,992
Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable $ - $ - $ 5,000 $ -
Deferred inflows of resources:
Unavailable revenues 1,960 909 3,187 5,044
Fund balance(deficit):
Restricted 421,659 174,728 587,067 539,948
Total deferred inflows of resources,and
and fund balances(deficit) $ 423,619 $ 175,637 $ 595,254 $ 544,992
104
Statement 21
G.O.
G.O. Street
Abatement Reconstruction Totals
Bonds Bonds Nonmajor Debt Service Funds
2019A 2021A 2023 2022
$ 1,071,504 $ 997,095 $ 3,771,774 $ 3,435,767
5,425 6,211 16,422 8,231
9,852 5,794 36,077 47,235
5,351 3,141 19,592 26,115
$ 1,092,132 $ 1,012,231 $ 3,843,865 $ 3,517,348
$ - $ - $ 5,000 $ -
5,351 3,141 19,592 26,115
1,086,791 1,009,090 3,819,273 3,491,233
$ 1,092,132 $ 1,012,231 $ 3,843,865 $ 3,517,348
105
CITY OF ANDOVER,MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR DEBT SERVICE FUNDS
For The Year Ended December 31,2023
With Comparative Totals For The Year Elided December 31,2022
G.O.
G.O. G.O. Capital G.O.
Equipment Equipment Improvement Abatement
Certificate Certificate Plan Bonds Bonds
2020A 2021A 2018A 2012C
Revenues:
General property taxes S 374,158 S 173,575 S 608,592 S 963,095
Investment income 10,147 3,835 13,883 1,395
Total revenues 384,305 177,410 622,475 964,490
Expenditures:
Debt service:
Principal retirement 330,000 150,000 290,000 960,000
Interest 20,400 11,100 334,006 249,281
Paying agent fees 1,060 590 1,140 1,140
Professional services - - 5,000 -
Total expenditures 351,460 161,690 630,146 1,210,421
Revenues over(under)expenditures 32,845 15,720 (7,671) (245,931)
Other financing sources(uses):
Transfers in - - 45,300 300,000
Transfers out - - - -
Total other financing sources(uses) - - 45,300 300,000
Net increase(decrease)in fund balance 32,845 15,720 37,629 54,069
Fund balance-January 1 388,814 159,009 549,438 485,879
Fund balance-December 31 S 421,659 $ 174,729 S 587,067 $ 539,948
106
Statement 22
G.O.
G.O. Street
Abatement Reconstruction Totals
Bonds Bonds Nonmajor Debt Service Funds
2019A 2021A 2023 2022
$ 1,021,726 $ 599,724 $ 3,740,870 $ 3,738,045
27,488 32,279 89,027 (50,825)
1,049,214 632,003 3,829,897 3,687,220
570,000 825,000 3,125,000 2,110,000
536,900 109,310 1,260,997 1,291,283
1,140 1,090 6,160 5,200
- - 5,000 -
1,108,040 935,400 4,397,157 3,406,483
(58,826) (303,397) (567,260) 280,737
150,000 400,000 895,300 908,443
- - - (254,328)
150,000 400,000 895,300 654,115
91,174 96,603 328,040 934,852
995,607 912,497 3,491,233 2,556,381
$ 1,086,781 $ 1,009,090 $ 3,819,273 $ 3,491,233
107
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108
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 2021A-This fund was established to account for the purchase of capital equipment that was
financed through the issuance of capital notes.
Permanent Improvement Revolving- This fund serves as a long-term funding source for large capital improvement
expenditures.
109
CITY OF ANDOVER,MINNESOTA
SUBCOMBINING BALANCE SHEET
NONMAJOR CAPITAL PROJECTS FUNDS
December 31,2023
With Comparative Totals For December 31,2022
Capital
Park Building Trail& Equipment
Dedication Fund Transportation Reserve
Assets:
Cash and investments $ 2,132,227 $ 758,079 $ 1,125,959 $ 2,964,402
Accrued interest 16,583 5,889 9,093 15,060
Due from other governmental units - - - 105,875
Accounts receivable-net - - - -
Prepaid items - 26,938 - -
Property taxes receivable:
Unremitted 141 3,434 - 2,658
Delinquent 85 2,067 - 1,723
Special assessments receivable:
Deferred - - - -
Total assets $ 2,149,036 $ 796,407 $ 1,135,052 $ 3,089,718
Liabilities,Deferred Inflows of Resources and Fund Balances
Liabilities:
Accounts payable $ - -
Contracts payable - 9,490 - -
Deposits payable - - - 25,782
Due to other government units - - - -
Total liabilities - 9,490 - 25,782
Deferred inflows of resources:
Unavailable revenues 85 2,067 - 1,723
Fund balance(deficit):
Nonspendable - 26,938 - -
Restricted - - - 1,495,558
Assigned 2,149,951 757,912 1,135,052 1,566,655
Total fund balance(deficit) 2,148,951 784,850 1,135,052 3,062,213
Total liabilities,deferred inflows of
resources,and fund balances(deficit) $ 2,149,036 $ 796,407 $ 1,135,052 $ 3,089,718
110
Statement 23
Permanent Totals
Improvement Nonmajor Capital Projects Funds
Revolving 2023 2022
$ 608,521 $ 7,589,188 $ 6,150,735
5,150 51,775 26,822
- 105,875 101,562
- - 5,929
- 26,938 -
- 6,233 8,270
- 3,875 5,835
88,249 88,249 90,904
$ 701,920 $ 7,872,133 $ 6,390,057
$ - $ - $ 14,266
- 9,490 -
- 25,782 24,465
- - 4,969
- 35,272 43,700
88,249 92,124 96,739
- 26,938 -
- 1,495,558 50,127
613,671 6,222,241 6,199,491
613,671 7,744,737 6,249,618
$ 701,920 $ 7,872,133 $ 6,390,057
111
CITY OF ANDOVER,MINNESOTA
SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR CAPITAL PROJECTS FUNDS
For The Year Ended December 31,2023
With Comparative Totals For The Year Ended December 31,2022
Capital
Park Building Trail& Equipment
Dedication Fund Transportation Reserve
Revenues:
General property taxes S 14,488 S 352,975 S - $ 272,441
Intergovernmental - 12,806 - 1,551,897
Special assessments - - - -
Investment income 100,019 34,701 51,342 93,221
Miscellaneous:
Park dedication fees 337,085 - - -
Other 13,920 - 69,305 25,333
Total revenues 465,512 400,482 120,647 1,942,892
Expenditures:
Current:
General government - 138,372 - 4,754
Public safety - - - 61,199
Public works - - 12,083 -
Parks and recreation 22,623 - - 5,903
Capital outlay:
General government - 128,737 - 33,299
Public safety - - - 82,555
Public works - - - 208,658
Parks and recreation 110,486 - - 299,720
Construction/acquisition costs - 42,788 - -
Total expenditures 133,109 309,897 12,083 696,088
Revenues over(under)expenditures 332,403 90,585 108,564 1,246,804
Other financing sources(uses):
Transfers in - - - -
Transfers out (150,000) - - -
Proceeds from sale of capital assets - - - 86,059
Total other financing sources(uses) (150,000) - - 86,059
Net increase(decrease)in fund balance 182,403 90,585 108,564 1,332,863
Fund balance(deficit)-January 1 1,966,548 694,265 1,026,488 1,729,350
Fund balance(deficit)-December 31 S 2,148,951 $ 784,850 S 1,135,052 $ 3,062,213
112
Statement 24
Equipment Permanent Totals
Certificates Improvement Nonmajor Capital Projects Funds
2021A Revolving 2023 2022
639,904 $ 641,959
- - 1,564,703 160,829
- 3,525 3,525 3,525
588 35,919 315,690 (160,614)
- - 337,085 1,360,540
- - 108,558 383,098
588 39,344 2,969,465 2,389,337
- - 143,126 186,275
- - 61,199 60,263
- 8,513 20,596 2,039
- - 28,526 180,064
- - 162,036 296,850
50,715 - 133,270 384,126
- - 208,658 543,654
- - 410,206 589,161
- - 42,788 -
50,715 8,513 1,210,405 2,242,432
(50,127) 30,931 1,759,060 146,905
- - - 677,828
- (200,000) (350,000) (563,143)
- - 86,059 163,823
- (200,000) (263,941) 278,509
(50,127) (169,169) 1,495,119 425,413
50,127 782,840 6,249,618 5,824,205
$ - $ 613,671 $ 7,744,737 $ 6,249,618
113
CITY OF ANDOVER,MINNESOTA
SPECIAL REVENUE FUND-EDA GENERAL Statement 25
SCHEDULE OF REVENUES,EXPENDITURES AND
CHANGES 1N FUND BALANCES-BUDGET AND ACTUAL
For The Year Ended December 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Variance with
Final Budget-
Budgeted Amounts 2023 Positive 2022
Original Final Actual (Negative) Actual
Revenues:
Charges for services $ 15,000 $ 15,000 $ 17,422 $ 2,422 $ 22,447
Investment income 2,000 2,000 10,195 8,195 (5,432)
Miscellaneous - - 304 304 953
Total revenues 17,000 17,000 27,921 10,921 17,968
Expenditures:
Current:
Economic development 124,036 124,036 56,257 67,779 87,035
Capital outlay:
Economic development - - - - 27,618
Total expenditures 124,036 124,036 56,257 67,779 114,653
Revenues over(under)expenditures (107,036) (107,036) (28,336) 78,700 (96,685)
Other financing sources(uses):
Transfers in - - - - 150,000
Net increase(decrease)in fund balance $ (107,036) $ (107,036) (28,336) $ 78,700 53,315
Fund balance(deficit)-January 1 196,839 143,524
Fund balance(deficit)-December 31 $ 168,503 $ 196,839
114
CITY OF ANDOVER,MINNESOTA
SPECIAL REVENUE FUND-DRAINAGE AND MAPPING Statement 26
SCHEDULE OF REVENUES,EXPENDITURES AND
