Loading...
HomeMy WebLinkAbout2015 Annual Financial Report CITY OF OAK PARK HEIGHTS, MINNESOTA ANNUAL FINANCIAL REPORT December 31, 2015 CITY OF OAK PARK HEIGHTS, MINNESOTA TABLE OF CONTENTS Page ReferenceNo. INTRODUCTORY SECTION Elected and Appointed Officials3 FINANCIAL SECTION Independent Auditor's Report7 Management's Discussion and Analysis11 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net PositionStatement 125 Statement of ActivitiesStatement 226 Fund Financial Statements: Balance Sheet - Governmental FundsStatement 328 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental FundsStatement 430 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds Statement 532 Statement of Net Position - Proprietary FundsStatement 633 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary FundsStatement 734 Statement of Cash Flows - Proprietary FundsStatement 835 Statement of Fiduciary Net Position - Agency FundsStatement 936 Notes to Financial Statements37 Required Supplementary Information: Budgetary Comparison Schedule - General FundStatement 1070 Schedule of Proportionate Share of Net Pension Liability - General Employees Retirement FundStatement 1174 Schedule of Pension Contributions - General Employees Retirement FundStatement 1275 Schedule of Proportionate Share of Net Pension Liability - Public Employees Police and Fire FundStatement 1376 Schedule of Pension Contributions - Public Employees Police and Fire FundStatement 1477 Notes to RSI78 Combining and Individual Nonmajor Fund Financial Statements: Combining Balance Sheet - Nonmajor Governmental FundsStatement 1582 Combining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Governmental FundsStatement 1683 CITY OF OAK PARK HEIGHTS, MINNESOTA TABLE OF CONTENTS Page ReferenceNo. Subcombining Balance Sheet - Nonmajor Special Revenue FundsStatement 1784 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Special Revenue FundsStatement 1885 Subcombining Balance Sheet - Nonmajor Debt Service FundsStatement 1986 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Debt Service FundsStatement 2087 Subcombining Balance Sheet - Nonmajor Capital Project FundsStatement 2188 Subcombining Statement of Revenues, Expenditures and Changes in Fund Balance - Nonmajor Capital Project FundsStatement 2290 Agency Funds: Subcombining Balance SheetStatement 2392 Subcombining Statement of Changes in Assets and LiabilitiesStatement 2493 STATISTICAL SECTION (UNAUDITED) Financial Trends: Net Position by Component - Last Ten Fiscal YearsTable 196 Changes in Net Position - Last Ten Fiscal YearsTable 298 Fund Balances, Governmental Funds - Last Ten Fiscal YearsTable 3102 Changes in Fund Balances, Governmental Funds - Last Ten Fiscal YearsTable 4104 Revenue Capacity: Tax Capacity Value and Estimated Market Value of Taxable PropertyTable 5106 Direct and Overlapping Property Tax Capacity RatesTable 6108 Principal Property TaxpayersTable 7109 Property Tax Levies and CollectionsTable 8110 Debt Capacity: Ratios of Outstanding Debt by TypeTable 9111 Direct and Overlapping Governmental Activities DebtTable 10112 Legal Debt Margin InformationTable 11113 Pledged Revenue CoverageTable 12114 Demographic and Economic: Demographic and Economic StatisticsTable 13115 Principal EmployersTable 14117 Operating Information: Full-Time Equivalent City Government Employees By Function/ProgramTable 15118 Operating Indicators by Function/ProgramTable 16120 Capital Asset Statistics by Function/ProgramTable 17122 INTRODUCTORY SECTION CITY OF OAK PARK HEIGHTS, MINNESOTA ELECTED AND APPOINTED OFFICIALS December 31, 2015 Term Expires Mayor: Mary McComberDecember 31, 2016 Councilmembers: Chuck DoughertyDecember 31, 2016 Mike LilijegrenDecember 31, 2018 Mike RunkDecember 31, 2016 Mark SwensonDecember 31, 2018 Administrator: Eric JohnsonAppointed Finance Director: Betty CarusoAppointed FINANCIAL SECTION INDEPENDENT AUDITOR'S REPORT To the Honorable Mayor and Members of the City Council City of Oak Park Heights, Minnesota Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Oak Park Heights, Minnesota, as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise City of Oak Park Heights, Minnesota’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Oak Park Heights, Minnesota, as of December 31, 2015, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As described in Note 7 to the financial statements, City of Oak Park Heights, Minnesota adopted new accounting guidance, GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an Amendment of GASB Statement No. 27 for the year ended December 31, 2015. Our opinion is not modified with respect to this matter. Report on Summarized Comparative Information We have previously audited the City of Oak Park Heights, Minnesota’s 2014 financial statements, and we expressed an unmodified audit opinion on the respective financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information in our report dated April 13, 2015. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2014 is consistent, in all material respects, with the audited financial statements from which it has been derived. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison information, the schedules of pension contributions and the schedules of proportionate share of pension liability, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Oak Park Heights, Minnesota’s basic financial statements. The introductory section, combining and individual nonmajor fund financial statements, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 19, 2016, on our consideration of the City of Oak Park Heights, Minnesota’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance withGovernment Auditing Standards in considering the City of Oak Park Heights, Minnesota’s internal control over financial reporting and compliance. REDPATH AND COMPANY, LTD. St. Paul, Minnesota April 19, 2016 MANAGEMENT’S DISCUSSION AND ANALYSIS As management of the City of Oak Park Heights, Minnesota (the City) we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31, 2015. Financial Highlights The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $40,377,712 (net position). Of this amount, $15,814,180 (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. Net position of the government-wide financial statements was negatively impacted in the current year by $1,617,927 due to the required implementation of a new accounting standard. This is more fully described on page 15. The City’s total net position increased by $3,074,634. As of the close of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $22,119,895, a decrease of $1,112,446. The decrease is due tofunds utilized for the 2014/2015 Street Reconstruction Capital Project. Approximately 18% or $3,949,700 is available for spending according to the City’s policies and constraints. At the end of the current fiscal year the General Fund balance was $4,632,533, of which $57,602 is nonspendable, $54,188 is restricted, $165,000 is assigned, and $4,355,743 is unassigned. The unassigned fund balance is 94% of the total subsequent year General Fund budgeted expenditures. The General Fund balance increased by $729,726.This increase is a result of favorable budget variances for revenue and expenditures. The City’s budgeted transfers were $479,275 from the General Fund to the Budgeted Projects Fund for capital improvements for streets, parks, public safety, public works, and general government; $353,600 from the General Fund to the Street Reconstruction Fund; $84,000 from the General Fund to the Storm Sewer Renewal Replacement Fund, and $608,000 from the General Fund to the G.O. Capital Improvement Bond Funds of 2008, 2009, and 2014. Overview of the Financial Statements This discussion and analysis is 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 Management’s Discussion and Analysis 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. Thestatement 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. Thestatement 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 and parks and recreation. The business-type activities of the City include water, sanitary sewer and storm sewer. The government-wide financial statements are 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-term inflows and outflows of spendable resource, 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 statements. By doing so, readers may better understand the long-term impact of the Management’s Discussion and Analysis City's near term financial decisions. Both the governmental fund balance sheet and governmental fund statement of revenues, expenditures and change in fund balance provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The City maintains seven individual major governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures and changes in fund balance for the following major funds: General Fund TIF District #2 – Special Revenue Fund G.O. CIP Refunding Bonds of 2012A – Debt Service Fund G.O. Capital Improvement Bonds of 2014A – Debt Service Fund Capital Revolving Fund – Capital Project Fund Street Reconstruction Fund – Capital Project Fund Renewal and Replacement Fund – Capital Project Fund Data from the other governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of subcombining statements elsewhere in this report. The City adopts an annual appropriated budget for its General Fund. A budgetary comparison schedule has been provided for this fund to demonstrate compliance with this budget – see Statement 10. The basic governmental fund financial statements are statements 3 through 5 of this report. Proprietary funds. The City maintains three enterprise funds as a part of its proprietary fund type. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for its water, sanitary sewer and storm sewer operations. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the following funds: Enterprise funds: Water Sanitary Sewer Storm Sewer Internal service funds are used to report activities that provide services for the City’s other department, such as pension benefits. The internal service fund is reported with governmental activities in the government-wide financial statements. Management’s Discussion and Analysis The basic proprietary fund financial statements are statements 6 through 8 of this report. Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the City. Fiduciary funds are not reflected by the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The basic fiduciary fund statements are Statements 9, 23 and 24. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government–wide and fund financial statements. The notes to the financial statements can be found following Statement 9. Other information. The combining statements referred to earlier in connection with non- major governmental funds are presented immediately following the required supplementary information on budgetary comparisons. Combining and individual fund statements and schedules are presented as Statements 15 through 22. Government-Wide Financial Analysis As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the City, assets exceeded liabilities by $40,377,712 at the close of the most recent fiscal year. The largest portion of the City’s net position ($22,099,164 or 55%) reflects its investment in capital assets (e.g. land, improvements, buildings and structures, machinery and equipment, and furniture and fixtures) less any related debt used to acquire those assets that is still outstanding. 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. Management’s Discussion and Analysis City of Oak Park Heights’ Net Position Governmental ActivitiesBusiness-Type ActivitiesTotals 201520142015201420152014 Assets: Current and other assets$23,916,601$24,779,047$2,039,086$1,815,260$25,955,687$26,594,307 Capital assets23,371,54121,607,5168,069,0446,774,33031,440,58528,381,846 Total assets$47,288,142$46,386,563$10,108,130$8,589,590$57,396,272$54,976,153 Total deferred outflows of resources$344,091$0$0$0$344,091$0 Liabilities: Long-term liabilities outstanding$10,840,865$14,796,002$35,491$29,894$10,876,356$14,825,896 Other liabilities6,116,3791,220,12980,31839,3506,196,6971,259,479 Total liabilities$16,957,244$16,016,131$115,809$69,244$17,073,053$16,085,375 Total deferred inflows of resources$289,598$0$0$0$289,598$0 Net position: Net investment in capital assets$14,030,120$11,756,453$8,069,044$6,774,330$22,099,164$18,530,783 Restricted2,464,3681,355,960 - - 2,464,3681,355,960 Unrestricted13,890,90317,258,0191,923,2771,746,01615,814,18019,004,035 Total net position$30,385,391$30,370,432$9,992,321$8,520,346$40,377,712$38,890,778 The City adopted new accounting guidance, GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an Amendment of GASB Statement No. 27 for the year ended December 31, 2015. Essentially, the standard required the unfunded portion of defined benefit pension plans to be reported by all participating employers. Recording the net pension liability and the pension related deferred outflows and inflows of resources do not change the City’s future funding requirements or obligations under the plans, which are determined by Minnesota statutes. Net position was negatively impacted by $1,617,927 at December 31, 2015 due to the implementation of this standard. Pension-related amounts included in the above schedule related to the standard are as follows: Deferred outflows of resources$344,091 Deferred inflows of resources(289,598) Noncurrent liabilities(1,672,420) Total($1,617,927) A portion of the City’s net position ($15,814,180) is its unrestricted net position which may be used to meet the City’s ongoing obligations to citizens and creditors. The remaining balance of $2,464,368 represents resources that are subject to external restrictions on how they may be used. 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 government as a whole, as well as for its separate governmental and business-type activities. Management’s Discussion and Analysis Governmental Activities Governmental activities increased the City’s net position by $1,602,659 during 2015. Key elements of this increase are as follows: Charges for services increased $289,040 largely due to collection of area charges from development. Investment income decreased by $267,289 due to the realized and unrealized losses in the value of investments which are annually adjusted in accordance with accounting standards. Property taxes increased $582,056 due to an increase in taxes levied and a reduction in tax abatements. Capital grants and contributions increased $88,258 due to a small cities grant that the City received of $54,188 and an increase in police aid. Public works expenses decreased $117,112 due to savings in snowplowing expenditures. City of Oak Park Heights’ Changes in Net Position Governmental ActivitiesBusiness-Type ActivitiesTotals 201520142015201420152014 Revenues: Program revenues: Charges for services$699,627$410,587$1,745,846$1,666,867$2,445,473$2,077,454 Operating grants and contributions105,231101,4437,930 - 113,161101,443 Capital grants and contributions1,209,4321,121,1745161,2481,209,9481,122,422 General revenues: General property taxes5,104,7794,581,854 - - 5,104,7794,581,854 Tax increment184,251125,120 - - 184,251125,120 Grants and contributions not restricted to specific programs10,3202,040 - - 10,3202,040 Gain (loss) on sale of capital assets - 44,198 - - - 44,198 Other revenue22,65531,644 - - 22,65531,644 Unrestricted investment earnings154,098421,38711,54729,669165,645451,056 Total revenues7,490,3936,839,4471,765,8391,697,7849,256,2328,537,231 Expenses: General government1,685,4521,663,866 - - 1,685,4521,663,866 Public safety1,564,0581,565,544 - - 1,564,0581,565,544 Public works903,8581,020,664 - - 903,8581,020,664 Parks and recreation315,390285,877 - - 315,390285,877 Interest on long-term debt406,215463,217 - - 406,215463,217 Water - - 496,607477,771496,607477,771 Sanitary sewer - - 749,937694,406749,937694,406 Storm sewer - - 60,08146,39360,08146,393 Total expenses 4,874,9734,999,1681,306,6251,218,5706,181,5986,217,738 Increase in net position before transfers2,615,4201,840,279459,214479,2143,074,6342,319,493 Transfers(1,012,761)12,1701,012,761(12,170) - - Change in net position1,602,6591,852,4491,471,975467,0443,074,6342,319,493 Net position - January 1, as previously reported30,370,43228,517,9838,520,3468,053,30238,890,77836,571,285 Prior period adjustment(1,587,700) - - - (1,587,700) - Net position - January 1, as restated28,782,73228,517,9838,520,3468,053,30237,303,07836,571,285 Net position - December 31$30,385,391$30,370,432$9,992,321$8,520,346$40,377,712$38,890,778 Management’s Discussion and Analysis Below are specific graphs which provide comparisons of the governmental activities revenues and expenditures: Management’s Discussion and Analysis Business-Type Activities Business-type activities increased net position by $1,471,975 during 2015. Below are graphs showing the business-type activities revenue and expense comparisons: Management’s Discussion and Analysis Financial Analysis of the Government's Funds Governmental Funds. The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unreserved 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 $22,119,895. The General Fund increased by $729,726 in 2015. This is from revenues being over budget by $330,282 due to an increase in collection of Intergovernmental Revenue which includes the Small Cities Grant of $54,188 and Development Charges received from the developer issued Housing Revenue Notes. Expenditures were under budget by $402,444. Major savings were experienced in snow removal and reduction in personnel costs. The TIF District # 2 decreased by $28,777. This fund was established for possible development within the city which would require expenditures for street and utility infrastructure. Preliminary expenses of $406,067 including the purchase of property have been incurred during 2013-2015. The General Fund provided a $410,000 advance to fund the expenditures. The G.O. CIP Refunding Bonds of 2012A decreased by $74,959 due to scheduled debt payments made with escrowed funds. The G.O. Capital Improvement Bonds of 2014 increased by $903,462. The bonds were issued for partial financing of the 2014-2015 Street and Utility