HomeMy WebLinkAbout2.a. Responses to Auditor's Report on Internal ControlsAGENDA ITEM: Responses to Auditor's "Report on
Internal Controls"
AGENDA SECTION:
Discussion
PREPARED BY: Jeff May, Finance Director
AGENDA NO. 2.A.
ATTACHMENTS: 2008 Comprehensive Annual Financial
Report (CAFR), Report on Internal
Control, Management Responses to
Report on Internal Control
APPROVED BY:
flll)
RECOMMENDED ACTION: Discussion only.
4 ROSEMOUNT
CITY COUNCIL
City Council Work Session: June 10, 2009
EXECUTIVE SUMMARY
ISSUE
The issue before the City Council is the discussion of management's responses to our auditors Report on
Internal Control. The CAFR will be discussed this evening with two representatives from our audit firm
BACKGROUND
Based on discussion with the City Administrator, it was decided to carefully evaluate each
recommendation and put together formal responses to the items that were addressed in our auditors'
annual Report on Internal Control. Some of these items have been listed in the past and some of them are
new this year based on new, ever evolving standards on internal controls. We felt that it was appropriate
to discuss these items with the Council and update them on the status of the issues. There were a total of
18 items that we have responded to. We used a grading system of "Resolved" if the issue will be
addressed in this calendar year with the likelihood that it will not appear on next year's report; "Partially
Resolved" if we have been able to identify a plan or procedure that will likely lead to a resolution of the
matter within the next year or two; and "Unresolved" if the item is beyond our current capacity and
resources to resolve. Of the 18 items the auditors have agreed that 9 of the items, or 50 should be
resolved by the end of the year, with 5 items partially resolved and only 4 items that are unresolved and
will continue to be unresolved for the foreseeable future.
We are handing out the CAFR's for this meeting in case there are other issues that the Council would like
to discuss in a work session environment. On June 16 the auditors will give a brief presentation and
answer any questions that they have as well.
SUMMARY
After discussion this evening, staff will be bringing an agenda item for the City Council to accept the
CAFR at the .June 16 meeting.
MATERIAL WEAKNESS INTERNAL CONTROLS
As a result of our audit procedures, we are able to provide to you the following
information about where your controls over transactions either do not exist, or could be
improved. Below is a list of potential controls that should be in place to achieve a higher
level of reliability that errors or irregularities in your processes would be discovered by
your staff. 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 will likely be communicated to you.
CONTROLS OVER ACCOUNTS PAYABLE /DISBURSEMENTS
1. There is not an appropriate system for review and approval of new vendors.
Management's Response The City has begun verifying new vendors via the internet
or phone book in 2009. When the verification occurs via the internet documentation is
printed out and attached to the original purchase order or invoice. If verification cannot
be obtained via the internet phone books will be checked. That verification will be
documented with the original purchase order or invoice.
Status: Resolved
CONTROLS OVER PAYROLL
1. Persons preparing the payroll are not independent of other personnel duties or
restricted from access to the payroll account.
Management's Response Beginning in 2009, the City has designated an employee
that is not involved in processing payroll nor has access to the payroll system to select
approximately five employees paid during each month and verify their existence and
appropriate pay rates. This review will be documented using a standardized form.
Status: Resolved
CONTROLS OVER UTILITY BILLING
1. Proper segregation between receipting and receivable functions doesn't exist.
Management's Response In order for the City to comply with this control we would
have to involve two other employees in this process (besides the two current Utility
Billing lerks) to provide some segregation of duties and to assign particular duties on
an alternating basis to improve the likelihood of identifying unusual activity. With our
current staffing levels the only employees who would have the skill levels necessary to
be involved in this process already have access to the system (in a backup capacity) and
do not have the necessary time available to take on these tasks.
Status: Unresolved
2. There is no formal approval and review process for utility billing adjustments by
someone without access to the utility billing system.
Management's Response In addition to the review that is done indirectly by the
Finance Director each month to reconcile the general ledger to the subsidiary ledger, a
designated employee (without access to the utility billing system) should review
adjustments for unusual activity and document that review. As stated above, the only
employees who would have the skill levels necessary to be involved in this process
already have access to the utility billing system. Therefore it is not practical to complete
this review at this time. (This will be addressed when the Accounting Supervisor does
not need access to the Utility Billing system for Special Assessment lookups in the
next year or two)
Status: Partially Resolved
CONTROLS OVER FINANCIAL REPORTING
1. Adjusting journal entries and supporting documentation are not reviewed and
approved by an appropriate person who is not the original preparer in most cases.
Management's Response In order for the City to comply with this control we would
have to implement a review process that requires someone without general ledger
access (and with sufficient knowledge of the City's financial activities) to review the
listing of journal entries posted in the system to identify any entries that appear unusual
and review the support for those entries selected. This review would then be
documented. Currently the only person who would have the skill levels necessary to
perform this review has access to the general ledger system. There is not anyone on
staff, in the Finance Department or other departments, which would have the skill levels
necessary to complete this review process at this time.
Status: Unresolved
2. Account reconciliations are not performed by someone without general ledger
access and involved with processing of transactions.
Management's Response Based on comments in the 2007 audit, the City began
having someone without general ledger access review the bank reconciliations in 2008
and documenting those reviews. Other key reconciliations have not been reviewed for
the same reasons as stated in (1) above. (With the current staffing levels this is not
something that is viewed as being attainable anytime in the near future except for the
bank reconciliation portion as mentioned above)
Status: Unresolved
3. The review of interim financial statements (budget to actual reports, etc) is not
properly documented in some cases. Also, some reports reviewed are not system
generated and therefore are subject to manipulation.
Management's Response The City has made significant progress in this area,
there are still a few cases where the reviews are not documented. An increased
emphasis will be put on the department heads to comply with this requirement with the
expectation that all departments will have documented reviews for 2009. A form will be
generated that all department heads will utilize for this documentation. For those reports
provided to the Council that are not system generated, management has determined that
it is not always feasible to provide system reports that would still be meaningful to
replace those reports or provide system reports in addition to the manual reports that
agree to each other. These reports that are not system generated are used for
informational purposes and if issues come up that warrant further discussion, the system
generated reports are used for those discussions.
Status: Resolved
4. A financial statement disclosure checklist or similar tool is not utilized by the
government to ensure the completeness of the statements in accordance with
GASB reporting requirements.
Management's Response For the 2009 audit, the auditors will provide an
uncompleted checklist to the City to utilize in reviewing the financial statements prepared
by the auditor. That completed checklist will then be provided to the auditors. If items
cannot be completed by the City, the auditors will work with the City to resolve those
items.
Status: Partially Resolved
5. Controls do not exist for the identification and review of necessary financial
reporting disclosures, such as commitments and contingencies, related party
transactions, and subsequent events.
Management's Response This will be addressed as part of the process noted above
regarding the completion of the disclosure checklist.
Status: Partially Resolved
MATERIAL WEAKNESS INTERNAL CONTROL OVER FINANCIAL REPORTING
As we reported to you last year, we are required to communicate to you about your
internal 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
organization 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 material weakness in internal control includes consideration of the
year end financial reporting process. To avoid the auditor reporting a material weakness
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 anv material journal entries as a result of our audit
procedures. This is very rare for most of our clients.
Management's Response The City has made improvements in this area in recent
years and there were only two significant adjustments this year identified by the auditor.
City staff will review the 2008 audit entries and will put procedures in place to catch
these items and properly record them for the 2009 audit.
Status: Partially Resolved
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 material changes as a result of the audit.
Management's Response The City does not consider it to be feasible to prepare the
entire financial statement document, primarily due to the time commitment. As
mentioned above, the City will begin utilizing a disclosure checklist to ensure the
completeness of the financial statements and will attend training sessions, etc to remain
informed about new accounting pronouncements.
Status: Unresolved
INFORMATION TECHNOLOGY SYSTEM INTERNAL CONTROLS
1. A formal management procedure should be in place for all program changes, system
changes, and maintenance. Additionally a form should be used to authorize,
facilitate and document all changes. These forms should remain on file through out
the system's life.
Management's Response The City has implemented a Patch Management Policy. These
forms will be kept on hand by the IT Coordinator and regularly updated.
Status: Resolved
2. Best Practice states passwords should be changed every 90 days, require a
minimum of 6 characters, require strong passwords, and passwords should be
remembered so users can't reuse recent passwords.
Management's Response The City has implemented an Access Control policy stating that:
Software packages
Passwords are required to change every 180 days.
Password complexity must be at least 8 characters
User accounts are "locked" out after 3 invalid attempts, if the package allows
locks.
Servers
Passwords are required to change every 90 days.
Password complexity must be at least 8 characters long and contain 3 of the
following 4 requirements: lower case, upper case, numbers, and /or special
characters.
User accounts are "locked" out after 3 invalid attempts.
Event logs track details.
Status: Resolved
3. A formal process should be followed to facilitate adding new employees, modifying
existing employee access, and removing access for terminated employees.
Normally a form is used with approval granted by management before any changes
occur, on which IT would record the completion of the process and who completed it.
Management's Response An Access Control Policy has been implemented. Along with this
a new user /delete user form that has been created for all employees starting or departing the
City of Rosemount for domain access. This form must be signed by the direct supervisor of the
employee before any changes to the user access will be made.
Status: Resolved
4. Access should be reviewed once a year by management to ensure users don't have
access beyond their job responsibilities. Segregation of duties conflicts should also
be reviewed.
Management's Response An Access Control Policy has been established to ensure that this
is reviewed on an annual basis by the IT Coordinator and management to ensure proper access
has been given.
Status: Resolved
5. The operating system, database, and applications should be monitored by security
administrators to monitor any security violations. In addition there should be a
procedure to resolve or escalate any security violations.
Management's Response The IT Coordinator will monitor all servers by checking log files
and firewall logs to ensure no access has been granted by anyone other than authorized users.
Status: Resolved
6. Proactive periodic restores of the backup media should take place in case the
system was to ever crash.
Management's Response Included in the Rosemount IT Policy states: Data Restore: Test
restores are performed monthly by the IT Coordinator to ensure the backup and recovery
process are working. The test restores are logged by the IT Coordinator and stored at
I:IT /Backup Restore Test.
Status: Resolved
IDENTITY THEFT PREVENTION PROGRAM
New federal rules require that entities that bill regularly for services develop and implement an
Identity Theft Prevention Program. The Program, popularly referred to as the "Red Flag Rules"
must include reasonable policies and procedures for detecting, preventing and mitigating
customer identity theft. Under the Red Flag Rules, creditors such as municipalities and utilities
must develop a written program that identifies and detects the relevant warning signs, or "red
flags of identity theft. These may include, for example, unusual account activity, fraud alerts
on a consumer report, or attempted use of suspicious account application documents. The
program must also describe appropriate responses that would prevent and mitigate the crime
and detail a plan to update the program. The program must be managed by the Council or
senior employees of the entity and include appropriate staff training.
The compliance date is May 1, 2009. It is our understanding that you have not yet adopted a
policy to comply. We recommend you do so as soon as possible. Sample policies are available
from many statewide associations and other sources. You may also wish to check with your
attorney to discuss the applicability of these requirements.
Management's Response Staff is working on developing an acceptable program that would
be implemented prior to the end of this year.