CHANGES 1N FUND BALANCES-BUDGET AND ACTUAL
For The Year Ended December 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Variance with
Final Budget-
Budgeted Amounts 2023 Positive 2022
Original Final Actual (Negative) Actual
Revenues:
Charges for services $ 9,000 S 9,000 $ 20,304 $ 11,304 $ 27,546
Investment income 1,200 1,200 9,369 8,169 (4,913)
Total Revenues 10,200 10,200 29,673 19,473 22,633
Expenditures:
Current:
Public works 27,684 24,384 14,448 9,936 18,883
Net increase(decrease)in fund balance $ (17,484) $ (14,184) 15,225 $ 29,409 3,750
Fund balance(deficit)-January 1 182,602 178,852
Fund balance(deficit)-December 31 $ 197,827 $ 182,602
115
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 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Variance with
Final Budget-
Budgeted Amounts 2023 Positive 2022
Original Final Actual (Negative) Actual
Revenues:
General property taxes $ 40,000 S 40,000 $ 39,533 $ (467) $ 39,873
Investment income 200 200 4,284 4,084 (2,019)
Total revenues 40,200 40,200 43,817 3,617 37,854
Expenditures:
Current:
Public works 27,326 43,250 42,301 949 22,751
Net increase(decrease)in fund balance $ 12,874 $ (3,050) 1,516 $ 4,566 15,103
Fund balance(deficit)-January 1 100,887 85,784
Fund balance(deficit)-December 31 $ 102,403 $ 100,887
116
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 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Variance with
Final Budget-
Budgeted Amounts 2023 Positive 2022
Original Final Actual (Negative) Actual
Revenues:
Intergovernmental $ 12,500 S 12,500 $ 1,432 $ (11,068) $ 5,950
Investment income 50 50 246 196 (256)
Total revenues 12,550 12,550 1,678 (10,872) 5,694
Expenditures:
Current:
Public works 15,000 15,000 1,932 13,068 7,836
Net increase(decrease)in fund balance $ (2,450) $ (2,450) (254) $ 2,196 (2,142)
Fund balance(deficit)-January 1 3,248 5,390
Fund balance(deficit)-December 31 $ 2,994 $ 3,248
117
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 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Variance with
Final Budget-
Budgeted Amounts 2023 Positive 2022
Original Final Actual (Negative) Actual
Revenues:
Charges for services $ 26,000 $ 26,000 $ 65,723 $ 39,723 $ 49,284
Investment income 500 500 5,150 4,650 (2,605)
Total revenues 26,500 26,500 70,873 44,373 46,679
Expenditures:
Current:
Public works 35,676 31,976 25,048 6,928 22,802
Revenue over(under)expenditures (9,176) (5,476) 45,825 51,301 23,877
Other financing sources(uses):
Transfers out (8,300) (8,300) (8,300) - (7,400)
Net increase(decrease)in fund balance $ (17,476) $ (13,776) 37,525 $ 51,301 16,477
Fund balance(deficit)-January 1 102,444 85,967
Fund balance(deficit)-December 31 $ 139,969 $ 102,444
118
CITY OF ANDOVER,MINNESOTA
SPECIAL REVENUE FUND-CHARITABLE GAMBLING Statement 30
SCHEDULE OF REVENUES,EXPENDITURES AND
CHANGES 1N FUND BALANCES-BUDGET AND ACTUAL
For The Year Ended December 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Variance with
Final Budget-
Budgeted Amounts 2023 Positive 2022
Original Final Actual (Negative) Actual
Revenues:
Investment income $ 750 S 750 $ 12,141 $ 11,391 $ (6,043)
Miscellaneous 30,000 30,000 97,577 67,577 111,917
Total revenues 30,750 30,750 109,718 78,968 105,874
Expenditures:
Current:
General government 38,000 38,000 87,848 (49,848) 81,543
Net increase(decrease)in fund balance $ (7,250) $ (7,250) 21,870 $ 29,120 24,331
Fund balance(deficit)-January 1 253,398 229,067
Fund balance(deficit)-December 31 $ 275,268 $ 253,398
119
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 31,2023
With Comparative Actual Amounts For The Year Ended December 31,2022
Variance with
Final Budget-
Budgeted Amounts 2023 Positive 2022
Original Final Actual (Negative) Actual
Revenues:
Charges for services $ 10,000 S 13,460 $ 13,457 $ (3) $ 12,964
Investment income 500 500 1,471 971 728
Total revenues 10,500 13,960 14,928 968 13,692
Expenditures:
Current:
Public works 10,000 14,690 14,578 112 17,397
Net increase(decrease)in fund balance $ 500 $ (730) 350 $ 1,080 (3,705)
Fund balance(deficit)-January 1 1,452 5,157
Fund balance(deficit)-December 31 $ 1,802 $ 1,452
120
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.
121
CITY OF ANDOVER,MINNESOTA
COMBINING STATEMENT OF NET POSITION Statement 32
INTERNAL SERVICE FUNDS
December 31,2023
With Comparative Totals for December 31,2022
Central
Equipment Risk Totals
Maintenance Management 2023 2022
Assets:
Current assets:
Cash and cash equivalents $ 348,468 $ 492,847 $ 841,315 $ 476,526
Accrued interest 3,149 3,798 6,947 2,965
Accounts receivable 2,842 5,640 8,482 -
Prepaid items - 239,287 239,287 216,688
Inventories-at cost 141,972 - 141,972 138,220
Total assets 496,431 741,572 1,238,003 834,399
Liabilities:
Current liabilities:
Accounts payable 14,401 1,609 16,010 52,218
Salaries payable 11,532 626 12,158 11,875
Total liabilities 25,933 2,235 28,168 64,093
Net position:
Unrestricted $ 470,498 $ 739,337 $ 1,209,835 $ 770,306
122
CITY OF ANDOVER,MINNESOTA
COMBINING STATEMENT OF REVENUES,EXPENSES AND Statement 33
CHANGES IN NET POSITION
INTERNAL SERVICE FUNDS
For The Year Ended December 31,2023
With Comparative Totals For The Year Ended December 31,2022
Central
Equipment Risk Totals
Maintenance Management 2023 2022
Operating revenues:
User charges S 992,300 S 835,550 $ 1,827,850 $ 1,453,013
Other 2,962 26,408 29,370 60,717
Total operating revenues 995,262 861,958 1,857,220 1,513,730
Operating expenses:
Personal services 383,636 239,974 623,610 605,647
Supplies 400,875 32,916 433,791 456,270
Other service charges 213,902 424,034 637,936 625,371
Total operating expenses 998,413 696,924 1,695,337 1,687,288
Operating income(loss) (3,151) 165,034 161,883 (173,558)
Nonoperating revenues(expenses):
Investment income 11,838 20,808 32,646 (19,640)
Transfers:
Transfers in 245,000 - 245,000 -
Change in net position 253,687 185,842 439,529 (193,198)
Net position-January 1 216,811 553,495 770,306 963,504
Net position-December 31 $ 470,498 S 739,337 $ 1,209,835 $ 770,306
123
CITY OF ANDOVER,MINNESOTA
COMBINING STATEMENT OF CASH FLOWS Statement 34
INTERNAL SERVICE FUNDS
For The Year Ended December 31,2023
With Comparative Totals For The Year Ended December 31,2022
Central
Equipment Risk Totals
Maintenance Management 2023 2022
Cash flows from operating activities:
Receipts from customers and users $ 992,420 $ 856,318 $ 1,848,738 $ 1,513,730
Payment to suppliers (653,538) (480,748) (1,134,286) (1,098,465)
Payment to employees (383,372) (239,955) (623,327) (605,086)
Net cash flows from operating activities (44,490) 135,615 91,125 (189,821)
Cash flows from noncapital financing activities:
Transfers out 245,000 - 245,000
Cash flows from investing activities:
Investment income 9,663 19,001 28,664 (20,417)
Net increase(decrease)in cash and cash equivalents 210,173 154,616 364,789 (210,238)
Cash and cash equivalents-January 1 138,295 338,231 476,526 686,764
Cash and cash equivalents-December 31 $ 348,468 $ 492,847 $ 841,315 $ 476,526
Reconciliation of operating income to net cash provided
(used)by operating activities:
Operating income(loss) $ (3,151) $ 165,034 $ 161,883 $ (173,558)
Adjustments to reconcile operating income(loss)
to net cash flows from operating activities:
Changes in assets and liabilities:
Decrease(increase)in accounts receivable (2,842) (5,640) (8,482) -
Decrease(increase)in prepaid items (22,599) (22,599) 4,010
Decrease(increase)in inventory (3,752) (3,752) (41,614)
Increase(decrease)in accounts payable (35,009) (1,199) (36,208) 20,780
Increase(decrease)in salaries payable 264 19 283 561
Total adjustments (41,339) (29,419) (70,758) (16,263)
Net cash provided(used)by operating activities $ (44,490) $ 135,615 $ 91,125 $ (189,821)
124
III. STATISTICAL SECTION
This part of the City of Andover's comprehensive annual financial report presents detailed information as a context for
understanding what the information in the financial statements,note disclosures, and required supplementary information
says about the City's overall financial health.
