HomeMy WebLinkAbout3.a. Presentation and Acceptance of 2010 Comprehensive Annual Financial Report (CAFR)AGENDA ITEM: Presentation and Acceptance of 2010
Comprehensive Annual Financial Report
(CAFR)
AGENDA SECTION:
Presentations
PREPARED BY: Jeff May, Finance Director
AGENDA NO. 1J
ATTACHMENTS: Resolution, CAFR
APPROVED BY:
oaf
RECOMMENDED ACTION: Motion to adopt a Resolution Accepting the 2010
Comprehensive Annual Financial Report.
4 ROSEMOUNT
CITY COUNCIL
City Council Meeting Date: May 17, 2011
EXECUTIVE SUMMARY
ISSUE
Review and accept the 2010 CAFR.
BACKGROUND
A representative from our audit firm, Baker Tilly Virchow Krause, LLP, will be here on Tuesday evening,
May 17 to review the City of Rosemount's 2010 CAFR. The representative will give a brief presentation,
highlighting items that may be worthy of your attention and will also be available to answer any questions
that you may have. After you have reviewed your CAFR, if you have no further use for it, please
return it to me so I can use it as an extra copy for people or organizations that may request them.
Thank you!!
SUMMARY
Recommend the above motion to accept the 2010 CAFR.
ADOPTED this 17 day of May, 2011.
ATTEST:
Amy Domeier, City Clerk
CITY OF ROSEMOUNT
DAKOTA COUNTY, MINNESOTA
RESOLUTION 2011
A RESOLUTION ACCEPTING THE 2010 COMPREHENSIVE ANNUAL
FINANCIAL REPORT
WHEREAS, the City of Rosemount has been presented its 2010 Comprehensive
Annual Financial Report, prepared with the assistance of our audit firm of Baker TiIIy
Virchow Krause, LLP.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of
Rosemount, accepts its 2010 Comprehensive Annual Financial Report, prepared with
the assistance of our audit firm of Baker TiIIy Virchow Krause, LLP.
William H. Droste, Mayor
Honorable Mayor and Members of City Council
City of Rosemount, Minnesota
AUDITOR'S REPORT ON LEGAL COMPLIANCE
16 6 4 uA VAi_dt4w- Kcv4m„ c Ze
Minneapolis, Minnesota
May 12, 2011
dependent member of
BAKER TILLY
INTERNATIONAL
kf, I
BAKER TILLY
VIRCHOW KRAUSE, LLP
Baker Tilly Virchow Krause, LLP
225 S Sixth St, Ste 2300
Minneapolis, MN 55402 -4661
tel 612 876 4500
Fax 612 238 8900
bakertilly.com
We have audited the basic financial statements of the governmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the City of Rosemount as of and for the year
ended December 31, 2010 and have issued our report thereon dated May 12, 2011.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the provisions of the Minnesota Legal Compliance Audit Guide for Local Govemment,
promulgated by the State Auditor pursuant to Minnesota Stat. 6.65. Accordingly, the audit included such tests
of the accounting records and such other auditing procedures as we considered necessary in the
circumstances.
The Minnesota Legal Compliance Audit Guide for Local Government covers seven categories of compliance to
be tested: contracting and bidding, deposits and investments, conflicts of interest, public indebtedness, claims
and disbursements, miscellaneous provisions, and tax increment financing. Our study included all of the listed
categories.
The results of our tests indicate that for the items tested, the City of Rosemount, Minnesota complied with the
material terms and conditions of applicable legal provisions.
This report is intended solely for the information and use of management, the City Council, and state agencies,
and is not intended to be, and should not be, used by anyone other than those specified parties.
CITY OF ROSEMOUNT
REPORT ON INTERNAL CONTROL
(Including Memorandum on Accounting Procedures,
Internal Controls, and Other Matters)
December 31, 2010
CITY OF ROSEMOUNT
INDEX
Significant Deficiencies Internal Control over Financial Reporting 1
Charitable Contributions Substantiation and Disclosure 2
GASB Statement No. 54 Fund Balance Reporting 3
Communication With Those Charged With Governance 3
Two Way Communication Regarding Your Audit 6
Conclusion 7
To the City Council
City of Rosemount
Rosemount, Minnesota
In planning and performing our audit of the financial statements of the City of Rosemount, Minnesota as of and
for the year ended December 31, 2010, in accordance with auditing standards generally accepted in the United
States of America, we considered its intemal control over financial reporting (intemal control) as a basis for
designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not
for the purpose of expressing an opinion on the effectiveness of its internal control. Accordingly, we do not
express an opinion on the effectiveness of its intemal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies in intemal
control, such that there is a reasonable possibility that a material misstatement of the entity's financial
statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a
deficiency, or a combination of deficiencies, in internal control that is Tess severe than a material weakness, yet
important enough to merit attention by those charged with govemance. We consider the deficiencies described
on the following page to be significant deficiencies.
Our consideration of internal control was for the limited purpose described in the first paragraph and was not
designed to identify all deficiencies in internal control that might be significant deficiencies or material
weaknesses and, therefore, there can be no assurance that all such deficiencies have been identified. We did
not identify any deficiencies in internal control that we consider to be material weaknesses, as defined above.
This communication is intended solely for the information and use of the City of Rosemount's management and
is not intended to be, and should not be, used by anyone other than the specified parties.
16-
Minneapolis, Minnesota
May 12, 2011
eeoendent member of
BAKER TILLY
INTERNATIONAL
BAKER TILLY
VIRCHOW KRAUSE, LLP
Baker Tilly Virchow Krause, LLP
225 S Sixth St, Ste 2300
Minneapolis, MN 55402 -4661
tel 612 876 4500
fax 612 238 8900
bakertilly.com
SIGNIFICANT DEFICIENCIES INTERNAL CONTROLS OVER FINANCIAL REPORTING
Similar to last year, our procedures identified that these controls do not currently exist for the City of
Rosemount. Keep in mind that some of these controls may not be practical due to your staff size or other
reasons. However, we are required to communicate these to you. In addition, as you make changes
within your organization, and we continue to rotate audit procedures, more controls of this kind may be
communicated to you.
CONTROLS OVER UTILITY BILLING
1. Proper segregation between receipting and billing functions does not exist.
CONTROLS OVER FINANCIAL REPORTING ON A MONTHLY BASIS
1. A system report of manual adjusting journal entries is not reviewed by someone independent of
posting journal entries. Adjusting joumal entries and supporting documentation are not reviewed
by an appropriate person who is the not the original preparer in most cases.
2. Account reconciliations are not performed by someone without general ledger access and
involved with processing of transactions.
As we reported to you in past years, we are required to communicate to you about your intemal controls
over year -end financial reporting. In theory, a properly designed system of internal control staffed with
enough people with sufficient training would provide your entity with the ability to not only process and
record monthly transactions, but also to prepare a complete set of annual financial statements. Most of
our clients do a good job of processing and recording monthly transactions. However, very few have the
skills or the time needed to prepare annual financial statements.
The definition of a significant deficiency in intemal control includes consideration of the year -end financial
reporting process. To avoid the auditor reporting a significant deficiency in internal control, your system of
controls would need to be able to accomplish the following:
1. Present the books and records to the auditor in such a condition that the auditor is not able to
identify any significant journal entries as a result of our audit procedures. This is rare for most of
our clients.
2. Be capable of preparing a complete set of year -end financial statements for the auditor to test.
Currently, almost all of our clients have us prepare the financial statement document. This
includes drafting the individual fund statements, making conversion entries, drafting the
government -wide statements, and preparing footnote disclosures. Your staff would need to be
capable of presenting the auditor with a set of complete financial statements in such a condition
that the auditor is not able to identify any significant changes as a result of the audit.
To accomplish such a high level of internal control over financial reporting is a difficult task for most
govemments. Most governments operate with only enough staff to process monthly transactions and
reports, and so rely on us to prepare certain year -end audit entries and handle the year -end financial
reporting. Under the new auditing standards, we must, however, inform you that these are deficiencies in
your intemal control system.
Page 1
CHARITABLE CONTRIBUTIONS SUBSTANTIATION AND DISCLOSURE
Organizations that receive tax deductible charitable contributions, such as the city, should be aware of
two general rules to meet IRS substantiation and disclosure requirements (as noted in IRS Publication
1771) for federal income tax return reporting purposes:
1. A charitable organization is required to provide a written disclosure to a donor who receives
goods or services in exchange for a single payment in excess of $75.
2. A donor is responsible for obtaining a contemporaneous written acknowledgment from a
charity for any single contribution of $250 or more before the donor can claim a charitable
contribution on his /her federal income tax return.
The written disclosure statement in 1. above must:
inform a donor that the amount of the contribution that is deductible for federal income tax
purposes is limited to the excess of money (and the fair market value of property other than
money) contributed by the donor over the value of goods or services provided by the organization
provide a donor with a good faith estimate of the fair market value or the goods and services
be made in a manner that is likely to come to the attention of the donor.
A penalty is imposed on organizations that do not meet the written disclosure requirement. The penalty is
$10 per contribution, not to exceed $5,000 per fund raising event or mailing.
To assist a donor, an organization can provide a timely, written statement containing the following
information:
Name of organization
Amount of cash contribution
Description (but not the value) of non -cash contribution
Statement that no goods or services were provided by the organization in retum for the
contribution, if that was the case
Description and good faith estimate of the value of goods or services, if any, that an organization
provided in retum for the contribution
A separate acknowledgment may be provided for each single contribution of $250 or more, or one
acknowledgment, such as an annual summary, may be used to substantiate several single contributions
of $250 or more. Recipient organizations typically send written acknowledgments to donors no later than
January 31 of the year following the donation.
We recommend the city review their policies on charitable contributions to ensure they are in compliance
with the above requirements.
Page 2
GASB STATEMENT NO. 54 FUND BALANCE REPORTING
Last year, we informed you that the Governmental Accounting Standards Board (GASB) had issued
Statement No. 54, which changes governmental financial reporting. These changes will affect your
financial statements for the year ended December 31, 2011, primarily the governmental funds' balance
sheet presentation. No changes are necessary for proprietary fund types or government -wide statements.
The major change is to the terminology used for fund balance reporting. The terms reserved, unreserved,
designated, and undesignated are being replaced with the following categories: nonspendable, restricted,
committed, assigned, and unassigned. The new categories are designed to promote more consistent
financial reporting throughout the nation.
The GASB made these changes to fund balance reporting to make it easier for the reader of financial
statements to determine the various levels of restrictions that exist for the future use of fund balance. In
addition to the new method for displaying fund balances, the Statement also clarifies the definitions of the
various governmental fund types. You will want to understand the new rules in time for you to make
necessary changes by December 31, 2011. You will also need to consider adopting fund balance policies
so that options available in GASB No. 54 can be fully used by your government. We can assist you with
getting ready for these changes.
COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE
OUR RESPONSIBILITY UNDER AUDITING STANDARDS
GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA
Our Responsibility Under Auditing Standards Generally Accepted in the United States of America,
GovemmentAuditinq Standards, OMB Circular A -133
The objective of a financial statement audit is the expression of an opinion on the financial
statements. We conducted the audit in accordance with auditing standards generally accepted in
the United States of America, Government Auditing Standards, OMB Circular A -133. These
standards require that we plan and perform our audit to obtain reasonable, rather than absolute,
assurance about whether the financial statements prepared by management with your oversight
are free of material misstatement, whether caused by error or fraud. Our audit included
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. Our audit does not
relieve management or those charged with governance of their responsibilities.
We also considered internal control over compliance with requirements that could have a direct
and material effect on a major federal program in order to determine our auditing procedures for
the purpose of expressing our opinion on compliance and to test and report on intemal control
over compliance in accordance with OMB Circular A -133.
As part of obtaining reasonable assurance about whether the City's financial statements are free
of material misstatement, we performed tests of its compliance with certain provisions of laws,
regulations, contracts and grants, noncompliance with which could have a direct and material
effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit. Also, in accordance with OMB
Circular A -133, we examined, on a test basis, evidence about the City's compliance with the
types of compliance requirements described in the U.S. Office of Management and Budget
(OMB) CircularA -133 Compliance Supplement applicable to each of its major federal programs
for the purpose of expressing an opinion on the City's compliance with those requirements. While
our audit provides a reasonable basis for our opinion, it does not provide a legal determination on
the City's compliance with those requirements.
Page 3
COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE (CONT.)
PLANNED SCOPE AND TIMING OF THE AUDIT
We performed the audit according to the planned scope and timing previously communicated to you
during our audit planning process and through our prior year letter that discussed planning matters.
QUALITATIVE ASPECTS OF THE ENTITY'S SIGNIFICANT ACCOUNTING PRACTICES
Accounting Policies
Management is responsible for the selection and use of appropriate accounting policies. In accordance
with the terms of our engagement letter, we will advise management about the appropriateness of
accounting policies and their application. The significant accounting policies used by the City of
Rosemount are described in Note 1 to the financial statements. No new accounting policies were adopted
and the application of existing policies was not changed during 2010. We noted no transactions entered
into by the City of Rosemount during the year that were both significant and unusual, and of which, under
professional standards, we are required to inform you, or transactions for which there is a lack of
authoritative guidance or consensus.
Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and
are based on management's knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because of
their significance to the financial statements and because of the possibility that future events affecting
them may differ significantly from those expected.
Financial Statement Disclosures
The disclosures in. the financial statements are neutral, consistent, and clear.
DIFFICULTIES ENCOUNTERED IN PERFORMING THE AUDIT
We encountered no significant difficulties in dealing with management in performing our audit.
AUDIT ADJUSTMENTS
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of management.
The following is a summary of the significant financial statement misstatements (audit adjustments):
Record receivable for costs related to Quiet Zone project
Record receivable and deferred revenue for final costs
related to CR 73 project
211,449
628,198
In addition, we prepared GASB No. 34 conversion entries which are summarized in the "Reconciliation of
the Balance Sheet of Governmental Funds to the Statement of Net Assets" and the "Reconciliation of the
Statement of Revenues, Expenditures, and Changes in Fund Balances of Govemmental Funds to the
Statement of Activities" in the financial statements.
A summary of uncorrected financial statement misstatements is attached. Management has determined
that their effects are immaterial, both individually and in the aggregate, to the financial statements taken
as a whole.
Page 4
COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE (CONT.)
DISAGREEMENTS WITH MANAGEMENT
For purposes of this letter, professional standards define a disagreement with management as a matter,
whether or not resolved to our satisfaction, conceming a financial accounting, reporting, or auditing matter
that could be significant to the financial statements or the auditor's report. We are pleased to report that
no such disagreements arose during the course of our audit.
CONSULTATIONS WITH OTHER INDEPENDENT ACCOUNTANTS
In some cases, management may decide to consult with other accountants about auditing and accounting
matters. If a consultation involves application of an accounting principle to the govemmental unit's
financial statements or a determination of the type of auditors' opinion that may be expressed on those
statements, our professional standards require the consulting accountant to check with us to determine
that the consultant has all the relevant facts. To our knowledge, there were no such consultations with
other accountants.
MANAGEMENT REPRESENTATIONS
We have requested certain representations from management that are included in the management
representation letter. This letter is attached.
INDEPENDENCE
We are not aware of any relationships between Baker Tilly Virchow Krause, LLP and the City of
Rosemount that, in our professional judgment, may reasonably be thought to bear on our independence.
Relating to our audit of the financial statements of for the year ended December 31, 2010, Baker Tilly
Virchow Krause, LLP hereby confirms in accordance with the Code of Professional Conduct issued by the
American Institute of Certified Public Accountants, that we are, in our professional judgment, independent
with respect to the City of Rosemount and provided no services to the City of Rosemount other than the
audit of the current year's financial statements and non -audit services listed below which in our judgment
do not impair our independence.
Financial statement preparation
Adjusting journal entries
CIVIC Systems software
OTHER AUDIT FINDINGS OR ISSUES
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City of Rosemount's auditors. However,
these discussions occurred in the normal course of our professional relationship and our responses were
not a condition to our retention.
Page 5
TWO WAY COMMUNICATION REGARDING YOUR AUDIT
As part of our audit of your financial statements, we are providing communications to you throughout the
audit process. Auditing requirements provide for two -way communication and are important in assisting
the auditor and you with more information relevant to the audit.
As this past audit is concluded, we use what we have learned to begin the planning process for next
year's audit. It is important that you understand the following points about the scope and timing of our
next audit:
a. We address the significant risks of material misstatement, whether due to fraud or error, through
our detailed audit procedures.
b. We will obtain an understanding of the five components of intemal control sufficient to assess the
risk of material misstatement of the financial statements whether due to error or fraud, and to
design the nature, timing, and extent of further audit procedures. We will obtain a sufficient
understanding by performing risk assessment procedures to evaluate the design of controls
relevant to an audit of financial statements and to determine whether they have been
implemented. We will use such knowledge to:
Identify types of potential misstatements.
Consider factors that affect the risks of material misstatement.
Design tests of controls, when applicable, and substantive procedures.
We will not express an opinion on the effectiveness of internal control over financial reporting or
compliance with laws, regulations, and provisions of contracts or grant programs. For audits done
in accordance with Government Auditing Standards, our report will contain the following
restriction: "This report is intended solely for the information and use of the client's management,
others within the city, federal awarding agencies and pass- through entities and is not intended to
be, and should not be, used by anyone other than these specified parties."
c. The concept of materiality recognizes that some matters, either individually or in the aggregate,
are important for fair presentation of financial statements in conformity with generally accepted
accounting principles while other matters are not important. In performing the audit, we are
concerned with matters that, either individually or in the aggregate, could be material to the
financial statements. Our responsibility is to plan and perform the audit to obtain reasonable
assurance that material misstatements, whether caused by errors or fraud, are detected.
We are very interested in your views regarding certain matters. Those matters are listed here:
a. We typically will communicate with your top level of management unless you tell us otherwise.
b. We understand that the city council has the responsibility to oversee the strategic direction of
your organization, as well as the overall accountability of the entity. Management has the
responsibility for achieving the objectives of the entity.
c. We need to know your views about your organization's objectives and strategies, and the related
business risks that may result in material misstatements.
d. Which matters do you consider warrant particular attention during the audit, and are there any
areas where you request additional procedures to be undertaken?
e. Have you had any significant communications with regulators or grantor agencies?
f. Are there other matters that you believe are relevant to the audit of the financial statements or the
federal awards?
Page 6
TWO WAY COMMUNICATION REGARDING YOUR AUDIT (CONT.)
Also, is there anything that we need to know about the attitudes, awareness, and actions of the city
concerning:
a. The city's internal control and its importance in the entity, including how those charged with
governance oversee the effectiveness of internal control?
b. The detection or the possibility of fraud?
We also need to know if you have taken actions in response to developments in financial reporting, laws,
accounting standards, governance practices, or other related matters, or in response to previous
communications with us.
With regard to the timing of our audit, here is some general information. If necessary, we may do
preliminary audit work during the months of December- February. Our final fieldwork is scheduled during
the first two weeks of March to best coincide with your readiness and report deadlines. After fieldwork, we
wrap up our audit procedures at our office and may issue drafts of our report for your review. Final copies
of our report and other communications are issued after approval by your staff. This is typically 8 -12
weeks after final fieldwork, but may vary depending on a number of factors.