Reconstruction Project. $396,848 of the increase in the fund is due to the prepayment of assessments levied for the repayment of the bond, and $273,314 is a return of proceeds due to the reduction of a portion of the related street project. The Capital Revolving Fund decreased by $69,551 a net result of the expenditures incurred relating to the Highway 36 Bridge Project reduced by a partial reimbursement received from the Minnesota Department of Transportation. The bridge is being constructed by the State of Minnesota and the Minnesota Department of Transportation. The costs incurred are a result of negotiating funding and costs of the infrastructure that the City is obligated to relocate for the project. The Street Reconstruction Capital Project Fund decreased by $3,708,399 during 2015 . This decrease is due to the capital expenditures of $3,945,645 for the street reconstruction project. The Renewal and Replacement Capital Project Fund increased by $176,085 during 2015. This fund receives an annual transfer from the proprietary funds in an amount equal to depreciation expense on capital assets. The increase is the net of the annual transfers reduced by the amount transferred to fund the capital project for street reconstruction. Management’s Discussion and Analysis The nonmajor special revenue funds increased by $33,509 during 2015. The nonmajor debt service funds decreased by $27 during 2015. The nonmajor capital project funds increased by $926,488 during 2015 due to transfers in from other funds for the accumulation of resources for future capital improvement expenditures and the collection of $215,962 of area charges-connection fees from development. The charges are collected for use on future infrastructure improvement. Proprietary funds. The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Budgetary Highlights General Fund The General Fund budget was not amended during 2015. Actual results as compared to budgeted were significantly different because of the following: Intergovernmental revenue includes an unexpected Small Cities Grant of $54,188 from the state. Licenses and permits and Charges for services had increases over anticipated amounts due to development in the City. Investment income was over $18,621 as well as Refunds and Reimbursement was over $33,385. Investment income is not a budgeted revenue due to the fluctuations of rates and market values and is not measurable. Included in Refunds and reimbursements is insurance dividends which are not a guaranteed income and are not budgeted for. Total general government expenditures were $173,185 under budget because of favorable budget variances, reduction in personnel and insurance costs. Public safety expenditures were $54,517 under budget due to favorable budget variances. Public works expenditures were $157,918 under budget due to $139,082 of under budget expenditures for snow and ice removal and overall favorable budget variances. Parks and recreation expenditures were $16,824 under budget because of reduced labor costs. Capital Asset and Debt Administration Capital assets. The City’s investment in capital assets for its governmental and business- type activities as of December 31, 2015, amounts to $31,440,585 (net of accumulated depreciation). This investment in capital assets includes land, construction in progress, buildings and structures, other improvements, infrastructure, machinery and equipment and furniture and fixtures. Management’s Discussion and Analysis City of Oak Park Heights’ Capital Assets (Net of Depreciation) BeginningEnding BalanceIncreasesDecreasesBalance Governmental activities: Capital assets, not being depreciated: Land$2,581,071$ - $ - $2,581,071 Construction in progress4,843,8284,038,228(3,901,798)4,980,258 Total capital assets, not being depreciated7,424,8994,038,228(3,901,798)7,561,329 Capital assets, being depreciated: Buildings and structures7,600,119 - - 7,600,119 Other improvements1,505,928 - - 1,505,928 Machinery and equipment517,91427,684 - 545,598 Furniture and fixtures514,96119,469(17,695)516,735 Infrastructure12,939,2782,391,624(283,806)15,047,096 Total capital assets, being depreciated23,078,2002,438,777(301,501)25,215,476 Less accumulated depreciation for: Buildings and structures821,881182,179 - 1,004,060 Other improvements350,61546,537 - 397,152 Machinery and equipment360,71738,355 - 399,072 Furniture and fixtures224,82142,741(13,555)254,007 Infrastructure7,137,549469,524(256,100)7,350,973 Total accumulated depreciation8,895,583779,336(269,655)9,405,264 Total capital assets being depreciated - net14,182,6171,659,441(31,846)15,810,212 Governmental activities capital assets - net$21,607,516$5,697,669($3,933,644)$23,371,541 BeginningEnding BalanceIncreasesDecreasesBalance Business-type activities: Capital assets, not being depreciated: Land$937,919$ - $ - $937,919 Construction in progress - - - - Total capital assets, not being depreciated937,91900937,919 Capital assets, being depreciated: Buildings and structures2,047,665 - - 2,047,665 Machinery and equipment495,42029,984(11,285)514,119 Infrastructure7,760,4341,552,937(45,963)9,267,408 Total capital assets, being depreciated10,303,5191,582,921(57,248)11,829,192 Less accumulated depreciation for: Buildings and structures882,55872,542 - 955,100 Machinery and equipment240,62825,296(11,284)254,640 Infrastructure3,343,922180,482(36,077)3,488,327 Total accumulated depreciation4,467,108278,320(47,361)4,698,067 Total capital assets being depreciated - net5,836,4111,304,601(9,887)7,131,125 Business-type activities capital assets - net$6,774,330$1,304,601($9,887)$8,069,044 Additional information on the City’s capital assets can be found in Note 5. Long-term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of $14,607,470, a decrease of $519,338 from 2014. Management’s Discussion and Analysis Additional long-term debt in the amount of $271,601 for compensated absences and $1,672,420 for net pension liability was also outstanding at the end of 2015. City of Oak Park Heights’ Outstanding Debt General obligation bonds, compensated absences and unamortized bond premium: Governmental ActivitiesBusiness-Type ActivitiesTotals 201520142015201420152014 General obligation bonds$14,385,000$14,885,000$ - $ - $14,385,000$14,885,000 Compensated absences223,044215,02948,55732,935271,601247,964 Net pension liability1,672,420 - - - 1,672,420 - Bond premium222,470241,808 - - 222,470241,808 Total$16,502,934$15,341,837$48,557$32,935$16,551,491$15,374,772 State statutes limit the amount of general obligation debt a Minnesota city may issue to 3% of total estimated market value. The current debt limitation for the City is $21,366,828. The City’s 2008A and 2009A Capital Improvement Bonds and a portion of the 2014A General Obligation Bonds for a total of $8,185,000 are counted within the statutory limitation. Additional information on the City’s long-term debt can be found in Note 6. Requests for information.This financial report is designed to provide a general overview of the City’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 Director of Finance, 14168 Oak Park Boulevard, Oak Park Heights, Minnesota 55082-2007. BASIC FINANCIAL STATEMENTS CITY OF OAK PARK HEIGHTS, MINNESOTA STATEMENT OF NET POSITIONStatement 1 December 31, 2015 Primary Government GovernmentalBusiness-Type Assets:ActivitiesActivitiesTotal Cash and investments$17,447,802$1,551,434$18,999,236 Cash with escrow agent4,926,338 - 4,926,338 Accrued interest receivable33,5143,28736,801 Accounts receivable - net32,519423,619456,138 Internal balances2,026(2,026) - Due from other governmental units487,6709,740497,410 Prepaid items57,60253,032110,634 Taxes receivable62,490 - 62,490 Special assessments receivable - net740,640 - 740,640 Land held for resale126,000 - 126,000 Capital assets (net of accumulated depreciation): Land2,581,071937,9193,518,990 Building and structures6,596,0591,092,5657,688,624 Other improvements1,108,776 - 1,108,776 Machinery and equipment146,526259,480406,006 Furniture and fixtures262,728 - 262,728 Infrastructure7,696,1235,779,08013,475,203 Construction in progress4,980,258 - 4,980,258 Total assets47,288,14210,108,13057,396,272 Deferred outflows of resources: Related to pensions344,091 - 344,091 Liabilities:220,18260,317280,499 Accounts payable2,3998733,272 Salaries payable192,866 - 192,866 Contacts payable4544,6805,134 Due to other governmental units - - - Accrued interest payable17,176 - 17,176 Deposits payable18,000 - 18,000 Unearned revenue3,2331,3824,615 Compensated absences payable: Due within one year47,06913,06660,135 Due in more than one year175,97535,491211,466 Other post employment benefits - - - Bonds payable: - - - Due within one year5,615,000 - 5,615,000 Due in more than one year8,992,470 - 8,992,470 Net pension liability: Due in more than one year1,672,420 - 1,672,420 Total liabilities16,957,244115,80917,073,053 Deferred inflows of resources:289,598 - 289,598 Related to pensions Net position: Net investment in capital assets14,030,1208,069,04422,099,164 Restricted for: Debt service1,770,237 - 1,770,237 Park improvements544,506 - 544,506 Other purposes149,625 - 149,625 Unrestricted13,890,9031,923,27715,814,180 Total net position$30,385,391$9,992,321$40,377,712 The accompanying notes are an integral part of these financial statements. CITY OF OAK PARK HEIGHTS, MINNESOTA STATEMENT OF ACTIVITIES For The Year Ended December 31, 2015 Program Revenues Charges For Functions/ProgramsExpensesServices Primary government: Governmental activities: General government$1,685,452$136,997 Public safety1,564,058292,249 Public works903,858270,381 Parks and recreation315,390 - Interest and fees on long-term debt406,215 - Total governmental activities4,874,973699,627 Business-type activities: Water496,607781,537 Sanitary sewer749,937881,428 Storm sewer60,08182,881 Total business-type activities1,306,6251,745,846 Total primary government$6,181,598$2,445,473 The accompanying notes are an integral part of these financial statements. Statement 2 Net (Expense) Revenue and Program RevenuesChanges in Net Position Primary Government OperatingCapital Grants andGrants andGovernmentalBusiness-Type ContributionsContributionsActivitiesActivitiesTotal $ - $ - ($1,548,455)$ - ($1,548,455) 90,991 - (1,180,818) - (1,180,818) 14,2401,209,432590,195 - 590,195 - - (315,390) - (315,390) - - (406,215) - (406,215) 105,2311,209,432(2,860,683)0(2,860,683) 7,930 - - 292,860292,860 - - - 131,491131,491 - 516 - 23,31623,316 7,9305160447,667447,667 $113,161$1,209,948(2,860,683)447,667(2,413,016) General revenues: General property taxes5,104,779 - 5,104,779 Tax increment184,251 - 184,251 Grants and contributions not restricted to specific programs10,320 - 10,320 Unrestricted investment earnings154,09811,547165,645 Gain (loss) on sale of capital assets - - - Other revenue22,655 - 22,655 Transfers(1,012,761)1,012,761 - Total general revenues and transfers4,463,3421,024,3085,487,650 Change in net position1,602,6591,471,9753,074,634 Net position - January 1, as originally reported30,370,4328,520,34638,890,778 Prior period adjustment, See Note 18(1,587,700) - (1,587,700) Net position - January 1, as restated28,782,7328,520,34637,303,078 Net position - December 31$30,385,391$9,992,321$40,377,712 The accompanying notes are an integral part of these financial statements. CITY OF OAK PARK HEIGHTS, MINNESOTA BALANCE SHEET GOVERNMENTAL FUNDS December 31, 2015 With Comparative Totals For December 31, 2014 528 G.O. CIP 529 G.O. Capital 206 TIF District Refunding Bonds Improvement General Fund#2of 2012ABonds of 2014A Assets Cash and investments$4,194,065$17,353$15,357$1,162,981 Cash with escrow agent - - 4,926,338 - Accrued interest receivable5,72813301,115 Accounts receivable - net30,519 - - - Due from other governmental units57,106 - - - Due from other funds410,000 - - - Escrow deposit - - - - Prepaid items57,602 - - - Delinquent taxes receivable62,490 - - - Special assessments receivable - - - 814,725 Land held for resale - - - - Total assets$4,817,510$17,366$4,941,725$1,978,821 Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities: Accounts payable$101,634$13,409$ - $ - Salaries payable2,399 - - - Contracts payable - - - - Due to other governmental units454 - - - Due to other funds - 410,000 - - Deposits payable18,000 - - - Unearned revenue - - - - Total liabilities122,487423,40900 Deferred inflows of resources: Unavailable revenue62,490 - - 814,102 Fund balance: Nonspendable57,602 - - - Restricted54,188 - 4,941,7251,164,719 Assigned165,000 - - - Unassigned4,355,743(406,043) - - Total fund balance4,632,533(406,043)4,941,7251,164,719 Total liabilities, deferred inflows of resources, and fund balance$4,817,510$17,366$4,941,725$1,978,821 The accompanying notes are an integral part of these financial statements. Statement 3 710 Renewal and ReplacementOther 500 Capital 565 Street Capital Project GovernmentalIntra-Activity Revolving FundReconstructionFundFundsEliminations Total Governmental Funds 20152014 $32,965$1,873,428$3,199,234$6,952,419$ - $17,447,802$18,504,916 - - - - - 4,926,3385,001,408 1298,2856,02612,188 - 33,51435,025 - - - 2,000 - 32,51941,724 429,039 - - 1,525 - 487,670416,260 - - - - (410,000) - - - - - - - - - - - - - - 57,60280,806 - - - - - 62,49062,667 - - - - - 814,725510,041 - - - 126,000 - 126,000126,200 $462,133$1,881,713$3,205,260$7,094,132($410,000)$23,988,660$24,779,047 $6,905$6,806$1,037$90,391$ - $220,182$157,013 - - - - - 2,3996,551 - 192,866 - - - 192,866310,419 - - - - - 4541,460 - - - - (410,000) - - - - - - - 18,0009,000 - - - 3,233 - 3,2333,079 6,905199,6721,03793,624(410,000)437,134487,522 429,039 - - 126,000 - 1,431,6311,059,184 - - - - - 57,60280,806 - - - 755,683 - 6,916,3157,240,143 26,1891,682,0413,204,2236,118,825 - 11,196,27812,625,657 - - - - - 3,949,7003,285,735 26,1891,682,0413,204,2236,874,508022,119,89523,232,341 $462,133$1,881,713$3,205,260$7,094,132($410,000)$23,988,660$24,779,047 Fund balance reported above$22,119,895 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.23,371,541 Other long-term assets are not available to pay for current-period expenditures and, therefore, are reported as unavailable revenues in the funds.1,357,546 Long-term liabilities, are not due and payable in the current period and, therefore, are not reported in the funds: Bonds payable(14,607,470) Compensated absences payable(223,044) Other post employment benefits - Accrued interest payable(17,176) An internal service fund is used by management to change the costs of pension benefits to individual funds. The assets and liabilities are included in the governmental activities on the Statement of Net Position.(1,615,901) Net position of governmental activities$30,385,391 The accompanying notes are an integral part of these financial statements. CITY OF OAK PARK HEIGHTS, MINNESOTA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS For The Year Ended December 31, 2015 With Comparative Totals For December 31, 2014 529 G.O. 528 G.O. CIP Capital RefundingImprovement 206 TIF District Bonds of Bonds of General Fund#22012A2014A Revenues: General property taxes$5,104,956$ - $ - $ - Tax increment - - - - Special assessments - - - 381,071 Licenses and permits125,704 - - - Intergovernmental156,909 - - - Charges for services148,641 - - - Fines and forfeits64,515 - - - Investment income18,6211329,7992,165 Refunds and reimbursements108,3851,000 - 359,012 Donations and contributions4,550 - - - Total revenues5,732,281 1,013 29,799 742,248 Expenditures: Current: General government1,250,49829,790 - - Public safety1,610,831 - - - Public works459,007 - - - Parks and recreation154,344 - - - Capital outlay - - - - Debt service: Principal - - - 165,000 Interest - - 104,75885,100 Bond issuance costs - - - - Total expenditures3,474,680 29,790 104,758 250,100 Revenues over (under) expenditures2,257,601 (28,777)(74,959)492,148 Other financing sources (uses): Sale of capital assets - - - - Issuance of bonds - - - - Bond premium - - - - Transfers in - - - 411,314 Transfers out(1,527,875) - - - Total other financing sources (uses)(1,527,875)0 0 411,314 Net change in fund balance729,726 (28,777)(74,959)903,462 Fund balance - January 13,902,807(377,266)5,016,684261,257 Fund balance - December 31$4,632,533($406,043)$4,941,725$1,164,719 The accompanying notes are an integral part of these financial statements. Statement 4 710 Renewal and ReplacementOther 500 Capital 565 Street Capital Project GovernmentalIntra-Activity Revolving FundReconstructionFundFundsEliminationsTotal Governmental Funds 20152014 $ - $ - $ - $ - $ - $5,104,956$4,620,521 - - - 184,251 - 184,251125,120 - - - - - 381,071237,636 - - - - - 125,704137,543 9,041 - - - - 165,950453,283 - - - 252,906 - 401,547120,050 - - - 2,655 - 67,17062,885 60738,24522,21442,434 - 154,098421,387 - 107,381 - 18,476 - 594,254106,553 - - - - - 4,550200 9,648 145,626 22,214 500,722 0 7,183,551 6,285,178 - - - 239,495 - 1,519,7831,445,480 - - - 9,962 - 1,620,7931,535,387 2,4661,766 - 19,913 - 483,152601,870 - - - 22,072 - 176,416162,892 76,7333,945,64526,05863,003 - 4,111,4394,540,043 - - - 335,000 - 500,000315,000 - - - 236,275 - 426,133396,195 - - - - - - 80,533 79,199 3,947,411 26,058 925,720 0 8,837,716 9,077,400 (69,551)(3,801,785)(3,844)(424,998)0 (1,654,165)(2,792,222) - - - - - - 44,400 - - - - - - 3,775,000 - - - - - - 111,689 - 684,800414,0291,482,065(2,450,489)541,719412,772 - (591,414)(234,100)(97,100)2,450,489 - - 0 93,386 179,929 1,384,965 0 541,719 4,343,861 (69,551)(3,708,399)176,085 959,967 0 (1,112,446)1,551,639 95,7405,390,4403,028,1385,914,541 - 23,232,34121,680,702 $26,189$1,682,041$3,204,223$6,874,508$0$22,119,895$23,232,341 The accompanying notes are an integral part of these financial statements. CITY OF OAK PARK HEIGHTS, MINNESOTA RECONCILIATION OF THE STATEMENT OF REVENUES,Statement 5 EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS For The Year Ended December 31, 2015 2015 Amounts reported for governmental activities in the statement of activities are different because: Net changes in fund balances - total governmental funds (Statement 4)($1,112,446) 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: Depreciation(779,336) Capital outlay4,111,439 Capitalized interest18,248 Other various transactions relating to capital assets: Transfer of capital assets to business-type activities(1,554,480) Disposal of assets(31,846) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds: Change in delinquent taxes receivable(177) Change in deferred special assessments receivable229,976 Change in value of land held for resale(200) Change in unavailable grant receivable68,763 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. The amount of this difference is: Principal payments on bonds payable500,000 Bond premium19,338 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. Expenses reported in the statement of activities include the effects of the changes in these expense accruals as follows: Change in compensated absences payable(8,015) Change in other post employment benefits169,016 Change in accrued interest payable580 An internal service fund is used by management to charge pension costs to individual funds. This amount is the portion of net revenue attributable to governmental activities.