Status: Partially Resolved
SUMMARY
Eighteen total weaknesses were presented to staff by the auditors. Some of the weaknesses
are inherent in having a relatively small staff where many individuals have multiple functions and
duties. Staff has worked with the auditors to determine which weaknesses could be reasonably
addressed with current staffing resources.
The results of these efforts are as follows:
Resolved: nine items
Partially resolved: five items
Unresolved: four items
Staff considers an issue partially resolved if we have identified a plan or procedure that will likely
lead to a full resolution of the matter within the next year or two. Unresolved items are
considered to be items beyond our current capacity and resources to resolve.
COMPREHENSIVE
ANNUAL
FINANCIAL REPORT
FOR THE YEAR ENDED DECEMBER 31. 2008
4 ROSEMOUNT
MINNESOTA
CITY OF ROSEMOUNT, MINNESOTA
CITY OF ROSEMOUNT, MINNESOTA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2008
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, 2008
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, 2008
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
K ROSEMOUNT
May 15, 2009
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, 2008.
This report consists of management's representations concerning 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 internal 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 Virchow, Krause
Company, 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, 2008, 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,
2008, 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 require 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 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 Stjeet West Rosemount, MN 55068 -4997
651 423 -4411 TDD /TTY 651- 423 -6219 Fax 651 423 -5203
www.ci.rosemount.mn.us
MINNESOTA
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:
Population Percent
Population Increase Increase
2008 Estimate 22,750 8,131 56%
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 102 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 500 acres of
industrial and commercially zoned property ready for development. There is also well over 1000
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 Zink 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 25 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 is required
to hold a public hearing on the proposed budget and to adopt a final budget and levy by no later
than December 20 prior to the close of the City's fiscal year.
vi
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 57 -58
as part of the Required Supplemental 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 15.95% 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. 2008 labor force numbers were 2,937,716;
1,836,266; and 231,136 respectively with unemployment rates of 6.8 6.4% and 6.1% to match.
These figures compare quite favorably with national figures.
Community leadership has preserved 430 beautiful acres of land for 26 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, in contrast with the regional economy, were up from last
year at 237 new units. The new starts reflect a combination of attached and detached single
family units with 84 single family homes and 153 multi family units. Commercial, industrial and
institutional building remained relatively strong with building valuation of $26,631,862,
approximately 12.5% higher than in 2007.
VII
In 2008 the City continued to focus on redevelopment of the Downtown business area.
Construction commenced on a 3 -story mixed use project containing 106 rental units and 13,000
square feet of commercial space, within the heart of Downtown. It is expected that the project
will be available for lease in early summer of 2009. The City also entered into a purchase
agreement with Kraus Anderson to construct a medical office building on a Port Authority owned
property Downtown. The first phase of the project is a 12,000 square foot office building and
construction will begin in the spring of 2009.
Residential development has decreased due to national and regional economic conditions.
However, permitted new units were up slightly in 2008 to 237 from a low in 2007 of 143. The City
continues to position itself in the marketplace by promoting land availability and ensuring that
infrastructure is in place to allow property to be developed in an expeditious manner.
Construction on our newest well was completed in 2008. Well #15, located in the Meadows of
Bloomfield neighborhood, was completed and will be online early in 2009. The City also
decommissioned Well #3 and demolished the well house, making room for additional staff
parking on the east side of City Hall.
The Public Works Department coordinated several improvement projects, including a new hockey
rink at Jaycee Park, a new tennis court surface at Claret Park, the reconstruction of Schwarz
Park parking lot, and the interior and exterior painting of Fire Station #1 and the Public Works
north building.
The Engineering Division coordinated the work on several construction projects in 2008 including
the Harmony 5th Addition and Pickens Plat (the final phase of the Harmony development located
on the northeast corner of Trunk Highway 3 and Connemara Trail); Brazil Trail (a new pedestrian
trail connects the north end of the Koch Trail to Brazil Avenue just north of the ball fields and
another segment provides a connection along Brazil Avenue from Upper 138 Street West to the
existing trail on the south side of Connemara Trail); CSAH 38 turn lanes at Shannon Parkway
(joint project between the City and Dakota County created an eastbound right turn lane and a
westbound bypass lane on CSAH 38 at Shannon Parkway); and CSAH 42 Shannon Parkway
intersection improvements (project began in 2007 and was completed in 2008 included a new
signal system with protective permissive left -turn phasing on Shannon Parkway, and a
realignment of the north south thru lanes on Shannon Parkway with concrete medians)
The 2008 Pavement Management Project included improvements to approximately 1.2 miles of
urban streets in the Winds Crossing neighborhood, including Claret Avenue, Cornell Trail, 156
Street West and Cicerone Path. This project also included the addition of approximately 3,520
feet (0.7 miles) of new sidewalk in accordance with the adopted Trail /Sidewalk Plan.
In 2008 the Public Works /Engineering Department began using CarteGraph's PAVEMENTview
for our Pavement Management inspections and analysis. They also expanded their use of
CarteGraph to include WATERview to record inspections and maintenance information for all
hydrants. Aided by interactive maps and other GIS tools, staff is able to enter valuable
information directly into CarteGraph from the field using laptops or other mobile devices.
ROWay, a web -based right -of -way management application, was activated on January 1, 2008.
This online tool enables Engineering staff to better manage utility permits and public right -of -way
construction. Ninety -one utility permits were issued in 2008 using ROWay.
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 2008 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
Drug Abuse Resistance and Education (D.A.R.E.) An officer taught students at
three Rosemount schools. About 250 fifth grade students graduated from the program
in 2008.
National Night Out Police and fire officials, along with City Council members, visited
neighborhoods on the first Tuesday of August as part of this nationwide event. The
event continues to grow each year.
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 on emergency planning and readiness were made to several groups in
2008.
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, an incident management team and a drug task force.
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 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 CAC to house their Rosemount operations.
Cash management policies and practices. Cash temporarily idle during the year was invested
in certificates of deposit, obligations of the US Treasury, and government agencies. The
maturities of the investments ranged from 1 month to 10 years.
Risk management. The City is exposed to various risks of loss related to tort liability, theft of,
damage to, or destruction of assets; errors or omissions; injuries to employees; or natural
disasters. The City has entered into a joint powers agreement with the League of Minnesota
Cities Insurance Trust (LMCIT). The LMCIT is a public entity risk pool currently operating as a
common risk management and insurance program for Minnesota cities. The agreement for
formation of the LMCIT provides that the pool will be self- sustaining through member premiums
and will reinsure through commercial companies for claims in excess of reserved amounts for
each insured event. The pooling agreement allows for the pool to make additional assessments
to make the pool self- sustaining. The City has determined that it is not possible to estimate the
amount of such additional assessments in the unlikely event that they are necessary.
ix
occurrence for liability insurance that offers substantial premium savings when the City has a
relatively small amount of claims. An insurance fund has been established to account for the
savings when the City has a low claim year in either of the insurance policies to offset the
negative effects that the City may have if the City has a high claim year. The City's plan is to
continue to build reserves in this fund in the hope of raising the deductibles and working closer
towards self- insurance (although we realize that we will never be totally self- insured).
The City has also contracted with a risk management consulting firm to assist in the planning
and administering of our insurance needs. The City has been working with a firm since 1994 and
the positive impact on the City has been substantial. Advice given to the City in working towards
self- insurance has proven very beneficial. Also, advice given to the City regarding areas that are
underinsured and areas that are over insured have resulted in many changes, all of them
benefiting the City, and ultimately, its citizens.
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, 2007.
This was the twelfth 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 and Administration Departments. 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.
Respectfully submitted,
Jeffrey A. May
Finance Director
1
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, 2007
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 fmancial reporting.
President
Executive Director
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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, 2008
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
Term Expires
December 31, 2010
December 31, 2010
December 31, 2010
December 31, 2012
December 31, 2012
Kennedy Graven
Fluegel Moynihan, P.A.
Briggs Morgan
Virchow, Krause Company, LLP
Springsted, Inc.
Ehlers Associates, Inc.
Bonestroo, Rosene, Anderlik Associates
Short- Elliot Hendrickson, Inc.
WSB Associates
Virchow K raus e
&company
INDEPENDENT AUDITORS' REPORT
To The Honorable Mayor and Members of the City Council
City of Rosemount, Minnesota
We have audited the accompanying financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of the City of Rosemount, Minnesota, as
of and for the year ended December 31, 2008, 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 2007 financial statements and, in our
report dated May 15, 2008, we expressed unqualified opinions on the respective financial statements of the
governmental 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.
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, 2008, 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.
The management's discussion and analysis on pages 2 through 10 and the budgetary comparison schedules on
pages 57 through 59 are not required parts of the basic financial statements, but are supplementary information
required by the Governmental 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 15, 2009
I mo._c61114 `3 994. G
Virchow, Krause Company, LLP
Certified Public Accountants Consultants An Independent Member of Baker Tilly International
Page 1
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,
2008. We encourage readers to consider the information presented here in conjunction with the City's financial
statements following this section.
Financial Highlights
Management's Discussion and Analysis (Unaudited)
The assets of the City exceeded it's liabilities at the close of the most recent fiscal year by
$168,457,916 (net assets). Of this amount, $34,272,361 (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 $3,445,200. Most of this increase is attributable to cash
contributions from developers.
At year end, unreserved fund balance for the general fund, net of $802,593 designated for compensated
absences, was $5,688,243, 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 $420,000 (1.5 percent) during the current year. The reason for this
increase was that there were three new debt issuances, offset by scheduled payments on existing debt
and the calls and defeasance of four debt issues in the current year.
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 five
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 governmental 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 internal 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, 2008.
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 -56 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 60 -65 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 $168,457,916 at the close of the most recent fiscal year.
The largest portion of the City's net assets (76 percent) reflects its investment in capital assets (e.g., land,
buildings, machinery and equipment, infrastructure) Tess 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.
Current and other assets
Capital assets
Total assets
Long -term liabilities outstanding
Other liabilities
Total liabilities
Net assets:
Invested in capital assets,
net of related debt
Restricted
Unrestricted
Total net assets
City of Rosemount's Net Assets
Governmental Business -Type
Activities Activities
22,784,690
59,080,362
81,865,052
22,006,107
1,246,936
23,253,043
20,602,277
96,595,859
117,198, 627
6,980,770
371,950
7,352,720
2008 Governmental Business -Type
Totals
43,387,458
155, 676, 221
199, 063, 679
28,986,877
1,618,886
30,605,763
Activities Activities
20,191,134 21,891,567 42,082,701
58,213,061 94, 759, 391 152, 972, 452
78,404,195 116, 650, 958 195,055,153
19,781,387 8,679,903 28,461,290
1,142,858 438,289 1,581,147
20,924,245 9,118,192 30,042,437
37,876,848 89,687,681 127,564,529 39,140,878 86,225,033 125,365,911
6,621,026 6,621,026 8,736,586 8,736,586
14,114,135 20,158,226 34,272,361 9,602,486 21,307,733 30,910,219
58,612,009 109,845,907 168,457,916 57,479,950 107,532,766 165,012,716
2007
Totals
An additional portion of the City's net assets (4 percent) represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net assets ($34,272,361) 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 n
33 percent of the total growth in the government's net assets.
Business -type activities. Business -type activities increased the City's
for 67 percent of the total growth in the government's net assets.