Keep in mind that while this communication may assist us with planning the scope and timing of the audit,
it does not change the auditor's sole responsibility to determine the overall audit strategy and the audit
plan, including the nature, timing, and extent of procedures necessary to obtain sufficient appropriate
audit evidence.
We realize that you may have questions on what this all means, or wish to provide other feedback. We
welcome the opportunity to hear from you.
CONCLUSION
In closing, we would like to thank you for allowing us to serve you. We are very interested in the Tong -term
success of the City of Rosemount and our comments are intended to draw your attention to issues which
need to be addressed for the City to meet its goals and responsibilities.
This letter, by its nature, focuses on improvements and does not comment on the many strong areas of
the City's systems and procedures. The comments and suggestions in this report are not intended to
reflect in any way on the integrity or ability of the personnel of the City. They are made solely in interest of
establishing a sound system of internal control practices. The City's staff seemed genuinely concerned
about maintaining the City's financial reporting system so that informed decisions can be made. They
were receptive to our ideas, comments and suggestions.
Page 7
COMPREHENSIVE
ANNUAL
FINANCIAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2010
�C ROSEMOUNT
MINNESOTA
CITY OF ROSEMOUNT, MINNESOTA
CITY OF ROSEMOUNT, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2010
PREPARED BY THE DEPARTMENTS OF
ADMINISTRATION AND FINANCE
DWIGHT D. JOHNSON, City Administrator
JEFFREY A. MAY, Finance Director
CITY OF ROSEMOUNT
COMPREHENSIVE ANNUAL FINANCIAL REPORT
December 31, 2010
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION
Letter of Transmittal V
GFOA Certificate of Achievement xi
Organizational Chart xii
List of Elected and Appointed Officials xiii
FINANCIAL SECTION
Independent Auditors' Report 1
Management's Discussion and Analysis 2 -10
Basic Financial Statements:
Government -wide Financial Statements:
Statement of Net Assets 11
Statement of Activities 12
Fund Financial Statements:
Balance Sheet Governmental Funds 13
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds 14
Reconciliation of the Statement of Revenues, Expenditures and
Changes in Fund Balances of Governmental Funds to the Statement
of Activities 15
Statement of Net Assets Proprietary Funds 16
Statement of Revenues, Expenses, and Changes in Fund Net Assets
Proprietary Funds 17
Statement of Cash Flows Proprietary Funds 18 19
Statement of Net Assets Fiduciary Fund 20
Notes to the Financial Statements 21 56
Required Supplementary Information:
Schedule of Revenues Compared to Budget (Budgetary Basis) Budget and
Actual General Fund 57
Schedule of Expenditures and Other Uses (Budgetary Basis) Budget and
Actual General Fund 58
Notes to Required Supplementary Information 59
Supplementary Information:
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet Nonmajor Governmental Funds 60
Combining Statement of Revenues, Expenditures and Changes in
Fund Balances Nonmajor Governmental Funds 61
Schedules of Revenues, Expenditures and Changes in Fund Balances (Budgetary Basis)
Budget and Actual:
Building CIP Capital Project Fund 62
Street CIP Capital Project Fund 63
Equipment CIP Capital Project Fund 64
Schedule of Changes in Assets and Liabilities M.A.A.G. Agency Fund 65
CITY OF ROSEMOUNT
COMPREHENSIVE ANNUAL FINANCIAL REPORT
December 31, 2010
TABLE OF CONTENTS
STATISTICAL SECTION (Unaudited)
Net Assets by Component 67
Changes in Net Assets 68
Fund Balances, Governmental Funds 70
Changes in Fund Balances, Governmental Funds 71
Assessed Value (or Tax Capacity) and Estimated Market Value of
All Taxable Property 72
Property Tax Rates All Direct and Overlapping Governmental Units 73
Principal Property Tax Payers 74
Property Tax Levies and Collections 75
Ratios of Outstanding Debt by Type 76
Ratios of Net General Bonded Debt Outstanding 77
Direct and Overlapping Governmental Activities Debt 78
Legal Debt Margin Calculation 79
Pledged Revenue Coverage 80
Demographic and Economic Statistics 81
Principal Employers 82
Full- Time /Permanent Part-Time City Government Employees by
Function /Program 83
Operating Indicators by Function /Program 84
Capital Asset Statistics by Function /Program 85
4 ROSEMOUNT
MINNESOTA
May 12, 2011
To the Honorable Mayor, Council Members, and the Citizens of the City of Rosemount:
Minnesota statutes require that all cities issue an annual financial report on its financial position and
activity prepared in accordance with generally accepted accounting principals (GAAP), and audited in
accordance with generally accepted auditing standards by a firm of licensed certified public accountants
or the Office of the State Auditor. Pursuant to that requirement, we hereby issue the comprehensive
annual financial report of the City of Rosemount (the City) for the fiscal year ended December 31, 2010.
This report consists of management's representations conceming the finances of the City. Consequently,
management assumes full responsibility for the completeness and reliability of all of the financial
information presented in this report. To provide a reasonable basis for making these representations,
management of the City has established a comprehensive internal control framework that is designed to
protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information
for the preparation of the City's financial statements in conformity with GAAP. Because the cost of
internal controls should not outweigh their benefits, the City's comprehensive framework of intemal
controls has been designed to provide reasonable rather than absolute assurance that the financial
statements will be free from material misstatement. As management, we assert that, to the best of our
knowledge and belief, this financial report is complete and reliable in all material respects.
The City of Rosemount's financial statements have been audited by Baker Tilly Virchow Krause, LLP, a
firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable
assurance that the financial statements of the City for the fiscal year ended December 31, 2010, are free
of material misstatement. The independent audit involved examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements; assessing the accounting principles
used and significant estimates made by management; and evaluating the overall financial statement
presentation. The independent auditor concluded, based upon the audit, that there was a reasonable
basis for rendering an unqualified opinion that the City's financial statements for the fiscal year ended
December 31, 2010, are fairly presented in conformity with GAAP. The independent auditor's report is
presented as the first component of the financial section of this report.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany
the basic financial statement in the form of Management's Discussion and Analysis (MD&A). This letter
of transmittal is designed to complement the MD &A and should be read in conjunction with it. The City
of Rosemount's MD&A can be found immediately following the report of the independent auditors.
SPIRIT OF PRIDE AND PROGRESS
Rosemount City Hall 2875 145th Street West Rosemount, MN 55068 -4997
651-423-4411 TDD /TTY 651-423-6219 Fax 651-423-5203
www.ci.rosemount.mn.us
Profile of the Government
The City was established as a municipal corporation in 1858, and became a statutory City in 1974. The
City has a Mayor Council form of government, with the four Council members being elected to
overlapping four -year terms of office and the Mayor serving a four -year term coinciding with the terms of
two of the Council members. This term for the Mayor was a change instituted in 1996. Prior to that, the
Mayor was elected every two years. The City Council is responsible, among other things, for passing
ordinances, adopting the budget, appointing committees and hiring the City's chief administrative officer.
The City's chief administrative officer is the City Administrator, who is appointed by and serves at the
discretion of the City Council. The City Administrator is responsible for carrying out the policies and
ordinances of the City Council, for overseeing the day -to -day operations of the City and for appointing the
heads of the City's various departments, with the City Council's final approval.
The City of Rosemount is a growing southern suburb in the Minneapolis /St. Paul metropolitan area,
located in Dakota County. The City encompasses approximately 36 square miles. The City is one of the
fastest growing communities in the seven county Minneapolis /St. Paul metropolitan area as demonstrated
by the following population trend:
vi
Population Percent
Population Increase Increase
2010 Census 21,874 7,255 50%
2000 Census 14,619 5,997 70%
1990 Census 8,622 3,539 70%
1980 Census 5,083 1,049 26%
1970 Census 4,034
Rosemount has an extensive system of State and County highways and 103 miles of city streets that
continue to contribute to the community's growth. This extensive highway network and large tracts of
attractive, developable land have made the City an ideal location for residential development and
increasingly commercial /industrial development. There is over 1,000 acres of industrial and commercially
zoned property ready for development. There is also well over 1,200 acres of property within the
Municipal Service Area (MUSA) to permit future residential growth. Rail, air, barge and freeway access
provides Rosemount's economic community with an expedient transportation system. Four major
highways link Rosemount to Minneapolis, St. Paul and the rest of the metropolitan area.
The City provides a full range of services, including police and fire protection; the construction and
maintenance of highways, streets, and other infrastructure; water, sewer, and storm water services; and
recreational activities and cultural events. Certain economic development services are provided through
the Rosemount Port Authority. The Port Authority's financial data has been presented in this financial
report as a blended component unit.
The annual budget serves as the foundation for the City's financial planning and control. All departments
of the City submit requests for appropriation to the City Administrator on or before May 1 of each year.
The City Administrator uses these requests as the starting point for developing a proposed budget. The
City Administrator then presents this proposed budget to the Council for review and adoption of a
preliminary levy by September 15 The council holds a public hearing on the proposed budget and must
adopt a final budget and levy by no later than December 20 prior to the close of the City's fiscal year.
The appropriated budget is prepared by fund, department and function. The City's department heads
may make transfers of appropriations within a department; transfers of appropriation between
departments require approval of the City Council. Budget -to- actual comparisons are provided in this
report for each individual governmental fund for which an appropriated annual budget has been
adopted. For the general fund, this comparison is presented on pages 56 -57 as part of the Required
Supplementary Information.
Factors Affecting Financial Condition
The information presented in the financial statements is perhaps best understood when it is considered
from the broader perspective of the specific environment within which the City operates.
Local economy Rosemount is unique in that a significant portion of the community is currently
undeveloped. The eastern two- thirds of the City is currently agricultural with the western one -third having
urban development. The rural areas have been considered in the City's 2030 Comprehensive Plan and
for the first time future urbanization is projected east of State Highway 52. The fifteen largest taxpayers
comprise a mix of residential, industrial, commercial and utilities that represent approximately 16.94% of
the City's tax base.
Labor market data is very impressive for the State, Minneapolis /St. Paul metropolitan area and Dakota
County, in which Rosemount is located. 2010 labor force numbers were 2,939,883; 1,843,678; and
231,254 respectively with unemployment rates of 6.8 6.5% and 6.3% to match. These figures compare
quite favorably with national figures.
Community leadership has preserved 440 beautiful acres of land for 27 parks. Residents can enjoy a
round of golf on a 27 -hole public course. Bordered by the scenic Mississippi River, Rosemount also
contains 270 acres of the Spring Lake Regional Park Preserve. Rosemount's Community Center, a part
of the Army National Guard's regional headquarters, provides a variety of indoor recreation opportunities
and meeting spaces, including an ice arena, gymnasium, auditorium and banquet facility.
Given the underlying strength of the economy in the seven county metropolitan area, the diversification of
tax and employment bases and Rosemount's desirable location, the future outlook is very optimistic.
Long -term financial planning Growth and development is guided by the City's adopted Comprehensive
Plan. The City has drafted a new 2030 Plan in accordance with State law which projects development for
the next 20 years. The Plan anticipates up to 6,500 more acres of urbanized development; encompassing
residential, commercial and industrial growth. The new Comprehensive Plan continues to promote
orderly development and growth which will perpetuate a sound tax base.
Other factors New housing starts continued to be flat in 2010. The majority of new housing continues to
be detached single family units with some small lot single family development also. In total, 80 new units
were approved in 2010, comparable to 2009's 88 permits. In the fall of 2010 and into early 2011, there
has been some renewed interest in residential development. Several national builders have been
meeting with staff to initiate new residential subdivisions to allow for 2011 construction.
The overall construction valuation for 2010 increased slightly as compared to 2009. This increase can be
directly attributed to Flint Hills Refinery's continued reinvestment into their complex. In 2010, 2.5 million
dollars of value was added to the site through three large construction projects. Institutional users in the
City continue to implement larger capital projects and the City also experienced some larger commercial
projects; either remodeling existing space or adding new retail users in the community. In total, the total
building permit valuation for all construction in 2010 was $32,177,918.
vii
Cartegraph and GIS Department staff continues to use Cartegraph and GIS in daily activities. Most of
the utility activities are set up with GIS /Cartegraph integration so the crews can update information in the
field as they perform routine maintenance (sewer cleaning, hydrant flushing, sump cleaning, etc.). Our
focus in 2010 was to upgrade and modify the existing systems in an effort to improve our efficiency and
effectiveness.
Capital Improvement Projects The Public Works Department coordinated and /or completed several
improvement projects, including roof inspections at Fire Station #1 and the Public Works maintenance
garage, roof maintenance at City Hall, and interior and exterior painting at the Public Works maintenance
garage. Several park improvements were also completed, including new playground borders at Camfield
and Kidder parks, and tennis court and basketball court resurfacing at Dallare and Bloomfield parks.
2010 Street Improvements The 2010 Street Improvement Project consisted mainly of mill overlay
improvements to 10.5 miles of streets in the Country Hills and Le Foret neighborhoods, as well as
Shannon Parkway between Connemara Trail and McAndrews Road. Trail and sidewalk segments were
also added along portions of Shannon Parkway, Connemara Trail and other neighborhood streets
throughout the project area. Trail and sidewalk segments were also added along portions of Shannon
Parkway, Connemara Trail and other neighborhood streets throughout the project area.
Additional pavement management improvements included 3.5 miles of roads that received a crack seal
and sealcoat finish, as well as parking lot sealcoating improvements at Fire Station #2, Bloomfield Park
and Meadows Park.
Construction Projects
The Engineering Division coordinated the work on several construction projects in 2010:
Glendalough 3rd Addition This development, which includes 29 single family homes, is the next -to -last
addition in the Glendalough development. The final phase, Glendalough 4 will be completed in 2011.
Rosewood Village 3 Addition This development includes six detached townhomes and a private cul-
de -sac.
Akron Avenue Improvements Surface improvements were completed in 2010 and the road was
reopened to traffic. Improvements to Akron Avenue included widening and paving, adding curb gutter,
adding bituminous trails, and upgrading the railroad crossing to comply with federal standards in
anticipation of a quiet zone.
County /State Road Improvements The City helped coordinate a major mill overlay project with
MnDOT for Trunk Highway 3 (TH3) through Rosemount. In conjunction with this project, a right -turn lane
was added on southbound TH3 at 143` Street West and a new signal configuration was implemented at
the intersection of TH3 and 145 Street West. The new configuration includes protected left-turn lanes in
all directions and new crosswalk activation signals.
Quiet Zone Improvements were completed at the at -grade railroad crossings on 145 Street West,
Biscayne Avenue and Akron Avenue. These improvements were made to comply with federal safety
standards in anticipation of a quiet zone. Upon approval from the Federal Rail Authority, the quiet zone is
expected to be implemented in the summer of 2011.
viii
The Police Department provides comprehensive law enforcement services to the community. By working
with residents and businesses, the Department strives to maintain a safe environment. Specific efforts of
the Department In 2010 included:
Patrol officers are assigned to specific geographic beats to patrol. This is done in an effort to get the
officers more familiar with the residents and issues within the area that they patrol on a daily basis.
After becoming more familiar with area issues, it is expected that officers will develop plans to
address crime or livability issues within their neighborhood.
Community Education and Outreach Programs
School Involvement The Department has officers working in both Rosemount High School
and Rosemount Middle School as school resource officers (SRO). The SROs' main duties
are education and intervention but they also do investigate criminal activity that occurs within
the schools or involves students who attend the schools. In the elementary schools, an
officer works cooperatively with the school social worker to make classroom presentations
across all grades.
Night to Unite Police and fire officials, along with City Council members, visit
neighborhoods on the first Tuesday of August as part of this nationwide event. The event
continues to grow each year and provides an opportunity for police, fire and city officials to
interact with residents within their own neighborhoods.
Child Safety Seat Clinics and Checks Several officers are specially trained in the proper
installation and use of child restraint seats. Residents, often new parents, make appointments
to have their seats checked by the officers.
Presentations and Cooperation The Police Department makes public presentations on
crime and crime prevention when requested by community members and groups. A weekly
"Coffee- with -a -Cop" is held at coffee shops within the community to give citizens another
forum to ask questions and seek information about police and crime topics.
The Department partners with other Dakota County law enforcement agencies to provide services in
a more effective and efficient manner. This includes participation on a joint tactical team, drug task
force and a county -wide dispatch center.
The Department has a strong emphasis on traffic enforcement, particularly DWI enforcement. Along
with all other law enforcement agencies within the County, Rosemount supports and participates in
the Dakota County Traffic Safety Project. This project concentrates traffic enforcement in a different
area of the county each week and all agencies work traffic enforcement in the selected area.
In 1999, a Family Resource Center building in Rosemount began operations. The 360° Communities
organization (formerly the Community Action Council (CAC)) and other service providers utilize this
building to work with families in need in our community. The City constructed the building with funding
coming entirely from grants and donations and leases the building to 360° Communities to house their
Rosemount operations.
City's financial policies During the current year, none of the City's financial polices had a significant
impact on the financial statements.
ix
Awards and Acknowledgements
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a
Certificate of Achievement for Excellence in Financial Reporting to the City of Rosemount for its
comprehensive annual financial report (CAFR) for the fiscal year ended December 31, 2009. This was the
fourteenth consecutive year that the City has achieved this prestigious award. In order to be awarded a
Certificate of Achievement, a government must publish an easily readable and efficiently organized
comprehensive annual financial report. This report must satisfy both generally accepted accounting
principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual financial report continues to meet the Certificate of Achievement Program's
requirements and we are submitting it to the GFOA to determine its eligibility for another certificate.
The preparation of this report on a timely basis could not have been accomplished without the efficient
and dedicated services of the Finance Department. We would like to express our appreciation to all
members of City staff who assisted and contributed to the preparation of this report. We would also like
to express our appreciation to the Mayor and the members of the City Council for their interest and
support in planning and conducting the financial operations of the City in a responsible and progressive
manner.
Respectful s itted,
Joffre A.! ay
Finance Director
x
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Rosemount
Minnesota
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
December 31, 2009
A Certificate of Achievement for Excellence in Financial
Reporting is presented by the Government Finance Officers
Association of the United States and Canada to
government units and public employee retirement
systems whose comprehensive annual financial
reports (CAFRs) achieve the highest
standards in government accounting
and financial reporting.
c
oO
E ca
c
O O
LL C
4+- N
O 'c
tt
U
ELECTED OFFICIALS:
Mayor Bill Droste
Councilmember Kim Shoe Corrigan
Councilmember Mark DeBettignies
Councilmember Kurt Bills
Councilmember Jeff Weisensel
APPOINTED OFFICIALS:
City Administrator
Finance Director
Assistant City Administrator
City Engineer
Community Development Director
Police Chief
Fire Chief
Parks and Recreation Director
CONSULTANTS AND ADVISORS:
Legal
Auditing
Fiscal
Engineering
CITY OF ROSEMOUNT
CITY OFFICIALS
Year Ended December 31, 2010
Term of Office
Four Years
Four Years
Four Years
Four Years
Four Years
Dwight D. Johnson
Jeffrey A. May
Emmy Foster
Andrew Brotzler
Kim Lindquist
Gary D. Kalstabakken
Scott W. Aker
Dan Schultz
Kennedy Graven
Fluegel Law Firm, P.A.