(28,201) Change in net position of governmental activities (Statement 2)$1,602,659 The accompanying notes are an integral part of these financial statements. CITY OF OAK PARK HEIGHTS, MINNESOTA STATEMENT OF NET POSITIONStatement 6 PROPRIETARY FUNDS December 31, 2015 With Comparative Totals For Enterprise Funds For December 31, 2014 Governmental Business-Type Activities Enterprise FundsActivities 707 Storm 705 Water 706 Sewer Sewer Utility Internal Service Utility FundUtility FundFundTotalsFund 201520142015 Assets: Current assets: Cash and cash equivalents$772,141$622,543$156,750$1,551,434$1,354,685$ - Accrued interest receivable1,6771,3172933,2872,737 - Accounts receivable: Customers161,180196,99120,760378,931355,860 - Certified to County16,56720,2037,91844,68849,017 - Due from other governmental units9,740 - - 9,740719 - Prepaid items7,58745,4341153,03252,242 - Total current assets968,892 886,488 185,732 2,041,112 1,815,260 0 Noncurrent assets: Capital assets: Land937,919 - - 937,919937,919 - Buildings and structures2,003,68243,983 - 2,047,6652,047,665 - Machinery and equipment498,77715,342 - 514,119495,420 - Distribution and collection system4,903,4294,363,979 - 9,267,4087,760,434 - Construction in progress - - - - - - Total capital assets8,343,807 4,423,304 0 12,767,111 11,241,438 0 Less: Allowance for depreciation(2,742,390)(1,955,677) - (4,698,067)(4,467,108) - Net capital assets5,601,4172,467,62708,069,0446,774,3300 Total noncurrent assets5,601,4172,467,62708,069,0446,774,3300 Total assets6,570,3093,354,115185,73210,110,1568,589,5900 Deferred outflows of resources: Related to pensions - - - - - 344,091 Liabilities: Current liabilities: Accounts payable12,67141,8405,80660,31713,401 - Deposits payable - - - - - - Salaries payable393480 - 8731,515 - Due to other governmental units4,680 - - 4,6804,164 - Unearned revenue1,382 - - 1,382 - - Compensated absences payable - current portion7,6774,61577413,0663,041 - Total current liabilities26,803 46,935 6,580 80,318 22,121 0 Noncurrent liabilities: Compensated absences payable - noncurrent portion20,77712,5662,14835,49129,894 - Other post employment benefits - - - - 17,229 - Net pension liability - - - - - 1,672,420 Noncurrent liabilities20,77712,5662,14835,49147,1231,672,420 Total liabilities47,58059,5018,728115,80969,2441,672,420 Deferred inflows of resources: Related to pensions - - - - - 289,598 Net position: Net investment in capital assets5,601,4172,467,627 - 8,069,0446,774,330 - Unrestricted921,312826,987177,0041,925,3031,746,016(1,617,927) Total net position$6,522,729$3,294,614$177,004$9,994,347$8,520,346($1,617,927) Net position reported above$9,994,347 Adjustment to report the cumulative internal balance for the net effect of activity between the internal service fund and the enterprise funds over time.(2,026) Net position of business-type activities$9,992,321 The accompanying notes are an integral part of these financial statements. CITY OF OAK PARK HEIGHTS, MINNESOTA STATEMENT OF REVENUES, EXPENSES AND Statement 7 CHANGES IN FUND NET POSITION PROPRIETARY FUNDS For The Year Ended December 31, 2015 With Comparative Totals For Enterprise Funds For December 31, 2014 Governmental Business-Type Activities Enterprise FundsActivities 707 Storm 705 Water 706 Sewer Sewer Utility Internal Service Utility FundUtility FundFundTotalsFund 201520142015 Operating revenues: Customer billings$766,661$855,152$82,174$1,703,987$1,556,493$ - Penalties8,90110,22967219,80216,037 - Meter charges5,288 - - 5,2882,553 - Charges for services6792,372353,0861,621197,636 Grants and contributions7,930 - - 7,930 - 8,280 Refunds and reimbursements813,675 - 13,68390,163 - Total operating revenues789,467 881,428 82,881 1,753,776 1,666,867 205,916 Operating expenses: Personal services208,871133,33322,401364,605353,943236,143 Contractual services73,404100,08532,302205,791163,098 - MCES charges - 414,812 - 414,812408,307 - Materials and supplies20,9305,92099427,84435,555 - Administrative and personnel charges - - 4,2424,2424,248 - Repairs and maintenance - - 1212 - - Depreciation188,52589,795 - 278,320253,419 - Total operating expenses491,730 743,945 59,951 1,295,626 1,218,570 236,143 Operating income (loss)297,737 137,483 22,930 458,150 448,297 (30,227) Nonoperating revenues (expenses): Earnings on investments5,8904,6411,01611,54729,669 - Other - - 5165161,248 - (Loss) on disposal of capital assets(3,723)(5,250) - (8,973) - - Total nonoperating revenues (expenses)2,167(609)1,5323,09030,917 - Income (loss) before contributions and transfers299,904136,87424,462461,240479,214(30,227) Capital contributions1,185,349369,131 - 1,554,480400,602 - Transfers: Transfers to other funds(363,544)(174,442)(3,733)(541,719)(412,772) - Total transfers and contributions821,805194,689(3,733)1,012,761(12,170)0 Change in net position1,121,709331,56320,7291,474,001467,044(30,227) Net position - January 1, as previously reported5,401,0202,963,051156,2758,520,3468,053,302 - Prior period adjustment - - - - - (1,587,700) Net position - January 1, as restated5,401,0202,963,051156,2758,520,3468,053,302(1,587,700) Net position - December 31$6,522,729$3,294,614$177,004$9,994,347$8,520,346($1,617,927) NetCapital PositionContributionsTransfers Reconciliation to Statement of Activities: Amounts reported above$9,994,347$1,554,480($541,719) Amounts reported for business-type activities in the Statement of Activities are different because: Transfer in of capital assets from governmental activities - (1,554,480)1,554,480 Adjustment to reflect the consolidation of Internal Service Fund activities(2,026) - - Amounts reported on the Statement of Activities$9,992,321$ - $1,012,761 The accompanying notes are an integral part of these financial statements. CITY OF OAK PARK HEIGHTS, MINNESOTA STATEMENT OF CASH FLOWSStatement 8 PROPRIETARY FUNDS For The Year Ended December 31, 2015 4 With Comparative Totals For Enterprise Funds For December 31, 201 Governmental Business-Type Activities Enterprise FundsActivities 707 Storm 705 Water 706 Sewer Sewer Utility Internal Service Utility FundUtility FundFundFund Totals 201520142015 Cash flows from operating activities: Receipts from customers and users$749,406$880,789$89,270$1,719,465$1,684,940$ - Receipts from interfund charges for pension benefits - - - - - 197,636 Grants and contributions7,930 - - 7,930 - 8,280 Payment to suppliers(92,208)(482,207)(31,644)(606,059)(708,360) - Payments to other funds for services provided - - - - - (205,916) Payment to employees(209,590)(134,443)(22,821)(366,854)(344,465) - Miscellaneous revenue - - 5165161,248 - Net cash flows provided by (used in) operating activities455,538264,13935,321754,998633,3630 Cash flows from noncapital financing activities: Transfer to other funds(363,544)(174,442)(3,733)(541,719)(412,772) - Cash flows from capital and related financing activities: Acquisition of capital assets(22,561)(5,880) - (28,441)(423,234) - Proceeds from sale of capital assets914 - - 914400,602 - (21,647)(5,880) - (27,527)(22,632) - Cash flows from investing activities: Investment income5,6914,35994710,99734,416 - Net increase (decrease) in cash and cash equivalents76,03888,17632,535196,749232,3750 Cash and cash equivalents - January 1696,103534,367124,2151,354,6851,122,310 - Cash and cash equivalents - December 31$772,141 $622,543 $156,750 $1,551,434 $1,354,685 $0 Reconciliation of operating income to net cash provided by operating activities: Operating income (loss)$297,737$137,483$22,930$458,150$448,297($30,227) Adjustments to reconcile operating income (loss) to net cash flows from operating activities: Depreciation188,52589,795 - 278,320253,419 - Miscellaneous revenue - - 5165161,2488,280 Changes in assets and liabilities: Decrease (increase) in receivables(33,513)(639)6,389(27,763)18,073 - Decrease (increase) in prepaid expenses1,324(2,235)121(790)(18,216) - Decrease (increase) in deferred outflows of resources - - - - - (262,483) Increase (decrease) in payables1,46539,7355,36546,565(69,458)(5,168) Increase (decrease) in deferred inflows of resources - - - - - 289,598 Total adjustments157,801 126,656 12,391 296,848 185,066 30,227 Net cash provided by (used in) operating activities$455,538$264,139$35,321$754,998$633,363$0 Noncash investing, capital and financing activities: Water utility assets in the amount of $1,185,349 were contributed to the Water Utility Fund in 2015. Sewer utility assets in the amount of $369,131 were contributed to the Sewer Utility Fund in 2015. The accompanying notes are an integral part of these financial statements. CITY OF OAK PARK HEIGHTS, MINNESOTA STATEMENT OF FIDUCIARY NET POSITIONStatement 9 AGENCY FUNDS December 31, 2015 With Comparative Totals For December 31, 2014 20152014 Assets: Cash and investments$274,893$247,944 Due from developers15,89110,210 Total assets290,784258,154 Liabilities: Escrow deposits payable146,000146,000 Accounts payable18,4469,422 Due to developers126,338102,732 Total liabilities290,784258,154 Net position: Unrestricted$0$0 The accompanying notes are an integral part of these financial statements. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Oak Park Heights, Minnesota 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 of Oak Park Heights, Minnesota 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, entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the City's operations and so data from these units are combined with data of the primary government. BLENDED COMPONENT UNIT The EDA of the City of Oak Park Heights, Minnesota is a separate legal entity. The EDA board members are substantially the same as the City council in that four of the five board members are council members and the fifth board member is the City mayor. Separate financial statements are not prepared by 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 changes in net position) 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 is 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, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 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. The City’s only fiduciary funds are agency funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers all revenues, except reimbursement grants, to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursement grants are considered available if they are collected within one year of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property taxes, special assessments, intergovernmental revenues, charges for services and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City. The City reports the following major governmental funds: TheGeneral 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. TheTIF District #2 Special Revenue Fund is used to account for all the activity within that district. TheG.O. CIP Refunding Bonds of 2012A Debt Service Fund is used to account for the accumulation of resources for debt service payments on the 2012A bonds. The fund also holds assets which will be used to refund the G.O. Capital Improvement Bonds of 2008 in the year 2016. TheG.O. Capital Improvement Bonds of 2014A Debt Service Fund is used to account for the accumulation of resources for debt service payments on the 2014A bonds. TheCapital Revolving Capital Project Fund is used to account for monies set aside for various capital improvements. TheStreet Reconstruction Capital Project Fund accounts for the accumulation of funds to be used for future street reconstruction projects. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 TheRenewal and Replacement Capital Project Fund is used to account for assets depreciated from the utility fund and water and sanitary sewer departments. Funds are used to renew or replace water and sanitary sewer system assets. The City reports the following major proprietary funds: The Water Utility Fund accounts for assets, liabilities, revenues and expenditures for water utility operations. The Sewer Utility Fund accounts for assets, liabilities, revenues and expenditures for sewer utility operations. The Storm Sewer Utility Fund accounts for assets, liabilities, revenues and expenditures for storm sewer utility operations. Additionally, the City reports the following fund type: Agency Funds account for the assets of various developers held by the City as an agent. Internal Service Fund – this pension benefit fund is used to provide pension benefits to other funds of the City on a cost reimbursement basis. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are transactions that would be treated as revenues, expenditures or expenses if they involved external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the 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. D.BUDGETS Budgets are legally adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budgets are legally adopted for the General Fund, but not for Special Revenue Funds. Budgeted expenditure appropriations lapse at year end. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 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 operating 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 passage of a resolution on a departmental basis and can be expended by each department based upon detailed budget estimates for individual expenditure accounts. 4. The department heads are authorized to transfer appropriations under $500 within any department budget. Additional interdepartmental or interfund appropriations and deletions are or may be authorized by the City Council with fund (contingency) reserves or additional revenues. 5. Formal budgetary integration is employed as a management control device during the year for the General Fund. 6. Legal debt obligation indentures determine the appropriation level and debt service tax levies for the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to determine and calculate user charges. These debt service and budget amounts represent general obligation bond indenture provisions and net income for operation and capital maintenance and are not reflected in the financial statements. 7. A capital improvement program is reviewed annually by the City Council for the Capital Project Funds. However, appropriations for major projects are not adopted until the actual bid award of the improvement. The appropriations are not reflected in the financial statements. 8. Expenditures may not legally exceed budgeted appropriations at the total fund level. Monitoring of budgets is maintained at the expenditure category level (i.e., personal services; material and supplies; contractual services; capital outlay) within each department. All amounts over budget have been approved by the City council through the disbursement approval process. 9. The City Council may authorize transfer of budgeted amounts between City funds. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 F.CASH AND INVESTMENTS Cash and investment balances from all funds are pooled and invested to the extent available in authorized investments. Earnings from investments are allocated to individual funds on the basis of the fund's equity in the cash and investment pool. Investments are stated at fair value, based upon quoted market prices, except for investments in 2a7-like external investment pools, which are stated at amortized cost and approximate fair value. Investment income is accrued at the balance sheet date. For purposes of the statement of cash flows the Enterprise Funds consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the Enterprise Funds have original maturities of 90 days or less. Therefore the entire balance in the fund is considered cash equivalents. G.RECEIVABLES AND PAYABLES Property taxes and special assessments (see notes 1H and I) have been reported net of estimated uncollectible accounts. 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 Council annually adopts a tax levy and certifies it to the County in December (levy/assessment date) of each year for collection in the following year. The County is responsible for billing and collecting all property taxes for itself, the City, the local School District and other taxing authorities. Such taxes become a lien on January 1 and are recorded as receivables by the City at that date. Real property taxes are payable (by property owners) on May 15 and October 15 of each calendar year. Personal property taxes are payable by taxpayers on February 28 and June 30 of each year. These taxes are collected by the County and remitted to the City on or before July 7 and December 2 of the same year. Delinquent collections for November and December are received the following January. The City has no ability to enforce payment of property taxes by property owners. The County possesses this authority. 