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
Extraordinary loss on disposal of
capital assets
Increase in net assets
Net assets Beginning of Year
Net assets End of Year
Governmental
Activities
2,670,642
731,496
4,286,937
11,442,674
208,667
611,533
365,516
20,317,465
2,639,752
3,468,249
5,279,784
1,417,400
1,956,865
958,900
15,720,950
4,596,515
(1,339,200)
(2,125,256)
City's Changes in Net Assets
Business
Type 2008
Activities Totals
Governmental
Activities
5,323,268 7,993,910 2,738,615
731,496 1,220,193
467,310 4,754,247 5,209,270
11,442,674 10,665,543
208,667 201,446
726,105 1,337,638 967,337
365,516 326,263
6,516,683 26,834,148 21,328,667
2,639,752 2,610,367
3,468,249 3,293,615
5,279,784 4,974,625
1,417,400 1,386,322
1,956,865 9,677
958,900 841,108
1,893,099 1,893,099
2,123,397 2,123,397
988,716 988,716
537,530 537,530
5,542,742 21,263,692 13,115,714
973,941 5,570,456
1,339,200
(2,125, 256)
et assets by $1,132,059, accounting for
net assets by $2,313,141, accounting
8,212,953
(3,599,876)
Business
Type
Activities
5,200,415 7,939,030
1,220,193
135,323 5,344,593
1,102, 729
6,438,467
2007
Totals
10,665,543
201,446
2,070,066
326,263
27,767,134
2,610,367
3,293,615
4,974,625
1,386,322
9,677
841,108
2,366,263 2,366,263
2,059,411 2,059,411
1,245,492 1,245,492
468,017 468,017
6,139,183 19,254,897
299,284 8,512,237
3,599,876
1,132,059 2,313,141 3,445,200 4,613,077 3,899,160 8,512,237
57,479,950 107,532,766 165,012,716 52,866,873 103,633,606 156,500,479
58,612,009 109,845,907 168,457,916 57,479,950 107,532,766 165,012,716
Page 5
Millions
5
4
General Government
Fines and forfeitures
0.6%
Licenses and permits
3.5%
Expenses and Program Revenues Governmental Activities
Public charges for
services
9.2%
Public Safety
Investment income and
miscellaneous
17.6%
Special assessments
4.8%
Public Works
Intergovernmental
7.5%
Recreation
Community
Development
Revenues by Source Governmental Activities
Taxes
56.7%
Interest on long -term
debt
Expenses
Revenue
Page 6
Millions
2.5
1.5
0.5
Expenses and Program Revenues Business -Type Activities
Water
Sewer
Investment income
11.7%
Special assessments
2.4%
Connection fees
21.2%
Surcharges and
penalties
4.6%
Water meters
0.9%
Charges for services
59.2%
Financial Analysis of the Government's Funds
Storm water
Revenues by Source Business -Type Activities
Ice Arena
Expenses
Revenue
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 $18,567,778, an increase of $2,642,098 in comparison with the prior year. Approximately 65 percent of this
total amount ($12,095,535) 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 ($855,918), 2) pay debt service ($5,582,205), and 3) prepaid items ($34,120).
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 $6,490,836, while total fund balance reached $7,049,860. 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
1999 4,855,900 3,054,533 58%
2000 5,258,318 3,716,529 66%
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
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 $25,220. 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, 2008, 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 decreased by $1,598,059 due to large principal and interest payments with most
of the special assessment payments collected in prior years. The capital projects fund balance increased by
$725,634 due to a decrease in spending for the year. The Port Authority TIF fund balance increased by
$3,553,514 due to proceeds from two bond issuances ($6,040,000) offset by the purchase of two TIF notes
($1,944,457) and capital outlay ($1,102,702).
Proprietary funds. The City's proprietary funds provide the same type of information found in the government
wide statements, but in more detail.
Unrestricted net assets of the public utilities funds at the end of the year amounted to $20,114,869 while the
arena fund had unrestricted net assets amounting to $43,357. The growth in total net assets for the public
utilities funds was $2,298,493 and the increase in total net assets for the arena fund was $14,648.
Page 8
General Fund Budgetary Highlights
There were no significant variances between final budgeted revenues and actual amounts. In the area of
licenses and permits the City did experience a slight surplus this year in spite of a slowdown in growth reflected
regionally and nationally as well. Other revenue areas experienced small surpluses and deficits that led to the
final surplus amount. Two revenue areas of note were the taxes section that experienced a deficit because of
the loss of state aid (taken from our scheduled December payment) and a surplus in charges for services
because of larger than expected host fee collections. Overall, actual expenditures were less than budgeted for
the General Fund by approximately 7 Government buildings and fleet maintenance expenditures exceeded
budgeted amounts by less than 5% each due to higher than anticipated energy 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, 2008, amounts to $155,676,221 (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 $6,639,769 for the year, developers paid for approximately
$1,900,000 of them.
Land
Land improvements
Buildings
Machinery and equipment
Mains and lines
Infrastructure
Construction in progress
Total capital assets
City of Rosemount's Capital Assets
(net of depreciation)
Governmental
Activities
9,357,561
1,986,370
15, 385, 900
8,204,808
38,648,285
1,664,498
59,080,362
Business -Type
Activities
2,764,407
10,150,675
2,639,886
115,949,494
4,280,493
96,595,859
Totals
12,121,968
1,986,370
25,536,575
10,844,694
115,949,494
38,648,285
5,944,991
155,676,221
Additional information on the City's capital assets can be found in Note IV.C. on pages 39 -41 of this report.
Long -term debt. At the end of the current fiscal year, the City had total bonded debt outstanding of
$28,060,000 (including debt recorded in the Port Authority). Of this amount, $6,285,000 was for general
obligation improvement debt which has financed special assessment construction as part the continuing
development within the City. An additional $9,390,000 was general obligation debt issued by the Port Authority
which financed the City's economic development and redevelopment programs. Another $6,850,000 was
general obligation revenue bond debt issued to add to and improve the water and storm water utility systems
within the City. The remaining $3,760,000 was general obligation and general obligation refunding debt. In
addition, the City had $1,775,000 of equipment certificates outstanding at December 31, 2008.
The City's total debt increased by $420,000, or 1.5 percent, during the current fiscal year. The reason for this
increase was that there were three new debt issuances, offset by scheduled payments on existing debt and the
calls and defeasance of four debt issues in the current year.
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 $70,972,809. Of
the City's $28,060,000 in outstanding general obligation debt at the current fiscal year end, $4,688,012 is
subject to the restrictions placed by state statute.
The City received a bond rating upgrade from Al to Aa 3 in 2007. 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 44 -46 of this report.
Economic Factors
Dakota County's unemployment rate ended the year at 6.1 percent, which compares favorably with the
state unemployment rate of 6.8 percent, and the national unemployment rate of 7.1 percent.
City building permits were slightly higher in both quantity and value in 2008, as compared to 2007. A
total of 1,649 permits with a total valuation of $67,945,640 were issued in 2008.
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 145 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, 2008
(With Summarized Information for December 31, 2007)
Governmental
Activities
19,691,928
548,146
207,398
121,815
2,324,478
32,796
(185,323)
34,120
9,332
9,357,561
1,664,498
1,986,370
15,385,900
8,204,808
38,648,285
(16,167,060)
81,865,052
Business
Type
Activities
18,989,736
748,712
321,282
211,847
49,013
185,323
96,855
2,764,407
4,280,493
10,150,675
2,639,886
115,949,494
(39,189,096)
117,198,627
58,612,009 109,845,907
See accompanying notes to financial statements.
2008
38,681,664
548,146
207,398
870,527
321,282
2,536,325
81,809
130,975
9,332
12,121,968
5,944,991
1,986,370
25,536,575
10,844,694
154, 597,779
(55,356,156)
199,063,679
168,457,916
Totals
2007
37,736,450
484,711
163,717
250
766,487
2,673,727
29,657
214,041
13,661
12,071,362
2,539,643
1,057,403
25,517,467
10,496,457
153,651,171
(52,361,051)
195,055,153
600,328 246,528 846,856 824,848
54,478 13,292 67,770 205,536
592,130 112,130 704,260 550,763
4,030,244 757,007 4,787,251 5,050,282
17,975,863 6,223,763 24,199,626 23,411,008
23,253,043 7,352,720 30,605,763 30,042,437
37,876,848 89,687,681 127,564,529 125,365,911
6,621,026 6,621,026 8,736,586
14,114,135 20,158,226 34,272,361 30,910,219
165,012,716
Page 11
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ASSETS
Cash and investments
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Taxes
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Due from other governmental units
Prepaid items
Total assets
LIABILITIES AND FUND BALANCES
Liabilities
Accounts payable
Accrued payroll and payroll taxes
Deposits payable
Deferred revenue
Advances from other funds
Total liabilities
CITY OF ROSEMOUNT
BALANCE SHEET GOVERNMENTAL FUNDS
December 31, 2008
Port Other Total
Authority Governmental Governmental
General Debt Service Capital Projects TIF Funds Funds
7,010,071 5,564,007 6,000,021 193,866 135,244 18,903,209
752,992 2,552
84,576 39,040
41,836 1,353,174 858,162
164 66,022 5,120
8,758 24,038
34,120
7,932,517 6,983,203 6,926,381 196,418
See accompanying notes to financial statements.
135,244
755,544
123,616
2,253,172
71,306
32,796
34,120
22,173,763
293,097 257,023 13,592 10,704 574,416
54,478 54,478
229,963 229,963
305,119 1,400,998 855,688 2,561,805
185,323 185,323
882,657 1,400,998 1,298,034 13,592 10,704 3,605,985
Fund Balances
Reserved for:
Debt service 5,582,205 5,582,205
Encumbrances 524,904 331,014 855,918
Prepaid items 34,120 34,120
Unreserved and designated, reported in:
General fund 6,480,777 6,480,777
Capital projects 5,297,333 5,297,333
Special revenue funds 15,017 15,017
Unreserved and undesignated, reported in:
General fund 10,059 10,059
Special revenue funds 182,826 109,523 292,349
Total fund balances 7,049,860 5,582,205 5,628,347 182,826 124,540 18,567,778
Total liabilities and fund balances 7,932,517 6,983,203 6,926,381 196,418 135,244
Amounts reported for governmental 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. 59,080,362
Some receivables that are not currently available are reported as deferred revenue in the fund financial
statements but are recognized as revenue when earned in the government -wide statements. 2,561,805
Internal service funds are reported in the statement of net assets as governmental activities. 761,006
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 II.A. (22,358,942)
NET ASSETS OF GOVERNMENTAL ACTIVITIES 58,612,009
Page 13
REVENUES
Taxes
Intergovernmental
Public charges for services
Licenses and permits
Fines and forfeitures
Special assessments
Investment income and miscellaneous
Total Revenues
EXPENDITURES
Current:
General government
Public safety
Public works
Parks and recreation
Conservation and development
Capital Outlay
Debt Service:
Principal retirement
Interest and fiscal charges
Total Expenditures
Excess (deficiency) of revenues
over expenditures
OTHER FINANCING SOURCES (USES)
Issuance of long -term debt
Sale of capital assets
Transfers in
Transfers out
Total Other Financing Sources
Net Change in Fund Balance
FUND BALANCES (DEFICIT) Beginning
FUND BALANCES ENDING
CITY OF ROSEMOUNT
STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS
For the Year Ended December 31, 2008
Port
Authority
General Debt Service Capital Projects TIF
8,149,395
345,895
1,251,234
698,756
127,239
15,712
317,855
10,906,086
2,331,521
3,042,094
2,985,247
1,186, 883
261,717
9,807,462
1,708,603 1,171,609
643,121
572,415
1,981
607,997
189,772
2,508,353
10,000
4,300,000
798,412
5,108,412
339,241
2,988,974
5,715,360
53,337
69,898
5,325,261
9,968
5,458,464
See accompanying notes to financial statements.