Baker Tilly Virchow Krause, LLP
Springsted, Inc.
Ehlers Associates, Inc.
WSB Associates
Term Expires
December 31, 2010
December 31, 2010
December 31, 2010
December 31, 2012
December 31, 2012
To The Honorable Mayor and Members of the City Council
City of Rosemount, Minnesota
INDEPENDENT AUDITORS' REPORT
BAKER TILLY
VIRCHOW KRAUSE, LLP
Baker Tilly Virchow Krause, LLP
225 S Sixth St, Ste 2300
Minneapolis, MN 55402 -4661
tel 612 876 4500
fax 612 238 8900
bakertilly.com
We have audited the accompanying financial statements of the govemmental activities, the business -type activities, each
major fund, and the aggregate remaining fund information of the City of Rosemount, Minnesota, as of and for the year
ended December 31, 2010, which collectively comprise the City's basic financial statements as listed in the table of
contents. These financial statements are the responsibility of the City of Rosemount's management. Our responsibility is to
express opinions on these financial statements based on our audit. The prior year summarized comparative information has
been derived from the City's 2009 financial statements and, in our report dated May 3, 2010, we expressed unqualified
opinions on the respective financial statements of the govemmental activities, the business -type activities, each major fund,
and the aggregate remaining fund information.
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 Govemment 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 of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our 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 Rosemount, Minnesota, as of December 31, 2010, and the respective changes in financial position
and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Govemment Auditing Standards, we have also issued a report dated May 12, 2011, on our consideration
of City of Rosemount's intemal control over financial reporting and our tests of its compliance with certain provisions of laws,
regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our
testing of intemal control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on the intemal control over financial reporting or on compliance. That report is an integral part of an audit performed
in accordance with Govemment Auditing Standards and should be considered in assessing the results of our audit.
The management's discussion and analysis on pages 2 through 10 and the budgetary comparison schedules on pages 56
through 58 are not required parts of the basic financial statements, but are supplementary information required by the
Govemmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of
inquiries of management regarding the methods of measurement and presentation of the required supplementary
information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City
of Rosemount's basic financial statements. The introductory section, combining and individual fund statements and
schedules, and statistical tables, as listed in the table of contents, are presented for purposes of additional analysis and are
not a required part of the basic financial statements. The combining and individual fund statements and schedules have
been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements taken as a whole. The introductory section and
statistical tables have not been subjected to the auditing procedures applied in the audit of the basic financial statements
and, accordingly, we express no opinion on them.
Minneapolis, Minnesota
May 12, 2011
eir an dependent member of
BAKER TILLY
INTERNATIONAL
Page 1
Management's Discussion and Analysis (Unaudited)
As management of the City of Rosemount (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, 2010. We encourage
readers to consider the information presented here in conjunction with the City's financial statements following this
section.
Financial Highlights
The assets of the City exceeded it's liabilities at the close of the most recent fiscal year by $178,099,028 (net
assets). Of this amount, $34,148,354 (unrestricted net assets) may be used to meet the government's ongoing
obligations to citizens and creditors.
The City's total net assets increased by $6,668,191. Most of this increase is attributable to an increase of our
capital assets which were funded by grants.
At year end, unreserved fund balance for the general fund, net of $922,229 designated for compensated
absences, was $5,731,123, or 55 percent of the total general fund expenditures budgeted for the upcoming year.
Comparison of this balance to prior years' balances is illustrated on the table on page 8.
The City's total debt increased by $320,000 (1.3 percent) during the current year. The reason for this increase
was that there were two new debt issuances for refundings of current debt, offset by scheduled payments on
existing debt.
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 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.
The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the
two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether
the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the government's net assets changed during the most
recent fiscal year. All changes in net assets 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 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, recreation, and community development. The business-
type activities of the City include water, sewer, storm water and an ice arena.
The government -wide financial statements include not only the City itself, but also a legally separate port authority, which
functions as the economic development arm of the City, and therefore has been blended in with the primary government.
The government -wide financial statements can be found on pages 11 -12 of this report.
Page 2
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 three categories: governmental funds, proprietary funds, and fiduciary 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 the near -term inflows and outflows of spendable resources,
as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in
evaluating a government's near -term financing 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
government's near -term financing decisions. Both the governmental fund balance sheet and governmental fund statement
of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between
governmental funds and governmental activities.
Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of
revenues, expenditures, and changes in fund balances for the general fund, debt service fund, capital project fund, and
the Port Authority TIF fund all of which are considered major funds. Data from the four 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 combining statements elsewhere in this report.
The City adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been
provided for the general fund to demonstrate compliance with this budget.
The basic govemmental fund financial statements can be found on pages 13 -15 of this report.
Proprietary funds. The City maintains two different types of proprietary funds. 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 public utilities and ice arena operations. The internal service fund is an accounting
device to accumulate and allocate costs internally among the City's various functions. The City uses its intemal service
fund to account for insurance premiums and deductibles and to accumulate resources for the risk of uninsured loss.
Because this service predominantly benefits governmental rather than business -type functions, it has been included within
governmental activities in the government -wide financial statements.
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 each of the public utilities, which are considered
to be major funds of the City, and information on the ice arena fund, which is considered a non -major fund. The internal
service fund is also presented separately in the proprietary fund financial statements.
The basic proprietary fund financial statements can be found on pages 16 -19 of this report.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government.
Fiduciary funds are not reflected in the government -wide financial statements because the resources of those funds are
not available to support the City's own programs.
The City had one fiduciary fund for the year ended December 31, 2010.
Page 3
Notes to the financial statements. The notes provide additional information that is essential to a full understanding of
the data provided in the government -wide and fund financial statements. The notes to the financial statements can be
found on pages 21 -55 of this report.
Other information. The combining statements referred to earlier in connection with nonmajor governmental funds are
presented following the basic financial statements. Combining and individual fund statements and schedules can be found
on pages 59 -64 of this report.
Government -wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government's financial position. In the case of
the City, assets exceeded liabilities by $178,099,028 at the close of the most recent fiscal year.
The largest portion of the City's net assets (78 percent) reflects its investment in capital assets (e.g., land, buildings,
machinery and equipment, infrastructure) 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 for future spending.
Although the City's investment in 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.
Net assets:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total net assets
Governmental
Activities
Current and other assets 22,970,463
Capital assets 65,328,286
Total assets 88,298,749
Long -term liabilities outstanding 17,996,519
Other liabilities 1,287,485
Total liabilities 19,284,004
City of Rosemount's Net Assets
Business -Type
Activities
49,563,765 89,025,234
5,361,675
14,089,305 20,059,049
69,014,745 109,084,283
2010
Totals
Governmental
Activities
20,482,019 43,452,482 21,710,664
95,986,089 161,314,375 58,908,024
116,468,108 204,766,857 80,618,688
7,148,694 25,145,213 18,419,139
235,131 1,522,616 1,234,183
7,383,825 26,667,829 19,653,322
138,588,999
5,361,675
34,148,354
178,099,028
41,347,888
4,637,711
14,979,767
Business -Type 2009
Activities Totals
18,894,909 40,605,573
98,110,169 157,018,193
117,005,078 197,623,766
6,324,588 24,743,727
215,019 1,449,202
6 539 607 26.192.929
91,948,323 133,296,211
4,637,711
18,517,148 33,496,915
110,465,471 17 1,430,837
An additional portion of the City's net assets (3 percent) represents resources that are subject to external restrictions on
how they may be used. The remaining balance of unrestricted net assets ($34,148,354) may be used to meet the
government's ongoing obligations to citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, both
for the government as a whole, as well as for its separate governmental and business -type activities.
Page 4
Governmental activities. Governmental activities increased the City's net assets by $8,049,379, accounting for 120
percent of the total growth in the government's net assets. This compares to an increase of $2,353,357 in 2009.
Revenues increased by approximately $3,800,000 resulting mostly from a large increase in grant proceeds for projects
completed in 2010. Expenses stayed relatively flat with a decrease of approximately $350,000.
Business -type activities. Business -type activities decreased the City's net assets by $1,381,188, accounting for a 20
percent decrease of the total growth in the government's net assets. This compares to an increase of $619,564 in 2009.
The primary reasons for the current year decrease is an increase in the net transfers to governmental activities and a
decrease of approximately $1,200,000 in the capital grants and contributions received in 2009 for the storm water utility.
Elements of these changes are as follows:
Revenues:
Program revenues:
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues:
Property taxes
Other taxes
Investment income
Other
Total revenues
Expenses:
General government
Public safety
Public works
Recreation
Community development
Interest on long -term debt
Water
Sewer
Storm water
Arena
Total expenses
Increase in net assets before
transfers and extraordinary item
Transfers
Special item loss on disposal of
capital assets
Increase in net assets
Net assets Beginning of Year
Net assets End of Year
Governmental
Activities
2,107,966 4,718,952
604,560
5,350,232 229,858
11,280,620
264,808
164,474
429,150
20,201,810
2,671,886
3,819,520
4,326,903
1,477,525
149,701
690,896
13,136,431
7,065,379
984,000
City's Changes in Net Assets
Business
Type
Activities
6,826,918
604,560
5,580,090
11,280,620
264,808
315,928 480,402
429,150
25,466,548
5,264,738
2,671,886
3,819,520
4,326,903
1,477,525
149,701
690,896
1,861,467 1,861,467
2,305,503 2,305,503
1,010,678 1,010,678
484,278 484,278
5,661,926 18,798,357
(397,188) 6,668,191
(984,000)
2010 Governmental
Totals Activities
1,930,292 4,471,103
695,671
1,478,010 1,561,813
11,479,843
224,276
297,536 464,289
340,763
16,446,391 6,497,205
2,754,573
3,688,658
4,260,284
1,378,619
648,476
750,226
13,480,836
2,965,555
239,241
(851,439)
Business
Type
Activities
1,878,310
2,313,576
989,808
456,706
5,638,400
858,805
(239,241)
2009
Totals
6,401,395
695,671
3,039,823
11,479,843
224,276
761,825
340,763
22,943,596
2,754,573
3,688,658
4,260,284
1,378,619
648,476
750,226
1,878,310
2,313,576
989,808
456,706
19,119,236
3,824,360
(851,439)
8,049,379 (1,381,188) 6,668,191 2,353,357 619,564 2,972,921
60,965,366 110,465,471 171,430,837 58,612,009 109,845,907 168,457,916
69,014,745 109,084,283 178,099,028 60,965,366 110,465,471 171,430,837
Page 5
Millions 3.
2i
Expenses and Program Revenues Governmental Activities
General Government Public Safety
Public Works
Recreation
Revenues by Source Governmental Funds
Community Interest on long -term
Development debt
Special assessmen
4.3%
Fines and forfeitures
0.6%
Licenses and permits
2.3%
Public charges for
services
7.9%
Investment income and
miscellaneous
6.3%
Intergovernmental
20.8%
Expenses
Revenue
Page 6
Millions
Water
Sewer
Connection fees
9.2%
Water meters
0.6%
Charges for services
75.4%
Financial Analysis of the Government's Funds
Expenses and Program Revenues Business -Type Activities
Storm water
Revenues by Source Proprietary Funds
Ice Arena
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance related legal
requirements.
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.
Page 7
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of
$18,502,222, an increase of $877,783 in comparison with the prior year. Approximately 42 percent of this total amount
($10,767,908) constitutes unreserved fund balance, which is available for spending at the government's discretion. The
remainder of the fund balance is reserved to indicate that it is not available for new spending because it has already been
committed to 1) liquidate contracts and purchase orders of the prior year ($1,527,070), 2) pay debt service ($6,173,964),
and 3) prepaid items ($33,280).
The general fund is the chief operating fund of the City. At the end of the current fiscal year, unreserved fund balance of
the general fund was $6,686,293, while total fund balance reached $7,185,117. The following table shows year -end
general fund balances as compared to the adopted expenditure budget of the following year:
Fund Balance
Year Budget Amount Percent of Next Budget
2001 5,663,200 3,765,603 58%
2002 6,501,600 5,126,656 70%
2003 7,338,100 4,061,256 55%
2004 7,409,400 4,383,289 55%
2005 7,996,100 4,511,547 53%
2006 8,516,300 4,806,577 52%
2007 9,181,100 5,747,445 54%
2008 10,574,900 5,688,243 55%
2009 10,384,800 5,693,475 55%
2010 10,466,000 5,731,123 55%
2011 10,480,400
This amount represents the unreserved general fund balance net of amount designated for compensated absences
During the current fiscal year, unreserved fund balance in the general fund increased by $133,815. The increase was
intentional as the City has determined, through the adoption of a formal Fund Balance Policy, it would like to maintain a
maximum unreserved fund balance of 55 percent of the next general fund operating expenditure budget. Forty to fifty
percent normally provides adequate working capital to finance general fund operations until property taxes and state aids
are received. The desired unreserved fund balance level also provides a certain amount of comfort that unforeseen
emergencies can be addressed without causing an immediate financial crisis.
As of December 31, 2010, 86 percent of the unreserved fund balance of the general fund has been designated to meet
working capital needs and 14 percent has been designated to cover the compensated absences liability.
The debt service fund balance increased by $2,319,204 due to a large crossover refunding issue for 2010 that will not
have the original bond principal called until 2012. The capital projects fund balance decreased by $1,531,447 due to the
timing of project payments and an increase in spending for the year. The Port Authority TIF fund balance increased by
$166,707 due to limited spending.
Proprietary funds The City's proprietary funds provide the same type of information found in the govemment -wide
statements, but in more detail.
Unrestricted net assets of the public utilities funds at the end of the year amounted to $19,853,495 while the arena fund
had unrestricted net assets amounting to $205,554. The change in total net assets for the public utilities funds was
($1,415,755) and the increase in total net assets for the arena fund was $34,567.
Page 8
General Fund Budgetary Highlights
There were no significant variances between final budgeted revenues and actual amounts. All revenue areas experienced
either small surpluses or deficits that led to the final surplus amount. The largest variance was in the area of taxes and
that was because we discontinued budgeting anything for delinquent taxes received. The hope was that the delinquent
collections would offset any current tax delinquencies and it ended up that the current collections were high combined with
a healthy delinquent collection. We also received a one -time reimbursement of approximately $100,000 for money that
was put into a metropolitan economic development program several years ago that was discontinued in 2010. Overall, all
individual department expenditures were less than budgeted for the General Fund (with the exception of the Fleet
Maintenance budget) between 1% and 5 The Fleet Maintenance Department exceeded budgeted amounts by less than
1% due to higher than anticipated fuel 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, 2010, amounts to $161,314,375 (net of accumulated depreciation). This investment in capital assets includes land,
buildings and structures, machinery and equipment, water, sewer, and storm water systems, infrastructure and
construction in progress.
Major capital assets events during the current fiscal year included the following:
Of the capital asset additions totaling $10,141,491 for the year, developers paid for approximately $900,000 of
them.
Land
Land improvements
Buildings
Machinery and equipment
Mains and lines
Infrastructure
Construction in progress
Accumulated depreciation
Total capital assets
City of Rosemount's Capital Assets
(net of depreciation)
Governmental
Activities
8,755,355
2,262,631
15,773,925
8,515,809
46,400,979
1,576,627
(17,957,040)
65,328,286
Business -Type
Activities
2,694,451
11,085,341
2,760,978
121,675,868
1,301,106
(43,531,655)
95,986,089
Totals
11,449,806
2,262,631
26,859,266
11,276,787
121,675,868
46,400,979
2,877,733
(61,488,695)
161,314,375
Additional information on the City's capital assets can be found in Note IV.C. on pages 38 -40 of this report.
Long -term debt At the end of the current fiscal year, the City had total bonded debt outstanding of $24,045,000 (including
debt recorded in the Port Authority). Of this amount, $4,275,000 was for general obligation improvement debt which has
financed special assessment construction as part the continuing development within the City. An additional $8,860,000
was general obligation debt issued by the Port Authority which financed the City's economic development and
redevelopment programs. Another $6,965,000 was general obligation revenue bond debt issued to add to and improve
the water and storm water utility systems within the City. The remaining $3,185,000 was general obligation and general
obligation refunding debt. In addition, the City had $760,000 of equipment certificates outstanding at December 31, 2010.
The City's total debt increased by $320,000, or 1.3 percent, during the current fiscal year. The reason for this increase
was that there were two new debt issuances for refundings of current debt, offset by scheduled payments on existing
debt.
Page 9
Cities in Minnesota may issue general obligation debt up to a maximum of 3 percent of the total estimated market value of
property within the city, per state statutes. The current debt limit for the City is $65,156,863. Of the City's $24,045,000 in
outstanding general obligation debt at the current fiscal year end, $2,008,682 is subject to the restrictions placed by state
statute.
The City received a bond rating upgrade from Aa3 to Aa2 in 2010. These excellent ratings have had a positive effect on
the sale of the City's bonds.
Additional information on the City's long -term debt can be found in Note IV.E. on pages 43 -45 of this report.
Economic Factors
Dakota County's unemployment rate ended the year at 6.3 percent, which compares favorably with the state
unemployment rate of 6.8 percent, and the national unemployment rate of 9.1 percent.
City building permits were down in quantity but not value in 2010, as compared to 2009. A total of 851 permits
with a total valuation of $32,177,918 were issued in 2010.
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
information should be addressed to the Finance Director, City of Rosemount, 2875 14eh Street West, Rosemount,
Minnesota 55068 -4997.
Page 10
ASSETS
Cash and investments
Receivables (net of allowance for uncollectibles)
Taxes
Delinquent taxes
Interest
Accounts
Other
Special assessments
Due from other governmental units
Internal balances
Prepaid items
Other assets
Capital assets:
Land
Construction in progress
Land improvements
Buildings
Machinery and equipment
Infrastructure
Less: accumulated depreciation
Total Assets
LIABILITIES
Accounts payable
Accrued payroll and payroll taxes
Other accrued liabilities and deposits
Noncurrent liabilities:
Due within one year
Due in more than one year
Total Liabilities
NET ASSETS
Invested in capital assets, net of related debt
Restricted for debt service
Unrestricted
Total Net Assets
CITY OF ROSEMOUNT
STATEMENT OF NET ASSETS
December 31, 2010
(With Summarized Information for December 31, 2009)
Govemmental
Activities
19,234,228
652,265
170,201
286,517
1,780,821
873,960
(155,118)
126,915
674
8,755,355
1,576,627
2,262,631
15,773,925
8,515,809
46,400,979
(17,957,040)
88,298,749
Business
Type
Activities
18,588,654 37,822,882
206
783,681
209,526
601,115
155,118
143,719
2,694,451
1,301,106
11, 085, 341
2,760,978
121,675,868
(43, 531,655)
116,468,108
See accompanying notes to financial statements.