Contents Page
Financial Trends 126
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 136
These tables contain information to help the reader assess the City's most significant local revenue source,
the property tax.
Debt Capacity 142
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 150
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 153
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.
125
CITY OF ANDOVER,MINNESOTA
NET POSITION BY COMPONENT
Last Ten Fiscal Years
(accrual basis of accounting)
2014 2015 2016 2017
Governmental Activities
Net investment in capital assets $ 94,533,473 $ 95,998,027 $ 99,539,838 $ 101,602,647
Restricted 4,776,047 5,755,162 5,787,072 4,935,375
Unrestricted 23,175,077 24,457,253 26,085,240 27,673,920
Total governmental activities net position 122,484,597 126,210,442 131,412,150 134,211,942
Business-Type Activities
Net investment in capital assets 34,787,392 35,507,385 37,531,815 37,174,817
Unrestricted 6,292,850 7,004,563 7,652,339 8,446,942
Total business-type activities net position 41,080,232 42,511,948 45,184,154 45,621,759
Primary Government
Net investment in capital assets 129,320,855 131,505,412 137,071,653 138,777,464
Restricted 4,776,047 5,755,162 5,787,072 4,935,375
Unrestricted 29,467,927 31,461,816 33,737,579 36,120,862
Total primary government net position $ 163,564,829 $ 168,722,390 $ 176,596,304 $ 179,833,701
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.
126
Table 1
2018 2019 2020 2021 2022 2023
$ 103,577,524 $ 106,637,436 $ 114,441,287 $ 115,576,274 $ 113,896,484 $ 113,094,608
5,081,230 5,294,610 3,851,631 4,465,945 5,088,833 6,922,836
28,319,303 30,608,612 35,974,899 38,516,535 43,578,925 48,345,360
136,978,057 142,540,658 154,267,817 158,558,754 162,564,242 168,362,804
37,068,699 38,547,614 40342,053 43,517,002 44,098,814 46,995,780
9,825,681 9,982,550 11,023,179 11,463,122 12,286,201 13,125,199
46,894,380 48,530,164 51,365,232 54,980,124 56,385,015 60,120,979
140,646,223 145,185,050 154,783,340 159,093,276 157,995,298 160,090,388
5,081,230 5,294,610 3,851,631 4,465,945 5,088,833 6,922,836
38,144,984 40,591,162 46,998,078 49,979,657 55,865,126 61,470,559
$ 183,872,437 $ 191,070,822 $ 205,633,049 $ 213,538,878 $ 218,949,257 $ 228,483,783
127
CITY OF ANDOVER,MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
2014 2015 2016 2017
Expenses
Governmental activities:
General government $ 2,791,507 $ 2,823,408 $ 2,904,102 $ 2,937,380
Public safety 4,747,142 4,774,033 5,140,347 5,167,930
Public works 4,430,295 2,967,957 3,905,703 5,428,350
Parks and recreation 3,229,894 3,340,561 3,321,814 3,385,001
Recycling 111,760 98,016 133,614 169,100
Economic development 676,039 192,265 411,958 1,098,300
Interest on long-term debt 542,139 454,808 437,513 403,200
Total governmental activities expenses 16,528,776 14,651,048 16,255,051 18,589,261
Business-type activities:
Water 2,308,552 2,316,651 2,454,931 2,263,748
Sewer 1,951,785 2,002,623 2,128,814 2,190,453
Storm sewer 848,745 595,902 546,526 684,708
Total business-type activities expenses 5,109,082 4,915,176 5,130,271 5,138,909
Total primary government expenses $ 21,637,858 $ 19,566,224 $ 21,385,322 $ 23,728,170
Program Revenues
Governmental activities:
Charges for services:
General government $ 801,458 $ 1,381,113 $ 2,124,665 $ 925,639
Public safety 492,665 624,430 832,412 680,729
Public works 318,018 298,143 661,788 334,273
Parks and recreation 1,545,794 1,514,900 1,521,585 1,465,562
Recycling 41,440 32,976 42,768 43,062
Economic development 96,772 50,628 174,754 461,294
Operating grants and contributions 946,540 965,986 992,194 1,186,721
Capital grants and contributions 4,677,704 863,155 2,703,429 3,414,161
Total governmental activities program revenue 8,920,391 5,731,331 9,053,595 8,511,441
Business-type activities:
Charges for services:
Water 2,347,763 2,593,303 2,575,920 2,716,239
Sewer 2,117,624 2,129,201 2,144,794 2,301,077
Storm sewer 421,056 444,335 464,928 499,974
Operating grants and contributions 9,506 - 2,681 -
Capital grants and contributions 990,412 1,524,088 2,670,641 481,343
Total business-type activities program revenue 5,886,361 6,690,927 7,858,964 5,998,633
Total primary government program revenues 14,806,752 12,422,258 16,912,559 14,510,074
Net(Expense)/Revenue
Governmental activities (7,608,385) (8,919,717) (7,201,456) (10,077,820)
Business-type activities 777,279 1,775,751 2,728,693 859,724
Total primary government net expense $ (6,831,106) $ (7,143,966) $ (4,472,763) $ (9,218,096)
128
Table 2
2018 2019 2020 2021 2022 2023
$ 3,209,512 $ 3,159,045 $ 3,193,326 $ 3,202,342 $ 3,832,215 $ 3,758,496
5,263,071 5,426,472 6,002,090 5,814,286 6,245,503 6,231,734
4,257,014 5,939,704 4,964,909 4,726,280 8,393,927 10,889,133
3,321,793 3,507,705 3,997,558 4,676,676 5,312,290 5,285,236
206,335 231,625 234,475 245,755 180,188 184,028
249,669 202,182 4,240,712 293,594 677,828 306,754
377,314 917,913 1,226,839 1,184,349 1,191,104 1,206,611
16,884,708 19,384,646 23,859,909 20,143,282 25,833,055 27,861,992
2,306,013 2,290,247 2,449,287 2,546,637 2,743,148 3,243,050
2,175,331 2,289,555 2,454,250 2,435,302 2,581,604 2,868,295
614,816 737,854 617,883 611,579 669,468 763,177
5,096,160 5,307,656 5,521,420 5,593,518 5,994,220 6,874,522
$ 21,980,868 $ 24,692,302 $ 29,381,329 $ 25,736,800 $ 31,827,275 $ 34,736,514
$ 647,452 $ 909,139 $ 757,188 $ 2,241,593 $ 2,114,479 $ 1,166,194
721,078 1,091,260 1,154,232 1,078,065 1,251,620 1,078,354
331,620 357,231 296,533 279,191 324,440 361,824
1,504,647 1,677,991 1,301,624 2,068,652 2,073,350 2,271,023
49,453 44,099 48,705 70,003 50,925 53,879
87,891 96,176 126,596 233,312 179,029 122,059
1,407,217 1,662,842 3,453,564 1,242,650 3,214,092 2,793,283
1,608,129 4,950,131 12,006,951 2,112,499 5,156,356 5,876,602
6,357,487 10,789,869 19,145,393 9,325,965 14,364,291 13,723,218
3,061,920 2,756,944 3,349,237 3,806,408 3,683,763 4,263,197
2,325,456 2,329,462 2,355,039 2,395,512 2,497,153 2,643,592
537,422 564,154 594,524 634,815 663,245 686,055
- - - - 3,600 -
504,267 712,976 2,807,445 2,508,801 1,266,143 2,937,115
6,429,065 6,363,536 9,106,245 9,345,536 8,113,904 10,529,959
12,786,552 17,152,405 28,251,638 18,671,501 22,478,195 24,253,177
(10,527,221) (8,595,777) (4,714,516) (10,817,317) (11,468,764) (14,138,774)
1,332,905 1,055,880 3,584,825 3,752,018 2,119,684 3,655,437
$ (9,194,316) $ (7,539,897) $ (1,129,691) $ (7,065,299) $ (9,349,080) $ (10,483,337)
(Continued)
129
CITY OF ANDOVER,MINNESOTA
CHANGES IN NET POSITION
Last Ten Fiscal Years
(accrual basis of accounting)
2014 2015 2016 2017
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes:
General property taxes $ 10,863,912 $ 11,120,449 $ 11,770,304 $ 11,874,354
Tax increment collections 353,773 210,625 69,772 74,771
Grants and contributions not restricted to
specific programs 87,179 15,327 16,260 13,638
Unrestricted investment earnings 747,621 348,885 399,021 373,585
Gain on sale of capital assets 228,639 548,950 20,360 20,489
Transfers 606,793 401,326 127,447 520,775
Total governmental activities 12,887,917 12,645,562 12,403,164 12,877,612
Business-type activities:
Unrestricted investment earnings 115,425 57,291 68,768 65,801
Gain on sale of capital assets - - 2,192 32,855
Transfers (606,793) (401,326) (127,447) (520,775)
Total business-type activities (491,368) (344,035) (56,487) (422,119)
Total primary government $ 12,396,549 $ 12,301,527 $ 12,346,677 $ 12,455,493
Change in Net Position
Governmental activities $ 5,279,532 $ 3,725,845 $ 5,201,708 $ 2,799,792
Business-type activities 285,911 1,431,716 2,672,206 437,605
Total primary government $ 5,565,443 $ 5,157,561 $ 7,873,914 $ 3,237,397
GASB 68 was implemented in 2015. Expenses for years prior to 2015 were not restated.