296,735
522,179
40,277
859,191
177,693
1,944,457
1,102,702
34,825
3,259,677
Other Total
Governmental Governmental
Funds Funds
50,000 11,376,342
1,511,195
20,999 1,844,648
698,756
129,220
962,950
1,472 3,538,350
72,471 20,061,461
70,049 2,579,263
1,037 3,096,468
40,633 3,105,778
1,186,883
1,944,457
6,689,680
4,300,000
843,205
111,719 23,745,734
1,098,624 (2,600,059) 256,896 {2,400,486) (39,248) (3,684,273)
385,000 6,040,000 6,425,000
4,780 4,780
10,633 1,002,000 353,451 1,366,084
(1,109,000) (274,493) (86,000) (1,469,493)
(1,098,367) 1,002,000 468,738 5,954,000 6,326,371
257 (1,598,059) 725,634 3,553,514 (39,248) 2,642,098
7,049,603 7,180,264 4,902,713 (3,370,688) 163,788 15,925,680
7,049,860 5,582,205 5,628,347 182,826 124,540 18,567,778
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, 2008
Net change in fund balances total governmental funds 2,642,098
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 6,689,680
Less: Some items reported as capital outlay but not capitalized (863,777)
Depreciation is reported in the government -wide statements (1,597,556)
Utility infrastructure constructed by capital projects funds not reported
as governmental activities (1,235,791)
In the statement of activities, the gain or Toss ($2,125,256) on the disposal of
capital assets is reported. In the fund financial statements, proceeds from the sale
of capital assets ($4,780) are reported because the proceeds increase
financial resources (2,130,036)
Internal service funds are reported in the statement of activities. 28,944
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. (49,145)
Issuing debt provides current financial resources to governmental funds, but issuing
debt increases long -term liabilities in the statement of net assets.
This is the amount of debt issued during the year. (6,425,000)
Repayment of debt principal is an expenditure in the governmental funds, but the
repayment reduces Tong -term liabilities in the statement of net assets. This is the amount
of principal payments paid. 4,300,000
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. (6,331)
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
(93,389)
(127,638)
CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVITIES 1,132,059
See accompanying notes to financial statements. Page 15
Total Assets
TOTAL NET ASSETS
CITY OF ROSEMOUNT
STATEMENT OF NET ASSETS PROPRIETARY FUNDS
December 31, 2008
Business -Type Activities Enterprise Funds
Storm Non -major
Water Sewer Water Arena
ASSETS
Current assets:
Cash and investments 6,253,636 8,207,308 4,516,908 11,884 18,989,736 788,720
Customer accounts receivable 305,710 292,037 150,965 748,712
Other receivables 321,282 321,282
Special assessments receivable 94,745 93,757 23,345 211,847
Due from other govemments 49,013 49,013
Prepaid and other assets 21,387 73,268 1,219 981 96,855
Total current assets 6,675,478 8,987,652 4,692,437 61,878 20,417,445 788,720
Non current assets:
Advance to other funds 262,540 262,540
Property and equipment:
Land 1,051,312 547,159 1,165,936 2,764,407
Construction in progress 2,042,522 1,250,091 987,880 4,280,493
Buildings 6,229,597 401,414 1,119,764 2,399,900 10,150,675
Mains and lines 16,408,991 13,385,429 20,163,786 49,958,206
Other improvements 16,528,701 36,927,459 12,535,128 65,991,288
Machinery and equipment 1,536,793 650,589 355,812 96,692 2,639,886
Less accumulated depreciation (9,670,546) (23,277,991) (5,489,254) (751,305) (39,189,096)
Net property and equipment 34,127,370 29,884,150 30,839,052 1,745,287 96,595,859
Total non current assets 34,127,370 30,146,690 30,839,052 1,745,287 96,858,399
40,802,848 39,134,342 35,531,489 1,807,165 117,275,844 788,720
LIABILITIES
Current liabilities:
Accounts payable 134,538 49,760 54,188 8,042 246,528
Accrued liabilities 5,760 3,712 1,493 2,327 13,292
Accrued interest 81,827 30,303 112,130
Current portion of long term obligations 575,296 25,296 148,891 7,524 757,007
Total current liabilities 797,421 78,768 234,875 17,893 1,128,957
Noncurrent liabilities:
Accrued compensated absences 27,404 27,404 9,632 8,152 72,592
General obligation debt 4,623,227 1,527,944 6,151,171
Advances from other funds 77,217 77,217
Total noncurrent liabilities 4,727,848 27,404 1,537,576 8,152 6,300,980
Total Liabilities 5,525,269 106,172 1,772,451 26,045 7,429,937 27,714
NET ASSETS
Invested in capital assets, net of related debt 28,928,847 29,858,854 29,162,217 1,737,763 89,687,681
Unrestricted 6,348,732 9,169,316 4,596,821 43,357 20,158,226 761,006
35,277,579 39,028,170 33,759,038 1,781,120 109,845,907 761,006
See accompanying notes to financial statements.
Totals
Governmental
Activities
Internal Service
Fund
27,714
27,714
Page 16
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
Investment income
Net increase in fair value of investment
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, 2008
Business -Type Activities Enterprise Funds
Storm Non -major
Water Sewer Water Arena
1,198,929 1,321,137 751,184 390,631 3,661,881
56,669 56,669
1,255,598 1,321,137 751,184
392,845 395,806 155,387
227,974 21,995 15,547
113,371 35,403 129,160
231,459 57,619 55,072
785,283
716,986 823,138 547,240
1,682,635 2,119,244 902,406
(427,037) (798,107) (151,222)
515,191 418,933 379,949
56,388 71,476 18,165
266,474 261,344 184,928 47
6,025 6,265 1,022
(3,633)
263,150 15,261 6,154
(213,152) (4,153) (86,310)
890,443 769,126 503,908 47
463,406 (28,981) 352,686
511,541 630,434 427,498
1,307,170 56,069
(1,335,880) (1,450) (84,000)
(360,933) 1,907,173 752,253
35,638,512 37,120,997 33,006,785
See accompanying notes to financial statements.
Totals
390,631 3,718,550
209,996
14,314
19,197
239,556
54,467
537,530
Governmental
Activities
Intemal Service
Funds
19,713
19,713
1,154,034
279,830
297,131 25,851
583,706 264,296
785,283
2,141,831
5,241,815 290,147
(146,899) (1,523,265) (270,434)
$35,277,579 $39,028,170 $33,759,038 1,781,120
1,314,073
275,000
146,029
712,793 24,754
13,312 (376)
(3,633)
284,565
(303,615)
2,163,524 299,378
(146,852) 640,259 28,944
1,569,473
165,000 1,528,239
(3,500) (1,424,830)
14,648 2,313,141 28,944
1 ,766,472 107,532,766 732,062
109,845,907 761,006
Page 17
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ASSETS
Cash and investments
CITY OF ROSEMOUNT
STATEMENT OF NET ASSETS
FIDUCIARY FUND
December 31, 2008
M.A.A.G.
Agency
Fund
53,964
LIABILITIES
Due to M.A.A.G. 53,964
See accompanying notes to financial statements.
Page 20
CITY OF ROSEMOUNT
INDEX TO NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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 32
8. Claims and Judgments 32
9. Equity Classifications 33
10. Prior Period Information 33
II. Reconciliation of Government -Wide and Fund Financial Statements 34
A. Explanation of Certain Differences Between the
Governmental Fund Balance Sheet and the Statement of Net Assets 34
III. Stewardship, Compliance, and Accountability
A. Budgetary Information
34
34
IV. Detailed Notes on All Funds 35
A. Deposits and Investments 35
B. Receivables 38
C. Capital Assets 39
D. Interfund Receivables /Payables and Transfers 41
E. Long -Term Obligations 44
F. Net Assets /Fund Balances 47
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. Subsequent Events 56
Page 21
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).
A. REPORTING ENTITY
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
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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 government'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
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
B. GOVERNMENT -WIDE AND FUND FINANCIAL STATEMENTS
Government -Wide Financial Statements
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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.
Fund Financial Statements
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, 2008
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
Crime Reduction Project 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, 2008
NOTE 1 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 pronouncements
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
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
(cont.)
Fund Financial Statements
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 in the year levied as receivables and deferred revenues. They are
recognized as revenues in the succeeding year when services financed by the levy are being
provided.
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 and fiduciary fund financial statements (other than agency funds) 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
Fund Financial Statements (cont.)
All Financial Statements
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
C. MEASUREMENT FOCUS, BASIS OF ACCOUNTING AND FINANCIAL STATEMENT PRESENTATION
(cont.)
The enterprise funds follow all pronouncements 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.
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 Tess 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
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
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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.
3. Inventories and Prepaid Items
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, 2008
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
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (cont.)
5. Other Assets
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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, 2008 are
determined on the basis of current salary rates and include salary related payments.
Page 31
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (cont.)
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.
8. Claims and Judgments
Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting
Standards Board pronouncements are met. Claims and judgments that would normally be
liquidated with expendable available financial resources are recorded during the year as
expenditures in the governmental funds. If they are not to be liquidated with expendable available
financial resources, no liability is recognized in the governmental fund statements. The related
expenditure is recognized when the liability is liquidated. Claims and judgments are recorded in
the government -wide statement and proprietary funds as expenses when the related liabilities are
incurred. There were no significant claims or judgments at year end.
Page 32
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
D. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY (cont.)
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, 2007, from which the
summarized information was derived.
Page 33
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
NOTE 11 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 Tong -term debt, are not due and payable in the current period and, therefore, are not
reported in the funds The details of this $22,358,942 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 21,210,000
Compensated absences 802,593
Accrued interest 362,167
Unamortized debt discount and issuance costs (15,818)
Combined Adjustment for Long -Term Liabilities 22,358,942
NOTE 111 STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A. BUDGETARY INFORMATION
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 $644,304.
Page 34
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 2,400 2,400 N/A
Demand deposits 31,608,158 32,398,470 Custodial credit
U.S. instrumentalities 7,125,070 7,125,070 Custodial credit,
credit, concentration
of credit, interest rate
Total Cash and Investments
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
Reconciliation to financial statements
Per statement of net assets
Unrestricted cash and investments 38,681,664
Per statement of net assets Agency 53,964
Total Cash and Investments 38,735,628
Carrying Statement Associated
Value Balance Risks
38,735,628 39,525,629
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 .5 percent.