2010
652,265
170,201
206
1,070,198
1,990,347
1,475,075
270,634
674
11,449,806
2,877,733
2,262,631
26,859,266
11,276,787
168,076,847
(61,488,695)
204,766,857
Totals
2009
36,004,696
605,586
235,602
911,223
225,000
2,297,543
28,402
292,518
Page 11
5,003
11,284,500
6,106,685
2,087,650
26,498,189
11,194, 304
158,863,449
(59,016,584)
197,623,766
691,355 124,727 816,082 731,530
90,720 17,958 108,678 86,561
505,410 92,446 597,856 631,111
1,987,317 860,163 2,847,480 3,072,210
16,009,202 6,288,531 22,297,733 21,671,517
19,284,004 7,383,825 26,667,829 26,192,929
49, 563, 765 89, 025, 234 138, 588, 999 133, 296, 211
5,361,675 5,361,675 4,637,711
14,089,305 20,059,049 34,148,354 33,496,915
69,014,745 109,084,283 178,099,028 171,430,837
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69
CITY OF ROSEMOUNT
BALANCE SHEET GOVERNMENTAL FUNDS
December 31, 2010
Port Other Total
Authority Govemmental Governmental
General Debt Service Capital Projects TIF Funds Funds
ASSETS
Cash and investments 7,112,256 6,161,165 4,705,652 427,615 142,206 18,548,894
Receivables from:
Taxes 819,872 2,594 822,466
Accounts 72,925 213,793 125 286,843
Special assessments 25,500 743,349 955,691 1,724,540
Delinquent special assessments 273 48,741 7,267 56,281
Due from other govemmental units 11,313 862,647 873,960
Prepaid items 33,280 33,280
Total assets 8,075,419 6,953,255 6,745,050 430,334 142,206 22,346,264
UABILITIES AND FUND BALANCES
Liabilities
Accounts payable
Accrued payroll and payroll taxes
Deposits payable
Deferred revenue
Advances from other funds
Total liabilities
298,492 377,844 1,050 387 677,773
90,720 90,720
224,333 224,333
276,757 779,291 1,640,050 2,696,098
155,118 155,118
890,302 779,291 2,173,012 1,050 387 3,844,042
Fund Balances
Reserved for:
Debt service 6,173,964 6,173,964
Encumbrances 465,544 1,061,526 1,527,070
Prepaid items 33,280 33,280
Unreserved and designated, reported in:
General fund 6,653,352 6,653,352
Capital projects 3,510,512 3,510,512
Special revenue funds 6,900 6,900
Unreserved and undesignated, reported in:
General fund 32,941 32,941
Special revenue funds 429,284 134,919 564,203
Total fund balances 7,185,117 6,173,964 4,572,038 429,284 141,819 18,502,222
Total liabilities and fund balances 8,075,419 6,953,255 6,745,050 430,334 142,206
Amounts reported for govemmental activities in the statement of net assets are different because:
Capital assets used in governmental funds are not financial resources and, therefore, are not reported in the funds. 65,328,286
Some receivables that are not currently available are reported as deferred revenue in the fund financial
statements but are recognized as revenue when eamed in the govemment -wide statements. 2,696,098
Internal service funds are reported in the statement of net assets as govemmental activities. 765,069
Some liabilities, including long -term debt, are not due and payable in the current period and, therefore, are not
reported in the funds. See Note ILA (18,276,930)
NET ASSETS OF GOVERNMENTAL ACTIVITIES 69,014,745
See accompanying notes to financial statements.
Page 13
CITY OF ROSEMOUNT
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
For the Year Ended December 31, 2010
Port Other Total
Authority Governmental Governmental
General Debt Service Capital Projects TIF Funds Funds
REVENUES
Taxes 8,737,430 809,111 1,225,633 448,253 50,000 11,270,427
Intergovernmental 306,892 3,602,910 141,841 4,051,643
Public charges for services 955,534 583,937 720 1,540,191
Licenses and permits 453,900 453,900
Fines and forfeitures 113,675 8,719 122,394
Special assessments 9,563 362,245. 460,878 832,686
Investment income and miscellaneous 286,336 13,090 921,595 2,483 674 1,224,178
Total Revenues 10,863,330 1,193,165 6,794,953 592,577 51,394 19,495,419
EXPENDITURES
Current:
General government 2,323,216 4,730 40,543 2,368,489
Public safety 3,306,466 59,826 208 3,366,500
Public works 2,756,407 34,732 11,298 3,330 2,805,767
Parks and recreation 1,239,742 1,239,742
Conservation and development 139,965 139,965
Capital Outlay 1,604 7,802,970 3,690 7,808,264
Debt Service:
Principal retirement 1,840,000 1,840,000
Interest and fiscal charges 440,864 8,529 277,485 726,878
Total Expenditures 9,627,435 2,315,596 7,882,623 425,870 44,081 20,295,605
Excess (deficiency) of revenues
over expenditures 1,235,895 (1,122,431) (1,087,670) 166,707 7,313 (800,186)
OTHER FINANCING SOURCES (USES)
Issuance of refunding debt 1,355,000 1,355,000
Sale of capital assets 12,505 12,505
Transfers in 3,500 2,086,635 999,151 3,089,286
Transfers out (1,323,389) (1,455,433) (2,778,822)
Total Other Financing Sources (1,319,889) 3,441,635 (443,777) 1,677,969
Net Change in Fund Balance (83,994) 2,319,204 (1,531,447) 166,707 7,313 877,783
FUND BALANCES Beginning 7,269,111 3,854,760 6,103,485 262,577 134,506 17,624,439
FUND BALANCES ENDING 7,185,117 6,173,964 4,572,038 429,284 141,819 18,502,222
See accompanying notes to financial statements.
Page 14
CITY OF ROSEMOUNT
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2010
Net change in fund balances total governmental funds 877,783
Amounts reported for governmental activities in the statement of activities
are different because:
Governmental funds report capital outlays as expenditures. However, in the
statement of net assets the cost of these assets is capitalized and they are
depreciated over their estimated useful lives with depreciation expense reported
in the statement of activities.
Capital outlay is reported as an expenditure in the fund financial statements
but is capitalized in the government -wide financial statements 7,808,264
Less: Some items reported as capital outlay but not capitalized (277,503)
Depreciation is reported in the government -wide statements (1,720,835)
Utility infrastructure constructed by capital projects funds not reported
as governmental activities (1,284,922)
Capital outlay constructed by utility funds is capitalized
within governmental activities in the government -wide statements 2,015,997
In the statement of activities, the gain or loss ($108,234) on the disposal of
capital assets is reported. In the fund financial statements, proceeds from the sale
of capital assets ($12,505) are reported because the proceeds increase
financial resources (120,739)
Internal service funds are reported in the statement of activities. (22,856)
Receivables not currently available are reported as deferred revenue in the fund financial
statements but are recognized as revenue when earned in the government -wide
financial statements. 331,234
Issuing debt provides current financial resources to governmental funds, but issuing
debt increases Tong -term liabilities in the statement of net assets.
This is the amount of debt issued during the year. (1,355,000)
Repayment of debt principal is an expenditure in the governmental funds, but the
repayment reduces long -term liabilities in the statement of net assets. This is the amount
of principal payments paid. 1,840,000
Governmental funds report the effect of issuance costs, premiums, discounts, and similar
items when debt is first issued, whereas these amounts are deferred and amortized in the
statement of activities.
Some expenses in the statement of activities do not require the use of
current financial resources and, therefore, are not reported as expenditures
in the governmental funds. This is the change in the following liabilities.
Compensated absences
Accrued interest on debt
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES
See accompanying notes to financial statements.
112
(62,489)
20,333
8,049,379
Page 15
Total Assets
TOTAL NET ASSETS
CITY OF ROSEMOUNT
STATEMENT OF NET ASSETS PROPRIETARY FUNDS
December 31, 2010
Business -Type Activities Enterprise Funds
Storm Non -major
Water Sewer Water Arena
ASSETS
Current assets:
Cash and investments 6,390,434 5,912,103 6,098,152 187,965 18,588,654 685,010
Accrued interest receivable 206 206
Customer accounts receivable 327,101 290,254 166,326 783,681
Special assessments receivable 100,962 85,103 23,461 209,526
Due from other govemments 544,829 56,286 601,115
Prepaid and other assets 19,839 90,535 29,521 3,824 143,719 93,163
Total current assets 6,838,542 6,377,995 6,862,289 248,075 20,326,901 778,173
Non current assets:
Advance to other funds 219,750 219,750
Property and equipment:
Land 1,051,312 547,158 1,095,981 2,694,451
Construction in progress 628,515 332,761 339,830 1,301,106
Buildings 6,794,504 401,414 1,489,523 2,399,900 11,085,341
Mains and lines 18,490,249 15,284,811 21,909,519 55,684,579
Other improvements 16,528,701 36,927,460 12,535,128 65,991,289
Machinery and equipment 1,674,395 637,998 351,893 96,692 2,760,978
Less accumulated depreciation (11,140,699) (24,918,627) (6,612,545) (859,784) (43,531,655)
Net property and equipment 34,026,977 29,212,975 31,109,329 1,636,808 95,986,089
Total non current assets 34,026,977 29,432,725 31,109,329 1,636,808 96,205,839
40,865,519 35,810,720 37,971,618 1,884,883 116,532,740 778,173
LIABILITIES
Current liabilities:
Accounts payable 40,086 26,254 43,563 14,824 124,727
Accrued liabilities 7,655 5,278 2,008 3,017 17,958
Accrued interest 64,981 27,465 92,446
Current portion of long term obligations 643,384 33,384 171,549 11,846 860,163
Total current liabilities 756,106 64,916 244,585 29,687 1,095,294
Noncurrent liabilities:
Accrued compensated absences 36,165 36,165 12,512 12,834 97,676
General obligation debt 3,434,051 2,756,804 6,190,855
Advances from other funds 64,632 64,632
Total noncurrent liabilities 3,534,848 36,165 2,769,316 12,834 6,353,163
Total Liabilities 4,290,954 101,081 3,013,901 42,521 7,448,457
NET ASSETS
Invested in capital assets, net of related debt 29,982,926 29,212,975 28,192,525 1,636,808 89,025,234
Unrestricted 6,591,639 6,496,664 6,765,192 205,554 20,059,049 765,069
36,574,565 35,709,639 34,957,717 1,842,362 109,084,283 765,069
See accompanying notes to financial statements.
Totals
Governmental
Activities
Intemal Service
Fund
Page 16
13,104
13,104
13,104
OPERATING REVENUES
Charges for services
Water meters
Miscellaneous
Total Operating Revenues
OPERATING EXPENSES
Personnel services
Supplies
Professional services and charges
Other services and charges
Metro sewer charges
Depreciation
Total Operating Expenses
Operating Loss
NONOPERATING REVENUES (EXPENSES)
Connection fees
Taxes
Special assessments
Intergovernmental
Investment income
Net decrease in fair value of investments
Loss from disposal of capital assets
Surcharges and penalties
Interest expense and fiscal agent fees
Total Nonoperating Revenues
Income (loss) before contributions
and transfers
Capital contributions
Transfers in
Transfers out
Change in Net Assets
TOTAL NET ASSETS Beginning
TOTAL NET ASSETS ENDING
CITY OF ROSEMOUNT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND
NET ASSETS PROPRIETARY FUNDS
For the Year Ended December 31, 2010
Business -Type Activities Enterprise Funds
Storm Non -major
Water Sewer Water Arena Totals
1,369,388 1,306,193 836,024 406,797 3,918,402
32,138 32,138
1,401,526 1,306,193 836,024 406,797 3,950,540
430,574 430,318 176,601
186,545 22,370 8,790
101,070 15,698 80,051
219,883 79,424 96,999
923,221
754,642 830,405 578,251
1,692,714 2,301,436 940,692
(291,188) (995,243) (104,668) (77,481) (1,468,580) (309,770)
276,498 153,300 49,070 478,868
275,000
71,752 70,448 17,867 160,067
1,208 1,208 5,024 7,440
99,348 157,941 102,246 548 360,083 12,086
(5,873) (11,714) (26,568) (44,155) (172)
(513) (513) (513) (1,539)
274,335 11,308 3,901 289,544
(168,240) (3,554) (69,473) (241,267)
548,515 378,424 81,554 548 1,009,041 286,914
257,327 (616,819) (23,114) (76,933) (459,539)
981,616 80,136 343,060
496,855 206,798
(399,000) (2,649,072) (93,542)
1,336,798 (3,185,755) 433,202
192,285
12,660
21,158
204,154
54,021
484,278
1,404,812
115,000 818,653
(3,500) (3,145,114)
34,567 (1,381,188)
35,237,767 38,895,394 34,524,515 1,807,795 110,465,471
See accompanying notes to financial statements.
Govemmental
Activities
Intemal Service
Funds
41,905
41,905
1,229,778
230,365 5,122
217,977 35,150
600,460 311,403
923,221
2,217,319
5,419,120 351,675
(22,856)
(22,856)
787,925
36,574,565 35,709,639 34,957,717 1,842,362 109,084,283 765,069
Page 17
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ASSETS
Cash and investments
CITY OF ROSEMOUNT
STATEMENT OF NET ASSETS
FIDUCIARY FUND
December 31, 2010
LIABILITIES
Due to M.A.A.G. 68,543
See accompanying notes to financial statements.
M.A.A.G.
Agency
Fund
68,543
Page 20
CITY OF ROSEMOUNT
INDEX TO NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE Page
I. Summary of Significant Accounting Policies 22
A. Reporting Entity 22
B. Government -Wide and Fund Financial Statements 23
C. Measurement Focus, Basis of Accounting,
and Financial Statement Presentation 25
D. Assets, Liabilities, and Net Assets or Equity 27
1. Deposits and Investments 27
2. Receivables 28
3. Inventories and Prepaid Items 29
4. Capital Assets 30
5. Other Assets 31
6. Compensated Absences 31
7. Long -Term Obligations/Conduit Debt 31
8. Claims and Judgments 32
9. Equity Classifications 32
10. Prior Period Information 32
II. Reconciliation of Govemment -Wide and Fund Financial Statements 33
A. Explanation of Certain Differences Between the
Governmental Fund Balance Sheet and the Statement of Net Assets 33
1I1. Stewardship, Compliance, and Accountability 33
A. Budgetary Information 33
IV. Detailed Notes on All Funds 34
A. Deposits and Investments 34
B. Receivables 37
C. Capital Assets 38
D. interfund Receivables /Payables and Transfers 40
E. Long -Term Obligations 43
F. Net Assets /Fund Balances 46
V. Other Information 50
A. Employees' Retirement System 50
B. Risk Management 54
C. Commitments and Contingencies 55
D. Joint Powers Debt Commitment 55
E. Related Organization 56
F. Effect of New Accounting Standards on Current Period Financial Statements 56
Page 21
A. REPORTING ENTITY
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Rosemount, Minnesota (the "City") was formed and operates pursuant to applicable Minnesota laws
and statutes. The governing body consists of a five member City Council elected at large by voters of the City.
City Council members serve four -year staggered terms and the mayor serves a four -year term coinciding with
the terms of two of the Council members. Elections take place every two years.
The accounting policies of the City conform to accounting principles generally accepted in the United States of
America, as applicable to governmental units. The accepted standard- setting body for establishing
governmental accounting and financial reporting principles in the Governmental Accounting Standards Board
(GASB).
This report includes all of the funds of the City of Rosemount. The reporting entity for the City consists of (a) the
primary government, (b) organizations for which the primary government is financially accountable and (c) other
organizations for which the nature and significance of their relationship with the primary government are such
that their exclusion would cause the reporting entity's financial statements to be misleading or incomplete. A
legally separate organization should be reported as a component unit if the elected officials of the primary
government are financially accountable to the organization. The primary government is financially accountable if
it appoints a voting majority of the organization's governing body and (1) it is able to impose its will on that
organization or (2) there is a potential for the organization to provide specific financial benefits to or burdens on
the primary government. The primary government may be financially accountable if an organization is fiscally
dependent on the primary government.
A legally separate, tax exempt organization should be reported as a component unit of a reporting entity if all of
the following criteria are met: (1) the economic resources received or held by the separate organization are
entirely or almost entirely for the direct benefit of the primary government, its component units, or its
constituents; (2) the primary government is entitled to, or has the ability to otherwise access, a majority of the
economic resources received or held by the separate organization; (3) the economic resources received or held
by an individual organization that the specific primary government, or its component units, is entitled to, or has
the ability to otherwise access, are significant to that primary government. Blended component units, although
legally separate entities, are, in substance, part of the government's operations and are reported with similar
funds of the primary government.
Blended Component Unit
Rosemount Port Authority
The Port Authority serves all the citizens of the government and is governed by a board comprised of four of five
of the government's elected council and three citizens appointed at large. The bond issuance authorizations are
approved by the govemment's council and the legal liability for the general obligation portion of the Port
Authority's debt remains with the government. The Port Authority is reported in the special revenue fund and in
the debt service fund. Separate financial statements have not been prepared for the Rosemount Port Authority.
Page 22
Government -Wide Financial Statements
Fund Financial Statements
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
The statement of net assets and statement of activities display information about the reporting government as a
whole. They include all funds of the reporting entity except for fiduciary funds. The statements distinguish
between governmental and business -type activities. Governmental activities generally are financed through
taxes, intergovernmental revenues, and other nonexchange revenues. Business -type activities are financed in
whole or in part by fees charged to external parties for goods or services.
The statement of activities demonstrates the degree to which the direct expenses of a given function, or
segment, are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
function or segment. The City does not allocate indirect expenses to functions in the statement of activities.
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 segment, and 2) grants and contributions that are
restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other
items not included among program revenues are reported as general revenues. Internally dedicated resources
are reported as general revenues rather than as program revenues.
Financial statements of the reporting entity are organized into funds, each of which is considered to be a
separate accounting entity. Each fund is accounted for by providing a separate set of self balancing accounts,
which constitute its assets, liabilities, net assets /fund equity, revenues, and expenditure /expenses.
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.
Funds are organized as major funds or non -major funds within the governmental and proprietary statements. An
emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered
major if it is the primary operating fund of the City or meets the following criteria:
a. Total assets, liabilities, revenues, or expenditures /expenses of that individual governmental or
enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type,
and
b. The same element of the individual governmental fund or enterprise fund that met the 10 percent test is
at least 5 percent of the corresponding total for all governmental and enterprise funds combined.
c. In addition, any other governmental or enterprise fund that the City believes is particularly important to
financial statement users may be reported as a major fund.
Page 23
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS (cont.)
Fund Financial Statements (cont.)
The City reports the following major governmental funds:
General Fund accounts for the City's primary operating activities. It is used to account for all financial
resources except those required to be accounted for in another fund.
Debt Service Fund accounts for resources accumulated and payments made for principal and interest
on long -term debt other than tax increment district or enterprise fund debt.
Capital Projects Fund accounts for proceeds from long -term borrowing and other resources to be used
for capital improvement projects. The capital projects fund consists of one primary fund and three
separate internal funds maintained by the City.
Port Authority TIF Fund accounts for the activities of the City's Downtown Brockway TIF District.
The City reports the following major enterprise funds:
Water Utility accounts for operations of the water system.
Sewer Utility accounts for operations of the sewer system.
Storm Water Utility accounts for operations of the storm water drainage system.
The City reports the following non -major governmental and enterprise funds:
Special Revenue Funds used to account for the proceeds of specific revenue sources (other than
major capital projects) that are legally restricted to expenditures for specified purposes.
Tree Disease Grant Program Fund
Fire Safety Education Fund
GIS Fund
Port Authority General Fund
Enterprise Funds may be used to report any activity for which a fee is charged to external uses for
goods or services, and must be used for activities which meet certain debt or cost recovery criteria.