130
Table 2
(Continued)
2018 2019 2020 2021 2022 2023
$ 12,423,060 $ 13,011,406 $ 14,479,488 $ 14,934,589 $ 16,036,590 $ 16,920,861
82,874 89,414 100,979 103,474 93,862 100,058
12,917 14,053 4,129 3,578 4,417 3,682
560,133 1,346,685 930,876 (71,710) (1,165,410) 2,454,949
36,431 24,550 3,000 18,800 50,113 39,991
177,921 (327,730) 923,203 119,523 454,680 417,795
13,293,336 14,158,378 16,441,675 15,108,254 15,474,252 19,937,336
117,637 236,356 173,446 (17,603) (260,113) 482,527
- 15,818 - - - 15,795
(177,921) 327,730 (923,203) (119,523) (454,680) (417,795)
(60,284) 579,904 (749,757) (137,126) (714,793) 80,527
$ 13,233,052 $ 14,738,282 $ 15,691,918 $ 14,971,128 $ 14,759,459 $ 20,017,863
$ 2,766,115 $ 5,562,601 $ 11,727,159 $ 4,290,937 $ 4,005,488 $ 5,798,562
1,272,621 1,635,784 2,835,068 3,614,892 1,404,891 3,735,964
$ 4,038,736 $ 7,198,385 $ 14,562,227 $ 7,905,829 $ 5,410,379 $ 9,534,526
131
CITY OF ANDOVER,MINNESOTA
FUND BALANCES-GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2014 2015 2016 2017
General Fund
Nonspendable S 137,001 $ 131,813 S 146,417 $ 117,253
Unassigned 7,065,133 7,136,091 7,650,328 7,672,363
Total general fund 7,202,134 7,267,904 7,796,745 7,789,616
All Other Governmental Funds
Nonspendable 1,562 1,800 2,027 2,041
Restricted 5,022,967 5,674,417 5,852,444 4,550,557
Committed 591,289 531,729 513,916 530,505
Assigned 16,095,395 17,907,929 19,109,145 20,855,184
Unassigned (114,344) (63,357) (64,193) (65,185)
Total all other governmental funds 21,596,869 24,052,519 25,413,339 25,873,102
Total governmental funds $ 28,799,003 $ 31,320,422 $ 33,210,084 $ 33,662,718
132
Table 3
2018 2019 2020 2021 2022 2023
$ 112,971 $ 122,993 $ 140,602 $ 154,736 $ 170,128 $ 400,396
8,023,365 9,240,458 9,513,916 9,471,730 9,794,213 11,149,054
8,136,336 9,363,451 9,654,518 9,626,466 9,964,341 11,549,450
2,386 1,957 2,123 17,920 10,000 26,938
14,225,839 19,696,883 4,651,447 12,033,034 8,508,752 6,557,805
518,617 518,312 508,062 499,284 584,224 610,504
21,327,036 22,569,932 27,612,210 30,214,430 35,196,270 37,587,640
(66,263) - - - - -
36,007,615 42,797,084 32,773,842 42,764,668 44,299,246 44,782,887
$ 44,143,951 $ 52,150,535 $ 42,428,360 $ 52,391,134 $ 54,263,587 $ 56,332,337
133
CITY OF ANDOVER,MINNESOTA
CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS
Last Ten Fiscal Years
(modified accrual basis of accounting)
2014 2015 2016 2017
Revenues
General property taxes S 10,894,301 S 11,148,149 S 11,809,352 S 11,923,097
Tax increment collections 377,733 213,020 91,808 82,448
Licenses and permits 364,430 452,422 625,907 546,378
Intergovernmental 3,464,985 959,790 1,564,848 3,150,578
Special assessments 733,425 690,161 818,065 832,528
Charges for services 1,720,972 1,499,909 1,613,941 1,574,242
Fines 94,375 99,304 88,600 75,287
Investment income 735,325 341,392 389,114 362,974
Miscellaneous:
Park dedication fees 156,384 170,144 431,784 95,198
Connection charges 676,826 405,967 445,698 412,691
Rent 639,000 638,220 656,604 641,691
Other 564,057 542,473 1,189,179 428,186
Total revenues 20,421,813 17,160,951 19,724,900 20,125,298
Expenditures
General government 2,588,950 2,639,821 2,686,308 2,754,189
Public safety 4,537,264 4,521,129 4,709,083 4,822,435
Public works 4,145,404 2,747,550 3,694,911 5,208,862
Parks and recreation 2,139,552 2,277,576 2,226,454 2,253,370
Recycling 106,587 91,940 124,860 169,956
Economic development 665,325 181,551 401,244 1,087,586
Unallocated 81,183 56,720 33,077 14,875
Capital outlay 2,816,375 941,213 2,220,253 1,484,422
Debt service:
Principal retirement 2,336,719 1,961,719 1,966,719 1,996,719
Interest 900,504 470,687 444,144 418,419
Other 7,895 5,009 1,325 3,095
Construction/acquisition costs - 167,955 414,987 52,527
Total expenditures 20,325,758 16,062,870 18,923,365 20,266,455
Revenues over(under)expenditures 96,055 1,098,081 801,535 (141,157)
Other Financing Sources(Uses)
Transfers in 627,530 627,530 627,530 627,530
Transfers out (20,737) (58,249) (85,096) (54,228)
Bonds issued 1,555,000 - 520,000 -
Redemption of refunded bonds (16,455,000) - - -
Bond premium 44,278 - - -
Proceeds from the sale of capital assets 922,408 854,057 25,693 20,489
Total other financing sources(uses) (13,326,521) 1,423,338 1,088,127 593,791
Net increase(decrease)in fund balance S (13,230,466) S 2,521,419 S 1,889,662 S 452,634
Debt service as a percentage of
noncapital expenditures 18.53% 16.30% 14.81% 12.91%
134
Table 4
2018 2019 2020 2021 2022 2023
$ 12,433,651 $ 12,985,096 $ 14,451,737 $ 14,924,342 $ 16,060,412 $ 16,955,120
86,794 90,189 100,979 103,474 94,701 100,476
562,525 855,831 892,279 891,762 972,879 854,739
1,641,806 2,786,445 6,211,801 1,102,318 3,593,374 5,067,131
554,471 721,950 631,999 696,591 709,864 1,114,953
1,656,254 1,941,637 1,672,023 2,393,518 2,646,415 3,007,678
73,719 62,349 47,630 53,747 55,983 70,683
543,672 1,316,876 913,671 (67,052) (1,145,770) 2,422,303
75,798 472,753 389,033 622,680 1,360,540 337,085
444,989 1,152,759 1,136,882 926,982 1,962,378 399,568
637,150 636,803 635,629 635,026 624,508 635,884
525,667 1,462,431 862,805 817,623 1,048,482 718,631
19,236,496 24,495,119 27,946,468 23,101,011 27,983,766 31,684,251
3,115,956 3,011,191 3,079,344 3,203,054 3,490,416 3,521,979
4,956,350 5,096,029 5,754,243 5,533,004 5,765,962 5,861,826