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 year end are classified as delinquent and due from County taxes receivable. The CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 portion of delinquent taxes not collected by the City in January is fully offset by deferred inflows of resources because they are not available to finance current expenditures. I.SPECIAL ASSESSMENT REVENUE RECOGNITION Special assessments are levied against benefited properties for the cost or a portion of the cost of special assessment improvement projects in accordance with State Statutes. These assessments are collectible by the City over a term of years usually consistent with the term of the related bond issue. Collection of annual installments (including interest) is handled by the County Auditor in the same manner as property taxes. Property owners are allowed to (and often do) prepay future installments without interest or prepayment penalties. Once a special assessment roll is adopted, the amount attributed to each parcel is a lien upon that property until full payment is made or the amount is determined to be excessive by the City Council or court action. If special assessments are allowed to go delinquent, the property is subject to tax forfeit sale. Proceeds of sales from tax forfeit properties are allocated first to the County’s costs of administering all tax forfeit properties. Generally, the City will collect the full amount of its special assessments not adjusted by City Council or court action. 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 Revenue from special assessments is recognized by the City 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. All remaining delinquent and deferred assessments receivable in governmental funds are offset by deferred inflows of resources. J.INVENTORIES The original cost of materials and supplies has been recorded as expenditures at the time of purchase. The City does not maintain material amounts of inventories of goods and supplies. 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 expenditure/expense at time of consumption. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 L.CAPITAL ASSETS Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), 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 (amount not rounded) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation. In the case of the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities) the City chose to include all such items regardless of their acquisition date. These assets are reported at historical cost. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.For the year ended December 31, 2015, no interest was capitalized in connection with construction in progress. Property, plant and equipment of the primary government, as well as the component units, are depreciated using the straight line method over the following estimated useful lives: Buildings and structures 20 - 50 years Machinery and equipment 3 - 20 years Distribution and collection systems 50 years Streets 25 years Storm sewers 50 years Pathways 20 years M.COMPENSATED ABSENCES It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay and accumulated vested sick leave benefits 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. In accordance with the provisions of Statement of Government Accounting Standards No. 16, Accounting for Compensated Absences, no liability is recorded for nonvesting accumulating rights to receive sick pay benefits. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 N.LONG-TERM OBLIGATIONS In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are amortized over the life of the bond. 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. O.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 City Council. Assigned - consistsof internally imposed constraints for the specific purpose of the City’s intended use. Pursuant to the City’s Fund Balance Policy, the Finance Director and/or City Administrator have been authorized to assign fund balance that reflects the City’s intended use of those funds. 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 committed, assigned or unassigned 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. P.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. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Q.RECLASSIFICATIONS Certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year’s presentation. R.USE OF ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. S.COMPARATIVE TOTALS The basic financial statements and combining and individual fund financial statements 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 City’s financial statements for the year ended December 31, 2014, from which the summarized information was derived. T.DEFERRED OUTFLOWS/INFLOWS OF RESOURCES In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has one item that qualifies for reporting in this category. It is the pension related deferred outflows of resources reported in the government-wide Statement of Net Position and the Proprietary Funds Statement of Net Position. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has pension related deferred inflows of resources reported in the government-wide Statement of Net Position and the proprietary funds Statement of Net Position. The City 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 fund balance sheet. The governmental funds report unavailable revenues from the following sources: property taxes, special assessments, land held for resale, and unavailable grant revenue. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Note 2 DEPOSITS AND INVESTMENTS A. DEPOSITS In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral includes the following: a)United States government treasury bills, treasury notes, treasury bonds; b)Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; c)General obligation securities of any state or local government with taxing powers which is rated “A” or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; d)Unrated general obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; e)Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation; and f)Time deposits that are fully insured by any Federal agency. At December 31, 2015 the carrying amount of the City’s deposits with financial institutions was $5,848,249. 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. State statutes require that insurance, surety bonds or collateral protect all City deposits. The market value of collateral pledged must equal 110% of deposits not covered by insurance or bonds. As of December 31, 2015, the bank balance of the City’s deposits was $5,118,125, all of which was either insured by the Federal Deposit Insurance Corporation (FDIC) or covered by perfected pledged collateral held in the City’s name. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 B. INVESTMENTS Minnesota Statutes authorize the City to invest in the following: a) Direct obligations or obligations guaranteed by the United States or its agencies, its instrumentalities or organizations created by an act of congress, excluding mortgage-backed securities defined as high risk. b) Shares of investment companies registered under the Federal Investment Company Act of 1940 and whose only investments are in securities described in (a) above, general obligation tax-exempt securities, or repurchase or reverse repurchase agreements. c) Obligations of the State of Minnesota or any of its municipalities as follows: 1)any security which is a general obligation of any state or local government with taxing powers which is rated “A” or better by a national bond rating service; 2)any security which is a revenue obligation of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; and 3)a general obligation of the Minnesota housing finance agency which is a moral obligation of the State of Minnesota and is rated “A” or better by a national bond rating agency. d) Bankers’ acceptance of United States banks eligible for purchase by the Federal Reserve System. e) Commercial paper issued by United States corporations or their Canadian subsidiaries, of the highest quality, and maturing in 270 days or less. f) Repurchase or reverse repurchase agreements with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000; a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York; certain Minnesota securities broker-dealers; or, a bank qualified as a depositor. g) General obligation temporary bonds of the same governmental entity issued under section 429.091, subdivision 7; 469.178, subdivision 5; or 475.61, subdivision 6. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 As of December 31, 2015 the City had the following investments and maturities: Investment Maturities (in Years) FairLess Investment TypeRatingValueThan 11-56-10 Federal National Mortgage Assn. NotesAaa$5,425,336$ - $5,425,336$ - Federal Home Loan Bank NotesAaa2,887,490 - 1,990,200897,290 Brokered certificates of depositNR8,776,7362,801,8375,312,877662,022 External investment pool - 4M FundNR1,262,5561,262,556 - - Total$18,352,118$4,064,393$12,728,413$1,559,312 NR - Not RatedTotal investments$18,352,118 Deposits5,848,249 Petty cash100 Total cash and investments$24,200,467 The Minnesota Municipal Money Market Fund (4M Fund) is regulated by Minnesota Statutes and the Board of Directors of the League of Minnesota Cities and is an external investment pool not registered with the Securities Exchange Commission (SEC) that follows the same regulatory rules of the SEC under rule 2a7. The fair value of the position in the pool is the same as the value of the pool shares. Following is a reconciliation of the City’s cash and investment balances as of December 31, 2015: Cash and investments: Governmental and business-type (Statement 1)$18,999,236 Fiduciary (Statement 9)274,893 Cash with escrow agent4,926,338 Total cash and investments$24,200,467 C. INVESTMENT RISKS Custodial credit risk – investments – For investments in securities, custodial credit risk is the risk that in the event of failure of the counterparty to a transaction, the City will not be able to recover the value of its investment securities that are in the possession of an outside party. Investments in investment pools and money markets are not evidenced by securities that exist in physical or book entry form, and therefore are not subject to custodial credit risk disclosures. The City’s investment policy does not address custodial risk. However, investments in securities are held by the City’s broker-dealer of which $2,000,000 is insured through SIPC. Each broker-dealer has provided additional protection by providing additional insurance. This insurance is subject to aggregate limits applied to all of the broker-dealer’s accounts. Interest rate risk – Interest rate risk is the risk that changes in interest rates of debt investments could adversely affect the fair value of an investment. The City’s investment policy requires the City to diversify its investment portfolio to eliminate the risk of loss resulting from over concentration of assets in a specific maturity. The policy also states the City’s investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Credit risk – Credit risk is the risk that an issuer or other counterparty to an investment will be unable to fulfill its obligation to the holder of the investment. Minnesota Statutes limit the City’s investments to direct obligations or obligations under the Federal Investment Company Act of 1940 that receive the highest credit rating, are rated in one of the two highest rating categories by a statistical rating agency, and all of the investments have a final maturity of thirteen months or less; shares of a Minnesota joint powers investment trust whose investments are restricted to securities described in 118.04; general obligations of any state or local government with taxing powers which is rated “A” or better; revenue obligations of any state or local government with taxing powers which is rated “AA” or better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; bankers’ acceptances of United States banks eligible for purchase by the Federal Reserve System; commercial paper issued by United States corporations or their Canadian subsidiaries, rated of the highest quality category by at least two nationally recognized rating agencies, and maturing in 270 days or less; guaranteed investment contracts guaranteed by a United States commercial bank, domestic branch of a foreign bank or a United States insurance company, and with the credit quality in one of the top two highest categories; repurchase or reverse purchase agreements and securities lending agreements with financial institutions qualified as a “depository” by the government entity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, that are a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York, or certain Minnesota securities brokers-dealers. The City’s investment policy does not place further restrictions on investment options. Concentration of credit risk – Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government’s investment in a single issuer. The City places no limit on the amount the City may invest in any one issuer. As of December 31, 2015, more than 5% of the City’s cash and investments are in the following governmental agencies: Federal National Mortgage Association (22%) and Federal Home Loan Bank (12%). Note 3 RECEIVABLES Significant receivable balances not expected to be collected within one year of December 31, 2015 are as follows: Storm Sewer Utility GeneralFundTotal Delinquent property taxes$33,930$ - $33,930 Deferred special assessments728,3005,445733,745 Total$762,230$5,445$767,675 CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Note 4 UNAVAILABLE REVENUE Governmental funds report deferred inflows of resources in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. As of the end of the current fiscal year, the various components of unavailable revenue reported in the governmental funds were as follows: Unavailable Property Special Land HeldGrant TaxesAssesmentsfor ResaleRevenueTotal Major funds: General Fund$62,490$ - $ - $ - $62,490 Capital Improvement Bonds of 2014A - 814,102 - - 814,102 Capital Revolving Fund - - - 429,039429,039 Nonmajor funds - - 126,000 - 126,000 Total unavailable revenue$62,490$814,102$126,000$429,039$1,431,631 CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Note 5 CAPITAL ASSETS Capital asset activity for the year ended December 31, 2015 was as follows: BeginningEnding BalanceIncreasesDecreasesBalance Governmental activities: Capital assets, not being depreciated: Land$2,581,071$ - $ - $2,581,071 Construction in progress4,843,8284,038,228(3,901,798)4,980,258 Total capital assets, not being depreciated7,424,8994,038,228(3,901,798)7,561,329 Capital assets, being depreciated: Buildings and structures7,600,119 - - 7,600,119 Other improvements1,505,928 - - 1,505,928 Machinery and equipment517,91427,684 - 545,598 Furniture and fixtures514,96119,469(17,695)516,735 Infrastructure12,939,2782,391,624(283,806)15,047,096 Total capital assets, being depreciated23,078,2002,438,777(301,501)25,215,476 Less accumulated depreciation for: Buildings and structures821,881182,179 - 1,004,060 Other improvements350,61546,537 - 397,152 Machinery and equipment360,71738,355 - 399,072 Furniture and fixtures224,82142,741(13,555)254,007 Infrastructure7,137,549469,524(256,100)7,350,973 Total accumulated depreciation8,895,583779,336(269,655)9,405,264 Total capital assets being depreciated - net14,182,6171,659,441(31,846)15,810,212 Governmental activities capital assets - net$21,607,516$5,697,669($3,933,644)$23,371,541 BeginningEnding BalanceIncreasesDecreasesBalance Business-type activities: Capital assets, not being depreciated: Land$937,919$ - $ - $937,919 Total capital assets, not being depreciated937,91900937,919 Capital assets, being depreciated: Buildings and structures2,047,665 - - 2,047,665 Machinery and equipment495,42029,984(11,285)514,119 Infrastructure7,760,4341,552,937(45,963)9,267,408 Total capital assets, being depreciated10,303,5191,582,921(57,248)11,829,192 Less accumulated depreciation for: Buildings and structures882,55872,542 - 955,100 Machinery and equipment240,62825,296(11,284)254,640 Infrastructure3,343,922180,482(36,077)3,488,327 Total accumulated depreciation4,467,108278,320(47,361)4,698,067 Total capital assets being depreciated - net5,836,4111,304,601(9,887)7,131,125 Business-type activities capital assets - net$6,774,330$1,304,601($9,887)$8,069,044 CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Depreciation expense was charged to functions/programs of the primary government as follows: Governmental activities: General government$200,188 Public safety24,276 Public works428,756 Recreation126,116 Total depreciation expense - governmental activities$779,336 Business-type activities: Water$188,525 Sewer89,795 Total depreciation expense - business-type activities$278,320 Note 6 LONG-TERM DEBT The City issues general obligation bonds 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. As of December 31, 2015, the long-term debt of the financial reporting entity consisted of the following: FinalAuthorized Issue Maturity Interest AndOutstanding DateDateRateIssued12/31/15 Governmental activities: Improvement bonds: G.O. Capital Improvement Bonds, Series 2008A06/15/0812/15/282.5 - 4.4$6,300,000$5,090,000 G.O. Capital Improvement Bonds, Series 2009A09/15/0912/15/191.2 - 3.551,195,000545,000 G.O. CIP Refunding Bonds, Series 2012A12/01/1212/15/282.0 - 2.155,140,0005,140,000 G.O. Capital Improvement Bonds, Series 2014A06/05/1412/15/252.0 - 3.03,775,0003,610,000 Bond premium222,470 Compensated absences payable223,044 Total governmental activities14,830,514 Business-type activities: Compensated absences payable48,557 Total City indebtedness$14,879,071 CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Annual debt service requirements to maturity are as follows: YearGovernmental Activities Ending2008A G.O. Cap Imp Bonds2009A G.O. Cap Imp Bonds2014A G.O. Cap Imp Bonds2012A G.O. CIP Ref. BondsTotal December 31,PrincipalInterestPrincipalInterestPrincipalInterestPrincipalInterestPrincipalInterest 2016$5,090,000$208,000$125,000$17,678$ - $104,758$400,000$81,800$5,615,000$412,236 2017 - - 130,00014,115305,000104,758400,00073,800835,000192,673 2018 - - 140,00010,084320,00098,658400,00065,800860,000174,542 2019 - - 150,0005,325340,00092,258375,00057,800865,000155,383 2020 - - - - 360,00085,458375,00050,300735,000135,758 2021 - - - - 380,00078,258350,00042,800730,000121,058 2022 - - - - 400,00070,658350,00035,800750,000106,458 2023 - - - - 430,00062,658325,00028,800755,00091,458 2024 - - - - 455,00054,058325,00019,050780,00073,108 2025 - - - - 495,00044,958310,0009,300805,00054,258 2026 - - - - 525,00035,058 - - 525,00035,058 2027 - - - - 545,00024,295 - - 545,00024,295 2028 - - - - 585,00012,578 - - 585,00012,578 Total$5,090,000$208,000$545,000$47,202$5,140,000$868,411$3,610,000$465,250$14,385,000$1,588,863 It is not practicable to determine the specific year for payment of accrued compensated absences. Change in Long-Term Liabilities Long-term liability activity for the year ended December 31, 2015, was as follows: BalanceBalanceDue Within 01/01/15AdditionsReductions12/31/15One Year Governmental Activities: Bonded debt: Improvement bonds$9,745,000$ - ($500,000)$9,245,000$5,615,000 CIP refunding bonds5,140,000 - - 5,140,000 - Bond premium241,808 - (19,338)222,470 - Compensated absences215,02984,890(76,875)223,04447,069 Total governmental activities$15,341,837$84,890($596,213)$14,830,514$5,662,069 Business-Type Activities: Compensated absences$32,935$18,178($2,556)$48,557$13,066 Total business-type activities$32,935$18,178($2,556)$48,557$13,066 For governmental activities, compensated absences are generally liquidated by the General Fund. All long- term bonded indebtedness outstanding at December 31, 2015 is backed by the full faith and credit of the City, including improvement bond issues. Delinquent taxes receivable at December 31, 2015 were $62,490. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Crossover Refunding – 2012A Bonds On December 1, 2012, the City issued $5,140,000 in General Obligation Capital Improvement Plan Crossover Refunding Bonds, Series 2012A with interest rates between 2.00% and 2.15% to advance refund $4,860,000 of outstanding 2008A General Obligation Capital Improvement Bonds with interest rates between 3.70% and 4.40%. The net proceeds were used to purchase U.S. government securities in the amount of $5,179,790. Those securities were deposited in an irrevocable trust with an escrow agent to provide for the interest on the refunding bonds before the crossover date and called principal on the refunded bonds on December 15, 2016. The City is responsible for the debt service of the refunded bonds through the crossover date (December 15, 2016) and the debt service of the refunding bonds after the crossover date. The debt service of the refunding bonds before the crossover date is payable from the escrow account. Assets held with the escrow agent total $4,926,338 at December 31, 2015. The financial statements present each bond issue and the escrow account assets pursuant to GASB No. 7. The effect on the financial statements is to report greater debt than, in substance, the City will be responsible for paying. The Refunding Bonds of 2012A are crossover refunding bonds whereby the City and the escrow agent are responsible for the debt service payments as follows: Debt Service Commitment Year EndingRefundedRefundingEscrow December 31,Bonds TotalBonds TotalAccountCity 2016$5,298,000$104,758$4,964,758$438,000 2017 - 409,758 - 409,758 2018 - 418,658 - 418,658 2019 - 432,258 - 432,258 2020 - 445,458 - 445,458 2021 - 458,258 - 458,258 2022 - 470,658 - 470,658 2023 - 492,658 - 492,658 2024 - 509,058 - 509,058 2025 - 539,958 - 539,958 2026 - 560,058 - 560,058 2027 - 569,295 - 569,295 2028 - 597,578 - 597,578 Total$5,298,000$6,008,411$4,964,758$6,341,653 CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Revenues Pledged Revenue PledgedCurrent Year Percent ofRemainingPrincipalPledged Use ofTotalTerm ofPrincipaland InterestRevenue Bond IssueProceedsTypeDebt ServicePledgeand InterestPaidReceived 2008ACity hall constructionProperty taxes100%2009 - 2028$5,298,000$430,417$430,000 2009ACity hall constructionProperty taxes100%2010 - 2019$592,202$140,858$140,000 Special assessments62% Water fund contribution 27% 2014AStreet reconstructionProptery taxes11%2015 - 2025$4,075,250$250,100$381,071 The City will begin making payments on the 2012A Bonds in 2017. Beginning then, the property taxes pledged for the 2008A Bonds will be applied to the 2012A Bonds, as the 2008A Bonds will have been refunded. Note 7 DEFINED BENFIT PENSION PLANS A.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Pensions. For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions 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. B.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 the exception of employees covered by PEPFF) and certain part-time employees of the City are covered by the General Employees Retirement Fund (GERF). GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. The Basic Plan was closed to new members in 1967. All new members must participate in the Coordinated Plan. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 2. Public Employees Police and Fire Fund (PEPFF) The PEPFF, originally established for police officers and firefighters not covered by a local relief association, now covers all police officers and firefighters hired since 1980. Effective July 1, 1999, the PEPFF also covers police officers and firefighters belonging to a local relief association that elected to merge with and transfer assets and administration to PERA. C.BENEFITS PROVIDED PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be modified by the state legislature. Benefit increases are provided to benefit recipients each January. Increases are related to the funding ratio of the plan. Members in plans that are at least 90 percent funded for two consecutive years are given 2.5% increases. Members in plans that have not exceeded 90% funded, or have fallen below 80%, are given 1% increases. The benefit provisions stated in the following paragraphs of this section are current provisions and apply to active plan participants. Vested, terminated employees who are entitled to benefits but are not receiving them yet are bound by the provisions in effect at the time they last terminated their public service. 1.GERF Benefits Benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2% of average salary for each of the first ten years of service and 2.7% for each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the first ten years and 1.7% for each remaining year. Under Method 2, the annuity accrual rate is 2.7% of average salary for Basic Plan members and 1.7% for Coordinated Plan members for each year of service. For members hired prior to July 1, 1989, a full annuity is available when age plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal retirement age is the age for unreduced Social Security benefits capped at 66. 2.PEPFF Benefits Benefits for the PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from 50% after five years up to 100% after ten years of credited service. Benefits for PEPFF members first hired after June 30, 2014, vest on a prorated basis from 50% after ten years up to 100% after twenty years of credited service. The annuity accrual rate is 3% of average salary for each year of service. For PEPFF who were first hired prior to July 1, 1989, a full annuity is available when age plus years of service equal at least 90. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 D.CONTRIBUTIONS Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state legislature. 1.GERF Contributions Basic Plan members and Coordinated Plan members were required to contribute 9.1% and 6.50%, respectively, of their annual covered salary in calendar year 2015. The City was required to contribute 11.78% of pay for Basic Plan members and 7.50% for Coordinated Plan members in calendar year 2015. The City’s contributions to the GERF for the year ended December 31, 2015, were $54,492. The City’s contributions were equal to the required contributions as set by state statute. 2.PEPFF Contributions Plan members were required to contribute 10.8% of their annual covered salary in calendar year 2015. The City was required to contribute 16.20% of pay for PEPFF members in calendar year 2015. The City’s contributions to the PEPFF for the year ended December 31, 2015, were $143,144. The City’s contributions were equal to the required contributions as set by state statute. E.PENSION COSTS 1.GERF Pension Costs At December 31, 2015, the City reported a liability of $627,085 for its proportionate share of the GERF’s net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2014, through June 30, 2015, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2015, the City’s proportion was .0121% which was a decrease of .0020% from its proportion measured as of June 30, 2014. For the year ended December 31, 2015, the City recognized pension expense of $59,890 for its proportionate share of the GERF’s pension expense. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 At December 31, 2015, the City reported its proportionate share of the GERF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred OutflowsDeferred Inflows of Resourcesof Resources Differences between expected and actual economic experience$ - $31,616 Changes in actuarial assumptions - - Difference between projected and actual investment earnings59,363 - Changes in proportion - 70,462 Contributions paid to PERA subsequent to the measurement date27,614 - Total$86,977$102,078 $27,614 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2016. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year EndedExpense December 31,Amount 2016($19,185) 2017(19,185) 2018(19,185) 201914,840 2020 - Thereafter - 2. PEPFF Pension Costs At December 31, 2015, the City reported a liability of $1,045,335 for its proportionate share of the PEPFF’s net pension liability. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2014, through June 30, 2015, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2015, the City’s proportion was .0920% which was a decrease of .0020% from its proportion measured as of June 30, 2014. For the year ended December 31, 2015, the City recognized pension expense of $167,973 for its proportionate share of the PEPFF’s pension expense. The City also recognized $8,280 for the year ended December 31, 2015, as pension expense (and grant revenue) for its proportionate share of the State of Minnesota’s on-behalf contributions to the PEPFF. Legislation passed in 2013 required the State of Minnesota to begin contributing $9 million to the PEPFF each year, starting in fiscal year 2014. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 At December 31, 2015, the City reported its proportionate share of the PEPFF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred OutflowsDeferred Inflows of Resourcesof Resources Differences between expected and actual economic experience$ - $169,519 Changes in actuarial assumptions - - Difference between projected and actual investment earnings182,132 - Changes in proportion - 18,001 Contributions paid to PERA subsequent to the measurement date74,982 - Total$257,114$187,520 $74,982 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2016. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Pension Year EndedExpense December 31,Amount 2016$8,029 20178,029 20188,029 20198,029 2020(37,504) Thereafter - F.ACTUARIAL ASSUMPTIONS The total pension liability in the June 30, 2015, actuarial valuation was determined using the following actuarial assumptions: Inflation 2.75% per year Active Member Payroll Growth 3.50% per year Investment Rate of Return 7.90% Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors and disabilitants were based on RP-2000 tables for males or females, as appropriate, with slight adjustments. Cost of living benefit increases for retirees are assumed to be 1% effective every st January 1 until 2034, and 2.5% thereafter. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Actuarial assumptions used in the June 30, 2015, valuation were based on the results of actuarial experience studies. The experience study in the GERF was for the period July 1, 2004, through June 30, 2008, with an update of economic assumptions in 2014. The experience study for PEPFF was for the period July 1, 2004 through June 30, 2009. There are no changes in actuarial assumptions in 2015. The long-term expected rate of return on pension plan investments is 7.9%. The State Board of Investment, which manages the investments of PERA, prepares an analysis of the reasonableness of the long-term expected rate of return on a regular basis using a building-block method in which best- estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-term rate of return by weighting the expected future rates of return by the target asset allocation percentages. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: TargetLong-Term Expected Asset ClassAllocationReal Rate of Return Domestic Stocks45%5.50% International Stocks15%6.00% Bonds18%1.45% Alternative Assets20%6.40% Cash2%0.50% G.DISCOUNT RATE The discount rate used to measure the total pension liability was 7.9%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rate specified in statute. Based on that assumption, each of the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. H.PENSION LIABILITY SENSITIVITY The following presents the City’s proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current discount rate: 1% Decrease in1% Increase in Discount Rate (6.9%)Discount Rate (7.9%)Discount Rate (8.9%) City's proportionate share of the GERF net pension liability$986,000$627,085$330,676 City's proportionate share of the PEPFF net pension liability2,037,3691,045,335225,742 CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 I.PENSION PLAN FIDUCIARY NET POSITION Detailed information about each pension plan’s fiduciary net position is available in a separately-issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org. J.PENSION EXPENSE Pension expense recognized by the City for the fiscal year ended December 31, 2015 is as follows: GERF$59,890 PEPFF176,253 Total$236,143 K.DEFINED CONTRIBUTION PLAN The City administrator does not participate in PERA, but is covered by a defined contribution plan administered by the ICMA Retirement Corporation. The Plan is a tax qualified plan under Section 457 of the Internal Revenue Code and all contributions by or on behalf of the employee are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. The City Council specifies plan provisions, including employee and employer contributions rates. An eligible participant contributes 0% of salary and the city contributes 10% of annual base salary. Total contributions made by the City during fiscal year 2015 were: Contribution AmountPercentage of Covered PayrollRequired Employer Employee(Pension Expense)EmployeeEmployerRate 0%$11,6050%10%10% Note 8 POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS The City does not provide post employment benefits other than permitting retired employees to continue in the City’s group health insurance plan, as required by Minnesota Statutes. The retiree is required to pay 100% of the premium. The premium charged is age adjusted, so there is not an implicit rate subsidy for retirees who continue on the plan. The City is also required by State Statute to provide post-employment health care benefits for retired employees disabled in the line of duty. The City hired an actuary and determined the liability resulting from disability is not material and therefore not included in these financial statements. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Note 9 INTERFUND TRANSFERS Major Funds Capital Street Renewal and Nonmajor Improvement ReconstructionReplacement Governmental Bonds of 2014AFundFund FundsTotal Transfers out: Governmental activities: General Fund$38,000$353,600$ - $1,136,275$1,527,875 Street Reconstruction Fund273,314 - 138,300179,800591,414 Renewal and Replacement Fund - 234,100 - - 234,100 Nonmajor Governmental Funds - 97,100 - - 97,100 Business-type activities: Water Utility Fund100,000 - 142,125121,419363,544 Sewer Utility Fund - - 133,60440,838174,442 Storm Sewer Utility Fund - - - 3,7333,733 Total transfers$411,314$684,800$414,029$1,482,065$2,992,208 During 2015, the City made routine interfund transfers to accumulate resources to be used for capital improvements and to fund debt service expenditures. Note 10 CONTINGENCIES AND COMMITMENTS A.ST. CROIX RIVER CROSSING PROJECT During 2012 the State of Minnesota and Minnesota Department of Transportation (MNDOT) finalized plans and received federal approval to construct an interstate bridge connecting Highway 36 in Oak Park Heights and Houlton, Wisconsin. As a direct result of the MNDOT project, the City was obligated to commit to relocate portions of its water, sewer and storm utility infrastructure along Highway 36 as well as participate in other costs as a result of the Project. Accordingly, the City at the request of MNDOT and the State of Minnesota has entered into agreements with MNDOT for the portions of the impacted relocations or improvements and all related soft costs and expenses to the present utility systems and for any related costs as a result of the Project in total. The estimated cost to the City for all costs is anticipated to be a total cost of $467,349 and is dependent on the final timing to be determined by MNDOT and their contractors. B.FEDERAL AND STATE FUNDS The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 2015. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Note 11 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. Workers compensation coverage is provided through a pooled self-insurance program through the League of Minnesota Cities Insurance Trust (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. For workers compensation, the City is not subject to a deductible. The City’s workers compensation coverage is retrospectively rated. With this type of coverage, final premiums are determined after loss experience is known. The amount of premium adjustment, if any, is considered immaterial and not recorded until received or paid. Property and casualty insurance coverage is provided through a pooled self-insurance program through the LMCIT. The City pays an annual premium to the LMCIT. The City is subject to supplemental assessments if deemed necessary by the LMCIT. The LMCIT reinsures through commercial companies for claims in excess various amounts. The City retains risk for deductible portions. These deductibles are considered immaterial to the financial statements. Employee health and disability insurance is provided through commercial insurance. The City does not have a deductible or yearly maximum on this 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. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Note 12 FUND BALANCE A.CLASSIFICATIONS Definitions of fund balance classifications are included in Note 1.O. At December 31, 2015, a summary of the governmental fund balance classifications are as follows: G.O. CIP RefundingG.O. CapitalCapitalRenewal andOther TIFBonds ofImprovementStreetRevolvingReplacementGovernmental General FundDistrict #22012ABonds of 2014ReconstructionFundFundFundsTotal Nonspendable: Prepaid items$57,602$ - $ - $ - $ - $ - $ - $ - $57,602 Restricted for: Law enforcement - - - - - - - 9,0969,096 Tax increment - - - - - - - 86,34186,341 Debt service - - 4,941,7251,164,719 - - - 115,7406,222,184 Small cities grant54,188 - - - - - - - 54,188 Park improvements - - - - - - - 198,995198,995 Moelter Park improvements - - - - - - - 345,511345,511 Total restricted54,18804,941,7251,164,719000755,6836,916,315 Assigned for: Compensated absences165,000 - - - - - - - 165,000 Capital purposes - - - - - 1,682,0413,204,2236,085,57310,971,837 Street reconstruction - - - - 26,189 - - - 26,189 Economic development - - - - - - - 33,25233,252 Total assigned165,00000026,1891,682,0413,204,2236,118,82511,196,278 Unassigned4,355,743(406,043) - - - - - - 3,949,700 Total$4,632,533($406,043)$4,941,725$1,164,719$26,189$1,682,041$3,204,223$6,874,508$22,119,895 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 – June 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 states the City will maintain an unassigned fund balance in the General Fund for the following purposes and in the following amounts: For cash flow needs – an amount should be established equal to 45-55% of the subsequent year’s budgeted operating expenditures. For emergencies or contingencies (such as revenue shortfalls or unexpected budget over runs) – an amount should be established equal to 10 – 15% of the ensuing year’s General Fund operating expenditures. At December 31, 2015, the unassigned fund balance of the General Fund was $4,355,743 which sufficiently meets the cash flow and emergency needs described above. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Note 13 MAJOR TAXPAYER The City has one major taxpayer, Xcel Energy. The total tax capacity value for this taxpayer represented approximately 40.89% of the City's total tax capacity value for taxes payable in 2015. Note 14 TAX INCREMENT DISTRICT The City is the administrating authority for Tax Increment District 1-1 (Oakgreen Project). During 2010, the City and the developer signed a $1,200,000 tax increment pay-as-you-go revenue note relating to this district. The note is not a general obligation of the City and is payable solely from available tax increments. Accordingly, the note is not reflected in the financial statements of the City. A summary of the note is as follows: Tax Increment Revenue Note, TIF 1-1 – issued in 2010 in the principal sum of $1,200,000 with an interest rate of 6.90% per annum. Principal and interest payments shall be payable on each February 1 and August 1 following the date of the note to and including February 1, 2026. Payments are payable solely from available tax increment, which shall mean 80% of the tax increment derived from the development property and received by the City. The City shall have no obligation to pay unpaid balance of principal or accrued interest that may remain after the final payment on February 1, 2026. At December 31, 2015 the principal amount outstanding on the note was $1,200,000. Note 15 CONDUIT DEBT OBLIGATIONS From time to time, the City has issued Rental Housing or Industrial Revenue Bonds to provide financial assistance to private-sector entities for the acquisition and construction of rental housing, office space or a clinic deemed to be in the public interest. The bonds are secured by the property financed and are payable solely from payments received on the underlying mortgage loans. Upon repayment of the bonds, ownership of the acquired facilities transfers to the private-sector entity served by the bond issuance. Neither the City, the State, nor any political subdivision thereof is obligated in any manner for repayment of the bonds. Accordingly, the bonds are not reported as liabilities in the accompanying financial statements. As of December 31, 2015, there were five series of Industrial Revenue Bonds outstanding. The principal amount payable at December 31, 2015 was $97,760,000. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Note 16 OPERATING LEASES The City leases space in and above its water tower. The space is used for antennas and other equipment necessary to provide radio communications. Lease terms are as follows: 2015 LeaseAnnual LeaseExpirationRenewal LocationLesseeAmountAdjustment Factor*DateOptions 58th and NorrellSprint PCS$36,944Greater of CPI or 5%9/20/20191 5-year term *Amounts for future lease receipts are unavailable because they are based on the Consumer Price Index. Note 17 RECENTLY ISSUED ACCOUNTING STANDARDS The Governmental Accounting Standards Boards (GASB) recently approved the following statements which were not implemented for these financial statements: Statement No. 72Fair Value Measurement and Application. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 2015. Statement No. 73Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68. The provisions in Statement 73 are effective for fiscal years beginning after June 15, 2015 – except those provisions that address employers and governmental nonemployer contributing entities for pensions that are not within the scope of Statement 68, which are effective for fiscal years beginning after June 15, 2016. Statement No. 74Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. The provisions in Statement 74 are effective for fiscal years beginning after June 15, 2016. Statement No. 75Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The provisions in Statement 75 are effective for fiscal years beginning after June 15, 2017. Statement No. 76The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. The provisions in Statement 76 are effective for reporting periods beginning after June 15, 2015. Statement No. 77Tax Abatement Disclosures. The provisions of this Statement are effective for reporting periods beginning after December 31, 2015. Statement No. 78Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans. The provisions of this Statement are effective for reporting periods beginning after December 15, 2015. CITY OF OAK PARK HEIGHTS, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Statement No. 79Certain External Investment Pools and Pool Participants. The provisions of this Statement are effective for reporting periods beginning after June 15, 2015, except for certain provisions on portfolio quality, custodial credit risk, and shadow pricing which are effective for reporting periods beginning after December 15, 2015. Statement No. 80Blending Requirements for Certain Component Units.. The provisions of this Statement are effective for reporting periods beginning after June 15, 2016. Statement No. 81Irrevocable Split-Interest Agreements. The provisions of this Statement are effective for reporting periods beginning after December 15, 2016. The effect these standards may have on future financial statements is not determinable at this time. Note 18 CHANGE IN ACCOUNTING PRINCIPLE For the year ended December 31, 2015, the City implemented GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an Amendment of GASB Statement No. 27. GASB 68 addresses accounting and financial reporting for pension plans that are provided to employees of state and local governments. The standard requires the City to record its share of the net pension liability of defined benefit plans, as well as any corresponding deferred inflows and outflows of resources. See Note 7 for further information. The standard required retroactive implementation which resulted in a restatement of net position as of December 31, 2014. Certain amounts necessary to fully restate 2014 financial information are not determinable, therefore, prior year comparative amounts have not been restated. Details of the prior period adjustment are as follows: GovernmentalInternal Service Fund ActivitiesPension Benefits Net position - January 1, 2015, as previously reported$30,370,432$ - Prior period adjustment: Deferred outflows of resources - pension related84,72084,720 Net pension liability(1,672,420)(1,672,420) Net position - January 1, 2015, as restated$28,782,732($1,587,700) REQUIRED SUPPLEMENTARY INFORMATION CITY OF OAK PARK HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATIONStatement 10 BUDGETARY COMPARISON SCHEDULE - GENERAL FUNDPage 1 of 4 For The Year Ended December 31, 2015 With Comparative Actual Amounts For The Year Ended December 31, 2014 Variance with Final Budget - 2015 Actual Positive2014 Actual Amounts(Negative)Amounts Budgeted Amounts OriginalFinal Revenues: Property taxes$5,022,731$5,022,731$5,053,681$30,950$4,836,318 Abatement of property taxes - - (21,976)(21,976)(289,042) Payment in lieu of taxes70,00070,00073,2513,25173,245 Total property taxes5,092,7315,092,7315,104,95612,2254,620,521 Intergovernmental: PERA aid2,0402,0402,039(1)2,040 Police aid60,00060,00078,43518,43576,839 Recycling grant9,0009,00014,2425,24214,074 Safe and Sober grant12,00012,0007,067(4,933)8,393 Small Cities grant - - 54,18854,188 - Other public works grants - - 9389381,937 Total intergovernmental83,04083,040156,90973,869103,283 Licenses and permits51,83051,830125,70473,874137,543 Charges for services: General government10,15010,15035,03424,88438,633 Administrative - Enterprise Fund4,2484,2484,242(6)4,248 Development charge40,00040,000109,36569,36541,985 Total charges for services54,39854,398148,64194,24384,866 Fines and forfeits45,00045,00064,51519,51556,537 Investment income - - 18,62118,62173,412 Refunds and reimbursements75,00075,000108,38533,385105,153 Donations and contributions - - 4,5504,550200 Total revenues5,401,9995,401,9995,732,281330,2825,181,515 Expenditures: General government: Mayor and city council: Current: Personal services60,32060,32055,8254,49557,675 Materials and supplies500500298202135 Other services and charges42,23542,23533,3668,86929,439 Total mayor and city council103,055103,05589,48913,56687,249 City administration: Current: Personal services231,275231,275231,072203217,754 Materials and supplies2,3502,3501,8924582,159 Other services and charges48,11048,11046,0042,10643,765 Total City administration281,735281,735278,9682,767263,678 Legal: Current: Personal services30,00030,00044,881(14,881)26,496 General management and building: Current: Materials and supplies11,90011,9008,0793,8219,053 Other services and charges164,360164,360134,77929,581150,448 Total general management and building176,260176,260142,85833,402159,501 CITY OF OAK PARK HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATIONStatement 10 BUDGETARY COMPARISON SCHEDULE - GENERAL FUNDPage 2 of 4 For The Year Ended December 31, 2015 With Comparative Actual Amounts For The Year Ended December 31, 2014 Variance with Final Budget - 2015 Actual Positive2014 Actual Amounts(Negative)Amounts Budgeted Amounts OriginalFinal Expenditures: (continued) General government: (continued) Elections: Current: Personal services$ - $ - $820($820)$4,386 Materials and supplies - - 32(32)620 Other services and charges1,3001,300604696973 Total elections1,3001,3001,456(156)5,979 Finance: Current: Personal services230,433230,433153,51576,918177,604 Materials and supplies3,2003,2001,2711,9291,259 Other services and charges43,67543,67525,55018,12528,641 Total finance277,308277,308180,33696,972207,504 Computer system: Current: Materials and supplies5,9005,9001,1114,7894,456 Other services and charges38,20038,20035,6152,58528,280 Total computer system44,10044,10036,7267,37432,736 Audit: Current: Personal services29,50029,50030,555(1,055)26,903 Insurance: Current: Other services and charges380,192380,192354,93925,253355,574 Assessing: Current: Personal services23,50023,50022,71678422,608 Planning and zoning: Current: Personal services30,00030,00034,100(4,100)23,800 Materials and supplies200200 - 200 - Other services and charges1,8001,800935865800 Total planning and zoning32,00032,00035,035(3,035)24,600 Engineering: Current: Other services and charges27,85027,85024,3103,54017,991 General contingency: Current: Other services and charges16,88316,8838,2298,65412,645 Total general government1,423,6831,423,6831,250,498173,1851,243,464 CITY OF OAK PARK HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATIONStatement 10 BUDGETARY COMPARISON SCHEDULE - GENERAL FUNDPage 3 of 4 For The Year Ended December 31, 2015 With Comparative Actual Amounts For The Year Ended December 31, 2014 Variance with Final Budget - 2015 Actual Positive2014 Actual Amounts(Negative)Amounts Budgeted Amounts Expenditures: (continued)OriginalFinal Public safety: Police department: Current: Personal services$1,024,656$1,024,656$1,012,598$12,058$963,201 Materials and supplies61,30061,30045,82815,47249,641 Other services and charges236,620236,620224,34212,278204,678 Total police department1,322,5761,322,5761,282,76839,8081,217,520 Building inspections: Current: Personal services81,28881,28884,313(3,025)78,610 Materials and supplies3,3003,3007792,5211,018 Other services and charges22,69622,69613,4849,21214,029 Total building inspections107,284107,28498,5768,70893,657 Fire protection: Current: Materials and supplies2,0002,0002,000 - 2,000 Other services and charges228,238228,238225,1473,091216,720 Total fire protection230,238230,238227,1473,091218,720 Civil defense: Current: Other services and charges3,6003,6009752,6253,589 Animal control: Current: Materials and supplies150150609060 Other services and charges1,5001,5001,3051951,335 Total animal control1,6501,6501,3652851,395 Total public safety1,665,3481,665,3481,610,83154,5171,534,881 Public works: Street maintenance: Current: Personal services26,11526,11525,0891,02624,466 Materials and supplies15,10015,1007,8477,2539,373 Other services and charges40,16040,16031,6318,52931,602 Total street maintenance81,37581,37564,56716,80865,441 Snow removal: Current: Materials and supplies1,0001,000 - 1,000561 Other services and charges201,000201,00079,726121,274193,950 Total snow removal202,000202,00079,726122,274194,511 Sanitation: Current: Other services and charges203,650203,650199,7713,879197,801 Street lighting: Current: Other services and charges76,00076,00066,9359,06561,577 CITY OF OAK PARK HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATIONStatement 10 BUDGETARY COMPARISON SCHEDULE - GENERAL FUNDPage 4 of 4 For The Year Ended December 31, 2015 With Comparative Actual Amounts For The Year Ended December 31, 2014 Variance with Final Budget - 2015 Actual Positive2014 Actual Amounts(Negative)Amounts Budgeted Amounts OriginalFinal Expenditures: (continued) Public works: (continued) Arborist: Current: Personal services$18,500$18,500$11,730$6,770$13,975 Materials and supplies10010097315 Other services and charges300300708(408) - Total arborist18,90018,90012,5356,36513,990 Tree removal and planting: Current: Other services and charges35,00035,00035,473(473)34,622 Total public works616,925616,925459,007157,918567,942 Parks and recreation: Parks, playgrounds and rinks: Current: Personal services69,20069,20058,90310,29759,649 Materials and supplies30,20030,20028,7671,43324,367 Other services and charges71,76871,76866,6745,09465,770 Total parks and recreation171,168171,168154,34416,824149,786 Total expenditures3,877,1243,877,1243,474,680402,4443,496,073 Revenues over expenditures 1,524,8751,524,8752,257,601732,7261,685,442 Other financing sources (uses): Sale of property - - - - 44,400 Transfers in - - - - 2,467 Transfers out(1,524,875)(1,524,875)(1,527,875)(3,000)(1,343,873) Total other financing sources (uses)(1,524,875)(1,524,875)(1,527,875)(3,000)(1,297,006) Net change in fund balance$0$0729,726$729,726388,436 Fund balance - January 1 3,902,8073,514,371 Fund balance - December 31$4,632,533$3,902,807 CITY OF OAK PARK HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATIONStatement 11 SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY* - GENERAL EMPLOYEES RETIREMENT FUND For The Year Ended December 31, 2015 Proportionate Share Proportionateof the Net PensionPlan Fiduciary ProportionShare (Amount)Liability as aNet Position as (Percentage) ofof the NetCovered-Percentage of itsa Percentage Measurement Fiscal Yearthe Net PensionPensionEmployeeCovered-Employeeof the Total DateEndingLiabilityLiability (a)Payroll (b)Payroll (a/b)Pension Liability June 30, 2015December 31, 20150.0121%$627,085$710,89888.2%78.2% * The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. CITY OF OAK PARK HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATIONStatement 12 SCHEDULE OF PENSION CONTRIBUTIONS* - GENERAL EMPLOYEES RETIREMENT FUND For The Year Ended December 31, 2015 StatutorilyContributions inContributionCovered-Contributions as a Required Relation to theDeficiencyEmployeePercentage of Fiscal YearContributionStatutorily Required(Excess)PayrollCovered-Employee Ending(a)Contribution (b)(a-b)(c)Payroll (b/c) December 31, 2015$54,492$54,492$0$726,5547.5% * The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. CITY OF OAK PARK HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATIONStatement 13 SCHEDULE OF PROPORTIONATE SHARE OF NET PENSION LIABILITY* - PUBLIC EMPLOYEES POLICE AND FIRE FUND For The Year Ended December 31, 2015 Proportionate Share Proportionateof the Net PensionPlan Fiduciary ProportionShare (Amount)Liability as aNet Position as (Percentage) ofof the NetCovered-Percentage of itsa Percentage Measurement Fiscal Yearthe Net PensionPensionEmployeeCovered-Employeeof the Total DateEndingLiabilityLiability (a)Payroll (b)Payroll (a/b)Pension Liability June 30, 2015December 31, 20150.0920%$1,045,335$841,195124.3%86.6% * The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. CITY OF OAK PARK HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATIONStatement 14 SCHEDULE OF PENSION CONTRIBUTIONS* - PUBLIC EMPLOYEES POLICE AND FIRE FUND For The Year Ended