Arena Fund accounts for the activities of the City's ice arena operations.
Page 24
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS (cont.)
Fund Financial Statements (cont.)
In addition, the City reports the following fund types:
Internal service funds are used to account for the financing of goods and services provided by one
department or agency to other departments or agencies of the City on a cost reimbursement basis.
Insurance Fund accumulates resources to pay deductibles and uninsured claims, and pays
for a majority of the general liability insurance and workers compensation insurance premiums
for the City.
Agency funds are used to account for assets held by the City in a trustee capacity or as an agent for
individuals, private organizations, and /or other governmental units.
M.A.A.G Fund funds are held on behalf of the Mutual Aid Assistance Group (M.A.A.G.) which
is a cooperative of various Dakota County police departments.
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
Government -Wide Financial Statements
The government -wide statement of net assets and statement of activities are reported using the economic
resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting,
revenues are recognized when earned and expenses are recorded when the liability is incurred or economic
asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange
like transactions are recognized when the exchange takes place. 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 are met. Special assessments are recorded as revenue when earned.
Unbilled receivables are recorded as revenues when services are provided.
The business -type activities follow all pronouncements of the Governmental Accounting Standards Board, and
have elected not to follow Financial Accounting Standards Board guidance issued after November 30, 1989.
As a general rule, the effect of interfund activity has been eliminated from the government -wide financial
statements. Exceptions to this general rule are charges between the City's water and sewer utility and various
other functions of the government. Elimination of these charges would distort the direct costs and program
revenues reported for the various functions concerned.
Page 25
Fund Financial Statements
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (cont.)
Governmental fund financial statements are reported using the current financial resources measurement focus
and the modified accrual basis of accounting. Revenues are recorded when they are both measurable and
available. Available means collectible within the current period or soon enough thereafter to be used to pay
liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected
within 60 days of the end of the current fiscal period. Expenditures are recorded when the related fund liability is
incurred, except for unmatured interest on long -term debt, claims, judgments, compensated absences, and
pension expenditures, which are recorded as a fund liability when expected to be paid with expendable available
financial resources.
Property taxes are recorded as receivables in the year levied. They are recognized as revenues when collected
in the current year and in the first 60 days of the succeeding year.
Intergovernmental aids and grants are recognized as revenues in the period the City is entitled the resources
and the amounts are available. Amounts owed to the City which are not available are recorded as receivables
and deferred revenues. Amounts received prior to the entitlement period are also recorded as deferred
revenues.
Special assessments are recorded as revenues when they become measurable and available as current assets.
Annual installments due in future years are reflected as receivables and deferred revenues.
Revenues susceptible to accrual include property taxes, miscellaneous taxes, public charges for services,
special assessments and interest. Other general revenues such as fines and forfeitures, inspection fees,
recreation fees, and miscellaneous revenues are recognized when received in cash or when measurable and
available under the criteria described above.
The City reports deferred revenues on its governmental funds balance sheet. Deferred revenues arise from
taxes levied in the current year which are for subsequent year's operations. For governmental fund financial
statements, deferred revenues arise when a potential revenue does not meet both the "measurable" and
"available" criteria for recognition in the current period. Deferred revenues also arise when resources are
received before the City has a legal claim to them, as when grant monies are received prior to the incurrence of
qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the City
has a legal claim to the resources, the liability for deferred revenue is removed from the balance sheet and
revenue is recognized.
Proprietary fund financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting, as described previously in this note. Agency funds follow the accrual basis of
accounting, and do not have a measurement focus.
Page 26
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION (cont.)
Fund Financial Statements (cont.)
The enterprise funds follow all guidance of the Governmental Accounting Standards Board, and have elected
not to follow Financial Accounting Standards Board pronouncements issued after November 30, 1989. The
proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues
and expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund's principal ongoing operations. The principal operating revenues of the water, sewer, storm
water, and arena funds are charges to customers for sales and services. Special assessments are recorded as
receivables and contribution revenue when levied. Operating expenses for proprietary 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.
All Financial Statements
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenditures /expenses during the reporting period. Actual results could differ from those
estimates.
D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY
1. Deposits and Investments
For purposes of the statement of cash flows, the City considers all highly liquid investments with an initial
maturity of three months or less when acquired to be cash equivalents.
Investment of City funds is restricted by state statutes. Available investments are limited to:
1. Direct obligations or obligations guaranteed by the United States or its agencies, commercial paper,
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 or certain Minnesota brokers/dealers.
2. General obligations of the State of Minnesota or any of its municipalities.
3. Bankers acceptances of United States banks eligible for purchase by the Federal Reserve System.
4. Shares of investment companies registered under the Federal Investment Company Act of 1940 and
whose only investments are direct obligations guaranteed by the United States or its agencies.
Page 27
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (cont.)
1. Deposits and Investments (cont.)
The City has adopted an investment policy. The policy contains the following guidelines:
Credit Risk The policy follows state statutes for allowable investments except that it does not
permit the purchase of shares of investment companies registered under the Federal Investment
Company Act of 1940 whose only investments are direct obligations guaranteed by the United
States or its agencies.
Concentration of Credit Risk The policy does not limit the amount the City may invest in any
one issuer.
Interest Rate Risk As a means of limiting its exposure to fair value losses arising from rising
interest rates, the City's investment policy limits the amount of investments with maturities of more
than five years to 35% of the City's total investment portfolio (including certificates of deposit).
Investments that are Highly Sensitive to Interest Rate Changes The policy does not address
interest rate sensitivity.
Investments are stated at fair value, which is the amount at which an investment could be exchanged in a
current transaction between willing parties. Fair values are based on quoted market prices. No investments are
reported at amortized cost. Adjustments necessary to record investments at fair value are recorded in the
operating statement as increases or decreases in investment income. Investment purchases are charged and
maturities are deposited to the consolidated bank account. The purpose of this consolidation is to reduce
administrative costs and to provide a single cash balance available for the maximization of investment earnings.
Each fund shares in the investment earnings according to its average cash and investment balances. Cash is
transferred from those funds with available cash resources to cover any negative cash balances in other funds
at year -end. The difference between the bank balance and carrying value is due to outstanding checks and /or
deposits in transit.
See Note IV.A. for further information.
2. Receivables
Property tax levies are set by the City Council in the fall each year and are certified to Dakota County for
collection in the following year. In Minnesota, counties act as collection agents for all property taxes.
The County spreads all levies over taxable property. Such taxes become a lien on January 1 and are recorded
as receivables by the City at that date. Property taxes are accrued and recognized as revenue in the year
collectible, net of delinquencies.
Real property taxes may be paid by taxpayers in two equal installments on May 15 and October 15. Personal
property taxes may be paid on February 28 and June 30. The County provides tax settlements to the City five
times per year, in January, April, June, July and December.
Page 28
3. Inventories and Prepaid Items
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (cont.)
2. Receivables (cont.)
Taxes which remain unpaid 60 days after year end are classified as delinquent taxes receivable and are fully
offset by deferred revenue because they are not known to be available to finance current expenditures.
Special assessments are levied against the benefited properties for the assessable costs of special
assessments improvement projects in accordance with state statutes. The City usually adopts the assessment
rolls when the individual projects are complete. The assessments are collectible over a term of years generally
consistent with the term of years of the related bond issue. Collection of annual installments (including interest)
is handled by the County in the same manner as property taxes. Property owners are allowed to prepay total
future installments without interest or prepayment penalties.
Special assessments receivable includes the following components:
Current amount collected by Dakota County and not remitted to the City.
Delinquent amounts billed to property owners but not paid.
Deferred assessment installments, which will be billed to property owners in future years.
Other assessments for which payment has been postponed based on council action.
Accounts receivable are considered to be 100% collectible.
During the course of operations, transactions occur between individual funds that may result in amounts owed
between funds. Short-term interfund loans are reported as "due to and from other funds." Long -term interfund
loans (noncurrent portion) are reported as "advances from and to other funds." Interfund receivables and
payables between funds within governmental activities are eliminated in the statement of net assets. Any
residual balances outstanding between the governmental activities and business -type activities are reported in
the government -wide financial statements as "internal balances
In the governmental fund financial statements, advances to other funds are offset equally by a fund balance
reserve account which indicates that they do not constitute expendable available financial resources and,
therefore, are not available for appropriation.
Governmental fund inventory items are charged to expenditure accounts when purchased. Year -end inventory
was not significant. Proprietary fund inventories are generally used for construction and for operation and
maintenance work. They are not for resale. They are valued at cost based on weighted average, and charged to
construction and /or operation and maintenance expense when used.
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.
Page 29
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (cont.)
4. Capital Assets
Government— Wide Statements
Capital assets, which include property, plant and equipment, are reported in the government -wide financial
statements. Capital assets are defined by the government as assets with an initial cost of more than $5,000 for
general capital assets and infrastructure assets, and an estimated useful life in excess of one year. All capital
assets are valued at historical cost or estimated historical cost if actual amounts are unavailable. Donated
capital assets are recorded at their estimated fair value at the date of donation.
Additions to and replacements of capital assets of business -type activities are recorded at original cost, which
includes material, labor, overhead, and an allowance for the cost of funds used during construction when
significant. For tax exempt debt, the amount of interest capitalized equals the interest expense incurred during
construction netted against any interest revenue from temporary investment of borrowed fund proceeds. No
interest was capitalized during the current year. The cost of renewals and betterments relating to retirement
units is added to plant accounts. The cost of property replaced retired or otherwise disposed of, is deducted
from plant accounts and, generally, together with removal costs less salvage, is charged to accumulated
depreciation.
Depreciation of all exhaustible capital assets is recorded as an allocated expense in the statement of activities,
with accumulated depreciation reflected in the statement of net assets. Depreciation is provided over the assets'
estimated useful lives using the straight -line method of depreciation. The range of estimated useful lives by type
of asset is as follows:
Buildings 30-65 Years
Machinery and equipment 4 -20 Years
Other improvements 60 Years
Utility system 65 Years
Infrastructure 35 -50 Years
Fund Financial Statements
In the fund financial statements, capital assets used in governmental fund operations are accounted for as
capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund
operations are accounted for the same way as in the government -wide statements.
Page 30
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE 1— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (cont.)
5. Other Assets
In governmental funds, debt issuance costs are recognized as expenditures in the current period. For the
government -wide and the proprietary fund type financial statements, debt issuance costs are deferred and
amortized over the term of the debt issue.
6. Compensated Absences
Under terms of employment, employees are granted vacation, sick and comp time benefits in varying amounts.
These benefits are based upon union contracts and City actions as applicable. Amounts carried forward for
vacation and comp time accruals are governed by these contracts and actions. Sick pay accruals may be
carried forward indefinitely.
All vested vacation, sick leave and comp time pay is accrued when incurred in the government -wide and
proprietary fund financial statements. A liability for these amounts is reported in governmental funds only if they
have matured, for example, as a result of employee resignations and retirements, and are payable with
expendable available resources.
Payments for vacation, sick and comp time leave will be made at rates in effect when the benefits are used.
Accumulated vacation, sick and comp time leave liabilities at December 31, 2010 are determined on the basis of
current salary rates and include salary related payments.
7. Long -Term Obligations/Conduit Debt
All long -term obligations to be repaid from governmental and business -type resources are reported as liabilities
in the government -wide statements. The long -term obligations consist primarily of notes and bonds payable, and
accrued compensated absences.
Long -term obligations for governmental funds are not reported as liabilities in the fund financial statements. The
face value of debts (plus any premiums) are reported as other financing sources and payments of principal and
interest are reported as expenditures. The accounting in proprietary funds is the same as it is in the
government -wide statements.
For the government -wide statements and proprietary fund statements, bond premiums and discounts are
deferred and amortized over the life of the issue using the effective interest method. Gains or losses on prior
refundings are amortized over the remaining life of the old debt, or the life of the new debt, whichever is shorter.
The balance at year end for both premiums/discounts and gains /losses, as applicable, is shown as an increase
or decrease in the liability section of the statement of net assets.
The City has approved the issuance of industrial revenue bonds (IRB) for the benefit of private business
enterprises. IRB's are secured by mortgages or revenue agreements on the associated projects, and do not
constitute indebtedness of the City. Accordingly, the bonds are not reported as liabilities in the accompanying
financial statements. At year end, the aggregate principal amount for the five issues outstanding could not be
determined; however, their original issue amounts totaled $14,294,720.
Page 31
CITY OF ROSEMOUNT
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (cont.)
8. Claims and Judgments
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting Standards
Board guidance are met. The liability and expenditure for claims and judgments are only reported in
governmental funds if it has matured. Claims and judgments are recorded in the government -wide statements
and proprietary funds as expenses when the related liabilities are incurred. There were no significant claims or
judgments at year end.
9. Equity Classifications
Government —Wide Statements
Equity is classified as net assets and displayed in three components:
a. Invested in capital assets, net of related debt Consists of capital assets including restricted capital
assets, net of accumulated depreciation and reduced by the outstanding balances (including
unspent debt proceeds) of any bonds, mortgages, notes, or other borrowings that are attributable to
the acquisition, construction, or improvement of those assets.
b. Restricted net assets Consists of net assets with constraints placed on their use either by
1) external groups such as creditors, grantors, contributors, or laws or regulations of other
governments or, 2) law through constitutional provisions or enabling legislation.
c. Unrestricted net assets All other net assets that do not meet the definition of "restricted" or
"invested in capital assets, net of related debt."
When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted
resources first, then unrestricted resources as they are needed.
Fund Statements
Governmental fund equity is classified as fund balance. Fund balance is further classified as reserved and
unreserved. Unreserved fund balance includes funds set aside by management for specific uses, which are
labeled "designated The balance of unreserved fund balance is labeled "undesignated which indicates it is
available for appropriation. Proprietary fund equity is classified the same as in the government -wide statements.
10. Prior Period Information
The basic 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 government's financial statements for the
year ended December 31, 2009, from which the summarized information was derived.
Page 32
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
NOTE II RECONCILIATION OF GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
A. EXPLANATION OF CERTAIN DIFFERENCES BETWEEN THE GOVERNMENTAL FUND BALANCE SHEET AND THE
STATEMENT OF NET ASSETS
The governmental fund balance sheet includes a reconciliation between fund balance total governmental
funds and net assets governmental activities as reported in the government -wide statement of net assets. One
element of that reconciliation explains that "Some liabilities, including long -term debt, are not due and payable in
the current period and, therefore, are not reported in the funds The details of this 18,276,930 difference are
as follows:
Long -term liabilities applicable to the City's governmental activities are not due and payable in the current
period, and accordingly, are not reported as fund liabilities. Interest on long -term debt is not accrued in
governmental funds, but rather is recognized as an expenditure when due. All liabilities both current and long-
term are reported in the statement of net assets.
Bonds and notes payable (excluding unspent capital related
proceeds) 17,080,000
Compensated absences 921,492
Accrued interest 281,088
Unamortized debt discount and issuance costs (5,650)
NOTE III STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. BUDGETARY INFORMATION
Combined Adjustment for Long -Term Liabilities 18,276,930
Budgetary information is derived from the annual operating budget and is presented using the same basis of
accounting for each fund as described in Note I. C. with departures from generally accepted accounting
principles for encumbrances.
Annual budgets have been adopted for the general fund and the capital project fund that is created by the
following sub funds, Building CIP, Street CIP and Equipment CIP. The remaining capital project sub funds adopt
project- length budgets and therefore are not included in the annual budgeting process. Formal budgetary
integration is not employed for debt service funds because effective budgetary control is alternatively achieved
through general obligation bond indenture provisions.
The budgeted amounts presented include any amendments made. The appropriated budget is prepared by
fund, department and function. The legal level of budgetary control is at the department level. The City Council
may authorize department heads to transfer budgeted appropriations within departments. The Council approved
several supplemental budgetary appropriations during the year, but they were not considered material.
Appropriations lapse at year end unless specifically carried over. Carryovers to the following year were
$1,365,812.
Page 33
NOTE IV DETAILED NOTES ON ALL FUNDS
A. DEPOSITS AND INVESTMENTS
The city maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of
this pool is displayed on the statement of net assets and balance sheet as cash and investments. In addition,
investments are separately held by several of the city's funds.
The City's cash and investments at year end were comprised of the following:
Petty cash and cash on hand
Demand deposits
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Carrying
Value
2,400
25,950,210
Reconciliation to financial statements
Per statement of net assets
Unrestricted cash and investments 37,822,882
Per statement of net assets Agency 68,543
Statement
Balance
2,400
26,279,464
U.S. instrumentalities 11,938,815 11,938,815
Total Cash and Investments 37,891,425 38,220,679
Associated
Risks
N/A
Custodial credit
Custodial credit, credit,
concentration of credit,
interest rate
Total Cash and Investments 37,891,425
Deposits in each local and area bank are insured by the FDIC in the amount of $250,000 for interest bearing
accounts and unlimited amounts for noninterest bearing accounts and certain accounts bearing interest of less
than .25 percent.
Page 34
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
A. DEPOSITS AND INVESTMENTS (cont.)
Custodial Credit Risk
Deposits
Custodial credit risk is the risk in the event of a financial institution failure, the City's deposits may not be
returned to the City.
The City maintains collateral agreements with its banks. At December 31, 2010, the banks had pledged various
government securities in the amount of $24,208,416 to secure the City's deposits. Therefore, the City has no
custodial credit risk.
Investments
For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will
not be able to recover the value of its investments or collateral securities that are in the possession of an outside
party.
The City does not have any investments exposed to custodial credit risk.
Credit Risk
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations.
As of December 31, 2010, all of the City of Rosemount's investments were U.S. agency obligations which
received AAA ratings from Standard Poor's and /or Moody's Investors Service, respectively.
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of the City's investment in a single
issuer.
As of December 31, 2010, all of the City of Rosemount's investments were U.S. agency obligations, as follows:
Issuer
Federal Home Loan Bank 2,011,855 43%
Federal Home Mortgage Corporation 5,162,061 40%
Federal National Mortgage Association 4,764,899 17%
11,938,815
Fair Value Percentage of Total
Page 35
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
A. DEPOSITS AND INVESTMENTS (cont.)
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the value of an investment.
As of December 31, 2010, the City of Rosemount's investments were as follows:
Investment Maturities (in years)
Investment Type
Total Fair Less
Value than 1
Investments Highly Sensitive to Interest Rate Changes
1 -5
See Note I.D.1 for further information on deposit and investment policies.
6 -10
More
than 10
U.S. Agency Obligations 11,938,815 200,002 10,999,636 739,177
Investments highly sensitive to interest rate changes are investments that vary in value more than one would
expect in normal circumstances.
At December 31, 2010, the City held $10,899,281 in U.S. Agency Obligations that are callable at increasing
stepped interest rates.