4,298,845 5,691,654 4,588,958 4,361,714 7,648,471 10,280,107
2,214,415 2,371,437 2,495,594 2,799,832 3,233,250 3,283,349
199,182 224,574 228,124 239,606 169,169 176,063
539,955 191,468 4,154,244 297,628 743,191 297,191
11,940 15,001 12,778 16,109 17,396 23,436
2,102,030 14,825,106 16,930,198 1,596,917 2,255,478 2,033,247
1,612,717 1,444,000 1,561,000 1,899,000 2,110,000 3,125,000
385,555 568,864 1,290,844 1,278,030 1,291,283 1,260,997
3,095 1,000 5,000 5,500 5,200 11,160
164,399 1,564,585 7,145 743,203 388,924 497,932
19,603,439 35,004,909 40,007,472 21,973,597 27,118,740 30,372,287
(366,943) (10,519,790) (12,061,004) 1,127,414 865,026 1,311,964
643,729 1,323,739 990,088 1,011,431 996,481 1,004,672
(114,850) (58,110) (59,740) (148,705) (152,877) (333,945)
10,000,000 15,770,000 1,310,000 7,765,000 - -
254,260 1,458,695 95,481 188,834 - -
65,037 32,050 3,000 18,800 163,823 86,059
10,848,176 18,526,374 2,338,829 8,835,360 1,007,427 756,786
$ 10,481,233 $ 8,006,584 $ (9,722,175) $ 9,962,774 $ 1,872,453 $ 2,068,750
11.54% 10.82% 12.33% 16.21% 13.92% 15.79%
135
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
2014 S 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%
2021 3,510,521,981 36,700,449 33,434,800 666,326 3,543,956,781 37,366,775 35.845% 1.05%
2022 3,802,290,264 39,706,613 25,262,700 502,883 3,827,552,964 40,209,496 36.245% 1.05%
2023 4,758,344,434 49,712,076 27,980,700 555,902 4,786,225,134 50,267,979 31.073% 1.05%
Source: Anoka County Property Tax Division
136
CITY OF ANDOVER,MINNESOTA
PROPERTY TAX RATES-PER$1,000 OF ASSESSED TAX CAPACITY VALUE Table 6
DIRECT AND OVERLAPPING GOVERNMENTS
Last Ten Fiscal Years
Direct City
General Debt Lower
Taxes Oper Service Rum Overlapping Governments
Payable Levy Levy Watershed Total School County Other Total Total
2015 30.441% 6.628% 0.391% 37.460% 22.482% 38.123% 4.104% 64.709% 102.169%
2016 31.898% 6.381% 0.388% 38.667% 20.885% 38.894% 4.949% 64.728% 103.395%
2017 33.128% 4.246% 0.364% 37.738% 18.590% 36.841% 3.952% 59.383% 97.121%
2019 30.607% 4.020% 0.325% 34.952% 18.392% 35.334% 3.906% 57.632% 92.584%
2019 29.830% 5.480% 0.311% 35.621% 16.330% 34.473% 3.478% 54.281% 89.902%
2020 28.390% 7.266% 0.286% 35.942% 16.893% 33.361% 3.157% 53.411% 89.353%
2021 28.367% 7.207% 0.271% 35.845% 17.801% 30.935% 3.146% 51.882% 87.727%
2022 27.590% 8.403% 0.250% 36.243% 16.319% 29.254% 3.091% 48.664% 84.907%
2023 24.046% 6.827% 0.200% 31.073% 13.671% 24.176% 2.655% 40.502% 71.575%
2024 25.189% 6.921% 0.197% 32.307% 13.592% 25.629% 2.799% 42.020% 74.327%
Source: Anoka County Property Tax Division
137
CITY OF ANDOVER,MINNESOTA
PROPERTY TAX LEVIES AND COLLECTIONS Table 7
Last Ten Fiscal Years
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
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% 69,316 11,123,473 99.82%
2016 11,593,925 11,525,770 3,461 11,529,231 99.44% 22,980 11,552,211 99.64%
2017 11,938,555 11,858,376 3,545 11,861,921 99.36% 16,867 11,878,788 99.50%
2018 12,416,357 12,342,648 2,824 12,345,471 99.43% 5,762 12,351,233 99.48%
2019 13,103,487 12,974,413 3,960 12,978,373 99.05% 42,198 13,020,571 99.37%
2020 14,479,586 14,391,252 4,128 14,395,381 99.42% 30,842 14,426,223 99.63%
2021 14,913,945 14,853,700 3,578 14,857,278 99.62% 25,382 14,882,659 99.79%
2022 16,107,254 16,029,549 4,417 16,033,966 99.54% 19,583 16,053,549 99.67%
2023 17,073,084 16,980,523 3,682 16,984,205 99.48% F Not Available
138
CITY OF ANDOVER,MINNESOTA
PRINCIPAL TAXPAYERS Table 8
Current Year and Nine Years Ago
2023 2014
Net Percentage of Net Percentage of
Tax Total City Tax Total City
Taxpayers Capacity Rank Tax Capacity Capacity Rank Tax Capacity
Minnegasco,Inc. $ 304,238 1 0.81% $ 211,244 1 0.96%
Presbyterian Homes of Andover 251,795 2 0.67% 140,847 5 0.64%
Connexus Energy 245,398 3 0.66% 193,140 3 0.88%
Wal-Mart 186,388 4 0.50%
Arbor Oaks Senior Living Realty 181,781 5 0.49%
Target Corporation 166,692 6 0.45% 160,049 4 0.73%
Andover Limited Partnership 147,260 7 0.39% 117,528 6 0.53%
Great River Energy 142,857 8 0.38% 194,039 2 0.88%
Andover Station 2016 LLC 120,860 9 0.32% 97,182 7 0.44%
PC Arbor Oaks LLC 120.330 10 0.32%
DST Properties LLC 81,678 8 0.37%
Fairbanks Properties LLC 65,926 9 0.30%
Columbia Park Properties 59,878 10 0.27%
Total $ 1,867,599 4.99% $ 1,321,509 6.00%
Net Tax Capacity $ 37,366,775 $ 21,978,322
Source: Anoka County Property Tax Division
139
CITY OF ANDOVER,MINNESOTA
ESTIMATED MARKET VALUES AND NEW CONSTRUCTION Table 9
Last Ten Fiscal Years
Estimated Market Values New Construction
Commercial/ Connnercial/Industrial Residential
Year Industrial(1) Residential Total Permits Value Permits Value
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
2022 226,699,000 3,731,908,100 3,958,607,100 3 6,983,400 103 55,992,019
2023 244,378,800 4,635,315,300 4,879,694,100 3 22,344,000 64 21,454,268
Note: (1)Also includes agricultural,public utility,railroad operating property,and personal property.
140
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
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%
2022 269,026 483,558 179.74% 6,925 490,482 182.32% 278,861 103.66%
2023 324,879 580,154 178.58% 3,856 584,010 179.76% 298,692 91.94%
Note: (1) Only includes assessments certified to Anoka County.