Page 35
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
CITY OF ROSEMOUNT
NOTE IV DETAILED NOTES ON ALL FUNDS (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, 2008, the banks had
pledged various government securities in the amount of $30,944,998 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, 2008, all of the City of Rosemount's investments were U.S. agency
obligations which received AAA and /or 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, 2008, all of the City of Rosemount's investments were U.S. agency
obligations, as follows:
Issuer
Fair Value Percentage of Total
Federal Home Loan Bank 507,970 7%
Federal Home Mortgage Corporation 3,868,042 54%
Federal National Mortgage Association 2,248,903 32%
Federal Farm Credit Bank 500,155 7%
7,125,070
Page 36
U.S. Agency Obligations 7,125,070
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
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, 2008, the City of Rosemount's investments were as follows:
Investment Type
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
Investment Maturities (in years)
Total Fair Less More
Value than 1 1 -5 6 -10 than 10
Investments Highly Sensitive to Interest Rate Changes
501,446 6,623,624
See Note I.D.1 for further information on deposit and investment policies.
Investments highly sensitive to interest rate changes are investments that vary in value more than
one would expect in normal circumstances.
At December 31, 2008, the City held $4,912,744 in U.S. Agency Obligations that are callable at
increasing stepped interest rates.
Page 37
B. RECEIVABLES
Amounts not expected to
be collected within one
year
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
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 Internal
Governmental Activities General Service Projects TIF Service
Totals
Receivables:
Taxes 752,992 2,552 755,544
Accounts 84,576 39,040 123,616
Special assessments 41,836 1,353,174 858,162 2,253,172
Delinquent special
assessments 164 66,022 5,120 71,306
Due from other
governments 8,758 24,038 32,796
Total Receivables 888,326 1,419,196 926,360 2,552 3,236,434
31,080 1,049,465 638,829
1,719,374
Nonmajor
Water Sewer Storm Water Enterprise
Business -Type Activities Utility Utility Utility Funds Totals
Receivables:
Customer accounts 305,710 292,037 150,965 748,712
Other 321,282 321,282
Special assessments 94,745 93,757 23,345 211,847
Due from other governments 49,013 49,013
Total Receivables 400,455 707,076 174,310 49,013 1,330,854
Amounts not expected to be collected
within one year 70,111 69,380 17,275 156,766
Page 38
B. RECEIVABLES (cont.)
Delinquent property taxes receivable
Delinquent special assessments
Special assessments not yet due
Donations for future projects
Governmental Activities
Capital assets not being depreciated:
Land
Construction in progress
Total Capital Assets
Not Being Depreciated
Capital assets being depreciated:
Improvements
Buildings
Machinery and equipment
Roads
Bridges
Parking lots
Total Capital Assets
Being Depreciated
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
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:
Beginning
Balance
207,398
67,907
2,230,425
56,075
Total Deferred /Unearned Revenue
for Governmental Funds
C. CAPITAL ASSETS
Capital asset activity for the year ended December 31, 2008 was as follows:
2,561,805 2,561,805
10,115, 722
1,166,013
11,281,735
Unavailable Unearned
Additions
1,174,113
1,211,210
2,385,323
1,057,403 928,967
15,355,204 30,696
7,827,281 896,493
35,641,175 997,165
1,887,923
432,490 64,193
Deletions
Totals
207,398
67,907
2,230,425
56,075
Ending
Balance
1,932,274 9,357,561
712,725 1,664,498
2,644,999 11,022,059
1,986,370
15,385,900
518,966 8,204,808
320,427 36,317,913
1,887,923
54,234 442,449
62,201,476 2,917,514 893,627 64,225,363
The City is reporting a Toss of $2,125,256 on the disposal of capital assets, related to land parcels
deeded to a developer. This transaction is reported as a special item since it is both unusual in
nature and infrequent for the city. The city council made the decision to deed the parcels of land to
speed downtown redevelopment.
Page 39
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
Net Capital Assets
Being Depreciated
Total Governmental Activities
Capital Assets, Net of
Depreciation
Business -Type Activities
Capital assets not being depreciated:
Land
Construction in progress
Total Capital Assets
Not Being Depreciated
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, 2008
Beginning
Balance Additions
Total Governmental Activities Depreciation Expense
(594,778) (40,712)
(2,870,090) (307,310)
(4,662,596) (550,025)
(6,865,833) (641,403)
(101,640) (47,198)
(175,213) (10,908)
(15,270,150) (1,597,556)
46,931, 326 1,319,958
Depreciation expense was charged to functions as follows:
58,213,061 3,705,281 2,837,980 59,080,362
Governmental Activities
General government
Public safety
Public works, which includes the depreciation of roads, bridges and parking lots
Leisure activities
Beginning
Balance Additions
1,955,640 808,767
1,373,630 3,166,774
3,329,270 3,975,541
10,162,263
2,669,176
115,689, 583
6,390
259,911
128,521,022 266,301
Ending
Deletions Balance
(635,490)
(3,177,400)
(414,419) (4,798,202)
(248,339) (7,258,897)
(148,838)
(37,888) (148,233)
(700,646) (16,167,060)
192,981 48,058,303
208,579
244,900
973,103
170,974
1,597,556
Ending
Deletions Balance
2,764,407
259,911 4,280,493
259,911 7,044,900
11,588 10,150,675
35,680 2,639,886
115,949,494
47,268 128,740,055
Page 40
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
C. CAPITAL ASSETS (cont.)
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
Subtotal Fund financial statements
Less: Fund eliminations
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
Beginning
Balance
(1,582,875)
(1,235,302)
(34,272,724)
(37,090,901)
91,430,121
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
Payable Fund
Building CIP
Water
Total Government -Wide Statement of Net Assets
Additions
(206,314)
(155, 709)
(1,779,808)
(2,141,831)
(1,875,530)
94,759,391 2,100,011
Ending
Deletions Balance
263,543 96,595,859
The following is a schedule of interfund receivable /advances as of December 31, 2008:
Amount Not
Due Within
Receivable Fund One Year
Sewer 170,574
Sewer 71,078
Amount
185,323
77,217
262,540
(77,217)
185,323
(10,159) (1,779,030)
(33,477) (1,357,534)
(36,052,532)
(43,636) (39,189,096)
3,632 89,550,959
716,986
823,138
547,240
54,467
2,141,831
241,652
(71,078)
170,574
Page 41
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
D. INTERFUND RECEJVABLES /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 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:
Total
Principal Interest Totals
2009 20,873 13,127 34,000
2010 21,917 12,083 34,000
2011 23,013 10,987 34,000
2012 24,163 9,837 34,000
2013 25,371 8,629 34,000
2014 -2018 147,203 22,797 170,000
262,540 77,460 340,000
Page 42
Fund Transferred To
General
Debt Service
Capital Projects
Enterprise
Sewer
Storm water
Storm water
Arena
Sewer
Water
Storm water
General
Port Authority TIF
Sewer
General
Water
Water
Capital projects
General
Capital projects
Less: Fund eliminations
Less: Contributed plant reclassified to a transfer
in the government -wide statements
Total Transfers Government -Wide
Statement of Activities
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
D. INTERFUND RECEIVABLES /PAYABLES AND TRANSFERS (cont.)
The following is a schedule of interfund transfers:
Fund Transferred From Amount
Nonmajor enterprise 3,500
Capital projects 7,133
240,000
84,000
592,000
86,000
1,450 Sewer share of project
352,000 Future improvements
1,040,880
55,000
1,070
165,000
266,290
2,894,323
(2,664,050)
(1,569,473)
(1,339,200)
Principal Purpose
Building and grounds
maintenance
To close construction funds
Water portion of debt payment
Storm water portion of debt
payment
Payoff debt with excess funds
Cover interest on TIF debt
Water share of project
allocation of costs will be trued
up when the project is
completed
Water share of debt payment
Return excess funds for project
Operating expenses
Street CIP share of project
Page 43
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
D. INTERFUND RECEIVABLES /PAYABLES AND TRANSFERS (cont.)
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.
E. LONG -TERM OBLIGATIONS
Long -term obligations activity for the year ended December 31, 2008 was as follows:
Other Liabilities
Vested compensated absences 709,204
Total Governmental Activities
Long -Term Liabilities
BUSINESS -TYPE ACTIVITIES
Bonds and Notes Payable:
General obligation debt
Subtract Deferred Amounts For:
Discounts (20,642)
Sub -total 8,534,358
Other Liabilities:
Vested compensated absences
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
Amounts
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
GOVERNMENTAL ACTIVITIES
Bonds and Notes Payable:
General obligation debt 19,085,000 6,425,000 4,300,000 21,210,000 3,645,000
Net discount (12,817) (6,331) (6,486)
Sub -total 19,072,183 6,425,000 4,293,669 21,203,514 3,645,000
433,807 340,418
802,593 385,244
19,781,387 6,858,807 4,634,087 22,006,107 4,030,244
8,555,000 1,705,000 6,850,000 690,000
145,545 63,917
(11,812)
1,693,188
(8,830)
6,841,170
690,000
69,862 139,600 67,007
Total Business -Type Activities
Long -Term Liabilities 8,679,903 63,917 1,763,050 6,980,770 757,007
Page 44
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
E. LONG -TERM OBLIGATIONS (cont.)
General Obligation Debt
Governmental Activities
General Obligation Debt
Business -Type Activities
General Obligation Debt
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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.
Date of Final Interest Original Balance
Issue Maturity Rates Indebtedness 12 -31 -08
Refunding Bonds, Series 2001E 2001 2004- 2013 3.1% to 4.6% 725,000 395,000
Improvement Bonds, Series 1998A 1998 2000 -2009 3.9% to 4.7% 2,010,000 185,000
Improvement Bonds, Series 1999A 1999 2002 -2011 4.3% to 4.8% 3,715,000 735,000
Improvement Bonds, Series 2002A 2002 2004 -2013 2.3% to 4.0% 3,395,000 250,000
Improvement Bonds, Series 2003A 2003 2005 -2014 2.0% to 3.3% 1,945,000 1,150,000
Improvement Bonds, Series 2006B 2006 2008 -2017 4.00% 4,405,000 3,965,000
Municipal Bldg Refunding, Series 1998A 1998 2004 -2018 4.3% to 5.2% 2,405,000 1,710,000
Public Facilities Bonds, Series 2001C 2001 2003 -2022 4.0% to 5.0% 2,045,000 1,640,000
Fire Station GIP Bonds, Series 2005A 2005 2007 2025 3.5% to 4.3% 2,630,000 2,435,000
Equipment Certificates, Series 2005B 2005 2006 -2010 2.7% to 3.1% 1,535,000 640,000
Fire Station Refunding Bonds, Series 2005D 2005 2007 -2016 3.2% to 3.8% 1,115,000 930,000
Equipment Certificates, Series 2006A 2006 2008 -2012 3.7% to 3.8% 370,000 300,000
Equipment Certificates, Series 2007B 2007 2009 -2013 3.5% to 3.6% 450,000 450,000
Equipment Certificates, Series 2008A 2008 2010 -2014 3.99% 385,000 385,000
Port Authority TIF, Series 2008A 2008 2012 -2024 5.0% to 5.5% 2,765,000 2,765,000
Port Authority TIF, Series 2008B 2008 2024 -2032 4.0% to 4.1% 3,275,000 3,275,000
Total Governmental Activities General Obligation Debt 21,210,000
Date of Final Interest Original Balance
Issue Maturity Rates Indebtedness 12 -31 -08
Water Revenue Bonds, Series 2000A 2000 2002 -2016 4.4% to 5.4%
Storm Water Revenue Bonds, Series 2001B 2001 2003 -2017 4.0% to 4.9%
Storm Water Revenue Bonds, Series 2002B 2002 2004 -2018 3.0% to 4.6%
Storm Water Bonds, Series 2003B 2003 2005 -2014 1.2% to 3.4%
Water Revenue Bonds, Series 2005C 2005 2007 -2016 3.5% to 3.8%
Water Revenue Bonds, Series 2007A 2007 2009 -2018 4.0%
1,160,000 740,000
1,140,000 780,000
1,195,000 895,000
1,170,000 740,000
2,990,000 2,485,000
1,210,000 1,210,000
Total Business -Type Activities General Obligation Debt 6,850,000
Page 45
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
2009
2010
2011
2012
2013
2014 2018
2019 2023
2024 2028
2029 2032
Other Debt information
Defeasance of Debt
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
Governmental Activities
General Obligation Debt
Principal Interest
3,645,000
1,840,000
1,545,000
1,370,000
1,360,000
4,655,000
2,840,000
2,205,000
1,750,000
799,928
708,614
639,691
582,883
529,805
1,969,168
1,174, 304
562,539
145,395
Business -Type Activities
General Obligation Debt
Principal Interest
690,000 256,788
740,000 230,836
770,000 202,754
795,000 173,176
835,000 141,881
3,020,000 251,206
Totals 21,210,000 7,112,327 6,850,000 1,256,641
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 $2,011,241 and $2,901,922, respectively.