Page 36
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
B. RECEIVABLES
Governmental Activities
Business -Type Activities
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Receivables as of year end for the government's individual major funds and non -major and internal service
funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows:
Debt Capital Port Authority
General Service Projects TIF
Receivables:
Taxes 819,872 2,594 822,466
Accounts 72,925 213,793 125 286,843
Special assessments 25,500 743,349 955,691 1,724,540
Delinquent special assessments 273 48,741 7,267 56,281
Due from other governments 11,313 862,647 873,960
Total Receivables 929,883 792,090 2,039,398 2,719 3,764,090
Amounts not expected to be collected
within one year
22,423 689,114 837,774 1,549,311
Nonmajor
Water Sewer Storm Water Enterprise
Utility Utility Utility Funds
Totals
Totals
Receivables:
Customer accounts 327,101 290,254 166,326 783,681
Accrued interest 206 206
Special assessments 100,962 85,103 23,461 209,526
Due from other governments 544,829 56,286 601,115
Total Receivables 428,269 375,357 734,616 56,286 1,594,528
Amounts not expected to be collected
within one year 87,837 74,039 20,412 182,288
Page 37
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
B. RECEIVABLES (cont.)
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Governmental funds report deferred revenue in connection with receivables for revenues that are not considered
to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in
connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the
various components of deferred revenue and unearned revenue reported in the governmental funds were as
follows:
Unavailable Unearned Totals
Delinquent property taxes receivable 170,201 170,201
Delinquent special assessments 56,281 56,281
Special assessments not yet due 1,692,351 1,692,351
Amount due from the State 626,198 626,198
Grant receivable for parks and recreation 70,284 70,284
Donations receivable for future projects 80,783 80,783
Total Deferred /Unearned Revenue
for Governmental Funds 2,696,098 2,696,098
C. CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2010 was as follows:
Beginning Ending
Balance Additions Deletions Balance
Governmental Activities
Capital assets not being depreciated:
Land 8,590,049 165,306 8,755,355
Construction in progress 1,766,283 6,052,370 6,242,026 1,576,627
Total Capital Assets
Not Being Depreciated 10,356,332 6,217,676 6,242,026 10,331,982
Capital assets being depreciated:
Improvements 2,087,650 206,981 32,000 2,262,631
Buildings 15,412,848 366,541 5,464 15,773,925
Machinery and equipment 8,462,907 363,418 310,516 8,515,809
Roads 37,951,525 9,134,043 3,014,961 44,070,607
Bridges 1,887,923 1,887,923
Parking lots 442,449 442,449
Total Capital Assets
Being Depreciated 66,245,302 10,070,983 3,362,941 72,953,344
Page 38
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
C. CAPITAL ASSETS (cont.)
Governmental Activities (cont.)
Less: Accumulated depreciation for:
Improvements
Buildings
Machinery and equipment
Roads
Bridges
Parking lots
Total Accumulated Depreciation
Total Governmental Activities
Capital Assets, Net of
Depreciation
Capital Assets Being Depreciated:
Buildings
Machinery and equipment
Mains and lines
Total Capital Assets
Being Depreciated
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Beginning
Balance
(714,270)
(3,485,243)
(5,247,708)
(7,891,212)
(196,036)
(159,141)
(17,693,610)
Depreciation expense was charged to functions as follows:
Additions
Net Capital Assets
Being Depreciated 48,551,692 8,350,148
(92,662) (27,333)
(309,893) (2,359)
(526,127) (197,549)
(734,047) (1,230,164)
(47,198)
(10, 908)
(1,720,835) (1,457,405)
58,908,024 14,567,824 8,147,562 65,328,286
Governmental Activities
General government
Public safety
Public works, which includes the depreciation of roads, bridges and parking lots
Leisure activities
Total Governmental Activities Depreciation Expense
Beginning
Balance
11,085,341
2,731,397
118,581,551
132,398,289
Additions
Deletions
1,905,536
Deletions
Business -Type Activities
Capital assets not being depreciated:
Land 2,694,451 2,694,451
Construction in progress 4,340,402 2,071,019 5,110,315 1,301,106
Total Capital Assets
Not Being Depreciated 7,034,853 2,071,019 5,110,315 3,995,557
39,837
3,094,317
3,134,154
10,256
Ending
Balance
(779,559)
(3,792,777)
(5,579,286)
(7,395,095)
(243,234)
(170,049)
(17,957,040)
54, 996, 304
234,227
236,547
1,074,575
175,486
1,720,835
Ending
Balance
11,085,341
2,760,978
121,675,868
10,256 135,522,187
Page 39
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
C. CAPITAL ASSETS (cont.)
Construction in progress deletions are greater than total additions in capital
assets from business -type activities to governmental activities of $2,015,997
business -type activities and governmental activities caused the transfers to
fund statements. This was due to a project being maintained in the sewer
current year, at which time it was transferred to the appropriate funds.
Business -Type Activities (cont.)
Less: Accumulated depreciation for:
Buildings
Machinery and equipment
Mains and lines
Total Accumulated Depreciation
Net Capital Assets
Being Depreciated
Total Business -Type
Capital Assets, Net of
Depreciation
Depreciation expense was charged to functions as follows:
Business -Type Activities
Water
Sewer
Storm water
Arena
Total Business -type Activities Depreciation Expense
D. INTERFUND RECEIVABLES/PAYABLES AND TRANSFERS
The following is a schedule of interfund receivable /advances as of December 31, 2010:
Receivable Fund
Sewer
Sewer
Subtotal Fund financial statements
Less: Fund eliminations
Total Government -Wide Statement of Net Assets
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Beginning
Balance Additions
(1,987,166)
(1,493,430)
(37,842,378)
(41, 322,974)
91,075,315
Payable Fund
Building CIP
Water
(236,588)
(156,646)
(1,824,085)
(2,217,319)
916,835
assets due to a transfer of capital
during 2010. This transfer between
differ by the same amount in the
fund until it was completed in the
Amount
155,118
64,632
Ending
Deletions Balance
219,750
(64,632)
155,118
(2,223,754)
(8,638) (1,641,358)
(39,666,543)
(8,638) (43,531,655)
1,618 91,990,532
98,110,168 2,987,854 5,111,933 95,986,089
754,642
830,405
578,251
54,021
2,217,319
Amount Not
Due Within
One Year
139,012
57,794
196,806
(57,794)
139,012
Page 40
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
D. INTERFUND RECEIVABLES/PAYABLES AND TRANSFERS (cont.)
The principal purpose of these interfund loans was to finance the public works building expansion in 1999, and
to purchase and renovate a building in the Downtown Brockway Tax Increment Financing District in 2005.
For the statement of net assets, interfund balances which are owed within the governmental activities or
business -type activities are netted and eliminated.
The sewer fund advanced funds to the water fund and capital projects fund. The sewer fund is charging the
other funds interest on the advance based on the average outstanding advance balance during the year at a
rate of 5 Following is a detailed repayment schedule for the sewer fund advance:
2011 23,013
2012 24,163
2013 25,371
2014 26,640
2015 27,972
2016 -2018 92,591
Total
Principal Interest Totals
10,987 34,000
9,837 34,000
8,629 34,000
7,360 34,000
6,028 34,000
9,409 102,000
219,750 52,250 272,000
Page 41
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
D. INTERFUND RECEIVABLES/PAYABLES AND TRANSFERS (cont.)
The following is a schedule of interfund transfers:
Fund Transferred To Fund Transferred From Amount Principal Purpose
General Arena 3,500 Building and grounds
maintenance
Debt Service Water 200,000 Water share of debt payment
Storm Water 84,000 Storm water portion of debt
payment
General 355,000 Payoff debt with excess funds
Capital Projects 1,447,635 To close construction funds
Capital Projects Sewer 136,220 Sewer share of project
Storm Water 9,542 Storm water share of project
General 853,389 Future improvements
Enterprise
Storm Water Water 199,000 Water share of debt payments
Storm Water Capital Projects 7,798 To close construction funds
Arena General 115,000 Operating expenses
3,411,084
Less: Fund eliminations (2,855,025)
Less: Contributed plant reclassified to a transfer
in the government -wide statements 427,941
Total Transfers Government -Wide
Statement of Activities 984,000
Generally, transfers are used to (1) move revenues from the fund that collects them to the fund that the budget
requires to expend them, (2) move receipts restricted to debt service from the funds collecting the receipts to the
debt service fund, and (3) use unrestricted revenues collected in the general fund to finance various programs
accounted for in other funds in accordance with budgetary authorizations.
For the statement of activities, interfund transfers within the governmental activities or business -type activities
are netted and eliminated.
Page 42
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
E. LONG -TERM OBLIGATIONS
Long -term obligations activity for the year ended December 31, 2010 was as follows:
GOVERNMENTAL ACTIVITIES
Bonds and Notes Payable:
General obligation debt 17,565,000 1,355,000 1,840,000 17,080,000 1,545,000
Net discount (4,864) 112 (4,976)
Sub -total 17,560,136 1,355,112 1,840,000 17,075,027 1,545,000
Other Liabilities
Vested compensated absences 859,003 474,810 412,321 921,492 442,317
Total Governmental Activities
Long -Term Liabilities 18,419,139 1,829,925 2,252,321 17,996,519 1,987,317
BUSINESS -TYPE ACTIVITIES
Bonds and Notes Payable:
General obligation debt
Subtract Deferred Amounts For:
Discounts
Sub -total
Other Liabilities:
Vested compensated absences
Total Business -Type Activities
Long -Term Liabilities
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
6,160,000 1,545,000 740,000 6,965,000 770,000
(1,845) 9,270 (6,970) (4,145)
6,158,155 1,554,270 733,030 6,960,855
166,433 101,295 79,889
187,839 90,163
6,324,588 1,655,565 812,919 7,148,694 860,163
Page 43
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
E. LONG -TERM OBLIGATIONS (cont.)
General Obligation Debt
The City issues general obligation debt to provide funds for the acquisition and construction of major capital
facilities. All general obligation notes and bonds payable are backed by the full faith and credit of the City. Notes
and bonds in the governmental funds will be retired by future property tax levies or tax increments accumulated
by the debt service fund. Business -type activities debt is payable by revenues from user fees of those funds or, if
the revenues are not sufficient, by future tax levies.
Governmental Activities Date of Final
General Obligation Debt Issue Maturity
Refunding Bonds, Series 2001 E
Improvement Bonds, Series 1999A
Improvement Bonds, Series 2002A
Improvement Bonds, Series 2003A
Improvement Bonds, Series 2006B
Public Facilities Bonds, Series 2001C
Fire Station CIP Bonds, Series 2005A
Fire Station Refunding Bonds, Series 2005D
Equipment Certificates, Series 2006A
Equipment Certificates, Series 20076
Equipment Certificates, Series 2008A
Port Authority TIF, Series 2008A
Port Authority TIF, Series 2008B
Crossover Refunding Bonds, Series 2010B
2001
1999
2002
2003
2006
2001
2005
2005
2006
2007
2008
2008
2008
2010
Total Governmental Activities General Obligation Debt
Business -Type Activities Date of
General Obligation Debt Issue
Water Revenue Bonds, Series 2000A
Storm Water Revenue Bonds, Series 2001 B
Storm Water Revenue Bonds, Series 2002B
Storm Water Bonds, Series 20036
Water Revenue Bonds, Series 2005C
Water Revenue Bonds, Series 2007A
Utility Revenue Refunding Bonds, Series 2010A
2000
2001
2002
2003
2005
2007
2010
Total Business -Type Activities General Obligation Debt
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
2013
2011
2013
2014
2017
2022
2025
2016
2012
2013
2014
2024
2032
2022
Final
Maturity
2016
2017
2018
2014
2016
2018
2018
Interest
Rates
3.1% to 4.6%
4.3% to 4.8%
2.3% to 4.0%
2.0% to 3.3%
4.0%
4.0% to 5.0%
3.5% to 4.3%
3.2% to 3.8%
3.7% to 3.8%
3.5% to 3.6%
3.99%
5.0% to 5.5%
4.0% to 4.1%
1.2% to 3.7%
Interest
Rates
4.4% to 5.4%
4.0% to 4.9%
3.0% to 4.6%
1.2% to 3.4%
3.5% to 3.8%
4.0%
0.8% to 2.6%
Original
Indebtedness
725,000 245,000
3,715,000 240,000
3,395,000 150,000
1,945,000 770,000
4,405,000 3,115,000
2,045,000 1,465,000
2,630,000 2,225,000
1,115,000 715,000
370,000 155,000
450,000 285,000
385,000 320,000
2,765,000 2,765,000
3,275,000 3,275,000
1,355,000 1,355,000
Original
Indebtedness
Balance
12 -31 -10
17,080,000
Balance
12 -31 -10
1,160,000 585,000
1,140,000 635,000
1,195,000 745,000
1,170,000 510,000
2,990,000 1,925,000
1,210,000 1,020,000
1,545,000 1,545,000
6,965,000
Page 44
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
E. LONG -TERM OBLIGATIONS (cont.)
General Obligation Debt (cont.)
Debt service requirements to maturity are as follows:
Years
Totals
Other Debt Information
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Governmental Activities Business -Type Activities
General Obligation Debt General Obligation Debt
Principal Interest Principal Interest
2011 1,545,000 662,231 770,000 218,295
2012 1,370,000 616,828 1,085,000 195,329
2013 1,485,000 563,031 1,145,000 161,091
2014 1,310,000 511,081 1,175,000 124,024
2015 1,090,000 463,351 935,000 87,505
2016 2020 4,300,000 1,716,018 1,855,000 81,473
2021 2025 3,090,000 909,415
2026 2030 1,980,000 390,854
2031 2032 910,000 37,260
17,080,000 5,870,069 6,965,000 867,717
Estimated payments of compensated absences are not included in the debt service requirement schedules. The
compensated absences liability attributable to governmental activities will be liquidated primarily by the general
fund.
There are a number of limitations and restrictions contained in the various bond indentures and loan
agreements. The City believes it is in compliance with all significant limitations and restrictions, including federal
arbitrage regulations.
The water and storm water utilities have pledged future water and storm water revenues net of specified
operating expenses to repay $6,850,000 in water and storm water revenue bonds issued in 2000, 2001, 2002,
2003, 2005 and 2007. Annual principal and interest payments on the bonds are expected to require 25% of net
revenues. Proceeds from bonds provided financing for utility improvements. Principal and interest paid for the
current year and the gross customer revenues were $973,681 and $2,563,118, respectively.
Page 45
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
E. LONG -TERM OBLIGATIONS (cont.)
Current Refunding
Defeasance of Debt
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
On December 1, 2010, the City issued $1,545,000 of general obligation revenue refunding bonds with an
average interest rate of 1.8 Net bond proceeds of $1,510,000 (after payment of $35,000 in underwriting fees,
insurance and other issuance costs) were used to prepay the outstanding debt service requirements on
outstanding bonds on February 1, 2011. Outstanding bonds refunded in 2011 with the 2010 bond proceeds are
$465,000 of 2001 B general obligation refunding bonds at an average interest rate of 4.5 $680,000 of 2002B
general obligation refunding bonds at an average interest rate of 3.8 and $400,000 of 2003B general
obligation refunding bonds at an average interest rate of 2.3
The cash flow requirements on those bonds prior to the current refunding would be $2,173,291 from 2011
through 2018. The cash flow requirements on the 2010 bonds used for refunding are $1,962,254 from 2011
through 2018. The current refunding resulted in an economic gain (difference between the present values of the
debt service payments on the old and new debt including city funds used in prepayment) of $100,027.
Crossover Refunding
On December 1, 2010, the City issued $1,355,000 in general obligation public facility refunding bonds with an
average interest rate of 2.9% to crossover refund $1,370,000 of outstanding 2001C general obligation public
facilities bonds with an average interest rate of 4.5 The net proceeds of $1,310,503 (after underwriter's
discount of $11,179, issuance costs of $34,732, and accrued interest of $1,414) were placed on deposit with an
escrow agent and will be used to call the 2001C general obligation public facilities bonds on February 1, 2012.
The cash flow requirements on the refunding bonds and notes prior to the crossover refunding were $1,936,203
from 2011 through 2022. The cash flow requirements on the 2010 refunding bonds are $1,872,715 from 2011
through 2022. The crossover refunding results in an economic gain (difference between the present value of the
debt service payments on the old and new debt) of $55,287.
In prior years, the City defeased certain outstanding bonds by placing surplus funds collected on special
assessments in an irrevocable trust to provide for all future debt service payments on the old bonds.
Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City's
financial statements. At December 31, 2010, $470,000 of bonds outstanding were considered defeased. The
bonds are callable on February 1, 2011.
Page 46
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
F. NET ASSETS/FUND BALANCES
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Net assets reported on the government -wide statement of net assets at December 31, 2010 include the
following:
Governmental Activities
Invested in capital assets, net of related debt
Land 8,755,355
Construction in progress 1,576,627
Other capital assets, net of accumulated depreciation 54,996,304
Less: related long -term debt outstanding (excluding unspent
capital related debt proceeds) (15,764,521)
Total Invested in Capital Assets, Net of Related Debt 49,563,765
Restricted for debt service 5,361,675
Unrestricted 14,089,305
Total Governmental Activities Net Assets 69,014,745
Page 47
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
F. NET ASSETS /FUND BALANCES (cont.)
Governmental Activities (cont.)
Governmental fund balances reported on the fund financial statements at December 31, 2010 include the
following:
Reserved
Major Funds
General Fund
Encumbrances 465,544
Prepaid items 33,280
Total 498,824
Debt Service Fund
Reserved for debt service 6,173,964
Capital Project Fund
Reserved for capital projects 1,061,526
Total Major Funds Reserved 7,734,314
Unreserved, undesignated
Major Funds
General Fund 32,941
Special Revenue Funds
Port Authority TIF Fund 429,284
Total 462,225
Non Major Funds
Special Revenue Funds
Port Authority General Fund
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
134,919
Page 48
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
F. NET ASSETS/FUND BALANCES (cont.)
Governmental Activities (cont.)
Unreserved, designated
Major Funds
General fund
Designated for working capital
Designated for compensated absences
Total
General Capital Projects Fund
Designated for capital projects
Total Major Funds Unreserved, designated
Non -Major Funds
Special Revenue Funds
Tree disease grant program fund
Fire safety education fund
GIS fund
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Total Non -Major Funds Unreserved, designated
5,731,123
922,229
6,653,352
3,510,512
10,163,864
152
5,235
1,516
6,900
Page 49
NOTE V OTHER INFORMATION
A. EMPLOYEES' RETIREMENT SYSTEM
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
City employees and firefighters participate in the pension plans administered by the Public Employees
Retirement Association of Minnesota (PERA) and the Rosemount Volunteer Fire Relief Association. In
accordance with GASB Statement No. 27, the PERA plans are classified as multiple employer, cost sharing
plans, and the Association's plan is classified as a single employer plan.
1. Public Employees Retirement Association
a. Plan Description
All full -time and certain part-time employees of the City of Rosemount, Minnesota are covered by
defined benefit plans administered by the Public Employees Retirement Association of Minnesota
(PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public
Employees Police and Fire Fund (PEPFF) which are cost sharing, multiple employer retirement
plans. These plans are established and administered in accordance with Minnesota Statutes,
Chapters 353 and 356.
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. All new members must
participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for
membership by statute are covered by the PEPFF.