141
CITY OF ANDOVER,MINNESOTA
RATIO OF NET BONDED DEBT Table 11
TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA
Last Ten Fiscal Years
General Bonded Debt Outstanding(2)
Gross Amount Net Percentage Net Bonded
Fiscal Estimated Bonded Restricted For Bonded of Estimated Debt
Year Population(1) Market Value Debt Debt Service Debt Market Value Per Capita
2014 31,574 $ 2,270,068,100 $ 21,035,000 $ (942,607) $ 20,092,393 0.89% $ 636.36
2015 31,704 2,611,399,200 19,330,000 (1,064,634) 18,265,366 0.70% 576.12
2016 32,335 2,714,130,100 18,080,000 (1,163,486) 16,916,514 0.62% 523.16
2017 32,470 2,806,893,400 16,280,000 (800,214) 15,479,786 0.55% 476.74
2018 32,728 3,116,175,500 24,864,000 (899,986) 23,964,014 0.77% 732.22
2019 32,882 3,271,908,300 40,619,047 (917,364) 39,701,683 1.21% 1,207.40
2020 33,448 3,561,318,700 40,296,991 (1,582,258) 38,714,633 1.09% 1,157.46
2021 32,708 3,685,960,800 46,091,735 (2,064,237) 44,027,498 1.19% 1,346.08
2022 32,822 3,958,607,100 43,910,579 (3,024,557) 40,886,022 1.03% 1,245.69
2023 33,022 4,879,694,100 40,714,423 (3,329,304) 37,385,119 0.77% 1,132.13
Notes: (1) SoLu-ce: Metropolitan Council
(2) Only includes debt supported by tax levy.
142
CITY OF ANDOVER,MINNESOTA
COMPUTATION OF DIRECT AND OVERLAPPING DEBT Table 12
December 31,2023
Gross General
Obligation Percentage Net Amount
Bonded Debt Applicable Applicable
Outstanding to City(2) to City
Direct:
City of Andover $ 40,714,423 100.0000% $ 40,714,423
Overlapping:
Anoka County 49,315,000 (1) 9.1237% 4,499,353
ISD No. 11 Anoka-Hennepin 251,620,000 (1) 12.8635% 32,367,139
ISD No. 15 St.Francis 85,080,000 (1) 6.2198% 5,291,806
Anoka County Regional Railroad Authority 18,860,000 (1) 9.1237% 1,720,730
Metropolitan Council 193,320,000 (1) 0.8470% 1,637,420
Total overlapping debt 45,516,448
Total overlapping and direct debt $ 96,230,871
Notes: (1) Information obtained from Anoka County.
(2) Overlapping governments are those that coincide with the geographical boundaries of the city. This schedule estimates
the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City.
This process recognizes that,when considering the City's ability to issue and repay long-term debt,the entire debt burden
borne by the residents and businesses should be taken into account. However,this does not imply that every taxpayer is a
resident,and therefore responsible for repaying the debt of each overlapping government.
143
CITY OF ANDOVER,MINNESOTA
COMPUTATION OF LEGAL DEBT MARGIN
Last Ten Fiscal Years
2014 2015 2016 2017
Estimated Taxable Market Value $ 2,071,812,281 $ 2,435,770,612 $ 2,539,686,867 $ 2,633,480,159
Debt limitation:
Debt limit percent 3% 3% 3% 3%
Debt limit in dollars 62,154,368 73,073,118 76,190,606 79,004,405
Debt applicable to limit:
Total bonded debt 27,405,000 25,050,000 27,110,000 20,740,000
Less: Nonapplicable debt
G.O.water revenue bonds (6,310,000) (5,720,000) (9,030,000) (4,460,000)
State aid bonds (60,000) - - -
Less: Cash and investments in
related debt service funds (942,607) (1,191,519) (1,299,334) (943,862)
Total debt applicable to limitation 20,092,393 18,138,481 16,780,666 15,336,138
Legal debt margin $ 42,061,975 $ 54,934,637 $ 59,409,940 $ 63,668,267
Total debt applicable to the limit as
a percentage of debt limit 32.33% 24.82% 22.02% 19.41%
144
Table 13
2018 2019 2020 2021 2022 2023
$ 2,959,411,470 $ 3,121,797,779 $ 3,422,826,162 $ 3,543,956,781 $ 3,827,552,964 $ 4,786,225,134
3% 3% 3% 3% 3% 3%
88,782,344 93,653,933 102,684,785 106,318,703 114,826,589 143,586,754
29,639,000 42,260,000 41,284,000 46,415,000 43,550,000 39,655,000
(3,775,000) (3,070,000) (2,345,000) (1,610,000) (855,000) (85,000)
(1,032,604) (1,418,376) (2,021,047) (2,516,818) (3,435,767) (3,771,774)
23,831,396 37,771,624 36,917,953 42,288,182 39,259,233 35,798,226
$ 64,950,948 $ 55,882,309 $ 65,766,832 $ 64,030,521 $ 75,567,356 $ 107,788,528
26.84% 40.33% 35.95% 39.77% 34.19% 24.93%
145
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146
CITY OF ANDOVER,MINNESOTA
PLEDGED-REVENUE COVERAGE Table 14
Last Ten Fiscal Years
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
2014 $ 2,347,763 $ 1,320,552 $ 20,737 $ 1,047,948 $ 565,000 $ 254,715 1.28
2015 2,593,303 1,373,362 58,249 1,278,190 590,000 231,978 1.56
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 3,806,409 2,119,084 148,705 1,836,029 735,000 38,743 2.37
2022 3,683,763 2,251,200 152,877 1,585,440 755,000 22,084 2.04
2023 4,263,197 2,775,054 133,945 1,622,088 770,000 5,036 2.09
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
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
2022 2,235,783 1,720,151 515,632 1,981,792 1,490,000 833,708 1.07
2023 2,533,714 1,957,846 575,868 1,984,821 1,530,000 786,181 1.11
Special Assessment and Permanent Improvement Revolviniz Bonds
Fiscal Special Assessment Debt Service
Year Revenue Principal Interest Coverage
2014 $ 102,380 $ 385,000 $ 3,850 0.26
2015 126,628 No outstanding debt
2016 78,189 No outstanding debt
2017 228 No outstanding debt
2018 28,848 No outstanding debt
2019 136,450 No outstanding debt
2020 4,215 No outstandingdebt
2021 3,569 No outstanding debt
2022 3,525 No outstanding debt
2023 3,525 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.
147
CITY OF ANDOVER,MINNESOTA
OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
2014 2015 2016 2017
Cite of Andover's Outstanding Debt
Governmental activities
Abatement bonds $ 16,675,000 $ 15,840,000 $ 14,995,000 $ 14,140,000
Certificates of indebtedness 2,140,000 1,915,000 2,125,000 1,330,000
Capital improvement bonds 970,000 470,000 - -
State aid bonds 60,000 - - -
Street reconstruction bonds - - - -
Referendum bonds 1,250,000 1,105,000 960,000 810,000
Promissory note payable 786,874 590,155 393,436 196,717
Issuance premiums - - - -
Total governmental activities 21,881,874 19,920,155 18,473,436 16,476,717
Business-type activities
G.O.revenue bonds 6,310,000 5,720,000 9,030,000 4,460,000
Issuance premiums - - 81,006 67,690
Total business-type activities 6,310,000 5,720,000 9,111,006 4,527,690
Total outstanding debt $ 28,191,874 $ 25,640,155 $ 27,584,442 $ 21,004,407
Total outstanding debt as a
percentage of personal income 2.91% 2.57% 2.68% 1.96%
Total outstanding debt per capita $ 893 $ 809 $ 853 $ 647
148
Table 1.5
2018 2019 2020 2021 2022 2023
$ 13,270,000 $ 28,155,000 $ 27,245,000 $ 26,085,000 $ 24,595,000 $ 23,065,000
939,000 540,000 1,444,000 1,625,000 1,305,000 825,000
10,000,000 10,000,000 9,915,000 9,790,000 9,660,000 9,370,000
- - - 7,135,000 7,135,000 6,310,000
655,000 495,000 335,000 170,000 - -
- 1,429,047 1,357,891 1,286,735 1,215,579 1,144,423
24,864,000 40,619,047 40,296,891 46,091,735 43,910,579 40,714,423
3,775,000 3,070,000 2,345,000 1,610,000 855,000 85,000
54,374 41,058 27,742 14,426 - -
3,829,374 3,111,058 2,372,742 1,624,426 855,000 85,000
$ 28,693,374 $ 43,730,105 $ 42,669,633 $ 47,716,161 $ 44,765,579 $ 40,799,423
2.55% 3.71% 3.45% 3.86% 3.40% 2.87%
$ 877 $ 1,330 $ 1,276 $ 1,459 $ 1,364 $ 1,236
149
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
2014 31,874 S 976,842,478 341,864 S 10,477,106,008 S 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 6.4%
2021 32,708 1,236,591,356 367,018 13,875,849,526 37,807 3.8%
2022 32,822 1,314,750,854 369,108 14,785,359,156 40,057 2.6%
2023 33,022 1,423,446,332 372,441 16,054,441,746 43,106 2.9%
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
150
CITY OF ANDOVER,MINNESOTA
PRINCIPAL EMPLOYERS Table 17
Current Year and Nine Years Ago
2023 2014
Percentage Percentage
of Total City of Total City
Taxpayer Employees Rank Employment Employees Rank Employment
Anoka Hennepin I.S.D.No.11 816 (1) 1 29.9% 760 1 31.8%
Walmart 335 2 12.3% 210 5 8.8%
Fairview Andover Clinic 300 3 11.0% 300 2 12.6%
Anoka County Sheriffs Office 250 4 9.1% 250 3 10.5%
Kottkes'Bus Service,Inc. 225 5 8.2% 225 4 9.4%
YMCA 220 6 8.0% 196 6 7.8%
Target 200 7 7.3% 170 7 7.1%
TE Connectivity 142 8 5.2% -
GAF Materials Corp 125 9 4.6% -
Anoka County Highway Department 120 10 4.4% 103 8 4.2%
Banker Hills Regional Park/Activity Center - 100 9 4.2%
Andover County Market - 85 10 3.6%
Total 2,733 100.0% 2,389 100.0%
Source: Minnesota Department of Employment and Economic Development
(1)Number of district employees that work in school buildings located within the City.