December 31, 2015 StatutorilyContributions inContributionCovered-Contributions as a Required Relation to theDeficiencyEmployeePercentage of Fiscal YearContributionStatutorily Required(Excess)PayrollCovered-Employee Ending(a)Contribution (b)(a-b)(c)Payroll (b/c) December 31, 2015$143,144$143,144$0$883,60816.2% * The schedule is provided prospectively beginning with the City's fiscal year ended December 31, 2015 and is intended to show a ten year trend. Additional years will be reported as they become available. CITY OF OAK PARK HEIGHTS, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY COMPARISON SCHEDULE NOTE TO RSI December 31, 2015 Note A LEGAL COMPLIANCE – 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 department level for the General Fund. Note B PENSION INFORMATION PERA – General Employees Retirement Fund There are no factors that affect trends in the amounts reported, such as change of benefit terms or assumptions. With only one year reported in the RSI, there is no additional information to include in the notes. Details can be obtained from the financial reports of PERA. PERA – Public Employees Police and Fire Fund There are no factors that affect trends in the amounts reported, such as change of benefit terms or assumptions. With only one year reported in the RSI, there is no additional information to include in the notes. Details can be obtained from the financial reports of PERA. COMBINING AND INDIVIDUAL NONMAJOR FUND FINANCIAL STATEMENTS NONMAJOR GOVERNMENTAL FUNDS CITY OF OAK PARK HEIGHTS, MINNESOTA COMBINING BALANCE SHEETStatement 15 NONMAJOR GOVERNMENTAL FUNDS December 31, 2015 With Comparative Totals For December 31, 2014 Totals Nonmajor SpecialDebtCapitalGovernmental Funds AssetsRevenueServiceProject20152014 Cash and investments$202,019$115,413$6,634,987$6,952,419$5,956,348 Accrued interest receivable23032711,63112,18812,016 Accounts receivable - net2,000 - - 2,000100 Due from other governments - - 1,5251,525 - Land held for resale126,000 - - 126,000126,200 Total assets$330,249$115,740$6,648,143$7,094,132$6,094,664 Liabilities, Deferred Inflows of Resources, and Fund Balance Liabilities: Accounts payable$75,560$ - $14,831$90,391$50,844 Unearned revenue - - 3,2333,2333,079 Total liabilities75,560018,06493,62453,923 Deferred inflows of resources: Unavailable revenue126,000 - - 126,000126,200 Fund balance: Restricted95,437115,740544,506755,683843,723 Assigned33,252 - 6,085,5736,118,8255,070,818 Total fund balance128,689115,7406,630,0796,874,5085,914,541 Total liabilities, deferred inflows of resources, and fund balance$330,249$115,740$6,648,143$7,094,132$6,094,664 CITY OF OAK PARK HEIGHTS, MINNESOTA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND Statement 16 CHANGES IN FUND BALANCE NONMAJOR GOVERNMENTAL FUNDS For The Year Ended December 31, 2015 With Comparative Totals For The Year Ended December 31, 2014 Totals Special DebtCapitalNonmajor Governmental Funds RevenueServiceProject20152014 Revenues: Tax increment$184,251$ - $ - $184,251$125,120 Charges for services - - 252,906252,90635,184 Fines and forfeits2,655 - - 2,6556,348 Investment income6701,24840,51642,434129,006 Refunds and reimbursements1,001 - 17,47518,4761,400 Total revenues188,577 1,248 310,897 500,722 297,058 Expenditures: Current: General government148,109 - 91,386239,495171,497 Public safety9,962 - - 9,962506 Public works - - 19,91319,91314,656 Parks and recreation - - 22,07222,07213,106 Capital outlay - - 63,00363,00346,151 Debt service: Principal - 335,000 - 335,000315,000 Interest - 236,275 - 236,275245,578 Total expenditures158,071 571,275 196,374 925,720 806,494 Revenues over (under) expenditures30,506 (570,027)114,523 (424,998)(509,436) Other financing sources (uses): Transfers in3,000570,000909,0651,482,0651,166,234 Transfers out - - (97,100)(97,100)(491,191) Total other financing sources (uses)3,000 570,000 811,965 1,384,965 675,043 Net change in fund balance33,506 (27)926,488 959,967 165,607 Fund balance - January 195,183115,7675,703,5915,914,5415,748,934 Fund balance - December 31$128,689$115,740$6,630,079$6,874,508$5,914,541 CITY OF OAK PARK HEIGHTS, MINNESOTA SUBCOMBINING BALANCE SHEETStatement 17 NONMAJOR SPECIAL REVENUE FUNDS December 31, 2015 With Comparative Totals For December 31, 2014 202 Forfeiture 204 Economic 205 TIF Totals Nonmajor Special and SeizureDevelopmentDistrict #1 Revenue Funds Assets20152014 Cash and investments$9,196$33,188$159,635$202,019$145,086 Accrued interest receivable2564141230145 Accounts receivable - - 2,0002,000 - Land held for resale - 126,000 - 126,000126,200 Total assets$9,221$159,252$161,776$330,249$271,431 Liabilities, Deferred Inflows of Resources, and Fund Balance Liabilities: Accounts payable$125$ - $75,435$75,560$50,048 Due to other governments - - - - - Total liabilities125075,43575,56050,048 Deferred inflows of resources: Unavailable revenue - 126,000 - 126,000126,200 Fund balance: Restricted9,096 - 86,34195,43763,164 Assigned - 33,252 - 33,25232,019 Total fund balance9,09633,25286,341128,68995,183 Total liabilities, deferred infows of resources, and fund balance$9,221$159,252$161,776$330,249$271,431 CITY OF OAK PARK HEIGHTS, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES,Statement 18 EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR SPECIAL REVENUE FUNDS For The Year Ended December 31, 2015 With Comparative Totals For The Year Ended December 31, 2014 202 Forfeiture 204 Economic 205 TIF Totals Nonmajor Special and SeizureDevelopmentDistrict #1Revenue Funds 20152014 Revenues: Tax increment$ - $ - $184,251$184,251$125,120 Confiscated property2,655 - - 2,6556,348 Investment income992323396701,836 Refunds and reimbursements - 1,001 - 1,001 - Total revenues2,754 1,233 184,590 188,577 133,304 Expenditures: Current: General government - - 148,109148,109100,649 Public safety9,962 - - 9,962506 Total expenditures9,962 0 148,109 158,071 101,155 Revenues over (under) expenditures(7,208)1,233 36,481 30,506 32,149 Other financing sources (uses): Transfers in3,0000 03,0005,049 Net change in fund balance(4,208)1,233 36,481 33,506 37,198 Fund balance - January 113,30432,01949,86095,18357,985 Fund balance - December 31$9,096$33,252$86,341$128,689$95,183 CITY OF OAK PARK HEIGHTS, MINNESOTA SUBCOMBINING BALANCE SHEETStatement 19 NONMAJOR DEBT SERVICE FUNDS December 31, 2015 With Comparative Totals For December 31, 2014 526 G.O. 527 G.O. CapitalCapital ImprovementImprovement Bonds of 2008Bonds of 2009Total Nonmajor Debt Service Funds 20152014 Assets Cash and investments$95,755$19,658$115,413$115,458 Accrued interest receivable24483327309 Total assets$95,999 $19,741 $115,740 $115,767 Liabilities and Fund Balance Liabilities$ - $ - $ - $ - Fund balance: Restricted95,99919,741115,740115,767 Total liabilities and fund balance$95,999 $19,741 $115,740 $115,767 CITY OF OAK PARK HEIGHTS, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES,Statement 20 EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR DEBT SERVICE FUNDS For The Year Ended December 31, 2015 With Comparative Totals For The Year Ended December 31, 2014 526 G.O. Capital 527 G.O. Capital ImprovementImprovement Bonds of 2008Bonds of 2009 Total Nonmajor Debt Service Funds 20152014 Revenues: Investment income$921$327$1,248$2,868 Expenditures: Debt service: Principal215,000120,000335,000315,000 Interest215,41720,858236,275245,578 Total expenditures430,417140,858571,275560,578 Revenues over (under) expenditures(429,496)(140,531)(570,027)(557,710) Other financing sources (uses): Transfers in430,000140,000570,000559,000 Net change in fund balance504(531)(27)1,290 Fund balance - January 195,49520,272115,767114,477 Fund balance - December 31$95,999 $19,741 $115,740 $115,767 CITY OF OAK PARK HEIGHTS, MINNESOTA SUBCOMBINING BALANCE SHEET NONMAJOR CAPITAL PROJECT FUNDS December 31, 2015 With Comparative Totals For December 31, 2014 401 Budgeted 712 Storm Projects and Sewer Renewal Equipment405 Park 407 Moelter 572 City Hall / Replacement RevolvingDevelopmentParkImprovementsFund Assets Cash and investments$2,418,921$660,155$393,846$92,610$440,287 Accounts Receivable - - - - - Due from other governments - - 1,525 - - Accrued interest receivable4,0761,309961189432 Total assets$2,422,997 $661,464 $396,332 $92,799 $440,719 Liabilities and Fund Balance Liabilities: Accounts payable$ - $ - $95$ - $ - Unearned revenue - - - - - Total liabilities0 0 95 0 0 Fund balance: Restricted - 198,995345,511 - - Assigned2,422,997462,46950,72692,799440,719 Total fund balance2,422,997 661,464 396,237 92,799 440,719 Total liabilities and fund balance $2,422,997 $661,464 $396,332 $92,799 $440,719 Statement 21 734 Water 771 Sanitary 773 AAE - Tower735 Well 736 Sewer Sewer772 Water Storm Sewer Totals Nonmajor Capital Project RehabilitationRehabilitationRehabilitationConnectionConnectionConnection Funds 20152014 $371,226$142,192$53,076$453,587$611,838$997,249$6,634,987$5,695,804 - - - - - - - 100 - - - - - - 1,525 - 6122631018419211,92611,63111,562 $371,838 $142,455 $53,177 $454,428 $612,759 $999,175 $6,648,143 $5,707,466 $ - $14,736$ - $ - $ - $ - $14,831$796 3,233 - - - - - 3,2333,079 3,233 14,736 0 0 0 0 18,064 3,875 - - - - - - 544,506664,792 368,605127,71953,177454,428612,759999,1756,085,5735,038,799 368,605 127,719 53,177 454,428 612,759 999,175 6,630,079 5,703,591 $371,838 $142,455 $53,177 $454,428 $612,759 $999,175 $6,648,143 $5,707,466 CITY OF OAK PARK HEIGHTS, MINNESOTA SUBCOMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE NONMAJOR CAPITAL PROJECT FUNDS For The Year Ended December 31, 2015 With Comparative Totals For The Year Ended December 31, 2014 401 Budgeted 712 Storm Projects and Sewer Renewal Equipment405 Park 407 Moelter 572 City Hall / Replacement RevolvingDevelopmentParkImprovementsFund Revenues: Intergovernmental$ - $ - $ - $ - $ - Charges for services: Rents - - - - - Connection charges - - - - - Investment income13,8984,7913,777701973 Refunds and reimbursements5,950 - 1,525 - - Total revenues19,8484,7915,302701973 Expenditures: Current: General government85,572 - - 5,814 - Public works19,840 - - - - Parks and recreation - 3,00019,072 - - Capital outlay47,153 - 1,114 - - Total expenditures152,5653,00020,1865,8140 Revenues over (under) expenditures(132,717)1,791(14,884)(5,113)973 Other financing sources (uses): Transfers in593,842 - - - 263,800 Transfers out - - (97,100) - - Total other financing sources (uses)593,8420(97,100)0263,800 Net change in fund balance461,1251,791(111,984)(5,113)264,773 Fund balance - January 11,961,872659,673508,22197,912175,946 Fund balance - December 31$2,422,997 $661,464 $396,237 $92,799 $440,719 Statement 22 734 Water 771 Sanitary 773 AAE - Tower735 Well 736 Sewer Sewer772 Water Storm Sewer Totals Nonmajor Capital Project RehabilitationRehabilitationRehabilitationConnectionConnectionConnection Funds 20152014 $ - $ - $ - $ - $ - $ - $ - $ - 36,944 - - - - - 36,94435,184 - - - 30,819160,17224,971215,962 - 2,0879493673,0022,9916,98040,516124,302 10,000 - - - - - 17,4751,400 49,03194936733,821163,16331,951310,897160,886 - - - - - - 91,38670,848 73 - - - - - 19,91314,656 - - - - - - 22,07213,106 - 14,736 - - - - 63,00346,151 7314,7360000196,374144,761 48,958(13,787)36733,821163,16331,951114,52316,125 40,4799,0061,938 - - - 909,065602,185 - - - - - - (97,100)(491,191) 40,4799,0061,938000811,965110,994 89,437(4,781)2,30533,821163,16331,951926,488127,119 279,168132,50050,872420,607449,596967,2245,703,5915,576,472 $368,605 $127,719 $53,177 $454,428 $612,759 $999,175 $6,630,079 $5,703,591 CITY OF OAK PARK HEIGHTS, MINNESOTA SUBCOMBINING BALANCE SHEETStatement 23 AGENCY FUNDS December 31, 2015 With Comparative Totals For December 31, 2014 902 Developer 903 Developer Deposit FundEscrow FundTotals - Agency Funds 20152014 Assets Cash and investments$128,893$146,000$274,893$247,944 Due from developers15,891 - 15,89110,210 Total assets$144,784 $146,000 $290,784 $258,154 Liabilities Escrow deposits payable$ - $146,000$146,000$146,000 Accounts payable18,446 - 18,4469,422 Due to developers126,338 - 126,338102,732 Total liabilities$144,784 $146,000 $290,784 $258,154 CITY OF OAK PARK HEIGHTS, MINNESOTA SUBCOMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIESStatement 24 AGENCY FUNDS For The Year Ended December 31, 2015 BalanceBalance January 1,December 31, 2015AdditionsDeletions2015 902 Developer Deposit Fund Assets: Cash and investments$101,944$129,925$102,976$128,893 Due from developers10,21015,89110,21015,891 Total assets$112,154$145,816$113,186$144,784 Liabilities: Accounts payable$9,422$18,446$9,422$18,446 Due to developers102,732129,925106,319126,338 Total liabilities$112,154$148,371$115,741$144,784 903 Developer Escrow Fund Assets: s$146,000$ - $ - $146,000 Cash and investment Liabilities: Escrow deposits payable$146,000$ - $ - $146,000 Total Agency: Assets: Cash and investments$247,944$129,925$102,976$274,893 Due from developers10,21015,89110,21015,891 Total assets$258,154$145,816$113,186$290,784 Liabilities: Escrow deposits payable$146,000$ - $ - $146,000 Accounts payable9,42218,4469,42218,446 Due to developers102,732129,925106,319126,338 Total liabilities$258,154$148,371$115,741$290,784 STATISTICAL SECTION (UNAUDITED) CITY OF OAK PARK HEIGHTS, MINNESOTA NET POSITION BY COMPONENT Last Ten Fiscal Years (Accrual Basis of Accounting) 2006200720082009 Governmental activities: Net investment in capital assets$11,481,494$11,799,071$12,328,032$11,908,771 Restricted899,708614,170235,559867,103 Unrestricted10,290,01810,950,97811,705,19212,164,925 Total governmental activities net position$22,671,220$23,364,219$24,268,783$24,940,799 Business-type activities: Net investment in capital assets$5,826,582$6,355,129$6,227,796$6,925,825 Unrestricted1,382,1631,355,5641,165,2051,156,208 Total business-type activities net position$7,208,745$7,710,693$7,393,001$8,082,033 Primary government: Net investment in capital assets$17,308,076$18,154,200$18,555,828$18,834,596 Restricted899,708614,170235,559867,103 Unrestricted11,672,18112,306,54212,870,39713,321,133 Total primary government net position$29,879,965$31,074,912$31,661,784$33,022,832 Note: 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 of resources. Net position for years prior to 2015 was not restated. Table 1 201020112012201320142015 $11,519,528$11,381,436$11,172,202$11,849,446$11,756,453$14,030,120 1,234,8351,152,7891,007,208842,2101,355,9602,464,368 13,308,71213,958,68915,242,15715,826,32717,258,01913,890,903 $26,063,075$26,492,914$27,421,567$28,517,983$30,370,432$30,385,391 $6,752,968$6,964,787$6,746,344$6,604,514$6,774,330$8,069,044 1,166,8531,135,6791,279,8741,448,7881,746,0161,923,277 $7,919,821$8,100,466$8,026,218$8,053,302$8,520,346$9,992,321 $18,272,496$18,346,223$17,918,546$18,453,960$18,530,783$22,099,164 1,234,8351,152,7891,007,208842,2101,355,9602,464,368 14,475,56515,094,36816,522,03117,275,11519,004,03515,814,180 $33,982,896$34,593,380$35,447,785$36,571,285$38,890,778$40,377,712 CITY OF OAK PARK HEIGHTS, MINNESOTA CHANGES IN NET POSITION Last Ten Fiscal Years (Accrual Basis of Accounting) 2006200720082009 Expenses Governmental activities: General government$987,597$1,046,676$1,477,836$1,356,038 Public safety1,226,0421,234,7691,347,1641,364,734 Public works755,989796,025796,532957,308 Parks and recreation152,899184,008224,426211,795 Interest on long-term debt43,96537,255138,399262,586 Total governmental activities expenses3,166,4923,298,7333,984,3574,152,461 Business-type activities: Water398,766387,766405,965434,577 Sanitary sewer661,367606,458670,661680,468 Storm sewer65,14934,27759,11543,337 Sanitation147,565153,848 - - Total business-type activities expenses1,272,8471,182,3491,135,7411,158,382 Total primary government expenses$4,439,339$4,481,082$5,120,098$5,310,843 Program revenues Governmental activities: Charges for services: Licenses and permits$306,266$155,820$203,041$100,074 Inspections - City of Bayport - - - - Administrative - Enterprise Fund64,46563,20062,04064,400 Direct charges to developers938,298244,895 - - Connection charges780,14134,595 - 5,419 Park fees1,004,240 - - - Refunds and reimbursements155,080105,832153,267112,856 Other activities116,793151,00284,905112,161 Operating grants and contributions74,105142,87990,54888,187 Capital grants and contributions165,39711,32410,091688,975 Total governmental activities program revenues3,604,785909,547603,8921,172,072 Business-type activities: Charges for services: Water502,407482,100475,658546,606 Sanitary sewer767,207679,821656,809651,022 Storm sewer74,17373,94274,25774,473 Sanitation97,26697,764494 - Operating grants and contributions - - - - Capital grants and contributions - - - - Total business-type activities program revenues1,441,0531,333,6271,207,2181,272,101 Total primary government program revenues$5,045,838$2,243,174$1,811,110$2,444,173 Table 2 Page 1 of 2 201020112012201320142015 $1,575,297$1,381,589$1,455,359$1,601,402$1,663,866$1,685,452 1,407,1611,411,6901,431,5941,497,7651,565,5441,564,058 980,630999,4731,128,2491,080,4371,020,664903,858 201,716239,100248,243269,929285,877315,390 280,548275,196377,713463,537463,217406,215 4,445,3524,307,0484,641,1584,913,0704,999,1684,874,973 466,218472,040470,266468,932477,771496,607 740,184746,656668,588695,817694,406749,937 108,46748,36043,90458,23946,39360,081 - - - - - - 1,314,8691,267,0561,182,7581,222,9881,218,5701,306,625 $5,760,221$5,574,104$5,823,916$6,136,058$6,217,738$6,181,598 $197,181$131,081$163,986$90,910$137,543$125,704 - - - - - - 66,42069,4253,8304,1804,2484,242 - - - - - 109,365 147,09818,824 - - - 215,962 241,440 - - - - - 117,735114,847125,243108,83890,109105,206 180,639107,860102,320390,340178,687139,148 145,04896,402112,91299,171101,443105,231 76,97015,94324,131341,9911,121,1741,209,432 1,172,531554,382532,4221,035,4301,633,2042,014,290 565,859648,663714,660720,590657,286781,537 749,378782,266800,281833,063927,129881,428 75,69866,74083,76288,06382,45282,881 - - - - - - - 4,594 - - - 7,930 - - - 23,2341,248516 1,390,9351,502,2631,598,7031,664,9501,668,1151,754,292 $2,563,466$2,056,645$2,131,125$2,700,380$3,301,319$3,768,582 CITY OF OAK PARK HEIGHTS, MINNESOTA CHANGES IN NET POSITION Last Ten Fiscal Years (Accrual Basis of Accounting) 2006200720082009 Net (expense) revenue: Governmental activities$438,293($2,389,186)($3,380,465)($2,980,389) Business-type