PERA provides retirement benefits as well as disability benefits to members, and benefits to
survivors upon death of eligible members. Benefits are established by State Statute, and vest after
three years of credited service. The defined retirement 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 percent of average salary for each of the first 10 years of service and 2.7 percent for each
remaining year. The annuity accrual rate for Coordinated Plan member is 1.2 percent of average
salary for each of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the
annuity accrual rate is 2.7 percent of average salary for Basic Plan members and 1.7 percent for
Coordinated Plan members for each year of service. For PEPFF members, the annuity accrual rate
is 3.0 percent for each year of service. For all PEPFF members and for GERF members whose
annuity is calculated using Method 1, a full annuity is available when age plus years of service equal
90. A reduced retirement annuity is also available to eligible members seeking early retirement.
Page 50
NOTE V OTHER INFORMATION (cont.)
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
A. EMPLOYEES' RETIREMENT SYSTEM (cont.)
1. Public Employees Retirement Association (cont.)
a. Plan Description (cont.)
There are different types of annuities available to members upon retirement. A normal annuity is a
lifetime annuity that ceases upon the death of the retiree no survivor annuity is payable. There are
also various types of joint and survivor annuity options available which will reduce the monthly
normal annuity amount, because the annuity is payable over joint lives. Members may also leave
their contributions in the fund upon termination of public service in order to qualify for a deferred
annuity at retirement age. Refunds of contributions are available at any time to members who leave
public service, but before retirement benefits begin.
The benefit provisions stated in the previous 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.
PERA issues a publicly available financial report that includes financial statements and required
supplementary information for GERF and PEPFF. That report may be obtained on the Internet at
www.mnpera.org, by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103 -2088 or
by calling (651) 296 -7460 or 1- 800 -652 -9026.
b. Funding Policy
Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These
statutes are established and amended by the state legislature. The City makes annual contributions
to the pension plans equal to the amount required by state statutes. GERF Basic Plan members
and Coordinated Plan members were required to contribute 9.1% and 6.0 respectively, of their
annual covered salary in 2010. PEPFF members were required to contribute 9.4% of their annual
covered salary in 2010. The City of Rosemount is required to contribute the following percentages of
annual covered payroll: 11.78% for Basic Plan members, 7.0% for Coordinated Plan members, and
14.1% for PEPFF members. The City's contributions to the Public Employees Retirement Fund for
the years ending December 31, 2010, 2009 and 2008 were $258,857, $248,891 and $242,631,
respectively. The City's contributions to the Public Employees Police Fire Fund for the years
ending December 31, 2010, 2009 and 2008 were $249,472, $240,374 and $219,322, respectively.
The City's contributions were equal to the contractually required contributions for each year as set
by state statute.
Page 51
NOTE V OTHER INFORMATION (cont.)
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
A. EMPLOYEES' RETIREMENT SYSTEM (cont.)
2. Rosemount Fire Department Relief Association Defined Benefit Pension Plan
a. Plan Description
The City of Rosemount contributes to the Rosemount Fire Department Relief Association Pension
Plan; a single employer retirement system administered by the Rosemount Fire Department Relief
Association. The Rosemount Fire Department Relief Association provides a lump -sum benefit to its
members upon retirement, total disability or death. These benefit provisions are established and can
be amended by the Rosemount Fire Department Relief Association's Board of Trustees with
approval by the Rosemount City Council. The Rosemount Fire Department Relief Association
issues a publicly available financial report that includes financial statements and required
supplementary information for the Rosemount Fire Department Relief Association Pension Plan.
That report may be obtained by writing to City of Rosemount, 2875 145 Street West, Rosemount,
Minnesota 55068 -4997, or by calling (651) 423 -4411.
b. Funding Policy
The contribution requirements are established and may be amended by the Minnesota State
Legislature. The Rosemount Fire Department Relief Association is comprised of volunteers.
Therefore, there are not covered payroll amounts or member contributions required. Individuals with
at least 20 years of service who have reached age 50 are entitled to a lump -sum payment of $6,900
per year of service. In the event an otherwise qualified member has less than 20 years of service,
the member is eligible for a pension payment of 60 percent after 10 years of service, increasing 4
percent for each year of service after 10 years to a maximum of 100 percent. Members retiring
before 50 do not receive distributions until age 50, but interest at 5% per year is added to their
retirement benefit until paid.
c. Annual Pension Cost and Net Pension Obligations
Financial requirements of the Association are determined based on a formula prescribed in
Minnesota Statues 69.772. Those statutes prescribe a set amount of funding, per $100 of lump -sum
benefits payable per year of service. For associations with assets exceeding the statutory pension
liability, the financial requirements shall be the increase in the statutory pension liability for the next
year over the current year, reduced by an amount equal to one -tenth of the surplus. For
associations with a deficit of assets to fund the statutory pension liability, the financial requirements
shall be the increase in the statutory pension liability for the next year over the current year,
increased by an amount equal to one -tenth the deficit. The City's minimum obligation is the financial
requirement for the year less anticipated state aids and interest on investments calculated at a rate
of 5 percent. The value of assets was determined using fair value.
Page 52
NOTE V OTHER INFORMATION (cont.)
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
A. EMPLOYEES' RETIREMENT SYSTEM (cont.)
2. Rosemount Fire Department Relief Association- Defined Benefit Pension Plan (cont.)
c. Annual Pension Cost and Net Pension Obligations (cont.)
The annual pension cost for the Rosemount Fire Department Relief Association Pension Plan
for the year ended December 31, 2010 was as follows:
State of Minnesota contribution
City of Rosemount contribution
Amount
73,399
161,200
234,599
The City recognizes the State of Minnesota's contributions to the Rosemount Fire Department
Relief Association Pension Plan as revenue and expense.
Three Year Trend Information
Percentage
Fiscal Year Annual Pension of APC Net Pension
Ending Cost (APC) Contribution Obligation
2010 234,599 100.0% 0
2009 228,382 100.0 0
2008 237,086 100.0 0
A formal actuarial valuation is not required by Minnesota Statutes because the pension benefit is a
lump -sum distribution. The formula used to compute pension contributions requirements is
substantially the same as that used to determine the standardized measure of the net pension
obligation. The computation of the pension contribution requirements for 2010 was based on the
same formula, funding method and other factors that were used in previous years.
d. Required Supplementary Information, Schedule of Funding Progress
Ten -year historical trend information is presented in the Rosemount Firefighters Relief Association's
Annual Financial Report. This information is useful in assessing the pension plan's accumulation of
sufficient assets to pay pension benefits as they become due.
Page 53
NOTE V OTHER INFORMATION (cont.)
A. EMPLOYEES' RETIREMENT SYSTEM (cont.)
2. Rosemount Fire Department Relief Association Defined Benefit Pension Plan (cont.)
d. Required Supplementary Information, Schedule of Funding Progress (cont.)
The following historical trend information was obtained from the Association's financial report for the
year ended December 31, 2010.
Date
e. Related Party Transactions
B. RISK MANAGEMENT
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Assets as a Overfunded
Percentage of (Underfunded)
Accrued Accrued Accrued
Assets Liabilities Liabilities Liabilities
12 -31 -10 2,615,897 2,902,338 91% (286,441)
12 -31 -09 2,267,776 2,442,290 93 (174,514)
12 -31 -08 1,854,425 2,203,084 84 (348,659)
Computations of the unfunded net pension obligation and employer contributions as a percent of
covered payroll are not applicable since the fire department is a volunteer organization and no
covered payroll exists.
As of December 31, 2010 and for the year then ended, the Association held no securities issued by
City or other related parties.
The City is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors
and omissions; workers compensation; and health care of its employees. The City purchases commercial
insurance and participates in a public entity risk pool called the Minnesota League of Cities Insurance Trust to
provide coverage for these various risks of loss. Settled claims have not exceeded coverage in any of the past
three years. There were no significant reductions in coverage compared to the prior year.
The City has established an internal service fund (Insurance Fund) to account for and finance uninsured risks of
loss related to torts, theft of, damage to and destruction of assets, including deductibles. The majority of the
City's general liability and workers compensation insurance premiums are paid for by this fund. At December 31,
2010, there are no claims liabilities in the Insurance Fund based on the requirements of Governmental
Accounting Standards Board Statement Number 10, which requires that a liability for claims be reported if
information prior to the issuance of the financial statements indicates that it is probable a liability has been
incurred at the date of the financial statements and the amount of loss can be reasonably estimated.
Page 54
NOTE V OTHER INFORMATION (cont.)
C. COMMITMENTS AND CONTINGENCIES
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
From time to time, the City is party to various pending claims and legal proceedings. Although the outcome of
such matters cannot be forecasted with certainty, it is the opinion of management that the likelihood is remote
that any such claims or proceedings will have a material adverse effect on the City's financial position or results
of operations.
The City has received federal and state grants for specific purposes that are subject to review and audit by the
grantor agencies. Such audits could lead to requests for reimbursements to the grantor agency for expenditures
disallowed under terms of the grants. Management believes such disallowances, if any, would be immaterial.
Funding for the operating budget of the City comes from many sources, including property taxes, grants and
aids from other units of government, user fees, fines and permits, and other miscellaneous revenues. The State
of Minnesota provides a variety of aid and grant programs which benefit the City. Those aid and grant programs
are dependent on continued approval and funding by the Minnesota governor and legislature, through their
budget processes. The State of Minnesota is currently experiencing budget problems, and is considering
numerous alternatives including reducing aid to local governments. Any changes made by the State to funding
or eligibility of local aid programs could have a significant impact on the future operating results of the City.
The City has commitments of approximately $600,000 on various contracts related to construction projects.
In 2007, the City committed to a municipal revenue obligation as part of a development agreement with 146
Street Partners, Limited Partnership. The amount of the obligation is $1,500,000, and is payable to the
developer solely from available tax increments collected from a specific portion of the development. Payments
are scheduled through the year 2032, and carry an interest rate of 4.96 The obligation does not constitute a
charge upon any funds of the city. In the event that future tax increments are not sufficient to pay off the
obligation, the obligation terminates with no further liability to the city. Since the amount of future payments is
contingent on the collection of future TIF increments, the obligation is not reported as a liability in the
accompanying financial statements. The balance of the commitment outstanding at year end has not been
determined.
D. JOINT POWERS DEBT COMMITMENT
On August 25, 2005 the City of Rosemount entered into a joint powers agreement with the Cities of Apple
Valley, Burnsville, Eagan, Farmington, Hastings, Inver Grove Heights, Lakeville, Mendota Heights, South St.
Paul, West St. Paul, Minnesota, and Dakota County Minnesota, to establish the Dakota Communications Center
(DCC), a Minnesota nonprofit corporation. The purpose of the DCC is to engage in the operation and
maintenance of a countywide public safety answering point and communications center for law enforcement,
fire, emergency medical services, and other public safety services for the mutual benefit of residents residing in
the abovementioned cities and county, (members). Pursuant to the joint powers agreement, members are
required to provide DCC their pro rata share of cost of operations and maintenance, and capital projects.
Page 55
NOTE V OTHER INFORMATION (cont.)
D. JOINT POWERS DEBT COMMITMENT (cont.)
On May 1, 2007, the DCC issued Public Safety Revenue Bonds, Series 2007 in the amount of $7,315,000 to
provide financing for the acquisition of equipment and reimbursement for conversion costs. The bonds are
special obligations of the DCC, payable from revenues to be received from members. Pursuant to the joint
powers agreement, members will levy taxes for the payment of their pro rata share of the principal and interest
payments due on the bonds. The bonds mature February 1, 2014, and bear interest rates ranging from 4.5%
5.0%. The debt will be re -paid with member assessments over a seven year amortization. All members reserve
the right to prepay, in whole or in part on any date, its allocated share of principal and interest on the bonds.
Payments from the City of Rosemount are provided from General Fund appropriations. The City of Rosemount's
future member payments to DCC as of December 31, 2010 are as follows:
E.. RELATED ORGANIZATION
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2010
Payment Year Amount
2011 62,150
2012 59,950
2013 57,570
Total 179,670
Pursuant to Section 9.5 of the joint powers agreement, member payments are submitted monthly and held in
escrow by U.S. Bank National Association (trustee) until the funds are remitted to the bond holders according to
the established bond principal and interest due dates. The interest earnings from the escrow account will reduce
future member obligations on the debt. Information regarding the Dakota Communications Center can be
obtained at the website www.mn dcc.org /stats.asp or by contacting Jeff May at the City of Rosemount, 2875
145 Street West, Rosemount, Minnesota 55068. Telephone 651 322 -2031 or email address
jeff. rosemount. mn. us.
The City entered into an agreement with SKB Environmental, Inc. for the purpose of providing for the
construction and maintenance of facilities for public recreation, to improve living and working conditions within
the City, further public educational opportunities, and to provide for the charitable needs of the City. This
agreement created a trust called the City of Rosemount SKB Environmental Trust Fund. For 2010, the amount
of distributions to the City could not exceed $80,000, assuming the value of the trust is equal to greater than
$1,500,000. The trust agreement states the funds can be used by the City for any lawful public purpose. During
2010, the City received approximately $344,000 from the trust.
F. EFFECT OF NEW ACCOUNTING STANDARDS ON CURRENT PERIOD FINANCIAL STATEMENTS
The Governmental Accounting Standards Board (GASB) has approved GASB Statement No. 54, Fund Balance
Reporting and Governmental Fund Type Definitions, Statement No. 61, The Financial Reporting Entity:
Omnibus, and Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in
Pre November 30, 1989 FASB and AICPA Pronouncements. Application of these standards may restate
portions of these financial statements.
Page 56
REVENUES
CITY OF ROSEMOUNT
REQUIRED SUPPLEMENTARY INFORMATION
GENERAL FUND
SCHEDULE OF REVENUES COMPARED TO BUDGET (BUDGETARY BASIS) BUDGET AND ACTUAL
For the Year Ended December 31, 2010
Budgeted Amounts Variance with
Original Final Actual Final Budget
TAXES
General property tax 7,171,087 7,171,087 7,263,683 92,596
Fiscal disparities 1,195,913 1,195,913 1,195,913
Other 206,000 206,000 277,834 71,834
Total Taxes 8,573,000 8,573,000 8,737,430 164,430
INTERGOVERNMENTAL REVENUES
Federal grants 9,397 9,397
State aid police 145,000 145,000 147,975 2,975
State aid general government 21,000 21,000 31,087 10,087
State aid highway 29,000 29,000 30,165 1,165
Other 85,500 85,500 88,268 2,768
Total Intergovernmental Revenues 280,500 280,500 306,892 26,392
PUBLIC CHARGES FOR SERVICES
General, government 615,200 615,200 640,757 25,557
Public safety 36,200 36,200 38,127 1,927
Highways and streets 1,500 1,500 18,758 17,258
Parks and recreation 258,800 258,800 255,738 (3,062)
SAC 3,000 3,000 2,154 (846)
Total Charges for Services 914,700 914,700 955,534 40,834
LICENSES AND PERMITS
Business 41,500 41,500 77,325 35,825
Non business 341,100 341,100 376,575 35,475
Total Licenses and Permits 382,600 382,600 453,900 71,300
FINES AND FORFEITURES
County 125,000 125,000 113,675 (11,325)
SPECIAL ASSESSMENTS 10,000 10,000 9,563 (437)
INVESTMENT INCOME AND MISCELLANEOUS
Investment income 150,500 150,500 167,178 16,678
Net decrease in the fair value of investments (42,296) (42,296)
Miscellaneous general revenues 4,000 4,000 116,915 112,915
Donations 18,639 18,639
Rents 22,200 22,200 25,900 3,700
Total Investment income and miscellaneous 176,700 195,339 286,336 90,997
Total Revenues 10,462,500 10,481,139 10,863,330 382,191
OTHER FINANCING SOURCES
Transfers in
3,500 3,500 3,500
Total Revenues and Other Financing Sources 10,466,000 10,484,639 10,866,830 382,191
See auditors' report and accompanying notes to required supplementary information.
Page 57
CURRENT EXPENDITURES
GENERAL GOVERNMENT
Mayor and council
Executive
Elections
Finance
Community development
General government
TOTAL GENERAL GOVERNMENT
PUBLIC SAFETY
Police department
Fire department
TOTAL PUBLIC SAFETY
PUBLIC WORKS
Government building maintenance
Fleet maintenance
Street maintenance
Park maintenance
TOTAL PUBLIC WORKS
PARKS AND RECREATION
CAPITAL OUTLAY
OTHER FINANCING USES
Transfers out
TOTAL EXPENDITURES
Beginning of year budget basis encumbrances
End of year budget basis encumbrances
GAAP basis expenditures and other financing uses
CITY OF ROSEMOUNT
REQUIRED SUPPLEMENTARY INFORMATION
GENERAL FUND
SCHEDULE OF EXPENDITURES AND OTHER USES (BUDGETARY BASIS) BUDGET AND ACTUAL
For the Year Ended December 31, 2010
Budgeted Amounts
Original Final
256,500
520,300
40,000
422,300
945,700
387,700
256,500
520,300
40,000
422,300
946,200
387,700
Variance with
Actual Final Budget
143,611
479,353
26,719
410,465
890,419
377,807
112,889
40,947
13,281
11,835
55,781
9,893
2,572,500 2,573,000 2,328,374 244,626
3,029,100 3,038,788 3,005,323 33,465
303,000 303,000 301,143 1,857
3,332,100 3,341,788 3,306,466 35,322
490,200 490,200 416,324 73,876
612,300 612,300 615,092 (2,792)
1,331,300 1,331,300 862,382 468,918
723,900 723,900 684,742 39,158
3,157,700 3,157,700 2,578,540 579,160
1,288,700 1,297,151 1,239,742 57,409
1,604 (1,604)
115,000 115,000 1,323,389 (1,208,389)
10,466,000 10,484,639 10,778,115 (293,476)
638,253
(465,544)
10,950,824
See auditors' report and accompanying notes to required supplementary information.
Page 58
Budgetary Information
General Fund
Fleet maintenance
CITY OF ROSEMOUNT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2010
Budgetary information is derived from the annual operating budget and is presented using generally
accepted accounting principles and the modified accrual basis of accounting with departures from
generally accepted accounting principles for encumbrances.
Excess expenditures over appropriations are as follows:
Final
Budget Expenditures Excess
612,300 615,092 2,792
Rosemount Fire Department Relief Association Defined Benefit Pension Plan
Required Supplementary Information, Schedule of Funding Progress
The following historical trend information was obtained from the Association's financial report
for the year ended December 31, 2010.
Date
Assets as a Overfunded
Percentage of (Underfunded)
Accrued Accrued Accrued
Assets Liabilities Liabilities Liabilities
12 -31 -10 2,615,897 2,902,338 91% (286,441)
12 -31 -09 2,267,776 2,442,290 93 (174,514)
12 -31 -08 1,854,425 2,203,084 84 (348,659)
Computations of the unfunded net pension obligation and employer contributions as a percent
of covered payroll are not applicable since the fire department is a volunteer organization and
no covered payroll exists.