151
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152
CITY OF ANDOVER,MINNESOTA
FULL TIME EQUIVALENT EMPLOYEES Table 18
CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
Last Ten Fiscal Years
Function/Program 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Governmental:
Administration 1.05 1.05 1.18 1.13 1.13 1.15 1.05 1.08 1.26 1.60
Human resources 0.03 0.03 0.03 0.03 0.03 0.03 0.07 0.07 0.08 0.09
City clerk 1.84 1.84 1.89 1.89 1.89 1.89 1.88 1.91 1.92 1.89
Elections 0.10 0.10 0.10 0.15 0.15 0.15 0.25 0.14 0.15 0.20
Financial administration 1.91 1.91 1.97 1.94 1.94 1.94 1.98 1.99 1.99 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 3.90 3.90 4.00 4.03 4.03 4.05 4.05 4.05 3.70 4.00
Engineering 4.20 4.20 4.40 4.48 4.48 4.48 4.51 4.48 5.04 5.21
Facility Management 0.22 0.22 0.16 1.05 1.05 0.96 0.81 0.86 0.85 0.87
EDA general 0.35 0.35 0.10 0.05 0.05 - - - - -
LRRWMO 0.15 0.15 0.07 0.07 0.07 0.07 0.09 0.09 0.08 0.08
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 3.21 3.21 3.21 3.21 4.58 4.48 5.02 5.36
Protective inspection 3.93 3.93 4.05 4.03 4.03 4.03 4.18 4.19 3.60 4.33
Emergency management 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.02 0.05 0.05
Public Works:
Streets and highways 4.88 534 5.68 5.37 5.19 5.22 5.52 6.14 5.63 5.64
Snow and ice 3.95 1.98 2.23 1.83 2.83 3.79 1.85 1.92 2.95 2.60
Street signs 1.30 L70 1.42 1.57 1.52 1.46 1.69 1.57 1.30 1.24
Natural Resource Preservation - - 0.03 0.01 0.01 - - - - 0.02
Drainage and mapping - - - - - - - 0.04 0.10 0.09
ROW management utility 0.20 0.20 0.08 0.08 0.08 0.08 0.08 0.12 0.16 0.19
Water 4.52 439 4.87 4.55 4.52 4.86 5.22 5.25 5.41 4.74
Sewer 3.06 3.36 2.91 2.82 3.08 2.80 3.27 3.48 3.18 3.50
Storm sewer 2.25 2.50 2.39 2.94 2.38 2.08 1.95 1.58 2.12 2.53
Central equipment 2.81 3.10 3.07 3.31 3.25 3.19 3.43 3.41 3.40 3.34
Park&Recreation:
Park and recreation 7.33 8.77 8.58 8.65 8.30 7.80 9.00 8.34 7.69 7.70
Community center 3.10 3.10 3.16 3.22 3.22 3.32 333 4.74 6.10 5.82
Recycling 0.76 0.72 0.79 1.03 1.00 0.88 0.79 0.95 0.83 0.92
56.00 5T00 57.43 58.50 58.50 5850 60.64 61.91 63.62 65.00
Source: City Finance Deparhoent
Note: Employees are allocated to various departments based on the functions that they perform.
153
CITY OF ANDOVER,MINNESOTA
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Years
Function/Program 2014 2015 2016 2017 2018
General government:
Registered voters 19,772 n/a 22,051 n/a 20,433
Number of precincts 10 n/a 10 n/a 10
Public safety:
Police:
Number of calls for services 10,319 10,400 14,736 15,636 14,724
Number of traffic citations 2,536 2,066 1,614 1,491 1,585
Number of patrol hours 29,200 29,200 29,200 29,200 29,200
Fire:
Fire responses 257 262 378 350 365
Emergency medical responses 838 336 594 500 740
Protective inspections:
Inspections 2,840 3,100 3,562 2,785 2,844
Residential permits 52 74 111 95 58
Other permits 1,898 2,744 2,536 2,653 2,396
Public works:
Streets and highways:
Asphalt streets maintained(miles) 195 200 204 190 194
Gravel roads maintained(miles) 7 6 6 6 7
Cul-de-sacs and dead ends maintained 332 345 348 350 353
Parks and recreation:
Number of City parks 51 52 53 53 53
Total acreage mowed 332 332 332 332 336
Ballfields maintained 28 29 27 27 27
Number of playgrounds 38 38 41 41 42
Soccer fields maintained 16 16 18 18 20
Trail maintained(miles) 33 33 34 34 37
Community center bookings(hrs):
Fieldhouse 12,182 11,919 12,701 12,900 13,796
Ice arena 2,593 2,643 2,606 2,702 3,288
Water:
New connections 43 57 97 91 62
Total customers 6,418 6,475 6,572 6,663 6,725
Annual consumption
(thousands of gallons) 827,574 885,886 850,307 873,457 975,387
Sanitary Sewer:
New connections 43 57 101 92 58
Total customers 7,324 7,381 7,482 7,574 7,632
Storm Sewer:
Total customers 10,626 10,700 10,812 10,948 10,971
Storm sewer lines maintained(miles) 75 76 77 78 78
Source: Various City Departments
154
Table 19
2019 2020 2021 2022 2023
n/a 23,545 n/a 23,227 n/a
n/a 10 n/a 10 n/a
18,164 14,080 13,114 12,846 13,272
1,246 908 884 898 757
29,200 29,200 29,200 28,480 26,280
472 375 404 545 556
790 667 1,340 1,528 1,623
3,574 4,791 5,100 4,917 5,210
116 139 140 104 64
2,758 2,983 3,427 2,400 2,793
195 202 205 205 206
7 7 7 7 7
357 358 363 364 364
53 53 53 53 53
336 338 340 340 340
27 27 27 27 27
42 42 42 42 43
20 20 20 20 20
39 40 41 41 41
13,891 7,771 16,200 16,524 12,121
3,156 2,585 4,650 4,743 5,047
90 187 203 306 288
6,815 6,912 7,018 7,121 7,200
829,721 1,024,844 1,144,573 1,051,087 1,196,966
36 123 124 318 265
7,668 7,755 7,792 7,986 8,020
11,118 11,249 11,304 11,380 11,431
80 81 85 86 86
155
CITY OF ANDOVER,MINNESOTA
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Table 20
Last Ten Years
Function/Program 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Public Safety:
Fire:
Stations 3 3 3 3 3 3 3 3 3 3
Fire vehicles 21 19 20 18 19 17 16 17 18 18
Protective inspections:
Vehicles 4 4 4 4 4 5 5 5 5 4
Public Works:
Sheets and Highways:
Streets(miles) 195 200 204 190 194 195 202 205 205 206
Street lights 1,240 1,248 1,260 1,268 1,282 1,301 1,326 1,348 1,373 1,381
Traffic signals 24 25 25 26 26 27 27 27 28 28
Parks and Recreation:
Parks 51 52 53 53 53 53 53 53 53 53
Ball fields 28 29 27 27 27 27 27 27 27 27
Soccer fields 16 16 18 18 20 20 20 20 20 20
Playgrounds 38 38 41 41 42 42 42 42 42 43
Trails(miles) 33 33 34 34 37 39 40 41 41 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) 115 116 118 119 120 121 122 123 125 125
Connections 6,418 6,475 6,635 6,663 6,725 6,815 6,912 7,018 7,121 7,200
Sanitary sewer:
Sewer main(miles) 95 96 96 98 99 100 101 103 105 105
Connections 7,324 7,381 7,482 7,574 7,632 7,668 7,755 7,792 7,986 8,020
Number of lift stations 9 9 9 9 9 10 10 11 11 11
Storm sewer:
Storm sewer Lines(miles) 75 76 77 78 78 80 81 85 86 86
156
IV. OTHER FINANCIAL INFORMATION
157
CITY OF ANDOVER,MINNESOTA
COMBINED SCHEDULE OF INDEBTEDNESS
December 31,2023
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 2/1/2040 3.00-5.00% 15,770,000
33,085,000
Certificates of Indebtedness:
2020A G.O.Equipment Certificates 3/19/2020 2/1/2024 4.00% 1,310,000
2021A G.O.Equipment Certificates 12/28/2021 2/1/2026 2.00% 630,000
Total certificates of indebtedness 1,940,000
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:
2021A G.O.Street Reconstruction Bonds 12/28/2021 2/l/2030 1.00-2.00% 7,135,000
Total bonded indebtedness 52,160,000
Issuance premiums -
Compensated absences payable -
Total governmental activities indebtedness 52,160,000
BUSINESS-TYPE ACTIVITIES:
General Obligation Revenue Bonds:
2009A G.O.Water Revenue Bonds 3/26/2009 2/1/2024 2.00-4.25% 1,025,000
2016B G.O.Water Revenue Refunding Bonds 12/7/2016 2/1/2023 2.00% 3,925,000
Total general obligation revenue bonds 4,950,000
Compensated absences payable -
Total business-type activities indebtedness 4,950,000
Total City indebtedness $ 57,110,000
158
Exhibit 1
Principal Payments
Prior Current Outstanding 2024 Payment
Years Year 12/31/23 Principal Interest Total
$ 7,710,000 $ 960,000 $ 8,645,000 $ 985,000 $ 228,000 $ 1,213,000
780,000 570,000 14,420,000 600,000 507,650 1,107,650
8,490,000 1,530,000 23,065,000 1,585,000 735,650 2,320,650
635,000 330,000 345,000 345,000 6,900 351,900
- 150,000 480,000 155,000 8,050 163,050
635,000 480,000 825,000 500,000 14,950 514,950
340,000 290,000 9,370,000 300,000 319,256 619,256
- 825,000 6,310,000 855,000 92,510 947,510
9,465,000 3,125,000 39,570,000 3,240,000 1,162,366 4,402,366
- - 1,144,423 - - -
- - 919,990 - - -
9,465,000 3,125,000 41,634,413 3,240,000 1,162,366 4,402,366
860,000 80,000 85,000 85,000 1,806 86,806
3,235,000 690,000 - - - -
4,095,000 770,000 85,000 85,000 1,806 86,806
- - 157,861 - - -
4,095,000 770,000 242,861 85,000 1,806 86,806
$ 13,560,000 $ 3,895,000 $ 41,877,274 $ 3,325,000 $ 1,164,172 $ 4,489,172
159
CITY OF ANDOVER,MINNESOTA
SCHEDULE OF TAX CAPACITY RATES AND LEVIES Exhibit 2
Taxes Payable
2024 2023
Tax capacity values $ 52,405,763 $ 50,267,978
Captured tax increment value (211,466) (141,278)
Fiscal disparities-contribution (1,449,326) (1,368,461)
Local taxable value 50,744,971 48,758,239
Fiscal disparities-distribution 5,711,542 5,500,256
Adjusted tax capacity $ 56,456,513 $ 54,258,495
2024 2023
Certified Tax Capacity Certified Tax Capacity
Levy Rate Levy Rate
General Revenue Levy:
General Fund $ 11,576,126 $ 10,736,789
Community Center Operations Levy 155,000 155,000
Capital Equipment/Projects 300,000 275,000
Facility Maintenance Reserve 355,000 355,000
Parks Projects 15,000 15,000
Road and Bridge 1,651,822 1,619,190
Pedestrian Trail Maintenance 112,616 110,408
Total General Revenue Levy 14,165,564 25.189% 13,266,387 24.046%
Debt Service Levy:
2012C G.O.Abatement Bonds 973,650 969,745
2018A G.O.Capital Improvement Plan Bonds 612,794 612,794
2019A G.O.Abatement Bonds 1,028,793 1,028,782
2020A G.O.Equipment Certificate - 376,740
2021A G.O.Equipment Certificate 174,825 174,773
2021A G.O.Street Recon 651,659 603,863
2024 G.O.Equipment Certificate 450,000 -
Total Debt Service Levy 3,891,710 6.921% 3,766,697 6.827%
Lower Rum River Watershed 40,000 0.197% 40,000 0.200%
Total $ 18,097,274 32.307% $ 17,073,084 31.073%
160
CITY OF ANDOVER,MINNESOTA
SCHEDULE OF DEFERRED TAX LEVIES Exhibit 3
GENERAL OBLIGATION BONDS
December 31,2023
Capital Street
Abatement Abatement Certificates of Certificates of Improvement Reconstruction Total
Taxes Bonds Bonds indebtedness Indebtedness Plan Bonds Bonds Deferred Tax
Payable 2012C 2019A 2021A 2024 2018A 2021A Levies
2024 $ 973,650 $ 1,028,783 $ 174,825 $ 450,000 $ 612,794 $ 651,658 $ 3,891,710
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 - - 662,959 - 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
$ 9,869,359 $18,680,696 $ 351,540 $ 450,000 $13,171,108 $ 5,653,827 $48,176,530
161
CITY OF ANDOVER,MINNESOTA
SCHEDULE OF FUND TRANSFERS Exhibit 4
December 31,2023
Transfer Transfer
In Out
General Fund
Water EF S 127,509 $ - General Fund Armin Allocation
Sewer EF 77,857 - General Fund Armin Allocation
Storm Sewer EF 23,406 - General Fund Admin Allocation
Central Equipment ISF 200,000 Offset Prior Years Increased Costs
Total General Fund 228,772 200,000
Special Revenue Funds(SRF)
Community Center SRF
2012C GO Abatement Bonds DSF 300,000 Debt Service Allocation
Right of Way Management/Utility SRF
Road and Bridge CPF 8,300 Roadway Degredation
Total Special Revenue Funds 308,300
Debt Service Funds(DSF)
2012C GO Abatement Bonds DSF
Community Center SRF 300,000 Debt Service Allocation
2018A GO Capital Improvement Plan Bonds DSF
Water EF 22,650 - Debt Service Allocation
Sewer EF 22,650 Debt Service Allocation
45,300
2019A GO Abatement Bonds DSF
Park Dedication CPF 150,000 Debt Service Allocation
2021A GO Street Reconstruction Bonds DSF
Road and Bridge CPF 200,000 Debt Service Allocation
Permanent Improvement Revolving CPF 200,000 Debt Service Allocation
400,000
Total Debt Service Funds 895,300
Capital Proiects Funds(CPF)
Water Trunk CPF
Water EF 300,000 - Replacement Reserve
Water EF 133,945 Debt Service Allocation
300,000 133,945
Sewer Trunk CPF
Sewer EF 400,000 Replacement Reserve
Road and Bridge CPF
Right of Way Management/Utility SRF 8,300 - Roadway Degredation
2021 A GO Street Reconstruction Bonds DSF 200,000 Debt Service Allocation
8,300 200,000
Park Dedication CPF
2019A GO Abatement Bonds DSF 150,000 Debt Service Allocation
Permanent Improvement Revolving CPF
2021 A GO Street Reconstruction Bonds DSF 200,000 Debt Service Allocation
Total Capital Projects Funds 708,300 683,945
Enterprise Funds(EF)
Water EF
Water Trunk CPF 133,945 - Debt Service Allocation
General Fund - 127,509 General Fund Admin Allocation
Water Trunk CPF - 300,000 Replacement Reserve
2018A GO Capital Improvement Plan Bonds CPF - 22,650 Debt Service Allocation
Central EquipmentlSF 15,000 Offset Prior Years increased Costs
133,945 465,159
Sewer EF
General Fund - 77,857 General Fund Admin Allocation
Sewer Trunk CPF - 400,000 Replacement Reserve
2018A GO Capital Improvement Plan Bonds CPF - 22,650 Debt Service Allocation
Central EquipmentlSF 15,000 Offset Prior Years Increased Costs
515,507
Storm Sewer EF
General Fund - 23,406 General Fund Admin Allocation
Central Equipment ISF 15,000 Offset Prior Years Increased Costs
38,406
Total Enterprise Funds 133,945 1,019,072
Enterprise Funds(EF)
Central Equipment ISF
General Fund 200,000 - Offset Prior Years Increased Costs
Water EF 15,000 - Offset Prior Years Increased Costs
Scwcr EF 15,000 - Offset Prior Years Increased Costs
Storm Sewer EF 15,000 Offset Prior Years Increased Costs
245,000
Total All Funds S 2,211,317 S 2,211,317
162