activities168,206151,27871,477113,719 Total primary government net (expense) revenue606,499(2,237,908)(3,308,988)(2,866,670) General revenues and other changes in net position: Governmental activities: General property taxes and tax increment2,417,0142,730,9943,146,0493,537,829 Unrestricted grants and contributions29,838111,09056,693180,430 Investment earnings425,160532,827606,996456,934 Gain on sale of property244,0999,23720,89512,165 Miscellaneous16,25427,62622,14814,186 Transfers101,917(329,589)432,248(549,139) Total governmental activities3,234,2823,082,1854,285,0293,652,405 Business-type activities: Investment earnings49,03760,10343,08026,174 Loss on sale of capital assets - - - - Transfers(101,917)329,589(432,248)549,139 Total business-type activities(52,880)389,692(389,168)575,313 Total primary government$3,181,402$3,471,877$3,895,861$4,227,718 Change in net position: Governmental activities$3,672,575$692,999$904,564$672,016 Business-type activities115,326540,970(317,691)689,032 Total primary government$3,787,901$1,233,969$586,873$1,361,048 Note: GASB 68 was implemented in 2015. Pension expense for years prior to 2015 was not restated. Table 2 Page 2 of 2 201020112012201320142015 ($3,272,821)($3,752,666)($4,108,736)($3,877,640)($3,365,964)($2,860,683) 76,066235,207415,945441,962449,545447,667 (3,196,755)(3,517,459)(3,692,791)(3,435,678)(2,916,419)(2,413,016) 3,692,1273,934,3094,289,5664,541,1034,706,9745,289,030 104,9872,0402,0402,0402,04010,320 320,183239,763204,422(85,474)421,387154,098 - 8,9607,9501,95644,198 - 16,58817,71829,17226,52631,64422,655 261,212(20,285)504,239406,38012,170(1,012,761) 4,395,0974,182,5055,037,3894,892,5315,218,4134,463,342 22,93417,78014,046(7,026)29,66911,547 - - - (1,472) - - (261,212)20,285(504,239)(406,380)(12,170)1,012,761 (238,278)38,065(490,193)(414,878)17,4991,024,308 $4,156,819$4,220,570$4,547,196$4,477,653$5,235,912$5,487,650 $1,122,276$429,839$928,653$1,014,891$1,852,449$1,602,659 (162,212)273,272(74,248)27,084467,0441,471,975 $960,064$703,111$854,405$1,041,975$2,319,493$3,074,634 CITY OF OAK PARK HEIGHTS, MINNESOTA FUND BALANCES, GOVERNMENTAL FUNDS Last Ten Fiscal Years (Modified Accrual Basis of Accounting) 2006200720082009 General Fund: Nonspendable$ - $ - $ - $ - Restricted - - - - Assigned for: Employee benefits169,633183,000188,000188,000 Ensuing year's budget - - - 193,635 Unassigned: Cash flow reserve1,409,0001,698,0001,541,0001,558,000 General contingency reserve493,000595,000542,000557,000 Remaining unassigned balance230,86939,620345,370223,377 Total general fund$2,302,502$2,515,620$2,616,370$2,720,012 All other governmental funds: Restricted for: Debt service$717,829$460,263$127,247$102,115 Park improvements - - - - Law enforcement - - - - Tax increment - - - - Unspent bond proceeds - - - - Assigned, reported in: Special revenue funds86,326100,960102,181100,737 Debt service funds47,315 - - - Capital projects funds8,022,5888,480,88414,977,67813,236,361 Unassigned - - - - Total all other governmental funds$8,874,058$9,042,107$15,207,106$13,439,213 Table 3 201020112012201320142015 $ - $2,057$4,609$5,201$80,806$57,602 - - - - - 54,188 172,000179,000165,000173,000159,000165,000 100,000 - - - - - 1,593,0001,911,0002,060,0002,125,0002,293,0002,370,000 554,000698,000734,000777,000810,000847,000 554,797471,504706,024434,170560,0011,138,743 $2,973,797$3,261,561$3,669,633$3,514,371$3,902,807$4,632,533 $97,296$112,571$5,309,831$5,192,539$5,393,708$6,222,184 - 913,170870,864815,549664,792544,506 - 8,1556,9237,33013,3049,096 - - 4,60419,33149,86086,341 - - - - 1,118,479 - 88,47131,19831,62731,32432,01933,252 - - - - - - 11,188,96810,704,78211,645,00312,100,25812,434,63810,998,026 - - - - (377,266)(406,043) $11,374,735$11,769,876$17,868,852$18,166,331$19,329,534$17,487,362 CITY OF OAK PARK HEIGHTS, MINNESOTA CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS Last Ten Fiscal Years 2006200720082009 Revenues: General property taxes$2,423,246$2,687,730$3,156,807$3,470,670 Tax increment - - - - Special assessments553,45042,34232,07843,810 Licenses and permits306,266155,820203,041100,074 Intergovernmental102,818188,594141,141276,772 Charges for services1,886,776192,545102,199107,392 Fines and forfeits84,73066,18963,60274,588 Investment income425,160532,827606,996456,934 Direct charges to developers938,298244,895 - - Refunds and reimbursements155,080105,832134,987137,422 Donations and contributions136,51483,06427,672612,525 Total revenues7,012,338 4,299,838 4,468,523 5,280,187 Expenditures: Current: General government941,8751,002,7631,075,6161,117,822 Public safety1,180,4411,193,4511,292,4651,277,600 Public works423,010458,241632,530586,872 Parks and recreation107,071138,491146,928139,188 Capital outlay1,797,0171,327,754901,5644,957,653 Debt service: Principal retirement190,000125,000750,000135,000 Interest and other44,53537,688134,850255,213 Bond issuance costs - - 111,02033,537 Total expenditures4,683,949 4,283,388 5,044,973 8,502,885 Revenues over (under) expenditures2,328,389 16,450 (576,450)(3,222,698) Other financing sources (uses): Sale of capital assets244,0999,23721,28912,200 Bonds issued - - 6,300,0001,195,000 Premium on bonds issued - - 5,827 - Transfers in190,417432,2801,790,9261,144,241 Transfers out(88,500)(76,800)(1,275,843)(792,994) Total other financing sources (uses)346,016 364,717 6,842,199 1,558,447 Net change in fund balance$2,674,405$381,167$6,265,749($1,664,251) Debt service as a percentage of noncapital expenditures8.1%5.5%21.9%11.1% Debt service as percentage of total expenditures 5.0%3.8%17.5%4.6% Table 4 201020112012201320142015 $3,697,809$3,984,389$4,245,360$4,433,202$4,620,521$5,104,956 - - 26,583106,924125,120184,251 28,58322,95221,90620,731237,636381,071 197,181131,081163,98690,910137,543125,704 282,55197,442114,952102,211453,283165,950 561,411134,23749,441337,912120,050292,182 73,76160,82256,70956,60862,88567,170 320,183239,763204,422(85,474)421,387153,792 - - - - - 109,365 134,323132,565154,415135,364106,553594,254 2,18412,5004005002004,550 5,297,986 4,815,751 5,038,174 5,198,888 6,285,178 7,183,245 1,370,3811,178,7101,195,1211,378,8911,445,4801,519,783 1,312,3351,351,5671,394,5861,449,1031,535,3871,620,793 592,897605,955737,001805,776601,870482,846 125,414129,327132,497152,061162,892176,416 3,583,666767,988160,8561,103,3094,540,0434,111,439 250,000255,000275,000295,000315,000500,000 272,000266,675260,680362,436396,195426,133 - - 103,854 - 80,533 - 7,506,693 4,555,222 4,259,595 5,546,576 9,077,400 8,837,410 (2,208,707)260,529 778,579 (347,688)(2,792,222)(1,654,165) 42510,01024,4182,00044,400 - - - 5,140,000 - 3,775,000 - - - 155,137 - 111,689 - 397,589412,366408,9142,274,5404,081,6622,992,208 - - - (1,868,160)(3,668,890)(2,450,489) 398,014 422,376 5,728,469 408,380 4,343,861 541,719 ($1,810,693)$682,905$6,507,048$60,692$1,551,639($1,112,446) 13.3%13.8%13.4%14.8%16.0%19.6% 7.0%11.5%12.6%11.9%7.8%10.5% CITY OF OAK PARK HEIGHTS, MINNESOTA TAX CAPACITY VALUE AND ESTIMATED MARKET VALUE OF TAXABLE PROPERTY Last Ten Fiscal Years Fiscal YearCommercial/ EndedResidentialIndustrialPublicAll December 31,PropertyPropertyUtilityOther 2006$3,269,468$2,687,650$1,415,909$112,921 20073,318,0523,331,9101,733,70388,073 20083,429,1043,679,1883,060,14482,329 20093,483,7263,952,5233,568,95793,832 20103,304,1103,869,5683,311,71687,480 20113,202,6133,676,9853,454,88092,822 20122,928,5143,567,1963,599,10491,665 20132,736,977 3,528,330 3,990,896 96,104 20142,834,815 3,424,868 3,904,920 96,659 20153,280,449 3,286,102 4,148,063 91,068 Source: Washington County Certificate as to Taxes and Taxable Property Table 5 Adjusted Less:Less:Tax Capacity TotalFiscalTax AdjustedTotalEstimatedas a Percent TaxDisparityIncrementTax CapacityDirect TaxMarketof Total Tax CapacityContributionCapturedValueRateValueCapacity $7,485,948$1,037,753$ - $6,448,19538.377$539,357,10086.1% 8,471,7381,115,215 - 7,356,52335.731579,089,80086.8% 10,250,7651,508,660 - 8,742,10536.343673,570,60085.3% 11,099,0382,177,678 - 8,921,36038.732718,753,40080.4% 10,572,8742,492,111 - 8,080,76343.845682,742,10076.4% 10,427,3002,117,456 - 8,309,84445.028674,199,10079.7% 10,186,4792,336,41126,9137,823,15551.710643,608,30076.8% 10,352,3072,346,765 108,254 7,897,28854.898641,169,000 76.3% 10,261,2622,467,230 126,677 7,667,35559.641640,880,100 74.7% 10,805,6822,214,196 185,870 8,405,61656.804689,680,000 77.8% CITY OF OAK PARK HEIGHTS, MINNESOTA DIRECT AND OVERLAPPING PROPERTY TAX CAPACITY RATES Table 6 Last Ten Fiscal Years Overlapping Rates City FiscalDirectSchoolOther YearRateCountyDistrictDistrictsTotal 200636.13626.96819.4055.74188.250 200735.73325.67319.0044.85685.266 200836.34325.93617.4044.88584.568 200938.73226.37117.7144.83287.649 201043.84527.77519.7345.10796.461 201145.02829.77220.3005.536100.636 201251.71031.93922.3346.250112.232 201354.89834.22522.0186.983118.123 201459.64132.81123.1506.538122.140 201556.80430.18621.1245.884113.997 Source: Washington County website. CITY OF OAK PARK HEIGHTS, MINNESOTA PRINCIPAL PROPERTY TAXPAYERS Table 7 Current Year and Nine Years Ago 20152006 Percentage Percentage Taxableof Total CityTaxableof Total City CapacityCapacityCapacityCapacity TaxpayerValueRankValueValueRankValue Xcel Energy$4,418,501140.89%$1,600,747123.14% VSSA Boutwells Landing LLC552,74825.12%290,60864.20% Wal-Mart Stores, Inc.294,78032.73% - - 0.00% OPH Pat LLC & OPH Val LLC215,65842.00%199,50042.88% Menard Inc.177,45051.64%185,998 52.69% OP Stillwater LLC174,84661.51% - - 0.00% Lowe's Home Centers, Inc.163,10271.62% - - 0.00% SC Mall LLC159,25081.47%367,420 2 5.31% W.A.T.E. Enterprises Inc.125,61091.16%108,22491.56% Oakgreen Commons114,967101.06% - - 0.00% Raduenz Dealership - - 0.00%83,328101.20% Prudential Insuance Co of America - - 0.00%213,522 33.09% Wal-Mart Real Estate Business - - 0.00%147,879 72.14% VSSA McKean West LLC - - 0.00%220,682 83.19% Total$6,396,91259.20%$3,417,90849.40% Total All Property $10,805,682$6,918,930 Source: Washington County CITY OF OAK PARK HEIGHTS, MINNESOTA PROPERTY TAX LEVIES AND COLLECTIONS Table 8 Last Ten Fiscal Years FiscalTaxesCollections Collected Within The YearLeviedinFiscal Year of the LevyTotal Collections to Date EndedFor ThePercentageSubsequentPercentage December 31,Fiscal Year Amountof LevyYearsAmountof Levy (1) 2006$2,395,044$2,363,19298.67%$31,579$2,394,77199.99% (1) 20072,781,4892,646,42195.14%(20,936)2,625,48594.39% (1) 20083,286,2303,211,39297.72%(35,600)3,175,79296.64% (1) 20093,574,8553,447,96596.45%73,3613,521,32698.50% (1) 20103,662,4553,584,02797.86%(24,119)3,559,90897.20% (1) 20113,870,7703,819,22098.67%(51,137)3,768,08397.35% (2) 20124,229,9244,176,12598.73%(86,116)4,090,00996.69% (2) 2013 4,549,431 97.99%(39,007)4,418,87997.13%4,457,886 (2) 20144,803,959 98.47%(11,637)4,718,70698.23%4,730,343 (2) 20155,044,879 99.70% - 5,029,81499.70%5,029,814 (1) The levy amount presented is after deduction for Market Value Homestead Credit. (2) The levy amount presented includes excess TIF Tax. Source: City Finance Department. CITY OF OAK PARK HEIGHTS, MINNESOTA RATIOS OF OUTSTANDING DEBT BY TYPE Table 9 Last Ten Fiscal Years Governmental Activities GeneralPercentage FiscalObligationImprovementof TaxPer YearBondsBondsTotalCapacityCapita 2006$ - $875,000$875,00011.69%188 2007 - 750,000750,0008.85%161 20086,300,000 - 6,300,00061.46%1,326 20097,360,000 - 7,360,00066.31%1,549 20107,110,000 - 7,110,00067.25%1,639 20116,855,000 - 6,855,00065.74%1,580 201211,720,000(1) - 11,720,000115.05%2,637 201311,425,000 - 11,425,000110.36%2,455 201414,885,000 - 14,885,000145.06%3,142 201514,385,000 - 14,385,000133.12%3,095 Notes: (1)Details regarding the City's outstanding debt can be found in the notes to the financial statements. There is no business-type activity long-term debt. In 2012, the City issued the $5,140,000 Crossover Refunding Bonds to refund $4,860,000 of the 2008 GO Improvement Bonds. The 2008 Bonds will be called for prepayment in 2016. CITY OF OAK PARK HEIGHTS, MINNESOTA DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBTTable 10 December 31, 2015 Estimated EstimatedShare of DebtPercentageOverlapping Governmental UnitOutstandingApplicableDebt Debt repaid with property taxes: Independent School District No. 834$122,320,0009.81%$11,999,592 Washington County125,075,0003.38%4,227,535 Metro Transit184,210,0000.31%571,051 Metropolian Council12,470,0000.27%33,669 Subtotal - overlapping debt16,831,847 City direct debt100.00%8,185,000 Total direct and overlapping debt$25,016,847 Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This table 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. CITY OF OAK PARK HEIGHTS, MINNESOTA LEGAL DEBT MARGIN INFORMATIONTable 11 Last Ten Fiscal Years Legal Debt Margin Calculation for Fiscal Year 2015 Market value$712,227,600 Debt limit (3% of market value)21,366,828 Debt applicable to limit: Debt Applicable to Limit5,915,000 Legal debt margin$15,451,828 Legal Debt Margin Calculation for Fiscal Years 2006 Through 2015 Net DebtLegalAmount of Debt FiscalDebtApplicable toDebtApplicable to YearLimitLimitMarginDebt Limit 2006$10,787,142$ - $10,787,1420.00% 200711,581,796 - 11,581,7960.00% 200820,207,1186,300,00013,907,11831.18% 200921,562,6026,165,00015,397,60228.59% 201020,482,2637,110,00013,372,26334.71% 201120,098,1616,855,00013,243,16134.11% 201219,308,249 6,860,000 12,448,24935.53% 201319,235,070 6,565,000 12,670,07034.13% 201419,991,982 6,250,000 13,741,98231.26% 201521,366,828 5,915,000 15,451,82827.68% Note: In 2008, State Statutes increased the percentage used to calculate the debt limit from 2% to 3%. CITY OF OAK PARK HEIGHTS, MINNESOTA PLEDGED REVENUE COVERAGE Table 12 Last Ten Fiscal Years Improvement Bonds PropertySpecialProperty Tax FiscalTaxAssessmentTransfer FromDebt Service (1)(2)(3) Collections YearCollectionsGeneral FundPrincipalInterestCoverage 2006$ - $156,905$ - $190,000$44,5350.669 2007 - 35,180 - 125,00037,6880.216 2008 - 31,221 - 750,00010,8330.041 2009336,292 - - 135,000252,6130.868 2010392,805 -122,000250,000272,0000.986 2011400,902 -134,000255,000266,6751.025 2012 - -536,000275,000260,6801.001 2013 - -548,000295,000253,6050.999 2014 - 217,836 559,000315,000291,4371.281 2015 - 379,964 608,000500,000426,1341.067 Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1,3) Capital Improvement Bonds were issued during 2008 and 2009 to finance construction of City Hall. The debt service payments, which began in 2009, are funded by property tax collections and transfers from the General Fund. (2) Debt service payments on Improvement Bonds of 1998 ended in 2008 when the bond was paid off. Special assessment collections, as well as transfers from the connection charge funds, were used to make the debt service payments. CITY OF OAK PARK HEIGHTS, MINNESOTA DEMOGRAPHIC AND ECONOMIC STATISTICSTable 13 Last Ten Fiscal Years Per Capita FiscalUnemploymentPersonalPersonal (1)(1) Income YearPopulationRateIncome 20064,6763.5% 20074,7514.1% 20084,7085.4% 20094,6537.4% 20104,3396.3% Information Not Available 20114,3395.2% 2012 4,4455.3% 2013 4,6544.6% 2014 4,7383.8% 2015 4,6483.1% Sources: Metropolitan Council (population), Continuing Disclosure Document or County Records (unemployment rate) (1) Information Not Available CITY OF OAK PARK HEIGHTS, MINNESOTA PRINCIPAL EMPLOYERSTable 14 Current Year and Nine Years Ago 20152006 EmployerProduct ServiceEmployeesEmployees Andersen CorporationWindow Manufacturer614600 VSSA - Boutwell's Landing/McKean SquareSenior Community Housing44795 State of Minnesota Correctional FacilityGovernment Correctional Institution366297 Wal-Mart Stores, Inc.Retail266225 ISD No. 834, StillwaterPublic education177220 Menard's Inc.Retail Lumber/Hardware135100 Lowe'sRetail118 - Xcel EnergyElectric Utility104 - Stillwater MotorsAuto Dealership/Service Repair101105 Kowalski'sRetail/Grocery90190 Kohl'sRetail - 155 Stillwater FordAuto Dealership/Service Repair - 129 Total2,4182,116 CITY OF OAK PARK HEIGHTS, MINNESOTA FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM Last Ten Fiscal Years Full-Time Equivalent Employees as of December 31, Function/Program200620072008 General government: Administration222 Finance333 Building inspections222 Public safety101010 Public works444 Total212121 Source: City Finance Department Table 15 Full-Time Equivalent Employees as of December 31, 2009201020112012201320142015 2222333 3333332 2221111 10101010111111 3344444 20202120222221 CITY OF OAK PARK HEIGHTS, MINNESOTA OPERATING INDICATORS BY FUNCTION/PROGRAM Last Ten Fiscal Years Fiscal Year Function/Program200620072008 Police: Physical arrests240207224 Parking violations12492135 Traffic violations7386131,016 Fire: Fire and related calls11910698 Medical calls302270292 Building inspection: Permits issued: Residential11194 Commercial1582 Total permit valuation$36,975,066$6,521,063$18,707,532 Water: Connections1,2891,3041,315 Average daily demand (thousands of gallons)676,000681,452654,172 Sewer: Connections1,2641,2741,283 Sources: Various City departments. (1) Connection for Irrigation accounts removed from the total Table 16 Fiscal Year 2009201020112012201320142015 208176151151148169115 17017115599918688 9691,2408741,1261,0811,2831,270 9111083107170170172 293260306451546546596 - 1 - 2 - 15 2132111 $7,254,000$10,955,024$1,828,000$8,776,295$4,781,710$4,781,710$7,000,000 (1)(1)(1) 1,3181,3171,3211,2731,2741,2741,281 681,816576,085593,496667,835626,000608,216573,463 1,2851,2681,2781,2861,2801,2801,287 CITY OF OAK PARK HEIGHTS, MINNESOTA CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM Last Ten Fiscal Years Fiscal Year Function/Program2006200720082009 Police: Stations1111 Squad cars6666 Fire stations Other public works: Miles of paved streets22.022.022.022.0 Streetlights392396396396 Traffic signals2222 Parks and recreation: Parkland acreage105104108104 Number of parks4555 Water: Water mains (miles)26.626.826.827.1 Fire hydrants316316316265 Storage capacity (thousands of gallons)750750750750 Wastewater: Sanitary sewers (miles)23.324.924.924.9 Storm sewers (miles)12.512.612.612.6 Sources: Various City departments. Table 17 Fiscal Year 201020112012201320142015 111111 666666 22.022.022.022.022.022.0 396396396396396396 222222 104104104104104104 555555 27.127.127.127.127.127.1 265265265265267270 750750750750750750 24.924.924.924.924.924.9 12.612.612.612.612.612.6