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, 2008, $615,000 of bonds outstanding
were considered defeased. The bonds are callable on February 1, 2009. In 2008, the City also
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, 2008, $710,000 of bonds outstanding were considered
defeased. The bonds are callable on February 1, 2010.
Page 46
F. NET ASSETS /FUND BALANCES
Governmental Activities
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
Net assets reported on the government -wide statement of net assets at December 31, 2008
include the following:
Invested in capital assets, net of related debt
Land 9,357,561
Construction in progress 1,664,498
Other capital assets, net of accumulated depreciation 48,058,303
Less: related Tong -term debt outstanding (excluding unspent
capital related debt proceeds) (21,203,514)
Total Invested in Capital Assets, Net of Related Debt 37,876,848
Restricted for debt service 6,621,026
Unrestricted 14,114,135
Total Governmental Activities Net Assets 58,612,009
Page 47
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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, 2008
include the following:
Reserved
Major Funds
General Fund
Encumbrances 524,904
Prepaid items 34,120
Total 559,024
Debt Service Fund
Reserved for debt service 5,582,205
Capital Project Fund
Reserved for capital projects 331,014
Total Major Funds Reserved 6,472,243
Unreserved, undesignated
Major Funds
General Fund 10,059
Special Revenue Funds
Port Authority TIF Fund 182,826
Total 192,885
Non -Major Funds
Special Revenue Funds
Port Authority General Fund 109,523
Page 48
F. NET ASSETS /FUND BALANCES (cont.)
Governmental Activities (cont.)
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
NOTE IV DETAILED NOTES ON ALL FUNDS (cont.)
Unreserved, designated
Major Funds
General fund
Designated for working capital 5,678,184
Designated for compensated absences 802,593
Total 6,480,777
General Capital Projects Fund
Designated for capital projects 5,297,333
Total Major Funds Unreserved, designated 11,778,110
Non -Major Funds
Special Revenue Funds
Tree disease grant program fund 151
Fire safety education fund 7,427
GIS fund 7,439
Total Non -Major Funds Unreserved, designated 15,017
Page 49
NOTE V OTHER INFORMATION
A. EMPLOYEES' RETIREMENT SYSTEM
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
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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 Public
Employees Retirement Fund (PERF) 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.
PERF 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 PERF'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 PERF 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, 2008
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 PERF and PEPFF. That report may be
obtained on the Internet at www.mnpera.orq 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. PERF Basic Plan members and Coordinated Plan
members are required to contribute 9.1% and 6.0 respectively, of their annual
covered salary. PEPFF members are required to contribute 8.6% of their annual
covered salary in 2008. That rate will increase to 9.4% in 2009. The City of
Rosemount is required to contribute the following percentages of annual covered
payroll: 11.78% for Basic Plan PERF members, 6.5% for Coordinated Plan PERF
members, and 12.9% for PEPFF members. Employer contribution rates for the
Coordinated Plan and PEPFF will increase to 6.75% and 14.1% respectively,
effective January 1, 2009. The City's contributions to the Public Employees
Retirement Fund for the years ending December 31, 2008, 2007 and 2006 were
$242,631, $222,179 and $204,745, respectively. The City's contributions to the
Public Employees Police Fire Fund for the years ending December 31, 2008,
2007 and 2006 were $219,322, $178,096 and $149,675 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.)
b. Funding Policy
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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.
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 actuarial value of assets was determined using fair value.
Page 52
NOTE V OTHER INFORMATION (cont.)
A. EMPLOYEES' RETIREMENT SYSTEM (cont.)
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
2. Rosemount Fire Department Relief Association Defined Benefit Pension Plan
(cont.)
c. Annual Pension Cost and Net Pension Obligations (cont.)
The following actuarial assumptions and methods were used:
Actuarial cost method
Inflation rate
Investment return
Projected salary increases
Postretirement benefit increases
Amortization method
Amortization period
Items are not available because no actuarial valuation was required by Minnesota
statutes.
The annual pension cost for the Rosemount Fire Department Relief Association
Pension Plan for the year ended December 31, 2008 was as follows:
State of Minnesota contribution
City of Rosemount contribution
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Three Year Trend Information
Amount
85,086
152,000
237,086
The City recognizes the State of Minnesota's contributions to the Rosemount Fire
Department Relief Association Pension Plan as revenue and expense.
Annual Percentage
Fiscal Year Pension Cost of APC Net Pension
Ending (APC) Contribution Obligation
2008 237,086 100.0% 0
2007 249,647 100.0 0
2006 256,225 100.0 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 2005 was based on the same formula,
funding method and other factors that were used in previous years.
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
Ten -year historical trend information is presented in the Rosemount Firefighters
Relief Association's Annual Financial Report for the year ended December 31,
2005. This information is useful in assessing the pension plan's accumulation of
sufficient assets to pay pension benefits as they become due.
The following historical trend information was obtained from the Association's
financial report for the year ended December 31, 2008.
Valuation
Date
12 -31 -08
12 -31 -07
12 -31 -06
Valuation
Assets
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.
e. Related Party Transactions
B. RISK MANAGEMENT
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
Aggregate
Accrued
Liabilities
1,854,425 2,203,084
2,607,807 2,601,785
2,557,862 2,431,423
Assets as a
Percentage of
Accrued
Liabilities
84%
100
105
Overfunded
(Underfunded)
Accrued
Liabilities
(348,659)
6,022
126,439
As of December 31, 2008 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, 2008, 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
D. JOINT POWERS DEBT COMMITMENT
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
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 $4,200,000 on various contracts related to
construction projects.
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.
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.
Page 55
NOTE V OTHER INFORMATION (cont.)
D. JOINT POWERS DEBT COMMITMENT (cont.)
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, 2008 are as follows:
E. SUBSEQUENT EVENTS
CITY OF ROSEMOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 2008
Payment Year Amount
2009 61,650
2010 59,650
2011 62,150
2012 59,950
2013 57,570
Total 300,970
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.may @ci.rosemount.mn.us.
On February 1, 2009, the City (Port Authority) called the Municipal Building Refunding Bonds,
Series 1998A, for redemption and repayment in the amount of $1,555,000 plus accrued interest.
Page 56
REVENUES
FINES AND FORFEITURES
County
SPECIAL ASSESSMENTS
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, 2008
Budgeted Amounts Variance with
Original Final Actual Final Budget
TAXES
General property tax 7,224,908 7,224,908 6,963,001 (261,907)
Fiscal disparities 968,892 968,892 968,892
Other 189,000 189,000 217,502 28,502
Total Taxes 8,382,800 8,382,800 8,149,395 (233,405)
INTERGOVERNMENTAL REVENUES
State aid police 127,000 127,000 147,847 20,847
State aid general government 15,000 15,000 21,882 6,882
State aid highway 26,000 26,000 29,115 3,115
Other 78,000 142,203 147,051 4,848
Total Intergovernmental Revenues 246,000 310,203 345,895 35,692
PUBLIC CHARGES FOR SERVICES
General government 768,700 768,700 859,697 90,997
Public safety 33,700 33,700 75,817 42,117
Highways and streets 15,000 15,000 25,418 10,418
Parks and recreation 253,600 253,600 283,560 29,960
SAC 5,000 5,000 6,742 1,742
Total Charges for Services 1,076,000 1,076,000 1,251,234 175,234
LICENSES AND PERMITS
Business 37,000 37,000 53,578 16,578
Non business 535,600 535,600 645,178 109,578
Total Licenses and Permits 572,600 572,600 698,756 126,156
90,000 90,000 127,239 37,239
15,000 15,000 15,712 712
INVESTMENT INCOME AND MISCELLANEOUS
Investment income 181,000 181,000 224,412 43,412
Net increase in the fair value of investments 3,624 3,624
Miscellaneous general revenues 2,000 2,000 21,958 19,958
Donations 26,545 22,580 (3,965)
Rents 6,000 6,000 45,281 39,281
Total Investment income and miscellaneous 189,000 215,545 317,855 102,310
Total Revenues 10,571,400 10,662,148 10,906,086 243,938
OTHER FINANCING SOURCES
Transfers in 3,500 3,500 10,633 7,133
Total Revenues and Other Financing Sources 10,574,900 10,665,648 10,916,719 251,071
See auditors' report and accompanying notes to required supplementary information.
Page 57
PUBLIC SAFETY
Police department
Fire department
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, 2008
CURRENT EXPENDITURES
GENERAL GOVERNMENT
Mayor and council
Executive
Elections
Finance
Community development
General government
TOTAL GENERAL GOVERNMENT
TOTAL PUBLIC SAFETY
PUBLIC WORKS
Govemment 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
Budgeted Amounts
Original Final
199,500 199,500
542,000 542,000
61,800 61,800
448,400 448,400
930,300 930,300
395,000 395,000
2,577,000 2,577,000
Variance with
Actual Final Budget
176,735 22,765
487,524 54,476
39,468 22,332
391,299 57,101
864,689 65,611
339,235 55,765
2,298,950 278,050
2,812,000 2,818,496 2,751,622 66,874
318,500 319,700 291,472 28,228
3,130,500 3,138,196 3,043,094 95,102
526,500 526,500 539,315 (12,815)
504,600 504,600 524,657 (20,057)
1,206,100 1,206,100 1,198,413 7,687
769,400 769,400 721,147 48,253
3,006,600 3,006,600 2,983,532 23,068
1,221,800 1,233,298 1,186,883 46,415
474,000 545,551 261,717 283,834
165,000 165,000 1.109,000 (944,000)
10,574,900 10,665,645 10,883,176 (217,531)
558,190
(524,904)
10,916,462
See auditors' report and accompanying notes to required supplementary information.