See auditors' report
Page 59
Total
Tree Disease Fire Nonmajor
Grant Safety Port Authority Governmental
Program Education GIS General Funds
ASSETS
Cash and investments 152 5,232 1,516 135,306 142,206
Total assets 152 5,232 1,516 135,306 142,206
LIABILITIES
Accounts payable 387 387
Total liabilities 387 387
FUND BALANCES
Unreserved
Designated for subsequent years' expenditures
Undesignated
Total fund balances
CITY OF ROSEMOUNT
COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS
December 31, 2010
152
152
Special Revenue Funds
5,232
5,232
1,516
1,516
6,900
134,919 134,919
134,919 141,819
Total liabilities and fund balances 152 5,232 1,516 135,306 142,206
Page 60
CITY OF ROSEMOUNT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2010
Special Revenue Funds
Total
Tree Disease Fire Nonmajor
Grant Safety Port Authority Governmental
Program Education GIS General Funds
REVENUES
Taxes 50,000 50,000
Public charges for services 720 720
Investment income and miscellaneous 1 336 7 330 674
Total Revenues 1 336 727 50,330 51,394
EXPENDITURES
Current:
General government 40,543 40,543
Public safety 208 208
Public works 3,330 3,330
Total Expenditures 208 3,330 40,543 44,081
Net change in fund balance 1 128 (2,603) 9,787 7,313
FUND BALANCES Beginning of Year 151 5,104 4,119 125,132 134,506
FUND BALANCES END OF YEAR 152 5,232 1,516 134,919 141,819
Page 61
CITY OF ROSEMOUNT
REVENUES
Taxes
Intergovernmental
Charges for services
Investment income fair value adjustment
Miscellaneous
Total Revenues
EXPENDITURES
Current:
General government
Capital Outlay
Debt Service:
Interest on lease
Total Expenditures
Excess of revenues over expenditures
OTHER FINANCING SOURCES
Transfers in
Total Other Financing Sources
Net Change in Fund Balance
FUND BALANCE Beginning
FUND BALANCE ENDING
BUILDING CIP CAPITAL PROJECT SUB -FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE (BUDGETARY BASIS) BUDGET AND ACTUAL
For the Year Ended December 31, 2010
Original and
Final Budgeted
Amounts
24,000
94,995
100,000
2,500
25,000
246,495
2,500
134,745
9,250
146,495
100,000
100,000
718,692
818,692
Actual
24,000
22,309
577,137
(78)
623,368
2,500
110,872
8,529
121,901
501,467
484,087
484,087
985,554
718,692
Variance with
Final Budget
(72,686)
477,137
(2,578)
(25,000)
376,873
23,873
721
24,594
401,467
484,087
484,087
885,554
1,704,246 885,554
Page 62
REVENUES
Taxes
Intergovernmental
Special assessments
Investment income
Total Revenues
EXPENDITURES
Current:
General government
Public works
Capital Outlay
Total Expenditures
STREET CIP CAPITAL PROJECT SUB -FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE (BUDGETARY BASIS) BUDGET AND ACTUAL
For the Year Ended December 31, 2010
Excess of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
CITY OF ROSEMOUNT
Original and
Final Budgeted
Amounts
700,000
10,500
710,500
2,500
700,000
702,500
8,000
Net Change in Fund Balance 8,000
FUND BALANCE Beginning
FUND BALANCE ENDING
Actual
700,000
132,067
460,878
9,639
1,302,584
3,322
2,977
89,202
95,501
1,207,083
2,322,424 2,322,424
Variance with
Final Budget
132,067
460,878
(861)
592,084
(822)
(2,977)
610,798
606,999
1,199, 083
23,804 23,804
(2,399,405) (2,399,405)
(2,375,601) (2,375,601)
(1,168,518) (1,176,518)
2,330,424 1,153,906 11,176,518)
Page 63
Original and
Final Budgeted Variance with
REVENUES Amounts Actual Final Budget
Taxes 501,633 501,633
Intergovernmental 17,549 17,549
Investment income 5,000 7,295 2,295
Miscellaneous 1,562 1,562
Total Revenues
EXPENDITURES
Current:
General government 2,500 2,500
Capital Outlay 439,000 210,698 228,302
Debt Service:
Principal retirement 60,000 59,826 174
Total Expenditures 501,500 273,024 228,476
Excess of revenues over (under) expenditures 5,133 255,015 249,882
OTHER FINANCING SOURCES
Sale of capital assets 9,000 12,505 3,505
Total Other Financing Sources 9,000 12,505 3,505
Net Change in Fund Balance 14,133 267,520 253,387
FUND BALANCE Beginning 1,355,711 1,355,711
FUND BALANCE ENDING
CITY OF ROSEMOUNT
EQUIPMENT CIP CAPITAL PROJECT SUB -FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE (BUDGETARY BASIS) BUDGET AND ACTUAL
For the Year Ended December 31, 2010
506,633
528,039 21,406
1,369,844 1,623,231 253,387
Page 64
CITY OF ROSEMOUNT
SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES
M.A.A.G. AGENCY FUND
For the Year Ended December 31, 2010
Balance
Balance
1/1/2010 Receipts Disbursements 12/31/2010
ASSETS
Cash and investments 63,602 35,545 30,604 68,543
LIABILITIES
Due to M.A.A.G. 63,602 35,545 30,604 68,543
Page 65
STATISTICAL SECTION
This part of the City of Rosemount's comprehensive annual financial report presents detailed information
as a context for understanding what the information in the financial statements, note disclosures, and
required supplementary information says about the government's overall financial health.
Contents Page
Financial Trends 67
These schedules contain trend information to help the reader understand how the
government's financial performance and well -being have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the government's
most significant local revenue source, the property tax.
Debt Capacity
These schedules present information to help the reader assess the affordability of
the government's current levels of outstanding debt and the government's ability
to issue additional debt in the future.
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader
understand the environment within which the govemment's financial activities
take place.
Operating Information
These schedules contain service and infrastructure data to help the reader
understand how the information in the government's financial report relates to the
services the government provides and the activities it performs.
73
77
82
84
Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports
for the relevant year.
Page 66
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Schedule 2
City of Rosemount
Changes in Net Assets
Last Eight Fiscal Years
(Accrual Basis of Accounting)
Expenses
Govemmental activities
General govemment
Public safety
Public works
Culture, education and recreation
Conservation and economic development
Interest and fiscal charges
Total govemmental activities expenses
Net (Expense) Revenue
Governmental activities
Business -Type activities
Total primary government net expense
Fiscal Years
2003 2004 2005 2006 2007 2008 2009 2010
1,772,833 2,068,246 2,739,933 2,722,728 2,610,367 2,639,752 2,754,573 2,671,886
2,350,428 2,468,826 2,730,428 2,928,783 3,293,615 3,468,249 3,688,658 3,819,520
3,814,357 5,893,405 8,344,837 7,724,300 4,974,625 5,279,784 4,260,284 4,326,903
1,099,990 1,154,709 1,250,743 1,257,556 1,386,322 1,417,400 1,378,619 1,477,525
2,648 23,598 2,297 342 9,677 1,956,865 648,476 149,701
971,498 802,957 1,067,478 921,318 841,108 958,900 750,226 690,896
10, 011, 754 12, 411, 741 16,135, 716 15,555, 027 13,115, 714 15, 720, 950 13, 480 13,136, 431
Business -Type activities
Water Utility 1,268,363 1,763,570 1,671,775 1,603,391 2,366,263 1,893,099 1,878,310 1,861,467
Sewer Utility 1,482,577 1,703,280 1,975,164 1,913,071 2,059,411 2,123,397 2,313,576 2,305,503
Storm Water Utility 839,499 737,401 842,701 916,557 1,245,492 988,716 989,808 1,010,678
Arena 359,630 391,570 443,128 457,897 468,017 537,530 456,706 484,278
Total Business -Type activities expenses 3,950,069 4,595,821 4 932 768 4,890 916 6139,183 5,542,742 5,638,400 5,661,926
Total primary govemment expenses $13,961,823 17,007,562 21,068,484 20,445,943 19,254,897 21,263,692 19,119,236 $18,798,357
Program Revenues
Governmental activities
Charges for services
General government 1,854,322 2,591,883 2,695,090 2,065,514 1,876,616 2,031,866 1,501,756 1,672,014
Public safety 130,581 135,673 120,182 117,017 159,624 203,056 169,112 151,802
Public works 43,377 97,140 37,497 25,159 8,893 32,160 15,050 20,912
Culture, education and recreation 355,981 1,365,568 1,137,357 351,867 693,482 403,560 244,374 263,238
Operating grants and contributions
General govemment 12,889 65,600 11,802 25,608 25,823 22,580
Public safety 152,036 182,122 252,907 212,885 251,262 233,349 254,175 246,346
Public works 1,315,865 1,738,997 354,618 169,586 926,545 392,136 380,737 311,630
Culture, education and recreation 23,633 19,076 1,135 1,163 628 659 26,484
Conservation and economic development 169,866 18,019 15,000 18,500 15,400 82,803 60,100 20,100
Capital grants and contributions
General government 3,435,395 8,746 117,025 1,775 7,118
Public safety 152,495 1,562 337 3,971 697
Public works 9,167,679 8,672,316 13,294,175 5,218,862 4,667,378 3,762,115 1,206,361 5,320,892
Culture, education and recreation 1,024,357 1,349 423,305 531 4,203 9,218
Conservation and economic development 210,863 522,179 256,357 19,425
Total governmental activities program revenues 13,202,596 14,890,951 22,760,814 8,216,228 9,168,078 7,689,075 4,103,973 8,062,758
Business -Type activities
Charges for services
Water Utility 2,626,145 3,361,166 2,562,552 2,115,864 2,092,633 2,027,618 1,764,784 1,952,359
Sewer Utility 1,837,761 2,089,244 1,946,894 1,722,929 1,677,768 1,767,732 1,482,651 1,470,801
Storm Water Utility 1,510,114 1,739,183 1,999,635 1,167,514 1,056,510 1,137,287 852,704 888,995
Arena 308,461 337,912 331,205 351,808 373,504 390,631 370,964 406,797
Operating grants and contributions
Water Utility 1,570
Sewer Utility 930
Capital grants and contributions
Water Utility 111,117 288,615 44,989 107,855 46,807 56,388 70,279 72,960
Sewer Utility 525,459 126,936 87,619 90,776 88,516 392,757 416,493 71,656
Storm Water Utility 729,012 846,683 80 18,165 1,075,041 85,242
Arena 39,900
Total Business -Type activities program revenues 7,690,469 8,789,739 6,972,894 5,556,826 5,335,738 5,790,578 6,032,916 4,948,810
Total primary government program revenues 20,893,065 23,680,690 29,733,708 13,773054 14,503,816 13,479,653 10136,889 13,011,568
3,190,842 2,479,210 6,625,098 (7,338,799) (3,947,636) (8,031,875) (9,376,863) (5,073,673)
3,740,400 4,193,918 2,040,126 665,910 (803,445) 247,836 394,516 (713,116)
6,931,242 6,673,128 8,665,224 (6,672,889) (4,751,081) (7,784,039) (8,982,347) (5,786,789)
Schedule 2 (continued)
City of Rosemount
Changes in Net Assets
Last Seven Fiscal Years
(Accrual Basis of Accounting)
General Revenues and Other Changes in Net Assets
Govemmental activities
Property taxes, levied for general purposes 5,832,653 6,325,217 6,902,852 7,275,781 8,640,194 9,437,336 9,768,391 10,023,255
Property taxes, levied for debt service 266,011 1,644,099 1,377,159 1,951,327 2,025,349 2,005,338 1,711,452 1,257,365
Other taxes 133,525 141,642 173,719 184,868 201,446 208,667 224,276 264,808
Public gifts and/or grants 77,884
Investment income 391,103 376,200 567,112 1,064,315 967,337 611,533 297,536 164,474
Gain (loss) on the sale of assets (232,155) (2,125,256) (851,439)
Miscellaneous 5,127 29,244 71,371 131,352 326,263 365,516 340,763 429,150
Transfers (5,476,1 (5,087,288) (4,468,254) (5,169,779) (3,599,876) (1,339,200) 239,241 984,000
Total governmental activities 998 ,023 3,429,114 4,623,959 5,437,864 8,560,713 9,163,934 11,730,220 13,123,052
Business -Type activities
Investment income 299,851 440,306 572,317 943,911 1,102,729 726,105 464,289 315,928
Gain (loss) on the sale of assets (1,604)
Transfers 5,476,125 5,087,288 4,468,254 5,169,779 3,599,876 1,339,200 (239,241) (984,000)
Total Business -Type activities 5,774,372 5,527,594 5,040,571 6,113,690 4,702,605 2,065,305 225,048 (668,072)
Total primary govemment 6,772,395 8,956,708 9,664,530 11,551,554 13,263,318 11,229,239 11,955,268 12,454,980
Change in Net Assets
Governmental activities
Business -Type activities
Total primary government
Source: City of Rosemount Comprehensive Annual Financial Reports
Note: The City began to report this information when it implemented GASB Statement 34 in fiscal year 2003.
Fiscal Years
2003 2004 2005 2006 2007 2008 2009 2010
4,188,865 5,908,324 11,249,057 (1,900,935) 4,613,077 1,132,059 2,353,357 8,049,379
9,514,772 9,721,512 7,080,697 6,779,600 3,899,160 2,313,141 619,564 (1,381,188)
13,703,637 15,629,836 $18,329,754 4,878,665 8,512,237 3,445,200 2,972,921 6,668,191
Page 69
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Schedule 7
City of Rosemount
Principal Property Tax Payers
Current Year and Nine Years Ago
Taxpayer
2010 2001
Percentage Percentage
Local of Total Local of Total
Tax Local Tax Tax Local Tax
Capacity (1) Rank Capacity Capacity (1) Rank Capacity
Great Northern Oil Co. 1,602,738 1 6.25% 1,055,504 1 7.23%
Flint Hills Resources LP (2001 Koch Refining Co.) 1,224,967 2 4.78% 516,132 2 3.54%
Northern States Power Co. 297,424 3 1.16% 268,951 3 1.84%
Clare) Corporation (Cub Foods) 189,250 4 0.74%
146th Street Partners LP (Waterford Commons) 152,550 5 0.60%
Northern Natural Gas Co. 128,618 6 0.50%
Rosemount Crossing LLC (Aldi's) 106,016 7 0.41
Webb Properties LLC 96,494 8 0.38% 53,118 11
Francis Patricia Dolejs 90,444 9 0.35%
Bigos Rosemount LLC (Cannon Equipment) 87,660 10 0.34% 82,904 5 0.57%
CF Industries, Inc. (Cenex) 86,086 11 0.34% 69,166 7 0.47%
Warren K. lsraelson (Formerly Progress Land Co.) 82,870 12 0.32%
Hidden Valley Spe LLC (Rosemount Woods) 79,310 13 0.31
Limerick Way LLC 76,251 14 0.30% 81,651 6 0.56%
Koch Exploration Properties LLC 41,458 15 0.16%
Centex Homes 88,837 4 0.61%
CP Limited Partnership 64,844 8 0.44%
Cue Properties LLC (Wintz Companies) 63,705 9 0.44%
Continental Nitrogen Resources (CNR) 63,212 10 0.43%
Greif Brothers 52,932 12 0.36%
Rosemount Properties LLC (Rsmt Market Square) 51,950 13 0.36%
SKB Environmental Inc. 45,290 14 0.31%
DR Horton Inc. Minnesota 33,341 15 0.23%
Principal Taxpayers Total 4,342,136 16.94% 2,591,537 17.76%
Total City Tax Capacity
Source: Dakota County Treasurer- Auditor
25,633,368 14,593,889
(1) These figures do not include the dollars collected but the tax capacity for each entity.
Page 74
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Schedule 11
City of Rosemount
Direct and Overlapping Governmental Activities Debt
As of December 31, 2010
Net General Estimated Estimated
Obligation Percentage Amount
Bonded Debt Applicable Applicable
Governmental Units (1) Outstanding (2) to City (7) to City
Direct Debt:
City of Rosemount 2,008,682 (3) 100.00% 2,008,682
Overlapping Debt:
School Districts:
I.S.D. 196 Rosemount 130,168,730 (4) 13.90% 18,093,453
I.S.D. 199 Inver Grove Heights 45,380,000 5.50% 2,495,900
1.S.D. 200 Hastings 54,220,000 0.10% 54,220
Dakota County 63,530,000 (5) 5.50% 3,494,150
Regional:
Metropolitan Council 16,320,000 (6) 0.70% 114,240
Metropolitan Transit District 162,675,000 0.80% 1,301,400
Total Overlapping Debt 472,293,730 25,553,363
Total Direct Overlapping Debt 474,302,412 27,562,045
(1) Only those units with debt outstanding are shown here.
(2) Excludes general obligation debt supported by revenues and tax and aid anticipation debt. Includes
annual appropriation lease revenue debt.
(3) Net general obligation bonded debt of the city supported by property taxes (see Schedule 10).
(4) Includes annual appropriation lease revenue debt.
(5) Includes Dakota County's proportionate share ($305,000) of the Dakota Communication Center's
$7,315,000 Public Safety Revenue Bonds, Series 2007.
(6) Excludes general obligation debt payable from sewer system revenues, 911 user fees and
housing rental payments. Includes certificates of participation.
(7) Percent of govemmental unit within the City of Rosemount's boundaries calculated
by the city's Financial Advisors, Springsted Inc.
Page 78
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Schedule 14
City of Rosemount
Demographic and Economic Statistics
Last Ten Calendar Years
Calendar Per Capita Personal School Unemployment Median
Year Population (1) Income (2) Income (3) Enrollment (4) Rate (5) Age (6)
2001 15,270 36,788 561,752,760 3,638 3.9% 33.7
2002 16,110 37,591 605,591,010 4,262 3.6% 33.7
2003 18,700 38,856 726,607,200 3,849 4.0% 33.7
2004 19,907 40,548 807,189,036 4,111 3.7% 34.7
2005 20,837 41,706 869,027,922 4,474 3.7% 35.2
2006 22,049 43,095 950,201,655 4,551 3.7% 35.7
2007 22,397 45,045 1,008,872,865 4,458 4.4% 34.6
2008 22,750 46,357 1,054,621,750 4,623 6.1% 36.0
2009 23,750 46,357 1,100,978,750 5,266 7.0% 36.2
2010 21,874 46,357 1,014,013,018 5,179 6.3% 36.2
(1) 2010 is a regular decennial census figure. All years prior to 2003 are best available estimates provided by the
Minnesota State Demographic Center (as of 4/1 of each year). All years from 2003 and on (except for 2010) are the City staffs
best estimates as of 12/31 of each year to give a more indicative estimate of the actual population.
(2) These figures are provided by and are for Dakota County. These figures usually have a 2 to 3 -year lag time
so that is why the two most current years use the 2008 figure for computing the "Personal Income" figure.
(3) These figures are derived by multiplying the City's population figure times Dakota County's per capita income figures.
(4) School enrollment is the total number of students who reside within the Rosemount High School boundaries and go to
independent School District No. 196 schools located in Rosemount. Beginning in 2000, the total school enrollment will
show the total number of students with homes in the City of Rosemount.
(5) Unemployment rates were compiled by the Minnesota Local Area Unemployment Statistics (LAUS) for Dakota County.
(6) These figures are provided by Dakota County. 2001, 2002 2003 figures were unavailable (the figure provided is the median age for 2001).
2009's median age is the most current information available so 2010 is shown as the same age.
Page 81
Schedule 15
City of Rosemount
Principal Employers
Current Year and Nine Years Ago
Employer
2010 2001
Percentage Percentage
of Total of Total
City City
Employees Rank Employment Employees Rank Employment
Note: The City of Rosemount does not track this information and there are no sources at the County or State level to provide this information.
Page 82
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