Page 58
Budgetary Information
CITY OF ROSEMOUNT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
December 31, 2008
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:
General Fund
Government building maintenance
Fleet maintenance
526,500 539,315 12,815
504,600 524,657 20,057
See auditors' report
Final
Budget Expenditures Excess
Page 59
ASSETS
Cash and investments
Total assets
FUND BALANCES
Unreserved
Designated for subsequent years' expenditures
Undesignated
Total fund balances
Total liabilities and fund balances 151
CITY OF ROSEMOUNT
COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS
December 31, 2008
Special Revenue Funds
Total
Tree Disease Crime Fire Nonmajor
Grant Reduction Safety Port Authority Governmental
Program Project Education GIS General Funds
151 7,427 13,187 114,479 135,244
151 7,427 13,187 114,479 135,244
LIABILITIES
Accounts payable 5,748 4,956 10,704
Total liabilities 5,748 4,956 10,704
151
151
7,427
7,427
7,439 15,017
109,523 109,523
7,439 109,523 124,540
7,427 13,187 114,479 135,244
Page 60
FUND BALANCES Beginning of Year
FUND BALANCES END OF YEAR
CITY OF ROSEMOUNT
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS
For the Year Ended December 31, 2008
Special Revenue Funds
Total
Tree Disease Crime Fire Nonmajor
Grant Reduction Safety Port Authority Governmental
Program Project Education GIS General Funds
REVENUES
Taxes 50,000 50,000
Public charges for services 7,680 13,319 20,999
Investment income and miscellaneous 1 1 29 185 1,256 1,472
Total Revenues 1 1 29 7,865 64,575 72,471
EXPENDITURES
Current:
General govemment 70,049 70,049
Public safety 836 201 1,037
Public works 40,633 40,633
Total Expenditures 836 201 40,633 70,049 111,719
Net change in fund balance 1 (835) (172) (32,768) (5,474) (39,248)
150 835 7,599 40,207 114,997 163,788
151 7,427 7,439 109,523 124,540
Page 61
CITY OF ROSEMOUNT
BUILDING CIP CAPITAL PROJECT FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE (BUDGETARTY BASIS) BUDGET AND ACTUAL
For the Year Ended December 31, 2008
Original and
Final Budgeted Variance with
REVENUES Amounts Actual Final Budget
Taxes 124,000 124,000
Investment income 2,500 8,273 5,773
Total Revenues 126,500 132,273 5,773
EXPENDITURES
Current:
General government 2,500 2,500
Capital Outlay 114,050 452,000 (337,950)
Debt Service:
Interest on lease 9,950 9,968 (18)
Total Expenditures 126,500 464,468 (337,968)
Excess of revenues over expenditures (332,195) (332,195)
OTHER FINANCING SOURCES
Operating transfers in 352,000 352,000
Total Other Financing Sources (Uses) 352,000 352,000
Net Change in Fund Balance 19,805 19,805
FUND BALANCE Beginning 599,379 599,379
FUND BALANCE ENDING 599,379
619,184 19,805
Page 62
REVENUES
Taxes
Intergovernmental
Charges for services
Special assessments
Investment income
Miscellaneous
Total Revenues
EXPENDITURES
Current:
General government
Public Works
Capital Outlay
CITY OF ROSEMOUNT
STREET CIP CAPITAL PROJECT FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE (BUDGETARY BASIS) BUDGET AND ACTUAL
For the Year Ended December 31, 2008
Total Expenditures
Excess of revenues over expenditures
OTHER FINANCING SOURCES (USES)
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
FUND BALANCE Beginning
FUND BALANCE ENDING
Original and
Final Budgeted
Amounts
765,000
Actual
765,000
19,750
300,000 452,415
339,241
10,500 47,008
102,354
1,075,500
2,500 3,722 (1,222)
61,176 (61,176)
965,000 227,176 737,824
967,500 292,074 675,426
108,000 1,433,694 1,325,694
108,000
1,930,823
1,725,768
(1,556,225)
(1,556,225)
(122,531)
1,930,823
Variance with
Final Budget
19,750
152,415
339,241
36,508
102,354
650,268
(1,556,225)
(1,556,225)
(230,531)
2,038,823 1,808,292 (230,531)
Page 63
Budgeted Amounts Variance with
REVENUES Original Final Actual Final Budget
Taxes 282,609 282,609 282,609
Intergovernmental 307,623 307,623
Investment income 5,000 5,000 38,808 33,808
Total Revenues
Total Expenditures
Excess of revenues over (under) expenditures
OTHER FINANCING SOURCES
Issuance of long -term debt
Sale of capital assets
Total Other Financing Sources
Net Change in Fund Balance
FUND BALANCE Beginning
FUND BALANCE ENDING
CITY OF ROSEMOUNT
EQUIPMENT CIP CAPITAL PROJECT FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES
IN FUND BALANCE (BUDGETARY BASIS) BUDGET AND ACTUAL
For the Year Ended December 31, 2008
287,609 595,232
EXPENDITURES
Current:
General government 2,500 2,500 2,500
Capital Outlay 846,000 1,153,623 895,382 258,241
Debt Service:
Principal retirement 58,500 58,500 53,337 5,163
907,000 1,214,623 951,219 263,404
(619,391) (619,391) (322,179) 297,212
625,000 625,000 385,000 (240,000)
4,000 4,000 4,780 780
629,000 629,000 389,780 (239,220)
9,609 9,609 67,601 57,992
1,041,267 1,041,267 1,041,267
629,040 33,808
1,050,876 1,050,876 1,108,868 57,992
Page 64
ASSETS
Cash and investments
LIABILITIES
Due to M.A.A.G.
CITY OF ROSEMOUNT
SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES
M.A.A.G. AGENCY FUND
For the Year Ended December 31, 2008
Balance
1/1/2008 Receipts Disbursements 12/31/2008
35,615 33,028 14,679 53,964
Balance
35,615 33,028 14,679 53,964
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
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 government'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.
67
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
Schedule 1
City of Rosemount
Net Assets by Component
Last Six Fiscal Years
(Accrual Basis of Accounting)
Source: City of Rosemount Comprehensive Annual Financial Reports
Fiscal Years
2003 2004 2005 2006 2007 2008
Governmental activities
Invested in capital assets, net of related debt 19,273,447 17,030,985 24,737,314 34,221,147 39,140,878 37,876,848
Restricted 9,632,707 7,554,872 8,736,586 6,621,026
Unrestricted 21,839,805 26,487,766 20,397,787 11,090,854 9,602,486 14,114,135
Total governmental activities net assets 41,113,252 43,518,751 54,767,808 52,866,873 57,479,950 58,612,009
Business -type activities
Invested in capital assets, net of related debt 62,897,357 69,812,374 72,422,792 82,445,638 86,225,033 89,687,681
Unrestricted 17,154,440 19,960,935 24,431,214 21,187,968 21,307,733 20,158,226
Total business -type activities net assets 80,051,797 89,773,309 96,854,006 103,633,606 107,532,766 109,845,907
Primary government
Invested in capital assets, net of related debt 82,170,804 86,843,359 97,160,106 116,666,785 125,365,911 127,564,529
Restricted 9,632,707 7,554,872 8,736,586 6,621,026
Unrestricted
38,994,245 46,448,701 44,829,001 32,278,822 30,910,219 34,272,361
Total primary government net assets 121,165,049 133,292,060 151,621,814 156,500,479 165,012,716 168,457,916
Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003.
Page 67
Schedule 2
City of Rosemount
Changes in Net Assets
Last Six Fiscal Years
(Accrual Basis of Accounting)
Expenses
Governmental activities
General government
Public safety
Public works
Culture, education and recreation
Conservation and economic development
Interest and fiscal charges
Total governmental activities expenses
Business -Type activities
Water Utility
Sewer Utility
Storm Water Utility
Arena
Total Business -Type activities expenses
Total primary government expenses
Program Revenues
Governmental activities
Charges for services
General government
Public safety
Public works
Culture, education and recreation
Operating grants and contributions
General govemment
Public safety
Public works
Culture, education and recreation
Conservation and economic development
Capital grants and contributions
General govemment
Public safety
Public works
Culture, education and recreation
Conservation and economic development
Total govemmental activities program revenues
Business -Type activities
Charges for services
Water Utility
Sewer Utility
Storm Water Utility
Arena
Operating grants and contributions
Water Utility
Sewer Utility
Capital grants and contributions
Water Utility
Sewer Utility
Stone Water Utility
Arena
Total Business -Type activities program revenues
Total primary govemment program revenues
Net (Expense) Revenue
Govemmental activities
Business -Type activities
Total primary govemment net expense
2003
2004
2005
Fiscal Years
2006
2007
2008
1,772,833 2,068,246 2,739,933 2,722,728 2,610,367 2,639,752
2,350,428 2,468,826 2,730,428 2,928,783 3,293,615 3,468,249
3,814,357 5,893,405 8,344,837 7,724,300 4,974,625 5,279,784
1,099,990 1,154,709 1,250, 743 1,257, 556 1,386,322 1,417,400
2,648 23,598 2,297 342 9,677 1,956,865
971,498 802,957 1,067,478 921,318 841,108 958,900
10,011,754 12,411,741 16,135,716 15, 555, 027 13,115,714 15,720,950
1,268,363 1,763,570 1,671,775 1,603, 391 2,366,263 1,893,099
1,482,577 1,703,280 1,975,164 1,913,071 2,059,411 2,123,397
839,499 737,401 842,701 916,557 1,245,492 988,716
359,630 391,570 443,128 457,897 468,017 537,530
3,950,069 4,595,821 4,932,768 4,890,916 6,139,183 5,542,742
13,961,823 17,007,562 5 21,068,484 20,445,943 19,254,897 21,263,692
1,854,322 2,591,883 2,695,090 2,065,514 1,876,616 2,031,866
130,581 135,673 120,182 117,017 159,624 203,056
43,377 97,140 37,497 25,159 8,893 32,160
355,981 1,365,568 1,137,357 351,867 693,482 403,560
12,889 65,600 11,802 25,608
152,036 182,122 252,907 212,885
1,315,865 1,738,997 354,618 169,586
23,633 19,076 1,135
169,866 18,019 15,000 18,500
3,435,395 8,746
152,495
9,167,679 8,672,316 13,294,175 5,218,862
1,024,357 1,349
210,863
13,202,596 14,890,951 22,760,814 8,216,228
2,626,145
1,837,761
1,510,114
308,461
1,570
930
111,117
525,459
729,012
39,900
7,690,469
20,893,065
3,361,166
2,089,244
1,739,183
337,912
288,615
126,936
846,683
8,789,739
23,680,690
2,562,552
1,946,894
1,999,635
331,205
2,115,864
1,722,929
1,167,514
351,808
25,823
251,262
926,545
1,163
15,400
22,580
233,349
392,136
628
82,803
117,025 1,775
1,562 337
4,667,378 3,762,115
423,305 531
522,179
9,168,078 7,689,075
2,092,633
1,677,768
1,056,510
373,504
2,027,618
1,767,732
1,137,287
390,631
44,989 107,855 46,807 56,388
87,619 90,776 88,516 392,757
80 18,165
6,972,894 5,556,826 5,335,738 5,790,578
29, 733, 708 13, 773,054 14,503,816 13
3,190,842 2,479,210 6,625,098 (7,338,799) (3,947,636) (8,031,875)
3,740,400 4,193,918 2,040,126 665,910 (803,445) 247,836
5 6,931,242 6,673,128 8,665,224 (6,672,889) (4,751,081) 5 (7,784,039)
Page 68
Schedule 2 (continued)
City of Rosemount
Changes in Net Assets
Last Six Fiscal Years
(Accrual Basis of Accounting)
Fiscal Years
2003 2004 2005 2006 2007 2008
General Revenues and Other Changes in Net Assets
Governmental 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
Property taxes, levied for debt service 266,011 1,644,099 1,377,159 1,951,327 2,025,349 2,005,338
Other taxes 133,525 141,642 173,719 184,868 201,446 208,667
Public gifts and /or grants 77,884
Investment income 391,103 376,200 567,112 1,064,315 967,337 611,533
Gain (loss) on the sale of assets (232,155) (2,125,256)
Miscellaneous 5,127 29,244 71,371 131,352 326,263 365,516
Transfers (5,476,125) (5,087,288) (4,468,254) (5,169,779) (3,599,876) (1,339,200)
Total governmental activities 998,023 3,429,114 4,623,959 5,437,864 8,560,713 9,163,934
Business -Type activities
Investment income
Gain (loss) on the sale of assets
Transfers
Total Business -Type activities
Total primary government
Change in Net Assets
Governmental activities
Business -Type activities
Total primary government
Source: City of Rosemount Comprehensive Annual Financial Reports
299,851 440,306 572,317 943,911 1,102,729 726,105
(1,604)
5,476,125 5,087,288 4,468,254 5,169,779 3,599,876 1,339,200
5,774,372 5,527,594 5,040,571 6,113,690 4,702,605 2,065,305
6,772,395 8,956,708 9,664,530 11,551,554 13,263,318 11,229,239
4,188,865 5,908,324 11,249,057 (1,900,935) 4,613,077 1,132,059
9,514,772 9,721,512 7,080,697 6,779,600 3,899,160 2,313,141
13,703,637 15,629,836 18,329,754 4,878,665 8,512,237 3,445,200
Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003.
Page 69
Schedule 3
City of Rosemount
Fund Balances, Governmental Funds
Last Six Fiscal Years
(Modified Accrual Basis of Accounting)
General Fund
Reserved for
Prepaid items
Encumbrances
Unreserved
Designated
Undesignated
Total General Fund
All Other Govemmental Funds
Reserved for
Debt service
Special revenue funds prepaid items
Capital projects funds encumbrances
Unreserved
Designated
Capital projects funds
Special revenue funds
Undesignated
Port Authority TIF fund
Special revenue funds
Total All Other Govemmental Funds
Total All Funds
2003
27,979 30,048 29,926 31,447
147,339 503,524 599,962 334,104
4,525,008 4,931,177 5,162,364
12,821 '13,999 15,486
4,713,147 5,478,748 5,807,738
7,563,183 9,508,673
335
1,128,712 1,630,159
2,507,528 2,712,870 6,395,862 4,862,317 4,662,910 5,297,333
1,666,889 3,117,074 3,706,078
(98,266)
12,768,046
17,481,193
Source: City of Rosemount Comprehensive Annual Financial Reports
2004
(92,969)
16,876,142
22,354,890
2005
9,784,931
364
1,168,027
Fiscal Years
(2,971,333)
(331,928) 232,497
20, 723, 334 10,473, 875
26,531,072 16,286,735
Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003.
2006
5,429,801
17,508
5,812,860
7,570,248
391
727,152
52,603
2007
25,797 34,120
558,190 524,904
6,456,649 6,480,777
8,967 10,059
7,049,603 7,049,860
7,180,264 5,582,205
416
239,803 331,014
48,791
(3,370,688)
114,581
8,876,077
15,925,680
2008
15,017
182,826
109,523
11,517,918
18,567,778
Page 70
Schedule 4
City of Rosemount
Changes in Fund Balances, Governmental Funds
Last Six Fiscal Years
(Modified Accrual Basis of Accounting)
Revenues
Taxes
Tax increments
Intergovernmental
Public charges for services
Licenses and permits
Fines and forfeitures
Special assessments
Investment income and miscellaneous
Total revenues
Expenditures
General govemment
Public safety
Public works
Parks and recreation
Conservation and development
Other
Capital Outlay
Debt Service
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues
over (under) expenditures
Other financing sources (uses)
Issuance of long -term debt
Payment to escrow agent
Premium on long -term debt
Discount on long -term debt
Capital leases
Sale of capital assets
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balances
Fund balances Beginning
Fund balances Ending
Debt service as a percentage of
noncapital expenditures
2003
6,232,189 8,110,958 8,176,465 9,111,739 10,447,961 11,079,607
22,264 40,236 159,030 296,735
1,650,656 1,983,738 619,637 402,106 1,194,371 1,511,195
1,378,920 2,798,197 2,708,131 1,671,934 1,967,889 1,844,648
915,589 1,295,164 1,194,106 799,650 650,634 698,756
89,752 98,947 90,787 90,776 120,870 129,220
1,557,386 1,590,026 1,382,539 1,373,904 1,582,277 962,950
7,817,963 8,544,963 12,891,807 6,171,310 4,426,241 3,538,350
19,642,455 24,421,993 27,085,736 19,661,655 20,549,273 20,061,461
1,605,319
2,091,444
2,055,389
907,100
297
21,050
7,356,580
10,265,948
1,137,023
25,440,150
(5,797,695) 221,725 (1,766,782) (17,021,197) (2,763,591) (3,684,273)
63.1
2004 2005 2006 2007 2008
1,898,739 2,482,348 2,270,416 2,380,884 2,579,263
2,234,367 2,464,679 2,626,053 2,913,163 3,096,468
2,623,105 2,190,297 2,822,803 2,568,514 3,105,778
980,841 1,034,193 1,080, 786 1,152,615 1,186,883
1,944,457
12,469,486 15,932,587 22,873,101 9,719,678 6,689,680
3,011,929
981,801
24,200,268
1,945,000 5,280,000 4,775,000 450,000 6,425,000
(1,182,525) (1,800)
21,147
(3,533)
74,257
37,513 6,350 2,650 101,841 19,005 4,780
2,451,981 3,615,269 2,177,097 3,283,961 2,120,800 1,366,084
(7,928,106) (2,070,942) (1,516,783) (219,031) (185,469) (1,469,493)
(3,419,355) 1,550,677 5,942,964 6,776,860 2,402,536 6,326,371
(9,217,050) 1,772,402 4,176,182 $(10,244,337) (361,055) 2,642,098
29,799,538 20,582,488 22,354,890 26,531,072 16,286,735 15,925,680
20,582,488 22,354,890 26,531,072 16,286,735 15,925,680 18,567,778
34.0%
3,811,892
936,522
28,852,518
36.8%
Fiscal Years
Source: City of Rosemount Comprehensive Annual Financial Reports
Note: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 2003.
4,106,223
903,470
36,682,852
36.3%
3,565,000 4,300,000
1,013,010 843,205
23,312,864 23,745,734
33.7%
30.2%
Page 71
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Schedule 7
City of Rosemount
Principal Property Tax Payers
Current Year and Nine Years Ago
Taxpayer
2008 1999
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. 1,619,224 1 6.08% 1,647,928 1 14.43%
Flint Hills Resources LP 1,126,465 2 4.23% 754,498 2 6.61%
Northern States Power Co. 303,913 3 1.14% 467,092 3 4.09%
Clare) Corporation (Cub Foods) 228,442 4 0.86%
Rosemount Crossing LLC 115,904 5 0.43%
Northern Natural Gas Co. 106,068 6 0.40%
Francis Patricia Dolejs 103,116 7 0.39%
Continental Nitrogen Resources (CNR) 97,792 8 0.37% 93,112 7 0.82%
Webb Properties LLC 96,912 9 0.36%
Bigos Rosemount LLC (Cannon Equipment) 91,518 10 0.34% 140,192 4 1.23%
CF Industries, Inc. (Cenex) 86,950 11 0.33% 116,295 5 1.02%
Limerick Way LLC 85,001 12 0.32% 91,202 8 0.80%
Hidden Valley Spe LLC (Rosemount Woods) 79,310 13 0.30%
Progress Land Company 62,383 14 0.23%
Koch Exploration Properties LLC 47,125 15 0.18%
Laidlaw Environmental Services (SKB) 84,357 0.74%
Triangle Warehouse (Wintz Companies) 102,044 6 0.89%
Rosemount Properties LLC (Rsmt Market Square) 83,541 9 0.73%
Greif Brothers 80,678 10 0.71%
Utilicorp United (MERC) 71,536 11 0.63%
Koch Refining Pipeline 71,434 12 0.63%
Endres Properties LLC 68,771 13 0.60%
CP Limited Partnership 64,086 14 0.56%
Laidlaw Environmental Services (SKB) 64,048 15 0.56%
Principal Taxpayers Total 4,250,123 15.95% 4,000,814 35.04%
Total City Tax Capacity 26,650,584 11,419,083
Source: Dakota County Treasurer Auditor
(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, 2008
Net General Estimated Estimated
Obligation Percentage Amount
Bonded Debt Applicable Applicable
Governmental Units (1) Outstanding (2) to City (5) to City
Direct Debt:
City of Rosemount 4,668,012 (3) 100.00% 4,668,012
Overlapping Debt:
School Districts:
I.S.D. 196 Rosemount 117,677,630 13.90% 16,357,191
I.S.D. 199 Inver Grove Heights 38,310,000 4.60% 1,762,260
I.S.D. 200 Hastings 39,310,000 0.10% 39,310
Dakota County 85,030,000 5.40% 4,591,620
Regional:
Metropolitan Council 21,120,000 (4) 0.70% 147,840
Total Overlapping Debt 301,447,630 22,898,221
Total Direct Overlapping Debt 306,115,642 27,566,233
(1) Only those units with debt outstanding are shown here.
(2) Includes only general obligation debt supported by taxes, special assessments, tax increment revenue, and
annual appropriation lease revenue issues. Exludes general obligation debt supported by other revenues.
(3) Net general obligation bonded debt of the city supported by property taxes (see Schedule 10).
(4) Excludes general obligation debt supported by sanitary sewer revenues, 911 user fees and
housing rental payments. Includes certificates of participation.
(5) Percent of governmental unit within the City of Rosemount's boundaries calculated
by the city's fiscal consultants, 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)
1999 13,544 33,193 449,565,992 5,651 1.7% 30.2
2000 14,619 36,577 534,719,163 3,190 2.2% <35.4
2001 15,270 36,788 561,752,760 3,638 3.9% <35.4
2002 16,110 37,289 600,725,790 4,262 3.6% <35.4
2003 18,700 38,819 725,915,300 3,849 3.9% <35.4
2004 19,907 40,548 807,189,036 4,111 3.6% <35.4
2005 20,837 41,706 869,027,922 4,474 3.6% <35.4
2006 22,049 43,095 950,201,655 4,551 3.7% <35.4
2007 22,397 43,095 965,198,715 4,458 4.3% <35.4
2008 22,750 43,095 980,411,250 4,623 6.1% <35.4
(1) 2000 is a regular decennial census figure. All other 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 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 the Minnesota State Demographic Center 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 2006 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 the Census Bureau and are for Dakota County.
Figures prior to 2000 will be reflective of the 1990 census and figures from
2000 fo,ward will be reflective of the 2000 census.
Page 81
Schedule 15
City of Rosemount
Principal Employers
Current Year and Nine Years Ago
Employer
2008 1999
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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